Source: https://www.legalcrystal.com/case/97910/american-power-light-co-vs-sec
Timestamp: 2019-10-20 01:11:20
Document Index: 143574197

Matched Legal Cases: ['§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 4', '§ 11', '§ 11', '§ 11', '§ 1', '§ 11', '§ 1', '§ 1', '§ 7', '§ 10', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 19', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11', '§ 11']

American Power and Light Co Vs Sec - Citation 97910 - Court Judgment | LegalCrystal
American Power and Light Co. Vs. Sec - Court Judgment
LegalCrystal Citation legalcrystal.com/97910
Case Number 329 U.S. 90
Appellant American Power and Light Co.
american power & light co. v. sec - 329 u.s. 90 (1946) u.s. supreme court american power & light co. v. sec, 329 u.s. 90 (1946) american power & light co. v. securities and exchange commission no. 4 argued november 16, 1945 reargued october 14, 15, 1946 decided november 25, 1946 * 329 u.s. 90 certiorari to the circuit court of appeals for the first circuit syllabus 1. section 11(b)(2) of the public utility holding company act of 1935 directs the securities & exchange commission, as soon as practicable after january 1, 1938, "to require by order, after notice and opportunity for hearing, that each registered holding company, and each subsidiary company thereof, shall take such steps as the.....
American Power & Light Co. v. SEC - 329 U.S. 90 (1946)
U.S. Supreme Court American Power & Light Co. v. SEC, 329 U.S. 90 (1946)
Decided November 25, 1946 *
Held: that the orders were authorized by § 11(b)(2), and that the section as so applied is constitutional. Pp. 329 U. S. 96 , 329 U. S. 121 .
2. Section 11(b)(2) is a valid exercise of the power of Congress under the commerce clause of the Federal Constitution. Pp. 329 U. S. 96 -104.
(a) Section 11(b)(2) applies only to registered holding companies and their subsidiaries. P. 329 U. S. 97 .
(b) The impact of § 11(b)(2) is limited, by reference to the registration requirements, to those holding companies which are in fact in the stream of interstate activity or that affect commerce in more States than one, North American Co. v. SEC, 327 U. S. 686 , and depend for their very existence upon the constant and systematic use of the mails and the instrumentalities of interstate commerce. P. 329 U. S. 98 .
(c) The holding company system in which the petitioners are embraced possesses an undeniable interstate character which makes it properly subject, from the statutory standpoint, to the provisions of § 11(b)(2). P. 329 U. S. 98 .
(d) Congress has power under the commerce clause to impose relevant conditions and requirements on those who use the channels of interstate commerce so that those channels will not be conduits for promoting or perpetuating economic evils. P. 329 U. S. 99 .
(e) Congress is completely uninhibited by the commerce clause in selecting the means considered necessary for bringing about the desired conditions in the channels of interstate commerce. Any limitations are to be found in other sections of the Constitution. P. 329 U. S. 100 .
(f) Congress has constitutional authority under the commerce clause to undertake to solve national problems directly and realistically, giving due recognition to the scope of state power. P. 329 U. S. 103 .
3. Section 11(b)(2) does not unconstitutionally delegate legislative power to the Securities & Exchange Commission. Pp. 329 U. S. 104 -106.
(a) The standards of § 11(b)(2), which provides that the Commission shall act so as to ensure that the corporate structure or continued existence of any company in a particular holding company system does not "unduly or unnecessarily complicate the structure" or "unfairly or inequitably distribute voting power among security holders," are not too indefinite, in the light of the purpose of the Act, its factual background, and the statutory context in which they appear. Pp. 329 U. S. 104 -105.
then becomes constitutionally sufficient if Congress clearly delineates the general policy, the public agency which is to apply it, and the boundaries of this delegated authority. Private rights are protected by access to the courts to test the application of the policy in the light of these legislative declarations. P. 329 U. S. 105 .
(c) Under these circumstances, it is of no constitutional significance that the Commission, in executing the policies of § 11(b)(2), also has discretion to fashion remedies of a civil nature necessary for attaining the desired goals. P. 329 U. S. 106 .
