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UNITED STATES v. CHANDLER et al.
No. 72-438.
Decided January 22, 1973
Per Curiam.
This case presents a narrow federal estate tax issue: Does a registered co-owner of a United States Savings Bond, Series E, by physical inter vivos delivery of the bond to the other registered co-owner, with intent to effectuate a gift, but without reissuance of the bond, succeed in divesting himself of the incidents of ownership so that, at his subsequent death, the value of the bond is not includable in his gross estate under the joint interests provisions of § 2040 of the Internal Revenue Code of 1954, 26 U. S. C. § 2040?
The United States District Court for the Northern District of California ruled that the co-owner had accomplished this divestiture, and it rendered judgment in favor of the taxpayer-estate. 312 F. Supp. 1263 (1970). The United States Court of Appeals for the Ninth Circuit affirmed for the reasons set out in the District Court’s opinion. 460 F. 2d 1281 (1972). The Sixth Circuit theretofore had held to the contrary on a fact situation similar to that of the present case. Estate of Curry v. United States, 409 F. 2d 671 (1969). There are other decisions to like effect. Estate of Elliott v. Commissioner, 57 T. C. 152 (1971), reviewed by the court and now pending on appeal to the Fifth Circuit; Chambless v. United States, 70-1 U. S. T. C. ¶ 12,655, 25 A. F. T. R. 2d 70-1512 (SC 1970). The Third Circuit, however, previously had ruled sweepingly along the lines followed by the Ninth Circuit here. Silverman v. McGinnes, 259 F. 2d 731 (1958).
We grant certiorari and reverse.
I
The decedent, Mary E, Baum, purchased several United States Savings Bonds, Series E, in 1954. She had them issued in the familiar co-ownership form. Some were in the names of Mrs. Baum "or” Patricia Ritter, a granddaughter. Others were in the names of Mrs. Baum “or” Beatrice Baum, another granddaughter. In 1961 the decedent delivered these bonds to the respective granddaughters, with the intention of making complete, irrevocable, inter vivos gifts.
Mrs. Baum died in 1962. At her death the bonds were still in the original co-ownership form. They had not been redeemed. Neither had they been reissued, as they might have been under the applicable regulations, in the names of the respective granddaughters as sole owners.
The respondents, who are executors of the decedent’s will, disclosed the bonds in the federal estate tax return filed for the decedent’s estate but did not include them in the gross estate. On audit, the Internal Revenue Service ruled that the bonds were includable. A resulting deficiency in estate tax was assessed and was paid by the respondents. The present suit for refund of the tax attributable to the inclusion of the bonds was instituted in due course.
II
Section 2040 is the governing statute. At the time of the decedent’s death the section provided that there shall be included in a decedent’s gross estate, with exceptions not here pertinent, “the value of all property . . . to the extent of the interest therein held as joint tenants by the decedent and any other person ... in their joint names and payable to either or the survivor . . . .”
Title 31 U. S. C. § 757c (a) authorizes the Secretary of the Treasury to issue United States Savings Bonds “in such manner and subject to such terms and conditions consistent with subsections (b)-(d) of this section, and including any restrictions on their transfer, as the Secretary of the Treasury may from time to time prescribe” (emphasis supplied).
Pursuant to this authorization, the Secretary issued Regulations on United States Savings Bonds. The first were those that appeared in Department Circular 571, dated December 16, 1936, 1 Fed. Reg. 2165. They have been revised from time to time. The eighth revision was in effect in 1961 when Mrs. Baum delivered the bonds in question to her respective granddaughters.
Section 315.5 of the Regulations, 31 CFR (1959 revision), provided that the “form of registration used must express the actual ownership of and interest in the bond and . . . will be considered as conclusive of such ownership and interest.” Section 315.7 authorized registration in the names of two persons in the alternative as co-owners, and stated, “No other form of registration establishing co-ownership is authorized.”
Section 315.15 imposed a limitation on transfer: “Savings Bonds are not transferable . . . except as specifically-provided in the regulations . . . .” Section 315.20 (a) stated, “No judicial determination will be recognized which would give effect to an attempted voluntary transfer inter vivos of a bond . . . .” Section 315.60 provided that a savings bond registered in co-ownership form will be paid, during the lives of both co-owners, “to either upon his separate request,” in which case the other “shall cease to have any interest in the bond,” or will be reissued, during the lives of both co-owners, upon the request of both, in the “name of either, alone or with a new co-owner or beneficiary,” if, in the case of reissuance, the co-owners possessed one of a number of specifically enumerated relationships, including “grandparent and grandchild.”
Section 351.61 related to payment or reissue after the death of a co-owner. The survivor is recognized “as the sole and absolute owner,” and payment or reissue is “made as though the bond were registered in the name of the survivor alone,” except that the request must be supported by proof of death of the other co-owner.
The regulations thus made the jointly issued bond nontransferable in itself and permitted a change in ownership, so long as both co-owners were alive, only through reissuance at the request of both co-owners.
III
Mary E. Baum, the decedent here, whatever the reason may have been, chose not to have the bonds in question reissued in the names of her granddaughters, as she might have done pursuant to the applicable regulations. Instead, she merely delivered the bonds to the granddaughters with donative intent. Our issue is whether that delivery, accompanied by that donative intent, was sufficient to remove the bonds from the decedent’s gross estate. We conclude that it was not.
We have no reason to rule against the integrity and effect of the regulations. The issuance of the bonds by the Secretary, subject to such “restrictions on their transfer” as the Secretary may prescribe, was clearly authorized by the Congress in 31 U. S. C. § 757c (a). And the restrictions on their transfer were just as clearly spelled out by the Secretary in his regulations. No claim is made — and none could be made — that the regulations are unclear or are inapplicable to Mrs. Baum’s purported transfers. Nor can we view the regulations as an undue or improper restriction of the transfer rights the decedent would otherwise have. The bonds were issued subject to transfer restrictions, and those restrictions, in the eyes of the law at least, were known to her. She could have had the bonds issued originally in the sole names of the grandchildren, but she chose the co-ownership form and, as her later attempts at transfer reveal, she chose to retain possession of them. Having done so, she was obligated to play the game according to the rules.
The decisions below also overlook the facts that until her death, the decedent retained the right to redeem each of the bonds in question, the right to succeed to the proceeds if she survived the putative donee, and the right to join or to veto any attempt to have the bonds reissued. 31 CFR §§ 315.60 and 315.61 (1959 revision).
We note, in passing, that any other rule could well lead to chaotic conditions with respect to savings bonds and to great potential for abuse. Millions of these bonds are outstanding. The requirements of Government for uniformity and for proper recordkeeping alone demand and justify something less than absolute freedom of transfer. Considerations of safety and an aspect of permanency of investment are additional factors that demand the same result.
Our conclusion, we feel, is required by the holding in Free v. Bland, 369 U. S. 663 (1962). There the Court held that, absent fraud, the regulations creating a right of survivorship in United States Savings Bonds issued in co-ownership form overrode or pre-empted any inconsistent state property law. We stressed there, as we do here, that a contrary result would fail “to give effect to a term or condition under which a federal bond is issued.” Id., at 669. We see nothing in the earlier case of Bank of America Trust & Savings Assn. v. Parnell, 352 U. S. 29 (1956), that implies anything to the contrary. That case was also distinguished in Free v. Bland, 369 U. S., at 669.
Reversed.
It is stipulated that these deliveries were not made in contemplation of death. Section 2035 of the 1954 Code, 26 U. S. C. § 2035, relating to transfers in contemplation of death, therefore has no application.
This is § 22 (a) of the Second Liberty Bond Act, 40 Stat. 288, as added by § 6 of the Act of Feb. 4, 1935, 49 Stat. 21, and as amended by § 3 of the Public Debt Act of 1941, 55 Stat. 7.
The District Court, and the Court of Appeals in adopting the District Court’s opinion, stated that either co-owner could have had the bonds “reissued without even the signature of the other.” 312 F. Supp. 1263, 1268. This ignores the positive requirement of § 315.60 that reissue is to be “upon the request of both.”
The Government in its petition, p. 8, asserts that approximately 600 million Series E Bonds are outstanding, that these are worth over 50 billion dollars, and that 75% of them are registered in co-ownership-form. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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UNITED STATES, Petitioner
v.
Gary WOODS.
No. 12-562.
Supreme Court of the United States
Argued Oct. 9, 2013.
Decided Dec. 3, 2013.
Syllabus*
Respondent Gary Woods and his employer, Billy Joe McCombs, participated in an offsetting-option tax shelter designed to generate large paper losses that they could use to reduce their taxable income. To that end, they purchased from Deutsche Bank a series of currency-option spreads. Each spread was a package consisting of a long option, which Woods and McCombs purchased from Deutsche Bank and for which they paid a premium, and a short option, which Woods and McCombs sold to Deutsche Bank and for which they received a premium. Because the premium paid for the long option was largely offset by the premium received for the short option, the net cost of the package to Woods and McCombs was substantially less than the cost of the long option alone. Woods and McCombs contributed the spreads, along with cash, to two partnerships, which used the cash to purchase stock and currency. When calculating their basis in the partnership interests, Woods and McCombs considered only the long component of the spreads and disregarded the nearly offsetting short component. As a result, when the partnerships' assets were disposed of for modest gains, Woods and McCombs claimed huge losses. Although they had contributed roughly $3.2 million in cash and spreads to the partnerships, they claimed losses of more than $45 million.
The Internal Revenue Service sent each partnership a Notice of Final Partnership Administrative Adjustment, disregarding the partnerships for tax purposes and disallowing the related losses. It concluded that the partnerships were formed for the purpose of tax avoidance and thus lacked "economic substance," i.e., they were shams. As there were no valid partnerships for tax purposes, the IRS determined that the partners could not claim a basis for their partnership interests greater than zero and that any resulting tax underpayments would be subject to a 40-percent penalty for gross valuation misstatements. Woods sought judicial review. The District Court held that the partnerships were properly disregarded as shams but that the valuation-misstatement penalty did not apply. The Fifth Circuit affirmed.
Held :
1. The District Court had jurisdiction to determine whether the partnerships' lack of economic substance could justify imposing a valuation-misstatement penalty on the partners. Pp. 562 - 565.
(a) Because a partnership does not pay federal income taxes, its taxable income and losses pass through to the partners. Under the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), the IRS initiates partnership-related tax proceedings at the partnership level to adjust "partnership items," i.e., items relevant to the partnership as a whole. 26 U.S.C. §§ 6221, 6231(a)(3). Once the adjustments become final, the IRS may undertake further proceedings at the partner level to make any resulting "computational adjustments" in the tax liability of the individual partners. §§ 6230(a)(1)-(2), (c), 6231(a)(6). Pp. 562 - 563.
(b) Under TEFRA's framework, a court in a partnership-level proceeding has jurisdiction to determine "the applicability of any penalty... which relates to an adjustment to a partnership item." § 6226(f). A determination that a partnership lacks economic substance is such an adjustment. TEFRA authorizes courts in partnership-level proceedings to provisionally determine the applicability of any penalty that could result from an adjustment to a partnership item, even though imposing the penalty requires a subsequent, partner-level proceeding. In that later proceeding, each partner may raise any reasons why the penalty may not be imposed on him specifically. Applying those principles here, the District Court had jurisdiction to determine the applicability of the valuation-misstatement penalty. Pp. 563 - 565.
2. The valuation-misstatement penalty applies in this case. Pp. 565 - 568.
(a) A penalty applies to the portion of any underpayment that is "attributable to" a "substantial" or "gross" "valuation misstatement," which exists where "the value of any property (or the adjusted basis of any property) claimed on any return of tax" exceeds by a specified percentage "the amount determined to be the correct amount of such valuation or adjusted basis (as the case may be)." §§ 6662(a), (b)(3), (e)(1)(A), (h). The penalty's plain language makes it applicable here. Once the partnerships were deemed not to exist for tax purposes, no partner could legitimately claim a basis in his partnership interest greater than zero. Any underpayment resulting from use of a non-zero basis would therefore be "attributable to" the partner's having claimed an "adjusted basis" in the partnerships that exceeded "the correct amount of such... adjusted basis." § 6662(e)(1)(A). And under the relevant Treasury Regulation, when an asset's adjusted basis is zero, a valuation misstatement is automatically deemed gross. Pp. 565 - 566.
(b) Woods' contrary arguments are unpersuasive. The valuation-misstatement penalty encompasses misstatements that rest on legal as well as factual errors, so it is applicable to misstatements that rest on the use of a sham partnership. And the partnerships' lack of economic substance is not an independent ground separate from the misstatement of basis in this case. Pp. 565 - 568.
471 Fed.Appx. 320, reversed.
SCALIA, J., delivered the opinion for a unanimous Court.
Malcolm L. Stewart, Washington, DC, for Petitioner.
Gregory G. Garre, Washington, DC, for Respondent.
Joel N. Crouch, Meadows, Collier, Reed, Cousins, Crouch & Ungerman LLP, Dallas, TX, Gregory G. Garre, Counsel of Record, Brian D. Schmalzbach, Katya S. Cronin, Latham & Watkins LLP, Washington, DC, for Respondent.
Donald B. Verrilli, Jr., Solicitor General, Kathryn Keneally, Assistant Attorney General, Malcolm L. Stewart, Deputy Solicitor General, John F. Bash, Assistant to the Solicitor General, Gilbert S. Rothenberg, Richard Farber, Arthur T. Catterall, Attorneys, Department of Justice, Washington, DC, for Petitioner.
Justice SCALIA delivered the opinion of the Court.
We decide whether the penalty for tax underpayments attributable to valuation misstatements, 26 U.S.C. § 6662(b)(3), is applicable to an underpayment resulting from a basis-inflating transaction subsequently disregarded for lack of economic substance.
I. The Facts
A
This case involves an offsetting-option tax shelter, variants of which were marketed to high-income taxpayers in the late 1990's. Tax shelters of this type sought to generate large paper losses that a taxpayer could use to reduce taxable income. They did so by attempting to give the taxpayer an artificially high basis in a partnership interest, which enabled the taxpayer to claim a significant tax loss upon disposition of the interest. See IRS Notice 2000-44, 2000-2 Cum. Bull. 255 (describing offsetting-option tax shelters).
The particular tax shelter at issue in this case was developed by the now-defunct law firm Jenkens & Gilchrist and marketed by the accounting firm Ernst & Young under the name "Current Options Bring Reward Alternatives," or COBRA. Respondent Gary Woods and his employer, Billy Joe McCombs, agreed to participate in COBRA to reduce their tax liability for 1999. To that end, in November 1999 they created two general partnerships: one, Tesoro Drive Partners, to produce ordinary losses, and the other, SA Tesoro Investment Partners, to produce capital losses.
Over the next two months, acting through their respective wholly owned, limited liability companies, Woods and McCombs executed a series of transactions. First, they purchased from Deutsche Bank five 30-day currency-option spreads. Each of these option spreads was a package consisting of a so-called long option, which entitled Woods and McCombs to receive a sum of money from Deutsche Bank if a certain currency exchange rate exceeded a certain figure on a certain date, and a so-called short option, which entitled Deutsche Bank to receive a sum of money from Woods and McCombs if the exchange rate for the same currency on the same date exceeded a certain figure so close to the figure triggering the long option that both were likely to be triggered (or not to be triggered) on the fated date. Because the premium paid to Deutsche Bank for purchase of the long option was largely offset by the premium received from Deutsche Bank for sale of the short option, the net cost of the package to Woods and McCombs was substantially less than the cost of the long option alone. Specifically, the premiums paid for all five of the spreads' long options totaled $46 million, and the premiums received for the five spreads' short options totaled $43.7 million, so the net cost of the spreads was just $2.3 million. Woods and McCombs contributed the spreads to the partnerships along with about $900,000 in cash. The partnerships used the cash to purchase assets-Canadian dollars for the partnership that sought to produce ordinary losses, and Sun Microsystems stock for the partnership that sought to produce capital losses. The partnerships then terminated the five option spreads in exchange for a lump-sum payment from Deutsche Bank.
As the tax year drew to a close, Woods and McCombs transferred their interests in the partnerships to two S corporations. One corporation, Tesoro Drive Investors, Inc., received both partners' interests in Tesoro Drive Partners; the other corporation, SA Tesoro Drive Investors, Inc., received both partners' interests in SA Tesoro Investment Partners. Since this left each partnership with only a single partner (the relevant S corporation), the partnerships were liquidated by operation of law, and their assets-the Canadian dollars and Sun Microsystems stock, plus the remaining cash-were deemed distributed to the corporations. The corporations then sold those assets for modest gains of about $2,000 on the Canadian dollars and about $57,000 on the stock. But instead of gains, the corporations reported huge losses: an ordinary loss of more than $13 million on the sale of the Canadian dollars and a capital loss of more than $32 million on the sale of the stock. The losses were allocated between Woods and McCombs as the corporations' co-owners.
The reason the corporations were able to claim such vast losses-the alchemy at the heart of an offsetting-options tax shelter-lay in how Woods and McCombs calculated the tax basis of their interests in the partnerships. Tax basis is the amount used as the cost of an asset when computing how much its owner gained or lost for tax purposes when disposing of it. See J. Downes & J. Goodman, Dictionary of Finance and Investment Terms 736 (2010). A partner's tax basis in a partnership interest-called "outside basis" to distinguish it from "inside basis," the partnership's basis in its own assets-is tied to the value of any assets the partner contributed to acquire the interest. See 26 U.S.C. § 722. Collectively, Woods and McCombs contributed roughly $3.2 million in option spreads and cash to acquire their interests in the two partnerships. But for purposes of computing outside basis, Woods and McCombs considered only the long component of the spreads and disregarded the nearly offsetting short component on the theory that it was "too contingent" to count. Brief for Respondent 14. As a result, they claimed a total adjusted outside basis of more than $48 million. Since the basis of property distributed to a partner by a liquidating partnership is equal to the adjusted basis of the partner's interest in the partnership (reduced by any cash distributed with the property), see § 732(b), the inflated outside basis figure was carried over to the S corporations' basis in the Canadian dollars and the stock, enabling the corporations to report enormous losses when those assets were sold. At the end of the day, Woods' and McCombs' $3.2 million investment generated tax losses that, if treated as valid, could have shielded more than $45 million of income from taxation.
B
The Internal Revenue Service, however, did not treat the COBRA-generated losses as valid. Instead, after auditing the partnerships' tax returns, it issued to each partnership a Notice of Final Partnership Administrative Adjustment, or "FPAA." In the FPAAs, the IRS determined that the partnerships had been "formed and availed of solely for purposes of tax avoidance by artificially overstating basis in the partnership interests of [the] purported partners." App. 92, 146. Because the partnerships had "no business purpose other than tax avoidance," the IRS said, they "lacked economic substance"-or, put more starkly, they were "sham[s]"-so the IRS would disregard them for tax purposes and disallow the related losses. Ibid. And because there were no valid partnerships for tax purposes, the IRS determined that the partners had "not established adjusted bases in their respective partnership interests in an amount greater than zero," id., at 95, ¶ 7, 149, ¶ 7 so that any resulting tax underpayments would be subject to a 40-percent penalty for gross valuation misstatements, see 26 U.S.C. § 6662(b)(3).
Woods, as the tax-matters partner for both partnerships, sought judicial review of the FPAAs pursuant to § 6226(a). The District Court held that the partnerships were properly disregarded as shams but that the valuation-misstatement penalty did not apply. The Government appealed the decision on the penalty to the Court of Appeals for the Fifth Circuit. While the appeal was pending, the Fifth Circuit held in a similar case that, under Circuit precedent, the valuation-misstatement penalty does not apply when the relevant transaction is disregarded for lacking economic substance. Bemont Invs., LLC v. United States, 679 F.3d 339, 347-348 (2012). In a concurrence joined by the other members of the panel, Judge Prado acknowledged that this rule was binding Circuit law but suggested that it was mistaken. See id., at 351-355. A different panel subsequently affirmed the District Court's decision in this case in a one-paragraph opinion, declaring the issue "well settled." 471 Fed.Appx. 320 ( per curiam ), reh'g denied (2012).1
We granted certiorari to resolve a Circuit split over whether the valuation-misstatement penalty is applicable in these circumstances. 569 U.S. ----, 133 S.Ct. 1632, --- L.Ed.2d ---- (2013). See Bemont, supra, at 354-355 (Prado, J., concurring) (recognizing "near-unanimous opposition" to the Fifth Circuit's rule). Because two Courts of Appeals have held that District Courts lacked jurisdiction to consider the valuation-misstatement penalty in similar circumstances, see Jade Trading, LLC v. United States, 598 F.3d 1372, 1380 (C.A.Fed.2010); Petaluma FX Partners, LLC v. Commissioner, 591 F.3d 649, 655-656 (C.A.D.C.2010), we ordered briefing on that question as well.
II. District-Court Jurisdiction
A
We begin with a brief explanation of the statutory scheme for dealing with partnership-related tax matters. A partnership does not pay federal income taxes; instead, its taxable income and losses pass through to the partners. 26 U.S.C. § 701. A partnership must report its tax items on an information return, § 6031(a), and the partners must report their distributive shares of the partnership's tax items on their own individual returns, §§ 702, 704.
Before 1982, the IRS had no way of correcting errors on a partnership's return in a single, unified proceeding. Instead, tax matters pertaining to all the members of a partnership were dealt with just like tax matters pertaining only to a single taxpayer: through deficiency proceedings at the individual-taxpayer level. See generally §§ 6211-6216 (2006 ed. and Supp. V). Deficiency proceedings require the IRS to issue a separate notice of deficiency to each taxpayer, § 6212(a) (2006 ed.), who can file a petition in the Tax Court disputing the alleged deficiency before paying it, § 6213(a). Having to use deficiency proceedings for partnership-related tax matters led to duplicative proceedings and the potential for inconsistent treatment of partners in the same partnership. Congress addressed those difficulties by enacting the Tax Treatment of Partnership Items Act of 1982, as Title IV of the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA). 96 Stat. 648 (codified as amended at 26 U.S.C. §§ 6221-6232 (2006 ed. and Supp. V)).
Under TEFRA, partnership-related tax matters are addressed in two stages. First, the IRS must initiate proceedings at the partnership level to adjust "partnership items," those relevant to the partnership as a whole. §§ 6221, 6231(a)(3). It must issue an FPAA notifying the partners of any adjustments to partnership items, § 6223(a)(2), and the partners may seek judicial review of those adjustments, § 6226(a)-(b). Once the adjustments to partnership items have become final, the IRS may undertake further proceedings at the partner level to make any resulting "computational adjustments" in the tax liability of the individual partners. § 6231(a)(6). Most computational adjustments may be directly assessed against the partners, bypassing deficiency proceedings and permitting the partners to challenge the assessments only in post-payment refund actions. § 6230(a)(1), (c). Deficiency proceedings are still required, however, for certain computational adjustments that are attributable to "affected items," that is, items that are affected by (but are not themselves) partnership items. §§ 6230(a)(2)(A)(i), 6231(a)(5).
B
Under the TEFRA framework, a court in a partnership-level proceeding like this one has jurisdiction to determine not just partnership items, but also "the applicability of any penalty... which relates to an adjustment to a partnership item." § 6226(f). As both sides agree, a determination that a partnership lacks economic substance is an adjustment to a partnership item. Thus, the jurisdictional question here boils down to whether the valuation-misstatement penalty "relates to" the determination that the partnerships Woods and McCombs created were shams.
The Government's theory of why the penalty was triggered is based on a straightforward relationship between the economic-substance determination and the penalty. In the Government's view, there can be no outside basis in a sham partnership (which, for tax purposes, does not exist), so any partner who underpaid his individual taxes by declaring an outside basis greater than zero committed a valuation misstatement. In other words, the penalty flows logically and inevitably from the economic-substance determination.
Woods, however, argues that because outside basis is not a partnership item, but an affected item, a penalty that would rest on a misstatement of outside basis cannot be considered at the partnership level. He maintains, in short, that a penalty does not relate to a partnership-item adjustment if it "requires a partner-level determination," regardless of "whether or not the penalty has a connection to a partnership item." Brief for Respondent 27.
Because § 6226(f)'s "relates to" language is "essentially indeterminate," we must resolve this dispute by looking to "the structure of [TEFRA] and its other provisions." Maracich v. Spears, 570 U.S. ----, ----, 133 S.Ct. 2191, 2200, 186 L.Ed.2d 275 (2013) (internal quotation marks and brackets omitted). That inquiry makes clear that the District Court's jurisdiction is not as narrow as Woods contends. Prohibiting courts in partnership-level proceedings from considering the applicability of penalties that require partner-level inquiries would be inconsistent with the nature of the "applicability" determination that TEFRA requires.
Under TEFRA's two-stage structure, penalties for tax underpayment must be imposed at the partner level, because partnerships themselves pay no taxes. And imposing a penalty always requires some determinations that can be made only at the partner level. Even where a partnership's return contains significant errors, a partner may not have carried over those errors to his own return; or if he did, the errors may not have caused him to underpay his taxes by a large enough amount to trigger the penalty; or if they did, the partner may nonetheless have acted in good faith with reasonable cause, which is a bar to the imposition of many penalties, see § 6664(c)(1). None of those issues can be conclusively determined at the partnership level. Yet notwithstanding that every penalty must be imposed in partner-level proceedings after partner-level determinations, TEFRA provides that the applicability of some penalties must be determined at the partnership level. The applicability determination is therefore inherently provisional; it is always contingent upon determinations that the court in a partnership-level proceeding does not have jurisdiction to make. Barring partnership-level courts from considering the applicability of penalties that cannot be imposed without partner-level inquiries would render TEFRA's authorization to consider some penalties at the partnership level meaningless.
Other provisions of TEFRA confirm that conclusion. One requires the IRS to use deficiency proceedings for computational adjustments that rest on "affected items which require partner level determinations (other than penalties... that relate to adjustments to partnership items)." § 6230(a)(2)(A)(i). Another states that while a partnership-level determination "concerning the applicability of any penalty... which relates to an adjustment to a partnership item" is "conclusive" in a subsequent refund action, that does not prevent the partner from "assert[ing] any partner level defenses that may apply." § 6230(c)(4). Both these provisions assume that a penalty can relate to a partnership-item adjustment even if the penalty cannot be imposed without additional, partner-level determinations.
These considerations lead us to reject Woods' interpretation of § 6226(f). We hold that TEFRA gives courts in partnership-level proceedings jurisdiction to determine the applicability of any penalty that could result from an adjustment to a partnership item, even if imposing the penalty would also require determining affected or non-partnership items such as outside basis. The partnership-level applicability determination, we stress, is provisional: the court may decide only whether adjustments properly made at the partnership level have the potential to trigger the penalty. Each partner remains free to raise, in subsequent, partner-level proceedings, any reasons why the penalty may not be imposed on him specifically.
Applying the foregoing principles to this case, we conclude that the District Court had jurisdiction to determine the applicability of the valuation-misstatement penalty-to determine, that is, whether the partnerships' lack of economic substance (which all agree was properly decided at the partnership level) could justify imposing a valuation-misstatement penalty on the partners. When making that determination, the District Court was obliged to consider Woods' arguments that the economic-substance determination was categorically incapable of triggering the penalty. Deferring consideration of those arguments until partner-level proceedings would replicate the precise evil that TEFRA sets out to remedy: duplicative proceedings, potentially leading to inconsistent results, on a question that applies equally to all of the partners.
To be sure, the District Court could not make a formal adjustment of any partner's outside basis in this partnership-level proceeding. See Petaluma, 591 F.3d, at 655. But it nonetheless could determine whether the adjustments it did make, including the economic-substance determination, had the potential to trigger a penalty; and in doing so, it was not required to shut its eyes to the legal impossibility of any partner's possessing an outside basis greater than zero in a partnership that, for tax purposes, did not exist. Each partner's outside basis still must be adjusted at the partner level before the penalty can be imposed, but that poses no obstacle to a partnership-level court's provisional consideration of whether the economic-substance determination is legally capable of triggering the penalty.2
III. Applicability of Valuation-Misstatement Penalty
A
Taxpayers who underpay their taxes due to a "valuation misstatement" may incur an accuracy-related penalty. A 20-percent penalty applies to "the portion of any underpayment which is attributable to... [a]ny substantial valuation misstatement under chapter 1." 26 U.S.C. § 6662(a), (b)(3). Under the version of the penalty statute in effect when the transactions at issue here occurred,
"there is a substantial valuation misstatement under chapter 1 if... the value of any property (or the adjusted basis of any property) claimed on any return of tax imposed by chapter 1 is 200 percent or more of the amount determined to be the correct amount of such valuation or adjusted basis (as the case may be)." § 6662(e)(1)(A) (2000 ed.).
If the reported value or adjusted basis exceeds the correct amount by at least 400 percent, the valuation misstatement is considered not merely substantial, but "gross," and the penalty increases to 40 percent. § 6662(h).3
The penalty's plain language makes it applicable here. As we have explained, the COBRA transactions were designed to generate losses by enabling the partners to claim a high outside basis in the partnerships. But once the partnerships were deemed not to exist for tax purposes, no partner could legitimately claim an outside basis greater than zero. Accordingly, if a partner used an outside basis figure greater than zero to claim losses on his tax return, and if deducting those losses caused the partner to underpay his taxes, then the resulting underpayment would be "attributable to" the partner's having claimed an "adjusted basis" in the partnerships that exceeded "the correct amount of such... adjusted basis." § 6662(e)(1)(A).
An IRS regulation provides that when an asset's true value or adjusted basis is zero, "[t]he value or adjusted basis claimed... is considered to be 400 percent or more of the correct amount," so that the resulting valuation misstatement is automatically deemed gross and subject to the 40-percent penalty. Treas. Reg. § 1.6662-5(g), 26 CFR § 1.6662-5(g) (2013). 4
B
Against this straightforward application of the statute, Woods' primary argument is that the economic-substance determination did not result in a "valuation misstatement." He asserts that the statutory terms "value" and "valuation" connote "a factual-rather than legal-concept," and that the penalty therefore applies only to factual misrepresentations about an asset's worth or cost, not to misrepresentations that rest on legal errors (like the use of a sham partnership). Brief for Respondent 35.
We are not convinced. To begin, we doubt that "value" is limited to factual issues and excludes threshold legal determinations. Cf. Powers v. Commissioner, 312 U.S. 259, 260, 61 S.Ct. 509, 85 L.Ed. 817 (1941) ("[W]hat criterion should be employed for determining the 'value' of the gifts is a question of law"); Chapman Glen Ltd. v. Commissioner, 140 T.C. No. 15, 2013 WL 2319282, at *17 (2013) ("[T]hree approaches are used to determine the fair market value of property," and "which approach to apply in a case is a question of law"). But even if "value" were limited to factual matters, the statute refers to "value" or "adjusted basis," and there is no justification for extending that limitation to the latter term, which plainly incorporates legal inquiries. An asset's "basis" is simply its cost, 26 U.S.C. § 1012(a) (2006 ed., Supp. V), but calculating its "adjusted basis" requires the application of a host of legal rules, see §§ 1011(a) (2006 ed.), 1016 (2006 ed. and Supp. V), including specialized rules for calculating the adjusted basis of a partner's interest in a partnership, see § 705 (2006 ed.). The statute contains no indication that the misapplication of one of those legal rules cannot trigger the penalty. Were we to hold otherwise, we would read the word "adjusted" out of the statute.
To overcome the plain meaning of "adjusted basis," Woods asks us to interpret the parentheses in the statutory phrase "the value of any property (or the adjusted basis of any property)" as a signal that "adjusted basis" is merely explanatory or illustrative and has no meaning independent of "value." The parentheses cannot bear that much weight, given the compelling textual evidence to the contrary. For one thing, the terms reappear later in the same sentence sans parentheses-in the phrase "such valuation or adjusted basis." Moreover, the operative terms are connected by the conjunction "or." While that can sometimes introduce an appositive-a word or phrase that is synonymous with what precedes it ("Vienna or Wien," "Batman or the Caped Crusader")-its ordinary use is almost always disjunctive, that is, the words it connects are to "be given separate meanings." Reiter v. Sonotone Corp., 442 U.S. 330, 339, 99 S.Ct. 2326, 60 L.Ed.2d 931 (1979). And, of course, there is no way that "adjusted basis" could be regarded as synonymous with "value." Finally, the terms' second disjunctive appearance is followed by "as the case may be," which eliminates any lingering doubt that the preceding items are alternatives. See New Oxford American Dictionary 269 (3d ed. 2010). The parentheses thus do not justify "rob[bing] the term ['adjusted basis'] of its independent and ordinary significance." Reiter, supra, at 338-339, 99 S.Ct. 2326.
Our holding that the valuation-misstatement penalty encompasses legal as well as factual misstatements of adjusted basis does not make superfluous the new penalty that Congress enacted in 2010 for transactions lacking in economic substance, see § 1409(b)(2), 124 Stat. 1068-1069 (codified at 26 U.S.C. § 6662(b)(6) (2006 ed., Supp. V)). The new penalty covers all sham transactions, including those that do not cause the taxpayer to misrepresent value or basis; thus, it can apply in situations where the valuation-misstatement penalty cannot. And the fact that both penalties are potentially applicable to sham transactions resulting in valuation misstatements is not problematic. Congress recognized that penalties might overlap in a given case, and it addressed that possibility by providing that a taxpayer generally cannot receive more than one accuracy-related penalty for the same underpayment. See § 6662(b) (2006 ed. and Supp. V).5
C
In the alternative, Woods argues that any underpayment of tax in this case would be | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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68
] | sc_adminaction |
VILLAGE OF SCHAUMBURG v. CITIZENS FOR A BETTER ENVIRONMENT et al.
No. 78-1335.
Argued October 30, 1979
Decided February 20, 1980
White, J., delivered the opinion of the Court, in which Burger, C. J., and BreNnan, Stewart, Marshall, BlacKMUN, Powell, and SteveNS, JJ., joined. RehNquist, J., filed a dissenting opinion, post, p. 639.
Jack M. Siegel argued the cause and filed briefs for petitioner.
Milton I. Shadur argued the cause for respondents. With him on the brief were Geraldine Soat Brown and David Goldberger.
Adam Yarmolinsky argued the cause and filed a brief for the Coalition of National Voluntary Organizations et al. as amici curiae urging affirmance.
Briefs of amici curiae urging affirmance were filed by J. Albert Woll and Laurence Gold for the American Federation of Labor and Congress of Industrial Organizations; by Barry A, Fisher for the Holy Spirit Association for the Unification of World Christianity; by Arnold H. Gold for the Los Angeles Council of National Voluntary Health Agencies; by Alan B. Morrison for the National Committee for Responsive Philanthropy et al.; and by Sanford Jay Rosen for the National Council of Churches of Christ in the U. S. A. et al.
Me. Justice White
delivered the opinion of the Court.
The issue in this case is the validity under the First and Fourteenth Amendments of a municipal ordinance prohibiting the solicitation of contributions by charitable organizations that do not use at least 75 percent of their receipts for “charitable purposes,” those purposes being defined to exclude solicitation expenses, salaries, overhead, and other administrative expenses. The Court of Appeals held the ordinance unconstitutional. We affirm that judgment.
I
The Village of Schaumburg (Village) is a suburban community located 25 miles northwest of Chicago, Ill. On March 12, 1974, the Village adopted “An Ordinance Regulating Soliciting by Charitable Organizations,” codified as Art. Ill of Chapter 22 of the Schaumburg Village Code (Code), which regulates the activities of “peddlers and solicitors,” Code §22-1 et seq. (1975). Article III provides that “[e]very charitable organization, which solicits or intends to solicit contributions from persons in the village by door-to-door solicitation or the use of public streets and public ways, shall prior to such solicitation apply for.a permit.” § 22-20. Solicitation of contributions for charitable organizations without a permit is prohibited and is punishable by a fine of up to $500 for each offense. Schaumburg Ordinance No. 1052, §§ 1, 8 (1974).
Section 22-20 (g), which is the focus of the constitutional challenge involved in this case, requires that permit applications, among other things, contain “[satisfactory proof that at least seventy-five per cent of the proceeds of such solicitations will be used directly for the charitable purpose of the organization.” In determining whether an organization satisfies the 75-percent requirement, the ordinance provides that
“the following items shall not be deemed to be used for the charitable purposes of the organization, to wit:
“(1) Salaries or commissions paid to solicitors;
“(2) Administrative expenses of the organization, including, but not limited to, salaries, attorneys’ fees, rents, telephone, advertising expenses, contributions to other organizations and persons, except as a charitable contribution and related expenses incurred as administrative or overhead items.” § 22-20 (g).
Respondent Citizens for a Better Environment (CBE) is an Illinois not-for-profit corporation organized for the purpose of promoting “the protection of the environment.” CBE is registered with the Illinois Attorney General’s Charitable Trust Division pursuant to Illinois law, and has been afforded tax-exempt status by the United States Internal Revenue Service, and gifts to it are deductible for federal income tax purposes. CBE requested permission to solicit contributions in the Village, but the Village denied CBE a permit because CBE could not demonstrate that 75 percent of its receipts would be used for “charitable purposes” as required by § 22-20 (g) of the Code. CBE then sued the Village in the United States District Court for the Northern District of Illinois, charging that the 75-percent requirement of § 22-20 (g) violated the First and Fourteenth Amendments. Declaratory and injunctive relief was sought.
In its amended complaint, CBE alleged that “[i]t was organized for the purpose, among others, of protecting, maintaining, and enhancing the quality of the Illinois environment.” The complaint also alleged:
“That incident to its purpose, CBE employs 'canvassers’ who are engaged in door-to-door activity in the Chicago metropolitan area, endeavoring to distribute literature on environmental topics and answer questions of an environmental nature when posed; solicit contributions to financially support the organization and its programs; receive grievances and complaints of an environmental nature regarding which CBE may afford assistance in the evaluation and redress of these grievances and complaints.”
The Village’s answer to the complaint averred that the foregoing allegations, even if true, would not be material to the issues of the case, acknowledged that CBE employed “canvassers” to solicit funds, but alleged that “CBE is primarily devoted to raising funds for the benefit and salary of its employees and that its charitable purposes are negligible as compared with the primary objective of raising funds.” The Village also alleged “that more than 60% of the funds collected [by CBE] have been spent for benefits of employees and not for any charitable purposes.”
CBE moved for summary judgment and filed affidavits describing its purposes and the activities of its “canvassers” as outlined in the complaint. One of the affidavits also alleged that “the door-to-door canvass is the single most important source of funds” for CBE. A second affidavit offered by CBE stated that in 1975 the organization spent 23.3% of its income on fundraising and 21.5% of its income on administration, and that in 1976 these figures were 23.3% and 16.5%, respectively. The Village opposed the motion but filed no counteraffidavits taking issue with the factual representations in CBE’s affidavits.
The District Court awarded summary judgment to CBE. The court recognized that although “the government may regulate solicitation in order to protect the community from fraud,... [a]ny action impinging upon the freedom of expression and discussion... must be minimal, and intimately related to an articulated, substantial government interest.” The court concluded that the 75-percent requirement of § 22-20 (g) of the Code on its face was “a form of censorship” prohibited by the First and Fourteenth Amendments. Section 22-20 (g) was declared void on its face, its enforcement was enjoined, and the Village was ordered to issue a charitable solicitation permit to CBE.
The Court of Appeals for the Seventh Circuit affirmed. 590 F. 2d 220 (1978). The court rejected the Village’s argument that summary judgment was inappropriate because material issues of fact were disputed. Because CBE challenged the facial validity of the village ordinance on First Amendment grounds, the court held that “any issue of fact as to the nature of CBE’s particular activities is not material... and is therefore not an obstacle to the granting of summary judgment.” Id., at 223. Like the District Court, the Court of Appeals recognized that the Village had a legitimate interest in regulating solicitation to protect its residents from fraud and the disruption of privacy, but that such regulation “must be done 'with narrow specificity’ ” when First Amendment interests are affected. Id., at 223-224. The court concluded that even if the 75-percent requirement might be valid as applied to other types of charitable solicitation, the Village’s requirement was unreasonable on its face because it barred solicitation by advocacy-oriented organizations even “where it is made clear that the contributions will be used for reasonable salaries of those who will gather and disseminate information relevant to the organization’s purpose.” Id., at 226. The court distinguished National Foundation v. Fort Worth, 415 F. 2d 41 (CA5 1969), cert. denied, 396 U. S. 1040 (1970), which upheld an ordinance authorizing denial of charitable solicitation permits to organizations with excessive solicitation costs, on the ground that although the Fort Worth ordinance deemed unreasonable solicitation costs in excess of 20 percent of gross receipts, it nevertheless permitted organizations that demonstrated the reasonableness of such costs to obtain solicitation permits.
We granted certiorari, 441 U. S. 922 (1979), to review the Court of Appeals’ determination that the village ordinance violates the First and Fourteenth Amendments.
II
It is urged that the ordinance should be sustained because it deals only with solicitation and because any charity is free to propagate its views from door to door in the Village without a permit as long as it refrains from soliciting money. But this represents a far too limited view of our prior cases relevant to canvassing and soliciting by religious and charitable organizations.
In Schneider v. State, 308 U. S. 147 (1939), a canvasser for a religious society, who passed out booklets from door to door and asked for contributions, was arrested and convicted under an ordinance which prohibited canvassing, soliciting, or distribution of circulars from house to house without a permit, the issuance of which rested much in the discretion of public officials. The state courts construed the ordinance as aimed mainly at house-to-house canvassing and solicitation. This distinguished the case from Lovell v. Griffin, 303 U. S. 444 (1938), which had invalidated on its face and on First Amendment grounds an ordinance criminalizing the distribution of any handbill at any time or place without a permit. Because the canvasser’s conduct “amounted to the solicitation... of money contributions without a permit” Schneider, supra, at 159, and because the ordinance was thought to be valid as a protection against fraudulent solicitations, the conviction was sustained. This Court disagreed, noting that the ordinance applied not only to religious canvassers but also to “one who wishes to present his views on political, social or economic questions,” 308 U. S., at 163, and holding that the city could not, in the name of preventing fraudulent appeals, subject door-to-door advocacy and the communication of views to the discretionary permit requirement. The Court pointed out that the ordinance was not limited to those “who canvass for private profit,” ibid., and reserved the question whether “commercial soliciting and canvassing” could be validly subjected to such controls. Id., at 165.
Cantwell v. Connecticut, 310 U. S. 296 (1940), involved a state statute forbidding the solicitation of contributions of anything of value by religious, charitable, or philanthropic causes without obtaining official approval. Three members of a religious group were convicted under the statute for selling books, distributing pamphlets, and soliciting contributions or donations. Their convictions were affirmed in the state courts on the ground that they were soliciting funds and that the statute was valid as an attempt to protect the public from fraud. This Court set aside the convictions, holding that although a “general regulation, in the public interest, of solicitation, which does not involve any religious test and does not unreasonably obstruct or delay the collection of funds, is not open to any constitutional objection,” id., at 305, to “condition the solicitation of aid for the perpetuation of religious views or systems upon a license, the grant of which rests in the exercise of a determination by state authority as to what is a religious cause,” id., at 307, was considered to be an invalid prior restraint on the free exercise of religion. Although Cantwell turned on the Free Exercise Clause, the Court has subsequently understood Cantwell to have implied that soliciting funds involves interests protected by the First Amendment’s guarantee of freedom of speech. Virginia Pharmacy Board v. Virginia Citizens Consumer Council, 425 U. S. 748, 761 (1976); Bates v. State Bar of Arizona, 433 U. S. 350, 363 (1977).
In Valentine v. Chrestensen, 316 U. S. 52 (1942), an arrest was made for distributing on the public streets a commercial advertisement in violation of an ordinance forbidding this distribution. Addressing the question left open in Schneider, the Court recognized that while municipalities may not unduly restrict the right of communicating information in the public streets, the “Constitution imposes no such restraint on government as respects purely commercial advertising.” 316 U. S., at 54. The Court reasoned that unlike speech “communicating information and disseminating opinion” commercial advertising implicated only the solicitor’s interest in pursuing “a gainful occupation.” Ibid.
The following Term in Jamison v. Texas, 318 U. S. 413 (1943), the Court, without dissent, and with the agreement of the author of the Chrestensen opinion, held that although purely commercial leaflets could be banned from the streets, a State could not “prohibit the distribution of handbills in the pursuit of a clearly religious activity merely because the handbills invite the purchase of books for the improved understanding of the religion or because the handbills seek in a lawful fashion to promote the raising of funds for religious purposes.” 318 U. S., at 417. The Court reaffirmed what it deemed to be an identical holding in Schneider, as well as the ruling in Cantwell that “a state might not prevent the collection of funds for a religious purpose by unreasonably obstructing or delaying their collection.” 318 U. S., at 417. See also, Largent v. Texas, 318 U. S. 418 (1943).
In the course of striking down a tax on the sale of religious literature, the majority opinion in Murdock v. Pennsylvania, 319 U. S. 105 (1943), reiterated the holding in Jamison that the distribution of handbills was not transformed into an unprotected commercial activity by the solicitation of funds. Recognizing that drawing the line between purely commercial ventures and protected distributions of written material was a difficult task, the Court went on to hold that the sale of religious literature by itinerant evangelists in the course of spreading their doctrine was not a commercial enterprise beyond the protection of the First Amendment.
On the same day, the Court invalidated a municipal ordinance that forbade the door-to-door distribution of handbills, circulars, or other advertisements. None of the justifications for the general prohibition was deemed sufficient; the right of the individual resident to warn off such solicitors was deemed sufficient protection for the privacy of the citizen. Martin v. Struthers, 319 U. S. 141 (1943). On its facts, the case did not involve the solicitation of funds or the sale of literature.
Thomas v. Collins, 323 U. S. 516 (1945), held that the First Amendment barred enforcement of a state statute requiring a permit before soliciting membership in any labor organization. Solicitation and speech were deemed to be so intertwined that a prior permit could not be required. The Court also recognized that “espousal of the cause of labor is entitled to no higher constitutional protection than the espousal of any other lawful cause.” Id., at 538. The Court rejected the notion that First Amendment claims could be dismissed merely by urging “that an organization for which the rights of free speech and free assembly are claimed is one ‘engaged in business activities’ or that the individual who leads it in exercising these rights receives compensation for doing so.” Id., at 531. Concededly, the “collection of funds” might be subject to reasonable regulation, but the Court ruled that such regulation “must be done, and the restriction applied, in such a manner as not to intrude upon the rights of free speech and free assembly.” Id., at 540-541.
In 1951, Breard v. Alexandria, 341 U. S. 622, was decided. That case involved an ordinance making it criminal to enter premises without an invitation to sell goods, wares, and merchandise. The ordinance was sustained as applied to door-to-door solicitation of magazine subscriptions. The Court held that the sale of literature introduced “a commercial feature,” id., at 642, and that the householder’s interest in privacy outweighed any rights of the publisher to distribute magazines by uninvited entry on private property. The Court’s opinion, however, did not indicate that the solicitation of gifts or contributions by religious or charitable organizations should be deemed commercial activities, nor did the facts of Breará involve the sale of religious literature or similar materials. Martin v. Struthers, supra, was distinguished but not overruled.
Hynes v. Mayor of Oradell, 425 U. S. 610 (1976), dealt with a city ordinance requiring an identification permit for canvassing or soliciting from house to house for charitable or political purposes. Based on its review of prior cases, the Court held that soliciting and canvassing from door to door were subject to reasonable regulation so as to protect the citizen against crime and undue annoyance, but that the First Amendment required such controls to be drawn with “ ‘narrow specificity.’ ” Id., at 620. The ordinance was invalidated as unacceptably vague.
Prior authorities, therefore, clearly establish that charitable appeals for funds, on the street or door to door, involve a variety of speech interests — communication of information, the dissemination and propagation of views and ideas, and the advocacy of causes — that are within the protection of the First Amendment. Soliciting financial support is undoubtedly subject to reasonable regulation but the latter must be undertaken with due regard for the reality that solicitation is characteristically intertwined with informative and perhaps persuasive speech seeking support for particular causes or for particular views on economic, political, or social issues, and for the reality that without solicitation the flow of such information and advocacy would likely cease. Canvassers in such contexts are necessarily more than solicitors for money. Furthermore, because charitable solicitation does more than inform private economic decisions and is not primarily concerned with providing information about the characteristics and costs of goods and services, it has not been dealt with in our cases as a variety of purely commercial speech.
III
The issue before us, then, is not whether charitable solicitations in residential neighborhoods are within the protections of the First Amendment. It is clear that they are. “[0]ur cases long have protected speech even though it is in the form of... a solicitation to pay or contribute money, New York Times Co. v. Sullivan, [376 U. S. 254 (1964)].” Bates v. State Bar of Arizona, 433 U. S., at 363.
The issue is whether the Village has exercised its power to regulate solicitation in such a manner as not unduly to intrude upon the rights of free speech. Hynes v. Mayor of Oradell, supra, at 616. In pursuing this question we must first deal with the claim of the Village that summary judgment was improper because there was an unresolved factual dispute concerning the true character of CBE’s organization. Although CBE’s affidavits in support of its motion for summary judgment and describing its interests, the activities of its canvassers, and the percentage of its receipts devoted to salaries and administrative expenses were not controverted, the District Court made no findings with respect to the nature of CBE’s activities; and the Court of Appeals expressly stated that the facts with respect to the internal affairs and operations of the organization were immaterial to a proper resolution of the case. The Village claims, however, that it should have had a chance to prove that the 75-percent requirement is valid as applied to CBE because CBE spends so much of its resources for the benefit of its employees that it may appropriately be deemed an organization existing for private profit rather than for charitable purposes.
We agree with the Court of Appeals that CBE was entitled to its judgment of facial invalidity if the ordinance purported to prohibit canvassing by a substantial category of charities to which the 75-percent limitation could not be applied consistently with the First and Fourteenth Amendments, even if there was no demonstration that CBE itself was one of these organizations. Given a case or controversy, a litigant whose own activities are unprotected may nevertheless challenge a statute by showing that it substantially abridges the First Amendment rights of other parties not before the court. Grayned v. City of Rockford, 408 U. S. 104, 114-121 (1972); Chaplinsky v. New Hampshire, 315 U. S. 568 (1942); Schneider v. State, 308 U. S., at 162—165; Lovell v. Griffin, 303 U. S., at 451; Thornhill v. Alabama, 310 U. S. 88, 97 (1940). See also the discussion in Broadrick v. Oklahoma, 413 U. S. 601, 612-616 (1973), and in Bigelow v. Virginia, 421 U. S. 809, 815-817 (1975). In these First Amendment contexts, the courts are inclined to disregard the normal rule against permitting one whose conduct may validly be prohibited to challenge the proscription as it applies to others because of the possibility that protected speech or associative activities may be inhibited by the overly broad reach of the statute.
We have declared the overbreadth doctrine to be inapplicable in certain commercial speech cases, Bates v. State Bar of Arizona, supra, at 381, but as we have indicated, that limitation does not concern us here. The Court of Appeals was thus free to inquire whether § 22-20 (g) was overbroad, a question of law that involved no dispute about the characteristics of CBE. On this basis, proceeding to rule on the merits of the summary judgment was proper. As we have indicated, we also agree with the Court of Appeals’ ruling on the motion.
IV
Although indicating that the 75-percent limitation might be enforceable against the more “traditional charitable organizations” or “where solicitors represent themselves as mere conduits for contributions,” 590 F. 2d, at 225, 226, the Court of Appeals identified a class of charitable organizations as to which the 75-percent rule could not constitutionally be applied. These were the organizations whose primary purpose is not to provide money or services for the poor, the needy or other worthy objects of charity, but to gather and disseminate information about and advocate positions on matters of public concern. These organizations characteristically use paid solicitors who “necessarily combine” the solicitation of financial support with the “functions of information dissemination, discussion, and advocacy of public issues.” Id., at 225. These organizations also pay other employees to obtain and process the necessary information and to arrive at and announce in suitable form the organizations’ preferred positions on the issues of interest to them. Organizations of this kind, although they might pay only reasonable salaries, would necessarily spend more than 25 percent of their budgets on salaries and administrative expenses and would be completely barred from solicitation in the Village. The Court of Appeals concluded that such a prohibition was an unjustified infringement of the First and Fourteenth Amendments.
We agree with the Court of Appeals that the 75-percent limitation is a direct and substantial limitation on protected activity that cannot be sustained unless it serves a sufficiently strong, subordinating interest that the Village is entitled to protect. We also agree that the Village’s proffered justifications are inadequate and that the ordinance cannot survive scrutiny under the First Amendment.
The Village urges that the 75-percent requirement is intimately related to substantial governmental interests “in protecting the public from fraud, crime and undue annoyance.” These interests are indeed substantial, but they are only peripherally promoted by the 75-percent requirement and could be sufficiently served by measures less destructive of First Amendment interests.
Prevention of fraud is the Village’s principal justification for prohibiting solicitation by charities that spend more than one-quarter of their receipts on salaries and administrative expenses. The submission is that any organization using more than 25 percent of its receipts on fundraising, salaries, and overhead is not a charitable, but a commercial, for-profit enterprise and that to permit it to represent itself as a charity is fraudulent. But, as the Court of Appeals recognized, this cannot be true of those organizations that are primarily engaged in research, advocacy, or public education and that use their own paid staff to carry out these functions as well as to solicit financial support. The Village, consistently with the First Amendment, may not label such groups “fraudulent” and bar them from canvassing on the streets and house to house. Nor may the Village lump such organizations with those that in fact are using the charitable label as a cloak for profitmaking and refuse to employ more precise measures to separate one kind from the other. The Village may serve its legitimate interests, but it must do so by narrowly drawn regulations designed to serve those interests without unnecessarily interfering with First Amendment freedoms. Hynes v. Mayor of Oradell, 425 U. S., at 620; First National Bank of Boston v. Bellotti, 435 U. S. 765, 786 (1978). “Broad prophylactic rules in the area of free expression are suspect. Precision of regulation must be the touchstone....” NAACP v. Button, 371 U. S. 415, 438 (1963) (citations omitted).
The Village’s legitimate interest in preventing fraud can be better served by measures less intrusive than a direct prohibition on solicitation. Fraudulent misrepresentations can be prohibited and the penal laws used to punish such conduct directly. Schneider v. State, 308 U. S., at 164; Cantwell v. Connecticut. 310 U. S., at 306; Viroinia Pharmacy Board v. Virginia Citizens Consumer Council, 425 U. S., at 771. Efforts to promote disclosure of the finances of charitable organizations also may assist in preventing fraud by informing the public of the ways in which their contributions will be employed. Such measures may help make contribution decisions more informed, while leaving to individual choice the decision whether to contribute to organizations that spend large amounts on salaries and administrative expenses.
We also fail to perceive any substantial relationship between the 75-percent requirement and the protection of public safety or of residential privacy. There is no indication that organizations devoting more than one-quarter of their funds to salaries and administrative expenses are any more likely to employ solicitors who would be a threat to public safety than are other charitable organizations. Other provisions in the ordinance that are not challenged here, such as the provision making it unlawful for charitable organizations to use convicted felons as solicitors, Code § 22-23, may bear some relation to public safety; the 75-percent requirement does not.
The 75-percent requirement is related to the protection of privacy only in the most indirect of ways. As the Village concedes, householders are equally disturbed by solicitation on behalf of organizations satisfying the 75-percent requirement as they are by solicitation on behalf of other organizations. The 75-percent requirement protects privacy only by reducing the total number of solicitors, as would any prohibition on solicitation. The ordinance is not directed to the unique privacy interests of persons residing in their homes because it applies not only to door-to-door solicitation, but also to solicitation on “public streets and public ways.” § 22-20. Other provisions of the ordinance, which are not challenged here, such as the provision permitting homeowners to bar solicitors from their property by posting signs reading “No Solicitors or Peddlers Invited,” § 22-24, suggest the availability of less intrusive and more effective measures to protect privacy. See Rowan v. Post Office Dept., 397 U. S. 728 (1970); Martin v. Struthers, 319 U. S., at 148.
The 75-percent requirement in the village ordinance plainly is insufficiently related to the governmental interests asserted in its support to justify its interference with protected speech. “Frauds may be denounced as offenses and punished by law. Trespasses may similarly be forbidden. If it is said that these means are less efficient and convenient than... [deciding in advance] what information may be disseminated from house to house, and who may impart the information, the answer is that considerations of this sort do not empower a municipality to abridge freedom of speech and press.” Schneider v. State, supra, at 164.
We find no reason to disagree with the Court of Appeals’ conclusion that § 22-20 (g) is unconstitutionally overbroad. Its judgment is therefore affirmed.
It is so ordered.
Article II of Chapter 22 regulates commercial solicitation by requiring “for profit peddlers and solicitors” to obtain a commercial license. For the purposes of Art. II, peddlers and solicitors are defined as any persons who, going from place to place without appointment, offer goods or services for sale or take orders for future delivery of goods or services. Code § 22-6. Section 22-7 requires any person “engage [d] in the business of a peddler or solicitor within the village” to obtain a license. Licenses can be obtained by application to the village collector and payment of an annual fee ranging from $10 to $25. License applications must contain a variety of information, including the kind of merchandise to be offered, the address of the applicant, the name of the applicant’s employer, and whether the applicant has ever been arrested for a misdemeanor or felony. § 22-8. A license must be denied to anyone “who is not found to be a person of good character and reputation.” § 22-9.
Solicitation is permitted between the hours of 9 a. m. and 6 p. m., Monday through Saturday. § 22-13. Cheating, deception, or fraudulent misrepresentation by peddlers or solicitors is prohibited by § 22-12. Peddlers and solicitors are required to depart “immediately and peacefully” from the premises of any home displaying a sign, “No Solicitors or Peddlers Invited,” near the main entrance. §§ 22-15 and 22-16.
Persons violating the provisions of Art. II may be fined up to $500 for each offense. § 22-18. The village manager may revoke the license of any peddler or solicitor who violates any village ordinance or any state or federal law or who ceases to possess good character. § 22-11.
Article III of Chapter 22 includes §§ 22-19 to 22-24 of the Code. Section 22-19 defines a “charitable organization” as “[a]ny benevolent, philanthropic, patriotic, not-for-profit, or eleemosynary group, association or corporation, or such organization purporting to be such, which solicits and collects funds for charitable purposes.” A “charitable purpose” is defined as “[a]ny charitable, benevolent, philanthropic, patriotic, or eleemosynary purpose.” A “contribution” is defined as “[t]he promise or grant of any money or property of any kind or value, including payments for literature in excess of | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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DAVIS et al. v. SCHERER
No. 83-490.
Argued April 16, 1984
Decided June 28, 1984
Powell, J., delivered the opinion of the Court, in which Burger, C. J., and White, Rehnquist, and O’Connor, JJ., joined. Brennan, J., filed an opinion concurring in part and dissenting in part, in which Marshall, Blackmun, and Stevens, JJ., joined, post, p. 197.
Mitchell D. Franks argued the cause for appellants. With him on the briefs were Jim Smith, Attorney General of Florida, and Vicki Gordon Kaufman, Bruce A. Minnick, and Pamela Lutton-Shields, Assistant Attorneys General.
Richard G. Wilkins argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General Lee, Acting Assistant Attorney General Willard, Deputy Solicitor General Getter, Barbara L. Herwig, and John F. Cordes.
Bruce S. Rogow argued the cause and filed a brief for appellee.
Michael S. Heifer, Burt Neubome, and Charles S. Sims filed a brief for the American Civil Liberties Union as amicus curiae urging affirmance.
Justice Powell
delivered the opinion of the Court.
Appellants in this case challenge the holding of the Court of Appeals that a state official loses his qualified immunity from suit for deprivation of federal constitutional rights if he is found to have violated the clear command of a state administrative regulation.
I
The present controversy arose when appellee Gregory Scherer, who was employed by the Florida Highway Patrol as a radio-teletype operator, applied for permission from the Patrol to work as well for the Escambia County Sheriff’s Office as a reserve deputy. To avoid conflicts of interest, an order of the Florida Department of Highway Safety and Motor Vehicles required that proposed outside employment of Patrol members be approved by the Department. A letter from appellee’s troop commander, Capt. K. S. Sconiers, dated September 1, 1977, granted appellee permission to accept the part-time work. The letter noted that permission would be rescinded “should [the] employment interfere . . . with your duties with [the] department.” 543 F. Supp. 4, 8 (ND Fla. 1981). Later that month, Capt. Sconiers informed appellee by memorandum that permission to accept the employment was revoked. As Capt. Sconiers explained at trial, his superiors in the Highway Patrol had determined that appellee’s reserve deputy duties could conflict with his duties at the Highway Patrol.
Appellee continued to work at the second job, despite the revocation of permission. Oral discussions and an exchange of letters among appellee and his superiors ensued. Sgt. Clark, appellee’s immediate superior, advised appellee that he was violating instructions; appellee explained that he had invested too much money in uniforms to give up his part-time work. Lt. Wiggins, the next highest officer in the chain of command, then orally and by memorandum ordered appellee to quit his part-time job. Appellee explained to Lt. Wiggins that he saw no conflict between the two jobs and would not quit his second job.
Sgt. Clark and Lt. Wiggins had submitted memoranda to Capt. Sconiers that described appellee’s continued employment and their conversations with appellee. Appellee also wrote to Capt. Sconiers explaining that he saw no reason to resign his outside employment. So advised, Capt. Sconiers recommended to Col. J. E. Beach, director of the Florida Highway Patrol, that appellee be suspended for three days for violation of the dual-employment policy. Capt. Sconiers submitted a number of documents, including his own letters approving appellee’s request and rescinding the approval; ap-pellee’s letter of request and subsequent letter explaining his refusal to quit his job; and the memoranda of Sgt. Clark and Lt. Wiggins. On the basis of these documents, Col. Beach on October 24, 1977, ordered that appellee’s employment with the Florida Highway Patrol be terminated.
On November 10, 1977, appellee filed an appeal with the Florida Career Service Commission. Before the Commission had heard appellee’s administrative appeal from his dismissal, appellee and the Department settled the dispute. The settlement reinstated appellee with backpay. But friction between appellee and his superiors continued, and in January 1979, after appellee was suspended from the Patrol, he resigned “to avoid further harassment and to remove a cloud over his employability.” Id., at 11.
Appellee then filed the present suit against appellants in the United States District Court for the Northern District of Florida, seeking relief under 42 U. S. C. § 1983. Appellee’s complaint alleged that appellants in 1977 had violated the Due Process Clause of the Fourteenth Amendment by discharging appellee from his job without a formal pre-termination or a prompt post-termination hearing. Appel-lee requested a declaration that his rights had been violated and an award of money damages.
The District Court granted the requested relief for violation of appellee’s Fourteenth Amendment rights. The court found that appellee had a property interest in his job and that the procedures followed by appellants to discharge appellee were constitutionally “inadequate” under the Fourteenth Amendment. Id., at 14. Further, the court declared unconstitutional Florida’s statutory provisions governing removal of state employees, Fla. Stat. §110.061 (1977). Finally, the District Court concluded that appellants had forfeited their qualified immunity from suit under §1983 because appellee’s “due process rights were clearly established at the time of his October 24, 1977, dismissal.” Id., at 16.
Five days after entry of the District Court’s order, the Court of Appeals for the Fifth Circuit decided Weisbrod v. Donigan, 651 F. 2d 334 (1981). The Court of Appeals there held that Florida officials in 1978 had-violated no well-established due process rights in discharging a permanent state employee without a pretermination or a prompt post-termination hearing. On motion for reconsideration, the District Court found that Weisbrod required it to vacate its prior holding that appellants had forfeited their immunity by violating appellee’s clearly established constitutional rights. The court nevertheless reaffirmed its award of monetary damages. It reasoned that proof that an official had violated clearly established constitutional rights was not the “sole way” to overcome the official’s claim of qualified immunity. Applying the “totality of the circumstances” test of Scheuer v. Rhodes, 416 U. S. 232, 247-248 (1974), the District Court held that “if an official violates his agency’s explicit regulations, which have the force of state law, [that] is evidence that his conduct is unreasonable.” 543 F. Supp., at 19. In this respect, the court noted that the personnel regulations of the Florida Highway Patrol clearly required “a complete investigation of the charge and an opportunity [for the employee] to respond in writing.” Id., at 20. The District Court concluded that appellants in discharging appellee had “followed procedures contrary to the department’s rules and regulations”; therefore, appellants were “not entitled to qualified immunity because their belief in the legality of the challenged conduct was unreasonable.” Ibid. The court explicitly relied upon the official violation of the personnel regulation, stating that “[i]f [the] departmental order had not been adopted . . . prior to [appellee’s] dismissal, no damages of any kind could be awarded.” Ibid. The District Court’s order amending the judgment did not discuss the issue whether appellants violated appellee’s federal constitutional rights. On that issue, the District Court relied upon its previous opinion; the court did not indicate that the personnel regulation was relevant to its analysis of appellee’s rights under the Due Process Clause.
The District Court also amended its judgment declaring the Florida civil service statute unconstitutional. The State’s motion for reconsideration had informed the court that the statute had been repealed by the Florida Legislature. The District Court therefore declared unconstitutional the provisions of the newly enacted civil service statute, Fla. Stat., ch. 110 (1982 and Supp. 1983), insofar as “they fail to provide a prompt post-termination hearing.” Id., at 21.
The Court of Appeals affirmed on the basis of the District Court’s opinion. Scherer v. Graham, 710 F. 2d 838 (CA11 1983). We noted probable jurisdiction, 464 U. S. 1017 (1983), to consider whether the Court of Appeals properly had declared the Florida statute unconstitutional and denied appellants’ claim of qualified immunity. Appellants do not seek review of the District Court’s finding that appellee’s constitutional rights were violated. As appellee now concedes that the District Court lacked jurisdiction to adjudicate the constitutionality of the Florida statute enacted in 1981, we consider only the issue of qualified immunity. We reverse.
II
In the present posture of this case, the District Court’s decision that appellants violated appellee’s rights under the Fourteenth Amendment is undisputed. This finding of the District Court—based entirely upon federal constitutional law—resolves the merits of appellee’s underlying claim for relief under § 1983. It does not, however, decide the issue of damages. Even defendants who violate constitutional rights enjoy a qualified immunity that protects them from liability for damages unless it is further demonstrated that their conduct was unreasonable under the applicable standard. The precise standard for determining when an official may assert the qualified immunity defense has been clarified by recent cases, see Wood v. Strickland, 420 U. S. 308 (1975); Butz v. Economou, 438 U. S. 478 (1978); Harlow v. Fitzgerald, 457 U. S. 800 (1982). The present case requires us to consider the application of the standard where the official’s conduct violated a state regulation as well as a provision of the Federal Constitution.
The District Court’s analysis of appellants’ qualified immunity, written before our decision in Harlow v. Fitzgerald, supra, rests upon the “totality of the circumstances” surrounding appellee’s separation from his job. This Court applied that standard in Scheuer v. Rhodes, 416 U. S., at 247-248. As subsequent cases recognized, Wood v. Strickland, supra, at 322, the “totality of the circumstances” test comprised two separate inquiries: an inquiry into the objective reasonableness of the defendant official’s conduct in light of the governing law, and an inquiry into the official’s subjective state of mind. Harlow v. Fitzgerald, supra, rejected the inquiry into state of mind in favor of a wholly objective standard. Under Harlow, officials “are shielded from liability for civil damages insofar as their conduct does not violate clearly established statutory or constitutional rights of which a reasonable person would have known.” 457 U. S., at 818. Whether an official may prevail in his qualified immunity defense depends upon the “objective reasonableness of [his] conduct as measured by reference to clearly established law.” Ibid.(footnote deleted). No other “circumstances” are relevant to the issue of qualified immunity.
Appellee suggests, however, that the District Court judgment can be reconciled with Harlow in two ways. First, appellee urges that the record evinces a violation of constitutional rights that were clearly established. Second, in appellee’s view, the District Court correctly found that, absent a violation of clearly established constitutional rights, appellants’ violation of the state administrative regulation— although irrelevant to the merits of appellee’s underlying constitutional claim — was decisive of the qualified immunity question. In our view, neither submission is consistent with our prior cases.
A
Appellee contends that the District Court’s reliance in its qualified immunity analysis upon the state regulation was “superfluous,” Brief for Appellee 19, because the federal constitutional right to a pretermination or a prompt post-termination hearing was well established in the Fifth Circuit at the time of the conduct in question. As the District Court recognized in rejecting appellee’s contention, Weisbrod v. Donigan, 651 F. 2d 334 (CA5 1981), is authoritative precedent to the contrary. The Court of Appeals in that case found that the State had violated no clearly established due process right when it discharged a civil service employee without any pretermination hearing.
Nor was it unreasonable in this case, under Fourteenth Amendment due process principles, for the Department to conclude that appellee had been provided with the fundamentals of due process. As stated above, the District Court found that appellee was informed several times of the Department’s objection to his second employment and took advantage of several opportunities to present his reasons for believing that he should be permitted to retain his part-time employment despite the contrary rules of the Patrol. Appel-lee’s statement of reasons and other relevant information were before the senior official who made the decision to discharge appellee. And Florida law provided for a full evi-dentiary hearing after termination. We conclude that the District Court correctly held that appellee has demonstrated no violation of his clearly established constitutional rights.
B
Appellee’s second ground for affirmance in substance is that upon which the District Court relied. Appellee submits that appellants, by failing to comply with a clear state regulation, forfeited their qualified immunity from suit for violation of federal constitutional rights.
Appellee makes no claim that the appellants’ violation of the state regulation either is itself actionable under § 1983 or bears upon the claim of constitutional right that appellee asserts under §1983. And appellee also recognizes that Harlow v. Fitzgerald makes immunity available only to officials whose conduct conforms to a standard of “objective legal reasonableness.” 457 U. S., at 819. Nonetheless, in appel-lee’s view, official conduct that contravenes a statute or regulation is not “objectively reasonable” because officials fairly may be expected to conform their conduct to such legal norms. Appellee also argues that the lawfulness of official conduct under such a statute or regulation may be determined early in the lawsuit on motion for summary judgment. Appellee urges therefore that a defendant official’s violation of a clear statute or regulation, although not itself the basis of suit, should deprive the official of qualified immunity from damages for violation of other statutory or constitutional provisions.
On its face, appellee’s reasoning is not without some force. We decline, however, to adopt it. Even before Harlow, our cases had made clear that, under the “objective” component of the good-faith immunity test, “an official would not be held liable in damages under § 1983 unless the constitutional right he was alleged to have violated was ‘clearly established’ at the time of the violation.” Butz v. Economou, 438 U. S., at 498 (emphasis added); accord, Procunier v. Navarette, 434 U. S. 555, 562 (1978). Officials sued for constitutional violations do not lose their qualified immunity merely because their conduct violates some statutory or administrative provision.
We acknowledge of course that officials should conform their conduct to applicable statutes and regulations. For that reason, it is an appealing proposition that the violation of such provisions is a circumstance relevant to the official’s claim of qualified immunity. But in determining what circumstances a court may consider in deciding claims of qualified immunity, we choose “between the evils inevitable in any available alternative.” Harlow v. Fitzgerald, 457 U. S., at 813-814. Appellee’s submission, if adopted, would disrupt the balance that our cases strike between the interests in vindication of citizens’ constitutional rights and in public officials’ effective performance of their duties. The qualified immunity doctrine recognizes that officials can act without fear of harassing litigation only if they reasonably can anticipate when their conduct may give rise to liability for damages and only if unjustified lawsuits are quickly terminated. See Butz v. Economou, supra, at 506-507; Harlow v. Fitzgerald, supra, at 814, 818-819. Yet, under appellee’s submission, officials would be liable in an indeterminate amount for violation of any constitutional right — one that was not clearly defined or perhaps not even foreshadowed at the time of the alleged violation — merely because their official conduct also violated some statute or regulation. And, in § 1983 suits, the issue whether an official enjoyed qualified immunity then might depend upon the meaning or purpose of a state administrative regulation, questions that federal judges often may be unable to resolve on summary judgment.
Appellee proposes that his new rule for qualified immunity be limited by requiring that plaintiffs allege clear violation of a statute or regulation that advanced important interests or was designed to protect constitutional rights. Yet, once the door is opened to such inquiries, it is difficult to limit their scope in any principled manner. Federal judges would be granted large discretion to extract from various statutory and administrative codes those provisions that seem to them sufficiently clear or important to warrant denial of qualified immunity. And such judgments fairly could be made only after an extensive inquiry into whether the official in the circumstances of his decision should have appreciated the applicability and importance of the rule at issue. It would become more difficult, not only for officials to anticipate the possible legal consequences of their conduct, but also for trial courts to decide even frivolous suits without protracted litigation.
Nor is it always fair, or sound policy, to demand official compliance with statute and regulation on pain of money damages. Such officials as police officers or prison wardens, to say nothing of higher level executives who enjoy only qualified immunity, routinely make close decisions in the exercise of the broad authority that necessarily is delegated to them. These officials are subject to a plethora of rules, “often so voluminous, ambiguous, and contradictory, and in such flux that officials can only comply with or enforce them selectively.” See P. Schuck, Suing Government 66 (1983). In these circumstances, officials should not err always on the side of caution. “[Officials with a broad range of duties and authority must often act swiftly and firmly at the risk that action deferred will be futile or constitute virtual abdication of office.” Scheuer v. Rhodes, 416 U. S., at 246.
I — I I — < H — I
A plaintiff who seeks damages for violation of constitutional or statutory rights may overcome the defendant official’s qualified immunity only by showing that those rights were clearly established at the time of the conduct at issue. As appellee has made no such showing, the judgment of the Court of Appeals is reversed, and the case is remanded for proceedings consistent with this opinion.
It is so ordered.
One memorandum reported to Capt. Sconiers that appellee had continued to work at his second job; a second had been addressed by Lt. Wiggins to appellee; other memoranda summarized Lt. Wiggins’ and Sgt. Clark’s discussions with appellee.
Appellant Ralph Davis was Executive Director of the Department of Highway Safety and Motor Vehicles at the time of appellee’s discharge from employment. Appellant Chester Blakemore succeeded Davis to that position and is a party only in his official capacity. Appellant Col. J. Eldridge Beach is Director of the Florida Highway Patrol, a division of the Department of Highway Safety and Motor Vehicles; as noted above, he held that position at the time of appellee’s discharge.
The complaint also alleged that appellants, in violation of the Fourteenth Amendment, had coerced appellee to accept an inadequate settlement and had infringed upon appellee’s right of privacy guaranteed by the First and Ninth Amendments.
The District Court rejected appellee’s other constitutional claims.
The District Court relied in part on the reasoning of Williams v. Treen, 671 F. 2d 892 (CA5 1982), cert. denied, 459 U. S. 1126 (1983), that had held that official conduct in violation of an explicit and clearly established state regulation was per se unreasonable. 671 F. 2d, at 899.
These regulations specified in pertinent part:
“Upon receiving a report of... a violation of Department or Division rules and regulations . . . , the Director shall order a complete investigation to determine the true facts concerning the circumstances surrounding the alleged offense. The completed investigation report will also contain a written statement made by the employee against whom the complaint was made. If after a thorough study of all information concerning the violation, the Director decides that a . . . dismissal will be in order, he will present the employee in writing with the reason or reasons for such actions.” General Order No. 43, §1.C (Sept. 1, 1977), quoted in 543 F. Supp., at 19-20.
The Florida civil service statute now in force replaced the statute under which appellee’s employment was terminated. As the current state statute was never applied to appellee, he lacks standing to question its constitutionality. Cf. Golden v. Zwickler, 394 U. S. 103 (1969).
Appellee’s concession does not deprive the Court of appellate jurisdiction over the remaining issue in the case. In cases where the Court of Appeals has declared a state statute unconstitutional, this Court may decide the “Federal questions presented,” 28 U. S. C. §1254(2). Cf. Flournoy v. Wiener, 321 U. S. 253, 263 (1944); Leroy v. Great Western United Corp., 443 U. S. 173 (1979). Under § 1254(2), the Court retains discretion to decline to consider those issues in the case not related to the declaration that the state statute is invalid. In the present casé, however, we choose to consider the important question whether the District Court and the Court of Appeals properly denied appellants’ good-faith immunity from suit.
As we discuss below, it is contested whether these constitutional rights were clearly established at the time of appellants’ conduct.
We see no reason to doubt, as does the partial dissent, that the Court of Appeals in Weisbrod had full knowledge of its own precedents and correctly construed them.
As the partial dissent explains at some length, the decisions of this Court by 1978 had required “some kind of a hearing,” Board of Regents v. Roth, 408 U. S. 564, 570, n. 7 (1972), prior to discharge of an employee who had a constitutionally protected property interest in his employment. But the Court had not determined what kind of a hearing must be provided. Such a determination would require a careful balancing of the competing interests — of the employee and the State — implicated in the official decision at issue. See Mathews v. Eldridge, 424 U. S. 319, 335 (1976). As the Court had considered circumstances in which no hearing at all had been provided prior to termination, Perry v. Sindermann, 408 U. S. 593 (1972), or in which the requirements of due process were met, Board of Regents v. Roth, supra; Arnett v. Kennedy, 416 U. S. 134 (1974); Bishop v. Wood, 426 U. S. 341 (1976); Codd v. Velger, 429 U. S. 624 (1977), there had been no occasion to specify any minimally acceptable procedures for termination of employment. The partial dissent cites no case establishing that appellee was entitled to more elaborate notice, or a more formal opportunity to respond, than he in fact received.
State law may bear upon a claim under the Due Process Clause when the property interests protected by the Fourteenth Amendment are created by state law. See Board of Regents v. Roth, supra, at 577. Appellee’s property interest in his job under Florida law is undisputed. Appellee does not contend here that the procedural rules in state law govern the constitutional analysis of what process was due to him under the Fourteenth Amendment.
In Harlow, the Court acknowledged that officials may lose their immunity by violating “clearly established statutory . . . rights.” 457 U. S., at 818. This is the case where the plaintiff seeks to recover damages for violation of those statutory rights, as in Harlow itself, see id., at 820, n. 36, and as in many §1983 suits, see, e. g., Maine v. Thiboutot, 448 U. S. 1 (1980) (holding that § 1983 creates cause of action against state officials for violating federal statutes). For the reasons that we discuss, officials sued for violations of rights conferred by a statute or regulation, like officials sued for violation of constitutional rights, do not forfeit their immunity by violating some other statute or regulation. Rather, these officials become liable for damages only to the extent that there is a clear violation of the statutory rights that give rise to the cause of action for damages. And if a statute or regulation does give rise to a cause of action for damages, clear violation of the statute or regulation forfeits immunity only with respect to damages caused by that violation. In the present case, as we have noted, there is no claim that the state regulation itself or the laws that authorized its promulgation create a cause of action for damages or provide the basis for an action brought under § 1983.
Harlow was a suit against federal, not state, officials. But our cases have recognized that the same qualified immunity rules apply in suits against state officers under § 1983 and in suits against federal officers under Bivens v. Six Unknown Federal Narcotics Agents, 403 U. S. 388 (1971). See Butz v. Economou, 438 U. S., at 504. Neither federal nor state officials lose their immunity by violating the clear command of a statute or regulation — of federal or of state law — unless that statute or regulation provides the basis for the cause of action sued upon.
Officials would be required not only to know the applicable regulations, but also to understand the intent with which each regulation was adopted. Such an understanding often eludes even trained lawyers with full access to the relevant legislative or administrative materials. It is unfair and impracticable to require such an understanding of public officials generally.
Appellee urges as well that appellants’ violation of the personnel regulation constituted breach of their “ministerial” duty — established by the regulation — to follow various procedures before terminating appellee’s employment. Although the decision to discharge an employee clearly is discretionary, appellee reasons that the Highway Patrol regulation deprived appellants of all discretion in determining what procedures were to be followed prior to discharge. Under this view, the Harlow standard is inapposite because this Court’s doctrine grants qualified immunity to officials in the performance of discretionary, but not ministerial, functions.
Appellee’s contention mistakes the scope of the “ministerial duty” exception to qualified immunity in two respects. First, as we have discussed, breaeh of a legal duty created by the personnel regulation would forfeit official immunity only if that breach itself gave rise to the appellee’s cause of action for damages. This principle equally applies whether the regulation created discretionary or ministerial duties. Even if the personnel regulation did create a ministerial duty, appellee makes no claim that he is entitled to damages simply because the regulation was violated. See supra, at 193-194, and n. 12.
In any event, the rules that purportedly established appellants’ “ministerial” duties in the present ease left to appellants a substantial measure of discretion. Cf. Amy v. The Supervisors, 11 Wall. 136, 138 (1871); Kendall v. Stokes, 3 How. 87, 98 (1845). Appellants were to determine, for example, what constituted a “complete investigation” and a “thorough study of all information” sufficient to justify a decision to terminate ap-pellee’s employment. See n. 6, supra. And the District Court’s finding that appellants ignored a clear legal command does not bear on the “ministerial” nature of appellants’ duties. A law that fails to specify the precise action that the official must take in each instance creates only discretionary authority; and that authority remains discretionary however egregiously it is abused. Cf. Kendall v. Stokes, supra. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
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] | [
116
] | sc_adminaction |
RICHARDSON, SECRETARY OF HEALTH, EDUCATION, AND WELFARE v. BELCHER
No. 70-53.
Argued October 13, 1971
Decided November 22, 1971
Richard B. Stone argued the cause for appellant. With him on the brief were Solicitor General Griswold, Assistant Attorney General Gray, and Kathryn H. Baldwin.
John Charles Harris argued the cause and filed a brief for appellee.
William E. Miller and Richard A. Whiting filed a brief for the American Mutual Insurance Alliance et al. as amici curiae urging reversal.
Briefs of amici curiae urging affirmance were filed by Edward J. Kionka for the American Trial Lawyers Association, and by Edward L. Carey, Harrison Combs, and M. E. Boiarsky for United Mine Workers of America.
Mr. Justice Stewart
delivered the opinion of the Court.
The appellee was granted social security disability benefits effective in October 1968, in the amount of $329.70 per month for himself and his family. In January 1969, the federal payment was reduced to $225.30 monthly under the “offset” provision of Section 224 of the Social Security Act, 79 Stat. 406, 42 U. S. C. § 424a, upon a finding that the appellee was receiving workmen’s compensation benefits from the State of West Virginia in the amount of $203.60 per month. After exhausting his administrative remedies, the appellee brought this action challenging the reduction of payments required by § 224 on the ground that the statutory provision deprived him of the due process of law guaranteed by the Fifth Amendment. The District Judge, disagreeing with other courts that have considered the question, held the statute unconstitutional. 317 F. Supp. 1294. The Secretary of the Department of Health, Education, and Welfare appealed directly to this Court under 28 U. S. C. § 1252. We noted probable jurisdiction, 401 U. S. 935, and the case was briefed and argued on the merits. We now reverse the judgment of the District Court.
In our last consideration of a challenge to the constitutionality of a classification created under the Social Security Act, we held that “a person covered by the Act has not such a right in benefit payments as would make every defeasance of ‘accrued’ interests violative of the Due Process Clause of the Fifth Amendment.” Flemming v. Nestor, 363 U. S. 603, 611. The fact that social security benefits are financed in part by taxes on an employee’s wages does not in itself limit the power of Congress to fix the levels of benefits under the Act or the conditions upon which they may be paid. Nor does an expectation of public benefits confer a contractual right to receive the expected amounts. Our decision in Goldberg v. Kelly, 397 U. S. 254, upon which the District Court relied, held that as a matter of procedural due process the interest of a welfare recipient in the continued payment of benefits is sufficiently fundamental to prohibit the termination of those benefits without a prior evidentiary hearing. But there is no controversy over procedure in the present case, and the analogy drawn in Goldberg between social welfare and “property,” 397 U. S., at 262 n. 8, cannot be stretched to impose a constitutional limitation on the power of Congress to make substantive changes in the law of entitlement to public benefits.
To characterize an Act of Congress as conferring a “public benefit” does not, of course, immunize it from scrutiny under the Fifth Amendment. We have held that “[t]he interest of a covered employee under the [Social Security] Act is of sufficient substance to fall within the protection from arbitrary governmental action afforded by the Due Process Clause.” Flemming v. Nestor, supra, at 611. The appellee argues that the classification embodied in § 224 is arbitrary because it discriminates between those disabled employees who receive workmen’s compensation and those who receive compensation from private insurance or from tort claim awards. We cannot say that this difference in treatment is constitutionally invalid.
A statutory classification in the area of social welfare is consistent with the Equal Protection Clause of the Fourteenth Amendment if it is “rationally based and free from invidious discrimination.” Dandridge v. Williams, 397 U. S. 471, 487. While the present case, involving as it does a federal statute, does not directly implicate the Fourteenth Amendment’s Equal Protection Clause, a classification that meets the test articulated in Dand-ridge is perforce consistent with the due process requirement of the Fifth Amendment. Cf. Bolling v. Sharpe, 347 U. S. 497, 499.
To find a rational basis for the classification created by § 224, we need go no further than the reasoning of Congress as reflected in the legislative history. The predecessor of § 224, enacted in 1956 along with the amendments first establishing the federal disability insurance program, required a full offset of state or federal workmen’s compensation payments against benefits payable under federal disability insurance. 70 Stat. 816. It is self-evident that the offset reflected a judgment by Congress that the workmen’s compensation and disability insurance programs in certain instances served a common purpose, and that the workmen’s compensation programs should take precedence in the area of overlap. The provision was repealed in 1958, 72 Stat. 1025, because Congress believed that “the danger that duplication of disability benefits might produce undesirable results [was] not of sufficient importance to justify reduction of the social security disability benefits.” H. R. Rep. No. 2288, 85th Cong., 2d Sess., 13.
In response to renewed criticism of the overlap between the workmen’s compensation and the social security disability insurance programs, Congress re-examined the problem in 1965. Data submitted to the legislative committees showed that in 35 of the 50 States, a typical worker injured in the course of his employment and eligible for both state and federal benefits received compensation for his disability in excess of his take-home pay prior to the disability. Hearings on H. R. 6675 before the Senate Committee on Finance, 89th Cong., 1st Sess., pt. 2, p. 904. It was strongly urged that this situation reduced the incentive of the worker to return to the job, and impeded the rehabilitative efforts of the state programs. Furthermore, it was anticipated that a perpetuation of the duplication in benefits might lead to the erosion of the workmen’s compensation programs. The legislative response was § 224, which, by limiting total state and federal benefits to 80% of the employee’s average earnings prior to the disability, reduced the duplication inherent in the programs and at the same time allowed a supplement to workmen’s compensation where the state payments were inadequate.
The District Court apparently assumed that the only basis for the classification established by § 224 lay in the characterization of workmen’s compensation as a "public benefit.” Because the state program was financed by employer contributions rather than by taxes, the court held that the “public” characterization afforded no rational basis to distinguish workmen’s compensation from private insurance. We agree that a statutory discrimination between two like classes cannot be rationalized by assigning them different labels, but neither can two unlike classes be made indistinguishable by attaching to them a common label. The original purpose of state workmen’s compensation laws was to satisfy a need inadequately met by private insurance or tort claim awards. Congress could rationally conclude that this need should continue to be met primarily by the States, and that a federal program that began to duplicate the efforts of the States might lead to the gradual weakening or atrophy of the state programs.
We have no occasion, within our limited function under the Constitution, to consider whether the legitimate purposes of Congress might have been better served by applying the same offset to recipients of private insurance, or to judge for ourselves whether the apprehensions of Congress were justified by the facts. If the goals sought are legitimate, and the classification adopted is rationally related to the achievement of those goals, then the action of Congress is not so arbitrary as to violate the Due Process Clause of the Fifth Amendment.
The judgment is
Reversed.
Section 224 provides, in pertinent part:
“(a) If for any month prior to the month in which an individual attains the age of 62—
“(1) such individual is entitled to benefits under section 423 of this title, and
“(2) such individual is entitled for such month, under a workmen’s compensation law or plan of the United States or a State, to periodic benefits for a total or partial disability (whether or not permanent), and the Secretary has, in a prior month, received notice of such entitlement for such month,
“the total of his benefits under section 423 of this title for such month and of any benefits under section 402 of this title for such month based on his wages and self-employment income shall be reduced (but not below zero) by the amount by which the sum of—
“(3) such total of benefits under sections 423 and 402 of this title for such month, and
“(4) such periodic benefits payable (and actually paid) for such month to such individual under the workmen’s compensation law or plan,
“exceeds the higher of—
“(5) 80 percentum of his ‘average current earnings,’. . .
“For purposes of clause (5), an individual’s average current earnings means the larger of (A) the average monthly wage used for purposes of computing his benefits under section 423 of this title, or (B) one-sixtieth of the total of his wages and self-employment income (computed without regard to the limitations specified in sections 409 (a) and 411 (b) (1) of this title) for the five consecutive calendar years after 1950 for which such wages and self-employment income were highest. . . .” 42 U. S. C. §424a (a).
E. g., Gambill v. Finch, 309 F. Supp. 1 (ED Tenn. 1970); Lofty v. Cohen, 325 F. Supp. 285, aff’d sub nom. Lofty v. Richardson, 440 F. 2d 1144 (CA6 1971); Bartley v. Finch, 311 F. Supp. 876 (ED Ky. 1970); Bailey v. Finch, 312 F. Supp. 918 (ND Miss. 1970); Benjamin v. Finch, Civ. No. 32816, ED Mich., May 26, 1970, aff’d sub nom. Benjamin v. Richardson, No. 20,714, CA6, Apr. 29, 1971; Gooch v. Finch, Civ. No. 6840, SD Ohio, July 13, 1970; Rodatz v. Finch, Civ. No. 69-170, ED Ill., Sept. 4, 1970, aff’d sub nom. Rodatz v. Richardson (CA7 1971).
“Any party may appeal to the Supreme Court from an interlocutory or final judgment, decree or order of any court of the United States . . . , holding an Act of Congress unconstitutional in any civil action, suit, or proceeding to which the United States or any of its agencies, or any officer or employee thereof, as such officer or employee, is a party.”
The primary federal workmen's compensation programs are the Longshoremen’s and Harbor Workers’ Compensation Act, 44 Stat. 1424, 33 U. S. C. § 901 et seq., applicable to employees in the District of Columbia and in maritime-related occupations, and the Federal Employees’ Compensation Act, 80 Stat. 532, 5 U. S. C. § 8101 et seq., applicable to employees of the Federal Government. The overwhelming majority of workers in the United States are covered by state rather than federal programs, and thus we may refer generally to workmen’s compensation as a program of the States.
The Senate Committee on Finance, with which the 1965 amendment originated, took note of “the concern that has been expressed by many witnesses in the hearings about the payment of disability benefits concurrently with benefits payable under State workmen’s compensation programs.” S. Rep. No. 404, 89th Cong., 1st Sess., pt. 1, p. 100. Testimony concerning the anticipated effects of duplication upon the future of the state programs appears in Hearings on H. R. 6675 before the Senate Committee on Finance, 89th Cong., 1st Sess., pt. 1, pp. 252, 259, 366, pt. 2, pp. 540, 738-740, 892-897, 949-954, 990. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
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"Alien Property Custodian",
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PUBLIC SERVICE COMMISSION OF THE STATE OF NEW YORK v. MID-LOUISIANA GAS CO. et al.
No. 81-1889.
Argued March 22, 1983 —
Decided June 28, 1983
Jerome M. Feit argued the cause for petitioners in all cases. With him on the briefs for petitioner in No. 82-19 were Solicitor General Lee, Elliott Schulder, and Charles A. Moore. David E. Blabey, Richard A. Solomon, and David DAles-sandro filed briefs for petitioner in No. 81-1889. Arnold
D. Berkeley and Richard I. Chaifetz filed briefs for petitioner in No. 81-1958. Frank J. Kelley, Attorney General of Michigan, Louis J. Caruso, Solicitor General, and Arthur
E. D’Hondt and R. Philip Brown, Assistant Attorneys General, filed a brief for petitioner in No. 81-2042.
James D. McKinney argued the cause for respondents in all cases. With him on the brief for respondents Mid-Louisiana Gas Co. et al. were George W. McHenry, Jr., John H. Bumes, Jr., Alan C. Wolf, C. Frank Reifsnyder, Richard C. Green, Donald J. Maclver, Jr., Richard Owen Baish, Scott D. Fobes, William M. Lange, Augustine A. Mazzei, Jr., Morris Kennedy, William R. Mapes, Jr., and Larry D. Hall. William W. Brackett, Daniel F. Collins, Terry 0. Vogel, and Gary L. Cowan filed a brief for respondent Michigan Wisconsin Pipe Line Co. John E. Holtzinger, Jr., Karol Lyn Newman, David E. Weatherwax, and Philip L. Jones filed a brief for respondent Consolidated Gas Supply Corp.
Together with No. 81-1958, Arizona Electric Power Cooperative, Inc. v. Mid-Louisiana Gas Co. et al.; No. 81-2042, Michigan v. Mid-Louisiana Gas Co. et al.; and No. 82-19, Federal Energy Regulatory Commission v. Mid-Louisiana Gas Co. et al., also on certiorari to the same court.
Briefs of amid curiae urging reversal were filed by Byron S. Georgiou for Edmund G. Brown, Jr., Governor of California; and by Daniel E. Gib son, Robert B. McLennan, Janice E. Kerr, J. Calvin Simpson, Randolph W. Deutsch, Gordon Pearce, and Thomas D. Clarke for the Public Utilities Commission of the State of California et al.
Richard H. Silverman and Morton L. Simons filed a brief for the Public Power Group as amicus curiae.
Justice Stevens
delivered the opinion of the Court.
By enacting the Natural Gas Policy Act of 1978 (NGPA), 92 Stat. 3350, 15 U. S. C. §3301 et seq. (1976 ed., Supp. V), Congress comprehensively and dramatically changed the method of pricing natural gas produced in the United States. In Title I of that Act, Congress defined eight categories of natural gas production, specified the maximum lawful price that may be charged for “first sales” in each category, and prescribed rules for increasing first sale prices each month and passing them on to downstream purchasers. The question presented in these cases is whether the Federal Energy Regulatory Commission has the authority to exclude from this scheme most of the gas produced from wells owned by interstate pipelines and to prescribe a different method of setting prices for that gas. The answer is provided by the Act’s definition of a “first sale” and by the scheme of the entire NGPA.
Respondents are interstate pipeline companies that transport natural gas from the wellhead to consumers. They purchase most of their gas from independent producers. In addition, they acquire a significant amount of gas from wells that they own themselves or that their affiliates own. Gas from all three sources is usually commingled in the pipelines before being delivered to their customers downstream. Thus, at the time of delivery it is often impossible to identify the producer of a particular volume of gas.
On November 14, 1979, the Commission entered Order No. 58, promulgating final regulations to implement the definition of “first sale” under the NGPA. The first category of producers — independent producers — is assigned a “first sale” for all natural gas transferred to interstate pipelines. The second category of producers — pipeline affiliates that are not themselves pipelines or distributors — is also assigned a “first sale” for all natural gas transferred to interstate pipelines, unless the Commission specifically rules to the contrary. In contrast, the third category of producers — pipelines themselves — is not automatically assigned a “first sale” for its production. A pipeline does enjoy a “first sale” for any gas it sells at the wellhead. Similarly, it enjoys a “first sale” for any gas it sells downstream that consists solely of its own production. It also enjoys a “first sale” for any downstream sales of commingled independent-producer and pipeline-producer gas, as long as it dedicated an equivalent volume of its own production to that purchaser by contract. Finally, it enjoys a “first sale” for any downstream sales of commingled gas in an otherwise unregulated intrastate market. However, if a pipeline producer sells commingled gas in an interstate market without having dedicated a particular volume of its production to that particular sale, it does not enjoy first sale treatment.
On August 4,1980, the Commission entered Order No. 98. The Commission noted that its construction of the NGPA in Order No. 58 had left most interstate pipeline production outside the Act’s coverage, since so much of it is commingled with purchased gas. It announced that such production and its downstream sale remain subject to the Commission’s regulatory jurisdiction under the Natural Gas Act (NGA), 52 Stat. 821, 15 U. S. C. §717 et seq. (1976 ed. and Supp. V). In order to provide pipelines with an incentive to compete with independent producers in acquiring new leases and drilling new wells, the Commission decided that pipeline production should receive treatment under the NGA that is comparable to the treatment given independent production under the NGPA. It therefore promulgated regulations under the NGA providing that the NGPA’s first sale pricing should apply to all pipeline production on leases acquired after October 8, 1969, and to all pipeline production from wells drilled after January 1, 1973, regardless of when the underlying lease had been acquired. All other pipeline production would be priced for ratemaking purposes just as it had been before the NGPA was enacted.
Respondents petitioned for review of both Commission orders, contending that Order No. 58 was based on a misreading of the NGPA and that in Order No. 98 the Commission had acted arbitrarily in refusing to authorize NGPA pricing for all pipeline production. The Court of Appeals held that the NGPA was intended to provide the same incentives to pipeline production as to independent production, that there were no practical obstacles to treating the transfer of gas from a pipeline’s production division to its transportation division as a first sale, and that the Commission’s reading of the NGPA was inconsistent with the goals of Congress. 664 F. 2d 530 (CA5 1981). It held Order No. 58 invalid and therefore did not review Order No. 98 separately.
We granted petitions for certiorari filed by the Commission and by state regulatory Commissions, which contend that the Court of Appeals’ holding will provide the pipelines with windfall profits that Congress did not intend. 459 U. S. 820 (1982). In explaining why we are in general agreement with the Court of Appeals, we first review the statutory definition of “first sale,” then consider the history and structure of the NGPA, and finally examine the specific arguments on behalf of the Commission’s position.
The respondents seek first sale treatment for one of two transfers of natural gas: the intracorporate transfer from a pipeline-owned production system to the pipeline, or the downstream transfer of commingled gas from the pipeline to a customer. If either transfer is treated as a first sale, respondents would be able to include an NGPA rate for production among their costs of service, just as they do when they acquire natural gas from independent producers. They contend initially that Congress has authorized the Commission, in the exercise of its sound discretion, to treat either transfer as a first sale. They contend further that Congress has not authorized the Commission to reject both possibilities.
The definition of a “first sale” is found in §2(21) of the NGPA. 92 Stat. 3355, 15 U. S. C. §3301(21) (1976 ed., Supp. V). It takes the form of a general rule, qualified by an exclusion. The general rule sweeps broadly, providing:
“(A) General rule. — The term ‘first sale’ means any sale of any volume of natural gas—
“(i) to any interstate pipeline or intrastate pipeline;
“(ii) to any local distribution company;
“(iii) to any person for use by such person;
“(iv) which precedes any sale described in clauses (i),
(ii), or (iii); and
“(v) which precedes or follows any sale described in clauses (i), (ii), (iii), or (iv) and is defined by the Commission as a first sale in order to prevent circumvention of any maximum lawful price established under this Act.” 92 Stat. 3355,15 U. S. C. §3301(21)(A) (1976 ed., Supp. V) (emphasis added).
Under the terms of the general rule, a transfer that falls within any one of its five clauses is presumptively a first sale. This means that there can be many first sales of a single volume of gas between the well and the pipeline’s customers. In this case, the downstream transfer plainly satisfies the general rule. The only obstacle to including the intracorporate transfer within the general rule is the question whether it may properly be deemed a “sale.” That obstacle, however, is insubstantial. The legislative history clearly demonstrates that the statute was not intended to prohibit the Commission from deeming it a sale; the Conference Committee Report provides that the Commission may “establish rules applicable to intracorporate transactions under the first sale definition.” H. R. Conf. Rep. No. 95-1752, p. 116 (1978). Thus, if the first sale definition consisted only of the general rule, the Commission would plainly be authorized to treat either transfer as a first sale.
The exception to the general rule provides:
“(B) Certain sales not included. — Clauses (i), (ii), (iii), or (iv) of subparagraph (A) shall not include the sale of any volume of natural gas by any interstate pipeline, intrastate pipeline, or local distribution company, or any affiliate thereof, unless such sale is attributable to volumes of natural gas produced by such interstate pipeline, intrastate pipeline, or local distribution company, or any affiliate thereof.” 92 Stat. 3355, 15 U. S. C. §3301(21)(B) (1976 ed., Supp. V).
This language does not diminish the Commission’s authority to treat the intracorporate transfer as a first sale. Whether it affects the Commission’s authority to treat the downstream transfer as a first sale depends on the meaning of the words “attributable to.” Although the Commission interpreted them as meaning “solely attributable to,” it would be at least as consistent with the ordinary understanding of the words to interpret them as meaning “measurably attributable to.” Furthermore, it would have been fully consistent with the spirit of the exemption if the Commission had adopted the latter interpretation and had given “first sale” treatment to a percentage of the downstream sale — the percentage that pipeline production forms of all the gas in the pipeline.
Thus, we agree with the respondents that the Commission has the authority to treat either the intracorporate transfer or the downstream transfer as a first sale. That, however, does not dispose of this litigation. For there is a substantial difference between holding that the Commission had the authority to treat either transfer as a first sale and holding that the Commission was required so to treat one or the other.
II
In order to determine whether the Commission was obligated to treat either the intracorporate transfer or the relevant portion of the downstream transfer as a first sale, it is necessary to examine the purposes of the NGPA. Those purposes are rooted in the history of federal natural gas regulation before 1978 and in the overall structure of the statute.
A
Between 1938 and 1978, the Commission regulated sales of natural gas in interstate commerce pursuant to the NGA. The NGA was enacted in response to reports suggesting that the monopoly power of interstate pipelines was harming consumer welfare. Initially, the Commission construed the NGA to require only regulation of gas sales at the downstream end of interstate pipelines. E. g., Natural Gas Pipeline Co., 2 F. P. C. 218 (1940). It authorized rates that were “just and reasonable” within the meaning of §4(a) of the NGA, 52 Stat. 822, 15 U. S. C. § 717c(a), by examining whatever costs the pipeline had incurred in acquiring and transporting the gas to the consumer. If the pipeline itself or a pipeline affiliate had produced the gas, the actual expenses historically associated with production and gathering were included in the rate base to the extent proper and reasonable. See FPC v. Hope Natural Gas Co., 320 U. S. 591, 614-615, and n. 25 (1944); Colorado Interstate Gas Co. v. FPC, 324 U. S. 581, 604-606 (1945). However, if the pipeline had purchased the gas from an independent producer, the Commission did not take jurisdiction over the producer to evaluate the reasonableness of its rates; it only considered the broad issue of whether, from the pipeline’s perspective, the purchase price was “collusive or otherwise improperly excessive.” Phillips Petroleum Co., 10 F. P. C. 246, 280 (1951).
In 1954, this Court rejected the Commission’s approach. We held that the NGA required the Commission to take jurisdiction over independent gas producers and to scrutinize the reasonableness of the rates they charged to interstate pipelines. Phillips Petroleum Co. v. Wisconsin, 347 U. S. 672 (1954). We interpreted the purpose of the NGA as being “to give the Commission jurisdiction over the rates of all wholesales of natural gas in interstate commerce, whether by a pipeline company or not and whether occurring before, during, or after transmission by an interstate pipeline company,” id., at 682, and concluded that, for regulatory purposes, there was no essential difference between the gas a pipeline obtains from independent producers and the gas it obtains from its own affiliates, id., at 685.
The problems of regulating the natural gas industry grew steadily between Phillips and the passage of the NGPA. At first, the Commission attempted to follow the Phillips mandate by applying the same regulatory technique it had always applied to pipeline-produced natural gas. It calculated just and reasonable rates for each company — whether pipeline, pipeline affiliate, or independent producer — by studying the costs of production that had historically been incurred by that particular company. But that so-called “cost of service” approach quickly proved impractical. See Atlantic Refining Co. v. Public Service Comm’n of New York, 360 U. S. 378, 389 (1959). Whereas there were relatively few interstate pipelines, the vast number of natural gas producers threatened to overwhelm the Commission’s administrative capacity. See Permian Basin Area Rate Cases, 390 U. S. 747, 757, and n. 13 (1968).
The Commission then shifted to an “area rate” approach. See Statement of General Policy 61-1, 24 F. P. C. 818 (1960). Instead of establishing individual rates for each company on the basis of its own costs of service, it established a single rate schedule for each producing region. Two elements of the area rate method bear mention. First, the Commission continued to base its computations on historical costs, rather than on projections of future costs. And second, it established two maximum rates for each area: a “new gas” rate for gas produced independently of oil from wells drilled after a given date, and an “old gas” rate for all other gas. The two-tiered structure, which priced gas on the basis of its “vintage,” rested on the theory that for already-flowing gas “price could not serve as an incentive, and... any price above average historical costs, plus an appropriate return, would merely confer windfalls.” Permian Basin Area Rate Cases, supra, at 797.
The Permian Basin area rate proceeding governed only production by independent producers. The Commission undertook a separate proceeding to consider whether it remained appropriate to treat pipelines and pipeline affiliates on a company-by-company basis. On October 7, 1969, 17 months after this Court approved the use of area rates, the Commission concluded that for leases acquired from that date on, pipeline gas should receive pricing on a “parity” basis; such gas would be eligible for the same area rate as independently produced gas of the same vintage. Pipeline Production Area Rate Proceeding (Phase I), 42 P. P. C. 738, 752 (Opinion No. 568). Gas produced from already-acquired leases would continue to be priced on the old single-company cost-of-service method “in order to expedite the proceedings and to avoid complications and evidentiary problems.” Id., at 753. Significantly, gas produced by pipeline affiliates would be treated in precisely the same manner as gas produced by the pipelines themselves.
In the early 1970’s, it became apparent that the regulatory structure was not working. The Commission recognized that the historical-cost-based, two-tiered rate scheme had led to serious production shortages. See Southern Louisiana Area Rate Proceeding, 46 F. P. C. 86, 110-111 (1971). See generally Breyer & MacAvoy, The Natural Gas Shortage and the Regulation of Natural Gas Producers, 86 Harv. L. Rev. 941, 965-979 (1973). Therefore, the Commission modified its practices, shifting from an “area rate” to a “national rate” approach. National Rates for Natural Gas, 51 F. P. C. 2212 (1974) (Opinion No. 699). The national rate became effective for all wells drilled after January 1, 1973, and applied equally to production by independent producers, pipelines, and pipeline affiliates. A few months later, the Commission responded further by shifting from a pure historical-cost-based to an incentive-price-based approach, National Rates for Natural Gas, 52 F. P. C. 1604, 1615-1618 (1974) (Opinion No. 699-H), and by temporarily abandoning the practice of vintaging, id., at 1636.
These measures did not prove sufficient. The interstate rates remained substantially below the unregulated prices available for intrastate sales, and the interstate supply remained inadequate. Throughout 1977 and 1978, the 95th Congress studied the situation. During the closing hours of the Second Session, it enacted a package of five Acts, one of which was the NGPA. The NGPA is designed to preserve the Commission’s authority under the NGA to regulate natural gas sales from pipelines to their customers; however, it is designed to supplant the Commission’s authority to establish rates for the wholesale market, the market consisting of so-called “first sales” of natural gas.
B
The NGPA was the product of a Conference Committee’s careful reconciliation of two strong, but divergent, responses to the natural gas shortage.
The House bill had proposed “a single uniform price policy for natural gas produced in the United States.” H. R. Rep. No. 95-496, pt. 4, p. 96 (1977). A key element of that policy had been the establishment of a statutory incentive price structure that would simultaneously promote production and reduce the regulatory burden:
“[0]ther controversial aspects of current Federal regulation are not perpetuated. The uncertainties associated with lengthy judicial review of Federal Power Commission wellhead price determinations are avoided by use of a statutorily established maximum lawful price. Regulatory lag and other problems associated with reliance upon historical costs to establish just and reasonable wellhead prices are similarly avoided. Vintaging of new natural gas prices would also terminate.” Id., at 97.
The Senate bill, passed on the floor, would have maintained Natural Gas Act regulation for all gas sold or delivered in interstate commerce before January 1, 1977, and steadily cut back on Commission jurisdiction so that all natural gas sold after January 1, 1982, would have been completely deregulated. S. 2104, 95th Cong., 1st Sess., 123 Cong. Rec. 32306 (1977).
The Conference Committee’s compromise has been justly described as “a comprehensive statute to govern future natural gas regulation.” Note, Legislative History of the Natural Gas Policy Act, 59 Texas L. Rev. 101, 116 (1980). In Title I, it establishes an exhaustive categorization of natural gas production, and sets forth a methodology for calculating an appropriate ceiling price within each category: Section 102 covers “new natural gas and certain natural gas produced from the Outer Continental Shelf”; §103 covers “new, onshore production wells”; § 104 covers “natural gas committed or dedicated to interstate commerce on the day before the date of the enactment of [the NGPA]”; § 105 covers “sales under existing intrastate contracts”; § 106 covers “sales under rollover contracts”; § 107 covers “high-cost natural gas”; § 108 covers “stripper well natural gas”; and § 109 is a catchall, covering “any natural gas which is not covered by any maximum lawful price under any other section of this subtitle.” 92 Stat. 3358-3368, 15 U. S. C. §§3312-3319 (1976 ed., Supp. V).
In each category of gas, the statute explicitly establishes an incentive pricing scheme that is wholly divorced from the traditional historical-cost methods applied by the Commission in implementing the NGA. The price is established either in terms of a dollar figure per million Btu’s, or in terms of a previously existing price, and is inflated over time according to a statutory formula. See § 101. For three categories of gas, the statute recognizes that the ceiling may be too low and authorizes the Commission to raise it whenever traditional NGA principles would dictate a higher price. See §§ 104, 106, and 109. The Commission is also given a somewhat ambiguous mandate to authorize increases above the ceiling for the other five categories. See § 110(a)(2). In none of the eight categories, however, is the Commission given authority to require a rate lower than the statutory ceiling.
Several features of this comprehensive scheme bear directly on the question whether Congress intended the Commission to be able to exclude pipeline production from its coverage completely. To begin with, the categories are defined on the basis of the type of well and the past uses of its gas, not on the basis of who owns the well. And since it is drafted in a manner that is designed to be exhaustive, all natural gas production falls within at least one of the categories.
Moreover, the statute replaces the Commission’s authority to fix rates of return to gas producers according to what is “just and reasonable” with a precise schedule of price ceilings. Section 601(b)(1)(A) provides that, “[sjubject to paragraph (4), for purposes of sections 4 and 5 of the Natural Gas Act, any amount paid in any first sale of natural gas shall be deemed to be just and reasonable if... such amount does not exceed the applicable maximum lawful price established under Title I of this Act.” 92 Stat. 3410, 15 U. S. C. § 3431(b)(1)(A) (1976 ed., Supp. V). The new statutory rates are intended to provide investors with adequate incentives to develop new sources of supply. As the Commission itself recognized in Order No. 98: “The Congressional decision to reorder the economic regulation of natural gas prices to provide a uniform system of statutorily prescribed price incentives was based on a... belief that such incentives are necessary to secure continued development and additional production of natural gas.” 45 Fed. Reg. 53093 (1980).
The statute evinces careful thought about the extent to which producers of “old gas” — gas already dedicated to interstate commerce before passage of the NGPA — would be able to enjoy incentive pricing. Section 104 of the statute directly incorporates part of the “vintaging” pattern that previously existed under the NGA. Thus, most old gas continues to receive the price it received under the NGA, increased over time in accordance with the inflation formula found in § 101. However, § 101(b)(5) of the Act specifies that if a volume of gas fits into more than one category, “the provision which could result in the highest price shall be applicable.” 92 Stat. 3357, 15 U. S. C. §3311(b)(5) (1976 ed., Supp. V). Thus, old gas that would be subject to the old NGA vintaging rules may be entitled to a higher rate if it falls within one or more of the other Title I categories, in particular § 107 (high-cost natural gas) and § 108 (stripper well gas). Whether or not the old NGA rates were in fact sufficient to stimulate some production from those categories, Congress concluded that the Nation’s energy needs justified the higher, statutory rates.
In addition, the costs of providing these production incentives are plainly to be shouldered by downstream consumers, not by pipelines. Title II of the Act establishes a complicated structure, to be implemented by the Commission, for determining which consumers are to face the bulk of the price increases. 92 Stat. 3371-3381, 15 U. S. C. §§3341-3348 (1976 ed., Supp. V). That Title is designed to allocate the burden among categories of consumers; it is not designed to diminish in any way the incentive for producers or to force pipelines to bear any part of that burden. As the Conference Report makes plain:
“The conference agreement guarantees that interstate pipelines may pass through costs of natural gas purchases if the price of the purchased natural gas does not exceed the ceiling price levels established under the legislation.... This recovery must be consistent with the incremental pricing provisions of Title II; however, Title II is structured to permit recovery of all costs which a pipeline is entitled to recover.” H. R. Conf. Rep. No. 95-1752, p. 124 (1978).
