# Opposition Brief — United States v. W. M. Webb, Inc. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386413_0158%3A03 ## Record - **Collection:** Supreme Court brief - **Document type:** Opposition Brief - **Published:** January 1, 1970 - **Citation:** 397 U.S. 179 ## Text In THE Supreme Court of the United States OCTOBER TERM, 1968 THE UNITED STATES OF AMERICA v8, W. M. WEsB, INC., ET AL. ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT BRIEF FOR RESPONDENTS IN OPPOSITION JOSEPH J. LYMAN Attorney for the Respondents 1200 18th Street, N.W. Washington, D. C. 20036 WILSON - Eres PRINTING Co. - RE 7-6002 - WASHINGTON, D. C. 20001 — CONTENTS Page Opinions Below 1 Jurisdiction - 1 Question Presented ..... 2 Statutes and Regulations Involved 2 Statement -...-. 2 Reasons For Denying the Writ 5 Argument ......------- 5 Conclusion -... 19 Appendix . 20-22 CASES Baker v. Texas & Pacific Ry. Co., 359 U.S. Ee 7 Bartels v. Birmingham, 332 US. 126 8,9 Burlington Truck Lines V. United States, 317 U.S. 156 -. 15 Cape Shore Fish Co. V. United States, 330 F.2d 961 ..5, 6, 12, 13 Capital Trawlers, Inc. V. United States, 324 F.2d 506, aff’d. per curiam; 216 F. Supp. 440 5, 6, 14 Enochs Vv. Williams Packing and Navigation Co., 370 US. 1 - - 8, 10, 11, 12 Hoosier Home Improvement Co. V. United States, 350 F.2d 640 . 11 Hopson Vv. Texaco Co., 383 U.S. 262 13 Jackson V. Phinney, 266 F.Supp. 835 14 Kirkconnell v. United States, 347 F.2d 260 5, 7,13 Lifetime Siding Co. v. United States, 359 F.2d 657 (CA- 2), cert. den. 385 U.S. 921 -.......-.-.--- 11 NLRB Vv. Hearst Publications, Inc., 322 i & Fears 14 Service Trucking Co. v. United States, 347 F.2d 671 -... 11 United States v. Crawford Packing Co., 330 F.2d 194 .. 12 United States v. Silk, 331 U.S. 704 8, 9, 10 Wisconsin Electric Co. v. Dunmore, 282 ff se 6 Statutes and Regulations: Statutes At Large: 49 Stat. 623 64 Stat. 482, 490 64 Stat. 524 United States Code: Title 26, Section 3121 (d) Title 26, Section 3306 (i) ..... Title 26, Section 3306 (c) (17) Title 26, Section 7202 .......... ek Tetde BB, FB.Clv.P. GRC a) es seccecnececceeee.. Internal Revenue Code, 1939: | | eee 17 SI I nt ensoncsihintcnionsonsirnticseneonsbininbnscela 17 Internal Revenue Code 1954: LS eee rae 17 NTI cnc cigsacncssnatnisdaokibdunseaiatemcmuanecae 2, 16 Section $121(G) ............c...coces.s. 2, 5, 6, 7, 10, 12, 14, 16 Section 8806 ........0..00000... sipennninteacinntediiaiinaimatic 2,16 | | | ee 2, 5, 6, 7, 10, 12, 17 26 C.F.R. EE SERS nes ea Manes HEN A Tar 2,9 UIE cinnusrnteniaadercdieimciaaieahesecas ces 2 Miscellaneous: Social Security Act EE CR ae ae eS AMER CUS 16, 17, 18 OM UE sinicstntastadebn eed pate cue ate ae 16 Federal Insurance Contributions Act _....... 2, 12, 18, 16, 18 Federal Unemployment Tax Act ...................... 2, 12, 18, 16 Self Employment Contributions Act (1950) ............ 17, 18 Jones Act ............ 18, 15 Sen. Rept. No. 1255, 80th Cong. 2d Sess. _.............. 7,9, 10 Vol. 132, Supreme Court Records and Briefs, Oct. Term 1961, No. 493 ...... i 11 Gilmore & Black, The Law of Admiralty, 1957 ed. SARL Mai eee: 18 SST 387, 1940-1 Cum. Bull. 192 20.2.0... eeeecesceeoeeee 17 w—— IN THE Supreme Court of the United States OCTOBER TERM, 1968 No, 1124 THE UNITED STATES OF AMERICA v8. W. M. WEBB, INC., ET AL. ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT BRIEF FOR RESPONDENTS IN OPPOSITION OPINIONS BELOW The findings of fact and conclusions of law of the dis- trict court (R. 218-241) were officially reported at 271 F. Supp. 249. The opinion of the Court of Appeals for the Fifth Circuit below (Pet. App. A, 1a-9a) is reported at 402 F.2d 956. JURISDICTION The jurisdictional prerequisites are adequately set forth in the petition. Time for filing the response was extended by the Clerk of the Court to April 14, 1969. — 2 QUESTION PRESENTED The sole question presented is whether fishermen (cap. tains and crewmen) operating menhaden fishing boats owned by the respondents were their “employees” as that term is defined in the Federal Insurance Contributions Act (FICA) and the Federal Unemployment Tax Ac (FUTA), Sections 3121 et seq. and 3306 et seq. of the Internal Revenue Code of 1954; 26 USCA §§ 3121 et seq, and 3306 et seq. STATUTES AND REGULATIONS INVOLVED The specific statutes involved are §§ 3121(d) and 3306 (i), Internal Revenue Code of 1954; 26 USCA §8§ 3121(d) and 3306(i), and the interpretive regulations, 26 CFR § 31.8121(d)-1 and § 31.3306(i)-1. They are set forth in the Appendix, infra, pp. 20-22, STATEMENT The importance of the facts to the decision requires a full summary of the district court’s findings of fact. (R. 219-238) Petitioner’s statement of the case ignored a number of the district court’s special findings, necessary to its conclusions, and distorted others.’ Adding to those already stated (Pet. 2-6), the following are considered pertinent: The business of each respondent embraced: (1) owner- 1A material distortion in petitioner’s statement is embraced in the words (Pet. 4): “The captain could be fired if he failed to follow a respondent’s instructions (R. 224).” We have searched the district court’s findings and petitioner’s record reference to no avail. We think this statement exceeds the reasonable bounds of inference and the outer limits of editorial license. It is a bald and transparent attempt to inject elements of control into the court’s findings which do not exist. The contrary was evident. See, R. 237, Fdg. 47. The petitioner’s record r ference (“R. 224)” at (Pet. 4) to the nonexistent language is a calious disregard for material mat- ters basic to the resolution of questions raised by the petition. — ship of one or more menhaden fishing boats; (2) the fish- ing for menhaden under contractual arrangements with certain captains and (3) the processing of the fish into fish meal products for sale on the open market. (R. 221; Fdg. 7) The employment tax effect of the contractual arrange- ment between each respondent and the fishermen (cap- tains and crewmen) was the sole question for determina- tion below. (R. 219) While not formalized by the par- ties and designated as such, the district court found that the arrangement between them constituted an oral con- tract. (R. 224; Fdg. 15). To this end, respondents re- inquished control of their fishing boats for a season* to captains who provisioned them at their own expense a5 they saw fit and staffed them with crews selected without interference by the respondents. (R. 221, 227, 231; Fdgs. 8, 22, 34) Further, it was the exclusive prerogative of the captains to conduct the fishing operations, actually and entirely, by their own means and methods without interference by the respondents and without a guarantee of compensation of any kind. (R. 221, 224, 228; Fdgs. 8,15, 25,31) Unless fish were caught, the fishermen had no earnings. (R. 230, Fdg. 31) The general area to be fished (the Gulf of Mexico or Atlantic Ocean) was determined by the seasonal presence and availability of the menhaden fish. When a choice of two places to fish occurred, the captain’s preference was a factor in a joint decision with the respondent. (R. 225, Fdg. 17) By their own choice the captains fished either the Gulf of Mexico or the Atlantic Ocean. Some fished in both areas for consecutive seasons in a single year. Some captains contracted for a single season for a single year. Others fished a single season for respondents and at other times for competitors without any pattern of continuity 2A fishing season lasted anywhere from three to seven months depending upon the area fished. (R. 224, 225; Fdgs. 13, 16). 4 of relationship with the respondents. (R. 225, 226; Fag, 18) Payment was made by respondents to captains at an agreed rate per unit, i.e. each “1000-fish” caught and de livered. (R. 230, Fdg. 30) The commencement and termination of each season was considered a separate and complete undertaking by the captains and respondents. New negotiations between the parties respecting prices per “1,000 fish” and arrange. ments for staffing and provisioning of the boats were com- menced with each separate season. There was no pattern of continuity in the service relationship beyond the short seasonal fishing period, each of which inaugurated a new set of fiscal and personnel records between the fishermen and respondents. (R. 226-227, 230; Fdgs. 19, 20, 32) While respondents determined that a crew of 24 men was necessary for successful fishing (Pet. 4), additional persons could be hired in the captains’ discretion who, in turn, bore the burden of the extra expense. Fewer than 24 men were not shipped by a captain without first con- sulting a respondent. (R. 227; Fdgs. 21, 22) Although respondents furnished the captains with seasonal pay scales for crew members (Pet. 4), each captain was privi- leged to increase the amount paid the crewmen, but, again, he assumed the burden of the extra expense without reimbursement by the respondent. (R. 228; Fdgs. 28, 24) Although it was in the interest of the parties to fish the boats as often as practicable, whether a boat remained in port due to unseaworthiness or bad weather were consid- erations left solely to the discretion of the captain, as opposed to the respondents. (R. 234; Fdg. 40) A captain used the radio communications facilities aboard the boat as he deemed necessary, without interference by the re spondent and freely accepted or rejected the services of fish spotter airplanes provided by the processing plants. (R. 236-237; Fdg. 45) Although the arrangements de- scribed could be terminated voluntarily or involuntarily _ 5 by either party at the end of any trip (Pet. 3), the cap- tains did not leave their boats prior to the season’s end. There was no evidence of termination of any relationship or contract during a season. (R. 237; Fdg. 47) The district court further found that, (1) there was no express agreement specifying the extent to which respond- ents had control over the fishing activities of the captains and it was clear that no actual control was exercised over the details, manner or method employed by the captains and their crews. (R. 236; Fdg. 44) ; (2) that respondents had no agreement with the captains that entitled them to a preferred call on all the time and services of the captains (R. 237; Fdg. 48); and (3) that respondents had no actual control