(d) The Constitution does not require that the Commission translate the legislative standards into formal and detailed rules of thumb prior to their application to particular cases. It is sufficient that the Commission's actions conform to the statutory language and policy. P. 329 U. S. 106 .
4. Section 11(b)(2) does not violate the due process clause of the Fifth Amendment. Pp. 329 U. S. 106 -108.
(a) It is not the function of the Court to reweigh the factors considered by Congress in enacting the legislation, or to question the conclusion reached by Congress. P. 329 U. S. 106 .
(b) Section 11(b)(2) does not, on its face, authorize or necessarily involve any destruction of any valuable interests without just compensation. North American Co. v. SEC. 327 U. S. 686 . P. 329 U. S. 107 .
(c) Section 11(b)(2) is not rendered void by the absence of an express provision for notice and opportunity for hearing to security holders regarding proceedings under that section. P. 329 U. S. 107 .
(d) The managements of the petitioners, having been notified and having participated in § 11(b)(2) proceedings, possess no standing to assert the invalidity of that, section from the viewpoint of the security holders' constitutional rights to notice and hearing. P. 329 U. S. 107 .
(e) The Commission is bound under the statute to give notice and opportunity for hearing to consumers, investors, and other persons whenever constitutionally necessary. P. 329 U. S. 108 .
(f) Section 11(b)(2), fairly construed, neither expressly nor impliedly authorizes unconstitutional procedure. P. 329 U. S. 108 .
5. The record amply supports the Commission's findings that the corporate structures and continued existence of petitioners unduly and unnecessarily complicate the holding company system in which they are subholding companies, and unfairly and inequitably distribute voting power among the security holders of that system. Pp. 329 U. S. 108 -112.
6. The Commission's choice of the dissolution of petitioners as "necessary to ensure" effectuation of the Act was authorized, and may not be set aside on judicial review. Pp. 329 U. S. 112 -118.
(a) Where Congress has entrusted an administrative agency with the responsibility of selecting the means of achieving the statutory policy, the relation of remedy to policy is peculiarly a matter for administrative competence. P. 329 U. S. 112 .
(b) Only if the remedy chosen is unwarranted in law or without justification in fact should a court intervene. Pp. 329 U. S. 112 -113.
(c) Dissolution of a holding company or a subholding company is contemplated and authorized by § 11(b)(2) as a possible remedy. P. 329 U. S. 113 .
(d) The phrase "in the holding company system" does not limit the authority of the Commission to orders removing a particular company from the holding company system of which it is a part but permits an order terminating its corporate existence. P. 329 U. S. 113 .
(e) The legislative history of the Act compels the conclusion that dissolution is one of the remedies contemplated by § 11(b)(2) and that its choice falls within the allowable area of the Commission's discretion. Pp. 329 U. S. 114 -115.
(f) The Commission's choice of dissolution with respect to the petitioners is not so lacking in reasonableness as to constitute an abuse of discretion. P. 329 U. S. 115 .
(g) Dissolution is not so drastic a remedy as to be unreasonable. P. 329 U. S. 116 .
(h) Since the Commission's choice of dissolution of the petitioners has a rational basis, the fact that other solutions might have been selected is immaterial. P. 329 U. S. 118 .
(i) Review by this Court of the Commission's choice of remedies is limited solely to testing the propriety of the remedy so chosen from the standpoint of the Constitution and the statute. P. 329 U. S. 118 .
(j) The Commission's finding that the continued existence of petitioners violates the statutory standards warrants the order of their dissolution, whatever may be the shortcomings of the parent holding company. P. 329 U. S. 118 .
The Commission deferred consideration of the motions until it entered the dissolution orders under § 11(b)(2). It then denied the motions and refused to grant hearings on the plans in advance of its orders of dissolution. It did this after thorough examination of the plans, and after finding that they were incomplete and inadequate on their face and that they failed to hold out any real promise of effectuating the standards of § 11(b)(2). Held, that there was no error in this procedure. Pp. 329 U. S. 118 -119.
