The Burger Court Opinion Writing Database

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1 The Burger Court Opinion Writing Database United States v. Swank 451 U.S. 571 (1981) Paul J. Wahlbeck, George Washington University James F. Spriggs, II, Washington University in St. Louis Forrest Maltzman, George Washington University

2 .1143.r.etnt Q1:1-art of t1t Ian/tea Mates Pas king n, g). 2irA4g CHAMBERS OF THECHIEFJUSTICE May 7, 1981 RE: United States v. Swank Dear John: I join. Justice Stevens Copies to the Conference

3 avrrnte iltixt of tile gnitzb tutee Witoiringtolt, (c. CHAMBERS OF JUSTICE W.. J. BRENNAN, JR. March 30, 1981 RE: No United States v. Swank Dear John: I agree. Justice Stevens cc: The Conference

4 ',5itp-rErnt (Crart if til t TIM:U.?!,:5taito Pmallutgicat, p. (c. 2i ) CHAMBERS OF JUSTICE POTTER STEWART March 30, 1981 Re: No , U.S. v. Swank Dear John, I shall await Byron's possible dissenting opinion. Sincerely yours, Justice Stevens Copies to the Conference

5 $itp-rrutt (Court of flit 2Ettritzb 121P,Ef 711Tagfringirat, P. QT. CHAMBERS OF JUSTICE POTTER STEWART May 5, 1981 Re: No , U.S. v. Swank Dear Byron, opinion. Please add my name to your dissenting Sincerely yours, Justice White Copies to the Conference

6 C, 1yrtrot rritt-t of thr25initei tates' aztoirengtan, p. 2r1n.g CHAMBERS OF JUSTICE BYRON R. WHITE March 30, 1981 C Re: U. S. v. Swank Dear John, I am considering writing a dissent in this case. Sincerely yours, c `s1 = (-) (24\ Mr. Justice Stevens Copies to the Conference '71

7 Mr. 7-1-CM: Mr. J 1 e Whlta Circulated: 1st DRAFT Recirculated: SUPREME COURT OF THE UNITED STATE No United States, Petitioner, " On Writ of Certiorari to the v. United States Court of Claims, Elwood Swank et al. [May, 1981] JUSTICE WHITE, dissenting. The Court today rejects the Internal Revenue Service's interpretation of 611 and 613 and the applicable regulation because it has not "suggested any rational basis for linking the right to a depletion deduction to the period of time that the taxpayer operates a mine." The Court suggests that depletion tax policy should be the same "whether the entire operation is conducted by one taxpayer over a prolonged period or by a series of taxpayers for successive shorter period." My disagreement with the Court's opinion is simple: It is not our function to speculate on who deserves an allowance; our duty is to determine if the Service's interpretation is a reasonable one. Since in my view the construction of the statutory provisions and the attendant regulation is clearly acceptable, I dissent. Congress has provided for a depletion allowance in recognition of the fact that mineral deposits are wasting assets in order "to compensate the owner for the part used up in production." Helreriny v. Bankline Oil Co., 303 U. S. 362, 366 (1938). The theoretical justification for the allowance is that it will permit an owner to recoup his capital investment in the minerals as the resources are being exhausted. Commis,sioner v. Sonthwest Exploration Co., 350 U. S. 308, 312 (1956) ; United,States v. Cannelton Sewer Pipe Co., 364 U. S (1960). The fact that the manner of calculating the depletion allowance has changed and is not that closely tied

