Source: http://www.chanrobles.com/usa/us_supremecourt/310/381/case.php
Timestamp: 2019-10-15 17:02:46
Document Index: 331352010

Matched Legal Cases: ['§ 4', '§ 4', '§ 4', '§ 4', '§ 4', '§ 4', '§ 4', '§ 4', '§ 5', '§ 4', '§ 4', '§ 4', '§ 6', '§ 4', '§ 17', '§ 17', '§ 3', '§ 3', '§ 4', '§ 3', '§ 3', '§ 4', '§ 4', '§ 4', '§ 3', '§ 4', '§ 15', '§ 211', '§ 4', '§ 3', '§ 17']

That Act provides for the regulation of the sale and distribution of bituminous coal by the National Bituminous Coal Commission [Footnote 2] with the cooperation of the bituminous chanroblesvirtualawlibrary
Page 310 U. S. 388
coal industry. Its aim is the stabilization of the industry primarily through price-fixing and the elimination of unfair competition. It is provided in § 4 that the coal producers, accepting membership, shall be organized under the Bituminous Coal Code. Some twenty district boards of code members are provided for, which are to operate as an aid to the Commission, but subject to its pervasive surveillance and authority. The statute specifies in detail the methods of their organization and operation, the scope of their functions, and the jurisdiction of the Commission over them. The Commission is empowered to fix minimum prices for code members in accordance with stated standards. Under § 4, II(a), each board shall, "on its own motion or when directed by the Commission," propose minimum prices pursuant to prescribed statutory standards. These may be approved, disapproved, or modified by the Commission as the basis for the coordination of minimum prices. Somewhat comparable machinery is provided for such coordination of minimum prices "in common consuming market areas upon a fair competitive basis," § 4, II(b), and for establishment of rules and regulations incidental to the sale and distribution of coal by code members. § 4, II(a). The Commission is also given power by § 4, II(c), to establish maximum prices for code members pursuant to standards prescribed therein. The sale, delivery, or offer for sale of coal below the minimum or above the maximum prices established by the Commission is made a violation of the code. § 4, II(e). So are numerous practices specified in § 4, II(i) as unfair methods of competition. And contracts for the sale of coal at prices below the prescribed minimum or above the maximum are invalid and unenforceable. § 4, II(e). The Commission may, after hearing, revoke the code membership of any coal producer for willful violation of the code or of any regulation made thereunder. § 5(b). chanroblesvirtualawlibrary
Page 310 U. S. 389
Machinery is provided in § 4-A for obtaining exemptions. A producer who believes that any commerce in coal is not, or may not be made, subject to the provisions of § 4 may file an application for exemption with the Commission. Subject to qualifications not material here, the filing of such application "in good faith" exempts the applicant from any "obligation, duty or liability" imposed by § 4 pending action by the Commission on the application. The Commission shall grant the application or, chanroblesvirtualawlibrary
Page 310 U. S. 390
after notice and opportunity for hearing, shall deny or otherwise dispose of it. An applicant aggrieved by such denial or other disposition may obtain a review of the order in the Court of Appeals for the District of Columbia or in the Court of Appeals in the circuit where he resides or has his principal place of business. § 6(b). The findings of the Commission as to the facts, if supported by substantial evidence, are conclusive.
Appellant is lessee of coal lands in Arkansas, and is engaged in the business of mining and shipping coal. It has not subscribed to or accepted the provisions of the Bituminous Coal Code provided for in § 4 of the Act. In August, 1937, it filed an application for exemption on the grounds that its coal was not bituminous coal as defined in § 17(b) of the Act. [Footnote 5] The Commission held a public hearing on that application in October, 1937. [Footnote 6] Appellant appeared, introduced evidence, and was heard on oral argument before the Commission. [Footnote 7] In August, 1938, the Commission handed down an opinion with findings of fact and conclusions of law and entered an order denying appellant's application for exemption on the grounds that its coal was bituminous within the meaning chanroblesvirtualawlibrary
Page 310 U. S. 391
of § 17(b). Appellant obtained a review of this order in the Circuit Court of Appeals. That court held that the Commission had jurisdiction to determine the status of coal claimed to be exempt, and that the Commission's decision was based on substantial evidence. It accordingly affirmed the order. Sunshine Anthracite Coal Co. v. National Bituminous Coal Commission, 105 F.2d 559. We denied certiorari. 308 U.S. 604.