(a) The filing of the plans under § 11(e) did not oust the Commission of jurisdiction to enter its orders under § 11(b)(2). P. 329 U. S. 119 .
(b) Where consideration of plans filed under § 11(e) leads the Commission to the conclusion that, on their face, they are incomplete, inadequate, and unlikely to satisfy the statutory standards, or where they are found to have been filed solely for purposes of delay, it would be contrary to the statutory policy of prompt action to require the Commission to hold hearings on them before entering an order under § 11(b)(2). P. 329 U. S. 120 .
(c) To the extent that entry of the § 11(b)(2) orders made the plans filed under § 11(e) moot or hearings thereon unnecessary, the result is one that is inevitable if proper accommodation is to be made for the different sections of the Act and for the various statutory policies. Pp. 329 U. S. 120 -121.
(d) Moreover, a § 11(b)(2) proceeding leads only to the expression of the Commission's view of what must be done to ensure compliance with the statutory standards. Petitioners are not yet foreclosed from attacking the Commission's orders under § 11(b)(2). P. 329 U. S. 121 .
In a proceeding under § 11(b)(2) of the Public Utility Holding Company Act of 1935, the Securities & Exchange Commission entered orders requiring the dissolution of petitioners and requiring them to submit plans for the effectuation of the orders. 11 S.E.C. 1146. The Circuit Court of Appeals sustained the orders. 141 F.2d 606. This Court granted certiorari. 325 U.S. 846. Affirmed, p. 329 U. S. 121 .
We are concerned here with the constitutionality of § 11(b)(2) of the Public Utility Holding Company Act of 1935 [ Footnote 1 ] and its application to the petitioners, the American Power & Light Company and the Electric Power & Light Corporation.
American and Electric are two of the subholding companies in the Electric Bond and Share Company holding company system, certain aspects of which were considered by this Court in Electric Bond & Share Co. v. SEC, 303 U. S. 419 . This system is a pyramid-like structure of which Bond and Share itself constitutes the apex, five subholding companies (including American and Electric) create an intermediate tier, [ Footnote 2 ] and approximately 237 direct
So far as here pertinent, [ Footnote 3 ] § 11(b)(2) directs the Securities and Exchange Commission, as soon as practicable after January 1, 1938,
Like § 11(b)(1) its statutory companion, § 11(b)(2) applies only to registered holding companies and their subsidiaries. We noted in North American Co. v. SEC, 327 U. S. 686 , that, by making certain interstate transactions unlawful unless a holding company registers with the Commission § 4(a), and by extending § 11(b)(1) to registered holding companies, Congress has effectively applied § 11(b)(1) to those holding companies that are
The Bond and Share system including American and Electric, possesses an undeniable interstate character which makes it properly subject, from the statutory standpoint, to the provisions of § 11(b)(2). This vast system embraces utility properties in no fewer than 32 states, from New Jersey to Oregon and from Minnesota to Florida, as well as in 12 foreign countries. Bond and Share dominates and controls this system from its headquarters in New York City. [ Footnote 4 ] As was the situation in the North American case, the proper control and functioning of such an extensive
multi-state network of corporations necessitates continuous and substantial use of the mails and the instrumentalities of interstate commerce. Only in that way can Bond and Share, or its subholding companies or service subsidiary, market and distribute securities, control and influence the various operating companies, negotiate inter-system loans, acquire or exchange property, perform service contracts, or reap the benefits of stock ownership. See § 1(a). See also International Textbook Co. v. Pigg, 217 U. S. 91 . Moreover, many of the operating companies on the lower echelon sell and transmit electric energy or gas in interstate commerce to an extent that cannot be described as spasmodic or insignificant. Electric Bond & Share Co. v. SEC, supra, 303 U. S. 432 -433. [ Footnote 5 ] Such activities serve to augment the interstate nature of the Bond and Share system. And they make even plainer the fact that this system falls within the intended scope of § 11(b)(2).
