Source: https://supreme.justia.com/cases/federal/us/310/113/
Timestamp: 2019-04-19 00:37:38+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 310 › Perkins v. Lukens Steel Co.
in effect a wage determination made by the Secretary for that industry. Complainants asserted that the construction given by the Secretary to the term "locality" was arbitrary, capricious, and unauthorized by law, and that if, in order to bid on Government contracts, they must abide by the wage determination thus made, they would suffer irreparable loss and damage, for which there was no plain, adequate, and complete remedy at law.
Held, that the complainants were without standing to maintain the suit. P. 310 U. S. 125.
1. The bill failed to show that any legal rights of the complainants were invaded or threatened. P. 310 U. S. 125.
2. In the absence of statute, damage resulting from action by the Government which does not invade any recognized legal right is irremediable. P. 310 U. S. 125.
3. That the Secretary of Labor is charged with an erroneous interpretation of the term "locality" in making the wage determination is no basis for the suit. P. 310 U. S. 125.
4. Complainants are not entitled to vindicate any general interest which the public may have in the Secretary's construction or administration of the Act. P. 310 U. S. 125.
5. Neither R.S. § 3709, requiring advertising for proposals in respect of Government purchases and contracts, nor the Public Contracts Act itself, affords any basis for the suit. P. 310 U. S. 126.
6. The Act does not provide for judicial review of wage determinations. P. 310 U. S. 128.
7. The Act vests no right in prospective bidders. P. 310 U. S. 127.
8. Congress has not by the Act exercised any regulatory power over private business or employment, and cases involving governmental regulation of private business are distinguishable. P. 310 U. S. 128.
9. The defendants have not tortiously invaded private rights. P. 310 U. S. 121.
10. Complainants were not entitled to a declaratory judgment. P. 310 U. S. 132.
11. The conclusion that the complainants lack standing to sue is based upon principles implicit in the constitutional division of authority in our system of Government and the impropriety of judicial interpretations of law at the instance of those who show no more than a possible injury to the public. P. 310 U. S. 132.
70 App.D.C. 354, 107 F.2d 627, reversed.
Certiorari, 309 U.S. 643, to review the reversal of a order of the District Court dismissing a bill in equity.
or similar industries or groups of industries currently operating in the locality in which the . . . supplies . . . are to be manufactured or furnished under said contract."
The Court of Appeals for the District of Columbia has held that the Secretary erroneously construed the term "locality" to include a larger geographical area than the Act contemplates, and has ordered six Members of the Cabinet, including the Secretary of Labor, the Director of Procurement, and all other officials responsible for purchases necessary in the operation of the Federal Government, not to abide by or give effect to the wage determination made by the Secretary for the iron and steel industry either as to the complaining companies or any others. In this vital industry, by action of the Court of Appeals for the District of Columbia, the Act has been suspended and inoperative for more than a year.
States filed briefs and submitted information and suggestions, and these producers who are parties here had notice of and actively participated in the various stages of the proceedings. After the hearing, time for filing of briefs was allowed. Following investigation of testimony, exhibits, letters, telegrams, briefs, data from the Bureau of Labor Statistics, and arguments of representatives of both labor and industry itself, the Board, October 27, 1938, made its findings of fact, conclusions and recommendations: (a), Accepting recommendations of industry and labor, the Board adopted -- with minor exceptions -- the definition of the steel industry previously in effect under the National Industrial Recovery Act, 48 Stat. 195; (b), "the base rates paid to the workers classified as common laborers" was utilized as a basis for finding the minimum wage prevailing in the industry and a common laborer was defined as "one who performs physical or manual labor of a general character and simple nature, requiring no special training, judgment nor skill;" (c), the view that municipalities be treated as the geographical limit of a "locality," and that different minimum prevailing wage standards be adopted for small, as distinguished from larger, companies, was rejected. The Board pointed out that "the main channels of trade in the industry take their course far beyond the confines of local producing areas;" that "conventional measurement of miles on the map to outline the marketing areas of the iron and steel producers" was unsuitable; that "geographic location does not limit the efforts of iron and steel manufacturers to secure Government business;" that "the workers being paid wages below the base rates are employed in large, medium and small size companies and in plants located in all parts of the country;" and that, in fixing a "locality," all these factors, as well as geographic and economic considerations, were relevant.
"the law . . . permits the division of the country into localities for the purpose of determining minimum wages. No rule is laid down to define the extent of any localities. . . . A too minute concept of locality would obviously nullify the law, for each plant must necessarily occupy a different locale or site from every other. To reduce the interpretation of locality to its most minute point would be to find a minimum wage prevailing in each plant. . . . When we depart from this interpretation, we are immediately thrown upon judgment. . . . Obviously we must look for wage patterns or uniformities. . . . Again, judgment must be relied upon for the answer."