over the crewmen, nor did they exercise any control over the latter’s activities through the cap- tains. (R. 238; Fdg. 49) In applying the common law test of the employer-em- ployee relationship, it was open to the district court to hold that for purposes of 8§ 3121(d) and 3306(i), the fishermen were employees of the respondents. But it was obvious from its findings of fact that the district court had the common-law control test clearly in mind. (R. 236, 237, 238; Fdgs. 44, 46, 48 and 49) And the Circuit Court below affirmed, noting that there was ample evidence in the record to support the district court’s findings. (Pet. App. A, p. 9a) REASONS FOR DENYING THE WRIT Argument L Petitioner’s contentions that different approaches exist between the Fifth Circuit opinion below (Pet. App. A, p. la), the Court of Claims* and the First Circuit * * Cape Shore Fish Co. V. United States, 330 F.2d 961, and Kirk- connell v. United States, 347 F.2d 260. ‘Capital Trawlers, Inc., et al v. United States, 324 F.2d 506, aff’g., per curiam, 216 F. Supp. 440. 6 (Pet. 6-7) respecting the issue involved here will not withstand analysis. Petitioner concedes that the common law test determin- ing who are employees, provided in §§ 3121(d) and 3806 (i), Title 26, United States Code, was applied to all the cases claimed differently approached. (Pet. 2, “question presented”, 10-11, 12) It clearly appears therefore, that the asserted conflict in “approaches” arises from differ. ences in states of fact, or from different inferences drawn from similar facts and not in varied applications of a principle of law. In these circumstances the writ should not be granted.® Petitioner forcefully argues that a complete identity of circumstances, without important factual differences, exists among the cases cited (Pet. 7, 10) and a rule of law should be fashioned by this Court, under its supervisory powers, to govern lower court decisions respecting tax incidence growing out of service relationships in the fish- ing industry. (Pet. 6, 9, 10) A casual reading of the petitioner’s authorities cited for comparison® (Pet. 7) discloses material differences from those at bar. 5 Wisconsin Electrical Co. v. Dunmore, 282 U.S. 813. * Material departures in petitioner’s citations from the case at bar are: Cape Shore Fish Co. v. United States, supra; the service relationship was governed by a union contract which materially controlled the captain’s hiring practices, curtailed his free- dom of boat operations as to time of departure, arrival and the fixing of working hours and watches at sea for the crew; payments were guaranteed following “brokers”, and patterns of long and continued relationships were evident in a general atmosphere of supervision of the captains under sanctions for failure to follow the owner’s instructions. Capital Trawlers, Inc., et al vy. United States, supra; the arrangement provided for guaranteed payments following a “broker”, patterns of continuity of service relationships for extended periods and control by the owner over details of the fishing operations, including staffing and provisioning of the boats. [Footnote continued on page 7] — But assuming, arguendo, that the facts were not mate- rially different, as alleged, the rule is that where the jury has tried the matter upon instructions, the only in- quiry is whether it cannot be said that reasonable men could reach differing conclusions or. the issue. Where, as here, the trial has been by the judge without a jury, the judge’s findings must stand, unless “clearly erroneous.” F.R.Civ.P. 52(a), 28 USCA. These rules will on many occasions be presented in cases deciding service relation- ships, not alone in the fishing industry, but any indus- _ And, as observed by the Circuit Court below (Pet. App. A, P.- 8a), Congress having been explicit when it amended Sections 3121(d) and 3306(i), Internal Reve- nue Code, that the common-law standards alone should be applied, anticipated a variance in results by triers of the facts.’ The facts stressed by petitioner indicated at most that the question of the fishermen’s status was a debateable one, that is, one upon which reasonable men may differ. Baker v. Texas & Pacific Ry. Co., 359 U.S. 227, 228. It was open to the fact finder to reach a contrary result but the respondents prevailed. Decisions in close cases are @ familiar litigation casualty to which the government is no more immune than taxpayers. ¢ [Continued] Kirkconnell, et al v. United States, supra; a union contract permeated the service relationship, creating an atmosphere of tight control by the owner over the captains including crew hire and permanency of relationship. The Court of Claims called this a “very close case.” (id. 347 F.2d at p. 267) All three cases contained language distinguishing their facts from those in Fifth Circuit cases cited reaching contrary results. 1“Thus the inquiry when proceeding under the usual common- law rules, realistically applied, has a clearly focused and practical end point. A whole field of pertinent fact, documentary and other- wise, is available to cast its weight one way or the other. Common- sense and our own experience tell us that the rule so applied will work a reasonable sifting of difficult cases.” Sen. Rept. No. 1255, 80th Cong. 2d. Sess., p. 10; 2 U.S. Code Cong. Serv., 1948, at p. 1762. 