Source: https://www.law.cornell.edu/supremecourt/text/310/113
Timestamp: 2019-04-19 02:54:09+00:00

Document:
In exercise of its authority to determine conditions under which purchases of Government supplies shall be made, Congress passed the Public Contracts Act of June 30, 1936. 1 By virtue of that Act, sellers must agree to pay employees engaged in producing goods so purchased 'not less than the minimum wages as determined by the Secretary of Labor to be the prevailing minimum wages for persons employed on similar work or in the particular 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.
July 11, 1938, all the iron and steel companies in the United States were given notice that the Secretary contemplated proceedings for determining the minimum prevailing wage for their industry. On the 25th and 26th of that month, hearings were had before the Public Contracts Board also functioning under the Act. Many companies, and all of those involved here, were represented in the hearings. Companies from the entire United 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 out-line 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.
We are of opinion that no legal rights of respondents were shown to have been invaded or threatened in the complaint upon which the injunction of the Court of Appeals was based. It is by now clear that neither damage nor loss of income in consequence of the action of Government, which is not an invasion of recognized legal rights, is in itself a source of legal rights in the absence of constitutional legislation recognizing it as such. 10 It is not enough that the Secretary of Labor is charged with an erroneous interpretation of the term 'locality' as an element in her wage determination. Nor can respondents vindicate any general interest which the public may have in the construction of the Act by the Secretary and which must be left to the political process. Respondents, to have standing in court, must show an injury or threat to a particular right of their own, as distinguished from the public's interest in the administration of the law. 11 They claim a standing by asserting that they have particular rights under and even apart from statute to bid and negotiate for Government contracts free from compliance with the determination made by the Secretary of Labor for their industry. Respondents point to Section 3709 of the Revised Statutes, 41 U.S.C.A. § 5, and to the Public Contracts Act itself.
Section 3709 of the Revised Statutes requires for the Government's benefit that its contracts be made after public advertising. 12 It was not enacted for the protection of sellers and confers no enforceable rights upon prospective bidders. 13 'The United States needs the protection of publicity, form, regularity of returns and affidavit (Rev.Stat., §§ 3709, 37183724, 37453747 (34 U.S.C.A. §§ 561563, 570, 572574, 41 U.S.C.A. §§ 5, 1719)), 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.' 14 That duty is owing to the Government and to no one else.
Like private individuals and businesses, the Government enjoys the unrestricted power to produce its own supplies, to determine those with whom it will deal, and to fix the terms and conditions upon which it will make needed purchases. 15 Acting through its agents as it must of necessity, the Government may for the purpose of keeping its own house in order lay down guide posts by which its agents are to proceed in the procurement of supplies, and which create duties to the Government alone. It has done so in the Public Contracts Act. That Act does not depart from but instead embodies the traditional principle of leaving purchases necessary to the operation of our Government to administration by the executive branch of Government, with adequate range of discretion free from vexatious and dilatory restraints at the suits of prospective or potential sellers. It was not intended to be a bestowal of litigable rights upon those desirous of selling to the Government; it is a self-imposed restraint for violation of which the Governmentbut not private litigantscan complain. Thus, a wage determination by the Secretary contemplates no controversy between parties and no fixing of private rights; the process of arriving at a wage determination contains no semblance of these elements which go to make up a litigable controversy as our law knows the concept. 16 Courts have never reviewed or supervised the administration of such an executive responsibility even where executive duties 'require an interpretation of the law.' 17 Judicial restraint of those who administer the 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 Act does not represent an exercise by Congress of regulatory power over private business or employment. 19 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. 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.
The contested action of the restrained officials did not invade private rights in a manner amounting to a tortious violation. On the contrary, respondents in effect seek through judicial action to interfere with the manner in which the Government may dispatch its own internal affairs. And in attempted support of the injunction granted they cite many cases involving contested Government regulation of the conduct of private business. 21 Their cited cases, however, all relate to problems different from those 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. 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, 23 and by statute contracts for the purchase of Departmental supplies are in general limited to one year. 24 These prohibitions emphasize the grave importance of leaving the restraint of the Government's purchasing agents to Congress and their executive superiors.
309 U.S. 643, 60 S.Ct. 513, 84 L.Ed. -.
United States v. New York & P.R.S.S. Co., 239 U.S. 88, 92, 93, 36 S.Ct. 41, 42, 60 L.Ed. 161; American Smelting & Refining Co. v. United States, 259 U.S. 75, 78, 42 S.Ct. 420, 421, 66 L.Ed. 833; Cf. Colorado Paving Co. v. Murphy, 8 Cir., 78 F. 28, 37 L.R.A. 630. 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, D.C., 6 F.Supp. 761; B. F. Cummins v. Burleson, 40 App.D.C. 500; Champion C.P. Co. v. Joint Committee on Printing, 47 App.D.C., 141; cf. Strong v. United States, 6 Ct.Cl. 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. 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.
41 U.S.C. 13, 41 U.S.C.A. § 13.
Federal Communications Commission v. Pottsville Broadcasting Co., 309 U.S. 134, 60 S.Ct. 437, 84 L.Ed. -.
UNITED STATES, Appellant, v. GEORGIA PUBLIC SERVICE COMMISSION.
Edward J. HARDIN, as Mayor of Tazewell, Tennessee et al., Petitioners, v. KENTUCKY UTILITIES COMPANY. POWELL VALLEY ELECTRIC CO-OPERATIVE, Petitioner, v. KENTUCKY UTILITIES COMPANY. TENNESSEE VALLEY AUTHORITY, Petitioner, v. KENTUCKY UTILITIES COMPANY.
UNITED STATES, Petitioner, v. Ethel Mae YAZELL.
PRIEBE & SONS, Inc. v. UNITED STATES.
DALEHITE et al. v. UNITED STATES.

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