author: Mr. Justice Harlan

text:
    GASTON COUNTY, NORTH CAROLINA v. UNITED STATES.
    No. 701.
    Argued April 23-24, 1969.
    Decided June 2, 1969.

      Grady B. Stott argued the cause for appellant. With him on the brief was Wesley E. McDonald, Sr.

      Louis F. Claiborne argued the cause for the United States. With him on the brief were Solicitor General Griswold, Assistant Attorney General Leonard, Francis X. Beytagh, Jr., and David L. Norman.

   Mr. Justice Harlan

delivered the opinion of the Court.

The Voting Rights Act of 1965 suspends the use of any test or device as a prerequisite to registering to vote in any election, in any State or political subdivision which, on November 1, 1964, maintained a test or device, and in which less than 50% of the residents of voting age were registered on that date or voted in the 1964 presidential election. Suspension is automatic upon publication in the Federal Register of determinations by the Attorney General and the Director of the Census, respectively, that these conditions apply to a particular governmental unit. If the unit wishes to reinstate the test or device, it must bring suit against the Government in a three-judge district court in the District of Columbia and prove “that no such test or device has been used during the five years preceding the filing of the action for the purpose or with the effect of denying or abridging the right to vote on account of race or color,” §4 (a). The constitutionality of these provisions was upheld in South Carolina v. Katzenbach, 383 U. S. 301 (1966).

On March 29, 1966, the Attorney General and the Director of the Census published the necessary determinations with respect to appellant, Gaston County, North Carolina. Use of the State’s literacy test within the County was thereby suspended. On August 18,1966, appellant brought this action in the District Court, making the requisite averments and seeking to reinstate the literacy test.

The United States opposed the granting of relief on the ground, inter alia, that use of the test had “the effect of denying or abridging the right to vote on account of race or color” because it placed a specially onerous burden on the County’s Negro citizens for whom the County had maintained separate and inferior schools.

After a full trial on this and other issues, the District Court denied the relief requested, holding that appellant had not met its burden of proving that its use of the literacy test, in the context of its historic maintenance of segregated and unequal schools, did not discrimina-torily deprive Negroes of the franchise. Gaston County v. United States, 288 F. Supp. 678 (1968). The court made clear:

“[W]e do not rely solely on the fact that the schools in Gaston County have been segregated during the period when persons presently of voting age were of school age, but instead have reviewed the evidence adduced by the Government in this case and concluded that the Negro schools were of inferior quality in fact as well as in law.” Id., at 689-690, n. 23.

Pursuant to § 4 (a) of the Act, the County appealed directly to this Court. We noted probable jurisdiction, 393 U. S. 1011 (1969), and we affirm for substantially the reasons given by the majority in the District Court.

Appellant contends that the decision of the District Court is erroneous on three scores: first, as a matter of statutory construction and legislative history, the court could not consider Gaston County’s practice of educational discrimination in determining whether its literacy test had the effect of discriminatorily denying the franchise; second, on the facts of this case, appellant met its burden of proving that the education it provided had no such effect; and third, whatever may have been the situation in the past, Gaston County has not fostered discrimination in education or voting in recent years. We consider these arguments in turn.

I.

The legislative history of the Voting Rights Act of 1965 discloses that Congress was fully cognizant of the potential effect of unequal educational opportunities upon exercise of the franchise. This causal relationship was, indeed, one of the principal arguments made in support of the Act’s test-suspension provisions. Attorney General Katzenbach testified before the Senate Committee on the Judiciary:

“It might be suggested that this kind of [voting] discrimination could be ended in a different way— by wiping the registration books clean and requiring all voters, white or Negro, to register anew under a uniformly applied literacy test.
“. . . [S]uch an approach would not solve, but would compound our present problems.
“To subject every citizen to a higher literacy standard would, inevitably, work unfairly against Negroes — Negroes who have for decades been systematically denied educational opportunity equal to that available to the white population. Although the discredited ‘separate but equal’ doctrine had colorable constitutional legitimacy until 1954, the notorious and tragic fact is that educational opportunities were pathetically inferior for thousands of Negroes who want to vote today.
“The impact of a general reregistration would produce a real irony. Years of violation of the 14th amendment, right of equal protection through equal education, would become the excuse for continuing violation of the 15th amendment, right to vote.” Hearings on S. 1564 before the Senate Committee on the Judiciary, 89th Cong., 1st Sess., 22.

Mr. Katzenbach testified similarly before the House Committee. See Hearings on H. R. 6400 before Subcommittee No. 5 of the House Committee on the Judiciary, 89th Cong., 1st Sess., 18-19, 49. And significantly, the Report of the Senate Judiciary Committee explicitly asserted:

“[T]he educational differences between whites and Negroes in the areas to be covered by the prohibitions — differences which are reflected in the record before the committee — would mean that equal application of the tests would abridge 15th amendment rights. This advantage to whites is directly attributable to the States and localities involved.” S. Rep. No. 162, pt. 3, 89th Cong., 1st Sess., 16.

Appellant’s response to this seemingly unequivocal legislative history is, in essence, that it proves too much. As Judge Gasch put it in his separate opinion below:

“[I]t is clear that the Voting Rights Act was primarily directed at the Southern states. In the Act, the Congress allowed a fair opportunity for a certified unit to rebut the presumption that its literacy test was used in a discriminatory manner. Thus, sections 4 and 5 of the Act provide a procedure whereby a State or political subdivision which has been the subject of a certification under the Act, may petition this Court for declaratory relief to reinstate its test before the five-year suspension period has elapsed. Sections 4 and 5 will provide no remedy to a Southern state, however, if, as the majority finds, a segregated school system coupled with census data showing higher literacy and education for whites than for Negroes, is sufficient to preclude recovery under the Act. We can take judicial notice that the segregated school system was the prevailing system throughout the South. If this were what Congress had in mind, it would have stated that no test could be used where literacy was higher among whites than among Negroes. I do not believe that Congress intended that the Act be interpreted in such a way as to render §§ 4 and 5 inapplicable to Southern states or those which had segregated educational systems.” 288 F. Supp., at 690, 695.

Appellant's contentions fundamentally misconceive the import of the majority opinion below, as we read it. That opinion explicitly disclaims establishing any per se rule. The court's decision is premised not merely on Gaston County’s historic maintenance of a dual school system, but on substantial evidence that the County deprived its black residents of equal educational opportunities, which in turn deprived them of an equal chance to pass the literacy test. Consistent with the court’s holding, a State or subdivision may demonstrate that although its schools suffered from the inequality inherent in any segregated system, see Brown v. Board of Education, 347 U. S. 483 (1954), the dual educational system had no appreciable discriminatory effect on the ability of persons of voting age to meet a literacy requirement.

It is of no consequence that Congress might have dealt with the effects of educational discrimination by employing a coverage formula different from the one it enacted. The coverage formula chosen by Congress was designed to be speedy, objective, and incontrovertible; it is triggered appropriately by voting or registration figures. The areas at which the Act was directed

“share two characteristics incorporated by Congress into the coverage formula: the use of tests and devices for voter registration, and a voting rate in the 1964 presidential election at least 12 points below the national average. Tests and devices are relevant to voting discrimination because of their long history as a tool for perpetrating the evil; a low voting rate is pertinent for the obvious reason that widespread disenfranchisement must inevitably affect the number of actual voters. Accordingly, the coverage formula is rational in both practice and theory.” South Carolina v. Katzenbach, 383 U. S. 301, 330 (1966).

In contrast, a coverage formula based on educational disparities, or one based on literacy rates, would be administratively cumbersome: the designation of racially disparate school systems is not susceptible of speedy, objective, and incontrovertible determination; and the Bureau of the Census collects no' accurate county statistics on literacy. Furthermore, a coverage formula based on either of these factors would not serve as an appropriate basis for suspending all of the tests and devices encompassed by § 4 (c) of the Act — for example, a “good moral character” requirement.

We conclude that in an action brought under § 4 (a) of the Voting Rights Act of 1965, it is appropriate for a court to consider whether a literacy or educational requirement has the “effect of denying . .. the right to vote on account of race or color” because the State or subdivision which seeks to impose the requirement has maintained separate and inferior schools for its Negro residents who are now of voting age.

II.

In an action for declaratory relief under § 4 (a) of the Voting Rights Act of 1965, the plaintiff carries the burden of proof. The plaintiff cannot be expected to raise and refute every conceivable defense, however, cf. Federal Rules of Civil Procedure, Rule 9 (c), and it was incumbent upon the Government in the case at bar to put into issue its contention that appellant’s use of the literacy test, coupled with its racially segregated and unequal school system, discriminatorily deprived Negroes of the franchise. The plaintiff-appellant would then have the burden of proving the contrary. See South Carolina v. Katzenbach, 383 U. S. 301, 332 (1966). The Government did place this contention in issue, and in support thereof it introduced considerable evidence, which we now summarize.

