author:
Justice Rehnquist
      Justice Blackmun,

text:
    WASHINGTON et al. v. UNITED STATES
    No. 81-969.
    Argued January 10, 1983
    Decided March 29, 1983

      Rehnquist, J., delivered the opinion of the Court, in which BURGER, C. J., and Brennan, Powell, and O’Connor, JJ., joined. Blackmun, J., filed a dissenting opinion, in which White, Marshall, and Stevens, JJ., joined, post, p. 547.

      Kenneth 0. Eikenberry, Attorney General of Washington, argued the cause for appellants. With him on the briefs were Leland T. Johnson and Timothy R. Malone, Assistant Attorneys General.

      Stuart A. Smith argued the cause for the United States. With him on the brief were Solicitor General Lee, Assistant Attorney General Archer, David English Carmack, and JohnJ. McCarthy.

        George Deukmejian, Attorney General, filed a brief for the State of California as amicus curiae urging reversal.
      ‘The sales tax is imposed by Chapters 82.04, 82.08, and 82.14 of the Revised Code of Washington (1981). The use tax is imposed by Chapters 82.12 and 82.14 (1981). The terms “buyer” and “consumer” are quite broadly defined in Wash. Rev. Code §§82.08.010, 82.04.190 (1981).

   Justice Rehnquist

delivered the opinion of the Court.

The State of Washington’s principal source of revenue is a sales and use tax imposed on the buyer or consumer in all retail sales and consumer uses of tangible personal property. In this case the United States contends that one aspect of that tax statute — its application to building construction — is invalid under the Supremacy Clause of the United States Constitution. The statutory provisions are most easily understood in light of their history.

Before 1941, building contractors were treated as consumers for sales tax purposes. All sales of tangible personal property, such as construction materials, to contractors were subject to the sales tax. The legal incidence of this tax was on the contractor; the tax was collected by suppliers who sold to contractors, and remitted by them to the State.

In 1941, Washington changed the sales tax system it applied to contractors by defining the landowner who purchases construction work from the contractor, rather than the contractor, as the “consumer.” The legal incidence of the tax was now on the landowner, who paid tax on the full price of the construction project. The net result was that contractors’ labor costs and markups were added to the tax base, which had previously included only the cost of tangible personal property sold to contractors.

The post-1941 tax system could not, however, be applied to construction for the Federal Government because the Supremacy Clause prohibits States from taxing the United States directly. United States v. New Mexico, 455 U. S. 720 (1982). Thus, when the United States was the landowner, Washington did not collect any tax on the sale either of tangible personal property to the contractor or of the finished building to the Government.

In 1975, the Washington Legislature acted to eliminate the complete tax exemption for construction purchased by the United States. It did so by reimposing the pre-1941 tax on contractors that work for the Federal Government (“federal contractors”). Thus, Washington now taxes the sale of non-federal projects to the landowner, and taxes the sale of materials to federal contractors. The net result is that for federal projects the legal incidence of the tax falls on the contractor rather than the landowner, and the tax is measured by a lesser amount than the tax on nonfederal projects because the contractor’s labor costs and markup are not included in the tax base.

Shortly after the new statute was enacted, the United States sued the State in the District Court for the Western District of Washington, seeking a declaratory judgment and a permanent injunction against the assessment and collection of the sales tax from federal contractors, and an order requiring the refund of sales taxes already so collected, for which the United States had reimbursed its contractors. The District Court granted the United States’ motion for partial summary judgment, holding that the statutes discriminate against federal contractors in violation of the Supremacy Clause. On appeal, the Court of Appeals for the Ninth Circuit affirmed. 654 F. 2d 570 (1981). Washington appealed pursuant to 28 U. S. C. §1254(2), and we noted probable jurisdiction. 456 U. S. 970 (1982).

In recent years this Court has examined in some detail the history of the Federal Government’s constitutional immunity from state taxation. United States v. New Mexico, supra, at 730-738; United States v. County of Fresno, 429 U. S. 452, 457-464 (1977). There is no reason to repeat these discussions here; it suffices to restate our conclusions. In New Mexico, we explained that “immunity may not be conferred simply because the tax has an effect on the United States, or even because the Federal Government shoulders the entire economic burden of the levy. . . . Similarly, immunity cannot be conferred simply because the state tax falls on the earnings of a contractor providing services to the Government.” 455 U. S., at 734. In Fresno, we stated the rule that, “[s]o long as the tax is not directly laid on the Federal Government, it is valid if nondiscriminatory... or until Congress declares otherwise.” 429 U. S., at 460 (citing James v. Dravo Contracting Co., 302 U. S. 134, 150, 161 (1937)). Accord, Memphis Bank & Trust Co. v. Garner, 459 U. S. 392, 397 (1983).

The United States’ principal argument is that the tax is invalid because Washington has circumvented the Federal Government’s tax immunity by identifying a federal activity for different tax treatment. Brief for United States 10, 21-31; Tr. of Oral Arg. 29-33, 40-41. Because Washington does not impose a sales tax on contractors who do not work for the Federal Government, the argument goes, it discriminates against the Federal Government and those with whom it deals.

Washington does, however, impose a sales tax on all purchases from contractors who do not deal with the Federal Government. The tax is imposed on every construction transaction, and the tax rate is the same for everyone. The only deviation from equality between the Federal Government and federal contractors on one hand, and every other taxpayer on the other, is that the former are taxed on a smaller proportion of the value of the project than the latter. Thus the Federal Government and federal contractors are both better off than other taxpayers because they pay less tax than anyone else in the State. This hardly seems, on its face, to be the mistreatment of the Federal Government against which the Supremacy Clause protects.

The United States relies upon Phillips Chemical Co. v. Dumas Independent School District, 361 U. S. 376 (1960), in which Texas taxed the lessees of property owned by the State on the value of their leasehold interest, but taxed some lessees of property owned by the United States on the full value of the premises. However, the Court there rejected the United States’ argument that the tax was invalid simply because it treats those who deal with the Federal Government differently than it treats others. Id., at 382. We plainly stated that a determination whether a tax is discriminatory “requires ‘an examination of the whole tax structure of the state.’” Id., at 383 (quoting Tradesmens National Bank v. Oklahoma Tax Comm’n, 309 U. S. 560, 568 (1940)). The Texas tax was invalid only because it imposed “a heavier tax burden on lessees of federal property than is imposed on lessees of” state property. 361 U. S., at 383, 387. See Memphis Bank & Trust Co. v. Garner, supra, at 398.

In United States v. County of Fresno, supra, the county imposed a tax on the owners of real property. Of course, property owned by the United States was exempt from the tax. Rather than forgo all revenue from federally owned, land, the county taxed private lessees’ interests in real property rented from the Federal Government and other tax-exempt owners. It did not tax the interests of any lessees of nonexempt property. We rejected the United States’ contention that the tax system discriminated against lessees of federal property. Because the economic burden of a tax imposed on the owner of nonexempt property is ordinarily passed on to the lessee, we explained that those who leased property from the Federal Government were no worse off than their counterparts in the private sector. 429 U. S., at 464-465.

Similarly, in United States v. City of Detroit, 355 U. S. 466, 473-474 (1958), Michigan taxed private property owners, but not the United States or other exempt owners. Instead, the State taxed nonexempt parties’ use of exempt property. It did not tax the use of nonexempt property. We upheld the tax because the State may “equate the tax burden imposed on private enterprise using exempt property with that carried by similar businesses using taxed property.” Id., at 473. We explained that “[tjhose using exempt property are required to pay no greater tax than that placed on private owners or passed on by them to their business lessees.” Id., at 473-474.

In this case, federal contractors are required to pay no greater tax than that placed on private buyers of construction work or passed on by them to their contractors. The Court of Appeals sought to distinguish Detroit on the ground that the tax burden in this case is not necessarily shifted to the nonfederal contractors. 654 F. 2d, at 576. But there was no proof in either Detroit or Fresno that private owners would necessarily pass the tax on to their lessees; the opportunity for the parties to allocate the economic burden of the tax among themselves was sufficient. No more should be required here.

