Source: https://supreme.justia.com/cases/federal/us/302/464/
Timestamp: 2019-04-19 10:35:00+00:00

Document:
1. An electric power company, operating in Alabama under a nonexclusive franchise, sued to enjoin the performance of agreements whereby a federal official purporting to act under Title II of the National Industrial Recovery Act, as amended, undertook on behalf of the United States to make loans and grants of money to several Alabama municipalities to assist each of them, respectively, in constructing an electrical distribution system within its municipal limits. Held that the company had no standing to question the validity of the loans and grants under the federal statute, or the validity of the statute in that regard under the Federal Constitution, since the only damage threatening the company was the damage of lawful competition -- damnum absque injuria. Pp. 302 U. S. 478-479.
According to the findings in the cases, each of the municipalities had authority to construct and operate its proposed plant and distribution system in competition with the company, and to borrow money for that purpose, and had determined to do so of its own free will; no conspiracy was involved, nor any desire to cause injury or financial loss to the company, nor purpose to regulate rates or foster municipal ownership of utilities. Neither the United States nor any of the respondent officers had reserved any right to require an elimination of competition or designate any agency from which the municipality must purchase its power. Each municipality was left entirely free from federal control or direction in respect of the management and control of its plant and business.
2. Findings of the District Court, made after hearing, supported by substantial evidence, and not questioned by the intermediate appellate court, held unassailable in this Court. P. 302 U. S. 477.
3. The interest of a taxpayer in the moneys of the federal treasury affords him no status to enjoin expenditures upon the ground that they are for an unconstitutional purpose. P. 302 U. S. 478.
4. Courts have no power to enjoin the execution of an Act of Congress upon the Ground of unconstitutionality where no wrong directly resulting in the violation of a legal right is presented in a justiciable issue. P. 302 U. S. 479.
67 App.D.C. 230, 91 F.2d 303, affirmed.
Certiorari, 301 U.S. 681, to review decrees affirming the dismissal of bills brought against the Emergency Public Works Administrator and other Government officials to restrain the making of loans and grants of money to certain municipalities in Alabama, in aid of the construction of municipal light and power plants. These cases were consolidated and tried with others which later became moot. No. 84 also became moot insofar as it related to three of the municipalities originally named in the bill. The opinion of the District Court is in LXIV Wash.L.Rep. 563.
"Sec. 202. The Administrator, under the direction of the President, shall prepare a comprehensive program of public works, which shall include, among other things, the following: (a) construction, repair, and improvement of public highways and parkways, public buildings, and any publicly owned instrumentalities and facilities; (b) conservation and development of natural resources, including control, utilization, and purification of waters, prevention of soil or coastal erosion, development of water power, transmission of electrical energy; . . . (c) any projects of the character heretofore constructed or carried on either directly by public authority or with public aid to serve the interests of the general public; (d) construction, reconstruction, alteration, or repair under public regulation or control of low-cost housing and slum clearance projects; (e) any project (other than those included in the foregoing classes) of any character heretofore eligible for loans under subsection (a) of section 201 of the Emergency Relief and Construction Act of 1932, as amended. . . ."
"Sec. 203. (a) With a view to increasing employment quickly (while reasonably securing any loans made by the United States), the President is authorized and empowered, through the Administrator or through such other agencies as he may designate or create, (1) to construct, finance, or aid in the construction or financing of any public works project included in the program prepared pursuant to section 202; (2) upon such terms as the President shall prescribe, to make grants to States, municipalities, or other public bodies for the construction, repair, or improvement of any such project, but no such grant shall be in excess of 30 [by later act, 45] percentum of the cost of the labor and materials employed upon such project. . . . "
The bills of complaint challenge the validity of the loans and grants on the grounds, among others, that these statutory provisions purporting to authorize such loans and grants are unconstitutional, and that, in any event, the loans and grants do not come within the statutory provisions.
The injury which petitioner will suffer, it is contended, is the loss of its business as a result of the use of the loans and grants by the municipalities in setting up and maintaining rival and competing plants -- a result, it is further contended, which will be directly caused by the unlawful act of the administrator in making and consummating the loan and grant agreements.
The suits were brought in the United States District Court for the District of Columbia. There, the respondents, in addition to defending the validity of the action of the administrator, contended that petitioner was without legal standing to maintain the suits. After a full hearing, the District Court held that petitioner had standing to challenge the administrator's action, but denied the injunctions and dismissed the bills of complaint upon the view that the statutory provisions were constitutional, and that they conferred upon the administrator the power which he had exercised.