8 It is not in harmony with sound practice considerj the nature of this Court’s function and those of the dig. trict courts for the Supreme Court to undertake drawing the final conclusion generally in these border-line cases Having declared the principles of law in Enochs v, Wi. liams Packing and Navigation Co., 370 U.S. 1 (di infra, p. 10) to be applied in these boatowner-fishermen cases, the function of this Court is sufficiently discharged by seeing to it that they are observed. When this has been done, drawing the final conclusion in matters s largely factual as the end result must be in close it is more properly the business of the district courts than this Court. II. Alternatively, petitioner argues that the holdings in the case below and similar cases were not resolutions of fact issues at all, but were ultimate conclusions based on undisputed facts, representing pure questions of law which are subject to plenary review on appeal. (Pet, 9) Citing United States v. Silk, 331 U.S. 704 and Bartels v. Birmingham, 332 U.S. 126 (Pet. 9, 11) for support, petitioner not only misread those cases but ignored the rules basic to issuing a writ of certiorari. The writ was granted in those cases in 1947 because the federal courts were applying varying standards when determining who were employees under the Act. This Court observed in Silk (id. 381 U.S. at 711): “No defini- tion of employer or employee applicable to these cases occurs in the Act. * * * Nothing that is helpful in deter- mining the scope of the coverage of the tax sections of the Social Security Act has come to our attention in the legislative history of the passage of the Act or amend- ments thereto.” But, as petitioner says, in 1948 Congress passed clari- fying legislation defining the term “employee”. (Pet. 10-11) There could be no mistake that the common law standards and those alone were to be applied. The text — is contained in the petition, App. A, at 2a, 4a and in the Appendix infra, pp. 20-22. Although the moving principles in Silk and Bartels were consistent with thé common law rules, the Commit- tee Reports leading to the amendments emphatically re- jected and overrode the liberalized “economic reality test” suggested by this Court in prefatory remarks in Silk,’ and as dictum in Bartels,’ which led to a new regu- lation proposed by the Treasury Department for deciding employee status.” (Pet. App. A. p. 3a) Thus Congres- sional enactment removed the uncertainty of definition as to who were “employees” under the Social Security Act. No serious question of construction of a statute of nation- wide importance remains, nor does petitioner present an issue of clarity. Petitioner would equate Congress’ desire for “nation- wide uniformity of application of the act” (Pet. 11) with some litmus paper test for deciding who are employees under the common-law rules, Even the Treasury De- partment in the text of its implementing regulations,” approved by the Congress as the test to be applied, real- ized that the diverse blends of personal relationships in 6 331 U.S. 704 at 713. 9332 U.S. 126 at 130. 10“But, we repeat, if it be argued that the Supreme Court decisions establish a new definition of ‘employee’, then it is the purpose of this resolution to reestablish its meaning according to the usual common law rules, realistically applied.” Senate Rept. No. 1255, 80th Cong. 2d Sess. p. 7; 2 U.S. Code Cong. Serv. (1948) at p. 1758. 11 See, 26 CFR §§ 31.3121 (d)-1 Who are employees. ao * * * (c) Common law employees. * * * (3) Whether the relationship of employer and employee exists under the usual common law rules will in doubtful cases be determined upon an examination of the particular facts of each case. — our industrial society present niceties for ajudication which can not be put to rest by any kind of general for- mulation. In situations so dependent upon the inferences drawn from the facts in each case, the desired uniformity of decision urged by the petitioner can be achieved only by the application of appropriate legal rules, whether by the judge as the trier of facts or the jury under appro. priate instructions. The Committee Report leading to amendments of §§ 3121(d) and 3306(i) contained a chapter titled: Uni- formity of Application of the Act Promoted by Supreme Court Decisions Applying the Existing Regulation.” The text following said in substance that the existing Treasury Regulations “provide the answer to the Federal Security Agency for a rule of common application promotive of more uniform coverage of the act * * *” and encvuraged its continued application rather than invite changes which would give “rise to new uncertainties, more varied inter. pretations, a larger area for litigation, greater diversity of judicial decisions.” (Senate Rept. No. 1255, 80th Cong. 2nd Sess. at p. 18; 2 U.S. Code Cong. & Admin. News (1948) at p. 1769.) The notion that “employee” status under §§ 3121(d) and 3306(i) is a question of law runs counter to this Court’s decision in Enochs vy. Williams Packing and Navi- gation Co., 370 U.S. 1, holding the employment status of fishermen for social security tax purposes is a question of fact.” The Enochs v. Williams decision was based on jurisdictional grounds not here applicable and discussed the merits only for the purpose of determining “whether the government has a chance of ultimately prevailing.” 