I. Appellant argues that it is not subject to the 19 1/2% tax imposed by § 3(b) because that section does not apply chanroblesvirtualawlibrary
Page 310 U. S. 392
to producers who are not members of the code. Its argument rests on the construction of § 3(b) and § 4. As we have seen, the former places the 19 1/2% tax on the sale or other disposition of coal "which would be subject to the application of the conditions and provisions of the code provided for in section 4, or of the provisions of section 4-A." Sec. 4 provides that the "provisions of such code shall apply only to such code members." Appellant therefore contends that the tax is not applicable to its coal, since the coal produced by a noncode producer such as appellant is not subject to the provisions of the code.
But if the 19 1/2% tax is not applicable to noncode members, it is not applicable to anyone, since § 3(b) exempts code members from that tax. That construction would read the 19 1/2% tax out of the Act. The essential sanction of the Act would then disappear, and its effectiveness would be seriously impaired. That alternative will not be taken where a construction is possible which will preserve the vitality of the Act and the utility of the language in question. See Armstrong Paint & Varnish Works v. Nu-Enamel Corp., 305 U. S. 315, 305 U. S. 333, and cases cited. Only a highly strained construction of § 3(b) would lead to the conclusion that noncode members are exempt from the 19 1/2% tax. It seems that Congress made a deliberate choice of words when it said that the tax applied to the sale or other disposition of coal which "would be" subject to § 4 and § 4-A. Sec. 4 is made expressly applicable "only to matters and transactions in or directly affecting interstate commerce in bituminous coal." Hence, it seems plain that the tax was intended to apply only to those sales by noncode members which "would be" subject to regulation under § 4. Appellant's coal plainly falls in that class, since practically its entire output is sold to purchasers outside the state of Arkansas. To sustain appellant's position, we would not only have to substitute "is" for "would be;" we would have to override the express Congressional chanroblesvirtualawlibrary
Page 310 U. S. 393
plan to make the 19 1/2% tax "in aid of the regulation of interstate commerce" in bituminous coal. [Footnote 9] That would be not only to rewrite § 3(b), but to remake the whole statutory scheme. Obviously such a task is not for the courts.
The regulatory provisions are clearly within the power of Congress under the commerce clause of the Constitution. These provisions are applicable only to sales or transactions in, or directly or intimately affecting, interstate commerce. The fixing of prices, the proscription of unfair trade practices, the establishment of marketing rules respecting such sales of bituminous coal constitute regulations within the competence of Congress under the commerce clause. As stated by Mr. Justice Cardozo in chanroblesvirtualawlibrary
Page 310 U. S. 394
his dissent in Carter v. Carter Coal Co., supra, p. 298 U. S. 326, "To regulate the price for such transactions is to regulate commerce itself, and not alone its antecedent conditions or its ultimate consequences." See Tagg Bros. & Moorhead v. United States, 280 U. S. 420. What is true of prices is true of the attachment of other conditions to the flow of a commodity in interstate channels. Mulford v. Smith, 307 U. S. 38, and cases cited. Since this power, when it exists, is complete in itself, 22 U. S. 196, there can be no question but that the provisions of this Act are an exertion of the paramount federal power over interstate commerce. See United States v. Rock Royal Cooperative, Inc.,@ 207 U. S. 533.