Given such a comprehensive scheme, we conclude that Congress would have clearly identified, either in the statutory language or in the legislative history, any significant source of production that was intended to be excluded. For the usefulness of natural gas does not depend on who produces it, and there is no reason to believe that any one group of producers is less likely to respond to incentives than any other. Yet nowhere in the NGPA do we find any expression of a desire to exclude pipeline production.
Indeed, three statutory provisions combine to give a clear signal that the statute was intended to include such production. Section 203, which defines the acquisition costs subject to passthrough requirements, specifically states:
“Interstate pipeline production. — For purposes of this section, in the case of any natural gas produced by any interstate pipeline or any affiliate of such pipeline, the first sale acquisition cost of such natural gas shall be determined in accordance with rules prescribed by the Commission.” 92 Stat. 3375, 15 U. S. C. § 3343(b)(2) (1976 ed., Supp. V).
This provision expressly mentions pipeline production as a matter subject to NGPA jurisdiction. Perhaps even more significantly, it makes clear that Congress intended to continue a policy that had been in effect since 1938: a policy of drawing no distinction between wells owned by a pipeline itself and those owned by an affiliate. That point is equally apparent from the exemption half of the definition of “first sale” in Title I. That provision requires first sale treatment of a sale that is “attributable to volumes of natural gas produced by such interstate pipeline... or any affiliate thereof.” § 2(21)(B) (emphasis added). See supra, at 326. Given that pipelines are to be treated in the same manner as pipeline affiliates, and given that pipeline affiliates are explicitly covered under the NGPA, see § 601(b)(1)(E), it follows directly that pipeline production is covered.
In sum, the Court of Appeals correctly concluded that Congress intended pipeline production to receive first sale pricing. The Commission had no authority to ignore that intention absent a persuasive justification for doing so.
l ) — I
Of course, “the interpretation of an agency charged with the administration of a statute is entitled to substantial deference.” Blum v. Bacon, 457 U. S. 132, 141 (1982). It is therefore incumbent upon us to consider carefully the Commission’s arguments that Congress implicitly intended to exempt pipeline production from an otherwise comprehensive regulatory scheme. We think it important to address three of the Commission’s arguments explicitly: one is aimed at the propriety of giving first sale treatment to the intra-corporate transfer, one at the propriety of giving first sale treatment to the downstream sale, and the third at the propriety of any form of first sale treatment for pipeline production.
The Commission suggests that it would be wrong to assign the intracorporate transfer a first sale price “automatically” because not even independent producers receive such automatic treatment. It emphasizes the Conference Committee’s admonition that “maximum lawful prices are ceiling prices only. In no case may a seller receive a higher price than his contract permits.” H. R. Conf. Rep. No. 95-1752, p. 74 (1978). Since arm’s-length contractual bargaining may reduce the price for independent producers, the Commission suggests that “[i]t would be anomalous in the extreme to conclude that Congress nonetheless meant to permit pipeline producers to qualify automatically for full NGPA prices by virtue of intracorporate transfers that are not covered by contracts.” Brief for Federal Energy Regulatory Commission 31-32.
This argument refutes a position that no one advocates. We agree completely that the intracorporate transfer should not “automatically” receive the NGPA ceiling price. Congress undoubtedly intended pipeline producers to be treated in the same manner as pipeline affiliate producers. The latter group is subjected to market control, through the application of § 601(b)(1)(E), which provides that, “in the case of any first sale between any interstate pipeline and any affiliate of such pipeline, any amount paid in any first sale shall be deemed to be just and reasonable if, in addition to satisfying the requirements of [Title I], such amount does not exceed the amount paid in comparable | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
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"Unidentifiable",
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"NO Admin Action",
"Processing Tax Board of Review"
] | [
43
] | sc_adminaction |
COLUMBIA BROADCASTING SYSTEM, INC. v. DEMOCRATIC NATIONAL COMMITTEE
No. 71-863.
Argued October 16, 1972
Decided May 29, 1973
Burger, C. J., announced the Court’s judgment and delivered an opinion of the Court with respect to Parts I, II, and IV, in which White, Blacicmun, Powell, and Rehnquist, JJ., joined, and in which as to Parts I, II, and III Stewart and Rehnquist, JJ., joined. Stewart, J., filed an opinion concurring in Parts I, II, and III, post, p. 132. White, J., filed an opinion concurring in Parts I, II, and IV, post, p. 146. Blacicmun, J., filed an opinion concurring in Parts I, II, and IV, in which Powell, J., joined, post, p. 147. Douglas, J., filed an opinion concurring in the judgment, post, p. 148. Brennan, J., filed a dissenting opinion, in which Marshall, J., joined, post, p. 170.
J. Roger Wollenberg argued the cause for petitioner in No. 71-863. With him on the briefs were Lloyd N. Cutler, Timothy B. Dyk, Daniel Marcus, Robert V. Evans, John D. Appel, and Joseph DeFranco. Solicitor General Griswold argued the cause for petitioners in No. 71-864. With him on the brief were Acting Assistant Attorney General Comegys, Howard E. Shapiro, and John W. Pettit. Ernest W. Jennes argued the cause for petitioner in No. 71-865. With him on the briefs were Charles A. Miller and Michael Boudin. Vernon L. Wilkinson argued the cause for petitioner in No. 71-866. With him on the brief were James A. McKenna, Jr., and Carl R. Ramey.
Joseph A. Calif ano, Jr., argued the cause for respondent Democratic National Committee in Nos. 71-863, 71-864, and 71-866. With him on the brief was John G. Kester. Thomas R. Asher argued the cause for respondent Business Executives’ Move for Vietnam Peace in Nos. 71-864 and 71-865. With him on the brief was Albert PL. Kramer.
Together with Nos. 71-864, Federal Communications Commission et al. v. Business Executives’ Move for Vietnam Peace et al.; 71-865, Post-Newsweek Stations, Capital Area, Inc. v. Business Executives’ Move for Vietnam Peace; and 71-866, American Broadcasting Cos., Inc. v. Democratic National Committee, also on certiorari to the same court.
Floyd Abrams and Cory don B. Dunham filed a brief for National Broadcasting Co., Inc., as amicus curiae urging reversal.
J. Albert Woll, Laurence Gold, and Thomas E. Harris filed a brief for the American Federation of Labor and Congress of Industrial Organizations as amicus curiae urging affirmance.
MR. Chief Justice Burger
delivered the opinion of the Court (Parts I, II, and IV) together with an opinion (Part III), in which Mr. Justice Stewart and Mr. Justice Rehnquist joined.
We granted the writs of certiorari in these cases to consider whether a broadcast licensee’s general-policy of not selling advertising time to individuals or groups wishing to speak out on issues they consider important violates the Federal Communications Act of 1934, 48 Stat. 1064, as amended, 47 U. S. C. § 151 &t seq., or the First Amendment.
In two orders announced the same day, the Federal Communications Commission ruled that a broadcaster who meets his public obligation to provide full and fair coverage of public issues is not required to accept editorial advertisements. Democratic National Committee, 25 F. C. C. 2d 216; Business Executives’ Move for Vietnam Peace, 25 F. C. C. 2d 242. A divided Court of Appeals reversed the Commission, holding that a broadcaster’s fixed policy of refusing editorial advertisements violates the First Amendment; the court remanded the cases to the Commission to develop procedures and guidelines for administering a First Amendment right of access. Business Executives’ Move For Vietnam Peace v. FCC, 146 U. S. App. D. C. 181, 450 F. 2d 642 (1971).
The complainants in these actions are the Democratic National Committee (DNC) and the Business Executives' Move for Vietnam Peace (BEM), a national organization of businessmen opposed to United States involvement in the Vietnam conflict. In January 1970, BEM filed a complaint with the Commission charging that radio station WTOP in Washington, D. C., had refused to sell it time to broadcast a series of one-minute spot announcements expressing BEM views on Vietnam. WTOP, in common with many, but not all, broadcasters, followed a policy of refusing to sell time for spot announcements to individuals and groups who wished to expound their views on controversial issues. WTOP took the position that since it presented full and fair coverage of important public questions, including the Vietnam conflict, it was justified in refusing to accept editorial advertisements. WTOP also submitted evidence showing that the station had aired the views of critics of our Vietnam policy on numerous occasions. BEM challenged the fairness of WTOP’s coverage of criticism of that policy, but it presented no evidence in support of that claim.
Four months later, in May 1970, DNC filed with the Commission a request for a declaratory ruling:
“That under the First Amendment to the Constitution and the Communications Act, a broadcaster may not, as a general policy, refuse to sell time to responsible entities, such as the DNC, for the solicitation of funds and for comment on public issues.”
DNC claimed that it intended to purchase time from radio and television stations and from the national networks in order to present the views of the Democratic Party and to solicit funds. Unlike BEM, DNC did not object to the policies of any particular broadcaster but claimed that its prior “experiences in this area make it clear that it will encounter considerable difficulty — if not total frustration of its efforts — in carrying out its plans in the event the Commission should decline to issue a ruling as requested.” DNC cited Red Lion Broadcasting Co. v. FCC, 395 U. S. 367 (1969), as establishing a limited constitutional right of access to the airwaves.
In two separate opinions, the Commission rejected respondents’ claims that “responsible” individuals and groups have a right to purchase advertising time to comment on public issues without regard to whether the broadcaster has complied with the Fairness Doctrine. The Commission viewed the issue as one of major significance in administering the regulatory scheme relating to the electronic media, one going “to the heart of the system of broadcasting which has developed in this country....” 25 F. C. C. 2d, at 221. After reviewing the legislative history of the Communications Act, the provisions of the Act itself, the Commission’s decisions under the Act, and the difficult problems inherent in administering a right of access, the Commission rejected the demands of BEM and DNC.
The Commission also rejected BEM’s claim that WTOP had violated the Fairness Doctrine by failing to air views such as those held by members of BEM; the Commission pointed out that BEM had made only a “general allegation” of unfairness in WTOP’s coverage of the Vietnam conflict and that the station had adequately rebutted the charge by affidavit. The Commission did, however, uphold DNC’s position that the statute recognized a right of political parties to purchase broadcast time for the purpose of soliciting funds. The Commission noted that Congress has accorded special consideration for access by political parties, see 47 U. S. C. § 315 (a), and that solicitation of funds by political parties is both feasible and appropriate in the short space of time generally allotted to spot advertisements.
A majority of the Court of Appeals reversed the Commission, holding that “a flat ban on paid public issue announcements is in violation of the First Amendment, at least when other sorts of paid announcements are accepted.” 146 ü. S. App. D. C., at 185, 450 F. 2d, at 646. Recognizing that the broadcast frequencies are a scarce resource inherently unavailable to all, the court nevertheless concluded that the First Amendment mandated an “abridgeable” right to present editorial advertisements. The court reasoned that a broadcaster's policy of airing commercial advertisements but not editorial advertisements constitutes unconstitutional discrimination. The court did not, however, order that either BEM's or DNC’s proposed announcements must be accepted by the broadcasters; rather, it remanded the cases to the Commission to develop “reasonable procedures and regulations determining which and how many ‘editorial advertisements' will be put on the air.” Ibid.
Judge McGowan dissented; in his view, the First Amendment did not compel the Commission to undertake the task assigned to it by the majority:
“It is presently the obligation of a licensee to advance the public’s right to know by devoting a substantial amount of time to the presentation of controversial views on issues of public importance, striking a balance which is always subject to redress by reference to the fairness doctrine. Failure to do so puts continuation of the license at risk — a sanction of tremendous potency, and one which the Commission is under increasing pressure to employ.
“This is the system which Congress has, wisely or not, provided as the alternative to public ownership and operation of radio and television communications facilities. This approach has never been thought to be other than within the permissible limits of constitutional choice.” 146 U. S. App. D. C., at 205, 450 F. 2d, at 666.
Judge McGowan concluded that the court’s decision to overrule the Commission and to remand for development and implementation of a constitutional right of access put the Commission in a “constitutional straitjacket” on a highly complex and far-reaching issue.
I
Mr. Justice White’s opinion for the Court in Red Lion Broadcasting Co. v. FCC, 395 U. S. 367 (1969), makes clear that the broadcast media pose unique and special problems not present in the traditional free speech case. Unlike other media, broadcasting is subject to an inherent physical limitation. Broadcast frequencies are a scarce resource; they must be portioned out among applicants. All who possess the financial resources and the desire to communicate by television or radio cannot be satisfactorily accommodated. The Court spoke to this reality when, in Red Lion, we said “it is idle to posit an unabridgeable First Amendment right to broadcast comparable to the right of every individual to speak, write, or publish.” Id., at 388.
Because the broadcast media utilize a valuable and limited public resource, there is also present an unusual order of First Amendment values. Red Lion discussed at length the application of the First Amendment to the broadcast media. In analyzing the broadcasters’ claim that the Fairness Doctrine and two of its component rules violated their freedom of expression, we held that “[n]o one has a First Amendment right to a license or to monopolize a radio frequency; to deny a station license because ‘the public interest’ requires it ‘is not a denial of free speech.’ ” Id., at 389. Although the broadcaster is not without protection under the First Amendment, United States v. Paramount Pictures, Inc., 334 U. S. 131, 166 (1948), “[i]t is the right of the viewers and listeners, not the right of the broadcasters, which is paramount.... It is the right of the public to receive suitable access to social, political, esthetic, moral, and other ideas and experiences which is crucial here. That right may not constitutionally be abridged either by Congress or by the FCC.” Red Lion, supra, at 390.
Balancing the various First Amendment interests involved in the broadcast media and determining what best serves the public’s right to be informed is a task of a great delicacy and difficulty. The process must necessarily be undertaken within the framework of the regulatory scheme that has evolved over the course of the past half century. For, during that time, Congress and its chosen regulatory agency have established a delicately balanced system of regulation intended to serve the interests of all concerned. The problems of regulation are rendered more difficult because the broadcast industry is dynamic in terms of technological change; solutions adequate a decade ago are not necessarily so now, and those acceptable today may well be outmoded 10 years hence.
Thus, in evaluating the First Amendment claims of respondents, we must afford great weight to the decisions of Congress and the experience of the Commission. Professor Chafee aptly observed:
“Once we get away from the bare words of the [First] Amendment, we must construe it as part of a Constitution which creates a government for the purpose of performing several very important tasks. The [First] Amendment should be interpreted so as not to cripple the regular work of the government. A part of this work is the regulation of interstate and foreign commerce, and this has come in our modern age to include the job of parceling out the air among broadcasters, which Congress has entrusted to the FCC. Therefore, every free-speech problem in the radio has to be considered with reference to the satisfactory performance of this job as well as to the value of open discussion. Although free speech should weigh heavily in the scale in the event of conflict, still the Commission should be given ample scope to do its job.” 2 Z. Chafee, Government and Mass Communications 640-641 (1947).
The judgment of the Legislative Branch cannot be ignored or undervalued simply because one segment of the broadcast constituency casts its claims under the umbrella of the First Amendment. That is not to say we “defer” to the judgment of the Congress and the Commission on a constitutional question, or that we would hesitate to invoke the Constitution should we determine that the Commission has not fulfilled its task with appropriate sensitivity to the interests in free expression. The point is, rather, that when we face a complex problem with many hard questions and few easy answers we do well to pay careful attention to how the other branches of Government have addressed the same problem. Thus, before confronting the specific legal issues in these cases, we turn to an examination of the legislative and administrative development of our broadcast system over the last half century.
II
This Court has on numerous occasions recounted the origins of our modern system of broadcast regulation. See, e. g., Red Lion, supra, at 375-386; National Broad casting Co. v. United States, 319 U. S. 190, 210-217 (1943); FCC v. Sanders Brothers Radio Station, 309 U. S. 470, 474 (1940); FCC v. Pottsville Broadcasting Co., 309 U. S. 134, 137-138 (1940). We have noted that prior to the passage of the Radio Act of 1927, 44 Stat. 1162, broadcasting was marked by chaos. The unregulated and burgeoning private use of the new media in the 1920’s had resulted in an intolerable situation demanding congressional action:
“It quickly became apparent that broadcast frequencies constituted a scarce resource whose use could be regulated and rationalized only by the Government. Without government control, the medium would be of little use because of the cacaphony of competing voices, none of which could be clearly and predictably heard." Red Lion, supra, at 376.
But, once it was accepted that broadcasting was subject to regulation, Congress was confronted with a major dilemma: how to strike a proper balance between private and public control. Cf. Farmers Union v. WDAY, 360 U. S. 525, 528 (1959).
One of the earliest and most frequently quoted statements of this dilemma is that of Herbert Hoover, when he was Secretary of Commerce. While his Department was making exploratory attempts to deal with the infant broadcasting industry in the early 1920’s, he testified before a House Committee:
“We can not allow any single person or group to place themselves in [a] position where they can censor the material which shall be broadcasted to the public, nor do I believe that the Government should ever be placed in the position of censoring this material.” Hearings on H. R. 7357 before the House Committee on the Merchant Marine and Fisheries, 68th Cong., 1st Sess., 8 (1924).
That statement foreshadowed the “tightrope” aspects of Government regulation of the broadcast media, a problem the Congress, the Commission, and the courts have struggled with ever since. Congress appears to have concluded, however, that of these two choices — private or official censorship — Government censorship would be the most pervasive, the most self-serving, the most difficult to restrain and hence the one most to be avoided.
The legislative history of the Radio Act of 1927, the model for our present statutory scheme, see FCC v. Pottsville Broadcasting Co., supra, at 137, reveals that in the area of discussion of public issues Congress chose to leave broad journalistic discretion with the licensee. Congress specifically dealt with — and firmly rejected — the argument that the broadcast facilities should be open on a nonselective basis to all persons wishing to talk about public issues. Some members of Congress — those whose views were ultimately rejected— strenuously objected to the unregulated power of broadcasters to reject applications for service. See, e. g., H. R. Rep. No. 404, 69th Cong., 1st Sess., 18 (minority report). They regarded the exercise of such power to be “private censorship,” which should be controlled by treating broadcasters as public utilities. The provision that came closest to imposing an unlimited right of access to broadcast time was part of the bill reported to the Senate by the Committee on Interstate Commerce. The bill that emerged from the Committee contained the following provision:
“[I]f any licensee shall permit a broadcasting station to be used... by a candidate or candidates for any public office, or for the discussion of any question affecting the public, he shall make no discrimination as to the use of such broadcasting station, and with respect to said matters the licensee shall be deemed a common carrier in interstate commerce: Provided, that such licensee shall have no power to censor the material broadcast.” 67 Cong. Rec. 12503 (1926) (emphasis added).
When the bill came to the Senate floor, the principal architect of the Radio Act of 1927, Senator Dill, offered an amendment to the provision to eliminate the common carrier obligation and to restrict the right of access to candidates for public office. Senator Dill explained the need for the amendment:
“When we recall that broadcasting today is purely voluntary, and the listener-in pays nothing for it, that the broadcaster gives it for the purpose of building up his reputation, it seemed unwise to put the broadcaster under the hampering control of being a common carrier and compelled to accept anything and everything that was offered him so long as the price was paid.” 67 Cong. Rec. 12502.
The Senators were also sensitive to the problems involved in legislating “equal opportunities” with respect to the discussion of public issues. Senator Dill stated:
“[‘Public questions'] is such a general term that there is probably no question of any interest whatsoever that could be discussed but that the other side of it could demand time; and thus a radio station would be placed in the position that the Senator from Iowa mentions about candidates, namely, that they would have to give all their time to that kind of discussion, or no public question could be discussed.” Id., at 12504.
The Senate adopted Senator Dill’s amendment. The provision finally enacted, § 18 of the Radio Act of 1927, 44 Stat. 1170, was later re-enacted as § 315 (a) of the Communications Act of 1934, but only after Congress rejected another proposal that would have imposed a limited obligation on broadcasters to turn over their microphones to persons wishing to speak out on certain public issues. Instead, Congress after prolonged consideration adopted §3(h), which specifically provides that “a person engaged in radio broadcasting shall not, insofar as such person is so engaged, be deemed a common carrier.”
Other provisions of the 1934 Act also evince a legislative desire to preserve values of private journalism under a regulatory scheme which would insure fulfillment of certain public obligations. Although the Commission was given the authority to issue renewable three-year licenses to broadcasters and to promulgate rules and regulations governing the use of those licenses, both consistent with the “public convenience, interest, or necessity,” § 326 of the Act specifically provides that:
“Nothing in this chapter shall be understood or construed to give the Commission the power of censorship over the radio communications or signals transmitted by any radio station, and no regulation or condition shall be promulgated or fixed by the Commission which shall interfere with the right of free speech by means of radio communication.” 47 U. S. C. § 326.
From these provisions it seems clear that Congress intended to permit private broadcasting to develop with the widest journalistic freedom consistent with its public obligations. Only when the interests of the public are found to outweigh the private journalistic interests of the broadcasters will government power be asserted within the framework of the Act. License renewal proceedings, in which the listening public can be heard, are a principal means of such regulation. See Office of Communication of United Church of Christ v. FCC, 123 U. S. App. D. C. 328, 359 F. 2d 994 (1966), and 138 U. S. App. D. C. 112, 425 F. 2d 543 (1969).
Subsequent developments in broadcast regulation illustrate how this regulatory scheme has evolved. Of particular importance, in light of Congress’ flat refusal to impose a “common carrier” right of access for all persons wishing to speak out on public issues, is the Commission’s “Fairness Doctrine,” which evolved gradually over the years spanning federal regulation of the broadcast media. Formulated under the Commission’s power to issue regulations consistent with the “public interest,” the doctrine imposes two affirmative responsibilities on the broadcaster: coverage of issues of public importance must be adequate and must fairly reflect differing viewpoints. See Red Lion, 395 U. S., at 377. In fulfilling the Fairness Doctrine obligations, the broadcaster must provide free time for the presentation of opposing views if a paid sponsor is unavailable, Cullman Broadcasting Co., 25 P & F Radio Reg. 895 (1963), and must initiate programming on public issues if no one else seeks to do so. See John J. Dempsey, 6 P & F Radio Reg. 615 (1950); Red Lion, supra, at 378.
Since it is physically impossible to provide time for all viewpoints, however, the right to exercise editorial judgment was granted to the broadcaster. The broadcaster, therefore, is allowed significant journalistic discretion in deciding how best to fulfill the Fairness Doctrine obligations, although that discretion is bounded by rules designed to assure that the public interest in fairness is furthered. In its decision in the instant cases, the Commission described the boundaries as follows:
“The most basic consideration in this respect is that the licensee cannot rule off the air coverage of important issues or views because of his private ends or beliefs. As a public trustee, he must present representative community views and voices on controversial issues which are of importance to his listeners.... This means also that some of the voices must be partisan. A licensee policy of excluding partisan voices and always itself presenting views in a bland, inoffensive manner would run counter to the ‘profound national commitment that debate on public issues should be uninhibited, robust, and wide-open.' New York Times Go. v. Sullivan, 376 U. S. 254, 270 (1964); see also Red Lion Broadcasting Co., Inc. v. F. C. C., 395 U. S. 367, 392 (n. 18) (1969)... 25 F. C. C. 2d, at 222-223.
Thus, under the Fairness Doctrine broadcasters are responsible for providing the listening and viewing public with access to a balanced presentation of information on issues of public importance. The basic principle underlying that responsibility is “the right of the public to be informed, rather than any right on the part of the Government, any broadcast licensee or any individual member of the public to broadcast his own particular views on any matter... Report on Editorializing by Broadcast Licensees, 13 F. C. C. 1246, 1249 (1949). Consistent with that philosophy, the Commission on several occasions has ruled that no private individual or group has a right to command the use of broadcast facilities. See, e. g., Dowie A. Crittenden, 18 F. C. C. 2d 499 (1969); Margaret Z. Scherbina, 21 F. C. C. 2d 141 (1969); Boalt Hall Student Assn., 20 F. C. C. 2d 612 (1969); Madalyn Murray, 40 F. C. C. 647 (1966); Democratic State Central Committee of California, 19 F. C. C. 2d 833 (1968); U. S. Broadcasting Cory., 2 F. C. C. 208 (1935). Congress has not yet seen fit to alter that policy, although since 1934 it has amended the Act on several occasions and considered various proposals that would have vested private individuals with a right of access.
With this background in mind, we next proceed to consider whether a broadcaster’s refusal to accept editorial advertisements is governmental action violative of the First Amendment.
Ill
That “Congress shall make no law... abridging the freedom of speech, or of the press” is a restraint on government action, not that of private persons. Public Utilities Gomm’n v. Poliak, 343 U. S. 451, 461 (1952). The Court has not previously considered whether the action of a broadcast licensee such as that challenged here is “governmental action” for purposes of the First Amendment. The holding under review thus presents a novel question, and one with far-reaching implications. See Jaffe, The Editorial Responsibility of the Broadcaster: Reflections on Fairness and Access, 85 Harv. L. Rev. 768, 782-787 (1972).
The Court of Appeals held that broadcasters are in-strumentalities of the Government for First Amendment purposes, relying on the thesis, familiar in other contexts, that broadcast licensees are granted use of part of the public domain 'and are regulated as “proxies” or “ ‘fiduciaries’ of the people.” 146 U. S. App. D. C., at 191, 450 F. 2d, at 652. These characterizations are not without validity for some purposes, but they do not resolve the sensitive constitutional issues inherent in deciding whether a particular licensee action is subject.to First Amendment restraints.
In dealing with the broadcast media, as in other contexts, the line between private conduct and governmental action cannot be defined by reference to any general formula unrelated to particular exercises of governmental authority. When governmental action is alleged there must be cautious analysis of the quality and degree of Government relationship to the particular acts in question. “Only by sifting facts and weighing circumstances can the nonobvious involvement of the State in private conduct be attributed its true significance.” Burton v. Wilmington Parking Authority, 365 U. S. 715, 722 (1961).
In deciding whether the First Amendment encompasses the conduct challenged here, it must be kept in mind that we are dealing with a vital part of our system of communication. The electronic media have swiftly become a major factor in the dissemination of ideas and information. More than 7,000 licensed broadcast stations undertake to perform this important function. To a large extent they share with the printed media the role of keeping people informed.
As we have seen, with the advent of radio a half century ago, Congress was faced with a fundamental choice between total Government ownership and control of the new medium — the choice of most other countries — or some other alternative. Long before the impact and potential of the medium was realized, Congress opted for a system of private broadcasters licensed and regulated by Government. The legislative history suggests that this choice was influenced not only by traditional attitudes toward private enterprise, but by a desire to maintain for licensees, so far as consistent with necessary regulation, a traditional journalistic role. The historic aversion to censorship led Congress to enact § 326 of the Act, which explicitly prohibits the Commission from interfering with the exercise of free speech over the broadcast frequencies. Congress pointedly refrained from divesting broadcasters of their control over the selection of voices; § 3 (h) of the Act stands as a firm congressional statement that broadcast licensees are not to be treated as common carriers, obliged to accept whatever is tendered by members of the public. Both these provisions clearly manifest the intention of Congress to maintain a substantial measure of journalistic independence for the broadcast licensee.
The regulatory scheme evolved slowly, but very early the licensee’s role developed in terms of a “public trustee” charged with the duty of fairly and impartially informing the public audience. In this structure the Commission acts in essence as an “overseer,” but the initial and primary responsibility for fairness, balance, and objectivity rests with the licensee. This role of the Government as an “overseer” and ultimate arbiter and guardian of the public interest and the role of the licensee as a journalistic “free agent” call for a delicate balancing of competing interests. The maintenance of this balance for more than 40 years has called on both the regulators and the licensees to walk a “tightrope” to preserve the First Amendment values written into the Radio Act and its successor, the Communications Act.
The tensions inherent in such a regulatory structure emerge more clearly when we compare a private newspaper with a broadcast licensee. The power of a privately owned newspaper to advance its own political, social, and economic views is bounded by only two factors: first, the acceptance of a sufficient number of readers— and hence advertisers — to assure financial success; and, second, the journalistic integrity of its editors and publishers. A broadcast licensee has a large measure of journalistic freedom but not as large as that exercised by a newspaper. A licensee must balance what it might prefer to do as a private entrepreneur with what it is required to do as a “public trustee.” To perform its statutory duties, the Commission must oversee without censoring. This suggests something of the difficulty and delicacy of administering the Communications Act — a function calling for flexibility and the capacity to adjust and readjust the regulatory mechanism to meet changing problems and needs.
The licensee policy challenged in this case is intimately related to the journalistic role of a licensee for which it has been given initial and primary responsibility by Congress. The licensee’s policy against accepting editorial advertising cannot be examined as an abstract proposition, but must be viewed in the context of its journalistic role. It does not help to press on us the idea that editorial ads are “like” commercial ads, for the licensee’s policy against editorial spot ads is expressly based on a journalistic judgment that 10- to 60-second spot announcements are ill-suited to intelligible and intelligent treatment of public issues; the broadcaster has chosen to provide a balanced treatment of controversial | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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"NO Admin Action",
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] | [
37
] | sc_adminaction |
CONSUMER PRODUCT SAFETY COMMISSION et al. v. GTE SYLVANIA, INC., et al.
No. 79-521.
Argued April 14, 1980
Decided June 9, 1980
Rehnqttist, J., delivered the opinion for a unanimous Court.
Peter Buscemi argued the cause -pro hac vice for petitioners. With him on the briefs were Solicitor General McCree, Assistant Attorney General Daniel, Deputy Solicitor General Getter, Leonard Schaitman, Mark N. Mutterperl, and Andrew S. Krulwich.
Bernard G. Segal argued the cause for respondents. With him on the brief were Charles C. Hileman III, Ira P. Tiger, Deena Jo Schneider, Robert W. Steele, Alan M. Grimaldi, Harry L. Shniderman, H. James Conaway, Jr., Januar D. Bove, Jr., Stephen B. Clarkson, Charles S. Crompton, Jr., Ira M. Millstein, Peter Gartland, David Fleischer, Burton Y. Weitsenfeld, Michael A. Stiegel, William F. Patten, and H. Woodruff Turner.
Richard A. Lowe filed a brief for the Consumer Federation of America as amicus curiae urging reversal.
Mr. Justice Rehnquist
delivered the opinion of the Court.
The question presented is whether § 6 (b)(1) of the Consumer Product Safety Act, 15 U. S. C. § 2055 (b)(1), governs the disclosure of records by the Consumer Product Safety Commission pursuant tó a request under the Freedom of Information Act. We granted certiorari to review a judgment of the Court of Appeals for the Third Circuit because of the importance of the question and because of a conflict in the Circuits. 444 U. S. 979.
I
In 1972, Congress enacted the Consumer Product Safety Act (CPSA), 86 Stat. 1207, 15 U. S. C. § 2051 et seq., in order, •inter alia, “to protect the public against unreasonable risks of injury associated with consumer products” and “to assist consumers in evaluating the comparative safety of consumer products.”'15 U. S. C. §§ 2051 (b)(1) and (2). The CPSA created the Consumer Product Safety Commission (Commission) to carry out the statutory purposes. 15 U. S. C. § 2053. The Commission’s powers include the authority to collect and disseminate product safety information, 15 IT. S. C. § 2054 (a)(1), to conduct research and tests on consumer products, 15 IT. S. C. §§2054 (b)(1) and (2), to promulgate safety standards, 15 IT. S. C. § 2056, and to ban hazardous products, 15 U. S. C. § 2057.
Section 6 of the CPSA, 86 Stat. 1212, 15 U. S. C. § 2055, regulates the “public disclosure” of information by the Commission. Section 6 (b)(1), with which we deal here, requires the Commission, at least 30 days before the public disclosure of information pertaining to a consumer product, to notify the manufacturer and to provide it with a summary of the information to be disclosed, if the product is to be designated or described in such a way as to permit the public to ascertain readily the manufacturer’s identity. The manufacturer must be given a reasonable opportunity to submit comments regarding the information. And the Commission must take reasonable steps to assure that such information is accurate and that disclosure is “fair in the circumstances and reasonably related to effectuating the purposes” of the CPSA. If the Commission subsequently finds that it has-made public disclosure of inaccurate or misleading information that adversely reflects on a manufacturer’s products or practices, the Commission must “publish a retraction” in a manner “similar to that in which such disclosure was made....”
The relevant facts are set forth in a case decided by this Court earlier this Term, GTE Sylvania, Inc. v. Consumers Union, 445 U. S. 375 (1980), and need not be restated in detail. Briefly, the Commission obtained from respondents various accident reports, most of which were accompanied by claims of confidentiality. The Commission subsequently decided, after receiving Freedom of Information Act (FOIA) requests from the Consumers Union of 'the United States, Inc., and the Public Citizen’s Health Research Group (the requesters), to release even those accident reports that were claimed to be confidential. Not surprisingly, lawsuits were soon filed in several Federal District Courts. See GTE Sylvania, Inc. v. Consumers Union, supra, at 378, n. 1.
The District Court for the District of Delaware ultimately granted respondents’ motion for summary judgment and permanently enjoined the Commission from disclosing the submitted accident reports, as well as data compiled on a computer printout from those reports. 443 F. Supp. 1152 (1977). The District Court rejected the Commission’s contention that §6 (b)(1) applies only when the Commission affirmatively undertakes to disclose information to the public, but not when it merely complies with a request for information under the FOIA, It held that § 6 (b)(1) is applicable to disclosures in response to FOIA requests and that it establishes particular criteria for withholding information, thereby falling within the scope of Exemption 3 -of the FOIA, 5 U. S. C. § 552 (b)(3). It also found that the Commission failed to comply with §6 (b)(1) procedures in this case. Thus, it concluded that the release of the accident reports would be contrary to the CPSA. 443 F. Supp., at 1162.
The Court of Appeals for the Third Circuit affirmed. 598 F. 2d 790 (1979). After thoroughly examining the language and legislative history of § 6 (b)(1), it concluded that “Congress did not intend that provision to apply only to Commission press releases, news conferences, publication of reports and other forms of ‘affirmative disclosure’ of information obtained under the Act.” 598 F. 2d, at 811. Rather, “the information disclosure requirements of the CPSA were meant to protect manufacturers from the harmful effects of inaccurate or misleading public disclosure by the Commission, through any means, of material obtained pursuant to its broad information-gathering powers. The policies designed to be served by section 6 (b)(1) would be severely undermined, if not eviscerated, were the Commission’s interpretation to prevail.” Id., at 811-812.
Petitioners repeat their contention here that § 6 (b) (1) was intended to provide safeguards for the release of information by the Commission only when the Commission makes public disclosures of information on its own initiative in carrying out its responsibilities under the CPSA. When information is released in this fashion, they argue, the Commission explicitly or implicitly represents that it believes the disclosed information to be true and that the public should rely on it. Brief for Petitioners 10. When the Commission merely releases information in response to an FOIA request, by contrast, they claim the Commission is obliged to release whatever materials it possesses and need not comply with §6 (b)(1), because it has not made any express or implied statement regarding the documents released or the extent to which those documents reflect agency policy. Brief for Petitioners 11. Although there is some support for petitioners’ interpretation of § 6 (b)(1) in legislative history contained in a Conference Report four years after the enactment of that section, see Part IV, infra, we agree with the Court of Appeals’ determination that “legislative history” oi this sort cannot be viewed as controlling.
II
We begin with the familiar canon of statutory construction that the starting point for interpreting a statute is the language of the statute itself. Absent a clearly expressed legislative intention to the contrary, that language must ordinarily be regarded as conclusive.
Section 6 (b)(1) by its terms applies to the “public disclosure of any information” obtained by the Commission pursuant to its authority under the CPSA, and to any information “to be disclosed to the public in connection therewith.” (Emphasis added.) Nothing in the language of that section, or in any other provision of the CPSA, supports petitioners’ claim that § 6 (b) (1) is limited to disclosures initiated by the Commission, And as a matter of common usage the term “public” is properly understood as including persons who are FOIA requesters. A disclosure pursuant to the FOIA would thus seem to be most accurately characterized as a “public disclosure” within the plain meaning of § 6 (b)(1).
Section 6 (b)(2) of the CPSA, 15 IT. S. C. § 2055 (b)(2), contains specific exceptions to the requirements of § 6 (b) (l). But the list of exceptions does not include the disclosure of information in response to an FOIA request. If Congress had intended to exclude FOIA disclosures from § 6 (b)(1) it could easily have done so explicitly in this section as it did with respect to the other listed exceptions. That Congress was aware of the relationship between § 6 and the FOIA when it enacted the CPSA is exhibited by the fact that Congress in §6 (a)(1) specifically incorporated by reference the nine exemptions of the FOIA, 5 IT. S. C. § 552 (b). We are consequently reluctant to conclude that Congress’ failure to include FOIA requests within the exceptions to §6 (b)(1) listed in § 6 (b) (2) was unintentional.
Finally, § 25 (c) of the CPSA, 15 IT. S.' O. § 2074 (c), further supports the conclusion that § 6 (b) (1) was not intended to distinguish between information disclosed to the public pursuant to FOIA requests and information disclosed at the initiative of the Commission. Section 25 (c) designates accident and investigation reports that do not identify injured parties and their physicians, and reports on research and demonstration projects as “public information” notwithstanding the fact that they might be exempted from disclosure under the FOIA and thus within the scope of §6 (a)(1). Section 25 (c), however, specifically makes the disclosure of this information subject to the limitations of §§ 6 (a)(2) and 6 (b), whether it be “affirmatively” released by the Commission or released pursuant to an FOIA request. The language of the CPSA thus provides little basis for accepting petitioners’ claim that § 6 (b)(1) does not apply to information released by the Commission in response to FOIA requests.
Ill
Petitioners next argue that the legislative history of the CPSA requires the conclusion that § 6 (b)(1) is inapplicable to FOIA requests despite the language of the statute. In making their argument, petitioners concede that “the pre-enactment history of this legislation does not directly address the precise issue of statutory construction involved in this case.” Brief for Petitioners 33. They nonetheless maintain that the principal concern underlying the adoption of the section was the danger that the Commission might on its own initiative disseminate findings, reports, and other product information harmful to manufacturers without first assuring the fairness and accuracy of the disclosure. We agree with petitioners that industry representatives were concerned about the harms resulting from information affirmatively disclosed by an agency. But petitioners have failed to establish that industry concerns were limited to information disclosed in this fashion. More importantly, a full examination of the legislative history of the CPSA prior to its enactment indicates that for purposes of §6 (b)(1) no distinction was made between information affirmatively disclosed by the Commission and information released pursuant to the POIA.
The CPSA gave the Commission broad powers to gather, analyze, and disseminate vast amounts of private information. In granting the Commission such authority, Congress adopted safeguards specifically designed to protect manufacturers’ reputations from damage arising from improper disclosure of information gathered and received by the Commission. The House Report on the CPSA states:
“If the Commission is to act responsibly and with adequate basis, it must have complete and full access to information relevant to its statutory responsibilities. Accordingly, the committee has built into this bill broad information-gathering powers. It recognizes that in so doing it has recommended giving the Commission the means of gaining access to a great deal of information which would not otherwise be available to the public or to Government. Much of this relates to trade secrets or other sensitive cost and competitive information. Accordingly, the committee has written into section 6 of the bill detailed requirements and limitations relating to the Commission’s authority to disclose information which it acquires in the conduct of its responsibilities under this act.” H. R. Rep. No. 92-1153, p. 31 (1972).
The House Report does not provide any indication that the safeguards for the release of CPSA information are inapplicable when the Commission discloses information in response to an FOIA request. And in its explanatory comments on § 6 (b)(1) the Report makes no distinction whatsoever between information released at the initiative of the Commission and information disclosed pursuant to an FOIA request. Rather, it states:
“Before disseminating any information which identifies the manufacturer or private labeler of a product, the Commission is directed to give the manufacturer or private labeler 30 days in which to comment on the proposed disclosure of information. This procedure is intended to permit the manufacturer or private labeler an opportunity to come forward with explanatory data or other relevant information for the Commission’s consideration.” H. R. Rep. No. 92-1153, supra, at 32 (emphasis added).
Nor does the Conference Report contain any suggestion that § 6 (b) (1) does not apply to FOIA requests. As observed by the Court of Appeals, the “conferees’ description of section 6 (b)(1) is instructive in that the accuracy and fairness requirements for ‘publicly disclosed information’ are mentioned in almost the same breath as the description of section 6 (a) (1), stating that no information need be ‘publicly disclosed’ by the Commission if it is exempt from disclosure under the FOIA.” 598 F. 2d, at 809,
Further support for this construction of § 6 (b)(1) can be found in examining comments made with respect to earlier versions of the House bill. In commenting on the disclosure provisions of the administration bill, H. R. 8110, Representative Moss, chairman of the Subcommittee on Commerce and Finance, which was considering the House bills, stated: “I am sure the subcommittee will want to examine carefully this proposed change in the Freedom of Information Act.” Subcommittee Hearings, pt. 2, p. 300. The operative information-disclosure requirements contained in § 4 (c) of H. R. 8110, absent a requirement that the Commission publish manufacturers’ comments, were nonetheless enacted into law in § 6 (b). See n. 8, supra.
Section 4 (c) and the provision that was finally enacted as § 6 (b) by their terms include both affirmative disclosures by the Commission and information released pursuant to the FOIA. And the Department of Health, Education, and Welfare, the agency that drafted H. R. 8110, stated in its section-by-section analysis of the bill:
“Section 4(c) would protect the Secretary’s refusal to disclose information not required to be released by the [FOIA], and would expressly prohibit his disclosure of commercial secrets, or of illness or injury data revealing [the] identity of the victim.
“It would also require the provision of thirty days notice to the manufacturer of any consumer product prior to the Secretary’s public disclosure of information respecting that product, if such information would reveal the manufacturer’s identity.” Subcommittee Hearings, pt. 1, p. 188.
These comments clearly do not support petitioners’ reading of the present disclosure requirements of the CPSA. And the General Counsel of the Department of Commerce, in opposing the Senate’s less restrictive proposal for the disclosure of information by the Commission, wrote:
“[W]e believe that in the interest of fairness the disclosure of any information should be attendant with safeguards. These include prior notice to manufacturers, the right of the manufacturer to rebut false information, and a requirement that the information be fair and accurate.” S. Rep. No. 92-749, p. 100 (1972) (emphasis added).
The legislative history of §6 (b)(1) thus fails to establish that petitioners’ proposed distinction should be read into the section.
IV.
Petitioners also contend that legislative interpretations of § 6 (b)(1) made after the section was enacted and the Commission’s administrative interpretation of that section support their proposed construction. Petitioners first rely on a statement by Representative Moss, one of the sponsors of the House bill. In testimony before a congressional Oversight Subcommittee, then Commission Chairman Richard O. Simpson explained that the Commission interpreted §6 (b)(1) to be inapplicable to FOIA requests. Representative Moss then remarked: “As the primary author of both acts, I am inclined to agree with you.” Regulatory Reform: Hearings before the Subcommittee on Oversight and Investigations of the House Committee on Interstate and Foreign Commerce, 94th Cong., 2d Sess., Yol. IV, pp. 7-8 (1976). Petitioners also note that when Congress added § 29 (e), 15 U. S. C. § 2078 (e), to the CPSA in the Consumer Product Safety Commission Improvements Act of 1976, the Conference Committee explained the joint operation of the new section and § 6 (b) as follows:
“The requirement that the Commission comply with section 6 (b) prior to another Federal agency’s public disclosure of information obtained under the Act is not intended by the conferees to supersede or conflict with the requirements of the Freedom of Information Act (5 U. S. C. § 552 (a)(3) and (a)(6)). The former relates to public disclosure initiated by the Federal agency while the latter relates to disclosure initiated by a specific request from a member of the public under the Freedom of Information Act.” H. R. Conf. Rep. No. 94^1022, p. 27 (1976) (emphasis added).
In evaluating the weight to be attached to these statements, we begin with the oft-repeated warning that “the views of a subsequent Congress form a hazardous basis for inferring the intent of an earlier one.” United States v. Price, 361 U. S. 304, 313 (1960), quoted in United States v. Philadelphia National Bank, 374 U. S. 321, 348-349 (1963). And ordinarily even the contemporaneous remarks of a single legislator who sponsors a bill are not controlling in analyzing legislative history. Chrysler Corp. v. Brown, 441 U. S. 281, 311 (1979). We do not think that either Representative Moss’ isolated remark or the post hoc statement of the Conference Committee with respect to § 6 (b) is entitled to much weight here.
While Representative Moss claimed sponsorship of the CPSA generally, he was not a sponsor of the original bill that ultimately provided that legislation with its provisions governing information disclosure. Rather he authored another bill, H. R. 8157, that contained much less restrictive disclosure requirements than those ultimately adopted. His statement is thus not one that provides a reliable indication as to congressional intention.
An examination of the statement of the Conference Committee, as the Court of Appeals concluded, reveals that it also is not persuasive authority in support of petitioners’ position. Section 29 (e) by its terms does not purport to interpret the scope of § 6 (b). Rather, it deals solely with the release of accident and investigation reports by the Commission to other agencies. See n. 12, supra. And as the Court of Appeals stated:
“[T]he conference committee statement was made in the context of approving legislation that contained numerous and extensive amendments to the Consumer Product Safety Act; yet the problem before us here was not otherwise addressed by Congress in enacting the Improvements Act. The interpretation of section 6 (b) espoused by the conferees was not mentioned by the House committee that drafted the Improvements Act. See H. R. Rep. No. 94^325, 94th Cong., 1st Sess. 18 (1975). The Senate version of the Improvements Act did not contain a provision amending section 29. [H. R. Conf. Rep. No. 94H022, p. 26.] In the debates in the House the amendment to section 29, and the relationship between section 6 (b) and the FOIA, were not mentioned. Nor was the conferees' interpretation of section 6 (b) mentioned in either House when the conference report was debated. See 122 Cong. Rec. 10,811 (House approval of the conference report); id., 11,585 (Senate approval) (1976).” 598 F. 2d, at 810-811.
In light of this background, the statement of the Conference Committee is far from authoritative as an expression of congressional will under the oft-quoted factors enunciated in Skidmore v. Swift & Co., 323 U. S. 134, 140 (1944). For the same reasons, we reject petitioners’ contention that the Commission’s 1977 administrative interpretation should be afforded the degree of deference necessary for it to prevail here. See 42 Fed. Reg. 54304 et seq. (1977). This case presents a narrow legal issue that is readily susceptible of judicial resolution. Nor are we presented here with a situation in which there has been a longstanding contemporaneous administrative construction upon which those subject to the jurisdiction of the agency would have been likely to rely.
V
Petitioners next argue that the interpretation of § 6 (b) (1) by the Court of Appeals is inconsistent with the FOIA time requirements for the release of information. The FOIA requires an agency to “determine within ten days... whether to comply with [an FOIA] request” and to notify the requester “immediately” of the agency’s determination. 5 U. S. C. §552 (a)(6) (A)(i). The FOIA also requires an agency to resolve any administrative appeal of a refusal to disclose within 20 days after the filing of the appeal. § 552 (a) (6) (A) (ii). Petitioners claim that if §6 (b)(1) applies to FOIA requests the Commission will be unable to comply with FOIA time requirements.
Petitioners’ argument assumes that despite the specific procedural safeguards set forth in § 6 (b)(1) the Commission must comply with FOIA time limitations. Federal agencies, however, are granted discretion to refuse FOIA requests when the requested material falls within one of the nine statutory exemptions set forth in 5 U. S. C. § 552 (b). Exemption 3 of the FOIA, 5 U. S. C. § 552 (b)(3), states that the FOIA does not apply to matters that are
“specifically exempted from disclosure by statute (other than section 552b of this title), provided that such statute (A) requires that the matters be withheld from the public in such a manner as to leave no discretion on the issue, or (B) establishes particular criteria for withholding or refers to particular types of matters to be withheld.”
Here § 6 (b)(1) sets forth sufficiently definite standards to fall within the scope of Exemption 3. It does not grant the Commission broad discretion to refuse to comply with FOIA requests. Rather, it requires that the Commission “take reasonable steps to assure” (1) that the information is “accurate,” (2) that disclosure will be “fair in the circumstances,” and (3) that disclosure will be “reasonably related to effectuating the purposes of [the CPSA].” We therefore do not believe there is any insoluble conflict between § 6 (b)(1) and the FOIA.
VI
Finally, petitioners argue that requiring the Commission to comply with §6 (b)(1) in meeting FOIA requests will impose insurmountable burdens on the agency. In making this claim, petitioners state that the Commission receives nearly 8,000 FOIA requests annually. The extent to which these requests will present problems of fairness and accuracy with respect to the information released by the Commission is entirely speculative. And in light of the fact that Exemption 3 is applicable to the disclosure of information controlled by § 6 (b)(1), we do not think these burdens will prove to be unbearable. Most importantly, our interpretation of the language and legislative history of §6 (b)(1) reveals that any increased burdens imposed on the Commission as a result of its compliance with § 6 (b)(1) were intended by Congress in striking an appropriate balance between the interests of consumers and the need for fairness and accuracy with respect to information disclosed by the Commission. Thus, petitioners’ claim that the Commission’s compliance with the requirements of § 6 (b)(1) will impose undue burdens on the Commission is properly addressed to Congress, not to this Court.
For the foregoing reasons, the judgment of the Court of Appeals for the Third Circuit is
Affirmed.
The decision below, 598 F. 2d 790 (1979), is in direct conflict' with Pierce & Stevens Chemical Corp. v. U. S. Consumer Product Safety Comm’n, 585 F. 2d 1382 (CA2 1978).
In its entirety, § 6 states:
“(a)(1) Nothing contained in this Act shall be deemed to require the release of any information described by subsection (b) of section 552, title 5, United States Code, or which is otherwise protected by law from disclosure to the public.
“(2) All information reported to or otherwise obtained by the Commission or its representative under this Act which information contains or relates to a trade secret.or other matter referred to in section 1905 of title 18, United States Code, shall be considered confidential and shall not be disclosed, except that such information may be disclosed to other officers or employees concerned with carrying out this Act or when relevant in any proceeding under this Act. Nothing in this Act shall authorize the withholding of information by the Commission or any officer or employee under its control from the duly authorized committees of the Congress.
“(b)(1) Except as provided by paragraph (2) of this subsection, not less than 30 days prior to its public disclosure of any information obtained under this Act, or to be disclosed to the public in connection therewith (unless the Commission finds out that the public health and safety requires a lesser period of notice), the Commission shall, to the extent practicable, notify, and provide a summary of the information to, each manufacturer or private labeler of any consumer product to which such information pertains, if the manner in which such consumer product is to be designated or described in such information will permit the public to ascertain readily the identity of such manufacturer or private labeler, and shall provide such manufacturer or private labeler with a reasonable opportunity to submit comments to the Commission in regard to such information. The Commission shall take reasonable steps to assure, prior to its public disclosure thereof, that information from which the identity of such manufacturer or private labeler may be readily ascertained is accurate, and that such disclosure is fair in the circumstances and reasonably related to effectuating the purposes of this Act. If the Commission finds that, in the administration of this Act, it has maije public disclosure of inaccurate oí misleading information which reflects adversely upon the safety of any consumer product, or the practices of any manufacturer, private labeler, distributor, or retailer of consumer products, it shall, 'in a manner similar to that in which such disclosure was made, publish a retraction of such inaccurate or misleading information.
“(2) Paragraph (1) (except for the last sentence thereof) shall not apply to the public disclosure of (A) information about any consumer product with respect to which product the Commission has filed an action under section 12 (relating to imminently hazardous products), or which the Commission has reasonable cause to believe is in violation of section 19 (relating to prohibited acts), or (B) information in the course of or concerning any administrative or judicial proceeding under this Act.” 86 Stat. 1212,15 U. S. C. § 2055.
Earlier decisions of the District Court are reported at 438 F. Supp. 208 (1977) and 404 F. Supp. 352 (1975). These decisions are discussed in GTE Sylvania, Inc. v. Consumers Union, 445 U. S., at 377-378, and n. 1.
Petitioners argue that the exception to the 30-day notice requirement where “the Commission finds out that the public health and safety requires a lesser period of notice” suggests that the term “public disclosure” in § 6 (b) (1) should be read to encompass only affirmative disclosures by the Commission. The exception, they claim, makes little sense as applied to FOIA disclosures in that such disclosures are the result of the Commission’s statutory obligation to comply with an FOIA request rather than a Commission-initiated decision to assist the public. The language of § 6 (b) (1), however, does not limit the scope of that, section to disclosures of information intended “to assist the public.” Rather, it refers broadly to any “public disclosure.” And, as discussed in Part III, infra, the legislative history indicates that the concerns underlying §6 (b)(1) were not limited to information affirmatively disclosed by the Commission.
These exceptions, for example, include the disclosure of information concerning an imminently hazardous product and disclosures in the course of an administrative or judicial proceeding under the CPSA.
Section 25 (c), as set forth in 15 U. S,C. § 2074 (c), states:
“Subject to sections 2055 (a) (2) and 2055 (b) of this title but notwithstanding section 2055 (a).(l) of this title, (1) any accident or investigation report made under this chapter by an officer or employee of the Commission shall be made available to the public in a manner which will not identify any injured person or any person treating him, without the consent of the person so identified, and (2) all reports on research projects, demonstration projects, and other related activities shall be public information.”
Thus, although as petitioners point out, a vice president of General Electric Co., James F. Young, cautioned against the dangers of information “[i]ssued under the dignity and with the apparent imprimatur of the U. S. Government,” Consumer Product Safety Act: Hearings before the Subcommittee on Commerce and Finance of the House Committee on Interstate and Foreign Commerce, 92d Cong., 1st and 2d S | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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ARKANSAS ELECTRIC COOPERATIVE CORP. v. ARKANSAS PUBLIC SERVICE COMMISSION
No. 81-731.
Argued January 17, 1983
Decided May 16, 1983
Brennan, J., delivered the opinion of the Court, in which Marshall, Blackmun, Powell, Rehnquist, Stevens, and O’Connor, JJ., joined. White, J., filed a dissenting opinion, in which Burger, C. J., joined, post, p. 396.
Robert D. Cabe argued the cause for appellant. With him on the brief was Leland F. Leatherman.
Jeff Broadwater argued the cause for appellee. With him on the brief was Robert H. Wood, Jr.
Wallace F. Tillman filed a brief for the National Rural Electric Cooperative Association as amicus curiae urging reversal.
Paul Rodgers filed a brief for the National Association of Regulatory Utility Commissioners as amicus curiae urging affirmance.
Justice Brennan
delivered the opinion of the Court.
This appeal requires us to decide whether the Arkansas Public Service Commission (PSC) acted contrary to the Commerce Clause or the Supremacy Clause of the Constitution when it asserted regulatory jurisdiction over the wholesale rates charged by the Arkansas Electric Cooperative Corporation (AECC) to its member retail distributors, all of whom are located within the State. The Arkansas Supreme Court upheld the PSC’s assertion of jurisdiction. We affirm.
I
Maintaining the proper balance between federal and state authority in the regulation of electric and other energy utilities has long been a serious challenge to both judicial and congressional wisdom. On the one hand, the regulation of utilities is one of the most important of the functions traditionally associated with the police power of the States. See Munn v. Illinois, 94 U. S. 113 (1877). On the other hand, the production and transmission of energy is an activity particularly likely to affect more than one State, and its effect on interstate commerce is often significant enough that uncontrolled regulation by the States can patently interfere with broader national interests. See FERC v. Mississippi, 456 U. S. 742, 755-757 (1982); New England Power Co. v. New Hampshire, 455 U. S. 331, 339 (1982).
This dilemma came into sharp focus for this Court early in this century in a series of cases construing the restrictions imposed by the Commerce Clause on state regulation of the sale of natural gas. Our solution was to fashion a bright line dividing permissible from impermissible state regulation. See Missouri v. Kansas Gas Co., 265 U. S. 298, 309 (1924); Public Utilities Comm’n for Kan. v. Landon, 249 U. S. 236 (1919); cf. Pennsylvania Gas Co. v. Public Service Comm’n of N. Y., 252 U. S. 23 (1920). Simply put, the doctrine of these cases was that the retail sale of gas was subject to state regulation, “even though the gas be brought from another State and drawn for distribution directly from interstate mains; and this is so whether the local distribution be made by the transporting company or by independent distributing companies,” Missouri v. Kansas Gas Co., supra, at 309, but that the wholesale sale of gas in interstate commerce was not subject to state regulation even though some of the gas being sold was produced within the State. Our rationale was that “[transportation of gas from one State to another is interstate commerce; and the sale and delivery of it to the local distributing companies is a part of such commerce,” 265 U. S., at 307, but that “[w]ith the delivery of the gas to the distributing companies... the interstate movement ends” and the further “effect on interstate commerce, if there be any, is indirect and incidental,” id., at 308. See also, e. g., State Corporation Comm’n v. Wichita Gas Co., 290 U. S. 561, 563-564 (1934); East Ohio Gas Co. v. Tax Comm’n of Ohio, 283 U. S. 465, 470-471 (1931).
The wholesale/retail line drawn in Landon and Kansas Gas was applied to electric utilities in Public Utilities Comm’n of R. I. v. Attleboro Steam & Electric Co., 273 U. S. 83 (1927). Attleboro involved an attempt by the Rhode Island Public Utilities Commission to regulate the rates at which the Narragansett Electric Lighting Co. — a Rhode Island utility— could sell electric current to a Massachusetts distributor. We struck down the regulation, holding that, because it involved a transaction at wholesale, it imposed a “direct” rather than an “indirect” burden on interstate commerce. In doing so we held that it was immaterial “that the general business of the Narragansett Company appears to be chiefly local,” id., at 90, or that the State Commission grounded its assertion of jurisdiction on the need to facilitate the regulation of the company’s retail sales to its Rhode Island customers.
As a direct result of Attleboro and its predecessor cases, Congress undertook to establish federal regulation over most of the wholesale transactions of electric and gas utilities engaged in interstate commerce, and created the Federal Power Commission (FPC) (now the Federal Energy Regulatory Commission) (FERC) to carry out that task. See Federal Power Act of 1935 (Title II of the Public Utility Act of 1935), 49 Stat. 838-863; Natural Gas Act of 1938, 52 Stat. 821. Although the main purpose of this legislation was to “ ‘fill the gap’ ” created by Attleboro and its predecessors, see New England Power Co. v. New Hampshire, supra, at 340; United States v. Public Utilities Comm’n of California, 345 U. S. 295, 311 (1953), it nevertheless shifted this Court’s main focus — in determining the permissible scope of state regulation of utilities — from the constitutional issues that concerned us in Attleboro to analyses of legislative intent. For example, in Illinois Gas Co. v. Public Service Co., 314 U. S. 498 (1942), we were required to determine whether the sale of natural gas by an Illinois pipeline corporation to local distributors in Illinois was subject to the jurisdiction of the Federal Power Commission or the Illinois Commerce Commission. We began our analysis by describing the wholesale/retail test drawn in Landon, Kansas Gas, Attleboro, and other cases. We then noted another line of cases — relating to both utility regulation and other Commerce Clause issues — in which the Court was “less concerned to find a point in time and space where the interstate commerce... ends and intrastate commerce begins, and... looked [instead] to the nature of the state regulation involved, the objective of the state, and the effect of the regulation upon the national interest in the commerce.” 314 U. S., at 505. We stated:
“In the absence of any controlling act of Congress, we should now be faced with the question whether the interest of the state in the present regulation of the sale and distribution of gas transported into the state, balanced against the effect of such control on the commerce in its national aspect, is a more reliable touchstone for ascertaining state power than the mechanical distinctions on which appellee relies.” Id., at 506.
We concluded, however, that we were “under no necessity of making that choice here,” ibid., for Congress, partly to avoid “drawing the precise line between state and federal power by the litigation of particular cases,” id., at 507, had adopted the “mechanical” line established in Kansas Gas and Attleboro as the statutory line dividing federal and state jurisdiction.
The analysis in Illinois Gas was reaffirmed in subsequent cases and extended to similar jurisdictional disputes arising under the Federal Power Act. See, e. g., Panhandle Eastern Pipe Line Co. v. Public Service Comm’n of lnd., 332 U. S. 507, 517 (1947) (“The line of the statute was... clear and complete. It cut sharply and cleanly between sales for resale and direct sales for consumptive uses”); United States v. Public Utilities Comm’n of California, supra, at 308 (“Congress interpreted [Attleboro] as prohibiting state control of wholesale rates in interstate commerce for resale, and so armed the Federal Power Commission with precisely that power”) (footnote omitted); FPC v. Southern California Edison Co., 376 U. S. 205 (1964). The last of these cases is particularly noteworthy for our purposes here, for it held, among other things, that under the Attleboro test, a California utility that received some of its power from out-of-state was subject to federal and not state regulation in its sales of electricity to a California municipality that resold the bulk of the power to others. See also FPC v. Florida Power & Light Co., 404 U. S. 453 (1972).
II
AECC is one of a large number of customer-owned rural power cooperatives established with loan funds and technical assistance provided by the federal Rural Electrification Administration (REA) in order to bring electric power to parts of the country not adequately served by commercial utility companies. See generally Rural Electrification Act of 1936, 49 Stat. 1363, 7 U. S. C. §901 et seq. (1976 ed. and Supp. V). Unlike most rural power cooperatives, however, AECC does not provide power directly to individual consumers. Rather, its sole members and primary customers are 17 smaller Arkansas rural power cooperatives who in turn serve the ultimate consumer. AECC is governed by a Board of Directors consisting of 34 persons, 2 designated by each of the 17 member cooperatives. Among the duties of this Board is to determine the rates charged the member cooperatives by AECC.
AECC obtains most of its energy from a number of power-plants located in Arkansas, which it wholly or partially owns. Moreover, it sells most of what it generates to its member cooperatives. Like most electric utilities, however, AECC also participates in a variety of sale and exchange arrangements with other producers, buying power when its own need or the excess capacity of other utilities is high, and selling it when the opposite is the case. By virtue of these arrangements, AECC is ultimately tied into a multicompany and multistate “grid,” and, electricity being what it is, see FPC v. Florida Power & Light Co., supra, it is difficult to say with any confidence that the power AECC provides to its member cooperatives at any particular moment originated entirely within the State.
The retail rates charged by AECC’s member cooperatives are regulated by the Arkansas PSC. If AECC were not a rural power cooperative, the wholesale rates it charges to its members would, under the scheme we described in Part I, supra, be subject exclusively to federal regulation. See § 201(b) of the Federal Power Act, 49 Stat. 838, 847, as amended, 16 U. S. C. § 824(b) (1976 ed., Supp. V); FPC v. Southern California Edison Co., supra; FPC v. Florida Power & Light Co., supra. In 1967, however, the FPC held that it had no jurisdiction under the Federal Power Act to regulate wholesale rates charged by rural power cooperatives under the supervision of the REA. Dairyland Power Cooperative, 37 F. P. C. 12, 67 P. U. R. 3d 340. Thus, until the proceedings that culminated in this case, the rates charged by AECC to its member cooperatives were not subject, at either the federal or the state level, to the type of pervasive rate regulation almost universally associated with electric utilities in this country.
In 1979, after public hearings, the Arkansas PSC entered an order asserting jurisdiction over the rates charged by AECC to its member cooperatives. The PSC based its decision on the same Arkansas statutes that authorize its regulation of rural power cooperatives engaged in retail sales of electricity. App. 52-53; see Ark. Stat. Ann: §§73-201(a), 73-202(a), 73-202.1 (1979). In response to objections raised by AECC, the PSC held that state regulation was neither forbidden by Attleboro or FPC v. Southern California Edison Co., supra, nor pre-empted by the Federal Power Act or the Rural Electrification Act. On review, the Pulaski County Circuit Court set aside the PSC’s order, but the Arkansas Supreme Court reversed and upheld the jurisdiction of the PSC. 273 Ark. 170, 618 S. W. 2d 151 (1981). We noted probable jurisdiction. 457 U. S. 1130 (1982).
In its brief on the merits, AECC presses both the Commerce Clause and the pre-emption arguments rejected by the Arkansas PSC. We consider the statutory argument first.
I — < h-Í
The basic principles governing the pre-emption of state regulation by federal law are well known. See Fidelity Federal Savings & Loan Assn. v. De la Cuesta, 458 U. S. 141 (1982); Jones v. Rath Packing Co., 430 U. S. 519, 525-526 (1977). In this case, we are concerned with the possible preemptive effects of two federal statutes and administrative acts taken pursuant to them: the Federal Power Act and the Rural Electrification Act.
A
As we discuss supra, at 381-382, the FPC determined in 1967 that it did not have jurisdiction under the Federal Power Act over the wholesale rates charged by rural power cooperatives. That does not dispose of the possibility that the Federal Power Act pre-empts state regulation, however, because a federal decision to forgo regulation in a given area may imply an authoritative federal determination that the area is best left tmregulated, and in that event would have as much pre-emptive force as a decision to regulate. See NLRB v. Nash-Finch Co., 404 U. S. 138, 144 (1971); cf. Fidelity Federal Savings & Loan Assn. v. De la Cuesta, supra, at 155. In this case, however, nothing in the language, history, or policy of the Federal Power Act suggests such a conclusion. Congress’ purpose in 1935 was to fill a regulatory gap, not to perpetuate one. Moreover, the FPC’s refusal in 1967 to assert jurisdiction over rural power cooperatives does not suggest anything to the contrary. In that decision, the FPC simply held that, purely as a jurisdictional matter, the relevant statutes gave the REA exclusive authority among federal agencies to regulate rural power cooperatives. Dairy land Power Cooperative, 37 F. P. C., at 26, 67 P. U. R. 3d, at 352-354. It did not determine that, as a matter of policy, rural power cooperatives that are engaged in sales for resale should be left unregulated. Indeed, the FPC’s published opinion concluded by specifically urging Congress to amend the statute and grant it jurisdiction over at least some of the activities of such utilities. Id., at 28, 67 P. U. R. 3d, at 355. We therefore find no bar to the PSC’s assertion of jurisdiction either in the Federal Power Act itself or in the FPC’s Dairyland decision.
B
We turn then to the REA. Nothing in the Rural Electrification Act expressly pre-empts state rate regulation of power cooperatives financed by the REA. Nevertheless, AECC and certain of the amici, including the United States, argue that the PSC’s assertion of jurisdiction interferes with the REA’s pervasive involvement in the management of the rural power cooperatives to which it loans funds, and may frustrate important federal interests. As the United States expresses this position in its brief:
“The terms and conditions of a loan to a generation and transmission association [such as AECC] require the borrower’s rates and rate structure to be approved by the REA, not just at its inception, but throughout the term of the loan. And in passing on rate questions, the REA considers, not only the security thus afforded for payment of the loan, but also the suitability of the rates and structure to the Act’s underlying purpose of facilitating the availability of cheap electric power in rural America.
“The spectre of state regulation poses a threat to the REA loan because of the possibility that the state may refuse to permit its cooperatives to pay a generation and transmission association the rates to which they agreed and upon the security of which the loan was issued. Moreover, the policy behind the Rural Electrification Act is at stake.... [T]he REA has always encouraged its borrowers to establish affordable rates for all of its subscribers. In this way, costs are shared in a manner which, over the long run, benefits all by the creation of a sound, extensive rural electric system. If the state were to insist on a restructuring of the generation and transmission association’s rate structure, the policies of the Act would be undermined.” Brief for United States as Amicus Curiae 12-13.
As the United States and AECC admit, the REA is a lending agency rather than a classic public utility regulatory body in the mold of either FERC or the Arkansas PSC. This case might therefore present the interesting question of how we should in general define the proper relationship between the requirements established by federal lending agencies and the more direct regulatory activities of state authorities. We need not examine the issue at that level of abstraction, however, because we have quite specific indications of congressional and administrative intent on precisely the question before us. Cf. Fidelity Federal Savings & Loan Assn. v. De la Cuesta, 458 U. S., at 159, n. 14.
First, the legislative history of the Rural Electrification Act makes abundantly clear that, although the REA was expected to play a role in assisting the fledgling rural power cooperatives in setting their rate structures, it would do so within the constraints of existing state regulatory schemes. See, e. g., 80 Cong. Rec. 5316 (1936) (Rep. Lea); Hearing on S. 3483 before the House Committee on Interstate and Foreign Commerce, 74th Cong., 2d Sess., 30, 37, 51, 52 (1936). Admittedly, the legislative record focuses on retail rates charged by rural power cooperatives, but with respect to the particular concerns that AECC and amici have pressed in support of pre-emption, we can discern no relevant difference between wholesale and retail rates: both types of rates implicate the Government’s interest in securing its loans, and, if anything, retail rates more directly implicate the Government’s interest in assuring that individual rural households receive electricity at a reasonable price.
Second, the present published policy of the REA is wholly inconsistent with pre-emption of state regulatory jurisdiction. Although generating cooperatives dealing with the REA must obtain the agency’s approval whenever they modify their wholesale rates, the same document setting out guidelines for what constitute proper wholesale rates also states: “Borrowers must, of course, submit proposed rate changes to any regulatory commissions having jurisdiction and must seek approval in the manner prescribed by those commissions.” REA Bulletin 111-4, pp. 1-2 (1972). Since Bulletin 111-4 was issued subsequent to the FPC’s decision in Dairyland, the “regulatory commissions having jurisdiction” to which it refers can only be state regulatory agencies such as the Arkansas PSC. Moreover, it is worth noting that the REA’s supervision of wholesale rates charged by its borrowers appears to be no more exclusive than its supervision over their retail rates, REA Bulletin 112-2 (1971); REA Bulletin 112-1, pp. 1, 16 (1979), and it has never been contended that state regulatory jurisdiction over those rates is pre-empted, see REA Bulletin 112-2, at 5; Brief for United States as Amicus Curiae 11.
There may come a time when the REA changes its present policy, and announces that state rate regulation of rural power cooperatives is inconsistent with federal policy. If that were to happen, and if such a rule was valid under the Rural Electrification Act, it would of course pre-empt any further exercise of jurisdiction by the Arkansas PSC. See Ray v. Atlantic Richfield Co., 435 U. S. 151, 171-172 (1978); cf. Fidelity Federal Savings & Loan Assn. v. De la Cuesta, 458 U. S., at 154; Free v. Bland, 369 U. S. 663, 668 (1962). Similarly, as Arkansas already recognizes, see Ark. Stat. Ann. §73-202.3 (1979), the PSC can make no regulation affecting rural power cooperatives which conflicts with particular regulations promulgated by the REA. Moreover, even without an explicit statement from the REA, a particular rate set by the Arkansas PSC may so seriously compromise important federal interests, including the ability of the AECC to repay its loans, as to b,e implicitly pre-empted by the Rural Electrification Act. See Jones v. Rath Packing Co., 430 U. S., at 525-526, 540-543; cf. Rice v. Santa Fe Elevator Corp., 331 U. S. 218, 231-232 (1947). We will not, however, in this facial challenge to the PSC’s mere assertion of jurisdiction, assume that such a hypothetical event is so likely to occur as to preclude the setting of any rates at all. Exxon Corp. v. Governor of Maryland, 437 U. S. 117, 130-131 (1978). See generally Merrill Lynch, Pierce, Fenner & Smith v. Ware, Inc., 414 U. S. 117, 136-140 (1973).
IV
A
Even in the absence of congressional legislation, “the Commerce Clause contains an implied limitation on the power of the States to interfere with or impose burdens on interstate commerce.” Western & Southern Life Insurance Co. v. Board of Equalization, 451 U. S. 648, 652 (1981) (footnote omitted). If the constitutional rule articulated in Attleboro were applied in this case, it would require setting aside the PSC’s assertion of jurisdiction over AECC, since AECC, like the utility in Attleboro, sells at wholesale electric energy transmitted in interstate commerce. As we pointed out in Illinois Gas, however, see supra, at 379-380, it is difficult to square the mechanical line drawn in Attleboro and its predecessor cases, and based on a supposedly precise division between “direct” and “indirect” effects on interstate commerce, with the general trend in our modern Commerce Clause jurisprudence to look in every case to “the nature of the state regulation involved, the objective of the state, and the effect of the regulation upon the national interest in the commerce.” 314 U. S., at 505. Cf. Pike v. Bruce Church, Inc., 397 U. S. 137 (1970). This modern jurisprudence has usually, although not always, given more latitude to state regulation than the more categorical approach of which Attleboro is one example. But in any event, it recognizes, as Attleboro did not, that there is an “infinite variety of cases, in which regulation of local matters may also operate as a regulation of [interstate] commerce, [and] in which reconciliation of the conflicting claims of state and national power is to be attained only by some appraisal and accommodation of the competing demands of the state and national interests involved.” Southern Pacific Co. v. Arizona ex rel. Sullivan, 325 U. S. 761, 768-769 (1945). See Minnesota v. Clover Leaf Creamery Co., 449 U. S. 456 (1981); Pike v. Bruce Church, Inc., supra, at 142; Parker v. Brown, 317 U. S. 341, 362-363 (1943).
We are faced, then, in this case, with precisely the question left open in Illinois Gas: Do we follow the mechanical test set out in Attleboro, or the balance-of-interests test applied in our Commerce Clause cases for roughly the past 45 years? Of course, the principle of stare decisis counsels us, here as elsewhere, not lightly to set aside specific guidance of the sort we find in Attleboro. Nevertheless, the same respect for the rule of law that requires us to seek consistency over time also requires us, if with somewhat more caution and deliberation, to seek consistency in the interpretation of an area of law at any given time. Thus, in recent years, this Court has explicitly abandoned a series of formalistic distinctions — akin to the one in Attleboro — which once both defined and controlled various corners of Commerce Clause doctrine. See, e. g., Commonwealth Edison Co. v. Montana, 453 U. S. 609 (1981) (abandoning rule that constitutionality of state severance tax depended on whether it was imposed on goods prior to their entry into interstate commerce); Hughes v. Oklahoma, 441 U. S. 322 (1979) (rejecting rule, based on legal fiction of ownership, that States had absolute control over disposition of wild animals within their borders); Washington Revenue Dept. v. Association of Washington Stevedoring Cos., 435 U. S. 734 (1978) (rejecting rule that tax on stevedoring automatically constituted an impermissible “direct” tax on interstate commerce); cf. Michelin Tire Corp. v. Wages, 423 U. S. 276 (1976) (overruling “original package” rule in Import-Export Clause doctrine).
The wholesale/retail line drawn in Attleboro is no less anachronistic than the rules we rejected in the cited cases. Moreover, we have had no occasion, since the 1930’s, either to apply that line or to reject it in a case not governed by statute. The difficulty of harmonizing Attleboro with modern Commerce Clause doctrine has been apparent for a long time, so much so that we expressed skepticism about its continuing soundness as a constitutional, rather than statutory, rule in Illinois Gas. Our constitutional review of state utility regulation in related contexts has not treated it as a special province insulated from our general Commerce Clause jurisprudence. See New England Power Co. v. New Hampshire, 455 U. S. 331 (1982); Panhandle Eastern Pipe Line Co. v. Michigan Public Service Comm’n, 341 U. S. 329, 336-337 (1951). Finally, we can see no strong reliance interests that would be threatened by our rejection today of the mechanical line drawn in Attleboro. Therefore, here, as in few other contexts, the burden shifts somewhat to the party defending the rule to show why it should be applied in this case.
AECC makes essentially two arguments, in the course of its brief and oral argument, for why Attleboro should govern here. First, it contends that the constitutional import of the Attleboro line was reaffirmed in FPC v. Southern California Edison Co., 376 U. S. 205, which was decided in 1964. This claim is simply wrong. Southern California Edison Co. did no more than interpret the Federal Power Act, and it cited with approval the constitutional agnosticism spelled out at length in Illinois Gas. See 376 U. S., at 214.
Second, AECC argues that, although “[t]he Attleboro line of cases established an admittedly mechanical test for determining the limitation of state power,... the court arrived at that test by careful consideration of what was national importance as opposed to what was essentially local and could be, therefore, regulated by the states,” Tr. of Oral Arg. 11, and that nothing that has happened since has changed that implicit balance. This contention is also unpersuasive. Even if we assume — as is not necessarily the case, see supra, at 390 — that the underlying substantive concerns motivating the Court to strike down the state regulation in Attleboro were identical to the considerations articulated in our more recent cases, that in itself does not explain why the bright-line test drawn in Attleboro should be applied to the somewhat different set of facts present here, see n. 16, supra. Bright lines are important and necessary in many areas of the law, including constitutional law. Moreover, Southern California Edison Co. and other cases have made it clear that the Federal Power Act draws a bright line between the respective jurisdictions of federal and state regulatory agencies. Nevertheless, AECC has given us no good reason why a bright line between state regulation and unexercised federal power is more justifiable here than in other contexts in which we must interpret the negative implications of the Commerce Clause.
Attleboro and its predecessors are by no means judicial atrocities, plainly wrong at the time they were decided. In the first place, it is not entirely insignificant, quite apart from the sort of statutory analysis in which we engaged in Part III, supra, that those cases were decided in a day before Congress had already spoken with some breadth on the subject of utility regulation. Cf. Duckworth v. Arkansas, 314 U. S. 390, 400 (1941) (Jackson, J., concurring in result). This Court was in 1927 the sole authority safeguarding federal interests over a wide range of state utility regulation. Under those circumstances, drawing a fairly restrictive bright line may have made considerable sense. Indeed, the line the Court drew in Attleboro, though by no means perfect, would undoubtedly lead in a large number of cases to results entirely consistent with present-day doctrine. Second, the judicial turn of mind apparent in Attleboro, although problematic in many respects, can also be a healthy counterweight in many contexts to an otherwise too-easy dilution of guarantees contained in the Constitution. Nevertheless, Attleboro can no longer be thought to provide thersole standard by which to decide this case, and we proceed instead to undertake an analysis grounded more solidly in our modern cases.
B
Illinois Gas cited as examples of the less formalistic approach to the Commerce Clause such now-classic cases as South Carolina Highway Dept. v. Barnwell Bros., 303 U. S. 177 (1938), and Duckworth v. Arkansas, supra. One recent reformulation of the test established in those cases is found in Pike v. Bruce Church, Inc.:
“Where [a] statute regulates evenhandedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits. If a legitimate local purpose is found, then the question becomes one of degree. And the extent of the burden that will be tolerated will of course depend on the nature of the local interest involved, and on whether | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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SULLIVAN, SECRETARY OF HEALTH AND HUMAN SERVICES v. ZEBLEY et al.
No. 88-1377.
Argued November 28, 1989
Decided February 20, 1990
Blackmun, J., delivered the opinion of the Court, in which Brennan, Marshall, Stevens, O’Connor, Scalia, and Kennedy, JJ., joined. White, J., filed a dissenting opinion, in which Rehnquist, C. J., joined, post, p. 541.
Edwin S. Kneedler argued the cause for petitioner. With him on the briefs were Solicitor General Starr, Acting Assistant Attorney General Schiffer, Deputy Solicitor General Merrill, and John F. Cordes.
Richard P. Weishaupt argued the cause for respondents. With him on the briefs were Jonathan M. Stein and Thomas D. Sutton.
Briefs of amici curiae urging affirmance were filed for the Commonwealth of Massachusetts et al. by James M. Shannon, Attorney General of Massachusetts, and Suzanne E. Durrell and Judith Fabricant, Assistant Attorneys General, Don Siegelman, Attorney General of Alabama, Douglas B. Baily, Attorney General of Alaska, Robert K. Corbin, Attorney General of Arizona, John Steven Clark, Attorney General of Arkansas, Clarine Nardi Riddle, Acting Attorney General of Connecticut, Charles M. Oberly III, Attorney General of Delaware, Herbert O. Reid, Sr., Acting Corporation Counsel for the District of Columbia, and Charles L. Reischel, Deputy Corporation Counsel, Neil F. Hartigan, Attorney General of Illinois, Linley E. Pearson, Attorney General of Indiana, Thomas J. Miller, Attorney General of Iowa, Robert T. Stephan, Attorney General of Kansas, William J. Guste, Jr., Attorney General of Louisiana, J. Joseph Curran, Jr., Attorney General of Maryland, Hubert H. Humphrey III, Attorney General of Minnesota, William L. Webster, Attorney General of Missouri, Marc Racicot, Attorney General of Montana, Robert M. Spire, Attorney General of Nebraska, John P. Arnold, Attorney General of New Hampshire, Robert Abrams, Attorney General of New York, Ernest D. Preate, Jr., Attorney General of Pennsylvania, James E. O’Neil, Attorney General of Rhode Island, Roger A. Tellinghuisen, Attorney General of South Dakota, Charles W. Burson, Attorney General of Tennessee, Jim Mattox, Attorney General of Texas, R. Paul Van Dam, Attorney General of Utah, Jeffrey L. Amestoy, Attorney General of Vermont, and Joseph B. Meyer, Attorney General of Wyoming; for the American Academy of Child and Adolescent Psychiatry et al. by Leonard S. Rubenstein; for the American Medical Association et al. by Carter G. Phillips, Elizabeth H. Esty, Jack R. Bierig, and Stephan E. Lawton; for the National Easter Seal Society et al. by Robeyd E. Lehrer; for Pennsylvania Protection and Advocacy et al. by Janet F. Stotland and Robin Resnick; for the Children’s Defense Fund et al. by Alice Bussiere, Marilyn Hollé, and James D. Weill; and for the National Organization of Social Security Claimants’ Representatives by Robert E. Rains and Nancy G. Shor.
James Bopp, Jr., and Thomas J. Marzen filed a brief for the Medical Issues Task Force of the United Handicapped Federation et al. as amici curiae.
Justice Blackmun
delivered the opinion of the Court.
This case concerns a facial challenge to the method used by the Secretary of Health and Human Services to determine whether a child is “disabled” and therefore eligible for benefits under the Supplemental Security Income Program, Title XVI of the Social Security Act, as added, 86 Stat. 1465, and amended, 42 U. S. C. § 1381 et seq. (1982 ed. and Supp. V).
f — Í
In 1972, Congress enacted the Supplemental Security Income (SSI) Program to assist “individuals who have attained age 65 or are blind or disabled” by setting a guaranteed minimum income level for such persons. 42 U. S. C. § 1381 (1982 ed.). The program went into effect January 1, 1974. Currently, about 2 million claims for SSI benefits are adjudicated each year. Of these, about 100,000 are child-disability claims.
A person is eligible for SSI benefits if his income and financial resources are below a certain level, § 1382(a), and if he is “disabled.” Disability is defined in § 1382c(a)(3) as follows:
“(A) An individual shall be considered to be disabled for purposes of this subchapter if he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve months (or, in the case of a child under the age of 18, if he suffers from any medically determinable physical or mental impairment of comparable severity).
“(B) For purposes of subparagraph (A), an individual shall be determined to be under a disability only if his physical or mental impairment or impairments are of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy....
“(C) For purposes of this paragraph, a physical or mental impairment is an impairment that results from anatomical, physiological, or psychological abnormalities which are demonstrable by medically acceptable clinical and laboratory diagnostic techniques.”
This statutory definition of disability was taken from Title II of the Social Security Act, 70 Stat. 815, as amended, 42 U. S. C. §423 et seq. (1982 ed. and Supp. V) (providing for payment of insurance benefits to disabled workers who have contributed to the Social Security Program). See §§ 423(d)(1)(A) and (d)(2)(A) (definitions of disability).
Pursuant to his statutory authority to implement the SSI Program, the Secretary has promulgated regulations creating a five-step test to determine whether an adult claimant is disabled. See Bowen v. Yuckert, 482 U. S. 137, 140-142 (1987). The first two steps involve threshold determinations that the claimant is not presently working and has an impairment which is of the required duration and which significantly limits his ability to work. See 20 CFR § § 416.920(a) through (c) (1989). In the third step, the medical evidence of the claimant’s impairment is compared to a list of impairments presumed severe enough to preclude any gainful work. See 20 CFR pt. 404, subpt. P, App. 1 (pt. A) (1989). If the claimant’s impairment matches or is “equal” to one of the listed impairments, he qualifies for benefits without further inquiry. § 416.920(d). If the claimant cannot qualify under the listings, the analysis proceeds to the fourth and fifth steps. At these steps, the inquiry is whether the claimant can do his own past work or any other work that exists in the national economy, in view of his age, education, and work experience. If the claimant cannot do his past work or other work, he qualifies for benefits. §§ 416.920(e) and (f).
The Secretary’s test for determining whether a child claimant is disabled is an abbreviated version of the adult test. A child qualifies for benefits if he “is not doing any substantial gainful activity,” § 416.924(a), if his impairment meets the duration requirement, § 416.924(b)(1), and if it matches or is medically equal to a listed impairment, §§416.924(b)(2) and (3). In evaluating a child’s claim, both the general listings and a special listing of children’s impairments, 20 CFR pt. 404, subpt. P, App. 1 (pt. B) (1989), are considered. If a child cannot qualify under these listings, he is denied benefits. There is no further inquiry corresponding to the fourth and fifth steps of the adult test.
hH
Respondent Brian Zebley, a child who had been denied SSI benefits, brought a class action in the United States District Court for the Eastern District of Pennsylvania to challenge the child-disability regulations. His complaint alleges that the Secretary
“has promulgated regulations and issued instructions... whereby children have their entitlement to SSI disability benefits based solely on the grounds that they have a listed impairment or the medical equivalent of a listed impairment... in contravention of the Act’s requirement that a child be considered disabled ‘if he suffers from any medically determinable physical or mental impairment of comparable severity’ to that which disables an adult under the program.” Complaint in Civil Action No. 83-3314, ¶2.
The District Court, on January 10, 1984, certified a class of all persons “who are now, or who in the future will be, entitled to an administrative determination... as to whether supplemental security income benefits are payable on account of a child who is disabled, or as to whether such benefits have been improperly denied, or improperly terminated, or should be resumed.” App. 26, 27.
The court in due course granted summary judgment in the Secretary’s favor as to the class claims, ruling that the regulations are not “facially invalid or incomplete... and permit] the award of benefits in conformity with the intent of Congress.” Zebley v. Heckler, 642 F. Supp. 220, 222 (1986). The Court of Appeals for the Third Circuit vacated in part that summary judgment. Zebley ex rel. Zebley v. Bowen, 855 F. 2d 67 (1988). The Third Circuit found the Secretary’s regulatory scheme for child-disability benefits inconsistent with the statute because the listings-only approach of the regulations does not account for all impairments of “comparable severity” and denies child claimants the individualized functional assessment that the statutory standard requires and that the Secretary provides to adults. Id., at 69. Although the Court of Appeals recognized that the Secretary’s interpretation of the statute is entitled to deference, it rejected the regulations as contrary to clear congressional intent. The court remanded the case to the District Court with the direction that summary judgment be entered in favor of the plaintiff class on the claim that the Secretary must give child claimants an opportunity for individualized assessment of their functional limitations. Id., at 77. We granted certiorari to resolve a conflict among the Circuits as to the validity of the Secretary’s approach to child disability. 490 U. S. 1064 (1989).
1 í — Í H-I
Since the Social Security Act expressly grants the Secretary rulemaking power, see n. 2, supra, “ ‘our review is limited to determining whether the regulations promulgated exceeded the Secretary’s statutory authority and whether they are arbitrary and capricious.’” Yuckert, 482 U. S., at 145 (quoting Heckler v. Campbell, 461 U. S. 458, 466 (1983)); see Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, 843-844 (1984) (“If Congress has explicitly left a gap for the agency to fill, there is an express delegation of authority to the agency to elucidate a specific provision of the statute by regulation. Such legislative regulations are given controlling weight unless they are arbitrary, capricious, or manifestly contrary to the statute”). We conclude, however, that the Secretary’s child-disability regulations cannot be reconciled with the statute they purport to implement.
The statute generally defines “disability” in terms of an individualized, functional inquiry into the effect of medical problems on a person’s ability to work. Yuckert, 482 U. S., at 146 (Social Security Act adopts “functional approach”); Campbell, 461 U. S., at 459-460, 467 (Act “defines ‘disability’ in terms of the effect a physical or mental impairment has on a person’s ability to function in the workplace”; “statutory scheme contemplates that disability hearings will be individualized determinations”).
The statutory standard for child disability is explicitly linked to this functional, individualized standard for adult disability. A child is considered to be disabled “if he suffers from any... impairment of comparable severity” to one that would render an adult “unable to engage in any substantial gainful activity.” 42 U. S. C. § 1382c(a)(3)(A) (1982 ed.). The next paragraph of the statute elaborates on the adult disability standard, providing that an adult is considered unable to engage in substantial gainful activity, and is therefore disabled, if he is unable to do either his own past work or other work. § 1382c(a)(3)(B). In plain words, the two provisions together mean that a child is entitled to benefits if his impairment is as severe as one that would prevent an adult from working.
The question presented is whether the Secretary’s method of determining child disability conforms to this statutory standard. Respondents argue, and the Third Circuit agreed, that it does not, because the regulatory requirement that a child claimant’s impairment must match or be equivalent to a listed impairment denies benefits to those children whose impairments are severe and disabling even though the impairments are not listed and cannot meaningfully be compared with the listings. The Secretary concedes that his listings do not cover every impairment that could qualify a child for benefits under the statutory standard, but insists that the listings, together with the equivalence determination, see 20 CFR § 416.924(b)(3) (1989), are sufficient to carry out the statutory mandate that children with impairments of “comparable severity” shall be considered disabled. To decide this question, we must take a closer look at the regulations at issue.
IV
The listings set out at 20 CFR pt. 404, subpt. P, App. 1 (pt. A) (1989), are descriptions of various physical and mental illnesses and abnormalities, most of which are categorized by the body system they affect. Each impairment is defined in terms of several specific medical signs, symptoms, or laboratory test results. For a claimant to show that his impairment matches a listing, it must meet all of the specified medical criteria. An impairment that manifests only some of those criteria, no matter how severely, does not qualify. See Social Security Ruling (SSR) 83-19, Dept, of Health and Human Services Rulings 90 (Jan. 1983) (“An impairment ‘meets’ a listed condition... only when it manifests the specific findings described in the set of medical criteria for that listed impairment.” “The level of severity in any particular listing section is depicted by the given set of findings and not by the degree of severity of any single medical finding — no matter to what extent that finding may exceed the listed value”). Id., at 91. (Emphasis in original.)
For a claimant to qualify for benefits by showing that his unlisted impairment, or combination of impairments, is “equivalent” to a listed impairment, he must present medical findings equal in severity to all the criteria for the one most similar listed impairment. 20 CFR § 416.926(a) (1989) (a claimant’s impairment is “equivalent” to a listed impairment “if the medical findings are at least equal in severity” to the medical criteria for “the listed impairment most like [the claimant’s] impairment”); SSR 83-19, at 91 (a claimant’s impairment is “equivalent” to a listing only if his symptoms, signs, and laboratory findings are “at least equivalent in severity to” the criteria for “the listed impairment most like the individual’s impairment(s)”; when a person has a combination of impairments, “the medical findings of the combined impairments will be compared to the findings of the listed impairment most similar to the individual’s most severe impairment”). A claimant cannot qualify for benefits under the “equivalence” step by showing that the overall functional impact of his unlisted impairment or combination of impairments is as severe as that of a listed impairment. SSR 83-19, at 91-92 (“[I]t is incorrect to consider whether the listing is equaled on the basis of an assessment of overall functional impairment.... The functional consequences of the impairments... irrespective of their nature or extent, cannot justify a determination of equivalence”) (emphases in original).
The Secretary explicitly has set the medical criteria defining the listed impairments at a higher level of severity than the statutory standard. The listings define impairments that would prevent an adult, regardless of his age, education, or work experience, from performing any gainful activity, not just “substantial gainful activity.” See 20 CFR § 416.925(a) (1989) (purpose of listings is to describe impairments “severe enough to prevent a person from doing any gainful activity”); SSR 83-19, at 90 (listings define “medical conditions which ordinarily prevent an individual from engaging in any gainful activity”). The reason for this difference between the listings’ level of severity and the statutory standard is that, for adults, the listings were designed to operate as a presumption of disability that makes further inquiry unnecessary. That is, if an adult is not actually working and his impairment matches or is equivalent to a listed impairment, he is presumed unable to work and is awarded benefits without a determination whether he actually can perform his own prior work or other work. See Yuckert, 482 U. S., at 141 (if an adult’s impairment “meets or equals one of the listed impairments, the claimant is conclusively presumed to be disabled. If the impairment is not one that is conclusively presumed to be disabling, the evaluation proceeds to the fourth step”); id., at 153 (the listings “streamlin[e] the decision process by identifying those claimants whose medical impairments are so severe that it is likely they would be found disabled regardless of their vocational background”); Bowen v. City of New York, 476 U. S. 467, 471 (1986) (“If a claimant’s condition meets or equals the listed impairments, he is conclusively presumed to be disabled and entitled to benefits”; if not, “the process moves to the fourth step”); Campbell, 461 U. S., at 460 (“The regulations recognize-that certain impairments are so severe that they prevent a person from pursuing any gainful work.... A claimant who establishes that he suffers from one of these impairments will be considered disabled without further inquiry.... If a claimant suffers from a less severe impairment, the Secretary must determine whether the claimant retains the ability to [work]”).
When the Secretary developed the child-disability listings, he set their medical criteria at the same level of severity as that of the adult listings. See 42 Fed. Reg. 14705 (1977) (the child-disability listings describe impairments “of ‘comparable severity’ to the adult listing”); SSA Disability Insurance Letter No. Ill — 11 (Jan. 9, 1974), App. 97 (child-disability listings describe impairments that affect children “to the same extent as... the impairments listed in the adult criteria” affect adults’ ability to work).
Thus, the listings in several ways are more restrictive than the statutory standard. First, the listings obviously do not cover all illnesses and abnormalities that actually can be disabling. The Secretary himself has characterized the adult listing as merely containing “over 100 examples of medical conditions which ordinarily prevent” a person from working, and has recognized that “it is difficult to include in the listing all the sets of medical findings which describe impairments severe enough to prevent any gainful work.” SSR 83-19, at 90 (emphasis added). See also 50 Fed. Reg. 50068, 50069 (1985) (listings contain only the most “frequently diagnosed” impairments); 44 Fed. Reg. 18170, 18175 (1979) (“The Listing criteria are intended to identify the more commonly occurring impairments”). Similarly, when the Secretary published the child-disability listings for comment in 1977, he described them as including only the “more common impairments” affecting children. 42 Fed. Reg. 14706 (the child-disability listings “provide a means to efficiently and equitably evaluate the more common impairments”).
Second, even those medical conditions that are covered in the listings are defined by criteria setting a higher level of severity than the statutory standard, so they exclude claimants who have listed impairments in a form severe enough to preclude substantial gainful activity, but not quite severe enough to meet the listings level — that which would preclude any gainful activity. Third, the listings also exclude any claimant whose impairment would not prevent any and all persons from doing any kind of work, but which actually precludes the particular claimant from working, given its actual effects on him — such as pain, consequences of medication, and other symptoms that vary greatly with the individual— and given the claimant’s age, education, and work experience. Fourth, the equivalence analysis excludes claimants who have unlisted impairments, or combinations of impairments, that do not fulfill all the criteria for any one listed impairment. Thus, there are several obvious categories of claimants who would not qualify under the listings, but who nonetheless would meet the statutory standard.
For adults, these shortcomings of the listings are remedied at the final, vocational steps of the Secretary’s test. A claimant who does not qualify for benefits under the listings, for any of the reasons described above, still has the opportunity to show that his impairment in fact prevents him from working. 20 CFR §§416.920(e) and (f) (1989); Yuckert, 482 U. S., at 141 (if an adult claimant’s “impairment is not one that is conclusively presumed to be disabling, the evaluation proceeds” to the fourth and fifth steps); Campbell, 461 U. S., at 460 (“If a claimant suffers from a less severe impairment” than the listed impairments, “the Secretary must determine whether the claimant retains the ability to perform either his former work or some less demanding employment”).
For children, however, there is no similar opportunity. Children whose impairments are not quite severe enough to rise to the presumptively disabling level set by the listings; children with impairments that might not disable any and all children, but which actually disable them, due to symptomatic effects such as pain, nausea, side effects of medication, etc., or due to their particular age, educational background, and circumstances; and children with unlisted impairments or combinations of impairments that are not equivalent to any one listing — all these categories of child claimants are simply denied benefits, even if their impairments are of “comparable severity” to ones that would actually (though not presumptively) render an adult disabled.
The child-disability regulations are simply inconsistent with the statutory standard of “comparable severity.” This inconsistency is aptly illustrated by the fact that the Secretary applies the same approach to child-disability determinations under Title XVI and to widows’ and widowers’ disability benefits under Title II, despite the fact that Title II sets a stricter standard for widows’ benefits. Under the Secretary’s regulations and rulings, both widows and children qualify for benefits only if the medical evidence of their impairments meets or equals a listing. SSR 83-19, at 93. Title II provides: “A widow... [or] widower shall not be determined to be under a disability... unless his or her... impairment or impairments are of a level of severity which under regulations prescribed by the Secretary is deemed to be sufficient to preclude an individual from engaging in any gainful activity.” 42 U. S. C. § 423(d)(2)(B) (1982 ed., Supp. V). When Congress set out to provide disabled children with benefits, it chose to link the disability standard not to this test, but instead to the more liberal test set forth in § 423(d)(2)(A) and in § 1382c(a)(3)(A) (any impairment making a claimant “unable to engage in any substantial gainful activity” qualifies him for benefits). The Secretary’s regulations, treating child-disability claims like claims for widows’ benefits, nullify this congressional choice. See Yuckert, 482 U. S., at 163-164 (dissenting opinion) (contrasting widows’ disability statute with the § 423(d)(2)(A)/§ 1382c(a)(3) test, which requires an individualized inquiry as to whether the claimant can work); S. Rep. No. 744, 90th Cong., 1st Sess., 49 (1967) (disabled widows’ statutory “test of disability... is somewhat more restrictive than that for disabled workers”).
V
The Secretary does not seriously dispute the disparity in his approach to child- and adult-disability determinations. He argues, instead, that the listings-only approach is the only-practicable way to determine whether a child’s impairment is “comparable” to one that would disable an adult. An individualized, functional approach to child-disability claims like that provided for adults is not feasible, the Secretary asserts, since children do not work; there is no available measure of their functional abilities analogous to an adult’s ability to work, so the only way to measure “comparable severity” is to compare child claimants’ medical evidence with the standard of severity set by the listings. Laying to one side the obvious point that such a comparison does not properly implement the statute because the Secretary’s current listings set a level of severity higher than that prescribed by the statute, this argument still is not persuasive. Even if the listings were set at the same level of severity as the statute, and expanded to cover many more childhood impairments, no set of listings could ensure that child claimants would receive benefits whenever their impairments are of “comparable severity” to ones that would qualify an adult for benefits under the individualized, functional analysis contemplated by the statute and provided to adults by the Secretary. No decision process restricted to comparing claimants’ medical evidence to a fixed, finite set of medical criteria can respond adequately to the infinite variety of medical conditions and combinations thereof, the varying impact of such conditions due to the claimant’s individual characteristics, and the constant evolution of medical diagnostic techniques.
The Secretary’s claim that a functional analysis of child-disability claims is not feasible is unconvincing. The fact that a vocational analysis is inapplicable to children does not mean that afunctional analysis cannot be applied to them. An inquiry into the impact of an impairment on the normal daily activities of a child of the claimant’s age — speaking, walking, washing, dressing, feeding oneself, going to school, playing, etc. —is, in our view, no more amorphous or unmanageable than an inquiry into the impact of an adult’s impairment on his ability to perform “any other kind of substantial gainful work which exists in the national economy,” § 1382c(a)(3)(B). Moreover, the Secretary tacitly acknowledges that functional assessment of child claimants is possible, in that some of his own listings are defined in terms of functional criteria. See, e. g., 20 CFR pt. 404, subpt. P, App. 1 (pt. B), § 101.03 (1989) (listing for “Deficit of musculo-skeletal function” defined in terms of difficulty in walking or “[inability to perform age-related personal self-care activities involving feeding, dressing, and personal hygiene”); § 111.02(B) (listing for “Major motor seizures” defined in terms of “Significant interference with communication” or “Significant emotional disorder,” or “Where significant adverse effects of medication interfere with major daily activities”); § 112.05(C) (mental retardation listing for claimants with IQ of 60-69 requiring “a physical or other mental impairment imposing additional and significant restriction of function or developmental progression”). Also, the Secretary’s own test for cessation of disability involves an examination of a child claimant’s ability to “perform age-appropriate activities.” 20 CFR § 416.994(c) (1989). Finally, the Secretary’s insistence that child claimants must be assessed from “a medical perspective alone, without individualized consideration of... residual functional capacity,” Brief for Petitioner 45, seems to us to make little sense in light of the fact that standard medical diagnostic techniques often include assessment of the functional impact of the disorder.
<1 I — I
We conclude that the Secretary’s regulations and rulings implementing the child-disability statute simply do not carry out the statutory requirement that SSI benefits shall be provided to children with “any... impairment of comparable severity” to an impairment that would make an adult “unable to engage in any substantial gainful activity.” § 1382c(a)(3)(A). For that reason, the Secretary’s approach to child disability is “manifestly contrary to the statute,” Chevron, 467 U. S., at 844, and exceeds his statutory authority.
The judgment of the Court of Appeals, vacating in part the District Court’s grant of summary judgment in the Secretary’s favor as to the claims of the plaintiff class, is affirmed.
It is so ordered.
Social Security Administration, Office of Disability, Preliminary Staff Report: Childhood Disability Study, p. B-l (Sept. 20, 1989).
Title 42 U. S. C. § 405(a), made applicable to Title XVI by 42 U. S. C. § 1383(d)(1) (1982 ed., Supp. V), reads:
“The Secretary shall have full power and authority to make rules and regulations and to establish procedures, not inconsistent with the provisions of this subchapter, which are necessary or appropriate to carry out such provisions, and shall adopt reasonable and proper rules and regulations to regulate and provide for the nature and extent of the proofs and evidence... in order to establish the right to benefits hereunder.”
The regulations implementing the Title II disability standard, 42 U. S. C. § 423(d), at issue in Yuckert, and those implementing the identical Title XVI standard, § 1382c(a)(3), at issue in this case, are the same in all relevant respects. Compare 20 CFR §§ 404.1520-1530 with §§ 416.920-930 (1989).
Respondents Joseph Love and Evelyn Raushi, two children who were denied benefits, are the other two named plaintiffs in this action. All three named plaintiffs’ individual claims were eventually remanded to the Secretary by the District Court; only the | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
62
] | sc_adminaction |
SUTTON et al. v. UNITED AIR LINES, INC.
No. 97-1943.
Argued April 28, 1999 —
Decided June 22, 1999
O’Connor, J., delivered the opinion of the Court, in which Rehnquist, C. J., and Scalia, Kennedy, Souter, Thomas, and Ginsburg, JJ., joined. Ginsburg, J., filed a concurring opinion, post, p. 494. Stevens, J., filed a dissenting opinion, in which Breyer, J., joined, post, p. 495. Breyer, J., filed a dissenting opinion, post, p. 513.
Van Aaron Hughes argued the cause for petitioners. With him on the briefs were Tucker K. Trautman and Shawn D. Mitchell.
Deputy Solicitor General Kneedler argued the cause for the United States as amicus curiae urging reversal. On the briefs were Solicitor General Waxman, Acting Assistant Attorney General Lee, Deputy Solicitor General Underwood, James A. Feldman, Jessica Dunsay Silver, Seth M. Galanter, Philip B. Sklover, and Carolyn L. Wheeler.
Roy T. Englert, Jr., argued the cause for respondent. With him on the brief were Lisa Hogan and Patrick F. Carrigan.
Briefs of amici curiae urging reversal were filed for AIDS Action et al. by Claudia Center and Guy Wallace; for the American Civil Liberties Union by Louis M. Bograd, Chai R. Feldblum, Steven R. Shapiro, and Matthew A Coles; for the American Federation of Labor and Congress of Industrial Organizations by Jonathan P. Hiatt, Marsha S. Berzon, and Laurence Gold; and for the National Employment Lawyers Association by Gary Phelan and Paula A Brantner.
Briefs of amici curiae urging affirmance were filed for the Air Transport Association of America, Inc., by John J. Gallagher, Neal D. Mollen, and Margaret H. Spurlin; and for the Equal Employment Advisory Council et al. by Ann Elizabeth Reesman, Corrie L. Fischel, Stephen A Bokat, Robin S. Conrad, and J. Walker Henry.
Briefs of amici curiae were filed for LPA, Inc., by Daniel V. Yager; for the Society for Human Resource Management by Peter J. Petesch, Thomas J. Walsh, Jr., Timothy S. Bland, and David S. Harvey, Jr.; and for Senator Tom Harkin et al. by Arlene B. Mayerson.
Justice O’Connor
delivered the opinion of the Court.
The Americans with Disabilities Act of 1990 (ADA or Act), 104 Stat. 328, 42 U. S. C. § 12101 et seq., prohibits certain employers from discriminating against individuals on the basis of their disabilities. See § 12112(a). Petitioners challenge the dismissal of their ADA action for failure to state a claim upon which relief can be granted. We conclude that the complaint was properly dismissed. In reaching that result, we hold that the determination of whether an individual is disabled should be made with reference to measures that mitigate the individual’s impairment, including, in this instance, eyeglasses and contact lenses. In addition, we hold that petitioners failed to allege properly that respondent “regarded” them as having a disability within the meaning of the ADA.
I
Petitioners’ amended complaint was dismissed for failure to state a claim upon which relief could be granted. See Fed. Rule Civ. Proc. 12(b)(6). Accordingly, we accept the allegations contained in their complaint as true for purposes of this ease. See United States v. Gaubert, 499 U. S. 315, 327 (1991).
Petitioners are twin sisters, both of whom have severe myopia. Each petitioner’s uncorreeted visual acuity is 20/ 200 or worse in her right eye and 20/400 or worse in her left eye, but “[w]ith the use of corrective lenses, each... has vision that is 20/20 or better.” App. 23. Consequently, without corrective lenses, each “effectively cannot see to conduct numerous activities such as driving a vehicle, watching television or shopping in public stores,” id., at 24, but with corrective measures, such as glasses or contact lenses, both “function identically to individuals without a similar impairment,” ibid.
In 1992, petitioners applied to respondent for employment as commercial airline pilots. They met respondent’s basic age, education, experience, and Federal Aviation Administration certification qualifications. After submitting their applications for employment, both petitioners were invited by respondent to an interview and to flight simulator tests. Both were told during their interviews, however, that a mistake had been made in inviting them to interview because petitioners did not meet respondent’s minimum vision requirement, which was uncorrected visual acuity of 20/100 or better. Due to their failure to meet this requirement, petitioners’ interviews were terminated, and neither was offered a pilot position.
In light of respondent’s proffered reason for rejecting them, petitioners filed a charge of disability discrimination under the ADA with the Equal Employment Opportunity Commission (EEOC). After receiving a right to sue letter, petitioners filed suit in the United States District Court for the District of Colorado, alleging that respondent had discriminated against them “on the basis of their disability, or because [respondent] regarded [petitioners] as having a disability” in violation of the ADA. App. 26. Specifically, petitioners alleged that due to their severe myopia they actually have a substantially limiting impairment or are regarded as having such an impairment, see id., at 23-26, and are thus disabled under the Act.
The District Court dismissed petitioners’ complaint for failure to state a claim upon which relief could be granted. See Civ. A. No. 96-5-121 (Aug. 28, 1996), App. to Pet. for Cert. A-27. Because petitioners could fully correct their visual impairments, the court held that they were not actually substantially limited in any major life activity and thus had not stated a claim that they were disabled within the meaning of the ADA. Id., at A-32 to A-36. The court also determined that petitioners had not made allegations sufficient to support their claim that they were “regarded” by respondent as having an impairment that substantially limits a major life activity. Id., at A-36 to A-37. The court observed that “[t]he statutory reference to a substantial limitation indicates... that an employer regards an employee as handicapped in his or her ability to work by finding the employee’s impairment to foreclose generally the type of employment involved.” Ibid. But petitioners had alleged only that respondent regarded them as unable to satisfy the requirements of a particular job, global airline pilot. Consequently, the court held that petitioners had not stated a claim that they were regarded as substantially limited in the major life activity of working. Employing similar logic, the Court of Appeals for the Tenth Circuit affirmed the District Court’s judgment. 130 P. 3d 893 (1997).
The Tenth Circuit’s decision is in tension with the decisions of other Courts of Appeals. See, e.g., Bartlett v. New York State Bd. of Law Examiners, 156 P. 3d 321, 329 (CA2 1998) (holding self-accommodations cannot be considered when determining a disability), cert. pending, No. 98-1285; Baert v. Euclid Beverage, Ltd., 149 F. 3d 626, 629-630 (CA7 1998) (holding disabilities should be determined without reference to mitigating measures); Matczak v. Frankford Candy & Chocolate Co., 136 F. 3d 933, 937-938 (CA3 1997) (same); Arnold v. United Parcel Service, Inc., 136 F. 3d 854, 859-866 (CA1 1998) (same); see also Washington v. HCA Health Servs. of Texas, Inc., 152 F. 3d 464, 470-471 (CA5 1998) (holding that only some impairments should be evaluated in their uncorrected state), cert. pending, No. 98-1365. We granted certiorari, 525 U. S. 1063 (1999), and now affirm.
II
The ADA prohibits discrimination by covered entities, including private employers, against qualified individuals with a disability. Specifically, it provides that no covered employer “shall discriminate against a qualified individual with a disability because of the disability of such individual in regard to job application procedures, the hiring, advancement, or discharge of employees, employee compensation, job training, and other terms, conditions, and privileges of employment” 42 U. S. C. § 12112(a); see also § 12111(2) (“The term 'covered entity’ means an employer, employment agency, labor organization, or joint labor-management committee”). A “qualified individual with a disability” is identified as “an individual with a disability who, with or without reasonable accommodation, can perform the essential functions of the employment position that such individual holds or desires.” § 12111(8). In turn, a “disability” is defined as:
“(A) a physical or mental impairment that substantially limits one or more of the major life activities of such individual;
“(B) a record of such an impairment; or
“(C) being regarded as having such an impairment.”
§12102(2).
Accordingly, to fall within this definition one must have an actual disability (subsection (A)), have a record of a disability (subsection (B)), or be regarded as having one (subsection (Q).
The parties agree that the authority to issue regulations to implement the Act is split primarily among three Government agencies. According to the parties, the EEOC has authority to issue regulations to carry out the employment provisions in Title I of the ADA, §§ 12111-12117, pursuant to § 12116 (“Not later than 1 year after [the date of enactment of this Act], the Commission shall issue regulations in an accessible format to carry out this subehapter in accordance with subchapter II of chapter 5 of title 5”). The Attorney General is granted authority to issue regulations with respect to Title II, subtitle A, §§ 12131-12134, which relates to public services. See § 12134 (“Not later than 1 year after [the date of enactment of this Act], the Attorney General shall promulgate regulations in an accessible format that implement this part”). Finally, the Secretary of Transportation has authority to issue regulations pertaining to the transportation provisions of Titles II and III. See § 12149(a) (“Not later than 1 year after [the date of enactment of this Act], the Secretary of Transportation shall issue regulations, in an accessible format, necessary for carrying out this subpart (other than section 12143 of this title)”); § 12164 (substantially same); § 12186(a)(1) (substantially same); § 12143(b) (“Not later than one year after [the date of enactment of this Act], the Secretary shall issue final regulations to carry out this section”). See also § 12204 (granting authority to the Architectural and Transportation Barriers Compliance Board to issue minimum guidelines to supplement the existing Minimum Guidelines and Requirements for Accessible Design). Moreover, each of these agencies is authorized to offer technical assistance regarding the provisions they administer. See § 12206(e)(1) (“Each Federal agency that has responsibility under paragraph (2) for implementing this chapter may render technical assistance to individuals and institutions that have rights or duties under the respective subehapter or subchapters of this chapter for which such agency has responsibility”).
No agency, however, has been given authority to issue regulations implementing the generally applicable provisions of the ADA, see §§12101-12102, which fall outside Titles I-V. Most notably, no agency has been delegated authority to interpret the term “disability.” § 12102(2). Justice Breyer’s contrary, imaginative interpretation of the Act’s delegation provisions, see post, at 514-515 (dissenting opinion), is belied by the terms and structure of the ADA. The EEOC has, nonetheless, issued regulations to provide additional guidance regarding the proper interpretation of this term. After restating the definition of disability given in the statute, see 29 CFR § 1630.2(g) (1998), the EEOC regulations define the three elements of disability: (1) “physical or mental impairment,” (2) “substantially limits,” and (3) “major life activities.” See §§ 1630.2(h)-(j). Under the regulations, a “physical impairment” includes “[a]ny physiological disorder, or condition, cosmetic disfigurement, or anatomical loss affecting one or more of the following body systems: neurological, musculoskeletal, special sense organs, respiratory (including speech organs), cardiovascular, reproductive, digestive, genito-urinary, hemic and lymphatic, skin, and endocrine.” § 1630.2(h)(1). The term "substantially limits” means, among other things, “[u]nable to perform a major life activity that the average person in the general population can perform”; or "[significantly restricted as to the condition, manner or duration under which an individual can perform a particular major life activity as compared to the condition, manner, or duration under which the average person in the general population can perform that same major life activity.” § 1630.2(j). Finally, “[m]ajor [l]ife [activities means functions such as caring for oneself, performing manual tasks, walking, seeing, hearing, speaking, breathing, learning, and working.” § 1630.2(i). Because both parties accept these regulations as valid, and determining their validity is not necessary to decide this ease, we have no occasion to consider what deference they are due, if any.