Congress, of course, has undoubted power under the commerce clause to impose relevant conditions and requirements on those who use the channels of interstate commerce so that those channels will not be conduits for promoting or perpetuating economic evils. North American Co. v. SEC, supra; United States v. Darby, 312 U. S. 100 ; Brooks v. United States, 267 U. S. 432 . Thus, to the extent that corporate business is transacted through such channels, affecting commerce in more states than one, Congress may act directly with respect to that business to protect what it conceives to be the national welfare. It
may prescribe appropriate regulations and determine the conditions under which that business may be pursued. [ Footnote 6 ] It may compel changes in the voting rights and other privileges of stockholders. [ Footnote 7 ] It may order the divestment or rearrangement of properties. [ Footnote 8 ] It may order the reorganization or dissolution of corporations. [ Footnote 9 ] In short, Congress is completely uninhibited by the commerce clause in selecting the means considered necessary for bringing about the desired conditions in the channels of interstate commerce. Any limitations are to be found in other sections of the Constitution. Gibbons v. Ogden, 9 Wheat. 1, 22 U. S. 196 .
"The most distinctive characteristic, and perhaps the most serious defect of the present holding company organization, is the pyramided structure which is found in all of the important holding company groups examined. [ Footnote 10 ]"
The pyramiding device, in its most common form, consisted of interposing one or more subholding companies between the holding company and the operating companies, and issuing at each level of the structure different classes of stock with unequal voting rights. Most of the financing of the various companies in the structure occurred through the sale to the public of bonds and preferred stock having low fixed returns and generally carrying no voice in the managements. Under such circumstances, a relatively small but strategic investment in common stock (with voting privileges) in the higher levels of a pyramided structure often resulted in absolute control of underlying operating companies with assets of hundreds of millions of dollars. [ Footnote 11 ] A tremendous "leverage" in relation
to that stock was thus produced; the earnings of the top holding company were greatly magnified by comparatively small changes in the earnings of the operating companies. The common stock of the top holding company might quickly rise in value and just as quickly fall, making it a natural object for speculation and gambling. In many instances, this created financially irresponsible managements and unsound capital structures. [ Footnote 12 ] Public investors in such stock found themselves the innocent victims, while those who supplied most of the capital through the purchase of bonds and preferred stock likewise suffered, in addition to being largely disfranchised. Prudent management of the operating companies became a minor consideration, with pressure being placed on them to sustain the excessive capitalization to the detriment of their service to consumers. Reduction of rates was firmly resisted. The conclusion was accordingly reached by those making the studies that the highly pyramided system "is dangerous, and has no justification for existence" [ Footnote 13 ]
and "represents the holding company system at its worst." [ Footnote 14 ]
476. From these sources -- from the manifold evils revealed by the legislative investigations, the express recital of evils in § 1(b) of the Act, the general policy declarations of Congress in § 1(c), the standards for new security issues set forth in § 7, the conditions for acquisitions of properties and securities prescribed in § 10, and the nature of the inquiries contemplated by § 11(a) -- a veritable code of rules reveals itself for the Commission to follow in giving effect to the standards of § 11(b)(2). These standards are certainly no less definite in nature than those speaking in other contexts in terms of "public interest," "just and reasonable rates," "unfair methods of competition" or "relevant factors." The approval which this Court has given in the past to those standards thus compels the sanctioning of the ones in issue. See New York Central Securities Corp. v. United States, 287 U. S. 12 , 287 U. S. 24 -25; Yakus v. United States, 321 U. S. 414 , 321 U. S. 419 -427, and cases cited.
The judicial approval accorded these "broad" standards for administrative action is a reflection of the necessities of modern legislation dealing with complex economic and social problems. See Sunshine Anthracite Coal Co. v. Adkins, 310 U. S. 381 , 310 U. S. 398 . The legislative process would frequently bog down if Congress were constitutionally required to appraise beforehand the myriad situations to which it wishes a particular policy to be applied, and to formulate specific rules for each situation. Necessity, therefore, fixes a point beyond which it is unreasonable and impracticable to compel Congress to prescribe detailed rules; it then becomes constitutionally sufficient if Congress clearly delineates the general policy, the public agency which is to apply it, and the boundaries of this delegated authority. Private rights are protected by access to the courts to test the application of the policy in the light of these legislative declarations. Such is the situation here.
