author: Chief Justice Roberts

text:
    KNIGHT, trustee of WILLIAM L. RUDKIN TESTAMENTARY TRUST v. COMMISSIONER OF INTERNAL REVENUE
    CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
    No. 06-1286.
    Argued November 27, 2007
    Decided January 16, 2008

      Roberts, C. J., delivered the opinion for a unanimous Court.

      Peter J. Rubin argued the cause for petitioner. With him on the briefs were Cornelia T. L. Pillará, Walter Dellinger, Carol A. Cantrell, Michael D. Martin, and Jonathan S. Massey.

      Eric D. Miller argued the cause for respondent. With him on the brief were Solicitor General Clement, Acting Assistant Attorney General Morrison, Deputy Solicitor General Hungar, Acting Deputy Assistant Attorney General Rothenberg, Anthony T. Sheehan, and Donalá L. Korb

      Briefs of amici curiae were filed for the American Bankers Association et al. by Gregory F. Taylor and Lisa Bleier; and for the Tax Section of The Florida Bar by Angela C. Vigil, Jonathan Blattmachr, and David Pratt.

   Chief Justice Roberts

delivered the opinion of the Court.

Under the Internal Revenue Code, individuals may subtract from their adjusted gross income certain itemized deductions, but only to the extent the deductions exceed 2% of adjusted gross income. A trust may also claim those deductions, also subject to the 2% floor, except that costs incurred in the administration of the trust, which would not have been incurred if the trust property were not held by a trust, may be deducted without regard to the floor. In the case of individuals, investment advisory fees are subject to the 2% floor; the question presented is whether such fees are also subject to the floor when incurred by a trust. We hold that they generally are and therefore affirm the judgment below, albeit for different reasons than those given by the Court of Appeals.

I

The Internal Revenue Code imposes a tax on the “taxable income” of both individuals and trusts. 26 U. S. C. § 1(a). The Code instructs that the calculation of taxable income begins with a determination of “gross income,” capaciously defined as “all income from whatever source derived.” § 61(a). “Adjusted gross income” is then calculated by subtracting from gross income certain “above-the-line” deductions, such as trade and business expenses and losses from the sale or exchange of property. § 62(a). Finally, taxable income is calculated by subtracting from adjusted gross income “itemized deductions” — also known as “below-the-line” deductions — defined as all allowable deductions other than the “above-the-line” deductions identified in § 62(a) and the deduction for personal exemptions allowed under § 151 (2000 ed. and Supp. V). . § 63(d) (2000 ed.).

Before the passage of the Tax Reform Act of 1986, 100 Stat. 2085, below-the-line deductions were deductible in full. This system resulted in significant complexity and potential for abuse, requiring “extensive [taxpayer] recordkeeping with regard to what commonly are small expenditures,” as well as “significant administrative and enforcement problems for the Internal Revenue Service.” H. R. Rep. No. 99-426, p. 109 (1985).

In response, Congress enacted what is known as the “2% floor” by adding §67 to the Code. Section 67(a) provides that “the miscellaneous itemized deductions for any taxable year shall be allowed only to the extent that the aggregate of such deductions exceeds 2 percent of adjusted gross income.” The term “miscellaneous itemized deductions” is defined to include all itemized deductions other than certain ones specified in § 67(b). Investment advisory fees are deductible pursuant to 26 U. S. C. §212. Because §212 is not listed in § 67(b) as one of the categories of expenses that may be deducted in full, such fees are “miscellaneous itemized deductions” subject to the 2% floor. 26 CFR § 1.67-1T(a)(1)(ii) (2007).

Section 67(e) makes the 2% floor generally applicable not only to individuals but also to estates and trusts, with one exception relevant here. Under this exception, “the adjusted gross income of an estate or trust shall be computed in the same manner as in the case of an individual, except that.. . the deductions for costs which are paid or incurred in connection with the administration of the estate or trust and which would not have been incurred if the property were not held in such trust or estate ... shall be treated as allowable” and not subject to the 2% floor. § 67(e)(1).

Petitioner Michael J. Knight is the trustee of the William L. Rudkin Testamentary Trust, established in the State of Connecticut in 1967. In 2000, the Trustee hired Warfield Associates, Inc., to provide advice with respect to investing the Trust’s assets. At the beginning of the tax year, the Trust held approximately $2.9 million in marketable securities, and it paid Warfield $22,241 in investment advisory fees for the year. On its fiduciary income tax return for 2000, the Trust reported total income of $624,816, and it deducted in full the investment advisory fees paid to Warfield. After conducting an audit, respondent Commissioner of Internal Revenue found that these investment advisory fees were miscellaneous itemized deductions subject to the 2% floor. The Commissioner therefore allowed the Trust to deduct the investment advisory fees, which were the only claimed deductions subject to the floor, only to the extent that they exceeded 2% of the Trust’s adjusted gross income. The discrepancy resulted in a tax deficiency of $4,448.

The Trust filed a petition in the United States Tax Court seeking review of the assessed deficiency. It argued that the Trustee’s fiduciary duty to act as a “prudent investor” under the Connecticut Uniform Prudent Investor Act, Conn. Gen. Stat. §§45a-541a to 45a-541£ (2007), required the Trustee to obtain investment advisory services, and therefore to pay investment advisory fees. The Trust argued that such fees are accordingly unique to trusts and therefore fully deductible under 26 U. S. C. § 67(e)(1). The Tax Court rejected this argument, holding that § 67(e)(1) allows full deductibility only for expenses that are not commonly incurred outside the trust setting. Because investment advisory fees are commonly incurred by individuals, the Tax Court held that they are subject to the 2% floor when incurred by a trust. Rudkin Testamentary Trust v. Commissioner, 124 T. C. 304, 309-311 (2005).