All persons of voting age in 1966 who attended schools in Gaston County attended racially separate and unequal schools. Between the years 1908 and 1929, when approximately 45% of the voting age population was of school age, the salaries of Negro teachers in the County ranged from a low of about 20% to a high of about 50% of those of their white colleagues. In 1919, when uniform teacher certification was first required in North Carolina, 98% of the white teachers, but only 5% of the Negro teachers, qualified for regular state teaching certificates. The remaining 95% of the Negro teachers held “second grade” certificates. The Biennial Report of the State Superintendent of Public Instruction, 1918-1920, described a second grade certificate as “the lowest permit issued to any teacher in the State. It is not a certificate in the proper sense, but merely a permit to teach until someone can be found who is competent to take the place.”

During this same period, the per-pupil valuation of Negro school property in the County ranged from 20% to about 40% of that of the white schools. A much higher proportion of Negro than of white children attended one-room, one-teacher, wooden schoolhouses which contained no desks.

By the 1938-1939 school year, Negro teachers’ salaries had increased to about 70% of that of white teachers, and by the 1948-1949 school year, salaries were almost equal. At this later date, the per-pupil valuation of Negro school property was still only about one-third that of the white schools.

Of those persons over 25 years old at the time of the 1960 census, the proportion of Negroes with no schooling whatever was twice that of whites in Gaston County; the proportion of Negroes with four or less years of education was slightly less than twice that of whites.

In 1962, Gaston County changed its system of registration and required a general reregistration of all voters. North Carolina law provides that “[e]very person presenting himself for registration shall be able to read and write any section of the Constitution in the English language.” N. C. Const., Art. VI, § 4; see n. 3, supra. The State Supreme Court has described this requirement as “relatively high, even after more than a half century of free public schools and universal education,” Bazemore v. Bertie County Board of Elections, 254 N. C. 398, 402, 119 S. E. 2d 637, 641 (1961), and a Negro minister active in voter registration testified that it placed an especially heavy burden on the County’s older Negro citizens. Appendix 131-132. It was publicized throughout the County that the literacy requirement would be enforced. A registrar told a Negro leader not to bring illiterates to register. Some Negroes who attempted to register were, in fact, rejected because they could not pass the test, and others did not attempt to register, knowing that they could not meet the standard.

With this evidence, the Government had not only put its contention in issue, but had made out a prima facie case. It is only reasonable to infer that among black children compelled to endure a segregated and inferior education, fewer will achieve any given degree of literacy than will their better-educated white contemporaries. And on the Government’s showing, it was certainly proper to infer that Gaston County’s inferior Negro schools provided many of its Negro residents with a subliterate education, and gave many others little inducement to enter or remain in school.

The only evidence introduced by the appellant in rebuttal was the testimony of Thebaud Jeffers, a Negro principal of a Negro high school, who had first come to Gaston County in 1932. He stated that “[a] 11 of our schools . . . would have been able to teach any Negro child to read and write so that he could read a newspaper, so that he could read any simple material,” and so that he could pass the literacy test. Appendix 169.

The District Court characterized Mr. Jeffers as an “interested witness,” and found his testimony “unpersuasive” when measured against the Government’s evidence. The court further noted that the principal’s knowledge about the school system dated only from 1932, by which time some of the more blatant educational disparities were being reduced. Almost one-half of the county’s black adults were of school age well before Mr. Jeffers’ arrival.

The District Court concluded that appellant had not met the burden imposed by § 4 (a) of the Voting Rights Act of 1965. This was not clearly erroneous.

III.

Appellant urges that it administered the 1962 reregistration in a fair and impartial manner, and that in recent years it has made significant strides toward equalizing and integrating its school system. Although we accept these claims as true, they fall wide of the mark. Affording today’s Negro youth equal educational opportunities will doubtless prepare them to meet, on equal terms, whatever standards of literacy are required when they reach voting age. It does nothing for their parents, however. From this record, we cannot escape the sad truth that throughout the years Gaston County systematically deprived its black citizens of the educational opportunities it granted to its white citizens. “Impartial” administration of the literacy test today would serve only to perpetuate these inequities in a different form.

The judgment of the District Court is

Affirmed.

Mr. Justice Black dissents for substantially the same reasons he stated in § (b) of his separate opinion in South Carolina v. Katzenbach, 383 U. S. 301, 355, 358.

       “The phrase ‘test or device’ shall mean any requirement that a person as a prerequisite for voting or registration for voting (1) demonstrate the ability to read, write, understand, or interpret any matter, (2) demonstrate any educational achievement or his knowledge of any particular subject, (3) possess good moral character, or (4) prove his qualifications by the voucher of registered voters or members of any other class.” Voting Rights Act of 1965, § 4 (c), 79 Stat. 438, 42 U. S. C. § 1973b (c) (1964 ed., Supp. III).

       §4 (a), 79 Stat. 438, 42 U. S. C. § 1973b (a) (1964 ed., Supp. III).

       N. C. Const., Art. VI, § 4, provides: “Every person presenting himself for registration shall be able to read and write any section of the Constitution in the English language.” At all times relevant to this case, N. C. Gen. Stat. § 163-28 mirrored the constitutional provision. In 1967 the statute was renumbered § 163-58 and its wording was amended in minor aspects.

       Judge Wright wrote the majority opinion, in which Judge Robinson joined. Judge Gasch dissented from the court’s holding, see infra, at 290-291, but would have denied appellant relief for different reasons.

       In view of this obvious relationship, and acknowledgment of it by the Attorney General and Congress, it is of no consequence that the Act was explicitly designed to enforce the Fifteenth, and not the Fourteenth, Amendment. See, e. g., Hearings on S. 1564 before the Senate Committee on the Judiciary, 89th Cong., 1st Sess., 141-142; Hearings on H. R. 6400 before Subcommittee No. 5 of the House Committee on the Judiciary, 89th Cong., 1st Sess., 49-50, 66, 102. The Act was, of course, concerned solely with voting rights, and discrimination in education bears on the Act only insofar as it may result in discriminatory abridgment of the franchise.

       Section 4 (b) of the Act makes the determinations by the Attorney General and the Director of the Census unreviewable in any court. “[T]he findings not subject to review consist of objective statistical determinations by the Census Bureau and a routine analysis of state statutes by the Justice Department. These functions are unlikely to arouse any plausible dispute.” South Carolina v. Katzenbach, 383 U. S. 301, 333 (1966).

       See n. 1, su-pra; Hearings on H. R. 6400 before Subcommittee No. 5 of the House Committee on the Judiciary, 89th Cong., 1st Sess., 30-31.

       We have no occasion to decide whether the Act would permit reinstatement of a literacy test in the face of racially disparate educational or literacy achievements for which a government bore no responsibility.

       We assume, and appellant does not suggest otherwise, that most of the adult residents of Gaston County resided there as children. Cf. Bureau of the Census, 1960 Census of Population, Vol. I, pt. 35, table 39. It would seem a matter of no legal significance that they may have been educated in other counties or States also maintaining segregated and unequal school systems.

        Gaston County v. United States, 288 F. Supp. 678, 686 (1968). Unless otherwise indicated, the facts and statistics set out below, which are not controverted, appear in the opinion of the District Court, 288 F. Supp., at 686-687, or in Government’s Exhibit No. 2 (Excerpts from the Reports of the Superintendent of Public Instruction of North Carolina).

       Elsewhere in its opinion, the court stated that a registrant must be able to read aloud, as well as copy, a section of the State Constitution. 254 N. C., at 404, 119 S. E. 2d, at 642. Appellant’s registrars required only that a registrant copy one of three sentences of the Constitution.

       This is, indeed, an inference that appears throughout the Act’s legislative history. See supra, at 289-290.


source: Caselaw Access Project

author: Me. Justice Brennan Mr. Justice Douglas, Mr. Justice Black,

license: Public Domain

text:
    DANIEL et al. v. PAUL.
    No. 488.
    Argued March 24 — 25, 1969.
    Decided June 2, 1969.

      Conrad K. Harper argued the cause for petitioners pro hac vice. With him on the brief were Jack Greenberg, James M. Nabrit III, and Norman C. Amaker.

      James W. Gallman, by invitation of the Court, 393 U. S. 1061, argued the cause and filed a brief as amicus curiae in support of the judgment below.