On appeal to the United States Court of Appeals for the District of Columbia, that court found it unnecessary to consider the validity of the loans and grants, and affirmed the decrees of the District Court dismissing the bills on the ground that no legal or equitable right of the power company had been invaded, and the company therefore was without standing to challenge the validity of the administrator's acts. 91 F.2d 303. With that view we agree, and confine our consideration of the cases accordingly.
is a corporation organized under the laws of Alabama, having its principal office and corporate domicile in that state. Respondent Ickes is the Administrator of the Federal Emergency Administration of Public Works, duly appointed by the President of the United States in pursuance of law. The other respondents are subordinate officers and agents of the same Emergency Administration, or officers connected with its operations.
Petitioner, under its charter, has the right to manufacture, supply, and sell electrical energy throughout the State of Alabama. Among other communities served by its system are the four municipalities here involved, from each of which it has a nonexclusive franchise giving it the right to construct, maintain, and operate within the municipality an electricity distribution system. Petitioner is a taxpayer of each of the municipalities, of the counties in which they are located, and of the state, with respect to petitioner's properties and operations, and it also is a taxpayer of the United States with respect thereto.
its own free will. There was no solicitation or coercion on the part of any of the defendants [respondents], their agents, or subordinates. There was and is no conspiracy between any of the defendants and any other person, nor is there any other effort on the part of any of the defendants to, nor are their actions motivated by a desire to, cause injury or financial loss to the plaintiffs, or to regulate their rates or electric rates generally, or to foster municipal ownership of utilities."
"The expenditures under these statutes involve no purchase of, nor contract providing for, regulation by the United States. The failure of any city to apply for or receive loans or grants under those statutes will impose upon it no disadvantage or financial loss."
"The defendants have not reserved any right or power to influence or control rates to be charged by the proposed municipal power plants. . . ."
"Neither the United States nor any of the defendants has reserved any right or power under the existing contracts, or in any other way, to require any of the municipalities to eliminate competition or to designate the person or agency from whom the municipality must purchase its power. . . ."
"Neither the United States nor any of the defendants has any power to control the operation of the projects after construction is completed. . . ."
"Each of the projects herein involved is a part of a program of national scope, is designed to relieve unemployment, and promotes the general welfare of the United States."
These findings were made, after hearing, by the district judge upon undisputed or conflicting evidence. The findings were not questioned by the court below, and, since they are not without substantial support in the evidence, we accept them here as unassailable. Davis v. Schwartz, 155 U. S. 631, 155 U. S. 636-637; Adamson v. Gilliland, 242 U. S. 350, 242 U. S. 353.
It therefore appears that each of the municipalities in question has authority to construct and operate its proposed plant and distribution system in competition with petitioner, and to borrow money, issue bonds, and receive grants for that purpose; that it determined to do so of its own free will, without solicitation or coercion; that there was no conspiracy between any of the respondents and any other person, or any effort or action motivated by a desire to cause injury or financial loss to petitioner, or any purpose to regulate rates or foster municipal ownership of utilities. It further appears that neither the United States nor any of the respondents has reserved any right or power to require an elimination of competition or designate any agency from which the municipality must purchase its power. Each municipality is left entirely free from federal control or direction in respect of the management and control of its plant and business. In short, the case for petitioner comes down to the contention that consummation of the loan and grant agreements should be enjoined on the sole and detached ground that the administrator lacks constitutional and statutory authority to make them, and that the resulting moneys, which the municipalities have clear authority to take, will be used by the municipalities in lawful, albeit destructive, competition with petitioner.
by the case just cited is that the courts have no power to consider in isolation and annul an act of Congress on the ground that it is unconstitutional, but may consider that question "only when the justification for some direct injury suffered or threatened, presenting a justiciable issue, is made to rest upon such an act." The term "direct injury" is there used in its legal sense, as meaning a wrong which directly results in the violation of a legal right.
"An injury, legally speaking, consists of a wrong done to a person, or, in other words, a violation of his right. It is an ancient maxim that a damage to one without an injury in this sense (damnum absque injuria) does not lay the foundation of an action, because, if the act complained of does not violate any of his legal rights, it is obvious, that he has no cause to complain. . . . Want of right and want of remedy are justly said to be reciprocal. Where, therefore, there has been a violation of a right, the person injured is entitled to an action."
