author: Justice Rehnquist Chief Justice Burger,

text:
    UPJOHN CO. et al. v. UNITED STATES et al.
    No. 79-886.
    Argued November 5, 1980
    Decided January 13, 1981

      RehNquist, J., delivered the opinion of the Court, in which BreNNAN, StewaRt, White, Marshall, Blackmun, Powell, and SteveNS, JJ., joined, and in Parts I and III of which Burger, C. J., joined. Burger, C. J., filed an opinion concurring in part and concurring in the judgment, post, p. 402.

      Daniel M. Gribbon argued the cause and filed briefs for petitioners.

      Deputy Solicitor General Wallace argued the cause for respondents. With him on the brief were Solicitor General McCree, Assistant Attorney General Ferguson, Stuart A. Smith, and Robert E. Lindsay

      Briefs of amici curiae urging reversal were filed by Leonard S. Janofsky, Leon Jaworski, and Keith A. Jones for the American Bar Association; by Thomas G. Lilly, Alfred F. Belcuore, Paul F. Rothstein, and Ronald L. Carlson for the Federal Bar Association; by Erwin N. Griswold for the American College of Trial Lawyers et al.; by Stanley T. Kaleczyc and J. Bruce Brown for the Chamber of Commerce of the United States; and by Lewis A. Kaplan, James N. Benedict, Brian D. Forrow, John G. Koeltl, Standish Forde Medina, Jr., Renee J. Roberts, and Marvin Wexler for the Committee on Federal Courts et al.

        William W. Becker filed a brief for the New England Legal Foundation as amicus curiae.

   Justice Rehnquist

delivered the opinion of the Court.

We granted certiorari in this case to address important questions concerning the scope of the attorney-client privilege in the corporate context and the applicability of the work-product doctrine in proceedings to enforce tax summonses. 445 U. S. 925. With respect to the privilege question the parties and various amici have described our task as one of choosing between two “tests” which have gained adherents in the courts of appeals. We are acutely aware, however, that we sit to decide concrete cases and not abstract propositions of law. We decline to lay down a broad rule or series of rules to govern all conceivable future questions in this area, even were we able to do so. We can and do, however, conclude that the attorney-client privilege protects the communications involved in this case from compelled disclosure and that the work-product doctrine does apply in tax summons enforcement proceedings.

I

Petitioner Upjohn Co. manufactures and sells pharmaceuticals here and abroad. In January 1976 independent accountants conducting an audit of one of Upjohn’s foreign subsidiaries discovered that the subsidiary made payments to or for the benefit of foreign government officials in order to secure government business. The accountants so informed petitioner Mr. Gerard Thomas, Upjohn’s Vice President, Secretary, and General Counsel. Thomas is a member of the Michigan and New York Bars, and has been Upjohn’s General Counsel for 20 years. He consulted with outside counsel and R. T. Parfet, Jr., Upjohn’s Chairman of the Board. It was decided that the company would conduct an internal investigation of what were termed “questionable payments.” As part of this investigation the attorneys prepared a letter containing a questionnaire which was sent to “All Foreign General and Area Managers” over the Chairman’s signature. The letter began by noting recent disclosures that several American companies made “possibly illegal” payments to foreign government officials and emphasized that the management needed full information concerning any such payments made by Upjohn. The letter indicated that the Chairman had asked Thomas, identified as “the company’s General Counsel,” “to conduct an investigation for the purpose of determining the nature and magnitude of any payments made by the Upjohn Company or any of its subsidiaries to any employee or official of a foreign government.” The questionnaire sought detailed information concerning such payments. Managers were instructed to treat the investigation as “highly confidential” and not to discuss it with anyone other than Upjohn employees who might be helpful in providing the requested information. Responses were to be sent directly to Thomas. Thomas and outside counsel also interviewed the recipients of the questionnaire and some 33 other Upjohn officers or employees as part of the investigation.

On March 26, 1976, the company voluntarily submitted a preliminary report to the Securities and Exchange Commission on Form 8-K disclosing certain questionable payments. A copy of the report was simultaneously submitted to the Internal Revenue Service, which immediately began an investigation to determine the tax consequences of the payments. Special agents conducting the investigation were given lists by Upjohn of all those interviewed and all who had responded to the questionnaire. On November 23, 1976, the Service issued a summons pursuant to 26 U. S. C. § 7602 demanding production of:

“All files relative to the investigation conducted under the supervision of Gerard Thomas to identify payments to employees of foreign governments and any political contributions made by the Upjohn Company or any of its affiliates since January 1, 1971 and to determine whether any funds of the Upjohn Company had been improperly accounted for on the corporate books during the same period.
“The records should include but not be limited to written questionnaires sent to managers of the Upjohn Company’s foreign affiliates, and memorandums or notes of the interviews conducted in the United States and abroad with officers and employees of the Upjohn Company and its subsidiaries.” App. 17a-18a.

The company declined to produce the documents specified in the second paragraph on the grounds that they were protected from disclosure by the attorney-client privilege and constituted the work product of attorneys prepared in anticipation of litigation. On August 31, 1977, the United States filed a petition seeking enforcement of the summons under 26 U. S. C. §§ 7402 (b) and 7604 (a) in the United States District Court for the Western District of Michigan. That court adopted the recommendation of a Magistrate who concluded that the summons should be enforced. Petitioners appealed to the Court of Appeals for the Sixth Circuit which rejected the Magistrate’s finding of a waiver of the attorney-client privilege, 600 F. 2d 1223, 1227, n. 12, but agreed that the privilege did not apply “[t]o the extent that the communications were made by officers and agents not responsible for directing Upjohn’s actions in response to legal advice ... for the simple reason that the communications were not the 'client’s.’ ” Id., at 1225. The court reasoned that accepting petitioners’ claim for a broader application of the privilege would encourage upper-echelon management to ignore unpleasant facts and create too broad a “zone of silence.” Noting that Upjohn’s counsel had interviewed officials such as the Chairman and President, the Court of Appeals remanded to the District Court so that a determination of who was within the “control group” could be made. In a concluding footnote the court stated that the work-product doctrine “is not applicable to administrative summonses issued under 26 U. S. C. § 7602.” Id., at 1228, n. 13.

II

Federal Rule of Evidence 501 provides that “the privilege of a witness . . . shall be governed by the principles of the common law as they may be interpreted by the courts of the United States in light of reason and experience.” The attorney-client privilege is the oldest of the privileges for confidential communications known to the common law. 8 J. Wigmore, Evidence §2290 (McNaughton rev. 1961). Its purpose is to encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice. The privilege recognizes that sound legal advice or advocacy serves public ends and that such advice or advocacy depends upon the lawyer’s being fully informed by the client. As we stated last Term in Trammel v. United States, 445 U. S. 40, 51 (1980): “The lawyer-client privilege rests on the need for the advocate and counselor to know all that relates to the client’s reasons for seeking representation if the professional mission is to be carried out.” And in Fisher v. United States, 425 U. S. 391, 403 (1976), we recognized the purpose of the privilege to be “to encourage clients to make full disclosure to their attorneys.” This rationale for the privilege has long been recognized by the Court, see Hunt v. Blackburn, 128 U. S. 464, 470 (1888) (privilege “is founded upon the necessity, in the interest and administration of justice, of the aid of persons having knowledge of the law and skilled in its practice, which assistance can only be safely and readily availed of when free from the consequences or the apprehension of disclosure”). Admittedly complications in the application of the privilege arise when the client is a corporation, which in theory is an artificial creature of the law, and not an individual; but this Court has assumed that the privilege applies when the client is a corporation, United States v. Louisville & Nashville R. Co., 236 U. S. 318, 336 (1915), and the Government does not contest the general proposition.

The Court of Appeals, however, considered the application of the privilege in the corporate context to present a “different problem,” since the client was an inanimate entity and “only the senior management, guiding and integrating the several operations, . . . can be said to possess an identity analogous to the corporation as a whole.” 600 F. 2d, at 1226. The first case to articulate the so-called “control group test” adopted by the court below, Philadelphia v. Westinghouse Electric Corp., 210 F. Supp. 483, 485 (ED Pa.), petition for mandamus and prohibition denied sub nom. General Electric Co. v. Kirkpatrick, 312 F. 2d 742 (CA3 1962), cert. denied, 372 U. S. 943 (1963), reflected a similar conceptual approach:

“Keeping in mind that the question is, Is it the corporation which is seeking the lawyer’s advice when the asserted privileged communication is made?, the most satisfactory solution, I think, is that if the employee making the communication, of whatever rank he may be, is in a position to control or even to take a substantial part in a decision about any action which the corporation may take upon the advice of the attorney, . . . then, in effect, he is {or personifies) the corporation when he makes his disclosure to the lawyer and the privilege would apply.” (Emphasis supplied.)