Nor does the Act violate the Fifth Amendment. Price control is one of the means available to the states (Nebbia v. New York, 291 U. S. 502) and to the Congress (United States v. Rock Royal Cooperative, Inc., supra) in their respective domains (Baldwin v. G.A.F. Seelig, Inc., 294 U. S. 511) for the protection and promotion of the welfare of the economy. But appellant claims that this Act is not an appropriate exercise of the Congressional power. It urges that the nature and use of bituminous coal in nowise endanger the health and morals of the populace; that no question of conservation is involved; that the ills of the industry are attributable to overproduction; that the increase of prices will cause a further loss of markets and add to the afflictions which beset the industry, and that the consuming public will be deprived of the wholesome restriction of the antitrust laws. Those matters, however, relate to questions of policy, to the wisdom of the legislation, and to the appropriateness of the remedy chosen -- matters which are not our concern. If we endeavored to appraise them, we would be trespassing on the legislative domain. And if we undertook to narrow the scope of federal intervention in this field, as suggested by appellant, we would be blind to at least chanroblesvirtualawlibrary
Page 310 U. S. 395
thirty years of history. For a generation, there have been various manifestations of incessant demand for federal intervention in the coal industry. [Footnote 10] The investigations preceding the 1935 and 1937 Acts are replete with an exposition of the conditions which have beset that industry. [Footnote 11] Official [Footnote 12] and private [Footnote 13] records give eloquent testimony to the statement of Mr. Justice Cardozo in the Carter case (p. 298 U. S. 330) that free competition had been "degraded into anarchy" in the bituminous coal industry. Overproduction and savage competitive warfare wasted the industry. Labor and capital alike were the victims. Financial distress among operators and acute poverty among miners prevailed even during periods of general prosperity. This history of the bituminous coal industry is written in blood, as well as in ink.
It was the judgment of Congress that price-fixing and the elimination of unfair competitive practices were appropriate methods for prevention of the financial ruin, low wages, poor working conditions, strikes, and disruption of the channels of trade which followed in the wake of the demoralized price structures in this industry. If the strategic character of this industry in our economy and the chaotic conditions which have prevailed in it do not justify legislation, it is difficult to imagine what would. To invalidate this Act we would have to deny chanroblesvirtualawlibrary
Page 310 U. S. 396
the existence of power on the part of Congress under the commerce clause to deal directly and specifically with those forces which in its judgment should not be permitted to dislocate an important segment of our economy and to disrupt and burden interstate channels of trade. That step could not be taken without plain disregard of the Constitution. There are limits on the powers of the states to act as respects these interstate industries. Baldwin v. G.A.F. Seelig, Inc., supra. If the industry, acting on its own, had endeavored to stabilize the markets through price-fixing agreements, it would have run afoul of the Sherman Act. United States v. Socony-Vacuum Oil Co., Inc. ante, p. 310 U. S. 150. But that does not mean that there is a no man's land between the state and federal domains. Certainly what Congress has forbidden by the Sherman Act, it can modify. It may do so by placing the machinery of price-fixing in the hands of public agencies. It may single out for separate treatment, as it has done on various occasions, [Footnote 14] a particular industry, and thereby remove the penalties of the Sherman Act as respects it. Congress, under the commerce clause, is not impotent to deal with what it may consider to be dire consequences of laissez-faire. It is not powerless to take steps in mitigation of what in its judgment are abuses of cut-throat competition. And it is not limited in its choice between unrestrained self-regulation, on the one hand, and rigid prohibitions, on the other. The commerce clause empowers it to undertake stabilization of an interstate industry through a process of price-fixing which safeguards the public interest by placing price control in the hands of its administrative representative. United States v. Rock Royal Cooperative, Inc., supra. That was the choice which Congress made here. There is nothing chanroblesvirtualawlibrary
Page 310 U. S. 397
in the Carter case which stands in the way. The majority of the Court in that case did not pass on the price-fixing features of the earlier Act. The Chief Justice and Mr. Justice Cardozo, in separate minority opinions, expressed the view that the price-fixing features of the earlier Act were constitutional. We rest on their conclusions for sustaining the present Act.