The important consideration, therefore, is not whether the State differentiates in determining what entity shall bear the legal incidence of the tax, but whether the tax is discriminatory with regard to the economic burdens that result. The only difference between this case and Fresno and Detroit is that the taxpayer here is a vendor of services to the United States, rather than one who receives an economic benefit from the Federal Government. To rest upon this distinction would be to elevate form over substance. The entire trend of our decisions since James v. Dravo Contracting Co., 302 U. S. 134 (1937), has been to avoid “wooden formalism.” United States v. New Mexico, 455 U. S., at 737. See Fresno, 429 U. S., at 460-461, and n. 9. See generally Comment, Federal Immunity from State Taxation, 45 U. Chi. L. Rev. 695, 700-702 (1978). The State does not discriminate against the Federal Government and those with whom it deals unless it treats someone else better than it treats them.

The Court of Appeals thought that the Washington statutes do not provide a “political check against abuse of the taxing power,” Fresno, supra, at 463, because “there is no broad state constituency taxed as are the prime contractors who deal with the federal government.” 654 F. 2d, at 577. A “political check” is provided when a state tax falls on a significant group of state citizens who can be counted upon to use their votes to keep the State from raising the tax excessively, and thus placing an unfair burden on the Federal Government. It has been thought necessary because the United States does not have a direct voice in the state legislatures. See generally Fresno, swpra, at 458-459, and n. 6.

The Court of Appeals focused only on the taxes levied directly on contractors, and not on “ ‘the whole tax structure of the state.’” Phillips, 361 U. S., at 383 (quoting Trades-mens, 309 U. S., at 568). The tax on federal contractors is part of the same structure, and imposed at the same rate, as the tax on the transactions of private landowners and contractors. Indeed, the tax on contractors is part of a single sales tax scheme that is imposed at the same rate on every retail transaction in Washington; virtually every citizen is affected by the tax in the same way. As long as the tax imposed on those who deal with the Federal Government is an integral part of a tax system that applies to the entire State, there is little chance that the State will take advantage of the Federal Government by increasing the tax.

In short, Washington has not singled out contractors who work for the United States for discriminatory treatment. It has merely accommodated for the fact that it may not impose a tax directly on the United States as the project owner. This the State may do without running afoul of the Supremacy Clause. As the Court stated in United States v. New Mexico, supra, at 737-738:

“If the immunity of federal contractors is to be expanded beyond its narrow constitutional limits, it is Congress that must take responsibility for the decision, by so expressly providing as respects contracts in a particular form, or contracts under particular programs. James v. Dravo Contracting Co., 302 U. S., at 161; Carson v. Roane-Anderson Co., 342 U. S. 232, 234 (1952). And this allocation of responsibility is wholly appropriate, for the political process is ‘uniquely adapted to accommodating the competing demands’ in this area. Massachusetts v. United States, 435 U. S. 444, 456 (1978) .... But absent congressional action, we have emphasized that the States’ power to tax can be denied only under ‘the clearest constitutional mandate.’ Michelin Tire Corp. v. Wages, 423 U. S. 276, 293 (1976).”

The judgment of the Court of Appeals is

Reversed.

Justice Blackmun,

with whom Justice White, Justice Marshall, and Justice Stevens join, dissenting.

The Court by its ruling in this case continues its recent tendency to be sympathetic with States in their urgent quest for new taxes. In my view, however, the Court now oversteps the important and significant boundary that separates appropriate state taxation, having only an incidental effect on federal operations, from inappropriate state taxation that is imposed directly or indirectly upon the United States and is therefore invalid under the Supremacy Clause, Art. VI, cl. 2, of the United States Constitution. The State of Washington has sought to circumvent the United States’ absolute constitutional immunity from state taxation. The District Court and the Court of Appeals in this litigation upheld the Federal Government’s protest against the incursion and granted the United States declaratory and injunctive relief. This Court, by reversing that considered judgment, upholds Washington’s circumvention.

HH

The Supremacy Clause, of course, is the foundation of McCulloch v. Maryland, 4 Wheat. 316 (1819), where the Court laid down the principle that the property, functions, and instrumentalities of the Federal Government are immune from taxation by its constituent parts. Since McCulloch, the Court “has never questioned the propriety of absolute federal immunity from state taxation.” United States v. New Mexico, 455 U. S. 720, 733 (1982). And “a State may not, consistent with the Supremacy Clause ... lay a tax ‘directly upon the United States, Mayo v. United States, 319 U. S. 441, 447 (1943).” Ibid. Federal immunity is “the unavoidable consequence of that supremacy which the constitution has declared.” McCulloch v. Maryland, 4 Wheat., at 436.

An established corollary of this basic principle is that “a tax may be invalid even though it does not fall directly on the United States if it operates so as to discriminate against the Government or those with whom it deals.” United States v. City of Detroit, 355 U. S. 466, 473 (1958). Accord, Memphis Bank & Trust Co. v. Garner, 459 U. S. 392 (1983). Specifically, it “remains true . . . that state taxes on contractors are constitutionally invalid if they discriminate against the Federal Government, or substantially interfere with its activities.” United States v. New Mexico, 455 U. S., at 735, n. 11. To be sure, “the economic burden on a federal function of a state tax imposed on those who deal with the Federal Government does not render the tax unconstitutional so long as the tax is imposed equally on the other similarly situated constituents of the State.” United States v. County of Fresno, 429 U. S. 452, 462 (1977).

But here, contractors for the Federal Government are singled out for a special tax that applies to no other contractor within the State of Washington. A contractor who deals with the Federal Government is subject to the tax. One who deals with the State or a private party is not subject to the tax. It is as simple as that. It necessarily follows that the tax violates the Supremacy Clause, just as if the tax were laid directly upon the United States. To hold otherwise, by measuring the perceived economic burden, demeans the principle of McCulloch v. Maryland.

I — I h — i

I agree with the Court that Washington’s statutory provisions are best understood “in light of their history.” Ante, at 538. But that history reveals, it seems to me, the clear purpose of the Washington Legislature to “get at” the Federal Government and to overcome its tax immunity. In contrast with the usual silence of legislative history behind state enactments, the history here is clear and the purpose is specific.

A. Washington’s sales and use taxes came into being in 1935. 1935 Wash. Laws, ch. 180. Under that original legislation, all building contractors were treated in precisely the same manner. Sales of tangible personal property to the contractor were subject to the retail sales tax, and use of tangible personal property by the contractor was subjected to the use tax if it had not first been subjected to the sales tax. There were no exceptions to this pattern. It applied to contractors who dealt with the Federal and State Governments, with local governments, and with private parties.

B. In 1941, however, a major change was effected in the State’s system as it applied to contractors. The taxable transaction no longer was the sale to the contractor; instead, the taxable transaction became the sale by the contractor to the property owner. 1941 Wash. Laws, ch. 178, §2. See Klickitat County v. Jenner, 15 Wash. 2d 373, 130 P. 2d 880 (1942). The sale of building items to the contractor then became a nontaxable wholesale transaction. This change, for purposes of the present case, had two important consequences. The first was that the State’s sales tax base was expanded. Before 1941, it had included only property sold to the contractor. Now it included the contractor’s total charge to the owner. This charge, of course, included not only the costs of material, but labor costs and the contractor’s profit as well. The second consequence of the 1941 statute related to construction for the Federal Government. Here the tax base was diminished. Most sales of property to the contractor were immune because they were at wholesale. But the transaction between the contractor and the Federal Government also was immune because of the Government’s vendee status and its constitutional immunity from a direct tax.

Clearly, this 1941 change in the statute was a knowing one. Washington accepted Federal Government immunity in exchange, as it were, for the substantial expansion of the sales tax base for all other construction. Thus, from 1941 through the first half of 1975, no sales or use taxes were levied on nonroad construction projects on real property owned by the Federal Government in the State of Washington. This was the result of a considered choice by the legislature generally to enlarge its tax base.

C. This happy situation for federal construction projects in the State became the subject of the Washington Legislature’s concern and disapproval in 1975. In an attempt to collect sales and use taxes with respect to material incorporated in building construction projects owned by the United States, the legislature redefined the terms “retail sale” and “consumer” in the State’s sales and use tax statutes. It is conceded that the target was specific and the change purposefully made to catch the burgeoning federal construction in the State. Brief for Appellants 6-8; Tr. of Oral Arg. 7. As a result, prime contractors performing construction work on real property owned by the United States now were required to pay sales and use taxes on material and personal property incorporated into such construction projects. In stark contrast, however, the 1975 legislation did not amend the State’s sales and use tax laws so as to impose like obligations on contractors performing construction work on real property owned by the State or by private persons. With respect to these, any such taxes imposed continued to be the obligation of the particular project’s owner. The enlargement of the tax base that had been effectuated in 1941 was thus preserved.