"this narrowly restricted construction of the word 'locality' . . . is contrary to the administrative construction consistently adhered to by the Secretary of Labor in the administration of the Act,"
and that, while Congress had closely followed the language of the Davis-Bacon Act in some respects, it had "carefully avoided the use of the more narrowly restrictive language of city, town, village or other civil subdivision.'" In the twenty-two preceding wage determinations under this Act, the Secretary's administrative construction of the term had been -- with a sole exception -- that of geographic areas no smaller than those determined for the steel industry. [Footnote 3] The determination in question was made January 16, 1939, but was not made operative until March 1, 1938, "in order that industry may make necessary readjustments to comply with the decision."
"officers, agents, assistants, employees, representatives and attorneys, and anyone associated with or acting in concert or participation with them, or any of them, and their successors in office and each of them, and their officers,"
Government officials be restrained from requiring the statutory stipulation as to minimum wages in contracts with any other steel and iron manufacturers throughout the United States.
"restricted to enjoining enforcement of the Determination against parties to this proceeding . . . , and . . . not be extended to other bidders, not parties to this action and who, for all that appears, may desire to abide by the Determination."
In our judgment, the action of the Court of Appeals for the District of Columbia goes beyond any controversy that might have existed between the complaining companies and the Government officials. The benefits of its injunction, and of that ordered by it, were not limited to the potential bidders in the "locality," however construed, in which the respondents do business. All Government officials with duties to perform under the Public Contracts Act have been restrained from applying the wage determination of the Secretary to bidders throughout the Nation who were not parties to any proceeding, who were not before the court and who had sought no relief.
"a plain error of law in interpreting the Act, . . . and consequently, in purporting . . . to determine the prevailing minimum wages for persons employed in the manufacture . . . of the iron and steel industry in the six so-called 'localities' set forth in this determination, [the Secretary] acted arbitrarily and capriciously and wholly without warrant or authority in law."
Respondents had been selling their products to agents of the United States for many years; they wished to continue to bid on Government contracts; their minimum wages had ranged from 53¢ to 56 1/2¢ per hour; if required to pay the 62 1/2¢ per hour minimum rate determined by the Secretary, there was grave danger that they would be unable successfully to compete with others for Government contracts; they had a legal right to bid for Government contracts free from any obligation to abide by the minimum wage determination because of alleged illegal administrative construction of "locality," and, if denied the right to bid without paying their employees this minimum wage, they would suffer "irreparable and irrecoverable damages" for which the law provided no "plain adequate or complete remedy."
"so far beyond any possible proper application of the word as to defeat its meaning and to constitute an attempt arbitrarily to disregard the statutory mandate."
made by the Secretary of Labor for their industry. Respondents point to Section 3709 of the Revised Statutes, and to the Public Contracts Act itself.
"The United States needs the protection of publicity, form, regularity of returns, and affidavit (Rev.Stat., §§ 3709, 3718-3724, 3745-3747) in order to prevent possible frauds upon it by officers. A private person needs no such protection against a written undertaking signed by himself. The duty is imposed upon the officers of the government, not upon him. [Footnote 14]"
That duty is owing to the Government, and to no one else.
Government's purchasing would constitute a break with settled judicial practice and a departure into fields hitherto wisely and happily apportioned by the genius of our polity to the administration of another branch of Government.
"The object of the bill is to require persons having contracts with the Government to conform to certain labor conditions in the performance of the contracts, and thus to eliminate the practice under which the Government is compelled to deal with sweatshops."
We find nothing in the Act indicating any intention to abandon a principle acted upon since the Nation's founding under which the legislative and executive departments have exercised complete and final authority to enter into contracts for Government purchases. The Committee Hearings and Reports and the construction of the measure by its sponsors disclose no purpose to invoke judicial supervision over agents chosen by Congress to perform these duties. And Sections 4 and 5, do not subject a wage determination to such review. Provision for hearings and findings by the Secretary with respect to decisions upon breaches of stipulations by contractors, once purchases have been made, is indicative of a lack of intention to create any rights for prospective bidders before a purchase is concluded.