Such a view, we think, overlooks the fact that the privilege exists to protect not only the giving of professional advice to those who can act on it but also the giving of information to the lawyer to enable him to give sound and informed advice. See Trammel, supra, at 51; Fisher, supra, at 403. The first step in the resolution of any legal problem is ascertaining the factual background and sifting through the facts with an eye to the legally relevant. See ABA Code of Professional Responsibility, Ethical Consideration 4-1:

“A lawyer should be fully informed of all the facts of the matter he is handling in order for his client to obtain the full advantage of our legal system. It is for the lawyer in the exercise of his independent professional judgment to separate the relevant and important from the irrelevant and unimportant. The observance of the ethical obligation of a lawyer to hold inviolate the confidences and secrets of his client not only facilitates the full development of facts essential to proper representation of the client but also encourages laymen to seek early legal assistance.”

See also Hickman v. Taylor, 329 U. S. 495, 511 (1947).

In the case of the individual client the provider of information and the person who acts on the lawyer’s advice are one and the same. In the corporate context, however, it will frequently be employees beyond the control group as defined by the court below — “officers and agents . . . responsible for directing [the company’s] actions in response to legal advice” — who will possess the information needed by the corporation’s lawyers. Middle-level — and indeed lower-level — employees can, by actions within the scope of their employment, embroil the corporation in serious legal difficulties, and it is only natural that these employees would have the relevant information needed by corporate counsel if he is adequately to advise the client with respect to such actual or potential difficulties. This fact was noted in Diversified Industries, Inc. v. Meredith, 572 F. 2d 596 (CA8 1978) (en banc):

“In a corporation, it may be necessary to glean information relevant to a legal problem from middle management or non-management personnel as well as from top executives. The attorney dealing with a complex legal problem ‘is thus faced with a “Hobson’s choice”. If he interviews employees not having “the very highest authority”, their communications to him will not be privileged. If, on the other hand, he interviews only those employees with “the very highest authority”, he may find it extremely difficult, if not impossible, to determine what happened.’ ” Id., at 603-609 (quoting Weinschel, Corporate Employee Interviews and the Attorney-Client Privilege, 12 B. C. Ind. & Com. L. Rev. 873, 876 (1971)).

The control group test adopted by the court below thus frustrates the very purpose of the privilege by discouraging the communication of relevant information by employees of the client to attorneys seeking to render legal advice to the client corporation. The attorney’s advice will also frequently be more significant to noncontrol group members than to those who officially sanction the advice, and the control group test makes it more difficult to convey full and frank legal advice to the employees who will put into effect the client corporation’s policy. See, e. g., Duplan Corp. v. Deering Milliken, Inc., 397 F. Supp. 1146, 1164 (SC 1974) (“After the lawyer forms his or her opinion, it is of no immediate benefit to the Chairman of the Board or the President. It must be given to the corporate personnel who will apply it”).

The narrow scope given the attorney-client privilege by the court below not only makes it difficult for corporate attorneys to formulate sound advice when their client is faced with a specific legal problem but also threatens to limit the valuable efforts of corporate counsel to ensure their client’s compliance with the law. In light of the vast and complicated array of regulatory legislation confronting the modern corporation, corporations, unlike most individuals, “constantly go to lawyers to find out how to obey the law,” Burnham, The Attorney-Client Privilege in the Corporate Arena, 24 Bus. Law. 901, 913 (1969), particularly since compliance with the law in this area is hardly an instinctive matter, see, e. g., United States v. United States Gypsum Co., 438 U. S. 422, 440-441 (1978) (“the behavior proscribed by the [Sherman] Act is often difficult to distinguish from the gray zone of socially acceptable and economically justifiable business conduct”). The test adopted by the court below is difficult to apply in practice, though no abstractly formulated and unvarying “test” will necessarily enable courts to decide questions such as this with mathematical precision. But if the purpose of the attorney-client privilege is to be served, the attorney and client must be able to predict with some degree of certainty whether particular discussions will be protected. An uncertain privilege, or one which purports to be certain but results in widely varying applications by the courts, is little better than no privilege at all. The very terms of the test adopted by the court below suggest the unpredictability of its application. The test restricts the availability of the privilege to those officers who play a “substantial role” in deciding and directing a corporation’s legal response. Disparate decisions in cases applying this test illustrate its unpredictability. Compare, e. g., Hogan v. Zletz, 43 F. R. D. 308, 315-316 (ND Okla. 1967), aff’d in part sub nom. Natta v. Hogan, 392 F. 2d 686 (CA10 1968) (control group includes managers and assistant managers of patent division and research and development department), with Congoleum Industries, Inc. v. GAF Corp., 49 F. R. D. 82, 83-85 (ED Pa. 1969), aff’d, 478 F. 2d 1398 (CA3 1973) (control group includes only division and corporate vice presidents, and not two directors of research and vice president for production and research).

The communications at issue were made by Upjohn employees to counsel for Upjohn acting as such, at the direction of corporate superiors in order to secure legal advice from counsel. As the Magistrate found, “Mr. Thomas consulted with the Chairman of the Board and outside counsel and thereafter conducted a factual investigation to determine the nature and extent of the questionable payments and to.beSnM position to give legal advice to the company, with, respect to the payments.” (Emphasis supplied.) 78-1 USTC ¶ 9277, pp. 83,598, 83,599. Information, not available from upper-echelon management, was needed to supply a basis for legal advice concerning compliance with securities and tax laws, foreign laws, currency regulations, duties to shareholders, and potential litigation in each of these areas. The communications concerned matters within the scope of the employees’ corporate duties, and the employees themselves were sufficiently aware that' they were being questioned in order that the corporation could obtain legal advice. The questionnaire identified Thomas as “the company’s General Counsel” and referred in its opening sentence to the possible illegality of payments such as the ones on which information was sought. App. 40a. A statement of policy accompanying the questionnaire clearly indicated the legal implications of the investigation. The policy statement was issued “in order that there be no uncertainty in the future as to the policy with respect to the practices which are the subject of this investigation.” It began “Upjohn will comply with all laws and regulations,” and stated that commissions or payments “will not be used as a subterfuge for bribes or illegal payments” and that all payments must be “proper and legal.” Any future agreements with foreign distributors or agents were to be approved “by a company attorney” and any questions concerning the policy were to be referred “to the company’s General Counsel.” Id., at 165a-166a. This statement was issued to Upjohn employees worldwide, so that even those interviewees not receiving a questionnaire were aware of the legal implications of the interviews. Pursuant to explicit instructions from the Chairman of the Board, the communications were considered “highly confidential” when made, id., at 39a, 43a, and have been kept confidential by the company. Consistent with the underlying purposes of the attorney-client privilege, these communications must be protected against compelled disclosure.

The Court of Appeals declined to extend the attorney-client privilege beyond the limits of the control group test for fear that doing so would entail severe burdens on discovery and create a broad “zone of silence” over corporate affairs. Application of the attorney-client privilege to communications such as those involved here, however, puts the adversary in no worse position than if the communications had never taken place. The privilege only protects disclosure of communications; it does not protect disclosure of the underlying facts by those who communicated with the attorney:

“[T]he protection of the privilege extends only to communications and not to facts. A fact is one thing and a communication concerning that fact is an entirely different thing. The client cannot be compelled to answer the question, ‘What did you say or write to the attorney?’ but may not refuse to disclose any relevant fact within his knowledge merely because he incorporated a statement of such fact into his communication to his attorney.” Philadelphia v. Westinghouse Electric Corp., 205 F. Supp. 830, 831 (ED Pa. 1962).

See also Diversified Industries, 572 F. 2d, at 611; State ex rel. Dudek v. Circuit Court, 34 Wis. 2d 559, 580, 150 N. W. 2d 387, 399 (1967) (“the courts have noted that a party cannot conceal a fact merely by revealing it to his lawyer”). Here the Government was free to question the employees who communicated with Thomas and outside counsel. Upjohn has provided the IRS with a list of such employees, and the IRS has already interviewed some 25 of them. While it would probably be more convenient for the Government to secure the results of petitioner’s internal investigation by simply subpoenaing the questionnaires and notes taken by petitioner’s attorneys, such considerations of convenience do not overcome the policies served by the attorney-client privilege. As Justice Jackson noted in his concurring opinion in Hickman v. Taylor, 329 U. S., at 516: “Discovery was hardly intended to enable a learned profession to perform its functions ... on wits borrowed from the adversary.”