The consequence of the 1975 change is that prime contractors performing construction work in the State of Washington were divided into two separate and distinct categories. The first consisted of those performing construction work for the United States; these contractors now were liable for sales and use taxes on material incorporated in their projects. The second consisted of prime contractors performing construction work for the State or a private person; these contractors were not liable for sales and use taxes with respect to material incorporated therein. Since the 1975 statutory-change, the State has required prime contractors on United States construction projects to pay state sales and use taxes as “consumers” of material. But similarly situated prime contractors for the State and for private persons are not so taxed.

Ill

It is easy and convenient to argue, as the Court does, ante, at 540-542, that Washington imposes a sales tax on all purchases from contractors who do not deal with the Federal Government, that the tax rate is the same for everyone, and that the Federal Government is really better off than others because the tax consequence to it is a lesser amount inasmuch as the contractor’s labor costs and markup are not included in the tax base. The latter alleged fact, as I shall endeavor to point out, is a glib and, in my view, unwarranted assumption.

Three cases, in particular, decided by this Court demand affirmance of the judgment of the Court of Appeals. The first is Miller v. Milwaukee, 272 U. S. 713 (1927). There the Court struck down a Wisconsin income tax provision that, similarly, sought to circumvent the tax immunity of the United States. It held unconstitutional the State’s attempt to single out the income from corporation-owned Government bonds and to tax a fraction of corporate dividends equal to the fraction of the corporation’s income derived from Government bonds. It was the selection of such income for tax, to the exclusion of other income, that was the basis of the decision. Justice Holmes, in speaking for the Court, stated:

“A system of taxation that applied to stockholders of all corporations equally might tax ... the stockholders of a corporation that had invested all its property in United States bonds. But it would be a different matter if the state selected such corporations . . . and taxed their stockholders alone. It is a familiar principle that conduct which in usual situations the law protects may-become unlawful when part of a scheme to reach a prohibited result.” Id., at 714-715.

Such discriminatory selectivity is forbidden by the Constitution. This analysis was reaffirmed by a unanimous Court in Phillips Chemical Co. v. Dumas Independent School Dist., 361 U. S. 376, 383 (1960), when it pronounced that Miller v. Milwaukee stands for the proposition that “a State may not single out those who deal with the Government, in one capacity or another, for a tax burden not imposed on others similarly situated.”

Phillips is the second case. It demonstrates that discrimination against the Federal Government need not be explicit in a State’s statute to be prohibited by the Supremacy Clause. There, Texas legislation provided for taxation of private users of Government realty but the tax was less for property held under a lease for three years or more. Because a federal lease was subject to termination in the event of sale, the lessee could not qualify for the preferential tax treatment. Accordingly, the Court held the Texas statute unconstitutional. It said:

“Here, Phillips is taxed ... on the full value of the real property which it leases from the Federal Government, while businesses with similar leases, using exempt property owned by the State and its political subdivisions, are not taxed on their leaseholds at all. The differences . . . seem too impalpable to warrant such a gross differentiation. It follows that [the statute], as applied in this case, discriminates unconstitutionally against the United States and its lessee.” 361 U. S., at 387.

The continuing validity of Phillips was recognized by a unanimous Court just a few weeks ago. Memphis Bank & Trust Co. v. Garner, 459 U. S., at 398. As the Court acknowledges, ante, at 542, the Texas tax was said to be invalid “because it imposed ‘a heavier tax burden on lessees of federal property than is imposed on lessees of’ state property.” The reference to the comparative weight of the tax was not one to the rate but to the quantity of the property interest taxed. So it is here, for what the State of Washington taxes with respect to a federal building contractor is different from what it taxes with respect to any other building contractor. The holding and principle of Phillips are not so easily to be explained away.

The third case is Moses Lake Homes, Inc. v. Grant County, 365 U. S. 744 (1961). There the county attempted to tax the full value of improvements on privately owned Wherry Act leaseholds of housing developments on a military base. It taxed other leaseholds, however, including privately owned leaseholds of tax-exempt state lands, at a lower valuation. A unanimous Court held the tax unconstitutional and void, and it reversed the lower court’s judgment to the effect that the Constitution required only that the amount collectible be reduced to the level of taxes upon other leaseholds. The Court today would distinguish Moses Lake Homes by saying merely that it “does not support the United States’ position any more than the holding in Phillips.” Ante, at 542-543, n. 7.

It seems to me that Miller, Phillips, and Moses Lake Homes all require the conclusion that the Washington tax under submission here is invalid as applied to contractors for the Federal Government. A State cannot single out the Federal Government and those with whom it deals for special tax burdens. For more than 30 years the State of Washington apparently remained content with the choice it made in its 1941 restructuring of its sales and use taxes to gain enhanced revenue from other sources at the price of sacrificing revenue from Federal Government contractors. A substantial expansion of construction activity on behalf of the United States brought to the attention of the state legislature a prized target for increased state taxation. A statute singling out those who serve the United States was the result and equated with a tax on the United States itself.

The State asserts, and the Court appears to agree, ante, at 541-542 and 543, that so long as the monetary burden on Government contractors is no greater than the burden on others, the discrimination is constitutionally acceptable. It asserts, in other words, that the United States has no ground for complaint unless it is placed at a competitive disadvantage in the marketplace.

This conclusion is misguided as a matter of law. The decision in Moses Lake Homes establishes that the Supremacy Clause guarantees more than that the United States will not be placed at a competitive disadvantage, for there this Court reversed a ruling that would have resulted in equal tax burdens on federal and nonfederal lessees. The Supremacy Clause does not merely guarantee equality; it absolutely immunizes the contractors and lessees of the United States from discriminatory state taxation.

The Court’s economic burden argument is also questionable as a matter of fact. That the incidence of the tax as applied to federal contractors does not include labor and profit components does not necessarily mean that the total costs to the contractors and hence to the United States are less than the total costs to a nonfederal contractor. Only the federal contractor is required, under Washington’s system, to put out additional tax money “up front,” as the project progresses, to maintain special records, to hire personnel for such recordkeeping, and to prepare and file returns. This is not inexpensive activity, and its costs could exceed what would have been the tax increment on the labor and profit components. The record does not disclose the facts. In any event, those facts are inconsequential, for it is discrimination, not the quality of the burden, that carries unconstitutional consequences. It is “absolute federal immunity from state taxation” that this Court “has never questioned.” United States v. New Mexico, 455 U. S., at 733.

The Court’s reliance upon United States v. County of Fresno, 429 U. S. 452 (1977), deserves passing mention. There a possessory use tax was imposed solely on private citizens who used tax-exempt land. The individual appellants in that case were United States Forest Service employees who lived in federally owned houses. The Court concluded, however, that there was no discrimination, for the tax did not discriminate against the Forest Service or other federal employees. Indeed, the United States expressly abandoned any claim that the tax treated federal employees differently from state employees who lived in state-owned houses. Id., at 464, n. 13.

Finally, it is of interest to note the Court’s obvious discomfort in evaluating the relative burdens of different methods of taxation by States of the Federal Government and of those with whom it does business. In Minneapolis Star & Tribune Co. v. Minnesota Comm’r of Revenue, also decided today, post, at 589-590, n. 12, the Court struggles with the problem of the economic incidence of a tax on the Federal Government. There it says that a State remains free to impose the economic incidence of a tax on the United States so long as that tax is not discriminatory, and it explains the result in this Washington case as a mere accommodation. This, the Court says, may “force us, within limits, . . . to compare the burdens of two different taxes.” For me, that is a new approach to state taxation of the Federal Government, and it flies in the face of the Court’s simultaneously expressed view that “courts as institutions are poorly equipped to evaluate with precision the relative burdens of various methods of taxation.” Post, at 589; see post, at 600 (Rehnquist, J., dissenting). I had thought this measure of state taxation of the Federal Government absolutely improper as a constitutional matter. United States v. New Mexico, 455 U. S., at 733. Now the Court, in order to prevent abuse, will have to dissect and carefully measure every state system that imposes its tax burden upon the United States.