Under these circumstances, it is of no constitutional significance that the Commission, in executing the policies of § 11(b)(2), also has discretion to fashion remedies of a civil nature necessary for attaining the desired goals. See Phelps Dodge Corp. v. Labor Board, 313 U. S. 177 , 313 U. S. 194 . The legislative policies and standards being clear, judicial review of the remedies adopted by the Commission safeguards against statutory or constitutional excesses.
"outweighed by the political and general economic desirability of breaking up concentrations of financial power in the utility field too big to be effectively regulated in the interest of either the consumer or the investor and too big to permit the functioning of democratic institutions. [ Footnote 15 ]"
Equally groundless is the contention that § 11(b)(2) is void in the absence of an express provision for notice and opportunity for hearing as to security holders regarding proceedings under that section. The short answer is that such a contention can be raised properly only by a security holder who has suffered injury due to lack of notice or opportunity for hearing. No security holder of that type is now before us. The managements of American and Electric admittedly were notified and participated in the hearings as required by § 11(b)(2), and they possess no standing to assert the invalidity of that section from the viewpoint of the security holders' constitutional rights to notice and hearing. See Tyler v. Judges of Court of Registration, 179 U. S. 405 , 179 U. S. 410 ; Hatch v. Reardon, 204 U. S. 152 , 204 U. S. 160 .
relevance under these circumstances. Wherever possible, statutes must be interpreted in accordance with constitutional principles. Here, in the absence of definite contrary indications, it is fair to assume that Congress desired that § 11(b)(2) be lawfully executed by giving appropriate notice and opportunity for hearing to all those constitutionally entitled thereto. And, when that assumption is added to the provisions of § 19, it becomes quite evident that the Commission is bound under the statute to give notice and opportunity for hearing to consumers, investors, and other persons whenever constitutionally necessary. See The Japanese Immigrant Case, 189 U. S. 86 , 189 U. S. 100 -101.
But, should the Commission neglect to follow the necessary procedure in a particular case, such failure would, at most, justify an objection to the administrative determination, rather than to the statute itself. It would then be needless to do more than nullify the action taken in disregard of the constitutional rights to notice and opportunity for hearing. Since we do not have that situation here, however, we need only reiterate that § 11(b)(2), fairly construed, neither expressly nor impliedly authorizes unconstitutional procedure. It is thus immune to attack on that basis. See Kentucky Railroad Tax Cases, 115 U. S. 321 ; Bratton v. Chandler, 260 U. S. 110 ; Toombs v. Citizens' Bank of Waynesboro, 281 U. S. 643 . Cf. Coe v. Armour Fertilizer Works, 237 U. S. 413 ; Wuchter v. Pizzutti, 276 U. S. 13 .
