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NAACP V. FPC, 425 U. S. 662 (1976)
US Supreme Court Decisions On-Line> Volume 425 > NAACP V. FPC, 425 U. S. 662 (1976)
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Decided May 19, 1976*
1. The FPC is authorized to consider the consequences of discriminatory employment practices on the part of its regulatees only insofar as such consequences are directly related to the FPC's establishment of just and reasonable rates in the public interest. To the extent that illegal, duplicative, or unnecessary labor costs are demonstrably the product of a regulatee's discriminatory employment practices and can be or have been demonstrably quantified by judicial decree or the final action of an administrative agency, the FPC should disallow them. Pp. 425 U. S. 666-669.
2. The FPC's asserted duty to advance the public interest, however, does not afford any basis for its prohibiting regulatees from engaging in discriminatory employment practices, as references to the "public interest" in the Federal Power Act and Natural Gas Act require the FPC to promote the orderly production of plentiful supplies of electric energy and natural gas at just chanrobles.com-red
and reasonable rates, and do not constitute a directive to the FPC to seek to eradicate discrimination. Pp. 425 U. S. 669-671.
STEWART, J., delivered the opinion of the Court, in which BRENNAN, WHITE, BLACKMUN, POWELL, REHNQUIST, and STEVENS, JJ., joined. POWELL, J., filed a concurring opinion, post, p. 425 U. S. 671. BURGER, C.J.,filed an opinion concurring in the judgment, post, p. 425 U. S. 672. MARSHALL, J., took no part in the consideration or decision of the cases.
The issue in this case is to what extent, if any, the Federal Power Commission, in the performance of its functions under the Federal Power Act, 41 Stat. 1063, as amended, 16 U.S.C. § 791a et seq. (Power Act), and the Natural Gas Act, 52 Stat. 821, as amended, 15 U.S.C. § 717 et seq. (Gas Act), has authority to prohibit discriminatory employment practices on the part of its regulatees. chanrobles.com-red
In 1972, the National Association for the Advancement of Colored People (NAACP) and several other organizations petitioned the Commission to issue a rule "requiring equal employment opportunity and nondiscrimination in the employment practices of its regulatees." The proposed rule would have required the regulated companies to adopt affirmative action programs to combat discrimination in employment, and would have given any person who believed himself to have been subjected to employment discrimination by any such company the right to file a complaint with the Commission. [Footnote 1]
Because of doubt as to the Commission's recognition of any power on its part to take into account the employment practices of its regulatees even in the narrower sense described above, the Court of Appeals vacated the Commission's order and remanded the case. Id. at 47, 520 F.2d 447. The Commission and the NAACP each petitioned for certiorari, and we granted both petitions in order to consider the scope of the Commission's authority to deal with discriminatory employment practices on the part of the companies that it regulates. 423 U.S. 890.
The question presented is not whether the elimination of discrimination from our society is an important national goal. It clearly is. The question is not whether Congress could authorize the Federal Power Commission to combat such discrimination. It clearly could. The question is simply whether or to what extent Congress did grant the Commission such authority. Two possible statutory bases have been advanced to justify the conclusion that the Commission can or must concern itself with discriminatory employment practices on the part of the companies it regulates. [Footnote 2] chanrobles.com-red
The first of these statutory bases is the legislative command to the Commission under the Power and Gas Acts to establish "just and reasonable" rates for the transmission and sale of electric energy, 16 U.S.C. § 824d(a), and for the transportation and sale of natural gas, 15 U.S.C. § 717c(a), and, consequently, to allow only such rates as will prevent consumers from being charged any unnecessary or illegal costs. [Footnote 3] The second and broader statutory basis advanced for Commission regulation of employment discrimination is the Commission's asserted duty to advance the public interest. The NAACP notes that Congress found that "the business of transmitting and selling electric energy for ultimate distribution to the public is affected with a public interest," 16 U.S.C. § 824(a), and that "the business of transporting and selling natural gas for ultimate distribution to the public is affected with a public interest," 15 U.S.C. § 717(a). From these and other references to the "public interest" in the Gas and Power Acts, [Footnote 4] it is argued that the Commission is charged with advancing the public interest in general, and that the Commission is thus authorized, if not required, to promulgate rules prohibiting its regulatees from engaging in discriminatory employment practices, since ending discrimination in employment is in the public interest.
172 U.S.App.D.C. at 44, 520 F.2d 444 (footnote omitted). chanrobles.com-red
As a general proposition, it is clear that the Commission has the discretion to decide whether to approach these problems through the process of rulemaking, individual adjudication, or a combination of the two procedures. SEC v. Chenery Corp., 332 U. S. 194, 332 U. S. 202-203. The present Commission practice, we are told, is to consider chanrobles.com-red
New York Central Securities Corp. v. United States, 287 U. S. 12, 287 U. S. 24-25. See also New Haven Inclusion Cases, 399 U. S. 392, 399 U. S. 432; National Broadcasting Co. v. United States, 319 U. S. 190, 319 U. S. 216; Federal Radio Comm'n v. Nelson Bros. Co., 289 U. S. 266, 289 U. S. 285.
Thus, in order to give content and meaning to the words "public interest" as used in the Power and Gas Acts, it is necessary to look to the purposes for which the Acts were adopted. In the case of the Power and Gas Acts, it is clear that the principal purpose of those chanrobles.com-red
Acts was to encourage the orderly development of plentiful supplies of electricity and natural gas at reasonable prices. [Footnote 5] While there are undoubtedly other subsidiary purposes contained in these Acts, [Footnote 6] the parties point to nothing in the Acts or their legislative histories to indicate that the elimination of employment discrimination was one of the purposes that Congress had in mind when it enacted this legislation. The use of the words "public interest" in the Gas and Power Acts is not a directive to the Commission to seek to eradicate discrimination, but, rather, is a charge to promote the orderly production of plentiful supplies of electric energy and natural gas at just and reasonable rates. [Footnote 7] chanrobles.com-red
* Together with No. 74-1619, Federal Power Commission v. National Association for the Advancement of Colored People et al., also on certiorari to the same court.