The Trust appealed to the United States Court of Appeals for the Second Circuit. The Court of Appeals concluded that, in determining whether costs such as investment advisory fees are fully deductible or subject to the 2% floor, § 67(e) “directs the inquiry toward the counterfactual condition of assets held individually instead of in trust,” and requires “an objective determination of whether the particular cost is one that is peculiar to trusts and one that individuals are incapable of incurring.” 467 F. 3d 149, 155, 156 (2006). The court held that because investment advisory fees were “costs of a type that could be incurred if the property were held individually rather than in trust,” deduction of such fees by the Trust was subject to the 2% floor. Id., at 155-156.

The Courts of Appeals are divided on the question presented. The Sixth Circuit has held that investment advisory fees are fully deductible. O’Neill v. Commissioner, 994 F. 2d 302, 304 (1993). In contrast, both the Fourth and Federal Circuits have held that such fees are subject to the 2% floor, because they are “commonly” or “customarily” incurred outside of trusts. See Scott v. United States, 328 F. 3d 132, 140 (CA4 2003); Mellon Bank, N. A. v. United States, 265 F. 3d 1275, 1281 (CA Fed. 2001). The Court of Appeals below came to the same conclusion, but as noted announced a more exacting test, allowing “full deduction only for those costs that could not have been incurred by an individual property owner.” 467 F. 3d, at 156 (emphasis added). We granted the Trustee’s petition for certiorari to resolve the conflict, 551 U. S. 1144 (2007), and now affirm.

II

“We start, as always, with the language of the statute.” Williams v. Taylor, 529 U. S. 420, 431 (2000). Section 67(e) sets forth a general rule: “[T]he adjusted gross income of [a]... trust shall be computed in the same manner as in the case of an individual.” That is, trusts can ordinarily deduct costs subject to the same 2% floor that applies to individuals’ deductions. Section 67(e) provides for an exception to the 2% floor when two conditions are met. First, the relevant cost must be “paid or incurred in connection with the administration of the ... trust.” § 67(e)(1). Second, the cost must be one “which would not have been incurred if the property were not held in such trust.” Ibid.

In applying the statute, the Court of Appeals below asked whether the cost at issue could have been incurred by an individual. This approach flies in the face of the statutory language. The provision at issue asks whether the costs “would not have been incurred if the property were not held” in trust, ibid., not, as the Court of Appeals would have it, whether the costs “could not have been incurred” in such a case, 467 F. 3d, at 156. The fact that an individual could not do something is one reason he would not, but not the only possible reason. If Congress had intended the Court of Appeals’ reading, it easily could have replaced “would” in the statute with “could,” and presumably would have. The fact that it did not adopt this readily available and apparent alternative strongly supports rejecting the Court of Appeals’ reading.

Moreover, if the Court of Appeals’ reading were correct, it is not clear why Congress would have included in the statute the first clause of § 67(e)(1). If the only costs that are fully deductible are those that could not be incurred outside the trust context — that is, that could only be incurred by trusts — then there would be no reason to place the further condition on full deductibility that the costs be “paid or incurred in connection with the administration of the . . . trust,” § 67(e)(1). We can think of no expense that could be incurred exclusively by a trust but would nevertheless not be “paid or incurred in connection with” its administration.

The Trustee argues that the exception in § 67(e)(1) “establishes a straightforward causation test.” Brief for Petitioner 22. The proper inquiry, the Trustee contends, is “whether a particular expense of a particular trust or estate was caused by the fact that the property was held in the trust or estate.” Ibid. Investment advisory fees incurred by a trust, the argument goes, meet this test because these costs are caused by the trustee’s obligation “to obtain advice on investing trust assets in compliance with the Trustees’ particular fiduciary duties.” Ibid. We reject this reading as well.

On the Trustee’s view, the statute operates only to distinguish costs that are incurred by virtue of a trustee’s fiduciary duties from those that are not. But all (or nearly all) of a trust’s expenses are incurred because the trustee has a duty to incur them; otherwise, there would be no reason for the trust to incur the expense in the first place. See G. Bogert & G. Bogert, Law of Trusts and Trustees § 801, p. 134 (2d rev. ed. 1981) (“[T]he payment for expenses must be reasonably necessary to facilitate administration of the trust”). As an example of a type of trust-related expense that would be subject to the 2% floor, the Trustee offers “expenses for routine maintenance of real property” held by a trust. Brief for Petitioner 23. But such costs would appear to be fully deductible under the Trustee’s own reading because a trustee is obligated to incur maintenance expenses in light of the fiduciary duty to maintain trust property. See 1 Restatement (Second) of Trusts §176, p. 381 (1957) (“The trustee is under a duty to the beneficiary to use reasonable care and skill to preserve the trust property”).

Indeed, the Trustee’s formulation of its argument is circular: “Trust investment advice fees are caused by the fact the property is held in trust.” Brief for Petitioner 19. But “trust investment advice fees” are only aptly described as such because the property is held in trust; the statute asks whether such costs would be incurred by an individual if the property were not. Even when there is a clearly analogous category of costs that would be incurred by individuals, the Trustee’s reading would exempt most or all trust costs as fully deductible merely because they derive from a trustee’s fiduciary duty. Adding the modifier “trust” to costs that otherwise would be incurred by an individual surely cannot be enough to escape the 2% floor.

What is more, if the Trustee’s position were correct, then only the first clause of § 67(e)(1) — providing that the cost be “incurred in connection with the administration of the . . . trust” — would be necessary. The statute’s second, limiting condition — that the cost also be one “which would not have been incurred if the property were not held in such trust”— would do no work; we see no difference in saying, on the one hand, that costs are “caused by” the fact that the property is held in trust and, on the other, that costs are incurred “in connection with the administration” of the trust. Thus, accepting the Trustee’s approach “would render part of the statute entirely superfluous, something we are loath to do.” Cooper Industries, Inc. v. Aviall Services, Inc., 543 U. S. 157, 166 (2004).