The agencies have also issued interpretive guidelines to aid in the implementation of their regulations. For instance, at the time that it promulgated the above regulations, the EEOC issued an "Interpretive Guidance,” which provides that "[t]he determination of. whether an individual is substantially limited in a major life activity must be made on a ease by case basis, without regard to mitigating measures such as medicines, or assistive or prosthetic devices.” 29 CFR pt. 1630, App. § 1630.2(j) (1998) (describing § 1630.2(j)). The Department of Justice has issued a similar guideline. See 28 CFR pt. 35, App. A, §35.104 (“The question of whether a person has a disability should be assessed without regard to the availability of mitigating measures, such as reasonable modification or auxiliary aids and services”); pt. 36, App. B, §36.104 (same). Although the parties dispute the persuasive force of these interpretive guidelines, we have no need in this ease to decide what deference is due.
III
With this statutory and regulatory framework in mind, we turn first to the question whether petitioners have stated a claim under subsection (A) of the disability definition, that is, whether they have alleged that they possess a physical impairment that substantially limits them in one or more major life activities. See 42 U. S. C. § 12102(2)(A). Because petitioners allege that with corrective measures their vision “is 20/20 or better,” App. 23, they are not actually disabled within the meaning of the Act if the “disability” determination is made with reference to these measures. Consequently, with respect to subsection (A) of the disability definition, our decision turns on whether disability is to be determined with or without reference to corrective measures.
Petitioners maintain that whether an impairment is substantially limiting should be determined without regard to corrective measures. They argue that, because the ADA does not directly address the question at hand, the Court should defer to the agency interpretations of the statute, which are embodied in the agency guidelines issued by the EEOC and the Department of Justice. These guidelines specifically direct that the determination of whether an individual is substantially limited in a major life activity be made without regard to mitigating measures. See 29 CFR pt. 1630, App. § 1630.2(j); 28 CFR pt. 35, App. A §35.104 (1998); 28 CFR pt. 36, App. B §36.104.
Respondent, in turn, maintains that an impairment does not substantially limit a major life activity if it is corrected. It argues that the Court should not defer to the agency guidelines cited by petitioners because the guidelines conflict with the plain meaning of the ADA. The phrase “substantially limits one or more major life activities,” it explains, requires that the substantial limitations actually and presently exist. Moreover, respondent argues, disregarding mitigating measures taken by an individual defies the statutory command to examine the effect of the impairment on the major life activities “of such individual/’ And even if the statute is ambiguous, respondent claims, the guidelines' directive to ignore mitigating measures is not reasonable, and thus this Court should not defer to it.
We conclude that respondent is correct that the approach adopted by the agency guidelines — that persons are to be evaluated in their hypothetical uncorrected state — is an impermissible interpretation of the ADA. Looking at the Act as a whole, it is apparent that if a person is taking measures to correct for, or mitigate, a physical or mental impairment, the effects of those measures — both positive and negative— must be taken into account when judging whether that person is “substantially limited” in a major life activity and thus “disabled” under the Act. Justice Stevens relies on the legislative history of the ADA for the contrary proposition that individuals should be examined in their uncorreeted state. See post, at 499-501 (dissenting opinion). Because we decide that, by its terms, the ADA cannot be read in this manner, we have no reason to consider the ADA’s legislative history.
Three separate provisions of the ADA, read in concert, lead us to this conclusion. The Act defines a “disability” as “a physical or mental impairment that substantially limits one or more of the major life activities” of an individual. § 12102(2)(A) (emphasis added). Because the phrase “substantially limits” appears in the Act in the present indicative verb form, we think the language is properly read as requiring that a person be presently — not potentially or hypothetically — substantially limited in order to demonstrate a disability. A “disability” exists only where an impairment “substantially limits” a major life activity, not where it “might,” “could,” or “would” be substantially limiting if mitigating measures were not taken. A person whose physical or mental impairment is corrected by medication or other measures does not have an impairment that presently “substantially limits” a major life activity. To be sure, a person whose physical or mental impairment is corrected by mitigating measures still has an impairment, but if the impairment is corrected it does not "substantially limi[t]” a major life activity.
The definition of disability also requires that disabilities be evaluated “with respect to an individual” and be determined based on whether an impairment substantially limits the “major life activities of such individual.” §12102(2). Thus, whether a person has a disability under the ADA is an individualized inquiry. See Bragdon v. Abbott, 524 U. S. 624, 641-642 (1998) (declining to consider whether HIV infection is a per se disability under the ADA); 29 CFR pt. 1630, App. §1630.2(j) (“The determination of whether an individual has a disability is not necessarily based on the name or diagnosis of the impairment the person has, but rather on the effect of that impairment on the life of the individual”).
The agency guidelines’ directive that persons be judged in their uncorreeted or unmitigated state runs directly counter to the individualized inquiry mandated by the ADA. The agency approach would often require courts and employers to speculate about a person’s condition and would, in many eases, force them to make a disability determination based on general information about how an uncorreeted impairment usually affects individuals, rather than on the individual’s actual condition. For instance, under this view, courts would almost certainly find all diabetics to be disabled, because if they failed to monitor their blood sugar levels and administer insulin, they would almost certainly be substantially limited in one or more major life activities. A diabetic whose illness does not impair his or her daily activities would therefore be considered disabled simply because he or she has diabetes. Thus, the guidelines approach would create a system in which persons often must be treated as members of a group of people with similar impairments, rather than as individuals. This is contrary to both the letter and the spirit of the ADA.
The guidelines approach could also lead to the anomalous result that in determining whether an individual is disabled, courts and employers could not consider any negative side effects suffered by an individual resulting from the use of mitigating measures, even when those side effects are very severe. See, e. g., Johnson, Antipsychotics: Pros and Cons of Antipsychotics, RN (Aug. 1997) (noting that antipsychotic drugs can cause a variety of adverse effects, including neuro-leptic malignant syndrome and painful seizures); Liver Risk Warning Added to Parkinson’s Drug, FDA Consumer (Mar. 1,1999) (warning that a drug for treating Parkinson’s disease can cause liver damage); Curry & Kulling, Newer Antiepileptic Drugs, American Family Physician (Feb. 1,1998) (cataloging serious negative side effects of new antiepileptic drugs). This result is also inconsistent with the individualized approach of the ADA.
Finally, and critically, findings enacted as part of the ADA require the conclusion that Congress did not intend to bring under the statute’s protection all those whose uncorrected conditions amount to disabilities. Congress found that “some 43,000,000 Americans have one or more physical or mental disabilities, and this number is increasing as the population as a whole is growing older.” § 12101(a)(1). This figure is inconsistent with the definition of disability pressed by petitioners.
Although the exact source of the 43 million figure is not clear, the corresponding finding in the 1988 precursor to the ADA was drawn directly from a report prepared by the National Council on Disability. See Burgdorf, The Americans with Disabilities Act: Analysis and Implications of a Second-Generation Civil Rights Statute, 26 Harv. Civ. Rights-Civ. Lib. L. Rev. 413, 434, n. 117 (1991) (reporting, in an article authored by the drafter of the original ADA bill introduced in Congress in 1988, that the report was the source for a figure of 36 million disabled persons quoted in the versions of the bill introduced in 1988). That report detailed the difficulty of estimating the number of disabled persons due to varying operational definitions of disability. National Council on Disability, Toward Independence 10 (1986). It explained that the estimates of the number of disabled Americans ranged from an overinelusive 160 million under a “health conditions approach,” which looks at all conditions that impair the health or normal functional abilities of an individual, to an underinclusive 22.7 million under a “work disability approach,” which focuses on individuals’ reported ability to work. Id., at 10-11. It noted that “a figure of 35 or 36 million [was] the most commonly quoted estimate.” Id., at 10. The 36 million number included in the 1988 bill’s findings thus clearly reflects an approach to defining disabilities that is closer to the work disabilities approach than the health conditions approach.
This background also provides some clues to the likely source of the figure in the findings of the 1990 Act. Roughly two years after issuing its 1986 report, the National Council on Disability issued an updated report. See On the Threshold of Independence (1988). This 1988 report settled on a more concrete definition of disability. It stated that 37.3 million individuals have “difficulty performing one or more basic physical activities,” including “seeing, hearing, speaking, walking, using stairs, lifting or carrying, getting around outside, getting around inside, and getting into or out of bed.” Id., at 19. The study from which it drew this data took an explicitly functional approach to evaluating disabilities. See U. S. Dept, of Commerce, Bureau of Census, Disability, Functional Limitation, and Health Insurance Coverage: 1984/85, p. 2 (1986). It measured 37.3 million persons with a “functional limitation” on performing certain basic activities when using, as the questionnaire put it, “special aids,” such as glasses or hearing aids, if the person usually used such aids. Id., at 1, 47. The number of disabled provided by the study and adopted in the 1988 report, however, includes only noninstitutionalized persons with physical disabilities who are over age 15. The 5.7 million gap between the 43 million figure in the ADA’s findings and the 37.3 million figure in the report can thus probably be explained as an effort to include in the findings those who were excluded from the National Council figure. See, e. g., National Institute on Disability and Rehabilitation Research, Data on Disability from the National Health Interview Survey 1983-1985, pp. 61-62 (1988) (finding approximately 943,000 noninstitutionalized persons with an activity limitation due to mental illness; 947,000 noninstitutionalized persons with an activity limitation due to mental retardation; 1,900,000 noninstitutionalized persons under 18 with an activity limitation); U. S. Dept, of Commerce, Bureau of the Census, Statistical Abstract of the United States 106 (1989) (Table 168) (finding 1,553,000 resident patients in nursing and related care facilities (excluding hospital-based nursing homes) in 1986).
Regardless of its exact source, however, the 43 million figure reflects an understanding that those whose impairments are largely corrected by medication or other devices are not “disabled” within the meaning of the ADA. The estimate is consistent with the numbers produced by studies performed during this same time period that took a similar functional approach to determining disability. For instance, Mathematica Policy Research, Inc., drawing on data from the National Center for Health Statistics, issued an estimate of approximately 31.4 million civilian noninstitutionalized persons with “chronic activity limitation status” in 1979. Digest of Data on Persons with Disabilities 25 (1984). The 1989 Statistical Abstract offered the same estimate based on the same data, as well as an estimate of 32.7 million non-institutionalized persons with “activity limitation” in 1985. Statistical Abstract, supra, at 115 (Table 184). In both cases, individuals with “activity limitations” were those who, relative to their age-sex group could not conduct “usual” activities: e. g., attending preschool, keeping house, or living independently. See National Center for Health Statistics, U. S. Dept. of Health and Human Services, Vital and Health Statistics, Current Estimates from the National Health Interview Survey, 1989, Series 10, pp. 7-8 (1990).
By contrast, nonfunctional approaches to defining disability produce significantly larger numbers. As noted above, the 1986 National Council on Disability report estimated that there were over 160 million disabled under the “health conditions approach.” Toward Independence, supra, at 10; see also Mathematiea Policy Research) supra, at 3 (arriving at similar estimate based on same Census Bureau data). Indeed, the number of people with vision impairments alone is 100 million. See National Advisory Eye Council, U. S. Dept, of Health and Human Services, Vision Research — A National Plan: 1999-2003, p. 7 (1998) (“[M]ore than 100 million people need corrective lenses to see properly”). “It is estimated that more than 28 million Americans have impaired hearing.” National Institutes of Health, National Strategic Research Plan: Hearing and Hearing Impairment v (1996). And there were approximately 50 million people with high blood pressure (hypertension). Tindall, Stalking a Silent Killer; Hypertension, Business & Health 37 (August 1998) (“Some 50 million Americans have high blood pressure”).
Because it is included in the ADA’s text, the finding that 43 million individuals are disabled gives content to the ADA’s terms, specifically the term “disability.” Had Congress intended to include all persons with corrected physical limitations among those covered by the Act, it undoubtedly would have cited a much higher number of disabled persons in the findings. That it did not is evidence that the ADA’s coverage is restricted to only those whose impairments are not mitigated by corrective measures.
The dissents suggest that viewing individuals in their corrected state will exclude from the definition of “disab[led]” those who use prosthetic limbs, see post, at 497-498 (opinion of Stevens, J.), post, at 513 (opinion of Breyer, J.), or take medicine for epilepsy or high blood pressure, see post, at 507, 509 (opinion of Stevens, J.). This suggestion is incorrect. The use of a corrective device does not, by itself, relieve one’s disability. Rather, one has a disability under subsection (A) if, notwithstanding the use of a corrective device, that individual is substantially limited in a major life activity. For example, individuals who use prosthetic limbs or wheelchairs may be mobile and capable of functioning in society but still be disabled because of a substantial limitation on their ability to walk or run. The same may be true of individuals who take medicine to lessen the symptoms of an impairment so that they can function but nevertheless remain substantially limited. Alternatively, one whose high blood pressure is “cured” by medication may be regarded as disabled by a covered entity, and thus disabled under subsection (C) of the definition. The use or nonuse of a corrective device does not determine whether an individual is disabled; that determination depends on whether the limitations an individual with an impairment actually faces are in fact substantially limiting.
Applying this reading of the Act to the case at hand, we conclude that the Court of Appeals correctly resolved the issue of disability in respondent’s favor. As noted above, petitioners allege that with corrective measures, their visual acuity is 20/20, App. 23, Amended Complaint ¶ 36, and that they “function identically to individuals without a similar impairment,” id., at 24, Amended Complaint fl37e. In addition, petitioners concede that they “do not argue that the use of corrective lenses in itself demonstrates a substantially limiting impairment.” Brief for | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
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"Unidentifiable",
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"Board of General Appraisers",
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"General Land Office or Commissioners",
"NO Admin Action",
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] | [
31
] | sc_adminaction |
FEDERAL TRADE COMMISSION v. RUBEROID CO.
NO. 448.
Argued March 31 and April 1, 1952.
Decided May 26, 1952.
Cyrus Austin argued the cause and filed a brief for the Ruberoid Company.
James W. Cassedy argued the cause for the Federal Trade Commission. With him on the brief were Solicitor General Perlman, Assistant Attorney General Morison, Daniel M. Friedman, Ralph S. Spritzer and W. T. Kelley.
Mr. Justice Clark
delivered the opinion of the Court.
In this case we granted cross-petitions for certiorari to review the decree of the Court of Appeals affirming, but refusing to enforce, a cease and desist order issued by the Federal Trade Commission to the Ruberoid Co.
Ruberoid is one of the nation’s largest manufacturers of asphalt and asbestos roofing materials and allied products. The Commission found that Ruberoid, in a number of specific instances, had discriminated among customers in the prices charged them for roofing materials. Further finding that the effect of those discriminations “may be substantially to lessen competition in the line of commerce in which [those customers] are engaged, and to injure, destroy, or prevent competition between [those customers] ,” the Commission held that the discriminations were violations of § 2 (a) of the Clayton Act, as amended by the Robinson-Patman Act. 46 F. T. C. 379. Ruberoid was ordered to:
“[C]ease and desist from discriminating in price:
“By selling such products of like grade and quality to any purchaser at prices lower than those granted other purchasers who in fact compete with the favored purchaser in the resale or distribution of such products.”
Upon Ruberoid’s petition for review, the Court of Appeals affirmed and granted enforcement of the order. 189 F. 2d 893. However, on rehearing, the Court of Appeals amended its mandate to strike that part which directed enforcement. 191 F. 2d 294. We granted certiorari to review questions, important in the administration of the Clayton Act, as to the scope and enforcement of Federal Trade Commission orders. 342 U. S. 917.
We first consider the contentions of Ruberoid, which are mainly attacks upon the breadth of the order. Orders of the Federal Trade Commission are not intended to impose criminal punishment or exact compensatory damages for past acts, but to prevent illegal practices in the future. In carrying out this function the Commission is not limited to prohibiting the illegal practice in the precise form in which it is found to have existed in the past. If the Commission is to attain the objectives Congress envisioned, it cannot be required to confine its road block to the narrow lane the transgressor has traveled; it must be allowed effectively to close all roads to the prohibited goal, so that its order may not be by-passed with impunity. Moreover, “[t]he Commission has wide discretion in its choice of a remedy deemed adequate to cope with the unlawful practices” disclosed. Jacob Siegel Co. v. Federal Trade Comm’n, 327 U. S. 608, 611 (1946). Congress placed the primary responsibility for fashioning such orders upon the Commission, and Congress expected the Commission to exercise a special competence in formulating remedies to deal with problems in the general sphere of competitive practices. Therefore we have said that “the courts will not interfere except where the remedy selected has no reasonable relation to the unlawful practices found to exist.” Id., at 613.
In the light of these principles, we examine the specific objections of Ruberoid to the order in this case. First, it is argued that the order went too far in prohibiting all price differentials between competing purchasers, although only differentials of 5% or more were found. But the Commission found that very small differences in price were material factors in competition among Ruberoid’s customers, and Ruberoid offered no evidence to the contrary. In this state of the record the Commission was not required to limit its prohibition to the specific differential shown to have been adopted in past violations of the statute. In the absence of any indication that a lesser discrimination might not affect competition there was no need to afford an escape clause through which the seller might frustrate the whole purpose of the proceedings and the order by limiting future discrimination to something less than 5%.
The roofing material customers of Ruberoid may be classified as wholesalers, retailers, and roofing contractors or applicators. The discriminations found by the Commission were in sales to retailers and applicators. The Commission held that there was insufficient evidence in the record to establish discrimination among wholesalers, as such. Ruberoid contends that the order should have been similarly limited to sales to retailers and applicators. But there was ample evidence that Ruberoid’s classification of its customers did not follow real functional differences. Thus some purchasers which Ruberoid designated as “wholesalers” and to which Ruberoid allowed extra discounts in fact competed with other purchasers as applicators. And the Commission found that some purchasers operated as both wholesalers and applicators. So finding, the Commission disregarded these ambiguous labels, which might be used to cloak discriminatory discounts to favored customers, and stated its order in terms of “purchasers who in fact compete.” Thus stated, we think the order is understandable, reasonably related to the facts shown by the evidence, and within the broad discretion which the Commission possesses in determining remedies.
Finally, Ruberoid complains that the order enjoins lawful acts by failing to except from its prohibitions differentials which merely make allowance for differences in cost of manufacture, sale or delivery, or which are made in good faith to meet an equally low price of a competitor. Differences in price satisfying either of these tests are permitted by the terms of the Act. It is argued that the Commission has radically broadened its prohibitory powers through failure to include these provisos in the order. We do not think so because we think the provisos are necessarily implicit in every order issued under the authority of the Act, just as if the order set them out in extenso. Although previous Commission orders have included these provisos, they gained no force by that inclusion. Their absence cannot preclude the seller from differentiating in price in a new competitive situation involving different circumstances where it can justify the discrimination in accordance with the statutory provisos. Nor is the seller required to seek modification of the order each time, for example, that a competitor’s price reduction requires it either to lower its price in good faith to meet the lower competing price or to lose a fleeting sales opportunity. On the other hand, the implied inclusion of the provisos in the order does not shift from the seller the burden of proof of justification. Neither does recognition of the implicit availability of these defenses allow the seller to relitigate issues already settled by prior proceedings before the Commission which resulted in an order that was affirmed in the courts. If questions of justification, claimed upon the basis of facts relating to costs or meeting competition, have once been finally decided against the seller, it cannot again interpose the same defense upon substantially similar facts when the Commission seeks to show that its order has been violated. The same result follows where the evidence supporting the defense, although not produced in the previous proceedings, was then available to the seller. In short, the seller, in contesting enforcement or contempt proceedings, may plead only those facts constituting statutory justification which it has not had a previous opportunity to present.
The sole question presented by the Commission’s petition concerns the lower court’s holding, with one dissent, that the Commission could not “obtain a decree directing enforcement of an order issued under the Clayton Act in the absence of showing that a violation of the order has occurred or is imminent.” The pertinent parts of the Act provide:
“If such person [subject to the order] fails or neglects to obey such order of the commission . . . while the same is in effect, the commission . . . may apply to the circuit court of appeals of the United States ... for the enforcement of its order . . . . [T]he court . . . shall have power to make and enter ... a decree affirming, modifying, or setting aside the order of the commission ....
“Any party required by such order of the commission ... to cease and desist from a violation charged may obtain a review of such order in said circuit court of appeals by filing in the court a written petition praying that the order of the commission ... be set aside. . . . [T]he court shall have the same jurisdiction to affirm, set aside, or modify the order of the commission ... as in the case of an application by the commission . . . for the enforcement of its order ....
“The jurisdiction of the circuit court of appeals of the United States to enforce, set aside, or modify orders of the commission . . . shall be exclusive.”
The Commission argues, first, that the provision authorizing it to apply for enforcement “if such person fails or neglects to obey such order” is merely “a Congressional directive to the Commission as to the circumstances under which it may go into court to seek enforcement,” which does not amount to a prerequisite to the court’s granting of enforcement. We cannot subscribe to this argument, which disregards the unequivocal language of the statute and its consistent interpretation over the thirty-eight-year period of its existence. Congress, in 1938, amended similar language in the Federal Trade Commission Act, so that the reviewing court is now plainly required, upon affirmance, to enforce an order based upon violation of that Act. The Commission has repeatedly sought similar amendment of the Clayton Act provisions involved in this case. We will not now achieve the same result by reinterpretation in the face of Congress’ failure to pass the bills thus brought before it. Effective enforcement of the Clayton Act by the Commission may be handicapped by the present provisions, but that is a question of policy for Congress.
Alternatively, the Commission argues that, even though disobedience of the order is a condition to enforcement upon the application of the Commission, there is no such condition where the order comes before the court upon petition for review by the affected party. This argument begins with the difference in language between the statutory paragraphs providing for review at the instance of the respective parties, but consideration of the section as a whole convinces us that the most that can be said for the argument is that the section is' ambiguous. We think the statutory prerequisite to enforcement applies when the Commission seeks enforcement by cross-petition after review has been set in motion by the party subject to the order as well as when the Commission makes the original application. There is no reason why one who has complied with the order, but who seeks to have it reviewed and modified or set aside, should be placed in a worse position than one who does not exercise that right. We doubt that Congress intended its requirement for enforcement to depend entirely upon which party goes to court first.
Affirmed.
Mr. Justice Black concurs in the judgment and opinion of the Court, except that he thinks the Commission’s order should expressly except from its prohibitions differentials which merely make allowances for differences in the cost of manufacture, sale, or delivery, or which are made in good faith to meet an equally low price of a competitor.
Mr. Justice Frankfurter, not having heard the argument, owing to illness, took no part in the disposition of this case.
Mr. Justice Douglas dissents from the denial of enforcement of the order.
46 F. T. C. 379, 386.
38 Stat. 730, as amended, 49 Stat. 1526, 15 U. S. C. § 13.
46 F. T. C. 379, 387.
Federal Trade Comm’n v. Morton Salt Co., 334 U. S. 37, 51-52 (1948); cf. International Salt Co. v. United States, 332 U. S. 392, 398-400 (1947).
Federal Trade Comm’n v. Cement Institute, 333 U. S. 683, 726-727 (1948); 38 Stat. 722, 15 U. S. C. § 47.
Federal Trade Comm’n v. Morton Salt Co., 334 U. S. 37, 51-52 (1948); cf. Labor Board v. Express Publishing Co., 312 U. S. 426, 436-437 (1941).
“True, the Commission did not merely prohibit future discounts, rebates, and allowances in the exact mathematical percentages previously utilized by respondent. Had the order done no more than that, respondent could have continued substantially the same unlawful practices despite the order by simply altering the discount percentages and the quantities of salt to which the percentages applied.” Federal Trade Comm’n v. Morton Salt Co., 334 U. S. 37, 52-53 (1948). The discussion following these words in the Morton Salt case, of certain aspects of the order in question there, manifestly affords no support to Ruberoid’s contention here. Id., at 53-54.
Ruberoid suggests a fourth category of purchasers — manufacturers — and contends that the order is too broad in that it prohibits discrimination in sales to that group, e. g., in sales of shingles to competing manufacturers of prefabricated houses. We need not consider whether such an order would be too broad because we do not think the order here applies to such sales. By its terms, the order covers only sales to those competitively engaged “in the resale or distribution of such products [i. e., ‘asbestos or asphalt roofing materials’],” and not sales to those who use roofing materials in the fabrication of wholly new and different products.
“[N]othing herein contained shall prevent differentials which make only due allowance for differences in the cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which such commodities are to such purchasers sold or delivered. . . ." 49 Stat. 1526, 15 U. S. C. § 13 (a). “[N]othing herein contained shall prevent a seller rebutting the prima-facie case thus made by showing that his lower price . . . was made in good faith to meet an equally low price of a competitor 49 Stat. 1526, 15 U. S. C. § 13 (b), Standard Oil Co. v. Federal Trade Comm’n, 340 U. S. 231 (1951). Ruberoid does not complain of the omission from the order of the statutory provisos relating to the seller’s right to select its own customers and to price changes in response to changing conditions affecting the market for, or the marketability of, the goods concerned. Hence we do not deal with those defenses here.
Cf. Federal Trade Comm’n v. Morton Salt Co., 334 U. S. 37, 44-45 (1948) (cost justification); Federal Trade Comm’n v. A. E. Staley Mfg. Co., 324 U. S. 746 (1945) (meeting-competition justification) .
Where the Commission seeks both affirmance and enforcement of its order in one proceeding, contending that the seller has continued in its unlawful practices since the order was issued, the court, in deciding whether the order should be affirmed, will of course review the determination of the Commission in the ordinary manner. But questions thus settled will not be open in deciding whether the order has been violated and should therefore be enforced.
191 F. 2d 294, 295.
38 Stat. 735, as amended, 15 U. S. C. § 21.
Brief for the Federal Trade Commission in No. 448, p. 16.
E. g., Federal Trade Comm’n v. Whitney & Co., 192 F. 2d 746 (C. A. 9th Cir. 1951); Federal Trade Comm’n v. Standard Brands, Inc., 189 F. 2d 510 (C. A. 2d Cir. 1951); Federal Trade Comm’n v. Herzog, 150 F. 2d 450 (C. A. 2d Cir. 1945); Federal Trade Comm’n v. Baltimore Paint & Color Works, 41 F. 2d 474 (C. A. 4th Cir. 1930); Federal Trade Comm’n v. Balme, 23 F. 2d 615 (C. A. 2d Cir. 1928); Federal Trade Comm’n v. Standard Education Society, 14 F. 2d 947 (C. A. 7th Cir. 1926). The last three cases cited arose under the Federal Trade Commission Act, but since the Clayton Act provisions involved here are identical with the corresponding provisions of the Federal Trade Commission Act prior to 1938, 38 Stat. 720, the decisions make no distinction between them.
“To the extent that the order of the Commission is affirmed, the court shall thereupon issue its own order commanding obedience to the terms of such order of the Commission.” 52 Stat. 113,15 U. S. C. § 45(c). Unless the party subject to an order issued under the provisions of the Federal Trade Commission Act files a petition for review within sixty days, the order becomes final and its violation punishable. 52 Stat. 113-114, 15 U. S. C. § 45 (g) and (Z).
E. g., Ann. Rep. F. T. C. (1951) 7-8; Ann. Rep. F. T. C. (1948) 12; Ann. Rep. F. T. C. (1947) 13; Ann. Rep. F. T. C. (1946) 12.
E. g., H. R. 10176, 75th Cong., 3d Sess.; H. R. 3402, 81st Cong., 1st Sess.
Accord, e. g., Federal Trade Comm’n v. Fairyfoot Products Co., 94 F. 2d 844 (C. A. 7th Cir. 1938); Butterick Co. v. Federal Trade Comm’n, 4 F. 2d 910 (C. A. 2d Cir. 1925); L. B. Silver Co. v. Federal Trade Comm’n, 292 F. 752 (C. A. 6th Cir. 1923). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
56
] | sc_adminaction |
NEW YORK TELEPHONE CO. et al. v. NEW YORK STATE DEPARTMENT OF LABOR et al.
No. 77-961.
Argued Ootober 30, 1978
Decided March 21, 1979
Stevens, J., announced the Court’s judgment and delivered an opinion, in which White and Rehnquist, JJ., joined. Brennan, J., filed an opinion concurring in the result, post, p. 546. Blackmun, J., filed an opinion concurring in the judgment, in which Marshall, J., joined, post, p. 547. Powell, J., filed a dissenting opinion, in which Burger, C. J., and Stewart, J., joined, post, p. 551.
David D. Benetar argued the cause for petitioners. With him on the brief were Stanley Schair, Mark H. Leeds, George E. Ashley, William P. Witman, and Laurel J. McKee.
Maria L. Marcus, Special Assistant Attorney General of New York, argued the cause for respondents. With her on the brief were Louis J. Lefkowitz, Attorney General, Samuel A. Hirshowitz, First Assistant Attorney General, Kathleen H. Casey, Assistant Attorney General, Donald Sticklor, Deputy Assistant Attorney General, and Nicholas G. Garaufis, Special Assistant Attorney General.
Briefs of amici curiae urging reversal were filed by Vincent J. Apruz- zese, Lawrence B. Kraus, and Stephen A. Bokat for the Chamber of Commerce of the United States; by Lawrence M. Cohen, Jeffrey S. Goldman, Jared H. Jossem, Brynn Aurelius, and Anthony G. Sousa for Dow Chemical Co. et ah; by Eugene D. Ulterino for Rochester Telephone Corp. et al.; and by Hugh L. Reilly for Stephen R. Havas et al.
Briefs of amici curiae urging affirmance were filed by Solicitor General McCree, John S. Irving, Carl L. Taylor, Norton J. Come, and Linda Sher for the United States; by J. Albert Woll and Laurence Gold for the American Federation of Labor and Congress of Industrial Organizations et al.; by Michael Krinsky, Thomas Kennedy, and Jerome Tauber for the National Lawyers Guild; and by Frederick L. Edwards for the Center on National Labor Policy.
Mr. Justice Stevens
announced the judgment of the Court and delivered an opinion, in which Mr. Justice White and Mr. Justice Rehnquist joined.
The question presented is whether the National Labor Relations Act, as amended, implicitly prohibits the State of New York from paying unemployment compensation to strikers.
Communication Workers of America, AFL-CIO (CWA), represents about 70% of the nonmanagement employees of companies affiliated with the Bell Telephone Co. In June 1971, when contract negotiations had reached an impasse, CWA recommended a nationwide strike. The strike commenced on July 14, 1971, and, for most workers, lasted only a week. In New York, however, the 38,000 CWA members employed by petitioners remained on strike for seven months.
New York’s unemployment insurance law normally authorizes the payment of benefits after approximately one week of unemployment. If a claimant’s loss of employment is caused by “a strike, lockout, or other industrial controversy in the establishment in which he was employed,” § 592 (1) of the law suspends the payment of benefits for an additional 7-week period. In 1971, the maximum weekly benefit of $75 was payable to an employee whose base salary was at least $149 per week.
After the 8-week waiting period, petitioners’ striking employees began to collect unemployment compensation. During the ensuing five months more than $49 million in ben-fits were paid to about 33,000 striking employees at an average rate of somewhat less than $75 per week. Because New York’s unemployment insurance system is financed primarily by employer contributions based on the benefits paid to former employees of each employer in past years, a substantial part of the cost of these benefits was ultimately imposed on petitioners.
Petitioners brought suit in the United States District Court for the Southern District of New York against the state officials responsible for the administration of the unemployment compensation fund. They sought a declaration that the New York statute authorizing the payment of benefits to strikers conflicts with federal law and is therefore invalid, an injunction against the enforcement of § 592 (1), and an award recouping the increased taxes paid in consequence of the disbursement of funds to their striking employees. After an 8-day trial, the District Court granted the requested relief. 434 P. Supp. 810 (1977).
The District Court concluded that the availability of unemployment compensation is a substantial factor in the worker’s decision to remain on strike, and that in this case, as in others, it had a measurable impact on the progress of the strike. The court held that the payment of such compensation by the State conflicted “with the policy of free collective bargaining established in the federal labor laws and is therefore invalid under the supremacy clause of the United States Constitution.” Id., at 819.
The Court of Appeals for the Second Circuit reversed. It did not, however, question the District Court’s finding that the New York statute “alters the balance in the collective bargaining relationship and therefore conflicts with the federal labor policy favoring the free play of economic forces in the collective bargaining process.” 566 P. 2d 388, 390. The Court of Appeals noted that Congress has not expressly forbidden state unemployment compensation for strikers; the court inferred from the legislative history of the National Labor Relations Act, and Title IX of the Social Security Act, as well as from later developments, that the omission was deliberate. Accordingly, without questioning the premise that federal law generally requires that “State statutes which touch or concern labor relations should be neutral,” the Court of Appeals concluded that “th[is] conflict is one which Congress has decided to tolerate.” Id., at 395.
The importance of the question led us to grant certiorari. 435 U. S. 941. We now affirm. Our decision is ultimately governed by our understanding of the intent of the Congress that enacted the National Labor Relations Act on July 5, 1935, and the Social Security Act on August 14 of the same year. Before discussing the relevant history of these statutes, however, we briefly summarize (1) the lines of pre-emption analysis that have limited the exercise of state power to regulate private conduct in the labor-management area and (2) the implications of our prior cases, both inside and outside the labor area, involving the distribution of public benefits to persons unemployed by reason of a labor dispute.
I
The doctrine of labor law pre-emption concerns the extent to which Congress has placed implicit limits on “the permissible scope of state regulation of activity touching upon labor-management relations.” Sears, Roebuck & Co. v. Carpenters, 436 U. S. 180, 187. Although this case involves the exploration of those limits in a somewhat novel setting, it soon becomes apparent that much of that doctrine is of limited relevance in the present context.
There is general agreement on the proposition that the “animating force” behind the doctrine is a recognition that the purposes of the federal statute would be defeated if state and federal courts were free, without limitation, to exercise jurisdiction over activities that are subject to regulation by the National Labor Relations Board. Id., at 218 (Brennan, J., dissenting). The overriding interest in a uniform, nationwide interpretation of the federal statute by the centralized expert agency created by Congress not only demands that the NLRB’s primary jurisdiction be protected, it also forecloses overlapping state enforcement of the prohibitions in § 8 of the Act, Plankinton Packing Co. v. Wisconsin Employment Relations Board, 338 U. S. 953, as well as state interference with the exercise of rights protected by § 7 of the Act. Automobile Workers v. Russell, 356 U. S. 634, 644. Consequently, almost all of the Court’s labor law decisions in which state regulatory schemes have been found to be preempted have involved state efforts to regulate or to prohibit private conduct that was either protected by § 7, prohibited by § 8, or at least arguably so protected or prohibited.
In contrast to those decisions, there is no claim in this case that New York has sought to regulate or prohibit any conduct subject to the regulatory jurisdiction of the Labor Board under § 8. Nor are the petitioning employers pursuing any claim of interference with employee rights protected by § 7. The State simply authorized striking employees to receive unemployment benefits, and assessed a tax against the struck employers to pay for some of those benefits, once the economic warfare between the two groups reached its ninth week. Accordingly, beyond identifying the interest in national uniformity underlying the doctrine, the cases comprising the main body of labor pre-emption law are of little relevance in deciding this case.
There is, however, a pair of decisions in which the Court has held that Congress intended to forbid state regulation of economic warfare between labor and management, even though it was clear that none of the regulated conduct on either side was covered by the federal statute. In Teamsters v. Morton, 377 U. S. 252, the Court held that an Ohio court could not award damages against a union for peaceful secondary picketing even though the union's conduct was neither protected by § 7 nor prohibited by § 8. Because Congress had focused upon this type of conduct and elected not to proscribe it when § 303 of the Labor Management Relations Act was enacted, the Court inferred a deliberate legislative intent to preserve this means of economic warfare for use during the bargaining process.
More recently, in Machinists v. Wisconsin Employment Relations Comm’n, 427 U. S. 132, the Court held that the state Commission could not prohibit a union’s concerted refusal to work overtime. Although this type of partial strike activity had not been the subject of special congressional consideration, as had the secondary picketing involved in Morton, the Court nevertheless concluded that it was a form of economic self-help that was “ 'part and parcel of the process of collective bargaining,’ ” 427 U. S., at 149 (quoting NLRB v. Insurance Agents, 361 U. S. 477, 495), that Congress implicitly intended to be governed only by the free play of economic forces. The Court identified the crucial inquiry in its pre-emption analysis in Machinists as whether the exercise of state authority to curtail or entirely prohibit self-help would frustrate effective implementation of the policies of the National Labor Relations Act.
The economic weapons employed by labor and management in Morton, Machinists, and the present case are similar, and petitioners rely heavily on the statutory policy,. emphasized in the former two cases, of allowing the free play of economic forces to operate during the bargaining process. Moreover, because of the twofold impact of § 592 (1), which not only provides financial support to striking employees but also adds to the burdens of the struck employers, see n. 5, supra, we must accept the District Court’s finding that New York’s law, like the state action involved in Morton and Machinists, has altered the economic balance between labor and management.
But there is not a complete unity of state regulation in the three cases. Unlike Morton and Machinists, as well as the main body of labor pre-emption cases, the case before us today does not involve any attempt by the State to regulate or prohibit private conduct in the labor-management field. It involves a state program for the distribution of benefits to certain members of the public. Although the class benefited is primarily made up of employees in the State and the class providing the benefits is primarily made up of employers in the State, and although some of the members of each class are occasionally engaged in labor disputes, the general purport of the program is not to regulate the bargaining relationships between the two classes but instead to provide an efficient means of insuring employment security in the State. It is therefore clear that even though the statutory policy underlying Morton and Machinists lends support to petitioners’ claim, the holdings in those cases are not controlling. The Court is being asked to extend the doctrine of labor law pre-emption into a new area.
II
The differences between state laws regulating private conduct and the unemployment-benefits program at issue here are important from a pre-emption perspective. For a variety of reasons, they suggest an affinity between this case and others in which the Court has shown a reluctance to infer a pre-emptive congressional intent.
Section 591 (1) is not a “state la[w] regulating the relations between employees, their union, and their employer,” as to which the reasons underlying the pre-emption doctrine have their “greatest force.” Sears, 436 U. S., at 193. Instead, as discussed below, the statute is a law of general applicability. Although that is not a sufficient reason to exempt it from preemption, Farmer v. Carpenters, 430 U. S. 290, 300, our cases have consistently recognized that a congressional intent to deprive the States of their power to enforce such general laws is more difficult to infer than an intent to pre-empt laws directed specifically at concerted activity. See id., at 302; Sears, supra, at 194-195; Cox, supra n. 16, at 1356-1357.
Because New York’s program, like those in other States, is financed in part by taxes assessed against employers, it is not strictly speaking a public welfare program. It nevertheless remains true that the payments to the strikers implement a broad state policy that does not primarily concern labor-management relations, but is implicated whenever members of the labor force become unemployed. Unlike most States, New York has concluded that the community interest in the security of persons directly affected by a strike outweighs the interest in avoiding any impact on a particular labor dispute.
As this Court has held in a related context, such unemployment benefits are not a form of direct compensation paid to strikers by their employer; they are disbursed from public funds to effectuate a public purpose. NLRB v. Gullett Gin Co., 340 U. S. 361, 364-365. This conclusion is no less true because New York has found it most efficient to base employer contributions to the insurance program on “experience ratings.” Id., at 365. Although this method makes the struck, rather than all, employers primarily responsible for financing striker benefits, the employer-provided moneys are nonetheless funneled through a public agency, mingled with other — and clearly public — funds, and imbued with a public purpose. There are obvious reasons, in addition, why the pre-emption doctrine should not “hinge on the myriad provisions of state unemployment compensation laws.” Ibid.
■New York’s program differs from state statutes expressly regulating labor-management relations for another reason. The program is structured to comply with a federal statute, and as a consequence is financed, in part, with federal funds. The federal subsidy mitigates the impact on the employer of any distribution of benefits. See n. 4, supra. More importantly, as the Court has pointed out in the past, the federal statute authorizing the subsidy provides additional evidence of Congress’ reluctance to limit the States’ authority in this area.
Title IX of the Social Security Act of 1935 established the participatory federal unemployment compensation scheme. The statute authorizes the provision of federal funds to States having programs approved by the Secretary of Labor. In Ohio Bureau of Employment Services v. Hodory, 431 U. S. 471, an employee who was involuntarily deprived of his job because of a strike claimed a federal right under Title IX to collect benefits from the Ohio Bureau. Specifically, he contended that Ohio’s statutory disqualification of claims based on certain labor disputes was inconsistent with a federal requirement that all persons involuntarily unemployed must be eligible for benefits.
Our review of both the statute and its legislative history convinced us that Congress had not intended to prescribe the nationwide rule that Hodory urged us to adopt. The voluminous history of the Social Security Act made it abundantly clear that Congress intended the several States to have broad freedom in setting up the types of unemployment compensation that they wish. We further noted that when Congress wished to impose or forbid a condition for compensation, it did so explicitly; the absence of such an explicit condition was therefore accepted as a strong indication that Congress did not intend to restrict the States’ freedom to legislate in this area.
The analysis in Ho dory confirmed this Court’s earlier interpretation of Title IX of the Social Security Act in Steward Machine Co. v. Davis, 301 U. S. 548, and was itself confirmed by the Court’s subsequent interpretation of Title IV of the Act in Batterton v. Francis, 432 U. S. 416. These cases demonstrate that Congress has been sensitive to the importance of the States’ interest in fashioning their own unemployment compensation programs and especially their own eligibility criteria. It is therefore appropriate to treat New York’s statute with the same deference that we have afforded analogous state laws of general applicability that protect interests “deeply rooted in local feeling and responsibility.” With respect to such laws, we have stated “that, in the absence of compelling congressional direction, we could not infer that Congress had deprived the States of the power to act.” San Diego Building Trades Council v. Garmon, 359 U. S. 236, 244.
III
Pre-emption of state law is sometimes required by the terms of a federal statute. See, e. g., Ray v. Atlantic Richfield Co., 435 U. S. 151, 173-179. This, of course, is not such a case. Even when there is no express pre-emption, any proper application of the doctrine must give effect to the intent of Congress. Malone v. White Motor Corp., 435 U. S. 497, 504. In this case there is no evidence that the Congress that enacted the National Labor Relations Act in 1935 intended to deny the States the power to provide unemployment benefits for strikers. Cf. Hodory, 431 U. S., at 482. Far from the compelling congressional direction on which preemption in this case would have to be predicated, the silence of Congress in 1935 actually supports the contrary inference that Congress intended to allow the States to make this policy determination for themselves.
New York was one of five States that had an unemployment insurance law before Congress passed the Social Security and the Wagner.Acts in the summer of 1935. Although the New York law did not then assess taxes against employers on the basis of their individual experience, it did authorize the payment of benefits to strikers out of a general fund financed by assessments against all employers in the State. The junior Senator from New York, Robert Wagner, was a principal sponsor of both the National Labor Relations Act and the Social Security Act; the two statutes were considered in Congress simultaneously and enacted into law within five weeks of one another; and the Senate Report on the Social Security bill, in the midst of discussing the States’ freedom of choice with regard to their unemployment compensation laws, expressly referred to the New York statute as a qualifying example. Even though that reference did not mention the subject of benefits for strikers, it is difficult to believe that Senator Wagner and his colleagues were unaware of such a controversial provision, particularly at a time when both unemployment and labor unrest were matters of vital national concern.
Difficulty becomes virtual impossibility when it is considered that the issue of public benefits for strikers became a matter of express congressional concern in 1935 during the hearings and debates on the Social Security Act. As already noted, the scheme of the Social Security Act has always allowed the States great latitude in fashioning their own programs. From the beginning, however, the Act has contained a few specific requirements for federal approval. One of these provides that a State may not deny compensation to an otherwise qualified applicant because he had refused to accept work as a strikebreaker, or had refused to resign from a union as a condition of employment. By contrast, Congress rejected the suggestions of certain advisory members of the Roosevelt administration as well as some representatives of citizens and business groups that the States be prohibited from providing benefits to strikers. The drafters of the Act apparently concluded that such proposals should be addressed to the individual state legislatures “without dictation from Washington.”
Undeniably, Congress was aware of the possible impact of unemployment compensation on the bargaining process. The omission of any direction concerning payment to strikers in either the National Labor Relations Act or the Social Security Act implies that Congress intended that the States be free to authorize, or to prohibit, such payments.
Subsequent events confirm our conclusion that the congressional silence in 1935 was not evidence of an intent to pre-empt the States’ power to make this policy choice. On several occasions since the 1930’s Congress has expressly addressed the question of paying benefits to strikers, and especially the effect of such payments on federal labor policy. On none of these occasions has it suggested that such payments were already prohibited by an implicit federal rule of law. Nor, on any of these occasions has it been willing to supply the prohibition. The fact that the problem has been discussed so often supports the inference that Congress was well aware of the issue when the Wagner Act was passed in 1935, and that it chose, as it has done since, to leave this aspect of unemployment compensation eligibility to the States.
In all events, a State’s power to fashion its own policy concerning the payment of unemployment compensation is not to be denied on the basis of speculation about the unexpressed intent of Congress. New York has not sought to regulate private conduct that is subject to the regulatory jurisdiction of the National Labor Relations Board. Nor, indeed, has it sought to regulate any private conduct of the parties to a labor dispute. Instead, it has sought to administer its unemployment compensation program in a manner that it believes best effectuates the purposes of that scheme. In an area in which Congress has decided to tolerate a substantial measure of diversity, the fact that the implementation of this general state policy affects the relative strength of the antagonists in a bargaining dispute is not a sufficient reason for concluding that Congress intended to pre-empt that exercise of state power.
The judgment of the Court of Appeals is
Affirmed.
Petitioners — New York Telephone Co., American Telephone & Telegraph Co. Long Lines Department, Western Electric Co., and Empire City Subway Co. — are the four Bell Telephone Co. affiliates with facilities and employees in the State of New York.
The goal of the New York strike was to disassociate the New York units of the CWA from the nationally settled-upon contract and to dislodge petitioners from the “pattern” bargaining format long used by Bell affiliates. Under that format, management and International CWA officials would select two Bell affiliates with early contract expiration dates and would attempt to reach a settlement at both, which would then be used as the basis for the contracts at all Bell units around the country. In order to “break the pattern,” the New York CWA units refused to ratify the pattern contract agreed upon by the International CWA and the pattern-setting affiliates during the week-long national strike in July 1971, and most members of the New York units remained on strike. Although the International originally opposed the continuation of the strike, it eventually lent its support. The strike was settled when petitioners agreed to a modest, but precedentially significant, increase in wage benefits over the national pattern. 434 F. Supp. 810, 812-814, and n. 3 (SDNY 1977).
N. Y. Lab. Law § 590 (7) (McKinney Supp. 1978-1979). Eligibility for benefits turns on the recipient’s total unemployment and his capability and readiness, but inability, to gain work in his “usual employment or in any other for which he is reasonably fitted by training and experience.” §§ 591 (1), 591 (2).
Section 592 (McKinney 1977) is entitled “Suspension of accumulation of benefit rights.” Subsection (1) of that section, entitled “Industrial controversy,” provides:
“The accumulation of benefit rights by a claimant shall be suspended during a period of seven consecutive weeks beginning with the day after he lost his employment because of a strike, lockout, or other industrial controversy in the establishment in which he was employed, except that benefit rights may be accumulated before the expiration of such seven weeks beginning with the day after such strike, lockout, or other industrial controversy was terminated.”
In order to explain why the entire cost was not borne by the companies, it is necessary to describe in some detail the rather complicated method used by New York to compute employer contributions. The State maintains an “unemployment insurance fund” made up of all moneys available for distribution to unemployed persons. § 550 (McKinney 1977). A separate “unemployment administration fund” is maintained to finance the administration of the unemployment law. § 551.
The unemployment fund is divided into various “accounts.” The “general account” is primarily made up of moneys derived from federal contributions under 42 U. S. C. § 1103 (a part of Title IX of the Social Security Act), the earnings on all moneys in the fund, and, occasionally, employer contributions. N. Y. Lab. Law §§577 (l)(a), 577 (2) (McKinney 1977 and Supp. 1978-1979). The money in the general account may be transferred to the administrative fund (the federally contributed money being specially set aside for this purpose, § 550 (3)) or used to finance refunds, the payment of benefits to certain employees who move into New York from out of state, and claims against “employer accounts” that show negative balances. §§577 (l)(b), 581 (l)(e) (McKinney 1977 and Supp. 1978-1979).
Employer accounts, which make up the rest of the unemployment fund, contain all of the contributions from individual employers. The rate of contributions — above a minimum level charged to all employers — is generally based on the employer’s “experience rating,” i. e., the amount of unemployment benefits attributable to employees previously in his employ. §§570 (1), 581 (McKinney 1977 and Supp. 1978-1979).
Employees are generally eligible for 156 “effective days” of benefits, which usually amount to about eight calendar months. §§ 523, 590 (4), 601 (McKinney 1977 and Supp. 1978-1979). But not all of those benefits are attributed to the account, and thus reflected in the experience rating, of the employer who last employed the claimant. First, the account is only charged with four days of benefits for every five days during which the claimant was employed by that employer. If this computation exhausts the claimant’s tenure with a given employer, the benefits are then charged to the account of the recipient’s next most recent employer, or to the general account when the class of former employers of the recipient is exhausted. §581(l)(e) (McKinney Supp. 1978-1979). Second, special provisions limit the liability of employers for claimants who previously held down two jobs or were only employed part time. Ibid. Third, any benefits reimbursed by the Federal Government are not debited to employer accounts. Ibid. Finally, and most importantly, only one-half of the last 52 effective days of benefits available to a claimant are charged to the employer's account; the other half is debited to the general account, and that account is credited with amounts received from the Federal Government pursuant to the Federal-State Extended Unemployment'Compensation Act, 26 U. S. C. § 3304. N. Y. Lab. Law § 601 (4) (McKinney Supp. 1978-1979). Hence, it is not by any means accurate to state that the struck employer is charged with all of the unemployment benefits paid to striking employees. The Federal Government, and the class of New York employers as a whole, may also pay significant amounts of the benefits, as well as of the costs of administering the program.
In this case, for example, the payments to strikers commenced at a time when the unemployment account of petitioner New York Telephone Co. (TELCO) had credits of about $40 million. During the strike, about $43 million in benefits were paid to TELCO employees. Yet, TELCO’s account was not completely depleted during the period, apparently because other accounts were debited with approximately $3 million in benefits paid to its workers.
Based on its unemployment benefits “experience” during the strike, TELCO’s contributions to its unemployment account during the next two years were increased by about $16 million over what they would have been had no strike occurred. (The like figure for petitioners as a whole was just under $18 million.) See 434 F. Supp., at 813-814, and n. 4.
“Notwithstanding the State’s adamant position to the contrary, I regard it as a fundamental truism that the availability to, or expectation or receipt of a substantial weekly tax-free payment of money by, a striker is a substantial factor affecting his willingness to go on strike or, once on strike, to remain on strike, in the pursuit of desired goals. This being a truism, one therefore would expect to find confirmation of it everywhere. One does.” Id., at 813-814.
In the District Court’s opinion, as well as in petitioners’ briefs in this Court, the primary emphasis is on the impact of the availability of unemployment benefits on the striking employee. The District Court’s economic-impact analysis finds further support, however, in the separate impact that the New York scheme has on the struck employer, whose unemployment insurance contribution rate will increase in rough proportion to the length of the 8-weeks-plus strike. But, as the District Court apparently recognized, under an economic-impact test it makes little difference— assuming the same amount of money is involved — whether the result of the unemployment scheme is simply to provide payments to striking workers, or simply to exact payments from struck employers, or some of both.
The District Court regarded the State’s interest in making the payments as not of sufficient consequence to be a factor in its determination. Id., at 819.
49 Stat. 449, as amended, 29 U. S. C. § 151 et seq.
49 Stat. 639, as amended and recodified as the Federal Unemployment Tax Act, 26 U. S. C. § 3301 et seq., 42 U. S. C. § 501 et seq., § 1101 et seq.
"The animating force behind the doctrine of labor law pre-emption has been the recognition that nothing could more fully serve to defeat the purposes of the Act than to permit state and federal courts, without any limitation, to exercise jurisdiction over activities that are subject to regula^ tion by the National Labor Relations Board. See Motor Coach Employees v. Lockridge, [403 U. S. 274, 286]. Congress created the centralized expert agency to administer the Act because of its conviction — generated by the historic abuses of the labor injunction,... that the judicial attitudes, court procedures, and traditional judicial remedies, state and federal, were as likely to produce adjudications incompatible with national labor policy as were different rules of substantive law | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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"National Credit Union Administration",
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"National Enforcement Commission",
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"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
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"Office of Price Administration, or Price Administrator",
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] | [
116
] | sc_adminaction |
NATIONAL BELLAS HESS, INC. v. DEPARTMENT OF REVENUE OF THE STATE OF ILLINOIS.
No. 241.
Argued February 23, 1967.
Decided May 8, 1967.
Archibald Cox argued the cause for appellant. With him on the. briefs were Herman A. Benjamin and Julian R. Wilheim.
Terence F. MacCarthy, Specihl Assistant Attorney General of Illinois, argued the causé for appellee. With .him on the brief were William G. Clark, Attorney General, and Richard A. Michael, Assistant Attorney General. •
James B. Lewis and Jay H. Topkis filed a brief for the American Heritage Publishing Co., Inc., as amicus curiae, urging reversal.
Mr. Justice Stewart
delivered the opinion the Court.
The appellant, National Bellas Hess, is a mail order house with its principal place of business in North Kansas City, Missouri. It is licensed to do business in only that State and in Delawaré, where it is incorporated. Although the company has neither outlets nor sales representatives in Illinois, the appellee, Department of Revenue, obtained a judgment from the Illinois Supreme Court that National is required to collect and pay to the State the use taxes imposed by Ill. Rev. Stat. c. 120, § 439.3 (1965). Since National’s constitutional objections to the imposition of this liability present a substantial federal question, we noted probable jurisdiction of its appeal.
The facts bearing upon National’s relationship with Illinois are accurately set forth in the opinion of the State Supreme Court:
“[National] does not maintain in Illinois any office, distribution house, sales house, warehouse or any other place of business; it does not have in Illinois any agent, salesman, canvasser, solicitor or other type of representative to sell or take orders, to deliver merchandise, to accept payments, or to service merchandise it sells; it does not own any tangible property, real or personal, in Illinois; it has no telephone listing in Illinois and it has not advertised its merchandise for sale in newspapers, on billboards, or by radio or television , in Illinois.”
All of the contacts which National does have with the State are via the United States mail or common carrier. Twice a year catalogues are mailed to- the company’s active or recent customers throughout the Nation, including Illinois. This mailing is supplemented by advertising “flyers” which are occasionally mailed to past and potential customers. Orders for merchandise are mailed by the customers to National and are accepted at its Missouri plant. The ordered goods are then sent to the customers either by mail or by common carrier.
This manner of doing business is sufficient under the Illinois statute to classify National as a “[r]etailer maintaining a place of business in this State,” since that term includes any retailer:
“Engaging in soliciting orders within this State from users by means of catalogues or other advertising, whether such, orders are received or accepted within or without this State.” Ill. Rev. Stat. c. 120, § 439.2 (1965).
Accordingly, the statute requires National to collect and pay to the appellee Department the tax imposed by Illinois upon consumers who purchase the company’s goods for use within the State. When collecting this tax, National must give the Illinois purchaser “a receipt therefor in the manner and form prescribed by the [appellee],” if one.is demanded. It must also “keep such records, receipts, invoices and other pertinent books, documents, memoranda and papers as the [appellee] shall require, in such form as the [appellee] shall require, and must submit to such investigations, hearings, and examinations as are needed by the appellee to administer and enforce the use tax law. Failure to keep such records or to give required receipts is punishable by a fine of up to $5,000 and imprisonment of up to six months. Finally, to allow, service of process on an out-of-state company like National, the statute designates the Illinois Secretary of State as National’s appointed agent, and jurisdiction in tax collection suits attaches when process is served on him and the company is notified by registered mail.
National argues that the liabilities which Illinois has thus imposed violate the Due Process Clause of the Fourteenth Amendment and create an unconstitutional burden upon interstate commerce. These two claims are closely related. For the test whether a particular state exaction-is such, as to. invade the exclusive authority of Congress to fegulate trade between the States: and the test for a State’s compliance with the requirements of due process in this area are similar. See Central R. Co. v. Pennsylvania, 370 U. S. 607, 621-622 (concurring opinion of Mr. Justice Black). As to the former, the Court has held that “State taxation falling on interstate commerce . . . can only be justified as designed to make such commerce bear a fair share of the cost of the local government whose protection it enjoys.” Freeman v. Hewit, 329 U. S. 249, 253. See also Greyhound Lines v. Mealey, 334 U. S. 653, 663; Northwestern Cement Co. v. Minnesota, 358 U. S. 450, 462. And in determining whether a state táx falls within the confines of the Due Process Clause, the Court has said that the “simple but controlling question is whether the state has given anything for which it can ask return.” Wisconsin v. J. C. Penney Co., 311 U. S. 435, 444. See also Standard Oil Co. v. Peck, 342 U. S. 382; Ott v. Mississippi Barge Line, 336 U. S. 169, 174. The same principles have been held applicable in determining the power of a State to impose-thé burdens of collecting use taxes upon interstate sales. Here, too, the Constitution requires “some definite link, some minimum connection, between a state and the person, property or transaction it seeks to tax.” Miller Bros. Co. v. Maryland, 347 U. S. 340, 344-345; Scripto, Inc. v. Carson, 362 U. S. 207, 210-211. See also American Oil Co. v. Neill, 380 U. S. 451, 458.
In applying, these principles the Court has upheld the power of a State to impose liability upon an out-of-state seller to collect a local use tax in a variety of circumstances. Where the sales were arranged by local agents in the taxing State, we have upheld such power; Felt & Tarrant Co. v. Gallagher, 306 U. S. 62; General Trading Co. v. Tax Comm’n, 322 U. S. 335.' We have reached the same result where the mail order seller maintained local retail stores. Nelson v. Sears, Roebuck & Co., 312 U. S. 359; Nelson v. Montgomery Ward, 312 U. S. 373. In those situations the out-of-state seller was plainly accorded the protection and services of the taxing State. The case in this Court which represents the furthest constitutional reach to date of a State’s power to deputize an out-of-state retailer as its collection agent for a use tax is Scripto, Inc. v. Carson, 362 U. S. 207. There we held that Florida could constitutionally impose upon a Georgia seller the duty of collecting a state use tax upon the sale of goods shipped to customers in Florida. In that case the seller had “10 wholesalers, jobbers, or ‘salesmen’ conducting continuous local solicitation in Florida and forwarding the resülting orders from that State to Atlanta for shipment of the ordered goods.” 362 U. S., at 211.
But the Court has never held that a State may impose the duty of use tax collection and payment upon a seller whose only connection with customers in the State is by common carrier or the United States mail. Indeed, in the Sears, Roebuck case the Court sharply differentiated such a situation from one where the seller had local retail outlets, pointing out that “those other concerns ... are not receiving benefits from Iowa for which it has the power to exact & price.” 312 U. S., at 365. And in Miller Bros. Co. v. Maryland, 347 U. S. 340, the Court held that Maryland could not constitutionally impose a use tax obligation upon a Delaware seller who had no retail outlets or sales solicitors in Maryland. There the seller advertised its wares to Maryland residents through newspaper and radio advertising, in addition to mailing circulars four times a year. As a result, it made substantial sales to Maryland customers, and made deliveries to them by its own trucks and drivers.
In order to uphold the power of Illinois to impose use tax burdens .on National in this case, we would have to repudiate totally the sharp distinction which these and other debisions have drawn between mail order sellers with retail outlets, solicitors, or property within a State, and those who do no more than communicate with customers in the State by mail or common carrier as part of a general interstate business. But this basic distinction, which until now has been generally recognized by the state taxing authorities, is a valid one, and we decline to obliterate it.
We need not rest on the broad foundation of all that Was said in the Miller Bros. opinion,, for here-there was neither local advertising nor local household deliveries, upon which the dissenters in Miller Bros. so largely relied. 347 U. S., at 358. Indeed, it is difficult to conceive of commercial transactions more exclusively interstate in character than the mail order transactions here involved. And if the power of Illinois to impose use tax burdens upon National were upheld, the resulting impediments upon the free conduct of its interstate business would be neither imaginary nor remote. For if Illinois can impose such burdens, so can every other State, and so, indeed, can every municipality, every school district, and every other political subdivision throughout the Nation with power to impose sales and use taxes. The many variations in rates of tax, in allowable exemptions, and in administrative and record-keeping requirements could entangle National’s interstate business in a virtual welter of complicated obligations to local jurisdictions with no legitimate claim to impose “a fair share of the cost of the local government.”
The very purpose of. the Commerce Clause was to ensure a rational economy free from such unjustifiable local entanglements. Under the Constitution, this is a domain where Congress alone has the power of regulation, and control.
The judgment is
Reversed.
34 Ill. 2d 164, 214 N. E. 2d 755.
385 U. S. 809.
34 Ill. 2d, at 166-167, 214 N. E. 2d, at 757.
Ill. Rev. Stat. c. 120, § 439.3 (1965).
Id., § 439.5.
Id., § 439.11.
Id., § 439.14.
Id., § 439.12a.
Strictly speaking, there is no question of the. connection- or link between the State and “the person ... it seeks to tax.” For that person in Miller Bros. Co. v. Maryland, 347 U. S. 340, in Scripto, Inc. v. Carson, 362 U. S. 207, and in the. present case is the user of the goods to whom the out-of-state retailer sells. National is not -the person being directly taxed, but rather it is asked to collect the tax from the user. It is, however, made directly liable for the payment of the tax whether collected or not. Ill. Rev. Stat. c. 120, § 439.8 (1965).
National acknowledges its obligation to collect a use tax in Alabama, Kansas, and Mississippi, since it has retail outlets in those States.
As of 1965, 11 States besides Illinois had use tax statutes which required a seller like National to participate in the tax collection system. However, state taxing administrators appear to have generally considered an advertising nexus insufficient. For they have testified that doubts as to the constitutionality of such statutes underlay their failure to take full advantage of their statutory authority. Report of the’ Special Subcommittee on State Taxation of Interstate Commerce of the House Committee on the Judiciary, H. R. Rep. No. 565, 89th Cong., 1st Sess., 631-635 (1965). These doubts were substantiated by the only other State Supreme Court that has considered the issue now before us. The Alabama Supreme Court, dealing with a situation very much dike the present one, found that this application of the use tax statute would be invalid under the Federal Constitution, State v. Lane Bryant, Inc., 277 Ala. 385, 171 So. 2d 91.
“Local sales taxes are imposed today [1965] by over 2,300 localities. ... In most States, the local sales tax is complemented by a use tax.” H. R. Rep. No. 565, supra, at 872.
In 1964 there were seven different rates of sales and use taxes: 2, 2¼, 2½, 3, 3½, 4, and 5%. H. R. Rep. No. 565, supra, at 611—613, 607-608. The State of Washington has recently added an eighth, 4.2%. Wash. Rev. Code § 82.12.020 (Supp. 1965).
“The prevailing system requires [the seller] to administer rules which differ from one State to another and whose application— especially for the industrial retailer — turns on -facts which are often too remote and uncertain for the level of accuracy demanded by the prescribed system.” H. R. Rep. No. 565, supra, at 673.
“Given the broad spread of sales of even small and moderate sized companies, it is clear that if just the localities which now impose the tax were to realize anything like their potential of out-of-State registrants the recordkeeping task of multistate sellers would be-clearly intolerable.” Id., at 882.
Congress has in fact recently evidenced an active interest in this area. See Tit. II, Pub. L. 86-272, 73 Stat. 556, as amended by Pub. L. 87-17, 75 Stat. .41, which authorized the detailed congressional study of state taxation of interstate commerce that resulted in H. R. Rep. No. 565, supra. See also H. R. Rep. No. 2013, 89th Cong., 2d Sess. (1966). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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116
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LINCOLN, ACTING DIRECTOR, INDIAN HEALTH SERVICE, et al. v. VIGIL et al.
No. 91-1833.
Argued March 3, 1993 —
Decided May 24, 1993
Edwin S. Kneedler argued the cause for petitioners. With him on the briefs were Solicitor General Starr, Acting Assistant Attorney General O’Meara, James A. Feldman, Anne S. Almy, John A. Bryson, and Andrew C. Mergen.
Joel R. Jasperse argued the cause and filed a brief for respondents.
Briefs of amici curiae urging affirmance were filed for Bristol Bay Area Health Corp. et al. by Charles A Hobbs; for the National Congress of American Indians et al. by Steven C. Moore; and for the Native American Protection & Advocacy Project et al. by Thomas W. Christie.
Justice Souter
delivered the opinion of the Court.
For several years in the late 1970’s and early 1980’s, the Indian Health Service provided diagnostic and treatment services, referred to collectively as the Indian Children’s Program (Program), to handicapped Indian children in the Southwest. In 1985, the Service decided to reallocate the Program’s resources to a nationwide effort to assist such children. We hold that the Service’s decision to discontinue the Program was “committed to agency discretion by law” and therefore not subject to judicial review under the Administrative Procedure Act, 5 U. S. C. § 701(a)(2), and that the Service’s exercise of that discretion was not subject to the notice-and-comment rulemaking requirements imposed by §553.
h-i
The Indian Health Service, an agency within the Public Health Service of the Department of Health and Human Services, provides health care for some 1.5 million American Indian and Alaska Native people. Brief for Petitioners 2. The Service receives yearly lump-sum appropriations from Congress and expends the funds under authority of the Snyder Act, 42 Stat. 208, as amended, 25 U. S. C. § 13, and the Indian Health Care Improvement Act, 90 Stat. 1400, as amended, 25 U. S. C. § 1601 et seq. So far as it concerns us here, the Snyder Act authorizes the Service to “expend such moneys as Congress may from time to time appropriate, for the benefit, care, and assistance of the Indians,” for the “relief of distress and conservation of health.” 25 U. S. C. § 13. The Improvement Act authorizes expenditures for, inter alia, Indian mental-health care, and specifically for “therapeutic and residential treatment centers.” § 1621(a)(4)(D).
The Service employs roughly 12,000 people and operates more than 500 health-care facilities in the continental United States and Alaska. See Hearings on Department of the Interior and Related Agencies Appropriations for 1993 before a Subcommittee of the House Committee on Appropriations, 102d Cong., 2d Sess., pt. 4, p. 32 (1992); Brief for Petitioners 2. This case concerns a collection of related services, commonly known as the Indian Children’s Program, that the Service provided from 1978 to 1985. In the words of the Court of Appeals, a “clou[d] [of] bureaucratic haze” obscures the history of the Program, Vigil v. Rhoades, 953 F. 2d 1225, 1226 (CA10 1992), which seems to have grown out of a plan “to establish therapeutic and residential treatment centers for disturbed Indian children.” H. R. Rep. No. 94-1026, pt. 1, p. 80 (1976) (prepared in conjunction with enactment of the Improvement Act). These centers were to be established under a “major cooperative care agreement” between the Service and the Bureau of Indian Affairs, id., at 81, and would have provided such children “with intensive care in a residential setting.” Id., at 80.
Congress never expressly appropriated funds for these centers. In 1978, however, the Service allocated approximately $292,000 from its fiscal year 1978 appropriation to its office in Albuquerque, New Mexico, for the planning and development of a pilot project for handicapped Indian children, which became known as the Indian Children’s Program. See 953 F. 2d, at 1227. The pilot project apparently convinced the Service that a building was needed, and, in 1979, the Service requested $3.5 million from Congress to construct a diagnostic and treatment center for handicapped Indian children. See ibid.; Hearings on Department of the Interior and Related Agencies Appropriations for 1980 before a Subcommittee of the House Committee on Appropriations, 96th Cong., 1st Sess., pt. 8, p. 250 (1979) (hereináfter House Hearings (Fiscal Year 1980)). The appropriation for fiscal year 1980 did not expressly provide the requested funds, however, and legislative reports indicated only that Congress had increased the Service’s funding by $300,000 for nationwide expansion and development of the Program in coordination with the Bureau. See H. R. Rep. No. 96-374, pp. 82-83 (1979); S. Rep. No. 96-363, p. 91 (1979).
Plans for a national program to be managed jointly by the Service and the Bureau were never fulfilled, however, and the Program continued simply as an offering of the Service’s Albuquerque office, from which the Program’s staff of 11 to 16 employees would make monthly visits to Indian communities in New Mexico and southern Colorado and on the Navajo and Hopi Reservations. Brief for Petitioners 6. The Program’s staff provided “diagnostic, evaluation, treatment planning and followup services” for Indian children with emotional, educational, physical, or mental handicaps. “For parents, community groups, school personnel and health care personnel,” the staff provided “training in child development, prevention of handicapping conditions, and care of the handicapped child.” Hearings on Department of the Interior and Related Agencies Appropriations for 1984 before a Subcommittee of the House Committee on Appropriations, 98th Cong., 1st Sess., pt. 3, p. 374 (1983) (Service submission) (hereinafter House Hearings (Fiscal Year 1984)). Congress never authorized or appropriated moneys expressly for the Program, and the Service continued to pay for its regional activities out of annual lump-sum appropriations from 1980 to 1985, during which period the Service repeatedly apprised Congress of the Program’s continuing operation. See, e. g., Hearings on Department of the Interior and Related Agencies Appropriations for 1985 before a Subcommittee of the House Committee on Appropriations, 98th Cong., 2d Sess., pt. 3, p. 486 (1984) (Service submission); House Hearings (Fiscal Year 1984), pt. 3, pp. 351, 374 (same); Hearings on Department of the Interior and Related Agencies Appropriations for 1983 before a Subcommittee of the House Committee on Appropriations, 97th Cong., 2d Sess., pt. 3, p. 167 (1982) (same); Hearings on Department of the Interior and Related Agencies Appropriations for 1982 before a Subcommittee of the House Committee on Appropriations, 97th Cong., 1st Sess., pt. 9, p. 71 (1981) (testimony of Service Director); Hearings on Department of the Interior and Related Agencies Appropriations for 1981 before a Subcommittee of the House Committee on Appropriations, 96th Cong., 2d Sess., pt. 3, p. 632 (1980) (Service submission); House Hearings (Fiscal Year 1980), pt. 8, pp. 245-252 (testimony of Service officials); H. R. Rep. No. 97-942, p. 110 (1982) (House Appropriations Committee “is pleased to hear of the continued success of the Indian Children’s Program”).
Nevertheless, the Service had not abandoned the proposal for a nationwide treatment program, and in June 1985 it noti-'fied those who referred patients to the Program that it was “re-evaluating [the Program’s] purpose... as a national mental health program for Indian children and adolescents.” App. 77. In August 1985, the Service determined that Program staff hitherto assigned to provide direct clinical services should be reassigned as consultants to other nationwide Service programs, 953 F. 2d, at 1226, and discontinued the direct clinical services to Indian children in the Southwest. The Service announced its decision in a memorandum, dated August 21, 1985, addressed to Service offices and Program referral sources:
“As you are probably aware, the Indian Children’s Program has been involved in planning activities focusing on a national program effort. This process has included the termination of all direct clinical services to children in the Albuquerque, Navajo and Hopi reservation service areas. During the months of August and September,... staff will [see] children followed by the program in an effort to update programs, identify alternative resources and facilitate obtaining alternative services. In communities where there are no identified resources, meetings with community service providers will be scheduled to facilitate the networking between agencies to secure or advocate for appropriate services.” App. 80.
The Service invited public “input” during this “difficult transition,” and explained that the reallocation of resources had been “motivated by our goal of increased mental health services for all Indian [c]hildren.” Ibid.
Respondents, handicapped Indian children eligible to receive services through the Program, subsequently brought this action for declaratory and injunctive relief against petitioners, the Director of the Service and others (collectively, the Service), in the United States District Court for the District of New Mexico. Respondents alleged, inter alia, that the Service’s decision to discontinue direct clinical services violated the federal trust responsibility to Indians, the Snyder Act, the Improvement Act, the Administrative Procedure Act, various agency regulations, and the Fifth Amendment’s Due Process Clause.
The District Court granted summary judgment for respondents. Vigil v. Rhoades, 746 F. Supp. 1471 (1990). The District Court held that the Service’s decision to discontinue the Program was subject to judicial review, rejecting the argument that the Service’s decision was “committed to agency discretion by law” under the Administrative Procedure Act (APA), 5 U.S.C. § 701(a)(2). 746 F. Supp., at 1479. The court declined on ripeness grounds, however, to address the merits of the Service’s action. It held that the Service’s decision to discontinue the Program amounted to the making of a “legislative rule” subject to the APA’s notice-and-comment requirements, 5 U. S. C. § 553, and that the termination was also subject to the APA’s publication requirements for the adoption of “statements of general policy,” § 552(a)(1)(D). See 746 F. Supp., at 1480, 1483. Because the Service had not met these procedural requirements, the court concluded that the termination was procedurally invalid and that judicial review would be “premature.” Id., at 1483. The court ordered the Service to reinstate the Program, id., at 1486-1487, and the Solicitor General has represented that a reinstated Program is now in place. Brief for Petitioners 9.
The Court of Appeals affirmed. Like the District Court, it rejected the Service’s argument that the decision to discontinue the Program was committed to agency discretion under the APA. Although the court coneededly could identify no statute or regulation even mentioning the Program, see 953 F. 2d, at 1229, it believed that the repeated references to it in the legislative history of the annual appropriations Acts, supra, at 187, “in combination with the special relationship between the Indian people and the federal government,” 953 F. 2d, at 1230, provided a basis for judicial review. The Court of Appeals also affirmed the District Court’s ruling that the Service was subject to the APA’s notice-and-comment procedures in terminating the Program, reasoning that our decision in Morton v. Ruiz, 415 U. S. 199 (1974), requires as much whenever the Federal Government “ ‘cuts back congressionally created and funded programs for Indians.’ ” 953 F. 2d, at 1231 (citation omitted). The Court of Appeals did not consider whether the APA’s publication requirements applied to the Service’s decision to terminate the Program or whether the District Court’s order to reinstate the Program was a proper form of relief, an issue the Service had failed to raise. Id., at 1231-1232. We granted certiorari to address the narrow questions presented by the Court of Appeals’s decision. 506 U. S. 813 (1992).
HH
First is the question whether it was error for the Court of Appeals to hold the substance of the Service’s decision to terminate the Program reviewable under the APA. The APA provides that “[a] person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof,” 5 U. S. C. § 702, and we have read the APA as embodying a “basic presumption of judicial review,” Abbott Laboratories v. Gardner, 387 U. S. 136, 140 (1967). This is “just” a presumption, however, Block v. Community Nutrition Institute, 467 U. S. 340, 349 (1984), and under § 701(a)(2) agency action is not subject to judicial review “to the extent that” such action “is committed to agency discretion by law.” As we explained in Heckler v. Chaney, 470 U. S. 821, 830 (1985), § 701(a)(2) makes it clear that “review is not to be had” in those rare circumstances where the relevant statute “is drawn so that a court would have no meaningful standard against which to judge the agency’s exercise of discretion.” See also Webster v. Doe, 486 U. S. 592, 599-600 (1988); Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U. S. 402, 410 (1971). “In such a ease, the statute (‘law) can be taken to have ‘committed the decisionmaking to the agency’s judgment absolutely.” Heckler, supra, at 830.
Over the years, we have read § 701(a)(2) to preclude judicial review of certain categories of administrative decisions that courts traditionally have regarded as “committed to agency discretion.” See Franklin v. Massachusetts, 505 U. S. 788, 817 (1992) (Stevens, J., concurring in part and concurring in judgment); Webster, supra, at 609 (Scalia, J., dissenting). In Heckler itself, we held an agency’s decision not to institute enforcement proceedings to be presumptively unreviewable under § 701(a)(2). 470 U. S., at 831. An agency’s “decision not to enforce often involves a complicated balancing of a number of factors which are peculiarly within its expertise,” ibid., and for this and other good reasons, we concluded, “such a decision has traditionally been ‘committed to agency discretion,’ ” id., at 832. Similarly, in ICC v. Locomotive Engineers, 482 U. S. 270, 282 (1987), we held that § 701(a)(2) precludes judicial review of another type of administrative decision traditionally left to agency discretion, an agency’s refusal to grant reconsideration of an action because of material error. In so holding, we emphasized “the impossibility of devising an adequate standard of review for such agency action.” Ibid. Finally, in Webster, supra, at 599-601, we held that § 701(a)(2) precludes judicial review of a decision by the Director of Central Intelligence to terminate an employee in the interests of national security, an area of executive action “in which courts have long been hesitant to intrude.” Franklin, supra, at 819 (Stevens, J., concurring in part and concurring in judgment).
The allocation of funds from a lump-sum appropriation is another administrative decision traditionally regarded as committed to agency discretion. After all, the very point of a lump-sum appropriation is to give an agency the capacity to adapt to changing circumstances and meet its statutory responsibilities in what it sees as the most effective or desirable way. See International Union, United Automobile, Aerospace & Agricultural Implement Workers of America v. Donovan, 241 U. S. App. D. C. 122, 128, 746 F. 2d 855, 861 (1984) (Scalia, J.) (“A lump-sum appropriation leaves it to the recipient agency (as a matter of law, at least) to distribute the funds among some or all of the permissible objects as it sees fit”) (footnote omitted), cert. denied sub nom. Automobile Workers v. Brock, 474 U. S. 825 (1985); 2 United States General Accounting Office, Principles of Federal Appropriations Law, p. 6-159 (2d ed. 1992). For this reason, a fundamental principle of appropriations law is that where “Congress merely appropriates lump-sum amounts without statutorily restricting what can be done with those funds, a clear inference arises that it does not intend to impose legally binding restrictions, and indicia in committee reports and other legislative history as to how the funds should or are expected to be spent do not establish any legal requirements on” the agency. LTV Aerospace Corp., 55 Comp. Gen. 307, 319 (1975); cf. American Hospital Assn. v. NLRB, 499 U. S. 606, 616 (1991) (statements in committee reports do not have the force of law); TVA v. Hill, 437 U. S. 153, 191 (1978) (“Expressions of committees dealing with requests for appropriations cannot be equated with statutes enacted by Congress”). Put another way, a lump-sum appropriation reflects a congressional recognition that an agency must be allowed “flexibility to shift... funds within a particular... appropriation account so that” the agency “can make necessary adjustments for ‘unforeseen developments’” and “‘changing requirements.’” LTV Aerospace Corp., supra, at 318 (citation omitted).
Like the decision against instituting enforcement proceedings, then, an agency’s allocation of funds from a lump-sum appropriation requires “a complicated balancing of a number of factors which are peculiarly within its expertise”: whether its “resources are best spent” on one program or another; whether it “is likely to succeed” in fulfilling its statutory mandate; whether a particular program “best fits the agency’s overall policies”; and, “indeed, whether the ageney has enough resources” to fund a program “at all.” Heckler, 470 U. S., at 831. As in Heckler, so here, the “agency is far better equipped than the courts to deal with the many variables involved in the proper ordering of its priorities.” Id., at 831-832. Of course, an agency is not free simply to disregard statutory responsibilities: Congress may always circumscribe agency discretion to allocate resources by putting restrictions in the operative statutes (though not, as we have seen, just in the legislative history). See id., at 833. And, of course, we hardly need to note that an agency’s decision to ignore congressional expectations may expose it to grave political consequences. But as long as the agency allocates funds from a lump-sum appropriation to meet permissible statutory objectives, § 701(a)(2) gives the courts no leave to intrude. “[T]o [that] extent,” the decision to allocate funds “is committed to agency discretion by law.” § 701(a)(2).
The Service’s decision to discontinue the Program is accordingly unreviewable under § 701(a)(2). As the Court of Appeals recognized, the appropriations Acts for the relevant period do not so much as mention the Program, and both the Snyder Act and the Improvement Act likewise speak about Indian health only in general terms. It is true that the Service repeatedly apprised Congress of the Program’s continued operation, but, as we have explained, these representations do not translate through the medium of legislative history into legally binding obligations. The reallocation of agency resources to assist handicapped Indian children nationwide clearly falls within the Service’s statutory mandate to provide health care to Indian people, see supra, at 185, and respondents, indeed, do not seriously contend otherwise. The decision to terminate the Program was committed to the Service’s discretion.
The Court of Appeals saw a separate limitation on the Service’s discretion in the special trust relationship existing between Indian people and the Federal Government. 953 F. 2d, at 1230-1231. We have often spoken of this relationship, see, e. g., Cherokee Nation v. Georgia, 5 Pet. 1, 17 (1831) (Marshall, C. J.) (Indians’ “relation to the United States resembles that of a ward to his guardian”), and the law is “well established that the Government in its dealings with Indian tribal property acts in a fiduciary capacity,” United States v. Cherokee Nation of Okla., 480 U. S. 700, 707 (1987); see also Quick Bear v. Leupp, 210 U. S. 50, 80 (1908) (distinguishing between money appropriated to fulfill treaty obligations, to which trust relationship attaches, and “gratuitous appropriations”). Whatever the contours of that relationship, though, it could not limit the Service’s discretion to reorder its priorities from serving a subgroup of beneficiaries to serving the broader class of all Indians nationwide. See Hoopa Valley Tribe v. Christie, 812 F. 2d 1097, 1102 (CA9 1986) (Federal Government “does have a fiduciary obligation to the Indians; but it is a fiduciary obligation that is owed to all Indian tribes”) (emphasis added).
One final note: although respondents claimed in the District Court that the Service’s termination of the Program violated their rights under the Fifth Amendment’s Due Process Clause, see supra, at 189, that court expressly declined to address respondents’ constitutional arguments, 746 F. Supp., at 1483, as did the Court of Appeals, 953 F. 2d, at 1228-1229, n. 3. Thus, while the APA contemplates, in the absence of a clear expression of contrary congressional intent, that judicial review will be available for colorable constitutional claims, see Webster, 486 U. S., at 603-604, the record at this stage does not allow mature consideration of constitutional issues, which we leave for the Court of Appeals on remand.
Ill
We next consider the Court of Appeals’s holding, quite apart from the matter of substantive reviewability, that before terminating the Program the Service was required to abide by the familiar notice-and-eomment rulemaking provisions of the APA, 5 U. S. C. § 553. Section 553 provides generally that an agency must publish notice of a proposed rule-making in the Federal Register and afford “interested persons an opportunity to participate... through submission of written data, views, or arguments.” §§ 553(b), (c). The same section also generally requires the agency to publish a rule not less than 30 days before its effective date and incorporate within it “a concise general statement” of the rule’s “basis and purpose.” §§ 558(c), (d). There are exceptions, of course. Section 553 has no application, for example, to “a matter relating to agency management or personnel or to public property, loans, grants, benefits, or contracts.” § 553(a)(2). The notice-and-comment requirements apply, moreover, only to so-called “legislative” or “substantive” rules; they do not apply to “interpretative rules, general statements of policy, or rules of agency organization, procedure, or practice.” § 553(b). See McLouth Steel Products Corp. v. Thomas, 267 U. S. App. D. C. 367, 370, 838 F. 2d 1317, 1320 (1988); Community Nutrition Institute v. Young, 260 U. S. App. D. C. 294, 296-297, 818 F. 2d 943, 945-946 (1987) (per curiam); id., at 301-303, 818 F. 2d, at 950-952 (Starr, J., concurring in part and dissenting in part); Anthony, Interpretive Rules, Policy Statements, Guidances, Manuals, and the Like — Should Federal Agencies Use Them to Bind the Public?, 41 Duke L. J. 1311, 1321 (1992); see generally Chrysler Corp. v. Brown, 441 U. S. 281, 301 (1979) (noting that this is “[t]he central distinction among agency regulations found in the APA”).
It is undisputed that the Service did not abide by these notice-and-comment requirements before discontinuing the Program and reallocating its resources. The Service argues that it was free from any such obligation because its decision to terminate the Program did not qualify as a “rule” within the meaning of the APA. Brief for Petitioners 29-34. Respondents, to the contrary, contend that the Service’s action falls well within the APA’s broad definition of that term. § 551(4). Brief for Respondents 17-19. Determining whether an agency’s statement is what the APA calls a “rule” can be a difficult exercise. We need not conduct that exercise in this case, however. For even assuming that a statement terminating the Program would qualify as a “rule” within the meaning of the APA, it would be exempt from the notice-and-comment requirements of §553. Termination of the Program might be seen as affecting the Service’s organization, but “rules of agency organization” are exempt from notice-and-comment requirements under § 553(b)(A). Moreover, § 553(b)(A) also exempts “general statements of policy,” which we have previously described as “‘statements issued by an agency to advise the public prospectively of the manner in which the agency proposes to exercise a discretionary power.’ ” Chrysler Corp., supra, at 302, n. 31 (quoting Attorney General’s Manual on the Administrative Procedure Act 30, n. 3 (1947)). Whatever else may be considered a “general statement] of policy,” the term surely includes an announcement like the one before us, that an agency will discontinue a discretionary allocation of unrestricted funds from a lump-sum appropriation.
Our decision in Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U. S. 402 (1971), confirms our conclusion that the Service was not required to follow the notice-and-comment procedures of § 553 before terminating the Program. Overton Park dealt with the Secretary of Transportation’s decision to authorize the use of federal funds to construct an interstate highway through a public park in Memphis, Tennessee. Private citizens and conservation organizations claimed that the Secretary’s decision violated federal statutes prohibiting the use of federal funds for such a purpose where there existed a “‘feasible and prudent’” alternative route, id., at 405 (citations omitted), and argued, inter alia, that the Secretary’s determination was subject to judicial review under the APA’s “substantial evidence” standard, 5 U. S. C. § 706(2)(E). 401 U. S., at 414. In rejecting that contention, we explained that the substantial-evidence test applies, in addition to circumstances not relevant here, only where “agency action is taken pursuant to [the] rulemaking provision^]” of §553. We held unequivocally that “[t]he Secretary’s decision to allow the expenditure of federal funds to build [the highway] through [the park] was plainly not an exercise of a rulemaking function.” Ibid.
Overton Park is authority here for the proposition that decisions to expend otherwise unrestricted funds are not, without more, subject to the notice-and-eomment requirements of § 553. Although the Secretary’s determination in Overton Park was subject to statutory criteria of “ ‘feasibility] and pruden[ce],’” id., at 405, the generality of those • standards underscores the administrative discretion inherent in the determination (reviewable though it was), to which the Service’s discretionary authority to meet its obligations under the Snyder and Improvement Acts is comparable. Indeed, respondents seek to distinguish Overton Park principally on the ground that the Service’s determination altered the eligibility criteria for Service assistance. See Brief for Respondents 24-25. But the record fails to support the distinction, there being no indication that the Service’s decision to discontinue the Program (or, for that matter, to initiate it) did anything to modify eligibility standards for Service care, as distinct from affecting the availability of services in a particular geographic area. The Service’s decision to reallocate funds presumably did mean that respondents would no longer receive certain services, but it did not alter the Service’s criteria for providing assistance any more than the Service’s initiation of the pilot project in 1978 altered the criteria for assistance to Indians in South Dakota.
Nor, finally, do we think that the Court o'f Appeals was on solid ground in holding that Morton v. Ruiz, 415 U. S. 199 (1974), required the Service to abide by the APA’s notice- and-comment provisions before terminating the Program. Those provisions were not at issue in Ruiz, where respondents challenged a provision, contained in a Bureau of Indian Affairs manual, that restricted eligibility for Indian assistance. Although the Bureau’s own regulations required it to publish the provision in the Federal Register, the Bureau had failed to do so. Id., at 233-234. We held that the Bureau’s failure to abide by its own procedures rendered the provision invalid, stating that, under those circumstances, the denial of benefits would be “inconsistent with ‘the distinctive obligation of trust incumbent upon the Government in its dealings with these dependent and sometimes exploited people.’” Id., at 236 (quoting Seminole Nation v. United States, 316 U. S. 286, 296 (1942)). No such circumstances exist here.
IV
The judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
By its terms, the Snyder Act applies to the Bureau of Indian Affairs, an agency within the Department of the Interior. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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96
] | sc_adminaction |
BUREAU OF ALCOHOL, TOBACCO AND FIREARMS v. FEDERAL LABOR RELATIONS AUTHORITY et al.
No. 82-799.
Argued October 11, 1983
Decided November 29, 1983
Carolyn F. Corwin argued the cause for petitioner. With her on the briefs were Solicitor General Lee, Assistant Attorney General McGrath, Deputy Solicitor General Geller, William Ranter, and Douglas Letter.
Ruth E. Peters argued the cause for respondents. Steven H. Svartz and William E. Persina filed a brief for respondent Federal Labor Relations Authority. Robert M. Tobias, Lois G. Williams, and Kerry L. Adams filed a brief for respondent National Treasury Employees Union.
Edmn Vieira, Jr., filed a brief for the Public Service Research Council as amicus curiae urging reversal.
Briefs of amici curiae urging affirmance were filed for the American Federation of Government Employees, AFL-CIO, by Mark D. Roth and James R. Rosa; and for the National Federation of Federal Employees by Catherine Waelder.
Justice Brennan
delivered the opinion of the Court.
Title VII of the Civil Service Reform Act of 1978 (Act), Pub. L. 95-454, 92 Stat. 1214, 5 U. S. C. § 7131(a) (1982 ed.), requires federal agencies to grant “official time” to employees representing their union in collective bargaining with the agencies. The grant of official time allows the employee negotiators to be paid as if they were at work, whenever they bargain during hours when they would otherwise be on duty. The Federal Labor Relations Authority (FLRA or Authority) concluded that the grant of official time also entitles employee union representatives to a per diem allowance and reimbursement for travel expenses incurred in connection with collective bargaining. 2 F. L. R. A. 265 (1979). In this case, the Court of Appeals for the Ninth Circuit enforced an FLRA order requiring an agency to pay a union negotiator travel expenses and a per diem, finding the Authority’s interpretation of the statute “reasonably defensible.” 672 F. 2d 732, 733 (1982). Three other Courts of Appeals have rejected the FLRA’s construction of the Act. We granted certiorari to resolve this conflict, 459 U. S. 1145 (1983), and now reverse.
I
A
Title VII of the Civil Service Reform Act, part of a comprehensive revision of the laws governing the rights and obligations of civil servants, contains the first statutory scheme governing labor relations between federal agencies and their employees. Prior to enactment of Title VII, labor-management relations in the federal sector were governed by a program established in a 1962 Executive Order. The Executive Order regime, under which federal employees had limited rights to engage in concerted activity, was most recently administered by the Federal Labor Relations Council, a body composed of three Executive Branch management officials whose decisions were not subject to judicial review.
The new Act, declaring that “labor organizations and collective bargaining in the civil service are in the public interest,” 5 U. S. C. § 7101(a) (1982 ed.), significantly strengthened the position of public employee unions while carefully preserving the ability of federal managers to maintain “an effective and efficient Government,” § 7101(b). Title VII expressly protects the rights of federal employees “to form, join, or assist any labor organization, or to refrain from any such activity,” § 7102, and imposes on federal agencies and labor organizations a duty to bargain collectively in good faith, §§ 7116(a)(5) and (b)(5). The Act excludes certain management prerogatives from the scope of negotiations, although an agency must bargain over the procedures by which these management rights are exercised. See § 7106. In general, unions and federal agencies must negotiate over terms and conditions of employment, unless a bargaining proposal is inconsistent with existing federal law, rule, or regulation. See §§ 7103(a), 7114, 7116, and 7117(a). Strikes and certain other forms of concerted actitivies by federal employees are illegal and constitute unfair labor practices under the Act, § 7116(b)(7)(A).
The Act replaced the management-controlled Federal Labor Relations Council with the FLRA, a three-member independent and bipartisan body within the Executive Branch with responsibility for supervising the collective-bargaining process and administering other aspects of federal labor relations established by Title VII. § 7104. The Authority, the role of which in the public sector is analogous to that of the National Labor Relations Board in the private sector, see H. R. Rep. No. 95-1403, p. 41 (1978), adjudicates negotiability disputes, unfair labor practice complaints, bargaining unit issues, arbitration exceptions, and conflicts over the conduct of representational elections. See §§ 7105(a)(2) (A)-(I). In addition to its adjudicatory functions, the Authority may engage in formal rulemaking, § 7134, and is specifically required to “provide leadership in establishing policies and guidance relating to matters” arising under the Act, § 7105(a)(1). The FLRA may seek enforcement of its adjudicatory orders in the United States courts of appeals, § 7123(b), and persons, including federal agencies, aggrieved by any final FLRA decision may also seek judicial review in those courts, § 7123(a).
B
Petitioner, the Bureau of Alcohol, Tobacco and Firearms (BATF or Bureau), an agency within the Department of the Treasury, maintained a regional office in Lodi, California. Respondent National Treasury Employees Union (NTEU or Union) was the exclusive representative of BATF employees stationed in the Lodi office. In November 1978, the Bureau notified NTEU that it intended to move the Lodi office to Sacramento and to establish a reduced duty post at a new location in Lodi. The Union informed BATF that it wished to negotiate aspects of the move’s impact on employees in the bargaining unit. As its agent for these negotiations, the Union designated Donald Pruett, a BATF employee and NTEU steward who lived in Madera, California, and was stationed in Fresno. Bureau officials agreed to meet with Pruett at the new offices and discuss the planned move. Pruett asked that his participation in the discussions be classified as “official time” so that he could receive his regular salary while attending the meetings. The Bureau denied the request and directed Pruett to take either annual leave or leave without pay for the day of the meeting.
On February 23, 1979, Bureau officials met with Pruett at the proposed new Sacramento offices and inspected the physical amenities, including the restrooms, dining facilities, and parking areas. Pruett and the BATF officials then drove to Lodi where they conducted a similar inspection of the new reduced duty post. Finally, the group repaired to the existing Lodi office where they discussed the planned move. After Pruett expressed his general satisfaction with the new facilities, he negotiated with the agency officials about such matters as parking arrangements, employee assignments, and the possibility of excusing employee tardiness for the first week of operations in the Sacramento office. Once the parties reached an agreement on the move, Pruett drove back to his home in Madera.
Pruett had spent 1154 hours traveling to and attending the meetings, and had driven more than 300 miles in his own car. When he renewed his request to have his participation at the meetings classified as official time, the Bureau informed him that it did not reimburse employees for expenses incurred in negotiations and that it granted official time only for quarterly collective-bargaining sessions and not for midterm discussions like those involved here. In June 1979, the Union filed an unfair labor practice charge with the FLRA, claiming that BATF had improperly compelled Pruett to take annual leave for the February 23 sessions.
While the charge was pending, the FLRA issued an “Interpretation and Guidance” of general applicability which required federal agencies to pay salaries, travel expenses, and per diem allowances to union representatives engaged in collective bargaining with the agencies. 2 F. L. R. A. 265 (1979). The Interpretation relied on 5 U. S. C. § 7131(a) (1982 ed.), which provides that “[a]ny employee representing an exclusive representative in the negotiation of a collective bargaining agreement... shall be authorized official time for such purposes....” The Authority concluded that an employee’s entitlement to official time under this provision extends to “all negotiations between an exclusive representative and an agency, regardless of whether such negotiations pertain to the negotiation or renegotiation of a basic collective bargaining agreement.” 2 F. L. R. A., at 268. The Authority further determined that § 7131(a) requires agencies to pay a per diem allowance and travel expenses to employees representing their union in such negotiations. Id., at 270.
Based on the NTEU’s pending charge against the Bureau, the General Counsel of the Authority issued a complaint and notice of hearing, alleging that the B ATF had committed an unfair labor practice by refusing to grant Pruett official time for the February 23 meetings. During the course of a subsequent hearing on the charge before an Administrative Law Judge, the complaint was amended to add a claim that, in addition to paying Pruett’s salary for the day of the meetings, the BATF should have paid his travel expenses and a per diem allowance. Following the hearing, the ALJ determined that negotiations had in fact taken place between Pruett and BATF officials at the February 23 meetings. Bound to follow the recent FLRA Interpretation and Guidance, the ALJ concluded that the Bureau had committed an unfair labor practice by failing to comply with § 7131(a). Accordingly, he ordered the Bureau to pay Pruett his regular salary for the day in question, as well as his travel costs and a per diem allowance. The ALJ also required the BATF to post a notice stating that the agency would do the same for all employee union representatives in future negotiations. The Bureau filed exceptions to the decision with the Authority, which, in September 1980, affirmed the decision of the ALJ, adopting his findings, conclusions, and recommended relief. 4 F. L. R. A. 288 (1980).
The Bureau sought review in the United States Court of Appeals for the Ninth Circuit, and the Union intervened as a party in that appeal. The Bureau challenged both the FLRA’s conclusion that § 7131(a) applies to midterm negotiations and its determination that the section requires payment of travel expenses and a per diem allowance. After deciding that the Authority’s construction of its enabling Act was entitled to deference if it was “reasoned and supportable,” 672 F. 2d, at 735-736, the Court of Appeals enforced the Authority’s order on both issues. Id., at 737, 738. On cer-tiorari to this Court, petitioner does not seek review of the holding with respect to midterm negotiations. Only that aspect of the Court of Appeals’ decision regarding travel expenses and per diem allowances is at issue here.
The FLRA order enforced by the Court of Appeals in this case was, as noted, premised on the Authority’s earlier construction of § 7131(a) in its Interpretation and Guidance. Although we have not previously had occasion to consider an interpretation of the Civil Service Reform Act by the FLRA, we have often described the appropriate standard of judicial review in similar contexts. Like the National Labor Relations Board, see, e. g., NLRB v. Erie Resistor Corp., 373 U. S. 221, 236 (1963), the FLRA was intended to develop specialized expertise in its field of labor relations and to use that expertise to give content to the principles and goals set forth in the Act. See §7105; H. R. Rep. No. 95-1403, p. 41 (1978). Consequently, the Authority is entitled to considerable deference when it exercises its “special function of applying the general provisions of the Act to the complexities” of federal labor relations. Cf. NLRB v. Erie Resistor Corp., supra, at 236. See also Ford Motor Co. v. NLRB, 441 U. S. 488, 496 (1979); NLRB v. Iron Workers, 434 U. S. 335, 350 (1978); NLRB v. Truck Drivers, 353 U. S. 87, 96 (1957).
On the other hand, the “deference owed to an expert tribunal cannot be allowed to slip into a judicial inertia which results in the unauthorized assumption by an agency of major policy decisions properly made by Congress.” American Ship Building Co. v. NLRB, 380 U. S. 300, 318 (1965). Accordingly, while reviewing courts should uphold reasonable and defensible constructions of an agency’s enabling Act, NLRB v. Iron Workers, supra, at 350, they must not “rubber-stamp... administrative decisions that they deem inconsistent with a statutory mandate or that frustrate the congressional policy underlying a statute.” NLRB v. Brown, 380 U. S. 278, 291-292 (1965). See Chemical & Alkali Workers v. Pittsburgh Plate Glass Co., 404 U. S. 157, 166 (1971). Guided by these principles, we turn to a consideration of the FLRA’s construction of § 7131(a).
f — < bH
Title 5 U. S. C. § 7131(a) (1982 ed.) provides in full:
“Any employee representing an exclusive representative in the negotiation of a collective bargaining agreement under this chapter shall be authorized official time for such purposes, including attendance at impasse proceeding, during the time the employee otherwise would be in a duty status. The number of employees for whom official time is authorized under this subsection shall not exceed the number of individuals designated as representing the agency for such purposes.”
According to the House Committee that reported the bill containing § 7131, Congress used the term “official time” to mean “paid time.” See H. R. Rep. No. 95-1403, p. 58 (1978). In light of this clear expression of congressional intent, the parties agree that employee union negotiators are entitled to their usual pay during collective-bargaining sessions that occur when the employee “otherwise would be in a duty status.” Both the Authority, 2 F. L. R. A., at 269, and the Court of Appeals, 672 F. 2d, at 737, recognized that there is no corresponding expression, either in the statute or the extensive legislative history, of a congressional intent to pay employee negotiators travel expenses and per diem allowances as well.
Despite this congressional silence, respondents advance several reasons why the FLRA’s determination that such payments are required is consistent with the policies underlying the Act. Each of these arguments proceeds from the assumption that, by providing employee negotiators with official time for bargaining, Congress rejected the model of federal labor relations that had shaped prior administrative practice. In its place, according to respondents, Congress substituted a new vision of collective bargaining under which employee negotiators, like management representatives, are considered “on the job” while bargaining and are therefore entitled to all customary forms of compensation, including travel expenses and per diem allowances. In order to evaluate this claim, it is necessary briefly to review the rights of employee negotiators to compensation prior to adoption of the Act.
A
Under the 1962 Executive Order establishing the first federal labor relations program, the decision whether to pay union representatives for the time spent in collective bargaining was left within the discretion of their employing agency, apparently on the ground that, without some control by management, the length of such sessions could impose too great a burden on Government business. See Report of the President’s Task Force on Employee-Management Relations in the Federal Service, reprinted in Legislative History of the Federal Service Labor-Management Relations. Statute, Title VII of the Civil Service Reform Act of 1978, pp. 1177, 1203 (Comm. Print 1979) (hereinafter Leg. Hist.). Under this early scheme, employee negotiators were not entitled to per diem allowances and travel expenses, on the view that they were engaged, not in official business of the Government, but rather in activities “primarily in the interest of the employee organization.” 44 Comp. Gen. 617, 618 (1965).
Executive Order No. 11491, which became effective in 1970, cut back on the previous Order by providing that employees engaged in negotiations with their agencies could not receive official time, even at the agencies’ discretion. See 3 CFR 861-862, 873-874 (1966-1970 Comp.). Again, the prohibition was based on the view that employee representatives work for their union, not for the Government, when negotiating an agreement with their employers. See Leg. Hist., at 1167. In 1971, however, at the recommendation of the Federal Labor Relations Council, an amending Executive Order allowed unions to negotiate with agencies to obtain official time for employee representatives, up to a maximum of either 40 hours, or 50% of the total time spent in bargaining. Exec. Order No. 11616, 3 CFR 605 (1971-1975 Comp.). The Cpuncil made clear that this limited authorization, which was intended “to maintain a reasonable policy with respect to union self-support and an incentive to economical and businesslike bargaining practices,” Leg. Hist., at 1169, did not permit “[ojvertime, premium pay, or travel expenditures.” Id., at 1264.
The Senate version of the bill that became the Civil Service Reform Act would have retained the last Executive Order’s restrictions on the authorization of official time. S. Rep. No. 95-969, p. 112 (1978). Congress instead adopted the section in its present form, concluding, in the words of one Congressman, that union negotiators “should be allowed official time to carry out their statutory representational activities just as management uses official time to carry out its responsibilities.” 124 Cong. Rec. 29188 (1978) (remarks of Rep. Clay). See H. R. Conf. Rep. No. 95-1717, p. Ill (1978).
B
Respondents suggest that, by rejecting earlier limitations on official time, Congress repudiated the view that employee negotiators work only for their union and not for the Government. Under the new vision of federal labor relations postulated by respondents, civil servants on both sides of the bargaining table are engaged in official business of the Government and must be compensated equally. Because federal employees representing the views of management receive travel expenses and per diem allowances, federal employees representing the views of labor are entitled to such payments as well. In support of this view, respondents rely on the Act’s declaration that public sector collective bargaining is in “the public interest” and “contributes to the effective conduct of public business,” § 7101(a), as well as on a number of specific provisions in the Act intended to equalize the position of management and labor. For instance, the Act requires agencies to deduct union dues from employees’ paychecks and to transfer the funds to the union at no cost, § 7115(a); in addition, agencies must furnish a variety of data useful to unions in the collective-bargaining process, § 7114(b)(4). Respondents also contend that Congress employed the term “official time” in § 7131 specifically to indicate that employee negotiators are engaged in Government business and therefore entitled to all of their usual forms of compensation.
Although Congress certainly could have adopted the model of collective bargaining advanced by respondents, we find no indications in the Act or its legislative history that it intended to do so. The Act’s declaration that collective bargaining contributes to efficient government and therefore serves the public interest does not reflect a dramatic departure from the principles of the Executive Order regime under which employee negotiators had not been regarded as working for the Government. To the contrary, the declaration constitutes a strong congressional endorsement of the policy on which the federal labor relations program had been based since its creation in 1962. See, e. g., Exec. Order No. 10988, 3 CFR 521 (1959-1963 Comp.) (“participation of employees in the formulation and implementation of personnel policies affecting them contributes to effective conduct of public business”); Exec. Order No. 11491, 3 CFR 861 (1966-1970 Comp.) (“public interest requires... modern and progressive work practices to facilitate improved employee performance and efficiency” and efficient government is “benefited by providing employees an opportunity to participate in the formulation and implementation of personnel policies and practices affecting the conditions of their employment”). See also S. Rep. No. 95-969, p. 12 (1978); 124 Cong. Rec. 29182 (1978) (remarks of Rep. Udall) (“What we really do is to codify the 1962 action of President Kennedy in setting up a basic framework of collective bargaining for Federal employees”).
Nor do the specific provisions of the Act aimed at equalizing the positions of management and labor suggest that Congress intended employee representatives to be treated as though they were “on the job” for all purposes. Indeed, the Act’s provision of a number of specific subsidies for union activities supports precisely the opposite conclusion. As noted above, Congress expressly considered and ultimately rejected the approach to paid time that had prevailed under the Executive Order regime. See supra, at 101-102. In contrast, there is no reference in the statute or the legislative history to travel expenses and per diem allowances, despite the fact that these kinds of payments had also received administrative attention prior to passage of the Act, see supra, at 100, and n. 11. There is, of course, nothing inconsistent in paying the salaries, but not the expenses, of union negotiators. Congress might well have concluded that, although union representatives should not be penalized by a loss in salary while engaged in collective bargaining, they need not be further subsidized with travel and per diem allowances. The provisions of the Act intended to facilitate the collection of union dues, see §7115, certainly suggest that Congress contemplated that unions would ordinarily pay their own expenses.
Respondents also find their understanding of the role of union representatives supported by Congress’ use of the phrase “official time” in § 7131(a). For respondents, the use of this term indicates an intent to treat employee negotiators “as doing the government’s work for all the usual purposes,” and therefore entitled to “all attributes of employment,” including travel expenses and a per diem allowance. Brief for Respondent NTEU 24-28. They suggest that, if Congress intended to maintain only the employees’ salaries, it would have granted them “leave without loss of pay,” a term it has used in other statutes. See, e. g., 5 U. S. C. §6321 (absence of veterans to attend funeral services), § 6322(a) (jury or witness duty), and §6323 (military reserve duty) (1982 ed.). In contrast, Congress uses the terms “official capacity” and “duty status” to indicate that an employee is “on the job” and entitled to all the usual liabilities and privileges of employment. See, e. g., §§5751, 6322(b) (employee summoned to testify in “official capacity” entitled to travel expenses).
The difficulty with respondents’ argument is that Congress did not provide that employees engaged in collective bargaining are acting in their “official capacity,” “on the job,” or in a “duty status.” Instead, the right to a salary conferred by § 7131(a) obtains only when “the employee otherwise would be in a duty status” (emphasis supplied). This qualifying language strongly suggests that union negotiators engaged in collective bargaining are not considered in a duty status and thereby entitled to all of their normal forms of compensation. Nor does the phrase “official time,” borrowed from prior administrative practice, have the same meaning as “official capacity.” As noted above, employees on “official time” under the Executive Order regime were not generally entitled to travel expenses and a per diem allowance. See swpra, at 100-101. Moreover, as respondents’ own examples demonstrate, Congress does not rely on the mere use of the word “official” when it intends to allow travel expenses and per diems. Even as to those employees acting in an “official capacity,” Congress generally provides explicit authorization for such payments. See, e. g., §§5702, 5751(b), 6322(b). In the Civil Service Reform Act itself, for instance, Congress expressly provided that members of the Federal Service Impasses Panel are entitled to travel expenses and a per diem allowance, in addition to a salary. See §§5703, 7119(c)(4).
Perhaps recognizing that authority for travel expenses and per diem allowances cannot be found within the four corners of § 7131(a), respondents alternatively contend that the Authority’s decision is supported by the Travel Expense Act, 5 U. S. C. § 5702(a) (1982 ed.), which provides that a federal employee “traveling on official business away from his designated post of duty... is entitled to... a per diem allowance.” The Travel Expense Act is administered by the Comptroller General who has concluded that agencies may authorize per diem allowances for travel that is “sufficiently in the interest of the United States so as to be regarded as official business.” 44 Comp. Gen. 188, 189 (1964). Under the Executive Order regime, the Comptroller General authorized per diem payments to employee negotiators pursuant to this statute upon a certification that the employees’ travel served the convenience of the employing agency. See n. 11, supra.
Based on its view that employee negotiators are “on the job,” the Authority determined that union representatives engaged in collective bargaining are on “official business” and therefore entitled to a per diem allowance under the Travel Expense Act. 2 F. L. R. A., at 269. In support of this reasoning, the Authority notes that § 5702(a) has been construed broadly to authorize reimbursement in connection with a variety of “quasi-official” activities, such as employees’ attendance at their own personnel hearings and at privately sponsored conferences. See, e. g., Comptroller General of the United States, Travel in the Management and Operation of Federal Programs 1, App. I, p. 5 (Rpt. No. FPCD-77-11, Mar. 17, 1977); 31 Comp. Gen. 346 (1952). In each of these instances, however, the travel in question was presumably for the convenience of the agency and therefore clearly constituted “official business” of the Government. As we have explained, neither Congress’ declaration that collective bargaining is in the public interest nor its use of the term of art “official time” warrants the conclusion that employee negotiators are on “official business” of the Government.
1 — 1 <1
In passing the Civil Service Reform Act, Congress unquestionably intended to strengthen the position of federal unions and to make the collective-bargaining process a more effective instrument of the public interest than it had been under the Executive Order regime. See supra, at 91-93. There is no evidence, however, that the Act departed from the basic assumption underlying collective bargaining in both the pub-lie and the private sector that the parties “proceed from contrary and to an extent antagonistic viewpoints and concepts of self-interest.” NLRB v. Insurance Agents, 361 U. S. 477, 488 (1960), quoted in General Building Contractors Assn., Inc. v. Pennsylvania, 458 U. S. 375, 394 (1982). Nor did the Act confer on the FLRA an unconstrained authority to equalize the economic positions of union and management. See American Ship Building Co. v. NLRB, 380 U. S., at 316-318. We conclude, therefore, that the FLRA’s interpretation of § 7131(a) constitutes an “unauthorized assumption by [the] agency of [a] major policy decisio[n] properly made by Congress.” Id., at 318.
The judgment of the Court of Appeals is
Reversed.
Florida National Guard v. FLRA, 699 F. 2d 1082 (CA11 1983), cert. pending, No. 82-1970; United States Dept. of Agriculture v. FLRA, 691 F. 2d 1242 (CA8 1982), cert. pending, No. 82-979; Division of Military & Naval Affairs v. FLRA, 683 F. 2d 45 (CA2 1982), cert. pending, No. 82-1021.
Exec. Order No. 10988, 3 CFR 521 (1959-1963 Comp.). The Executive Order program was revised and continued by Exec. Order No. 11491, 3 CFR 861 (1966-1970 Comp.), as amended by Exec. Orders Nos. 11616, 11636, and 11838, 3 CFR 605, 634, 957 (1971-1975 Comp.).
The Council was established by Executive Order No. 11491 in 1970.
Certain federal employees, including members of the military and the Foreign Service, and certain federal agencies, including the Federal Bureau of Investigation and the Central Intelligence Agency, are excluded from the coverage of Title VII. 5 U. S. C. §§ 7102(a)(2) and (3) (1982 ed.).
Although the Authority invited interested persons to express their views prior to adoption of the Interpretation, see Notice Relating to Official Time, 44 Fed. Reg. 42788 (1979), the decision apparently was issued not under the FLRA’s statutory power to promulgate regulations, § 7134, but rather under § 7105(a)(1), which requires the Authority to provide leadership in establishing policies and guidance relating to federal labor-management relations. See Brief for Respondent FLRA 11, n. 10.