10 72 “These sections specifically adopt the common law test for ascertaining the existence of the employer-employee relationship. As stated in United States v. Silk, 331 U.S. 704, 716, ‘degrees of control, opportunities for profit or loss, investment in the facilities, permanency of the relation and skill required .... are important fo. decision [under the statutes]’.” (370 U.S. at 3) _—_ 11 On that record it held: “The record before us clearly re- yeals that the government’s claim for liability was not without foundation.” (370 U.S. at 8) Also, the govern- ment’s petition for a writ of certiorari in Williams, supra, successfully argued, “The record and issues in the present case pose questions of law and fact * * * which are sub- ject to reasonable disagreement * * *.” Likewise, the government’s brief on the merits in Williams took consid- erable comfort in the Circuit Court’s dissenting opinion which described the issue, deemed controlling by the ma- jority, as “closely and hotly litigated purely as a question of fact.” See, Vol. 132 of the Supreme Court Records and Briefs, Oct. Term 1961, No. 493, Petition at p. 7, and petitioner’s Brief at pp. 23-24. Unsuccessful taxpayers appealing adverse verdicts in employment tax cases respecting other relationships * have urged reversal, contending that the issue was one of law for the Court and should not have been submitted to the jury. The government opposed, arguing that conflict- ing inferences deducible from the facts were properly jury questions. The reviewing courts affirmed in each in- stance, Thus, petitioner would require the respondents plead in vain the very contentions urged so successfully by the government. The opinion below at most presents a unique set of facts not likely to recur. Respondents pray the Court to accept the concurring opinions of two courts below. We believe the Circuit Court’s decision below is not one that will have importance beyond the particular facts and par- ties involved, nor is it in conflict with the applicable deci- sions of this Court. The petition for the writ should be denied. 18 Lifetime Siding Co. V. United States, 359 F.2d 657 (CA-2), cert. denied 385 U.S. 921 (siding applicators) ; Service Trucking Co. v. United States, 847 F.2d 671 (CA-4) (truck unloaders) ; Hoosier Home Improvement Co. v. United States, 350 F.2d 640 (CA-7) (window installers). 12 III. Petitioner’s third ground, hardly a model of clarity, has two features: First, that the decisions in the Court of Claims and the Fifth Circuit give opposing constructions to the term “common law rules” in § 3121(d), which should be resolved by this Court; (Pet. 12, 15) and Second, as we understand it, petitioner says that respondents are liable for FICA and FUTA taxes on the earnings of figh- ermen even though they are not employees under the common-law standards prescribed by §§3121(d) and 3306 (i), Interna] Revenue Code, so long as the respond- ents, as owners of the boats, are liable to the fishermen for maintenance and cure under maritime law. (Pet. 13, 14 14) The contentions are indefensible. We take them in order. First, there is no conflict between the Court of Claims in Cape Shore Fish Co. and the Fifth Circuit decisions cited.* They are in full accord. As did the Fifth Cir. cuit, the Court of Claims in Cape Shore applied the com- mon-law standards in the statutes and Treasury Regula- tions involved to the facts adduced. (330 F.2d at 962, 964-5) Cape Shore listed as controlling (id. at 965) this Court’s decision in Enochs vy. Williams Packing Co., supra, which settled the question, saying: “These sections specifi- cally adopt the common-law test for ascertaining the existence of the employer-employee relationship.” (370 U.S. at 3) Petitioner’s asserted conflict became self-defeat- ing when the Court of Claims itself, in Cape Shore, dis- tinguished the contrary results reached by the Fifth Cir- cuit in Crawford Packing Co., stating: “The facts in Crawford Packing differed in material respects from the facts here.” (330 F.2d at 973; ftn. 18) Petitioner observed that the “Court of Claims exam- ined the maritime cases in detail and relied for its con- clusion on the fact that under maritime law the arrange- ments in that case would not have sufficed to relieve the * United States v. Crawford Packing Co., 330 F.2d 194 (Pet. 6, 8, 10, 12) and the opinion below at Pet. App. A, 1a et seq. wa 13 boat owner of the employer’s traditional obligations to his seamen.” (Pet, 14) The observations are beside the point. A boat owner’s obligations for maintenance and cure have no relation to his tax liabilities on the seamen’s earnings under FICA and FUTA. Each obligation and liability is governed by different acts having different leg- islative purposes. Maintenance and cure is a fact of the seaman’s