The Trustee’s reading is further undermined by our inclination, “[i]n construing provisions ... in which a general statement of policy is qualified by an exception, [to] read the exception narrowly in order to preserve the primary operation of the provision.” Commissioner v. Clark, 489 U. S. 726, 739 (1989). As we have said, § 67(e) sets forth a general rule for purposes of the 2% floor established in § 67(a): “For purposes of this section, the adjusted gross income of an estate or trust shall be computed in the same manner as in the case of an individual.” Under the Trustee’s reading, §67(e)(l)’s exception would swallow the general rule; most (if not all) expenses incurred by a trust would be fully deductible. “Given that Congress has enacted a general rule ..., we should not eviscerate that legislative judgment through an expansive reading of a somewhat ambiguous exception.” Ibid.

More to the point, the statute by its terms does not “establish a straightforward causation test,” Brief for Petitioner 22, but rather invites a hypothetical inquiry into the treatment of the property were it held outside a trust. The statute does not ask whether a cost was incurred because the property is held by a trust; it asks whether a particular cost “would not have been incurred if the property were not held in such trust,” § 67(e)(1). “Far from examining the nature of the cost at issue from the perspective of whether it was caused by the trustee’s duties, the statute instead looks to the counterfactual question of whether individuals would have incurred such costs in the absence of a trust.” Brief for Respondent 9.

This brings us to the test adopted by the Fourth and Federal Circuits: Costs incurred by trusts that escape the 2% floor are those that would not “commonly” or “customarily” be incurred by individuals. See Scott, 328 F. 3d, at 140 (“Put simply, trust-related administrative expenses are subject to the 2% floor if they constitute expenses commonly incurred by individual taxpayers”); Mellon Bank, 265 F. 3d, at 1281 (§ 67(e) “treats as fiilly deductible only those trust-related administrative expenses that are unique to the administration of a trust and not customarily incurred outside of trusts”). The Solicitor General also accepts this view as an alternative reading of the statute. See Brief for Respondent 20-21. We agree with this approach.

The question whether a trust-related expense is fully deductible turns on a prediction about what would happen if a fact were changed — specifically, if the property were held by an individual rather than by a trust. In the context of making such a prediction, when there is uncertainty about the answer, the word “would” is best read as “express [ing] concepts such as custom, habit, natural disposition, or probability.” Scott, supra, at 139. See Webster’s Third New International Dictionary 2637-2638 (1993); American Heritage Dictionary 2042, 2059 (3d ed. 1996). The Trustee objects that the statutory text “does not ask whether expenses are ‘customarily’ incurred outside of trusts,” Reply Brief for Petitioner 15, but that is the direct import of the language in context. The text requires determining what would happen if a fact were changed; such an exercise necessarily entails a prediction; and predictions are based on what would customarily or commonly occur. Thus, in asking whether a particular type of cost “would not have been incurred” if the property were held by an individual, § 67(e)(1) excepts from the 2% floor only those costs that it would be uncommon (or unusual, or unlikely) for such a hypothetical individual to incur.

III

Having decided on the proper reading of § 67(e)(1), we come to the application of the statute to the particular question in this case: whether investment advisory fees incurred by a trust escape the 2% floor.

It is not uncommon or unusual for individuals to hire an investment adviser. Certainly the Trustee, who has. the burden of establishing its entitlement to the deduction, has not demonstrated that it is. See INDOPCO, Inc. v. Commissioner, 503 U. S. 79, 84 (1992) (noting the “ ‘familiar rule’ that ‘an income tax deduction is a matter of legislative grace and that the burden of clearly showing the right to the claimed deduction is on the taxpayer’” (quoting Interstate Transit Lines v. Commissioner, 319 U. S. 590, 593 (1943))); Tax Court Rule 142(a)(1) (stating that the “burden of proof shall be upon the petitioner,” with certain exceptions not relevant here). The Trustee’s argument is that individuals cannot incur trust investment advisory fees, not that individuals do not commonly incur investment advisory fees.

Indeed, the essential point of the Trustee’s argument is that he engaged an investment adviser because of his fiduciary duties under Connecticut’s Uniform Prudent Investor Act, Conn. Gen. Stat. § 45a-541a(a) (2007). The Act eponymously requires trustees to follow the “prudent investor rule.” See n. 2, supra. To satisfy this standard, a trustee must “invest and manage trust assets as a prudent investor would, by considering the purposes, terms, distribution requirements and other circumstances of the trust.” § 45a-541b(a) (emphasis added). The prudent investor standard plainly does not refer to a prudent trustee-, it would not be very helpful to explain that a trustee should act as a prudent trustee would. Rather, the standard looks to what a prudent investor with the same investment objectives handling his own affairs would do — i. e., a prudent individual investor. See Restatement (Third) of Trusts (Prudent Investor Rule) Reporter’s Notes on § 227, p. 58 (1990) (“The prudent investor rule of this Section has its origins in the dictum of Harvard College v. Amory, 9 Pick. (26 Mass.) 446, 461 (1830), stating that trustees must ‘observe how men of prudence, discretion, and intelligence manage their own affairs, not in regard to speculation, but in regard to the permanent disposition of their funds, considering the probable income, as well as the probable safety of the capital to be invested’ ”). See also, e. g., In re Musser’s Estate, 341 Pa. 1, 9-10, 17 A. 2d 411, 415 (1941) (noting the “general rule” that “a trustee must exercise such prudence and diligence in conducting the affairs of the trust as men of average diligence and discretion would employ in their own affairs”). And we have no reason to doubt the Trustee’s claim that a hypothetical prudent investor in his position would have solicited investment advice, just as he did. Having accepted all this, it is quite difficult to say that investment, advisory fees “would not have been incurred” — that is, that it would be unusual or uncommon for such fees to have been incurred — if the property were held by an individual investor with the same objectives as the Trust in handling his own affairs.

We appreciate that the inquiry into what is common may not be as easy in other cases, particularly given the absence of regulatory guidance. But once you depart in the name of ease of administration from the language chosen by Congress, there is more than one way to skin the cat: The Trustee raises administrability concerns in support of his causation test, Reply Brief for Petitioner 6, but so does the Government in explaining why it prefers the Court of Appeals’ approach to the one it has successfully advanced before the Tax Court and two Federal Circuits. Congress’s decision to phrase the pertinent inquiry in terms of a prediction about a hypothetical situation inevitably entails some uncertainty, but that is no excuse for judicial amendment of the statute. The Code elsewhere poses similar questions — such as whether expenses are “ordinary,” see §§ 162(a), 212; see also Deputy, Administratrix v. Du Pont, 308 U. S. 488, 495 (1940) (noting that “[ojrdinary has the connotation of normal, usual, or customary”) — and the inquiry is in any event what § 67(e)(1) requires.