Title 5 U. S. C. §7118 (1982 ed.) provides in part:
“(a)(1) If any agency or labor organization is charged by any person with having engaged in or engaging in an unfair labor practice, the General Counsel shall investigate the charge and may issue and cause to be served upon the agency or labor organization a complaint....”
The complaint issued by the General Counsel in this case relied on § 7116, which provides in part:
“(a) For the purposes of this chapter, it shall be an unfair labor practice for an agency—
“(1) to interfere with, restrain, or coerce any employee in the exercise by the employee of any right under this chapter;
“(8) to otherwise fail or refuse to comply with any provision of this chapter.”
The decisions of the FLRA are subject to judicial review in accordance with the Administrative Procedure Act (APA), 5 U. S. C. § | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
46
] | sc_adminaction |
WORZ, INC., v. FEDERAL COMMUNICATIONS COMMISSION et al.
No. 349.
Decided October 27, 1958.
Eliot C. Lovett for petitioner.
Solicitor General Rankin, Assistant Attorney General Hansen, Charles H. Weston, John L. Fitzgerald and Richard A. Solomon for the Federal Communications Commission, respondent.
Per Curiam.
The petition for writ of certiorari is granted. In view of the representations in the Solicitor General’s brief on pages 4 and 5, concerning testimony given before the Subcommittee on Legislative Oversight of the House Committee on Interstate and Foreign Commerce subsequent to the decision by the Court of Appeals in this case, the judgment of the Court of Appeals is vacated and the case is remanded to the Court of Appeals for such action as it may deem appropriate. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
37
] | sc_adminaction |
ZUBER et al. v. ALLEN et al.
No. 25.
Argued October 16, 1969
Decided December 9, 1969
Lawrence D. Hollman argued the cause for petitioners in No. 25. With him on the briefs was Carlyle C. Ring, Jr. Daniel M. Friedman argued the cause for petitioner in No. 52. On the briefs were Solicitor General Gris-wold, Assistant Attorney General Ruckelshaus, Peter L. Strauss, Alan S. Rosenthal, and Walter H. Fleischer.
Charles Patrick Ryan argued the cause for respondents in both cases. With him on the brief was Edward J. Ryan.
Edwin H. Amidon, Jr., Assistant Attorney General, argued the cause for the State of Vermont as amicus curiae urging affirmance in both cases. With him on the brief was James M. Jeffords, Attorney General.
Robert H. Quinn, Attorney General of Massachusetts, pro se, Walter H. Mayo III, Assistant Attorney General, Herbert F. DeSimone, Attorney General of Rhode Island, pro se, Charles G. Edwards, Assistant Attorney General, Robert K. Killian, Attorney General of Connecticut, pro se, and Michael J. Scanlon, Assistant Attorney General, filed a brief for the Attorneys General of Massachusetts, Rhode Island, and Connecticut as amici curiae urging reversal in both cases.
C. Wayne Smyth filed a brief for Lorton Blair et al. as amici curiae urging affirmance in both cases.
Together with No. 52, Hardin, Secretary of Agriculture v. Allen et al., also on certiorari to the same court.
Mr. Justice Harlan
delivered the opinion of the Court.
This action was brought by respondent Vermont dairy farmers, “country” milk producers, seeking a judgment invalidating as contrary to the Agricultural Marketing Agreement Act of 1937, as amended, 50 Stat. 246, 7 U. S. C. §601 et seq. (1964 ed. and Supp. IV), the so-called farm location differential provided for by order of the Secretary of Agriculture. The effect of that order is to require milk distributors to pay to milk producers situated at certain distances from milk marketing areas, “nearby” farmers, higher prices than are paid to producers located at greater distances from such areas. The District Court issued a preliminary injunction on January 16, 1967, against further payments and on respondents’ motion for summary judgment transformed its decree into a permanent injunction on June 15, 1967. The Court of Appeals for the District of Columbia Circuit affirmed. 131 U. S. App. D. C. 109, 402 F. 2d 660 (1968). We granted certiorari to resolve the important issue of statutory construction involved in this aspect of the administration of the federal milk regulation program. 394 U. S. 958 (1969).
I
BACKGROUND
Once again this Court must traverse the labyrinth of the federal milk marketing regulation provisions. While previous decisions have outlined the operation of the statute and the pertinent regulations, a brief odyssey through the economic and regulatory background is essential perspective for focusing the issue now before the Court.
A. The Economics of the Milk Industry
The two distinctive and essential phenomena of the milk industry are a basic two-price structure that permits a higher return for the same product, depending on its ultimate use, and the cyclical characteristic of production.
Milk has essentially two end uses: as a fluid staple of daily consumer diet, and as an ingredient in manufactured dairy products such as butter and cheese. Milk used in the consumer market has traditionally commanded a premium price, even though it is of no higher quality than milk used for manufacture. While cost differences account for part of the discrepancy in price, they do not explain the entire gap. At the same time the milk industry is characterized by periods of seasonal overproduction. The winter months are low in yield and conversely the summer months are fertile. In order to meet fluid demand which is relatively constant, sufficiently large herds must be maintained to supply winter needs. The result is oversupply in the more fruitful months. The historical tendency prior to regulation was for milk distributors, “handlers,” to take advantage of this surplus to obtain bargains during glut periods. Milk can be obtained from distant sources and handlers can afford to absorb transportation costs and still pay more to outlying farmers whose traditional outlet is the manufacturing market. To maintain income farmers increase production and the disequilibrium snowballs.
To protect against market vicissitudes, farmers in the early 1920’s formed cooperatives. These cooperatives were effective in eliminating the self-defeating overproduction by pooling the milk supply and refusing to deal with handlers except on a collective basis. During the 1920’s era of relative market stability the nearby farmers enjoyed premium prices for their product. These favorable prices were apparently attributable to reduced transportation costs and also the nearby farmer’s historic position as a fluid supplier.
B. The First Federal Program
The drop in commodity prices during the depression years destroyed the equilibrium of the 1920’s and utter chaos ensued. Congress, in an effort to restore order to the market and boost the purchasing power of farmers, enacted the licensing provisions of the Agricultural Adjustment Act, 48 Stat. 31, 35. Under § 8 (3) the Secretary of Agriculture was empowered
“[t]o issue licenses permitting processors, associations of producers, and others to engage in the handling, in the current of interstate or foreign commerce, of any agricultural commodity or product thereof, or any competing commodity or product thereof. Such licenses shall be subject to such terms and conditions, not in conflict with existing Acts of Congress or regulations pursuant thereto, as may be necessary to eliminate unfair practices or charges that prevent or tend to prevent the effectuation of the declared policy and the restoration of normal economic conditions in the marketing of such commodities or products and the financing thereof. The Secretary of Agriculture may suspend or revoke any such license, after due notice and opportunity for hearing, for violations of the terms or conditions thereof...
Under the licensing system base-rating plans not unlike the private arrangements that obtained in the 1920’s were adopted. Producers were assigned bases which fixed the percent of their output that they would be permitted to sell at the Class I price that was paid for fluid milk. The viability of the licensing scheme was jeopardized, however, by judicial decisions disapproving a similarly broad delegation of power under the National Industrial Recovery Act provisions, 48 Stat. 195. Schechter Poultry Corp. v. United States, 295 U. S. 495 (1935). With its agricultural marketing program resting on quicksand, Congress moved swiftly to eliminate the defect of overbroad delegation and to shore up the void in the agricultural marketing provisions. Section 8 (3) of the 1933 Act was amended in 1935 and the pertinent language has been carried forward without significant change into § 8c of the present Act. Agricultural Marketing Agreement Act of 1937, 60 Stat. 246, as amended, 7 U. S. C. § 608c (1964 ed. and Supp. IV).
C. The Present Regulatory Scheme
The present system, which differs little in substance from the scheme conceived in 1937 for regulating the Boston market, provides for a uniform market price payable to all producers by all handlers. Prices are established for Class I and Class II uses. The total volume of milk channeled into the market in each category is multiplied by the appropriate coefficient price and the two results are totaled and then divided by the total number of pounds sold. The result represents the average value of milk sold in the marketing area and is the basic “uniform” price. Were all producers to receive this price they would share on an equal basis the profits of Class I marketing and assume equally the costs of disposing of the economic surplus in the Class II market. The actual price to the producer is, however, the “blended” price which is computed by adding and subtracting certain special differentials provided for by statute and order. See 7 CFR § 1001.64 (1969). The deduction for differential payments withheld for the benefit of nearby producers reduces the uniform “blended” price to those producers ineligible to collect this particular adjustment. The provision is contained in § 1001.72 of the order and provides:
“In making the payments to producers... each handler shall add any applicable farm location differential specified in this section.
“(a) With respect to milk received from a producer whose farm is located within any of the places specified in this paragraph, the differential shall be 46 cents per hundredweight, unless the addition of 46 cents gives a result greater than the Class I price determined under §§ 1001.60, 1001.62, and 1001.63 which is effective at the plant at which the milk is received. In that event there shall be added a rate which will produce that price.”
A differential of 23$ is provided for deliveries from farms in intermediate nearby zones. § 1001.72 (b).
The foregoing provisions appear in the so-called 1964 Massachusetts-Rhode Island Order, which consolidated into one region the four sub-markets which were previously regulated separately under the so-called four “New England” orders: the 1951 Boston order which carried forward the order adopted for the Boston area in 1937; the Springfield order promulgated in 1949; and the Southeastern New England order of 1958. Each order included a provision for a nearby differential payment to farmers within a stated radius of a designated market center. For example the differential under the Boston order was payable to farmers located within a 40-mile radius of the State House in Boston; a slightly lower differential was paid to farmers within an 80-mile radius. Under the 1964 order there is no central point for the computation of the radius for payment of the differential; the Secretary has retained the differential provisions as they appeared in the previous four orders. Farmers who would have been entitled to the differential under any one of the previous four marketing regulations continue to receive those payments under the present order. These nearby farmers are eligible for the differential on any shipments within the New England marketing area, even though their milk may actually be used outside the radius of their particular nearby zone.
II
THE STATUTORY SCHEME
The foundation of the statutory scheme is to provide uniform prices to all producers in the marketing area, subject only to specifically enumerated adjustments. The question before the Court, stated most simply, is whether payment of farm location differentials, set forth above, is a permissible adjustment under § 8c (5) (B) to the general requirement of uniformity of price.
The Secretary has in the past labeled the “nearby” differential a “location” differential and defended its inclusion in his orders on that ground. The justification and argument are now, however, pitched in a different key. The Government has apparently abandoned all but one of the numerous theories advanced below, and pressed most vigorously in the Blair v. Freeman litigation (125 U. S. App. D. C. 207, 370 P. 2d 229 (1966)), and it now stresses the provision in § 8c (5) (B) for “volume, market, and production differentials customarily applied by the handlers subject to such order.”
While the proper resolution of the issue is by no means self-evident, we are persuaded that “market... differentials customarily applied” contemplates cost adjustments. The plain thrust of the federal statute was to remove ruinous and self-defeating competition among the producers and permit all farmers to share the benefits of fluid milk profits according to the value of goods produced and services rendered. The Government’s proposed reading of the Act, bottomed, as it is, on the historical payment of a premium to nearby farmers during the monopolistic era of the cooperative pools, would come to perpetuate economic distortion and freeze the milk industry into the competitive structure that prevailed during the 1920’s.
Without the benefit of government muscle to eliminate crippling price warfare in the summer months, neither nearby nor country producers could share in the monopoly-type profits that accrue from fluid milk sales. Absent regulation only the handlers, if anyone, would stand to benefit from the “fluid” monopoly. While we cannot project what would be the case today if a free market prevailed, we might well anticipate that the nearby producers’ winter advantages would be negligible in view of reduced transportation costs and more reliable refrigeration. Thus even in winter handlers might be free to play nearby and outlying farmers against each other since handlers would be free of the leverage exercised by the nearby cooperatives during the 1920’s. Nearby producers now seek the best of both worlds. Having achieved the security that comes with regulation, they seek under a regulatory umbrella to appropriate monopoly profits that were never secure in the unregulated market.
We are reluctant to attribute such intent to Congress and, simply in the name of administrative expertise, to follow a path not marked by the language of the statute. Indeed, such signposts as may be discerned from the legislative history point in a very different direction. The legislative history strongly suggests that “market differentials,” as well as all the other differentials, contemplated particular understood economic adjustments. The House Report, in discussing the allowable adjustments characterizes the market differential as a payment over and above the transportation costs, i. e., a location differential, for delivery to the primary market. Thus farmers would share with handlers the savings from bypassing country-station processing and handling the milk only at the city plant.
The significance of the legislative history emerges upon study of the subsequent administrative practice. The original Boston order obscures the market differential payment by providing in place of a labeled adjustment a two-price structure which allowed an additional 180 per cwt. for city-delivered milk over and above the costs of transporting the milk from the country plant. However, the testimony of Mr. Aplin for the Market Administrator erases any doubt that those responsible for administering the Act fully understood the meaning of the Committee’s explanation of market differential.
Subsequent orders have combined the country station handling adjustment, properly the market differential, and the location-transportation differential into the so-called zone differential.
The statute before us does not contain a mandate phrased in broad and permissive terms. Congress has spoken with particularity and provided specifically enumerated differentials, which negatives the conclusion that it was thinking only in terms of historical considerations. The prefatory discussion in the House Report emphasizes the congressional purpose to confine the boundaries of the Secretary’s delegated authority. In these circumstances an administrator does not have “broad dispensing power.” See Addison v. Holly Hill Co., 322 U. S. 607, 617 (1944). The congressional purpose is further illumined by the character of the other statutory differentials for “volume,” “grade or quality,” “location,” and “production,” all of which compensate or reward the producer for providing an economic service of benefit to the handler.
The general language of the committee report indicating that Congress intended to carry forward the basic regulatory approach adopted under the 1933 Act, following the precedent of the 1920’s, is stressed by the dissent to this opinion. This committee language, it is argued, reinforces the continuity connotations of the “customarily applied” language, a thrust that is not blunted by any specific language indicating a legislative purpose to treat all farmers equally.
Legislative silence is a poor beacon to follow in discerning the proper statutory route. For here the light illumines two different roads. If nearby payments had the notoriety and significance in the milk distribution industry attributed to them by the dissent, Congress could have given its blessing by carving out another specific exception to the uniform price requirement. In an Act whose very purpose was to avoid the infirmity of overbroad delegation and to set forth with particularity the details for a comprehensive regulatory scheme, it would have been a simple matter to include in a list of enumerated differentials, “nearby” payments, or at least allude to them in the report of the draftsmen. It is clear that Congress was not conferring untrammeled discretion on the Secretary and authorizing him to proceed in a vacuum. This was the very evil condemned by the courts that the 1935 amendments sought to eradicate. It would be perverse to assume that congressional drafters, in eliminating ambiguity from the old Act, were careless in listing their exceptions and selecting the illustrations from the committee report from which their words would ultimately derive content.
We consider our conclusions in no way undermined by the colloquy on the floor between Senator Copeland and Senator Murphy upon which the dissent places such emphasis. A committee report represents the considered and collective understanding of those Congressmen involved in drafting and studying proposed legislation. Floor debates reflect at best the understanding of individual Congressmen. It would take extensive and thoughtful debate to detract from the plain thrust of a committee report in this instance. There is no indication, however, that the question of nearby differentials and the meaning of “market... differentials customarily applied” were precisely considered in the floor dialogue. The exchange is not only brief but also inconclusive as to meaning. Indeed, Senator Murphy apparently acquiesced in Senator Copeland’s implied criticism of the statute for providing uniform prices for distant and nearby producers within the marketing region. When Senator Copeland pursued his inquiry, asking whether the Act recognized the higher cost for taxes on nearby lands, Senator Murphy merely recited the differential provisions of the Act and suggested that they “adopt the present practice of business,” but conspicuously lacking is an affirmative statement that any specific differential covered these costs. This is not impressive legislative history especially in light of Senator Murphy’s earlier agreement with Senator Copeland’s statement that “[t]he provisions of the equalization... provide that a producer who is producing his milk on farms near to cities would receive the same price for his product as a farmer who produces his milk, say, 40 or 50 miles away from the same community,” and the specific business illustrations of the House Report.
Ill
SCOPE OF MARKET DIFFERENTIAL
While market differentials customarily applied need not be restricted to the sole illustration in the House Report, that illustration, taken in conjunction with the discussion of all the statutory differentials, suggests that the permissible adjustments are limited to compensation for rendering an economic service. The challenged nearby differentials do not fall into this category.
Nor has the Secretary advanced any economic justification for these differential payments. It is plain from the administrative record that the nearby differential was included in the original Boston order as a recognition of the favored position of nearby producers in the fluid market and as an inducement to nearby farmers to approve the Secretary’s order. (J. A. 237.) The only sense in which the handler may be said to gain economically is by virtue of the elimination of the nearby producer as a potential competitor. While this factor is mentioned in the findings accompanying the 1937 order, it has not been emphasized in the 1964 findings and the testimony at the 1963 hearings suggests that support in the record is indeed scant. That entry of the nearbys into the distribution market would bring unwanted competition, is irrelevant if it does not jeopardize market stability. We think the analysis of the court below was correct: if there is any economic benefit here, producers should receive their compensation directly from the handlers and not out of the marketwide pool. 131 U. S. App. D. C., at 114, 402 F. 2d, at 665.
While petitioner nearby farmers do not concede so readily the absence of economic foundation for the differential, no justifications are advanced that find any substantial support in the record. The allusion to the evenness of production on nearby farms would not justify the exclusive payment of this differential to nearby farmers. If the Secretary intended a production differential, all producers who qualify would be eligible. Some amici and petitioners point to higher taxes on nearby lands and opportunity costs as reason for retaining the differential. These are, admittedly, additional costs of nearby production, but they are of no concern to handlers who seek only to obtain reliably milk at the cheapest price. See Kessel, Economic Effects of Federal Regulation of Milk Markets, 10 J. Law & Econ. 51 (1967). This Court has been slow to attribute to Congress an intent to compensate for inefficient allocation of economic resources. Cf. West Ohio Gas Co. v. Comm’n, 294 U. S. 63, 72 (1935). While petitioners argue that the differential is a necessary inducement to keep the nearby farmers in business, the record does not reveal that the Secretary acted out of concern that the nearby farmers would quit the market, nor is there any evidence demonstrating the present necessity for nearby producers. In an era where efficient transportation is available this may be of nominal concern. At most this may have been an unspoken consideration in 1937.
Since the Secretary made no findings to that effect, the Court need not consider whether they would justify payment of the nearby differential in view of the legislative history indicating that the statute contemplates adjustments primarily for economic costs to handlers that are absorbed or reduced by the producers. Further if the representations of respondents are correct — and they are not without support in the record — it appears that the elimination of the 40-mile zone nearby differential payments of 460, even with the suspension of the intermediate differential payments of 230, would result in a higher uniform price to those farmers now receiving the 230 differential.
IV
PRIOR DECISIONS
Our holding does not represent a departure from this Court’s precedents. No opinion of this Court has ever explicitly approved the nearby differential. Reliance on United States v. Rock Royal Co-op., 307 U. S. 533 (1939), is misplaced. This Court’s refusal to invalidate the payment of a nearby differential to farmers in certain counties named in the New York order must be taken in the context of that action which was initiated by the Government against handlers who refused to obey the regulations. That decision did not repudiate the District Court’s finding that the provision was “discriminatory as between producers.” Id., at 567. The narrow reach of our Rock Royal holding was recognized in Stark v. Wickard, 321 U. S. 288 (1944), where we noted that Rock Royal held the handlers without standing "to object to the operation of the producer settlement fund,” id., at 308, except as it affected handlers. The Court in Rock Royal went on to reject Rock Royal’s contention that the payments placed those handlers without customers in the nearby counties at a competitive disadvantage.
Our attention is also drawn to the First Circuit’s decision in Green Valley Creamery v. United States, 108 F. 2d 342 (1939). As in Rock Royal, supra, the parties did not have standing to raise the invalidity of the nearby differential. To the extent the First Circuit’s view is contrary to our present holding, we disapprove it.
Y
SIGNIFICANCE OF DEPARTMENTAL CONSTRUCTION
While this Court has announced that it will accord great weight to a departmental construction of its own enabling legislation, especially a contemporaneous construction, see Udall v. Tollman, 380 U. S. 1, 16 (1965); Power Reactor Co. v. Electricians, 367 U. S. 396, 408 (1961); it is only one input in the interpretational equation. Its impact carries most weight when the administrators participated in drafting and directly made known their views to Congress in committee hearings. See Power Reactor Co. v. Electricians, supra; United States v. American Trucking Assns., 310 U. S. 534, 539 (1940). In such circumstances, absent any indication that Congress differed with the responsible department, a court should resolve any ambiguity in favor of the administrative construction, if such construction enhances the general purposes and policies underlying the legislation. See American Power & Light Co. v. SEC, 329 U. S. 90, 112-114 (1946).
The Court may not, however, abdicate its ultimate responsibility to construe the language employed by' Congress. Those props that serve to support a disputable administrative construction are absent here. There is no suggestion in the findings, nor have the parties explained, how the present differential contributes to the broad, general purpose of eliminating crippling competition. Nor in the present case has the Court’s attention been drawn to any hearings that suggest that Congress acted with the particular administrative construction before it in either 1935 or 1937. And if those administrators who participated in drafting the 1935 Act understood market differentials to encompass the farm location differential, they obviously failed to communicate their understanding to the drafters of the committee report. It is also evident that the 1937 re-enactment of the 1935 amendments was routine and did not follow a comprehensive review of the issues that had been explored in detail by the 1935 draftsmen who wrote the committee reports.
It is true that a report from the Federal Trade Commission set forth the computations employed under the 1936 Boston order which apparently provided for a nearby differential. But the stark figures, set forth in the appendix to the report without explication, can hardly be said to have given the administrative construction the “notoriety” that this Court found persuasive in Udall v. Tollman, 380 U. S., at 18. In Udall the Court was impressed by the fact that the Secretary’s interpretation had “been a matter of public record and discussion.” Id,., at 17. Even despite active congressional involvement in reviewing certain administrative action in connection with particular leases, the Court noted that it would not attribute ratification to Congress. Udall v. Tallman, supra. Nor can petitioners put flesh on this argument by citing § 4 of the 1937 re-enactment, 50 Stat. 249, and the committee report, H. R. Rep. No. 468, 75th Cong., 1st Sess., 4 (1937), which merely states in the language of the Act that § 4 purports to ratify, legalize, and confirm all action taken pursuant to the agreement and order provisions under the 1935 statute.
VI
RELEVANCE OF PRODUCER APPROVAL
Petitioners allude to the fact that the orders in question have been specifically approved by the farmers concerned as required by §§ 8c (9) (B) (i) and (ii) of the Act. While the contention is adumbrated, the argument appears to run as follows: since provision is made for approval of orders by the regulated subjects, the Secretary’s discretion should be generously interpreted. If provision for such approval could ever legitimize a regulation not authorized by statute, the provision has no significance in the case before us, in light of the considerations already discussed. It is the Secretary, not the farmers, who is responsible for administering the statute and initiating orders.
YII
PROPRIETY OP SUMMARY JUDGMENT
Although the Secretary does not press the point, the private petitioners argue that this Court should at the very least reverse for a trial on the merits or alternatively reverse with instructions to remand to the Secretary for further consideration.
This is not a case where a department has acted without a formal record. In such instances a trial might be appropriate to afford the department an opportunity to develop those facts which underpin its action. When action is taken on a record the department cannot then present testimony in court to remedy the gaps in the record, any more than arguments of counsel on review can substitute for an agency’s failure to make findings or give reasons. A remand to the Secretary is inappropriate in the absence of a request by the Government. Counsel for the Department has advanced no new theory for sustaining the order. Cf. SEC v. Chenery Corp., 318 U. S. 80, 92 (1943).
Unlike Addison v. Holly Hill Co., 322 U. S. 607 (1944), we do not have before us a definition in a regulation that is necessary to give meaning and content to the administrative scheme. Nor does our decision have the effect of engrafting a definition on a particular statutory term, a function that should, in the first instance, be left to the appropriate administrative body. The 1964 order, moreover, expressly provides for severance of any provision that is found invalid. See 7 CFR § 1001.96.
VIII
DISPOSITION OF THE ESCROW FUND
Petitioner farmers’ last line of retreat is their contention that they are entitled to escrow monies that have been accruing since the District Court’s entry of the order granting the respondents’ motion for a preliminary injunction. The court below struck an equitable balance in awarding to petitioners, nearby farmers, all escrow monies collected prior to the entry of final judgment by the District Court. This is a fair solution, and one this Court will not disturb. Petitioners have been on notice since Blair v. Freeman, 125 U. S. App. D. C. 207, 370 F. 2d 229 (1966), that nearby differentials were bottomed on a shaky statutory premise. Lest losing parties be encouraged to prolong litigation by frivolous appeals in order to reap a windfall, we think respondents deserve the fruits of their victory as of the date of final judgment at trial.
The judgment below is
Affirmed.
The Chief Justice and Mr. Justice Marshall took no part in the consideration or decision of these cases.
The Secretary has promulgated comprehensive regulations to govern the marketing of milk, 7 CFR § 1002.1 et seq. (1969), pursuant to the Agricultural Marketing Agreement Act. The provisions relevant to this cause are set forth in Part I of this opinion, at 178, infra.
The action was originally brought against the Secretary only. Petitioners Zuber et al., nearby farmers, unsuccessfully sought leave to intervene before the District Court in support of the Secretary’s regulations. When judgment was rendered against the Secretary, petitioners sought leave to intervene for the purposes of appeal. Leave was granted and the Secretary also decided to take an appeal. The parties have devoted a good deal of energy to disputing what constitutes the record in this litigation. Petitioners at various times have referred us to the testimony and record compiled in an action brought in the Northern District of New York, Cranston v. Freeman, 290 F. Supp. 785 (1968). Respondents have objected, noting that the record in Cranston is not formally before this Court, and have included in the appendix various materials that were not of record below. The Court need not pause over the controversy since none of the materials in respondents’ appendix is decisive of the action before us. As for the references to the Cranston record, they too are not decisive of the dispute.
See, e. g., Lehigh Valley Cooperative v. United States, 370 U. S. 76 (1962); Brannan v. Stark, 342 U. S. 451 (1952); Stark v. Wickard, 321 U. S. 288 (1944); United States v. Rock Royal Co-op., 307 U. S. 533 (1939); H. P. Hood & Sons v. United States, 307 U. S. 588 (1939). Tlie lower courts have also been plagued by the milk problem. See especially Judge Frank’s lament, Queensboro Farm Prods. v. Wickard, 137 F. 2d 969 (C. A | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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IMMIGRATION AND NATURALIZATION SERVICE v. MIRANDA
No. 82-29.
Decided November 8, 1982
Per Curiam.
Respondent Horacio Miranda, a citizen of the Philippines, entered the United States in. 1971 on a temporary visitor’s visa. After his visa expired, he stayed in this country, eventually marrying Linda Milligan, a citizen of the United States, on May 26, 1976. Shortly thereafter, Milligan filed a visa petition with the Immigration and Naturalization Service (INS) on respondent’s behalf. She requested that he be granted an immigrant visa as her spouse. Respondent simultaneously filed an application requesting the INS to adjust his status to that of a permanent resident alien. Section 245(a) of the Immigration and Nationality Act of 1952 conditions the granting of permanent resident status to an alien on the immediate availability of an immigrant visa. Milligan’s petition, if approved, would have satisfied this condition.
The INS did not act on either Milligan’s petition or respondent’s application for 18 months. Following the breakup of her marriage with respondent, Milligan withdrew her petition in December 1977. At that point, the INS denied respondent’s application for permanent residence because he had not shown that an immigrant visa was immediately available to him. The INS also issued an order to show cause why he should not be deported.
At a deportation hearing, respondent conceded his depor-tability but renewed his application for permanent resident status because of his marriage to Milligan. Although the marriage had ended, he claimed that a previous marriage was sufficient to support his application. The Immigration Judge rejected this claim, concluding that the immediate availability of an immigrant visa was a necessary condition to respondent’s application. Since Milligan had withdrawn her petition for an immigrant visa before the INS had acted on it, respondent was ineligible for permanent resident status.
Respondent appealed the decision to the Board of Immigration Appeals. For the first time, he raised the claim that the INS was estopped from denying his application because of its “unreasonable delay.” He argued that the “failure to act was not only unreasonable, unfair and unjust but also an abuse of governmental process if the delay was deliberate.” Record 44. The Board rejected respondent’s claim. It found “no evidence of any ‘affirmative misconduct’” and no basis for an equitable estoppel. Id., at 4.
Respondent sought review of the Board’s decision in the Court of Appeals for the Ninth Circuit. The Court of Appeals reversed, holding that “[t]he unexplained failure of the INS to act on the visa petition for an eighteen-month period prior to the petitioner’s withdrawal. . . was affirmative misconduct by the INS.” Miranda v. INS, 638 F. 2d 83, 84 (1980). We granted certiorari, vacated the judgment of the Court of Appeals, and remanded the case for further consideration in light of Schweiker v. Hansen, 450 U. S. 785 (1981). 454 U. S. 808 (1981).
On remand, the Court of Appeals adhered to its earlier decision. 673 F. 2d 1105 (1982) (per curiam). It found Hansen inapplicable for three reasons. First, the Government’s conduct in Hansen had not risen to the level of affirmative misconduct. In this case, however, affirmative misconduct was established by the INS’s unexplained delay in processing respondent’s application. Second, although the private party in Hansen subsequently had been able to correct the Government’s error, the INS’s error here inflicted irrevocable harm on respondent. Finally, unlike the private party in Hansen who sought to recover from the public treasury, respondent was seeking only to become a permanent resident — a result that would entail no burden on the public fisc. The Court of Appeals determined that “the Supreme Court’s conclusion that the government was not estopped in Hansen neither compels nor suggests the same conclusion here.” 673 F. 2d, at 1106.
In Hansen, we did not consider whether estoppel will lie against the Government when there is evidence of affirmative misconduct. We found that a Government official’s misstatement to an applicant for federal insurance benefits, conceded to be less than affirmative misconduct, did not justify allowing the applicant to collect retroactive benefits from the public treasury. See 450 U. S., at 788-789. Although Hansen involved estoppel in the context of a claim against the public treasury, we observed that “[i]n two cases involving denial of citizenship, the Court has declined to decide whether even ‘affirmative misconduct’ would estop the Government from denying citizenship, for in neither case was ‘affirmative misconduct’ involved.” Id., at 788.
The Court of Appeals thus correctly considered whether, as an initial matter, there ^was a showing of affirmative misconduct. See INS v. Hibi, 414 U. S. 5, 8-9 (1973) (per curiam); Montana v. Kennedy, 366 U. S. 308, 314-315 (1961). Hibi and Montana indicate, however, that the Court of Appeals erred in determining that the evidence in this case established affirmative misconduct. In Montana, a Government official had incorrectly informed the petitioner’s mother that she was unable to return to the United States because she was pregnant. The Court found that the official’s misstatement “falls far short of misconduct such as might prevent the United States from relying on petitioner’s foreign birth” as a basis for denying him citizenship. 366 U. S., at 314-315. In Hibi, Congress had exempted aliens serving in the United States Armed Forces from certain requirements normally imposed on persons seeking naturalization. We found that neither the Government’s failure to publicize fully the rights accorded by Congress nor its failure to make an authorized naturalization representative available to aliens serving outside of the United States estopped the Government from rejecting respondent’s untimely application for naturalization. See 414 U. S., at 8-9.
Unlike Montana and Hibi, where the Government’s error was clear, the evidence that the Government failed to fulfill its duty in this case is at best questionable. The only indication of negligence is the length of time that the INS took to process respondent’s application. Although the time was indeed long, we cannot say in the absence of evidence to the contrary that the delay was unwarranted. Cf. Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U. S. 402, 415 (1971) (presumption of regularity supports official act of public officer); United States v. Chemical Foundation, Inc., 272 U. S. 1, 14-15 (1926) (same). Both the number of the applications received by the INS and the need to investigate their validity may make it difficult for the agency to process an application as promptly as may be desirable. Even if the INS arguably was negligent in not acting more expeditiously, its conduct was not significantly different from that in Montana and Hibi. Nor is the harm to respondent different. Montana and Hibi make clear that neither the Government’s conduct nor the harm to the respondent is sufficient to estop the Government from enforcing the conditions imposed by Congress for residency in this country.
The final distinction drawn by the Court of Appeals between this case and Hansen is unpersuasive. It is true that Hansen relied on a line of cases involving claims against the public treasury. But there was no indication that the Government would be estopped in the absence of the potential burden on the fisc. An increasingly important interest, implicating matters of broad public concern, is involved in cases of this kind. Enforcing the immigration laws, and the conditions for residency in this country, is becoming more difficult. See n. 4, swpra. Moreover, the INS is the agency primarily charged by Congress to implement the public policy underlying these laws. See, e. g., INS v. Jong Ha Wang, 450 U. S. 139, 144-145 (1981) (per curiam); Hibi, supra, at 8. Appropriate deference must be accorded its decisions.
This case does not require us to reach the question we reserved in Hibi, whether affirmative misconduct in a particular case would estop the Government from enforcing the immigration laws. Proof only that the Government failed to process promptly an application falls far short of establishing such conduct. Accordingly, we grant the petition for certio-rari and reverse the judgment of the Court of Appeals.
It is so ordered.
Section 201(b) of the Immigration and Nationality Act of 1952 provides for the admission of immigrants who are immediate relatives of United States citizens. 66 Stat. 175, as amended, 8 U. S. C. § 1151(b).
Section 245(a) provides that the status of an alien who was admitted into the United States “may be adjusted by the Attorney General, in his discretion and under such regulations as he may prescribe, to that of an alien lawfully admitted for permanent residence if (1) the alien makes an application for such adjustment, (2) the alien is eligible to receive an immigrant visa and is admissible to the United States for permanent residence, and (3) an immigrant visa is immediately available to him at the time his application is filed.” 66 Stat. 217, as amended, 8 U. S. C. § 1255(a).
The INS has maintained consistently that the 18-month delay was reasonable because of the need to investigate the validity of respondent’s marriage. Because the issue of estoppel was raised initially on appeal, the parties were unable to develop any factual record on the issue.
In 1976, the year in which Milligan filed her petition on behalf of respondent, some 206,319 immediate-relative petitions were filed. See INS Ann. Rep. 11 (1976). The Service has noted: “In dealing with these petitions, an inordinate amount of fraud, particularly in relation to claimed marriages, has been uncovered. . . . For a fee, partners are provided and marriages contracted to establish eligibility under the statutes for visa issuance benefits.” Ibid. We cannot discount the need for careful investigation by the INS that these petitions demand. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
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"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
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"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
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"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
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"Federal Energy Administration",
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"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
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"Federal Maritime Commission",
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"Federal Parole Board",
"Federal Power Commission",
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"Federal Reserve Board of Governors",
"Federal Reserve System",
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"Federal Trade Commission",
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] | [
6
] | sc_adminaction |
BLOCK, SECRETARY OF AGRICULTURE, et al. v. COMMUNITY NUTRITION INSTITUTE et al.
No. 83-458.
Argued April 24, 1984
Decided June 4, 1984
Kathryn A. Oberly argued the cause for petitioners. With her on the briefs were Solicitor General Lee, Acting Assistant Attorney General Willard, Deputy Solicitor General Getter, and Leonard Schaitman.
Ronald L. Plesser argued the cause for respondents. With him on the brief were Janie A. Kinney, Alan R. Schwartz, William B. Schultz, and Alan B. Morrison.
Justice O’Connor
delivered the opinion of the Court.
This case presents the question whether ultimate consumers of dairy products may obtain judicial review of milk market orders issued by the Secretary of Agriculture (Secretary) under the authority of the Agricultural Marketing Agreement Act of 1937 (Act), ch. 296, 50 Stat. 246, as amended, 7 U. S. C. § 601 et seq. We conclude that consumers may not obtain judicial review of such orders.
I-H
A
In the early 1900’s, dairy farmers engaged in intense competition in the production of fluid milk products. See Zuber v. Allen, 396 U. S. 168, 172-176 (1969). To bring this destabilizing competition under control, the 1937 Act authorizes the Secretary to issue milk market orders setting the minimum prices that handlers (those who process dairy products) must pay to producers (dairy farmers) for their milk products. 7 U. S. C. §608c. The “essential purpose [of this milk market order scheme is] to raise producer prices,” S. Rep. No. 1011, 74th Cong., 1st Sess., 3 (1935), and thereby to ensure that the benefits and burdens of the milk market are fairly and proportionately shared by all dairy farmers. See Nebbia v. New York, 291 U. S. 502, 517-518 (1934).
Under the scheme established by Congress, the Secretary must conduct an appropriate rulemaking proceeding before issuing a milk market order. The public must be notified of these proceedings and provided an opportunity for public hearing and comment. See 7 U. S. C. § 608c(3). An order may be issued only if the evidence adduced at the hearing shows “that [it] will tend to effectuate the declared policy of this chapter with respect to such commodity.” 7 U. S. C. § 608c(4). Moreover, before any market order may become effective, it must be approved by the handlers of at least 50% of the volume of milk covered by the proposed order and at least two-thirds of the affected dairy producers in the region. 7 U. S. C. §§ 608c(8), 608c(5)(B)(i). If the handlers withhold their consent, the Secretary may nevertheless impose the order. But the Secretary’s power to do so is conditioned upon at least two-thirds of the producers consenting to its promulgation and upon his making an administrative determination that the order is “the only practical means of advancing the interests of the producers.” 7 U. S. C. § 608c(9)(B).
The Secretary currently has some 45 milk market orders in effect. See 7 CFR pts. 1001-1139 (1984). Each order covers a different region of the country, and collectively they cover most, though not all, of the United States. The orders divide dairy products into separately priced classes based on the uses to which raw milk is put. See 44 Fed. Reg. 65990 (1979). Raw milk that is processed and bottled for fluid consumption is termed “Class I” milk. Raw milk that is used to produce milk products such as butter, cheese, or dry milk powder is termed “Class II” milk.
For a variety of economic reasons, fluid milk products would command a higher price than surplus milk products in a perfectly functioning market. Accordingly, the Secretary’s milk market orders require handlers to pay a higher order price for Class I products than for Class II products. To discourage destabilizing competition among producers for the more desirable fluid milk sales, the orders also require handlers to submit their payments for either class of milk to a regional pool. Administrators of these regional pools are then charged with distributing to dairy farmers a weighted average price for each milk product they have produced, irrespective of its use. See 7 U. S. C. §608c(5)(B)(ii).
In particular, the Secretary has regulated the price of “reconstituted milk” — that is, milk manufactured by mixing milk powder with water — since 1964. See 29 Fed. Reg. 9002, 9010 (1964); see also 34 Fed. Reg. 16548, 16551 (1969). The Secretary’s orders assume that handlers will use reconstituted milk to manufacture surplus milk products. Handlers are therefore required to pay only the lower Class II minimum price. See 44 Fed. Reg. 65989, 65990 (1979). However, handlers are required to make a “compensatory payment” on any portion of the reconstituted milk that their records show has not been used to manufacture surplus milk products. 7 CFR §§ 1012.44(a)(5)(i), 1012.60(e) (1984). The compensatory payment is equal to the difference between the Class I and Class II milk product prices. Handlers make these payments to the regional pool, from which moneys are then distributed to producers of fresh fluid milk in the region where the reconstituted milk was manufactured and sold. § 1012.71(a)(1).
B
In December 1980, respondents brought suit in District Court, contending that the compensatory payment requirement makes reconstituted milk uneconomical for handlers to process. Respondents, as plaintiffs in the District Court, included three individual consumers of fluid dairy products, a handler regulated by the market orders, and a nonprofit organization. The District Court concluded that the consumers and the nonprofit organization did not have standing to challenge the market orders. In addition, it found that Congress had intended by the Act to preclude such persons from obtaining judicial review. The District Court dismissed the milk handler’s complaint because he had failed to exhaust his administrative remedies.
The Court of Appeals affirmed in part and reversed in part, and remanded the case for a decision on the merits. 225 U. S. App. D. C. 387, 698 F. 2d 1239 (1983). The Court of Appeals agreed that the milk handler and the nonprofit organization had been properly dismissed by the District Court. But the court concluded that the individual consumers had standing: they had suffered an injury-in-fact, their injuries were redressable, and they were within the zone of interests arguably protected by the Act. The Court also concluded that the statutory structure and purposes of the Act did not reveal “the type of clear and convincing evidence of congressional intent needed to overcome the presumption in favor of judicial review.” Id., at 400, and n. 75, 698 F. 2d, at 1252, and n. 75. The Court of Appeals expressly refused to follow the decision of the Ninth Circuit in Rasmussen v. Hardin, 461 F. 2d 595, cert. denied sub nom. Rasmussen v. Butz, 409 U. S. 933 (1972), which had held consumers precluded by statute from seeking judicial review.
We granted certiorari to resolve the conflict in the Circuits. 464 U. S. 991 (1983). We now reverse the judgment of the Court of Appeals in this case.
f-H I — (
Respondents filed this suit under the Administrative Procedure Act (APA), 5 U. S. C. § 701 et seq. The APA confers a general cause of action upon persons “adversely affected or aggrieved by agency action within the meaning of a relevant statute,” 5 U. S. C. § 702, but withdraws that cause of action to the extent the relevant statute “precluded] judicial review,” 5 U. S. C. § 701(a)(1). Whether and to what extent a particular statute precludes judicial review is determined not only from its express language, but also from the structure of the statutory scheme, its objectives, its legislative history, and the nature of the administrative action involved. See Southern R. Co. v. Seaboard Allied Mining Corp., 442 U. S. 444, 454-463 (1979); Morris v. Gressette, 432 U. S. 491, 499-507 (1977); see generally Note, Statutory Preclusion of Judicial Review Under the Administrative Procedure Act, 1976 Duke L. J. 431, 442-449. Therefore, we must examine this statutory scheme “to determine whether Congress precluded all judicial review, and, if not, whether Congress nevertheless foreclosed review to the class to which the [respondents] belon[g].” Barlow v. Collins, 397 U. S. 159, 173 (1970) (opinion of Brennan, J.,); see also Data Processing Service v. Camp, 397 U. S. 150, 156 (1970).
It is clear that Congress did not intend to strip the judiciary of all authority to review the Secretary’s milk market orders. The Act’s predecessor, the Agricultural Adjustment Act of 1933, 48 Stat. 31, contained no provision relating to administrative or judicial review. In 1935, however, Congress added a mechanism by which dairy handlers could obtain review of the Secretary’s market orders. 49 Stat. 760. That mechanism was retained in the 1937 legislation and remains in the Act as §608c(15) today. Section 608c(15) requires handlers first to exhaust the administrative remedies made available by the Secretary. 7 U. S. C. § 608c(15)(A); see 7 CFR §§900.50-900.71 (1984). After these formal administrative remedies have been exhausted, handlers may obtain judicial review of the Secretary’s ruling in the federal district court in any district “in which [they are] inhabitants], or ha[ve their] principal place[s] of business.” 7 U. S. C. § 608c(15)(B). These provisions for handler-initiated review make evident Congress’ desire that some persons be able to obtain judicial review of the Secretary’s market orders.
The remainder of the statutory scheme, however, makes equally clear Congress’ intention to limit the classes entitled to participate in the development of market orders. The Act contemplates a cooperative venture among the Secretary, handlers, and producers the principal purposes of which are to raise the price of agricultural products and to establish an orderly system for marketing them. Handlers and producers — but not consumers — are entitled to participate in the adoption and retention of market orders. 7 U. S. C. §§608c(8), (9), (16)(B). The Act provides for agreements among the Secretary, producers, and handlers, 7 U. S. C. §608(2), for hearings among them, §§608(5), 608c(3), and for votes by producers and handlers, §§608c(8)(A), (9)(B), (12), 608c(19). Nowhere in the Act, however, is there an express provision for participation by consumers in any proceeding. In a complex scheme of this type, the omission of such a provision is sufficient reason to believe that Congress intended to foreclose consumer participation in the regulatory process. See Switchmen v. National Mediation Board, 320 U. S. 297, 305-306 (1943); cf. United States v. Erika, Inc., 456 U. S. 201, 208 (1982).
To be sure, the general purpose sections of the Act allude to general consumer interests. See 7 U. S. C. §§ 602(2), (4). But the preclusion issue does not only turn on whether the interests of a particular class like consumers are implicated. Rather, the preclusion issue turns ultimately on whether Congress intended for that class to be relied upon to challenge agency disregard of the law. See Barlow v. Collins, supra, at 167. The structure of this Act indicates that Congress intended only producers and handlers, and not consumers, to ensure that the statutory objectives would be realized.
Respondents would have us believe that, while Congress unequivocally directed handlers first to complain to the Secretary that the prices set by milk market orders are too high, it was nevertheless the legislative judgment that the same challenge, if advanced by consumers, does not require initial administrative scrutiny. There is no basis for attributing to Congress the intent to draw such a distinction. The regulation of agricultural products is a complex, technical undertaking. Congress channelled disputes concerning marketing orders to the Secretary in the first instance because it believed that only he has the expertise necessary to illuminate and resolve questions about them. Had Congress intended to allow consumers to attack provisions of marketing orders, it surely would have required them to pursue the administrative remedies provided in § 608c(15)(A) as well. The restriction of the administrative remedy to handlers strongly suggests that Congress intended a similar restriction of judicial review of market orders.
Allowing consumers to sue the Secretary would severely disrupt this complex and delicate administrative scheme. It would provide handlers with a convenient device for evading the statutory requirement that they first exhaust their administrative remedies. A handler may also be a consumer and, as such, could sue in that capacity. Alternatively, a handler would need only to find a consumer who is willing to join in or initiate an action in the district court. The consumer or consumer-handler could then raise precisely the same exceptions that the handler must raise administratively. Consumers or consumer-handlers could seek injunctions against the operation of market orders that “impede, hinder, or delay” enforcement actions, even though such injunctions are expressly prohibited in proceedings properly instituted under 7 U. S. C. §608c(15). Suits of this type would effectively nullify Congress’ intent to establish an “equitable and expeditious procedure for testing the validity of orders, without hampering the Government’s power to enforce compliance with their terms.” S. Rep. No. 1011, 74th Cong., 1st Sess., 14 (1935); see also United States v. Ruzicka, 329 U. S. 287, 293-294, and n. 3 (1946). For these reasons, we think it clear that Congress intended that judicial review of market orders issued under the Act ordinarily be confined to suits brought by handlers in accordance with 7 U. S. C. § 608c(15).
Ill
The Court of Appeals viewed the preclusion issue from a somewhat different perspective. First, it recited the presumption in favor of judicial review of administrative action that this Court usually employs. It then noted that the Act has been interpreted to authorize producer challenges to the administration of market order settlement funds, see Stark v. Wickard, 321 U. S. 288 (1944), and that no legislative history or statutory language directly and specifically supported the preclusion of consumer suits. In these circumstances, the Court of Appeals reasoned that the Act could not fairly be interpreted to overcome the presumption favoring judicial review and to leave consumers without a judicial remedy. See 225 U. S. App. D. C., at 400, and n. 75, 698 F. 2d, at 1252, and n. 75. We disagree with the Court of Appeals’ analysis.
The presumption favoring judicial review of administrative action is just that — a presumption. This presumption, like all presumptions used in interpreting statutes, may be overcome by specific language or specific legislative history that is a reliable indicator of congressional intent. See, e. g., Southern R. Co. v. Seaboard Allied Milling Corp., 442 U. S., at 454-463; Schilling v. Rogers, 363 U. S. 666, 670-677 (1960). The congressional intent necessary to overcome the presumption may also be inferred from contemporaneous judicial construction barring review and the congressional acquiescence in it, see, e. g., Ludecke v. Watkins, 335 U. S. 160 (1948), or from the collective import of legislative and judicial history behind a particular statute, see, e. g., Heikkila v. Barber, 345 U. S. 229 (1953). More important for purposes of this case, the presumption favoring judicial review of administrative action may be overcome by inferences of intent drawn from the statutory scheme as a whole. See, e. g., Morris v. Gressette, 432 U. S. 491 (1977); Switchmen v. National Mediation Board, 320 U. S. 297 (1943). In particular, at least when a statute provides a detailed mechanism for judicial consideration of particular issues at the behest of particular persons, judicial review of those issues at the behest of other persons may be found to be impliedly precluded. See Barlow v. Collins, 397 U. S., at 168, and n. 2, 175, and n. 9 (opinion of Brennan, J.); Switchmen v. National Mediation Board, supra, at 300-301; cf. Associated General Contractors of California, Inc. v. Carpenters, 459 U. S. 519, 542 (1983).
A case that best illustrates the relevance of a statute’s structure to the Court’s preclusion analysis is Morris v. Gressette, supra. In that case, the Court held that the Attorney General’s failure to object to a change in voting procedures was an unreviewable administrative determination under the Voting Rights Act of 1965. Neither the Voting Rights Act nor its legislative history said anything about judicial review. Nevertheless, the Morris Court concluded that the “nature of the [statutory] remedy . . . strongly suggests that Congress did not intend the Attorney General’s actions under that provision to be subject to judicial review.” Id., at 501. The Court reasoned that Congress had intended the approval procedure to be expeditious and that review-ability would unnecessarily extend the period the State must wait for effecting its change. Id., at 504-505. The Court also found relevant the existence of other remedies to ensure the realization of the Voting Rights Act’s objectives. Id., at 505-507. In these circumstances, even though proof of specific congressional intent was not “clear and convincing” in the traditional evidentiary sense, the Court unremarkably found the intent to preclude judicial review implicit in the statutory scheme.
In this case, the Court of Appeals did not take the balanced approach to statutory construction reflected in the Morris opinion. Rather, it recited this Court’s oft-quoted statement that “only upon a showing of ‘clear and convincing evidence’ of a contrary legislative intent should the courts restrict access to judicial review.” Abbott Laboratories v. Gardner, 387 U. S. 136, 141 (1967). See also Southern R. Co. v. Seaboard Allied Milling Corp., supra, at 462; Dunlop v. Bachowski, 421 U. S. 560, 568 (1975). According to the Court of Appeals, the “clear and convincing evidence” standard required it to find unambiguous proof, in the traditional evidentiary sense, of a congressional intent to preclude judicial review at the consumers’ behest. Since direct statutory language or legislative history on this issue could not be found, the Court of Appeals found the presumption favoring judicial review to be controlling.
This Court has, however, never applied the “clear and convincing evidence” standard in the strict evidentiary sense the Court of Appeals thought necessary in this case. Rather, the Court has found the standard met, and the presumption favoring judicial review overcome, whenever the congressional intent to preclude judicial review is “fairly discernible in the statutory scheme.” Data Processing Service v. Camp, 397 U. S., at 157. In the context of preclusion analysis, the “clear and convincing evidence” standard is not a rigid evidentiary test but a useful reminder to courts that, where substantial doubt about the congressional intent exists, the general presumption favoring judicial review of administrative action is controlling. That presumption does not control in cases such as this one, however, since the congressional intent to preclude judicial review is “fairly discernible” in the detail of the legislative scheme. Congress simply did not intend for consumers to be relied upon to challenge agency disregard of the law.
It is true, as the Court of Appeals also noted, that this Court determined, in Stark v. Wickard, 321 U. S. 288 (1944), that dairy producers could challenge certain administrative actions even though the Act did not expressly provide them a right to judicial review. The producers challenged certain deductions the Secretary had made from the “producer settlement fund” established in connection with the milk market order in effect at the time. “[T]he challenged deduction[s] reduce[d] pro tanto the amount actually received by the producers for their milk.” Id., at 302. These deductions injured what the producers alleged were “definite personal rights” that were “not possessed by the people generally,” id., at 304, 309, and gave the producers standing to object to the administration of the settlement fund. See id., at 306. Though the producers’ standing could not by itself ensure judicial review of the Secretary’s action at their behest, see ibid., the statutory scheme as a whole, the Court concluded, implicitly authorized producers’ suits concerning settlement fund administration. See id., at 309-310. “[Hjandlers [could not] question the use of the fund, because handlers had no financial interest in the fund or its use.” Id., at 308. Thus, there was “no forum” in which this aspect of the Secretary’s actions could or would be challenged. Judicial review of the producers’ complaint was therefore necessary to ensure achievement of the Act’s most fundamental objectives— to wit, the protection of the producers of milk and milk products.
By contrast, preclusion of consumer suits will not threaten realization of the fundamental objectives of the statute. Handlers have interests similar to those of consumers. Handlers, like consumers, are interested in obtaining reliable supplies of milk at the cheapest possible prices. See Zuber v. Allen, 396 U. S., at 190. Handlers can therefore be expected to challenge unlawful agency action and to ensure that the statute’s objectives will not be frustrated. Indeed, as noted above, consumer suits might themselves frustrate achievement of the statutory purposes. The Act contemplates a cooperative venture among the Secretary, producers, and handlers; consumer participation is not provided for or desired under the complex scheme enacted by Congress. Consumer suits would undermine the congressional preference for administrative remedies and provide a mechanism for disrupting administration of the congressional scheme. Thus, preclusion of consumer suits is perfectly consistent with the Court’s contrary conclusion concerning producer challenges in Stark v. Wickard and its analogous conclusion concerning voter challenges in Morris v. Gressette.
<1
The structure of this Act implies that Congress intended to preclude consumer challenges to the Secretary’s market orders. Preclusion of such suits does not pose any threat to realization of the statutory objectives; it means only that those objectives must be realized through the specific remedies provided by Congress and at the behest of the parties directly affected by the statutory scheme. Accordingly, the judgment of the Court of Appeals is reversed.
It is so ordered.
Justice Stevens took no part in the decision of this case.
Under many orders, milk is divided into three classes. For purposes of this case, however, all milk other than milk used for fluid purposes is referred to as Class II milk.
Prior to filing suit, respondents petitioned the Secretary to hold a rulemaking hearing to amend the market orders so that reconstituted milk would no longer be subject to the compensatory payment rule. See 44 Fed. Reg. 65989 (1979). The Secretary published a Notice of Request and asked for comments. Ibid. Subsequently, the Secretary published a preliminary impact analysis of the proposal and invited comments. See 45 Fed. Reg. 75956 (1980). In April 1981, after respondents had filed suit in the District Court, the Secretary determined not to hold a rulemaking hearing because respondents’ proposal would not further the purposes of the Act. See App. 57-63. The portion of respondents’ complaint challenging the Secretary’s inaction on their rulemaking request was held moot by the Court of Appeals. 225 U. S. App. D. C. 387, 403, and n. 93, 698 F. 2d 1239, 1255, and n. 93 (1983). Respondents did not cross-petition for certiorari review of this issue, and we therefore have no occasion to consider it.
Whether handlers would pass on to consumers any savings they might secure through a successful challenge to the market order provisions is irrelevant. Consumers’ interest in market orders is limited to lowering the prices charged to handlers in the hope that consumers will then reap some benefit at the retail level.
The conclusion that Congress intended to preclude consumers from seeking judicial review of the Secretary’s market orders avoids any pronouncement on the merits of respondents’ substantive claims. Since congressional preclusion of judicial review is in effect jurisdictional, we need not address the standing issues decided by the Court of Appeals in this case. See National Railroad Passenger Corp. v. National Assn, of Railroad Passengers, 414 U. S. 453, 456 (1974); see also id., at 465, and n. 13. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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CHARLES D. BONANNO LINEN SERVICE, INC. v. NATIONAL LABOR RELATIONS BOARD et al.
No. 80-931.
Argued October 13, 1981
Decided January 12, 1982
White, J., delivered the opinion of the Court, in which Brennan, Marshall, Blackmun, and Stevens, JJ., joined. Stevens, J., filed a concurring opinion, post, p. 419. Burger, C. J., filed a dissenting opinion, in which Rehnquist, J., joined, post, p. 420. O’Connor, J., filed a dissenting opinion, in which Powell, J., joined, post, p. 427.
Sidney A. Coven argued the cause and filed a brief for petitioner.
Norton J. Come argued the cause for respondent National Labor Relations Board. With him on the brief were Acting Solicitor General Wallace, Harriet S. Shapiro, Linda Sher, and John H. Ferguson. James T. Grady argued the cause and filed a brief for respondent Teamsters Local Union No. 25.
Lawrence T. Zimmerman and Steven R. Semler filed a brief for Graphic Arts Union Employers of America as amicus curiae urging reversal.
Briefs of amici curiae were filed by Ralph B. Hoyt for Golden Bear Motors, Inc.; and by Harrison Combs for United Mine Workers of America.
Justice White
delivered the opinion of the Court.
The issue here is whether a bargaining impasse justifies an employer’s unilateral withdrawal from a multiemployer bargaining unit. The National Labor Relations Board (Board) concluded that an employer attempting such a withdrawal commits an unfair labor practice in violation of §§ 8(a)(5) and 8(a)(1) of the National Labor Relations Act (Act), 29 U. S. C. §§ 158(a)(5) and 158(a)(1), by refusing to execute the collective-bargaining agreement later executed by the union and the multiemployer association. The Court of Appeals for the First Circuit enforced the Board’s order. 630 F. 2d 25 (1980). Both the Board and the Court of Appeals recognized that several other Courts of Appeals had previously rejected the Board’s position on this issue. We granted certiorari, 450 U. S. 979 (1981), to resolve the conflict among the Circuits on this important question of federal labor law. We affirm the judgment of the Court of Appeals.
I
The factual findings of the Administrative Law Judge were affirmed by. the Board and are undisputed. Petitioner, Charles D. Bonanno Linen Service, Inc. (Bonanno), is a Massachusetts corporation engaged in laundering, renting, and distributing linens and uniforms. Teamsters Local No. 25 (Union) represents its drivers and helpers as well as those of other linen supply companies in the area. For several years, Bonanno has been a member of the New England Linen Supply Association (Association), a group of 10 employers formed to negotiate with the Union as a multiem-ployer unit and a signatory of the contracts negotiated between the Union and the Association. On February 19, 1975, Bonanno authorized the Association’s negotiating committee to represent it in the anticipated negotiations for a new contract. Bonanno’s president became a member of the committee.
The Union and the Association held 10 bargaining sessions during March and April. On April 30, the negotiators agreed upon a proposed contract, but four days later the Union members rejected it. By May 15, according to the stipulations of the parties, the Union and the Association had reached an impasse over the method of compensation: the Union demanded that the drivers be paid on commission, while the Association insisted on continuing payment at an hourly rate.
Several subsequent meetings failed to break the impasse. On June 23, the Union initiated a selective strike against Bonanno. In response, most of Association members locked out their drivers. Despite sporadic meetings, the stalemate continued throughout the summer. During this period two of the employers met secretly with the Union, presumably in an effort to reach a separate settlement. These meetings, however, never reached the level of negotiations.
Bonanno hired permanent replacements for all of its striking drivers. On November 21, it notified the Assocation by letter that it was “withdrawing from the Association with specific respect to negotiations at this time because of an ongoing impasse with Teamsters Local 25.” Pet. for Cert. 58. Bonanno mailed a copy of its revocation letter to the Union and read the letter over the phone to a Union representative.
Soon after Bonanno’s putative withdrawal, the Association ended the lockout. It told the Union that it wished to continue multiemployer negotiations. Several negotiating sessions took place between December and April, without Bonanno participating. In the middle of April, the Union abandoned its demand for payment on commission and accepted the Association’s offer of a revised hourly wage rate. With this development, the parties quickly agreed on a new contract, dated April 23, 1976, and given retroactive effect to April 18, 1975.
Meanwhile, on April 9, 1976, the Union had filed the present action, alleging that Bonanno’s purported withdrawal from the bargaining unit constituted an unfair labor practice. In a letter dated April 29, the Union informed Bonanno that because the Union had never consented to the withdrawal, it considered Bonanno to be bound by the settlement just reached. In a reply letter, Bonanno denied that it was bound by the contract.
An Administrative Law Judge concluded, after a hearing, that no unusual circumstances excused Bonanno’s withdrawal from the multiemployer bargaining unit. The Board affirmed, ordering Bonanno to sign and implement the contract retroactively. In a supplemental decision, the Board explained the basis of its decision that Bonanno’s attempt to withdraw from the multiemployer unit was untimely and ineffective. Charles D. Bonanno Linen Service, Inc., 243 N. L. R. B. 1093 (1979). The Court of Appeals enforced the Board’s order. 630 F. 2d 25 (1980).
II
The standard for judicial review of the Board’s decision m this case was established by NLRB v. Truck Drivers, 353 U. S. 87 (1957) (Buffalo Linen). There, the Union struck a single employer during negotiations with a multiemployer bargaining association. The other employers responded with a lockout. Negotiations continued, and an agreement was reached. The Union, claiming that the lockout violated its rights under §§ 7 and 8 of the Act, then filed charges with the Board. The Board rejected the claim, but the Court of Appeals held that the lockout was an unfair practice.
This Court in turn reversed. That the Act did not expressly authorize or deal with multiemployer units or with lockouts in that context was recognized. Nonetheless, multiemployer bargaining had “long antedated the Wagner Act” and had become more common as employers, in the course of complying with their duty to bargain under the Act, “sought through group bargaining to match increased union strength.” 353 U. S., at 94-95 (footnote omitted). Furthermore, at the time of the debates on the Taft-Hartley amendments, Congress had rejected a proposal to limit or outlaw multiemployer bargaining. The debates and their results offered “cogent evidence that in many industries multi-employer bargaining basis was a vital factor in the effectuation of the national policy of promoting labor peace through strengthened collective bargaining.” Id., at 95. Congress’ refusal to intervene indicated that it intended to leave to the Board’s specialized judgment the resolution of conflicts between union and employer rights that were bound to arise in multiemployer bargaining. In such situations, the Court said:
“The ultimate problem is the balancing of the conflicting legitimate interests. The function of striking that bal-
anee to effectuate national labor policy is often a difficult and delicate responsibility, which the Congress committed primarily to the National Labor Relations Board, subject to limited judicial review.” Id., at 96.
Thus, the Court of Appeals’ rejection of the Board’s justification of the lockout as an acceptable effort to maintain the integrity of the multiemployer unit and its refusal to accept the lockout as a legitimate response to the whipsaw strike had too narrowly confined the exercise of the Board’s discretion.. Id., at 97.
Multiemployer bargaining has continued to be the preferred bargaining mechanism in many industries, and as Buffalo Linen predicted, it has raised a variety of problems requiring resolution. One critical question concerns the rights of the union and the employers to terminate the multi-employer bargaining arrangement. Until 1958, the Board permitted both employers and the union to abandon the unit even in the midst of bargaining. Bearing & Rim Supply Co., 107 N. L. R. B. 101, 102-103 (1953); Stamford Wall Paper, 92 N. L. R. B. 1173 (1951); Morand Bros. Beverage Co., 91 N. L. R. B. 409, 413, 416-418 (1950), enf’d in part on other grounds, 190 F. 2d 576, 581-582 (CA7 1951). But in Retail Associates, Inc., 120 N. L. R. B. 388 (1958), the Board announced guidelines for withdrawal from multiemployer units. These rules, which reflect an increasing emphasis on the stability of multiemployer units, permit any party to withdraw prior to the date set for negotiation of a new contract or the date on which negotiations actually begin, provided that adequate notice is given. Once negotiations for a new contract have commenced, however, withdrawal is permitted only if there is “mutual consent” or “unusual circumstances” exist. Id., at 395.
The Board’s approach in Retail Associates has been accepted in the courts, as have its decisions that unusual circumstances will be found where an employer is subject to extreme financial pressures or where a bargaining unit has become substantially fragmented. But as yet there is no consensus as to whether an impasse in bargaining in a multi-employer unit is an unusual circumstance justifying unilateral withdrawal by the Union or by an employer. After equivocating for a time, the Board squarely held that an impasse is not such an unusual circumstance. Hi-Way Billboards, Inc., 206 N. L. R. B. 22 (1973). The Court of Appeals for the Fifth Circuit refused enforcement of that decision, 500 F. 2d 181 (1974), although it has since modified its views and now supports the Board. Similar decisions by the Board were also overturned by the Courts of Appeals in three other Circuits. NLRB v. Beck Engraving Co., 522 F. 2d 475 (CA3 1975); NLRB v. Independent Assn. of Steel Fabricators, 582 F. 2d 135 (CA2 1978); H. & D., Inc. v. NLRB, 665 F. 2d 257, 105 LRRM 3070 (CA9 1980), cert. pending, No. 80-1498. After again considering the question in this case, the Board issued its decision reaffirming its position that an impasse is not an unusual circumstance justifying withdrawal. Its decision was sustained and enforced by the Court of Appeals for the First Circuit.
Ill
We agree with the Board and with the Court of Appeals. The Board has recognized the voluntary nature of multi-employer bargaining. It neither forces employers into multiemployer units nor erects barriers to withdrawal prior to bargaining. At the same time, it has sought to further the utility of multiemployer bargaining as an instrument of labor peace by limiting the circumstances under which any party may unilaterally withdraw during negotiations. Thus, it has reiterated the view expressed in Hi-Way Billboards that an impasse is not sufficiently destructive of group bargaining to justify unilateral withdrawal. As a recurring feature in the bargaining process, impasse is only a temporary deadlock or hiatus in negotiations “which in almost all cases is eventually broken, through either a change of mind or the application of economic force.” 243 N. L. R. B., at 1093-1094. Furthermore, an impasse may be “brought about intentionally by one or both parties as a device to further, rather than destroy, the bargaining process.” Id., at 1094. Hence, “there is little warrant for regarding an impasse as a rupture of the bargaining relation which leaves the parties free to go their own ways.” Ibid. As the Board sees it, permitting withdrawal at impasse would as a practical matter undermine the utility of multiemployer bargaining.
Of course, the ground rules for multiemployer bargaining have not come into being overnight. They have evolved and are still evolving, as the Board, employing its expertise in the light of experience, has sought to balance the “conflicting legitimate interests” in pursuit of the “national policy of promoting labor peace through strengthened collective bargaining.” Buffalo Linen, 353 U. S., at 95, 96. The Board might have struck a different balance from the one it has, and it may be that some or all of us would prefer that it had done so. But assessing the significance of impasse and the dynamics of collective bargaining is precisely the kind of judgment that Buffalo Linen ruled should be left to the Board. We cannot say that the Board’s current resolution of the issue is arbitrary or contrary to law.
If the Board’s refusal to accept an impasse, standing alone, as an unusual circumstance warranting withdrawal were the only issue in this case, we would affirm without more. But several Courts of Appeals have rejected Hi-Way Billboards on the grounds that impasse may precipitate a strike against one or all members of the unit and that upon impasse the Board permits the union to execute interim agreements with individual employers. These Courts of Appeals consider the possibility of such events as sufficient grounds for any employer in the unit to withdraw.
In Beck Engraving Co., for example, the Court of Appeals for the Third Circuit held that an impasse followed by a selective strike justified unilateral withdrawal from the bargaining unit. Because at that juncture labor relations law, as interpreted by the Board, would permit the union to execute an interim agreement with the struck employer, the Court of Appeals concluded that the union and the employer entering into such an agreement would be given unfair advantage against other employers if the latter were not permitted to withdraw from the unit. The Court of Appeals thought the employer’s right to withdraw and the union’s privilege of executing interim contracts should mature simultaneously. It concluded that the Board’s approach too drastically upset the bargaining equilibrium to be justified in the name of maintaining the stability of the bargaining unit.
The Board’s reasons for adhering to its Hi-Way Billboards position are telling. They are surely adequate to survive judicial review. First, it is said that strikes and interim agreements often occur in the course of negotiations prior to impasse and that neither tactic is necessarily associated with impasse. Second, it is “vital” to understand that the Board distinguishes “between interim agreements which contemplate adherence to a final unitwide contract and are thus not antithetical to group bargaining and individual agreements which are clearly inconsistent with, and destructive of, group bargaining.” 243 N. L. R. B., at 1096. In Sangamo Construction Co., 188 N. L. R. B. 159 (1971), and Plumbers and Steamfitters Union No. 323 (P. H. C. Mechanical Contractors), 191 N. L. R. B. 592 (1971), the agreements arrived at with the struck employers were only temporary: both the union and the employer executing the interim agreement were bound by any settlement resulting from multiemployer bargaining. “[I]n both cases, since the early signers maintained a vested interest in the outcome of final union-association negotiations, the multiemployer unit was neither fragmented nor significantly weakened,” 243 N. L. R. B., at 1096, and unilateral withdrawal was not justified.
On the other hand, where the union, not content with interim agreements that expire with the execution of a unit-wide contract, executes separate agreements that will survive unit negotiations, the union has so “effectively fragmented and destroyed the integrity of the bargaining unit,” ibid., as to create an “unusual circumstance” under Retail Associates rules. Cf. Typographic Service Co., 238 N. L. R. B. 1565 (1978). Furthermore, the Board has held that the execution of separate agreements that would permit either the union or the employer to escape the binding effect of an agreement resulting from group bargaining is a refusal to bargain and an unfair labor practice on the part of both the union and any employer executing such an agreement. Teamsters Union Local No. 378 (Olympia Automobile Dealers Assn.), 243 N. L. R. B. 1086 (1979). The remaining members of the unit thus can insist that parties remain subject to unit negotiations in accordance with their original understanding.
The Board therefore emphatically rejects the proposition that the negotiation of truly interim, temporary agreements, as distinguished from separate, final contracts, is “inconsistent with the concept of multiemployer bargaining units.” 243 N. L. R. B., at 1096. Although interim agreements establish terms and conditions of employment for one or more employer members of the unit pending the outcome of renewed group bargaining, all employers, including those executing interim agreements, have an “equivalent stake” in the final outcome because the “resulting group agreement would then apply to all employers, including each signer of an interim agreement.” Ibid. Such interim arrangements “preclude a finding that the early signers had withdrawn from the unit.” Ibid. Although the Board concedes that interim agreements exert economic pressure on struck employers, this fact should no more warrant withdrawal than the refusal of one employer to join with others in a lockout. In any event, the Board’s view is that interim agreements, on bal-anee, tend to deter rather than promote unit fragmentation since they preserve a continuing mutual interest by all employer members in a final associationwide contract.
The Board also rests on this Court’s admonition that the Board should balance “conflicting legitimate interests” rather than economic weapons and bargaining strength. Its conclusion is that the interest in unit stability, recognized as a major consideration by both Buffalo Linen and NLRB v. Brown, 380 U. S. 278 (1965), adequately justifies enforcement of the obligation to bargain despite the execution of a temporary agreement.
Of course, no interim or separate agreements were executed in this case. But neither did the impasse initiate any right to execute an agreement inconsistent with the duty to abide by the results of group bargaining. Some Courts of Appeals, taking a different view of the interests involved, question the legitimacy of enforcing the duty to bargain where impasse has occurred and interim agreements have been or may be executed. We think the Board has confined itself within the zone of discretion entrusted to it by Congress. The balance it has struck is not inconsistent with the terms or purposes of the Act, and its decision should therefore be enforced.
IV
The Chief Justice, in dissent, is quite right that this case turns in major part on the extent to which the courts should defer to the Board’s judgment with respect to the critical factors involved. He is also correct in restating the Court’s admonition in Brown, swpm, at 291, that “[Reviewing courts are not obliged to stand aside and rubber-stamp their affirmance of administrative decisions that they deem inconsistent with a statutory mandate or that frustrate the congressional policy underlying a statute.” But The Chief Justice does not suggest that the Board seeks here to promote illegitimate ends. Both he and the Board strive to further labor peace through effective collective bargaining. Hence, if the Board’s assessment of the impact of impasse and interim agreements on those goals is accepted, it is plain that its decision in this case is consistent with its mandate and promotes the underlying congressional purpose.
The Chief Justice, candidly accepting that the issue is one of balancing the legitimate interests involved, nonetheless disputes the Board’s judgment regarding the underlying factors with respect to what would best serve the statutory goals. He rejects the Board’s assessment of the significance of impasse and interim agreements in the multiemployer bargaining context and substitutes his own views. For example, he finds that the impasse in this case “was no ‘temporary deadlock or hiatus in negotiations’ as the Board claims; this was instead a complete breakdown in negotiations coupled with a prolonged strike and lock-out.” Post, at 422. He also states, contrary to the Board’s judgment, that when the parties have remained at impasse for a long period, “withdrawal of one or a few employers may facilitate rather than frustrate bargaining.” Post, at 424. Thus, The Chief Justice avers, it would be “more consistent with [the goals of industrial peace] to permit withdrawal and allow negotiation of separate agreements than to force the parties into escalated economic warfare.” Post, at 425.
The Chief Justice may be quite right. There is obviously room for differing judgments, however, as the conflicting judgments of the Courts of Appeals and the strong views of the Board on the issues now before us make clear. But the dissenting Justices would have us substitute our judgment for those of the Board with respect to the issues that Congress intended the Board should resolve. This we are unwilling to do. If the courts are to monitor so closely the agency’s assessment of the kind of factors involved in this case, the role of the judiciary in administering regulatory statutes will be enormously expanded and its work will become more complex and time consuming. We doubt that this is what Congress intended in subjecting the Board to judical review. Indeed, we so held in Buffalo Linen.
We agree that the National Labor Relations Act does not constitute the Board as an “arbiter of the sort of economic weapons the parties can use in seeking to gain acceptance of their bargaining demands,” NLRB v. Insurance Agents, 361 U. S. 477, 497 (1960), or give “the Board a general authority to assess the relative economic power of the adversaries in the bargaining process and to deny weapons to one party or the other because of its assessment of that party’s bargaining power,” American Ship Building Co. v. NLRB, 380 U. S. 300, 317 (1965). But the Board has refused to enter that proscribed area, despite the urging of several Courts of Appeals. Instead, it looked at its statutory mandate and duty — to promote labor peace through strengthened collective bargaining — in developing its rule.
In Brown itself the Court disagreed with the Board and held that no unfair labor practice occurred when members of a multiemployer unit hired temporary replacements following a lockout. Maintaining the stability of the multiemployer unit was the key to that decision: the Court reasoned that without temporary replacements “the prospect that the whipsaw strike would succeed in breaking up the employer association was not at all fanciful.” Brown, 380 U. S., at 284. In contrast to its action in Brown, the Board in this case has developed a rule which, although it may deny an employer a particular economic weapon, does so in the interest of the proper and pre-eminent goal, maintaining the stability of the multiemployer unit. Because the Board has carefully considered the effect of its rule on that goal, we should defer to its judgment.
Affirmed.
Section 8(d) of the Act, 61 Stat. 142, 29 U. S. C. § 158(d), states, in relevant part:
“[T]o bargain collectively is the performance of the mutual obligation of the employer and the representative of the employees to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment, or the negotiation of an agreement,... and the execution of a written contract incorporating any agreement reached if requested by either party, but such obligation does not^ompel either party to agree to a proposal or require the making of a concession....”
Section 8(a)(5) of the Act, 61 Stat. 141, 29 U. S. C. § 158(a)(5), declares it an unfair labor practice for an employer to “refuse to bargain collectively with the representatives of his employees, subject to the provisions of section 9(a).” Section 8(b)(3), 61 Stat. 141, 29 U. S. C. § 158(b)(3), declares it an unfair labor practice for a labor organization “to refuse to bargain collectively with an employer, provided it is the representative of his employees subject to the provisions of section 9(a).” Section 9(a), 61 Stat. 143, 29 U. S. C. § 159(a), in turn, specifies that “[Representatives designated or selected for the purposes of collective bargaining by the majority of the employees in a unit appropriate for such purposes, shall be the exclusive representatives of all the employees in such unit for the purposes of collective bargaining....” Finally under §2(2), 61 Stat. 137, 29 U. S. C. § 152(2), the term “employer” includes “any person acting as an agent of an employer, directly or indirectly,” and the term “person” is defined in § 2(1), 61 Stat. 137, 29 U. S. C. § 152(1), to include “associations.”
See NLRB v. Independent Assn. of Steel Fabricators, Inc., 582 F. 2d 135 (CA2 1978), cert. denied, 439 U. S. 1130 (1979); NLRB v. Beck Engraving Co., Inc., 522 F. 2d 475 (CA3 1976); NLRB v. Associated Shower Door Co., Inc., 512 F. 2d 230 (CA9), cert. denied, 423 U. S. 893 (1975); NLRB v. Hi-Way Billboards, Inc., 500 F. 2d 181 (CA5 1974); Fairmont Foods Co. v. NLRB, 471 F. 2d 1170 (CA8 1972).
As the Court of Appeals explained in this case:
“Multiemployer bargaining offers advantages to both management and labor. It enables smaller employers to bargain ‘on an equal basis with a large union’ and avoid ‘the competitive disadvantages resulting from nonuniform contractual terms.’ NLRB v. Truck Drivers Local 449, 353 U. S. 87, 96... (1957). At the same time, it facilitates the development of industry-wide, worker benefit programs that employers otherwise might be unable to provide. More generally, multiemployer bargaining encourages both sides to adopt a flexible attitude during negotiations; as the Board explains, employers can make concessions ‘without fear that other employers will refuse to make similar concessions to achieve a competitive advantage,’ and a union can act similarly ‘without fear that the employees will be dissatisfied at not receiving the same benefits which the union might win from other employers.’ Brief, at 10. Finally, by permitting the union and employers to concentrate their bargaining resources on the negotiation of a single contract, multiemployer bargaining enhances the efficiency and effectiveness of the collective bargaining process and thereby reduces industrial strife.” 630 F. 2d, at 28.
A recent survey of major collective-bargaining agreements (those covering 1,000 or more employees) found that of 1,536 major agreements, 648 (42%) were multiemployer agreements and that 3,238,400 employees were covered by these agreements. U. S. Bureau of Labor Statistics, Dept, of Labor, Bull. No. 2065, Characteristics of Major Collective Bargaining Agreements — January 1, 1978, p. 12, table 1.8 (1980).
See, e. g., NLRB v. Custom Wood Specialties, Inc., 622 F. 2d 381 (CA8 1980); Carvel Co. v. NLRB, 560 F. 2d 1030 (CA1 1977), cert. denied, 434 U. S. 1065 (1978); NLRB v. Central Plumbing Co., 492 F. 2d 1252 (CA6 1974); NLRB v. Brotherhood of Teamsters, Local No. 70, 470 F. 2d 509 (CA9 1972), cert. denied, 414 U. S. 821 (1973); NLRB v. Johnson Sheet Metal, Inc., 442 F. 2d 1056 (CA10 1971); NLRB v. Dover Tavern Owners’ Assn., 412 F. 2d 725 (CA3 1969); NLRB v. John J. Corbett Press, Inc., 401 F. 2d 673 (CA2 1968).
See, e. g., NLRB v. Southwestern Colorado Contractors Assn., 447 F. 2d 968 (CA10 1971); NLRB v. Spun-Jee Corp., 385 F. 2d 379 (CA2 1967); Connell Typesetting Co., 212 N. L. R. B. 918 (1974); Atlas Electrical Service Co., 176 N. L. R. B. 827 (1969); U. S. Lingerie Corp., 170 N. L. R. B. 750 (1968).
In NLRB v. Marine Machine Works, Inc., 635 F. 2d 522 (CA5 1981), it was concluded that the Board’s policy wisely and properly weighed the competing policy concerns.
The Board explains that if withdrawal were permitted at impasse, the parties would bargain under the threat of withdrawal by any party who was not completely satisfied with the results of the negotiations. That is, parties could precipitate an impasse in order to escape any agreement less favorable than the one expected. In addition, it is precisely at and during impasse, when bargaining is temporarily replaced by economic warfare, that the need for a stable, predictable bargaining unit becomes acute in order that the parties can weigh the costs and possible benefits of their conduct. Brief for Respondent NLRB 24-25.
The Board adopts the language of the First Circuit below: “the uneven application of economic pressure per se is not inconsistent with multi-employer bargaining.” 630 F. 2d, at 33. In addition, it points out that the employer also has additional weapons at its disposal for exerting economic pressure. It can engage in a lockout, make unilateral changes in working conditions if they are consistent with the offers the union has rejected, hire replacements to counter the loss of striking employees, and try to blunt the effectiveness of an anticipated strike by stockpiling inventories, readjusting contract schedules, or transferring work from one plant to another. The Board further notes that interim agreements do not always have the effect the Union desires. The signing of an interim agreement may not weaken the association’s determination to resist the union’s demands, see Plumbers & Steamfitters Union No. 323 (P | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
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"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
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"National Security Agency",
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"Board of Tax Appeals",
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"NO Admin Action",
"Processing Tax Board of Review"
] | [
81
] | sc_adminaction |
MITCHELL et al. v. DONOVAN, SECRETARY OF STATE OF MINNESOTA, et al.
No. 726.
Argued April 21, 1970
Decided June 15, 1970
Lynn S. Costner argued the cause for appellants. With him on the brief were Melvin L. Wulf and Eleanor Holmes Norton.
Richard H. Kyle, Solicitor General of Minnesota, argued the cause for appellees. With him on the brief were Douglas M. Head, Attorney General, pro se, Arne L. Schoeller, Chief Deputy Attorney General, James M. Kelley, Assistant Attorney General, and John R. Kene-fick, Special Assistant Attorney General.
Per Curiam.
The appellants are the 1968 Communist Party candidates for President and Vice President of the United States, various Minnesota voters who alleged a desire to vote for these candidates, and the Communist Parties of the United States and of Minnesota. The appellant candidates obtained petitions containing the requisite number of names and asked the Secretary of State of Minnesota to place them on the ballot for the 1968 election. The Secretary denied the request, relying upon an opinion by the Attorney General of the State to the effect that placing Communist Party candidates on the ballot would violate the Federal Communist Control Act of 1954, 68 Stat. 775, 50 U. S. C. §§841-842, which declares that the Communist Party “should be outlawed,” and purports to strip it of all “rights, privileges, and immunities attendant upon legal bodies created under the jurisdiction of the laws of the United States or any political subdivision thereof . . . .”
The appellants brought an action in the United States District Court for the District of Minnesota seeking a declaration that the Communist Control Act was constitutionally invalid and praying for a temporary restraining order and permanent injunction requiring the Secretary to include the names of the appellant candidates on the November 1968 ballot. Because of the appellants’ request for injunctive relief based upon a claim that a federal statute was unconstitutional, a three-judge District Court was impaneled pursuant to 28 U. S. C. § 2282. The three-judge court noted that time was short before the election; that the equities favored the appellants; that the United States had taken the position in an amicus brief that the Communist Control Act did not bar the placement of Communist Party candidates upon the ballot; and that if the Act did apply in the manner asserted by the State, there would be “grave doubts” as to its constitutionality. Accordingly, without deciding the merits of the appellants’ claims, the court ordered that the names of the appellant candidates be placed on the November 1968 ballot. 290 F. Supp. 642. The candidates received the votes of 415 Minnesotans in that election.
After the election, the appellants moved to amend the complaint, alleging that the Communist Party intended to run candidates in future elections in Minnesota and, on information and belief, that Minnesota would adhere to its position that the Communist Control Act barred placing these candidates on the ballot. The District Court allowed the amendment of the complaint. It held that the prayer for injunctive relief, which referred only to the 1968 election and requested no injunction as to future conduct, had been rendered moot by the passing of that election. As to the prayer for a declaratory judgment striking down the Communist Control Act, the court found no present case or controversy. In the court’s view it was not sufficiently certain that the Communist Party would run candidates in the future or that Minnesota would adhere to its construction of the federal statute, to take the case out of the realm of the hypothetical. It therefore dismissed the complaint. 300 F. Supp. 1145.
The appellants brought a direct appeal to this Court under 28 IJ. S. C. § 1253, which provides:
“Except as otherwise provided by law, any party may appeal to the Supreme Court from an order granting or denying, after notice and hearing, an interlocutory or permanent injunction in any civil action, suit or proceeding required by any Act of Congress to be heard and determined by a district court of three judges.”
The appellees moved to dismiss the appeal on the ground that the order complained of was not one “granting or denying ... an interlocutory or permanent injunction.” We noted probable jurisdiction, 396 U. S. 1000. The appellees have persisted in their claim that the Court lacks jurisdiction to consider this appeal, and after hearing oral argument we have concluded that they are right.
The order appealed from does no more than deny the appellants a declaratory judgment striking down the Communist Control Act. The only injunction ever requested by the appellants was one ordering the names of the Communist Party candidates to be placed on the ballot for the November 1968 election. That injunction was granted, and no appeal was taken by the state officials. As is plain from the opening words of its opinion in the present proceeding, the District Court recognized that no request for injunctive relief was before it: “We concern ourselves here with the propriety of entertaining that portion of plaintiffs’ complaint seeking declaratory relief . . . .” 300 F. Supp., at 1146.
That leaves us with the question whether an order granting or denying, only a declaratory judgment may be appealed to this Court under § 1253. In a recent case, Rockefeller v. Catholic Medical Center, 397 U. S. 820, we gave a negative answer to that question, and we adhere to that decision. Section 1253 by its terms grants this Court jurisdiction only of appeals from orders granting or denying injunctions. While there are similarities between injunctions and declaratory judgments, there are also important differences. Kennedy v. Mendoza-Martinez, 372 U. S. 144, 154-155; cf. Zwickler v. Koota, 389 U. S. 241, 254. The provisions concerning three-judge courts, including the provisions for direct appeal to this Court, antedate the Declaratory Judgment Act of 1934, but Congress substantially amended the three-judge court provisions in 1937 and 1948 without providing for such direct appeals from orders granting or denying declaratory judgments.
We have stressed that the three-judge-court legislation is not “a measure of broad social policy to be construed with great liberality/’ but is rather “an enactment technical in the strict sense of the term and to be applied as such.” Phillips v. United States, 312 U. S. 246, 251. Thus this Court’s jurisdiction under that legislation is to be literally construed. It would hardly be faithful to such a construction to read the statutory term “injunction” as meaning “declaratory judgment.”
We conclude, therefore, that this Court lacks jurisdiction of the appeal. A simple dismissal for want of jurisdiction, however, would leave the appellants with no recourse to appellate review, because they brought their appeal here rather than to the Court of Appeals and the time for appealing to the Court of Appeals has long since passed. Accordingly, as in other cases where an appeal was improperly brought to this Court rather than the Court of Appeals, we vacate the judgment below and remand the case so that the District Court may enter a fresh order dismissing the complaint, thus affording the appellants an opportunity to take a timely appeal to the Court of Appeals for the Eighth Circuit.
It is so ordered.
Mr. Justice Black concurs in the result.
Mr. Justice Blackmun took no part in the consideration or decision of this case.
48 Stat. 955, 28 U. S. C. §§ 2201-2202.
The early history of the three-judge-court statute, then §266 of the Judicial Code, is summarized in Goldstein v. Cox, 396 U. S. 471, 476-477. The 1937 and 1948 amendments, both of which made substantial changes in the statute, appear at 50 Stat. 752 and 62 Stat. 968, respectively.
One commentator has argued for the broader construction on grounds of policy and logical symmetry, see Currie, The Three-Judge District Court in Constitutional Litigation, 32 U. Chi. L. Rev. 1, 13-20, but those arguments should be directed to Congress rather than the courts.
Rockefeller v. Catholic Medical Center, supra; Stamler v. Willis, 393 U. S. 407; Moody v. Flowers, 387 U. S. 97; Phillips v. United States, supra. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
116
] | sc_adminaction |
FEDERAL DEPOSIT INSURANCE CORPORATION v. MALLEN et al.
No. 87-82.
Argued March 22, 1988
Decided May 31, 1988
Stevens, J., delivered the opinion for a unanimous Court.
John Harrison argued the cause for appellant. With him on the briefs were Solicitor General Fried, Assistant Attorney General Willard, Deputy Solicitor General Cohen, Anthony J. Steinmeyer, Michael Kimmel, Ronald R. Glancz, and James A. Clark.
Mary E. Curtin, by appointment of the Court, 484 U. S. 1055, argued the cause for appellee. With her on the brief was David J. Siegrist.
Justice Stevens
delivered the opinion of the Court.
The question presented by this appeal concerns the constitutionality of a statutory provision that authorizes the Federal Deposit Insurance Corporation (FDIC) to suspend from office an indicted official of a federally insured bank. The District Court concluded that the statutory post-suspension procedure is unconstitutional because it does not guarantee the suspended officer a sufficiently prompt decision or an unqualified right to present oral testimony. The District Court therefore enjoined the FDIC from enforcing an order suspending appellee from serving as the president and as a director of the Farmers State Bank in Kanawha, Iowa, and from otherwise participating in the conduct of the affairs of any FDIC-insured bank. 667 F. Supp. 652, 662, 664 (1987). We noted probable jurisdiction. 484 U. S. 911 (1987). We reverse.
J — l
In 1966 Congress adopted several amendments to the Federal Deposit Insurance Act to give federal banking agencies more effective regulatory powers to deal with crises in financial institutions. The amendments were designed to protect the interests of depositors and to prevent the potentially debilitating effect of public loss of confidence in the banking industry. See S. Rep. No. 1482, 89th Cong., 2d Sess., 4-5 (1966) (S. Rep.); 112 Cong. Rec. 20080 (1966) (remarks of Sen. Proxmire). Congress therefore enacted 12 U. S. C. § 1818(g)(1) to give the appropriate federal banking agency the authority to take immediate action to suspend an officer or director of an insured bank if he or she is formally charged with a felony involving dishonesty or breach of trust. As originally enacted, § 1818(g)(1) permitted the appropriate banking agency to suspend an indicted bank officer without providing an opportunity to be heard either before or after issuance of the order of suspension.
In 1974, the FDIC invoked its § 1818(g)(1) authority to suspend the president of an Illinois bank who had been indicted for conspiracy to commit mail fraud. That officer successfully challenged the constitutionality of the suspension on the ground that it had deprived him of property without due process of law. The three-judge District Court, in Feinberg v. FDIC, 420 F. Supp. 109 (DC 1976), found that the public interest in prompt action justified a suspension without a prior hearing, but concluded that the officer was constitutionally entitled to a prompt and meaningful post-suspension hearing in which he could attempt to persuade the FDIC to exercise its discretion to revoke the suspension. In its opinion, the District Court emphasized that the 1966 statute had given the FDIC standardless discretion to suspend or not to suspend an indicted bank official.
In response to the Feinberg decision, in 1978 Congress amended § 1818(g) by incorporating standards in subsection (1) to guide the FDIC in the exercise of its discretion, and by enacting a new subsection (3) to give the suspended officer the right to a post-suspension hearing before the agency to demonstrate that his or her continued service would not jeopardize the interests of depositors or impair public confidence in the bank. It is the adequacy of the post-suspension procedure authorized by subsection (3) that is at issue in this appeal.
II
On December 10, 1986, appellee was indicted by a federal grand jury in the Northern District of Iowa. He was charged with making false statements to the FDIC in violation of 18 U. S. C. § 1001 and with making false statements to the Farmers State Bank with the purpose of influencing the actions of the FDIC in violation of 18 U. S. C. § 1014, offenses that are punishable by imprisonment for more than one year, and that unquestionably involve dishonesty or breach of trust. At the time of the indictment, appellee was the president and a director of a federally insured bank. Thus, if the FDIC found that his continued service “[might] pose a threat to the interests of the bank’s depositors or [might] threaten to impair public confidence in the bank,” the requirements specified in § 1818(g)(1) for a suspension order would be satisfied.
On January 20, 1987, the FDIC issued an ex parte order containing the necessary findings, suspending appellee as the president and as a director of the bank and prohibiting him “from further participation in any manner in the conduct of the affairs of the Bank, or any other bank insured by the FDIC.” App. to Juris. Statement 28a. A copy of the order was served on appellee on January 26, 1987. Four days later, appellee’s attorney made a written request for “an immediate administrative hearing” at which he proposed to offer “both oral testimony and written evidence” to establish that appellee’s continued service was not likely to pose a threat to the interests of the bank’s depositors or to threaten public confidence in the bank. App. 26. The letter requested that the hearing be expedited and commence no later than February 9, 1987.
After various communications with appellee’s counsel, the FDIC’s regional counsel, and the Administrative Law Judge who was selected to conduct the hearing, it was decided that a hearing would be held on February 18, 1987. 667 F. Supp., at 655. In those communications, the FDIC’s regional counsel took the position that oral testimony would not be necessary. App. 28-30. The hearing officer, however, never had an opportunity to decide whether to receive such testimony because the administrative proceedings were interrupted by this litigation.
On February 6, 1987, appellee filed his complaint against the FDIC in the Federal District Court for the Northern District of Iowa and promptly moved for a preliminary injunction. After receiving evidence in the form of affidavits and exhibits, and after hearing oral argument — but no oral testimony — the District Court entered an order declaring the suspension “null and void” and enjoining the FDIC from enforcing it. The District Court rejected appellee’s argument that the order was invalid because it was not preceded by a hearing, 667 F. Supp., at 658, but held that the post-suspension process was “constitutionally inadequate because it does not contemplate a ‘prompt’ disposition,” id., at 659, and also “because it fails to provide for a hearing at which oral evidence can be presented,” id., at 660. The District Court made it clear that it was expressing no opinion on the merits of the suspension; its decision rested entirely on the perceived procedural shortcomings in the post-suspension process.
f — H I — I Í-H
It is undisputed that appellee’s interest in the right to continue to serve as president of the bank and to participate in the conduct of its affairs is a property right protected by the Fifth Amendment Due Process Clause. The District Court and the parties correctly recognized that the FDIC cannot arbitrarily interfere with appellee’s continuing employment relationship with the bank, nor with his interest as a substantial stockholder in the bank’s holding company. See Feinberg v. FDIC, 173 U. S. App. D. C. 120, 125, 522 F. 2d 1335, 1340 (1975); cf. Cleveland Bd. of Education v. Loudermill, 470 U. S. 532, 538-541 (1985). It is also undisputed that the FDIC’s order of suspension affected a deprivation of this property interest. Accordingly, appellee is entitled to the protection of due process of law.
“Once it is determined that due process applies, the question remains what process is due.” Morrissey v. Brewer, 408 U. S. 471, 481 (1972). Here again, we at least start with substantial agreement. Appellee does not contend that he was entitled to an opportunity to be heard prior to the order of suspension. An important government interest, accompanied by a substantial assurance that the deprivation is not baseless or unwarranted, may in limited cases demanding prompt action justify postponing the opportunity to be heard until after the initial deprivation. See Barry v. Barchi, 443 U. S. 55, 64-66 (1979); Dixon v. Love, 431 U. S. 105, 112-115 (1977); North American Cold Storage Co. v. Chicago, 211 U. S. 306, 314-321 (1908). In this case, the postponement of the hearing is supported by such an interest. The legislation under scrutiny is premised on the congressional finding that prompt suspension of indicted bank officers may be necessary to protect the interests of depositors and to maintain public confidence in our banking institutions. See S. Rep., at 4-5; 112 Cong. Rec. 20080 (1966) (remarks of Sen. Proxmire). This interest is certainly as significant as the State’s interest in preserving the integrity of the sport of horse racing, an interest that we deemed sufficiently important in Barry v. Barchi, supra, at 64-65, to justify a brief period of suspension prior to affording the suspended trainer a hearing. Moreover, as in Barchi, appellee’s suspension was supported by findings that assure that the suspension was not baseless. A grand jury had determined that there was probable cause to believe that appellee had committed a felony. Such an ex parte finding of probable cause provides a sufficient basis for an arrest, which of course constitutes a temporary deprivation of liberty. See Baker v. McCollan, 443 U. S. 137, 142, 143 (1979). It should certainly be sufficient, when coupled with the congressional finding that a prompt suspension is important to the integrity of our banking institutions, to support the order entered in this case on January 20, 1987, even though the FDIC did not provide appellee with a separate pre-suspension hearing. The three-judge District Court in the Feinberg case, the District Court in this case, and this Court are all in accord on that proposition.
We cannot agree with the District Court, however, that appellee was denied a sufficiently prompt post-deprivation hearing. As our cases indicate, the District Court was properly concerned about the importance of providing prompt post-deprivation procedures in situations in which an agency’s discretionary impairment of an individual’s property is not preceded by any opportunity for a pre-deprivation hearing. See Barchi, supra, at 66.. However, the District Court seems to have been improperly concerned with the danger of an interminable delay by the agency, rather than by what would have happened in this case if the proceedings had not been interrupted, or indeed, what might have happened if the FDIC had been as dilatory as the statute permits. For even though there is a point at which an unjustified delay in completing a post-deprivation proceeding “would become a constitutional violation,” Cleveland Bd. of Education v. Loudermill, 470 U. S., at 547, the significance of such a delay cannot be evaluated in a vacuum. In determining how long a delay is justified in affording a post-suspension hearing and decision, it is appropriate to examine the importance of the private interest and the harm to this interest occasioned by delay; the justification offered by the Government for delay and its relation to the underlying governmental interest; and the likelihood that the interim decision may have been mistaken. Cf. Logan v. Zimmerman Brush Co., 455 U. S. 422, 434 (1982); Mathews v. Eldridge, 424 U. S. 319, 334-335 (1976).
Section 1818(g)(3) requires the FDIC to hold a hearing within 30 days of a written request for an opportunity to appear before the agency to contest a suspension and requires that it notify the suspended officer of its decision within 60 days of the hearing. Thus, at maximum, the suspended officer receives a decision within 90 days of his or her request for a hearing. In this case, the agency reported that it would have been able to issue a written decision within 30 days after the hearing. In addition, the initial hearing was scheduled to take place — had it not been interrupted by the preliminary injunction — 19 days after it was formally requested.
Appellee’s interest in continued employment is without doubt an important interest that ought not be interrupted without substantial justification. We have repeatedly recognized the severity of depriving someone of his or her livelihood. See Brock v. Roadway Express, Inc., 481 U. S. 252, 263 (1987); Loudermill, 470 U. S., at 543. Yet, even assuming that the FDIC required the complete 90 days to hear the case and reach its decision, we are not persuaded that this exceeds permissible limits. In fact, a suspended bank officer has an interest in seeing that a decision concerning his or her continued suspension is not made with excessive haste. The statute imposes a permissive standard for continuing a suspension, and presumably, when in doubt, the agency may give greater weight to the public interest and leave the suspension in place, particularly when the suspension does not impose the additional harm of a significant, incremental injury to reputation. Through the return of the indictment, the Government has already accused the appellee of serious wrongdoing. The incidental suspension is not likely to augment this injury to the officer’s reputation. We thus conclude that the 90-day period is not so long that it will always violate due process. In many cases, perhaps most, it will be justified by an important government interest coupled with factors minimizing the risk of an erroneous deprivation. Cf. id., at 546-547 (9-month delay in final decision not “unconstitutionally lengthy per se”).
The magnitude of the public interest in a correct decision counsels strongly against any constitutional imperative that might require overly hasty decisionmaking. The same governmental interest that justifies permitting suspension prior to the opportunity to be heard extends to this analysis as well. Congress has determined that the integrity of the banking industry requires that indicted bank officers be suspended until it is determined that they do not pose a threat to the interests of the bank’s depositors or threaten to undermine public confidence in the bank. To return these officers to a position of influence in the conduct of the bank’s affairs prior to an opportunity to weigh the evidence carefully would threaten these interests in the same way as allowing them to remain in office from the start. Thus, the public has a strong interest in seeing the ultimate decision made in a considered and deliberate manner. Congress certainly acted within constitutional bounds in determining that 30 days might be required to set and prepare for the hearing and that in some cases another 60 days may be needed to reach a decision. The decision is a serious one and may involve complex issues and an extensive evidentiary record. See Feinberg, 420 F. Supp., at 120 (hearing would involve a “complex legal question” and “subtle interrelation of fact and policy”).
Moreover, and perhaps most significantly, there is little likelihood that the deprivation is without basis. The returning of the indictment establishes that an independent body has determined that there is probable cause to believe that the officer has committed a crime punishable by imprisonment for a term in excess of one year. This finding is relevant in at least two important ways. First, the finding of probable cause by an independent body demonstrates that the suspension is not arbitrary. Second, the return of the indictment itself is an objective fact that will in most cases raise serious public concern that the bank is not being managed in a responsible manner. In addition, when § 1818(g) was initially enacted, Congress indicated that suspensions would be “virtually routine.” S. Rep., at 2. The later amendments prompted by the Feinberg decision do not suggest that Congress has disavowed this expectation; rather, the standard adopted by Congress — “may pose a threat to the bank’s depositors or may threaten to impair public confidence in the bank” — would appear to be easily satisfied in the case of bank officials charged with crimes involving dishonesty. One would expect that a decision not to suspend would be the exception. It is thus unlikely that any particular suspension would be erroneously imposed.
We are therefore persuaded that the congressionally recognized interest in maintaining confidence in our banking institutions, coupled with the finding of probable cause that the officer has committed a felony involving dishonesty, is sufficient ground for a regulatory suspension of up to 90 days without the benefit of a post-suspension ruling. In reaching a contrary result, the District Court attached importance to the fact that the criminal proceedings might be concluded more promptly than the FDIC proceeding. The Court reasoned that because the Speedy Trial Act requires that a federal criminal trial take place within 70 days of indictment — plus, of course, time properly excluded under the Act — the criminal trial might well take place before the FDIC need reach a decision. See 18 U. S. C. §3161. The Court accordingly concluded that the statutorily required hearing is • “a toothless remedy for the plaintiffs since the agency can postpone a disposition until after the criminal trial has concluded.’’,. 667 F. Supp., at 659. “It is a remedy only if the agency chooses for it to be a remedy.” Ibid.
We find the possibility that a suspended officer’s criminal trial may conclude before expiration of the 90-day period from request for a hearing to decision quite irrelevant. If appellee had been promptly acquitted, the basis for the suspension would have disappeared and the order would have been vacated. On the other hand, a conviction merely strengthens the case for maintaining the suspension and provides grounds for suspension under § 1829 as well. The criminal trial merely constitutes a potentially intervening factor that may require that the suspension be promptly vacated; it is difficult to conceive of how this intervening factor interferes with appellee’s due process rights.
Nor is this case controlled by our decision in Barry v. Barchi, 443 U. S. 55 (1979). In Barchi, a horse trainer’s license was suspended for 15 days after a horse he trained was discovered to have had drugs in its system during a race. The state regulatory scheme raised a rebuttable presumption that the trainer either administered the drug or was negligent in protecting against such an occurrence. The trainer claimed that he neither administered the drug nor was negligent. In considering the administrative scheme, we first concluded that the State acted within the bounds of due process in suspending the trainer without a pre-suspension hearing. However, we concluded that the scheme violated due process because “it [was] as likely as not” that the trainer would irretrievably suffer the full penalty before the State would be put to its proof at a post-suspension hearing. Id., at 66. In such situations, the State must assure a prompt post-suspension hearing, “without appreciable delay.” Ibid. In this case by contrast, the appellee is not denied a meaningful opportunity to be heard. Rather than closing the door to the benefit of an opportunity to be heard, the possibility that the criminal trial may precede the FDIC hearing simply provides an additional forum at which to demonstrate that the suspension was unjustified. If the official is successful in the criminal proceeding, then due process has prevailed and the order of suspension must be vacated.. If he or she is convicted, the order of suspension is further supported.
We also reject appellee’s contention that § 1818(g) violates due process because it does not guarantee an opportunity to present oral testimony. The statute provides that the suspended officer may “submit written materials (or, at the discretion of the agency, oral testimony)” and present oral argument. § 1818(g)(3). The- relevant regulation, in turn, delegates the decision whether to accept oral testimony to the hearing officer. See 12 CFR § 308.61(e) (1987). In rejecting appellee’s contention we may assume that there are post-suspension proceedings under § 1818(g) in which oral testimony is essential to enable the hearing officer to make a fair appraisal of the impact of a suspended officer’s continued service on the bank’s security and reputation. Indeed, we may assume that this is such a ease. The problem with ap-pellee’s position, however, is that he did not give the hearing officer an opportunity to decide whether to hear whatever testimony he might have adduced. No offer of proof was ever made, and thus certainly was not rejected^ For all we know, the hearing officer might have accepted such evidence; or if he rejected it, he might have been entirely correct in deciding that it was merely cumulative to material that was adequately covered by written submissions or that it was otherwise unnecessary or improper. A statute such as this is not to be held unconstitutional simply because it may be applied in an arbitrary or unfair way in some hypothetical case not before the Court. There is no inexorable requirement that oral testimony must be heard in every administrative proceeding in which it is tendered. See Califano v. Yamasaki, 442 U. S. 682, 696 (1979). The District Court’s reliance on the absence of such a guarantee in this case was therefore misplaced.
IV
The post-suspension procedure authorized by § 1818(g)(3) is not unconstitutional on its face; nor do we find any unfairness in the FDIC’s use of that procedure in this case. The District Court’s preliminary injunction is accordingly reversed.
It is so ordered.
See Financial Institutions Supervisory Act of 1966, Pub. L. 89-695, Title II, 80 Stat. 1046-1055, 12 U. S. C. § 1818.
The statute defines “appropriate Federal banking agency” by reference to the type of bank subject to regulation. See 12 U. S. C. § 1813(q). For example, “in the case of a national banking association, a District bank, or a Federal branch or agency of a foreign bank,” the Comptroller of the Currency is the “appropriate Federal banking agency.” § 1813(q)(1). Section 1813(q)(3) provides that “in the case of a State nonmember insured Bank... or a foreign bank having an insured branch,” the FDIC is the “appropriate Federal banking agency.” It is undisputed that in this case the FDIC is the appropriate federal banking agency.
As enacted in 1966, 12 U. S. C. § 1818(g)(1) provided:
“Whenever any director or officer of an insured bank, or other person participating in the conduct of the affairs of such bank, is charged in any information, indictment, or complaint authorized by a United States attorney, with the commission of or participation in a felony involving dishonesty or breach of trust, the appropriate Federal banking agency may, by written notice served upon such director, officer, or other person suspend him from office and/or prohibit him from further participation in any manner in the conduct of the affairs of the bank. A copy of such notice shall also be served upon the bank. Such suspension and/or prohibition shall remain in effect until such information, indictment, or complaint is finally disposed of or until terminated by the agency. In the event that a judgment of conviction with respect to such offense is entered against such director, officer, or other person, and at such time as such judgment is not subject to further appellate review, the agency may issue and serve upon such director, officer, or other person' an order removing him from office and/or prohibiting him from further participation in any manner in the conduct of the affairs of the bank except with the consent of the appropriate agency. A copy of such order shall also be served upon such bank, whereupon such director or officer shall cease to be a director or officer of such bank. A finding of not guilty or other disposition of the charge shall not preclude the agency from thereafter instituting proceedings to remove such director, officer, or other person from office and/or to prohibit further participation in bank affairs, pursuant to paragraph (1), (2), (3), (4), or (7) of subsection (e) of this section.” 80 Stat. 1050.
The court noted the breadth of discretion afforded the agency and intimated that if suspension was mandatory upon indictment, no pre- or post-suspension hearing would be required:
“It appears arguable that if the issuance of a Notice and Order of Suspension were automatic upon the return of an indictment or the filing of an information or complaint, then there might not be a need for a hearing or other incidents of due process. Such an argument could only retain its vitality though if there were no agency determination required prior to the issuance of the Notice and Order of Suspension. But this is not the case. Section 1818(g)(1), by its very language, requires that the agency decide whether the crime charged is one ‘involving dishonesty or breach of trust.’ Given the variety and nature of state offenses, it is apparent that the agency must exercise discretion as to this issue. This discretion, in fact, is enhanced by the lack in the statute of a definition of a crime of ‘dishonesty or breach of trust.’ But this is not the only discretionary question posed by the statute. The statute interjects an added element of discretion by providing that the agency ‘may’ issue a Notice and Order of Suspension; it is not required to do so. Furthermore, when the statute is construed it appears clear that even if the agency determines that the crime charged is one involving dishonesty or a breach of trust, the agency is still given — and in fact has exercised — the discretion not to issue a Notice and Order of Suspension. In addition, it is significant for purposes of due process that no specific guidelines are provided in the statute for the exercise of this discretion. The only ascertainable guidance is the general purpose of the statute: to insure the public’s confidence in the stability of the financial institution.” 420 F. Supp., at 116-117 (footnotes omitted).
As amended in 1978, 12 U. S. C. § 1818(g)(1) provided:
“Whenever any director or officer of an insured bank, or other person participating in the conduct of the affairs of such bank, is charged in any information, indictment, or complaint authorized by a United States attorney, with the commission of or participation in a crime involving dishonesty or breach of trust which is punishable by imprisonment for a term exceeding one year under State or Federal law, the appropriate Federal banking agency may, if continued service or participation by the individual may pose a threat to the interests of the bank’s depositors or may threaten to impair public confidence in the bank, by written notice served upon such director, officer, or other person, suspend him from office or prohibit him from further participation in any manner in the conduct of the affairs of the bank. A copy of such notice shall also be served upon the bank. Such suspension or prohibition shall remain in effect until such information, indictment, or complaint is finally disposed of or until terminated by the agency. In the event that a judgment of conviction with respect to such crime is entered against such director, officer, or other person, and at such time as such judgment is not subject to further appellate review, the agency may, if continued service or participation by the individual may pose a threat to the interests of the bank’s depositors or may threaten to impair public confidence in the bank, issue and serve upon such director, officer, or other person an order removing him from office or prohibiting him from further participation in any manner in the conduct of the affairs of the bank except with the consent of the appropriate agency. A copy of such order shall also be served upon such bank, whereupon such director or officer shall cease to be a director or officer of such bank. A finding of not guilty or other disposition of the charge shall not preclude the agency from thereafter instituting proceedings to remove such director, officer, or other person from office or to prohibit further participation in bank affairs, pursuant to paragraph (1), (2), or (3) of subsection (e) of this section. Any notice of suspension or order of removal issued under this paragraph shall remain effective and outstanding until the completion of any hearing or appeal authorized under paragraph (S) hereof unless terminated by the agency.” 92 Stat. 3665-3666 (the language emphasized was added in 1978).
Title 12 U. S. C. § 1818(g)(3) reads as follows:
“Within thirty days from service of any notice of suspension or order of removal issued pursuant to paragraph (1) of this subsection, the director, officer, or other person concerned may request in writing an opportunity to appear before the agency to show that the continued service to or participation in the conduct of the affairs of the bank by such individual does not, or is not likely to, pose a threat to the interests of the bank’s depositors or threaten to impair public confidence in the bank. Upon receipt of any such request, the appropriate Federal banking agency shall fix a time (not more than thirty days after receipt of such request, unless extended at the request of the concerned director, officer, or other person) and place at which the director, officer, or other person may appear, personally or through counsel, before one or more members of the agency or designated employees of the agency to submit written materials (or, at the discretion of the agency, oral testimony) and oral argument. Within sixty days of such hearing, the agency shall notify the director, officer, or other person whether the suspension or prohibition from participation in any manner in the conduct of the affairs of the bank will be continued, terminated, or otherwise modified, or whether the order removing said director, officer or other person from office or prohibiting such individual from further participation in any manner in the conduct of the affairs of the bank will be rescinded or otherwise modified. Such notification shall contain a statement of the basis for the agency’s decision, if adverse to the director, officer or other person. The Federal banking agencies are authorized to prescribe such rules as may be necessary to effectuate the purposes of this subsection.” 92 Stat. 3666.
Appellee was convicted on both counts. The District Court, however, set aside the 18 U. S. C. § 1014.conviction on the ground that the indictment failed to allege the essential elements of the crime. On appeal, the Court of Appeals for the Eighth Circuit affirmed the 'conviction under 18 U. S. C. § 1001 and reversed the District Court’s decision | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
40
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ZITTMAN v. McGRATH, ATTORNEY GENERAL, SUCCESSOR TO THE ALIEN PROPERTY CUSTODIAN.
NO. 298.
Argued February 28, 1951.
Decided May 28, 1951.
Joseph M. Cohen argued the cause and filed a brief for petitioner in No. 298.
Henry I. Fillman argued the cause for petitioner in No. 314. With him on the brief was Otto C. Sommerich.
Ralph S. Spritzer argued the cause for respondent. With him on the brief were Solicitor General Perlman, Assistant Attorney General Baynton, James L. Morrisson and George B. Searls.
Mr. Justice Jackson
delivered the opinion of the Court.
On December 11, 1941, petitioner Zittman, holder of claims against the Deutsche Reichsbank and the Deutsche Golddiskontbank, caused attachment warrants to be issued by the appropriate New York court and levied on accounts maintained by the debtors in New York City with the Chase National Bank. On January 21, 1942, petitioner McCarthy, holder of a claim against the Reichsbank, also attached its accounts with the Chase Bank. Both attachments were followed by state court actions which were pursued to default judgments. The judgments remain unsatisfied because the attached funds were and are “frozen” by federal government foreign funds controls. The New York courts have repeatedly extended the ninety-day limitation provided for the sheriff to reduce the accounts to his possession or commence an action to do so, so that the attachments, like the judgments, are outstanding.