Nor does the Act contain an invalid delegation of legislative power. Under § 4, II(c), the Commission may fix maximum prices when, in the public interest, it deems it necessary in order to protect the consumer against unreasonably high prices. These maximum prices must be fixed at a uniform increase above minimum prices so that, in the aggregate, they will yield a reasonable return above the weighted average total cost of the district. And no maximum price shall be established for any mine which will not yield a fair return on the fair value of the property. The minimum prices to be fixed must conform to the following standards: the weighted average cost for each minimum price area must be computed, the elements of cost being defined; a classification of the various sizes and grades of coal shall be made which reflects as nearly as possible the relative market value of the various kinds, qualities, and sizes of coal which is just and equitable as between producers within the district and which has due regard to the interests of the consuming public, and coordinated minimum prices shall be established for such coal (a) which reflect as nearly as possible the relative market values at points of delivery taking into account specifically enumerated factors, (b) which preserve as nearly as may be existing fair competitive opportunities, (c) which are just and equitable as between the districts, and (d) which, consistently with the process of coordination, yield a return to each area approximating its weighted average cost per ton. chanroblesvirtualawlibrary
Page 310 U. S. 398
The problem of fixing reasonable prices for bituminous coal cannot be differentiated legally from the task of fixing rates under the Interstate Commerce Act (41 Stat. 484, 49 U.S.C. § 15) and the Packers and Stockyards Act (42 Stat. 166, 7 U.S.C. § 211). The latter provide the standard of "just and reasonable" to guide the administrative body in the ratemaking process. The validity of that standard (Tagg Bros. & Moorhead v. United States, supra), the appropriateness of the criterion of the "public interest" in various contexts (New York Central Securities Corp. v. United States, 287 U. S. 12, 287 U. S. 24; United States v. Chemical Foundation, Inc., 272 U. S. 1; Avent v. United States, 266 U. S. 127), the legality of the standard of "unreasonable obstruction" to navigation (Union Bridge Co. v. United States, 204 U. S. 364) all make it clear that there is a valid delegation of authority in this case. The standards which Congress has provided here far exceed in specificity others which have been sustained. Certainly, in the hands of experts, the criteria which Congress has supplied are wholly adequate for carrying out the general policy and purpose of the Act. To require more would be to insist on a degree of exactitude which not only lacks legal necessity, but which does not comport with the requirements of the administrative process. Delegation by Congress has long been recognized as necessary in order that the exertion of legislative power does not become a futility. Currin v. Wallace, 306 U. S. 1, 306 U. S. 15, and cases cited. But the effectiveness of both the legislative and administrative processes would become endangered if Congress were under the constitutional compulsion of filling in the details beyond the liberal prescription here. Then, the burdens of minutiae would be apt to clog the administration of the law and deprive the agency of that flexibility and dispatch which are its salient virtues. For these reasons, we hold that the standards with which Congress has supplied the Commission are chanroblesvirtualawlibrary
Page 310 U. S. 399
plainly valid. United States v. Rock Royal Cooperative, Inc., supra.
As in the case of the term "interurban" electric railway in the Railway Labor Act (Shields v. Utah Idaho Central Railroad Co., 305 U. S. 177), we think the definition of bituminous coal is wholly adequate as a standard for administrative action. The fact that it is not a chemist's or an engineer's definition is not fatal. The definition is not devoid of meaning. We are unable to say that it cannot be applied so as to delineate the areas in which Congress intended to make this system of control effective. The fact that many instances may occur where its application may be difficult is merely to emphasize the nature of the administrative problem, and the reason for the grant of latitude by the Congress. The difficulty or impossibility of drawing a statutory line is one of the reasons for supplying chanroblesvirtualawlibrary
Page 310 U. S. 400
merely a statutory guide. Cf. Piedmont & Northern Ry. Co. v. Interstate Commerce Commission, 286 U. S. 299, 286 U. S. 312. That guide is sufficiently precise for an intelligent determination of the ultimate questions of fact by experts.
Appellant contends that the statutory classification of coal into code and noncode classes, and the application chanroblesvirtualawlibrary
Page 310 U. S. 401
of the 19 1/2% tax to the latter, are improper under the Fifth Amendment. Its objection is not premised on lack of due process. Nor could it be, in view of the elaborate machinery and procedure for the Act's enforcement which the Congress has provided. Rather, appellant's objection is founded on its claim of discrimination. But the Fifth Amendment, unlike the Fourteenth, has no equal protection clause. Steward Machine Co. v. Davis, 301 U. S. 548, 301 U. S. 584, and cases cited. And there is "no requirement of uniformity in connection with the commerce power." Currin v. Wallace, supra, p. 306 U. S. 14. The lack of similarity in treatment of the two classes of coal is an integral and essential feature of this Act. As we have said, it is through that device that Congress sought to obtain an effective sanction for the Act's enforcement. Coercion is the very essence of any penalty exacted for failure of submission. "It is of the essence of the plenary power conferred" by the commerce clause "that Congress may exercise its discretion in the use of the power." Currin v. Wallace, supra, p. 306 U. S. 14. A part of that discretion is the selection of the sanction for the law's enforcement. Discrimination constitutionally may be the price of noncompliance.