Needless to say, we decide only the case before us, and do not undertake to draft a set of rules which should govern challenges to investigatory subpoenas. Any such approach would violate the spirit of Federal Rule of Evidence 501. See S. Rep. No. 93-1277, p. 13 (1974) (“the recognition of a privilege based on a confidential relationship . . . should be determined on a case-by-case basis”); Trammel, 445 U. S., at 47; United States v. Gillock, 445 U. S. 360, 367 (1980). While such a “case-by-case” basis may to some slight extent undermine desirable certainty in the boundaries of the attorney-client privilege, it obeys the spirit of the Rules. At the same time we conclude that the narrow “control group test” sanctioned by the Court of Appeals in this case cannot, consistent with “the principles of the common law as . . . interpreted ... in the light of reason and experience,” Fed. Rule Evid. 501, govern the development of the law in this area.

Ill

Our decision that the communications by Upjohn employees to counsel are covered by the attorney-client privilege disposes of the case so far as the responses to the questionnaires and any notes reflecting responses to interview questions are concerned. The summons reaches further, however, and Thomas has testified that his notes and memoranda of interviews go beyond recording responses to his questions. App. 27a-28a, 91a-93a. To the extent that the material subject to the summons is not protected by the attorney-client privilege as disclosing communications between an employee and counsel, we must reach the ruling by the Court of Appeals that the work-product doctrine does not apply to summonses issued under 26 U. S. C. § 7602.

The Government concedes, wisely, that the Court of Appeals erred and that the work-product doctrine does apply to IRS summonses. Brief for Respondents 16, 48. This doctrine was announced by the Court over 30 years ago in Hickman v. Taylor, 329 U. S. 495 (1947). In that case the Court rejected “an attempt, without purported necessity or justification, to secure written statements, private memoranda and personal recollections prepared or formed by an adverse party’s counsel in the course of his legal duties.” Id., at 510. The Court noted that “it is essential that a lawyer work with a certain degree of privacy” and reasoned that if discovery of the material sought were permitted

“much of what is now put down in writing would remain unwritten. An attorney’s thoughts, heretofore inviolate, would not be his own. Inefficiency, unfairness and sharp practices would inevitably develop in the giving of legal advice and in the preparation of cases for trial. The effect on the legal profession would be demoralizing. And the interests of the clients and the cause of justice would be poorly served.” Id., at 511.

The “strong public policy” underlying the work-product doctrine was reaffirmed recently in United States v. Nobles, 422 U. S. 225, 236-240 (1975), and has been substantially incorporated in Federal Rule of Civil Procedure 26(b)(3).

As we stated last Term, the obligation imposed by a tax summons remains “subject to the traditional privileges and limitations.” United States v. Euge, 444 U. S. 707, 714 (1980). Nothing in the language of the IRS summons provisions or their legislative history suggests an intent on the part of Congress to preclude application of the work-product doctrine. Rule 26 (b)(3) codifies the work-product doctrine, and the Federal Rules of Civil Procedure are made applicable to summons enforcement proceedings by Rule 81 (a)(3). See Donaldson v. United States, 400 U. S. 517, 528 (1971). While conceding the applicability of the work-product doctrine, the Government asserts that it has made a sufficient showing of necessity to overcome its protections. The Magistrate apparently so found, 78-1 USTC ¶ 9277, p. 83,605. The Government relies on the following language in Hickman:

“We do not mean to say that all written materials obtained or prepared by an adversary’s counsel with an eye toward litigation are necessarily free from discovery in all cases. Where relevant and nonprivileged facts remain hidden in an attorney’s file and where production of those facts is essential to the preparation of one’s case, discovery may properly be had. . . . And production might be justified where the witnesses are no longer available or can be reached only with difficulty.” 329 U. S., at 511.

The Government stresses that interviewees are scattered across the globe and that Upjohn has forbidden its employees to answer questions it considers irrelevant. The above-quoted language from Hickman, however, did not apply to “oral statements made by witnesses . . . whether presently in the form of [the attorney’s] mental impressions or memoranda.” Id., at 512. As to such material the Court did “not believe that any showing of necessity can be made under the circumstances of this case so as to justify production. ... If there should be a rare situation justifying production of these matters, petitioner’s case is not of that type.” Id., at 512-513. See also Nobles, supra, at 252-253 (White, J., concurring). Forcing an attorney to disclose notes and memoranda of witnesses’ oral statements is particularly disfavored because it tends to reveal the attorney’s mental processes, 329 U. S., at 513 (“what he saw fit to write down regarding witnesses’ remarks”); id., at 516-517 (“the statement would be his [the attorney’s] language, permeated with his inferences”) (Jackson, J., concurring).

Rule 26 accords special protection to work product revealing the attorney’s mental processes. The Rule permits disclosure of documents and tangible things constituting attorney work product upon a showing of substantial need and inability to obtain the equivalent without undue hardship. This was the standard applied by the Magistrate, 78-1 USTC ¶ 9277, p. 83,604. Rule 26 goes on, however, to state that “[i]n ordering discovery of such materials when the required showing has been made, the court shall protect against disclosure of the mental impressions, conclusions, opinions or legal theories of an attorney or other representative of a party concerning the litigation.” Although this language does not specifically refer to memoranda based on oral statements of witnesses, the Hickman court stressed the danger that compelled disclosure of such memoranda would reveal the attorney’s mental processes. It is clear that this is the sort of material the draftsmen of the Rule had in mind as deserving special protection. See Notes of Advisory Committee on 1970 Amendment to Rules, 28 U. S. C. App., p. 442 (“The subdivision . . . goes on to protect against disclosure the mental impressions, conclusions, opinions, or legal theories ... of an attorney or other representative of a party. The Hickman opinion drew special attention to the need for protecting an attorney against discovery of memoranda prepared from recollection of oral interviews. The courts have steadfastly safeguarded against disclosure of lawyers’ mental impressions and legal theories . . .”).

Based on the foregoing, some courts have concluded that no showing of necessity can overcome protection of work product which is based on oral statements from witnesses. See, e. g., In re Grand Jury Proceedings, 473 F. 2d 840, 848 (CA8 1973) (personal recollections, notes, and memoranda pertaining to conversation with witnesses); In re Grand Jury Investigation, 412 F. Supp. 943, 949 (ED Pa. 1976) (notes of conversation with witness “are so much a product of the lawyer's thinking and so little probative of the witness’s actual words that they are absolutely protected from disclosure”). Those courts declining to adopt an absolute rule have nonetheless recognized that such material is entitled to special protection. See, e. g., In re Grand Jury Investigation, 599 F. 2d 1224, 1231 (CA3 1979) (“special considerations . . . must shape any ruling on the discoverability of interview memoranda . . . ; such documents will be discoverable only in a rare situation’ ”); cf. In re Grand Jury Subpoena, 599 F. 2d 504, 511-512 (CA2 1979).

We do not decide the issue at this time. It is clear that the Magistrate applied the wrong standard when he concluded that the Government had made a sufficient showing of necessity to overcome the protections of the work-product doctrine. The Magistrate applied the “substantial need” and “without undue hardship” standard articulated in the first part of Rule 26 (b)(3). The notes and memoranda sought by the Government here, however, are work product based on oral statements. If they reveal communications, they are, in this case, protected by the attorney-client privilege. To the extent they do not reveal communications, they reveal the attorneys’ mental processes in evaluating the communications. As Rule 26 and Hickman make clear, such work product cannot be disclosed simply on a showing of substantial need and inability to obtain the equivalent without undue hardship.

While we are not prepared at this juncture to say that such material is always protected by the work-product rule, we think a far stronger showing of necessity and unavailability by other means than was made by the Government or applied by the Magistrate in this case would be necessary to compel disclosure. Since the Court of Appeals thought that the work-product protection was never applicable in an enforcement proceeding such as this, and since the Magistrate whose recommendations the District Court adopted applied too lenient a standard of protection, we think the best procedure with respect to this aspect of the case would be to reverse the judgment of the Court of Appeals for the Sixth Circuit and remand the case to it for such further proceedings in connection with the work-product claim as are consistent with this opinion.

Accordingly, the judgment of the Court of Appeals is reversed, and the case remanded for further proceedings.

It is so ordered.

Chief Justice Burger,

concurring in part and concurring

in the judgment.

I join in Parts I and III of the opinion of the Court and in the judgment. As to Part II, I agree fully with the Court’s rejection of the so-called “control group” test, its reasons for doing so, and its ultimate holding that the communications at issue are privileged. As the Court states, however, “if the purpose of the attorney-client privilege is to be served, the attorney and client must be able to predict with some degree of certainty whether particular discussions will be protected.” Ante, at 393. Por this very reason, I believe that we should articulate a standard that will govern similar cases and afford guidance to corporations, counsel advising them, and federal courts.