In this legislation, Congress did no more than instruct its agents who were selected and granted final authority to fix the terms and conditions under which the Government will permit goods to be sold to it. The Secretary of Labor is under a duty to observe those instructions, just as a purchasing agent of a private corporation must observe those of this principal. In both instances, prospective bidders for contracts derive no enforceable rights against the agent for an erroneous interpretation of the principal's authorization. For erroneous construction of his instructions, given for the sole benefit of the principal, the agent is responsible to his principal alone, because his misconstruction violates no duty he owes to any but his principal. The Secretary's responsibility is to superior executive and legislative authority. Respondents have no standing in court to enforce that responsibility or to represent the public's interest in the Secretary's compliance with the Act. [Footnote 20] That respondents sought to vindicate such a public right or interest is made apparent both by their prayer that the determination be suspended as to the entire steel industry and by the extent of the injunction granted.
inherent in the imposition of judicial restraint upon agents engaged in the purchase of the Government's own supplies.
The Government can supply its needs by its own manufacturing or by purchase. And Congress can, as it always has, either do the purchasing of the Government's goods and supplies itself, or it can entrust its agents with final power to do so and make these agents responsible only to it. [Footnote 22] Courts should not, where Congress has not done so, subject purchasing agencies of Government to the delays necessarily incident to judicial scrutiny at the instance of potential sellers, which would be contrary to traditional governmental practice and would create a new concept of judicial controversies. A like restraint applied to purchasing by private business would be widely condemned as an intolerable business handicap. It is, as both Congress and the courts have always recognized, essential to the even and expeditious functioning of Government that the administration of the purchasing machinery be unhampered. The Constitution prohibits appropriations for the Army for more than two years, [Footnote 23] and, by statute, contracts for the purchase of Departmental supplies are in general limited to one year. [Footnote 24] These prohibitions emphasize the grave importance of leaving the restraint of the Government's purchasing agents to Congress and their executive superiors.
"The bare suggestion of such a result, with its attendant inconveniences, goes far to sustain the conclusion which we have reached, that a suit of this character cannot be maintained. [Footnote 26]"
and we are quite satisfied, that such a power was never intended to be given to them. [Footnote 30]"
Our decision that the complaining companies lack standing to sue does not rest upon a mere formality. We rest it upon reasons deeply rooted in the constitutional divisions of authority in our system of Government and the impropriety of judicial interpretations of law at the instance of those who show no more than a mere possible injury to the public. The judgment of the Court of Appeals is reversed, and that of the District Court dismissing the bill is affirmed.
MR. JUSTICE McREYNOLDS is of opinion that the challenged judgment should be affirmed.
2 Fed.Reg. 233, 1333, 1335, 1336, 1337, 1338, 1339, 2960, 2976; 3 Fed.Reg. 64, 224, 257, 889, 1613, 895, 901, 1612, 1153, 2371, 2370, 2537, 3043; 4 Fed.Reg. 4005.
The District Court's judgment was rendered without opinion.
"breach or violation of any of the representations and stipulations in any contract for the purposes set forth . . . shall render the party responsible therefor liable to the United States of America for liquidated damages, in addition to damages for any other breach of such contract, . . . a sum equal to the amount of any deductions, rebates, refunds, or underpayment of wages due to any employee engaged in the performance of such contract. . . . Any sums of money due to the United States of America by reason of any violation of any of the representations and stipulations of said contract set forth in section 1 hereof may be withheld from any amounts due on any such contracts or may be recovered in suits brought in the name of the United States of America by the Attorney General thereof. All sums withheld or recovered as deductions, rebates, refunds, or underpayments of wages shall be held in a special deposit account, and shall be paid, on order of the Secretary of Labor, directly to the employees who have been paid less than minimum rates of pay as set forth in such contracts and on whose account such sums were withheld or recovered. . . ."
The Government's motion to clarify and restrict the temporary injunction and for security was filed March 29, 1939; the motion to dissolve the temporary injunction was filed April 13, 1939. No specific consideration of these motions by the Court of Appeals of the District of Columbia is disclosed in the record. August 4, 1939, after argument on the merits, that Court of Appeals, per curiam, Justice Edgerton dissenting, announced that the temporary injunction would be kept in effect, that the judgment of the District Court would be reversed, and that the grounds for enjoining the administration of the Act would be set out in an opinion "to be filed shortly." The opinion of the Court of Appeals came down October 3, 1939; Justice Edgerton filed a separate opinion in dissent.
The remaining five localities are: 1, Louisiana, Arkansas, Mississippi, North Carolina, South Carolina, Florida, Oklahoma, Texas, Alabama, Tennessee, Georgia, Virginia, and a part of West Virginia; 2, Washington, Oregon and California; 3, Montana, Idaho, Nevada, Wyoming, New Mexico, Utah, Colorado and Arizona; 4, North Dakota, South Dakota, Nebraska, Kansas, Minnesota, Iowa, Missouri and the area in and about East Saint Louis, Illinois; 5, Wisconsin, Illinois (except the area in and about East Saint Louis, Illinois), Michigan and Indiana.