I respectfully dissent.

       The statute places public housing authorities in the same category as the Federal Government. No party has argued that this circumstance affects the analysis of this case, and public housing authorities will be disregarded throughout this opinion. The statute treats all branches of state or local government other than public housing authorities in the same way as private parties.

       As the Court of Appeals explained, 654 F. 2d 570, 573, n. 6 (1981):
      “The manner in which this was accomplished is somewhat complex. The change was effected by substitute House Bill No. 86, enacted into law as Chapter 90, Laws of 1975 (amending Wash. Rev. Code §§ 82.04.050 and 82.04.190); Section 5 of Substitute House Bill No. 2736, enacted into law as Section 5 of Chapter 291, Laws of 1975 (amending Wash. Rev. Code §82.04.050) and House Bill No. 1229, enacted into law as Chapter 1, Laws of 1975-76 (amending Wash. Rev. Code §§82.12.010 and 82.12.020). These statutes added the following definition of ‘consumer’ to Wash. Rev. Code §82.04.190:
      “ ‘ “Consumer” means the following: . . .
      “‘(6) Any person engaged in the business of constructing, repairing, decorating, or improving new or existing buildings or other structures under, upon or above real property of or for the United States, any instrumentality thereof, or a county or city housing authority created pursuant to chapter 35.82 RCW, including the installing or attaching of any article of tangible personal property therein or thereto, whether or not such personal property becomes a part of the realty by virtue of installation. Any such person shall be a consumer within the meaning of this subsection in respect to tangible personal property incorporated into, installed in, or attached to such building or other structure by such person.’
      “These statutes further expressly excluded from the definition of ‘consumer’ ‘the United States, instrumentalities thereof, and county and city housing authorities created pursuant to chapter 35.82 RCW in respect to labor and services rendered to their real property.’ Wash. Rev. Code §82.04.190(4). Wash. Rev. Code §82.04.050 was also amended so as to redefine ‘retail sale’ and ‘sale at retail’ to exclude expressly from their scope contracts calling for the improvement, repair or construction of real property owned by the United States or any of its instrumentalities and to include sales of materials to prime contractors engaged in construction work on federally-owned property. As with the sales tax, the liability of federal prime construction contractors for the State’s use tax arose basically from the inclusion of such contractors within the meaning of the term ‘consumer,’ and the use of that term in Wash. Rev. Code § 82.12.020, under which the use tax is levied.”

       The United States argues that it is inappropriate to consider the economic burden on the contractor and the owner together, and that we should focus solely on the tax the contractor is required to pay. When the case is viewed in this light, we are told, it is apparent that federal contractors pay more than other contractors. The Court of Appeals apparently accepted this argument. Id., at 576.
      This way of looking at the problem is unrealistic. The appropriate question is whether a contractor who is considering working for the Federal Government is faced with a cost he would not have to bear if he were to do the same work for a private party. If he works for the Federal Government, the contractor is required to pay a tax on the materials he buys. The contractor will count the tax among his costs in setting a price for the Government. Depending on his bargaining power, he may pass some or all of the tax on to the Federal Government when he sets his price. If he works for a private party, the contractor is required to collect the tax from the purchaser and remit it to the State. The purchaser will count the tax as part of the price of the building. Depending on his bargaining power, the contractor may reduce his price to make up for some or all of the tax the purchaser must pay. If the tax is the same, and the parties have the same bargaining power, the amounts the purchasers pay and the amounts the contractors receive will be identical in the two cases. Thus, it makes no difference to the contractor (or to the purchasers) which of them is required to pay the tax to the State, as long as they have the opportunity to allocate the burden among themselves by adjusting the price.

       We acknowledged that Macallen Co. v. Massachusetts, 279 U. S. 620 (1929), supported the United States’ argument, but explained that, “to the extent that it does, it no longer has precedential value.” 361 U. S., at 382. See also United States v. City of Detroit, 355 U. S. 466, 472, n. 2 (1958).

       We noted that “nothing in Miller [v. Milwaukee, 272 U. S. 713 (1927), upon which the United States also seeks to rely], at least as it has been interpreted in later eases, should be read as indicating that less is required.” 361 U. S., at 383.

       The United States also relies upon Moses Lake Homes, Inc. v. Grant County, 365 U. S. 744 (1961). In that ease, like in Phillips, the State taxed lessees of property owned by the State on a lower valuation than lessees of property owned by the United States. We held, on the authority of Phillips, that the tax was invalid. 365 U. S., at 751. This holding does not support the United States’ position any more than the holding in Phillips.

      The Court of Appeals in Moses Lake had attempted to eliminate the discriminatory aspect of the tax by reducing the tax “to what it would have been if” it had been levied on a state lessee. 365 U. S., at 752. We held that the Court of Appeals did not have the power to revise the state tax to cure a constitutional defect. Ibid. This was nothing more than a ruling on severability and has no bearing on this case.

       Nothing in the case turned on the existence of other tax-exempt owners.

       This answers the United States’ contention that the Washington tax is invalid simply because it is an attempt to circumvent the Federal Government’s tax immunity. The Washington statute is no different from any other taxing scheme that switches the incidence of the tax from one party to a transaction to another when the party that would ordinarily be taxed is immune. In this respect, this case is no different from Fresno or Detroit.

       In this respect, this case is like United States v. Department of Revenue of Illinois, 371 U. S. 21 (1962), summarily aff’g 202 F. Supp. 757 (ND Ill.). Illinois imposed a retail sales tax on the retailer and a tax in an identical amount on the purchaser. The State permitted the retailer to keep the tax he collected from the purchaser. Although retailers could not, of course, collect the tax from the United States when it purchased goods from them, they were nonetheless required to pay the tax imposed on them. Retailers who dealt with the United States were economically burdened by this taxing scheme unless they could adjust their prices to pass their tax burden on to the Federal Government. Nevertheless, this Court summarily affirmed the District Court’s conclusion, id., at 760, that such disparate treatment of taxpayers resulting from the United States’ immunity from state taxation is not forbidden by the Supremacy Clause.

       A different situation would be presented if a State imposed a sales tax on contractors who work for the Federal Government, and an entirely differrent kind of tax, such as a head tax or a payroll tax, on every other business. That, however, is not this case.

       We note that when Congress has acted in this field, it has applied a nondiscrimination rule. See, e. g., Memphis Bank & Trust Co. v. Garner, 459 U. S. 392 (1983) (construing 31 U. S. C. § 742). If some other test of the validity of a state tax was necessary to protect the Federal Government, it would be reasonable to expect that Congress would, for at least some situation, have devised one.

       See, e. g., United States v. County of Fresno, 429 U. S. 452 (1977); United States v. New Mexico, 455 U. S. 720 (1982). But compare Minneapolis Star & Tribune Co. v. Minnesota Comm’r of Revenue, post, p. 575.

       See 1975 Wash. Laws, 1st Ex. Sess., ch. 90, and ch. 291, §5, and 1975 Wash. Laws, 2d Ex. Sess., ch. 1.

         Miller v. Milwaukee is not to be explained away, as the Court attempts to do, ante, at 542, n. 6, by intimating that later cases have cut back the holding in Miller. The quotation from Miller, set forth in the Court’s footnote, appears on the same page of the Phillips opinion as the Court’s more positive and specific statement of law I have quoted in the text.

       Additionally, the Court’s assumption, ante, at 541-542, n. 4, that a federal contractor will be able to pass the tax through to the Federal Government is highly suspect. First, the assumption hardly can be applied to a contract made prior to the 1975 legislation. A contractor trapped with such a contract has the burden of the tax; a private contractor is not at the same risk. Second, the Court seems to believe that a federal contractor has the same amount of bargaining power with the Federal Government as his private counterpart has with his contractual partner. I suspect that in most circumstances this is not correct. Under Washington’s tax, a private contractor charges his client the amount of the state tax on top of the contract price; it is far from clear that a federal contractor is able to pass the tax on in the same way to the Federal Government.


source: Caselaw Access Project

author: Justice Stevens Justice Brennan,

license: Public Domain

text:
    ILLINOIS v. ABBOTT & ASSOCIATES, INC., et al.
    No. 81-1114.
    Argued November 29, 1982
    Decided March 29, 1983

      Stevens, J., delivered the opinion for a unanimous Court. Brennan, J., filed a concurring opinion, in which O’Connor, J., joined., post, p. 573.