      Assistant Attorney General Leonard argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General Griswold and Louis F. Claiborne.

   Me. Justice Brennan

delivered the opinion of the Court.

Petitioners, Negro residents of Little Rock, Arkansas, brought this class action in the District Court for the Eastern District of Arkansas to enjoin respondent from denying them admission to a recreational facility called Lake Nixon Club owned and operated by respondent, Euell Paul, and his wife. The complaint alleged that Lake Nixon Club was a “public accommodation” subject to the provisions of Title II of the Civil Rights Act of 1964, 78 Stat. 243, 42 U. S. C. § 2000a et seq., and that respondent violated the Act in refusing petitioners admission solely on racial grounds. After trial, the District Court, although finding that respondent had refused petitioners admission solely because they were Negroes, dismissed the complaint on the ground that Lake Nixon Club was not within any of the categories of “public accommodations” covered by the 1964 Act. 263 F. Supp. 412 (1967). The Court of Appeals for the Eighth Circuit affirmed, one judge dissenting. 395 F. 2d 118 (1968). We granted certiorari. 393 U. S. 975 (1968). We reverse.

Lake Nixon Club, located 12 miles west of Little Rock, is a 232-acre amusement area with swimming, boating, sun bathing, picnicking, miniature golf, dancing facilities, and a snack bar. The Pauls purchased the Lake Nixon site in 1962 and subsequently operated this amusement business there in a racially segregated manner.

Title II of the Civil Rights Act of 1964 enacted a sweeping prohibition of discrimination or segregation on the ground of race, color, religion, or national origin at places of public accommodation whose operations affect commerce. This prohibition does not extend to discrimination or segregation at private clubs. But, as both courts below properly found, Lake Nixon is not a private club. It is simply a business operated for a profit with none of the attributes of self-government and member-ownership traditionally associated with private clubs. It is true that following enactment of the Civil Rights Act of 1964, the Pauls began to refer to the establishment as a private club. They even began to require patrons to pay a 25-cent “membership” fee, which gains a purchaser a “membership” card entitling him to enter the Club’s premises for an entire season and, on payment of specified additional fees, to use the swimming, boating, and miniature golf facilities. But this “membership” device seems no more than a subterfuge designed to avoid coverage of the 1964 Act. White persons are routinely provided “membership” cards, and some 100,000 whites visit the establishment each season. As the District Court found, Lake Nixon is “open in general to all of the public who are members of the white race.” 263 F. Supp., at 418. Negroes, on the other hand, are uniformly denied “membership” cards, and thus admission, because of the Pauls’ fear that integration would “ruin” the “business.” The conclusion of the courts below that Lake Nixon is not a private club is plainly correct— indeed, respondent does not challenge that conclusion here.

We therefore turn to the question whether Lake Nixon Club is “a place of public accommodation” as defined by § 201 (b) of the 1964 Act, and, if so, whether its operations “affect commerce” within the meaning of § 201 (c) of that Act.

Section 201 (b) defines four categories of establishments as covered public accommodations. Three of these categories are relevant here:

“Each of the following establishments which serves the public is a place of public accommodation within the meaning of this title if its operations affect commerce ....
“(2) any restaurant, cafeteria, lunchroom, lunch counter, soda fountain, or other facility principally engaged in selling food for consumption on the premises, including, but not limited to, any such facility located on the premises of any retail establishment; or any gasoline station;
“(3) any motion picture house, theater, concert hall, sports arena, stadium or other place of exhibition or entertainment; and
“(4) any establishment (A) . . . (ii) within the premises of which is physically located any such covered establishment, and (B) which holds itself out as serving patrons of such covered establishment.”

Section 201 (c) sets forth standards for determining whether the operations of an establishment in any of these categories affect commerce within the meaning of Title II:

“The operations of an establishment affect commerce within the meaning of this title if . . . (2) in the case of an establishment described in paragraph (2) [set out supra] ... , it serves or offers to serve interstate travelers or a substantial portion of the food which it serves, or gasoline or other products which it sells, has moved in commerce; (3) in the case of an establishment described in paragraph (3) [set out supra] ... , it customarily presents films, performances, athletic teams, exhibitions, or other sources of entertainment which move in commerce; and (4) in the case of an establishment described in paragraph (4) [set out supra] . . . , there is physically located within its premises, an establishment the operations of which affect commerce within the meaning of this subsection. For purposes of this section, ‘commerce’ means travel, trade, traffic, commerce, transportation, or communication among the several States . . . .”

Petitioners argue first that Lake Nixon’s snack bar is a covered public accommodation under §§ 201 (b) (2) and 201 (c) (2), and that as such it brings the entire establishment within the coverage of Title II under §§ 201 (b)(4) and 201 (c)(4). Clearly, the snack bar is “principally engaged in selling food for consumption on the premises.” Thus, it is a covered public accommodation if “it serves or offers to serve interstate travelers or a substantial portion of the food which it serves . . . has moved in commerce.” We find that the snack bar is a covered public accommodation under either of these standards.

The Pauls advertise the Lake Nixon Club in a monthly magazine called “Little Rock Today,” which is distributed to guests at Little Rock hotels, motels, and restaurants, to acquaint them with available tourist attractions in the area. Regular advertisements for Lake Nixon were also broadcast over two area radio stations. In addition, Lake Nixon has advertised in the “Little Rock Air Force Base,” a monthly newspaper published at the Little Rock Air Force Base, in Jacksonville, Arkansas. This choice of advertising media leaves no doubt that the Pauls were seeking broad-based patronage from an audience which they knew to include interstate travelers. Thus, the Láke Nixon Club unquestionably offered to serve out-of-state visitors to the Little Rock area. And it would be unrealistic to assume that none of the 100,000 patrons actually served by the Club each season was an interstate traveler. Since the Lake Nixon Club offered to serve and served out-of-state persons, and since the Club’s snack bar was established to serve all patrons of the entire facility, we must conclude that the snack bar offered to serve and served out-of-state persons. See Hamm v. Rock Hill, 379 U. S. 306, 309 (1964); see also Wooten v. Moore, 400 F. 2d 239 (C. A. 4th Cir. 1968).

The record, although not as complete on this point as might be desired, also demonstrates that a “substantial portion of the food” served by the Lake Nixon Club snack bar has moved in interstate commerce. The snack bar serves a limited fare — hot dogs and hamburgers on buns, soft drinks, and milk. The District Court took judicial notice of the fact that the “principal ingredients going into the bread were produced and processed in other States” and that “certain ingredients [of the soft drinks] were probably obtained . . . from out-of-State sources.” 263 F. Supp., at 418. Thus, at the very least, three of the four food items sold at the snack bar contain ingredients originating outside of the State. There can be no serious doubt that a “substantial portion of the food” served at the snack bar has moved in interstate commerce. See Katzenbach v. McClung, 379 U. S. 294, 296-297 (1964); Gregory v. Meyer, 376 F. 2d 509, 511, n. 1 (C. A. 5th Cir. 1967).

The snack bar’s status as a covered establishment automatically brings the entire Lake Nixon facility within the ambit of Title II. Civil Rights Act of 1964, §§ 201 (b)(4) and 201 (c)(4), set out supra; see H. R. Rep. No. 914, 88th Cong., 1st Sess., 20; Fazzio Real Estate Co. v. Adams, 396 F. 2d 146 (C. A. 5th Cir. 1968).

Petitioners also argue that the Lake Nixon Club is a covered public accommodation under §§201 (b)(3) and 201 (c)(3) of the 1964 Act. These sections proscribe discrimination by “any motion picture house, theater, concert hall, sports arena, stadium or other place of exhibition or entertainment” which “customarily presents films, performances, athletic teams, exhibitions, or other sources of entertainment which move in commerce.” Under any accepted definition of “entertainment,” the Lake Nixon Club would surely qualify as a “place of entertainment.” And indeed it advertises itself as such. Respondent argues, however, that in the context of § 201 (b) (3) “place of entertainment” refers only to establishments where patrons are entertained as spectators or listeners rather than those where entertainment takes the form of direct participation in some sport or activity. We find no support in the legislative history for respondent’s reading of the statute. The few indications of legislative intent are to the contrary.