As the Solicitor General concedes, some trust-related investment advisory fees may be fully deductible “if an investment advisor were to impose a special, additional charge applicable only to its fiduciary accounts.” Brief for Respondent 25. There is nothing in the record, however, to suggest that Warfield charged the Trustee anything extra, or treated the Trust any differently than it would have treated an individual with similar objectives, because of the Trustee’s fiduciary obligations. See App. 24-27. It is conceivable, moreover, that a trust may have an unusual investment objective, or may require a specialized balancing of the interests of various parties, such that a reasonable comparison with individual investors would be improper. In such a case, the incremental cost of expert advice beyond what would normally be required for the ordinary taxpayer would not be subject to the 2% floor. Here, however, the Trust has not asserted that its investment objective or its requisite balancing of competing interests was distinctive. Accordingly, we conclude that the investment advisory fees incurred by the Trust are subject to the 2% floor.

The judgment of the Court of Appeals is affirmed.

It is so ordered.

       because this ease is only about trusts, we generally refer to trusts throughout, but the analysis applies equally to estates.

       Forty-four States and the District of Columbia have adopted versions of the Uniform Prudent Investor Act. See 7B U. L. A. 1-2 (2006) (listing States that have enacted the Uniform Prudent Investor Act). Five of the remaining six States have adopted their own versions of the prudent investor standard. See Del. Code Ann., Tit. 12, §3302 (1995 ed. and 2006 Supp.); Ga. Code Ann. §53-12-287 (1997); La. Rev. Stat. Ann. § 9:2127 (West 2005); Md. Est. & Trusts Code Ann. §15-114 (Lexis 2001); S. D. Codified Laws § 55-5-6 (2004). Kentucky, the only remaining State, applies the prudent investor standard only in certain circumstances. See Ky. Rev. Stat. Ann. § 286.3-277 (Lexis 2007 Cum. Supp.); §§ 386.454(1), 386.502 (Supp. 2007).

       The Solicitor General embraces this position in this Court, arguing that the Court of Appeals’ approach represents the best reading of the statute and establishes an easily administrable rule. See Brief for Respondent 17-20,22. Indeed, after the Court of Appeals’ decision, the Commissioner adopted that court’s reading of the statute in a proposed regulation. See Section 67 Limitations on Estates or Trusts, 72 Fed. Reg. 41245 (2007) (notice of proposed rulemaking) (a trust-related cost is exempted from the 2% floor only if “an individual could not have incurred that cost in connection with property not held in an estate or trust” (emphasis added)). The Government did not advance this argument before the Court of Appeals. See Brief for Appellee in No. 05-5151-AG (CA2), pp. 3-4, 22-24. In fact, the notice of proposed rulemaking appears to be the first time the Government has ever taken this position, and we are the first Court to which the argument has been made in a brief. See Brief for United States in Mellon Bank, N. A. v. United States, No. 01-5015 (CA Fed.), p. 27 (“[I]f a trust-related administrative expense is also customarily or habitually incurred outside of trusts, then it is subject to the two-percent floor”); Brief for United States in Scott v. United States, No. 02-1464 (CA4), p. 27 (same).

       In pressing the Court of Appeals’ approach, the Solicitor General argues that “to say that a team would not have won the game if it were not for the quarterback’s outstanding play is to say that the team could not have won without the quarterback.” Brief for Respondent 19. But the Solicitor General simply posits the truth of a proposition — that the team would not have won the game if it were not for the quarterback’s outstanding play — and then states its equivalent. The statute, in contrast, does not posit any proposition. Rather, it asks a question: whether a particular cost would have been incurred if the property were held by an individual instead of a trust.


source: Caselaw Access Project

author: Justice Scalia Justice Stevens, Justice Kennedy,

license: Public Domain

text:
    NEW YORK STATE BOARD OF ELECTIONS et al. v. LOPEZ TORRES et al.
    CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
    No. 06-766.
    Argued October 3, 2007
    Decided January 16, 2008

      Theodore B. Olson argued the cause for petitioners New York State Board of Elections et al. With him on the briefs were Matthew D. McGill, Michael S. Diamant, Todd D. Valentine, Randy M. Mastro, and Jennifer L. Conn. Andrew J. Rossman argued the cause for petitioners New York County Democratic Committee et al. With him on the briefs were Steven M. Pesner, James P. Chou, James E. dAuguste, Vincenzo A. DeLeo, Edward P. Lazarus, Carter G. Phillips, Thomas C. Goldstein, Joseph L. Forstadt, Ernst PL. Rosenberger, Burton N. Lipshie, David A. Sifre, and Arthur W. Greig. Andrew M. Cuomo, Attorney General of New York, Barbara D. Underwood, Solicitor General, Benjamin N. Gut-man, Deputy Solicitor General, and Denise A. Hartman, Assistant Solicitor General, filed briefs for petitioner the State of New York.

      Frederick A. O. Schwarz, Jr., argued the cause for respondents. With him on the brief were Burt Neuborne, Deborah Goldberg, Kent A. Yalowitz, and Paul M. Smith

      Briefs of amici curiae urging reversal were filed for the Asian American Bar Association of New York by Steven B. Shapiro and Vincent T. Chang; for the Mid-Manhattan Branch of the NAACP et al. by Gene C. Schaerr, Steffen N. Johnson, Linda T. Coberly, and Michael J. Friedman; and for the Republican National Committee by H. Christopher Bartolomucci.