attachment to the boat which creates the right and not the form of the contract with the owner. A term in a contract under which a seaman purported to waive the right would be unquestionably void. Gilmore & Black, The Law of Admiralty, 1957 ed. p. 257. “Employees” de- fined under the FICA and FUTA statutes are specifically described and their identity for tax purposes is finely drawn. On the other hand, the term “employee” in mari- time law is left at large, without definition to give effect to the ameliorating purposes of maritime law which recog- nizes the cost and debilitating effect of industrial injury. That the fishermen here are not employees in the common law sense is no bar to their rights and protection as wards of the admiralty court under maritime law. This Court said in Hopson v. Texaco Co., 383 U.S. 262 at 263-4, that the application of the Jones Act, an extension of the mari- time law, was “an avowed departure from the rules of the common law * * *.” “Suffice it to say here that the Court of Claims’ discus- sion of maritime cases was obiter dicta, having only his- torical significance. It is noteworthy that in Kirkconnell y. United States, supra, decided after Cape Shore, the Court of Claims reached a similar result, but made no mention of maritime law as a basis for conclusion that the fishermen were employees. Applying solely $$ 3121(d), 3306(i) and the Regulations in Kirkconnell, the Court of Claims again distinguished the contrary results reached by the Fifth Circuit and added that it was a “very close case”. (347 F.2d at 265, 267) It seem strange indeed that petitioner’s authorities, ie., Kirkconnell in the Court of Claims and Capital Trawlers in the First Circuit, cited earlier in the petition (Pet. 7) to support its transparent assertions of conflict have not been summoned here to lend aid and comfort to petitioner’s maritime-oriented em. ployee argument.’® 14 All that remains is a dictum from a single case which was later disowned by the same Court of Claims that spawned it. Numerous cases deciding the same tax issue, applying the same rules of law made no reference to prin- ciples of maritime law. The dictum in Cape Shore has authority only in the government’s petition. The second feature of petitioner’s ground suggests that in seafaring arrangements boatowners are liable for FICA and FUTA taxes on the earnings by seamen by vir. tue of the former’s obligation to the latter for maintenance and cure, irrespective of the true service relationship stemming from the contract between them. (Pet. 13, 14, 15) On its face the contention is unsound. As we said, the clear differences between the term “employee” spe cifically defined and circumscribed under the common law tests outlined by the tax statute on the one hand, and the term “employee” under marit.me law which is without definition on the other, should conclude the matter, Peti- tioner thus puts forth a contention which not only ignores basic concepts in admiralty and maritime jurisprudence, but also ignores elementary principles of statutory con- struction. Their exposition is out of place in these limited proceedings. Suffice it to say that this Court pointed the way in an analogous situation, a labor case, in NLRB vy. 18 The petition is not uniformly respectiful of its own cited autor- ities. At Pet. 7 and 15, petitioner asserted an alleged conflict within the Fifth Circuit citing Jackson v. Phinney, 266 F.Supp. 885 (WD Tex., 1967) as indicative of the necessity for resolution of the con- flict by this Court. Holding the fishermen employees under § $121 (d), the district court rejected the government’s maritime argu- ment, stating that “it seems questionable at best whether Congress in reaffirming the use of the common-law tests intended to thereby incorporate maritime law under the FICA and FUTA”. (id., at 889) _— 15 Hearst Publications, Inc., 322 U.S. 111 at 122, saying: we * * a person who * * * is held to be an ‘independent con- tractor’ for the purpose of imposing vicarious liability in tort may be an ‘employee’ for purposes of particular legis- lation, such as unemployment compensation.” Thus, while the fishermen may be excluded from the common-law type employee category they are nevertheless “employees” for maintenance and cure under the liberal tests applied in maritime law. In this regard this Court further stated (id, 322 U.S. at 126): “Myriad forms of service relationship, with infinite and subtle variations in the terms of employment, blanket the nation’s economy. Some are within this Act, others beyond its coverage. Lavge numbers will fall clearly on one side or on the other, by whatever test may be applied.” In short, because of the difference in concept between an “employee” for federal tax purposes and an “employee” for compensation purposes under maritime law, the fish- ermens’ right to maintenance and cure or Jones Act bene- fits cannot be considered an indication that they were employees in the common law sense. The sole issue here is whether these fishermen were employees within the meaning of the pertinent federal tax statutes. This ques- tion cannot be determined by whether or not they were em- ployees