8 To: The Chid J117,,tie., 2nd DRAPT Circulat SUPREME COURT OF THE UNITED STATIlip u2.2.ted: c' No United States, Petitioner. 3 " On Writ of Certiorari to the v. United States Court of Claims, Elwood Swank et al. c-: o [May 1981j t c4,.. r justice WHITE, with whom JUSTICE STEWART joh4s, 1 dissenting. The Court today rejects the Internal Revenue Service's interpretation of 611 and 613 and the applicable regulation because it has not "suggested any rational basis for linking the right to a depletion deduction to the period of time that the taxpayer operates a mine." The Court suggests that depletion tax policy should be the same "whether the en- cn tire operation is conducted by one taxpayer over a prolonged period or by a series of taxpayers for successive shorter periods." Ante, at My disagreement with the Court's opinion is simple. It is not our function to speculate on who deserves an allowance; our duty is to determine if the Service interpretation is a reasonable one. Since in my view the construction of the statutory provisions and the attendant regulation is clearly acceptable, I dissent. Congress has provided for a depletion allowance in recognition of the fact that mineral deposits are wasting assets in order to compensate "the owner for the part used up hi production." Helverina V. Bankline Oil Co., 303 U. S. 362, 366 (1938). The theoretical justification for the allowance is that it will permit an owner to recoup his capital investment in the minerals as the resources are being exhausted. Commissioner V. :Southwest Exploration Co., 350 U. S (1956) ; United States V. Cannelton. Sewer Ripe Co., 364 C". S. 76, 81 (1960). The fact that the manner of calculating the depletion allowance has changed and is not that closely tied C :r: z

9 The Chief Justice Mr, Justice Brennan Mr. Justice, Stewart V:-. Just.1_,?.? 3rd DRAFT ated: SUPREME COURT OF THE UNITED STATEI No, United States, Petitioner, Elwood Swank et al On Writ of Certiorari to the United States Court of Claims. [May, 1981] JUSTICE WHITE, with whom JUSTICE STEWART joins, dissenting. The Court today rejects the Internal Revenue Service's interpretation of 611 and 613 and the applicable regulation because it has not "suggested any rational basis for linking the right to a depletion deduction to the period of time that the taxpayer operates a mine." The Court suggests that depletion tax policy should be the same "whether the entire operation is conducted by one taxpayer over a prolonged period or by a series of taxpayers for successive shorter periods."' Ante, at My disagreement with the Court's opinion is sim ple. It is not our function to speculate on who deserves an allowance; our duty is to determine if the Service's interpretation is a reasonable one.. Since in my view the construction of the statutory provisions and the attendant regulation is clearly acceptable. I dissent. Congress has provided for a depletion allowance in recognition of the fact that mineral deposits are wasting assets in order to compensate "the owner for the part used up in production." Helvering v. Bankline Oil Co., 303 U. S. 362, 366 (1938). 'The theoretical justification for the allowance is that it will permit an owner to recoup his capital investment in the minerals as the resources are being exhausted. Commissioner V. Southwest Exploration Co., 350 LT. S. 308, 312 (1956) ; United States v. Cannelton Sewer Pipe Co U. S. 76, 81 (1960). The fact that the manner of calculating the nepletion allowance has changed and not that, closely tied

10 ,t5uprrznr (Court of tiir Voitrb.-5tatref lifizsilington. D. L CHAMBERS OF JUSTICE THURGOOD MARSHALL November 10, 1980 Re: No Federated Department Stores, Inc. v. Moitie and Brown Dear Bill: Please note in your opinion that I dissent and would give the case plenary review. Sincerely, dga T.M. Mr. Justice Rehnquist cc: The Conference

11 ,iinprrnir CConrt of t1ir 2i tat Ittashington, J. (fit. 20 )i3 CHAMBERS OF JUSTICE THURGOOD MARSHALL April 1, 1981 Re: No United States v. Swank Dear John: Please join me. Sincerely, RA T.M. Justice Stevens cc: The Conference

12 .:5uprtutt (Court of thr`gfititeb,atatte 2111" Iftngtan, 211g4g CHAMBERS OF JUSTICE HARRY A. BLACKMUN March 30, 1981 Dear John: Re: No United States v. Swank Please join me. Mr. Justice Stevens cc: The Conference