      Thomas M. Genovese, Assistant Attorney General of Illinois, argued the cause for petitioner. With him on the briefs were Tyrone C. Fahner, Attorney General, and Thomas J. DeMay and Thomas S. Malciauskas, Assistant Attorneys General. Richard G. Wilkins argued the cause pro hac vice for the United States, respondent under this Court’s Rule 19.6, in support of petitioner. With him on the briefs were Solicitor General Lee, Assistant Attorney General Baxter, Deputy Solicitor General Wallace, and Robert B. Nicholson.

      Michael B. Nash argued the cause for respondents and filed a brief for respondents Climatemp, Inc., et al. Jerold S. Solovy, Barry Sullivan, and Thomas E. Bindley filed a brief for respondents Abbott & Associates, Inc., et al. Mark Crane and Wm. Carlisle Herbert filed a brief for respondents Inland Heating & Air Conditioning Co. et al. Arthur C. Chapman filed a brief for undisclosed respondents.

      A brief of amici curiae urging reversal was filed for the State of Alabama et al. by Stephen H. Sachs, Attorney General of Maryland, and Charles 0. Monk II and Robert W. Hesselbacher, Jr., Assistant Attorneys General; Charles A. Graddick, Attorney General of Alabama, and Susan Beth Farmer, Assistant Attorney General; Wilson L. Condon, Attorney General of Alaska, and Louise E. Ma, Assistant Attorney General; Robert

        K. Corbin, Attorney General of Arizona; Steve Clark, Attorney General of Arkansas, and David L. Williams, Deputy Attorney General; George Deukmejian, Attorney General of California, Sanford N. Gruskin, Assistant Attorney General, and Linda L. Tedeschi, Deputy Attorney General; J. D. MacFarlane, Attorney General of Colorado, and Thomas P. McMahon, Assistant Attorney General; Carl R. Ajello, Attorney General of Connecticut, and Robert M. hanger and Steven M. Rutstein, Assistant Attorneys General; Richard S. Gebelein, Attorney General of Delaware, and Vincent M. Amberly, Deputy Attorney General; Judith Rogers, Corporation Counsel of the District of Columbia, Charles Reischel, Deputy Corporation Counsel, and Timothy J. Shearer, Assistant Corporation Counsel; Jim Smith, Attorney General of Florida, and Bill L. Bryant, Jr., Assistant Attorney General; Tany S. Hong, Attorney General of Hawaii, and Sonia Faust, Deputy Attorney General; Linley E. Pearson, Attorney General of Indiana, and Frank A. Baldwin, Assistant Attorney General; Thomas J. Miller, Attorney General of Iowa, and JohnR. Perkins, Assistant Attorney General; Robert T. Stephan, Attorney General of Kansas, and Wayne E. Hundley, Deputy Attorney General; Steven L. Beshear, Attorney General of Kentucky, and James M. Ringo, Assistant Attorney General; William J. Guste, Jr., Attorney General of Louisiana, and John R. Flowers, Jr., Assistant Attorney General; James E. Tierney, Attorney General of Maine, and Cheryl Harrington, Senior Assistant Attorney General; Francis X. Bellotti, Attorney General of Massachusetts, and Alan L. Kovacs, Assistant Attorney General; Frank J. Kelley, Attorney General of Michigan, and Edwin M. Bladen, Assistant Attorney General; Warren Spannaus, Attorney General of Minnesota, and Stephen P. Kilgriff, Special Assistant Attorney General; Bill Allain, Attorney General of Mississippi, and Robert E. Sanders, Special Assistant Attorney General; John Ashcroft, Attorney General of Missouri, and William Newcomb, Assistant Attorney General; Mike Greely, Attorney General of Montana, and Jerome J. Cate; Paul L. Douglas, Attorney General of Nebraska, and Dale A. Comer, Assistant Attorney General; Richard H. Bryan, Attorney General of Nevada, and Don Christensen, Deputy Attorney General; Gregory H. Smith, Attorney General of New Hampshire, and Edward E. Lawson; James R. Zazzali, Attorney General of New Jersey, Charles D. Sapienza, and Laurel A. Price, Deputy Attorney General; Jeff Bingaman, Attorney General of New Mexico, and James J. Wechsler, Assistant Attorney General; Rufus L. Edmisten, Attorney General of North Carolina,
        H. A. Cole, Jr., Special Deputy Attorney General, and Fred R. Gamin, Assistant Attorney General; Robert 0. Wefald, Attorney General of North Dakota, and Gary Lee, Assistant Attorney General; William J. Brown, Attorney General of Ohio, and Eugene F. McShane; Jan Eric Cartwright, Attorney General of Oklahoma, and Gary Gardenhire, Assistant Attorney General; Dave Frohnmayer, Attorney General of Oregon, and William F. Gary, Solicitor General; Dennis J. Roberts II, Attorney General of Rhode Island, and Patrick J. Quinlan, Assistant Attorney General; Daniel R. McLeod, Attorney General of South Carolina, and John M. Cox, Assistant Attorney General; Mark V. Meierhenry, Attorney General of South Dakota, and Dennis R. Holmes, Assistant Attorney General; William M. Leech, Jr., Attorney General of Tennessee, and William J. Haynes, Jr., Deputy Attorney General; Mark White, Attorney General of Texas, and Katie Bond, Assistant Attorney General; David L. Wilkinson, Attorney General of Utah, and Mark K. Buchi, Assistant Attorney General; John J. Easton, Jr., Attorney General of Vermont, and Glenn A. Jarrett, Assistant Attorney General; Gerald L. Baliles, Attorney General of Virginia, Elizabeth B. Lacy, Deputy Attorney General, and Bertram M. Long and Craig T. Merritt, Assistant Attorneys General; Kenneth 0. Eikenberry, Attorney General of Washington, and John R. Ellis, Senior Assistant Attorney General; Chauncey H. Browning, Attorney General of West Virginia, and Charles G. Brown, Deputy Attorney General; Bronson C. La Follette, Attorney General of Wisconsin, and Michael L. Zaleski, Assistant Attorney General; and Steven F. Freudenthal, Attorney General of Wyoming, and Gay Vanderpoel, Assistant Attorney General.

        Arthur M. Handler filed a brief for Cuisinarts, Inc., as amicus curiae urging affirmance.

        Dee J. Kelly, Reese Harrison, Robert Travis, Frank McCown, Stanley E. Neely, Wilson W. Herndon, Timothy R. McCormick, and Michael P. Carnes filed a brief for certain appellants in In re Grand Jury Proceedings as amici curiae.

   Justice Stevens

delivered the opinion of the Court.

The Attorney General of Illinois asserts a statutory right of access to transcripts, documents, and other materials gathered or generated by two federal grand juries during their investigations of alleged violations of the federal antitrust laws. He contends that § 4F(b) of the Clayton Act, 90 Stat. 1395, 15 U. S. C. § 15f(b), enacted as part of Title III of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (Act), makes it unnecessary for him to meet the “particularized need” standard generally required under Rule 6(e) of the Federal Rules of Criminal Procedure in order to obtain access to grand jury materials. Disagreeing with two other Courts of Appeals, the Seventh Circuit rejected this contention. We granted certiorari to resolve the conflict, 455 U. S. 1015 (1982), and now affirm.

I

On January 31, 1980, the State of Illinois filed a petition in the United States District Court for the Northern District of Illinois seeking disclosure of transcripts and documents generated during two federal grand jury investigations of alleged bid-rigging in the construction trades in Illinois. These investigations had resulted in the return of three separate indictments naming 59 defendants. At the time the State filed its petition, most of the defendants had entered pleas of nolo contendere to the federal charges and one had been found guilty by a jury, but eight defendants were still awaiting trial. The Justice Department had refused the State’s request for the grand jury materials, explaining that they could not be disclosed without a court order under Rule 6(e) of the Federal Rules of Criminal Procedure.