The accounts were frozen June 14, 1941, by Executive Order No. 8785, which extended to assets of German nationals freezing controls initiated by Executive Order No. 8389, issued April 10, 1940, by the President, pursuant to the powers vested in him by § 5 (b) of the Trading With the Enemy Act. The general effect of the basic order was to forbid “transactions” in the assets of blocked nationals, including all “transfers” of such funds. In October, 1946, more than four and a half years after the levy of these attachments, the Alien Property Custodian issued Vesting Orders, which vested “that certain debt or other obligation owing to” the German bank “and any and all rights to demand, enforce and collect the same.” The Chase Bank notified the Custodian that, due to the outstanding attachment levies, it could not release the accounts. Some sixteen months later, the Custodian petitioned the United States District Court for the Southern District of New York for a declaratory judgment that the petitioners “obtained no lien or other interest in” the attached accounts and that he was entitled to take the entire balances. The District Court granted the relief sought, and the United States Court of Appeals for the Second Circuit affirmed, per curiam, solely on the authority of Propper v. Clark, 337 U. S. 472. We granted certiorari. The question is whether the attachment levies were “transfers” forbidden by Executive Order No. 8389.
I. Rights of the Judgment Creditors Under New York Law.
In the New York courts, petitioners invoked one of several provisional remedies which, from time out of mind, New York has extended to its citizens against their nonresident debtors. These, in appropriate circumstances, may take the form of receivership or attachment. While these two remedies differ in nature and incidents, they are alike in being available at the commencement or during the pendency of an action, are not independent but auxiliary in character, and are not designed finally to adjudge substantive rights but to secure such judgment as may be rendered. As employed in this case, attachment also was the sole basis of jurisdiction.
The attachment levy on bank balances is perfected by service of a certified copy of the warrant of attachment on the banking institution, which is required to certify to the sheriff making the levy the balance due to the defendant. The levy does not require the sheriff to take physical possession of any property, nor does it require any transfer of title. The effect is prescribed: “Any such person so served with a certified copy of a warrant of attachment is forbidden to make or suffer, any transfer or other disposition of, or interfere with, any such property or interest therein so levied upon,... or sell, assign or transfer any right so levied upon, to any person, or persons, other than the sheriff serving the said warrant until ninety days from the date of such service, except upon direction of the sheriff or pursuant to an order of the court.” The account attached must, on the sheriff’s demand, be paid over to him within ninety days, unless, as here, the time has been extended by order of court, and the sheriff is authorized to institute an action within that time to recover amounts withheld.
These creditors prosecuted their actions to judgments which could be satisfied only from attached property and by issuance of executions. An attachment merges in an execution when issued, but it is not annulled until the judgment is paid and remains in force to keep alive the lien on the property. Castriotis v. Guaranty Trust Co., 229 N. Y. 74, 79, 127 N. E. 900, 902 (1920).
Execution, if issued, would require a transfer of credit and of funds, but this step has not been taken and, it is admitted, cannot be taken in these cases without a federal license. While requirement of a federal license creates something of a contingency as to satisfaction of the judgments, as matter of New York law this does not deprive the judgment of its validity or the attachment of its lien. Commission for Polish Relief v. Banca Nationala a Rumaniei, 288 N. Y. 332, 338, 43 N. E. 2d 345, 347 (1942).
Although the provisional remedy of attachment, as used in this case, has served to provide the basis of jurisdiction and has created a lien to secure satisfaction of the judgment, it is clear that it has neither attempted nor accomplished any transfer of possession, for these attachments have been maintained for over nine years, and the accounts are still where they were before the attachments were levied. That there has been no transfer of title to the funds by the proceedings to date also is clear. If the judgment debtors chose to satisfy the judgments by other means, or to substitute an undertaking for the property attached, they could do so, and the accounts would be freed of the lien.
Under state law, the position of these judgment creditors is that they have judgments, secured by attachments on balances owned by German aliens, good as against the debtors, but subject to federal licensing before they can be satisfied by transfer of title or possession. The Custodian claims, in a collateral attack, that federal courts should pronounce them wholly void and of no effect.
II. Effect of Federal Foreign Funds Control on Attachment.
The Government, in the present action, relies heavily on General Ruling No. 12 under Executive Order No. 8389, issued April 21, 1942, some three to five months after these attachments were levied, and almost two years after issuance of the Executive Order which it purports to interpret. Then, for the first time, an attachment levy was specifically designated as a prohibited “transfer.” The Government asks that it be construed to prohibit such attachments as here made and be applied retroactively to these attachments made before its promulgation. Whether an administrative agency could thus lump all attachments as prohibited “transfers,” without reference to the nature of the rights acquired or steps taken under the various state laws providing for attachments, presents a question which we need not decide here. Some attachments may well be transfers, and thus prohibited. We deal here only with an attachment under New York law relating specifically to bank accounts.
This General Ruling, as thus interpreted to forbid these attachments, would be not only retroactive but inconsistent and irreconcilable with the contentions made one day after its issuance by both the Treasury and the Department of Justice to the New York Court of Appeals. These Departments filed a brief amicus curiae, dated April 22, 1942, in the New York Court of Appeals in Commission for Polish Relief v. Banca Nationala a Rumaniei, supra. The case involved an attachment, identical in state law character with those here, of bank balances in New York of the National Bank of Rumania, which had been frozen by Executive Order prior to levy. The Government’s brief was subscribed by the General Counsel of the Treasury and an Assistant Attorney General, both members of the New York bar, presumably familiar with the peculiarities of the New York law of attachment of bank accounts. It specifically called attention to General Ruling No. 12, and, referring to the claim of incompatibility between the attachment and the federal freezing program, it declared: “This is the first occasion in which a court of last resort in this country has been called upon to meet this issue....” It went on to advise the Court of Appeals definitely and comprehensively as to the rights of New York courts to proceed on the basis of the attachment there involved. In view of the Custodian’s present contentions, it merits extensive consideration.
The New York courts were advised of five purposes of the Federal Government’s program: “1. Protecting property of persons in occupied countries”; “2. Preventing the Axis, now our enemy, from acquiring any benefit from these blocked assets”; “3. Facilitating the use of blocked assets in the United Nations war effort and protecting American banks and business institutions”; “4. Protecting American creditors”; “5. Foreign relations, including post-war negotiations and settlements.”
To accomplish these purposes in relation to over seven billion dollars of blocked foreign assets, it was said that “... the Treasury has had to deal with the problem of litigation, particularly attachment actions, as affecting blocked assets,” and the position of the Treasury was represented as follows:
“... the Treasury did not want to interfere with the orderly consideration of cases by the courts, including attachment actions, and at the same time it was essential to the Government’s program that the results of court proceedings be subject to the same policy considerations from the point of view of freezing control as those arising or recognized through voluntary action of the parties.
“Indeed the Treasury regards the courts as the appropriate place to decide disputed claims and suggested to parties that they adjudicate such claims before applying for a license to permit the transfer of funds. The judgment was then regarded by the Treasury as the equivalent of a voluntary payment order without the creation or transfer of any vested interest, and a license was issued or denied on the same principles of policy as those governing voluntary transfers of blocked assets.
“The Treasury Department did not feel that it could finally pass on an application for a license to transfer blocked assets where the facts were disputed or liability denied. The Treasury felt that it was not practical to pass on the freezing control questions involved in such applications until there was at least a determination of the facts by a court of law....”
Notwithstanding this assertion of complete discretion to grant or withhold approval of ultimate transfers, the Government advised the Court of Appeals that, “So far as foreign funds control is concerned there can be an attachable interest under New York law with respect to the blocked assets....” In language applicable to the case before us now, it said:
“The National Bank of Rumania has property within the jurisdiction. It has not been divested of all its property rights. In fact, its interests today in the blocked assets are perhaps by far the most valuable of all the interests in such assets. This property has not been confiscated by the Government. The National Bank of Rumania is prohibited from exercising powers and privileges which prior to the Executive Order it could exercise.... [T]he right of the owner of a blocked account to apply for a license to make payment out of such an account is a most substantial one, and that lawful payment can be made if a license is granted.”
And the Government continued:
“An attachment action against a national’s blocked account is an attempt to obtain an unlicensed assignment of the national’s interest in the blocked account — nothing more and nothing less.
“In this sense, the attachment action might be regarded as a levy upon the nationals contingent power (i. e. contingent upon Treasury authorization) to transfer all his interest in the blocked account to A; any judgment in the attachment action resulting in giving A a contingent interest in the account equivalent to what he would have obtained by voluntary assignment.
“The value of such an interest is of course problematical. Whether it is worthless or worth full value will depend upon whether the transfer sought is in accordance with the Government’s policies in administering freezing control.
“Under this analysis of what the nature of any attachment action against a blocked account must be, in the light of the purposes of freezing control, it is suggested that an attachment action of this nature might well be allowed in the New York courts.
“The Federal Government is anxious to keep to a minimum interference with the normal rights of litigants and the jurisdiction of courts to hear and determine cases, consistent with the most effective prosecution by the Government of total war. Applied to the instant case, this means that the Federal Government must have its hands unfettered in using freezing control, recognizing that it is desirable that private litigants be able to attach some interest with respect to blocked assets in order to clarify their rights and liabilities.
“This has been suggested in this Brief. The Government believes that the interests of private litigants in state courts can be served without interference with the freezing control program. However, the interest of the Government is paramount to the rights of private litigants in this field and should this Court be of the view that under the New York law there cannot be a valid attachment of the limited interests herein suggested, then the Government must reluctantly take the position that in the absence of further authorization under the freezing control, there can be no attachable interest under New York law with respect to blocked assets.”
As the Government pointed out in the Polish Relief case, the Custodian is charged, among other things, with preserving and distributing blocked assets for the benefit of American creditors. New claims are not subject to some question, and the Treasury does not pay questionable claims. For those claims to be settled so that they can properly be paid out of blocked assets they must be adjudicated valid by some court of law. Because the debtor rarely is amenable to personal service, any action must be in the nature of a quasi-in-rem action preceded by an attachment of property belonging to the debtor within the jurisdiction of the court. If, as the Custodian now contends, the freezing program puts all assets of an alien debtor beyond the reach of an attachment, it is not difficult to see that there can be no adjudications of the validity of American claims and consequently the claims, not being settled, would not be satisfied by the Treasury. The logical end of that course would be complete frustration of a large part of the freezing program. We cannot believe that the President intended the program to reach such a self-generated stalemate.
The New York Court of Appeals took the position urged by the Federal Government. It held that the interest of the debtor, although subject to the licensing contingency, was sufficient as matter of state law to render the levy valid and sufficient as a basis of jurisdiction to decide any issues between the attaching creditor and the foreign debtor. At the same time, it acknowledged that any transfer of the attached funds to satisfy the judgment could only be had if and when the proper license had been secured. Commission for Polish Relief v. Banca Nationala a Rumaniei, supra.
What the New York courts have done here is not distinguishable from what the Government urged in the Polish Relief case. Indeed, in that case, the Secretary of the Treasury had expressly denied the application of the petitioner for a license for his attachment. In spite of that, however, the Government urged that the attachment was authorized by settled administrative practice:
“From the very inception of freezing control, litigants, prior to commencing attachment actions against funds belonging to blocked nationals, have requested the Secretary of the Treasury to license a transfer to the sheriff by attachment. In all those cases, running into the hundreds, the Treasury Department has taken a consistent position. The Treasury Department has authorized the bringing of an attachment action. However, the Treasury Department has not licensed a transfer of the blocked funds to the sheriff prior to judgment.”
The foregoing is confirmed in this case by a stipulation that consistent administrative practice treated attachments such as we have here as permissible and valid at the time they were levied.
The Custodian now asks the federal courts to declare the state court attachments nullities. His request here is not merely that he is entitled to take and administer the fund, but that the attachments are not effective as against the right, title, and interest of the German banks. His request is irreconcilable with the admitted administrative practice and the position urged upon the New York courts in the Polish Relief case. He predicates that reversal of position, and so far has been sustained in it, upon the decision of this Court in Propper v. Clark, supra, to which we accordingly turn.
III.
The essence of the Custodian’s argument that Propper v. Clark requires invalidation of these attachments, as stated in his brief, is that:
“... [I] t is little short of absurd to suggest that, while creditors of an enemy national are precluded from reaching his blocked property in the absence of a license where they proceed by the provisional remedy of receivership, the opposite result will be permitted where they follow the provisional remedy of attachment.”
The answer to this suggested absurdity is that a distinction in New York law, all important here, has eluded the Custodian. The receiver in Propper was not a receiver appointed as a provisional remedy but was a special statutory receiver which state law purported to vest with both title and right to possession, which, in case of blocked assets of a foreign corporate debtor, would obviously defeat the scheme of federal controls. As our opinion notes, 337 U. S. at p. 475, Propper’s claim, adverse to that of the Custodian, was initiated by a temporary receiver, later made permanent, appointed by a New York state court pursuant to § 977-b of the New York Civil Practice Act, which is entitled, “Receivers to liquidate local assets of foreign corporations.” That is a special proceeding added to New York practice by the 1936 Legislature, and provides for appointment of a liquidating receiver of assets within the State owned by a foreign corporation which has been dissolved, liquidated, or nationalized, or which, voluntarily or otherwise, has ceased to do business. Upon application by a creditor of such a corporation, the court appoints a temporary receiver. Title to all such assets vests in him upon appointment, and the statute requires and empowers him to “reduce to his possession any and all assets, credits, choses in action and property” found in the State. If it is established on trial that the corporation has been dissolved or nationalized or that its charter has been annulled or that it has ceased, for any reason, to do business, the receivership is made permanent and notice is given to all creditors to prove their claims. Those allowed, the receiver pays in accordance with statutory priorities. Any surplus is paid to stockholders of the corporation or, in the discretion of the court, to a receiver or liquidator, if any, appointed in the domicile of the corporation or elsewhere.
This special proceeding, which has nothing but name in common with the traditional provisional remedy of receivership, was introduced to protect resident creditors and shareholders against confiscatory decrees by foreign nations. As one court has said:
“This section became effective on the 8th day of June, 1936, and marks a distinct change in the policy of this State with respect to the disposition of property situated here but which belongs to a foreign corporation that has ceased to do business for any reason, or has been dissolved, liquidated, or nationalized.
“The purpose of this statute, clearly, is to administer the distribution of such assets in this State, irrespective of the scheme of distribution promulgated in any other State inclusive of the domicile of the foreign corporation....” Oliner v. American-Oriental Banking Corp., 252 App. Div. 212, 297 N. Y. Supp. 432 (1937) aff’d 277 N. Y. 588, 13 N. E. 2d 783 (1938). See also Moscow Fire Ins. Co. v. Bank of New York & Trust Co., 161 Misc. 903, 924, 294 N. Y. Supp. 648, 676 (1937).
Such was the position of the receiver whose claims we rejected in Propper v. Clark. The courts of New York had themselves recognized that the Propper receivership conflicted in principle with federal funds control and had pointed out that in practice it might well defeat the federal policy. It was said, “The principle is well settled that war suspends the right of non-resident alien enemies to prosecute actions in our courts... and it cannot be denied that the plaintiff here [Propper], although himself neither an enemy nor an alien nor a non-resident, is seeking to enforce a cause of action which, at least until his appointment, existed, if at all, in favor of a non-resident alien which is also an enemy as the term ‘enemy’ is defined in the Trading with the Enemy Act.... His right to recover must rest upon the rights of such non-resident alien enemy, and while section 977-b of the Civil Practice Act purports to vest a receiver appointed thereunder with title to claims existing in favor of the foreign corporation it also is possible that under that section some proceeds of a recovery herein ultimately may benefit non-resident alien enemies....” Propper v. Buck, 178 Misc. 76, 78, 33 N. Y. S. 2d 11, 13 (1942).
But, as the Government before that decision so unequivocally urged upon the New York Court of Appeals, attachment proceedings as pursued in these cases have no such consequences. Nothing in these state court proceedings have purported to frustrate the purposes of the federal freezing program. On the contrary, the effect of the State’s action, like that of the federal, was to freeze these funds, to prevent their withdrawal or transfer to use of the German nationals. There is no suggestion that these attachment proceedings could in any manner benefit the enemy. The sole beneficiaries are American citizens whose liens are not derived from the enemy but are adverse to any enemy interests. And, if no federal freeze orders were in existence, these state proceedings would tie up enemy property and reduce the amounts available for enemy disposition. We agree with the Government’s assurance to the Court of Appeals in the Polish Relief case that these proceedings, in view of the fact that they do not purport to control the Custodian in the exercise of the federal licensing power, or in the power to vest the res if he sees fit to do so for administration, are not inconsistent with the freezing program and we think they were not invalidated or considered in Propper v. Clark, supra. The latter decision is not authority for the judgment asked and obtained by the Custodian here.
IV. The Vesting Order.
The Custodian in this case has only sought to vest in himself the “right, title, and interest” of the German banks. As we understand it, he acknowledges that if the interests acquired by the attachments are valid as against the German banks he is not, under the Vesting Orders involved, as he has chosen to phrase them, entitled to the attached funds, but he takes the position that no valid rights against the German debtors were acquired by the attachments because prohibited by the freezing program. He has, in short, put himself in the shoes of the German banks. As against the German debtors, the attachments and the judgments they secure are valid under New York law, and cannot be cancelled or annulled under a Vesting Order by which the Custodian takes over only the right, title, and interest of those debtors in the accounts. But, of course, as against the Custodian, exercising the paramount power of the United States, they do not control or limit the federal policy of dealing with alien property and do not prevent a res vesting, as sustained in the companion cases, if the Custodian sees fit to take over the entire fund for administration under the Act. In such case, all federal questions as to recognition by the Custodian of the state law lien, or priority of payment, are reserved for decision if and when presented in accordance with the Act.
This result, as we have indicated, in no way impairs federal control over alien property, since the petitioners admit that they cannot secure payment from the attached frozen funds without a license from the Custodian. The case is, therefore, more nearly like Lyon v. Singer, 339 U. S. 841, 842, where this Court said: “We accept the New York court’s determination that under New York law these claims arose from transactions in New York and were entitled to a preference. Since the New York court conditioned enforcement of the claims upon licensing by the Alien Property Custodian, federal control over alien property remains undiminished.”
The decision of the court below is
Reversed.
Mr. Justice Clark took no part in the consideration or decision of these cases.
As provided for in N. Y. Civ. Prac. Act § 922.
3 CFR, 1943 Cum. Supp., 948, 6 Fed. Reg. 2897.
3 CFR, 1943 Cum. Supp., 645, 5 Fed. Reg. 1400.
40 Stat. 411, 415, as amended by Joint Resolution of May 7, 1940, 54 Stat. 179, and First War Powers Act of 1941, § 301, 55 Stat. 839.
Executive Order No. 8389, as amended, provides:
“Section 1. All of the following transactions are prohibited, except as specifically authorized by the Secretary of the Treasury by means of regulations, rulings, instructions, licenses, or otherwise, if... such transactions involve property in which any foreign country designated in this Order, or any national thereof, has at any time on or since the effective date of this Order had any interest of any nature whatsoever, direct or indirect:
“A. All transfers of credit between any banking institutions within the United States... ;
“B. All payments by or to any banking institution within the United States;
“E. All transfers, withdrawals or exportations of, or dealings in, any evidences of indebtedness or evidences of ownership of property by any person within the United States; and
“F. Any transaction for the purpose or which has the effect of evading or avoiding the foregoing prohibitions.”
The Attorney General has since succeeded to the functions and powers of the Alien Property Custodian, but, for convenience, the respondent interest will be referred to throughout as the Custodian.
82 F. Supp. 740.
182 F. 2d 349.
340 U. S. 882.
N. Y. Civ. Prac. Act §§ 974-977.
Id. §§902-973.
Id. § 917 (2).
Id. § 918.
Id. §917 (2).
/A §922 (1).
Id.% 520.
Id. §§ 952, 953.
General Ruling No. 12 under Executive Order No. 8389, 31 CFR, 1943 Cum. Supp., 8849, April 21, 1942, defined a prohibited “transfer” as “... any actual or purported act or transaction... the purpose, intent, or effect of which is to create, surrender, release, transfer, or alter, directly or indirectly, any right, remedy, power, privilege, or interest with respect to any property and without limitation upon the foregoing shall include... the creation or transfer of any lien; the issuance, docketing, filing, or the levy of or under any judgment, decree, attachment, execution, or other judicial or administrative process or order, or the service of any garnishment...”
Brief of the United States as amicus curiae, p. 2, Commission for Polish Relief v. Banca Nationala a Rumaniei, 288 N. Y. 332, 43 N. E. 2d 345 (1942).
Id. at pp. 5, 7, 9, 11, 13.
Id. at p. 14.
Id. at pp. 14-15.
Id. at p. 42.
Id. at p. 50.
Id. at p. 52.
Id. at p. 53.
Id. at p. 39.
The stipulation of facts states:
“5. From the inception of 'freezing' controls, all litigants who, prior to commencing attachment actions against funds belonging to blocked nationals, had requested the Secretary of the Treasury to license an attachment, or levy, received from the Treasury Department a response of the following nature:
“Under Executive Order No. 8389, as amended, and the Regulations issued thereunder, no attempt is made to limit the bringing of suits in the courts of the United States or of any of the States. However, should you secure a judgment against one of the parties referred to in your letter, which is a country covered by the Order, or a national thereof, a license would have to be secured before payment could be made from accounts in banking institutions within the United States in the name of such country or national.
“6. From the inception of 'freezing’ controls, the Secretary of the Treasury in administering the ‘freezing’ control program adopted the position, in response to numerous requests made of him, that the bringing of an action, the issuance of a warrant of attachment therein, and the levy thereunder upon blocked property found within the jurisdiction of the court which issued the warrant were not forbidden but that a license was required to be secured before payment could be made from the blocked account to satisfy any judgment recovered in such action.
“7....A license to institute the action and levy the attachment was in fact not required by the Treasury Department.”
Brief for Respondent, pp. 16-17.
L. 1936, c. 917.
N. Y. Civ. Prac. Act § 977-b (1).
Id. § 977-b (4).
Id. § 977-b (19).
Id. § 977-b (4).
Id. § 977-b (10).
M§ 977-b (11).
Id. § 977-b (16).
Ibid.
Id. §§ 974-977. A receiver appointed as a provisional remedy is not an agent or representative of either party, but holds the property during the litigation pending final judgment. Weeks v. Weeks, 106 N. Y. 626, 631, 13 N. E. 96, 98 (1887); People ex rel. Attorney General v. Security Life Ins. Co., 79 N. Y. 267, 270 (1879). “The receiver acquires no title, but only the right of possession as the officer of the court. The title remains in those in whom it was vested when the appointment was made.” Stokes v. Hoffman House, 167 N. Y. 554, 559-560, 60 N. E. 667, | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
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"Federal Reserve System",
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"Comptroller General",
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"Department or Secretary of Health and Human Services",
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"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
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"Provider Reimbursement Review Board",
"Renegotiation Board",
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"Railroad Retirement Board",
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"Small Business Administration",
"Securities and Exchange Commission",
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] | [
4
] | sc_adminaction |
SWIFT & CO., INC., et al. v. WICKHAM, COMMISSIONER OF AGRICULTURE & MARKETS OF NEW YORK.
No. 9.
Argued October 13, 1965.
Decided November 22, 1965.
William J. Condon argued the cause for appellants. With him on the brief were William J. Colavito, William P. Woods, Arthur C. O’Meara, Earl G. Spiker and Edmund L. Jones.
S'amuel A. Hirshowitz, First Assistant Attorney General of New York, argued the cause for appellee. With him on the brief were Louis J. Lefkowitz, Attorney General, and Philip Kahaner, Lester Esterman and Joel Lewittes, Assistant Attorneys General.
Joseph 0. Parker and L. Alton Denslow filed a brief for the Institute of American Poultry Industries, as amicus curiae, urging reversal.
Solicitor General Marshall, Assistant Attorney General Douglas, Jack S. Levin, Sherman L. Cohn and Richard S. Salzman filed a brief for the United States, as amicus curiae, urging affirmance.
Mb. Justice- Harlan
delivered the opinion of the Court.
Appellants, the Swift and Armour Companies, stuff, freeze, and package turkeys which they ship to retailers throughout the country for ultimate sale to consumers. Each package is labeled with the net weight of the particular bird (including stuffing) in conformity with a governing federal statute, the Poultry Products Inspection Act of 1957, 71 Stat. 441, 21 U. S. C. §§ 451-469 (1964 ed.), and the regulations issued under its authority by the Secretary of Agriculture. Many of these turkeys are sold in New York. Section 193 of New York’s Agriculture and Markets Law has been interpreted through regulations and rulings to require that these packaged turkeys be sold with labels informing the public of the weight of the unstuffed bird as well as of the entire package. Because the amount of stuffing varies with each bird, the State thus seeks to help purchasers ascertain just how much fowl is included in each ready-for-the-oven turkey.
Swift and Armour requested permission of the Poultry Products Section of the Department of Agriculture to change their labels in order to conform with New York’s requirements, but such permission was refused at the initial administrative level and no administrative review of that refusal was sought. Swift and Armour then brought this federal action to enjoin the Commissioner of Agriculture and Markets of New York from enforcing the State’s labeling provisions, asserting that enforcement would violate the Commerce Clause and the Fourteenth Amendment of the Federal Constitution and overriding requirements of the federal poultry enactment.
Pursuant to appellants’ request, a three-judge district court was constituted under 28 U. S. C. § 2281 (1958 ed.), which provides for such a tribunal whenever the enforcement of a state statute is sought to be enjoined “upon the ground of the unconstitutionality of such statute.” The District Court, unsure of its jurisdiction for reasons appearing below, dismissed the suit on the merits acting both in a three-judge and single-judge capacity. Appeals were lodged in the Court of Appeals for the Second Circuit from the single-judge determination, and in this Court from the three-judge decision in accordance with the direct appeal statute, 28 U. S. C. § 1253 (1964 ed.). The threshold question before us, the consideration of which we postponed to the merits (379 U. S. 997), is whether this Court, rather than the Court of Appeals, has jurisdiction to review the District Court determination, and this in turn depends on whether a three-judge court was required. We hold that it was not.
At the outset, we agree with the District Court that the Commerce Clause and Fourteenth Amendment claims alleged in the complaint are too insubstantial to support the jurisdiction of a three-judge court. It has long been held that no such court is called for when the alleged constitutional claim is insubstantial, Ex parte Poresky, 290 U. S. 30; California Water Service Co. v. City of Redding, 304 U. S. 252. Since the only remaining basis put forth for enjoining enforcement of the state enactment was its asserted repugnancy to the federal statute, the District Court was quite right in concluding that the question of a three-judge court turned on the proper application of our 1962 decision in Kesler v. Department of Public Safety, 369 U. S. 153. There we decided that in suits to restrain the enforcement of a state statute allegedly in conflict with or in a field pre-empted by a federal statute, § 2281 comes into play only when the Supremacy Clause of the Federal Constitution is immediately drawn in question, but not when issues of federal or state statutory construction must first be decided even though the Supremacy Clause may ultimately be implicated. Finding itself unable to say with assurance whether its resolution of the merits of this case involved less statutory construction than had taken place in Kesler, the District Court was left with the puzzling question how much more statutory construction than occurred in Kesler is necessary to deprive three judges of their jurisdiction.
It might suffice to dispose of the three-judge court issue for us to hold, in agreement with what the District Court indicated, 230 F. Supp., at 410, that this case involves so much more statutory construction than did Kesler that a three-judge court was inappropriate. (We would indeed find it difficult to say that less or no more statutory construction was involved here than in Kesler and that therefore under that decision a three-judge court was necessary.) We think, however, that such a disposition of this important jurisdictional question would be less than satisfactory, that candor compels us to say that we find the application of the Kesler rule as elusive as did the District Court, and that we would fall short in our responsibilities if we did not accept this opportunity to take a fresh look at the problem. We believe that considerations of stare decisis should not deter us from this course. Unless inexorably commanded by statute, a pro.-cedural principle of this importance should not be kept on the books in the name of stare decisis once it is proved to be unworkable in practice; the mischievous consequences to litigants and courts alike from the perpetuation of an unworkable rule are too great. For reasons given in this opinion, we have concluded that the Kesler doctrine in this area of § 2281 is unsatisfactory, and that Kesler should be pro tanto overruled. The overruling of a six-to-two decision of such recent vintage, which was concurred in by two members of the majority in the present case, and the opinion in support of which was written by an acknowledged expert in the field of federal jurisdiction, demands full explication of our reasons.
I.
The three-judge district court is a unique feature of our jurisprudence, created to alleviate a specific discontent within the federal system. The antecedent of § 2281 was a 1910 Act passed to assuage growing popular displeasure with the frequent grants of injunctions by federal courts against the operation of state legislation regulating railroads and utilities in particular. The federal courts of the early nineteenth century had occasionally issued injunctions at the behest of private litigants against state officials to prevent the enforcement of state statutes, but such cases were rare and generally of a character that did not offend important state policies. The advent of the Granger and labor movements in the late nineteenth century, and the acceleration of state social legislation especially through the creation of regulatory bodies met with opposition in the federal judiciary. In Chicago, M. & St. P. R. Co. v. Minnesota, 134 U. S. 418, this Court held that the setting of rates not permitting a fair return violated the Due Process Clause of the Fourteenth Amendment. Ex parte Young, 209 U. S. 123, established firmly the corollary that inferior federal courts could enjoin state officials from enforcing such unconstitutional state laws.
This confrontation between the uncertain contours of the Due Process Clause and developing state regulatory legislation, arising in district courts that were generally considered unsympathetic to the policies of the States, had severe repercussions. Efforts were made in Congress to limit in various ways the jurisdiction of federal courts in these sensitive areas. State officials spoke out against the obstruction and delay occasioned by these federal injunction suits. The sponsor of the bill establishing the three-judge procedure for these cases, Senator Overman of North Carolina, noted:
“[TJhere are 150 cases of this kind now where one federal judge has tied the hands of the state officers, the governor, and the attorney-general....
Whenever one judge stands up in a State and enjoins the governor and the attorney-general, the people resent it, and public sentiment is stirred, as it was in my State, when there was almost a rebellion, whereas if three judges declare that a state statute is unconstitutional the people would rest easy under it.” 45 Cong. Rec. 7256.
In such an atmosphere was this three-judge court procedure put on the statute books, and although subsequent Congresses have amended the statute its basic structure remains intact.
II.
Section 2281 was designed to provide a more responsible forum for the litigation of suits which, if successful, would render void state statutes embodying important state policies. The statute provides for notification to the State of a pending suit, 28 U. S. C. § 2284 (2) (1964 ed.), thus preventing ex parte injunctions common previously. It provides for three judges, one of whom must be a circuit judge, 28 U. S. C. §2284 (1) (1964 ed.), to allow a more authoritative determination and less opportunity for individual predilection in sensitive and politically emotional areas. It authorizes direct review by this Court, 28 U. S. C. § 1253, as a means of accelerating a final determination on the merits; an important criticism of the pre-1910 procedure was directed at the length of time required to appeal through the circuit courts to the Supreme Court, and the consequent disruption of state tax and regulatory programs caused by the outstanding injunction.
That this procedure must be used in any suit for an injunction against state officials on the ground that a state enactment is unconstitutional has been clear from the start. What yet remains unclear, in spite of decisions by this and other courts, is the scope of the phrase “upon the ground of the unconstitutionality of such statute” when the complaint alleges not the traditional Due Process Clause, Equal Protection Clause, Commerce Clause, or Contract Clause arguments, but rather that the state statute or regulation in question is pre-empted by or in conflict with.some federal statute or regulation thereunder. Any such pre-emption or conflict claim is of course grounded in the Supremacy Clause of the Constitution: if a state measure conflicts with a federal requirement, the state provision must give way. Gibbons v. Ogden, 9 Wheat. 1. The basic question involved in these cases, however, is never one of interpretation of the Federal Constitution but inevitably one of comparing two statutes. Whether one district judge or three must carry out this function is the question at hand.
The first decision of this Court casting light on the problem was Ex parte Buder, 271 U. S. 461, in which the question presented was, as here, whether an appeal was properly taken directly from the District Court to the Supreme Court. At issue was whether a Missouri statute authorizing taxation of bank shares remained valid after the enactment of a federal statute which enlarged the scope of the States’ power to tax national banks by permitting taxation of shares, or dividends, or income. Under the federal scheme, States were apparently expected to choose one of the three methods. Although the Missouri law applied the first basis of assessment, the District Court held that because the State did not explicitly choose among the three types of taxation, but instead relied on a prior statute, the assessment was void. Mr. Justice Brandéis, writing for a unanimous Court, held that this was not properly a three-judge court case.. because no state statute was assailed as being repugnant to the Federal Constitution.” 271 U. S., at 465. Although the complaint in Buder did not explicitly invoke the Supremacy Clause, it should be noted that the defendants’ answer asserted that if the federal statute was constitutional under the Tenth Amendment, then it would indeed be the “'supreme law of the land’ within the meaning and provisions of Article VI of the Constitution of the United States,” and thus controlling over the particular state statute unless that statute could be construed as consistent with the federal law. The District Court in Buder was thus clearly presented with the Supremacy Clause basis of the statutory conflict.
Ex parte Bransford, 310 U. S. 354, raised a similar problem, also in the context of the validity of a state tax. The Court again held this type of federal-state confrontation outside the purview of the predecessor of § 2281:
“If such assessments are invalid, it is because they levy taxes upon property withdrawn from taxation by federal law or in a manner forbidden by the National Banking Act. The declaration of the supremacy clause gives superiority to valid federal acts over conflicting state statutes but this superiority for present purposes involves merely the construction of an act of Congress, not the constitutionality of the state enactment.” 310 U. S., at 358-359.
In a third case, Case v. Bowles, 327 U. S. 92, the question involved the proposed sale by the State of Washington of timber on state-owned land at a price violating the Federal Emergency Price Control Act of 1942. A federal district court enjoined the sale, and on appeal the State argued that the single judge lacked jurisdiction. This Court held otherwise: “the complaint did not challenge the constitutionality of the state statute but alleged merely that its enforcement would violate the Emergency Price Control Act. Consequently a three-judge court is not required.” 327 U. S., at 97.
The upshot of these decisions seems abundantly clear: Supremacy Clause cases are not within the purview of § 2281. This distinction between cases involving claims that state statutes are unconstitutional within the scope of § 2281 and cases involving statutory pre-emption or conflict remained firm until Kesler v. Department of Public Safety, 369 U. S. 153, in which the plaintiff alleged a conflict between the federal bankruptcy laws and a state statute suspending the driving licenses of persons who are judgment debtors as a result of an adverse decision in an action involving the negligent operation of an automobile. It was argued that federal policy underlying the bankruptcy law overrode the State’s otherwise legitimate exercise of its police power. Mr. Justice Frankfurter, for a majority, declared first that § 2281 made no distinction between the Supremacy Clause and other provisions of the Constitution as a ground for denying enforcement of a state statute, and second that Buder, Bransford, and Case could be distinguished on the ground that they presented no claims of unconstitutionality as such: “If in immediate controversy is not the unconstitutionality of a state law but merely the construction of a state law or the federal law, the three-judge requirement does not become operative.” 369 U. S., at 157. In the Kesler case itself, Mr. Justice Frankfurter said, there was no problem of statutory construction but only a “constitutional question” whether the state enactment was pre-empted. After what can only be characterized as extensive statutory analysis (369 U. S., at 158-174) the majority concluded that there had in fact been no pre-emption.
III.
In re-examining the Kesler rule the admonition that § 2281 is to be viewed “not as a measure of broad social policy to be construed with great liberality, but as an enactment technical in the strict sense of the term and to be applied as such,” Phillips v. United States, 312 U. S. 246, 251, should be kept in mind. The Kesler opinion itself reflects this admonition, for its rationalization of Buder, Bmnsford, and Case as being consistent with the view that Supremacy Clause cases are not excluded from “the comprehensive language of § 2281,” 369 U. S., at 156, is otherwise most difficult to explain.
As a procedural rule governing the distribution of judicial responsibility the test for applying § 2281 must be clearly formulated. The purpose of the three-judge scheme was in major part to expedite important litigation: it should not be interpreted in such a way that litigation, like the present one, is delayed while the proper composition of the tribunal is litigated. We are now convinced that the Kesler rule, distinguishing between cases in which substantial statutory construction is required and those in which the constitutional issue is “immediately” apparent, is in practice unworkable. Not only has it been uniformly criticized by commentators, but lower courts have quite evidently sought to avoid dealing with its application or have interpreted it with uncertainty. As Judge Friendly’s opinion for the court below demonstrates, in order to ascertain the correct forum, the merits must first be adjudicated in order to discover whether the court has “engaged in so much more construction than in Kesler as to make that ruling inapplicable.” 230 F. Supp., at 410. Such a formulation, whatever its abstract justification, cannot stand as an every-day test for allocating litigation between district courts of one and three judges.
Two possible interpretations of § 2281 would provide a more practicable rule for three-judge court jurisdiction. The first is that Kesler might be extended to hold, as some of its language might be thought to indicate, that all suits to enjoin the enforcement of a state statute, whatever the federal ground, must be channeled through three-judge courts. The second is that no such suits resting solely on “supremacy” grounds fall within the statute.
The first alternative holds some attraction. First, it is relatively straightforward: a court need not distinguish among different constitutional grounds for the requested injunction; it need look only at the relief sought. Moreover, in those cases, as in that before us, in which an injunction is sought on several grounds, the proper forum would not depend on whether certain alleged constitutional grounds turn out to be insubstantial. Second, § 2281 speaks of “unconstitutionality,” and, to be sure, any determination that a state statute is void for obstructing a federal statute does rest on the Supremacy Clause of the Federal Constitution. And, third, there is some policy justification for a wider rule. In a broad sense, what concerned the legislators who passed the progenitor of § 2281 was the voiding of state legislation by inferior federal courts. The sensibilities of the citizens, and perhaps more particularly of the state officials, were less likely to be offended, the Congress thought, by a judgment considered and handed down by three judges rather than by one judge. This rationale can be thought to be as applicable to a suit voiding state legislation on grounds of conflict with a federal statute as it is to an identical suit alleging a conflict with the Federal Constitution directly.
Persuasive as these considerations may be, we believe that the reasons supporting the second interpretation, that is, returning to the traditional Buder-Bransford-Case rule, should carry the day. This restrictive view of the application of § 2281 is more consistent with a discriminating reading of the statute itself than is the first and more embracing interpretation. The statute requires a three-judge court in order to restrain the enforcement of a state statute “upon the ground of the unconstitutionality of such statute.” Since all federal actions to enjoin a state enactment rest ultimately on the Supremacy Clause, the words “upon the ground of the unconstitutionality of such statute” would appear to be superfluous unless they are read to exclude some types of such injunc-tive suits. For a simple provision prohibiting the restraint of the enforcement of any state statute except by a three-judge court would manifestly have sufficed to embrace every such suit whatever its particular constitutional ground. It is thus quite permissible to read the phrase in question as one of limitation, signifying a congressional purpose to confine the three-judge court requirement to injunction suits depending directly upon a substantive provision of the Constitution, leaving cases of conflict with a federal statute (or treaty) to follow their normal course in a single-judge court. We do not suggest that this reading of § 2281 is compelled. We do say, however, that it is an entirely appropriate reading, and one that is supported by all the precedents in this Court until Kesler and by sound policy considerations.
An examination of the origins of the three-judge procedure does not suggest what the legislators would have thought about this particular problem, but it does show quite clearly what sort of cases were of concern to them. Their ire was aroused by the frequent grants of injunctions against the enforcement of progressive state regulatory legislation, usually on substantive due process grounds. (See pp. 116-119, supra.) Requiring the collective judgment of three judges and accelerating appeals to this Court were designed to safeguard important state interests. In contrast, a case involving an alleged incompatibility between state and federal statutes, such as the litigation before us, involves more confining legal analysis and can hardly be thought to raise the worrisome possibilities that economic or political predilections will find their way into a judgment. Moreover, those who enacted the three-judge court statute should not be deemed to have been insensitive to the circumstance that single-judge decisions in conflict and pre-emption cases were always subject to the corrective power of Congress, whereas a “constitutional” decision by such a judge would be beyond that ready means of correction and could be dealt with only by constitutional amendment. The purpose of § 2281 to provide greater restraint and dignity at the district court level cannot well be thought generally applicable to cases that involve conflicts between state and federal statutes, in this instance determining whether the Department of Agriculture’s regulations as applied to the labeling of total net weight on frozen stuffed turkeys necessarily renders invalid a New York statute requiring a supplemental net weight figure which excludes the stuffing.
Our decision that three-judge courts are not required in Supremacy Clause cases involving only federal-state statutory conflicts, in addition to being most consistent with the statute’s structure, with pre-Kesler precedent, and with the section’s historical purpose, is buttressed by important considerations of judicial administration. As Mr. Justice Frankfurter observed in Florida Lime & Avocado Growers, Inc. v. Jacobsen, 362 U. S. 73, 92-93 (dissenting opinion):
“[T]he convening of a three-judge trial court makes for dislocation of the normal structure and functioning of the lower federal courts, particularly in the vast non-metropolitan regions; and direct review of District Court judgments by this Court not only expands this Court’s obligatory jurisdiction but contradicts the dominant principle of having this Court review decisions only after they have gone through two judicial sieves....”
Although the number of three-judge determinations each year should not be exaggerated, this Court’s concern for efficient operation of the lower federal courts persuades us to return to the Buder-Bransford-Case rule, thereby conforming with the constrictive view of the three-judge jurisdiction which this Court has traditionally taken. Ex parte Collins, 277 U. S. 565; Oklahoma Gas & Elec. Co. v. Oklahoma Packing Co., 292 U. S. 386; Rorick v. Board of Commissioners, 307 U. S. 208; Phillips v. United States, 312 U. S. 246.
We hold therefore that this appeal is not properly before us under 28 U. S. C. § 1253 and that appellate review lies in the Court of Appeals, where appellants’ alternative appeal is now pending. The appeal is dismissed for lack of jurisdiction.
It is so ordered.
Mr. Justice Douglas, with whom Mr. Justice Black and Mr. Justice Clark concur, dissenting.
Less than four years ago, this Court decided that a three-judge district court was required in suits brought under 28 U. S. C. § 2281, even though the alleged “ground of the unconstitutionality” of the challenged statute was based upon a conflict between state and federal statutes. Kesler v. Department of Public Safety, 369 U. S. 153.
A state statute may violate the Equal Protection Clause of the Fourteenth Amendment or the Due Process Clause or some other express provision of the Constitution. If so a three-judge court is plainly required by 28 U. S. C. § 2281. But the issue of the “unconstitutionality” of a state statute can be raised as clearly by a conflict between it and an Act of Congress as by a conflict between it and a provision of the Constitution. The Supremacy Clause, contained in Art. VI, cl. 2, of the Constitution, states as much in clear language:
“This Constitution, and the Laws of the United States which shall be made in Pursuance thereof... shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.”
An issue of the “unconstitutionality” of a state statute is therefore presented whether the conflict is between a provision of the Constitution and a state enactment or between the latter and an Act of Congress. What Senator Overman, author of the three-judge provision, said of it in 1910 is as relevant to enjoining a state law on the ground of federal pre-emption as it is to enjoining it because it violates the Fourteenth Amendment:
“The point is, this amendment is for peace and good order in the State. Whenever one judge stands up in a State and enjoins the governor and the attorney-general, the people resent it, and public sentiment is stirred, as it was in my State, when there was almost a rebellion, whereas if three judges declare that a state statute is unconstitutional the people would rest easy under it. But let one little judge stand up against the whole State, and you find the people of the State rising up in rebellion. The whole purpose of the proposed statute is for peace and good order among the people of the States.” 45 Cong. Rec. 7256.
Some of the most heated controversies between State and Nation which this Court has supervised have involved questions whether there was a conflict between a state statute and a federal one or whether a federal Act was so inclusive as to pre-empt state action in the particular area. One of the earliest and most tumultuous was Cohens v. Virginia, 6 Wheat. 264, 440, where the alleged unconstitutionality of a Virginia law was based on the argument that an Act of Congress, authorizing a lottery in the District of Columbia, barred Virginia from making it a criminal offense to sell lottery tickets within that State. The protest from the States was vociferous even though the Court in the end construed the federal Act to keep it from operating in Virginia. Id., at 447. I therefore see no difference between a charge of “unconstitutionality” of a state statute whether the conflict be between it and the Constitution or between it and a federal law. Neither the language of the Supremacy Clause nor reason nor history makes any difference plain.
Pre-emption or conflict of a state law with a federal one is a recurring theme arising in various contexts. The storm against Cohens v. Virginia was a protest against this Court’s acting as referee in a federal-state contest involving pre-emption or a conflict between the laws of the two regimes. Congress has recently been concerned with the problem in another aspect of the matter, when efforts were made to curb the doctrine of preemption by establishing standards for an interpretation of an Act of Congress. The three-judge court is only another facet of the self-same problem.
The history of 28 U. S. C. § 2281, as related by the Court, speaks of the concern of Congress over the power of one judge to bring a halt to an entire state regulatory-scheme. That can — -and will hereafter — happen in all cases of pre-emption or conflict where the Supremacy Clause is thought to require state policy to give way. A fairly recent example is Cloverleaf Co. v. Patterson, 315 U. S. 148, where a federal court injunction in a preemption case suspended Alabama’s program for control of renovated butter — a demonstrably important health measure. The Court in Florida Lime Growers v. Jacobsen, 362 U. S. 73, where one of the issues was pre-emption or conflict between two statutory systems, emphasized that the interest of the States in being free from such injunctive interference at the instance of a single judge outweighed the additional burdens that such a rule imposed on the federal court system. On reflection I think that result better reflects congressional policy even though, as in Cohens v. Virginia, the end result is only a matter of statutory construction.
On the basis of virtually no experience in applying that interpretation of the statute, a majority has now decided that the rule of Kesler is “unworkable” and, therefore, that our previous interpretation of the statute must have been incorrect. I regret that I am unable to join in that decision. My objection is not that the Court has not given Kesler “a more respectful burial,” Gideon v. Wainwright, 372 U. S. 335, 349 (concurring opinion), but that the Court has engaged in unwarranted infanticide.
Stare decisis is no immutable principle. There are many occasions when this Court has overturned a prior decision, especially in matters involving an interpretation of the Constitution or where the problem of statutory construction had constitutional overtones.
An error in interpreting a federal statute may be easily remedied. If this Court has failed to perceive the intention of Congress, or has interpreted a statute in such a manner as to thwart the legislative purpose, Congress may change it. The lessons of experience are not learned by judges alone.
I am unable to find a justification for overturning a decision of this Court interpreting this Act of Congress, announced only on March 26, 1962.
If the Court were able to show that our decision in Kesler had thrown the lower courts into chaos, a fair case for its demise might be made out. The Court calls the rule “unworkable.” But it is not enough to attach that label. The Court broadly asserts that “lower courts have quite evidently sought to avoid dealing with its [Kesler’s] application or have interpreted it with uncertainty.” For this proposition, only three cases (in addition to the instant case) are cited. The Court's failure to provide more compelling documentation for its indictment of Kesler is not the result of less than meticulous scholarship, for so far as I have been able to discover, the truth of the matter is that there are no cases (not even the three cited) even remotely warranting the conclusion that Kesler is “unworkable.”
Kesler was an attempt to harmonize our earlier cases. If the Kesler test is “unworkable” as the Court asserts, we should nonetheless accept its basic premise:
“Neither the language of § 2281 nor the purpose which gave rise | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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YOUNGSTOWN SHEET & TUBE CO. v. BOWERS, TAX COMMISSIONER OF OHIO.
No. 9.
Argued November 12, 1958.
Decided February 24, 1959
Carlton S. Dargusch, Sr. argued the cause for appellant in No. 9. With him on the brief were Carlton S. Dar-gusch, Jr. and Jack H. Bertsch.
Roger C. Minahan argued the cause and filed a brief for petitioner in No. 44.
William Saxbe, Attorney General of Ohio, and John M. Tobin, Assistant Attorney General, argued the cause and filed a brief for appellee in No. 9.
Edwin Larkin argued the cause and filed a brief for respondent in No. 44.
Bruce Bromley and Roswell Magill filed a brief, as amici curiae, in Nos. 9 and 44.
Together with No. 44, United States Plywood Corp. v. City of Algoma, on certiorari to the Supreme Court of Wisconsin, argued November 12-13, 1958.
Mr. Justice Whittaker
delivered the opinion of the Court.
The principal question presented by these cases is whether appellant in No. 9, the Youngstown Sheet and Tube Company, and petitioner in No. 44, United States Plywood Corporation, have so acted upon the materials which they have imported for use in their manufacturing operations as to cause them to lose their distinctive character as “imports,” within the meaning of that term as used in the Import-Export Clause, Art. I, § 10, cl. 2, of the United States Constitution. The Supreme Courts of the States concerned have held that these manufacturers have done so. Our task is to decide whether, on the particular facts involved, those holdings violate the Import-Export Clause of the Constitution.
The facts in the Youngstown case are stipulated. In essence, they are that Youngstown, an Ohio corporation, operates an industrial plant in or near Youngstown, Ohio, where it manufactures iron and steel. In addition to the use of domestic ores, it imports iron ores from five countries “for ultimate use in [its] open hearth [and] blast furnaces” in its manufacturing processes. The imported ores arrive in shiploads “in bulk” either at an Atlantic or a Lake Erie port of entry where they are unloaded from the ship into railroad cars and are thereby transported to Youngstown’s plant in Ohio. The plant is enclosed by a wire fence. Within the enclosure and “adjacent to [the] manufacturing facilities” are several “ore yards” for the storage of supplies of ore. Each ore yard consists of “two parallel walls, on which there [is] a movable ore bridge.” When the imported ores arrive at this final destination, they are unloaded into one of the ore yards, but, because the ore from each country is different from the others and each is imported for a different use, the ores are kept segregated as to the country of origin by being “placed in a separate pile in a separate area of the ore yard.” The daily manufacturing needs for ore are taken from these piles. As needed, ores are conveyed from the particular pile or piles selected to “stock bins” or “stock houses,” holding one or two days’ supply and located in close proximity to the furnaces, from which the ores are fed into the furnaces. As ore from a particular “pile” in the ore yard is thus taken and consumed, other like ore is similarly imported from the same country and is brought to the plant and unloaded on top of the remainder of that particular pile. This course is continuously repeated. Youngstown endeavors to maintain “a supply of imported ores to meet its estimated requirements for a period of at least three months.” The ores are not imported “for resale,” but “for use in manufacturing [at the Ohio plant].”
Acting under Ohio statutes which provide, inter alia, that “All personal property located and used in business in this state [shall be] subject to taxation...” and that “Personal property is ‘used’ within the meaning of ‘used in business’... when stored or kept on hand as material, parts, products, or merchandise...,” the Tax Commissioner of Ohio proposed to assess an ad valorem tax against Youngstown based on the average value of the iron ores in its ore yards during the tax year ended January 1, 1954. Youngstown contested the proposed assessment. It contended, among other things, that the imported ores had not lost their character as imports and were therefore immune from state taxation under Art. I, § 10, cl. 2 of the United States Constitution.
After exhaustion of administrative proceedings, the case reached the Supreme Court of Ohio. It held that the “protection [of the Import-Export Clause cannot] extend to such iron ore (1) after it has been commingled with other iron ore imported at a different time, even though such other iron ore is of the same grade and was imported from the same place, and (2) after portions of such iron ore have been removed for use in manufacturing.” It then entered judgment sustaining the tax, 166 Ohio St. 122, 140 N. E. 2d 313, and we noted probable jurisdiction of Youngstown’s appeal. 355 U. S. 911.
The facts in the United States Plywood Corporation case were found in detail by the trial court and those findings are not challenged here. In essence, they are that United States Plywood Corporation (petitioner) operates an industrial plant in Algoma, Wisconsin, where it manufactures veneered wood products. It uses both domestic and imported lumber and veneers in its manufacturing processes. The imported lumber is shipped in railroad cars directly from Canada to petitioner’s plant. It is unfinished, and is received in bulk or as loose, individual pieces or boards. It is also “green” when received and therefore must be dried before it can be used by petitioner. Upon arrival at destination, it is unloaded and carted to petitioner’s storage yard, located “adjacent” to its plant, where it is stacked in the open in such a way as to allow the air freely to circulate through the stacks for the “dominant purpose” of air-drying it. This method does not so completely dry the lumber as to make kiln-drying unnecessary, but it does materially reduce the time and expense of that process. From time to time, so much of the lumber as is about to be put into veneered products is taken from the stacks and placed in a kiln where the drying is completed and the lumber readied for use. The veneers are imported from three countries. They are received in bundles and are kept in that form in piles, separated as to specie, in petitioner’s plant for use as needed in the day-to-day operations of the plant.
On the assessment date of May 1, 1955, the Assessor of the City of Algoma, acting under what is now Wis. Stat., 1957, § 70.01, assessed a tax against petitioner based upon the value of one-half of the imported lumber and veneers then on hand. Petitioner paid the tax and then sued in the state court for its recovery. The trial court also found that air-drying the lumber “was part of [petitioner’s] manufacturing practices,” and that, when stacked for air-drying, the lumber “entered the process of manufacture” and thus lost its character as an “import,” and therefore all of it might lawfully have been taxed by the city. The court further found that the lumber and veneers had been imported by petitioner “for use in manufacturing” at its Algoma plant, and that their importation journeys definitely had ended; that the lumber and veneers that were taxed (one-half of the amounts on hand) had been irrevocably committed to “use in manufacturing” at that plant, were “necessarily required to be kept on hand to meet [petitioner’s] current operational needs,” were being “used in manufacturing,” and had therefore lost their character as “imports” and were subject to local taxation. It then entered judgment for the city, sustaining the tax, and, on petitioner’s appeal, the Supreme Court of Wisconsin affirmed. 2 Wis. 2d 567, 87 N. W. 2d 481. Because of the importance of the constitutional question presented we granted certiorari. 356 U. S. 957.
The Constitution confers on Congress the power to lay and collect import duties, Art. I, § 8, and provides that “No State shall, without the Consent of the Congress, lay any Impost or Duties on Imports or Exports, except what may be absolutely necessary for executing it’s inspection Laws... Art. I, § 10, cl. 2. That these provisions were intended to confer on the National Government the exclusive power to tax the act of importation is plain from their terms. And early in our national history Chief Justice Marshall held, in the landmark case of Brown v. Maryland, 12 Wheat. 419, that one who had imported goods for the purpose of selling them had, “by payment of the duty to the United States, [acquired the] right to dispose of his merchandise, as well as to bring it into the country” (id., at 442), and that the State could not tax it “while remaining the property of the importer, in his warehouse, in the original form or package in which it was imported.” Id., at 442. But he made very clear that “... there must be a point of time when the prohibition ceases, and the power of the State to tax commences.” Id., at 441. Elaborating this concept, he said:
“The constitutional prohibition on the States to lay a duty on imports... may certainly come in conflict with their acknowledged power to tax persons and property within their territory. The power, and the restriction on it, though quite distinguishable when they do not approach each other, may yet... approach so nearly as to perplex the understanding.... Yet the distinction exists, and must be marked as the cases arise. Till they do arise, it might be premature to state any rule as being universal in its application. It is sufficient for the present to say, generally, that when the importer has so acted upon the thing imported, that it has become incorporated and mixed up with the mass of property in the country, it has, perhaps, lost its distinctive character as an import, and has become subject to the taxing power of the State... Id., at 441-442. (Emphasis added.)
While Chief Justice Marshall did not undertake definitively to state just what acts or conduct of the importer would be deemed to have “so acted upon the thing imported” as to cause it to be “mixed up with the mass of property in the country [and to losé] its distinctive character as an import,” he did specify some of the acts that would so result. He held that the goods lose their character as imports when the importer (1) “sells them,” or (2) “[breaks] up his packages, and [travels] with them as an itinerant pedlar.” Id., at 443. More important to the question confronting us, he also held (3) that goods brought into this country by an importer “for his own use” and here “used” by him are to be regarded as a part of “the common mass” of property and are not immune from state taxation.
In Hooven & Allison Co. v. Evatt, 324 U. S. 652, it was held that goods imported for “use” share the same immunity as goods imported for “sale,” and that goods imported “for manufacture [do not] lose their character as imports any sooner or more readily than imports for sale” (id., at 667); but “when [the imported goods are] used for the purpose for which they are imported, they cease to be imports and their tax exemption is at an end.” Id., at 665.
Thus, though Brown v. Maryland, supra, holds that goods brought into the country by an importer “for his own use” are not exempted from state taxation by the Import-Export Clause, and Hooven & Allison Co. v. Evatt, supra, holds that they are, both agree that when the imported goods are “used for the purpose for which they are imported, they cease to be imports and their tax exemption is at an end.” Hooven & Allison Co. v. Evatt, supra, at 665. Compare Brown v. Maryland, supra, at 441-443.
Do the facts as stipulated and found in the cases before us, when considered in the light of applicable legal principles, show that these manufacturers have so acted upon the imported materials as to cause them to lose their distinctive character as “imports” by irrevocably committing them, after their importation journeys have definitely ended, to “use in manufacturing” at the plant and point of final destination, and by “entering” and “using” them “in manufacturing” at that place? The manufacturers, relying upon their understanding of the Hooven case, argue that they do not, but we have concluded that they do.
In Hooven the taxpayer had imported bales of hemp and other fibers which it stored in its warehouse at its factory in Ohio with the intention of eventually using them in the manufacture of cordage and similar products. Ohio sought to lay an ad valorem tax on the bales of fibers so stored in the taxpayer’s warehouse. The taxpayer contended that the bales of fibers were “imports” and thus immune from state taxation under the Import-Export Clause of the Constitution. The Supreme Court of Ohio “thought that Brown v. Maryland, supra, laid down a rule applicable only to imports for the purpose of sale, and that imports for use became, upon storage, even if still in the original package, so intermingled with the common mass of property within the State as to be subject to the State power of taxation” (324 U. S., at 656), and upon that ground upheld the tax. This Court, holding that the tax immunity applies to goods imported for “use” as well as for “sale,” that the bales of fibers would not lose their character as imports “until [they were] put to the use for which [they were] imported” (id., at 665), and that the fibers were not shown by the record in that case to have been “subjected to manufacture when they were placed in [the taxpayer’s] warehouse in their original packages” {id., at 667), reversed the judgment. But the record there did not present, and this ^Court did not reach or decide, the question we have here. Indeed, the Court expressly reserved it.. It said :
“[I]t is unnecessary to decide whether, for purposes of the constitutional immunity, the presence of some fibers in the factory was so essential to current manufacturing requirements that they could be said to have entered the process of manufacture, and hence were already put to the use for which they were imported, before they were removed from the original packages. Even though the inventory of raw material required to be kept on hand to meet the current operational needs of a manufacturing business could be thought to have then entered the manufacturing process, the decision of the Ohio Supreme Court did not rest on that ground, and the record affords no basis for saying that any part of petitioner’s fibers, stored in its warehouse, were required to meet such immediate current needs. Hence we have'no occasion to consider that question.” Id., at 667.
Unlike Hooven, these are not cases of the mere storage in a warehouse of imported materials intended for eventual use in manufacturing but not found to have been essential to current operational needs. Here the Ohio and Wisconsin courts have in effect held that the stipulated and found facts show that the imported materials that were taxed by those States were so essential to current manufacturing requirements that they must be said to have entered the process of manufacture, and those courts have rested their judgments, in major part at least, on that ground. Our question therefore is precisely the one which the Court did not reach or consider in the Hooven case.
We are therefore confronted with the practical, albeit vexing, problem of reconciling the competing demands of the constitutional immunity of imports and of the State’s power to tax property within its borders. The design of the constitutional immunity was to prevent “[t]he great importing States [from laying] a tax on the non-importing States,” to which the imported property is or might ultimately be destined, which would not only discriminate against them but also “would necessarily produce countervailing measures on the part of those States whose situation was less favourable to importation.” Brown v. Maryland, supra, at 440. See Madison, Debates in the Federal Convention of 1787, August 28, 1787 (Hunt & Scott ed.). And see, e. g., Cook v. Pennsylvania, 97 U. S. 566, 574; Richfield Oil Corp. v. State Board, 329 U. S. 69, 76-77. The constitutional design was then to immunize imports from taxation by the importing States, and all others through or into which they may pass, so long as they retain their distinctive character as imports. Hence, that design is not impinged by the taxation of materials that were imported for use in manufacturing after all phases of the importation definitely have ended and the materials have been “put to the use for which they [were] imported” (Hooven & Allison Co. v. Evatt, supra, at 657), for in such a case they have lost their distinctive character as imports and are subject to taxation. And inasmuch as “the reconciliation of the competing demands of the constitutional immunity and of the state’s power to tax, is an extremely practical matter” (Hooven & Allison Co. v. Evatt, supra, at 668), we must approach the question whether these materials had been “put to the use for which they [were] imported” (id., at 657) with full awareness of realities and treat with them in a practical way.
The stipulation in the Youngstown case shows that the imported ores were essential to the operation of Youngstown’s Ohio plant; that Youngstown had imported them “for use in manufacturing” and “to meet its estimated [manufacturing] requirements” at that plant; that the ores had arrived at their destination, had been placed in “piles” in the “ore yards” of that plant, and their importation journey definitely had ended; that the ores were irrevocably committed to “use in manufacturing” at that plant and point of final destination; and that the daily ore needs of the plant were conveyed from the “piles” in the “ore yards” to “stock bins” or “stock houses,” holding one or two days’ supply, from which they were fed into the furnaces. Does not the stipulation thus show that the ores were not only needed, imported, and irrevocably committed to supply, but were actually being used to supply, the daily requirements of the plant? It seems to us that these stipulated facts inescapably establish that Youngstown had “so acted upon the [imported ores]” (Brown v. Maryland, supra, at 441), by using them “for the purpose for which they [were] imported,” that they must be held “to have then entered the manufacturing process” (Hooven & Allison Co. v. Evatt, supra, at 665, 667) and to have lost their distinctive character as “imports” and all tax immunity as such.
Youngstown does not deny that so much of the ores as have been conveyed from the “piles” in the “ore yards” to the “stock bins” or “stock houses” have lost their distinctive character as imports.' Is there any real basis of distinction? The only possible differences are in the sizes of the piles and their distances from the furnaces. Surely the size of the pile is not material. Just as surely the short distance between the smaller piles in the “stock bins” or “stock houses” and the larger piles in the ore yards is not a real distinction. If the larger piles stood on higher ground adjoining the “stock bins” and “stock houses” so that the ores might feed by gravity from the former to the latter there would be no practical difference from the actual facts involved, but it could not be argued that the ores in the one are any less certainly being used in the processes of manufacture than the ores in the other. It seems entirely plain that the ores in the smaller piles in the “stock bins” and “stock houses” are no more definitely and irrevocably committed to use, or being used, at the plant than are the ores in the larger piles in the ore yards from which the smaller ones are constantly kept supplied. “ [R] econciliation of the competing demands of the constitutional immunity and of the state’s power to tax [being] an extremely practical matter” (Hooven & Allison Co. v. Evatt, supra, at 668), taxability cannot depend upon whether the size of the pile of stored materials or its distance from the place of actual fabrication or consumption is a little more or a little less.
In the United States Plywood Corporation case, two types of imported materials are involved — unfinished “green” lumber received “in bulk” and veneers received in “bundles.” The Assessor of the City of Algoma, believing that one-half of the lumber and veneers on hand on the taxing date was necessarily required to be kept on hand to meet the current operating needs of petitioner’s manufacturing plant, assessed an ad valorem tax upon the value of that one-half of the lumber and veneers. In the ensuing litigation, the Wisconsin courts found that the imported materials had been imported by petitioner “for use in manufacturing” at its Algoma plant, had arrived at that place and that their importation journeys definitely had ended; that the lumber and veneers that were taxed (one-half of the amounts on hand on the taxing date) had been irrevocably committed to “use in manufacturing” at that plant, were “necessarily required to be kept on hand to meet [its] current operational needs,” and were actually being “used” to supply those needs. These findings are amply supported by the evidence and are not contested here. We think they clearly show that the lumber and veneers that were taxed were not only needed, imported, and irrevocably committed to supply, but were actually being used to supply, the day-to-day manufacturing requirements of the plant. They thus establish that petitioner had “so acted upon the [imported materials]” (Brown v. Maryland, supra, at 441) that were taxed by using them “for the purpose for which they [were] imported,” that — like the ores in the Youngstown case — they must be held “to have then entered the manufacturing process” (Hooven & Allison Co. v. Evatt, supra, at 665, 667) and to have lost their distinctive character as “imports” and all tax immunity as such.
The fact that the veneers were received in “bundles” which were not opened until the veneers were put into the daily manufacturing operations of the plant is not controlling under the facts and findings here. Whatever may be the significance of retaining in the “original package” goods that have been so imported for sale (Brown v. Maryland, supra; Waring v. The Mayor, 8 Wall. 110, 122-123; Low v. Austin, 13 Wall. 29, 32-33; Cook v. Pennsylvania, 97 U. S. 566, 573; May v. New Orleans, 178 U. S. 496, 501, 507-508), goods that have been so imported for use in manufacturing are not exempt from taxation, though not removed from the “original package,” if, as found here, they have been “put to the use for which they [were] imported.” Hooven & Allison Co. v. Evatt, supra, at 657. Breaking the original package is only one of the ways by which packaged goods that have been imported for use in manufacturing may lose their distinctive character as imports. Another way is by putting them “to the use for which they [were] imported.” Id. That the package has not been broken is, therefore, only one of the several factors to be considered in factually determining whether the goods are being “used for the purpose for which they [were] imported.” Hooven & Allison Co. v. Evatt, supra, at 665. Here the fact that the bundles are not opened until the veneers are put into the day-to-day manufacturing operations of the plant was fully considered by the Wisconsin courts before they made the finding that the veneers that were taxed were “necessarily required to be kept on hand to meet [petitioner’s] current operational needs,” and were actually being “used” to supply those needs.
Because of the views expressed, it is unnecessary to reach or discuss the further finding and conclusion of the Wisconsin courts that when the “green” lumber was stacked by petitioner in the open in a particular way for the “dominant purpose” of air-drying it, the lumber “entered the process of manufacture,” and, for that reason also, lost its character as an import.
The materials here in question were imported to supply, and were essential to supply, the manufacturer’s current operating needs. When, after all phases of their importation had ended, they were put to that use and indiscriminate portions of the whole were actually being used to supply daily operating needs, they stood in the same relation to the State as like piles of domestic materials at the same place that were kept for use and used in the same way. The one was then as fully subject to taxation as the other. In those circumstances, the tax was not on “imports,” nor was it a tax on the materials because they had been imported, but because at the time of the assessment they were being used, in every practical sense, for the purposes for which they had been imported. They were therefore subject to taxation just like domestic property that was kept at the same place in the same way for the same use. We cannot impute to the Framers of the Constitution a purpose to make such a discrimination in favor of materials imported from other countries as would result if we approved the views pressed upon us by the manufacturers. Compare May v. New Orleans, 178 U. S., at 509.
Youngstown also challenged a portion of the tax on the ground that its domestic ores stored on public docks on the shore of Lake Erie in Ohio were “merchandise... held in a storage warehouse for storage only” within the meaning of § 5701.08 (A), and that, because the section exempted nonresidents but taxed residents on stocks of merchandise so held, it denied to Youngstown, a resident of Ohio, the equal protection of the laws in violation of the Fourteenth Amendment of the Constitution. The Supreme Court of Ohio answered that contention by saying: “For the reasons stated in Allied Stores of Ohio, Inc., v. Bowers, Tax Commr., ante [166 Ohio St.], 116, the taxpayer’s contentions [in that respect] must be rejected....” Youngstown Sheet & Tube Co. v. Bowers, 166 Ohio St. 122, 124, 140 N. E. 2d 313, 316. We have today affirmed the judgment of the Supreme Court of Ohio in Allied Stores of Ohio, Inc., v. Bowers, Tax Comm’r, ante, p. 522, and for the reasons stated in our opinion in that case we hold that § 5701.08 (A) and the questioned tax laid thereunder did not violate the Equal Protection Clause of the Fourteenth Amendment.
It follows that the judgment in each case must be
Affirmed.
Mr. Justice Stewart took no part in the consideration or decision of these cases.
Article I, § 10, cl. 2 of the United States Constitution, in pertinent part, provides: “No State shall, without the Consent qf the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it’s inspection Laws....”
Exhibits in the record, though not giving measurements, indicate that the nearest ore yard is located within two or three hundred feet, and the most distant one is located within two or three hundred yards, of the furnaces.
Title 57, Page’s Ohio Rev. Code Ann., 1953, § 5709.01.
Title 57, Page’s Ohio Rev. Code Ann., 1953, § 5701.08 (A).
The Ohio taxing date is January 1, Title 57, Page’s Ohio Rev. Code Ann., 1953, § 5711.03. But personal property held by a manufacturer for use in manufacturing is valued for tax purposes “by taking the value of all [such] property... owned by such manufacturer on the last business day of each month [that] the manufacturer was engaged in business during the year, adding the monthly values together, and dividing the result by the number of months the manufacturer was engaged in such business during the year.” Title 57, Page’s Ohio Rev. Code Ann., 1953, § 5711.16.
Chief Justice Taney, while still at the bar, had argued that case for the State of Maryland. After coming to this Court, he had occasion to say that the theory of that holding was that while the imported articles “are in the hands of the importer for sale... they may be regarded as merely in transitu, and on their way to the distant cities, villages and country for which they are destined, and where they are expected to be used and consumed, and for the supply of which they were in truth imported.” License Cases, 5 How. 504, 575.
The Court said that when the imported goods are sold “the tax intercepts the import, as an import, in its way to become incorporated with the general mass of property, and denies it the privilege of becoming so incorporated until it shall have contributed to the revenue of the State.” 12 Wheat., at 443. That imported goods lose their character as “imports” upon being sold is well-settled. License Cases, 5 How. 504, 575; Waring v. The Mayor, 8 Wall. 110; Low v. Austin, 13 Wall. 29; May v. New Orleans, 178 U. S. 496.
Counsel for Maryland had argued that to permit state tax immunity in that case would result in granting immunity to “an importer who may bring in goods, as plate, for his own use, and thus retain much valuable property exempt from taxation.” In reply to that argument, Marshall rejected the assumption that the principles then announced would grant state tax exemptions to imports that were being used or held for use by the importer. In such a case, as in a case where the importer “[breaks] up his packages, and [travels] with them as an itinerant pedlar,” he said “[T]he tax finds the article already incorporated with the mass of property by the act of the importer. He has used the | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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116
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AUTOMATIC CANTEEN COMPANY OF AMERICA v. FEDERAL TRADE COMMISSION.
No. 89.
Argued December 12, 15, 1952.
Decided June 8, 1953.
Edward F. Howrey argued the cause for petitioner. With him on the brief were L. A. Gravelle, Emil N. Levin and Elmer M. Leesman.
Robert B. Dawkins argued the cause for respondent. With him on the brief were Solicitor General Cummings, W. T. Kelley and James E. Corkey.
Mr. Justice Frankfurter
delivered the opinion of the Court.
The Robinson-Patman Act, directed primarily against sellers who discriminate in favor of large buyers, includes a provision under which proceedings may be had against buyers who knowingly induce or receive discriminatory prices. That provision, § 2 (f) of the Act, is here for construction for the first time as a result of a complaint issued by the Federal Trade Commission against petitioner, a large buyer of candy and other confectionary products for resale through 230,000-odd automatic vending machines operated in 33 States and the District of Columbia. Petitioner, incorporated in 1931, has enjoyed rapid growth and has attained, so we are told, a dominant position in the sale of confectionary products through vending machines.
The Commission introduced evidence that petitioner received, and in some instances solicited, prices it knew were as much as 33% lower than prices quoted other purchasers, but the Commission has not attempted to show that the price differentials exceeded any. cost savings that sellers may. have enjoyed in sales to petitioner. Petitioner moved to dismiss the complaint on the ground that the Commission had not made a prima facie case. This motion was denied; the Commission stated that a prima facie case of violation had been established by proof that the buyer received lower prices on like goods than other buyers, “well knowing that it was being favored over competing purchasers,” under circumstances where the requisite effect on competition had been shown. The question whether the price differentials made more than due allowance for cost differentials did not need to be decided “at this stage of the proceeding.” On petitioner’s failure to introduce evidence, the Commission made findings that petitioner knew the prices it induced were below list prices and that it induced them without inquiry of the seller, or assurance from the seller, as to cost differentials which might justify the price differentials. The Commission thereupon entered a cease and desist order. 46 F. T. C. 861. On review, the Court of Appeals affirmed, holding that the Commission’s prima facie case under § 2 (f) does not require showing absence of a cost justification. 194 F. 2d 433.
Section 2 (f) of the Robinson-Patman Act, roughly the counterpart, as to buyers, of sections of the Act dealing with discrimination by sellers, is a vital prohibition in the enforcement scheme of the Act. In situations where buyers may have difficulty in proving their sellers’ costs, § 2 (f) could, if the Commission’s view in this case prevails, become a major reliance for simplified enforcement of the Act not only by the Commission but by plaintiffs suing for treble damages. Such enforcement, however, might readily extend beyond the prohibitions of the Act and, in doing so, help give rise to a price uniformity and rigidity in open conflict with the purposes of other antitrust legislation. We therefore thought it necessary to grant certiorari. 344 U. S. 809.
Enforcement of the Clayton Act’s original declaration against price discrimination was so frustrated by inadequacies in the statutory language that Congress in 1936 enacted the sweeping amendments to that Act contained in what is known as the Robinson-Patman Act. 49 Stat. 1526, 15 U. S. C. § 13. Chief among the inadequacies had been express exemption of price discrimination in the sales of different quantities of like goods, an exemption that was interpreted as leaving quantity-discount sellers free to grant discounts to quantity buyers that exceeded any cost savings in selling to such buyers. Goodyear Tire & Rubber Co. v. F. T. C., 101 F. 2d 620. In an effort to tighten the restriction against price discrimination inimical to the public interest, Congress enacted two provisions bearing on the issues in this case. It made price discrimination in the sale of like goods unlawful without regard to quantity, although quantity discounts, like other price differentials, could still be justified if they made no more than “due allowance” for cost differences in sales to different buyers. Congress in addition sought to reach the large buyer, capable of exerting pressure on smaller sellers, by making it unlawful “knowingly to induce or receive a discrimination in price which is prohibited by this section.”
Since precision of expression is not an outstanding characteristic of the Robinson-Patman Act, exact formulation of the issue before us is necessary to avoid inadvertent pronouncement on statutory language in one context when the same language may require separate consideration in other settings. Familiar but loose language affords too ready a temptation for comprehensive but loose construction. We therefore think it imperative in this case to confine ourselves as much as possible to what is in dispute here.
We are here asked to settle a controversy involving simply the burden of coming forward with evidence under § 2 (f) of the Act. The record, so abundant in its instances of individual transactions that the Commission itself felt bound to animadvert on undue proliferation of the evidence by Government lawyers, may be taken as presenting varying degrees of bargaining pressure exerted by a buyer on a seller to obtain prices below those quoted other purchasers. In some instances, so the Commission found, petitioner’s method was to “inform prospective suppliers of the prices and terms of sale which would be acceptable to [petitioner] without consideration or inquiry as to whether such supplier could justify such a price on a cost basis or whether it was being offered to other customers of the supplier.” 46 F. T. C., at 888. A typical instance of the maximum pressure found by the Commission was a series of negotiations in which representatives of petitioner sought to explain to a prospective supplier the kind of savings he might enjoy in sales to petitioner and might make the basis of a price differential. In such instances, petitioner sometimes gave the supplier estimates of what it considered “representative” percentage savings on various costs such as freight, sales costs, packaging, and returns and allowances.
The Commission made no finding negativing the existence of cost savings or stating that whatever cost savings there were did not at least equal price differentials petitioner may have received. It did not make any findings as to petitioner’s knowledge of actual cost savings of particular sellers and found only, as to knowledge, that petitioner knew what the list prices to other buyers were. Petitioner, for its part, filed offers of proof that many sellers would testify that they had never told petitioner that the price differential exceeded cost savings. An offer of proof was in turn made by the Commission as to the testimony of these sellers on cross-examination; such proof would have brought out that petitioner never inquired of its suppliers whether the price differential was in excess of cost savings, never asked for a written statement or affidavit that the price differentials did not exceed such savings, and never inquired whether the seller had made up “any exact cost figures” showing cost savings in serving petitioner.
Petitioner claims that the Commission has not, on this record, made a prima facie case of knowing inducement of prices that “made more ‘than due allowance for’ ” cost differences, while the Commission contends that it has established a prima facie case, justifying entry of a cease and desist order where the buyer fails to introduce evidence. Before proceeding to an examination of the statutory provisions, it is desirable to consider the kind of evidence about which this dispute centers. Petitioner is saying in effect that, under the Commission’s view, the burden of introducing evidence as to the seller’s cost savings and the buyer’s knowledge thereof is put on the buyer; this burden, petitioner insists, is so difficult to meet that it would be unreasonable to construe the language Congress has used as imposing it. If so construed, the statute, petitioner contends, would create a presumption so lacking rational connection with the fact established as to violate due process.
We have been invited to consider in this connection some of the intricacies inherent in the attempt to show costs in a Robinson-Patman Act proceeding. The elusiveness of cost data, which apparently cannot be obtained from ordinary business records, is reflected in proceedings against sellers. Such proceedings make us aware of how difficult these problems are, but this record happily does not require us to examine cost problems in detail. It is sufficient to note that, whenever costs have been in issue, the Commission has not been content with accounting estimates; a study seems to be required, involving perhaps stop-watch studies of time spent by some personnel such as salesmen and truck drivers, numerical counts of invoices or bills and in some instances of the number of items or entries on such records, or other such quantitative measurement of the operation of a business. What kind of proof would be required of a buyer we do not know. The Commission argues that knowledge generally available to the buyer from published data or experience in the trade could be used by petitioner to make a reasonable showing of his sellers’ costs. There was no suggestion in the Commission’s opinion, however, that it would take a different attitude toward cost showings by a buyer than it has taken with respect to sellers, and “general knowledge of the trade,” to use the Commission’s phrase, unsupported by factual analysis has as yet been far from acceptable, and indeed has been strongly reproved by Commission accountants, as the basis for cost showings in other proceedings before the Commission.
No doubt the burden placed on petitioner to show his sellers’ costs, under present Commission standards, is heavy. Added to the considerable burden that a seller himself may have in demonstrating costs is the fact that the data not only are not in the buyer’s hands but are ordinarily obtainable even by the seller only after detailed investigation of the business. A subpoena of the seller’s records is not likely to be adequate. It is not a question of obtaining information in the seller’s hands. It is a matter of studying the seller’s business afresh. Insistence on proof of costs by the buyer might thus have other implications; it would almost inevitably require a degree of cooperation between buyer and seller, as against other buyers, that may offend other antitrust policies, and it might also expose the seller’s cost secrets to the prejudice of arm’s-length bargaining in the future. Finally, not one but, as here, approximately 80 different sellers’ costs may be in issue.
It is against this background that the present dispute arises. The legislative setting indicates congressional recognition of the need to charge buyers with a responsibility for price discrimination comparable, so far as possible, to that placed on sellers. Thus, at the least, we can be confident in reading the words in § 2 (f), “a discrimination in price which is prohibited by this section,” as a reference to the substantive prohibitions against discrimination by sellers defined elsewhere in the Act. It is therefore apparent that the discriminatory price that buyers are forbidden by § 2 (f) to induce cannot include price differentials that are not forbidden to sellers in other sections of the Act, and, what is pertinent in this case, a buyer is not precluded from inducing a lower price based on cost differences that would provide the seller with a defense. This reading is, indeed, not seriously disputed by the parties. For we are not dealing simply with a “discrimination in price”; the “discrimination in price” in § 2 (f) must be one “which is prohibited by this section.” Even if any price differential were to be comprehended within the term “discrimination in price,” § 2 (f), which speaks of prohibited discrimina-tions, cannot be read as declaring out of bounds price differentials within one or more of the “defenses” available to sellers, such as that the price differentials reflect cost differences, fluctuating market conditions, or bona fide attempts to meet competition, as those defenses are set out in the provisos of §§ 2 (a) and 2 (b).
This is not to say, however, that the converse follows, for § 2 (f) does not reach all cases of buyer receipt of a prohibited discrimination in prices. It limits itself to cases of knowing receipt of such prices. The Commission seems to argue, in part, that the substantive violation occurs if the buyer knows only that the prices are lower than those offered other buyers. Such a reading not only distorts the language but would leave the word “knowingly” almost entirely without significance in § 2 (f). A buyer with no knowledge whatsoever of facts indicating the possibility that price differences were not based on cost differences would be liable if in fact they were not. We have seen above that § 2 (f) does not refer to all price differentials. But we do not think that price differentials, even as a matter of uncritical impression, come so often within the prohibited range of price discriminations that the language can in any way be read one way for some purposes and another in relation to the word “knowingly.”
The Commission’s attempts in this case to limit the word “knowingly” to a more reasonable area of prohibition are not, we think, justified by the language Congress has used. The Commission argues that Congress was attempting to reach buyers who through their own activities obtain a special price and that “knowingly to induce or receive” can be read as charging such buyers with responsibility for whatever unlawful prices result. But that argument would comprehend any buyer who engages in bargaining over price. If the Commission means buyers who exert undue pressure, the argument might find greater support in the legislative background but less in the language Congress has employed. Such a reading not only ignores the word “receive” but opens up even more entangling difficulties with interpretation of what is undue pressure.
The Commission also urges, from legislative explanation of similar language in § 2 (a), that the word “receive” can in some way be limited to a continued and systematic receipt of lower prices that could fairly charge the recipient with knowledge of illegality. While we need not decide whether systematic receipt of prices in itself could ever be sufficient to give the buyer the requisite knowledge, we think, as the argument itself recognizes, that the inquiry must be into the buyer’s knowledge of the illegality.
Not only are the arguments of the Commission unsatisfying, but we think a fairer reading of the language and of what limited legislative elucidation we have points toward a reading of § 2 (f) making it unlawful only to induce or receive prices known to be prohibited discrimi-nations. For § 2 (f) was explained in Congress as a provision under which a seller, by informing the buyer that a proposed discount was unlawful under the Act, could discourage undue pressure from the buyer. Of course, such devices for private enforcement of the Act through fear of prosecution could equally well have been achieved by providing that the buyer would be liable if, through the seller or otherwise, he learned that the price he sought or received was lower than that accorded competitors, but we are unable, in the light of congressional policy as expressed in other antitrust legislation, to read this ambiguous language as putting the buyer at his peril whenever he engages in price bargaining. Such a reading must be rejected in view of the effect it might have on that sturdy bargaining between buyer and seller for which scope was presumably left in the areas of our economy not otherwise regulated. Although due consideration is to be accorded to administrative construction where alternative interpretation is fairly open, it is our duty to reconcile such interpretation, except where Congress has told us not to, with the broader antitrust policies that have been laid down by Congress. Even if the Commission has, by virtue of the Robinson-Patman Act, been given some authority to develop policies in conflict with those of the Sherman Act in order to meet the special problems created by price discrimination, we cannot say that the Commission here has adequately made manifest reasons for engendering such a conflict so as to enable us to accept its conclusion. Cf. Eastern-Central Motor Carriers Assn. v. United States, 321 U. S. 194, 211-212.
We therefore conclude that a buyer is not liable under § 2 (f) if the lower prices he induces are either within one of the seller’s defenses such as the cost justification or not known by him not to be within one of those defenses. This conclusion is of course only a necessary preliminary in this case. As we have noted earlier, the precise issue in the case before us is the burden of introducing evidence — a separate issue, though of course related to the substantive prohibition. This issue, involving as it does some of the same considerations, requires us further to consider a balance of convenience in the light of whatever evidentiary rules Congress has laid down for proceedings under the Act. Assuming, as we have found, that there is no substantive violation if the buyer did not know that the prices it induced or received were not cost-justified, we must in this case determine whether proof that the buyer knew that the price was lower is sufficient to shift the burden of introducing evidence to the buyer.
The Commission, in support of its position that it need only show the buyer’s knowledge that the prices were lower, employs familiar interpretative tools without adequate regard to their immediate serviceability. It labels a seller’s defense, such as the cost justification, as an “exception to the general prohibition” and from this argues that under conventional rules of evidence the Commission need come forward with evidence of violation only of the “general prohibition.” This interpretation has foundation in the many commonsensical readings of comparable prohibitions so as to put the burden of showing a justification on the one who claims its benefits. We have said as much even in connection with that part of § 2 (b) of the Robinson-Patman Act which attempts to lay down the rules of evidence under the Act. That section provides, “Upon proof being made... that there has been discrimination in price... the burden of rebutting the prima-facie case thus made by showing justification shall be upon the person charged with a violation of this section.” The Commission points out that it was under this section that we held in the Morton Salt case that the burden of showing a cost justification is on the seller in a § 2 (a) proceeding, and argues that the same burden is on the buyer. It argues that the “prima-facie case thus made” clearly refers back to “proof [of] discrimination in price” and thus, from our decision in Morton Salt, that the prima facie case of a prohibited discrimination to which § 2 (b) refers consists only of proof of a difference in prices in the sale of like goods having the requisite effect on competition. Saying that § 2 (f) differs from § 2 (a) “only in containing the express requirement that the buyer shall have 'knowingly’ induced or received such price discriminations,” the Commission asks us to hold that a prima facie case under § 2 (f) is made out with a showing of the prima facie case of § 2 (a) violation “plus the additional element of having induced or received such discrimination with knowledge of the facts which made it violative of Section 2 (a).”
We need not concern ourselves with the Commission’s interpretation of the words “prima-facie case thus made” in § 2 (b) and the resulting conclusion that if § 2 (a) and § 2 (f) are to be read as counterparts, the elements necessary for a prima facie case under § 2 (a) are sufficient for a prima facie showing of the “discrimination in price which is prohibited by this section” in § 2 (f). However that may be, the Commission recognizes that there is an “additional element” resulting from the word “knowingly” in § 2 (f), and, of course, it is that element about which the controversy here centers and to which we must address ourselves. We may, however, note in passing that consistency between § 2 (a) and § 2 (f) both as to what constitutes the prohibited “discrimination in price” and as to the elements of a prima facie showing of the prohibited “discrimination in price” would not be disturbed by a holding against the Commission in this case, for we are concerned here with the prima facie showing of knowledge, admittedly an independent and separate requirement of § 2 (f) above and beyond that of § 2 (a).
The Commission argues that a prima facie case of knowledge is made out when it is shown that the buyer knew the facts making the price differential violative of § 2 (a). At another point it urges that it must now show only “that the buyer affirmatively contributed to obtaining the discriminatory prices by special solicitation, negotiation or other action taken by him.” However the argument is phrased, the Commission is, on this record, insisting that once knowledge of a price differential is shown, the burden of introducing evidence shifts to the buyer. The Commission’s main reliance in this argument is § 2 (b), which, as we have stated above, we interpreted in the Morton Salt case as putting the burden of coming forward with evidence of a cost justification on the seller, on the one, that is, who claimed the benefits of the justification.
To this it is answered that although § 2 (b) does speak not of the seller but of the “person charged with a violation of this section,” other language in § 2 (b) and its proviso seems directed mainly to sellers, that the legislative chronology of the various provisions ultimately resulting in the Robinson-Patman Act indicates that § 2 (b) was drafted with sellers in mind, and that the few cases so far decided have dealt only with sellers.
A confident answer cannot be given; some answer must be given. We think we must read the infelicitous language of § 2 (b) as enacting what we take to be its purpose, that of making it clear that ordinary rules of evidence were to apply in Robinson-Patman Act proceedings. If § 2 (b) is to apply to § 2 (f), although we do not decide that it does because we reach the same result without it, we think it must so be read. Considerations of fairness and convenience operative in other proceedings must, we think, have been controlling in the drafting of § 2 (b), for it would require far clearer language than we have here to reach a contrary result. Cf. Addison v. Holly Hill Co., 322 U. S. 607, 617-618. If that is so, however, decisions striking the balance of convenience for Commission proceedings against sellers are beside the point. And we think the fact that the buyer does not have the required information, and for good reason should not be required to obtain it, has controlling importance in striking the balance in this case. This result most nearly accommodates this case to the reasons that have been given by judges and legislators for the rule of § 2 (b), that is, that the burden of justifying a price differential ought to be on the one who “has at his peculiar command the cost and other record data by which to justify such discriminations.” Where, as here, such considerations are inapplicable, we think we must disregard whatever contrary indications may be drawn from a merely literal reading of the language Congress has used. It would not give fair effect to § 2 (b) to say that the burden of coming forward with evidence as to costs and the buyer’s knowledge thereof shifts to the buyer as soon as it is shown that the buyer knew the prices differed. Certainly the Commission with its broad power of investigation and subpoena, prior to the filing of a complaint, is on a better footing to obtain this information than the buyer. Indeed, though it is of course not for us to enter the domain of the Commission’s discretion in such matters, the Commission may in many instances find it not inconvenient to join the offending seller in the proceedings.
If the requirement of knowledge in § 2 (f) has any significant function, it is to indicate that the buyer whom Congress in the main sought to reach was the one who, knowing full well that there was little likelihood of a defense for the seller, nevertheless proceeded to exert pressure for lower prices. Enforcement of the provisions of § 2 (f) against such a buyer should not be difficult. Proof of a cost justification being what it is, too often no one can ascertain whether a price is cost-justified. But trade experience in a particular situation can afford a sufficient degree of knowledge to provide a basis for prosecution. By way of example, a buyer who knows that he buys in the same quantities as his competitor and is served by the seller in the same manner or with the same amount of exertion as the other buyer can fairly be charged with notice that a substantial price differential cannot be justified. The Commission need only show, to establish its prima facie case, that the buyer knew that the methods by which he was served and quantities in which he purchased were the same as in the case of his competitor. If the methods or quantities differ, the Commission must only show that such differences could not give rise to sufficient savings in the cost of manufacture, sale or delivery to justify the price differential, and that the buyer, knowing these were the only differences, should have known that they could not give rise to sufficient cost savings. The showing of knowledge, of course, will depend to some extent on the size of the discrepancy between cost differential and price differential, so that the two questions are not isolated. A showing that the cost differences are very small compared with the price differential and could not reasonably have been thought to justify the price difference should be sufficient.
What other circumstances can be shown to indicate knowledge on the buyer’s part that the prices cannot be justified we need not now attempt to illustrate; but surely it will not be an undue administrative burden to explain why other proof may be sufficient to justify shifting the burden of introducing evidence that the buyer is or is not an unsuspecting recipient of prohibited discrim-inations. We think, in any event, it is for the Commission to spell out the need for imposition of such a harsh burden of introducing evidence as it appears to have sought in this case. Certainly we should have a more solid basis than an unexplained conclusion before we sanction a rule of evidence that contradicts antitrust policy and the ordinary requirements of fairness. While this Court ought scrupulously to abstain from requiring of the Commission particularization in its findings so exacting as to make this Court in effect a court of review on the facts, it is no less important, since we are charged with the duty of reviewing the correctness of the standards which the Commission applies and the essential fairness of the mode by which it reaches its conclusions, that the Commission do not shelter behind uncritical generalities or such looseness of expression as to make it essentially impossible for us to determine what really lay behind the conclusions which we are to review. Cf. United States v. Chicago, M., St. P. & P. R. Co., 294 U. S. 499, 510-511.
Because of our view of the balance of convenience in these circumstances, we do not reach petitioner’s claim that the Commission is in effect saying that knowledge of a difference in prices creates a presumption of knowledge that the price was unlawful, a presumption it claims would fall for lack of rational connection under Tot v. United States, 319 U. S. 463. Cf. Note, E[dmund] M. M[organ], 56 Harv. L. Rev. 1324. It has seemed to us unnecessary in this case to speak of presumptions, and we need only call attention to the fact that in this case, as in the Tot case, we have dealt only with the burden of introducing evidence and not with the burden of persuasion, as to which different considerations may apply.
The judgment of the Court of Appeals, accordingly, is reversed as to the charges in Count II of the complaint (Count I is not before us), and the case is remanded to that court with instructions to remand it to the Federal Trade Commission for such further action as is open under this opinion.
It is so ordered.
The Court also granted enforcement of the order on a cross-petition by the Commission. The Commission concedes the impropriety of this action under our decision in Federal Trade Commission v. Ruberoid Co., 343 U. S. 470, rendered after the decision of the Court of Appeals in the case now before us. In view of this concession, we assume that the Court of Appeals, on the remand of this case, will, without further direction, reconsider its order for enforcement.
The two prohibitions are as follows:
“Sec. 2. (a) That it shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly, to discriminate in price between different purchasers of commodities of like grade and quality, where either or any of the purchases involved in such discrimination are in commerce, where such commodities are sold for use, consumption, or resale within the United States or any Territory thereof or the District of Columbia or any insular possession or other place under the jurisdiction of the United States, and where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them: Provided, That nothing herein contained shall prevent differentials which make only due allowance for differences in the cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which such commodities are to such purchasers sold or delivered:....
[The other provisos of § 2 (a), not relevant here, concern the grant of authority to the Commission to establish quantity limits, recognition of the seller’s right to select his customers under certain conditions, and exemption of price changes made in response to changing market conditions.]
“ (f) That it shall be unlawful for any person engaged in commerce, in the course of such commerce, knowingly to induce or receive a discrimination in price which is prohibited by this section.”
The Commission recognized the need, common in antitrust litigation, for care on the part of the prosecuting officers not to overburden the record. “The record in this case does not disclose the reason for such a plethora of cumulative evidence as was adduced by Government counsel in the instant matter. Neither harassment of litigants nor the waste of Government funds in needless reiteration through cumulative evidence should be countenanced, nor does it seem that it was necessary to name 14 sellers as typical of a group from which respondents had induced or received discriminations in price, and certainly the records of not more than 5 of such sellers would have supplied ample evidence of such discriminations or price differentials.” In re Automatic Canteen Co. of America, 46 F. T. C. 861, 892. Failure to limit the evidence in some such way to typical transactions would create an especially heavy burden in a proceeding against a buyer under § 2 (f) such as that here, where discriminatory sales were alleged to have been made by about 80 of the buyer’s 115 suppliers.
Although the Commission recited such instances, it did not relate them to what the buyer should have known as to costs. It did not find from such instances that the circumstances should have provoked inquiry in the | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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56
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COMMODITY FUTURES TRADING COMMISSION v. WEINTRAUB et al.
No. 84-261.
Argued March 19, 1985
Decided April 29, 1985
Marshall, J., delivered the opinion of Court, in which all other Members joined, except Powell, J., who took no part in the consideration or decision of the case.
Bruce N. Kuhlik argued the cause pro hac vice for petitioner. With him on the briefs were Solicitor General Lee, Deputy Solicitor General Bator, Kenneth M. Raisler, Whitney Adams, and Helen G. Blechman.
David A. Epstein argued the cause for respondents. With him on the brief for respondents McGhee et al. was Gary A. Weintraub, pro se.
John K. Notz, Jr., pro se, and David F. Heroy filed a brief for John K. Notz, Jr., Trustee, as amicus curiae urging reversal.
Justice Marshall
delivered the opinion of the Court.
The question here is whether the trustee of a corporation in bankruptcy has the power to waive the debtor corporation’s attorney-client privilege with respect to communications that took place before the filing of the petition in bankruptcy.
I
The case arises out of a formal investigation by petitioner Commodity Futures Trading Commission to determine whether Chicago Discount Commodity Brokers (CDCB), or persons associated with that firm, violated the Commodity Exchange Act, 7 U. S. C. § 1 et seq. CDCB was a discount commodity brokerage house registered with the Commission, pursuant to 7 U. S. C. § 6d(1), as a futures commission merchant. On October 27, 1980, the Commission filed a complaint against CDCB in the United States District Court for the Northern District of Illinois alleging violations of the Act. That same day, respondent Frank McGhee, acting as sole director and officer of CDCB, entered into a consent decree with the Commission, which provided for the appointment of a receiver and for the receiver to file a petition for liquidation under Chapter 7 of the Bankruptcy Reform Act of 1978 (Bankruptcy Code). The District Court appointed John K. Notz, Jr., as receiver.
Notz then filed a voluntary petition in bankruptcy on behalf of CDCB. He sought relief under Subchapter IV of Chapter 7 of the Bankruptcy Code, which provides for the liquidation of bankrupt commodity brokers. 11 U. S. C. §§761-766. The Bankruptcy Court appointed Notz as interim trustee and, later, as permanent trustee.
As part of its investigation of CDCB, the Commission served a subpoena duces tecum upon CDCB’s former counsel, respondent Gary Weintraub. The Commission sought Weintraub’s testimony about various CDCB matters, including suspected misappropriation of customer funds by CDCB’s officers and employees, and other fraudulent activities. Weintraub appeared for his deposition and responded to numerous inquiries but refused to answer 23 questions, asserting CDCB’s attorney-client privilege. The Commission then moved to compel answers to those questions. It argued that Weintraub’s assertion of the attorney-client privilege was inappropriate because the privilege could not be used to “thwart legitimate access to information sought in an administrative investigation.” App. 44.
Even though the Commission argued in its motion that the matters on which Weintraub refused to testify were not protected by CDCB’s attorney-client privilege, it also asked Notz to waive that privilege. In a letter to Notz, the Commission maintained that CDCB’s former officers, directors, and employees no longer had the authority to assert the privilege. According to the Commission, that power was vested in Notz as the then-interim trustee. Id., at 47-48. In response to the Commission’s request, Notz waived “any interest I have in the attorney/client privilege possessed by that debtor for any communications or information occurring or arising on or before October 27, 1980” — the date of Notz’ appointment as receiver. Id., at 49.
On April 26, 1982, a United States Magistrate ordered Weintraub to testify. The Magistrate found that Weintraub had the power to assert CDCB’s privilege. He added, however, that Notz was “successor in interest of all assets, rights and privileges of CDCB, including the attorney/client privilege at issue herein,” and that Notz’ waiver was therefore valid. App. to Pet. for Cert. 19a-20a. The District Court upheld the Magistrate’s order on June 9. Id., at 18a. Thereafter, Frank McGhee and his brother, respondent Andrew McGhee, intervened and argued that Notz could not validly waive the privilege over their objection. Record, Doc. No. 49, p. 7. The District Court rejected this argument and, on July 27, entered a new order requiring Weintraub to testify without asserting an attorney-client privilege on behalf of CDCB. App. to Pet. for Cert. 17a.
The McGhees appealed from the District Court’s order of July 27 and the Court of Appeals for the Seventh Circuit reversed. 722 F. 2d 338 (1984). It held that a bankruptcy trustee does not have the power to waive a corporate debtor’s attorney-client privilege with respect to communications that occurred before the filing of the bankruptcy petition. The court recognized that two other Circuits had addressed the question and had come to the opposite conclusion. See In re O. P. M. Leasing Services, Inc., 670 F. 2d 383 (CA2 1982); Citibank, N. A. v. Andros, 666 F. 2d 1192 (CA8 1981). We granted certiorari to resolve the conflict. 469 U. S. 929 (1984). We now reverse the Court of Appeals.
I — I I — I
It is by now well established, and undisputed by the parties to this case, that the attorney-client privilege attaches to corporations as well as to individuals. Upjohn Co. v. United States, 449 U. S. 383 (1981). Both for corporations and individuals, the attorney-client privilege serves the function of promoting full and frank communications between attorneys and their clients. It thereby encourages observance of the law and aids in the administration of justice. See, e. g., Upjohn Co. v. United States, supra, at 389; Trammel v. United States, 445 U. S. 40, 51 (1980); Fisher v. United States, 425 U. S. 391, 403 (1976).
The administration of the attorney-client privilege in the case of corporations, however, presents special problems. As an inanimate entity, a corporation must act through agents. A corporation cannot speak directly to its lawyers. Similarly, it cannot directly waive the privilege when disclosure is in its best interest. Each of these actions must necessarily be undertaken by individuals empowered to act on behalf of the corporation. In Upjohn Co., we considered whether the privilege covers only communications between counsel and top management, and decided that, under certain circumstances, communications between counsel and lower-level employees are also covered. Here, we face the related question of which corporate actors are empowered to waive the corporation’s privilege.
The parties in this case agree that, for solvent corporations, the power to waive the corporate attorney-client privilege rests with the corporation’s management and is normally exercised by its officers and directors. The managers, of course, must exercise the privilege in a manner consistent with their fiduciary duty to act in the best interests of the corporation and not of themselves as individuals. See, e. g., Dodge v. Ford Motor Co., 204 Mich. 459, 507, 170 N. W. 668, 684 (1919).
The parties also agree that when control of a corporation passes to new management, the authority to assert and waive the corporation’s attorney-client privilege passes as well. New managers installed as a result of a takeover, merger, loss of confidence by shareholders, or simply normal succession, may waive the attorney-client privilege with respect to communications made by former officers and directors. Displaced managers may not assert the privilege over the wishes of current managers, even as to statements that the former might have made to counsel concerning matters within the scope of their corporate duties. See Brief for Petitioner 11; Tr. of Oral Arg. 26. See generally In re O. P. M. Leasing Services, Inc., supra, at 386; Citibank v. Andros, supra, at 1195; In re Grand Jury Investigation, 599 F. 2d 1224, 1236 (CA3 1979); Diversified Industries, Inc. v. Meredith, 572 F. 2d 596, 611, n. 5 (CA8 1978) (en banc).
The dispute in this case centers on the control of the attorney-client privilege of a corporation in bankruptcy. The Government maintains that the power to exercise that privilege with respect to prebankruptcy communications passes to the bankruptcy trustee. In contrast, respondents maintain that this power remains with the debtor’s directors.
hH I — Í HH
As might be expected given the conflict among the Courts of Appeals, the Bankruptcy Code does not explicitly address the question before us. Respondents assert that 11 U. S. C. § 542(e) is dispositive, but we find reliance on that provision misplaced. Section 542(e) states:
“Subject to any applicable privilege, after notice and a hearing, the court may order an attorney, accountant, or other person that holds recorded information, including books, documents, records, and papers, relating to the debtor’s property or financial affairs, to disclose such recorded information to the trustee” (emphasis added).
According to respondents, the “subject to any applicable privilege” language means that the attorney cannot be compelled to turn over to the trustee materials within the corporation’s attorney-client privilege. In addition, they claim, this language would be superfluous if the trustee had the power to waive the corporation’s privilege.
The statutory language does not support respondents’ contentions. First, the statute says nothing about a trustee’s authority to waive the corporation’s attorney-client privilege. To the extent that a trustee has that power, the statute poses no bar on his ability to obtain materials within that privilege. Indeed, a privilege that has been properly waived is not an “applicable” privilege for the purposes of § 542(e).
Moreover, rejecting respondents’ reading does not render the statute a nullity, as privileges of parties other than the corporation would still be “applicable” as against the trustee. For example, consistent with the statute, an attorney could invoke the personal attorney-client privilege of an individual manager.
The legislative history also makes clear that Congress did not intend to give the debtor’s directors the right to assert the corporation’s attorney-client privilege against the trustee. Indeed, statements made by Members of Congress regarding the effect of § 542(e) “specifically deny any attempt to create an attorney-client privilege assertable on behalf of the debtor against the trustee.” In re O. P. M. Leasing Services, Inc., 13 B. R. 54, 70 (SDNY 1981) (Weinfeld, J.), aff’d, 670 F. 2d 383 (CA2 1982); see also 4 Collier on Bankruptcy ¶ 542.06 (15th ed. 1985). Rather, Congress intended that the courts deal with this problem:
“The extent to which the attorney client privilege is valid against the trustee is unclear under current law and is left to be determined by the courts on a case by case basis.” 124 Cong. Rec. 32400 (1978) (remarks of Rep. Edwards); id., at 33999 (remarks of Sen. DeConcini).
The “subject to any applicable privilege” language is thus merely an invitation for judicial determination of privilege questions.
In addition, the legislative history establishes that § 542(e) was intended to restrict, not expand, the ability of accountants and attorneys to withhold information from the trustee. Both the House and the Senate Reports state that § 542(e) “is a new provision that deprives accountants and attorneys of the leverage that they ha[d], . . . under State law lien provisions, to receive páyment in full ahead of other creditors when the information they hold is necessary to the administration of the estate.” S. Rep. No. 95-989, p. 84 (1978); H. R. Rep. No. 95-595, pp. 369-370 (1977). It is therefore clear that § 542(e) was not intended to limit the trustee’s ability to obtain corporate information.
> I — !
In light of the lack of direct guidance from the Code, we turn to consider the roles played by the various actors of a corporation in bankruptcy to determine which is most analogous to the role played by the management of a solvent corporation. See Butner v. United States, 440 U. S. 48, 55 (1979). Because the attorney-client privilege is controlled, outside of bankruptcy, by a corporation’s management, the actor whose duties most closely resemble those of management should control the privilege in bankruptcy, unless such a result interferes with policies underlying the bankruptcy laws.
A
The powers and duties of a bankruptcy trustee are extensive. Upon the commencement of a case in bankruptcy, all corporate property passes to an estate represented by the trustee. 11 U. S. C. §§323, 541. The trustee is “accountable for all property received,” §§704(2), 1106(a)(1), and has the duty to maximize the value of the estate, see § 704(1); In re Washington Group, Inc., 476 F. Supp. 246, 250 (MDNC 1979), aff’d sub nom. Johnston v. Gilbert, 636 F. 2d 1213 (CA4 1980), cert. denied, 452 U. S. 940 (1981). He is directed to investigate the debtor’s financial affairs, §§704(4), 1106(a)(3), and is empowered to sue officers, directors, and other insiders to recover, on behalf of the estate, fraudulent or preferential transfers of the debtor’s property, §§ 547(b)(4)(B), 548. Subject to court approval, he may use, sell, or lease property of the estate. § 363(b).
Moreover, in reorganization, the trustee has the power to “operate the debtor’s business” unless the court orders otherwise. §1108. Even in liquidation, the court “may authorize the trustee to operate the business” for a limited period of time. § 721. In the course of operating the debt- or’s business, the trustee “may enter into transactions, including the sale or lease of property of the estate” without court approval. § 363(c)(1).
As even this brief and incomplete list should indicate, the Bankruptcy Code gives the trustee wide-ranging management authority over the debtor. See 2 Collier on Bankruptcy ¶323.01 (15th ed. 1985). In contrast, the powers of the debtor’s directors are severely limited. Their role is to turn over the corporation’s property to the trustee and to provide certain information to the trustee and to the creditors. §§521, 343. Congress contemplated that when a trustee is appointed, he assumes control of the business, and the debtor’s directors are “completely ousted.” See H. R. Rep. No. 95-595, pp. 220-221 (1977).
In light of the Code’s allocation of responsibilities, it is clear that the trustee plays the role most closely analogous to that of a solvent corporation’s management. Given that the debtor’s directors retain virtually no management powers, they should not exercise the traditional management function of controlling the corporation’s attorney-client privilege, see supra, at 348, unless a contrary arrangement would be inconsistent with policies of the bankruptcy laws.
B
We find no federal interests that would be impaired by the trustee’s control of the corporation’s attorney-client privilege with respect to prebankruptcy communications. On the other hand, the rule suggested by respondents — that the debtor’s directors have this power — would frustrate an important goal of the bankruptcy laws. In seeking to maximize the value of the estate, the trustee must investigate the conduct of prior management to uncover and assert causes of action against the debtor’s officers and directors. See generally 11 U. S. C. §§704(4), 547, 548. It would often be extremely difficult to conduct this inquiry if the former management were allowed to control the corporation’s attorney-client privilege and therefore to control access to the corporation’s legal files. To the extent that management had wrongfully diverted or appropriated corporate assets, it could use the privilege as a shield against the trustee’s efforts to identify those assets. The Code’s goal of uncovering insider fraud would be substantially defeated if the debtor’s directors were to retain the one management power that might effectively thwart an investigation into their own conduct. See generally In re Browy, 527 F. 2d 799, 802 (CA7 1976) (per curiam).
Respondents contend that the trustee can adequately investigate fraud without controlling the corporation’s attorney-client privilege. They point out that the privilege does not shield the disclosure of communications relating to the planning or commission of ongoing fraud, crimes, and ordinary torts, see, e. g., Clark v. United States, 289 U. S. 1, 15 (1933); Garner v. Wolfinbarger, 430 F. 2d 1093, 1102-1103 (CA51970), cert. denied, 401U. S. 974 (1971). Brief for Respondents 11. The problem, however, is making the threshold showing of fraud necessary to defeat the privilege. See Clark v. United States, supra, at 15. Without control over the privilege, the trustee might not be able to discover hidden assets or looting schemes, and therefore might not be able to make the necessary showing.
In summary, we conclude that vesting in the trustee control of the corporation’s attorney-client privilege most closely comports with the allocation of the waiver power to management outside of bankruptcy without in any way obstructing the careful design of the Bankruptcy Code.
V
Respondents do not seriously contest that the bankruptcy trustee exercises functions analogous to those exercised by management outside of bankruptcy, whereas the debtor’s directors exercise virtually no management functions at all. Neither do respondents seriously dispute that vesting control over the attorney-client privilege in the trustee will facilitate the recovery of misappropriated corporate assets.
Respondents argue, however, that the trustee should not obtain control over the privilege because, unlike the management of a solvent corporation, the trustee’s primary loyalty goes not to shareholders but to creditors, who elect him and who often will be the only beneficiaries of his efforts. See 11 U. S. C. §§702 (creditors elect trustee), 726(a) (shareholders are last to recover in bankruptcy). Thus, they contend, as a practical matter bankruptcy trustees represent only the creditors. Brief for Respondents 22.
We are unpersuaded by this argument. First, the fiduciary duty of the trustee runs to shareholders as well as to creditors. See, e. g., In re Washington Group, Inc., 476 F. Supp., at 250; In re Ducker, 134 F. 43, 47 (CA6 1905). Second, respondents do not explain why, out of all management powers, control over the attorney-client privilege should remain with those elected by the corporation’s shareholders. Perhaps most importantly, respondents’ position ignores the fact that bankruptcy causes fundamental changes in the nature of corporate relationships. One of the painful facts of bankruptcy is that the interests of shareholders become subordinated to the interests of creditors. In cases in which it is clear that the estate is not large enough to cover any shareholder claims, the trustee’s exercise of the corporation’s attorney-client privilege will benefit only creditors, but there is nothing anomalous in this result; rather, it is in keeping with the hierarchy of interests created by the bankruptcy laws. See generally 11 U. S. C. § 726(a).
Respondents also ignore that if a debtor remains in possession — that is, if a trustee is not appointed — the debtor’s directors bear essentially the same fiduciary obligation to creditors and shareholders as would the trustee for a debtor out of possession. Wolf v. Weinstein, 372 U. S. 633, 649-652 (1963). Indeed, the willingness of courts to leave debtors in possession “is premised upon an assurance that the officers and managing employees can be depended upon to carry out the fiduciary responsibilities of a trustee.” Id., at 651. Surely, then, the management of a debtor-in-possession would have to exercise control of the corporation’s attorney-client privilege consistently with this obligation to treat all parties, not merely the shareholders, fairly. By the same token, when a trustee is appointed, the privilege must be exercised in accordance with the trustee’s fiduciary duty to all interested parties.
To accept respondents’ position would lead to one of two outcomes: (1) a rule under which the management of a debtor-in-possession exercises control of the attorney-client privilege for the benefit only of shareholders but exercises all of its other functions for the benefit of both shareholders and creditors, or (2) a rule under which the attorney-client privilege is exercised for the benefit of both creditors and shareholders when the debtor remains in possession, but is exercised for the benefit only of shareholders when a trustee is appointed. We find nothing in the bankruptcy laws that would suggest, much less compel, either of these implausible results.
VI
Respondents’ other arguments are similarly unpersuasive. First, respondents maintain that the result we reach today would also apply to individuals in bankruptcy, a result that respondents find “unpalatable.” Brief for Respondents 27. But our holding today has no bearing on the problem of individual bankruptcy, which we have no reason to address in this case. As we have stated, a corporation, as an inanimate entity, must act through agents. See supra, at 348. When the corporation is solvent, the agent that controls the corporate attorney-client privilege is the corporation’s management. Under our holding today, this power passes to the trustee because the trustee’s functions are more closely analogous to those of management outside of bankruptcy than are the functions of the debtor’s directors. An individual, in contrast, can act for himself; there is no “management” that controls a solvent individual’s attorney-client privilege. If control over that privilege passes to a trustee, it must be under some theory different from the one that we embrace in this case.