President Kennedy, in submitting to Congress the public accommodations provisions of the proposed Civil Rights Act, emphasized that “no action is more contrary to the spirit of our democracy and Constitution— or more rightfully resented by a Negro citizen who seeks only equal treatment — than the barring of that citizen from restaurants, hotels, theatres, recreational areas and other public accommodations and facilities.” (Emphasis added.) While Title II was being considered by the Senate, a civil rights demonstration occurred at a Maryland amusement park. The then Assistant Majority Leader of the Senate, Hubert Humphrey, took note of the demonstration and opined that such an amusement park would be covered by the provisions which were eventually enacted as Title II:

“In this particular instance, I am confident that merchandise and facilities used in the park were transported across State lines.
“The spectacle of national church leaders being hauled off to jail in a paddy wagon demonstrates the absurdity of the present situation regarding equal access to public facilities in Maryland and the absurdity of the arguments of those who oppose title II of the President’s omnibus civil rights bill.” 109 Cong. Rec. 12276 (1963).

Senator Magnuson, floor manager of Title II, spoke in a similar vein.

Admittedly, most of the discussion in Congress regarding the coverage of Title II focused on places of spectator entertainment rather than recreational areas. But it does not follow that the scope of § 201 (b) (3) should be restricted to the primary objects of Congress’ concern when a natural reading of its language would call for broader coverage. In light of the overriding purpose of Title II “to remove the daily affront and humiliation involved in discriminatory denials of access to facilities ostensibly open to the general public,” H. R. Rep. No. 914, 88th Cong., 1st Sess., 18, we agree with the en banc decision of the Court of Appeals for the Fifth Circuit in Miller v. Amusement Enterprises, Inc., 394 F. 2d 342 (1968), that the statutory language “place of entertainment” should be given full effect according to its generally accepted meaning and applied to recreational areas.

The remaining question is whether the operations of the Lake Nixon Club “affect commerce” within the meaning of § 201 (c)(3). We conclude that they do. Lake Nixon’s customary “sources of entertainment . . . move in commerce.” The Club leases 15 paddle boats on a royalty basis from an Oklahoma company. Another boat was purchased from the same company. The Club’s juke box was manufactured outside Arkansas and plays records manufactured outside the State. The legislative history indicates that mechanical sources of entertainment such as these were considered by Congress to be “sources of entertainment” within the meaning of §201 (c)(3).

Reversed.

Mr. Justice Douglas,

concurring.

While I join the opinion of the Court, I also rest on the Fourteenth Amendment. My views were set forth in Bell v. Maryland, 378 U. S. 226, 242, where I said:

“Segregation of Negroes in the restaurants and lunch counters of parts of America is a relic of slavery. It is a badge of second-class citizenship. It is a denial of a privilege and immunity of national citizenship and of the equal protection guaranteed by the Fourteenth Amendment against abridgment by the States.” Id., 260.

And see my concurring opinion in Atlanta Motel v. United States, 379 U. S. 241, 279 et seq.

Mr. Justice Black,

dissenting.

I could and would agree with the Court’s holding in this case had Congress in the 1964 Civil Rights Act based its power to bar racial discrimination at places of public accommodations upon § 5 of the Fourteenth Amendment. But Congress in enacting this legislation did not choose to invoke this broad Fourteenth Amendment power to protect against racial discrimination; instead it tied the Act and limited its protection to congressional power to regulate commerce among the States. Both courts below found that respondent’s swimming and recreational place is covered by the Act if its operations “affect commerce” within the meaning of § 201 (c) of the Act. The Act itself, in § 201 (c), provides the test for determining whether this respondent’s recreational operations adversely affect interstate commerce. That test is to determine from evidence whether the operation of an establishment like respondent’s (a) “serves or offers to serve interstate travelers” or (b) “a substantial portion of the food which it serves, or gasoline or other products which it sells, has moved in commerce . . . .” In order, therefore, for the Act to be held to apply the test must be shown to be met by evidence and judicial findings, not by guesswork, or assumptions, or “judicial knowledge” of crucially relevant facts, or by unproved probabilities or possibilities. My trouble with the Court’s holding is that it runs roughshod over District Court findings supported by the record and emphatically affirmed by the Court of Appeals. Let us briefly review the facts and findings on the foregoing two separate conditions of the Act’s applicability.

(A) Did Lake Nixon serve or offer to serve interstate travelers? There is not a word of evidence showing that such an interstate traveler was ever there or ever invited there or ever dreamed of going there. Nixon Lake can be reached only by country roads. The record fails to show whether these country roads are passable in all kinds of weather. They seem to be at least six to eight miles off the state or interstate roads over which interstate travelers are accustomed to travel. Petitioners did not offer evidence to show whether Lake Nixon is a natural lake, or whether it is simply a small body of water obtained by building a dam across a little creek in a narrow hollow between the hills. The District Court made findings about Lake Nixon and Spring Lake as follows:

“Both are accessible by country roads; neither is located on or near a State or federal highway. There is no evidence that either facility has ever tried to attract interstate travelers as such, and the location of the facilities is such that it would be in the highest degree unlikely that an interstate traveler would break his trip for the purpose of utilizing either establishment.” 263 F. Supp. 412, 418.

The foregoing finding is not impaired by this additional statement of the District Judge:

“Of course, it is probably true that some out-of-State people spending time in or around Little Rock have utilized one or both facilities.” Ibid.

In the first place the court’s statement that “it is probably true” takes this out of the category of a finding of fact; and secondly, “out-of-State people spending time in or around Little Rock” who happened to visit Lake Nixon would certainly not be the kind of “interstate travelers” doing the kind of interstate traveling that would “affect” interstate commerce.

The Court of Appeals, affirming the findings of the District Court, said:

“There is no evidence that any interstate traveler ever patronized this facility, or that it offered to serve interstate travelers . . . .” 395 F. 2d 118, 127.

This Court rejects these joint findings of the two courts below in this way. Referring to advertisements of Lake Nixon in a monthly magazine distributed at Little Rock hotels, motels, and restaurants, to radio announcements, and to advertisements in the “Little Rock Air Force Base,” this Court says:

“Thus, the Lake Nixon Club unquestionably offered to serve out-of-state visitors to the Little Rock area. And it would be unrealistic to assume that none of the 100,000 patrons actually served by the Club each season was an interstate traveler.”

In the above statement this Court jumps from the fact that there were an estimated number of admissions onto the club premises during a season to the conclusion that some one or more of these was an “interstate traveler” and that the owners of the premises, Mr. and Mrs. Paul, were bound to know that there were interstate travelers present. That conclusion is far too speculative to be used as a means of rejecting the solemn findings of the two courts below. If the facts here are to be left to such “iffy” conjectures, one familiar with country life and traveling would, it seems to me, far more likely conclude that travelers on interstate journeys would stick to their interstate highways, and not go miles off them by way of what, for all this record shows, may well be dusty, unpaved, “country” roads to go to a purely local swimming hole where the only food they could buy was hamburgers, hot dogs, milk, and soft drinks (but not beer). This is certainly not the pattern of interstate movements I would expect interstate travelers in search of tourist attractions to follow.

(B) The second prong of the test to determine applicability of the Act to Lake Nixon is whether a “substantial portion” of the hamburgers, milk, and soda pop sold there had previously moved in interstate commerce. The Court’s opinion generously concedes that the record is “not as complete on this point as might be desired . .. .” This is certainly no exaggeration. In fact, I would go further and agree with the two courts below that the record is totally devoid of evidence to show that a “substantial portion” of the small amount of food sold had previously moved in interstate commerce. The District Court found as follows on this point:

“Food and soft drinks are purchased locally by both establishments. The record before the Court does not disclose where or how the local suppliers obtained the products which they sold to the establishments. The meat products sold by defendants may or may not have come from animals raised, slaughtered, and processed in Arkansas. The bread used by defendants was baked and packaged locally, but judicial notice may be taken of the fact that the principal ingredients going into the bread were produced and processed in other States. The soft drinks were bottled locally, but certain ingredients were probably obtained by the bottlers from out-of-State sources.” 263 F. Supp., at 418.

Fact-findings on serious problems like this one, which involves marking the jurisdictional authority of State and Nation, should not be made on the basis of “judicial notice” and on probabilities not based on evidence. The Court of Appeals approved this finding of the District Court that a substantial part of the food served at Lake Nixon had not previously moved in interstate commerce. The Court of Appeals said:

“With regard to whether a substantial portion of the food which Lake Nixon serves has moved in commerce, the trial court found that food and soft drinks were purchased locally by the Club but noted that the record before the court did not disclose where or how the local suppliers obtained the products. The court further observed that the meat products sold by the defendants may or may not have come from animals raised, slaughtered, and processed in Arkansas. It also made an observation that the bread used in the sandwiches was baked and packaged locally but took judicial notice that the principal ingredients going into the bread were produced and processed in other states. This observation on the part of the court, however, was entirely voluntary, and the ingredients in the bread would not constitute a substantial part of the food served. We might add that it is a matter of common knowledge that Borden’s of Arkansas, which the record shows supplied the milk, obtains the unprocessed milk for its local plant from Arkansas dairy farmers.” 395 F. 2d, at 124.