American's capitalization and only 3.42% of the book values of American's subsidiaries, and its investment in Electric is the equivalent of only 22.25% of Electric's capitalization and 8.72% of the book values of Electric's subsidiaries. [ Footnote 16 ]
This disproportion between Bond and Share's investment and the value of the property controlled is even more acute if further adjustments are made to reflect the unconscionable writeups and inadequate depreciation which the Commission found in the book figures of the various operating companies. American and Electric disagree with many of these adjustments, and urge that the book values can be justified, and complaint is made that the Commission refused to consider certain valuation testimony offered by American in this respect. We deem it unnecessary, however, to enter into these disputed matters. Even with the use of the book values, the attenuated investment ratio is such as to justify the Commission's conclusion that Bond and Share's control of the operating companies is achieved "through disproportionately small investment." On that basis, over 96% of the investment in American's subsidiaries is without effective voting representation, while over 91% of the book values of Electric's subsidiaries is similarly disfranchised. [ Footnote 17 ]
It is a fundamental principle, however, that, where Congress has entrusted an administrative agency with the responsibility of selecting the means of achieving the statutory policy "the relation of remedy to policy is peculiarly a matter for administrative competence." Phelps Dodge Corp. v. Labor Board, supra, at 313 U. S. 194 . In dealing with the complex problem of adjusting holding company systems in accordance with the legislative standards, the Commission here has accumulated experience and knowledge which no court can hope to attain. Its judgment is entitled to the greatest weight, while recognizing that the Commission's discretion must square with its responsibility. Only if the remedy chosen is unwarranted in law
Dissolution of a holding company or a subholding company plainly is contemplated by § 11(b)(2) as a possible remedy. It directs the Commission to take such steps as it finds necessary to ensure that "the corporate structure or continued existence of any company in the holding company system" does not violate the standards set forth. American and Electric argue that the phrase "in the holding company system" limits the authority of the Commission to orders removing a particular company from the holding company system of which it is a part, and does not permit an order terminating its corporate existence. Grammatically, this contention is without merit. The phrase "in the holding company system" no more modifies "continued existence" than it does "corporate structure." It relates, rather, to the word "company," [ Footnote 18 ] as though the phrase read "the corporate structure or continued existence of any company which is in the holding company system."
Moreover, §§ 11(f) and 11(g) specifically refer to dissolution or plans for dissolution of registered holding companies or their subsidiaries in accordance with § 11. [ Footnote 19 ] Such statements would be meaningless and unnecessary were dissolution not contemplated as a possible remedy under § 11(b)(2).
holds out the promise of effectuating the statute's requirements fully or promptly." Ibid., p. 1215. Cf. Jacob Siegel Co. v. Federal Trade Commission, 327 U. S. 608 . That this choice of dissolution in preference to other remedies is not lightly to be disregarded is shown by the statement of Dr. Walter Splawn, much relied upon by Congress in shaping this statute, that
"The most effective means of preventing pyramiding is to eliminate the so-called intermediary company interposed between the operating company and the company at the top. [ Footnote 20 ]"
would harm no one. It may well have considered the fact brought out in the argument before us that, so far as Bond and Share and the public security holders are concerned, dissolution would mean little more than the receipt of securities of the operating companies in lieu of their present shares in American and Electric. Any number of benefits might thereafter accrue to these security holders. Their equities in the Bond and Share system would be materially strengthened by the removal of the useless and costly subholding companies, and their voting power would tend to be more in proportion to their investment. The financial weaknesses of the various companies remaining in the system would be easier to correct, with numerous benefits to the consumers and the general public, as well as the investors. [ Footnote 21 ]
We assume that the Commission will give due consideration to any plans that are filed under § 11(e) before it enters a § 11(b)(2) order. If it finds that such plans may have merit and may effectuate the policies of § 11(b)(2), the principles of orderly administration would dictate that entry of the § 11(b)(2) order be deferred until full hearings are had with respect to the plans. [ Footnote 22 ] It might then
See Otis & Co. v. SEC, 323 U. S. 624 .
United States v. Darby, 312 U. S. 100 ; Electric Bond & Share Co. v. SEC, 303 U. S. 419 .
Northern Securities Co. v. United States, 193 U. S. 197 ; Standard Oil Co. v. United States, 221 U. S. 1 ; United States v. American Tobacco Co., 221 U. S. 1 06.
North American Co. v. SEC, 327 U. S. 686 .
Northern Securities Co. v. United States, supra; Standard Oil Co. v. United States, supra; United States v. Reading Co., 253 U. S. 26 ; United States v. Delaware & Hudson Co., 213 U. S. 366 . See also Breckenridge, "Legal Study on Constitutional Power of Congress to Regulate Stock Ownership in Railroads Engaged in Interstate Commerce," House Report No. 2789, 71st Cong., 3d Sess., Vol. 1, p. 1.