The Court properly relies on a variety of factors in concluding that the communications now before us are privileged. See ante, at 394-395. Because of the great importance of the issue, in my view the Court should make clear now that, as a general rule, a communication is privileged at least when, as here, an employee or former employee speaks at the direction of the management with an attorney regarding conduct or proposed conduct within the scope of employment. The attorney must be one authorized by the management to inquire into the subject and must be seeking information to assist counsel in performing any of the following functions: (a) evaluating whether the employee's conduct has bound or would bind the corporation; (b) assessing the legal consequences, if any, of that conduct; or (c) formulating appropriate legal responses to actions that have been or may be taken by others with regard to that conduct. See, e. g., Diversified Industries, Inc. v. Meredith, 572 F. 2d 596, 609 (CA8 1978) (en banc); Harper & Row Publishers, Inc. v. Decker, 423 F. 2d 487, 491-492 (CA7 1970), aff’d by an equally divided Court, 400 U. S. 348 (1971); Duplan Corp. v. Deering Milliken, Inc., 397 F. Supp. 1146, 1163-1165 (SC 1974). Other communications between employees and corporate counsel may indeed be privileged — as the petitioners and several amici have suggested in their proposed formulations — but the need for certainty does not compel us now to prescribe all the details of the privilege in this case.

Nevertheless, to say we should not reach all facets of the privilege does not mean that we should neglect our duty to provide guidance in a case that squarely presents the question in a traditional adversary context. Indeed, because Federal Rule of Evidence 501 provides that the law of privileges “shall be governed by the principles of the common law as they may be interpreted by the courts of the United States in the light of reason and experience,” this Court has a special duty to clarify aspects of the law of privileges properly before us. Simply asserting that this failure “may to some slight extent undermine desirable certainty,” ante, at 396, neither minimizes the consequences of continuing uncertainty and confusion nor harmonizes the inherent dissonance of acknowledging that uncertainty while declining to clarify it within the frame of issues presented.

       On July 28, 1976, the company filed an amendment to this report disclosing further payments.

       The Government argues that the risk of civil or criminal liability suffices to ensure that corporations will seek legal advice in the absence of the protection of the privilege. This response ignores the fact that the depth and quality of any investigations to ensure compliance with the law would suffer, even were they undertaken. The response also proves too much, since it applies to all communications covered by the privilege: an individual trying to comply with the law or faced with a legal problem also has strong incentive to disclose information to his lawyer, yet the common law has recognized the value of the privilege in further facilitating communications.

       Seven of the eighty-six employees interviewed by counsel had terminated their employment with Upjohn at the time of the interview. App. 33a-38a. Petitioners argue that the privilege should nonetheless apply to communications by these former employees concerning activities during their period of employment. Neither the District Court nor the Court of Appeals had occasion to address this issue, and we decline to decide it without the benefit of treatment below.

       See id,., at 26a-27a, 103a, 123a-124a. See also In re Grand Jury Investigation, 599 F. 2d 1224, 1229 (CA3 1979); In re Grand Jury Subpoena, 599 F. 2d 504, 511 (CA2 1979).

       See Magistrate’s opinion, 78-1 USTC ¶ 9277, p. 83,599: “The responses to the questionnaires and the notes of the interviews have been treated as confidential material and have not been disclosed to anyone except Mr. Thomas and outside counsel.”

       The following discussion will also be relevant to counsel’s notes and memoranda of interviews with the seven former employees should it be determined that the attorney-client privilege does not apply to them. See n. 3, supra.

       This provides, in pertinent part:
      “[A] party may obtain discovery of documents and tangible things otherwise discoverable under subdivision (b)(1) of this rule and prepared in anticipation of litigation or for trial by or for another party or by or for that other party’s representative (including his attorney, consultant, surety, indemnitor, insurer, or agent) only upon a showing that the party seeking discovery has substantial need of the materials in the preparation of his case and that he is unable without undue hardship to obtain the substantial equivalent of the materials by other means. In ordering discovery of such materials when the required showing has been made, the court shall protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation.”

       Thomas described his notes of the interviews as containing “what I considered to be the important questions, the substance of the responses to them, my beliefs as to the importance of these, my beliefs as to how they related to the inquiry, my thoughts as to how they related to other questions. In some instances they might even suggest other questions that I would have to ask or things that I needed to find elsewhere.” 78-1 USTC ¶ 9277, p. 83,599.

      See Brief for Petitioners 21-23, and n. 25; Brief for American Bar Association as Amicus Curiae 5-6, and n. 2; Brief for American College of Trial Lawyers and 33 Law Firms as Amici Curiae 9-10, and n. 5.


source: Caselaw Access Project

author: Per Curiam. Justice Rehnquist,

license: Public Domain

text:
    MARISCAL v. UNITED STATES
    No. 80-5618.
    Decided January 19, 1981
   Per Curiam.

This case arises on a petition for certiorari to the United States Court of Appeals for the Ninth Circuit, which affirmed petitioner’s conviction on 10 counts of interstate transportation of property obtained by fraud, in violation of 18 U. S. C. § 2314, and on 12 counts of mail fraud, in violation of 18 U. S. C. 1 1341. 626 F. 2d 868. The court affirmed the interstate transportation convictions on the merits, and declined to address the “rather complex issues” presented by the mail fraud convictions, invoking the discretionary “concurrent sentence” doctrine. App. to Pet. for Cert. 6-7; see Barnes v. United States, 412 U. S. 837, 848, n. 16 (1973); Benton v. Maryland, 395 U. S. 784, 787-793 (1969). In light of the Solicitor General’s concession in this Court that the mail fraud convictions were invalid, Memorandum in Opposition 4-5, we grant the motion of petitioner for leave to proceed in forma pauperis, grant certiorari, vacate the judgment of the Ninth Circuit affirming the mail fraud convictions, and remand for reconsideration of the applicability of the “concurrent sentence” doctrine to a conviction conceded by the United States to be erroneous.

It is so ordered.

Justice White dissents, essentially for the reasons stated by Justice Rehnquist in his dissenting, opinion.

Justice Rehnquist,

dissenting.

There is a certain irony in the fact that I authored for the Court the opinion in United States v. Maze, 414 U. S. 395 (1974), which affirmed an opinion written by the present Solicitor General when he was a judge for the Court of Appeals for the Sixth Circuit reversing certain mail fraud convictions. Nonetheless, I think that a more important principle is at stake here than whether or not the mail fraud convictions are proper. That larger issue is whether this Court should mechanically accept any suggestion from the Solicitor General that a decision rendered in favor of the Government by a United States Court of Appeals was in error, and vacate the conviction and request that the Government present its “confession of error” to the Court of Appeals which it had earlier persuaded to affirm the conviction.

One may freely concede that with 93 United States Attorneys and 11 Courts of Appeals, there will be differing views as between prosecutors, as well as between prosecutors and courts, as to legal issues presented in criminal cases. But the Executive is one branch of the Government, and the Judiciary another. The Office of the Solicitor General, while having earned over the years a reputation for ability and expertise in presenting the Government’s claims to this Court, is nonetheless a part of the Executive Branch of the Federal Government, not of the Judicial Branch. I think it ill behooves this Court to defer to the Solicitor General’s suggestion that a Court of Appeals may have been in error after another representative of the Executive Branch and the Justice Department has persuaded the Court of Appeals to reach the result which it did.

The Office of the Solicitor General may be quite faithfully performing its obligations under our system by calling our attention to what it perceives to be errors in the decisions of the courts of appeals. But I harbor serious doubt that our adversary system of justice is well served by this Court’s practice of routinely vacating judgments which the Solicitor General questions without any independent examination of the merits on our own. With the increasing caseloads of all federal courts, there is a natural temptation to “pass the buck” to some other court if that is possible. Congress has given us discretionary jurisdiction to deny certiorari if we do not wish to grant plenary consideration to a particular case, a benefit that other federal courts do not share, but it has not to my knowledge moved the Office of the Solicitor General from the Executive Branch of the Federal Government to the Judicial Branch. Until it does, I think we are bound by our oaths either to examine independently the merits of a question presented for review on certiorari, or in the exercise of our discretion to deny certiorari. Because the Court exercises neither of these alternatives here, I dissent.


text:
    UNITED STATES v. CALIFORNIA
    No. 5,
    Orig.
    Decided June 23, 1947, May 17, 1965, May 15, 1978, and June 9, 1980
    Order and decree entered October 27, 1947
    Supplemental decree entered January 31, 1966
    Second supplemental decree entered June 13, 1977
    Third supplemental decree entered November 27, 1978
    Fourth supplemental decree entered January 19, 1981
   FOURTH SUPPLEMENTAL DECREE

IT IS ORDERED, ADJUDGED, AND DECREED that the Decree of October 27, 1947 (332 U. S. 804), and the Supplemental Decrees heretofore entered in this cause on January 31, 1966 (382 U. S. 448), June 13, 1977 (432 U. S. 40), and November 27, 1978 (439 U. S. 30), be, and the same hereby are further supplemented as follows:

1. The inland waters of the Port of San Pedro include those waters enclosed by a straight line from the eastern end of the Long Beach breakwater (NOS Chart 18749, 33°43'23'' N., 118°08'10'' W.) to the seaward end of the east jetty of Anaheim Bay (NOS Chart 18749, 33°43'36" N., 118°05'57'' W.).