Finally, the Court mentions, almost as an afterthought, Lake Nixon’s 15 paddle boats leased from an Oklahoma company on a royalty basis. As to these paddle boats the Court of Appeals said: “It is common knowledge that annually thousands of this type boat are manufactured locally in Arkansas, and there is no evidence whatsoever that any of the equipment moved in interstate commerce.” 395 F. 2d, at 125.

The Court’s opinion also mentions a juke box leased by Lake Nixon from the juke box’s local owner. The Court apparently refers to this juke box on the premise that playing music and dancing makes an establishment the kind of place of “entertainment” that is covered by § 201 (b)(3) of the Act. The Court of Appeals pointed out that Senator Magnuson, floor manager of this part of the Act, said that dance studios would be exempt under the Act. 110 Cong. Rec. 7406. Also, Senator Humphrey, a leading proponent of the measure, said:

“The deletion of the coverage of retail establishments generally is illustrative of the moderate nature of this bill and of its intent to deal only with the problems which urgently require solution.” 110 Cong. Rec. 6533.

See also Miller v. Amusement Enterprises, Inc., 394 F. 2d 342.

It seems clear to me that neither the paddle boats nor the locally leased juke box is sufficient to justify a holding that the operation of Lake Nixon affects interstate commerce within the meaning of the Act. While it is the duty of courts to enforce this important Act, we are not called on to hold nor should we hold subject to that Act this country people’s recreation center, lying in what may be, so far as we know, a little “sleepy hollow” between Arkansas hills miles away from any interstate highway. This would be stretching the Commerce Clause so as to give the Federal Government complete control over every little remote country place of recreation in every nook and cranny of every precinct and county in every one of the 50 States. This goes too far for me. I would affirm the judgments of the two courts below.

       Petitioners alleged that the denial of admission also constitutes a violation of the Civil Rights Act of 1866, as amended, 14 Stat. 27, now 42 U. S. C. § 1981. Neither the District Court nor the Court of Appeals passed on this contention. Our conclusion makes it unnecessary to consider the question.

       Respondent at trial answered affirmatively a question of the trial judge whether Negroes were denied admission “simply . . . because they were Negroes.” Respondent’s answer to an interrogatory why Negroes were refused admission was: “[w]e refused admission to them because white people in our community would not patronize us if we admitted Negroes to the swimming pool. Our business would be ruined and we have our entire life savings in it.”

       Section 201 (a) of the Act provides:
      “All persons shall be entitled to the full and equal enjoyment of the goods, services, facilities, privileges, advantages, and accommodations of any place of public accommodation, as defined in this section, without discrimination or segregation on the ground of race, color, religion, or national origin.”

       Section 201 (e) of the Act provides:
      “The provisions of this title shall not apply to a private club or other establishment not in fact open to the public, except to the extent that the facilities of such establishment are made available to the customers or patrons of an establishment within the scope of subsection (b).”

       The District Court, which did not find it necessary to decide whether the snack bar served or offered to serve interstate travelers, conceded that: “It is probably true that some out-of-State people spending time in or around Little Rock have utilized [Lake Nixon’s] facilities.” 263 F. Supp., at 418.

       Accord: Evans v. Laurel Links, Inc., 261 F. Supp. 474 (D. C. E. D. Va. 1966); United States v. Fraley, 282 F. Supp. 948 (D. C. M. D. N. C. 1968); United States v. All Star Triangle Bowl, Inc., 283 F. Supp. 300 (D. C. S. C. 1968).

       Webster’s Third New International Dictionary, at 757, defines “entertainment” as “the act of diverting, amusing, or causing someone’s time to pass agreeably: [synonymous with] amusement.”

       Respondent advertised over a local radio station that “Lake Nixon continues their policy of offering you year-round entertainment.”

       Special Message to the Congress on Civil Rights and Job Opportunities, June 19, 1963, in Public Papers of the Presidents, John F. Kennedy, 1963, at 485. This statement was originally made in a Special Message to the Congress on Civil Rights, Feb. 28, 1963, in Public Papers, supra, at 228.

       “Motion picture theaters which refuse to admit Negroes will obviously draw patrons from a narrower segment of the market than if they were open to patrons of all races. . . . Thus, the demand for films from out of State, and the royalties from such films, will be less.
      “These principles are applicable not merely to motion picture theaters but to other establishments which receive supplies, equipment, or goods through the channels of interstate commerce. If these establishments narrow their potential markets by artificially restricting their patrons to non-Negroes, the volume of sales and, therefore, the volume of interstate purchases will be less.” (Emphasis added.) 110 Cong. Rec. 7402 (1964).

       The Senate rejected an amendment which would have ruled out most mechanical sources by requiring that the source of entertainment be one which has “not come to rest within a State.” 110 Cong. Rec. 13915-13921 (1964). See also the remarks of Senator Mag-nuson, supra, n. 10.

       “The Congress shall have power to enforce by appropriate legislation, the provisions of this article.” U. S. Const., Arndt. XIV, §5. See concurring opinion of Mr. Justice Clark, which I joined, in United States v. Guest, 383 U. S. 745, 761.

       The District Court held hearings and made findings concerning Lake Nixon and another establishment, Spring Lake, in a single trial. No appeal was taken from the District Court’s decision holding that Spring Lake was not covered by the Act.

       In fact, Mr. Paul testified under oath that no interstate travelers were members of the ‘‘club,” that they had not invited any to join, and that as far as he knew, none had ever used the premises.

       “(b) Each of the following establishments which serves the public is a place of public accommodation within the meaning of this title if its operations affect commerce, or if discrimination or segregation by it is supported by State action:
      “(3) any motion picture house, theater, concert hall, sports arena, stadium or other place of exhibition or entertainment;”
      An establishment affects commerce within the meaning of this subsection if, according to § 201 (c) the Act, “it customarily presents films, performances, athletic teams, exhibitions, or other sources of entertainment which move in commerce . . .

       In my opinion in Atlanta Motel v. United States, 379 U. S. 241, 268, which also applies to Katzenbach v. McClung, 379 U. S. 294, concurring in the Court’s decision upholding the application of this Act to an Atlanta, Georgia, motel and a Birmingham, Alabama, restaurant, I said:
      “I recognize that every remote, possible, speculative effect on commerce should not be accepted as an adequate constitutional ground to uproot and throw into the discard all our traditional distinctions between what is purely local, and therefore controlled by state laws, and what affects the national interest and is therefore subject to control by federal laws. I recognize too that some isolated and remote lunchroom which sells only to local people and buys almost all its supplies in the locality may possibly be beyond the reach of the power of Congress to regulate commerce, just as such an establishment is not covered by the present Act.” 379 U. S., at 275.


author: Mk. Justice Marshall Mr. Justice Douglas,

text:
    UNITED STATES v. ESTATE OF GRACE et al.
    No. 574.
    Argued April 22, 1969.
    Decided June 2, 1969.

      Solicitor General Griswold argued the cause for the United States. With him on the brief were Acting Assistant Attorney General Roberts, Harris Weinstein, Harry Baum, Philip R. Miller, and Stuart A. Smith.

      William S. Downard argued the cause for respondents. With him on the brief was Walter J. Rockier.

   Mk. Justice Marshall

delivered the opinion of the Court.

This case involves the application of § 811 (c)(1)(B) of the Internal Revenue Code of 1939 to a so-called “reciprocal trust” situation. After Joseph P. Grace’s death in 1950, the Commissioner of Internal Revenue determined that the value of a trust created by his wife was includible in his gross estate. A deficiency was assessed and paid, and, after denial of a claim for a refund, this refund suit was brought. The Court of Claims, with two judges dissenting, ruled that the value of the trust was not includible in decedent’s estate under § 811 (c) (1)(B) and entered judgment for respondent. Estate of Grace v. United States, 183 Ct. Cl. 745, 393 F. 2d 939 (1968). We granted certiorari because of an alleged conflict between the decision below and certain decisions in the courts of appeals and because of the importance of the issue presented to the administration of the federal estate tax laws. 393 U. S. 975 (1968). We reverse.

I.

Decedent was a very wealthy man at the time of his marriage to the late Janet Grace in 1908. Janet Grace had no wealth or property of her own, but, between 1908 and 1931, decedent transferred to her a large amount of personal and real property, including the family’s Long Island estate. Decedent retained effective control over the family’s business affairs, including the property transferred to his wife. She took no interest and no part in business affairs and relied upon her husband’s judgment. Whenever some formal action was required regarding property in her name, decedent would have the appropriate instrument prepared and she would execute it.