The State advised the District Court that it had already initiated civil class actions against 86 defendants, charged in the indictments or identified as unindicted co-conspirators, to recover damages based on federal antitrust violations. The State’s petition invoked § 4F(b) and Rule 6(e) in support of disclosure. It further stated that “the materials requested are extremely relevant and material to Plaintiff’s causes; their disclosure will insure and promote efficient and economical utilization of scarce judicial and taxpayers resources, and will also obviate the need for duplicative and redundant discovery . . . App. 13. The Department of Justice supported the State’s petition. Certain defendants in the civil suits and others who had testified before the grand juries intervened to oppose disclosure.

The District Court first considered the State’s claim that it had a statutory right of access under § 4F(b) without making any showing of compelling or particularized need. The court concluded that, in response to a § 4F(b) request, the Justice Department was free to disclose documents that were independently acquired by the Executive Branch and voluntarily presented to the grand jury. But it held that transcripts of grand jury testimony and other materials acquired by the grand jury through the use of its subpoena power were not part of the “investigative files” of the Attorney General of the United States within the meaning of the Act. Moreover, the court found nothing in the legislative history of the Act to suggest that Congress intended either to authorize “unmonitored disclosure of purely grand jury materials” without a court order under Rule 6(e), or to modify the standard traditionally applied under Rule 6(e) itself.

The District Court then explained why the record as then developed would not justify disclosure under Rule 6(e) without reference to §4F(b). Noting the absence of any special showing of need for access to the grand jury materials, the scope of the material otherwise available to the plaintiffs, and the interests in grand jury secrecy that survived the termination of criminal proceedings, the District Court denied all of the petitions for disclosure. The denial, however, was without prejudice to renewed requests under Rule 6(e) after discovery efforts created a basis for more narrowly focused requests showing “particularized needs.”

The State of Illinois filed a timely appeal to the United States Court of Appeals for the Seventh Circuit. On appeal the State did not contend that its petition had satisfied the showing of particularized need normally required under Rule 6(e). Instead, it presented the issue that had been finally resolved by the District Court’s order: whether § 4F(b) gives the state attorney general a special right of access to grand jury materials that is independent of or that modifies the limitations that were imposed by Rule 6(e) in 1976 when the Act became law. Noting that the plain language of the Act authorizes disclosure only “to the extent permitted by law,” and that the legislative history affirmatively indicates Congress’ intent to preserve then-existing limitations on access to grand jury materials, the Court of Appeals affirmed. In re Illinois Petition to Inspect and Copy Grand Jury Materials, 659 F. 2d 800 (1981).

II

Section 4F(a) of the Clayton Act, 15 U. S. C. § 15f(a), provides that, whenever the Attorney General of the United States has brought an action under the antitrust laws, and he has reason to believe that any state attorney general would be entitled to bring a federal action based substantially on the same alleged violation, he shall promptly give written notification to that official. Under §4F(b), 15 U. S. C. § 15f(b), in order to assist a state attorney general in evaluating this notice or in bringing an action, the Attorney General of the United States “shall, upon request by such State attorney general, make available to him, to the extent permitted by law, any investigative files or other materials which are or may be relevant or material to the actual or potential cause of action under this Act.”

The plain language of §4F(b) requires us to evaluate the legal context in which Congress legislated in 1976. The statute expressly mandates disclosure of investigative files and other materials only “to the extent permitted by law.” It is therefore appropriate to examine the extent to which, at the time the Act was passed, federal law permitted the Attorney General of the United States to disclose matters occurring before a federal grand jury to a state attorney general.

Since 1946 the disclosure of grand jury minutes has been governed by Rule 6(e) of the Federal Rules of Criminal Procedure. In so many words, the Rule establishes a “General Rule of Secrecy,” a knowing violation of which “may be punished as a contempt of court.” The Rule provides that grand jury transcripts shall remain in the custody of the attorney for the Government “unless otherwise ordered by the court in a particular case.” There is only one exception to the general prohibition against disclosure without prior court approval, but that exception is limited to Federal Government personnel performing a specified federal law enforcement function. Plainly Rule 6(e) does not permit the Attorney General of the United States to disclose any grand jury proceedings to a state attorney general unless he is directed to do so by a court.

The court, however, is authorized by Rule 6(e)(3)(C) to permit certain disclosures that are otherwise prohibited by the “General Rule of Secrecy.” The scope of that authority has been delineated in a series of cases setting forth the standard of “particularized need.” We need not delineate the precise contours of that standard in this case, because the State made no attempt to make any such showing in the District Court, see n. 8, swpra, and has consistently maintained that it need not shoulder that burden.

Thus, under the law as it existed in 1976, two propositions were clear: (1) a state attorney general could not obtain access to federal grand jury proceedings without federal court approval; and (2) the State could not secure such approval merely by alleging that the materials were relevant to an actual or potential civil antitrust action. At the time the Act was passed in 1976, a blanket disclosure request comparable to the one at issue in this case would have been denied because it was not permitted by law. The State does not suggest that there has been any change in the law since 1976 that affects its right to disclosure. It therefore follows from the plain language of the Act that the State Attorney General is not entitled to the disclosure he seeks in this case.

I — I HH h — i

If the text of §4F(b) left any doubt concerning its recognition of the “General Rule of Secrecy” for grand jury mater i-als, that doubt would be removed by its legislative history. First, Congress considered and rejected a proposed section that would have specifically granted civil antitrust plaintiffs a right of access to grand jury materials after completion of federal civil or criminal proceedings. As reported by the Senate Judiciary Committee, the provision eliminated the particularized-need requirement and permitted disclosure, subject to court-imposed conditions, upon payment of reasonable costs. The proposed sweeping invasion of grand jury secrecy drew substantial criticism from a number of Senators. A floor amendment limited the section’s scope, and as amended it was adopted by the Senate, but at the informal House-Senate conference the House conferees objected and the Senate’s provision was dropped. The net effect of these deliberations was to leave the law applicable to grand jury-materials unchanged.

Second, a specific explanation of §4F(b) by Senator Ab-ourezk, the floor manager of the legislation, confirms the conclusion that Congress did not intend to change existing law concerning grand jury materials. The section was included in the compromise bill accepted by an informal House-Senate conference. After Senator Hruska expressed his concern that § 4F(b) might require the Department of Justice to act as “a massive document distribution center for the benefit of State officials,” Senator Abourezk explained:

“The section specifically limits the Attorney General’s power to release documents to whatever his powers are under existing law. Under existing law, he cannot turn over materials given in response to a grand jury demand or to a civil investigative demand. Therefore, the section is limited by existing law to cases where materials were turned over voluntarily.” 122 Cong. Rec. 29160 (1976).

Senator Abourezk’s interpretation of this provision was not questioned.

Third, the Act’s treatment of material obtained by the Government in response to Civil Investigative Demands (CID’s) supports our interpretation of §4F(b). The Act increases the Attorney General’s CID powers, but mandates that materials obtained in this manner be kept strictly confidential. CID materials may not be disclosed to persons outside the Federal Government without the consent of the provider. 15 U. S. C. § 1313 (1976 ed. and Supp. V). This requirement was imposed to safeguard the rights of individuals under investigation and to protect witnesses from retaliation. Since those reasons also underlie the traditional secrecy accorded to the grand jury, it would be anomalous for the same Congress that placed stringent limits on CID materials silently to have abrogated grand jury secrecy by permitting wholesale disclosure.

HH C

Finally, the State argues that the Act implements a general policy of encouraging federal/state cooperation and giving state attorneys general an important role in the enforcement of the antitrust laws. According to the State, this broad legislative goal would be served by facilitating the State’s access to grand jury materials. The State contends that virtually all of the Federal Government’s investigations of core Sherman Act violations — such as price fixing and bid rigging — are conducted from the outset by means of grand juries. Therefore, as in this case, a narrow reading of § 4F(b) would severely limit the amount of additional disclosure to state attorneys general. Further, the State asserts, a “particularized need” standard would be difficult to satisfy before a State has filed a civil action and attempted civil discovery — a stage when §4F(b) is intended to provide assistance to the State.