2. The inland waters of San Diego Bay are those enclosed by a straight line from the seaward end of Point Loma (NOS Chart 18772, 32°39'46" N., 117°14'29" W.) to the point at which the line of mean lower low water intersects with the southern seaward end of the entire Zuniga jetty (NOS Chart 18772, 32°40'00.5" N., 117°13'19" W.).

3. The following artificial structures do not form part of the coastline of California for purposes of establishing the federal-state boundary line under the Submerged Lands Act, 43 U. S. C. § 1301 et seq.:

a. The Sharp Beach pier (NOS Chart 18685, 37°38'00" N., 122°29'41" W.);
b. The Morro Strand pier (NOS Chart 18703, 35°24'-38.4" N., 120°52'31.9" W.);
c. The Port Orford pier (NOS Chart 18721, 34°28'09.6" N., 120°13'38.8" W.);
d. The Ellwood pier (NOS Chart 18721, 34°25'39" N., 119°55'20" W.) ;
e. The Santa Barbara Biltmore Hotel pier (NOS Chart 18725, 34°24'59.4" N., 119°38'30" W.);
f. The Carpintería pier (NOS Chart 18725, 34°23'06" N., 119°30'4.6" W.);
g. The Punta Gorda causeway and Rincon Island (NOS Chart 18725, 34°20'48.1" N., 119°26'39" W.);
h. The Venice pier (NOS Chart 18744, 30°59'06" N., 118°28'35" W.);
i. The Manhattan Beach pier (NOS Chart 18744, 33°-53'00" N., 118°24'48.2" W.);
j. The Hermosa Beach pier (NOS Chart 18744, 33°51'-40.2" N., 118°24'16.9" W.);
k. The Huntington Beach pier (NOS Chart 18740, 33°-09'14" N., 118°00'21" W.);
l. The Newport Beach pier (NOS Chart 18754, 33°36'-22.0" N., 117°55'49.6" W.);
m. The Balboa Beach pier (NOS Chart 18754, 33°35'54.4" N., 117°54'01.1" W.);
n. The Oceanside pier (NOS Chart 18740, 33°11'29.4" N., 117°23'18" W.);
o. The Ocean Beach pier (NOS Chart 18754, 32°44'-58.5" N., 117°15'30.5" W.); and
p. The Imperial Beach pier (NOS Chart 18772, 32°34'-46.6" N., 117°08'08.0" W.).

4. The parties having paid their own costs and having contributed equally to a fund for expenses of the Special Master, any amounts remaining in said fund after deduction of all expenses by the Special Master shall be divided equally and returned to each party by the Special Master.

5. The Court retains jurisdiction to entertain further proceedings, enter such orders, and issue such writs as may from time to time be deemed necessary or advisable to give proper force and effect to this decree or to effectuate the rights of the parties in the premises.

Justice Marshall took no part in the consideration or decision of this order.


author: Chief Justice Burger Justice Stewart,

text:
    UNITED STATES v. CORTEZ et al.
    No. 79-404.
    Argued December 1, 1980
    Decided January 21, 1981

      Burger, C. J., delivered the opinion of the Court, in which BreNNán, White, Blackmun, Powell, Rehnquist, and Stevens, JJ., joined. Stewart, J., filed an opinion concurring in the result, post, p. 422. Marshall, J., concurred in the judgment.

      Barbara E. Etkind argued the cause for the United States. With her on the briefs were Solicitor General McCree, Assistant Attorney General Heymann, Deputy Solicitor General Frey, William G. Otis, and John C. Winkfield.

      S. Jeffrey Minker argued the cause and filed a brief for respondent Cortez.

      Bernardo P. Velasco argued the cause for respondent Hernandez-Loera. With him on the brief was Thomas W. O’Toole.

   Chief Justice Burger

delivered the opinion of the Court.

We granted certiorari, 447 U. S. 904, to consider whether objective facts and circumstantial' evidence suggesting that a particular vehicle is involved in criminal activity may provide a sufficient basis to justify an investigative stop of that vehicle.

I

Late in 1976, Border Patrol officers patrolling a sparsely populated section of southern central Arizona found human footprints in the desert. In time, other sets of similar footprints were discovered in the same area. Prom these sets of footprints, it was deduced that, on a number of occasions, groups of from 8 to 20 persons had walked north from the Mexican border, across 30 miles of desert and mountains, over a fairly well-defined path, to an isolated point on Highway 86, an east-west road running roughly parallel to the Mexican border.

Officers observed that one recurring shoeprint bore a distinctive and repetitive Y-shaped or chevron design. Because the officers knew from recorded experience that the area through which the groups passed was heavily trafficked by aliens illegally entering the country from Mexico, they surmised that a person, to whom they gave the case-name "Chevron,” was guiding aliens illegally into the United States over the path marked by the tracks to a point where they could be picked up by a vehicle.

The tracks led into or over obstacles that would have been avoided in daylight. From this, the • officers deduced that “Chevron” probably led his groups across the border and to the pickup point at night. Moreover, based upon the times when they had discovered the distinctive sets of tracks, they concluded that “Chevron” generally traveled during or near weekends and on nights when the weather was clear.

Their tracking disclosed that when “Chevron’s” groups came within 50 to 75 yards of Highway 86, they turned right and walked eastward, parallel to the road. Then, approximately at highway milepost 122, the tracks would turn north and disappear at the road. From this pattern, the officers concluded that the aliens very likely were picked up by a ve-hide — probably one approaching from the east, for after a long overland march the group was most likely to walk parallel to the highway toward the approaching vehicle. The officers also concluded that, after the pickup, the vehicle probably returned to the east, because it was unlikely that the group would be walking away from its ultimate destination.

On the Sunday night of January 30-31, 1977, Officers Gray and Evans, two Border Patrolmen who had been pursuing the investigation of “Chevron,” were on duty in the Casa Grande area. The latest set of observed “Chevron” tracks had been made on Saturday night, January 15-16. January 30-31 was the first clear night after three days of rain. For these reasons, Gray and Evans decided there was a strong possibility that “Chevron” would lead aliens from the border to the highway that night.

The officers assumed that, if “Chevron” did conduct a group that night, he would not leave Mexico until after dark, that is, about 6 p. m. They knew from their experience that groups of this sort, traveling on foot, cover about two and a half to three miles an hour. Thus, the 30-mile journey would take from 8 to 12 hours. From this, the officers calculated that “Chevron” and his group would arrive at Highway 86 somewhere between 2 a. m. and 6 a. m. on January 31.

About 1 a. m., Gray and Evans parked their patrol car on an elevated location about 100 feet off Highway 86 at milepost 149, a point some 27 miles east of milepost 122. From their vantage point, the officers could observe the Altar Valley, an adjoining territory they had been assigned to watch that night, and they also could see vehicles passing on Highway 86. They estimated that it would take approximately one hour and a half for a vehicle to make a round trip from their vantage point to milepost 122. Working on the hypothesis that the pickup vehicle approached milepost 122 from the east and thereafter returned to its starting point, they focused upon vehicles that passed them from the east and, after about one hour and a half, passed them returning to the east.

Because “Chevron” appeared to lead groups of between 8 and 20 aliens at a time, the officers deduced that the pickup vehicle would be one that was capable of carrying that large a group without arousing suspicion. For this reason, and because they knew that certain types of vehicles were commonly used for smuggling sizable groups of aliens, they decided to limit their attention to vans, pickup trucks, other small trucks, campers, motor homes, and similar vehicles.