Second, respondents argue that giving the trustee control over the attorney-client privilege will have an undesirable chilling effect on attorney-client communications. According to respondents, corporate managers will be wary of speaking freely with corporate counsel if their communications might subsequently be disclosed due to bankruptcy. See Brief for Respondents 37-42; see also 722 F. 2d, at 343. But the chilling effect is no greater here than in the case of a solvent corporation, where individual officers and directors always run the risk that successor management might waive the corporation’s attorney-client privilege with respect to prior management’s communications with counsel. See supra, at 348-349.
Respondents also maintain that the result we reach discriminates against insolvent corporations. According to respondents, to prevent the debtor’s directors from controlling the privilege amounts to “economic . discrimination” given that directors, as representatives of the shareholders, control the privilege for solvent corporations. Brief for Respondents 42; see also 722 F. 2d, at 342-343. Respondents’ argument misses the point that, by definition, corporations in bankruptcy are treated differently from solvent corporations. “Insolvency is a most important and material fact, not only with individuals but with corporations, and with the latter as with the former the mere fact of its existence may change radically and materially its rights and obligations.” McDonald v. Williams, 174 U. S. 397, 404 (1899). Respondents do not explain why we should be particularly concerned about differential treatment in this context.
Finally, respondents maintain that upholding trustee waivers would create a disincentive for debtors to invoke the protections of bankruptcy and provide an incentive for creditors to file for involuntary bankruptcy. According to respondents, “[ijnjection of such considerations into bankruptcy would skew the application of the bankruptcy laws in a manner not contemplated by Congress.” Brief for Respondents 43. The law creates numerous incentives, both for and against the filing of bankruptcy petitions. Respondents do not explain why our holding creates incentives that are inconsistent with congressional intent, and we do not believe that it does.
VII
For the foregoing reasons, we hold that the trustee of a corporation in bankruptcy has the power to waive the corporation’s attorney-client privilege with respect to pre-bankruptcy communications. We therefore conclude that Notz, in his capacity as trustee, properly waived CDCB’s privilege in this case. The judgment of the Court of Appeals for the Seventh Circuit is accordingly reversed.
It is so ordered.
Justice Powell took no part in the consideration or decision of this case.
The Court of Appeals found that Andrew McGhee resigned his position as officer and director of CDCB on October 21, 1980. 722 F. 2d 338, 339 (1984). Frank McGhee, however, remained as an officer and director. See n. 5, infra.
The June 9 order had not made clear that Weintraub was barred only from invoking the corporation's attorney-client privilege.
The Court of Appeals distinguished O. P. M. Leasing, where waiver of the privilege was opposed by the corporation’s sole voting stockholder, on the ground that the corporation in O. P. M. Leasing had no board of directors in existence during the tenure of the trustee. Here, instead, Frank McGhee remained an officer and director of CDCB during Notz’ trusteeship. 722 F. 2d, at 341. The court acknowledged, however, a square conflict with Citibank v. Andros.
After the Court of Appeals’ decision in this case, the Court of Appeals for the Ninth Circuit held that a bankruptcy examiner has the power to waive the corporation’s attorney-client privilege over the objections of the debtor-in-possession. In re Boileau, 736 F. 2d 503 (1984). That holding also conflicts with the holding of the Seventh Circuit in this case.
State corporation laws generally vest management authority in a corporation’s board of directors. See, e. g., Del. Code Ann., Tit. 8, §141 (1983); N. Y. Bus. Corp. Law § 701 (McKinney Supp. 1983-1984); Model Bus. Corp. Act § 35 (1979). The authority of officers derives legally from that of the board of directors. See generally Eisenberg, Legal Models of Management Structure in the Modern Corporation: Officers, Directors, and Accountants, 63 Calif. L. Rev. 375 (1975). The distinctions between the powers of officers and directors are not relevant to this case.
It follows that Andrew McGhee, who is now neither an officer nor a director, see n. 1, supra, retains no control over the corporation’s privilege. The remainder of this opinion therefore focuses on whether Frank McGhee has such power.
While this reference is to the role of a trustee in reorganization, nothing in the Code or its legislative history suggests that the debtor’s directors enjoy substantially greater powers in liquidation.
The propriety of the trustee’s waiver of the attorney-client privilege in a particular case can, of course, be challenged in the bankruptcy court on the ground that it violates the trustee’s fiduciary duties. Respondents, however, did not challenge the waiver on those grounds; rather, they asserted that the trustee never has the power to waive the privilege. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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14
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IMMIGRATION AND NATURALIZATION SERVICE v. LOPEZ-MENDOZA et al.
No. 83-491.
Argued April 18, 1984
Decided July 5, 1984
O’Connor, J., announced the judgment of the Court and delivered the opinion of the Court with respect to Parts I, II, III, and IV, in which Burger, C. J., and Blackmun, Powell, and Rehnquist, JJ., joined, and an opinion with respect to Part V, in which Blackmun, Powell, and Rehnquist, JJ., joined. Brennan, J., post,, p. 1051, White, J., post, p. 1052, Marshall, J., post, p. 1Ó60, and Stevens, J., post, p. 1061, filed dissenting opinions.
Deputy Solicitor General Frey argued the cause for petitioner. With him on the briefs were Solicitor General Lee, Acting Assistant Attorney General Willard, Kathryn A. Oberly, Barbara L. Herwig, Marshall Tamor Golding, and Howard S. Scher.
Mary L. Heen argued the cause for respondents. With her on the brief were Burt Neuborne, Charles S. Sims, John E. Huerta, Joaquin G. Avila, Morris J. Bailer, and Charles H. Barr.
Justice O’Connor
announced the judgment of the Court and delivered the opinion of the Court with respect to Parts I, II, III, and IV, and an opinion with respect to Part V, in which Justice Blackmun, Justice Powell, and Justice Rehnquist joined.
This litigation requires us to decide whether an admission of unlawful presence in this country made subsequently to an allegedly unlawful arrest must be excluded as evidence in a civil deportation hearing. We hold that the exclusionary rule need not be applied in such a proceeding.
I
Respondents Adan Lopez-Mendoza and Elias Sandoval-Sanchez, both citizens of Mexico, were summoned to separate deportation proceedings in California and Washington, and both were ordered deported. They challenged the regularity of those proceedings on grounds related to the lawfulness of their respective arrests by officials of the Immigration and Naturalization Service (INS). On administrative appeal the Board of Immigration Appeals (BIA), an agency of the Department of Justice, affirmed the deportation orders.
The Court of Appeals for the Ninth Circuit, sitting en banc, reversed Sandoval-Sanchez’ deportation order and vacated and remanded Lopez-Mendoza’s deportation order. 705 F. 2d 1059 (1983). It ruled that Sandoval-Sanchez’ admission of his illegal presence in this country was the fruit of an unlawful arrest, and that the exclusionary rule applied in a deportation proceeding. Lopez-Mendoza’s deportation order was vacated and his case remanded to the BIA to determine whether the Fourth Amendment had been violated in the course of his arrest. We granted certiorari, 464 U. S. 1037 (1984).
A
Respondent Lopez-Mendoza was arrested in 1976 by INS agents at his place of employment, a transmission repair shop in San Mateo, Cal. Responding to a tip, INS investigators arrived at the shop shortly before 8 a. m. The agents had not sought a warrant to search the premises or to arrest any of its occupants. The proprietor of the shop firmly refused to allow the agents to interview his employees during working hours. Nevertheless, while one agent engaged the proprietor in conversation another entered the shop and approached Lopez-Mendoza. In response to the agent’s questioning, Lopez-Mendoza gave his name and indicated that he was from Mexico with no close family ties in the United States. The agent then placed him under arrest. Lopez-Mendoza underwent further questioning at INS offices, where he admitted he was born in Mexico, was still a citizen of Mexico, and had entered this country without inspection by immigration authorities. Based on his answers, the agents prepared a “Record of Deportable Alien” (Form 1-213), and an affidavit which Lopez-Mendoza executed, admitting his Mexican nationality and his illegal entry into this country.
A hearing was held before an Immigration Judge. Lopez-Mendoza’s counsel moved to terminate the proceeding on the ground that Lopez-Mendoza had been arrested illegally. The judge ruled that the legality of the arrest was not relevant to the deportation proceeding and therefore declined to rule on the legality of Lopez-Mendoza’s arrest. Matter of Lopez-Mendoza, No. [ AXX XXX XXX ] (INS, Dec. 21, 1977), reprinted in App. to Pet. for Cert. 97a. The Form 1-213 and the affidavit executed by Lopez-Mendoza were received into evidence without objection from Lopez-Mendoza. On the basis of this evidence the Immigration Judge found Lopez-Mendoza deportable. Lopez-Mendoza was granted the option of voluntary departure.
The BIA dismissed Lopez-Mendoza’s appeal. It noted that “[t]he mere fact of an illegal arrest has no bearing on a subsequent deportation proceeding,” In re Lopez-Mendoza, No. [ AXX XXX XXX ] (BIA, Sept. 19, 1979), reprinted in App. to Pet. for Cert. 100a, 102a, and observed that Lopez-Mendoza had not objected to the admission into evidence of Form 1-213 and the affidavit he had executed. Id., at 103a. The BIA also noted that the exclusionary rule is not applied to redress the injury to the privacy of the search victim, and that the BIA had previously concluded that application of the rule in deportation proceedings to deter unlawful INS conduct was inappropriate. Matter of Sandoval, 17 I. & N. Dec. 70 (BIA 1979).
The Court of Appeals vacated the order of deportation and remanded for a determination whether Lopez-Mendoza’s Fourth Amendment rights had been violated when he was arrested.
B
Respondent Sandoval-Sanchez (who is not the same individual who was involved in Matter of Sandoval, supra) was arrested in 1977 at his place of employment, a potato processing plant in Pasco, Wash. INS Agent Bower and other officers went to the plant, with the permission of its personnel manager, to check for illegal aliens. During a change in shift, officers stationed themselves at the exits while Bower and a uniformed Border Patrol agent entered the plant. They went to the lunchroom and identified themselves as immigration officers. Many people in the room rose and headed for the exits or milled around; others in the plant left their equipment and started running; still others who were entering the plant turned around and started walking back out. The two officers eventually stationed themselves at the main entrance to the plant and looked for passing employees who averted their heads, avoided eye contact, or tried to hide themselves in a group. Those individuals were addressed with innocuous questions in English. Any who could not respond in English and who otherwise aroused Agent Bower’s suspicions were questioned in Spanish as to their right to be in the United States.
Respondent Sandoval-Sanchez was in a line of workers entering the plant. Sandoval-Sanchez testified that he did not realize that immigration officers were checking people entering the plant, but that he did see standing at the plant entrance a man in uniform who appeared to be a police officer. Agent Bower testified that it was probable that he, not his partner, had questioned Sandoval-Sanchez at the plant, but that he could not be absolutely positive. The employee he thought he remembered as Sandoval-Sanchez had been “very evasive,” had averted his head, turned around, and walked away when he saw Agent Bower. App. 137, 138. Bower was certain that no one was questioned about his status unless his actions had given the agents reason to believe that he was an undocumented alien.
Thirty-seven employees, including Sandoval-Sanchez, were briefly detained at the plant and then taken to the county jail. About one-third immediately availed themselves of the option of voluntary departure and were put on a bus to Mexico. Sandoval-Sanchez exercised his right to a deportation hearing. Sandoval-Sanchez was then questioned further, and Agent Bower recorded Sandoval-Sanchez’ admission of unlawful entry. Sandoval-Sanchez contends he was not aware that he had a right to remain silent.
At his deportation hearing Sandoval-Sanchez contended that the evidence offered by the INS should be suppressed as the fruit of an unlawful arrest. The Immigration Judge considered and rejected Sandoval-Sanchez’ claim that he had been illegally arrested, but ruled in the alternative that the legality of the arrest was not relevant to the deportation hearing. Matter of Sandoval-Sanchez, No. [ AXX XXX XXX ] (INS, Oct. 7, 1977), reprinted in App. to Pet. for Cert. 104a. Based on the written record of Sandoval-Sanchez’ admissions the Immigration Judge found him deportable and granted him voluntary departure. The BIA dismissed Sandoval-Sanchez’ appeal. In re Sandoval-Sanchez, No. [ AXX XXX XXX ] (BIA, Feb. 21, 1980). It concluded that the circumstances of the arrest had not affected the voluntariness of his recorded admission, and again declined to invoke the exclusionary rule, relying on its earlier decision in Matter of Sandoval, supra.
On appeal the Court of Appeals concluded that Sandoval-Sanchez’ detention by the immigration officers violated the Fourth Amendment, that the statements he made were a product of that detention, and that the exclusionary rule barred their use in a deportation hearing. The deportation order against Sandoval-Sanchez was accordingly reversed.
f — n J — 4
A deportation proceeding is a purely civil action to determine eligibility to remain in this country, not to punish an unlawful entry, though entering or remaining unlawfully in this country is itself a crime. 8 U. S. C. §§ 1302,1306, 1325. The deportation hearing looks prospectively to the respondent’s right to remain in this country in the future. Past conduct is relevant only insofar as it may shed light on the respondent’s right to remain. See 8 U. S. C. §§ 1251, 1252(b); Bugajewitz v. Adams, 228 U. S. 585, 591 (1913); Fong Yue Ting v. United States, 149 U. S. 698, 730 (1893).
A deportation hearing is held before an immigration judge. The judge’s sole power is to order deportation; the judge cannot adjudicate guilt or punish the respondent for any crime related to unlawful entry into or presence in this country. Consistent with the civil nature of the proceeding, various protections that apply in the context of a criminal trial do not apply in a deportation hearing. The respondent must be given “a reasonable opportunity to be present at [the] proceeding,” but if the respondent fails to avail himself of that opportunity the hearing may proceed in his absence. 8 U. S. C. § 1252(b). In many deportation cases the INS must show only identity and alienage; the burden then shifts to the respondent to prove the time, place, and manner of his entry. See 8 U. S. C. § 1361; Matter of Sandoval, 17 I. & N. Dec. 70 (BIA 1979). A decision of deportability need be based only on “reasonable, substantial, and probative evidence,” 8 U. S. C. § 1252(b)(4). The BIA for its part has required only “clear, unequivocal and convincing” evidence of the respondent’s deportability, not proof beyond a reasonable doubt. 8 CFR §242.14(a) (1984). The Courts of Appeals have held, for example that the absence of Miranda warnings does not render an otherwise voluntary statement by the respondent inadmissible in a deportation case. Navia-Duran v. INS, 568 F. 2d 803, 808 (CA1 1977); Avila-Gallegos v. INS, 525 F. 2d 666, 667 (CA2 1975); Chavez-Raya v. INS, 519 F. 2d 397, 399-401 (CA7 1975). See also Abel v. United States, 362 U. S. 217, 236-237 (1960) (search permitted incidental to an arrest pursuant to an administrative warrant issued by the INS); Galvan v. Press, 347 U. S. 522, 531 (1954) (Ex Post Facto Clause has no application to deportation); Carlson v. Landon, 342 U. S. 524, 544-546 (1952) (Eighth Amendment does not require bail to be granted in certain deportation cases); United States ex rel. Bilokumsky v. Tod, 263 U. S. 149, 157 (1923) (involuntary confessions admissible at deportation hearing). In short, a deportation hearing is intended to provide a streamlined determination of eligibility to remain in this country, nothing more. The purpose of deportation is not to punish past transgressions but rather to put an end to a continuing violation of the immigration laws.
III
The “body” or identity of a defendant or respondent in a criminal or civil proceeding is never itself suppressible as a fruit of an unlawful arrest, even if it is conceded that an unlawful arrest, search, or interrogation occurred. See Ger- stein v. Pugh, 420 U. S. 103, 119 (1975); Frisbie v. Collins, 342 U. S. 519, 522 (1952); United States ex rel. Bilokumsky v. Tod, supra, at 158. A similar rule applies in forfeiture proceedings directed against contraband or forfeitable property. See, e. g., United States v. Eighty-Eight Thousand, Five Hundred Dollars, 671 F. 2d 293 (CA8 1982); United States v. One (1) 1971 Harley-Davidson Motorcycle, 508 F. 2d 351 (CA9 1974); United States v. One 1965 Buick, 397 F. 2d 782 (CA6 1968).
On this basis alone the Court of Appeals’ decision as to respondent Lopez-Mendoza must be reversed. At his deportation hearing Lopez-Mendoza objected only to the fact that he had been summoned to a deportation hearing following an unlawful arrest; he entered no objection to the evidence offered against him. The BIA correctly ruled that “[t]he mere fact of an illegal arrest has no bearing on a subsequent deportation proceeding.” In re Lopez-Mendoza, No. [ AXX XXX XXX ] (BIA, Sept. 19, 1979), reprinted in App. to Pet. for Cert. 102a.
> HH
Respondent Sandoval-Sanchez has a more substantial claim. He objected not to his compelled presence at a deportation proceeding, but to evidence offered at that proceeding. The general rule in a criminal proceeding is that statements and other evidence obtained as a result of an unlawful, warrantless arrest are suppressible if the link between the evidence and the unlawful conduct is not too attenuated. Wong Sun v. United States, 371 U. S. 471 (1963). The reach of the exclusionary rule beyond the context of a criminal prosecution, however, is less clear. Although this Court has once stated in dictum that “[i]t may be assumed that evidence obtained by the [Labor] Department through an illegal search and seizure cannot be made the basis of a finding in deportation proceedings,” United States ex rel. Bilokumsky v. Tod, supra, at 155, the Court has never squarely addressed the question before. Lower court decisions dealing with this question are sparse.
In United States v. Janis, 428 U. S. 433 (1976), this Court set forth a framework for deciding in what types of proceeding application of the exclusionary rule is appropriate. Imprecise as the exercise may be, the Court recognized in Janis that there is no choice but to weigh the likely social benefits of excluding unlawfully seized evidence against the likely costs. On the benefit side of the balance “the ‘prime purpose’ of the [exclusionary] rule, if not the sole one, ‘is to deter future unlawful police conduct.’ ” Id., at 446, quoting United States v. Calandra, 414 U. S. 338, 347 (1974). On the cost side there is the loss of often probative evidence and all of the secondary costs that flow from the less accurate or more cumbersome adjudication that therefore occurs.
At stake in Janis was application of the exclusionary rule in a federal civil tax assessment proceeding following, the unlawful seizure of evidence by state, not federal, officials. The Court noted at the outset that “[i]n the complex and turbulent history of the rule, the Court never has applied it to exclude evidence from a civil proceeding, federal or state.” 428 U. S., at 447 (footnote omitted). Two factors in Janis suggested that the deterrence value of the exclusionary rule in the context of that case was slight. First, the state law enforcement officials were already “punished” by the exclusion of the evidence in the state criminal trial as a result of the same conduct. Id,., at 448. Second, the evidence was also excludable in any federal criminal trial that might be held. Both factors suggested that further application of the exclusionary rule in the federal civil proceeding would contribute little more to the deterrence of unlawful conduct by state officials. On the cost side of the balance, Janis focused simply on the loss of “concededly relevant and reliable evidence.” Id., at 447. The Court concluded that, on balance, this cost outweighed the likely social benefits achievable through application of the exclusionary rule in the federal civil proceeding.
While it seems likely that the deterrence value of applying the exclusionary rule in deportation proceedings would be higher than it was in Janis, it is also quite clear that the social costs would be very much greater as well. Applying the Janis balancing test to the benefits and costs of excluding concededly reliable evidence from a deportation proceeding, we therefore reach the same conclusion as in Janis.
The likely deterrence value of the exclusionary rule in deportation proceedings is difficult to assess. On the one hand, a civil deportation proceeding is a civil complement to a possible criminal prosecution, and to this extent it resembles the civil proceeding under review in Janis. The INS does not suggest that the exclusionary rule should not continue to apply in criminal proceedings against an alien who unlawfully enters or remains in this country, and the prospect of losing evidence that might otherwise be used in a criminal prosecution undoubtedly supplies some residual deterrent to unlawful conduct by INS officials. But it must be acknowledged that only a very small percentage of arrests of aliens are intended or expected to lead to criminal prosecutions. Thus the arresting officer’s primary objective, in practice, will be to use evidence in the civil deportation proceeding. Moreover, here, in contrast to Janis, the agency officials who effect the unlawful arrest are the same officials who subsequently bring the deportation action. As recognized in Janis, the exclusionary rule is likely to be most effective when applied to such “intrasovereign” violations.
Nonetheless, several other factors significantly reduce the likely deterrent value of the exclusionary rule in a civil deportation proceeding. First, regardless of how the arrest is effected, deportation will still be possible when evidence not derived directly from the arrest is sufficient to support deportation. As the BIA has recognized, in many deportation proceedings “the sole matters necessary for the Government to establish are the respondent’s identity and alienage — at which point the burden shifts to the respondent to prove the time, place and manner of entry.” Matter of Sandoval, 17 I. & N. Dec., at 79. Since the person and identity of the respondent are not themselves suppressible, see supra, at 1039-1040, the INS must prove only alienage, and that will sometimes be possible using evidence gathered independently of, or sufficiently attenuated from, the original arrest. See Matter of Sandoval, supra, at 79; see, e. g., Avila-Gallegos v. INS, 525 F. 2d 666 (CA2 1975). The INS’s task is simplified in this regard by the civil nature of the proceeding. As Justice Brandéis stated: “Silence is often evidence of the most persuasive character.... [T]here is no rule of law which prohibits officers charged with the administration of the immigration law from drawing an inference from the silence of one who is called upon to speak.... A person arrested on the preliminary warrant is not protected by a presumption of citizenship comparable to the presumption of innocence in a criminal case. There is no provision which forbids drawing an adverse inference from the fact of standing mute.” United States ex rel. Bilokumsky v. Tod, 263 U. S., at 163-154.
The second factor is a practical one. In the course of a year the average INS agent arrests almost 500 illegal aliens. Brief for Petitioner 38. Over 97.5% apparently agree to voluntary deportation without a formal hearing. 705 F. 2d, at 1071, n. 17. Among the remainder who do request a formal hearing (apparently a dozen or so in all, per officer, per year) very few challenge the circumstances of their arrests. As noted by the Court of Appeals, “the BIA was able to find only two reported immigration cases since 1899 in which the [exclusionary] rule was applied to bar unlawfully seized evidence, only one other case in which the rule’s application was specifically addressed, and fewer than fifty BIA proceedings since 1952 in which a Fourth Amendment challenge to the introduction of evidence was even raised.” Id., at 1071. Every INS agent knows, therefore, that it is highly unlikely that any particular arrestee will end up challenging the lawfulness of his arrest in a formal deportation proceeding. When an occasional challenge is brought, the consequences from the point of view of the officer’s overall arrest and deportation record will be trivial. In these circumstances, the arresting officer is most unlikely to shape his conduct in anticipation of the exclusion of evidence at a formal deportation hearing.
Third, and perhaps most important, the INS has its own comprehensive scheme for deterring Fourth Amendment violations by its officers. Most arrests of illegal aliens away from the border occur during farm, factory, or other workplace surveys. Large numbers of illegal aliens are often arrested at one time, and conditions are understandably chaotic. See Brief for Petitioner in INS v. Delgado, O. T. 1983, No. 82-1271, pp. 3-5. To safeguard the rights of those who are lawfully present at inspected workplaces the INS has developed rules restricting stop, interrogation, and arrest practices. Id., at 7, n. 7, 32-40, and n. 25. These regulations require that no one be detained without reasonable suspicion of illegal alienage, and that no one be arrested unless there is an admission of illegal alienage or other strong evidence thereof. New immigration officers receive instruction and examination in Fourth Amendment law, and others receive periodic refresher courses in law. Brief for Petitioner 39-40. Evidence seized through intentionally unlawful conduct is excluded by Department of Justice policy from the proceeding for which it was obtained. See Memorandum from Benjamin R. Civiletti to Heads of Offices, Boards, Bureaus and Divisions, Violations of Search and Seizure Law (Jan. 16, 1981). The INS also has in place a procedure for investigating and punishing immigration officers who commit Fourth Amendment violations. See Office of General Counsel, INS, U. S. Dept, of Justice, The Law of Arrest, Search, and Seizure for Immigration Officers 35 (Jan. 1983). The INS’s attention to Fourth Amendment interests cannot guarantee that constitutional violations will not occur, but it does reduce the likely deterrent value of the exclusionary rule. Deterrence must be measured at the margin.
Finally, the deterrent value of the exclusionary rule in deportation proceedings is undermined by the availability of alternative remedies for institutional practices by the INS that might violate Fourth Amendment rights. The INS is a single agency, under central federal control, and engaged in operations of broad scope but highly repetitive character. The possibility of declaratory relief against the agency thus offers a means for challenging the validity of INS practices, when standing requirements for bringing such an action can be met. Cf. INS v. Delgado, 466 U. S. 210 (1984).
Respondents contend that retention of the exclusionary rule is necessary to safeguard the Fourth Amendment rights of ethnic Americans, particularly the Hispanic-Americans lawfully in this country. We recognize that respondents raise here legitimate and important concerns. But application of the exclusionary rule to civil deportation proceedings can be justified only if the rule is likely to add significant protection to these Fourth Amendment rights. The exclusionary rule provides no remedy for completed wrongs; those lawfully in this country can be interested in its application only insofar as it may serve as an effective deterrent to future INS misconduct. For the reasons we have discussed we conclude that application of the rule in INS civil deportation proceedings, as in the circumstances discussed in Janis, “is unlikely to provide significant, much less substantial, additional deterrence.” 428 U. S., at 458. Important as it is to protect the Fourth Amendment rights of all persons, there is no convincing indication that application of the exclusionary rule in civil deportation proceedings will contribute materially to that end.
On the other side of the scale, the social costs of applying the exclusionary rule in deportation proceedings are both unusual and significant. The first cost is one that is unique to continuing violations of the law. Applying the exclusionary rule in proceedings that are intended not to punish past transgressions but to prevent their continuance or renewal would require the courts to close their eyes to ongoing violations of the law. This Court has never before accepted costs of this character in applying the exclusionary rule.
Presumably no one would argue that the exclusionary rule should be invoked to prevent an agency from ordering corrective action at a leaking hazardous waste dump if the evidence underlying the order had been improperly obtained, or to compel police to return contraband explosives or drugs to their owner if the contraband had been unlawfully seized. On the rare occasions that it has considered costs of this type the Court has firmly indicated that the exclusionary rule does not extend this far. See United States v. Jeffers, 342 U. S. 48, 54 (1951); Trupiano v. United States, 334 U. S. 699, 710 (1948). The rationale for these holdings is not difficult to find. “Both Trupiano and Jeffers concerned objects the possession of which, without more, constitutes a crime. The repossession of such per se contraband by Jeffers and Trupiano would have subjected them to criminal penalties. The return of the contraband would clearly have frustrated the express public policy against the possession of such objects.” One 1958 Plymouth Sedan v. Pennsylvania, 380 U. S. 693, 699 (1965) (footnote omitted). Precisely the same can be said here. Sandoval-Sanchez is a person whose unregistered presence in this country, without more, constitutes a crime. His release within our borders would immediately subject him to criminal penalties. His release would clearly frustrate the express public policy against an alien’s unregistered presence in this country. Even the objective of deterring Fourth Amendment violations should not require such a result. The constable’s blunder may allow the criminal to go free, but we have never suggested that it allows the criminal to continue in the commission of an ongoing crime. When the crime in question involves unlawful presence in this country, the criminal may go free, but he should not go free within our borders.
Other factors also weigh against applying the exclusionary rule in deportation proceedings. The INS currently operates a deliberately simple deportation hearing system, streamlined to permit the quick resolution of very large numbers of deportation actions, and it is against this backdrop that the costs of the exclusionary rule must be assessed. The costs of applying the exclusionary rule, like the benefits, must be measured at the margin.
The average immigration judge handles about six deportation hearings per day. Brief for Petitioner 27, n. 16. Neither the hearing officers nor the attorneys participating in those hearings are likely to be well versed in the intricacies of Fourth Amendment law. The prospect of even occasional invocation of the exclusionary rule might significantly change and complicate the character of these proceedings. The BIA has described the practical problems as follows:
“Absent the applicability of the exclusionary rule, questions relating to deportability routinely involve simple factual allegations and matters of proof. When Fourth Amendment issues are raised at deportation hearings, the result is a diversion of attention from the main issues which those proceedings were created to resolve, both in terms of the expertise of the administrative decision makers and of the structure of the forum to accommodate inquiries into search and seizure questions. The result frequently seems to be a long, confused record in which the issues are not clearly defined and in which there is voluminous testimony.... The ensuing delays and inordinate amount of time spent on such cases at all levels has an adverse impact on the effective administration of the immigration laws.... This is particularly true in a proceeding where delay may be the only ‘defense’ available and where problems already exist with the use of dilatory tactics.” Matter of Sandoval, 17 I. & N., at 80 (footnote omitted).
This sober assessment of the exclusionary rule’s likely costs, by the agency that would have to administer the rule in at least the administrative tiers of its application, cannot be brushed off lightly.
The BIA’s concerns are reinforced by the staggering dimension of the problem that the INS confronts. Immigration officers apprehend over one million deportable aliens in this country every year. Id., at 85. A single agent may arrest many illegal aliens every day. Although the investigatory burden does not justify the commission of constitutional violations, the officers cannot be expected to compile elaborate, contemporaneous, written reports detailing the circumstances of every arrest. At present an officer simply completes a “Record of Deportable Alien” that is introduced to prove the INS’s case at the deportation hearing; the officer rarely must attend the hearing. Fourth Amendment suppression hearings would undoubtedly require considerably more, and the likely burden on the administration of the immigration laws would be correspondingly severe.
Finally, the INS advances the credible argument that applying the exclusionary rule to deportation proceedings might well result in the suppression of large amounts of information that had been obtained entirely lawfully. INS arrests occur in crowded and confused circumstances. Though the INS agents are instructed to follow procedures that adequately protect Fourth Amendment interests, agents will usually be able to testify only to the fact that they followed INS rules. The demand for a precise account of exactly what happened in each particular arrest would plainly pre | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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LOPEZ v. DAVIS, WARDEN, et al.
No. 99-7504.
Argued October 30, 2000
Decided January 10, 2001
Ginsburg, J., delivered the opinion of the Court, in which O’Connor, Scalia, Souter, Thomas, and Breyer, JJ., joined. Stevens, J., filed a dissenting opinion, in which Rehnquist, C. J., and Kennedy, J., joined, post, p. 245.
Mark V. Meierhenry argued the cause and filed briefs for petitioner.
Beth S. Brinkmann argued the cause for respondents. With her on the brief were Solicitor General Waxman, Assistant Attorney General Robinson, and Deputy Solicitor General Dreeben.
Stephen R. Sady filed a brief for the National Association of Criminal Defense Lawyers et al. as amici curiae urging reversal.
Justice Ginsburg
delivered the opinion of the Court.
Congress has provided, in 18 U. S. C. § 3621(e)(2)(B), that the Bureau of Prisons (Bureau or BOP) may reduce by up to one year the prison term of an inmate convicted of a nonviolent felony, if the prisoner successfully completes a substance abuse program. The Bureau’s implementing regulation categorically denies early release to prisoners whose current offense is a felony attended by “the carrying, possession, or use of a firearm.” 28 CFR § 550.58(a)(1)(vi)(B) (2000). The validity of the Bureau’s regulation is the question presented in this case. We hold, in accord with the Court of Appeals for the Eighth Circuit, that the regulation is a permissible exercise of the Bureau’s discretion under 18 U.S. C. § 3621(e)(2)(B).
I
A
Title 18 U. S. C. § 3621 governs the imprisonment of persons convicted of federal crimes. In 1990, Congress amended the statute to provide that “[t]he Bureau shall. .. make available appropriate substance abuse treatment for each prisoner the Bureau determines has a treatable condition of substance addiction or abuse.” Pub. L. 101-647, §2903, 104 Stat. 4913. Four years later, Congress again amended § 3621, this time to provide incentives for prisoner participation in BOP drug treatment programs. The incentive provision at issue reads: “The period a prisoner convicted of a nonviolent offense remains in custody after successfully completing a treatment program may be reduced by the Bureau of Prisons, but such reduction may not be more than one year from the term the prisoner must otherwise serve.” Pub. L. 103-322, §32001, 108 Stat. 1897 (codified at 18 U. S. C. § 3621(e)(2)(B)).
In 1995, the Bureau published a rule to implement the early release incentive. 60 Fed. Reg. 27692-27695; 28 CFR § 550.58. Because the statute explicitly confined the incentive to prisoners convicted of “nonviolent offensefs],” 18 U. S. C. § 3621(e)(2)(B), the BOP ranked ineligible for early release all inmates currently incarcerated for “crime[s] of violence,” 60 Fed. Reg. 27692. As explained in the Bureau’s program statement, the BOP defined “crimes of violence” to include a drug trafficking conviction under 21 U. S. C. § 841, if the offender received a two-level sentence enhancement under United States Sentencing Commission, Guidelines Manual (USSG) §2D1.1(b)(1) (Nov. 2000), for possessing a dangerous weapon during commission of the drug offense. Bureau of Prisons Program Statement No. 5162.02, § 9 (July 24, 1995), reprinted in App. to Brief for Petitioner 17-18. “[E]xercising [its] discretion in reducing a sentence,” the Bureau also excluded from early release eligibility inmates who had a prior conviction “for homicide, forcible rape, robbery, or aggravated assault.” 60 Fed. Reg. 27692 (codified at 28 CFR §550.58 (1995)).
The Courts of Appeals divided over the validity of the Bureau’s definition of crimes of violence to include drug offenses that involved possession of a firearm. A majority of Circuits, including the Eighth, held that § 3621(e)(2)(B) required the Bureau to look only to the offense of conviction (drug trafficking), and not to sentencing factors (firearm possession), in determining whether an offender was convicted of a “nonviolent offense,” and was therefore eligible under the statute for the early release incentive. Martin v. Gerlinski, 133 F. 3d 1076, 1079 (CA8 1998); see also Fristoe v. Thompson, 144 F. 3d 627, 631 (CA10 1998); Byrd v. Hasty, 142 F. 3d 1395, 1398 (CA11 1998); Roussos v. Menifee, 122 F. 3d 159, 164 (CA3 1997); Downey v. Crabtree, 100 F. 3d 662, 668 (CA9 1996). The Fourth and Fifth Circuits, however, upheld the Bureau’s classification of drug offenses attended by firearm possession as violent crimes. Pelissero v. Thompson, 170 F. 3d 442, 447 (CA4 1999); Venegas v. Henman, 126 F. 3d 760, 763 (CA5 1997).
This split among the Circuits prompted the Bureau in 1997 to publish the regulation now before the Court. See 62 Fed. Reg. 53690-53691. Like the 1995 rule, the current regulation excludes from early release eligibility offenders who possessed a firearm in connection with their offenses. In contrast to the earlier rule, however, the 1997 regulation does not order this exclusion by defining the statutory term “prisoner convicted of a nonviolent offense” or the cognate term “crimes of violence.” Instead, the current regulation relies upon “the discretion allotted to the Director of the Bureau of Prisons in granting a sentence reduction to exclude [enumerated categories of] inmates.” Id., at 53690. The regulation, designed to achieve consistent administration of the incentive, now provides:
“(a) Additional early release criteria. (1) As an exercise of the discretion vested in the Director of the Federal Bureau of Prisons, the following categories of inmates are not eligible for early release:
“(iv) Inmates who have a prior felony or misdemeanor conviction for homicide, forcible rape, robbery, or aggravated assault, or child sexual abuse offenses;
“(vi) Inmates whose current offense is a felony:
“(B) That involved the carrying, possession, or use of a firearm or other dangerous weapon . . . .” 28 CFR § 550.58(a) (2000).
In sum, the 1995 rule defined the statutory term “prisoner convicted of a nonviolent offense” to exclude categorically an inmate who possessed a firearm in connection with his offense. The current regulation categorically excludes such an inmate, not because § 3621(e)(2)(B) so mandates, but pursuant to the Bureau’s asserted discretion to prescribe additional early release criteria. Drug traffickers who possess firearms when they engage in crimes are no longer characterized as “violent” offenders within the meaning of the statute. But they are bracketed, for sentence reduction purposes, with persons currently incarcerated for “nonviolent offense[sj” who in the past committed crimes qualifying as violent. The preconviction conduct of both armed offenders and certain redicivists, in the Bureau’s view, “suggests] that they pose a particular risk to the public.” Brief for Respondents 30.
B
In 1997, petitioner Christopher A. Lopez was convicted of possession with intent to distribute methamphetamine, in violation of 21 U. S. C. §841. Upon finding that Lopez possessed a firearm in connection with his offense, the District Court enhanced his sentence by two levels pursuant to USSG §2D1.1(b)(1). Lopez is currently scheduled to be released from prison in June 2002.
While incarcerated, Lopez requested substance abuse treatment. The Bureau found him qualified for its residential drug abuse program, but categorically ineligible, under 28 CFR § 550.58(a)(1)(vi), for early release. App. 3-7.
When notified that he would not be a candidate for early release, Lopez challenged the BOP’s determination by filing a petition for a writ of habeas corpus, under 28 U. S. C. §2241, in the United States District Court for the District of South Dakota. The District Court granted the petition. In that court’s view, the Bureau’s 1997 regulation did not correct the infirmity the Eighth Circuit saw in the 1995 rule. See App. 17-18, and n. 4 (citing Martin, 133 F. 3d, at 1079). “[I]t is true,” the District Court recognized, “that the BOP may exercise a great deal of discretion in determining who among the eligible nonviolent offenders may be released.” App. 17. But, the District Court held, the BOP may not categorically count out, “based upon sentencing factors or weapon possession,” inmates whose underlying conviction was for a nonviolent crime. Id., at 18. Accordingly, the District Court ordered the BOP “to reconsider Lopez’s eligibility for early release.” Id., at 19.
The Eighth Circuit reversed. Bellis v. Davis, 186 F. 3d 1092 (1999). Section 3621(e)(2)(B), the Court of Appeals observed, “states only that the prison term of an inmate convicted of a nonviolent offense ‘may be reduced by the Bureau of Prisons.’ ” Id., at 1094 (quoting 18 U. S. C. § 3621(e)(2)(B)). This discretionary formulation, the Eighth Circuit reasoned, allows the Bureau to devise a regime based on criteria that can be uniformly applied. The statute grants no entitlement to any inmate or class of inmates, the Court of Appeals noted, and it does not instruct the Bureau to make “individual, rather than categorical, assessments of eligibility for inmates convicted of nonviolent offenses.” 186 F. 3d, at 1094. The court further reasoned that, to the extent Congress left a gap in § 3621(e)(2)(B) for the Bureau to fill, deference is owed the BOP’s interpretation under Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, 843-846, 866 (1984), so long as the interpretation is a permissible construction of the statute. 186 F. 3d, at 1095. The Bureau had elected to deny early release to certain categories of prisoners, notably recidivists and firearms carriers, whose “conduct indicates that they pose a serious risk to public safety.” Ibid. That decision, the Court of Appeals concluded, “represents a manifestly permissible construction of the statute and an appropriate exercise of the BOP’s discretion.” Ibid.
The Eighth Circuit next explained why its earlier decision in Martin did not control this case, which trains on the BOP’s 1997 regulation: Martin addressed only the Bureau’s 1995 attempt to interpret the statutory term “nonviolent offense”; the court in that ease did not address “whether the BOP may, as an exercise of its discretion, . . . look to sentencing factors in deciding which individuals among statutorily eligible inmates are appropriate candidates for early release.” 186 F. 3d, at 1095. Facing that issue, the Court of Appeals held such an exercise of discretion proper. Ibid.
The Courts of Appeals have again divided, now over the permissibility of the Bureau’s current (1997) regulation. The Tenth and Eleventh Circuits, in line with their prior decisions invalidating the 1995 rule, have concluded that § 3621(e)(2)(B) permits no categorical exclusions of nonviolent offenders based on sentence enhancements. Ward v. Booker, 202 F. 3d 1249, 1256-1257 (CA10 2000); Kilpatrick v. Houston, 197 F. 3d 1134, 1135 (CA11 1999). The Ninth Circuit, on the other hand, has agreed with the Eighth Circuit that precedent invalidating the 1995 rule does not control and that, in 1997, the BOP permissibly exercised its discretion under § 3621(e)(2)(B) when it categorically excluded from early release consideration inmates who possessed a firearm in connection with their nonviolent offenses. Bowen v. Hood, 202 F. 3d 1211, 1218-1220 (2000).
We granted certiorari to resolve this conflict, 529 U. S. 1086 (2000), and now affirm the judgment of the Eighth Circuit.
II
The statute provides: “The period a prisoner convicted of a nonviolent offense remains in custody after successfully completing a treatment program may be reduced by the Bureau of Prisons_” 18 U.S.C. § 3621(e)(2)(B). The measure thus categorically denies early release eligibility to inmates convicted of violent offenses. The question we address is whether the Bureau has discretion to delineate, as an additional category of ineligible inmates, those whose current offense is a felony involving a firearm. 28 CFR § 550.58(a)(1)(vi)(B) (2000).
Lopez urges that the statute is unambiguous. He says that, by identifying a class of inmates ineligible for sentence reductions under § 3621(e)(2)(B), i. e., those convicted of a violent offense, Congress has barred the Bureau from identifying further categories of ineligible inmates. “If Congress wanted the BOP to reduce the categories of inmates eligible for the early release incentive (beyond the one identified by Congress), Congress would have specifically placed this grant of authority in the language of the statute.” Brief for Petitioner 23. As to the statutory instruction that the Bureau “may” reduce sentences, Lopez initially suggests it is merely a grant of authority to the BOP to reduce a sentence that, prior to the enactment of § 3621(e)(2)(B), could not be reduced for successful completion of drug treatment: “The power granted was to give reductions not the power to decide who was eligible to receive reductions.” Id., at 21. He alternately contends that the Bureau may take into account only “post-conviction conduct,” not “pre-conviction conduct.” Reply Brief 4-5. Acting on a case-by-case basis, Lopez asserts, the Bureau may “deny early release to those inmates [who] are statutorily eligible, but who do not deserve early release based on their conduct while in prison.” Id., at 5. Under this reading, the Bureau may exercise discretion in denying early release, but only on an individual basis, taking account solely of postconviction conduct.
In the Bureau’s view, § 3621(e)(2)(B) establishes two prerequisites for sentence reduction: conviction of a nonviolent offense and successful completion of drug treatment. Brief for Respondents 18. If those prerequisites are met, the Bureau “may,” but also may not, grant early release. The BOP opposes Lopez’s argument that Congress barred the Bureau from imposing limitations categorically or on the basis of preconviction conduct. According to the Bureau, Congress simply “did not address how the Bureau should exercise its discretion within the class of inmates who satisfy the statutory prerequisites for early release.” Id., at 23. Because Congress left the question unaddressed, the Bureau maintains, the agency may exclude inmates either categorically or on a case-by-case basis, subject of course to its obligation to interpret the statute reasonably, see Chevron, 467 U. S., at 844, in a manner that is not arbitrary or capricious, see 5 U, S. C. § 706(2)(A). In this instance, the Bureau urges, it has acted reasonably: Its denial of early release to all inmates who possessed a firearm in connection with their current offense rationally reflects the view that such inmates displayed a readiness to endanger another’s life; accordingly, in the interest of public safety, they should not be released months in advance of completing their sentences.
We agree with the Bureau’s position. Preliminarily, we note conspicuous anomalies in Lopez’s construction. If § 3621(e)(2)(B) functions not as a grant of discretion to determine early release eligibility, but both as an authorization and a command to reduce sentences, then Congress’ use of the word “may,” rather than “shall,” has no significance. And if the BOP does have discretion to deny early release to certain inmates, but only based on individualized assessments of postconviction conduct, then the agency cannot categorically deny early release even to recidivists with prior (perhaps multiple) convictions for “homicide, forcible rape ... , or child sexual abuse offenses.” 28 CFR § 550.58(a)(l)(iv) (2000). For that provision, as much as the exclusion of inmates imprisoned for offenses involving a firearm, see supra, at 235, entails no individualized determination based on postconviction conduct. Furthermore, Lopez’s position would confine the BOP’s discretion under § 3621(e)(2)(B) to consideration of factors of the kind the Bureau already may consider in granting credit for “satisfactory behavior.” See 18 U. S. C. § 3624(b)(1) (“a prisoner [serving a term of more than one year and less than life] may receive credit toward the service of the prisoner’s sentence ... subject to determination by the Bureau of Prisons that, during that year, the prisoner has displayed exemplary compliance with such institutional disciplinary regulations”).
We turn now to the Bureau’s reading of the statutory text, which instructs that the agency “may” reduce the sentence of a nonviolent offender who has successfully completed a drug treatment program. Congress’ use of the permissive “may” in § 3621(e)(2)(B) contrasts with the legislators’ use of a mandatory “shall” in the very same section. Elsewhere in § 3621, Congress used “shall” to impose discretionless obligations, including the obligation to provide drug treatment when funds are available. See 18 U. S. C. § 3621(e)(1) (“Bureau of Prisons shall, subject to the availability of appropriations, provide residential substance abuse treatment (and make arrangements for appropriate aftercare)”); see also, e. g., § 3621(b) (“The Bureau shall designate the place of the prisoner’s imprisonment.... In designating the place of imprisonment or making transfers under this subsection, there shall be no favoritism given to prisoners of high social or economic status.”). Sensibly read, the grant of discretion in § 3621(e)(2)(B) to decide whether to reduce a sentence parallels the grant of discretion in § 3621(e)(2)(A) to retain a prisoner who successfully completes drug treatment “under such [custodial] conditions as the Bureau deems appropriate.” § 3621(e)(2)(A). When an eligible prisoner successfully completes drug treatment, the Bureau thus has the authority, but not the duty, both to alter the prisoner’s conditions of confinement and to reduce his term of imprisonment.
The constraints Lopez urges — requiring the BOP to make individualized determinations based only on postconviction conduct — are nowhere to be found in § 3621(e)(2)(B). Beyond instructing that the Bureau has discretion to reduce the period of imprisonment for a nonviolent offender who successfully completes drug treatment, Congress has not identified any further circumstance in which the Bureau either must grant the reduction, or is forbidden to do so. In this familiar situation, where Congress has enacted a law that does not answer “the precise question at issue,” all we must decide is whether the Bureau, the agency empowered to administer the early release program, has filled the statutory gap “in a way that is reasonable in light of the legislature’s revealed design.” NationsBank of N C., N. A. v. Variable Annuity Life Ins. Co., 513 U. S. 251, 257 (1995) (citing Chevron, 467 U. S., at 842); see also Reno v. Koray, 515 U. S. 50, 61 (1995) (deferring to BOP’s interpretation of statute). We think the agency’s interpretation is reasonable both in taking account of preconviction conduct and in making categorical exclusions.
First, as the dissent but not Lopez recognizes, see post, at 248, the Bureau need not blind itself to preconviction conduct that the agency reasonably views as jeopardizing life and limb. By denying eligibility to violent offenders, the statute manifests congressional concern for preconviction behavior — and for the very, conduct leading to conviction. The Bureau may reasonably attend to these factors as well. Its regulation in this regard is kin to the Attorney General’s order upheld in INS v. Yueh-Shaio Yang, 519 U. S. 26 (1996). That case involved a statute authorizing the Attorney General to waive deportation of aliens deportable for entry fraud. The Attorney General had refused to waive deportation for one alien because of “acts of fraud ... in connection with his entry.” Id., at 27. The alien argued that because the statute made aliens who had committed entry fraud eligible for waiver, the Attorney General was precluded from taking such conduct into account “at all” in deciding whether to grant relief. Id., at 30. We rejected this view, stating that the statute “establishes only the alien’s eligibility for the waiver. Such eligibility in no way limits the considerations that may guide the Attorney General in exercising her discretion to determine who, among those eligible, will be accorded grace.” Id., at 31. Similarly in this case, the statute’s restriction of early release eligibility to nonviolent offenders does not cut short the considerations that may guide the Bureau. Just as the Attorney General permissibly considered aspects of entry fraud, even though entry fraud was a criterion of statutory eligibility, so the Bureau may consider aspects of the conduct of conviction, even though the conviction is a criterion of statutory eligibility.
We also reject Lopez’s argument, echoed in part by the dissent, post, at 248-249, that the agency must not make categorical exclusions, but may rely only on case-by-case assessments. “[E]ven if a statutory scheme requires individualized determinations,” which this scheme does not, “the decisionmaker has the authority to rely on rulemaking to resolve certain issues of general applicability unless Congress clearly expresses an intent to withhold that authority.” American Hospital Assn. v. NLRB, 499 U. S. 606, 612 (1991); accord, Heckler v. Campbell, 461 U. S. 458, 467 (1983). The approach pressed by Lopez — case-by-case decisionmaking in thousands of cases each year, see supra, at 243, n. 4 — could invite favoritism, disunity, and inconsistency. The Bureau is not required continually to revisit “issues that may be established fairly and efficiently in a single rulemaking proceeding.” Heckler, 461 U. S., at 467.
Having decided that the Bureau may categorically exclude prisoners based on their preconviction conduct, we further hold that the regulation excluding Lopez is permissible. The Bureau reasonably concluded that an inmate’s prior involvement with firearms, in connection with the commission of a felony, suggests his readiness to resort to life-endangering violence and therefore appropriately determines the early release decision.
For the reasons stated, the judgment of the Court of Appeals for the Eighth Circuit is
Affirmed.
Title 21 U. S. C. §§ 841(a)(1) and (2) make it unlawful “to manufacture, distribute, or dispense, or possess with intent to manufacture, distribute, or dispense, a controlled substance,” or “to create, distribute, or dispense, or possess with intent to distribute or dispense, a counterfeit substance.” Section 2Dl.l(b)(l) of the Sentencing Guideline's provides for a two-level sentence enhancement if a dangerous weapon was possessed in connection with the commission of a drug offense. See USSG §2D1.1(b)(1) and comment., n. 3 (Nov. 2000).
To qualify for residential substance abuse treatment, an inmate must be “determined by the Bureau of Prisons to have a substance abuse problem” and be “willing to participate in [the] program.” 18 U. S. C. §§ 3621(e)(5)(B)(i), (ii).
The dissent straddles the fence, agreeing with Lopez that the statute addresses his case unambiguously, but disagreeing with him on precisely what the statute says. Lopez reads the statute to exclude Bureau consideration of preconviction conduct, Reply Brief 4-5; the dissent reads the same words to permit BOP consideration of such conduct, post, at 248 (opinion of Stevens, J.). These divergent readings hardly strengthen the dissent’s assertion that Congress supplied a definitive answer to the “precise question” at issue. See post, at 245.
Lopez contends that the Bureau’s creation of additional hurdles to receipt of a sentence reduction defeats Congress’ purpose of giving inmates an incentive to undergo drug treatment. Brief for Petitioner 24-29. In INS v. Yueh-Shaio Yang, 519 U. S. 26 (1996), we said that “[i]t could be argued that if the Attorney General determined that any entry fraud or misrepresentation, no matter how minor and no matter what the attendant circumstances, would cause her to withhold waiver, she would not be exercising the conferred discretion at all, but would be making a nullity of the statute.” Id., at 31. In this case, it is plain that the Bureau has not rendered § 3621(e)’s incentive a nullity. A total of 6,559 inmates have received sentence reductions under § 3621(e)(2)(B), including 2,633 inmates in Fiscal Year 1999 alone. Bureau of Prisons, Substance Abuse Treatment Programs in the Federal Bureau of Prisons, Report to Congress 8 (Jan. 2000). Moreover, inmates who do not qualify for early release, like inmates who do, receive other incentives to participate in substance abuse treatment. See 28 CFR §§ 550.57(a)(1), (3) (2000) (“An inmate may receive incentives for his or her satisfactory involvement in the residential [drug treatment] program,” including “[l]imited financial awards” and “[l]oeal institution incentives such as preferred living quarters or special recognition privileges.”).
The dissent appears to acknowledge that the Bureau may give “near-dispositive weight to preconviction criteria.” Post, at 249. To the extent the dissent would permit the BOP to accord heavy weight to preconviction conduct, the structured “[i]ndividualized [BOP] consideration” the dissent would allow, post, at 249, seems but a shade different from the forthright categorical exclusion the Bureau has adopted.
Amici urge reversal on the ground that the Bureau violated the notice and comment requirements of the Administrative Procedure Act when it published the 1997 regulation. Brief for National Association of Criminal Defense Lawyers et al. as Amici Curiae 18-24. We decline to address this matter, which was not raised or decided below, or presented in the petition for certiorari. Blessing v. Freestone, 520 U. S. 829, 340, n. 3 (1997).
Lopez invokes the rule of lenity in urging us to accede to his interpretation. Because, as discussed above, the statute cannot be read to prohibit the Bureau from exercising its discretion categorically or on the basis of preconviction conduct, his reliance on the rule is unavailing. See Caron v. United States, 524 U. S. 308, 316 (1998) (“The rule of lenity is not invoked by a grammatical possibility. It does not apply if the ambiguous reading relied on is an implausible reading of the congressional purpose.”). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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35
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ATCHISON, TOPEKA & SANTA FE RAILWAY CO. et al. v. WICHITA BOARD OF TRADE et al.
No. 72-214.
Argued February 28, 1973
Decided June 18, 1973
Marshall, J., announced the Court’s judgment and delivered an opinion,- in which Burger, C. J., and Stewart and Blackmun, JJ., joined. Douglas, J., filed an opinion concurring in the affirmance of the remand to the ICC and dissenting from the reversal of the decree authorizing the injunction, post, p. 826. White, J., filed an opinion concurring in the reversal of the injunction and dissenting from the affirmance of the remand to the ICC, in which Brennan and Rehnquist, JJ., joined, post, p. 828. Powell, J., took no part in the consideration or decision of the cases.
Earl E. Pollock argued the cause for appellants in No. 72-214. With him on the briefs were William F. Cottrell and Christopher A. Mills. Betty Jo Christian argued the cause for appellant in No. 72-433. With her on the briefs were Fritz B. Kahn and Hanford O’Hara.
Daniel J. Sweeney argued the cause for Wichita Board of Trade et al., appellees in both cases. With him on the brief was Harold E. Spencer. William A. Imhof argued the cause for the Secretary of Agriculture. With him on the brief were John A. Knebel, Harold M. Carter, and Kenneth H. Vail.
Solicitor General Griswold, Assistant Attorney General Kauper, Keith A. Jones, and Howard E. Shapiro filed a memorandum for the United States.
Together with No. 72-433, Interstate Commerce Commission v. Wichita Board of Trade et al., also on appeal from the same court.
Mr. Justice Marshall
announced the judgment of the Court, and an opinion in which The Chief Justice, Mr. Justice Stewart, and Mr. Justice Blackmun join.
We noted probable jurisdiction in these cases to resolve two important questions relating to the proper role of courts in reviewing approval by the Interstate Commerce Commission of proposed rate increases by railroads. 409 U. S. 1005 (1972). First, under what circumstances may a reviewing court find that the Commission has failed adequately to explain its apparent departure from settled Commission precedent? Because the problem of determining what policies an agency is following, as a prelude to determining whether the agency is acting in accordance with Congress’ will, is a recurring one, this issue raises general problems of judicial review of agency action. The second question in these cases is a more limited one: in order to enjoin a proposed rate increase after a final order by the Interstate Commerce Commission, what sort of error must a District Court find in the proceedings of the Commission? We hold that in these cases the Commission did not explain its apparent departure from precedent in a manner sufficient to permit judicial review of its policies, but that, nevertheless, that kind of error does not justify the District Court in entering an injunction against imposition of the rates pending review of the Commission’s action on remand. We therefore vacate the judgment of the District Court and remand for the entry of a proper order.
I
In these cases, the railroads proposed to establish a separate charge for inspection of grain while in transit. In order to inspect the grain, the railroad cars loaded with it are stopped and placed on track facilities. A sample of the grain is taken, and the official grade is determined. Once the grade is known and the commercial value of the grain established, the shipper orders the car to proceed to the appropriate market. In-transit inspections have substantial advantages to shippers over inspection at the destination. If the grain were to be found to be of a different grade than expected only after arrival at the destination, sending it to another market might be quite expensive. The advantages of in-transit inspections to purchasers, instead of inspection at the source that might satisfy shippers, are less marked but are nonetheless significant. The grain might deteriorate while in transit, thus leaving the purchaser with grain of a lower quality than he expected. And the possibility of bias of the inspector is greater if the inspection is made at the source.
The Commission found that “the orderly marketing of grain under present practices requires that a substantial portion of the commodity moving in commercial channels must be subjected to some form of sampling and inspection to determine grade or quality.” 339 I. C. C. 364, 385 (1971). However, it also found that this sampling need not take place while the grain is in transit. The practice of in-transit inspections developed when federal law required inspections for the purpose of grading. 39 Stat. 483. But the diversion of grain from railroads to motor trucks made it difficult to enforce the inspection requirements. When trucks are used, in-transit inspections are not generally made. Thus, in order to simplify the movement of grain, Congress abolished the requirement of inspections. Pub. L. 90-487, 82 Stat. 761. In addition, the convenience of sampling at the source of the grain has increased with the widening reliance on low-cost mechanical samplers installed at grain elevators. The Commission therefore concluded that in-transit inspections were not necessary for the orderly marketing of grain.
It also concluded that in-transit inspections resulted in a substantial decrease in the number of freight cars available for general use. Relying on a variety of studies conducted by the railroads, the Commission found that each inspection kept a freight car out of use for roughly three days, and that the cumulative impact of the delays due to in-transit inspection was to reduce the available freight car fleet by several thousand cars.
Finally, the Commission considered whether the proposed separate charge for each in-transit inspection fairly reflected the cost to the railroad of such an inspection. Again, it relied on quite detailed studies that established the cost of detaining a car, the cost of switching it on and off the main line, and the clerical costs of conducting inspections. The Commission concluded that the proposed charges were “not excessive in amount... on the basis of the convincing evidence of record showing the costs sustained by the railroads in performing the in-transit inspection service.” 340 I. C. C., at 71-72.
Shippers who had objected to the proposed new charges before the Commission sought review of the Commission’s order, and a statutory three-judge District Court was convened. The District Court found that these conclusions were supported by substantial evidence, and they are not challenged here. But the District Court held that the Commission had not adequately justified its failure to follow “its long established rule that it will not allow a separate charge for an accessorial service previously performed as part of the line-haul rates without substantial evidence that such an additional charge is justified measured against the overall services rendered and the overall reasonableness of the increased line-haul rate resulting therefrom.” 352 F. Supp. 365, 368. The Commission, although it analyzed the cost of each in-transit inspection, had made no attempt to consider the reasonableness of continuing the existing line-haul rate, which included some charge for in-transit inspections. Instead, the Commission had attempted to distinguish this case from prior cases in which the rule was invoked, but the District Court, relying on Secretary of Agriculture v. United States, 347 U. S. 645 (1954), was “not convinced that the instant proceeding can be 'distinguished’ as the Commission has indicated.” 352 F. Supp., at 369.
Although the Commission must be given some leeway to re-examine and reinterpret its prior holdings, it is not sufficiently clear from its opinion that it has done so in this case. A reviewing court must be able to discern in the Commission’s actions the policy it is now pursuing, so that it may complete the task of judicial review — in this regard, to determine whether the Commission’s policies are consistent with its mandate from Congress. Since we cannot tell from the Commission’s opinions what those policies are, we therefore agree with the District Court that the Commission’s order finding the rates just and reasonable cannot be sustained.
II
Judicial review of decisions by the Interstate Commerce Commission in rate cases necessarily has a limited scope. Such decisions “are not to be disturbed by the courts except upon a showing that they are unsupported by evidence, were made without a hearing, exceed constitutional limits, or for some other reason amount to an abuse of power.” Manufacturers R. Co. v. United States, 246 U. S. 457, 481 (1918). As this Court has observed, “The process of rate making is essentially empiric. The stuff of the process is fluid and changing— the resultant of factors that must be valued as well as weighed. Congress has therefore delegated the enforcement of transportation policy to a permanent expert body and has charged it with the duty of being responsive to the dynamic character of transportation problems.” Board of Trade of Kansas City v. United States, 314 U. S. 534, 546 (1942).
The delegation to the Commission is not, of course, unbounded, and it is the duty of a reviewing court to determine whether the course followed by the Commission is consistent with its mandate from Congress. See ICC v. Inland Waterways Corp., 319 U. S. 671, 691 (1943); Burlington Truck Lines, Inc. v. United States, 371 U. S. 156, 167-169 (1962). Cf. NLRB v. Wyman-Gordon Co., 394 U. S. 759, 767 (1969) (opinion of Fortas, J.). But a simple examination of the order being reviewed is frequently insufficient to reveal the policies that the Commission is pursuing. Thus, this Court has relied on the “simple but fundamental rule of administrative law,” SEC v. Chenery Corp., 332 U. S. 194, 196 (1947), that the agency must set forth clearly the grounds on which it acted. For “[w]e must know what a decision means before the duty becomes ours to say whether it is right or wrong.” United States v. Chicago, M., St. P. & P. R. Co., 294 U. S. 499, 511 (1935). See also Phelps Dodge Corp. v. NLRB, 313 U. S. 177, 197 (1941); SEC v. Chenery Corp., 318 U. S. 80, 94 (1943). And we must rely on the rationale adopted by the agency if we are to guarantee the integrity of the administrative process. Id., at 88. Cf. NLRB v. Metropolitan Life Ins. Co., 380 U. S. 438, 443-444 (1965). Only in that way may we “guard against the danger of sliding unconsciously from the narrow confines of law into the more spacious domain of policy.” Phelps Dodge Corp. v. NLRB, supra, at 194.
An agency “may articulate the basis of its order by reference to other decisions,” NLRB v. Metropolitan Life Ins. Co., supra, at 443 n. 6. For “[ajdjudicated cases may and do, of course, serve as vehicles for the formulation of agency policies, which are applied and announced therein. See H. Friendly, The Federal Administrative Agencies 36-52 (1962). They generally provide a guide to action that the agency may be expected to take in future cases. Subject to the qualified role of stare decisis in the administrative process, they may serve as precedents.” NLRB v. Wyman-Gordon Co., supra, at 765-766 (opinion of Fortas, J.). This is essentially a corollary of the general rule requiring that the agency explain the policies underlying its action. A settled course of behavior embodies the agency’s informed judgment that, by pursuing that course, it will carry out the policies committed to it by Congress.
There is, then, at least a presumption that those policies will be carried out best if the settled rule is adhered to. From this presumption flows the agency’s duty to explain its departure from prior norms. Secretary of Agriculture v. United States, supra, at 653. The agency may flatly repudiate those norms, deciding, for example, that changed circumstances mean that they are no longer required in order to effectuate congressional policy. Or it may narrow the zone in which some rule will be applied, because it appears that a more discriminating invocation of the rule will best serve congressional policy. Or it may find that, although the rule in general serves useful purposes, peculiarities of the case before it suggest that the rule not be applied in that case. Whatever the ground for the departure from prior norms, however, it must be clearly set forth so that the reviewing court may understand the basis of the agency’s action and so may judge the consistency of that action with the agency’s mandate.
A further complication arises when, as here, the agency distinguishes earlier cases in which it invoked the rule. An initial step, and often the only one clearly taken, is to specify factual differences between the cases. Those factual differences serve to distinguish the cases only when some legislative policy makes the differences relevant to determining the proper scope of the prior rule. It is all too easy for a court to judge the adequacy of an asserted distinction in light of the policies the court, rather than the agency, seeks to implement; that is, after all, what an appellate court does with respect to courts of the first instance. Yet when an agency’s distinction of its prior cases is found inadequate, the reviewing court may inadvertently adopt the stance it ordinarily takes with respect to other courts, and thereby may invade “the domain which Congress has set aside exclusively for the administrative agency,” SEC v. Chen- ery Corp., supra, at 196, that is, the choice of particular actions to carry out the broad policies stated by Congress. Instead, it is enough to satisfy the requirements of judicial oversight of administrative action if the agency asserts distinctions that, when fairly and sympathetically read in the context of the entire opinion of the agency, reveal the policies it is pursuing. So long as the policies can be discerned, the court may exercise its proper function of determining whether the agency’s policies are consistent with congressional directives.
These principles gain content when applied to the present cases. The District Court held that the Commission had not repudiated or adequately distinguished its prior cases establishing the rule that “it will not allow a separate charge for an accessorial service previously performed as part of the line-haul rates without substantial evidence that such an additional charge is justified measured against the overall services rendered and the overall reasonableness of the increased line-haul rate resulting therefrom.” 352 F. Supp., at 368. While this is a fair summary of the Commission’s established practice, it conceals the apparent purpose of the rule, to protect two distinct classes: shippers who will continue to utilize the acces-sorial service — in this case, those who will still have their grain inspected while in transit — and shippers who will not. To decide whether the Commission has adequately explained its failure to follow that rule, we must consider each class in turn, for the Commission may have made clear why it need not protect one class by invoking the rule but it may nonetheless have failed to say why it need not protect the other class.
In Unloading Lumber to New York Harbor, 256 I. C. C. 463 (1943), the Commission dealt with a proposal to charge separately for unloading, a service that was inextricably bound up with the line-haul service. Cf. Secretary of Agriculture v. United States, supra, at 648-649. The Commission said, “It follows that respondents may not now segregate a component of that [line-haul] service, making a separate charge therefor, without an adequate showing that the aggregate charge for the through service is reasonable.” 256 I. C. C., at 468. The explicit purpose of the rule in this situation is to guarantee that shippers receiving the same service that they had previously received do not pay an unreasonable amount. See also Duluth Dockage Absorption, 44 I. C. C. 300 (1917); Terminal Charges at Pacific Coast Ports, 255 I. C. C. 673, 682 (1943). The rule, in this regard, is that the railroads must demonstrate both that the proposed charge is reasonable in light of the costs of the separate service, and that the total charge for line haul plus the separate service is reasonable.
The Commission justified its departure from its prior eases by giving two reasons that relate to this aspect of the rule. First, it noted that “[t]he line-haul rates applicable on the grain to, from, and through [the] inspection points number in the thousands and, because of the complexities of the grain rate structure, vary to a large degree.” Thus, applying the general rule “effectively precludes respondents from ever establishing a separate charge for the accessorial first stop for inspection regardless of the need for such a charge.” Second, the Commission said that “the line-haul rate applicable to any movement of grain... when coupled with the proposed charge is less than the maximum reasonable level determined by this Commission. In no instance will the combined rate and charge exceed the maximum level prescribed in Grain and Grain Products[, 205 I. C. C. 301 (1934) and 215 I. C. C. 83 (1936)].” 339 I. C. C., at 386-387.
The maximum rates prescribed in Grain and Grain Products have been subjected to a large number of general rate increases. See, e. g., Ex parte Nos. 265 and 267, Increased Freight Rates, 1970 and 1971, 339 I. C. C. 125 (1971). In those proceedings, the Commission’s focus is on the general revenue needs of the railroads. Across-the-board percentage increases are permitted without detailed examination of individual rates. As a result, there may be specific routes on which the maximum is in fact unreasonable, because, for example, the costs of operating those routes have not increased as rapidly as the costs elsewhere. Thus, the Commission has held that its approval of a general increase “does not have the effect of approving any particular increased rate as not being in excess of a maximum reasonable rate.” Coal from Illinois to Alton and East St. Louis, 274 I. C. C. 637, 670 (1949). See also Tennessee Produce & Chemical Corp. v. Alabama G. S. R. Co., 277 I. C. C. 207 (1950); Brimstone R. Co. v. United States, 276 U. S. 104 (1928). However, in other contexts, the Commission has treated the prescribed rates as modified by general increases as “the best evidence of the reasonableness of corresponding rates on a... date” after the general increase. Agsco Chemicals, Inc. v. Alabama G. S. R. Co., 314 I. C. C. 725, 733 (1961). Cf. Public Service Comm’n of North Dakota v. Great Northern R. Co., 340 I. C. C. 739, 750 (1972).
The Commission thus has not determined that a rate which does not exceed the current general maximum is reasonable. A shipper can challenge any such rate as unreasonable and, if he succeeds, may recover reparations. In addition, the Commission may prescribe a rate to be charged in the future. 49 U. S. C. §§ 8, 9, 13(1), 15(1); ICC v. Inland Waterways Corp., 319 U. S. 671, 687 (1943). In such proceedings, the shipper must show that the rate charged was unreasonable. Cf. Louisville & N. R. Co. v. United States, 238 U. S. 1 (1915); Shaw Warehouse Co. v. Southern R. Co., 288 F. 2d 759 (CA5 1961). In contrast, when a proposed rate increase is challenged by a shipper before it goes into effect, “the burden of proof shall be upon the carrier to show that the proposed changed rate... is just and reasonable.” 49 U. S. C. § 15 (7).
The Commission in this litigation referred to the burden that applying the rule would place on the railroads. It rather clearly intended by this to suggest that the importance of implementing the new charges and so of increasing the supply of available freight cars justified some modification of its usual allocation of the burden of going forward. Instead of requiring the railroads to produce substantial evidence that the total charges were reasonable, it would leave that determination to later proceedings in which a shipper seeking reparations might point to particular individual charges as unreasonable.
If this were all that was at stake, the Commission would have adequately identified the concerns behind its course — in light of the pressing need to increase the freight car supply, it was not too much to require that shippers carry the burden of going forward. Such an assessment would surely permit a reviewing court to determine whether the Commission’s action was consistent with congressional transportation policy. Unfortunately, though, the change involved in making the shippers claim that particular rates are unreasonable is not all that is at stake. For in proceedings for reparations, there is also a change in the burden of proof: the shipper must produce substantial evidence that the rate is unreasonable. This would appear to affect the likelihood that the shipper will prevail. There is a zone in which rates are reasonable, United States v. Chicago, M., St. P. & P. R. Co., 294 U. S. 499, 506 (1935), and it would seem to be harder to establish that the proposed rates fell outside that zone than that they fell within it. Or so Congress believed, for it specified the allocation of the burden of proof in suspension proceedings as part of the cost to the carriers; in return for confining the power to suspend rates to the Commission, and so of eliminating the threat of long-drawn-out injunctive proceedings in the courts, Congress made the carriers carry a burden of proof that would otherwise not have been theirs. Cf. Part III, infra.
The Commission did not suggest that its approval of the proposed rates on the grounds it gave would alter the usual practice in actions for reparations. Nor did it say why the need for an increased supply of freight cars justified a significant change in the burden of proof. In this sense, the Commission’s action was, as the District Court noted, “discriminatory per se.”
It is even harder to understand from the Commission’s opinion why it departed from the rule in prior cases protecting shippers who decide not to have in-transit inspections. If the separate charges are to be effective in alleviating the ear-shortage problem, there must be a substantial number of shippers who do not seek in-transit inspections. Yet according to the Commission, the railroads need not show that the present line-haul rates are reasonable charges for the services provided to shippers who do not seek in-transit inspections. It would appear, thus, that the Commission has approved a policy that discriminates against what it hopes will be a very large number of shippers; it seems to have tried to justify its policy by citing reasons that affect only a much smaller class.
Some of the shippers who previously sought in-transit inspections will no longer do so. Others had the opportunity for such inspections. Now the railroads propose to eliminate some of the service previously provided, yet charge the same rates. The Commission in its prior cases has required railroads proposing a similar reduction in service either to show that the rates then in effect did not compensate them,for the service, and thus that the service was being provided at no charge, or to reduce the existing rates. See, e. g., Transit Charges, Southern Territory, 332 I. C. C. 664, 683 (1968); Loading of Less-Than-Carload Freight on Lighters in Norfolk, Va., Harbor, 91 I. C. C. 394 (1924); ICC v. Chicago, B. & Q. R. Co., 186 U. S. 320 (1902).
Nothing the Commission said suggests any reason why the railroads should not be required to follow the same rule in this case. At no time have rates ever been established, or found just and reasonable, when the railroads did not include the service of in-transit inspection. Perhaps the imperative need to increase the number of freight cars available to all shippers justifies some alteration of the general rule. Yet the Commission, when dealing with shippers who will continue to have in-transit inspections, invoked the fact that the new charges would not raise rates above those permitted by the general maximum. As to that class, the Commission apparently believed that it could not simply refuse to follow preexisting practices on the ground of exigency alone. The Commission offered no reason to distinguish the larger class from the smaller one, in that respect. But it might be that rates for services including an in-transit inspection, at the level of the general maximum, would be reasonable while rates for services without such inspections would be unreasonable at that level, or even below it. Thus, the fact that the new charges will not exceed the general maximum seems to have no bearing on the question of the reasonableness of the rates that will continue to be in force for now-reduced services.
Perhaps the current line-haul rates really do not include a substairtial amount attributable to the cost of providing in-transit inspections. But cf. Tr. 231-232, 258-266. Or perhaps the Commission has some reason to reinterpret the prior cases suggesting that its rule reflects a concern for rates that are “increased” simply because of a reduction in services.
As in Secretary of Agriculture v. United States, 347 U. S., at 652, the Commission may have reasons for “following a procedure fairly adapted to the unique circumstances of this case.” But, as in that case, it must make these reasons known to a reviewing court with sufficient clarity to permit it to do its job. Even giving the Commission’s opinion the most sympathetic reading that we find possible, we cannot discover in it an expressed reason for permitting the railroads to reduce their services without showing that the rates they propose to maintain are reasonable rates for the service they intend to provide.
Ill
After holding that the matter must be remanded to the Interstate Commerce Commission for further proceedings, the District Court ordered, “The proposed charges are suspended and shall be ineffective until and unless otherwise ordered by this Court.” No reasons for such an order were given; the District Court did not, for example, specify the nature of the harm to the shippers that would, presumably, injure them irreparably. Nor did it explain the basis for its apparent belief that Arrow Transportation Co. v. Southern R. Co., 372 U. S. 658 (1963), was distinguishable.
It was error to enter such an injunction. The District Court clearly had power to suspend the operation of the Commission's order pending the final determination of the shippers’ suit. That power is given in terms by 28 U. S. C. §2324: “The pendency of an action to enjoin, set aside, annul, or suspend any order of the Interstate Commerce Commission shall not of itself stay or suspend the operation of the order, but the court may restrain or suspend, in whole or in part, the operation of the order pending the final hearing and determination of the action.” But an injunction forbidding the railroads to implement a proposed change in rates is not, strictly speaking, an injunction suspending the Commission’s order. In this case, for example, the Commission’s order stated that “the proposed new or increased charges for in-transit inspection of grain at various points in the United States are just and reasonable....” 340 I. C. C., at 74. The only consequence of suspending that order is that the railroads may not rely, in some subsequent proceeding, on a Commission finding that the proposed rates were just and reasonable. In an action for reparations, for example, the railroads could not gain any benefit from the purported Commission approval of the increases. See Arizona Grocery v. Atchison, T. & S. F. R. Co., 284 U. S. 370 (1932). See also 49 U. S. C. §§ 1 (5), 10 (1). The Commission’s order also provided that the proceeding be discontinued, and suspension of the order requires the Commission to reopen its inquiry.
Carriers may put into effect any rate that the Commission has not declared unreasonable. 49 U. S. C. §§ 6 (3), 15 (1). Suspension of the Commission’s order thus does-not in itself preclude the carriers from implementing a new rate. The power conferred on the District Court by § 2324 does not in itself include a power to enjoin the railroads from implementing a proposed new charge. Rather, that power must be considered as at best ancillary to the general equitable powers of the reviewing court, and protective of its jurisdiction. See Arrow Transportation Co. v. Southern R. Co., supra, at 671 n. 22; Order of Conductors v. Pitney, 326 U. S. 561, 567 (1946). Cf. Pittsburgh & W. Va. R. Co. v. United States, 281 U. S. 479, 488 (1930); 28 U. S. C. § 1651 (a). As this Court noted in Scripps-Howard Radio, Inc. v. FCC, 316 U. S. 4 (1942), such a power must be inferred from Congress’ decision to permit judicial review of the agency action. “If the administrative agency has committed errors of law for the correction of which the legislature has provided appropriate resort to the courts, such judicial review would be an idle ceremony if the situation were irreparably changed before the correction could be made.” Id., at 10.
Yet it would be surprising if that power could be exercised to the extent that it might substantially interfere with the function of the administrative agency. “The existence of power in a reviewing court to stay the enforcement of an administrative order does not mean, of course, that its exercise should be without regard to the division of function which the legislature has made between the administrative body and the court of review.” Ibid. Proper regard for that division of function requires that we hold erroneous the District Court’s decision to enjoin not only the Commission’s order finding the proposed rates just and reasonable but also the implementation of those rates.
In Arrow Transportation Co. v. Southern R. Co., supra, this Court considered a similar problem. The Interstate Commerce Commission has the power to suspend proposed rate changes for seven months, while it proceeds to consider the reasonableness of the proposal. “If the proceeding has not been concluded and an order made within the period of suspension, the proposed change of rate... shall go into effect at the end of such period.” 49 U. S. C. § 15 (7). In Arrow, parties affected by proposed reductions sought an injunction against the implementation of the proposed reductions when, at | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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65
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BLUMENTHAL v. UNITED STATES.
NO. 54.
Argued October 23, 1947.
Decided December 22, 1947.
Arthur B. Dunne argued the cause for petitioners in Nos. 54, 55 and 57. With him on a brief filed for petitioner in No. 55 was Walter H. Duane.
Samuel S. Weiss, petitioner in No. 56, argued the cause and filed a brief pro se.
Hugh K. McKevitt filed a brief for petitioner in No. 54.
Leo R. Friedman filed a brief for petitioner in No. 57.
Beatrice Rosenberg argued the cause for the United States. With her on the brief were Solicitor General Perlman and Robert S. Erdahl.
Mr. Justice Rutledge
delivered the opinion of the Court.
The four petitioners and Abel, another defendant, were convicted of conspiring to sell whiskey at prices above the ceiling set by regulations of the Office of Price Administration, in violation of the Emergency Price Control Act. 50 U. S. C. §§ 902 (a), 904 (a) and 925 (b). The charge was made pursuant to the general conspiracy statute, § 37 of the Criminal Code. The convictions were affirmed by the Circuit Court of Appeals, one judge dissenting. 158 F. 2d 883, dissenting opinion at 158 F. 2d 762. Abel has not sought review in this Court. Certiorari was granted as to the other four defendants because we thought important questions were presented concerning the applicability of our recent decision in Kotteakos v. United States, 328 U. S. 750.
We did not limit our grant of certiorari to that question, however, and on the record it is inseparably connected with the other issues, which relate to the admissibility and sufficiency of the evidence. Accordingly we have considered all of petitioners’ contentions. The competent proof was clearly sufficient to show that each petitioner had aided in the whiskey’s illegal sale and had conspired with others to do so. The only phase of the case meriting further attention is whether, because of a difference in the state of the proof affecting two groups of defendants, the proof, in variance from the indictment, shows that there was more than one conspiracy.
I.
The indictment charges a single conspiracy in a single count. Ten overt acts are specified. The Government alleged and sought to establish that all of the defendants and other unidentified persons conspired together to dispose of two carloads, each consisting of about 2,000 cases, of Old Mr. Boston Rocking Chair Whiskey at over the ceiling wholesale prices.
This whiskey was shipped by rail from the distiller or his agent to the Francisco Distributing Company, in San Francisco, in December, 1943. Goldsmith was the individual and sole owner of that business and held a wholesale liquor dealer’s basic permit as required by federal law. Weiss, his former partner, was sales manager for the business. Feigenbaum operated the Sunset Drugstore in San Francisco. Blumenthal owned and operated the Sportorium, a sporting goods and pawn shop in the same city. Abel either owned or worked in a jewelry store in Vallejo, California. The evidence does not show that any of these last three was connected with Francisco in any way except that each had part in arranging sales and deliveries of portions of these two shipments to purchasers. These were tavern owners in San Francisco and near-by towns such as Vallejo, Santa Rosa, Livermore, Cottonwood and El Cerrito. Proof of the activities of Feigenbaum, Blumenthal and Abel was made largely by the testimony of the various tavernkeepers with whom they respectively dealt.
The evidence showed that on arrival of the whiskey in San Francisco legal title was taken in Francisco’s name, in which the shipping documents were made out; that it honored sight drafts for both shipments, upon Goldsmith’s directions to Francisco’s bank to pay them out of Francisco’s account; that some of the whiskey was delivered ex car directly to tavernkeepers who previously had arranged for purchases in lots varying from 25 to 200 cases; that the remainder was placed in storage with the San Francisco Warehouse Company, pursuant to arrangements made by Weiss, and thereafter was delivered by the warehouse to various purchasers holding invoices issued by Francisco on orders given by Weiss. The ex car deliveries also were made pursuant to similar invoices and orders.
It further appeared that the cost of the whiskey to Francisco was $21.97 a case, the wholesale ceiling price was $25.27, and Francisco received, by check of the purchasing tavernkeepers, $24.50 for each case sold. There was thus left to it a margin above cost of $2.53 on each case, out of which were to come storage charges, if any, and legitimate net profit.
Thus far no illegal act, transaction, intent or agreement appears. But by the testimony of purchasing tavernkeepers the Government proved that in connection with each sale the purchaser had paid to the selling intermediary, in addition to the $24.50 per case remitted by check to Francisco, an additional sum in cash amounting roughly to from $30 to $40 per case. Thus the actual cost to the retailer was from $55 to $65 per ease.
In some instances the identity of the person arranging the transaction for the seller and receiving the cash payment was not established or known to the witness testifying to the sale and its details. In others, however, Blumenthal, Feigenbaum or Abel was identified as the salesman or intermediary. It was not brought out with what person or persons Abel, Feigenbaum, Blumenthal or the other salesmen dealt in securing the whiskey from Francisco. In two sales, Figone, a tavernkeeper of El Cerrito, testified he arranged for the purchases in Francisco’s offices, but could not identify the person with whom he dealt.
In all instances, however, whether involving sales to San Francisco or to out-of-town dealers and whether through identified or unidentified selling intermediaries, the sales followed the general pattern described above. That is, once the understanding had been reached, the purchaser made out his check at the price of $24.50 per case, to the order of “Francisco Distributing Co.,” at the direction of the selling intermediary, to whom the check was delivered; at the same time or later the purchaser also paid in cash to the intermediary the difference between the amount of the check and the agreed over-ceiling purchase price; then or later the purchaser received invoices in the name of Francisco for the number of cases of Old Mr. Boston Rocking Chair Whiskey bought, showing only the legal price of $24.50 per case; and thereafter the purchaser received delivery of the whiskey from the warehouse company, by freight in the case of out-of-town buyers. Weiss gave the warehouse company instructions for shipments or local deliveries. Francisco collected the checks by endorsing and sending them through its bank for collection. Slight variations in detail of the pattern appear in some instances but they are insignificant for our purposes.
The foregoing is substantially the evidence used, not only in part to show the conspiracy, but also to connect Blumenthal, Feigenbaum and Abel with it. In addition to the evidence already related as it affects Goldsmith and Weiss, the court received as to them alone the testimony of Harkins, a special investigator for the Alcohol Tax Unit of the Treasury Department. He related conversations had with Goldsmith and Weiss, during which important admissions were made by one or the other or both. Those admissions give rise to the crucial problems in the case.
At the initial conference “early in January,” 1944, attended by both Goldsmith and Weiss, the latter “did most of the talking.” Questioned concerning who purchased the two carloads and how they were handled, Weiss said “that his firm received $2.00 a case for clearing it through their books.” Goldsmith concurred in this and both stated that they divided the $2.00, each taking a dollar. “They both stated, agreed, that they did not sell any of the whiskey. It was sold by others, and they received the check generally for the payment of [for] the whiskey in advance of the date that they had to take up the sight draft bills of lading. At that time they did not tell us who actually sold the whiskey.”
Later conferences held separately with Goldsmith and Weiss simply confirmed the substance of the first to the effect that Francisco was not the actual owner, but that Goldsmith and Weiss were acting for an unidentified person in handling the shipments in Francisco’s name. The identity of the owner was not established. But Goldsmith added the admission that he wrote most of the invoices.
Shortly after the trial began the court announced that it would save time and be fairer to all for the evidence to be received initially only as against the particular defendant or defendants to whom it appeared expressly related, reserving to the Government, however, the right to move for its admission as against any or all of the other defendants whenever in the Government’s opinion sufficient facts had been introduced to show such defendants to have been connected with the conspiracy-charged.
This course was followed. At the close of the Government’s case, the court granted its motion to admit all of the evidence as against all of the defendants, except that it declined to allow Harkins’ testimony concerning his conversations with Goldsmith and Weiss to be admitted as against the defendants Blumenthal, Feigenbaum and Abel. That testimony however was allowed to stand against both Goldsmith and Weiss insofar as it related the conversation had in the presence of both, and as to each of them respectively to the extent that the other interviews took place in his presence.
The court overruled numerous objections to these rulings by each defendant. None offered evidence in his own behalf.
Following its rulings on admissibility, the trial court concluded as against various objections that the evidence was sufficient to go to the jury on the issues whether the conspiracy charged had been made out and concerning each defendant’s connection with it. Accordingly, it overruled the defendants’ motions for directed verdicts and submitted the case to the jury. In the instructions the court expressly stated, in accordance with the previous rulings on admissibility, that Harkins’ testimony was to be considered only as against Goldsmith and Weiss, not as against the other three defendants.
II.
In the Kotteakos case, supra, the Government conceded that, under the charge of a single, all-inclusive conspiracy, the proof showed distinct and separate ones connected only by the fact that one man, Brown, was a participant and key figure in all. But it urged that under the ruling in Berger v. United States, 295 U. S. 78, the variance was at the most harmless error, a contention we rejected. Here the situation is the reverse. The Government has conceded, in effect, that prejudice has resulted if more than one conspiracy has been proved. But it insists that the evidence establishes a single conspiracy and no more, an issue not presented or determined in the Kotteakos case.
The proof, in relation to whether one or more conspiracies were shown as well as relative to whether any was made out, requires somewhat different treatment concerning the two groups of defendants, Weiss and Goldsmith, on the one hand, and Blumenthal, Feigenbaum and Abel, on the other. This is by reason of the court’s exclusion of the admissions of Goldsmith and Weiss from consideration as to the other three defendants.
The Government does not maintain that Francisco, or Goldsmith (or therefore Weiss), was the owner of the whiskey. It accepts the view that another or others, unidentified, were the real owner or owners and that Francisco (and thus Goldsmith and Weiss) was merely a channel for distributing the liquor and giving that unlawful process a legal fagade. Indeed the “innocent appearing actions” of Weiss and Goldsmith in their use of Francisco, the brief asserts, “were the crux of the conspiracy... since the color of legitimacy was an essential part of the plan to dispose of the liquor to tavern owners at over-ceiling prices.”
The evidence including the admissions was clearly sufficient to establish that the owner devised a plan which contemplated the entire chain of events from the original purchase in Francisco’s name to the ultimate black market sales and deliveries. This includes the obvious inference that he made the arrangements for clearance through Francisco’s books. Since Goldsmith and Weiss were the owner and sales manager respectively of Francisco and had active parts personally in carrying out those arrangements, there hardly can be any question that they knew the owner, had part in making the arrangements with him and, by virtue of those facts and their parts in facilitating the sales and deliveries to the tavernkeepers, knew also of his intention to resell the whiskey and of his plan for doing so in every material respect except that he intended to sell at over-ceiling prices.
The showing on that crucial question was entirely circumstantial. It was nonetheless substantial. Goldsmith and Weiss knew that there was a margin of only about 770 between the legal price ceiling and the $24.50 per case they received by check in payment for the whiskey. They knew that the invoices sent by Francisco to each purchaser gave no room for even that slender margin but represented only the owner’s cost figure. They knew further that by using Francisco’s name, services and facilities the owner was concealing his identity from the purchasers in the sales, making Francisco appear as the owner on the paper records; that sales were being made to numerous and widely scattered tavernkeepers; and that in every sale remittance was made to them uniformly not only by check, usually of the purchaser, but also in the exact amount of $24.50 per case.
The inference that the unknown owner was giving away the liquor is scarcely conceivable. The most likely inferences to be drawn were two, namely, that the owner was selling for a legal margin of not more than 77$ or that he was selling at over-ceiling prices. The first inference is hardly tenable, especially in view of the prevailing and widespread shortage and demand, with accompanying black market activity, of which the most meticulous wholesale liquor dealer hardly could have been ignorant. The inference was not only justified, it was almost inescapable, that Goldsmith and Weiss knew of the owner’s intent and purpose to sell above the lawful price, as well as most of the detail of his plan for doing so. With that knowledge their active aid toward executing his design made them co-conspirators with him, and he with them, toward accomplishing it.
III.
It remains however to consider whether, without the admissions, Blumenthal, Feigenbaum and Abel have been shown to have conspired together and with Goldsmith and Weiss in the scheme proved against the latter two.
The admissions alone disclosed the unknown owner’s existence; that Goldsmith and Weiss were acting for him, not for themselves; received from the transactions, and divided equally, the $2 per case; and gave the use of Francisco’s name to cover up the unknown owner’s existence, identity and part in the scheme.
Whether or not the evidence stripped of those facts was sufficient to sustain the charge, a preliminary question arises upon the trial court’s disposition of the admissions. They supplied strong confirmatory or supplementing proof to show, not only the connections of Goldsmith and Weiss with the scheme, but also its existence and illegal character. If therefore it were shown, or even were doubtful, that the admissions had been improperly received as against Blumenthal, Feigenbaum and Abel, reversal would be required as to them.
But the trial court’s rulings, both upon admissibility and in the instructions, leave no room for doubt that the admissions were adequately excluded, insofar as this could be done in a joint trial, from consideration on the question of their guilt. The rulings told the jury plainly to disregard the admissions entirely, in every phase of the case, in determining that question. The direction was a total exclusion, not simply a partial one as the Government’s argument seems to imply. The court might have been more emphatic. But we cannot say its unambiguous direction was inadequate. Nor can we assume that the jury misunderstood or disobeyed it.
With the admissions thus entirely excluded, we think nevertheless that the remaining evidence was sufficient to show, in accordance with the charge, that the five defendants joined in a single conspiracy to sell the whiskey at over-ceiling prices in the guise of legal sales. We set forth in the margin the remaining evidence, in part, which justifies this conclusion both as to Goldsmith and Weiss and as to the other three defendants.
The main difference comes with the elimination of the unknown owner from view, and Francisco’s consequent appearance as both actual and legal owner. This changes the detail of the fagade, but does not remove either the fagade itself or the essence of the unlawful scheme. That still was to sell the whiskey illegally in the guise of legal sales, to the knowledge of each defendant The gist of the conspiracy lay not in who actually owned the whiskey, but in the agreement to sell it in this unlawful fashion, regardless of who might own it.
With the case thus posited, it is true the salesmen did not know of the unknown owner’s existence or part in the plan. And in a hypertechnical aspect the case as a whole might be regarded as showing in one phase an agreement among Goldsmith, Weiss and the unknown owner, X, and in the other an agreement among the five defendants to which X was not a party. Thus in the most meticulous sense it might be regarded as disclosing two agreements, with Goldsmith and Weiss as figures common to both.
Indeed that may be what took place chronologically, for conspiracies involving such elaborate arrangements generally are not born full-grown. Rather they mature by successive stages which áre necessary to bring in the essential parties. And not all of those joining in the earlier ones make known their participation to others later coming in.
The law does not demand proof of so much. For it is most often true, especially in broad schemes calling for the aid of many persons, that after discovery of enough to show clearly the essence of the scheme and the identity of a number participating, the identity and the fact of participation of others remain undiscovered and undiscoverable. Secrecy and concealment are essential features of successful conspiracy. The more completely they are achieved, the more successful the crime. Hence the law rightly gives room for allowing the conviction of those discovered upon showing sufficiently the essential nature of the plan and their connections with it, without requiring evidence of knowledge of all its details or of the participation of others. Otherwise the difficulties, not only of discovery, but of certainty in proof and of correlating proof with pleading would become insuperable, and conspirators would go free by their very ingenuity.
Here, apart from the weight which the proof of the unknown owner’s existence and participation added to the convictions of Weiss and Goldsmith, it added no essential feature to the charge against the five defendants. The whiskey was the same. The agreements related alike to its disposition. They comprehended illegal sales in the guise of legal ones. Who owned the whiskey was irrelevant to the basic plan and its essential illegality. It was a matter of indifferent detail to the salesmen, as by the same token was the fact that Goldsmith and Weiss were receiving and splitting only the $2 per case. It mattered nothing to the others whether those two received only that amount or the larger illegal sums.
We think that in the special circumstances of this case the two agreements were merely steps in the formation of the larger and ultimate more general conspiracy. In that view it would be a perversion of justice to regard the salesmen’s ignorance of the unknown owner’s participation as furnishing adequate ground for reversal of their convictions. Nor does anything in the Kotteakos decision require this. The scheme was in fact the same scheme; the salesmen knew or must have known that others unknown to them were sharing in so large a project; and it hardly can be sufficient to relieve them that they did not know, when they joined the scheme, who those people were or exactly the parts they were playing in carrying out the common design and object of all. By their separate agreements, if such they were, they became parties to the larger common plan, joined together by their knowledge of its essential features and broad scope, though not of its exact limits, and by their common single goal.
The case therefore is very different from the facts admitted to exist in the Kotteakos case. Apart from the much larger number of agreements there involved, no two of those agreements were tied together as stages in the formation of a larger all-inclusive combination, all directed to achieving a single unlawful end or result. On the contrary each separate agreement had its own distinct, illegal end. Each loan was an end in itself, separate from all others, although all were alike in having similar illegal objects. Except for Brown, the common figure, no conspirator was interested in whether any loan except his own went through. And none aided in any way, by agreement or otherwise, in procuring another’s loan. The conspiracies therefore were distinct and disconnected, not parts of a larger general scheme, both in the phase of agreement with Brown and also in the absence of any aid given to others as well as in specific object and result. There was no drawing of all together in a single, over-all, comprehensive plan.
Here the contrary is true. All knew of and joined in the overriding scheme. All intended to aid the owner, whether Francisco or another, to sell the whiskey unlawfully, though the two groups of defendants differed on the proof in knowledge and belief concerning the owner’s identity. All by reason of their knowledge of the plan’s general scope, if not its exact limits, sought a common end, to aid in disposing of the whiskey. True, each salesman aided in selling only his part. But he knew the lot to be sold was larger and thus that he was aiding in a larger plan. He thus became a party to it and not merely to the integrating agreement with Weiss and Goldsmith.
We think therefore that in every practical sense the unique facts of this case reveal a single conspiracy of which the several agreements were essential and integral steps, and accordingly that the judgments should be affirmed.
The grave danger in this case, if any, arose not from the trial court’s rulings upon admissibility or from its instructions to the jury. As we have said, these were as adequate as might reasonably be required in a joint trial. The danger rested rather in the risk that the jury, in disregard of the court’s direction, would transfer, consciously or unconsciously, the effect of the excluded admissions from the case as made against Goldsmith and Weiss across the barrier of the exclusion to the other three defendants.
That danger was real. It is one likely to arise in any conspiracy trial and more likely to occur as the number of persons charged together increases. Perhaps even at best the safeguards provided by clear rulings on admissibility, limitations of the bearing of evidence as against particular individuals, and adequate instructions, are insufficient to ward off the danger entirely. It is therefore extremely important that those safeguards be made as impregnable as possible. Here, however, the case as presented involved none of the risks common to mass trials. And, in view of the trial court’s caution, the risk of transference of guilt over the border of admissibility was reduced to the minimum. So great was the court’s concern that it expressly told the jury, in addition to the instructions set forth above, “... the guilt or innocence of each defendant must be determined by the jury separately. Each defendant has the same right to that kind of consideration on your part as if he were being tried alone.”
We have considered petitioners’ remaining contentions and find them without merit.
The judgment is
Affirmed.
Mr. Justice Douglas concurs in the result.
Of the more than 4,000 cases received by Francisco, proof concerning disposition at over-ceiling prices related to less than half, or some 1,500-plus cases.
Consisting of $19.24 per case to the distiller, 810 for freight, and $1.92 for state taxes.
The witnesses identifying Feigenbaum testified they sought him out at the Sunset Drugstore in San Francisco and made the arrangements with him for their purchases there. Similar testimony was given by those identifying Blumenthal with the arrangements taking place in the Sportorium.
In some instances the out-of-town purchasing witnesses testified that they went to San Francisco in search of whiskey to buy and by one means or another, usually through inquiry of persons frequenting bars where the witnesses stopped, were directed to the selling agent. In other instances the intermediary sought out the tavernkeeper as a prospective purchaser at his place of business.
At an interview with Goldsmith “early in September,” Goldsmith was asked “who actually bought him the whiskey, who owned it.” In reply “he said that Blumenthal brought it in, and when asked if he knew of his own knowledge, he said, 'No.’ ” He again stated that Francisco received $2 per case, of which he gave Weiss half.
A still further questioning of Goldsmith took place on September 13. Harkins showed Goldsmith several invoices given to purchasers in the name of Francisco. Goldsmith admitted that he wrote most of the invoices and identified his own handwriting, stating however that a few were written by his bookkeeper.
Harkins testified also regarding a conversation with Weiss on May 14, 1944. In this Weiss stated “it was true that he received half of the $2 commission paid to the Francisco Distributing Company for clearing this whiskey through their books, and he finally refused to answer who actually owned the whiskey. He said 'I don’t want to involve myself.’ ” Weiss also admitted knowing Blumenthal, but “refused to state, to the best of my [the witness’] recollection, positively, whether Mr. Blumenthal was the owner of the whiskey or not.”
The brief states: “The Government does not contend that if the proof showed several conspiracies, as the dissenting judge thought, the variance would not be prejudicial.”
The brief also declares that “the gist of the conspiracy... was the scheme to sell liquor to tavern owners at over-ceiling prices in an apparently legitimate fashion through the medium of Francisco.”
The plan, it is said, “was not merely to sell liquor at over-ceiling prices; it was a plan to sell liquor at over-ceiling prices in an apparently legitimate fashion” and “the core of the scheme was the arrangement by which the whiskey would clear to tavern owners through Francisco, a legitimate wholesaler.”
The $24.50 price was at the most 530 above the actual cost of the whiskey, see note 2, plus the $2.00 fee paid Francisco for the use of its books. There is no evidence that the unknown owner received any portion of this 530 margin. Since the record shows that Francisco was billed by the warehouse company for the storage of the liquor, the inference was fully justified that the 530 margin was largely dissipated by the storage charges and other overhead costs attributable to the sale of the whiskey and that the remaining sum, if any, was retained by Francisco.
Even if the evidence were sufficient with the admissions excluded, they were of such importance that if admitted improperly the jury might have drawn entirely different inferences from the whole evidence including them than from it without them.
Before sending the case to the jury the court stated in its presence and for its benefit that it had granted the Government’s motion to admit all the evidence against all the defendants except: “That the testimony of the last witness, Mr. Harkins, is admitted in evidence as against the defendant Goldsmith as to the conversation had by the witness with the defendant Goldsmith; that his testimony is admitted as to the defendant Weiss with respect to conversations with the defendant Weiss; and as to both defendants, Goldsmith and Weiss, as to all conversations at which both defendants, Goldsmith and Weiss, were present, and exceptions are noted as to this ruling on behalf of all the defendants separately.” The court then added, on inquiry, that counsel was right in taking this to mean that the Harkins testimony “does not affect the defendants Blumenthal and the other two or three.”
At three distinct places the court made references either generally and abstractly or expressly applicable to the admissions.
In the first, after stating that the testimony of an accomplice or co-conspirator and oral admissions of a defendant must be received with caution, the court said: “In this case... proof of the conspiracy charged... must be made independent of admissions of any defendant made after the termination of the alleged conspiracy.” At a later point the jury was told: “... you must disregard entirely any testimony stricken out by the Court, or any testimony to which an objection has been sustained.... Testimony which has been admitted only to apply as to a specified defendant may only be considered by you as to that defendant and none other.” (Emphasis added.) And finally near the end of the instructions, expressly referring to the admissions of Goldsmith and Weiss, the court said: “Where the existence of a criminal conspiracy has been shown, every act or declaration of each member of such conspiracy, done or made thereafter pursuant to the concerted plan and in furtherance of the common object, is considered the act and declaration of all the conspirators, and is evidence against each of them. On the other hand, after a conspiracy has come to an end, either by the accomplishment of the common design, or by the parties abandoning the same, evidence of acts or declarations thereafter made by any of the conspirators can be considered only as against the person doing such acts or making such statements.
“In that connection, you will recall that I advised you during the trial of the case that the statements made by the defendants Goldsmith and Weiss to the witness Harkins could only be considered by you as against those two named defendants.” (Emphasis added.)
It is not entirely clear whether the words “In that connection,” italicized in the last paragraph of note 10, refer only to the last or to both of the preceding sentences, in the specific context of the two paragraphs last quoted. But when those statements are taken in conjunction with the earlier ones and with the court’s rulings on admissibility made in the jury’s presence, we think the total effect of the instructions was to tell the jury plainly to disregard the admissions entirely in considering the guilt of Blumenthal, Feigenbaum and Abel.
This view, though apparently differing from the Government’s, see note 12, is reinforced by the further instruction, immediately following the one last quoted in note 10, to the effect that admissions of a conspirator not made in execution of the common design are not evidence against any of the parties other than the one making them. The admissions here fell clearly in that category, some of them because made after termination of the conspiracy, others because they had no effect to forward its object. None were made in furtherance of the conspiracy’s object. Cf. Fiswick v. United States, 329 U. S. 211.
Although we are not sure the argument goes so far, it seems to urge, see note 6 and text, that the admissions, as well as the other evidence expressly affecting only one or some of the defendants, were admissible and were received, not merely as against Weiss and Goldsmith on the whole case but also in part as against the other three, that is, to show even as to them the existence and illegal character of the scheme, though not to establish their connections with it. We do not read the record as showing this was the effect of the trial court’s ruling.
The evidence as to the unknown owner no longer being in the picture, the inference is almost irresistible that Francisco was the owner. On | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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88
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BROWN SHOE CO., INC. v. COMMISSIONER OF INTERNAL REVENUE.
No. 445.
Argued April 5, 1950.
Decided May 15, 1950.
Charles B. Mclnnis argued the cause for petitioner. With him on the brief was Ernest M. Callomon.
Harry Marselli argued the cause for respondent. With him on the brief were Solicitor General Perlman, Assistant Attorney General Caudle, Stanley M. Silverberg, Ellis N. Slack and Lee A. Jackson.
Mr. Justice Clark
delivered the opinion of the Court.
This proceeding seeks redetermination of petitioner’s excess profits tax, computed by the invested capital method, for the fiscal years ended 1942 and 1943. The issues arise from the payment of cash and the transfer of other property to petitioner by certain community groups as an inducement to the location or expansion of petitioner’s factory operations in the communities. Petitioner claimed, and the Commissioner disallowed, (1) a deduction from gross income for depreciation on the property contributed and on the full cost of property acquired in part with contributed cash or equivalent funds, and (2) inclusion of the total value of the contributions in petitioner’s equity invested capital. The Tax Court reversed the Commissioner’s ruling in part. 10 T. C. 291 (1948) . The Court of Appeals for the Eighth Circuit held with the Commissioner on all issues. 175 F. 2d 305 (1949) . We granted certiorari, 338 U. S. 909 (1950), in view of an asserted conflict between the decision below and that of the Court of Appeals for the Third Circuit in Commissioner v. McKay Products Corp., 178 F. 2d 639 (1949), reversing the Tax Court, 9 T. C. 1082 (1947).
Two questions must be determined: First, whether petitioner in computing its normal-tax net income, which is adjusted in determining excess profits net income, is entitled to deductions for depreciation with respect to property transferred to it from community groups or acquired with cash to the extent received from such groups. Petitioner contends that the properties so acquired were depreciable as “gifts” under § 113 (a) (2) of the Internal Revenue Code or as “contributions to capital” under §113 (a) (8) (B) or both; as to the properties acquired with cash it contends alternatively that they had “cost” to the taxpayer under § 113 (a). Second, we must decide whether in computing petitioner’s invested capital credit the aggregate value of the assets transferred by the community groups may be included in equity invested capital under § 718 (a) of the Code either as a “contribution to capital” or as “accumulated earnings and profits.”
Petitioner is a New York corporation which at all times material conducted manufacturing operations in a number of plants located in Illinois, Indiana, Missouri and Tennessee. From 1914 to 1939 petitioner received in seventeen transactions an aggregate of $885,559.45 in cash and $85,471.56 in buildings from various community groups in twelve towns. Except in one instance, each transfer was pursuant to a written contract between petitioner and the respective community group. The contracts were of three types: The first required petitioner to locate, construct and equip, or enlarge, a factory in the community, to operate the factory “continuously so long as it is practicable in the conduct of its business for at least a period of ten years,” and to meet a minimum payroll, in consideration of which the community group agreed to transfer land and cash “to be used for the payment of suitable factory building or buildings”; in one instance existing buildings were also transferred and in another instance only buildings and no cash sum. Under this type of contract petitioner was obligated in the event of noncompliance to transfer the building back to the community group or to repay the sum. Under a second type of agreement petitioner in consideration of a cash payment undertook to enlarge an existing factory and to operate it for a period of ten years with a stipulated minimum addition to personnel. A third type of contract called only for the construction of an addition to petitioner’s existing factory in consideration of a cash sum. Contracts of the latter type were in the nature of supplementary agreements with community groups and may have involved an obligation on the part of petitioner to continue operation of the additional plant facilities for the unexpired remainder of a period not exceeding ten years agreed upon in an earlier contract. No restriction was imposed in any instance as to the use which petitioner might make of the property contributed or acquired with cash, or of the proceeds if the property should be disposed of, after expiration of the required period of operation. The Tax Court assumed performance by petitioner according to the terms of the agreements, and the Court of Appeals did not differ. In the case of eleven contracts the stipulated period for performance had expired prior to the taxable years in question.
The single transaction which was not based upon such contractual obligations involved a $10,000 cash bonus paid in 1914, according to the minutes of petitioner’s board of directors, “as a part of . . . organization expenses in starting the factory” in the particular town.
The cash sums received by petitioner from the groups were not earmarked for, or held intact and applied against, the plant acquisitions in the respective communities but were deposited in petitioner’s general bank account from which were paid general operating expenses and the cost of all assets acquired, including factory buildings and equipment in the towns involved. The cash payments were debited to cash account on the assets side of petitioner’s ledger and were credited to earned surplus either upon receipt or after having first been assigned to contributed surplus. The values of the buildings acquired were set up in a building account on the assets side and were credited to surplus. In every instance the cash received by petitioner from a community group was less than the amount expended by it for the acquisition or construction of the local factory building and equipment.
In computing its normal tax net income for the taxable years in controversy petitioner deducted depreciation on the buildings transferred by the community groups and on the full cost of the buildings and equipment acquired or enlarged in the communities from which it had received cash. Petitioner also included the total of $971,031.01 in cash and other property in its equity invested capital.
The Commissioner disallowed depreciation deductions with respect to the buildings transferred (in the value of $85,471.56) and the properties acquired with cash to the extent paid to petitioner by the groups (in the value of $885,559.45).° In computing the amount of depreciation to be allowed, the Commissioner deducted that portion of the cost of the buildings, land and machinery which was paid with such contributed cash or equivalent funds. The Commissioner in making such reductions allocated the cash contribution to each item, such as buildings, land if any had been purchased, and machinery in the proportion of the total cost of such item to the total cost of the project. The Commissioner also disallowed inclusion in equity invested capital of the total assets transferred, reducing such capital as computed by petitioner by $971,031.01.
The Tax Court reversed the Commissioner’s disallowance of depreciation with respect to that portion of the acquisitions paid for with cash. It concluded that these items had “cost” and therefore “basis” to petitioner, since they had been paid for from petitioner’s own unrestricted funds in which the cash contributions had been deposited without earmarking; as to the buildings transferred, the Court sustained the Commissioner on the ground that these transfers were not gifts and therefore the transferor’s basis was not available to petitioner. It held that the petitioner was in error in recording the contributions in equity invested capital as “contributions to capital” because only stockholders could make such contributions. The Court of Appeals, reversing the Tax Court as to the allowance of depreciation deductions with respect to property acquired with cash, held that to the extent of the contributions there was no cost to petitioner.
We think the assets transferred to petitioner by the community groups represented “contributions to capital” within the meaning of § 113 (a) (8) (B) and required no reduction in the depreciation basis of the properties acquired. The values which the taxpayer received were additions to “capital” as that term has commonly been understood in both business and accounting practice; conformably with this usage the pertinent Treasury Regulations have consistently recognized that contributions to capital may originate with persons having no proprietary interest in the business. That this interpretation is in harmony with broad congressional policy as to depreciation deductions was emphasized by the Third Circuit when considering the similar situation presented in Commissioner v. McKay Products Corp., supra, 178 F. 2d at 643:
. . the assets received . . . are being used by the taxpayer in the operation of its business. They will in time wear out, and if [the taxpayer] is to continue in business, the physical plant must eventually be replaced. Looking as they do toward business continuity, the Internal Revenue Code’s depreciation provisions — and especially those which provide for a substituted rather than a cost basis — would seem to envision allowance of a depreciation deduction in situations like this. . . .”
The Commissioner contends, however, that this conclusion was foreclosed by Detroit Edison Co. v. Commissioner, 319 U. S. 98 (1943). That decision denied inclusion in the base for depreciation of electric power lines the amount of payments received by the electric company for construction of the line extensions to the premises of applicants for service. It was held that to the extent of such payments the electric lines did not have cost to the taxpayer, and that such payments were neither gifts nor contributions to the taxpayer’s capital. We do not consider that case controlling on the issue whether contributions to capital are involved here. Because in the Detroit Edison case “The payments were to the customer the price of the service,” the Court concluded that “it overtaxes imagination to regard the farmers and other customers who furnished these funds as makers either of donations or contributions to the Company.” Since in this case there are neither customers nor payments for service, we may infer a different purpose in the transactions between petitioner and the community groups. The contributions to petitioner were provided by citizens of the respective communities who neither sought nor could have anticipated any direct service or recompense whatever, their only expectation being that such contributions might prove advantageous to the community at large. Under these circumstances the transfers manifested a definite purpose to enlarge the working capital of the company.
The assets transferred by the community groups are likewise contributions to petitioner’s capital for the purpose of computing its invested capital credit. Cf. I. R. C. § 728. Precisely the same interpretation has been placed by the relevant Treasury Regulations upon the term “contribution to capital” appearing in § 718 (a) as upon the like expression in the income tax provisions. That the excess profits tax provision characterizes capital contributions as being “invested” and “paid in” does not indicate, as the Commissioner urges, that the concept of capital is the constricted one of legal capital or capital originating with persons having a proprietary interest in the business; we think instead that the taxpayer’s investment includes certain values which are properly “treated as his investment,” cf. Reisinger v. Commissioner, 144 F. 2d 475, 477-478 (C. A. 2d Cir. 1944), though not having cost to the taxpayer. Cf. I. R. C. § 723. It would have been an oddity for Congress to make the inclusion of actual capital contributions in equity invested capital turn upon whether the transferor owned or failed to own one or two shares of stock in the corporation at the time of the transfer.
The decision of this Court in LaBelle Iron Works v. United States, 256 U. S. 377 (1921), is not to the contrary. That case was decided under the excess profits tax law of 1917 in which “invested capital” was defined as “(1) Actual cash paid in, (2) the actual cash value of tangible property paid in other than cash, for stock or shares ... at the time of such payment . . . and (3) paid in or earned surplus and undivided profits used or employed in the business . . . .” The Court held that neither unearned appreciation in value of the taxpayer’s ore lands nor the surrender of old stock in exchange for new issues based upon that value, could be regarded as “the actual cash value of tangible property paid in other than cash” or as “paid in or earned surplus and undivided profits.” The includability of contributions by outsiders in invested capital was not passed upon.
To the extent that petitioner acquired property involved in this controversy after December 31, 1920, it is entitled to deductions on account of depreciation under §113 (a) (8) (B). It also may include the value of the contributions from community groups in equity invested capital under § 718 (a) (1) and (2). The judgment of the Court of Appeals is reversed and the case remanded with directions to remand to the Tax Court for further proceedings in conformity with this opinion.
Reversed.
Mr. Justice Black agrees with the Court of Appeals and would affirm its judgment.