However correct these assertions may be, they do not authorize us to add specific language that Congress did not include in a carefully considered statute. Congress, of course, has the power to modify the rule of secrecy by changing the showing of need required for particular categories of litigants. But the rule is so important, and so deeply rooted in our traditions, that we will not infer that Congress has exercised such a power without affirmatively expressing its intent to do so. The general goals of enhancing federal-state cooperation in antitrust enforcement, and encouraging more state lawsuits against price fixers, are not sufficient. The statute as enacted by Congress simply does not authorize the Attorney General to turn over the entire investigative record of a federal antitrust grand jury to a state attorney general who has not complied with the judicially developed standards implementing Rule 6(e). Because the disclosure requested by the State in this case is not permitted by Rule 6(e) on the basis of the showing it made to the District Court, the judgment of the Court of Appeals is affirmed.

It is so ordered.

Justice Brennan,

with whom Justice O’Connor joins, concurring.

I join in the Court’s opinion. I write separately to state my view that when a district court considers “the public interest, if any, served by disclosure to a governmental body,” ante, at 568, n. 15, that consideration may properly include consideration of a specific statutory policy favoring disclosure in particular circumstances. In this case, the district court would have before it the specific provisions of § 4F(b) of the Clayton Act. I agree with the Court that § 4F(b) does not relieve a State of the requirement that it show particularized need under Rule 6(e) and Douglas Oil Co. v. Petrol Stops Northwest, 441 U. S. 211 (1979); but it does not follow that §4F(b) is irrelevant to the Douglas Oil balancing test. When the district court has before it a statute clearly evincing Congress’ intent to foster cooperation with and disclosure to state governments to aid them in enforcement of federal antitrust laws, that is surely material to the public interest served by disclosure to such governments.

         United States v. Colonial Chevrolet Corp., 629 F. 2d 948 (CA4 1980) (placing the burden of justifying nondisclosure on the opposing party), cert, denied, 450 U. S. 913 (1981); and United States v. B. F. Goodrich Co., 619 F. 2d 798 (CA9 1980) (allowing disclosure on a showing of “relevance”). Contra, In re Grand Jury Investigation of Cuisinarts, Inc., 665 F. 2d 24 (CA2 1981) (§ 4F(b) did not change the standard of “particularized need” for state attorneys general), cert, pending, No. 81-1595.

       In June 1978, 18 corporations, 13 individuals, and a labor union were charged with conspiring to rig bids on public sheet metal projects in the Chicago area. United States v. Climatemp, Inc., 78 CR 388 (ND Ill.) On January 31, 1979, 21 corporations and 6 individuals were indicted for conspiring to rig bids on piping construction projects in the same area. United States v. Borg, Inc., 79 CR 67 (ND Ill.) (felony); United States v. S. J. Reynolds Co., Inc., 79 CR 66 (ND Ill.) (misdemeanor).

       The State’s memorandum in support of its petition, filed on January 31, 1980, advised the court that eight defendants were scheduled to begin trial on February 4,1980. Four of these were subsequently acquitted. On request of the Justice Department, the State held its petition in abeyance pending completion of the trial.

       App. 4 (Justice Department notice to the Attorney General of Illinois that indictments had been returned); id., at 5, 7 (state requests for investigative materials relating to the indictments). In response, the Justice Department furnished 19 pages of staff memoranda. It advised the State that, with respect to other materials within the scope of the State’s request, the Department would support the State’s request for court-ordered disclosure. Id., at 9-10.

       Rule 6(e) provides, in part:
      “Rule 6. The Grand Jury

      “(e) Recording and Disclosure of Proceedings.
      “(1) Recording of proceedings. . . . The recording or reporter’s notes or any transcript prepared therefrom shall remain in the custody or control of the attorney for the government unless otherwise ordered by the court in a particular case.
      “(2) General rule of secrecy. A grand juror, an interpreter, a stenographer, an operator of a recording device, a typist who transcribes recorded testimony, an attorney for the government, or any person to whom disclosure is made under paragraph (3)(A)(ii) of this subdivision shall not disclose matters occurring before the grand jury, except as otherwise provided for in these rules. ... A knowing violation of Rule 6 may be punished as a contempt of court.
      “(3) Exceptions.

      “(C) Disclosure otherwise prohibited by this rule of matters occurring before the grand jury may also be made—
      “(i) when so directed by a court preliminarily to or in connection with a judicial proceeding; or
      “(ii) when permitted by a court at the request of the defendant, upon a showing that grounds may exist for a motion to dismiss the indictment because of matters occurring before the grand jury.
      “If the court orders disclosure of matters occurring before the grand jury, the disclosure shall be made in such manner, at such time, and under such conditions as the court may direct.”

       Section 4F of the Clayton Act, as added, 90 Stat. 1395, 15 U. S. C. § 15f, provides:
      “(a) Whenever the Attorney General of the United States has brought an action under the antitrust laws, and he has reason to believe that any State attorney general would be entitled to bring an action under this Act based substantially on the same alleged violation of the antitrust laws, he shall promptly give written notification thereof to such State attorney general.
      “(b) To assist a State attorney general in evaluating the notice or in bringing any action under this Act, the Attorney General of the United States shall, upon request by such State attorney general, make available to him, to the extent permitted by law, any investigative files or other materials which are or may be relevant or material to the actual or potential cause of action under this Act.”

       Similar petitions were filed on behalf of other parties, including local governmental entities and private persons, who had also filed treble-damages actions against the defendants. The Justice Department took no position with regard to these petitions. The District Court consolidated the various petitions for purposes of argument and decision.

       “Petitioners have simply requested the release to them of all of the grand jury material. In their quest for information grand juries often acquire reams of documents and hours of testimony later to be found irrelevant to the investigation or the final charge. Its wholesale disclosure could be embarrassing, if not destructive of third parties or of unindicted individuals and corporations concerned when witnesses are called upon to testify or furnish evidence which involves them. This is one of the principal reasons why grand jurors are sworn to secrecy. It is the duty of the court in following 6(e) to protect from public scrutiny and injury such individuals and corporations. Petitioners after having done little more than filing a suit, seek an all-encompassing, unparticularized general type of full disclosure which by the very nature of the request would defeat the spirit and rule of Procter & Gamble and Douglas Oil [United States v. Procter & Gamble Co., 356 U. S. 677 (1958); Douglas Oil Co. v. Petrol Stops Northwest, 441 U. S. 211 (1979)]. Their request offends the common-law concern for the traditional protection of the innocent that has been built into our grand jury system from its earliest conception.” App. to Pet. for Cert. 37a-38a.
      These comments carry special weight because they were made by the Chief Judge of a large metropolitan District, who had acquired a unique familiarity with the problems associated with the supervision of the conduct of grand juries.

       Because the District Court’s order finally disposed of the State Attorney General’s claim of a statutory right of access to grand jury materials without a showing of particularized need, we are satisfied that the order was appealable under 28 U. S. C. § 1291. The court’s acknowledgment that the State might subsequently seek disclosure of particular materials under a “particularized need” standard does not deprive the order of finality. The ruling at issue in this case was made by the Chief Judge of the Northern District of Illinois in a separately docketed proceeding, see App. to Pet. for Cert. 40a; the opinion contemplates that further disclosure requests would be filed with the District Judges presiding over the State’s civil antitrust actions, id., at 39a. See Illinois v. Sarbaugh, 552 F. 2d 768, 773-774 (CA7 1977); cf. Douglas Oil Co. v. Petrol Stops Northwest, supra, at 231-233 (Rehnquist, J., concurring) (the District Court’s order granting access to grand jury minutes “disposes of all of the contentions of the parties and terminates a separate proceeding pending before the grand jury court” and is therefore appealable as a “final decisio[n]” under 28 U. S. C. § 1291).

       The parties have briefed and argued, as a separate question, whether grand jury files are included in the “investigative files or other materials” covered by § 4F(b). Respondents suggest that, because the section imposes upon the Attorney General an automatic and mandatory obligation to disclose the materials to which it does apply, it simply does not apply to grand jury materials — which can be disclosed only if authorized by a court. Given our reading of the statute’s proviso that disclosure shall be made “to the extent permitted by law,” we do not need to address this question separately.