Traffic on Highway 86 at milepost 149 was normal on the night of the officers’ surveillance. In the 5-hour period between 1 a. m. and 6 a. m., 15 to 20 vehicles passed the officers heading west, toward milepost 122. Only two of them — both pickup trucks with camper shells — were of the kind that the officers had concluded “Chevron” would likely use if he was to carry aliens that night. One, a distinctively colored pickup truck with a camper shell, passed for the first time at 4:30 a. m. Officer Gray was able to see and record only a partial license number, “GN 88 — .” At 6:12 a. m., almost exactly the estimated one hour and a half later, a vehicle looking like this same pickup passed them again, this time heading east.

The officers followed the pickup and were satisfied from its license plate, “GN 8804,” that it was the same vehicle that had passed at 4:30 a. m. At that point, they flashed their police lights and intercepted the vehicle. Respondent Jesus Cortez was the driver and owner of the pickup; respondent Pedro Hernandez-Loera was sitting in the passenger’s seat. Hernandez-Loera was wearing shoes with soles matching the distinctive “chevron” shoeprint.

The officers identified themselves and told Cortez they were conducting an immigration check. They asked if he was carrying any passengers in the camper. Cortez told them he had picked up some hitchhikers, and he proceeded to open the back of the camper. In the camper, there were six illegal aliens. The officers then arrested the respondents.

Cortez and Hernandez-Loera were charged with six counts of transporting illegal aliens in violation of 8 U. S. C. § 1324 (a). By pretrial motion, they sought to suppress the evidence obtained by Officers Gray and Evans as a result of stopping their vehicle. They argued that the officers did not have adequate cause to make the investigative stop. The District Court denied the motion. A jury found the respondents guilty as charged. They were sentenced to concurrent prison terms of five years on each of six counts. In addition, Hernandez-Loera was fined $12,000.

A divided panel of the Court of Appeals for the Ninth Circuit reversed, holding that the officers lacked a sufficient basis to justify the stop of the pickup. 595 F. 2d 505 (1979). That court recognized that United States v. Brignoni-Ponce, 422 U. S. 873 (1975), provides a standard governing investigative stops of the kind involved in this case, stating:

“The quantum of cause necessary in . . . cases [like this one] was established ... in United States v. Brig-noni-Ponce .... ‘[Ojfficers on roving patrol may stop vehicles only if they are aware of specific articulable facts, together with rational inferences from those facts, that reasonably warrant suspicion that the vehicles contain aliens who may be illegally in the country.’ ” 595 F. 2d, at 507 (quoting United States v. Brignoni-Ponce, supra, at 884) (citations omitted).

The court also recognized that “the ultimate question on appeal is whether the trial judge’s finding that founded suspicion was present here was clearly erroneous.” 595 F. 2d, at 507. Here, because, in the view of the facts of the two judges constituting the majority, “[t]he officers did not have a valid basis for singling out the Cortez vehicle,” id., at 508, and because the circumstances admitted “far too many innocent inferences to make the officers’ suspicions reasonably warranted,” ibid., the panel concluded that the stop of Cortez’ vehicle was a violation of the respondents’ rights under the Fourth Amendment. In dissent, Judge Chambers was persuaded that Brignoni-Ponce recognized the validity of permitting an officer to assess the facts in light of his past experience.

II

A

The Fourth Amendment applies to seizures of the person, including brief investigatory stops such as the stop of the vehicle here. Reid v. Georgia, 448 U. S. 438, 440 (1980); United States v. Brignoni-Ponce, supra, at 878; Davis v. Mississippi, 394 U. S. 721 (1969); Terry v. Ohio, 392 U. S. 1, 16-19 (1968). An investigatory stop must be justified by some objective manifestation that the person stopped is, or is about to be, engaged in criminal activity. Brown v. Texas, 443 U. S. 47, 51 (1979); Delaware v. Prouse, 440 U. S. 648, 661 (1979); United States v. Brignoni-Ponce, supra, at 884; Adams v. Williams, 407 U. S. 143, 146-149 (1972); Terry v. Ohio, supra, at 16-19.

Courts have used a variety of terms to capture the elusive concept of what cause is sufficient to authorize police to stop a person. Terms like “articulable reasons” and “founded suspicion” are not self-defining; they fall short of providing clear guidance dispositive of the myriad factual situations that arise. But the essence of all that has been written is that the totality of the circumstances — the whole picture— must be taken into account. Based upon that whole picture the detaining officers must have a particularized and objective basis for suspecting the particular person stopped of criminal activity. See, e. g., Brown v. Texas, supra, at 51; United States v. Brignoni-Ponce, supra, at 884.

The idea that an assessment of the whole picture must yield a particularized suspicion contains two elements, each of which must be present before a stop is permissible. First, the assessment must be based upon all of the circumstances. The analysis proceeds with various objective observations, information from police reports, if such are available, and consideration of the modes or patterns of operation of certain kinds of lawbreakers. From these data, a trained officer draws inferences and makes deductions — inferences and deductions that might well elude an untrained person.

The process does not deal with hard certainties, but with probabilities. Long before the law of probabilities was articulated as such, practical people formulated certain commonsense conclusions about human behavior; jurors as factfinders are .permitted to do the same — and so are law enforcement officers. Finally, the evidence thus collected must be seen and weighed not in terms of library analysis by scholars, but as understood by those versed in the field of law enforcement.

The second element contained in the idea that an assessment of the whole picture must yield a particularized suspicion is the concept that the process just described must raise a suspicion that the particular individual being stopped is engaged in wrongdoing. Chief Justice Warren, speaking for the Court in Terry v. Ohio, supra, said that “[tjhis demand for specificity in the information upon which police action is predicated is the central teaching of this Court’s Fourth Amendment jurisprudence.” Id., at 21, n. 18 (emphasis added). See also Brown v. Texas, supra, at 51; Delaware v. Prouse, supra, at 661-663; United States v. Brignoni-Ponce, supra, at 884.

B

This case portrays at once both the enormous difficulties of patrolling a 2,000-mile open border and the patient skills needed by those charged with halting illegal entry into this country. It implicates all of the principles just discussed— especially the imperative of recognizing that, when used by trained law enforcement officers, objective facts, meaningless to the untrained, can be combined with permissible deductions from such facts to form a legitimate basis for suspicion of a particular person and for action on that suspicion. We see here the kind of police work often suggested by judges and scholars as examples of appropriate and reasonable means of law enforcement. Here, fact on fact and clue on clue afforded a basis for the deductions and inferences that brought the officers to focus on “Chevron.”

Of critical importance, the officers knew that the area was a crossing point for illegal aliens. They knew that it was common practice for persons to lead aliens through the desert from the border to Highway 86, where they could — by prearrangement — be picked up by a vehicle. Moreover, based upon clues they had discovered in the 2-month period prior to the events at issue here, they believed that one such guide, whom they designated “Chevron,” had a particular pattern of operations.

By piecing together the information at their disposal, the officers tentatively concluded that there was a reasonable likelihood that “Chevron” would attempt to lead a group of aliens on the night of Sunday, January 30-31. Someone with chevron-soled shoes had led several groups of aliens in the previous two months, yet it had been two weeks since the latest crossing. “Chevron,” they deduced, was therefore due reasonably soon. “Chevron” tended to travel on clear weekend nights. Because it had rained on the Friday and Saturday nights of the weekend involved here, Sunday was the only clear' night of that weekend; the officers surmised it was therefore a likely night for a trip.

Once they had focused on that night, the officers drew upon other objective facts known to them to deduce a time frame within which “Chevron” and the aliens were likely to arrive. From what they knew of the practice of those who smuggle aliens, including what they knew of “Chevron’s” previous activities, they deduced that the border crossing and journey through the desert would probably be at night. They knew the time when sunset would occur at the point of the border crossing; they knew about how long the trip would take. They were thus able to deduce that “Chevron” would likely arrive at the pickup point on Highway 86 in the time frame between 2 a. m. and 6 a. m.

From objective facts, the officers also deduced the probable point on the highway- — milepost 122 — at which “Chevron” would likely rendezvous with a pickup vehicle. They deduced from the direction taken by the sets of “Chevron” footprints they had earlier discovered that the pickup vehicle would approach the aliens from, and return with them to, a point east of milepost 122. They therefore staked out a position east of milepost 122 (at milepost 149) and watched for vehicles that passed them going west and then, approximately one and a half hours later, passed them again, this time going east.

From what they had observed about the previous groups guided by the person with “chevron” shoes, they deduced that “Chevron” would lead a group of 8 to 20 aliens. They therefore focused their attention on enclosed vehicles of that passenger capacity.