The tax in controversy is imposed under the excess profits tax provisions of the Second Revenue Act of 1940, 54 Stat. 974, 975, as amended, I. R. C. § 710 et seq. The tax is levied upon excess profits net income remaining after allowance of a $5,000 specific exemption and an excess profits credit representing a normal profit. The Act permitted computation of the credit on the basis either of average income over a base period or of “invested capital,” which includes equity invested capital and 50 percent of borrowed capital. The excess profits tax provisions of the Act were repealed in 1945. 59 Stat. 556, 568.
Section 23 (1) of the Code permits a deduction from gross income for depreciation of property, and § 23 (n) provides that the “basis” for depreciation shall be as provided in § 114, which adopts the “adjusted basis” provided in § 113 (b) for determining gain. This subsection in turn refers to § 113 (a), which provides that the “basis (unadjusted) ” shall be the “cost” of the property, with certain exceptions including the following: § 113 (a) (2) provides in relevant part that “If the property was acquired by gift after December 31, 1920, the basis shall be the same as it would be in the hands of the donor or the last preceding owner by whom it was not acquired by gift . . . .”; § 113 (a) (8) provides that “If the property was acquired after December 31, 1920, by a corporation . . . (B) as paid-in surplus or as a contribution to capital, then the basis shall be the same as it would be in the hands of the transferor . . . .”
Section 718 (a) provided relevantly:
"... The equity invested capital for any day of any taxable year . . . shall be the sum of the following amounts, reduced as provided in subsection (b) — ■
“(1) . . . Money previously paid in for stock, or as paid-in surplus, or as a contribution to capital;
“(2) . . . Property (other than money) previously paid in (regardless of the time paid in) for stock, or as paid-in surplus, or as a contribution to capital. . . .
“(4) . . . The accumulated earnings and profits as of the beginning of such taxable year . . . .” 54 Stat. 974, 982, 26 U. S. C. (1940 ed.) §718 (a) (1), (2), (4).
The value of the land upon which the buildings were located was not included in petitioner’s books and is unimportant for this proceeding.
Both courts below and the Commissioner have expressly assumed, as petitioner asserts, that the receipts of property and cash were not taxed as income.
The Commissioner does not deny that such deductions were disallowed for the first time in 1943, following the decision in Detroit Edison Co. v. Commissioner, 319 U. S. 98 (1943).
The amount thus disallowed on account of depreciation was $22,472.60 for the fiscal year ended 1942 and $24,307.10 for the fiscal year ended 1943. There was no determination by the Commissioner of a deficiency in petitioner’s normal tax for either year.
The Tax Court relied at this point upon McKay Products Corp., 9 T. C. 1082 (1947), which followed Frank Holton & Co., 10 B. T. A. 1317 (1928) and A. C. F. Gasoline Co., 6 B. T. A. 1337 (1927), decided under earlier excess profits tax laws, and Liberty Mirror Works, 3 T. C. 1018 (1944), involving I. R. C. § 718. The opinions in Frank Holton & Co. and Liberty Mirror Works regarded LaBelle Iron Works v. United States, 256 U. S. 377 (1921), as controlling.
For this result the Court of Appeals cited Detroit Edison Co. v. Commissioner, 319 U. S. 98 (1943); Commissioner v. Arundel-Brooks Concrete Corp., 152 F. 2d 225 (C. A. 4th Cir. 1945); and its own prior decision in C. L. Downey Co. v. Commissioner, 172 F. 2d 810 (C. A. 8th Cir. 1949). In affirming on the invested capital issue the Court of Appeals relied in part on LaBelle Iron Works v. United States, note 8 supra, and on the Detroit Edison case.
See O’Meara, Contributions to Capital by Non-shareholders, 3 Tax L. Rev. 568, 572 (1948).
No suggestion is made by the Commissioner that because the transfers were the subject of contract they were not “contributions” within the statute.
See, e. g., Current Problems in Accounting — Proceedings of the Accounting Institute, 1941, p. 20 (Revised Statement by American Accounting Association of Accounting Principles underlying Corporate Financial Statements); Guthmann and Dougall, Corporate Financial Policy 525 (1940); Harvey, Some Indicia of Capital Transfers under the Federal Income Tax Laws, 37 Mich. L. Rev. 745, 747, n. 6 (1939); Marple, Capital Surplus and Corporate Net Worth 12, 136-137 (1936). Cf. Magill, Taxable Income 389 (rev. ed., 1945) ; 1 Mertens, Law of Federal Income Taxation § 5.14 (1942); Texas & Pac. R. Co. v. United States, 286 U. S. 285, 289 (1932); Lykes Bros. S. S. Co., Inc., 42 B. T. A. 1395, 1401 (1940), aff’d 126 F. 2d 725, 727 (C. A. 5th Cir. 1942); Helvering v. Claiborne-Annapolis Ferry Co., 93 F. 2d 875, 876 (C. A. 4th Cir. 1938).
Treas. Reg. 86, Art. 113(a) (8) — 1; Treas. Reg. 94, Art. 113 (a) (8) — 1; Treas. Reg. ,101, Art. 113 (a) (8) — 1; Treas. Reg. 103, § 19.113 (a) (8)-l; and Treas. Reg. Ill, § 29.113 (a) (8)-l have read in part: “In respect of property acquired by a corporation after December 31, 1920, from a shareholder as paid-in surplus, or from any person as a contribution to capital, the basis of the property in the hands of the corporation is the basis which the property would have had in the hands of the transferor if the transfer had not been made. . . .” The provision of § 113 (a) (8) (B), Revenue Act of 1932, in which the term “contribution to capital” first appeared in federal revenue legislation, was reenacted without change in the Act of 1934 and, following the above interpretation in the regulations, in the Acts of 1936 and 1938 and in the Internal Revenue Code.
Commissioner v. Arundel-Brooks Concrete Corp., 152 F. 2d 225 (C. A. 4th Cir. 1945), relied upon by the court below, involved only the issue whether the full cost of a concrete mixing plant, the construction of which was financed in part by payments from a nearby supplier of a raw material used in mixing concrete, was depreciable to the taxpayer; there was no “contribution to capital” issue, the only question being one of cost basis. However, the payments in that case were made in consideration of services rendered. The construction of the concrete plant directly benefited the supplier of raw materials by insuring the use of its sole product by the taxpayer; the supplier was also served through a business affiliation with the parent of the wholly owned taxpayer in the form of an exclusive marketing arrangement which saved the supplier the expense of a sales organization. See Arundel-Brooks Concrete Corp. v. Commissioner, 129 F. 2d 762 (C. A. 4th Cir. 1942).
See Brewster, The Federal Excess Profits Tax 110-111 (1941).
Treas. Reg. 109, §30.718-1; Treas. Reg. 112, §35.718-1.
The Commissioner agrees that the term “contribution to capital” is used with the same meaning in §§ 113 (a) (8) (B) and 718 (a).
See 2 Montgomery’s Federal Taxes — Corporations and Partnerships — 1946-47, p. 372.
In Southern Pac. Co. v. Edwards, 57 F. 2d 891 (S. D. N. Y. 1932), the court held that a capital donation originating with a non-stockholder was includable in invested capital as “paid-in surplus” under the 1917 Act. However, contributions to capital account from outsiders are often thought of as contributed or donated capital surplus rather than as paid-in surplus, see e. g., Hoagland, Corporation Finance 555 (3d ed. 1947); we think that for this reason among others Congress added the term “contribution to capital” to the excess profits tax provisions of the 1940 Act, as it had to the Revenue Acts (§ 113 (a) (8)) since 1932, to indicate that contributions from outsiders intended as additions to capital should be included in the computation. See S. Rep. No. 665,72d Cong., 1st Sess. 27-28 (1932); H. R. Rep. No. 1492,72d Cong., 1st Sess. 13 (1932). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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68
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ST. MARTIN EVANGELICAL LUTHERAN CHURCH et al. v. SOUTH DAKOTA
No. 80-120.
Argued March 3, 1981
Decided May 26, 1981
BlacemuN, J., delivered the opinion of the Court, in which Burger, C. J., and BreNNAN, Stewart, White, Marshall, Powell, and RehN-quist, JJ., joined. SteveNS, J., filed an opinion concurring in the judgment, post, p. 788.
Edward Thomas Schilling argued the cause for petitioners. With him on the briefs was Ernst J. von Briesen.
Mark V. Meier henry, Attorney General of South Dakota, argued the cause for respondent. With him on the brief was Judith A. Atkinson, Assistant Attorney General.
Allen R. Snyder argued the cause for the State of Alabama et al. as amici curiae urging reversal. With him on the brief were Charles A. Graddick, Attorney General of Alabama, Richard H. Bryan, Attorney General of Nevada, Stuart Philip Ross, Peter W. Tredick, George Cocoris, and John A. Flangas.
Barry Sullivan argued the cause for the United States as amicus curiae urging affirmance. On the brief were Solicitor General McCree, Acting Assistant Attorney General Martin, Deputy Solicitor General Wallace, Alan I. Horowitz, Mark C. Rutzick, F. James Foley, Nathaniel Baccus III, Lois G. Williams, and Joseph M. Woodward.
Briefs of amid curiae urging reversal were filed by George Deukmejian, Attorney General, Arthur C. deGoede, Assistant Attorney General, and Lawrence K. Keethe and Jefferey M. Vesely, Deputy Attorneys General, for the State of California; by Lee Boothby and Robert W. Nixon for Americans United for Separation of Church and State; by WiUiam B. Ball, Philip J. Murren, and Robert L. Toms for the Association of Christian Schools International et al.; by Henry W. Sawyer III for the Germantown Friends School et al.; by David C. Gibbs, Jr., and Charles E. Craze for the Grace Baptist Temple et al.; and by Wilfred R. Caron, Charles M. Whelan, George E. Reed, Gerald C. Tobin, and John A. Liekweg for the United States Catholic Conference.
Briefs of amici curiae were filed by Nathan Z. Dershowitz for the American Jewish Congress and by Charles Alan Siegel for the Lutheran Church-Missouri Synod.
Justice Blackmttn
delivered the opinion of the Court.
Petitioners, St. Martin Evangelical Lutheran Church (St. Martin), at Watertown, S. D., and Northwestern Lutheran Academy (Academy), at Mobridge in that State, claim exemption with respect to their school employees from taxes imposed by the Federal Unemployment Tax Act (FUTA), 26 U. S. C. §§ 3301-3311 (1976 ed. and Supp. Ill), and by South Dakota’s statutes complementary thereto, S. D. Codified Laws § 61-1-1 et seq. (1978 and Supp. 1980). The exemption is claimed on both statutory and First Amendment grounds. The provisions primarily at issue are FUTA’s § 3309 (b) and South Dakota’s § 61-1-10.4.
I
A
FUTA appeared originally as Title IX of the Social Security Act of 1935, 49 Stat. 639, and was enacted in response to the widespread unemployment that accompanied the Great Depression. It called for a cooperative federal-state program of benefits to unemployed workers. The Act has undergone a series of amendments that progressively have expanded coverage of the Nation’s work force.
This case concerns one of the more recent of those amendments, namely, that effected by § 115 (b)(1) of the Unemployment Compensation Amendments of 1976, Pub. L. 94-566, 90 Stat. 2670. The Secretary of Labor has determined that this statute rendered nonprofit church-related primary and secondary schools subject to FUTA. The South Dakota authorities went along with that ruling in their interpretation of the State’s amended statute. Petitioners are among those religiously affiliated schools so claimed to be required to pay the FUTA and South Dakota taxes. They contest this construction of the statutes. They argue also, however, that holding them subject to the taxes would violate both the Free Exercise Clause and the Establishment Clause of the First Amendment.
B
Proper understanding of the effect of the 1976 amendment requires a review of FUTA’s development. From 1960 to 1970, FUTA, by §3306 (c)(8), unrestrictedly excluded from the definition of “employment” all “service performed in the employ of a religious, charitable, educational, or other organization described in section 501 (c)(3) which is exempt from income tax under section 501 (a).” Pub. L. 86-778, § 533, 74 Stat. 984. Under this definition, nonprofit church-related schools, of course, were exempt from the tax. A 1970 amendment, however, served to narrow that broad exemption of nonprofit organizations. See Employment Security Amendments of 1970, Pub. L. 91-373, § 104 (b)(1), 84 Stat. 697. The amendment generally required state coverage of employees of nonprofit organizations, state hospitals, and institutions of higher education. Simultaneously, however, Congress enacted a new and narrower exemption of nonprofit organizations and governmental entities. So far as pertinent to this case, that exemption was set forth in a new § 3309 (b), which then provided:
“This section shall not apply to service performed—
“(1) in the employ of (A) a church or convention or association of churches, or (B) an organization which is operated primarily for religious purposes and which is operated, supervised, controlled, or principally supported by a church or convention or association of churches;
“(2) by a duly ordained, commissioned, or licensed minister of a church in the exercise of his ministry or by a member of a religious order in the exercise of duties required by such order;
“(3) in the employ of a school which is not an institution of higher education...
No one, including the Secretary of Labor, disputes that church-run elementary and secondary schools remained exempt under this new § 3309 (b).
In 1976, Congress again amended the Act. Unemployment Compensation Amendments of 1976, Pub. L. 94-566, § 115 (b)(1), 90 Stat. 2670. The effect of the 1976 amendment, so far as pertinent to this case, was to eliminate completely the theretofore existing subsection (b)(3). Subsections (b) (1) and (b)(2), dealing specifically with religious employment, remained unchanged.
In 1978, the Secretary of Labor announced, in a letter made public, that the 1976 repeal of § 3309 (b) (3) of FUTA was
“clearly intended to result in State coverage of church-related schools, whose employees constitute over 80 percent of the employees of all nonprofit schools. In light of the repeal of 3309 (b)(3), we think the only services performed in the schools that may reasonably be considered within the scope of the exclusion permitted by 3309 (b)(1) are those strictly church duties performed by church employees pursuant to their religious responsibilities within the schools.” Letter dated April 18, 1978, of Secretary Marshall to the Most Reverend Thomas C. Kelley, O. P., General Secretary, United States Catholic Conference.
The Secretary also ruled that neither § 3309 (b)(1)(A) nor § 3309 (b)(1)(B) was applicable to church-run schools. He notified the States, and they took steps for the collection of unemployment taxes from church-related schools. See Employment and Training Administration, U. S. Department of Labor, Unemployment Insurance Program Letter No. 39-78 (May 30, 1978), reprinted in [1978 Transfer Binder] CCH Unemp. Ins. Rep. ¶ 21,522.
II
Both St. Martin and the Academy are members of the Wisconsin Evangelical Lutheran Synod and, as such, are organizations exempt from federal income tax under 26 U. S. C. §501 (c)(3). St. Martin operates a state-certified elementary Christian day school at Watertown that offers kindergarten through eighth-grade education. The school, which is not a separate legal entity from the church, is controlled by a Board of Education elected from the local congregation. The congregation entirely finances the school’s operation. The Academy is a state-certified 4-year secondary school at Mobridge and is owned, supported, and controlled by the Synod. It, also, is not separately incorporated. Approximately half of its students go on to become ministers within the Church. According to the record, all courses given at St. Martin and at the Academy are taught from a religious point of view based on the Synod’s scriptural convictions.
When South Dakota proposed to tax them under § 61 — 1— 10.3, petitioners took an administrative appeal. The Appeals Referee of the State’s Department of Labor — Unemployment Insurance Division ruled that service performed by employees of each petitioner was “employment” within the meaning of the statute. Although finding that the Synod “believes a theological basis exists for their schools” and operates them because it “holds the conviction that training of the youth involves both education and religion and that the two are so closely interwoven they cannot be separated,” App. to Pet. for Cert. A-36, the Referee declined to rule that petitioners were exempt under § 61-1-10.4, the state analogue to 26 U. S. C. § 3309 (b). See nn. 1 and 2, supra. He ruled that petitioners were not eligible for exemption under § 61-1-10.4 (1) (a) because, in his view, the term “church,” as used in that section, referred only to the “individual 'house of worship’ maintained by a particular congregation.” App. to Pet. for Cert. A-43. He also ruled, ibid., that they were ineligible for exemption under § 61-1-10.4 (1) (b) because “the primary purpose of the schools is education.”
On appeal, the Hughes County Circuit Court reversed, finding the Referee’s decision clearly erroneous. App. to Pet. for Cert. A-25. The court ruled that both St. Martin and the Academy were exempt under § 61-1-10.4 (1) (b); that the term “church” referred to “an organization of worship-pers,” rather than to a “house of worship”; and that the primary purpose of the schools was the propagation of the Synod’s faith, a religious concern. App. to Pet. for Cert. A-30 to A-33. The South Dakota Supreme Court, by a divided vote, in turn reversed the judgment of the Circuit Court, and held petitioners subject to the unemployment compensation taxes. In re Northwestern Lutheran Academy, 290 N. W. 2d 845 (1980). Noting the growing number of conflicting federal and state decisions on this issue, we granted certiorari. 449 U. S. 950 (1980).
Ill
A statute, of course, is to be construed, if such a construction is fairly possible, to avoid raising doubts of its constitutionality. Crowell v. Benson, 285 U. S. 22, 62 (1932); Machinists v. Street, 367 U. S. 740, 749-750 (1961); United States v. Clark, 445 U. S. 23, 27 (1980). Accordingly, we turn first to the federal statute itself. From our reading of the legislation and of its history, we conclude that the only reasonable construction of 26 U. S. C. §3309 (b)(1) is one that exempts petitioners’ church-run schools, and others similarly operated, from mandatory state coverage.
A
Section 3309 was added to TUTA in 1970. Although the legislative history directly discussing the intended coverage of its subsection (b)(1) is limited, the House Report had the following explanation:
“This paragraph excludes services of persons where the employer is a church or convention or association of churches, but does not exclude certain services performed for an organization which may be religious in orientation unless it is operated primarily for religious purposes and is operated, supervised, controlled, or principally supported by a church (or convention or association of churches). Thus, the services of the janitor of a church would be excluded, but services of a janitor for a separately incorporated college, although it may be church related, would be covered. A college devoted primarily to preparing students for the ministry would be exempt, as would a novitiate or a house of study training candidates to become members of religious orders. On the other hand, a church related (separately incorporated) charitable organization (such as, for example, an orphanage or a home for the aged) would not be considered under this paragraph to be operated primarily for religious purposes.” H. R. Rep. No. 91-612, p. 44 (1969).
The Senate Report contained identical language. See S. Rep. No. 91-752, pp. 48-49 (1970).
Respondent would read this discussion, as the South Dakota Supreme Court majority did, to mean that Congress in 1970 intended to bring within mandatory state coverage all institutions of higher education, including those with no separate legal existence from the church or churches that operate them, except for the narrow category of seminaries and novitiates. From this, respondent extrapolates that Congress intended §3309 (b)(1) to be read very narrowly, and that the later 94th Congress, in 1976, similarly intended to include within mandatory state coverage all primary and secondary educational institutions, including those entirely within the internal structure of churches.
The above quotation from the 1969 House Report, and its Senate counterpart, however, are susceptible of a simpler and more reasonable explanation that corresponds directly with the language of the subsection. Congress drew a distinction between employees “of a church or convention or association of churches,” §3309 (b)(1)(A), on the one hand, and employees of “separately incorporated” organizations, on the other. See H. R. Rep. No. 91-612, at 44. The former uniformly would be excluded from coverage by §3309 (b)(1) (A), while the latter would be eligible for exclusion under § 3309 (b) (1) (B) only when the organization is “operated, supervised, controlled, or principally supported by a church or convention or association of churches.” To hold, as respondent would have us do, that “organization” in subsection (b)(1)(B) also includes a church school that is not separately incorporated would make (b)(1)(A) and (b)(1)(B) redundant.
The distinction between church schools integrated into a church’s structure, and those separately incorporated, is given further credence by the statute’s use of specific words. The Department of Labor would interpret the term “church” in § 3309 (b)(1) as limited to the actual house of worship used by a congregation. See Brief for United States as Amicus Curiae 14-15. This reading, however, appears to us to deny several of FUTA’s phrases their intended meaning. Section 3309 (b), exempting “service performed — (1) in the employ of (A) a church...,” is phrased entirely in terms of the nature of the employer, and not in terms of the work performed or the place at which the employee works. Congress further defined “employer” in § 3306 (a) as “any person who —... paid wages... or... employed at least one individual” (emphasis added). It defined “employee” as “any individual who, under the usual common law rules applicable in determining the employer-employee relationship, has the status of an employee.” §§ 3306 (i) and 3121(d)(2). Thus, to hold “church” synonymous solely with a physical building that is a house of worship contradicts the phrasing of the statute. The word “church” in § 3309 (b) must be construed, instead, to refer to the congregation or the hierarchy itself, that is, the church authorities who conduct the business of hiring, discharging, and directing church employees.
We conclude that, at the time of its enactment in 1970, §3309 (b)(1)(A) was meant to apply to schools, like petitioners’, that have no separate legal existence from a church, or, as in the Academy’s case, from a “convention or association of churches.” As the Referee found, St. Martin directly finances, supervises, and controls its school’s operations. The Synod similarly supports and controls the Academy. Only teachers trained and certified by the Synod may teach at either school, and, again as the Referee found, these teachers, both male and female, “receive a divine, life-long call” to the church. App. to Pet. for Cert. A-38. Male teachers (“teaching ministers”) have equal status in the church and an equal vote on Synod matters, including matters of doctrine, with preaching ministers. Id., at A-37. Neither school has a separate legal existence. Thus, the employees working within these schools plainly are “in the employ... of a church or convention or association of churches... §3309 (b)(1)(A).
B
The 1976 Amendments did not alter the scope of § 3309 (b) (1), either directly or by implication. Congress, in eliminating the old § 3309 (b)(3), made no change in § 3309 (b) (1). It did not discuss churches or church schools, and it intimated that §3309 (b)(1) remained unchanged. See, e. g., H. R. Rep. No. 94-755, pp. 23, 41, 55-56 (1975) (explaining the then-current coverage of § 3309 (b) and the anticipated effect of the repeal, and containing no indication that the proposed amendments would alter §3309 (b)(1)).
Respondent places particular emphasis on legislative statements expressing an intention, for example, to extend coverage “on the basis of services performed for all educational institutions,” H. R. Rep. No. 94-755, at 56, and to “employees of non-profit elementary and secondary schools,” id., at 2. See also id., at 41 (“This section requires States, as a condition for tax offset credit to their employers, to extend coverage to employees of non-profit primary and secondary institutions of education, thus broadening present required coverage limited to non-profit institutions of higher education”); S. Rep. No. 94H265, pp. 2, 9-10 (1976).
These references are simply too general and too ambiguous to bear the weight respondent would assign to them. There is no indication that Congress, in these references, had in mind the scope of § 3309 (b)(1) and religious organizations. Rather, all the evidence demonstrates that it was concerned solely with the then-existing § 3309 (b)(3) and secular educational institutions, particularly the public schools. Furthermore, the reported comments implying total coverage of all educational institutions, as a result of the repeal of the former §3309 (b)(3), could not be taken as literally true because the 1970 Report expressly had noted that a college “devoted primarily to preparing students for the ministry,” H. R. Rep. No. 91-612, at 44, would be exempt. All institutions of higher education had not been covered by the 1970 Amendments.
Respondent also relies on a single statistic estimating the number of employees newly to be covered as a result of the repeal of the then § 3309 (b)(3). See S. Rep. No. 94H265, at 8 (table). This statistical reference, to the effect that 242,000 employees of nonprofit organizations would be covered by the 1976 repeal of subsection (b)(3), is much too meager to sustain respondent’s position. The Committee Report’s table containing this figure is devoid of any explanation, source, or supporting data. The South Dakota Supreme Court relied on the figure, however, reasoning that because it “approximates the total number of teachers in all nonprofit elementary and secondary schools” in 1975, 290 N. W. 2d, at 849, and n. 5, Congress must have included within that number religious-school teachers, who constitute more than half the staff of all private elementary and secondary schools in the United States. Yet, in repealing § 3309 (b)(3), Congress intended to include not just full-time teachers, but all employees of the newly covered nonprofit private elementary and secondary schools (custodians, cafeteria workers, nurses, part-time help, counselors, etc.). Thus, the inclusion of all employees in nonprofit private lower schools within the number of persons brought within FUTA by the repeal would far exceed the 242,000 contained in the Report’s table, rendering it, in our view, of dubious significance for the present issue.
This legislative history does not reveal any clear intent to repeal § 3309 (b)(1) or to alter its meaning. The Court has had frequent occasion to note that such indefinite congressional expressions cannot negate plain statutory language and cannot work a repeal or amendment by implication. “In the absence of some affirmative showing of an intention to repeal, the only permissible justification for a repeal by implication is when the earlier and later statutes are irreconcilable.” Morton v. Mancari, 417 U. S. 535, 550 (1974); see also Watt v. Alaska, ante, p. 259; TV A v. Hill, 437 U. S. 153, 189-190 (1978); FTC v. A. P. W. Paper Co., 328 U. S. 193, 202-203 (1946); Posadas v. National City Bank, 296 U. S. 497, 503-505 (1936); United States v. Noce, 268 U. S. 613, 618-619 (1925); United States v. Greathouse, 166 U. S. 601, 605 (1897). This long-established canon of construction carries special weight when an implied repeal or amendment might raise constitutional questions. See NLRB v. Catholic Bishop of Chicago, 440 U. S. 490 (1979). We therefore hold that the repeal of § 3309 (b) (3) did not alter the meaning of § 3309 (b)(1). Petitioners are eligible for exemption under subsection (b)(1)(A) by virtue of the nature of their relationship to the church bodies that employ them.
This makes it unnecessary for us to consider the Pirst Amendment issues raised by petitioners.
The judgment of the Supreme Court of South Dakota is reversed, and the case is remanded to that court for further proceedings not inconsistent with this opinion.
It is so ordered.
Title 26 U. S. C. §3309 (b) reads in pertinent part:
“This section shall not apply to service performed—
“(1) in the employ of (A) a church or convention or association of churches, or (B) an organization which is operated primarily for religious purposes and which is operated, supervised, controlled, or principally supported by a church or convention or association of churches;
“(2) by a duly ordained, commissioned, or licensed minister of a church in the exercise of his ministry or by a member of a religious order in the exercise of duties required by such order...
This South Dakota statute provides:
“For the purposes of §§ 61 — 1—10.2 and 61-1-10.3 the term 'employment’ does not apply to service performed:
“(1) In the employ of
“(a) a church or convention or association of churches, or
“(b) an organization which is operated primarily for religious purposes and which is operated, supervised, controlled, or principally supported by a church or convention or association of churches; or
“ (2) By a duly ordained, commissioned, or licensed minister of a church in the exercise of his ministry or by a member of a religious order in the exercise of duties required by such order; or
“(3) In the employ of a school which is not an institution of higher education prior to January 1, 1978....”
FUTA imposes an excise tax on “wages” paid by an “employer” in covered “employment,” 26 U. S. C. § 3301, as these terms are statutorily defined. §3306 (1976 ed. and Supp. III). An employer, however, is allowed a credit of up to 90% of the federal tax for “contributions” paid to a state fund established under a federally approved state unemployment compensation law. §3302 (1976 ed. and Supp. III). The requirements for federal approval are contained in §§ 3304 and 3309 (1976 ed. and Supp. Ill), and the Secretary of Labor must annually review and certify the state plan. §§ 3304 (a) and (c) (1976 ed. and Supp. III). All 50 States have employment security laws implementing the federal mandatory minimum standards of coverage. A State, of course, is free to expand its coverage beyond the federal minimum without jeopardizing its federal certification.
In response to each federal amendment, the States correspondingly have amended their statutes to retain their federal certifications.
From and after the effective date of the Internal Revenue Code of 1954 and until 1960, § 3306 (e) (8) related the exclusion to “service performed in the employ of a corporation, community chest, fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, and no substantial part of the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation.” 68A Stat. 450.
Inasmuch as the definition of “employment” in § 3306 (c) (8) continued to exclude service performed in the employ of an organization exempt from federal income tax under § 501 (c)(3), the 1970 amendment did not itself serve to impose a federal excise tax on nonprofit organizations. The amendment, however, as a condition for federal certification, required state statutes to cover employees of certain organizations of that type. § 3309 (a) (1) (A). Any covered nonprofit organization must be given the option of either making regular payments to the state unemployment fund or reimbursing the fund for benefits paid out to the organization’s employees. § 3309 (a) (2). South Dakota amended its unemployment statutes accordingly. See 1971 S. D. Laws, ch. 276 (now codified, as further amended, as S. D. Codified Laws §61-1-1 et seq. (1978 and Supp. 1980)).
In place of subsection (b)(3), Congress substituted a new and unrelated subsection (b) (3) that concerns the exemption of certain service in the employ of governmental entities. We continue herein to refer to the repealed subsection as “§3309 (b)(3)” or “(b)(3).”
Following the 1976 amendment, South Dakota effected corresponding amendments of its unemployment compensation statutes. See 1977 S. D. Laws, ch. 420, §§ 9, 10, and 11 (codified as S. D. Codified Laws §§ 61 — 1— 10.3 and 61-1-10.4 (1978)). Petitioners were ruled to be liable for state taxes under these provisions.
The South Dakota Supreme Court’s analysis depended entirely on its understanding of the meaning of FUTA and the First Amendment, and did not rest on any independent and adequate state ground. We therefore are at liberty to review this judgment, although, literally, it concerns the construction of a state statute. While the South Dakota courts remain free to construe the Staté’s own law differently, they deserve to be made aware of the proper and, here, significant interpretation of the intertwined federal law. See, e. g., Zacchini v. Scripps-Howard Broadcasting Co., 433 U. S. 562, 566-568 (1977); United Air Lines, Inc. v. Mahin, 410 U. S. 623, 630-631 (1973); State Tax Comm’n v. Van Cott, 306 U. S. 511, 514-515 (1939).
Most other courts that have addressed this general issue have ruled in favor of church-related schools. See, e. g., Alabama v. Marshall, 626 F. 2d 366 (CA5 1980), cert. pending No. 80-922; Lutheran Church-Missouri Synod v. Bowling, 89 Ill. App. 3d 100, 411 N. E. 2d 526 (1980) ; Roman Catholic Church of the Archdiocese of New Orleans v. State, 387 So. 2d 1248 (La. App. 1980); Sant Bani Ashram, Inc. v. New Hampshire Department of Employment Security, 121 N. H. 74, 426 A. 2d 34 (1981); Begley v. Employment Security Comm’n, 50 N. C. App. 432, 274 S. E. 2d 370 (1981); Grace Lutheran Church v. North Dakota Employment Security Bureau, 294 N. W. 2d 767 (N. D. 1980); Employment Division v. Archdiocese of Portland, 42 Ore. App. 421, 600 P. 2d 926 (1979); Christian School Assn. v. Commonwealth, 55 Pa. Commw. 555, 423 A. 2d 1340 (1980). But see Ascension Lutheran Church v. Employment Security Comm’n, 501 F. Supp. 843 (WDNC 1980).
On the Senate floor, Senator Long | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
116
] | sc_adminaction |
EDMOND v. UNITED STATES
No. 96-262.
Argued February 24, 1997
Decided May 19, 1997
Alan B. Morrison argued the cause for petitioners. With him on the briefs was Allen Lotz.
Malcolm L. Stewart argued the cause for the United States. With him on the brief were Acting Solicitor General Dellinger, Deputy Solicitor General Dreeben, Douglas N. Letter, Nancy E. McFadden, Paul M. Geier, Peter J Plocki, and Frank R. Levi
Together with Lazenby v. United States; Leaver v. United States; Leonard v. United States; Nichols v. United States; and Venable v. United States, also on certiorari to the same court (see this Court’s Rule 12.4).
Justice Scalia
delivered the opinion of the Court.
We must determine in this case whether Congress has authorized the Secretary of Transportation to appoint civilian members of the Coast Guard Court of Criminal Appeals, and if so, whether this authorization is constitutional under the Appointments Clause of Article II.
I
The Coast Guard Court of Criminal Appeals (formerly known as the Coast Guard Court of Military Review) is an intermediate court within the military justice system. It is one of four military Courts of Criminal Appeals; others exist for the Army, the Air Force, and the Navy-Marine Corps. The Coast Guard Court of Criminal Appeals hears appeals from the decisions of courts-martial, and its decisions are subject to review by the United States Court of Appeals for the Armed Forces (formerly known as the United States Court of Military Appeals).
Appellate military judges who are assigned to a Court of Criminal Appeals must be members of the bar, but may be commissioned officers or civilians. Art. 66(a), Uniform Code of Military Justice (UCMJ), 10 U. S. C. § 866(a). During the times relevant to this case, the Coast Guard Court of Criminal Appeals has had two civilian members, Chief Judge Joseph H. Baum and Associate Judge Alfred F. Bridgman, Jr. These judges were originally assigned to serve on the court by the General Counsel of the Department of Transportation, who is, ex officio, the Judge Advocate General of the Coast Guard, Art. 1(1), UCMJ, 10 U.S.C. §801(1). Subsequent events, however, called into question the validity of these assignments.
In Weiss v. United States, 510 U. S. 163 (1994), we considered whether the assignment of commissioned military officers to serve as military judges without reappointment under the Appointments Clause was constitutional. We held that military trial and appellate judges are officers of the United States and must be appointed pursuant to the Appointments Clause. Id., at 170. We upheld the judicial assignments at issue in Weiss because each of the military judges had been previously appointed by the President as a commissioned military officer, and was serving on active duty under that commission at the time he was assigned to a military court. We noted, however, that “allowing civilians to be assigned to Courts of Military Review, without being appointed pursuant to the Appointments Clause, obviously presents a quite different question.” Id., at 170, n. 4.
In anticipation of our decision in Weiss, Chief Judge Baum sent a memorandum to the Chief Counsel of the Coast Guard requesting that the Secretary, in his capacity as a department head, reappoint the judges so the court would be constitutionally valid beyond any doubt. See United States v. Senior, 36 M. J. 1016, 1018 (C. G. C. M. R. 1993). On January 15,1993, the Secretary of Transportation issued a memorandum “adopting” the General Counsel’s assignments to the Coast Guard Court of Military Review “as judicial appointments of my own.” The memorandum then listed the names of “[tjhose judges presently assigned and appointed by me,” including Chief Judge Baum and Judge Bridgman. Addendum to Brief for Petitioners A6.
Two Terms ago, in Ryder v. United States, 515 U. S. 177 (1995), we considered the validity of a conviction that had been affirmed by a panel of the Coast Guard Court of Military Review, including its two civilian members, before the secretarial appointments of January 15, 1993. The Government conceded that the civilian judges of the Court of Military Review had not been appointed pursuant to the Appointments Clause, see Brief for United States in Ryder v. United States, O. T. 1994, No. 94-431, p. 9, n. 9, but argued that Ryder’s conviction should be affirmed notwithstanding this defect. We disagreed, holding that Ryder was “entitled to a hearing before a properly appointed panel of” the Coast Guard Court of Military Review. 515 U. S., at 188. We did not consider the validity of convictions affirmed by the court after the secretarial appointments.
Each of the petitioners in the present case was convicted by court-martial. In each case the conviction and sentence were affirmed, in whole or in part, by the Coast Guard Court of Criminal Appeals (or its predecessor the Court of Military Review) after the January 15, 1993, secretarial appointments. Chief Judge Baum participated in each decision, and Judge Bridgman participated in the appeals involving two of the petitioners. The Court of Appeals for the Armed Forces affirmed the convictions, relying on its holding on remand in United States v. Ryder, 44 M. J. 9 (1996), that the Secretary of Transportation’s appointments were valid and cured the defect that had previously existed. 45 M. J. 19 (1996); 44 M. J. 273 (1996); 44 M. J. 272 (1996). Petitioners sought review in a consolidated petition pursuant to this Court’s Rule 12.4, and we granted certiorari, 519 U. S. 977 (1996).
II
Petitioners argue that the Secretary’s civilian appointments to the Coast Guard Court of Criminal Appeals are invalid for two reasons: First, the Secretary lacks authority under 49 U. S. C. § 323(a) to appoint members of the court; second, judges of military Courts of Criminal Appeals are principal, not inferior, officers within the meaning of the Appointments Clause, and must therefore be appointed by the President with the advice and consent of the Senate. We consider these contentions in turn.
Congress has established the Coast Guard as a military service and branch of the Armed Forces that, except in time of war (when it operates as a service within the Navy), is part of the Department of Transportation. 14 U. S. C. §§ 1-3. The Secretary of Transportation has broad authority over the Coast Guard, including the power to “promulgate such regulations and orders as he deems appropriate to carry out the provisions of [Title 14] or any other law applicable to the Coast Guard,” §633. The Commandant of the Coast Guard is required to “carry out duties and powers prescribed by the Secretary of Transportation,” and he “reports directly to the Secretary.” 49 U. S. C. § 108(b). Most relevant to the present case, § 323(a) provides: “The Secretary of Transportation may appoint and fix the pay of officers and employees of the Department of Transportation and may prescribe their duties and powers.” Petitioners do not dispute that judges of the Coast Guard Court of Criminal Appeals are officers of the Department of Transportation. Thus, although the statute does not specifically mention Coast Guard judges, the plain language of § 323(a) appears to give the Secretary power to appoint them.
Petitioners argue, however, that § 323(a) is a default statute, applicable only where Congress has not otherwise provided for the appointment of specific officers. Petitioners contend that Article 66(a) of the UCMJ, 10 U. S. C. § 866(a), gives the Judge Advocate General of each military branch exclusive authority to appoint judges of his respective Court of Criminal Appeals. That provision reads as follows:
“Each Judge Advocate General shall establish a Court of Criminal Appeals which shall be composed of one or more panels, and each such panel shall be composed of not less than three appellate military judges.... Appellate military judges who are assigned to a Court of Criminal Appeals may be commissioned officers or civilians, each of whom must be a member of a bar of a Federal court or of the highest court of a State. The Judge Advocate General shall designate as chief judge one of the appellate military judges of the Court of Criminal Appeals established by him. The chief judge shall determine on which panels of the court the appellate judges assigned to the court will serve and which military judge assigned to the court will act as senior judge on each panel.”
Were we to accept petitioners’ interpretation of Article 66(a) as providing for the “appointment” of Court of Criminal Appeals judges, their argument that Congress intended it to be the exclusive means of appointment might prove persuasive. Ordinarily, where a specific provision conflicts with a general one, the specific governs. Busic v. United States, 446 U. S. 398, 406 (1980). Conspicuously absent from Article 66(a), however, is any mention of the “appointment” of military judges. Instead, the statute refers to judges “who are assigned to a Court of Criminal Appeals” (emphasis added). The difference between the power to “assign” officers to a particular task and the power to “appoint” those officers is not merely stylistic. In Weiss, we upheld the assignment of military officers to serve on military courts because they had previously been “appointed” as officers of the United States pursuant to the Appointments Clause, and because Congress had not designated the position of a military judge as one requiring reappointment. 510 U. S., at 176. We noted in Weiss that Congress has consistently used the word “appoint” with respect to military positions requiring a separate appointment, rather than using terms not found within the Appointments Clause, such as “assign”: “Congress repeatedly and consistently distinguished between an office that would require a separate appointment and a position or duty to which one could be ‘assigned’ or ‘detailed’ by a superior officer.” Id., at 172. We found it significant that the sections of the UCMJ relating to military judges “speak explicitly and exclusively in terms of ‘detail’ or ‘assign’; nowhere in these sections is mention made of a separate appointment.” Ibid. This analysis suggests that Article 66(a) concerns not the appointment of Court of Criminal Appeals judges, but only their assignment.
Moreover, we see no other way to interpret Article 66(a) that would make it consistent with the Constitution. Under the Appointments Clause, Congress could not give the Judge Advocates General power to “appoint” even inferior officers of the United States; that power can be conferred only upon the President, department heads, and courts of law. Thus, petitioners are asking us to interpret Article 66(a) in a manner that would render it clearly unconstitutional — which we must of course avoid doing if there is another reasonable interpretation available. NLRB v. Catholic Bishop of Chicago, 440 U. S. 490, 500 (1979); Blodgett v. Holden, 275 U. S. 142 (1927). Petitioners respond that reading § 323(a) to permit the Secretary to appoint Court of Criminal Appeals judges causes us unnecessarily to reach the constitutional question whether those judges are inferior officers under the Appointments Clause, since Congress.may vest only the appointment of inferior officers in a department head. But a constitutional question confronted in order to preserve, if possible, a congressional enactment is not a constitutional question confronted unnecessarily.
We conclude that Article 66(a) does not give Judge Advocates General authority to appoint Court of Criminal Appeals judges; that § 323(a) does give the Secretary of Transportation authority to do so; and we turn to the constitutional question whether this is consistent with the Appointments Clause.
III
The Appointments Clause of Article II of the Constitution reads as follows:
“[The President] shall nominate, and by and with the Advice and Consent of the Senate, shall appoint Ambassadors, other public Ministers and Consuls, Judges of the supreme Court, and all other Officers of the United States, whose Appointments are not herein otherwise provided for, and which shall be established by Law: but the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments.” U. S. Const., Art. II, §2, cl. 2.
As we recognized in Buckley v. Valeo, 424 U. S. 1, 125 (1976) (per curiam), the Appointments.Clause of Article II is more than a matter of “etiquette or protocol”; it is among the significant structural safeguards of the constitutional scheme. By vesting the President with the exclusive power to select the principal (noninferior) officers of the United States, the Appointments Clause prevents congressional encroachment upon the Executive and Judicial Branches. See id., at 128-131; Weiss, supra, at 183-185 (Souter, J., concurring); Freytag v. Commissioner, 501 U. S. 868, 904, and n. 4 (1991) (Scalia, J., concurring). This disposition was also designed to assure a higher quality of appointments: The Framers anticipated that the President would be less vulnerable to interest-group pressure and personal favoritism than would a collective body. “The sole and undivided responsibility of one man will naturally beget a livelier sense of duty, and a more exact regard to reputation.” The Federalist No. 76, p. 387 (M. Beloff ed. 1987) (A. Hamilton); accord, 3 J. Story, Commentaries on the Constitution of the United States 374-375 (1833). The President’s power to select principal officers of the United States was not left unguarded, however, as Article II further requires the “Advice and Consent of the Senate.” This serves both to curb Executive abuses of the appointment power, see 3 Story, supra, at 376-377, and “to promote a judicious choice of [persons] for filling the offices of the union,” The Federalist No. 76, at 386-387. By requiring the joint participation of the President and the Senate, the Appointments Clause was designed to ensure public accountability for both the making of a bad appointment and the rejection of a good one. Hamilton observed:
“The blame of a bad nomination would fall upon the president singly and absolutely. The censure of rejecting a good one would lie entirely at the door of the senate; aggravated by the consideration of their having counteracted the good intentions of the executive. If an ill appointment should be made, the executive for nominating, and the senate for approving, would participate, though in different degrees, in the opprobrium and disgrace.” Id., No. 77, at 392.
See also 3 Story, supra, at 375 (“If [the President] should ... surrender the public patronage into the hands of profligate men, or low adventurers, it will be impossible for him long to retain public favour”).
The prescribed manner of appointment for principal officers is also the default manner of appointment for inferior officers. “[B]ut,” the Appointments Clause continues, “the Congress may by Law vest the Appointment of such inferior Officers, as they think proper, in the President alone, in the Courts of Law, or in the Heads of Departments.” This provision, sometimes referred to as the “Excepting Clause,” was added to the proposed Constitution on the last day of the Grand Convention, with little discussion. See 2 M. Farrand, Records of the Federal Convention of 1787, pp. 627-628 (1911 ed.). As one of our early opinions suggests, its obvious purpose is administrative convenience, see United States v. Germaine, 99 U. S. 508, 510 (1879)—but that convenience was deemed to outweigh the benefits of the more cumbersome procedure only with respect to the appointment of “inferior Officers.” Section 323(a), which confers appointment power upon the Secretary of Transportation, can constitutionally be applied to the appointment of Court of Criminal Appeals judges only if those judges are “inferior Officers.”
Our cases have not set forth an exclusive criterion for distinguishing between principal and inferior officers for Appointments Clause purposes. Among the offices that we have found to be inferior are that of a district court clerk, Ex parte Hennen, 13 Pet. 225, 258 (1839), an election supervisor, Ex parte Siebold, 100 U. S. 371, 397-398 (1880), a vice consul charged temporarily with the duties of the consul, United States v. Eaton, 169 U. S. 331, 343 (1898), and a “United States commissioner” in district court proceedings, Go-Bart Importing Co. v. United States, 282 U. S. 344, 352-354 (1931). Most recently, in Morrison v. Olson, 487 U. S. 654 (1988), we held that the independent counsel created by provisions of the Ethics in Government Act of 1978, 28 U. S. C. §§ 591-599, was an inferior officer. In reaching that conclusion, we relied on several factors: that the independent counsel was subject to removal by a higher officer (the Attorney General), that she performed only limited duties, that her jurisdiction was narrow, and that her tenure was limited. 487 U. S., at 671-672.
Petitioners are quite correct that the last two of these conclusions do not hold- with regard to the office of military judge at issue here. It is not “limited in tenure,” as that phrase was used in Morrison to describe “appointment] essentially to accomplish a single task [at the end of which] the office is terminated.” Id., at 672. Nor are military judges “limited in jurisdiction,” as used in Morrison to refer to the fact that an independent counsel may investigate and prosecute only those individuals, and for only those crimes, that are within the scope of jurisdiction granted by the special three-judge appointing panel. See Weiss, 510 U. S., at 192 (Souter, J., concurring). However, Morrison did not purport to set forth a definitive test for whether an office is “inferior” under the Appointments Clause. To the contrary, it explicitly stated: “We need not attempt here to decide exactly where the line falls between the two types of officers, because in our view [the independent counsel] clearly falls on the inferior officer’ side of that line.” 487 U. S., at 671.
To support principal-officer status, petitioners emphasize the importance of the responsibilities that Court of Criminal Appeals judges bear. They review those court-martial proceedings that result in the most serious sentences, including those “in which the sentence, as approved, extends to death, dismissal . . . , dishonorable or bad-conduct discharge, or confinement for one year or more.” Art. 66(b)(1), UCMJ, 10 U. S. C. § 866(b)(1). They must ensure that the court-martial’s finding of guilt and its sentence are “correct in law and fact,” id., Art. 66(c), § 866(c), which includes resolution of constitutional challenges. And finally, unlike most appellate judges, Court of Criminal Appeals judges are not required to defer to the trial court’s factual findings, but may independently “weigh the evidence, judge the credibility of witnesses, and determine controverted questions of fact, recognizing that the trial court saw and heard the witnesses.” Ibid. We do not dispute that military appellate judges are charged with exercising significant authority on behalf of the United States. This, however, is also true of offices that we have held were “inferior” within the meaning of the Appointments Clause. See, e. g., Freytag v. Commissioner, 501 U. S., at 881-882 (special trial judges having “significan[t]... duties and discretion” are inferior officers). The exercise of “significant authority pursuant to the laws of the United States” marks, not the line between principal and inferior officer for Appointments Clause purposes, but rather, as we said in Buckley, the line between officer and nonofficer. 424 U. S., at 126.
Generally speaking, the term “inferior officer” connotes a relationship with some higher ranking officer or officers below the President: Whether one is an “inferior” officer depends on whether he has a superior. It is not enough that other officers may be identified who formally maintain' a higher rank, or possess responsibilities of a greater magnitude. If that were the intention, the Constitution might have used the phrase “lesser officer.” Rather, in the context of a Clause designed to preserve political accountability relative to important Government assignments, we think it evident that “inferior officers” are officers whose work is directed and supervised at some level by others who were appointed by Presidential nomination with the advice and consent of the Senate.
This understanding of the Appointments Clause conforms with the views of the first Congress. On July 27,1789, Congress established the first Executive department, the Department of Foreign Affairs. In so doing, it expressly designated the Secretary of the Department as a “principal officer,” and his subordinate, the Chief Clerk of the Department, as an “inferior officer:
“Section 1. Be it enacted . . . That there shall be an Executive department, to be denominated the Department of Foreign Affairs, and that there shall be a principal officer therein, to be called the Secretary for the Department of Foreign Affairs, who shall perform and execute such duties as shall from time to time be enjoined on or intrusted to him by the President of the United States, agreeable to the Constitution, relative to [matters respecting foreign affairs]; and furthermore, that the said principal officer shall conduct the business of the said department in such manner as the President of the United States shall from time to time order or instruct.
“Sec. 2. And be it further enacted, That there shall be in the said department, an inferior officer, to be appointed by the said principal officer, and to be employed therein as he shall deem proper, and to be called the chief Clerk in the Department of Foreign Affairs. . . .” Ch. 4, 1 Stat. 28.
Congress used similar language in establishing the Department of War, repeatedly referring to the Secretary of that department as a “principal officer,” and the Chief Clerk, who would be “employed” within the Department as the Secretary “shall deem proper,” as an “inferior officer.” Ch. 7, 1 Stat. 49.
Supervision of the work of Court of Criminal Appeals judges is divided between the Judge Advocate General (who in the Coast Guard is subordinate to the Secretary of Transportation) and the Court of Appeals for the Armed Forces. The Judge Advocate General exercises administrative oversight over the Court of Criminal Appeals. He is charged with the responsibility to “prescribe uniform rules of procedure” for the court, and must “meet periodically [with other Judge Advocates General] to formulate policies and procedure in regard to review of court-martial cases.” Art. 66(f), UCMJ, 10 U. S. C. § 866(f). It is conceded by the parties that the Judge Advocate General may also remove a Court of Criminal Appeals judge from his judicial assignment without cause. The power to remove officers, we have recognized, is a powerful tool for control. Bowsher v. Synar, 478 U. S. 714, 727 (1986); Myers v. United States, 272 U. S. 52 (1926).
The Judge Advocate General’s control over Court of Criminal Appeals judges is, to be sure, not complete. He may not attempt to influence (by threat of removal or otherwise) the outcome of individual proceedings, Art. 37, UCMJ, 10 U. S. C. § 837, and has no power to reverse decisions of the court. This latter power does reside, however, in another Executive Branch entity, the Court of Appeals for the Armed Forces. That court reviews every decision of the Courts of Criminal Appeals in which: (a) the sentence extends to death; (b) the Judge Advocate General orders such review; or (c) the court itself grants review upon petition of the accused. Id., Art. 67(a), § 867(a). The scope of review is narrower than that exercised by the Court of Criminal Appeals: so long as there is some competent evidence in the record to establish each element of the offense beyond a reasonable doubt, the Court of Appeals for the Armed Forces will not reevaluate the facts. Id., Art. 67(c), § 867(c); United States v. Wilson, 6 M. J. 214 (C. M. A. 1979). This limitation upon review does not in our opinion render the judges of the Court of Criminal Appeals principal officers. What is significant is that the judges of the Court of Criminal Appeals have no power to render a final decision on behalf of the United States unless permitted to do so by other Executive officers.
Finally, petitioners argue that Freytag v. Commissioner, 501 U. S. 868 (1991), which held that special trial judges charged with assisting Tax Court judges were inferior officers and could be appointed by the Chief Judge of the Tax Court, suggests that Court of Criminal Appeals judges are principal officers. Petitioners contend that Court of Criminal Appeals judges more closely resemble Tax Court judges — who we implied (according to petitioners) were principal officers — than they do special trial judges. We note initially that Freytag does not hold that Tax Court judges are principal officers; only the appointment of special trial judges was at issue in that case. Moreover, there are two significant distinctions between Tax Court judges and Court of Criminal Appeals judges. First, there is no Executive Branch tribunal comparable to the Court of Appeals for the Armed Forces that reviews the work of the Tax Court; its decisions are appealable only to courts of the Third Branch. 26 U. S. C. § 7482. And second, there is no officer comparable to a Judge Advocate General who supervises the work of the Tax Court, with power to determine its procedural rules, to remove any judge without cause, and to order any decision submitted for review. Freytag does not control our decision here.
* * *
We conclude that 49 U. S. C. § 323(a) authorizes the Secretary of Transportation to appoint judges of the Coast Guard Court of Criminal Appeals; and that such appointment is in conformity with the Appointments Clause of the Constitution, since those judges are “inferior Officers” within the meaning of that provision, by reason of the supervision over their work exercised by the General Counsel of the Department of Transportation in his capacity as Judge Advocate General and the Court of Appeals for the Armed Forces. The judicial appointments at issue in this case are therefore valid.
Accordingly, we affirm the judgment of the Court of Appeals for the Armed Forces with respect to each petitioner.
It is so ordered.
The names of the Courts of Military Review and of the United States Court of Military Appeals were changed, effective October 5,1994, by Pub. L. 103-337, §924,108 Stat. 2831.
Article 141 of the UCMJ, 10 U.S.C. §941, states that the Court of Appeals for the Armed Forces “is established under article I of the Constitution,” and “is located for administrative purposes only in the Department of Defense. ” Although the statute does not specify the court’s “location” for nonadministrative purposes, other provisions of the UCMJ make clear that it is within the Executive .Branch. The court reviews the judgments of only military tribunals, id., Art. 67, §867; its judges must meet annually in committee with the Judge Advocates General and two members appointed by the Secretary of Defense to survey the operation of the military justice system, id., Art. 146, § 946; and the President may remove its judges for neglect of duty, misconduct, or mental or physical disability, id., Art. 142(c), § 942(c). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
28
] | sc_adminaction |
LEE, SUPERINTENDENT OF PORT AUTHORITY POLICE v. INTERNATIONAL SOCIETY FOR KRISHNA CONSCIOUSNESS, INC., et al.
No. 91-339.
Argued March 22, 1992
Decided June 26, 1992
Arthur P. Berg argued the cause for petitioner. With him on the brief were Philip Maurer, Arnold D. Kolikoff, and Milton H. Paehter.
Barry A. Fisher argued the cause for respondents. With him on the Briefs were David Grosz, Robert C. Moest, David M. Liberman, Jay Alan Sekulow, and Jeremiah S. Gutman.
Briefs of amici curiae were filed for the Airports Association Council International-North America by Michael M. Conway; for the American Civil Liberties Union et al. by Steven R. Shapiro, John A. Powell, and Arthur N Eisenberg; for the American Federation of Labor and Congress of Industrial Organizations by Marsha S. Berzon, Walter Kamiat, and Laurence Gold; for the American Jewish Congress et al. by Bradley P. Jacob and Edward McGlynn Gaffney, Jr.; for the American Newspaper Publishers Association et al. by Robert C. Bernius, Alice Neff Lucan, René P. Milam, Richard A Bernstein, Barbara Wartelle Wall, John C. Fontaine, Cristina L. Mendoza, George Freeman, and Carol D. Melamed; for the American Tract Society et al. by James Matthew Henderson, Sr., Mark N. Troobnick, Thomas Patrick Monaghan, and Charles E. Rice; for the Criminal Justice Legal Foundation by Kent S. Scheidegger and Charles L. Hobson; for the Free Congress Foundation by Wendell R. Bird and David J. Myers; for Multimedia Newspaper Co. et al. by Carl F. Muller and Wallace K. Lightsey; for Project Vote et al. by Robert Plotkin and Elliot M. Minceberg; and for the National Institute of Municipal Law Of-fleers by Benjamin L. Brown, Analeslie Muncy, Robert J. Alfton, Frank B. Gunvmey III, Frederick S. Dean, Neal M. Janey, Victor J. Kaleta, Robert J. Mangier, Neal E. McNeill, Robert J. Watson, and Iris J. Jones.
Per Curiam.
For the reasons expressed in the opinions of Justice O’Connor, Justice Kennedy, and Justice Souter, see ante, p. 685 (O’Connor, J., concurring in No. 91-155 and concurring in judgment in No. 91-339), ante, p. 693 (Kennedy, J., concurring in judgments), and ante, p. 709 (Souter, J., concurring in judgment in No. 91-339 and dissenting in No. 91-155), the judgment of the Court of Appeals holding that the ban on distribution of literature in the Port Authority airport terminals is invalid under the First Amendment is
Affirmed. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
64
] | sc_adminaction |
UNITED STATES v. MISSISSIPPI VALLEY GENERATING CO.
No. 26.
Argued October 19, 1960.
Decided January 9, 1961.
Solicitor General Rankin argued the cause for the United States. With him on the briefs were Oscar H. Davis, Howard E. Shapiro and Samuel D. Slade.
John T. Cahill and William C. Chanler argued the cause for respondent. With them on the brief was Robert G. Zeller.
MR. Chief Justice
Warren delivered the opinion of the Court.
We granted certiorari to review the decision of the Court of Claims because the conflict-of-interest problem presented by this case has a far-reaching significance in the area of public employment and involves fundamental questions relating to the standards of conduct which should govern those who represent the Government in its business dealings.
The person with whose activities we are primarily concerned is one Adolphe H. Wenzell, Vice President and Director of First Boston Corporation, which is one of the major financial institutions in the country. At the suggestion of First Boston’s Chairman, and subsequently at the request of the Bureau of the Budget, Wenzell undertook to advise the Government and act on its behalf in negotiations which culminated in a contract between the Government and the Mississippi Valley Generating Company (MVG), the respondent herein. The contract called for the construction and operation by the respondent of a $100,000,000 steam power plant in the Memphis, Tennessee, area. Ultimately, the plant was to supply 600,000 kw. of electrical energy for the use of the Atomic Energy Commission (AEC). Before the plant was constructed, but after the respondent had taken some steps toward performing the contract, the AEC, which was the governmental contracting agency, canceled the contract because the power to be generated by the proposed plant was no longer needed. The respondent then sued the Government in the Court of Claims for the sums it had expended in connection with the contract.
The Government defended on several grounds, but primarily on the ground that the contract was unenforceable due to an illegal conflict of interest on the part of Wenzell. Specifically, the Government contended that at the time of Wenzell’s employment by the Government, it was apparent that First Boston was likely to benefit, and as subsequently developed, in fact, did benefit, from the contract here in question; that Wenzell, as an officer of First Boston, was therefore “directly or indirectly” interested in the contract which he, as an agent of the Government, had helped to negotiate; that he consequently had violated the federal conflict-of-interest statute, 18 U. S. C. §434; and that his illegal conduct tainted the whole transaction and rendered the contract unenforceable.
A sharply divided Court of Claims rejected all of the Government’s defenses and awarded damages to the respondent in the sum of f1,867,545.56. 175 F. Supp. 505.
Because of the view which we take of the conflict-of-interest question, it will not be necessary for us to determine the validity of the other defenses raised by the Government in the court below, important though they may be. With regard to the conflict-of-interest defense, there appear to be but two legal principles involved: (1) Did the activities of Wenzell constitute a violation of 18 U. S. C. | 434; and (2) if so, does that fact alone preclude the respondent from enforcing the contract? For reasons which we shall set forth in detail below, we think that the Court of Claims was in error and that both of these questions must be answered in the affirmative.
I.
Because the outcome of this case depends largely upon an evaluation of Wenzell’s activities on behalf of the Government, a rather detailed statement of the facts is necessary in order to understand fully the nature of those activities and to place them in their proper context. The voluminous evidence in the case was heard by a trial commissioner. Based upon the commissioner’s report and the briefs and arguments of counsel, the Court of Claims made very extensive findings of fact which cover approximately 200 pages in the transcript of record. Fortunately, it will not be necessary for us to consider the original evidence, since both parties have agreed to rely upon the Court of Claims’ findings, and since we also conclude that those findings are sufficient to dispose of the issues presented. However, it should be noted that our reliance upon the findings of fact does not preclude us from making an independent determination as to the legal conclusions and inferences which should be drawn from them. See United States v. Du Pont de Nemours & Co., 353 U. S. 586, 598; Great Atl. & Pac. Tea Co. v. Supermarket Equip. Corp., 340 U. S. 147, 153-154.
First. At the outset, we think it is appropriate to discuss, in a general way, the origin of the contract here in question and the negotiations which led to the ultimate agreement. The story of.this contract begins in the early days of 1953. Almost immediately after assuming office, President Eisenhower announced his intention to revise the Government’s approach to the public power question. In his first State of the Union Message, delivered on February 2, 1953, the President indicated that it was his intention to encourage either private enterprise or local communities to provide power-generating sources in partnership with the Federal Government. Consonant with this policy, Joseph M. Dodge, Director of the Bureau of the Budget, decided in the fall of 1953 to eliminate from the Tennessee Valley Authority’s (TVA) budget for the fiscal year 1955 a request for funds to be used for the construction of a steam-generating plant at Fulton, Tennessee. The proposed TVA plant was to have served the commercial, industrial, and domestic power needs of the City of Memphis and its environs. When Gordon Clapp, the General Manager of TVA, learned of Dodge’s decision, he immediately informed persons working in the Bureau of the Budget that if provision for the Fulton plant were eliminated from TVA’s budget, TVA would take the position that the amount of power then being supplied by TVA to the AEC should be reduced so that sufficient power would be available to meet the growing demands of TVA’s other customers. As a result of this-statement by Clapp, the Bureau of the Budget began drafting a statement for the President’s budget message to the effect that steps would be taken to relieve TVA of some of its commitments to the AEC, and that if efforts in that direction proved unsuccessful, the possibility of the construction of a plant by TVA at Fulton would be reconsidered.
On December 2, 1953, Dodge met in his office with Lewis I. Strauss, Chairman of the AEC, and Walter J. Williams, General Manager of the AEC. Dodge said that he hoped to avoid further expenditures by TVA for the construction of power-generating plants, and that he thought the AEC should investigate the possibility of reducing its consumption of TVA-generated power by contracting with private industry for the construction of a plant that would supply 450,000 kw. of additional power for the AEC at its Paducah, Kentucky, installation by 1957. Dodge inquired whether the plan outlined by him would be feasible, and Williams replied that he could not answer the question until he had consulted with J. W. McAfee, the President of Electric Energy, Inc., a private utility company which had previously entered into long-term power contracts with the AEC similar to the one described by Dodge.
After the meeting, Williams arranged to meet with McAfee, and this meeting occurred on December 8, 1953. Williams asked McAfee whether he knew of a private power company that might be interested in building a plant to supply the AEC with as much as 450,000 kw. of generating capacity by the middle of 1957. McAfee stated that it might be difficult for his company to do the job, but he agreed to make some inquiries about the matter. Later, on December 14, 1953, McAfee wrote a letter to the AEC indicating that he thought a group of private investors could be formed to supply the AEC the amount of power requested. Because of the Budget Bureau’s continuing interest in the progress of the plan, a copy of McAfee’s letter was requested by and sent to William F. McCandless, Assistant Director for Budget Review in the Bureau.
Sometime prior to December 14, 1953, Edgar H. Dixon, President of Middle South Utilities, learned from McAfee that the AEC might be seeking an additional source of power in the Paducah area. On December 23, 1953, Dixon came to Strauss’ office for a meeting with Williams, Strauss, and Kenneth D. Nichols, who had been selected to succeed Williams as General Manager of the AEC. The purpose of the meeting was to discuss the possibility of having private utility companies build additional generating capacity near Paducah for the purpose of relieving TYA of its commitments to the AEC there. Shortly after the meeting had concluded, Williams called McCandless at the Bureau of the Budget to inform him of what had transpired at the meeting. On the next day, December 24, 1953, Rowland Hughes, Assistant Director of the Bureau of the Budget, wrote to Strauss, stating that it would be helpful if the AEC would continue negotiations with private power interests with a view toward reaching a firm agreement for the supply of power to the AEC at Paducah.
. On January 4, 1954, McAfee wrote a letter to Williams in which he expressed some doubts about the plan suggested by the Government. He thought that it might be wiser for TVA to reduce its commitments to the numerous municipalities which it supplied with power, or for TYA to arrange with neighboring power companies to buy power from them. Shortly after Williams received this letter, a meeting was held in Strauss’ office, and those present were Strauss, Williams, Nichols, Hughes, and McCandless. Nichols, speaking for the AEC, expressed a certain reluctance to continue the negotiations. He pointed out that if the AEC purchased more power from private utilities in lieu of the power already being supplied by TVA, the cost to the AEC would be greater and the supply less certain because of possible delays in the construction of the plant and the location of reserve power. He also noted that McAfee was apparently no longer eager to enter into the contract; that from an engineering point of view, Paducah was a poor location for the site of the new plant; and that if more power was needed in the Memphis area, it would be better for the City of Memphis or for TVA to enter into a contract with private companies for the construction of a plant at that location. McCandless requested that the AEC pursue the matter at greater length with McAfee.
Pursuant to this request, a meeting was arranged for January 20, 1954, between McAfee and Dixon and representatives of the Budget Bureau and the AEC. At the meeting it was made clear to Dixon and McAfee that the purpose of the power plant was to relieve the pressure on TVA in the Memphis area by reducing its commitments to the AEC. The discussion therefore turned to the possibility of constructing the plant at Memphis rather than at Paducah. Dixon suggested that since the power would be supplied directly to TVA, it might be better for TVA, rather than for the AEC, to act as the contracting agency. However, the government representatives preferred that the AEC contract and pay for the power, even though the actual delivery of power would be made to TVA. It was finally agreed that Dixon would prepare a study of the cost factors pertaining to the construction by his company of a power plant that could supply 450,000 to 600,000 kw. of power in the Memphis area.
When it became apparent that the new plant was to be located at Memphis, McAfee lost interest in the project because the location was far removed from the pool area of the companies in which he was interested. Dixon therefore proceeded on his own to draft an initial proposal. During the period in which Dixon was preparing his proposal, he kept in close contact with several government officials, especially Wenzell. The nature and scope of these associations will be discussed below.
On February 19,1954, Dixon met with Eugene A. Yates, Chairman of the Board of the Southern Company, a public utility holding company. Dixon's purpose in calling this meeting was to persuade Yates that Southern should join Middle South in building the proposed power plant. The next day Yates notified Hughes at the Bureau of the Budget and Nichols at the AEC that Southern had decided to join in the venture.
On February 25, 1954, Dixon and Yates (hereinafter referred to as the sponsors) submitted their proposal to the AEC. They offered' to form a new corporation (MVG) which would finance and construct generating facilities from which 600,000 kw. of electrical power would' be delivered to TVA in the Memphis area for the account of the AEC. We do not think it is necessary to relate the details of the proposal. Suffice it to say that after a comprehensive joint analysis by TVA and the AEC, the Government decided that the cost estimates contained in the proposal were too high. In fact, the analysis showed that the proposal would cost over seven million dollars more per year than the proposed TVA plant at Fulton would have cost. At the sponsors’ request, another analysis was made by Francis L. Adams, Chief of the Bureau of Power, Federal Power Commission. Adams confirmed the conclusions of the AEC and TVA, and said that the figures in the proposal were much higher than a reasonable estimate of costs to the sponsors should require.
By March 24, 1954, it became apparent to the sponsors that their initial proposal was unacceptable to the Government. Therefore, they worked from March 26 to April 1, 1954, to draft a proposal which would be more agreeable to the Government. This second proposal was ultimately submitted to the AEC on April 12, 1954. An intensive joint analysis was again made by the AEC and TVA. Although the findings of fact do not specifically indicate wherein the second proposal differed from the first, the second proposal was more to the Government’s liking, and the analysts suggested that it could be a basis for the negotiation of a final contract. On April 24, 1954, Hughes sent President Eisenhower a memorandum reporting the results of the analysis and recommending that the Budget Bureau be authorized to instruct the AEC to conclude a final agreement. On June 16,1954, the President authorized AEC to continue negotiations with the sponsors and to attempt to consummate an agreement based generally upon the terms of the second proposal.
The negotiation of the final contract began on July 7, 1954, and concluded with the signing of the contract on November 11, 1954. The Government was represented by a “competent and aggressive staff of negotiators.” Although the final contract was slightly different from the second proposal, in a general way, it was within the terms of that proposal. The contract became effective on December 17, 1954.
In June 1955, after the respondent had taken some preliminary steps toward performance of the contract, the sponsors learned that President Eisenhower had requested the Bureau of the Budget, the AEC and TVA to consider whether the contract should be terminated because in the interim the City of Memphis had decided to construct a municipal power plant, thereby obviating the need in that area for TVA-generated power. On July 11, 1955, the. sponsors were informed by the Chairman of the AEC that the President of the United States had decided to terminate the contract. During the months that followed, representatives of the sponsors and of the AEC attempted to agree upon a mutually acceptable basis for terminating the contract. On November 23, 1955, after protracted congressional debate concerning the propriety of Wen-zell’s activities on behalf of the Budget Bureau, the AEC advised the sponsors that, upon the advice of its counsel, it had reached the conclusion that the contract was not an obligation which could be recognized by the Government. This suit for damages was then initiated.
Second. Having sketched the general background of this litigation, we think it is now appropriate to set forth in some detail a description of Wenzell’s connection with the Government and of the role he played in the negotiations, for it is these activities on behalf of the Government, as well as his affiliation with First Boston, which constitute the basis for the Government’s assertion of a conflict of interest.
Wenzell’s first contact with the Government actually antedates any of the negotiations relating to the contract here in question. However, his earlier association with the Government does have a bearing on the issues with which we are primarily concerned, and we shall therefore advert briefly to that phase of Wenzell’s activities. In May 1953, George D. Woods, Chairman of First Boston, met with Dodge at the latter’s office in the Bureau of the Budget. Woods expressed his agreement with the Administration’s newly announced policy of reducing the Government’s participation in business activities, and he offered the services of himself and his firm in any way that might help to achieve the Administration’s objective. Dodge replied that he was interested in having some studies made on the amount of subsidy that TVA was receiving from the Federal Government. Dodge indicated that he had not been able to find the right person to conduct these studies, and he asked Woods if he could suggest someone. Woods replied that First Boston did have a man who had worked on many utility financing transactions and who would be qualified to do the work described by Dodge. The man referred to was Wenzell. Woods promised that he would endeavor to make Wen-zell’s services available for the special project described by Dodge. At the time, Wenzell was a vice president of First Boston and one of its directors. He had been with the firm since its inception in 1934 and before that with its predecessor since 1923. He owned stock in First Boston, although the stock was in his wife’s name.
Upon returning to New York, Woods conferred with Wenzell and with other executives of First Boston. Wen-zell indicated his willingness to take the job, and none of the other men consulted had any objection. A meeting between Dodge and Wenzell was therefore arranged for May 15, 1953. At the meeting, it was agreed that Wen-zell would serve as a part-time consultant to the Bureau, spending one or two days a week in Washington until the project was completed. Wenzell was to receive no compensation from the Government, but he was to be given $10 per day in lieu of subsistence plus transportation expenses. It was understood that he would neither resign his position with First Boston nor relinquish any part of his regular salary or yearly bonus based on the business which he brought to the firm.
Wenzell’s task'was to make a financial analysis of TVA for the purpose of estimating the amount and source of the subsidy given to TVA by the Government. Wenzell began his work for the Bureau on May 20, 1953, and his final report was submitted on September 20, 1953. During his four months with the Government, Wenzell was made privy to a vast quantity of data, much of it confidential, contained in the TVA files. Wenzell’s final report was generally favorable toward TVA’s technical operations, although it suggested that some of TVA’s internal accounting systems should be revised and that its service area should not be expanded. The report also contained many unsolicited recommendations to the effect that future demands for power in areas supplied by TVA should be met by private or municipal power plants rather than by an expansion of TVA’s facilities. When the report was delivered to Dodge, he read it briefly and was surprised to see that Wenzell had included in the report these recommendations, which had not been requested. Subsequently, after Wenzell had severed his connection with the Bureau, he showed a copy of his report to Woods, although Dodge had expressly admonished Wenzell that the report was a confidential document and should be shown to no one.
Wenzell’s next contact with the Government came in January 1954, shortly after the Bureau had commenced the above-described preliminary negotiations with Mc-Afee and Dixon. At the request of Hughes, Wenzell came to Washington on January 18, 1954, to confer on the possibility of his returning to the Bureau on a part-time basis to assist in the negotiations with Dixon. The decision to call upon Wenzell’s talents was made by Dodge and Hughes, for it was thought that Wenzell’s knowledge of TVA, based upon the analysis theretofore made by him, and of commercial transactions generally would be of great value during the negotiations. At the meeting, Hughes informed Wenzell of the Government’s intention to arrange for the construction of a privately owned power plant near Memphis. Wenzell was also told about the exploratory negotiations which had taken place in December 1953 between the AEC and McAfee and Dixon. Wenzell’s chief responsibility was to act as a consultant in the technical area of interest costs for any financing that would have to be undertaken in connection with the contract. Again, as in 1953, Wenzell was not asked to sever his connection with First Boston, and he did not do so. At the close of the meeting, Wenzell informed Hughes that he knew both Dixon and McAfee and that in 1948, or 1949, he had talked to Dixon in connection with services that First Boston proposed to render to one of Dixon’s companies. Hughes asked Wenzell to attend a forthcoming meeting between the AEC and Dixon and McAfee. “Hughes emphasized the need for great speed on the project,” and he asked Wen-zell “to use such influence as he had with the private utility people to impress upon them the need for prompt action on the matter.”
At the request of Hughes, Wenzell went to the AEC on the afternoon of January 18, 1954, to confer with Strauss. Strauss acquainted Wenzell with the purpose of the meeting scheduled for January 20, and impressed upon Wenzell the necessity for prompt action. On the following day, Wenzell called Dixon and told him that he would be present at the January 20 meeting as a representative of the Budget Bureau and that Dixon should not be surprised when he saw Wenzell at the meeting.
As prearranged, Wenzell attended the January 20 meeting, and he was the only representative of the Budget Bureau there. However, he did not come to the meeting unescorted. “On his own volition and without consulting any representative of the... [Government] or of First Boston, Wenzell took with him Paul Miller, an assistant in First Boston’s buying department.” The meeting lasted for several hours and the drift of the discussion has been described above. At the close of the meeting, Dixon said that he would begin investigating the feasibility of the type of contract desired by the Government, and it was agreed that Wenzell would talk to Tony Seal of Ebasco, an engineering firm which serviced Dixon’s projects.
Wenzell returned to New York after the meeting, but, before he left, Hughes “requested Wenzell to stay in touch with Dixon and his associates on the development of a proposal and particularly to help point up the real cost of money to be used in financing the project.” On January 21, 1954, Wenzell conferred with Seal. He informed Seal of what had happened in Washington and instructed him to begin a study of the proposed project. Seal met with Wenzell again on January 27, 1954, and the former described his progress on the study he was making. “Wenzell stated that he was at... [Seal’s] service as a representative of the Bureau of the Budget on the all-important matter of the cost of interest on money that would be borrowed to finance the construction of the plant.”
Wenzell went to Washington on February 4,.1954, to inform Hughes of what had transpired at his meetings with Seal. He met Dixon in Washington, and the two men flew to New York together that evening. During the flight, Dixon “asked Wenzell to do him a personal favor and ascertain the opinion of First Boston on what the interest rates in the then current money market would be for financing a project similar to the OVEC project.” On February 5,1954, Wenzell met with other executives of First Boston in an attempt to obtain the information requested by Dixon. After Wenzell thought he had found the answer to Dixon's question, he called Dixon and advised him of the information he had acquired from his colleagues at First Boston. During the week that followed, Wenzell made further studies and engrafted certain refinements onto his calculations. Then, on February 14, 1954, he attended a meeting in Dixon’s office and gave Dixon the new figures which he had computed.
After McAfee dropped out of the negotiations because of the proposed site of the new plant, Dixon began to search out support from other quarters. One of those from whom he sought assistance was Yates. Dixon arranged a meeting with Yates on February 19, and he requested Wenzell, who had known Yates for several years, to be present. The meeting occurred as scheduled, and Wenzell was the only representative of the Government present. As indicated, Yates agreed to join the project on February 20, 1954.
During his next trip to Washington on February 23, 1954, Wenzell drafted a letter to Dixon giving his opinion as to the cost of money. The information in this letter conformed to the oral opinion which Wenzell had rendered on February 14, 1954. The letter was on First Boston stationery and was signed by Wenzell as an officer of First Boston. Two days later, on February 25, 1954, the sponsors submitted their first proposal. The proposal contained only one reference to the cost of money, and that paragraph read as follows:
“We have received assurances from responsible financial specialists expressing the belief that financial arrangements can be consummated on the basis which we have used in making this proposal and under existing market conditions, and our offer is conditioned upon such consummation.”
The “responsible financial specialists” upon which the sponsors relied were Wenzell and his colleagues at First Boston, and the cost data upon which they conditioned their proposal was that which was contained in the opinion letter drafted by Wenzell.
Wenzell did not participate in the initial study of the sponsors’ proposal, but on March 1, 1954, he attended a Budget Bureau staff meeting which had been called for the purpose of completing the review of the proposal. Wenzell brought with him to this meeting Powell Robinson, an assistant vice president of First Boston’s sales department. Wenzell, who by March 1 had completed his function as a consultant on the cost of money, now assumed the role of a consultant on the total cost of the project. His initial reaction was that the cost estimates contained in the first proposal were too high. When it became apparent that Wenzell could not answer all of the technical questions relating to engineering costs, Wenzell decided to call Seal down from New' York. Seal arrived on the following day and the meeting was continued. As it turned out, Seal was also unable to answer all the questions asked by staff members, and Hughes was advised that, despite Wenzell’s insight into the problem, there still remained areas of uncertainty. It was. then suggested by a staff member that a joint AEC-TVA analysis be made. Immediately after Hughes made his decision, Wenzell informed Seal that such an analysis was to be made.
On March 9, 1954, a meeting took place at the Bureau of the Budget. The joint AEC-TVA analysis was discussed, and it was the view of all present that the.cost estimates were too high. Wenzell was therefore instructed to inform Seal that the sponsors should try to submit a more acceptable proposal. Wenzell conveyed the information to Seal as requested. On the next day, Wenzell arranged a meeting between Duncan Linsley, the Chairman of First Boston’s Executive Committee, and the sponsors. Dixon had requested the meeting so that he could confirm with a reliable source the cost-of-money-information previously given him by Wenzell.
On March 15, Wenzell participated in another Budget Bureau meeting which had been called to discuss the final AEC-TVA analysis. In addition to Wenzell, those present at the meeting were the sponsors and Dodge. The sponsors requested that an independent analysis of the proposal be made, and Wenzell suggested that Francis L. Adams, Chief of the Bureau of Power, Federal Power Commission, be requested to make the analysis. As indicated above, this suggestion was subsequently adopted.
On March 16, 1954, several representatives of the sponsors met in Dixon’s hotel room to draft a letter replying to the unfavorable conclusions contained in the AEC-TVA analysis. The evidence does not clearly demonstrate whether or not Wenzell was present at this meeting, but the Court of Claims found that Wenzell saw the letter and made several changes on it for the sponsors in his own handwriting. The letter was never sent to the AEC.
On March 23, 1954, Wenzell met with Adams and conferred with him on the proposal and the analysis which Adams was making. While Adams was preparing his analysis, the sponsors were working on some revised estimates. A meeting was called at the Budget Bureau for April 3, 1954, to discuss both Adams’ analysis and the sponsors’ new estimates. At the meeting, Wenzell once again confirmed the information he had previously given the sponsors on the cost of money. At the conclusion of the meeting, it was decided that the sponsors should undertake to prepare a new proposal in line with their revised estimates. On the afternoon of April 3, Wenzell saw Nichols of the AEC, who said that the sponsors’ most recent estimates might prove acceptable. “He suggested that Wenzell encourage the sponsors to refine their figures.”
April 3 was the last time that Wenzell came to Washington in his capacity as a consultant to the Bureau. However, the sponsors consulted him from time to time in the preparation of their second proposal, which was dated April 10, 1954, and was submitted to the AEC on April 12, 1954. Wenzell reconfirmed the information which he had previously given the sponsors on the cost of money, and “ [t]his information was relied upon by the sponsors in the drafting of the second proposal." The second proposal, like the first, contained a paragraph indicating that the sponsors relied upon Wenzell’s advice and conditioned their offer on that advice.
Wenzell took no part in the final negotiations which led to a formal contract based upon the second proposal. The Court of Claims found that Wenzell terminated his association with the Bureau on April 3, 1954; however, Wen-zell felt that his relationship with the Bureau ended on the date of the sponsors’ second proposal, April 10, 1954. The findings show that Wenzell received a telephone call from Dixon regarding the second proposal as late as April 10, 1954, and that McCandless and Wenzell also had a telephone conversation | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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NATIONAL LABOR RELATIONS BOARD v. LOCAL UNION NO. 103, INTERNATIONAL ASSOCIATION OF BRIDGE, STRUCTURAL & ORNAMENTAL IRON WORKERS, AFL-CIO, et al.
No. 76-719.
Argued October 31, 1977
Decided January 17, 1978
Norton J. Come argued the cause for petitioner. With him on the briefs were Solicitor General McCree, Richard A. Allen, John 8. Irving, Carl L. Taylor, and Linda Sher.
Sydney L. Berger argued the cause for respondents. With him on the brief was Charles L. Berger.
J. Albert Woll and Laurence Gold filed a brief for the American Federation of Labor and Congress of Industrial Organizations as amicus curiae.
Mr. Justice White
delivered the opinion of the Court.
Sections 8 (b) (7) and 8 (f) were added to the National Labor Relations Act in 1959. Section 8 (f), permitting so-called “prehire” agreements in the construction industry, provides that it shall not be an unfair labor practice to enter into such an agreement with a union that has not attained majority status prior to the execution of the agreement. Under § 8 (b) (7) (C), a union that is not the certified representative of the employees in the relevant unit commits an unfair labor practice if it pickets an employer with “an object” of “forcing or requiring an employer to recognize or bargain with a labor organization as the representative of his employees” and if it does not within 30 days file a petition for an election under §9 (c). The National Labor.Relations Board (Board) held that it is an unfair labor practice within the meaning of § 8 (b) (7) (C) for an uncertified union not representing a majority of the employees to engage in extended picketing in an effort to enforce a prehire agreement with the employer. The issue here is whether this is a misapplication of the section, as the Court of Appeals held in this case.
I
Higdon Construction Co. and Local 103 of the International Association of Bridge, Structural &; Ornamental Iron Workers, AFL-CIO (hereinafter Local 103), had a history of collective bargaining dating back to 1968. A prehire agreement was reached by Local 103 and Higdon on July 31, 1973, obliging Higdon to abide by the terms of the multiemployer understanding between Local 103 and the Tri-State Iron Workers Employers Association, Inc. No union security clause provision was contained in the Local 103-Higdon agreement. At about the same time, Higdon Contracting Co. was.formed for the express purpose of carrying on construction work with nonunion labor. Local 103 picketed two projects subsequently undertaken by Higdon Contracting Co.,, in Kentucky and Indiana, with signs which read: "Higdon Construction Company is in violation of the agreement of the Iron Workers Local Number 103.” Picketing at one jobsite persisted for more than 30 days, into March 1974. Local 103 had never represented a majority of the employees at either site and, although it was free to do so, it did not petition for a representation election to determine the wishes of the employees at either location.
On March 6, 1974, Higdon Contracting Co. filed a charge with the Regional Director of the Board, alleging that Local 103 was violating § 8 (b) (7) of the Labor Act. The Administrative Law Judge found that Higdon Contracting Co. and Higdon Construction Co. were legally indistinct for purposes of the proceedings. In -an opinion issued August 23, 1974, he concluded that Local 103’s picketing did not constitute an unfair labor practice. Higdon had entered into a lawful § 8 (f) prehire contract with Local 103 by which it promised to abide by the multiemployer standard. The picketing was for purposes of obtaining compliance with an existing contract, rather than to obtain recognition or bargaining as an initial matter. Only the latter was a purpose forbidden by § 8 (b)(7).
The Board did not agree with the Administrative Law Judge. Relying on its R.J. Smith decision, the Board emphasized the fact that Local 103 had never achieved majority status, and the § 8 (f) agreement thus had no binding force on the employer. For this reason, Local 103’s picketing was not simply for the purpose of forcing compliance with an existing contract, even though the Board accepted the finding that only a single employer was involved. Under the Board’s view of the law and the evidence, an object of the picketing was “forcing and requiring Higdon Contracting Company, Inc., to bargain with [Local 103], without being currently certified as the representative of Higdon Contracting Company, Inc.’s employees and without a petition under Section 9 (c) being filed within a reasonable period of time....”
Local 103 sought review in the United States Court of Appeals for the District of Columbia Circuit. That court set aside the order, as it had set aside the Board’s R. J. Smith order three years previously. The Court of Appeals ruled that the validity of a § 8 (f) prehire contract carried with it the right to enforce that contract by picketing, and the right as well, when breach of the agreement occurs, to file and prevail on an unfair labor practice charge against the employer for failure to bargain. This elevation of a nonmajority union to the rights of majority status was acceptable, in the court’s view, because of the second proviso to § 8 (f), which denies the usual contract bar protection to prehire agreements and permits a representation election to be held at the instance of either party at any time during the life of the agreement.
The Board’s subsequent petition to this Court for a writ of certiorari was granted. We reverse.
II
It is undisputed that the union was not the certified representative of Higdon’s employees and that it did not file an election petition within 30 days of the onset of the picketing. The issue for the Board was whether for the purposes of § 8 (b)(7)(C), the.union pickets carrying signs asserting that Higdon was violating an agreement with the union were picketing with the forbidden purpose of requiring Higdon to recognize or bargain with the union. Under the Board’s view of § 8 (f), a prehire agreement does not entitle a minority union to be treated as the majority representative of the employees until and unless it attains majority support in the relevant unit. Until that time the prehire agreement is voidable and does not have the same stature as a collective-bargaining contract entered into with a union actually representing a majority of the employees and recognized as such by the employer. Accordingly, the Board holds, as it did here, that picketing by a minority union to enforce a prehire agreement that the employer refuses to honor, effectively has the object of attaining recognition as the bargaining representative with majority support among the employees, and is consequently violative of § 8 (b) (7) (C). The Board and the Court of Appeals thus differ principally on the legal questions of how § 8 (f) is to be construed and of what consequences the execution of a prehire agreement has on the enforcement of other sections of the Act, primarily §§ 8 (a)(5) and 8 (b)(7) (C). We have concluded that the Board’s construction of the Act, although perhaps not the only tenable one, is an acceptable reading of the statutory language and a reasonable implementation of the purposes of the relevant statutory sections.
Although on its face, §8 (b)(7)(C) would apply to any extended picketing by an uncertified union where recognition or bargaining is an object, the section has not been literally applied. The Board holds that an employer’s refusal to honor a collective-bargaining contract executed with the union having majority support is a refusal to bargain and an unfair labor practice under § 8 (a) (5). Extended picketing by the union attempting to enforce the contract thus seeks to require bargaining, but as the Board applies the Act, § 8 (b) (7) (C) does not bar such picketing. Building & Construction Trades Council of Santa Barbara County (Sullivan Electric Co.), 146 N. L. R. B. 1086 (1964); Bay Counties District Council of Carpenters (Disney Roofing & Material Co.), 154 N. L. R. B. 1598, 1605 (1965). The prohibition of § 8 (b)(7)(C) against picketing with an object of forcing an employer “to recognize or bargain with a labor organization” should not be read as encompassing two separate and unrelated terms, but was “intended to proscribe picketing having as its target forcing or requiring an employer’s initial acceptance of the union as the bargaining representative of his employees.” Sullivan Electric, supra, at 1087.
As the present case demonstrates, however, the Sullivan Electric rule does not protect picketing to enforce a contract entered into pursuant to § 8 (f) where the union is not and has never been the chosen representative of a majority of the employees in a relevant unit. Neither will the Board issue a § 8 (a) (5) bargaining order against an employee refusing to abide by a § 8 (f) contract unless the complaining union can demonstrate its majority status in the unit. R. J. Smith Construction Co., 191 N. L. R. B. 693 (1971).
The Board’s position is rooted in the generally prevailing statutory policy that a union should not purport to act as the collective-bargaining agent for all unit employees, and may not be recognized as such, unless it is the voice of the majority of the employees in the unit. Section 7 of the Act, 61 Stat. 140, 29 U. S. C. § 157, guarantees the employees the right to bargain collectively with representatives of their own choosing. Section 9 (a), 29 U. S. C. § 159 (a), provides that the bargaining agent for all of the employees in the appropriate unit must be the representative “designated or selected for the purposes of collective bargaining by the majority of the employees....”
It is thus an unfair practice for an employer under §§ 8 (a) (1) and (2) and for a union under § 8 (b) (1) (A) to interfere with, restrain, or coerce employees in the exercise of their right to select their representative. The Court has held that both union and employer commit unfair practices when they sign a collective-bargaining agreement recognizing the union as the exclusive bargaining representative when in fact only a minority of the employees have authorized the union to represent their interests. “There could be no clearer abridgment of § 7 of the Act, assuring employees the right 'to bargain collectively through representatives of their own choosing’ or 'to refrain from’ such activity” than to grant “exclusive bargaining status to an agency selected by a minority of its employees, thereby impressing that agent upon the noncon-senting majority.” Garment Workers v. NLRB, 366 U. S. 731, 737 (1961). This is true even though the employer and the union believe in good faith, but mistakenly, that the union has obtained majority support. “To countenance such an excuse would place in permissibly careless employer and union hands the power to completely frustrate employee realization of the premise of the Act — that its prohibitions will go far to assure freedom of choice and majority rule in employee selection of representatives.” Id., at 738-739.
Section 8 (f) is an exception to this rule. The execution of an agreement with a minority union, an act normally an unfair practice by both employer and union, is legitimated by § 8 (f) when the employer is in the construction industry. The exception is nevertheless of limited scope, for the usual rule protecting the union from inquiry into its majority status during the terms of a collective-bargaining contract does not apply to prehire agreements. A proviso to the section declares that a § 8 (f) contract, which would be invalid absent the section, “shall not be a bar to a petition filed pursuant to section 9 (c) or 9 (e).” The employer and its employees — and the union itself for that matter — may call for a bargaining representative election at airy time.
The proviso exposing unions with prehire agreements to inquiry into their majority standing by elections under § 9 (c) led the Board to its decision in R. J. Smith: An employer does not commit an unfair practice under § 8 (a)(5) when he refuses to honor the contract and bargain with the union and the union fails to establish in the unfair labor practice proceeding that it has ever had majority support. As viewed by the Board, a “prehire agreement is merely a preliminary step that contemplates further action for the development of a full bargaining relationship.” Ruttmann Construction Co., 191 N. L. R. B. 701, 702 (1971). The employer’s duty to bargain and honor the contract is contingent on the union’s attaining majority support at the various construction sites. In NLRB v. Irvin, 475 F. 2d 1265 (CA3 1973), for example, the prehire contract was deemed binding on those projects at which the union had secured a majority but not with respect to those projects not yet begun before the union had terminated the contract.
Applying this view of § 8 (f) in the § 8 (b) (7) (C) context, the Board held in this case that when the union picketed to enforce its prehire agreement, Higdon could challenge the union's majority standing by filing a § 8 (b) (7) charge and could prevail, as Higdon did here, because the union admittedly lacked majority credentials at the picketed projects. Absent these qualifications, the collective-bargaining relationship and the union’s entitlement to act as the exclusive bargaining agent had never matured. Picketing to enforce the § 8 (f) contract was the legal equivalent of picketing to require recognition as the exclusive agent, and § 8 (b) (7) (C) was infringed when the union failed to request an election within 30 days.
Nothing in the language or purposes of either § 8 (f) or § 8 (b) (7) forecloses this application of the statute. Because of § 8 (f), the making of prehire agreements with minority unions is not an unfair practice as it would be in other industries. But § 8 (f) itself does not purport to authorize picketing to enforce prehire agreements where the union has not achieved majority support. Neither does it expand the duty of an employer under §8 (a)(5), which is to bargain with a majority representative, to require the employer to bargain with a union with which he has executed a prehire agreement but which has failed to win majority support in the covered unit.
As for § 8 (b)(7), which, along with § 8 (f), was added in 1959, its major purpose was to implement one of the Act’s principal goals — to ensure that employees were free to make an uncoerced choice of bargaining agent. As we recognized in Connell Construction Co. v. Plumbers & Steamfitters, 421 U. S. 616 (1975), “[o]ne of the major aims of the 1959 Act was to limit 'top down’ organizing campaigns, in which unions used economic weapons to force recognition from an employer regardless of the wishes of his employees.” Id., at 632, and references cited therein. The use of picketing was of particular concern as a method of coercion in three specific contexts: where employees had already selected another union representative, where employees had recently voted against a labor union, and where employees had not been given a chance to vote on the question of representation. Picketing in these circumstances was thought impermissibly to interfere with the employees’ freedom of choice.
Congressional concern about coerced designations of bargaining agents did not evaporate as the focus turned to the construction industry. Section 8 (f) was, of course, motivated by an awareness of the unique situation in that industry. Because the Board had not asserted jurisdiction over the construction industry before 1947, the House Committee Report observed that concepts evoked by the Board had been “developed without reference to the construction industry.” H. R. Rep. No. 741, 86th Cong., 1st Sess., 19 (1959), 1 Leg. Hist. 777. There were two aspects peculiar to the building trades that Congress apparently thought justified the use of prehire agreements with unions that did not then represent a majority of the employees:
“One reason for this practice is that it is necessary for the employer to know his labor costs before making the estimate upon which his bid will be based. A second reason is that the employer must be able to have available a supply of skilled craftsmen ready for quick referral.” Ibid.
The Senate Report also noted that “[representation elections in a large segment of the industry are not feasible to demonstrate... majority status due to the short periods of actual employment by specific employers.” S. Rep. No. 187, 86th Cong., 1st Sess., 55 (1959), 1 Leg. Hist. 541-542. Privileging unions and employers to execute and observe prehire agreements in an effort to accommodate the special circumstances in the construction industry may have greatly convenienced unions and employers, but in no sense can it be portrayed as an expression of the employees’ organizational wishes. Hence the proviso that an election could be demanded despite the prehire agreement. By the same token, because § 8 (b) (7) was adopted to ensure voluntary, uncoerced selection of a bargaining representative by employees, we cannot fault the Board for holding that § 8 (b)(7) applies to a minority union picketing to enforce a prehire contract.
The Board’s position does not, as respondents claim, render § 8 (f) meaningless. Except for § 8 (f), neither the employer nor the union could execute prehire agreements without committing unfair labor practices. Neither has the Board challenged the voluntary observance of otherwise valid § 8 (f) contracts, which is the normal course of events. It is also undisputed that when the union successfully -seeks majority support, the prehire agreement attains the status of a collective-bargaining agreement executed by the employer with a union representing a majority of the employees in the unit.
The Board's resolution of the conflicting claims in this case represents a defensible construction of the statute and is entitled to considerable deference. Courts may prefer a different application of the relevant sections, but “[t]he function of striking that balance to effectuate national labor policy is often a difficult and delicate responsibility, which the Congress committed primarily to the National Labor Relations Board, subject to limited judicial review.” NLRB v. Truck Drivers, 353 U. S. 87, 96 (1957); NLRB v. Insurance Agents, 361 U. S. 477, 499 (1960). Of course, “recognition of the appropriate sphere of the administrative power... obviously cannot exclude all judicial review of the Board’s actions.” Ibid. But we cannot say that the Board has here “[moved] into a new area of regulation which Congress [has] not committed to it.” Ibid, In American Ship Building Co. v. NLRB, 380 U. S. 300, 318 (1965), the Court was “unable to find that any fair construction of the provisions relied on by the Board... can support its finding of an unfair labor practice.... [T]he role assumed by the Board... -[was] fundamentally inconsistent with the structure of the Act and the function of the sections relied upon.” As we have explained, this is not the case here.
The union suggests that the Board’s construction of § 8 (f) deserves little or no deference because it is merely an application in the § 8 (b)(7) context of the decision in R. J. Smith Construction Co., 191 N. L. R. B. 693 (1971), which itself was inconsistent with a prior decision, Oilfield Maintenance Co., 142 N. L. R. B. 1384 (1963). It is not at all clear from the latter.case, however, that the union involved there had never had majority status. The issue received only passing attention at the time; and the case was distinguished by the Board in Ruttmann Construction Co., 191 N. L. R. B., at 701 n. 5, decided the same day as R.J. Smith, supra, as being “primarily concerned” with “the right of a successor-employer to disavow contracts made by a predecessor with five different unions and substitute the terms of a contract it had with another union.” In any event, if Oilfield Maintenance represents a view that the majority status of the union executing a prehire agreement may not be challenged in unfair labor practice proceedings, the Board has plainly not adhered to that approach. Its contrary view has been expressed on more than one occasion. An administrative agency is not disqualified from changing its mind; and when it does, the courts still sit in review of the administrative decision and should not approach the statutory construction issue de novo and without regard to the administrative understanding of the statutes.
The union argues that the Board’s position permitting an employer to repudiate a prehire agreement until the union attains majority support renders the contract for all practical purposes unenforceable, assertedly contrary to this Court’s decision in Retail Clerks v. Lion Dry Goods, Inc., 369 U. S. 17 (1962). There, the Court’s opinion recognized that § 301 of the Labor Management Relations Act confers jurisdiction on the federal courts to entertain suits on contracts between an employer and a minority union, as well as those with majority-designated collective-bargaining agents. Section 8 (f) contracts were noted as being in this category. The Court was nevertheless speaking to an issue of jurisdiction. That a court has jurisdiction to consider a suit on a particular contract does not suggest that the contract is enforceable. It would not be inconsistent with Lion Dry Goods for a court to hold that the union’s majority standing is subject to litigation in a § 301 suit to enforce a § 8 (f) contract, just as it is in a § 8 (a) (5) unfair labor practice proceeding, and that absent a showing that the union is the majority’s chosen instrument, the contract is unenforceable.
It is also clear from what has already been said, that the decision here is not inconsistent with Building & Construction Trades Council of Santa Barbara County (Sullivan Electric Co.), 146 N. L. R. B. 1086 (1964). That case merely permits picketing to enforce contracts with a union actually representing a majority of the employees in the unit. Here, the union did not represent the majority, and in picketing to enforce the prehire agreement, it sought the privileges of a majority representative. The conclusion that § 8 (b) (7) was violated is legally defensible and factually acceptable.
The judgment of the Court of Appeals is reversed.
So ordered.
Section 8 (b) (7), 73 Stat. 544, 29 U. S. C. § 158 (b) (7), provides:
“It shall be an unfair labor practice for a labor organization or its agents... to picket or cause to be picketed, or threaten to picket or cause to be picketed, any employer where an object thereof is forcing or requiring an employer to recognize or bargain with a labor organization as the representative of his employees, or forcing or requiring the employees of an employer to accept or select such labor organization as their collective bargaining representative, unless such labor organization is currently certified as the representative of such employees:
“ (A) where the employer has lawfully recognized in accordance with this Act any other labor organization and a question concerning representation may not appropriately be raised under section 9(c) of this Act,
“(B) where within the preceding twelve months a valid election under section 9(c) of this Act has been conducted, or
“(C) where such picketing has been conducted without a petition under section 9(c) being filed within a reasonable period of time not to exceed thirty days from the commencement of such picketing: Provided, That when such a petition has been filed the Board shall forthwith, without regard to the provisions of section 9 (c) (1) or the absence of a showing of a substantial interest on the part of the labor organization, direct an election in such unit as the Board finds to be appropriate and shall certify the results thereof: Provided further, That nothing in this subparagraph (C) shall be construed to prohibit any picketing or other publicity for the purpose of truthfully advising the public (including consumers) that an employer does not employ members of, or have a contract with, a labor organization, unless an effect of such picketing is to induce any individual employed by any other person in the course of his employment, not to pick up, deliver or transport any goods or not to perform any services.
“Nothing in this paragraph (7) shall be construed to permit any act which would otherwise be an unfair labor practice under this section 8 (b)
Section 8 (f), 73 Stat. 545, 29 U. S. C. § 158 (f), provides:
“It shall not be an unfair labor practice under subsections (a) and (b) of this section for an employer engaged primarily in the building and construction industry to make an agreement covering employees engaged (or who, upon their employment, will be engaged) in the building and- construction industry with a labor organization of which building and construction employees are members (not established, maintained, or assisted by any action defined in section 8 (a) of this Act as an unfair labor practice) because (1) the majority status of such labor organization has not been established under the provisions of section 9 of this Act prior to the making of such agreements, or (2) such agreement requires as a condition of employment, membership in such labor organization after the seventh day following the beginning of such employment or the effective date of the agreement, whichever is later, or (3) such agreement requires the employer to notify such labor organization of opportunities for employment with such employer, or gives such labor organization an opportunity to refer qualified applicants for such employment, or (4) such agreement specifies minimum training or experience qualifications for employment or provides for priority in opportunities for employment based upon length of service with such employer, in the industry or in the particular geographical area -. Provided, That nothing in this subsection shall set aside the final proviso to section 8 (a) (3) of this Act: Provided further, That any agreement which would be invalid, but for clause (1) of this subsection, shall not be a bar to a petition filed pursuant to section 9 (c) or 9 (e).”
Iron Workers Local 103 (Higdon Contracting Co.), 216 N. L. R. B. 45 (1975).
Iron Workers Local 103 v. NLRB, 175 U. S. App. D. C. 259, 535 F. 2d 87 (1976).
R. J. Smith Construction Co., 191 N. L. R. B. 693 (1971), enf. denied sub nom. Engineers Local 160 v. NLRB, 156 U. S. App. D. C. 294, 480 F. 2d 1186 (1973).
Engineers Local 150 v. NLRB, supra.
429 U. S. 1089 (1977).
As will appear, the Board’s conclusion, that an object of the picketing was to obtain recognition even though Local 103 sought only to enforce the § 8 (f) contract, flows from the Board’s view that a prehire contract is not the equivalent of recognizing the union as the majority representative of the employees, and that an attempt to enforce the prehire agreement by picketing to require the employer to treat with the union is recognitional picketing.
Determining the object, or objects, of labor union picketing is a recurring and necessary function of the Board. Its resolution of these mixed factual and legal questions normally survives judicial review. A type of activity frequently found to violate § 8 (b) (7) is picketing ostensibly for the purpose of forcing an employer to abide by terms incorporated into agreements between the union and other employers. Even in cases where the union expressly disavows any recognitional intent, acceptance of the uniform terms proposed by the union can have the “net effect” of establishing the union “as the negotiator of wage rates and benefits.” Centralia Building & Construction Trades Council v. NLRB, 124 U. S. App. D. C. 212, 214, 363 F. 2d 699, 701 (1966). “The Board has held that informing the public that an employer does not employ members of a'labor organization indicates an organizational object, and that stating that an employer does not have a contract with a labor organization similarly implies an object of recognition and bargaining.” Carpenters Local 906, 204 N. L. R. B. 138, 139 (1973). Hence, picketing to enforce area standards, where an employer had been assured by notice from the union that “while we expect you to observe the wages, hours, and other benefits set forth in these documents, we do not expect or seek any collective bargaining relationship with your firm,” has been held to violate § 8 (b) (7). Hotel & Restaurant Employees (Holiday Inns of America, Inc.), 169 N. L. R. B. 683, 684 (1968).
The Courts of Appeals have upheld the Board in these inferences. “Though this legend [‘Non-Union Conditions’] could be interpreted as merely a protest of the restaurant’s working conditions, it was reasonable for the NLRB to conclude that the message... was at least in part that the union desired to alter a non-union working situation by obtaining recognition. In the absence of any countervailing evidence, the NLRB could thus determine that the purpose of the picketing was recog-nitional.” San Francisco Local Joint Board v. NLRB, 163 U. S. App. D. C. 234, 239, 501 F. 2d 794, 799 (1974). See also NLRB v. Carpenters, 450 F. 2d 1255 (CA9 1971), and cases cited therein.
In the present case, the Local’s business agent contacted Higdon Contracting’s general manager, asking “if ‘we’ | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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"NO Admin Action",
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] | [
81
] | sc_adminaction |
LIBSON SHOPS, INC., v. KOEHLER, DISTRICT DIRECTOR OF INTERNAL REVENUE.
No. 64.
Argued January 15, 1957.
Decided May 27, 1957.
Henry C. Lowenhaupt and Owen T. Armstrong argued the cause for petitioner. With them on the brief was Abraham Lowenhaupt.
John N. Stull argued the cause for respondent. On the brief were Solicitor General Rankin, Assistant Attorney General Rice, Harry Baum and Grant W. Wiprud.
Louis Eisenstein filed a brief for the Newmarket Manufacturing Co., as amicus curiae, urging reversal.
Mr. Justice Burton
delivered the opinion of the Court.
The issue before us is whether, under §§23 (s) and 122 of the Internal Revenue Code of 1939, as amended, a corporation resulting from a merger of 17 separate incorporated businesses, which had filed separate income tax returns, may carry over and deduct the pre-merger net operating losses of three of its constituent corporations from the post-merger income attributable to the other businesses. We hold that such a carry-over and deduction is not permissible.
Petitioner, Libson Shops, Inc., was incorporated on January 2, 1946, under the laws of Missouri, as Libson Shops Management Corporation, to provide management services for corporations selling women’s apparel at retail. Its articles of incorporation also permitted it to sell apparel. At about the same time, the same interests incorporated 16 separate corporations to sell women’s apparel at retail at separate locations. Twelve were incorporated and went into business in Missouri; four in Illinois. Each of these 16 sales, corporations was operated separately and filed separate income tax returns. Petitioner’s sole activity was to provide management services for them. The outstanding stock of all 17 corporations was owned, directly or indirectly, by the same individuals in the same proportions.
On August 1, 1949, the 16 sales corporations were merged into petitioner under the laws of Missouri and Illinois. New shares of petitioner’s stock were issued, pro rata, in exchange for the stock of the sales corporations. By virtue of the merger agreement, petitioner’s name was changed, the amount and par value of its stock revised, and its corporate purposes expanded. Following the merger, petitioner conducted the entire business as a single enterprise. Thus, the effect of the merger was to convert 16 retail businesses and one managing agency, reporting their incomes separately, into a single enterprise filing one income tax return.
Prior to the merger, three of the sales corporations showed net operating losses. These were as follows:
Corporation Taxable Period Amount
Evanston Libson Shops, Inc.. Calendar year 1948. $8,115.11
Fiscal period begun Jan. 1,
1949, and ended July 31,
1949 . 6,422.28
Lawrence Libson Shops, Inc.. Fiscal period ended July
31, 1948. 245.03
Fiscal year ended July 31,
1949 . 2,770.42
Hampton Libson Shops, Inc.. Fiscal year ended July 31,
1949 . 4,879.92
Total . $22,432.76
In the year following the merger, each of the retail units formerly operated by these three corporations continued to sustain a net operating loss.
In its income tax return for the first year after the merger, petitioner claimed a deduction of the above $22,432.76 as a carry-over of its pre-merger losses. Petitioner sought this deduction under §§23 (s) and 122 of the Internal Revenue Code of 1939, as amended. The Commissioner of Internal Revenue disallowed it and petitioner paid the resulting tax deficiency. In due course petitioner brought this suit for a refund in the United States District Court for the Eastern District of Missouri. That court dismissed petitioner's complaint and the Court of Appeals affirmed. 229 F. 2d 220. We granted certiorari to decide the questions of tax law involved. 351 U. S. 961.
Section 23 (s) authorizes a “net operating loss deduction computed under section 122.” Section 122 prescribes three basic rules for this calculation. Its pertinent parts provide generally (1) that a “net operating loss” is the excess of the taxpayer’s deductions over its gross income (§ 122 (a)); (2) that, if the taxpayer has a net operating loss, the loss may be used as a “net operating loss carry-back” to the two prior years (§ 122 (b) (1) (A)) and, if not exhausted by that carry-back, the remainder may be used as a “net operating loss carry-over” to the three succeeding years (§ 122 (b)(2)(C)); and (3) that the aggregate of the net operating loss carry-backs and carry-overs applicable to a given taxable year is the “net operating loss deduction” for the purposes of §23 (s) (§ 122 (c)).
We are concerned here with a claim to carry over an operating loss to the immediately succeeding taxable year. The particular provision on which petitioner’s case rests is as follows:
“If for any taxable year beginning after December 31, 1947, and before January 1, 1950, the taxpayer has a net operating loss, such net operating loss shall be a net operating loss carry-over for each of the three succeeding taxable years . . . .” (Emphasis supplied.) § 122 (b)(2)(C), 64 Stat. 937, 938, 65 Stat. 505, 26 ü. S. C. § 122 (b)(2)(C).
The controversy centers on the meaning of “the taxpayer.” The contentions of the parties require us to decide whether it can be said that petitioner, a combination of 16 sales businesses, is “the taxpayer” having the pre-merger losses of three of those businesses.
In support of its denial of the carry-over, the Government argues that this statutory privilege is not available unless the corporation claiming it is the same taxable entity as that which sustained the loss. In reliance on New Colonial Co. v. Helvering, 292 U. S. 435, and cases following it, the Government argues that separately chartered corporations are not the same taxable entity. Petitioner, on the other hand, relying on Helvering v. Metropolitan Edison Co., 306 U. S. 522, and cases following it, argues that a corporation resulting from a statutory merger is treated as the same taxable entity as its constituents to whose legal attributes it has succeeded by operation of state law. However, we find it unnecessary to discuss this issue since an alternative argument made by the Government is dispositive of this case. The Government contends that the carry-over privilege is not available unless there is a continuity of business enterprise. It argues that the prior year’s loss can be offset against the current year’s income only to the extent that this income is derived from the operation of substantially the same business which produced the loss. Only to that extent is the same “taxpayer” involved.
The requirement of a continuity of business enterprise as applied to this case is in accord with the legislative history of the carry-over and carry-back provisions. Those provisions were enacted to ameliorate the unduly drastic consequences of taxing income strictly on an annual basis. They were designed to permit a taxpayer to set off its lean years against its lush years, and to strike something like an average taxable income computed over a period longer than one year. There is, however, no indication in their legislative history that these provisions were designed to permit the averaging of the pre-merger losses of one business with the post-merger income of some other business which had been operated and taxed separately before the merger. What history there is suggests that Congress primarily was concerned with the fluctuating income of a single business.
This distinction is recognized by the very cases on which petitioner relies. In Stanton Brewery, Inc. v. Commissioner, 176 F. 2d 573, 577, the Court of Appeals stressed the fact that the merging corporations there involved carried on “essentially a continuing enterprise, entitled to all . . . benefits [of the carry-over provisions] in ameliorating otherwise harsh tax consequences of fluctuating profits or expanding business.” (Emphasis supplied.) And in Newmarket Manufacturing Co. v. United States, 233 F. 2d 493, 497, the court expressly distinguished the case before it from the instant case on the ground that there “one single business” was involved in the merger, while in this case there were “several businesses.”
This difference is not merely a matter of form. In the Newmarket case, supra, a corporation desiring to change the state of its domicile caused the organization of a new corporation and merged into it. The new corporation sought to carry back its post-merger losses to the pre-merger income of the old corporation. But for the merger, the old corporation itself would have been entitled to a carry-back. In the present case, the 16 sales corporations, prior to the merger, chose to file separate income tax returns rather than to pool their income and losses by filing a consolidated return. Petitioner is attempting to carry over the pre-merger losses of three business units which continued to have losses after the merger. Had there been no merger, these businesses would have had no opportunity to carry over their losses. If petitioner is permitted to take a carry-over, the 16 sales businesses have acquired by merger an opportunity that they elected to forego when they chose not to file a consolidated return.
We do not imply that a question of tax evasion or avoidance is involved. Section 129 (a) of the 1939 Code, as amended, does contain provisions which may vitiate a tax deduction that was made possible by the acquisition of corporate property for the “principal purpose” of tax evasion or avoidance. And that section is inapplicable here since there was no finding that tax evasion or avoidance was the “principal purpose” of the merger. The fact that § 129 (a) is inapplicable does not mean that petitioner is automatically entitled to a carry-over. The availability of this privilege depends on the proper interpretation to be given to the carry-over provisions. We find nothing in those provisions which suggests that they should be construed to give a “windfall” to a taxpayer who happens to have merged with other corporations. The purpose of these provisions is not to give a merged
taxpayer a tax advantage over others who have not merged. We conclude that petitioner is not entitled to a carry-over since the income against which the offset is claimed was not produced by substantially the same businesses which incurred the losses.
The judgment of the Court of Appeals is
Affirmed.
Mr. Justice Douglas dissents.
Mr. Justice Whittaker took no part in the consideration or decision of this case.
As originally added to the 1939 Code by the Revenue Act of 1939, c. 247, 53 Stat. 862, 867-868, § 122 provided for the computation and carry-over of net operating losses without expressly relating them to a given taxpayer. Section 153 (a) of the Revenue Act of 1942, c. 619, 56 Stat. 798, 847-848, amended § 122 (b) not only to allow carry-backs for the first time, but also to provide, as to both carry-backs and carry-overs, that it was only the net operating losses of “the taxpayer” which could be so utilized.