      Briefs of amici curiae urging affirmance were filed for the City of New York et al. by Preeta D. Bansal, Barry Kamins, Michael A. Cardozo, Victor A. Kovner, and Kathryn Grant Madigan; for the American Civil Liberties Union et al. by Arthur N. Eisenberg and Steven R. Shapiro; for the Asian American Legal Defense and Education Fund et al. by Mariann Meier Wang; for the Cato Institute et al. by Erik S. Jaffe; for Guy-Uriel E. Charles et al. by Ellen D. Katz, pro se; for the New York County Lawyers' Association by Stephanie G. Wheeler and Bradley P. Smith; for the Washington Legal Foundation by Daniel J. Popeo and Richard A. Samp; for John Dunne by Andrew H. Schapiro; for Charles J. Hynes by Paul A. Engelmayer; for Edward I. Koch by Mr. Koch, pro se, and Bruce S. Kaplan; for Thomas Mann et al. by Daniel R. Ortiz, J. Gerald Hebert, and Paul S. Ryan; and for Former New York State Judges et al. by Holly K. Kulka and Jonathan R. Dowell.

   Justice Scalia

delivered the opinion of the Court.

The State of New York requires that political parties select their nominees for Supreme Court Justice at a convention of delegates chosen by party members in a primary election. We consider whether this electoral system violates the First Amendment rights of prospective party candidates.

I

A

The Supreme Court of New York is the State’s trial court of general jurisdiction, with an Appellate Division that hears appeals from certain lower courts. See N. Y. Const., Art. VI, §§ 7, 8. Under New York’s current Constitution, the State is divided into 12 judicial districts, see Art. VI, § 6(a); N. Y. Jud. Law Ann. § 140 (West 2005), and Supreme Court Justices are elected to 14-year terms in each such district, see N. Y. Const., Art. VI, § 6(c). The New York Legislature has provided for the election of a total of 328 Supreme Court Justices in this fashion. See N. Y. Jud. Law Ann. § 140-a (West Supp. 2007).

Over the years, New York has changed the method by which Supreme Court Justices are selected several times. Under the New York Constitution of 1821, Art. IV, §7, all judicial officers, except Justices of the Peace, were appointed by the Governor with the consent of the Senate. See 7 Sources and Documents of the U. S. Constitutions 181, 184-185 (W. Swindler ed. 1978). In 1846, New York amended its Constitution to require popular election of the Justices of the Supreme Court (and also the Judges of the New York Court of Appeals). Id., at 192, 200 (N. Y. Const. of 1846, Art. VI, § 12). In the early years under that regime, the State allowed political parties to choose their own method of selecting the judicial candidates who would bear their endorsements on the general-election ballot. See, e. g., Report of Joint Committee of Senate and Assembly of New York, Appointed to Investigate Primary and Election Laws of This and Other States, S. Doc. No. 26, pp. 195-219 (1910). The major parties opted for party conventions, the same method then employed to nominate candidates for other state offices. Ibid.; see also P. Ray, An Introduction to Political Parties and Practical Politics 94 (1913).

In 1911, the New York Legislature enacted a law requiring political parties to select Supreme Court nominees (and most other nominees who did not run statewide) through direct primary elections. Act of Oct. 18, 1911, ch. 891, § 45(4), 1911 N. Y. Laws pp. 2657, 2682. The primary system came to be criticized as a “device capable of astute and successful manipulation by professionals,” Editorial, The State Convention, N. Y. Times, May 1, 1917, p. 12, and the Republican candidate for Governor in 1920 campaigned against it as “a fraud” that “ ‘offered the opportunity for two things, for the demagogue and the man with money,’ ” Miller Declares Primary a Fraud, N. Y. Times, Oct. 23, 1920, p. 4. A law enacted in 1921 required parties to select their candidates for the Supreme Court by a convention composed of delegates elected by party members. Act of May 2, 1921, ch. 479, §§ 45(1), 110, 1921 N. Y. Laws pp. 1451, 1454, 1471.

New York retains this system of choosing party nominees for Supreme Court Justice to this day. Section 6-106 of New York’s election law sets forth its basic operation: “Party nominations for the office of justice of the supreme court shall be made by the judicial district convention.” N. Y. Elec. Law Ann. § 6-106 (West 2007). A “party” is any political organization whose candidate for Governor received 50,000 or more votes in the most recent election. § 1-104(3). In a September “delegate primary,” party members elect delegates from each of New York’s 150 assembly districts to attend the party’s judicial convention for the judicial district in which the assembly district is located. See N. Y. State Law Ann. §121 (West 2003); N. Y. Elec. Law Ann. §§ 6-124, 8-100(l)(a) (West 2007). An individual may run for delegate by submitting to the Board of Elections a designating petition signed by 500 enrolled party members residing in the assembly district, or by five percent of such enrolled members, whichever is less. §§6-136(2)(i), (3). These signatures must be gathered within a 37-day period preceding the filing deadline, which is approximately two months before the delegate primary. §§ 6-134(4), 6-158(1). The delegates elected in these primaries are uncommitted; the primary ballot does not specify the judicial nominee whom they will support. §7-114.

The nominating conventions take place one to two weeks after the delegate primary. §§ 6-126,6-158(5). Each of the 12 judicial districts has its own convention to nominate the party’s Supreme Court candidate or candidates who will run at large in that district in the general election. §§6-124, 6-156. The general election takes place in November. § 8-100(l)(c). The nominees from the party conventions appear automatically on the general-election ballot. § 7-104(5). They may be joined on the general-election ballot by independent candidates and candidates of political organizations that fail to meet the 50,000 vote threshold for “party” status; these candidates gain access to the ballot by submitting timely nominating petitions with (depending on the judicial district) 3,500 or 4,000 signatures from voters in that district or signatures from five percent of the number of votes cast for Governor in that district in the prior election, whichever is less. §§ 6-138,6-142(2).