13 itlxrtittr (ourt a titeptittir,;$tatto VaSilittOftrtt, 70. (. zagn.g CHAMBERS OF JUSTICE LEWIS F. POWELL,JR. March 30, U.S. v. Swank Dear John: Please join me. Sincerely, Mr. Justice Stevens lfp/ss cc: The Conference

14 .;.-5)tpterrtz Dort cf flit 14nitzb ;-.5-tatz0 IllralTirtgto-rt, p. (q. 2.C1-1- CHAMBERS or JUSTICE WILLIAM H. REHNQUIST March 30, 1981 Dear John: Re: No United States v. Swank Please join me. Mr. Justice Stevens Sincerely, Yf / Copies to the Conference

15 Mr. orals oe. Dr,,Inriar-; Just co St E's.wart ral te 7: :.,".,-7r.,an.. 7 st Fro:a:,Th.zst ca. Stevens O 1 1st DRAFT SUPREME COURT OF THE UNITED STATES No UNITED STATES, PETITIONER, v. ELWOOD SWANK ON PETITION FOR WRIT OF CERTIORARI TO THE UNITED STATES COURT OF CLAIMS [March, jus-rice STEVENS delivered the opinion of the Court. The owner of an economic interest in a mineral deposit is allowed a special deduction from taxable income measured by a percentage of his gross income derived from exhaustion of the mineral. This deduction, codified in 611 and 613 of the Internal Revenue Code, is designed to compensate such owners for the exhaustion of their interest in a wasting asset, the mineral in place.' This case presents the question ' "SEC Allowance of deduction for depletion: "(a) General Rule In the case of mines, oil and gas wells, other natural deposits and timber, there shall be allowed as a deduction in computing taxable income a reasonable allowance for depletion and for depreciation of improvements, according to the peculiar conditions in each case; such reasonable allowance in all cases to be made under regulations prescribed by the Secretary. "SEC Percentage depletion: "(a) General Rule In the case of the mines, wells, and other natural deposits listed in subsection (b), the allowance for depletion under 611 shall be the percentage, specified in subsection (b), of the gross income from the property excluding from such gross income an amount equal to any rents or royalties paid or incurred by the taxpayer in respect of the propert y. Such allowance shall not exceed 50% of the taxpayer's taxable income from the property (computed without allowance for depletion). * * In no case shall the allowance for depletion under 611 be less than it would he if computed without reference to this section." "(b) Percentage depletion rates The mines, wells, and other natural de-

16 To: The Chief Justice Mr. Justice Brennan Ur. Justice Stewart ar, Justice White 1;77. Juce Affirstall B11,11mun "Pal!,1r. s t From: Mr. Justice Stevens Circulated 2nd DRAFT 'RI SUPREME COURT OF THE UNITED STATES No United States, Petitioner, Elwood Swank et al. On Writ of Certiorari to the United States Court of Claims. [April --, JUSTICE STEVENS delivered the opinion of the Court. The owner of an economic interest in a mineral deposit is allowed a special deduction from taxable income measured by a percentage of his gross income derived from exhaustion of the mineral. This deduction, codified in 611 and 613 of the Internal Revenue Code, is designed to compensate such owners for the exhaustion of their interest in a wasting asset. the mineral in place,' This case presents the question cn P:J "SEC Allowance of deduction for depletion "(a) General Rale In the case of mines, oil and gas wells, other natural deposits, and timber, there shall be allowed as a deduction in computing taxable income a reasonable allowance for depletion and for depreciation of improvements, according to the peculiar conditions in each case; such reasonable allowance in :dl cases to Ile made under regulations prescribed by the Secret a ry... SEC (i13. Percentage depletion (a) General Rule In the case of the mines. wells, and other natural -11 deposits listed in subsection (b), the allowance for depletion tinder see- n Lion 611 shall he the percentage, specified in subsection (b), of the gross z 1 income from the property excluding from such gross income an amount equal to our rents or royalties paid or incurred by the taxpayer in respect sl of tie propert y. Such allowance shall not exceed 50 percent of the tax- cn payer's taxable income bunt the property (computed without allowance for deidetion). In no case shall the allowance for depletion under section till be less than it would he if computed without reference to this section. cn Pt)