On December 15, 1931, decedent executed a trust instrument, hereinafter called the Joseph Grace trust. Named as trustees were decedent, his nephew, and a third party. The trustees were directed to pay the income of the trust to Janet Grace during her lifetime, and to pay to her any part of the principal which a majority of the trustees might deem advisable. Janet was given the power to designate, by will or deed, the manner in which the trust estate remaining at her death was to be distributed among decedent and their children. The trust properties included securities and real estate interests.

On December 30, 1931, Janet Grace executed a trust instrument, hereinafter called the Janet Grace trust, which was virtually identical to the Joseph Grace trust. The trust properties included the family estate and corporate securities, all of which had been transferred to her by decedent in preceding years.

The trust instruments were prepared by one of decedent’s employees in accordance with a plan devised by decedent to create additional trusts before the advent of a new gift tax expected to be enacted the next year. Decedent selected the properties to be included in each trust. Janet Grace, acting in accordance with this plan, executed her trust instrument at decedent’s request.

Janet Grace died in 1937. The Joseph Grace trust terminated at her death. Her estate’s federal estate tax return disclosed the Janet Grace trust and reported it as a nontaxable transfer by Janet Grace. The Commissioner asserted that the Janet and Joseph Grace trusts were “reciprocal” and asserted a deficiency to the extent of mutual value. Compromises on unrelated issues resulted in 55% of the smaller of the two trusts, the Janet Grace trust, being included in her gross estate.

Joseph Grace died in 1950. The federal estate tax return disclosed both trusts. The Joseph Grace trust was reported as a nontaxable transfer and the Janet Grace trust was reported as a trust under which decedent held a limited power of appointment. Neither trust was included in decedent’s gross estate.

The Commissioner determined that the Joseph and Janet Grace trusts were “reciprocal” and included the amount of the Janet Grace trust in decedent’s gross estate. A deficiency in the amount of $363,500.97, plus interest, was assessed and paid.

II.

Section 811 (c)(1)(B) of the Internal Revenue Code of 1939 provided that certain transferred property in which a decedent retained a life interest was to be included in his gross estate. The general purpose of the statute was to include in a decedent’s gross estate transfers that are essentially testamentary — i. e., transfers which leave the transferor a significant interest in or control over the property transferred during his lifetime. See Commissioner v. Estate of Church, 335 U. S. 632, 643-644 (1949).

The doctrine of reciprocal trusts was formulated in response to attempts to draft instruments which seemingly avoid the literal terms of §811 (c)(1)(B), while still leaving the decedent the lifetime enjoyment of his property. The doctrine dates from Lehman v. Commissioner, 109 F. 2d 99 (C. A. 2d Cir.), cert. denied, 310 U. S. 637 (1940). In Lehman, decedent and his brother owned equal shares in certain stocks and bonds. Each brother placed his interest in trust for the other’s benefit for life, with remainder to the life tenant’s issue. Each brother also gave the other the right to withdraw $150,000 of the principal. If the brothers had each reserved the right to withdraw $150,000 from the trust that each had created, the trusts would have been in-cludible in their gross estates as interests of which each had made a transfer with a power to revoke. When one of the brothers died, his estate argued that neither trust was includible because the decedent did not have a power over a trust which he had created.

The Second Circuit disagreed. That court ruled that the effect of the transfers was the same as if the decedent had transferred his stock in trust for himself, remainder to his issue, and had reserved the right to withdraw $150,000. The court reasoned:

“The fact that the trusts were reciprocated or ‘crossed’ is a trifle, quite lacking in practical or legal significance. . . . The law searches out the reality and is not concerned with the form.” 109 F. 2d, at 100.

The court ruled that the decisive point was that each brother caused the other to make a transfer by establishing his own trust.

The doctrine of reciprocal trusts has been applied numerous times since the Lehman decision. It received congressional approval in § 6 of the Technical Changes Act of 1949, 63 Stat. 893. The present case is, however, this Court’s first examination of the doctrine.

The Court of Claims was divided over the requirements for application of the doctrine to the situation of this case. Relying on some language in Lehman and certain other courts of appeals’ decisions, the majority held that the crucial factor was whether the decedent had established his trust as consideration for the establishment of the trust of which he was a beneficiary. The court ruled that decedent had not established his trust as a quid pro quo for the Janet Grace trust, and that Janet Grace had not established her trust in exchange for the Joseph Grace trust. Rather, the trusts were found to be part of an established pattern of family giving, with neither party desiring to obtain property from the other. Indeed, the court found that Janet Grace had created her trust because decedent requested that she do so. It therefore found the reciprocal trust doctrine inapplicable.

The court recognized that certain cases had established a slightly different test for reciprocity. Those cases inferred consideration from the establishment of two similar trusts at about the same time. The court held that any inference of consideration was rebutted by the evidence in the case, particularly the lack of any evidence of an estate tax avoidance motive on the part of the Graces. In contrast, the dissent felt that the majority’s approach placed entirely too much weight on subjective intent. Once it was established that the trusts were interrelated, the dissent felt that the subjective intent of the parties in establishing the trusts should become irrelevant. The relevant factor was whether the trusts created by the settlors placed each other in approximately the same objective economic position as they would have been in if each had created his own trust with himself, rather than the other, as life beneficiary.

We agree with the dissent that the approach of the Court of Claims majority places too much emphasis on the subjective intent of the parties in creating the trusts and for that reason hinders proper application of the federal estate tax laws. It is true that there is language in Lehman and other cases that would seem to support the majority’s approach. It is also true that the results in some of those cases arguably support the decision below. Nevertheless, we think that these cases are not in accord with this Court’s prior decisions interpreting related provisions of the federal estate tax laws.

Emphasis on the subjective intent of the parties in creating the trusts, particularly when those parties are members of the same family unit, creates substantial obstacles to the proper application of the federal estate tax laws. As this Court said in Estate of Spiegel v. Commissioner, 335 U. S. 701, 705-706 (1949):

“Any requirement . . . [of] a post-death attempt to probe the settlor’s thoughts in regard to the transfer, would partially impair the effectiveness of . . . [section 811 (c)] as an instrument to frustrate estate tax evasions.”

We agree that “the taxability of a trust corpus . . . does not hinge on a settlor’s motives, but depends on the nature and operative effect of the trust transfer.” Id., at 705. See also Commissioner v. Estate of Church, supra.

We think these observations have particular weight when applied to the reciprocal trust situation. First, inquiries into subjective intent, especially in intrafamily transfers, are particularly perilous. The present case illustrates that it is, practically speaking, impossible to determine after the death of the parties what they had in mind in creating trusts over 30 years earlier. Second, there is a high probability that such a trust arrangement was indeed created for tax-avoidance purposes. And, even if there was no estate-tax-avoidance motive, the settlor in a very real and objective sense did retain an economic interest while purporting to give away his property. Finally, it is unrealistic to assume that the settlors of the trusts, usually members of one family unit, will have created their trusts as a bargained-for exchange for the other trust. “Consideration,” in the traditional legal sense, simply does not normally enter into such intrafamily transfers.

For these reasons, we hold that application of the reciprocal trust doctrine is not dependent upon a finding that each trust was created as a quid pro quo for the other. Such a “consideration” requirement necessarily involves a difficult inquiry into the subjective intent of the settlors. Nor do we think it necessary to prove the existence of a tax-avoidance motive. As we have said above, standards of this sort, which rely on subjective factors, are rarely workable under the federal estate tax laws. Rather, we hold that application of the reciprocal trust doctrine requires only that the trusts be interrelated, and that the arrangement, to the extent of mutual value, leaves the settlors in approximately the same economic position as they would have been in had they created trusts naming themselves as life beneficiaries.

Applying this test to the present case, we think it clear that the value of the Janet Grace trust fund must be included in decedent’s estate for federal estate tax purposes. It is undisputed that the two trusts are interrelated. They are substantially identical in terms and were created at approximately the same time. Indeed, they were part of a single transaction designed and carried out by decedent. It is also clear that the transfers in trust left each party, to the extent of mutual value, in the same objective economic position as before. Indeed, it appears, as would be expected in transfers between husband and wife, that the effective position of each party vis-á-vis the property did not change at all. It is no answer that the transferred properties were different in character. For purposes of the estate tax, we think that economic value is the only workable criterion. Joseph Grace’s estate remained undiminished to the extent of the value of his wife’s trust and the value of his estate must accordingly be increased by the value of that trust.

The judgment of the Court of Claims is reversed and the case is remanded for further proceedings consistent with this opinion.

It is so ordered.