B

Respondent López Torres was elected in 1992 to the civil court for Kings County — a court with more limited jurisdiction than the Supreme Court — having gained the nomination of the Democratic Party through a primary election. She claims that soon after her election, party leaders began to demand that she make patronage hires, and that her consistent refusal to do so caused the local party to oppose her unsuccessful candidacy at the Supreme Court nominating conventions in 1997, 2002, and 2003. The following year, López Torres — together with other candidates who had failed to secure the nominations of their parties, voters who claimed to have supported those candidates, and the New York branch of a public-interest organization called Common Cause — brought suit in federal court against the New York Board of Elections, which is responsible for administering and enforcing the New York election law. See §§ 3-102, 3-104. They contended that New York’s election law burdened the rights of challengers seeking to run against candidates favored by the party leadership, and deprived voters and candidates of their rights to gain access to the ballot and to associate in choosing their party’s candidates. As relevant here, they sought a declaration that New York’s convention system for selecting Supreme Court Justices violates their First Amendment rights, and an injunction mandating the establishment of a direct primary election to select party nominees for Supreme Court Justice.

The District Court issued a preliminary injunction granting the relief requested, pending the New York Legislature’s enactment of a new statutory scheme. 411 F. Supp. 2d 212, 256 (EDNY 2006). A unanimous panel of the United States Court of Appeals for the Second Circuit affirmed. 462 F. 3d 161 (2006). It held that voters and candidates possess a First Amendment right to a “realistic opportunity to participate in [a political party’s] nominating process, and to do so free from burdens that are both severe and unnecessary.” Id., at 187. New York’s electoral law violated that right because of the quantity of signatures and delegate recruits required to obtain a Supreme Court nomination at a judicial convention, see id., at 197, and because of the apparent reality that party leaders can control delegates, see id., at 198-200. In the court’s view, because “one-party rule” prevailed within New York’s judicial districts, a candidate had a constitutional right to gain access to the party’s convention, notwithstanding her ability to get on the general-election ballot by petition signatures. Id., at 193-195, 200. The Second Circuit’s holding effectively returned New York to the system of electing Supreme Court Justices that existed before the 1921 amendments to the election law. We granted certiorari. 549 U. S. 1204 (2007).

II

A

A political party has a First Amendment right to limit its membership as it wishes, and to choose a candidate-selection process that will in its view produce the nominee who best represents its political platform. Democratic Party of United States v. Wisconsin ex rel. La Follette, 450 U. S. 107, 122 (1981); California Democratic Party v. Jones, 530 U. S. 567, 574-575 (2000). These rights are circumscribed, however, when the State gives the party a role in the election process — as New York has done here by giving certain parties the right to have their candidates appear with party endorsement on the general-election ballot. Then, for example, the party’s racially discriminatory action may become state action that violates the Fifteenth Amendment. See id., at 573. And then also the State acquires a legitimate governmental interest in ensuring the fairness of the party’s nominating process, enabling it to prescribe what that process must be. Id., at 572-573. We have, for example, considered it to be “too plain for argument” that a State may prescribe party use of primaries or conventions to select nominees who appear on the general-election ballot. American Party of Tex. v. White, 415 U. S. 767, 781 (1974). That prescriptive power is not without limits. In Jones, for example, we invalidated on First Amendment grounds California’s blanket primary, reasoning that it permitted non-party-members to determine the candidate bearing the party’s standard in the general election. 530 U. S., at 577. See also Eu v. San Francisco County Democratic Central Comm., 489 U. S. 214, 224 (1989); Tashjian v. Republican Party of Conn., 479 U. S. 208, 214-217 (1986).

In the present case, however, the party’s associational rights are at issue (if at all) only as a shield and not as a sword. Respondents are in no position to rely on the right that the First Amendment confers on political parties to structure their internal party processes and to select the candidate of the party’s choosing. Indeed, both the Republican and Democratic state parties have intervened from the very early stages of this litigation to defend New York’s electoral law. The weapon wielded by these plaintiffs is their own claimed associational right not only to join, but to have a certain degree of influence in, the party. They contend that New York’s electoral system does not go far enough— does not go as far as the Constitution demands — in ensuring that they will have a fair chance of prevailing in their parties’ candidate-selection process.

This contention finds no support in our precedents. We have indeed acknowledged an individual’s associational right to vote in a party primary without undue state-imposed impediment. In Kusper v. Pontikes, 414 U. S. 51, 57 (1973), we invalidated an Illinois law that required a voter wishing to change his party registration so as to vote in the primary of a different party to do so almost two full years before the primary date. But Kusper does not cast doubt on all state-imposed limitations upon primary voting. In Rosario v. Rockefeller, 410 U. S. 752 (1973), we upheld a New York State requirement that a voter have enrolled in the party of his choice at least 30 days before the previous general election in order to vote in the next party primary. In any event, respondents do not claim that they have been excluded from voting in the primary. Moreover, even if we extended Kusper to cover not only the right to vote in the party primary but also the right to run, the requirements of the New York law (a 500-signature petition collected during a 37-day window in advance of the primary) are entirely reasonable. Just as States may require persons to demonstrate “a significant modicum of support” before allowing them access to the general-election ballot, lest it become unmanageable, Jenness v. Fortson, 403 U. S. 431, 442 (1971), they may similarly demand a minimum degree of support for candidate access to a primary ballot. The signature requirement here is far from excessive. See, e. g., Norman v. Reed, 502 U. S. 279, 295 (1992) (approving requirement of 25,000 signatures, or approximately two percent of the electorate); White, supra, at 783 (approving requirement of one percent of the vote cast for Governor in the preceding general election, which was about 22,000 signatures).

Respondents’ real complaint is not that they cannot vote in the election for delegates, nor even that they cannot run in that election, but that the convention process that follows the delegate election does not give them a realistic chance to secure the party’s nomination. The party leadership, they say, inevitably garners more votes for its slate of delegates (delegates uncommitted to any judicial nominee) than the unsupported candidate can amass for himself. And thus the leadership effectively determines the nominees. But this says nothing more than that the party leadership has more widespread support than a candidate not supported by the leadership. No New York law compels election of the leadership’s slate — or, for that matter, compels the delegates elected on the leadership’s slate to vote the way the leadership desires. And no state law prohibits an unsupported candidate from attending the convention and seeking to persuade the delegates to support her. Our cases invalidating ballot-access requirements have focused on the requirements themselves, and not on the manner in which political actors function under those requirements. See, e.g., Bullock v. Carter, 405 U. S. 134 (1972) (Texas statute required exorbitant filing fees); Williams v. Rhodes, 393 U. S. 23 (1968) (Ohio statute required, inter alia, excessive number of petition signatures); Anderson v. Celebrezze, 460 U. S. 780 (1983) (Ohio statute established unreasonably early filing deadline). Here respondents complain not of the state law, but of the voters’ (and their elected delegates’) preference for the choices of the party leadership.