within the meaning of the Jones Act or general maritime law. (Pet. 14) This action was brought by respondents solely to recover taxes overpaid by them. The fishermen have no direct interest in this controversy, nor does it appear their rights to maintenance and cure, or any other rights, are affected. The fishermen’s status for other purposes is not in issue here, nor would it seem they were bound by any attempt to decide such status in a proceeding in which they are not parties. This Court’s observation in Burlington Truck Lines v. United States, 371 U.S. 156 at 173 is appropriate here: «“<* * * nor should a determination under one statute be mechanically carried over into the interpretation — of another statute involving significantly different considerations and legislative purposes.’ ” Thus it may be said that while petitioner’s maritime concept is basic to the resolution of suits between owners, captains, crewmen and outside third parties, it is a non- sequitur in the resolution of tax controversies where the parties are solely the United States and the boatowner-re. spondents. 16 The opinion below observed that the Treasury Depart. ment unsuccessfully proposed to Congress that § 3121 (d) be amended to include as “employees” captains and crew- men of the kind concerned here, irrespective of their em- ployment status under the common law rules. The Com- mittee’s rejection of the agencies’ maritime-oriented em- ployee was considered by the Circuit Court as indicative of Congress’ intention to retain the common law control test as the sole test here for tax purposes, (Pet. App. A, 7a and footnotes 5 and 6) In recent times Congress amended various parts of Sections 3121 and 3306 of the Internal Revenue Code, but subsections (d) and (i), defining “em- ployee” remain intact—lending weight to the common-law definition of employee. If we understand the petition cor- rectly, it invites this Court to sit as a congressional com- mittee to bring about by its certiorari jurisdiction that which the Congress refused to do by legislative amend- ment, Petitioner’s reference to 26 U.S.C.A. § 3306(c) (17) (Pet. 13) demonstrates the government’s confusion in attempting to frame an issue for the Court to resolve. A]- though proposed by the petitioner (Pet. 13-14), that sec- tion has no bearing on the old-age benefits program ad- ministered under Title II of the Social Security Act and the correlative tax provisions of the Federal Insurance Contributions Act (FICA), §§ 3121 et seg. Petitioner’s reference deals solely with Title III of the Social Security Act, and the correlative tax sections of the Federal Un- employment Tax Act (FUTA), § 3306, et seq. The latter _ 17 provisions are concerned solely with grants of money to those states having unemployment jnsurance programs ap- proved by the Social Security Administration. And even in this limited area, the common law standards prescribed in $$ 3306(i), Internal Revenue Code determine whether fishermen on vessels over 10 gross tons are employees for unemployment insurance tax purposes. A careful reading of § 3306(c) (17) shows that fishermen on vessels under 10 gross tons are exempt, irrespective of their status under the common law standard. Petitioner’s single reference to g.8.T. 387, 1940-1 Cum. Bull, 192, as the official position of the Social Security Administration (Pet. 7) is misleading. It cannot be the official or other position of anyone. It has no sanction in the law. S.S.T. 387 was promulgated under the Federal Insurance Contributions Act, Sections 1426(b) (14) and (g) of the Internal Revenue Code of 1939. The 1954 re- vision of the Internal Revenue Code renumbered the FICA as §§ 3121, et seq. The provisions relating to fishermen contained in the 1939 Code sections were deleted from FICA entirely in the 1954 Code. No basis for granting the writ is warranted by any coritention put forth. IV. The petitioner, in closing, sugggests that the con- trary results in these cases may pose some administrative problems for the Social Security Administration in dis- pensing benefits. (Pet. 15-16) A further assertion is made that benefits may be denied to some, while they ac- crue to others without payment of the required social se- curity taxes (Pet. 16). These notions are not only un- sound, but disclose a gross misconception of the social security system. It is common knowledge that following the enactment of the Self-Employment Contributiens Act of 1950 (SECA) (64 Stat. 524) §§ 1401, et seq., internal Revenue Code, all persons, employees under any test and others in service relationships, including conventional independent contrac- tors (with few exceptions), are covered under the social 18 security program and accorded equal benefits. (Title II, Social Security Act; 49 Stat. 623 and 64 Stat, 482, 490) The benefits so accorded are besed upon the indi. vidual’s earnings. Taxes are paid by those liable for them and are collectible under the provisions of the FICA and SECA Acts. Under FICA the taxes are paid by the employer and employee in equal shares. The employer bears the burden of certain administrative duties and payments. His failure to abide by them may result