17 To: The Chief Justice Mr. Justice Brennan Mr. Justice Stewart Mr. justice White Mr. Justice NrIrs!Isli Mr. Just ^,l Ur. J11, 4-2^ P,--11 Hr. Jw;t:'e Prow Mr. Justice Stevens etroulat ed : 3rd DRAT Recirculated: MAY 1 1 '81 SUPREME COURT OF THE UNITED STATES No United States, Petitioner, On Writ of Certiorari to the V. United States Court of Claims, Elwood Swank et al. [April, 1981] JUSTICE STEVENS delivered the opinion of the Court. The owner of an economic interest in a mineral deposit is allowed a special deduction from taxable income measured by a percentage of his gross income derived from exhaustion of the mineral. This deduction, codified in 611 and 613 of the Internal Revenue Code, is designed to compensate such owners for the exhaustion of their interest in a wasting asset, the mineral in place.' This case presents the question 1 "SEC Allowance of deduction for depletion "(a) General Rule In the case of mines, oil and gas wells, other natural deposits, and timber, there shall be allowed as a deduction in computing taxable income a reasonable allowance for depletion and for depreciation -of improvements, according to the peculiar conditions in each case: such reasonable allowance in all cases to be made under regulations prescribed by the Secretary... "SEC Percentage depletion "(a) General Rule In the case of the mines, wells, and other natural deposits listed in subsection (b), the allowance for depletion under section 611 shall be the percentage, specified in subsection (b), of the gross income from the property excluding from such gross income an amount equal to any rents or royalties paid or incurred by the taxpayer in respect of the property. Such allowance shall not exceed 50 percent of the taxpayer's taxable income from the property (computed without allowance for' depletion)... In no case shall the allowance for depletion under section 611 he less than it would be if computed without reference to this section.

18 one Chief Justice Ur. Jus-t-cr-1 Mr. Justc9 Stewart Mr. just5: 9 Vt:Ite Mr. Jtriti,'- 7. J',7± From: Mr. Justice Stevens 4th DRAFT Circulated: RecirculateH: 0'. a SUPREME COURT OF THE UNITED STATES No United States, Petitioner, v. Elwood Swank et al. n On Writ of Certiorari to the o r United States Court of Claims. 7,1 ṉ i [April, 1981] JUSTICE STEVENS delivered the opinion of the Court. -..: The owner of an economic interest in a mineral deposit is -3 allowed a special deduction from taxable income measured by a percentage of his gross income derived from exhaustion of the mineral. This deduction, codified in 611 and 613 cn i of the Internal Revenue Code, is designed to compensate n m such owners for the exhaustion of their interest in a wasting )-.1,:1 asset, the mineral in place.' This case presents the question H I "SEC Allowance of deduction for depletion cn "(a) General Rule In the case of mines, oil and gas wells, other natural deposits, and timber, there shall be allowed as a deduction in computing o taxable income a reasonable allowance for depletion and for depreciation of improvements, according to the peculiar conditions in each case; such r reasonable allowance in all cases to be made under regulations prescribed by the Secretary.... z "SEC Percentage depletion -21 "(a) General Rule In the case of the mines, wells, and other natural deposits listed in subsection (b), the allowance for depletion under section 611 shall be the percentage, specified in subsection (b), of the gross income from the property excluding from such gross income an amount equal to any rents or royalties paid or incurred by the taxpayer in respect cn of the property. Such allowance shall not exceed 50 percent of the taxpayer's taxable income from the property (computed without allowance for depletion).... In no case shall the allowance for depletion under section be less than it would be if computed without reference to this section.

The Burger Court Opinion Writing Database

The Burger Court Opinion Writing Database United California Bank v. United States 439 U.S. 180 (1978) Paul J. Wahlbeck, George Washington University James F. Spriggs, II, Washington University in St. Louis