       See Rule 6(e)(2), quoted in n. 5, supra. The General Rule of Secrecy codifies a longstanding rule of common law which we have recognized as “an integral part of our criminal justice system.” Douglas Oil Co. v. Petrol Stops Northwest, supra, at 218, n. 9. Several distinct interests are served by safeguarding the confidentiality of grand jury proceedings. See 441U. S., at 219, and n. 10. Even after the conclusion of a particular grand jury’s investigation, continued secrecy protects the reputations of the innocent and safeguards witnesses from possible retaliation. In addition, stringent protection of the secrecy of completed grand jury investigations may be necessary to encourage persons to testify fully and freely before future grand juries. Id., at 222. More generally, grand jury secrecy has traditionally been invoked to justify the limited procedural safeguards available to witnesses and persons under investigation.

       Rule 6(e)(1).

       Rule 6(e)(3)(A)-(B).

       See Douglas Oil Co., 441 U. S., at 221-224. “Parties seeking grand jury transcripts under Rule 6(e) must show that the material they seek is needed to avoid a possible injustice in another judicial proceeding, that the need for disclosure is greater than the need for continued secrecy, and that their request is structured to cover only material so needed.” Id., at 222 (footnote omitted); see also United States v. Procter & Gamble Co., 356 U. S., at 682; Pittsburgh Plate Glass Co. v. United States, 360 U. S. 395, 398-399 (1959); cf. Dennis v. United States, 384 U. S. 855 (1966).

       The State’s petition sought all materials gathered or generated by the grand jury investigations. In this Court, the State concedes that the district court may properly exercise its discretion to determine whether to disclose the requested materials, but it proposes “a standard less restrictive than particularized need.” See Brief for Petitioner 30-33, 42-43. Under this standard the district court would determine whether disclosure would undermine an ongoing or potential federal enforcement proceeding and whether countervailing interests require secrecy, and it could impose appropriate protective limitations upon disclosure. Ibid. The United States, as respondent under this Court’s Rule 19.6, in support of petitioner proposes a similar test. See Brief for United States 24-28. However such a standard might be formulated, it differs from the “particularized need” standard, which is expressly preserved by § 4F(b). But in rejecting such a rule, we stress that under the particularized-need standard, the district court may weigh the public interest, if any, served by disclosure to a governmental body — along with the requisite particularized need — in determining whether “the need for disclosure is greater than the need for continued secrecy.” Douglas Oil Co., supra, at 222.

       The State does not directly argue that, apart from § 4F(b), the law permits it to obtain grand jury materials without a showing of particularized need. At oral argument the Assistant Attorney General expressed uncertainty regarding the legal standard that would apply in the absence of § 4F(b). Tr. of Oral Arg. 10. Cf. Brief for United States 15, n. 10 (expressing no opinion on the standard applicable to State requests for grand jury materials in the absence of § 4F(b)).

       Although we examine the law in 1976 as an aid to interpreting the intent of the Congress that enacted § 4F(b), the terms of the Act would, of course, be satisfied if a requested disclosure is “permitted by law” at the time the request is made.

       See S. Rep. No. 94-803, pp. 4, 33-35, 128, 152 (1976) (§202(0 of S. 1284). The Senate Judiciary Committee bill also authorized the Attorney General to give the Federal Trade Commission access to these grand jury materials. Id., at 31-32 (§202(k)).

       See, e. g., id., at 203-204 (minority views of five members of Judiciary Committee); 122 Cong. Rec. 15318 (1976) (Sen. Thurmond); id., at 15835 (Sen. Allen); id., at 17428-17431 (Sen. Tower). The proposal was also opposed by the administration. Id., at 17038.
      One of the leading opponents of § 212(1), Senator Allen, introduced a substitute amendment, defeated by the Senate, which was virtually identical in wording to the section in the House bill that was later enacted into law as § 4F(b). See id., at 15852-15853,16824-16825,17194. Senator Allen’s support of this provision, coupled with his strong opposition to § 212(1), indicates that § 4F(b) was not intended to abrogate traditional protections of grand jury secrecy.

       The amendment limited disclosure to cases in which a defendant had entered a plea of guilty or nolo contendere, and permitted only the disclosure of material provided by that defendant, not by third parties. Id., at 15917-15918, 16922-16923. Amended § 202(1) was part of the bill adopted by the Senate on June 10, 1976. Id., at 17572.

        Id., at 29147. After the conference, Senator Abourezk, the Senate floor manager of the bill, prepared a chart comparing the Senate and House versions. The chart showed that S. 1284 gave private plaintiffs and the FTC access to grand jury materials, and that the House version had no comparable provisions. In another section it stated that the House bill provided that state attorneys general may obtain investigative files or other materials from the United States Attorney General “to the extent permitted by law,” and noted that the Senate bill had no such provision. See id,., at 29151-29152. The chart’s structure and wording strongly suggest that § 4F(b) did not contemplate disclosure of grand jury materials to state attorneys general.

         Id., at 29144.

       This statement in floor debate is consistent with language in a House Committee Report on an earlier version of the statute, which explains that the Justice Department’s investigative files “are to be made available except where specifically prohibited.” H. R. Rep. No. 94-499, p. 17 (1975). This language merely paraphrases the plain language of the statute; Rule 6(e) quite specifically prohibits disclosure of grand jury documents save under specified conditions.

       Limited CID authority was conferred upon the Attorney General by the Antitrust Civil Process Act of 1962, Pub. L. 87-664, 76 Stat. 548. The Attorney General’s powers were considerably expanded by Title I of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, codified at 15 U. S. C. § 1311 et seq. (1976 ed. and Supp. V).

       See H. R. Rep. No. 94-1343, pp. 3, 8, 18 (1976); S. Rep. No. 94-803, supra n. 18, at 30-31; 122 Cong. Rec. 29341 (1976) (explanation of House-Senate compromise bill by Sen. Hart).

       Indeed, the House Report explains the Justice Department’s need for increased CID powers by canvassing the inadequacy of each alternative, including grand jury investigations, for civil enforcement purposes.
      “The Division might try to empanel a grand jury, as it currently does in criminal antitrust investigations, and use the sweeping, compulsory powers of that investigative body to unearth evidence of civil violations. But the U. S. Supreme Court has virtually eliminated the Antitrust Division’s power to utilize the grand jury as a civil investigative tool. In United States v. Procter & Gamble, 356 U. S. 677 (1958), Justice Douglas concluded that ‘if the prosecution were using . . . criminal procedures to elicit evidence in a civil case, it would be flouting the policy of the law.’ That is because such a use of the grand jury would subvert the Division’s policy of proceeding criminally only against flagrant, willful offenses, and would debase the law ‘by tarring respectable citizens with the brush of crime when their deeds involve no criminality.’ ” H. R. Rep. No. 94-1343, supra, at 5.

       Brief for Petitioner 14-15.
      Although the State cites passages from hearings to show that Congress was aware of the Justice Department’s use of the grand jury, id., at 16, n. 4, these passages stressed that grand jury investigations were of limited usefulness in civil enforcement and urged the adoption of strengthened CID powers.

       Congress has, on occasion, done precisely that. In 1966 it approved amendments to Rule 16 that gave defendants a right to obtain copies of their prior statements before grand juries; Fed. Rule Crim. Proc. 16(a)(1)(A). In 1977, it amended Rule 6(e) to permit disclosure of grand jury materials to personnel assisting United States Government attorneys in the enforcement of federal criminal law. Fed. Rule Crim. Proc. 6(e)(3)(A). See also 18 U. S. C. § 3500(e)(3) (Jencks Act).

       The 1976 legislation was designed to enhance the effectiveness of antitrust enforcement on behalf of small consumers. The availability of information to antitrust plaintiffs, however, was not at the forefront of legislative deliberations. Congress focused on the difficulty of achieving class certification of consumer actions under Rule 23 of the Federal Rules of Civil Procedure and the complexity of measuring and distributing damages in such cases. See generally H. R. Rep. No. 94-499, supra n. 23, at 3-8; S. Rep. No. 94-803, supra n. 18, at 6-7, 39-40. To remedy these problems, the 1976 statute permits state attorneys general the right to institute parens patriae suits on behalf of state residents, 15 U. S. C. § 15c; exempts such suits from the class-action requirements of Rule 23, § 15c(a); and allows damages in these suits to be computed through aggregation techniques, § 15d. Therefore the State exaggerates when it asserts that the 1976 Act’s purposes would be frustrated if Rule 6(e) continued to be applied to state requests for access to grand jury materials.