The analysis produced by Officers Gray and Evans can be summarized as follows: if, on the night upon which they believed “Chevron” was likely to travel, sometime between 2 a. m. and 6 a. m., a large enclosed vehicle was seen to make an east-west-east round trip to and from a deserted point (milepost 122) on a deserted road (Highway 86), the officers would stop the vehicle on the return trip. In a 4-hour period the officers observed only one vehicle meeting that description. And it is not surprising that when they stopped the vehicle on its return trip it contained “Chevron” and several illegal aliens.

C

The limited purpose of the stop in this case was to question the occupants of the vehicle about their citizenship and immigration status and the reasons for the round trip in a short timespan in a virtually deserted area. No search of the camper or any of its occupants occurred until after respondent Cortez voluntarily opened the back door of the camper; thus, only the stop, not the search is at issue here. The intrusion upon privacy associated with this stop was limited and was “reasonably related in scope to the justification for [its] initiation,” Terry v. Ohio, 392 U. S., at 29.

We have recently held that stops by the Border Patrol may be justified under circumstances less than those constituting probable cause for arrest or search. United States v. Brig-noni-Ponce, 422 U. S., at 880. Thus, the test is not whether Officers Gray and Evans had probable cause to conclude that the vehicle they stopped would contain “Chevron” and a group of illegal aliens. Rather the question is whether, based upon the whole picture, they, as experienced Border Patrol officers, could reasonably surmise that the particular vehicle they stopped was engaged in criminal activity. On this record, they could so conclude.

Reversed.

Justice Marshall concurs in the judgment.

Justice Stewart,

concurring in the result.

The Border Patrol officers in this case knew, or had rationally deduced, that “Chevron” had repeatedly shepherded illegal aliens up from the border; that his treks had commonly ended early in the morning around milepost 122 on Highway 86; that he usually worked on weekends; that he probably had made no trips for two weeks; and that trips were most likely when the weather was good. Knowing of this pattern, the officers could reasonably anticipate, even if they could not guarantee, the arrival of another group of aliens, led by Chevron, at milepost 122 on the first clear weekend night in late January 1977. Route 86 leads through almost uninhabited country, so little traveled in the hours of darkness that only 15 to 20 westbound vehicles passed the police during the five hours they watched that Sunday night. Only two vehicles capacious enough to carry a sizable group of illegal aliens went by. One of those two vehicles not only drove past them, but returned in the opposite direction after just enough time had elapsed for a journey to milepost 122 and back. This nocturnal round trip into “desolate desert terrain” would in any event have been puzzling. Coming when and as it did, surely the most likely explanation for it was that Chevron was again shepherding aliens.

In sum, the Border Patrol officers had discovered an abundance of “specific articulable facts” which, “together with rational inferences from [them],” entirely warranted a “suspicion that the vehicl[e] contain [ed] aliens who [might] be illegally in the country.” United States v. Brignoni-Ponce, 422 U. S. 873, 884. Because the information possessed by the officers thus met the requirements established by the Brignoni-Ponce case for the kind of stop made here, I concur in the reversal of the judgment of the Court of Appeals.

       The second camper passed them 15 or 20 minutes later. As far as the record shows, it did not return.

       Of course, an officer may stop and question a person if there are reasonable grounds to believe that person is wanted for past criminal conduct.

       In United States v. Brignoni-Ponce, 422 U. S. 873, 884-885 (1975), the Court listed several factors to be considered as part of the totality of the circumstances in determining the existence vel non of a particularized suspicion in cases treating official attempts to stem the influx of illegal aliens into our country. Though the list did not purport to be exhaustive, it is noteworthy that several of the factors present here were recognized by Brignoni-Ponce as significant in this context; for example, information about recent border crossings and the type of vehicle involved.

         The wide public interest in effective measures to prevent the entry of illegal aliens at the Mexican border has been cataloged by this Court. See, e. g., United States v. Ortiz, 422 U. S. 891, 899-914 (1975) (Burger, C. J., concurring in judgment); United States v. Brignoni-Ponce, supra, at 878-879.


author: Chief Justice Burger Justice Blackmun,

text:
    RUBIN v. UNITED STATES
    No. 79-1013.
    Argued November 12, 1980
    Decided January 21, 1981

      Burger, C. J., delivered the opinion of the Court, in which BreNNAN, Stewart, White, Marshall, Powell, RehNquist, and SteveNs, JJ., joined. BlaciímuN, J., filed an opinion concurring in the judgment, post, p. 431.

      Louis Bender argued the cause for petitioner. With him on the brief was Sandor Frcmkel.

      Stephen M. Shapiro argued the cause for the United States. With him on the brief were Solicitor General McCree, Sara Criscitelli, Ralph C. Ferrara, Jacob H. Stillman, and Elisse B. Walter.

        Darrel E. Reed, Jr., and Richard K. Willard filed a brief for Bossier Bank & Trust Co. as amicus curiae urging reversal.

   Chief Justice Burger

delivered the opinion of the Court.

We granted certiorari in this case to decide whether a pledge of stock to a bank as collateral for a loan is an “offer or sale” of a security under § 17 (a) of the Securities Act of 1933, 15 U. S. C. § 77q (a).

I

Late in 1972, petitioner became vice president of Tri-State Energy, Inc., a corporation holding itself out as involved in energy exploration and production. At the time, Tri-State was experiencing serious financial problems. Petitioner approached Bankers Trust Co., a bank with which he had frequently dealt while he had been affiliated with an accounting firm. Bankers Trust initially refused a $5 million loan to Tri-State for operating a mine. Nevertheless, it lent TriState $50,000 on October 20, 1972, for 30 days with the understanding that if Tri-State could produce adequate financial information and sufficient collateral, additional financing might be available.

Petitioner assisted other officers of Tri-State in preparing a financial statement for submission to the bank. The balance sheet, which listed a net worth of $7.1 million, was false and misleading in several respects. Tri-State also submitted inflated projections of future earnings based in large measure on sham contracts and forged documentation. Subsequently, petitioner personally paid the loan officer $4,000 and another official $1,000 as inducements for further loans. Tri-State borrowed an additional $425,000 over a brief period. Ultimately, the loans were consolidated into a single demand note for $475,000, dated February 26, 1973.

Bankers Trust required collateral for each new loan; between October 20, 1972, and January 19, 1973, Tri-State pledged stock in six companies. The stocks were represented as being good, marketable, and unrestricted and valued at a total of approximately $1.7 million; in fact, they were practically worthless. Many shares were issued by “shell” companies. Most were simply “rented” — i. e., borrowed from the owner for a fee — to show to the bank or were otherwise restricted. In one instance, petitioner arranged for fictitious quotations to appear in a service reporting over-the-counter transactions and used by the bank in evaluating pledged securities; in another, Tri-State planted, through others, a fictitious advertisement in an overseas newspaper and showed it to the bank, representing it to be a quotation. Trading of one issue was suspended shortly after the pledge when the issuing company could not account for 900,000 shares of its stock; Tri-State replaced this collateral before Bankers Trust learned of the difficulty. Petitioner acted as Tri-State’s agent for most of these transactions.

A Justice Department request for information about TriState received February 28, two days after the consolidated note was signed, prompted Bankers Trust on March 5 to demand payment in full within three days. No payment of this demand was made, and in May another officer of TriState met with bank officials and tried to forestall foreclosure. After rejecting Tri-State’s request for a further loan, the bank sued on the note.

Bankers Trust also proceeded against petitioner personally as a guarantor of the loans. Petitioner signed a confession of judgment against himself in the amount of the unpaid loans, plus accrued interest, but thereafter filed a petition for bankruptcy. The bank recovered only about $2,500, plus interest and expenses, on its $475,000 loan.

Petitioner was indicted on three counts of violating and conspiring to violate various federal antifraud statutes, including § 17 (a) of the Securities Act of 1933, 15 U. S. C. § 77q (a). Following a jury trial in the United States District Court for the Southern District of New York, petitioner was convicted on the conspiracy count. On appeal to the Court of Appeals for the Second Circuit, petitioner raised several grounds, including whether a pledge of stock as collateral for a bank loan is an “offer or sale” under § 17 (a). The Court of Appeals affirmed. 609 F. 2d 51 (1979). We granted certiorari limited to the question whether such a pledge is an “offer or sale.” 445 U. S. 960 (1980).

II

Section 17 (a) of the Securities Act of 1933 provides:

“It shall be unlawful for any person in the offer or sale of any securities by the use of any means or instruments of transportation or communication in interstate commerce or by the use of the mails, directly or indirectly—
“(1) to employ any device, scheme, or artifice to defraud, or
“(2) to obtain money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
“(3) to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser.” 48 Stat. 84, as amended, 15 U. S. C. § 77q (a) (emphasis added).