Mr. Justice Stewart took no part in the consideration or decision of this case.

Mr. Justice Douglas,

dissenting.

The object of a reciprocal trust, as I understand it, is for each settlor to rid himself of all taxable power over the corpus by exchanging taxable powers with the other settlor. Yet Joseph P. Grace and his wife did not exchange taxable powers. Each retained a sufficient power over the corpus to require the inclusion of the corpus in his or her taxable estate. Each settlor, as one of the three trustees, reserved the right to alter the trust by paying to the chief beneficiary “any amounts of the principal of the said trust, up to and including the whole thereof, which the said Trustees or a majority of them may at any time or from time to time deem advisable.” I have quoted from Janet Grace’s trust. But an almost identical provision is in the trust of Joseph P. Grace.

I would conclude from the existence of this reserved power that the corpus of the Janet Grace trust was includible in her estate for purposes of the estate tax. Lober v. United States, 346 U. S. 335.

That is to say the use of a reciprocal trust device to aid the avoidance of an estate tax is simply not presented by this case.

I would dismiss the petition as improvidently granted.

       Section 811 (c) (1) (B) provided that—
      “The value of the gross estate of the decedent shall be determined by including the value at the time of his death of all property . . .
      “(c) . . .
      “(1) General rule. To the extent of any interest therein of which the decedent has at any time made a transfer (except in case of a bona fide sale for an adequate and full consideration in money or money’s worth), by trust or otherwise—
      “(B) under which he has retained for his life or for any period not ascertainable without reference to his death or for any period which does not in fact end before his death (i) the possession or enjoyment of, or the right to the income from, the property, or (ii) the right, either alone or in conjunction with any person, to designate the persons who shall possess or enjoy the property or the income therefrom . . . .”
      Section 811 (c) (1) (B) has been recodified as § 2036 of the Internal Revenue Code of 1954, 26 U. S. C. § 2036.

       See Colgan & Molloy, Converse Trusts — The Rise And Fall Of A Tax Avoidance Device, 3 Tax L. Rev. 271 (1948).

       See, e. g., Glaser v. United States, 306 F. 2d 57 (C. A. 7th Cir. 1962); Estate of Moreno v. Commissioner, 260 F. 2d 389 (C. A. 8th Cir. 1958); Hanauer’s Estate v. Commissioner, 149 F. 2d 857 (C. A. 2d Cir.), cert. denied, 326 U. S. 770 (1945); Cole’s Estate v. Commissioner, 140 F. 2d 636 (C. A. 8th Cir. 1944).

       See S. Rep. No. 831, 81st Cong., 1st Sess., 5-6 (1949); H. R. Rep. No. 920, 81st Cong., 1st Sess., 5 (1949).

       See McLain v. Jarecki, 232 F. 2d 211 (C. A. 7th Cir. 1956); Newberry’s Estate v. Commissioner, 201 F. 2d 874 (C. A. 3d Cir. 1953); In re Lueder’s Estate, 164 F. 2d 128 (C. A. 3d Cir. 1947).

        E. g., Orvis v. Higgins, 180 F. 2d 537 (C. A. 2d Cir.), cert. denied, 340 U. S. 810 (1950).

       See cases cited in n. 5, supra.

       For example, in the present case decedent ostensibly devised the trust plan to avoid an imminent federal gift tax. Instead of establishing trusts for the present benefit of his children, he chose an arrangement under which he and his wife retained present enjoyment of the property and under which the property would pass to their children without imposition of either estate or gift tax.

       The present case is probably typical in this regard. Janet Grace created her trust because decedent requested that she do so; it was in no real sense a bargained-for quid pro quo for his trust. See also Hanauer’s Estate v. Commissioner, supra, n. 3.

       We do not mean to say that the existence of “consideration,” in the traditional legal sense of a bargained-for exchange, can never be relevant. In certain cases, inquiries into the settlor’s reasons for creating the trusts may be helpful in establishing the requisite link between the two trusts. We only hold that a finding of a bargained-for consideration is not necessary to establish reciprocity.

      The relevant provision of the 1939 Internal Revenue Code (§811 (d)(2)) is practically identical with the corresponding provision of the 1954 Code (26 U. S. C. § 2038 (a) (2)). Each provides that a decedent’s gross estate shall include property—
      “To the extent of any interest therein of which the decedent has at any time made a transfer . . . where the enjoyment thereof was subject at the date of his death to any change through the exercise of a power ... by the decedent alone or in conjunction with any person, to alter, amend, or revoke . . . .” (Emphasis supplied.) The provisions of the Joseph and Janet Grace trusts would seem to satisfy that test, for only two out of the three trustees were necessary to alter the trust. See Helvering v. City Bank Co., 296 U. S. 85.


author: Mr. Justice Marshall Me. Justice Harlan,

text:
    RODRIQUEZ v. UNITED STATES.
    No. 749.
    Argued March 26, 1969.
    Decided June 2, 1969.

      William Ross Wallace, by appointment of the Court, 393 U. S. 974, argued the cause and filed a brief for petitioner.

      Beatrice Rosenberg argued the cause for the United States. With her on the brief were Solicitor General Griswold, Assistant Attorney General Wilson, and Lawrence G. Wallace.

   Mr. Justice Marshall

delivered the opinion of the Court.

Petitioner brought this suit for post-conviction relief under 28 U. S. C. § 2255, alleging that after his conviction on several narcotics charges he had been improperly denied his right to appeal. Petitioner was sentenced to 11 concurrent 20-year terms on June 20, 1963. Immediately after the sentencing, petitioner’s retained counsel attempted to make a motion requesting leave for petitioner to proceed in forma pauperis. The trial judge cut petitioner’s counsel off, saying that all motions had to be in writing. Without making any further inquiry, he adjourned the court. No written motions were ever filed, and petitioner’s counsel did not submit a notice of appeal within the 10-day period specified by the applicable rule. On August 7, 1963, after the time had expired, petitioner attempted to file a notice of appeal himself. He declared that an oral notice had been given at trial. The trial judge ruled that the expiration of the appeal period deprived the court of jurisdiction. Petitioner then sought relief in the Court of Appeals for the Ninth Circuit. He alleged that he had told his counsel to perfect an appeal, but that counsel had failed to do so. The Ninth Circuit denied petitioner’s motion for lack of jurisdiction, citing United States v. Robinson, 361 U. S. 220 (1960). It also refused habeas corpus.

This action was commenced on February 15, 1966. Petitioner alleged that he was of Mexican descent and that his knowledge of English was limited. He further contended that his retained counsel had fraudulently deprived him of his right to appeal. He asked that his conviction be set aside and that he be resentenced so that he could properly take an appeal. The District Court for the Northern District of California denied petitioner’s application and the Ninth Circuit affirmed. 387 F. 2d 117 (1967). Both courts relied on a Ninth Circuit rule requiring applicants in petitioner’s position to disclose what errors they would raise on appeal and to demonstrate that denial of an appeal had caused prejudice. We granted certiorari to resolve a conflict among the circuits about the propriety of such a requirement. 393 U. S. 951 (1968). We reverse.

I.

As this Court has noted before, “[p] resent federal law has made an appeal from a District Court’s judgment of conviction in a criminal case what is, in effect, a matter of right.” Coppedge v. United States, 369 U. S. 438, 441 (1962). The Ninth Circuit seems to require an applicant under 28 U. S. C. § 2255 to show more than a simple deprivation of this right before relief can be accorded. It also requires him to show some likelihood of success on appeal; if the applicant is unlikely to succeed, the Ninth Circuit would characterize any denial of the right to appeal as a species of harmless error. We cannot subscribe to this approach.

Applicants for relief under § 2255 must, if indigent, prepare their petitions without the assistance of counsel. See Johnson v. Avery, 393 U. S. 483, 487-488 (1969). Those whose education has been limited and those, like petitioner, who lack facility in the English language might have grave difficulty in making even a summary statement of points to be raised on appeal. Moreover, they may not even be aware of errors which occurred at trial. They would thus be deprived of their only chance to take an appeal even though they have never had the assistance of counsel in preparing one. Like the approach rejected long ago in Powell v. Alabama, 287 U. S. 45, 69 (1932), the Ninth Circuit’s requirement makes an indigent defendant face “the danger of conviction because he does not know how to establish his innocence.” Moreover, the Ninth Circuit rule would require the sentencing court to screen out supposedly unmeritorious appeals in ways this Court rejected in Coppedge. Those whose right to appeal has been frustrated should be treated exactly like any other appellants; they should not be given an additional hurdle to clear just because their rights were violated at some earlier stage in the proceedings. Accordingly, we hold that the courts below erred in rejecting petitioner’s application for relief because of his failure to specify the points he would raise were his right to appeal reinstated.