But § 11(b)(2) does not stand alone or unqualified in this respect. Section 11(e) [ Footnote 2/1 ] expressly provides for the
" if, after notice and opportunity for hearing, the Commission shall find such plan, as submitted or as modified, necessary to effectuate the provisions of subsection (b) and fair and equitable to the persons affected by such plan, the Commission shall make an order approving such plan. . . ."
"in accordance with such rules and regulations or order as the Commission may deem necessary or appropriate in the public interest or for the protection of investors, [ Footnote 2/2 ]"
the Commission's consideration and to have them considered and determined "after notice and opportunity for hearing." See Chicago Junction Case, 264 U. S. 258 , 264 U. S. 264 -265.
Furthermore, although the section gives the Commission broad discretion concerning the procedure to be followed, it would seem clear, both from the section's purpose and from its terms, that the Act contemplates that it shall make the required determination, concerning such a voluntary plan properly submitted, prior to the entry of any order under § 11(b). Cf. Ashbacker Radio Corp. v. Federal Communications Commission, 326 U. S. 327 . Only in this way could the legislative purpose "to make unnecessary issuance of an involuntary order" be made effective. This being true, the section cast upon the Commission the duty of providing the appropriate procedure for submitting voluntary plans, by rules, regulations, or order comporting with the specified standards, including those for notice and hearing.
even if opportunity for filing and hearing were to be afforded, and a defense on the § 11(b)(2) hearing. Indeed, petitioners recognized that the time was inadequate for preparing their defense, for they applied for postponement of the hearing and other relief. [ Footnote 2/3 ] The Commission postponed the hearing one week, but found no adequate ground for further extension.
The hearing was commenced on June 18, 1940. On July 23, 1941, American submitted its voluntary plan under § 11(e). On December 3, 1941, Electric filed its plan. And on December 6, 1941, both companies moved to consolidate their applications with the pending § 11(b)(2) proceedings. [ Footnote 2/4 ] By agreement of counsel, consideration of the motion was delayed for the Commission to pass upon
at the end of the § 11(b)(2) hearing, [ Footnote 2/5 ] and, on July 22, 1942, that hearing was closed as to petitioners by stipulation.
"It appears that, if consolidation were granted, the result would be to inject into the present proceeding issues of fact and law in many respects different from, and unrelated to, those here involved. In consequence, no useful purpose would be served by permitting the consolidation of the 11(e) Plans with the present proceeding, but, on the contrary, delay and confusion would inevitably result. [ Footnote 2/6 ]"
statutory policy of prompt action, [ Footnote 2/7 ] and that the plans were incomplete and ineffective.
Although, in my opinion, it was the Commission's duty initially to make provision for notice and hearing on voluntary plans in accordance with § 11(e), the petitioners hardly can be considered to have been ignorant either of this duty or of the Commission's failure to perform it. By standing by through the long period of the § 11(b) proceedings prior to the time of submitting their plans without taking earlier action to secure preservation of their rights to hearing on such plans, the petitioners should be taken to have waived their rights to such hearings. They were not entitled to assert them for the first time at so late a stage in the § 11(b) proceedings. Nor, in my opinion, is the Commission required to give further consideration to such plans in these cases unless, in its own discretion, it sees fit to do so. [ Footnote 2/8 ]
" In accordance with such rules and regulations or order as the Commission may deem necessary or appropriate in the public interest or for the protection of investors or consumers, any registered holding company or any subsidiary company of a registered holding company may at any time after January 1, 1936, submit a plan to the Commission for the divestment of control, securities, or other assets, or for other action by such company or any subsidiary company thereof for the purpose of enabling such company or any subsidiary company thereof to comply with the provisions of subsection (b). If, after notice and opportunity for hearing, the Commission shall find such plan, as submitted or as modified, necessary to effectuate the provisions of subsection (b) and fair and equitable to the persons affected by such plan, the Commission shall make an order approving such plan, and the Commission, at the request of the company, may apply to a court, in accordance with the provisions of subsection (f) of section 18, to enforce and carry out the terms and provisions of such plan. . . ."