Petitioner does not deny that he engaged in a conspiracy to commit fraud through false representations to Bankers Trust concerning the stocks pledged; he does not deny that the shares were “securities” under the Act. Rather, he contends narrowly that these pledges did not constitute “offers” or “sales” under § 17 (a) of the Act. Tr. of Oral Arg. 6. To sustain this contention, petitioner argues that Tri-State deposited the stocks with the bank only as collateral security for a loan, not as a transfer or sale. From this he argues that the implied, power to dispose of the stocks could ripen into title and thereby constitute a “sale” only by effecting foreclosure of the various pledges, an event that could not occur without a default on the loans.

We begin by looking to the language of the Act. E. g., Ernst & Ernst v. Hochfelder, 425 U. S. 185, 197 (1976). The terms “offer” and “sale” in § 17 (a) are defined in § 2 (3) of the Act:

“The term ‘sale’ or ‘sell’ shall include every contract of sale or disposition of a security or interest in a security, for value. The term . . . 'offer’ shall include every attempt or offer to dispose of, or solicitation of an offer to buy, a security or interest in a security, for value.” 48 Stat. 74, as amended, 15 U. S. C. § 77b (3) (emphasis added).

Obtaining a loan secured by a pledge of shares of stock unmistakably involves a “disposition of [an] interest in a security, for value.” Although pledges transfer less than absolute title, the interest thus transferred nonetheless is an “interest in a security.” The pledges contemplated a self-executing procedure under a power that could, at the option of the pledgee (the bank) in the event of a default, vest absolute title and ownership. Bankers Trust parted with substantial consideration — specifically, a total of $475,000— and obtained the inchoate but valuable interest under the pledges and concomitant powers. It is not essential under the terms of the Act that full title pass to a transferee for the transaction to be an “offer” or a “sale.” See, e. g., United States v. Gentile, 530 F. 2d 461, 466 (CA2), cert. denied, 426 U. S. 936 (1976).

Ill

When we find the terms of a statute unambiguous, judicial inquiry is complete, except “in ‘rare and exceptional circumstances.' ” TV A v. Hill, 437 U. S. 153, 187, n. 33 (1978) (quoting Crooks v. Harrelson, 282 U. S. 55, 60 (1930)). Accord, Aaron v. SEC, 446 U. S. 680, 695 (1980); Ernst & Ernst v. Hochfelder, supra, at 214, n. 33. No such circumstances are present here, for our reading of the statute is wholly consistent with the history and the purposes of the Securities Act of 1933. The Uniform Sale of Securities Act, a model “blue sky” statute adopted in many states, defined “sale” in language almost identical to that now appearing in § 2 (3). In Cecil B. De Mille Productions, Inc. v. Woolery, 61 F. 2d 45 (1932), the Court of Appeals for the Ninth Circuit construed this provision of the model statute as adopted by California and held that the definition of “sale” embraced a pledge. Congress subsequently enacted the definition from the Uniform Act almost verbatim. See Federal Securities Act: Hearings on H. R. 4314 before the House Committee on Interstate and Foreign Commerce, 73d Cong., 1st Sess., 11 (1933). See generally id., at 13; Securities Act: Hearings on S. 875 before the Senate Committee on Banking and Currency, 73d Cong., 1st Sess., 71 (1933). Petitioner has cited nothing to suggest that Congress did not intend the broad scope that cases arising under the Uniform Act, such as Woolery, supra, had given the definition of “sale.” See Lorillard v. Pons, 434 U. S. 575, 581 (1978).

Treating pledges as included among “offers” and “sales” comports with the purpose of the Act and, specifically, with that of § 17 (a). We frequently have observed that these provisions were enacted to protect against fraud and promote the free flow of information in the public dissemination of securities. E. g., United States v. Naftalin, 441 U. S. 768, 774 (1979); Ernst & Ernst v. Hochfelder, supra, at 195. The economic considerations and realities present when a lender parts with value and accepts securities as collateral security for a loan are similar in important respect to the risk an investor undertakes when purchasing shares. Both are relying on the value of the securities themselves, and both must be able to depend on the representations made by the trans-feror of the securities, regardless of whether the transferor passes full title or only a conditional and defeasible interest to secure repayment of a loan.

Petitioner would have us interpret “offer” and “sale” in a way that not only is cramped but conflicts with the plain meaning of the statute and its purpose as well. We therefore hold that the pledges here were “offers” or “sales” under § 17 (a); accordingly, the judgment of the Court of Appeals is

Affirmed.

Justice Blackmun,

concurring in the judgment.

While I agree that a pledge of stock to a bank as collateral for a loan is an “offer or sale” of a security within the meaning of § 17 (a) of the Securities Act of 1933, 15 U. S. C. § 77q (a), I reach that conclusion by a slightly different route than does the Court. The Court holds that a pledge confers an “interest in a security,” and that therefore a pledge of shares of stock as collateral for a loan constitutes a “disposition of [an] interest in a security, for value” within the meaning of § 2 (3) of the Act, 15 U. S. C. § 77b (3). Ante, at 429. I would hold simply that a pledge of stock as collateral is a type of “disposition” within the meaning of § 2 (3). See United States v. Gentile, 530 F. 2d 461, 466 (CA2), cert, denied, 426 U. S. 936 (1976) (interpreting § 2 (3) of the 1933 Act). Cf. §3 (a)(14) of the Securities Exchange Act of 1934, 15 U. S. C. § 78c (a) (14) (“[t]he terms 'sale’ and 'sell’ each include any contract to sell or otherwise dispose of”) ; Mansbach v. Prescott, Ball & Turben, 598 F. 2d 1017, 1029 (CA6 1979) (interpreting § 3 (a)(14) of the 1934 Act).

       The balance sheet listed an account receivable of $7.5 million and included a copy of a contract that purportedly formed the basis of this account. No such item existed, and the signature on the contract had been forged. Evidence also indicated that Tri-State had listed a fictitious tax liability to offset the fictitious asset. The statement also referred to over $264,000 cash on hand and coal worth $180,000. Both figures were exaggerated.

       Subsequent loans were made on November 22 ($50,000), November 30 ($100,000), and December 6 ($275,000).

       The pledges were 400,000 shares of American Leisure Corp. (October 20 — shell company; shares restricted); 2,000 shares of All States Life Insurance Co. (November 10 — nonmarketable; “rented” to show the bank but not owned by Tri-State); 20,000 shares of Marlin Investment Co. (November 22 — “rented” from a person who was told they would not be used as collateral); 100,000 shares of Management Dynamics, Inc. (December 6 — trading suspended; withdrawn as collateral); 175,000 shares of General Investment Corp. (December 19 — restricted); 50,000 shares of Satellite Systems Corp. (January 19 — restricted and “rented”; fictitious overseas advertisement planted).

       Count 1 of the indictment charged petitioner and his codefendants with conspiring to violate 18 U. S. C. § 1014 (fraud in a bank loan application), 18 U. S. C. §1341 (mail fraud), and 18 U. S. C. § 1343 (wire fraud), as well as § 17 (a) (securities fraud). Counts 2 and 3 alleged substantive violations of § 17 (a) and 18 U. S. C. § 1014, respectively, against petitioner and some of the codefendants listed in the conspiracy count. Proceedings against petitioner were severed before trial. The Government agreed to dismiss the substantive charge of fraud in a bank loan application before the jury reached a verdict, and the jury acquitted petitioner of the substantive count of securities fraud.

         The Court of Appeals divided over an evidentiary issue. It rejected petitioner’s argument regarding the scope of § 17 (a) without comment. See 609 F. 2d, at 66.

       The misrepresentations at issue in this case related to the stocks themselves; petitioner does not allege that his conviction, insofar as it involved securities fraud under § 17 (a), was based on misrepresentations made about the financial condition of Tri-State itself. Thus, we need not decide whether misrepresentations or omissions involved in a securities transaction but not pertaining to thé securities themselves can form the basis of a violation of § 17 (a).

       National Conference of Commissioners on Uniform State Laws, Handbook and Proceedings 174 (1929) (Fourth and Final Draft) ("sale” defined to “include every disposition, or attempt to dispose of a security or interest in a security for value”).

       To the extent that petitioner argues there was no need to protect pledgees, the very fact that Congress saw fit to afford such protection under the Commerce Clause, U. S. Const., Art. I, §8, cl. 3, ends our inquiry, absent a contention, not present here, that the Constitution otherwise prohibits the means selected. “Our individual appraisal of the wisdom or unwisdom of a particular course consciously selected by the Congress is to be put aside in the process of interpreting a statute. Once the meaning of an enactment is discerned and its constitutionality determined, the judicial process comes to an end.” TV A v. Hill, 437 U. S. 153, 194 (1978).