To be sure, we have, as described above, permitted States to set their faces against “party bosses” by requiring party-candidate selection through processes more favorable to insurgents, such as primaries. But to say that the State can require this is a far cry from saying that the Constitution demands it. None of our cases establishes an individual’s constitutional right to have a “fair shot” at winning the party’s nomination. And with good reason. What constitutes a “fair shot” is a reasonable enough question for legislative judgment, which we will accept so long as it does not too much infringe upon the party’s associational rights. But it is hardly a manageable constitutional question for judges— especially for judges in our legal system, where traditional electoral practice gives no hint of even the existence, much less the content, of a constitutional requirement for a “fair shot” at party nomination. Party conventions, with their attendant “smoke-filled rooms” and domination by party leaders, have long been an accepted manner of selecting party candidates. “National party conventions prior to 1972 were generally under the control of state party leaders” who determined the votes of state delegates. American Presidential Elections: Process, Policy, and Political Change 14 (H. Schantz ed. 1996). Selection by convention has never been thought unconstitutional, even when the delegates were not selected by primary but by party caucuses. See ibid.

The Second Circuit’s judgment finesses the difficulty of saying how much of a shot is a “fair shot” by simply mandating a primary until the New York Legislature acts. This was, according to the Second Circuit, the New York election law’s default manner of party-candidate selection for offices whose manner of selection is not otherwise prescribed. Petitioners question the propriety of this mandate, but we need not pass upon that here. Even conceding its propriety, there is good reason to believe that the elected members of the New York Legislature remain opposed to the primary, for the same reasons their predecessors abolished it 86 years ago: because it leaves judicial selection to voters uninformed about judicial qualifications, and places a high premium upon the ability to raise money. Should the New York Legislature persist in that view, and adopt something different from a primary and closer to the system that the Second Circuit invalidated, the question whether that provides enough of a “fair shot” would be presented. We are not inclined to open up this new and excitingly unpredictable theater of election jurisprudence. Selection by convention has been a traditional means of choosing party nominees. While a State may determine it is not desirable and replace it, it is not unconstitutional.

B

Respondents put forward, as a special factor which gives them a First Amendment right to revision of party processes in the present case, the assertion that party loyalty in New York’s judicial districts renders the general-election ballot “uncompetitive.” They argue that the existence of entrenched “one-party rule” demands that the First Amendment be used to impose additional competition in the nominee-selection process of the parties. (The asserted “one-party rule,” we may observe, is that of the Democrats in some judicial districts, and of the Republicans in others. See 411 F. Supp. 2d, at 230.) This is a novel and implausible reading of the First Amendment.

To begin with, it is hard to understand how the competitiveness of the general election has anything to do with respondents’ associational rights in the party’s selection process. It makes no difference to the person who associates with a party and seeks its nomination whether the party is a contender in the general election, an underdog, or the favorite. Competitiveness may be of interest to the voters in the general election, and to the candidates who choose to run against the dominant party. But we have held that those interests are well enough protected so long as all candidates have an adequate opportunity to appear on the general-election ballot. In Jenness we upheld a petition-signature requirement for inclusion on the general-election ballot of five percent of the eligible voters, see 403 U. S., at 442, and in Munro v. Socialist Workers Party, 479 U. S. 189, 199 (1986), we upheld a petition-signature requirement of one percent of the vote in the State’s primary. New York’s general-election balloting procedures for Supreme Court Justice easily pass muster under this standard. Candidates who fail to obtain a major party’s nomination via convention can still get on the general-election ballot for the judicial district by providing the requisite number of signatures of voters resident in the district. N. Y. Elec. Law Ann. § 6-142(2). To our knowledge, outside of the Fourteenth and Fifteenth Amendment contexts, see Jones, 530 U. S., at 573, no court has ever made “one-party entrenchment” a basis for interfering with the candidate-selection processes of a party. (Of course, the lack of one-party entrenchment will not cause free access to the general-election ballot to validate an otherwise unconstitutional restriction upon participation in a party’s nominating process. See Bullock, 405 U. S., at 146-147.)

The reason one-party rule is entrenched may be (and usually is) that voters approve of the positions and candidates that the party regularly puts forward. It is no function of the First Amendment to require revision of those positions or candidates. The States can, within limits (that is, short of violating the parties’ freedom of association), discourage party monopoly — for example, by refusing to show party endorsement on the election ballot. But the Constitution provides no authority for federal courts to prescribe such a course. The First Amendment creates an open marketplace where ideas, most especially political ideas, may compete without government interference. See Abrams v. United States, 250 U. S. 616, 630 (1919) (Holmes, J., dissenting). It does not call on the federal courts to manage the market by preventing too many buyers from settling upon a single product.

Limiting respondents’ court-mandated “fair shot at party endorsement” to situations of one-party entrenchment merely multiplies the impracticable lines courts would be called upon to draw. It would add to those alluded to earlier the line at which mere party popularity turns into “one-party dominance.” In the case of New York’s election system for Supreme Court Justices, that line would have to be drawn separately for each of the 12 judicial districts — and in those districts that are “competitive” the current system would presumably remain valid. But why limit the remedy to one-party dominance? Does not the dominance of two parties similarly stifle competing opinions? Once again, we decline to enter the morass.

New York State has thrice (in 1846, 1911, and 1921) displayed a willingness to reconsider its method of selecting Supreme Court Justices. If it wishes to return to the primary system that it discarded in 1921, it is free to do so; but the First Amendment does not compel that. We reverse the Second Circuit’s contrary judgment.

It is so ordered.