These contentions are untenable. In the first place, the Commissioner of Internal Revenue is merely the agency to collect taxes levied under the Act; he is not the chanroblesvirtualawlibrary
Page 310 U. S. 402
administrative agent whom Congress has designated to determine what coal is exempt from the 19 1/2% tax. That function is entrusted to the Commission. By the terms of § 4-A, it is the Commission which determines whether an application for exemption should be granted or denied. By the provisions of § 3(b), it is the Commission which certifies to the Commissioner those who are code members, and consequently exempt from the 19 1/2% tax. Hence, the Commission determines the scope of the provisions of the Act and their applicability to various producers. The Commissioner is given no administrative functions whatsoever except tax collection. In the second place, the underlying issue in each of these two suits is the same. In Sunshine Anthracite Coal Co. v. National Bituminous Coal Commission, supra, the question was whether or not appellant's coal was "bituminous" within the meaning of § 17(b). When that issue was decided adversely to appellant, liability for the 19 1/2% tax followed unless appellant joined the code, in which event it would be entitled to a certificate from the Commission evidencing its tax exemption. In the present suit, appellant is seeking to raise the identical issue, since its purpose is to enjoin collection of the self-same tax.
A judgment is res judicata in a second action upon the same claim between the same parties or those in privity with them. Cromwell v. County of Sac, 94 U. S. 351. There is privity between officers of the same government, so that a judgment chanroblesvirtualawlibrary
Page 310 U. S. 403
in a suit between a party and a representative of the United States is res judicata in relitigation of the same issue between that party and another officer of the government. See Tait v. Western Maryland Ry. Co., 289 U. S. 620. The crucial point is whether or not, in the earlier litigation, the representative of the United States had authority to represent its interests in a final adjudication of the issue in controversy. Cf. Gunter v. Atlantic Coast Line R. Co., 200 U. S. 273, 200 U. S. 284-289. Cases holding that a judgment in a suit against a collector for unlawful exaction is not a bar to a subsequent suit by or against the Commissioner or the United States (Sage v. United States, 250 U. S. 33; Bankers' Pocahontas Coal Co. v. Burnet, 287 U. S. 308) are not in point, since the suit against the collector is "personal, and its incidents, such as the nature of the defenses open and the allowance of interest, are different." Sage v. United States, supra, p. 250 U. S. 37. But here, the authority of the Commission is clear. There can be no question that it was authorized to make the determination of the status of appellant's coal under the Act. It represented the United States in that determination, and the delegation of that power to the Commission was valid, as we have said. That suit therefore bound the United States, as well as the appellant. Where a suit binds the United States, it binds its subordinate officials. Tait v. Western Maryland Ry. Co., supra. The suggestion that the doctrine of res judicata does not apply unless the court rendering the judgment had jurisdiction of the cause is sufficiently answered by Stoll v. Gottlieb, 305 U. S. 165, and Treinies v. Sunshine Mining Co., 308 U. S. 66. As held in those cases, in general, the principles of res judicata apply to questions of jurisdiction, as well as to other matters -- whether it be jurisdiction of the subject matter or of the parties. Accordingly, the lower court correctly held that it had no jurisdiction to determine chanroblesvirtualawlibrary
Page 310 U. S. 404
whether appellant's coal was "bituminous," as defined in the Act. Furthermore where, as here, Congress has created a special administrative procedure for the determination of the status of persons or companies under a regulatory act and has prescribed a procedure which meets all requirements of due process, that remedy is exclusive. See Anniston Manufacturing Co. v. Davis, 301 U. S. 337.