Parker v. Griswold, 17 Conn. 288, 302, 303. The converse is equally true, that where, although there is damage, there is no violation of a right, no action can be maintained.
other words, these municipalities have the right under state law to engage in the business in competition with petitioner, since it has been given no exclusive franchise. If its business be curtailed or destroyed by the operations of the municipalities, it will be by lawful competition from which no legal wrong results.
What petitioner anticipates, we emphasize, is damage to something it does not possess -- namely, a right to be immune from lawful municipal competition. No other claim of right is involved. It is, in principle, as though an unauthorized loan were about to be made to enable the borrower to purchase a piece of property in respect of which he had a right, equally with a prospective complainant, to become the buyer. While the loan might frustrate complainant's hopes of a profitable investment, it would not violate any legal right, and he would have no standing to ask the aid of a court to stop the loan. What difference, in real substance, is there between the case supposed and the one in hand?
are perfectly lawful. The supposition opens a vista of litigation hitherto unrevealed.
John Doe, let us suppose, is engaged in operating a grocery store. Richard Roe, desiring to open a rival and competing establishment, seeks a loan from a manufacturing concern which, under its charter, is without authority to make the loan. The loan, if made, will be ultra vires. The state or a stockholder of the corporation, perhaps a creditor, in some circumstances, may, upon that ground, enjoin the loan. But may it be enjoined at the suit of John Doe, a stranger to the corporation, because the lawful use of the money will prove injurious to him and this result is foreseen and expected both by the lender and the borrower, Richard Roe? Certainly not, unless we are prepared to lay down the general rule that A, who will suffer damage from the lawful act of B, and who plainly will have no case against B, may nevertheless invoke judicial aid to restrain a third party, acting without authority, from furnishing means which will enable B to do what the law permits him to do. Such a rule would be opposed to sound reason, as we have already tried to show, and cannot be accepted.
If there are conditions under which two distinct transactions, neither of which, apart, constitutes a judicially remediable wrong, may be so related to one another as to afford a basis for judicial relief, such conditions are not to be found in the circumstances of the present case.
the usurpation and perversion of its franchises, because it is a trustee of its powers for uses strictly public. In these questions the appellee has no interest, and he cannot raise them in order, under that cover, to create and protect a monopoly which the law does not give him. The only injury of which he can be heard in a judicial tribunal to complain is the invasion of some legal or equitable right. If he asserts that the competition of the railroad company damages him, the answer is that it does not abridge or impair any such right. If he alleges that the railroad company is acting beyond the warrant of the law, the answer is that a violation of its charter does not, of itself, injuriously affect any of his rights. The company is not shown to own him any duty which it has not performed."
Supporting cases are cited. See also United States v. Dern, 63 App.D.C. 28, 68 F.2d 773. Compare Edward Hines Trustees v. United States, 263 U. S. 143, 263 U. S. 148; Sprunt & Son v. United States, 281 U. S. 249, 281 U. S. 256-257; Milwaukee Horse & Cow Comm'n Co. v. Hill, 207 Wis. 420, 423, 430-432, 241 N.W. 364.
dissenting opinion shows very clearly that, but for express statutory provision creating a different rule, the decision in the Ellerman case would have been controlling.
The precise question here involved was decided, in accordance with the view we have expressed, in Duke Power Co. v. Greenwood County, 91 F.2d 665, 676; Greenwood County v. Duke Power Co., 81 F.2d 986, 997. Compare Arkansas-Missouri Power Co. v. Kennett, 78 F.2d 911. See also Allegan v. Consumers' Power Co., 71 F.2d 477. The Greenwood County case, supra, is now pending in this Court upon certiorari, and will be determined upon the authority of our present decision.
this is fundamental, for the competition contemplated there was unlawful, while that of the municipalities contemplated here is entirely lawful.
We deem it unnecessary to review the many other cases cited by petitioner where suits against officials have been sustained. An examination of them will disclose the presence of fraud, coercion, malice, conspiracy, or some other element or condition of controlling force, none of which, as shown by the findings which we have accepted as unassailable, exists in the present case.
Chapter 90, 48 Stat. 195, 200.
Chapter 48, 49 Stat. 115, 119.
See Oppenheim v. City of Florence, 229 Ala. 50, 155 So. 859.

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