II.

The Government, while not arguing that the courts below properly denied relief on the pleadings, urges us to remand this case for a truncated factual hearing. Drawing upon this Court’s recognition in Machibroda v. United States, 368 U. S. 487, 495 (1962), that the hearing requirement of § 2255 “does not strip the district courts of all discretion to exercise their common sense,” the Government suggests that the District Court be instructed to obtain an affidavit from petitioner’s trial attorney explaining why no notice of appeal was filed. This explanation, together with petitioner’s allegations, would be used to judge the propriety of a hearing.

This issue was not present in this case when certiorari was granted and we do not think it is present now. For we think it “just under the circumstances,” 28 U. S. C. § 2106, for us to dispose of petitioner’s arguments finally at this stage. Six years have now elapsed since petitioner was sentenced, and we do not see how further delay and further prolonged proceedings would serve the cause of justice. Moreover, it appears from the trial transcript in this case that the trial judge erroneously failed to advise petitioner of his right to appeal. At the time of trial, Fed. Rule Crim. Proc. 37 (a)(2) required the sentencing judge to inform unrepresented defendants of their right to appeal; the clerk upon request was required to file a notice of appeal for the defendant. Counsel’s attempt to obtain leave for petitioner to proceed in forma pauperis should have put the trial judge on notice that petitioner would be unrepresented in the future. Moreover, unless an appeal was contemplated, there would be no reason to make such a motion. As the trial judge should have recognized, petitioner was therefore precisely the kind of defendant who needed the protection afforded by the rule. Had he known that the clerk would file a notice of appeal for him, he could easily have avoided the difficulties he has faced. At the very least, the trial judge should have inquired into the circumstances surrounding the attempt to make the in forma pauperis motion. His failure to do so effectively deprived petitioner of his right to appeal. Since this deprivation appears on the record before us, we see no need for any factual determinations on remand. Cf. United States v. Smith, 387 F. 2d 268 (C. A. 6th Cir. 1967).

The judgment is reversed and the case is remanded to the District Court where petitioner should be resentenced so that he may perfect an appeal in the manner prescribed by the applicable rules.

It is so ordered.

Me. Justice Harlan,

concurring in part and dissenting in part.

I agree with Part I of the Court’s opinion, but cannot subscribe to Part II, in which the Court reinstates petitioner’s right to appeal without further proceedings below. In taking this course I think the Court has been too insensitive to what, on this record, is due the trial judge, petitioner’s trial counsel, and the orderly administration of the criminal process.

In my opinion, this record does not show that petitioner was wrongfully denied an opportunity to appeal. It appears from the record that immediately following petitioner’s sentencing his lawyer indicated orally that petitioner wished to appeal in forma pauperis, and that the judge informed the lawyer that “all motions” had to be made in writing. Thereafter no written notice of appeal was filed within the 10-day limit. Petitioner further alleges that he told his counsel to perfect an appeal and that counsel neglected to do so, but those allegations have never been tested by the adversary process.

The Court undertakes to justify its decision not to require a hearing and findings on this score by characterizing as “error” the sentencing judge’s failure “to advise petitioner of his right to appeal,” as then supposedly required by Fed. Rule Crim. Proc. 37 (a)(2), and by concluding that it is “just under the circumstances,” 28 U. S. C. § 2106, to dispose of the case at this level. See ante, at 331-332.

Although I share the Court’s concern that petitioner receive promptly all relief which is legally due him, I am unable to accept either this attribution of “error” to the trial judge or this bypassing of established methods for determining the truth of factual allegations. At the time petitioner was sentenced, Rule 37 (a) (2) required that a sentencing judge advise only “a defendant not represented by counsel” of his right to appeal. (Emphasis supplied.) In this instance, petitioner was represented by retained counsel both at trial and at sentencing. The excerpts from the trial transcript upon which the Court relies contain nothing at all to rebut the natural inference, apparently drawn by the sentencing judge, that petitioner’s counsel would continue to represent him at least for the purpose of filing a notice of appeal. Indeed, petitioner’s own statement of the facts reveals that this inference was wholly justified, for petitioner asserts that after his sentencing “his counsel advised both him and his wife that he would arrange for their appeals.” Thus, even if it is assumed that “the trial judge should have inquired into the circumstances surrounding the attempt to make the in forma pauperis motion,” ante, at 332, the judge’s omission was surely at most harmless error.

I would therefore remand the case to the District Court, so that it may be determined whether petitioner in fact did instruct his attorney to perfect an appeal and whether the attorney in fact neglected to do so. This course seems to me to be required both in the interest of orderly procedure and in fairness to petitioner’s trial attorney.

Furthermore, as suggested by the Government, I would permit the District Court discretion to begin by obtaining an affidavit from petitioner’s attorney in response to petitioner’s allegations. Who knows whether the attorney may not have in his possession documentary evidence conclusively showing the allegations to be unfounded? Or who knows whether the attorney may not wish to concede the accuracy of the allegations? In either case, the affidavit procedure might obviate the necessity for a full-blown hearing. If the attorney has no documentary evidence, and if his affidavit reveals a factual controversy, then of course a hearing would be required. Such a procedure entirely fits the language of 28 U. S. C. § 2255 and this Court’s statement in Machibroda v. United States, 368 U. S. 487, 495 (1962), that § 2255 “does not strip the district courts of all discretion to exercise their common sense.”

       Fed. Rule Crim. Proc. 37 (a), now Fed. Rule App. Proc. 4 (b).

       The Ninth Circuit rule originated in two 1964 decisions, Wilson v. United States, 338 F. 2d 54, and Miller v. United States, 339 F. 2d 581. Cf. McGarry v. Fogliani, 370 F. 2d 42 (C. A. 9th Cir. 1966). The First Circuit has adopted an intermediate position; the defendant is not required to show plain reversible error in his application, but the Government may defeat relief by showing that an appeal would be futile. Desmond v. United States, 333 F. 2d 378 (1964). Both petitioner and the Government attempt to find support in the position of the Tenth Circuit. Hannigan v. United States, 341 F. 2d 587 (1965). The Fifth, Sixth, Seventh, Eighth, and District of Columbia Circuits do not require any showing about the issues to be raised on appeal. Camp v. United States, 352 F. 2d 800 (C. A. 5th Cir. 1965); United States v. Smith, 387 F. 2d 268 (C. A. 6th Cir. 1967); Calland v. United States, 323 F. 2d 405 (C. A. 7th Cir. 1963); Williams v. United States, 402 F. 2d 548 (C. A. 8th Cir. 1968); Dillane v. United States, 121 U. S. App. D. C. 354, 350 F. 2d 732 (1965).

       Rule 37 (a)(2) provided:
      “When a court after trial imposes sentence upon a defendant not represented by counsel, the defendant shall be advised of his right to appeal and if he so requests, the clerk shall prepare and file forthwith a notice of appeal on behalf of the defendant.”
      This provision has since been transferred to Rule 32 (a) (2). It now applies to defendants going to trial on a plea of not guilty, whether or not they are represented by counsel. The problem of determining whether to give notice to a person represented at trial, but who may not be represented on appeal, will therefore not recur.

       This provision was subsequently amended to require that the judge so advise all defendants, whether or not represented by counsel. See ante, at 331, n. 3. See also Peoples v. United States, 337 F. 2d 91 (1964); Calland v. United States, 323 F. 2d 405 (1963); Boruff v. United States, 310 F. 2d 918 (1962).

       Brief for Petitioner 6.


author: Per Curiam.

text:
    KOWAN v. CALIFORNIA.
    No. 1268.
    Decided June 2, 1969.

      Gladys Towles Root and Kirkpatrick W. Dilling for appellant.

      Roger Arnebergh, Philip E. Grey, and Michael T. Sauer for appellee.
   Per Curiam.

The motion to dismiss is granted and the appeal is dismissed for want of jurisdiction. Treating the papers whereon the appeal was taken as a petition for a writ of certiorari, certiorari is denied.


text:
    EGLESON v. MASSACHUSETTS.
    No. 1335.
    Decided June 2, 1969.

      John G. S. Flym for appellant.

      Robert H. Quinn, Attorney General of Massachusetts, John J. Wall, Assistant Attorney General, Lawrence P. Cohen, Deputy Assistant Attorney General, and Garrett H. Byrne for appellee.
   Per Curiam.

The motion to dismiss is granted and the appeal is dismissed for want of jurisdiction. Treating the papers whereon the appeal was taken as a petition for a writ of certiorari, certiorari is denied.