in as- sessments and penalties and possible criminal sanctions, See, 26 U.S.C. § 7202. Under the Self-Employment Con- tributions Act (SECA) the individual pays the tax, (about 34 of the combined FICA tax) and assumes the responsibilities for reporting and payment to the tax col- lector. The alleged problems, it seems, lie with the agen- cies who, for administrative convenience, bring pressure to bear on respondents and others to assume liability for taxes under FICA without a basis in law or fact. The asserted “dilemma” of the Internal Revenue Serv- ice complained of (Pet. 17) is self-induced. Systematic refusal to consider (R. 3, par. 10) and summary disallow- ance of claims for refund, without examination of the working relationships in issue, are a standing National Office policy of the Internal Revenue Service in disposing of all boatowner-fishermen claims. By this device the agency transfers its entire administrative responsibilities to the courts to sift the validity of the claims on a case by case basis, and, by a show of statistics (Pet. 17) accuses the respondents and other taxpayers for the responsibility of increased calendar loads in the Fifth Circuit. Respond- ents were left no alternative in these circumstances but to bring this suit. Review of the decision below by writ of certiorari will not resolve the petitioner’s administrative lapses. — 19 CONCLUSION The decision of the court below is clearly correct. There are no conflicts of decision, and the case does not call for review. The petition for a writ of certiorari should, there- fore, be denied. Respectfully submitted, Washington, D. C. 20036 April 1969 20 APPENDIX STATUTES AND REGULATIONS INVOLVED Internal Revenue Code of 1954: Sec. 3121. DEFINITIONS. * * * * (d) EMPLOYEE.—For purposes of this chapter, the term “employee” means— (1) any officer of a corporation; or (2) any individual who, under the usual con. mon law rules applicable in determining the employer-employee relationship, has the status of an employee; © = & = Sec. 3306. DEFINITIONS (i) EMPLOYEE.—For purposes of this chapter, the term “employee” includes an officer of a corporation, but such term does not include— (1) any individual who, under the usual con- mon law rules applicable in determining the employer-employee relationship, has the status of an independent contractor, or (2) any individual (except an officer of a cor- poration) who is not an employee under such common law rules. * * * ae (26 U.S.C. 1955 ed., Sec. 3121 and 3306) — 21 Treasury Regulations under the 1954 Internal Revenue Code, promulgated under the Federal Insurance Contri- putions Act: § 31.3121 (d)-1. Who Are Employees. (a) | a wd (c) Common Law Employees. (1) Every individ- ual is an employee if under the usual common law rules the relationship between him and the person for whom he performs services is the legal relation- ship of employer and employee. (2) Generally such relationship exists when the n for whom services are performed has the right to control and direct the individual who per- forms the services, not only as to the result to be accomplished by the work but also as to the details and means by which that result is accomplished. That is, an employee is subject to the will and con- trol of the employer not only as to what shall be done but how it shall be done. In this connection, it is not necessary that the employer actually direct or control the manner in which the services are per- formed; it is sufficient if he has the right to do so. The right to discharge is also an important factor in- dicating that the person possessing that right is an employer. Other factors characteristic of an employ- er, but not necessarily present in every case, are the furnishing of tools and the furnishing of a place to work, to the individual who performs the services. In general, if an individual is subject to the control or direction of another merely as to the result to be ac- complished by the work and not as to the means and methods for accomplishing the result, he is an inde- pendent contractor. An individual performing serv- ice as an independent contractor is not as to such services an employee under the usual common law rules. Individuals such as physicians, lawyers, den- 22 tists, veterinarians, construction contractors, pub stenographers, and auctioneers, engaged in the x suit of an independent trade, business, or profe in which they offer their services to the public, independent contractors and not employees. If an dividual enters into an agreement with another pe son pursuant to which such individual undertakes q produce a crop or livestock on land owned or leg by such other person and pursuant to which (i) ¢ crop or livestock produced by such individual or th proceeds thereof are to be divided between such indi vidual and such other person, and (ii) the amou of such individual’s share depends on the amount @ the crop or livestock produced, such individual ig with respect to such undertaking an independent com tractor and not an employee. d (8) Whether the relationship of employer and em- ployee exists under the usual common law rules will” in doubtful cases be determined upon an