Tennessee Electric Power Co. v. Tennessee Valley Authority, 306 U. S. 118, 306 U. S. 137-138; Alabama Power Co. v. Ickes, 302 U. S. 464; Massachusetts v. Mellon, 262 U. S. 447.
Stearns v. Wood, 236 U. S. 75, 236 U. S. 78; Fairchild v. Hughes, 258 U. S. 126, 258 U. S. 129.
"Except as otherwise provided by law, all purchases and contracts for supplies or services in any of the departments of the Government and purchases of Indian supplies, except for personal services, shall be made by advertising a sufficient time previously for proposals respecting the same, when the public exigencies do not require the immediate delivery of the articles, or performance of the service. When immediate delivery or performance is required by the public exigency, the articles or service required may be procured by open purchase or contract at the places and in the manner in which such articles are usually bought and sold, or such services engaged, between individuals."
Cf. United States ex rel. Goldberg v. Daniels, 231 U. S. 218.
United States v. New York & Porto Rico S.S. Co., 239 U. S. 88, 239 U. S. 92-93; American Smelting & Refining Co. v. United States, 259 U. S. 75, 259 U. S. 78. Cf. Colorado Paving Co. v. Murphy, 78 F. 28. See 38 Op.Atty.Gen. 555, 557. Bidders have not been able to contest the award of contracts as bidders or in their capacity as citizens generally. O'Brien v. Carney, 6 F.Supp. 761; B. F. Cummins v. Burleson, 40 App.D.C. 500; Champion Coated Paper Co. v. Joint Committee on Printing, 47 App.D.C. 141; cf. Strong v. United States, 6 Ct.Cls. 135. And the view that bidders have no standing in the courts has been generally recognized by the Comptroller General, the Inter-Departmental Board on Contracts of the Bureau of the Budget, as well as the Senate Judiciary Committee. Hearing before the Comm'n on the Judiciary, House of Representatives, 71st Cong., 2nd Sess., on H.R. 5568, Serial 4, Part 1, pp. 16-22, 26-27; Senate Report 433, 74th Cong., 1st Sess.
Atkin v. Kansas, 191 U. S. 207; Ellis v. United States, 206 U. S. 246; Heim v. McCall, 239 U. S. 175; cf. Federal Trade Commission v. Raymond Co., 263 U. S. 565.
Norwegian Nitrogen Co. v. United States, 288 U. S. 294, 288 U. S. 319-320.
United States ex rel. Dunlap v. Black, 128 U. S. 40, 128 U. S. 48; cf. Butte, A. & P. Ry. Co. v. United States, 290 U. S. 127, 290 U. S. 136, 290 U. S. 142-143.
House Report No. 2946, 74th Cong., 2nd Sess.
Cf. Ex parte Williams, 277 U. S. 267, 277 U. S. 269, 277 U. S. 272; Great Northern Ry. Co. v. United States, 277 U. S. 172, 277 U. S. 180.
See, e.g., Utah Fuel Co. v. Coal Comm'n, 305 U.S. 575; Shields v. Utah Idaho Central R. Co., 305 U. S. 177; Waite v. Macy, 246 U. S. 606; American School of Magnetic Healing v. McAnnulty, 187 U. S. 94; Gegious v. Uhl, 239 U. S. 3; Truax v. Raich, 239 U. S. 33; Pierce v. Society of Sisters, 268 U. S. 510.
Great Northern Railway Co. v. United States, 277 U. S. 172, 277 U. S. 182; Work v. Rives, 267 U. S. 175; Butte, Anaconda & Pacific Ry. Co. v. United States, 290 U. S. 127; United States v. Babcock, 250 U. S. 328; Louisiana v. McAdoo, 234 U. S. 627; Adams v. Nagle, 303 U. S. 532, 303 U. S. 540-541.
Art. I, Sec. 8, cl. 12.
Cf. Mr. Chief Justice Taney in Decatur v. Paulding, 14 Pet. 497, 39 U. S. 516.
Massachusetts v. Mellon, 262 U. S. 447, 262 U. S. 487.
Bulletins Nos. 75 to 176, inclusive, of the Division of Public Contracts of the Department of Labor.
Federal Communications Commission v. Pottsville Broadcasting Co., 309 U. S. 134.
Missouri, K. & T. Ry. Co. v. May, 194 U. S. 267, 194 U. S. 270.
Decatur v. Paulding, supra, at 39 U. S. 516.
Aetna Life Ins. Co. v. Haworth, 300 U. S. 227, 300 U. S. 240-241.

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