See, e.g., Acker v. United States, 298 U. S. 426, 298 U. S. 430-431; Cities Serv. Gas Co. v. FPC, 424 F.2d 411 (CA10); Safe Harbor Water Power Corp. v. FPC, 179 F.2d 179 (CA3). See also n 5, infra.
See, e.g., 15 U.S.C. §§ 717b, 717f(a), 71n; 16 U.S.C. §§ 797(e), (g), 800(a), 803(i), 806, 815, 824a (a-c), (e), 824b (a-b), 824c(a). See also 15 U.S.C. §§ 717f (b-c), (e).
16 U.S.C. § 824a(a) (The purpose of the Power Act is to "assur[e] an abundant supply of electric energy throughout the United States with the greatest possible economy"); Pennsylvania Power Co. v. FPC, 343 U. S. 414, 343 U. S. 418 ("A major purpose of the [Power] Act is to protect power consumers against excessive prices"); FPC v. Hope Gas Co., 320 U. S. 591, 320 U. S. 610 (The "primary aim" of the Natural Gas Act is "to protect consumers against exploitation at the hands of natural gas companies"). See also S.Rep. No. 621, 74th Cong., 1st Sess., 17; FPC v. Tennessee Gas Co., 371 U. S. 145, 371 U. S. 154; Atlantic Rfg. Co. v. Public Serv. Comm'n, 360 U. S. 378, 360 U. S. 388; Permian Basin Area Rate Cases, 390 U. S. 747, 390 U. S. 770.
For example, the Commission has authority to consider conservation, environmental, and antitrust questions. See 15 U.S.C. § 717s(a); 16 U.S.C. §§ 803(a), (h); Gulf States Utilities Co. v. FPC, 411 U. S. 747; Udall v. FPC, 387 U. S. 428.
The Federal Communications Commission has adopted regulations dealing with the employment practices of its regulatees. See 47 CFR §§ 73.125, 73.301, 73.599, 73.680, 73.793 (1975). These regulations can be justified as necessary to enable the FCC to satisfy its obligation under the Communications Act of 1934, 48 Stat. 1064, as amended, 47 U.S.C. § 151 et seq., to ensure that its licensees' programming fairly reflects the tastes and viewpoints of minority groups. See Office of Communication of United Church of Christ v. FCC, 123 U.S.App.D.C. 328, 359 F.2d 994; 33 Fed.Reg. 9960, 9962. It has nowhere been argued that the Federal Power Commission needs similar regulations in order to promote energy production at reasonable rates.
The Court quotes a portion of the opinion of the Court of Appeals that identifies six categories of "costs" said to be "arguably within the Commission's range of concern." Ante at 425 U. S. 667. The Court of Appeals correctly noted, however, that these costs "range from the very definite and easily ascertainable to the very questionable and virtually unquantifiable." Ibid. chanrobles.com-red
The Court's opinion explicitly does not endorse all of these categories of costs, and requires that consideration be given only to costs that have been "demonstrably quantified by judicial decree or the final action of an administrative agency charged with consideration of such matters. . . ." Ante at 425 U. S. 668. Although implicit in what the Court says, I think it important to emphasize that the costs identified in the opinion of the Court of Appeals as categories (4), (5), and (6) could not be quantified without resort to wholly speculative assumptions that would be unacceptable for ratemaking purposes. It would be quite impossible, for example, to measure or determine with any exactitude "the costs of inefficiency among minority employees demoralized by discriminatory barriers to their fair treatment or promotion." Nor is it likely that "the costs of strikes, demonstrations, and boycotts aimed against [a utility] because of employment discrimination," ante at 425 U. S. 667, could ever be determined with sufficient reliability.
of jurisdiction to adopt (1) the specific proposed rule, or (2) any rule relating to employment discrimination by regulatees."
In context, the FPC's order could fairly have been read simply as rejecting the rule proposed by the NAACP. This is particularly true in view of the Commission's auditing practice of disallowing duplicative costs, including those occasioned by backpay awards. Ante at 425 U. S. 668.
The Court of Appeals correctly recognized that this far-reaching proposal would put the Federal Power Commission into the business of regulating the everyday employment practices of regulated industries. The necessary result of this intrusion would be the imposition of another layer of federal regulation of the same subject matter, with the inevitable potential for conflict between administrative agencies. * If Congress had chanrobles.com-red
mandated duplicative regulation, the result, however inefficient, would be none of our concern. But Congress did not do so. It centralized responsibility in the Equal Employment Opportunity Commission. To the extent that the judiciary orders administrative responsibility to be diffused, congressional intent is frustrated, regulated industries are subjected to the commands of different voices in the bureaucracy, and the agonizingly long administrative process grinds even more slowly. To suggest, for example, that the FPC could deny a license on account of a regulatee's discriminatory employment practices, 172 U.S.App.D.C. at 44, 520 F.2d 444, is to thrust the Commission into a complex, volatile area for which Congress has already assigned authority to the EEOC.
Weidenbaum, The New Wave of Government Regulation of Business, 15 Business and Society Review 81, 84 (1975). See also U.S. News & World Report, May 10, 1976, p. 96. And as Mr. Justice Douglas reminded us:
Wyman v. James, 400 U. S. 309, 400 U. S. 335 (1971) (dissenting opinion).