Justice Stevens,

with whom Justice Souter joins, concurring.

While I join Justice Scalia’s cogent resolution of the constitutional issues raised by this case, I think it appropriate to emphasize the distinction between constitutionality and wise policy. Our holding with respect to the former should not be misread as endorsement of the electoral system under review, or disagreement with the findings of the District Court that describe glaring deficiencies in that system and even lend support to the broader proposition that the very practice of electing judges is unwise. But as I recall my esteemed former colleague, Thurgood Marshall, remarking on numerous occasions: “The Constitution does not prohibit legislatures from enacting stupid laws.”

Justice Kennedy,

with whom Justice Breyer joins as to Part II, concurring in the judgment.

The Court’s analysis, in my view, is correct in important respects; but my own understanding of the controlling principles counsels concurrence in the judgment and the expression of these additional observations.

I

When a state-mandated primary is used to select delegates to conventions or nominees for office, the State is bound not to design its ballot or election processes in ways that impose severe burdens on First Amendment rights of expression and political participation. See Kusper v. Pontikes, 414 U. S. 51, 57-58 (1973); see also California Democratic Party v. Jones, 530 U. S. 567, 581-582 (2000); cf. Lubin v. Panish, 415 U. S. 709, 716 (1974); Bullock v. Carter, 405 U. S. 134, 144 (1972); Gray v. Sanders, 372 U. S. 368, 380 (1963). Respondents’ objection to New York’s scheme of nomination by convention is that it is difficult for those who lack party connections or party backing to be chosen as a delegate or to become a nominee for office. Were the state-mandated- and-designed nominating convention the sole means to attain access to the general election ballot there would be considerable force, in my view, to respondents’ contention that the First Amendment prohibits the State from requiring a delegate selection mechanism with the rigidities and difficulties attendant upon this one. The system then would be subject to scrutiny from the standpoint of a “reasonably diligent independent candidate,” Storer v. Brown, 415 U. S. 724, 742 (1974). The Second Circuit took this approach. 462 F. 3d 161, 196 (2006).

As the Court is careful to note, however, New York has a second mechanism for placement on the final election ballot. Ante, at 201. One who seeks to be a justice of the New York Supreme Court may qualify by a petition process. The petition must be signed by the lesser of (1) 5 percent of the number of votes last cast for Governor in the judicial district or (2) either 3,500 or 4,000 voters (depending on the district). This requirement has not been shown to be an unreasonable one, a point respondents appear to concede. True, the candidate who gains ballot access by petition does not have a party designation; but the candidate is still considered by the voters.

The petition alternative changes the analysis. Cf. Munro v. Socialist Workers Party, 479 U. S. 189, 199 (1986) (“It can hardly be said that Washington’s voters are denied freedom of association because they must channel their expressive activity into a campaign at the primary as opposed to the general election”).

This is not to say an alternative route to the general election exempts the delegate primary/nominating convention from all scrutiny. For instance, the Court in Bullock, after determining that Texas’ primary election filing fees were so “patently exclusionary” on the basis of wealth as to invoke strict scrutiny under the Equal Protection Clause, rejected the argument that candidate access to the general election without a fee saved the statute. 405 U. S., at 143-144, 146-147 (“[W]e can hardly accept as reasonable an alternative that requires candidates and voters to abandon their party affiliations in order to avoid the burdens of the filing fees”). But there is a dynamic relationship between, in this case, the convention system and the petition process; higher burdens at one stage are mitigated by lower burdens at the other. See Burdick v. Takushi, 504 U. S. 428, 448 (1992) (Kennedy, J., dissenting) (“The liberality of a State’s ballot access laws is one determinant of the extent of the burden imposed by the write-in ban; it is not, though, an automatic excuse for forbidding all write-in voting”); Persily, Candidates v. Parties: Constitutional Constraints on Primary Ballot Access Laws, 89 Geo. L. J. 2181, 2214-2216 (2001). And, though the point does not apply here, there are certain injuries (as in Bullock) that are so severe they are unconstitutional no matter how minor the burdens at the other stage. As the Court recognized in Kusper, moreover, there is an individual right to associate with the political party of one’s choice and to have a voice in the selection of that party’s candidate for public office. See 414 U. S., at 58. On the particular facts and circumstances of this case, then, I reach the same conclusion the Court does.

II

It is understandable that the Court refrains from commenting upon the use of elections to select the judges of the State’s courts of general jurisdiction, for New York has the authority to make that decision. This closing observation, however, seems to be in order.

When one considers that elections require candidates to conduct campaigns and to raise funds in a system designed to allow for competition among interest groups and political parties, the persisting question is whether that process is consistent with the perception and the reality of judicial independence and judicial excellence. The rule of law, which is a foundation of freedom, presupposes a functioning judiciary respected for its independence, its professional attainments, and the absolute probity of its judges. And it may seem difficult to reconcile these aspirations with elections.

Still, though the Framers did not provide for elections of federal judges, most States have made the opposite choice, at least to some extent. In light of this longstanding practice and tradition in the States, the appropriate practical response is not to reject judicial elections outright but to find ways to use elections to select judges with the highest qualifications. A judicial election system presents the opportunity, indeed the civic obligation, for voters and the community as a whole to become engaged in the legal process. Judicial elections, if fair and open, could be an essential forum for society to discuss and define the attributes of judicial excellence and to find ways to discern those qualities in the candidates. The organized bar, the legal academy, public advocacy groups, a principled press, and all the other components of functioning democracy must engage in this process.

Even in flawed election systems there emerge brave and honorable judges who exemplify the law’s ideals. But it is unfair to them and to the concept of judicial independence if the State is indifferent to a selection process open to manipulation, criticism, and serious abuse.

Rule of law is secured only by the principled exercise of political will. If New York statutes for nominating and electing judges do not produce both the perception and the reality of a system committed to the highest ideals of the law, they ought to be changed and to be changed now. But, as the Court today holds, and for further reasons given in this separate opinion, the present suit does not permit us to invoke the Constitution in order to intervene.

III

With these observations, I concur in the judgment of the Court.