These words have been omitted from the new provisions of the Internal Revenue Code of 1954 relating to carry-backs and carryovers after corporate acquisitions of assets of another corporation. See §§ 381, 382.
E. g., Standard Paving Co. v. Commissioner, 190 F. 2d 330; Weber Flour Mills Co. v. Commissioner, 82 F. 2d 764; Pennsylvania Co. v. Commissioner, 75 F. 2d 719; Shreveport Producing & Refining Co. v. Commissioner, 71 F. 2d 972; Brandon Corp. v. Commissioner, 71 F. 2d 762.
E. g., Newmarket Manufacturing Co. v. United States, 233 F. 2d 493; E. & J. Gallo Winery v. Commissioner, 227 F. 2d 699; Stanton Brewery, Inc. v. Commissioner, 176 F. 2d 573; Koppers Co. v. United States, 133 Ct. Cl. 22, 134 F. Supp. 290.
See Lewyt Corp. v. Commissioner, 349 U. S. 237, 243-244 (dissenting opinion); Manning v. Seeley Tube & Box Co., 338 U. S. 561, 566-567; Stanton Brewery, Inc. v. Commissioner, 176 F. 2d 573, 574; H. R. Rep. No. 855, 76th Cong., 1st Sess. 9-10; S. Rep. No. 1631, 77th Cong., 2d Sess. 51-52.
The House Committee on Ways and Means, reporting on § 122 as it was originally added to the 1939 Code by the Revenue Act of 1939, c. 247, 53 Stat. 862, 867-868, stated that—
“The bill, together with the committee amendments, permits taxpayers to carry over net operating business losses for a period of 2 years. Prior to the Revenue Act of 1932, such 2-year carry-over was allowed. No net loss has ever been allowed for a greater period than 2 years. In the Revenue Act of 1932, the 2-year net loss carry-over was reduced to 1 year and in the National Industrial Recovery Act the net loss carry-over was entirely eliminated. As a result of the elimination of this carry-over, a business with alternating profit and loss is required to pay higher taxes over a period of years than a business with stable profits, although the average income of the two firms is equal. New enterprises and the capital-goods industries are especially subject to wide fluctuations in earnings. It is, therefore, believed that the allowance of a net operating business loss carry-over will greatly aid business and stimulate new enterprises.” (Emphasis supplied.) H. R. Rep. No. 855, 76th Cong., 1st Sess. 9.
Koppers Co. v. United States, 133 Ct. Cl. 22, 134 F. Supp. 290, also involves a situation in which the corporation resulting from the merger carried on essentially the same taxable enterprise as before, since the merged corporations had been filing consolidated tax returns. E. & J. Gallo Winery v. Commissioner, 227 F. 2d 699, is inconclusive on this point since the opinion does not disclose whether or not a continuing enterprise was involved. Cf. § 382 (a) of the Internal Revenue Code of 1954 relating to the purchase of a corporation and change in its trade or business. Under circumstances there defined, that section precludes a carry-over by the same corporation, unless it continues to engage in “substantially the same” trade or business as before the change in ownership. §382 (a)(1)(C).
The Revenue Act of 1943, c. 63, 58 Stat. 21, 47, by § 128, added to the 1939 Code the following section:
“SEC. 129. ACQUISITIONS MADE TO EVADE OR AVOID INCOME OR EXCESS PROFITS TAX.
“(a) Disallowance of Deduction, CREDIT, or Allowance. — If (1) any person or persons acquire, on or after October 8,1940, directly or indirectly, control of a corporation, or (2) any corporation acquires, on or after October 8, 1940, directly or indirectly, property of another corporation, not controlled, directly or indirectly, immediately prior to such acquisition, by such acquiring corporation or its stockholders, the basis of which property, in the hands of the acquiring corporation, is determined by reference to the basis in the hands of the transferor corporation, and the principal purpose for which such acquisition was made is evasion or avoidance of Federal income or excess profits tax by securing the benefit of a deduction, credit, or other allowance which such person or corporation would not otherwise enjoy, then such deduction, credit, or other allowance shall not be allowed. For the purposes of clauses (1) and (2), control means the ownership of stock possessing at least 50 per centum of the total combined voting power of all classes of stock entitled to vote or at least 50 per centum of the total value of shares of all classes of stock of the corporation.”
See H. R. Rep. No. 871, 78th Cong., 1st Sess. 24, 49-50; S. Rep. No. 627, 78th Cong., 1st Sess. 26-27, 58-61.
We do not pass on situations like those presented in Northway Securities Co. v. Commissioner, 23 B. T. A. 532; Alprosa Watch Corp. v. Commissioner, 11 T. C. 240; A. B. & Container Corp. v. Commissioner, 14 T. C. 842; W A G E, Inc. v. Commissioner, 19 T. C. 249. In these cases a single corporate taxpayer changed the character of its business and the taxable income of one of its enterprises was reduced by the deductions or credits of another. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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68
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NATIONAL LABOR RELATIONS BOARD v. DEENA ARTWARE, INC., et al.
No. 46.
Argued December 8, 1959.
Decided February 23, 1960.
Ralph S. Spritzer argued the cause for petitioner. With him on the brief were Solicitor General Rankin, Stuart Rothman, Thomas J. McDermott and Dominick L. Manoli.
James G. Wheeler argued the cause for respondents. With him on the brief were Mervin N. Bachman, Thomas J. Marshall, Jr. and Sidney R. Zatz.
Mr. Justice Douglas
delivered the opinion of the Court.
This litigation has been long and drawn out and the present case is merely a small segment of it. In 1949 petitioner found that respondent Deena Artware, Inc. (Artware), had violated the National Labor Relations Act, 61 Stat. 136, 29 U. S. C. § 158 (a), by discharging and refusing to reinstate 66 employees who had engaged in a strike (86 N. L. R. B. 732, 95 N. L. R. B. 9); and it ordered Artware “and its officers, agents, successors, and assigns” to offer reinstatement to those employees and to make them whole for any loss of pay suffered by them as a result of the discriminating action. The Court of Appeals in 1952 affirmed the Board’s decision with respect to 62 of the 66 employees and entered a decree enforcing the Board’s order, 198 F. 2d 645, remanding the case to the Board to determine the amounts due the individual employees. In 1953 Artware offered reinstatement to all of these employees but shortly closed its plant (which was located in Kentucky), never resumed operations, and never paid any back pay to the employees in question.
It appears that Weiner, one of the respondents, created a series of corporations, at the top of which was Deena Products, Inc. (Products), an Illinois corporation. Beneath it was a group of. subsidiaries — formed under Kentucky law — Artware, Deena of Arlington, Inc., Sippi Products Co., Inc., and Industrial Realty Co., Inc. — all of whose shares, except for qualifying shares, were owned by Products. Weiner owned all the shares of Products, except for qualifying shares; and all the officers and directors of Products and the several subsidiaries were .Weiner, his wife, his son, and his secretary. Weiner was president and treasurer of Products and of each of the subsidiaries, including Artware.
Artware in 1949 gave Products a promissory note secured by a mortgage on Artware’s property, allegedly for advances made. In 1952 Artware made an assignment to Products in partial satisfaction, of its indebtedness. In 1953 the Board applied to the Court of Appeals for an order restraining that assignment. It also asked for an order of discovery, alleging that the affairs of Products and Artware were being conducted in such a way as to dissipate Artware’s assets and to avoid making the back wage payments. The court denied these motions, holding that, until the amount of back pay was liquidated and payment of the fixed sum refused, there was no warrant for granting that relief (207 F. 2d 798), the court, adding that if upon liquidation of Artware “any financial inability” on its part to pay the awards was shown to be “the result of improper actions on its part in the meantime, appropriate contempt action can then- be taken.” Id., at 802.
At that time, the Board had not issued an order determining the specific amounts of back pay owed the individual employees. In 1955 — nearly two years later — it made that determination and entered an order, directing payment of back pay totaling about $300,000; and the Court of Appeals' ordered Artware, “its officers, agents, successors and assigns” to pay that amount to specified employees. 228 F. 2d 871. That' was on December 16, 1955.
In 1957 the Board moved the Court of Appeals for discovery, inspection, and depositions, naming Artware, Weiner, Products, and the other subsidiaries of Products. It alleged that Weiner had caused the assets of Artware to be siphoned off through the other corporations under his control for the purpose of evading the back pay obligation. The Court of Appeals denied the motion, 251 F. 2d 183, holding that a contempt proceeding, rather than discovery, was the proper procedure.
On August 20, 1958, the Board petitioned the Court of Appeals to hold Artware, Weiner, Products and the other subsidiaries in civil contempt for failure to pay the amounts due employees under the back pay order. On October 11, 1958, the Board renewed its motion for discovery, inspection, and the taking of depositions from Artware, the affiliated corporations, and Weiner and other officers of these corporations. ■
In its petition the Board made charges of dealings between these corporations and between them and Weiner occurring from 1949 to 1955 which, it maintained, showed both (1) fraud and wrongdoing for the purpose of frustrating the back pay order and (2) the operation of these various corporations “as 'a single enterprise,” each of the corporations performing “a particular function, as a department or division of the one enterprise in the manufacture, sale- and distribution of the common product.” The allegations (which are summarized in the opinion below, 261 F. 2d 503, 506-507) need not be repeated here, as the Court of Appeals merely held that, although the enforcement order was entered July 30, 1952, it was not made specific as to amounts owed until December 16, 1955. It, therefore, concluded that prior to the latter date the decree was “not sufficiently definite and mandatory to serve as the basis for contempt proceedings.” Id., at 510. It, therefore, dismissed the Board’s petition for adjudication in civil contempt. It also denied the Board’s motion for discovery, inspection, and depositions. 261 F. 2d 503, 510. The case is here on a petition for certiorari, 359 U. S. 983, which we granted in order to consider the validity of the action of the Court of Appeals in dismissing the petition insofar as it charged the existence of “a single enterprise.”
The Court of Appeals dismissed the petition without considering the second group of allegations made by the Board, viz., that these various corporations were in fact “a single enterprise.” ■ And it denied the motion for discovery even as it pertained to that alternative theory of liability. It may have done so because it thought that the issues tendered in the petition related solely to inter-company transactions alleged to be conveyances in fraud of creditors or preferences in favor of some creditors. That seemed to be its preoccupation, as is evident by its references to possible causes of action under Kentucky law to set those transactions aside. Id., at 509.
We do not stop to consider what would be a proper formulation of a rule of law governing liability in contempt for frustration of a decree. The Court of Appeals may have considered the transactions and assignments as if they were made between separate and distinct corporations. If they are viewed in that light, we cannot say they are so colorable as to warrant us in reversing the Court of Appeals. But we think the Board is entitled to show that these separate corporations are not what they appear to be, that in truth they are but divisions or departments of a “single enterprise.”- That is the alternative theory of liability which the Court of Appeals did not consider. We think that the Board is entitled to a hearing un that alternative theory and to discovery in aid of it.
The question whether the corporations under Weiner’s ownership were only departments or divisions in one single enterprise is in a different category than those that arise under either 13 Eliz. or the modern law of preferences. Whether one corporation is liable for the obligations of an affiliate turns on other considerations. The insulation of a stockholder from the debts and obligations of his corporation is the norm, not the exception. See Pullman Car Co. v. Missouri Pacific R. Co., 115 U. S. 587, 597. Yet as Mr. Justice Cardozo said in Berkey v. Third Avenue R. Co., 244 N. Y. 84, 95, 155 N. E. 58, 61, “Dominion may be so complete, interference so obtrusive, that by the general rules of agency the parent will be a principal and the subsidiary an agent. Where control is less than this, we are remitted to the tests of honesty and justice.” That is not a complete catalogue. The several companies may be represented as one. Apart from that is the question whether in fact the economic enterprise is one, the corporate forms being largely paper arrangements that do not reflect the business realities. One company may in fact be operated as-a division of another; one may be only a shell, inadequately financed; the affairs of the group may be so intermingled "that no distinct corporate lines are maintained. These are some, though by no means all, of the relevant considerations, as the authorities recognize. See Lattin on Corporations (1959) ch. 2, §§ 13, 14; Stevens on Corporations (1949) § 17; Berle, The Theory of Enterprise Entity, 47 Col. L. Rev. 343.
We do not intimate an opinion on the merits of this alternative theory of liability. The authorities we have cited merely indicate the range of inquiry which the petition of the Board presented. Discovery is useful in determining what the facts are. It is, indeed, necessary to determine whether the decree of the court enforcing the Board’s order should run to any of the affiliated corporations or their stockholders. When the facts are resolved, it will be time enough to consider what further enforcement decree, if any, would be appropriate.
The petition should be reinstated insofar as it charges the existence of “a single enterprise,” and the motion for discovery should be granted so that the Board will have an opportunity to prove those allegations.
Reversed.
Mr. Justice Stewart took no part in the consideration or decision of this case.
See Platt v. Bradner Co., 131 Wash. 573, 230 P. 633. Cf. American Nat. Bank v. National Wall-Paper Co., 77 F. 85, 91.
See Foard Co. v. Maryland, 219 F. 827, 829; Portsmouth Cotton Oil Corp. v. Fourth Nat. Bank, 280 F. 879; Dillard & Coffin Co. v. Richmond Cotton Oil Co., 140 Tenn. 290, 296, 204 S. W. 758; Costan v. Manila Electric Co., 24 F. 2d 383, 384-385. Cf. United States v. Delaware, L. & W. R. Co., 238 U. S. 516, 529; Chicago, M. & St. P. R. Co. v. Minneapolis Civic Assn., 247 U. S. 490, 500-502; Erickson v. Minnesota & Ontario Power Co., 134 Minn. 209, 213-215,158 N. W. 979, 980-981.
See Luckenbach S. S. Co. v. W. R. Grace & Co., 267 F. 676, 681; Oriental Investment Co. v. Barclay, 25 Tex. Civ. App. 543, 554-557, 64 S. W. 80, 86-87. For discussion of the situation where a company is “deliberately kept judgment-proof” see Weisser v. Mursam Shoe Corp., 127 F. 2d 344, 346.
See The Willem van Driel, 252 F. 35, 38; Wichita Falls & N. W. R. Co. v. Puckett, 53 Okla. 463, 502-505, 157 P. 112, 124-125. Cf. United States v. Lehigh Valley R. Co., 220 U. S. 257, 272-274.
Cf. Union Sulphur Co. v. Freeport Texas Co., 251 F. 634, 661-662; Harlan Public Service Co. v. Eastern Constr. Co., 254 Ky. 135, 143, 71 S. W. 2d 24, 29.
Cf. Regal Knitwear Co. v. Labor Board, 324 U. S. 9, 16. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
81
] | sc_adminaction |
SORIC v. IMMIGRATION AND NATURALIZATION SERVICE.
No. 610.
Decided December 13, 1965.
Nathan T. Nothin for petitioner.
Solicitor General Marshall for respondent.
Per Curiam.
Upon the stipulation of the parties and an examination of the entire record, the petition for a writ of certio-rari is granted. The judgment of the Court of Appeals is vacated and the case is remanded to that court with instructions to remand to the Immigration and Naturalization Service for consideration of claims for relief as authorized by the 1965 amendments to the Immigration and Nationality Act. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
67
] | sc_adminaction |
SOLID WASTE AGENCY OF NORTHERN COOK COUNTY v. UNITED STATES ARMY CORPS OF ENGINEERS et al.
No. 99-1178.
Argued October 31, 2000
Decided January 9, 2001
Rehnquist, C. J., delivered the opinion of the Court, in which O’Con-nor, Scalia, Kennedy, and Thomas, JJ., joined. Stevens, J., filed a dissenting opinion, in which Souter, Ginsburg, and Breyer, JJ., joined, post, p. 174.
Timothy S. Bishop argued the cause for petitioner. With him on the briefs were Raspar J. Stoffelmayr, Sharon Swingle, and George J. Mannina, Jr.
Deputy Solicitor General Wallace argued the cause for respondents. With him on the brief for the federal respondents were Solicitor General Waxman, Assistant Attorney General Schiffer, Malcolm L. Stewart, and John A. Bryson. Myron M. Cherry filed a brief for respondents Village of Bartlett et al.
Briefs of amici curiae urging reversal were filed for the State of Alabama by Bill Pryor, Attorney General, Alice Arm Byrne, Assistant Attorney General, and Jeffrey S. Sutton; for the American Farm Bureau Federation et al. by William G. Myers III; for Arid Operations, Inc., by Charles L. Kaiser; for Cargill, Inc., by Leslie G. Landau, Edgar B. Washburn, and David M. Ivester; for the Cato Institute et al. by Theodore M. Cooperstein, William H. Mellor, Clint Bolick, Scott G. Bullock, Timothy Lynch, Robert A. Levy, and Ronald D. Rotunda; for the Center for the Original Intent of the Constitution by Michael P. Farris and Scott W. Somerville; for the Chamber of Commerce of the United States by Robert R. Gasaway, Jeffrey B. Clark, Daryl Joseffer, and Robin S. Conrad; for the Claremont Institute Center for Constitutional Jurisprudence by Edwin Meese III; for Defenders of Property Rights by Mancie G. Marzulla; for the National Association of Home Builders by Thomas C. Jackson; for the Nationwide Public Projects Coalition et al. by Lawrence R. Liebesman; for the Pacific Legal Foundation et al. by Anne M. Hayes and M. Reed Hopper; for the Serrano Water District et al. by Virginia S. Albrecht and Stephen J. Wenderoth; for the Washington Legal Foundation et al. by Mark A. Perry, Daniel J. Popeo, and Paul D. Kamenar; for the U. S. Conference of Mayors et al. by Richard Ruda and James I. Crowley; and for James J. Wilson by Steven A. Steinbach and Gerald A. Feffer.
Briefs of amici curiae urging affirmance were filed for the State of California et al. by Bill Lockyer, Attorney General of California, Richard M. Frank, Chief Assistant Attorney General, J. Matthew Rodriguez, Senior Assistant Attorney General, Dennis M. Eagan, Supervising Deputy Attorney General, and Joseph Barbieri, Deputy Attorney General, and by the Attorneys General for their respective States as follows: Thomas J. Miller of Iowa, Andrew Ketterer of Maine, John J. Farmer, Jr., of New Jersey, W. A. Drew Edmondson of Oklahoma, Hardy Myers of Oregon, William H. Sorrell of Vermont, and Christine 0. Gregoire of Washington; for the Anti-Defamation League et al. by Martin E. Karlinsky, Steven M. Freeman, Michael Lieberman, and Elliot M. Mincberg; and for Environmental Defense et al. by Louis R. Cohen and Michael Bean.
Briefs of amici curiae were filed for the American Forest & Paper Association et al. by Russell S. Frye; for the Center for Individual Rights by Michael E. Rosman; for the National Stone Association by Kurt E. Blase; and for Dr. Gene Likens et al. by Michael Bean.
CHIEF Justice Rehnquist
delivered the opinion of the Court.
Section 404(a) of the Clean Water Act (CWA or Act), 86 Stat. 884, as amended, 33 U. S. C. § 1344(a), regulates the discharge of dredged or fill material into “navigable waters.” The United States Army Corps of Engineers (Corps) has interpreted § 404(a) to confer federal authority over an abandoned sand and gravel pit in northern Illinois which provides habitat for migratory birds. We are asked to decide whether the provisions of § 404(a) may be fairly extended to these waters, and, if so, whether Congress could exercise such authority consistent with the Commerce Clause, U. S. Const., Art. I, § 8, cl. 3. We answer the first question in the negative and therefore do not reach the second.
Petitioner, the Solid Waste Agency of Northern Cook County (SWANCC), is a consortium of 23 suburban Chicago cities and villages that united in an effort to locate and develop a disposal site for baled nonhazardous solid waste. The Chicago Gravel Company informed the municipalities of the availability of a 533-aere parcel, bestriding the Illinois counties Cook and Kane, which had been the site of a sand and gravel pit mining operation for three decades up until about 1960. Long since abandoned, the old mining site eventually gave way to a successional stage forest, with its remnant excavation trenches evolving into a scattering of permanent and seasonal ponds of varying size (from under one-tenth of an acre to several acres) and depth (from several inches to several feet).
The municipalities decided to purchase the site for disposal of their baled nonhazardous solid waste. By law, SWANCC was required to file for various permits from Cook County and the State of Illinois before it could begin operation of its balefill project. In addition, because the operation called for the filling of some of the permanent and seasonal ponds,, SWANCC contacted federal respondents (hereinafter respondents), including the Corps, to determine if a federal landfill permit was required under § 404(a) of the CWA, 33 U.S. C. § 1344(a).
Section 404(a) grants the Corps authority to issue permits “for the discharge of dredged or fill material into the navigable waters at specified disposal sites.” Ibid. The term “navigable waters” is defined under the Act as “the waters of the United States, including the territorial seas.” § 1362(7). The Corps has issued regulations defining the term “waters of the United States” to include
“waters such as intrastate lakes, rivers, streams (including intermittent streams), mudflats, sandflats, wetlands, sloughs, prairie potholes, wet meadows, playa lakes, or natural ponds, the use, degradation or destruction of which could affect interstate or foreign commerce....” 33 CFR § 328.3(a)(3) (1999).
In 1986, in an attempt to “clarify” the reach of its jurisdiction, the Corps stated that § 404(a) extends to instrastate waters:
“a. Which are or would be used as habitat by birds protected by Migratory Bird Treaties; or
“b. Which are or would be used as migratory birds which cross state lines; or
“c. Which are or would be used as gered species; or
“d. Used to irrigate crops sold in interstate commerce.” 51 Fed. Reg. 41217.
This last promulgation has been dubbed the “Migratory Bird Rule.”
The Corps initially concluded that it had no jurisdiction over the site because it contained no “wetlands,” or areas which support “vegetation typically adapted for life in saturated soil conditions,” 33 CFR § 328.3(b) (1999). However, after the Illinois Nature Preserves Commission informed the Corps that a number of migratory bird species had been observed at the site, the Corps reconsidered and ultimately asserted jurisdiction over the balefill site pursuant to subpart (b) of the “Migratory Bird Rule.” The Corps found that approximately 121 bird species had been observed at the site, including several known to depend upon aquatic environments for a significant portion of their life requirements. Thus, on November 16,1987, the Corps formally “determined that the seasonally ponded, abandoned gravel mining depressions located on the project site, while not wetlands, did qualify as ‘waters of the United States’... based upon the following criteria: (1) the proposed site had been abandoned as a gravel mining operation; (2) the water areas and spoil piles had developed a natural character; and (3) the water areas are used as habitat by migratory bird [sic] which cross state lines.” U. S. Army Corps of Engineers, Chicago District, Dept. of Army Permit Evaluation and Decision Document, Lodging of Petitioner, Tab No. 1, p. 6.
During the application process, SWANCC made several proposals to mitigate the likely displacement of the migratory birds and to preserve a great blue heron rookery located on the site. Its balefill project ultimately received the necessary local and state approval. By 1993, SWANCC had received a special use planned development permit from the Cook County Board of Appeals, a landfill development permit from the Illinois Environmental Protection Agency, and approval from the Illinois Department of Conservation.
Despite SWANCC’s securing the required water quality certification from the Illinois Environmental Protection Agency, the Corps refused to issue a § 404(a) permit. The Corps found that SWANCC had not established that its proposal was the “least environmentally damaging, most practicable alternative” for disposal of nonhazardous solid waste; that SWANCC’s failure to set aside sufficient funds to reme-diate leaks posed an “unacceptable risk to the public’s drinking water supply”; and that the impact of the project upon area-sensitive species was “unmitigatable since a landfill surface cannot be redeveloped into a forested habitat.” Id., at 87.
Petitioner filed suit under the Administrative Procedure Act, 5 U. S. C. § 701 et seq., in the Northern District of Illinois challenging both the Corps’ jurisdiction over the site and the merits of its denial of the § 404(a) permit. The District Court granted summary judgment to respondents on the jurisdictional issue, and petitioner abandoned its challenge to the Corps’ permit decision. On appeal to the Court of Appeals for the Seventh Circuit, petitioner renewed its attack on respondents’ use of the “Migratory Bird Rule” to assert jurisdiction over the site. Petitioner argued that respondents had exceeded their statutory authority in interpreting the CWA to cover nonnavigable, isolated, intrastate waters based upon the presence of migratory birds and, in the alternative, that Congress lacked the power under the Commerce Clause to grant such regulatory jurisdiction.
The Court of Appeals began its analysis with the constitutional question, holding that Congress has the authority to regulate such waters based upon “the cumulative impact doctrine, under which a single activity that itself has no discernible effect on interstate commerce may still be regulated if the aggregate effect of that class of activity has a substantial impact on interstate commerce.” 191 F. 3d 845, 850 (CA7 1999). The aggregate effect of the “destruction of the natural habitat of migratory birds” on interstate commerce, the court held, was substantial because each year millions of Americans cross state lines and spend over a billion dollars to hunt and observe migratory birds. Ibid. The Court of Appeals then turned to the regulatory question. The court held that the CWA reaches as many waters as the Commerce Clause allows and, given its earlier Commerce Clause ruling, it therefore followed that respondents’ “Migratory Bird Rule” was a reasonable interpretation of the Act. See id., at 851-852.
We granted certiorari, 529 U. S. 1129 (2000), and now reverse.
Congress passed the CWA for the stated purpose of “restoring] and maintaining] the chemical, physical, and biological integrity of the Nation’s waters.” 33 U. S. C. § 1251(a). In so doing, Congress chose to “recognize, preserve, and protect the primary responsibilities and rights of States to prevent, reduce, and eliminate pollution, to plan the development and use (including restoration, preservation, and enhancement) of land and water resources, and to consult with the Administrator in the exercise of his authority under this chapter.” § 1251(b). Relevant here, § 404(a) authorizes respondents to regulate the discharge of fill material into “navigable waters,” 33 U. S. C. § 1344(a), which the statute defines as “the waters of the United States, including the territorial seas,” §1362(7). Respondents have interpreted these words to cover the abandoned gravel pit at issue here because it is used as habitat for migratory birds. We conclude that the “Migratory Bird Rule” is not fairly supported by the CWA.
This is not the first time we have been called upon to evaluate the meaning of § 404(a). In United States v. Riverside Bayview Homes, Inc., 474 U. S. 121 (1985), we held that the Corps had § 404(a) jurisdiction over wetlands that actually abutted on a navigable waterway. In so doing, we noted that the term “navigable” is of “limited import” and that Congress evidenced its intent to “regulate at least some waters that would not be deemed 'navigable' under the classical understanding of that term.” Id., at 133. But our holding was based in large measure upon Congress’ unequivocal acquiescence to, and approval of, the Corps’ regulations interpreting the CWA to cover wetlands adjacent to navigable waters. See id, at 135-139. We found that Congress’concern for the protection of water quality and aquatic ecosystems indicated its intent to regulate wetlands “inseparably bound up with the 'waters’ of the United States.” Id., at 134.
It was the significant nexus between the wetlands and “navigable waters” that informed our reading of the CWA in Riverside Bayview Homes. Indeed, we did not “express any opinion” on the “question of the authority of the Corps to regulate discharges of fill material into wetlands that are not adjacent to bodies of open water....” Id., at 131-132, n. 8. In order to rule for respondents here, we would have to hold that the jurisdiction of the Corps extends to ponds that are not adjacent to open water. But we conclude that the text of the statute will not allow this.
Indeed, the Corps’ original interpretation of the CWA, promulgated two years after its enactment, is inconsistent with that which it espouses here. Its 1974 regulations defined §404(a)’s “navigable waters” to mean “those waters of the United States which are subject to the ebb and flow of the tide, and/or are presently, or have been in the past, or may be in the future susceptible for use for purposes of interstate or foreign commerce.” 33 CFR § 209.120(d)(1). The Corps emphasized that “[i]t is the water body’s capability of use by the public for purposes of transportation or commerce which is the determinative factor.” § 209.260(e)(1). Respondents put forward no persuasive evidence that the Corps mistook Congress’ intent in 1974.
Respondents next contend that whatever its original aim in 1972, Congress charted a new course five years later when it approved the more expansive definition of “navigable waters” found in the Corps’ 1977 regulations. In July 1977, the Corps formally adopted 33 CFR § 323.2(a)(5) (1978), which defined “waters of the United States” to include “isolated wetlands and lakes, intermittent streams, prairie potholes, and other waters that are not part of a tributary system to interstate waters or to navigable waters of the United States, the degradation or destruction of which could affect interstate commerce.” Respondents argue that Congress was aware of this more expansive interpretation during its 1977 amendments to the CWA. Specifically, respondents point to a failed House bill, H. R. 3199, that would have defined “navigable waters” as “all waters which are presently used, or are susceptible to use in their natural condition or by reasonable improvement as a means to transport interstate or foreign commerce.” 123 Cong. Rec. 10420, 10434 (1977). They also point to the passage in § 404(g)(1) that authorizes a State to apply to the Environmental Protection Agency for permission “to administer its own individual and general permit program for the discharge of dredged or fill material into the navigable waters (other than those waters which are presently used, or are susceptible to use in their natural condition or by reasonable improvement as a means to transport interstate or foreign commerce..., including wetlands adjacent thereto) within its jurisdiction....” 33 U. S. C. § 1344(g)(1). The failure to pass legislation that would have overturned the Corps’ 1977 regulations and the extension of jurisdiction in § 404(g) to waters “other than” traditional “navigable waters,” respondents submit, indicate that Congress recognized and accepted a broad definition of “navigable waters” that includes nonnavigable, isolated, intrastate waters.
Although we have recognized congressional acquiescence to administrative interpretations of a statute in some situations, we have done so with extreme care,' “[FJailed legislative proposals are ‘a particularly dangerous ground on which to rest an interpretation of a prior statute/ ” Central Bank of Denver, N. A. v. First Interstate Bank of Denver, N. A., 511 U. S. 164, 187 (1994) (quoting Pension Benefit Guaranty Corporation v. LTV Corp., 496 U. S. 633, 650 (1990)). A bill can be proposed for any number of reasons, and it can be rejected for just as many others. The relationship between the actions and inactions of the 95th Congress and the intent of the 92d Congress in passing § 404(a) is also considerably attenuated. Because “subsequent history is less illuminating than the contemporaneous evidence,” Hagen v. Utah, 510 U. S. 399, 420 (1994), respondents face a difficult task in overcoming the plain text and import of § 404(a).
We conclude that respondents have failed to make the necessary showing that the failure of the 1977 House bill demonstrates Congress’ acquiescence to the Corps’ regulations or the “Migratory Bird Rule,” which, of course, did not first appear until 1986. Although respondents cite some legislative history showing Congress’ recognition of the Corps’ assertion of jurisdiction over “isolated waters,” as we explained in Riverside Bayview Homes, “[i]n both Chambers, debate on the proposals to narrow the definition of navigable waters centered largely on the issue of wetlands preservation.” 474 U. S., at 136. Beyond Congress’ desire to regulate wetlands adjacent to “navigable waters,” respondents point us to no persuasive evidence that the House bill was proposed in response to the Corps’ claim of jurisdiction over nonnavigable, isolated, intrastate waters or that its failure indicated congressional acquiescence to such jurisdiction.
Section 404(g) is equally unenlightening. In Riverside Bayview Homes we recognized that Congress intended the phrase “navigable waters” to include “at least some waters that would not be deemed 'navigable’ under the classical understanding of that term.” Id., at 133. But § 404(g) gives no intimation of what those waters might be; it simply refers to them as “other... waters.” Respondents conjecture that “other... waters” must incorporate the Corps’ 1977 regulations, but it is also plausible, as petitioner contends, that Congress simply wanted to include all waters adjacent to “navigable waters,” such as nonnavigable tributaries and streams. The exact meaning of § 404(g) is not before us and we express no opinion on it, but for present purposes it is sufficient to say, as we did in Riverside Bayview Homes, that “§ 404(g)(1) does not conclusively determine the construction to be placed on the use of the term ‘waters’ elsewhere in the Act (particularly in § 502(7), which contains the relevant definition of ‘navigable waters’)....” Id., at 138, n. 11.
We thus decline respondents’ invitation to take what they see as the next ineluctable step after Riverside Bayview Homes: holding that isolated ponds, some only seasonal, wholly located within two Illinois counties, fall under §404(a)’s definition of “navigable waters” because they serve as habitat for migratory birds. As counsel for respondents conceded at oral argument, such a ruling would assume that “the use of the word navigable in the statute... does not have any independent significance.” Tr. of Oral Arg. 28. We cannot agree that Congress’ separate definitional use of the phrase “waters of the United States” constitutes a basis for reading the term “navigable waters” out of the statute. We said in Riverside Bayview Homes that the word “navigable” in the statute was of “limited import,” 474 U. S., at 133, and went on to hold that § 404(a) extended to nonnavigable wetlands adjacent to open waters. But it is one thing to give a word limited effect and quite another to give it no effect whatever. The term “navigable” has at least the import of showing us what Congress had in mind as its authority for enacting the CWA: its traditional jurisdiction over waters that were or had been navigable in fact or which could reasonably be so made. See, e.g., United States v. Appalachian Elec. Power Co., 311 U. S. 377, 407-408 (1940).
Respondents — relying upon all of the arguments addressed above — contend that, at the very least, it must be said that Congress did not address the precise question of §404(a)’s scope with regard to nonnavigable, isolated, intrastate waters, and that, therefore, we should give deference to the “Migratory Bird Rule.” See, e. g., Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837 (1984). We find § 404(a) to be clear, but even were we to agree with respondents, we would not extend Chevron deference here.
Where an administrative interpretation of a statute invokes the outer limits of Congress’ power, we expect a clear indication that Congress intended that result. See Edward J. DeBartolo Corp. v. Florida Gulf Coast Building & Constr. Trades Council, 485 U. S. 568, 575 (1988). This requirement stems from our prudential desire not to needlessly reach constitutional issues and our assumption that Congress does not casually authorize administrative agencies to interpret a statute to push the limit of congressional authority. See ibid. This concern is heightened where the administrative interpretation alters the federal-state framework by permitting federal encroachment upon a traditional state power. See United States v. Bass, 404 U. S. 336, 349 (1971) (“[U]nless Congress conveys its purpose clearly, it will not be deemed to have significantly changed the federal-state balance”). Thus, “where an otherwise acceptable construction of a statute would raise serious constitutional problems, the Court will construe the statute to avoid such problems unless such construction is plainly contrary to the intent of Congress.” DeBartolo, supra, at 575.
Twice in the past six years we have reaffirmed the proposition that the grant of authority to Congress under the Commerce Clause, though broad, is not unlimited. See United States v. Morrison, 529 U. S. 598 (2000); United States v. Lopez, 514 U. S. 549 (1995). Respondents argue that the “Migratory Bird Rule” falls within Congress’ power to regulate intrastate activities that “substantially affect” interstate commerce. They note that the protection of migratory birds is a “national interest of very nearly the first magnitude,” Missouri v. Holland, 252 U. S. 416, 435 (1920), and that, as the Court of Appeals found, millions of people spend over a billion dollars annually on recreational pursuits relating to migratory birds. These arguments raise significant constitutional questions. For example, we would have to evaluate the precise object or activity that, in the aggregate, substantially affects interstate commerce. This is not clear, for although the Corps has claimed jurisdiction over petitioner’s land because it contains water areas used as habitat by migratory birds, respondents now, post litem motam, focus upon the fact that the regulated activity is petitioner’s municipal landfill, which is “plainly of a commercial nature.” Brief for Federal Respondents 43. But this is a far cry, indeed, from the “navigable waters” and “waters of the United States” to which the statute by its terms extends.
These are significant constitutional questions raised by respondents’ application of their regulations, and yet we find nothing approaching a clear statement from Congress that it intended § 404(a) to reach an abandoned sand and gravel pit such as we have here. Permitting respondents to claim federal jurisdiction over ponds and mudflats falling within the “Migratory Bird Rule” would result in a significant impingement of the States’ traditional and primary power over land and water use. See, e. g., Hess v. Port Authority Trans-Hudson Corporation, 513 U. S. 30, 44 (1994) (“[Regulation of land use [is] a function traditionally performed by local governments”). Rather than expressing a desire to readjust the federal-state balance in this manner, Congress chose to “recognize, preserve, and protect the primary responsibilities and rights of States... to plan the development and use... of land and water resources....” 33 U. S. C. § 1251(b). We thus read the statute as written to avoid the significant constitutional and federalism questions raised by respondents’ interpretation, and therefore reject the request for administrative deference.
We hold that 33 CFR § 328.3(a)(3) (1999), as clarified and applied to petitioner’s balefill site pursuant to the “Migratory Bird Rule,” 51 Fed. Reg. 41217 (1986), exceeds the authority granted to respondents under § 404(a) of the CWA. The judgment of the Court of Appeals for the Seventh Circuit is therefore
Reversed.
The Corps issued the “Migratory Bird Rule” without following the notice and comment procedures outlined in the Administrative Procedure Act, 5 U.S.C. §553.
Relying upon its earlier decision in Hoffman Homes, Inc. v. EPA, 999 F. 2d 256 (CA7 1993), and a report from the United States Census Bureau, the Court of Appeals found that in 1996 approximately 3.1 million Americans spent $1.3 billion to hunt migratory birds (with 11 percent crossing state lines to do so) as another 17.7 million Americans observed migratory birds (with 9.5 million traveling for the purpose of observing shorebirds). See 191 F. 3d, at 850.
Respondents refer us to portions of the legislative history that they believe indicate Congress’ intent to expand the definition of “navigable waters.” Although the Conference Report includes the statement that the conferees “intend that the term ‘navigable waters’ be given the broadest possible constitutional interpretation,” S. Conf. Rep. No. 92-1236, p. 144 (1972), neither this, nor anything else in the legislative history to which respondents point, signifies that Congress intended to exert anything more than its commerce power over navigation. Indeed, respondents admit that the legislative history is somewhat ambiguous. See Brief for Federal Respondents 24.
While this bill passed in the House, a similarly worded amendment to a bill originating in the Senate, S. 1952, failed. See 123 Cong. Rec. 26710, 26728 (1977).
In Bob Jones Univ. v. United States, 461 U. S. 574, 595, 600-601 (1983), for example, we upheld an Internal Revenue Service (IRS) Revenue Ruling that revoked the tax-exempt status of private schools practicing racial discrimination because the IRS’ interpretation of the relevant statutes was “correct”; because Congress had held “hearings on this precise issue,” making it “hardly conceivable that Congress — and in this setting, any Member of Congress — was not abundantly aware of what was going on”; and because “no fewer than 13 bills introduced to overturn the IRS interpretation” had failed. Absent such overwhelming evidence of acquiescence, we are loath to replace the plain text and original understanding of a statute with an amended agency interpretation. See Consumer Product Safety Comm’n v. GTE Sylvania, Inc., 447 U. S. 102, 118, n. 13 (1980) (“[E]ven when it would otherwise be useful, subsequent legislative history will rarely override a reasonable interpretation of a statute that can be gleaned from its language and legislative history prior to its enactment”).
Respondents cite, for example, the Senate Report on S. 1952, which referred to the Corps’ “isolated waters” regulation. See S. Rep. No. 95-370, p. 75 (1977). However, the same report reiterated that “[t]he committee amendment does not redefine navigable waters.” Ibid.
Respondents also make a passing reference to Congress’ decision in 1977 to exempt certain types of discharges from 1404(a), including, for example, “discharge of dredged or fill material... for the purpose of construction or maintenance of farm or stock ponds or irrigation ditches, or the maintenance of drainage ditches.” §67, 91 Stat. 1600, 33 U. S. C. § 1344(f)(C). As § 404(a) only regulates dredged or fill material that is discharged “into navigable waters,” Congress’ decision to exempt certain types of these discharges does not affect, much less address, the definition of “navigable waters.”
Because violations of the CWA carry criminal penalties, see 33 U. S. C. § 1319(c)(2), petitioner invokes the rule of lenity as another basis for rejecting the Corps’ interpretation of the CWA. Brief for Petitioner 31-32. We need not address this alternative argument. See United States v. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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UNITED STATES v. VOGEL FERTILIZER CO.
No. 80-1251.
Argued November 3, 1981
Decided January 13, 1982
Brennan, J., delivered the opinion of the Court, in which Burger, C. J., and Marshall, Powell, Rehnquist, Stevens, and O’Connor, JJ., joined. Blackmun, J., filed a dissenting opinion, in which White, J., joined, post, p. 35.
Stuart A. Smith argued the cause for the United States. With him on the briefs were Solicitor General Lee, former Solicitor General McCree, Acting Assistant Attorney General Murray, Ernest J. Brown, and William A. Friedlander.
Ronald C. Jensen argued the cause and filed a brief for respondent.
Briefs of amici curiae urging affirmance were filed by David Elliot Weisman and W. G. Dinning, Jr., for Dixie Realty Co., Inc., et al.; and by Michael A. Williams for the Minnequa Bank of Pueblo et al.
Justice Brennan
delivered the opinion of the Court.
Section 1561(a) of the Internal Revenue Code of 1954, 26 U. S. C. § 1561(a), limits a “controlled group of corporations” to a single corporate surtax exemption. Section 1563(a)(2) provides that a “controlled group of corporations” includes a “brother-sister controlled group,” defined as “[t]wo or more corporations if 5 or fewer persons... own... stock possessing (A) at least 80 percent of the total combined voting power... or at least 80 percent of the total value... of each corporation, and (B) more than 50 percent of the total combined voting power... or more than 50 percent of the total value... of each corporation, taking into account the stock ownership of each such person only to the extent such stock ownership is identical with respect to each such corporation.” The interpretation of the statutory provision by Treas. Reg. § 1.1563-l(a)(3), 26 CFR § 1.1563-1(a)(3) (1981), is that the “term ‘brother-sister controlled group’ means two or more corporations if the same five or fewer persons... own... singly or in combination” the two prescribed percentages of voting power or total value. The question presented is whether the regulatory interpretation — that the statutory definition is met by the ownership of the prescribed stock by five or fewer persons “singly or in combination” — is a reasonable implementation of the statute or whether Congress intended the statute to apply only where each person whose stock is taken into account owns stock in each corporation of the group.
I
Respondent Vogel Fertilizer Co. (Vogel Fertilizer), an Iowa corporation, sells farm fertilizer products. During the tax years in question — 1973, 1974, and 1975 — Vogel Fertilizer had only common stock issued and outstanding and Arthur Vogel (Vogel) owned 77.49 percent of that stock. Richard Crain (Crain), who is unrelated to Arthur Vogel, owned the remaining 22.51 percent. Vogel Popcorn Co. (Vogel Popcorn), another Iowa corporation, sells popcorn in both the wholesale and retail markets. For the tax years in question Crain owned no stock in Vogel Popcorn. Vogel, however, held 87.5 percent of the voting power, and between 90.66 percent and 93.42 percent of the value of Vogel Popcorn’s stock.
Vogel Fertilizer did not claim a full surtax exemption on its tax returns for the years in question, believing that Treas. Reg. § 1.1563-1(a)(3) barred such a claim. But when the United States Tax Court, in 1976, held that Treas. Reg. § 1.1563 — 1(a)(3) was invalid because the statute did not permit the Commissioner to take a person’s stock ownership into account for purposes of the 80-percent requirement unless that person owned stock in each corporation within the brother-sister controlled group, Fairfax Auto Parts of Northern Virginia, Inc. v. Commissioner, 65 T. C. 798 (1976), rev’d, 548 F. 2d 501 (CA4 1977), Vogel Fertilizer filed timely claims for refunds, asserting that Vogel Fertilizer and Vogel Popcorn were not members of a controlled group and that Vogel Fertilizer was therefore entitled to a full surtax exemption for each taxable year. The Internal Revenue Service disallowed the claims and respondent brought this suit for a refund in the United States Court of Claims. The Court of Claims held that Vogel Fertilizer and Vogel Popcorn did not constitute a brother-sister controlled group within the meaning of § 1563(a)(2)(A); that Treas. Reg. § 1.1563-l(a)(3) is invalid to the extent that it takes into account, with respect to the 80-percent requirement, stock held by a shareholder who owns stock in only one corporation of the controlled group; and that respondent was, accordingly, entitled to a refund. 225 Ct. Cl. 15, 634 F. 2d 497 (1980). We granted cer-tiorari to resolve a conflict among the Circuits on this issue, 450 U. S. 994 (1981), and now affirm.
II
Vogel’s ownership of more than 50 percent of both Vogel Fertilizer and Vogel Popcorn satisfies Part (B) of the statutory test—the 50-percent identical-ownership requirement. The controversy centers on Part (A) of the test—the 80-percent requirement.
Respondent argues that the statute must be construed as including a common-ownership requirement—Congress was attempting to identify interrelated corporations that are in reality subdivided portions of a larger entity. In the taxpayer’s view, Congress thus did not intend that a person’s stock ownership be taken into account for purposes of the 80-per-cent requirement unless that shareholder owned stock in all of the corporations within the controlled group. The same “5 or fewer” individuals cannot be said to control 80 percent of both Vogel Fertilizer and Vogel Popcorn because Crain owns no stock in Vogel Popcorn and therefore his 22.51 percent of Vogel Fertilizer cannot be added to Vogel’s 77.49 percent of that corporation to satisfy § 1563(a)(2)(A). The Commissioner takes the position, however, reflected in his addition of the words “singly or in combination” in Treas. Reg. § 1.1563-l(a)(3) to the statutory language, that there is no common-ownership requirement — various subgroups of “5 or fewer persons” can own the requisite 80 percent of the different corporations within the controlled group. The Commissioner acknowledges that under this interpretation, Part (A)’s 80-percent requirement in no respect measures the interrelationship between two corporations. The Commissioner’s view is that only the 50-percent requirement measures this interrelationship. He contends the 80-percent requirement “continues to have independent significance” in that it “insures that all the members of the corporate group will be closely held,” so that “the more-than-50-percent shareholder control group can obtain additional control in those instances where a greater interest is needed without the necessity of dealing with a large number of other shareholders.” Brief for United States 35.
A
Our role is limited to determining the validity of Treas. Reg. § 1.1563 — 1(a)(3). Deference is ordinarily owing to the agency construction if we can conclude that the regulation “implements the congressional mandate in some reasonable manner.” United States v. Correll, 389 U.S 299, 307 (1967). But this general principle of deference, while fundamental, only sets “the framework for judicial analysis; it does not displace it.” United States v. Cartwright, 411 U. S. 546, 550 (1973).
The framework for analysis is refined by consideration of the source of the authority to promulgate the regulation at issue. The Commissioner has promulgated Treas. Reg. § 1.1563-1(a)(3) interpreting this statute only under his general authority to “prescribe all needful rules and regulations.” 26 U. S. C. § 7805(a). Accordingly, “we owe the interpretation less deference than a regulation issued under a specific grant of authority to define a statutory term or prescribe a method of executing a statutory provision.” Rowan Cos. v. United States, 452 U. S. 247, 253 (1981). In addition, Treas. Reg. § 1.1563-l(a)(3) purports to do no more than add a clarifying gloss on a term — “brother-sister controlled group”— that has already been defined with considerable specificity by Congress. The Commissioner’s authority is consequently more circumscribed than would be the case if Congress had used a term “‘so general... as to render an interpretive regulation appropriate.’” National Muffler Dealers Assn., Inc. v. United States, 440 U. S. 472, 476 (1979), quoting Helvering v. R. J. Reynolds Co., 306 U. S. 110, 114 (1939). See also Rowan Cos. v. United States, supra.
B
We consider first whether the Regulation harmonizes with the statutory language. National Muffler Dealers Assn., Inc. v. United States, supra, at 477. That language, set forth supra, at 18, and n. 2, while not completely unambiguous, is in closer harmony with the taxpayer’s interpretation than with the Commissioner’s Regulation. The term that the statute defines — “brother-sister controlled group” — connotes a close horizontal relationship between two or more corporations, suggesting that the same indivisible group of five or fewer persons must represent 80 percent of the ownership of each corporation.
This interpretation is strengthened by the structure of the statute. Section 1563(a)(2) defines the controlling group of shareholders (“5 or fewer”), and then sets forth the two ownership requirements (80 percent and 50 percent). This structure suggests that precisely the same shareholders must satisfy both the 80-percent and 50-percent requirements. As the Tax Court stated it, “5 or fewer persons” is the “conjunctive subject” of both requirements. Fairfax Auto Parts of Northern Virginia, Inc. v. Commissioner, 65 T. C., at 803. Since under Part (B)’s 50-percent requirement, stock ownership is taken into account only to the extent it is “identical,” that part of the statutory test clearly includes a common-ownership requirement. If, as the statutory structure suggests, the shareholders whose holdings are considered for purposes of Part (A) must be precisely the same shareholders as those whose holdings are considered for purposes of Part (B), the former also requires common ownership.
Of course, a Treasury Regulation is not invalid simply because the statutory language will support a contrary interpretation. But the mere fact that there are no words in Part (A) explicitly requiring that each shareholder own stock in each corporation does not mean that the Regulation’s interpretation, “singly or in combination,” must be accepted as reasonable. This Court has firmly rejected the suggestion that a regulation is to be sustained simply because it is not “technically inconsistent” with the statutory language, when that regulation is fundamentally at odds with the manifest congressional design. United States v. Cartwright, supra, at 557. The challenged Regulation is not a reasonable statutory interpretation unless it harmonizes with the statute’s “origin and purpose.” National Muffler Dealers Assn., Inc. v. United States, supra, at 477.
C
The legislative history of § 1563(a)(2) resolves any ambiguity in the statutory language and makes it plain that Treas. Reg. § 1.1563 — 1(a)(3) is not a reasonable statutory interpretation. Through the controlled-group test, Congress intended to curb the abuse of multiple incorporation — large organizations subdividing into smaller corporations and receiving unintended tax benefits from the multiple use of surtax exemptions, accumulated earnings credits, and various other tax provisions designed to aid small businesses. S. Rep. No. 91-552, p. 134 (1969). The House Ways and Means Committee Report noted: “[LJarge organizations have been able to obtain substantial benefits... by dividing the organization’s income among a number of related corporations. Your committee does not believe that large organizations which operate through multiple corporations should be allowed to receive the substantial and unintended tax benefits resulting from the multiple use of the surtax exemption and the other provisions of present law.” H. R. Rep. No. 91-413, pt. 1, p. 98 (1969). The intended targets of § 1563(a)(2) were groups of interrelated corporations — corporations characterized by common control and ownership. Although the 50-percent requirement measures, to a lesser degree, the overlap between two corporations, the history of the enactment of § 1563(a)(2) illustrates that Congress intended that the 80-percent requirement be the primary requirement for defining the interrelationship between two or more corporations.
Until 1964, the method prescribed by the Code to curb the abuse of multiple incorporation was subjective: Multiple exemptions or benefits were allowed or disallowed depending on the reasons for the taxpayer’s actions. The Revenue Act of 1964 changed this approach, adding §§1561-1563 to the Code. Pub. L. 88-272, § 235(a), 78 Stat. 116-125. These sections prescribed the application of mechanical, objective tests for determining whether two corporations were a “controlled group” and thereby restricted to one surtax exemption. The original, 1964, definition of a “brother-sister controlled group” was:
“Two or more corporations if stock possessing at least 80 percent of the total combined voting power of all classes of stock entitled to vote or at least 80 percent of the total value of shares of all classes of stock of each of the corporations is owned... by one person who is an individual, estate, or trust.” 26 U. S. C. § 1563(a)(2) (1964 ed.).
Because corporations were not part of a controlled group unless the same person owned 80 percent of all corporations within the group, the 1964 provision clearly included a common-ownership requirement.
In 1969 Congress adopted the present two-part percentage test codified in § 1563(a)(2). Pub. L. 91-172, § 401(c), 83 Stat. 602. This change was proposed by the Treasury Department as part of an extensive package of.tax reform proposals. See Hearings Before the House Committee on Ways and Means on the Subject of Tax Reform, 91st Cong., 1st Sess., pt. 14, pp. 5050-5478 (1969) (hereinafter Hearings). The Treasury Department proposed, inter alia, that the definition of a brother-sister controlled group “be broadened to include groups of corporations owned and controlled by five or fewer persons, rather than only those owned and controlled by one person,” as was the case under then existing law. Id., at 5166. In setting forth the “Technical Explanation” for this new definition of brother-sister controlled groups, the Treasury Department was most explicit that the 80-percent requirement, like the 50-percent requirement, included common ownership: “[T]he same five or fewer persons [must] own at least 80 percent of the voting stock or value of shares of each corporation and... these five or fewer individuals” must satisfy the 50-percent requirement in Part (B). Id., at 5168 (emphasis added except for “five”).
The Treasury Department’s “General Explanation” of the amendment to § 1563(a)(2) defined a brother-sister controlled group as one “in which five or fewer persons own, to a large extent in identical proportions, at least 80 percent of the stock of each of the corporations.” Hearings, at 5394 (footnote omitted). The General Explanation then set forth the respective roles of the expanded 80-percent requirement and the new 50-percent requirement:
“This provision expands present law by considering the combined stock ownership of five individuals, rather than one individual, in applying the 80-percent test....
“However, in order to insure that this expanded definition of brother-sister controlled group applies only to those cases where the five or fewer individuals hold their 80 percent in a way which allows them to operate the corporations as one economic entity, the proposal would add an additional rule that the ownership of the five or fewer individuals must constitute more than 50 percent of the stock of each corporation considering, in this test of ownership, stock of a particular person only to the extent that it is owned identically with respect to each corporation.” Ibid.
The General Explanation made it clear that, under the 1969 amendment to § 1563(a)(2), the 80-percent requirement would remain the primary basis for determining whether two or more corporations represent the same financial interests. Part (A) of the 1969 test was simply an expansion of the 1964 test, which considered the two or more corporations to be a brother-sister controlled group only when one person owned 80 percent of all of the corporations. This “expansion” was necessary to “close the present opportunity for easy avoidance” of the 80-percent test. Hearings, at 5396. Because five persons now played the role previously played by one, this expanded version of the test required a new safeguard— the 50-percent requirement — to “insure that the new expanded definition is limited to cases where the brother-sister corporations are, in fact, controlled by the group of stockholders as one economic enterprise.” Ibid, (emphasis added).
The “singly or in combination” provision of Treas. Reg. § 1.1563-l(a)(3) is clearly incompatible with the explanation offered by the Treasury Department when it proposed the statute. In addition to the explicit statement that the members of the controlling group must own stock in “each” corporation, the Treasury Department presented a test in which the 80-percent requirement remained the primary indicia of interrelationship. But under the challenged Regulation, the 80-percent requirement measures only whether or not the brother-sister corporations are closely held. The fact that a corporation is closely held, absent common ownership, is irrelevant to the congressional purpose of identifying interrelationship: “It is not the smallness of the number of persons in each company that triggers § 1563; it is the sameness of that small number.” T. L. Hunt, Inc. v. Commissioner, 562 F. 2d 532, 537 (CA8 1977) (Webster, J. dissenting).
The Treasury Department’s explanations of the proposed statute are not, as the dissent in the Court of Claims suggested, a mere “admission against interest” by the Commissioner. 225 Ct. Cl., at 44, 634 F. 2d, at 514. The expanded definition of “brother-sister controlled group” was proposed by the Treasury Department and adopted in the same form in which it was presented. Of course, it is Congress’ understanding of what -it was enacting that ultimately controls. But we necessarily attach “great weight” to agency representations to Congress when the administrators “participated in drafting and directly made known their views to Congress in committee hearings.” Zuber v. Allen, 396 U. S. 168, 192 (1969). The subsequent legislative history of § 1563(a)(2) confirms that Congress adopted not only the proposal of the Treasury Department, but also the Department’s explanation and interpretation which are tvholly incompatible with the “singly or in combination” interpretation of the Regulation. The Ways and Means Committee Report stated:
“This bill expands the definition [of a brother-sister controlled group] to include two or more corporations which are owned 80 percent or more (by voting power or value) by five or fewer persons (individuals, estates, or trusts) provided that these five or fewer persons own more than 50 percent of each corporation when the stock of each person is considered only to the extent it is owned identically with respect to each corporation.” H. R. Rep. No. 91-413, pt. 1, p. 99 (1969).
The House Committee Report thus reflects the Treasury Department’s explanations — the 80-percent requirement is an expanded version of the 1964 statute and measures overlapping interests, while the 50-percent requirement is an additional proviso necessary in light of the expanded number of shareholders whose overlapping interests were to be considered.
D
The Commissioner’s further reasons for sustaining his interpretation are unpersuasive.
The Commissioner relies on the fact that, in expanding the coverage of § 1563(a)(2), Congress expressly adopted part of the language used in § 1551(b)(2) of the Code to describe a transfer from one corporation to another “controlled” by the same “five or fewer” individuals. The Commissioner contends that Congress thereby approved the interpretation the Commissioner had placed on § 1551(b)(2). Even if we could assume that Congress was aware of Treasury Regulations interpreting § 1551, promulgated only two years before § 1563 was enacted, see 32 Fed. Reg. 3214-3216 (1967), the promulgated regulations do not support the Commissioner’s present interpretation of the statutory language in § 1563(a)(2). The Regulations defining control under §1551 contain no language similar to the words “singly or in combination” found in Treas. Reg. § 1.1563-l(a)(3) and they contain no suggestion that the Treasury Department had interpreted § 1551(b)(2) as not having a common-ownership requirement. See Treas. Reg. § 1.1551-l(e), 26 CFR §1.1551-l(e) (1981).
Also unpersuasive is the Commissioner’s reliance on the fact that § 1563(a)(2) is referred to in § 1015 of the Employee Retirement Income Security Act of 1974, 26 U. S. C. §414. From this the Commissioner infers congressional approval of all the Regulations promulgated under § 1563(a)(2), including the Regulation at issue in this case. But it is the intent of the Congress that amended § 1563(a), not the views of the subsequent Congress that enacted § 414, that are controlling. See Teamsters v. United States, 431 U. S. 324, 354, n. 39 (1977). In any event, this passing reference in 26 U. S. C. § 414(b), enacted only two years after Treas. Reg. § 1.1563-l(a)(3) was promulgated, 37 Fed. Reg. 8068-8070 (1972), hardly constitutes legislative approval of a longstanding administrative interpretation, from which we could infer any congressional acceptance. Cf. United States v. Correll, 389 U. S., at 305-306.
Finally, the Commissioner seeks to uphold the Regulation on the ground that a common-ownership requirement leads to the assertedly nonsensical result that ownership of only one share could be determinative. For example, if Crain owned but one share of Vogel Popcorn, then the 80-percent requirement would be met and the taxpayer corporation would be part of a controlled group even under the taxpayer’s interpretation of the statute. This argument is without merit, for several reasons. First, Congress purposefully substituted the mechanical formula of § 1563(a)(2) for the subjective, case-by-case analysis that had previously prevailed. Inherent in such an objective test is a sharp dividing line that is crossed by incremental changes in ownership. Moreover, it is obvious that a shareholder would not buy a small amount of stock in order to create a controlled group, since it is to the taxpayer’s advantage not to be part of such a group. Finally, a person’s “mere” ownership of one share of stock plays an important role in the operation of the test. It insures that each of the “5 or fewer” shareholders representing the bulk of the financial interest of the corporations actually knows of the other corporations within the putative brother-sister controlled group. Under this construction of the statute, controlled-group membership cannot catch such a shareholder by surprise, as it could under the Commissioner’s construction.
Affirmed.
For two of the tax years in question in this ease — the years ending November 30, 1973 and 1974 — the Code exempted the first $25,000 of corporate earnings from the federal surtax on corporate income, 26 U. S.’ C. § 11(d) (1970 ed.), and for the third year — ending November 30, 1975 — the Code exempted the first $50,000. 26 U. S. C. § 11(d). For each of these tax years, however, § 1561 of the Code limited the members of a “controlled group” of corporations to a single shared surtax exemption. Amendments to the Code in 1978 replaced the surtax exemption with a graduated five-step tax rate structure on taxable corporate income. 26 U. S. C. § 11 (1976 ed., Supp. III). Now members of a controlled group must share a single rate schedule. 26 U. S. C. § 1561(a) (1976 ed., and Supp. III).
The full text of § 1563(a)(2) is:
“Brother-sister controlled group
“Two or more corporations if 5 or fewer persons who are individuals, estates, or trusts own (within the meaning of subsection (d)(2)) stock possessing—
“(A) at least 80 percent of the total combined voting power of all classes of stock entitled to vote or at least 80 percent of the total value of shares of all classes of the stock of each corporation, and
“(B) more than 50 percent of the total combined voting power of all classes of stock entitled to vote or more than 50 percent of the total value of shares of all classes of stock of each corporation, taking into account the stock ownership of each such person only to the extent such stock ownership is identical with respect to each such corporation.”
The full text of the Treasury Regulation is:
“Brother-sister controlled group.
“(i) The term ‘brother-sister controlled group’ means two or more corporations if the same five or fewer persons who are individuals, estates, or trusts own (directly and with the application of the rules contained in paragraph (b) of § 1.1563-3), singly or in combination, stock possessing—
“(a) At least 80 percent of the total combined voting power of all classes of stock entitled to vote or at least 80 percent of the total value of shares of all classes of the stock in each corporation; and
“(b) More than 50 percent of the total combined voting power of all classes of stock entitled to vote or more than 50 percent of the total value of shares of all classes of stock of each corporation, taking into account the stock ownership of each such person only to the extent such stock ownership is identical with respect to each such corporation.
“(ii) The principles of this subparagraph may be illustrated by the following examples:
“Example (1). The outstanding stock of corporations P, Q, R, S, and T, which have only one class of stock outstanding, is owned by the following unrelated individuals:
Corporations P, Q, R, S, and T are members of a brother-sister controlled group.
“Example (2). The outstanding stock of corporations U and V, which have only one class of stock outstanding, is owned by the following unrelated individuals:
Corporations U and V are not members of a brother-sister controlled group because at least 80 percent of the stock of each corporation is not owned by the same five or fewer persons.”
The remainder of the Vogel Popcorn stock — voting preferred stock— was owned by Vogel as trustee of the Alex Vogel Family Trust. Under the attribution rules of 26 U. S. C. §§ 1563(d)(2), (e), Vogel is not deemed to own this stock for tax purposes. See 225 Ct. Cl. 15,18, 634 F. 2d 497, 499 (1980).
In the original version of §§ 1561-1563, controlled groups retained the option of taking multiple surtax exemptions and paying a penalty. See 26 U. S. C. § 1562 (1964 ed.). During the tax years in question this option was being gradually phased out. 26 U. S. C. § 1564. For 1973 and 1974 respondent utilized the multiple surtax exemption under 26 U. S. C. § 1564(a), and paid the penalty imposed by § 1562(b) (1970 ed.). For the tax year ending November 30,1975, respondent elected to allocate entirely to Vogel Popcorn the single surtax exemption then allowed to members of a controlled group of corporations.
The Court of Appeals for the Fifth Circuit is in agreement with the Court of Claims and the Tax Court that Treas. Reg. § 1.1563-l(a)(3), 26 CFR § 1.1563-l(a)(3) (1981), is invalid insofar as it permits the 80-percent requirement to be satisfied without common ownership. Delta Metal-forming Co. v. Commissioner, 632 F. 2d 442 (1980). The Tax Court has adhered to its view that the Regulation is invalid. See, e. g., Charles Baloian Co. v. Commissioner, 68 T. C. 620, 629-631 (1977); Davidson Chevrolet Co. v. Commissioner, 39 TCM 299 (1979), [¶ 79,414] P-H Memo TC; Allen Oil Co. v. Commissioner, 38 TCM 355 (1979), [¶ 79,088] P-H Memo TC; Delta Metalforming Co. v. Commissioner, 37 TCM 1485 (1978), [¶ 78,354] P-H Memo TC; T. L. Hunt, Inc. v. Commissioner, 35 TCM 966 (1976), [¶ 76,221] P-H Memo TC. This adherence has persisted in the face of reversals by the Courts of Appeals for the Second, Fourth, and Eighth Circuits. Allen Oil Co. v. Commissioner, 614 F. 2d 336 (CA2 1980); Fair-fax Auto Parts of Northern Virginia v. Commissioner, 548 F. 2d 501 (CA4 1977) (per curiam); T. L. Hunt, Inc. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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68
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NATIONAL LABOR RELATIONS BOARD et al. v. BAPTIST HOSPITAL, INC.
No. 78-223.
Argued April 23, 1979 —
Decided June 20, 1979
Powell, J., delivered the opinion of the Court, in which Stewart, BlackmuN, Rehnquist, and Stevens, JJ., joined. Blackmun, J., filed a concurring opinion, post, p. 791. Burger, C. J., filed an opinion concurring in the judgment, post, p. 791. Brennan, J., filed an opinion concurring in the judgment, in which White and Marshall, JJ., joined, post, p. 793.
Norton /. Come argued the cause for petitioner National Labor Relations Board. With him on the brief were Solicitor General McCree, John S. Irving, Linda Sher, and David F. Zorensky. Laurence Gold argued the cause for intervenor Local 150-T Service Employees International Union. With him on the briefs were Lester Asher, J. Albert Woll, and George Kaufmann.
Fred W. Elarbee argued the cause for respondent. With him on the brief was David M. Vaughan.
Richard Dorn filed a brief for the National Union of Hospital and Health Care Employees as amicus curiae urging reversal.
William Francis Ford and Samuel Dunbar Hewlett filed a brief for the Hospital Corporation of America as amicus curiae.
Mr. Justice Powell
delivered the opinion of the Court.
This case presents the question of the validity of an order of the National Labor Relations Board (Board) prohibiting respondent, Baptist Hospital (Hospital), from enforcing any rule against solicitation by employees “on behalf of any labor organization during their nonworking time in any area of its hospital other than immediate patient care areas.”
I
The Hospital is a nonprofit general hospital with 600 beds and 1,800 employees. For several years prior to 1974, the Hospital enforced a rule against solicitation anywhere on its premises. The intervenor, Local 150-T, Service Employees International Union, AFL-CIO (Union), in August 1974 began a campaign to organize the Hospital’s employees. The Hospital, at least partly in response to this organizational activity, promulgated a new rule prohibiting solicitation by employees at all times “in any area of the Hospital which is accessible to or utilized by the public.” These areas include the lobbies, gift shop, cafeteria, and entrances on the first floor of the hospital as well as the corridors, sitting rooms, and public restrooms on the other floors. In parts of the Hospital not open to patients and their visitors, employee solicitation is allowed in work areas on nonwork time, and distributions are allowed in nonwork areas on nonwork time.
The Union filed charges with the'Board, which thereupon issued a complaint against the Hospital. The complaint focused primarily on the Hospital’s no-solicitation rule, charging that the broad proscriptions contained in the rule violated §8 (a)(1) of the National Labor Relations Act (Act), as amended, 29 U. S. C. §158 (a)(1). After hearing testimonial evidence introduced by both the Hospital and the General Counsel for the Board, the Administrative Law Judge concluded that the Hospital’s no-solicitation rule was invalid. Baptist Hospital, Inc., 223 N. L. R. B. 344, 347 (1976). The Board agreed, and issued an order that the Hospital cease and desist from “[promulgating, maintaining in effect, enforcing, or applying any rule or regulation prohibiting its employees from soliciting on behalf of any labor organization during their nonworking time in any area of its hospital other than immediate patient care areas.” Id., at 346.
The Board sought enforcement of its order by the Court of Appeals. After reviewing the evidence of record before the Board, the court concluded that the Hospital had presented evidence of the ill effects of solicitation on patient care that justified the broad prohibition of solicitation. The court accordingly denied enforcement of the Board’s order. 576 F. 2d 107 (CA6 1978). We granted the Board’s petition for cer-tiorari, 439 U. S. 1065 (1979), and now affirm in part and vacate and remand in part.
II
The Board, in implementing the 1974 extension of the Act to nonprofit health-care institutions, has modified its general rule regarding the validity of employer regulations of solicitation. Because its usual presumption that rules against solicitation on nonwork time are invalid gives too little weight to the need to avoid disruption of patient care and disturbance of patients in the hospital setting, the Board has indicated that it will not regard as presumptively invalid proscriptions on solicitation in immediate patient-care areas. In Beth Israel Hospital v. NLRB, 437 U. S. 483 (1978), the Court considered the general acceptability of the use of this presumption by the Board.
At issue in Beth Israel Hospital was that hospital’s rule against solicitation in its cafeteria and coffeeshop. The Court, in the course of affirming a decision of the Board that struck down the no-solicitation rule, described the Board’s general approach to such rules.
“The Board concluded that prohibiting solicitation in [immediate patient-care areas] was justified and required striking the balance against employees’ interests in organizational activity. The Board determined, however, that the balance should be struck against the prohibition in areas other than immediate patient-care areas such as lounges and cafeterias absent a showing that disruption to patient care would necessarily result if solicitation and distribution were permitted in those areas.” Id., at 495.
The Court found no merit in Beth Israel’s argument that the Board’s use of such a presumption was inconsistent with the legislative intent underlying extension of the Act to nonprofit health-care institutions. The Congress has committed to the Board the task of striking the appropriate balance among the interests of hospital employees, patients, and employers, a role familiar to the Board in other contexts. Beth Israel Hospital v. NLRB, supra, at 496-497, 500-501; Hudgens v. NLRB, 424 U. S. 507, 521-523 (1976). And the balance struck by the Board — solicitation on nonwork time may be prohibited only where necessary to avoid disruption of patient care or disturbance of patients — is not inconsistent with the Act. Beth Israel Hospital v. NLRB, supra, at 497-500. Accordingly, the Court held “that the Board’s general approach of requiring health-care facilities to permit employee solicitation and distribution during nonworking time in nonworking areas, where the facility has not justified the prohibitions as necessary to avoid disruption of health-care operations or disturbance of patients, is consistent with the Act.” 437 U. S., at 507.
The scope of the Board’s presumption depends upon the definition of the phrase “immediate patient-care areas.” The Court had no occasion in Beth Israel to determine or review the limits of the Board’s definition. The attack on the no-solicitation rule at issue there focused entirely on the prohibition of solicitation in the cafeteria and coffeeshop, and the Board’s order was limited to a requirement that the hospital “[r]escind its written rule prohibiting distribution of union literature and union solicitation in its cafeteria and coffee-shop.” Beth Israel Hospital, 223 N. L. R. B. 1193, 1199 (1976) (emphasis added); see NLRB v. Beth Israel Hospital, 554 F. 2d 477, 482 (CA1 1977), aff’d, 437 U. S. 483 (1978). The Board’s definition of “immediate patient-care areas” is essential, however, to an understanding of both the operation of the presumption and the Board’s final order in the present case. The Hospital’s rule prohibits solicitation in all areas of the Hospital open to patients or visitors, and the complaint charged that the Hospital had violated § 8 (a)(1) by maintaining an overly broad rule against solicitation. 223 N. L. R. B., at 347, 355. The Board’s order covers all areas of the Hospital, and explicitly limits application of a no-solicitation rule to areas of “immediate patient care.”
Neither the Board nor the Administrative Law Judge mentioned in their respective opinions the exact scope that they assigned to the term “immediate patient-care areas.” But, as the Court of Appeals remarked, 576 F. 2d, at 109, the Board based its ruling on the analysis it had adopted in St. John’s Hospital & School of Nursing, Inc., 222 N. L. R. B. 1150 (1976), enf. granted in part and denied in part, 557 F. 2d 1368 (CA10 1977). See 223 N. L. R. B., at 344 n. 2. In St. John’s Hospital, the Board stated that immediate patient-care areas are areas “such as the patients’ rooms, operating rooms, and places where patients receive treatment, such as x-ray and therapy areas.” 222 N. L. R. B., at 1150.. Thus, it appears that in the present case the Board assumed the validity of prohibitions on solicitation only in these limited areas, treating any broader ban as presumptively invalid. And given this definition of patient-care areas, the Board’s order prevents the Hospital from applying a no-solicitation rule not only to its lobbies, cafeteria, and gift shop but also to the corridors and sitting rooms that adjoin or are accessible to patients’ rooms and operating and treatment rooms.
Ill
The Board’s presumption, of course, does no more than place on the Hospital the burden of proving, with respect to areas to which it applies, that union solicitation may adversely affect patients. Accordingly, in Beth Israel the Court described the Board’s presumption as a ban on the prohibition of solicitation in areas other than immediate patient-care areas “where the facility has not justified the prohibitions as necessary to avoid disruption of health-care operations or disturbance of patients.” 437 U. S., at 507; accord, id., at 495. The hospital in Beth Israel failed to introduce any evidence that the proscription of solicitation in its cafeteria and coffee-shop was necessary to prevent either disruption of patient care or disturbance of patients. The Court found that “patient use of the cafeteria [was] voluntary, random, and infrequent,” and considered it of “critical significance that only 1.56% of the cafeteria’s patrons are patients.” Id., at 502; see also id., at 508-509 (Blackmun, J., concurring in judgment); id., at 516-517 (Powell, J., concurring in judgment).
In the present case, in contrast, extensive evidence was offered, through the testimony of doctors and a hospital administrator, in justification of the no-solicitation rule. The Board, after applying its presumption to the evidence before it, concluded that the Hospital had failed to meet the burden placed upon it by the presumption. In doing so, the Board made a finding of fact that there was no demonstrated likelihood that solicitation outside of “immediate patient-care areas” would disrupt patient care or disturb patients. 223 N. L. R. B., at 357; 576 F. 2d, at 109.
Such findings are binding on the reviewing courts, but only if they are supported by “substantial evidence on the record considered as a whole.” Act, § 10 (e), 29 U. S. C. § 160 (e). When the Board’s findings lack such support in the record, the reviewing courts must set them aside, along with the orders of the Board that rest on those findings. Administrative Procedure Act, 5 U. S. C. § 706 (2) (E); Universal Camera Corp. v. NLRB, 340 U. S. 474, 490 (1951). The Court of Appeals, exercising its reviewing function, determined that the Board’s findings were contrary to the proof of record, which in its view provided adequate support for the application of the no-solicitation rule in all areas of the Hospital. We think that the correct position lies between those taken by the Board and the court below. While the Board’s holding with respect to some of the areas in dispute has substantial evi-dentiary support in the record, the Court of Appeals was justified in concluding that the Board lacked such support for its sweeping protection of solicitation in all but “immediate patient-care areas.”
The Hospital’s Vice President for Personnel Services, Yic-tory, testified that the no-solicitation rule was adopted because of concern about the ill effects of union organizational activity on patients. App. 5-6, 31. The general purpose of the rule, he indicated, is to protect the patients and their families from the disquiet that might result if they perceived that the Hospital’s staff had concerns other than the care of patients. Id., at 12, 13. The rule rests, in Victory’s words, on the Hospital’s experience: “we have found that anytime we do anything that lets a patient or their [sic] family see that we have our mind on anything but patient care, this is very disruptive to the patient and sometimes affects the patient’s ability to recover.” Id., at 12. The Hospital’s Chief of Medical Staff, Ricketson, echoed this rationale for proscription of solicitation in any area of the Hospital open to patients or their visitors, emphasizing that the “psychological attitudes [of patients] play a good part,” id., at 57, in determining the success of their treatment. See id., at 53, 57-58, 62. Another doctor, Birmingham, testified that because “[p]eople who are physically ill are more emotionally upset,” it is essential to create within the Hospital the tranquillity that is most conducive to their recovery. Id., at 43-44. The Court of Appeals laid great stress on this aspect of the evidence before the Board, stating that “[t]hese witnesses, two physicians and an experienced hospitál administrator, repeatedly referred to the necessity of creating and maintaining a tranquil atmosphere throughout the hospital for patients and visitors. The testimony of the medical witnesses related this requirement directly to the well-being of the patients. The witnesses made no distinction between areas of immediate patient care and other areas of the hospital.” 576 F. 2d, at 109-110.
The evidence concerning the corridors and sitting rooms adjoining or accessible to the patients’ rooms and treatment rooms on the upper floors of the Hospital provided more detailed illustration of the need for a no-solicitation rule applicable to those areas. Patients in the most critical and fragile conditions often move or are moved through these corridors, either en route to treatment in some other part of the Hospital or as part of their convalescence. App. 10, 24, 54, 64. The increased emphasis in modern hospitals on the mobility of patients as an important aspect of patient therapy is well known, and appears to be a part of patient care at the Hospital. Id., at 40-41, 54. Small public rooms or sitting areas on the patient-care floors, as well as the corridors themselves, provide places for patients to visit with family and friends, as well as for doctors to confer with patients’ families — often during times of crisis. Id., at 24, 40, 55-56. Nothing in the evidence before the Board provided any basis, with respect to those areas of the Hospital, for doubting the accuracy of the statements made by Ricketson and Birmingham that union solicitation in the presence or within the hearing of patients may have adverse effects on their recovery. Id., at 23, 39-40, 57-58, 62.
The Hospital also presented uncontradicted evidence that solicitation on nonwork time is allowed in other areas even-under the no-solicitation rule at issue here. These areas in-elude the 26 nurses’ stations and adjoining utility rooms located throughout the Hospital, two employee lounges, and the maintenance and laundry buildings. Id., at 8, 16, 25-26. Especially in view of our ruling upholding the Board’s position on the first-floor lobbies, gift shop, and cafeteria, the availability of these alternative locations for solicitation, though not dispositive, lends support to the validity of the Hospital’s ban on such activity in other areas of the Hospital. As the Court remarked in Beth Israel:
“[I]n the context of health-care facilities, the importance of the employer’s interest in protecting patients from disturbance cannot be gainsaid. While outside of the health-care context, the availability of alternative means of communication is not, with respect to employee organizational activity, a necessary inquiry..., it may be that the importance of the employer’s interest here demands use of a more finely calibrated scale. For example, the availability of one part of a health-care facility for organizational activity might be regarded as a factor required to be considered in evaluating the permissibility of restrictions in other areas of the same facility.” 437 U. S., at 505.
We conclude that, with respect to the corridors and sitting rooms on patients’ floors, the Court of Appeals correctly determined that there was no substantial evidence of record to support the Board's holding that the Hospital had failed to justify its ban on solicitation in these areas.
The same may not be said, however, of the cafeteria, gift shop, and lobbies on the first floor of the Hospital. No evidence directly contradicting the professional judgments of Victory, Birmingham, and Ricketson as to the importance of a tranquil hospital atmosphere to successful patient care was presented to the Board. But when viewed as a whole, the evidence presented by the Hospital may be regarded fairly as insufficient to rebut the Board’s presumption that the needs of essential patient care do not require the banning of all solicitation in such areas. The Hospital presented no clear evidence of the frequency with which patients use the cafeteria and gift shop, or visit the lobbies on the first floor. See App. 11-13, 27, 36-38. It appears that patients normally remain on the floors of the Hospital above the first floor, with visits to the first floor only by some patients and then only occasionally. Id., at 20, 28, 35-36, 64. In fact, a patient must have special permission to leave the floor on which his room is located, as well as to take meals in the cafeteria. Id., at 54, 64; 223 N. L. R. B., at 348. From this evidence, one may conclude reasonably that only those patients who are judged fit to withstand the activities of the public areas on the first floor are allowed to visit those parts of the Hospital. Moreover, both Victory and Ricketson testified that at least some kinds of solicitation in public areas such as the cafeteria would be unlikely to have a significant adverse impact on patients or patient care. App. 10, 31-32, 62. It thus appears that there was substantial evidence in the record to support the Board’s conclusion that the Hospital had not justified the prohibition of union solicitation in the cafeteria, gift shop, and lobbies on the first floor of the Hospital.
IV
In addition to reviewing the sufficiency of the evidence in this case to support the Board’s findings and order, the Court of Appeals also adopted a broader rationale for refusing to enforce the order. “In the setting of a modern general hospital,” it stated, “it is difficult to define the areas of immediate patient care.” 576 F. 2d, at 110. Since patients visit many parts of such a hospital during their treatment and convalescence, activities anywhere in the public areas of the hospital may well affect their recovery. Thus, the Court of Appeals concluded, in effect, that the Board’s presumption that solicitation outside of immediate patient-care areas does not disrupt patient care or disturb patients is irrational, and that the Board should be required to prove that solicitation in any particular patient-access area will not interfere with patients’ treatment or convalescence.
It is, of course, settled law that a presumption adopted and applied by the Board must rest on a sound factual connection between the proved and inferred facts. As the Court stated in Republic Aviation Corp. v. NLRB, 324 U. S. 793, 804-805 (1945), “[l]ike a statutory presumption or one established by regulation, the validity [of the Board’s presumption regarding the permissibility of no-solicitation rules], perhaps in a varying degree, depends upon the rationality between what is proved and what is inferred.” More recently, in Beth Israel, the Court again recognized that the courts have the duty to review the Board’s presumptions both “for consistency with the Act, and for rationality.” 437 U. S., at 501.
We do not share the apparent view of the Court of Appeals that the Board’s presumption is irrational in all respects, since experience in cases such as Beth Israel and the present one makes clear that solicitation in at least some of the public areas of hospitals often will not adversely affect patient care or disturb patients. The evidence of record in this case and other similar cases does, however, cast serious doubt on a presumption as to hospitals so sweeping that it embraces solicitation in the corridors and sitting rooms on floors occupied by patients. Since the 1974 amendments to the Act, each hospital making the attempt has overcome the effect of the Board’s presumption as applied to such corridors and sitting rooms. The evidence by which the Hospital rebutted the presumption in the present case has been reviewed above. In Baylor University Medical Center v. NLRB, 188 U. S. App. D. C. 109, 578 F. 2d 351 (1978), vacated in part and remanded, 439 U. S. 9 (1978), the evidence demonstrating the need for the prohibition of solicitation in such areas was even more extensive.
“The importance of preventing crowding and disruption in the hospital corridors cannot be seriously debated. Experienced witnesses testified of the extent to which congestion in the corridors impedes the operation of the medical staff and annoys patients and visitors. Quick and unimpeded passage through the hallways was shown to be imperative to the efficient operation of the hospital and to the success of certain of its emergency services, such as the cardiac arrest unit. The hallways serve not only as passageways for patients, visitors, doctors, and medicine, but also as viewing rooms for the nursery and storerooms for a variety of hospital equipment which must be available at a moment’s notice. There was also testimony that a great deal of the physical therapy undertaken at :[the hospital] actually took place in the corridors, and that for many departments the corridors served as the only available waiting room.” 188 U. S. App. D. C., at 113-114, 578 F. 2d, at 355-356 (footnotes omitted).
After reviewing the record in St. John’s Hospital & School of Nursing, Inc. v. NLRB, 557 F. 2d 1368 (CA10 1977), the court there found that the Board’s presumption (first adopted in that case) was unsupported by any evidence that solicitation in such areas would not adversely affect patient care. It concluded that to save the Board’s presumption, “the Board’s definition of'strictly patient care areas’ must be interpreted to include such areas as halls, stairways, elevators, and waiting rooms accessible to patients.” Id., at 1375.
Because the evidence presented by the Hospital in this case is sufficient to rebut the Board’s presumption as applied to corridors and sitting rooms on patients’ floors, we need not here decide the rationality of this portion of the Board’s presumption, or undertake the task of framing the limits of an appropriate presumption regarding the permissibility of union solicitation in a modern hospital. Indeed, the development of such presumptions is normally the function of the Board. It must be said, however, that the experience to date raises serious doubts as to whether the Board’s interpretation of its present presumption adequately takes into account the medical practices and methods of treatment incident to the delivery of patient-care services in a modern hospital. In its continuous review of the usefulness of its presumption, the Board should be mindful of the Court's admonition in Beth Israel.
“ ‘[T]he Board [bears] a heavy continuing responsibility to review its policies concerning organizational activities in various parts of hospitals. Hospitals carry on a public function of the utmost seriousness and importance. They give rise to unique considerations that do not apply in the industrial settings with which the Board is more familiar. The Board should stand ready to revise its rulings if future experience demonstrates that the well-being of patients is in fact jeopardized.' ” 437 U. S., at 508, quoting NLRB v. Beth Israel Hospital, 554 F. 2d, at 481.
y
The Court of Appeals correctly concluded that the Board lacked substantial evidence in the record to support its order forbidding any prohibition on solicitation in the corridors and sitting rooms on floors of the Hospital housing either patients’ rooms or operating and therapy rooms, and we affirm that portion of its judgment. The judgment of the Court.of Appeals with respect to other parts of the Hospital is vacated, and the case is remanded for further proceedings consistent with this opinion.
So ordered.
The rule read:
“In order to protect employees from any form of solicitation, raffle, charity drives, etc., it is strictly prohibited for anyone to solicit patients or visitors while on hospital premises without written approval from Administration. Violation of this policy will subject employee to disciplinary action. Employees who discover persons making unauthorized solicitation should report this immediately to their Supervisor.”
This rule was adopted primarily to keep salesmen out of the Hospital. Baptist Hospital, Inc., 223 N. L. R. B. 344, 348, 357 (1976), enf. granted in part and denied in part, 576 F. 2d 107 (CA6 1978).
The new rule governing solicitation in the Hospital provides:
“No solicitations of any kind, including solicitations for memberships or subscriptions, will be permitted by employees at any time, including work time and non-work time in any area of the Hospital which is accessible to or utilized by the public. Anyone who does so will be subject to disciplinary action. In those work areas of the Hospital not accessible to or utilized by the public, no solicitations of any kind, including solicitations for memberships or subscriptions will be permitted at any time by employees who are supposed to be working, or in such a way as to interfere with the work of other employees who are supposed to be working. Anyone who does so and thereby neglects his work or interferes with the work of others will likewise be subject to disciplinary action.
“No distributions of any kind, including circulars or other printed materials, shall be permitted in any work area at any time.”
All of the parties agree that the restrictions on solicitation and distribution imposed with respect to areas of the Hospital not accessible to patients and the public are in conformity with existing law.
Section 8 (a)(1), as set forth in 29 U. S. C. § 158 (a) (1), makes it an unfair labor practice for an employer “to interfere with, restrain, or coerce employees in the exercise of the rights [of self-organization and collective bargaining] guaranteed in section 157 of [Title 29].”
The complaint also charged that the Hospital had violated § 8 (a) (3) of the Act, 29 U. S. C. § 158 (a) (3), by discriminating against an employee, Russell French, on account of his union organizational activities. The Board sustained this charge, ordering the Hospital to reinstate French and pay him any wages lost because of such discrimination. French died before the decision of the case in the Court of Appeals, leaving only the issue of backpay. The Court of Appeals, after concluding that the Hospital’s no-solieitation rule did not violate § 8 (a) (1), remanded to the Board for a determination of what portions of the backpay previously ordered were unrelated to the Hospital’s no-solicitation rule. 576 F. 2d, at 111. Neither the Board nor the Hospital has questioned this disposition of the § 8 (a) (3) claim.
Section 1 (a) of the Board’s order; see 223 N. L. R. B., at 346. In § 2 (b) of its order, the Board also directed the Hospital to rescind its existing no-solicitation rule “to the extent that it prohibits its employees from soliciting on behalf of a labor organization during their nonworking time in any nonworking area of the Hospital including those areas open to the public.” 223 N. L. R. B., at 346, 361.
The court also noted that the proscription of solicitation and distribution did not extend to the Hospital’s parking lots. “[I]n denying enforcement of the Board’s order we construe the hospital’s... rule to apply only to areas within the various buildings occupied by the hospital and those exterior areas immediately adjacent to entrances used by patients and the public.” 576 F. 2d, at 111. This conclusion comports with the testimony given at the administrative hearing on the Board’s complaint. App. 34, 45, 63.
Act of July 26, 1974, 88 Stat. 395; see Beth Israel Hospital v. NLRB, 437 U. S. 483, 485, and n. 1 (1978).
Republic Aviation Corp. v. NLRB, 324 U. S. 793, 803-804, and n. 10 (1945).
The Board first announced this modification of the presumption in St. John’s Hospital & School of Nursing, Inc., 222 N. L. R. B. 1150 (1976), enf. granted in part and denied in part, 557 F. 2d 1368 (CA10 1977). The Board has applied its modified presumption in a number of subsequent cases involving union organizational activities in hospitals, including, in addition to the present case, Beth Israel Hospital, 223 N. L. R. B. 1193 (1976), enf'd, 554 F. 2d 477 (CA1 1977), aff’d, 437 U. S. 483 (1978); Lutheran Hospital of Milwaukee, 224 N. L. R. B. 176 (1976), enf. granted in part and denied in part, 564 F. 2d 208 (CA7 1977), vacated and remanded, 438 U. S. 902 (1978); Baylor University Medical Center, 225 N. L. R. B. 771 (1976), enf. granted in part and denied in part, 188 U. S. App. D. C. 109, 578 F. 2d 351, vacated in part and remanded, 439 U. S. 9 (1978); St. Joseph Hospital, 228 N. L. R. B | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
81
] | sc_adminaction |
HYNES, REGIONAL DIRECTOR, FISH AND WILDLIFE SERVICE, DEPARTMENT OF THE INTERIOR, v. GRIMES PACKING CO. et al.
No. 24.
Argued October 21, 1948.
Decided May 31, 1949.
Roger P. Marquis argued the cause for petitioner. With him on the brief were Solicitor General Perlman, Assistant Attorney General Vanech, Stanley M. Silver-berg and S. Billingsley Hill.
Frank L. Mechem and W. C. Arnold argued the cause for respondents. With them on the brief was Edward F. Medley.. Charles A. Horsky was also of counsel for respondents.
Felix S. Cohen, James E. Curry and Henry Cohen filed a brief on behalf of the Native Village of Karluk et al., as amici curiae, urging reversal.
Mr. Justice Reed
delivered the opinion of the Court.
The Secretary of the Interior on May 22, 1943, issued Public Land Order 128. It is set out in full below. In this case the significant part of No. 128 is that the Secretary included in the reservation, by paragraph 2, adjacent tidelands and coastal waters along tht entire shore line of the uplands that touched Shelikof StrL H between Kodiak Island and the Alaska Peninsula. The authority of the Secretary to utilize presidential power in the designation of this reservation out of public lands in Alaska flows from a delegation to the Secretary of presidential power to withdraw or reserve public lands and revoke or modify prior reservations. Executive Order No. 9146, of April 24, 1942, 1 C. F. R., Cum. Supp. 1149. The presidential power over reservations is made specific by the Act of June 25, 1910. Another statutory provision, however, is the principal basis for Order 128. This is § 2 of the Act of May 1-, 1936, 49 Stat. 1250. This act was passed to extend to Alaska the benefits of the Wheeler-Howard Act of June 18, 1934, 48 Stat. 984, and to provide for the designation of Indian reservations in Alaska. As § 2 is important in our discussion, the pertinent provisions are set out in full:
“Sec. 2. That the Secretary of the Interior is hereby authorized to designate as an Indian reservation any area of land which has been reserved for the use and occupancy of Indians or Eskimos by section 8 of the Act of May 17, 1884 (23 Stat. 26), or by section 14 or section 15 of the Act of March 3, 1891 (26 Stat. 1101), or which has been heretofore reserved under any executive order and placed under the jurisdiction of the Department of the Interior or any bureau thereof, together with additional public lands adjacent thereto, within the Territory of Alaska, or any other public lands which are actually occupied by Indians or Eskimos within said Territory: Provided, That the designation by the Secretary of the Interior of any such area of land as a reservation shall be effective only upon its approval by the vote, by secret ballot, of a majority of the Indian or. Eskimo residents thereof who vote at a special election duly called by the Secretary of the Interior upon thirty days’ notice:'"'....’’
The Native Village of Karluk held a meeting on May 23, 1944, and accepted “the proposed Indian Reservation for this village. The adoption of said Reservation' passed by a vote of 46 for and 0 against. 11 of the eligible voters were absent.” See note 26, infra. Under § 19 of the Wheeler-Howard Act the Alaskan aborigines are classified as Indians.
On March 22 and August 27, 1946, the Secretary of the Interior amended the Alaská Fisheries General Regulations, 50 C. F. R., 1946 Supp., § 208.23, that related to the commercial fishing for salmon in the Kodiak Area Fisheries by the addition of a subsection (r), reading as follows:
“(r) All waters within 3,000 feet of the shores of Karluk Reservation (Public Land Order No. 128, May 22,.1943), beginning at a point on the east shore of Shelikof Strait,,on Kodiak Island, latitude 57°32'30// N., thence northeasterly along said shore to a point 57°39'40".
“The foregoing prohibition shall not apply to fishing by natives in possession of said reservation, nor to fishing by other persons under authority granted by said natives (49 Stat. 1250; 48 U. S.-C. 358a). Such authority shall be granted only by or pursuant to ordinance of the Native Village of Karluk, approved by the Secretary of the Interior or his duly authorized representative.” 11 Fed. Reg. 3105, 9528.
The authority for the regulation is given as 34 Stat. 263 and 478, as amended by the Act of June 6, 1924, 43 Stat. 464, an Act'for the protection of the fisheries of Alaska, known-as the White Act. As the controlling section of this statute also is important, it is set out here, 44 Stat. 752:
“Section 1. That for the purpose of protecting and conserving the fisheries of the United States in all waters of Alaska the Secretary of Commerce from time to time may set apart and reserve fishing areas in any of the waters of Alaska over which the United States has jurisdiction, and within such areas may establish closed seasons during which fishing may be limited or prohibited as he may prescribe. Under this authority to limit fishing in any area so set apart and reserved the Secretary may (a) fix the size and character of nets, boats, traps, or other gear and appliances to be used therein; (b) limit the catch of fish to be taken fro.m any area; (c) make such regulations as to time, means, methods, and extent of fishing as he may deem advisable. From and after the creation of any such fishing area and during the time fishing is prohibited therein it shall be unlawful to fish therein or to operate therein any boat, seine, trap, or other gear or apparatus for the.purpose of taking fish; arid from and after the creation of any such fishing area in which limited fishing is permitted such fishing shall be carried on only during the time, in the manner, to the extent, and in conformity with such rules and regulations as the Secretary prescribes under the authority herein given: Provided, That every such regulation made by the Secretary of Commerce shall be of general application within the particular area to which it applies, and that no exclusive or several right of fishery shall be granted therein, nor shall any citizpn of the United States be denied the right to take, prepare, cure, or preserve fish or shellfish in any area of the waters of Alaska where fishirig is permitted by the Secretary of Commerce....” (See for definition of “several,” 2 Bl. Com. 39-40.)
These are the statutes and orders that created the situation that led to this litigation.
The issuance of the White Act regulation of March 22, 1946, brought concern to the commercial fishing, interests of Alaska. This w{is because of its drastic penalties. Sep note 49, infra. The native village of Karluk spoken of in Order No. 128 establishing the reservation is situated ón the Karluk; River, long recognized as one of the most important salmon spawning streams of Alaska. The natives live at its mouth on Shelikof Strait. There the salmon must congregate from the Strait to enter the channel of the river leading to their spawning grounds in the interior of Kodiak Island. The waters included in the reservation are those, stretching eight miles along the coast north and south of the mouth, 3,000 feet into the -Strait. Thus the best of the Karluk salmon fishery is put into the reservation by Order,No. 128. For an understanding of the locality, a sketch map is appended.
The importance of the Karluk fishery will be appreciated by reference to a few of the facts in connection with'When Russia ceded Alaska to the United. States in 1867, 15 Stat'. 539, Karluk was already well known as an abundant salmon fishery. By 1885 the salmon canneries were flourishing and Bancroft reports the Karluk pack at 36,000 cases out of a total of 65,000. The production continued large. The red salmon was most prolific. There were variations in the catch but it was always valuable. In later years, the fluctuations continued and other varieties increased relatively.
None of the respondent companies have packing plants at Karluk. All are, however, on Kodiak Island, which is around 100 miles long and 50 broad, and within fishing distance of the reservation waters. There is a fish refrigeration plant on the river. These canners^ 1iaye canned fish from these waters for from seven to twenty-four years. The percentage of each canner’s pack" that comes from the reserved waters is so large thatdhe trial court found irreparable injury to the packers if they could not obtain the catch of the reservation... no other replacement source of such salmon for -their canneries on Kodiak Island is available to them.” The canners’ investment is substantial, running from two to five hundred thousand dollars respectively. The fishing is done by men who own their own three- to four-man boats, use similar company boats or operate under boat-buying contracts. Prices for the catch vary for these classifications. These packers employ over four hundred fishermen, chiefly residents of Alaska, and over six hundred cannery employees, chiefly nonresidents.
The fishing season at Karluk begins around June 1 and continues intermittently, depending upon the run of fish, until Sept. 30. After the issuance of § 208.23 (r) restricting the fishery at Karluk Reservation to Karluk natives and licensees, respondents brought this action against the Regional Director for the Territory of Alaska of the Fish and Wildlife Service to permanently enjoin the exclusion of their fishermen from the reservation on the ground that neither regulation § 208.23 (r) nor Public Land Order No. 128- legally closed the fishery of the coastal waters to respondents. The District Court granted the permanent injunction and held invalid both the regulation and the land order. 67 F. Supp. 43. On the same grounds the Court of Appeals for the Ninth Circuit affirmed the order for permanent injunction. 165 F.' 2d 323.
I.
(a) At the outset the United States-contends that the Secretary of the Interior is an indispensable party who must be joined as a party defendant in order to give the.District Court jurisdiction of this suit. In Williams v. Fanning, 332 U. S. 490, the test as to whether a superior official can be dispensed with as a party was stated to be whether “the decree which is entered will effectively, grant the relief desired by expending itself" on the subordinate official who is before the court.” P. 494. Such is the' precise situation here. Nothing is required of the Secretary; he does not have to perform any act,.either directly or indirectly. Respondents merely seek an injunction restraining petitioner from interfering with their fishing. No affirmative action is required of petitioner, and if he and his subordinates cease their interference, respondents have been accorded all the relief which they seek. The issues of the instant suit can be settled by a decree between these parties without having the’ Secretary of the Interior as a party to the litigation.
(b) Petitioner, Regional Director for the Territory of Alaska of the Fish and Wildlife Service of the Interior Department, is charged with the duty of enforcing the acts of Congress relating to the fisheries of Alaska and regulations issued thereunder. The District Court found that since March 22, 1946, the effective date of § 208.23 (r) of the Alaska Fisheries General Regulations, petitioner has continually threatened the seizure of all boats and éqúipment used to fish in the waters covered by this regulation to respondents’ substantial and irreparable loss, and that the seasonal run of salmon in the reservation waters was essential for respondents’ profitable operation. From the following facts it will be seen that there is sufficient evidence to support these findings.
After the promulgation of the fishery regulation, § 208.23 (r), the Warden for the Fish and Wildlife Service qn Kodiak Island, one of petitioner’s subordinate agents, repeatedly informed officials of the canneries that the regulation would be enforced and. that the necessary steps would be taken to prosecute any violations. He communicated to the representatives of the canneries the contents of a telegram in which petitioner directed that a case to test the regulation be arranged for the opening day of the fishing season. The contents of this telegram were relayed to the headquarters in Seattle of the Alaska Salmon Industry, Inc., a trade association of the canned salmon packers of which all but one of respondents are members. Thence the information was distributed to all interested parties. ■ The Kodiak warden then reiterated to the cannery operators on that island his intention to enforce the regulation even though his fo?ce and equipment were inadequate for the purpose.
Thereafter two officers of the Indian Service were appointed special agents for the Fish and Wildlife Service to assist in the enforcement of the fishing regulations issued by the Interior Department. They arrived at Karluk June 24, 1946. These two deputies were armed and maintained a boat patrol in the waters of the reservation. They checked the names of boats fishing in the waters of the reservation against the permits issued by the village of Karluk. No boats were allowed inside the area which had been restricted for beach seining by vote of the Indian meeting of May 23, 1944, and which was marked off by buoys.
- If respondents show that they are without an adequate remedy at law and will suffer irreparable injury unless the enforcement of the alleged invalid regulation is restrained, a civil court'will enjoin. While ordinarily criminal prosecutions will not be restrained even under an invalid statute, a civil action will lie in exceptional circumstances that make an injunction necessary to effectually protect property rights.
The facts heretofore detailed as to the investments of respondents in canneries and fishing equipment and their established activities in the waters of the reservation make clear the serious effect on them of exclusion from the reservation. It is not a threat of a single prosecution, as in the Spielman case, but an ousting of respondents and their employees from the fishing grounds unless each individual person takes a fishing license. Under the findings the respondénts could not operate profitably if prohibited from fishing in the reservation area. Many fishermen may stay away from, the grounds for fear of punishment. In the pursuit of their.otherwise lawful business respondents are threatened with criminal prosecution should they fish in the waters of the Karluk Reservation without a permit from the native village. For the violation of the applicable regulation under the White Act, severe penalties are imposed, including fine, imprisonment, the. summary seizure of boats, haul, gear, equipment, and their forfeiture to the United States. These sanctions deny to respondents an adequate remedy at law, for to challenge the regulation in an ordinary criminal proceeding is to hazard -a loss against the payment of a license fee and compliance with the fishing rules of the natives. Yet to stay out of the reservation prevents the profitable operation of the canneries. In such a sitúaHon-a majority of the Court thinks that the “danger of irreparable loss is both great arid immediate” arid properly calls forth the jurisdiction of the court of equity.
II.
Respondents sought this injunction forbiddirig criminal proceedings aimed^ at excluding them from fishing in the coastal waters of K'arluk Reservation.on-the ground that Public Land Order No. 128, note 1, supra, Was invalid as a whole and particularly because of thé inclusion of tidelarids and coastal Waters by § 2 of the order.
Respondents attack in their complaint the validity of the entire order because “no part, of the land area involved had been withdrawn by Executive Order and placed urider the jurisdiction of the Department ofrthe. Interior prior to May 1, 1936, as required by the -Act of May 1, 1936.” This position has not been pressed or decided. The final order for an injunction against petitioner does not include any ruling on that point..
Nor do we think the authority of the Secretary of the.Interior to establish the Karluk Reservation, Public Land Order 128, by virtue of the use and occupancy of the area 'by the natives under § 8 of the Act of May 17, 1884,.23 Stat. 26, or §§14 or 15 of the Act of March 3, 1891, 26Btat. 1101, need be decided. While the point is referred to in the briefs, no such issue was tendered by the complaint; no such point was.raised by the assignments of error; the question was specifically pretermitted by the-opinion of the Court of Appeals, 165 F. 2d at 325.; it is not included in the questions presented by the petition for certiorari and is not relied upon by the respondents to require affirmance of the Court of Appeals decree.^
(a) The validity of Public Land Order 128 depends in this case on the scope of the power granted, to the Secretary to establish this reservation by the language of § 2. of the Act of May 1, 1936, supra, authorizing the Secretary of the Interior to designate as a. reservation “any other public lands which are actually occupied by Indians or Eskimos within said Territory.” An administrative order is presumptively valid.
In this instance, the Secretary acted under a.statute, § 2, Act' of May 1, 1936, and through delegation of presidential authority. This delegation in turn rested on the Act of June 25, 1910, 36 Stat. 847. This chain of delegated authority for the allocation of public lands in Alaska retains for future congressional'a'ction the power for the ultimate disposition of the. property, land and water, within the boundaries of the reservation; Withdrawals under the Act of June 25, 1910, are “temporary” and “until revoked by him or by an Act of Congress.”
The Wheeler-Howard Act of June 18, 1934, “To conserve and develop. Indian lands and resources,” which was. extended to the Territory of Alaska by § 1 of the Act of May 1, 1936, authorized the Secretary of the Interior to restore to tribal ownership only the remaining surplus lands of any Indian reservation theretofore opened for sale or other disposition. It did not authorize the creation of reservations of any kind. Its only reference to acquisition of lands by or for Indians is in § 5 where appropriations are authorized for that purpose. This section is inapplicable here.
'Section 2 of the extending act, set out at the beginning of this opinion, page 91, supra, gives no power to the Secretary to dispose finally of federal lands. By the new section he isiauthorized simply “to designate as an Indian reservation” any other public lands which are actually occupied by Indians or Eskimos within said Territory.. There is no language in the various acts, in their legislative history, or in Land Order 128, from which an inference pan be drawn that the Secretary has or has claimed power to convey any permanent title or right to the Indians in the lands or waters of Karluk Reservation. Rather the contrary is true. In the Act of May 14,1898,30 Stat. 409, 48 U. S. 0. § 411, “Extending the homestead laws and providing for right of way.for railroads ip the District of Alaska,' and for other pprposes,” there is the express proviso that nothing contained in the Act “shall be construed as impairing in any degree the title of any State that may hereafter be erected out of the Térritory of Alaska, or any part thereof, to tide lands and beds of any of its navigable waters, or the right of such State to regulate the use thereof, nor the right of the United States to resume possession of such lands, it being declared that all such rights shall continue to be held by the United States in trust for the people of any State or States which.may hereafter be erected out of said Territory. The term ‘navigable waters/ as herein used, shall be held to include all tidal waters up to the line of ordinary high tide and all nontidal waters navigable in fact up to the line of ordinary high-water mark.” Indeed the United States affirms in its brief that Karluk Reservation- is merely a reservation “for a particular governmental use,” not a disposal of the-area. The Government says it is like Sioux Tribe v. United States, 316 U. S. 317, not like United States v. Holt Bank, 270 U. S. 49.
An Indian reservation created by Executive Order of the President conveys no right of use or occupancy to the beneficiaries beyond the pleasure of Congress or the President. Such fights may be terminated by the unilateral action of the United States without legal liability for compensation in any form even though Congress has permitted suit on the claim. Sioux Tribe v. United States, 316 U. S. 317; see United States v. Santa Fe Pacific R. Co., 314 U. S. 339 at 347. When a reservation is established by a treaty ratified by the Senate or a statute, the quality of the rights thereby secured to the occupants of the reservation depends upon the language or purpose of the congressional action. Since Congress, under :the Constitution, § 3 of Art. IV, has the power to dispose. of the lands of the United States, it may convey to or recognize such rights in the Indians, even a title equal to fee simple, as in its judgment is just. Shoshone Indians v. United States, 324 U. S. 335, 339, 340. When.Congress intends to delegate power to turn over lands to the Indians permanently, Qne would expect to and doubtless would find definite indications of such a purpose.
In the present case a determination-of the power delegated to the Secretary of the Interior by the 'Wheeler-Howard Act of June 18,1934, and § 2 of the Act of May 1,1936, is important. It is-important for the reason that a statute that authorizes permanent disposition of federal property would be most strictly construed to avoid inclusion of fisheries by implication. Petitioner argues for a holding that he power granted covers water as well as land. If that power were broad enough to enable the Secretary to designate nonrevocable or permanent reservations of all Alaska fishing grounds for the sole benefit of "natives living in villages adjacent to the fisheries, it might place in his hands the power to grant the natives the right to exclude all other fishermen from the fisheries. In this present case, for example, it' might mean that the native residents of the Karluk Reservation would have the perpetual use and enjoyment of this valuable Karluk fishery for themselves and their licensees. On May 23,1944, a year after Public Land Order 128, the petitioner shows that there were 57 residents eligible to vote for approval of the designation of the reservation. As indicated by the cases hereinbefore cited, a recognition of such ownership in Indians might require just compensation to them of the fair value of the fishery, if the United States should desire hereafter to reopen the area, to the public under its regulations. There is much less reason to read such power of permanent disposition by the Secretary into § 2 than there was to read it into the President’s “implied grant of power” to create reservations. United States v. Midwest Oil Co., 236 U. S. 459, 475. It would take specific and unambiguous legislation to cause us to rule that Congress intended to authorize the Secretary of the Interior to alienate the Alaska fisheries permanently from public control. The argument that Congress did not intend to authorize the designation of water or fisheries as a part of an Indian reservation has behind it the unarticulated premise that the United States must have complete power to protect, improve and regulate for the good of all our people these unrivalled sea fisheries with their wealth of food. It loses much of its force by our conclusion that Alaskan Indian reservations established or enlarged under § 2 are subject to the unfettered will of Congress.
(b) An argument that the reservation is a nonrevocable grant can be made. Under the Act of June 18, 1934, § 16, applicable to Alaska, see § 13, an Indian tribe was authorized to adopt a constitution and by-laws for its government. This was done by the Karluk Reservation Indians. There is a phrase in the section that has color of recognition of ownership of tribal lands in the Indians. It reads as follows:
“In. addition to all powers vested in any Indian tribe or tribal council by existing law, the constitution adopted by said tribe shall also vest in such tribe or its tribal council the following rights and powers:... to prevent the sale, disposition, lease, or encumbrance of tribal lands; interests in lands, or other tribal assets without the consent of 'the tribe;... 48 Stat. 987. -.
We think, however, in view of the breadth of the coverage of the Wheeler-Howard Act that this language would be effective only where there has been specific recognition by the United States of Indian rights, to control absolutely tribal lands.
Persuasive of this conclusion is that the bill when originally proposed by Interior provided in § 7 of Title III that “Title to any land acquired pursuant to the provisions of this section shall be taken in the name of the. United States in trust for the Indian tribe or community for whom the land is acquired, but title may be transferred by the Secretary to such community under the conditions set forth in this Act.” The italicized words were omitted when this section was incorporated into § 5 of the Wheeler-Howard Act. See Hearings before House Committee on Indian Affairs, 73d Cong., 2d Sess., on H. R. 7902, p, 9..
Turning to § 2 of the Act of May 1, 1936, the strongest argument for the nonrevocability of a reservation created under § 2 of that Act comes from a letter of the Secretary of the Interior printed in the House and Senate Reports on the bill which became the Act in- question. The reports, speaking of § 2, said:
“This provision in reality carries out the promise Of this • Government contained in its act approved on May 17, 1884 (23 Stat. 26), as follows:
“ ‘Provided, That the'Indians or other persons in said district shall not be disturbed in the possession of any lands actually.; in their use or occupation or now' claimed by them but the terms under which such' persons may acquire title to such lands is reserved for future legislation by Congress.’ ” H. R. Rep. bfo. 2244, 74th Cong., 2d Sess., p. 3.
The pertinent part of the letter is set out below. The legislation was, of course, a fulfillment of the aid foreshadowed in the statutes referred to in the letter. Such references to general legislation on public lands in the huge Territory of Alaska, however, cannot be treated as an adequate basis for courts to declare that power was. given the Secretary of the Interior to dispose finally of ■Alaska lands. The first section of the Act of May 1 was a mere amendment of the Wheeler-Howard Act. to bring Alaska under its coverage. The Wheeler-Howard Act did not-authorize.the creation of Indian reservations. Section 2 of the act extending the Wheeler-Howard.Act to Alaska was intended to permit the organization of the Alaska natives so that they could avail themselves of the earlier Act. It cannot be said, we think, that such reservations may be permanent or nonrevocable. A reading of § 2 will show.that there are no words with the connotation of recognition or conveyance of title. There, are no words, such as appear in other statutes, res&Fving the right of exploration, discovery and claim for precious, metals and valuable minerals. There is no discussion in the reports or the debates that show a definite. intention of anyone to part with, public property to establish an Alaskan Indian communal system. Under such circumstances, we think the land and water reservations created under § 2 are reservations at will.
(c) Wjs are convinced that § 2 of the Act of May 1, :1936, authorizes, the Secretary of the Interior to include in the Karluk Reservation the waters described in § 2 of Public Land Order Ño. 128. To interpret the clause “or any other public lands which are actually occupied by Indians • or Eskimos within said Territory” to describe only land above mean low tide is too restrictive in view of the history and habits of Alaska natives and the course of administration of Indian affairs in that Territory. ’ The title to the uplands and'waters in question is in the United States. The fisheries as well as the uplands are subject to its present control. In 1868 Congress extended<>our laws relating to customs, commerce and navigation over the “mainland, islands, and waters of the territory.” 15 Stat. 240. The seal islands and the’ waters adjacent thereto were promptly made a reservation for the preservation and exploitation of the seal 'fishery. 15 Stat. 348, 16 Stat. 180! A civil government for the new territory was set up in 1884. 23 Stat. 24. In that, act appeared the proviso referred to supra, n. 31, in the letter of the Secretary of the Interior. By § 12 a commission was empowered to report upon the condition of the Indians. On June 30, 1885, the 'Commission reported to the Secretary of the Interior as to the fisheries in the words in the margin below.
By virtue of § 15 of the act of Congress of March 3, 1891, supra, note 28, the Congress set apart the “body of lands known as Annette Islands” in Alaska for a reservation for the Metlakahtla Indians. Nothing was said as to-fishing rights. A. presidential proclamation, of April 28, 1916, reserved to them the surrounding waters within 3,000 feet. 39'Stat. 1777. After the proclamation a proceeding was brought by the United States relying upon the statute and proclamation to oust.a fish trap of the Alaska Pacific Fisheries from the waters mentioned inNhe-' proclamation. Such a decree was obtained in th§ District Court and affirmed by the Uriited. States Court of Appeals for the Ninth Circuit On the ground "that the reservation of Annette Island by the act of Congress, and of its. surrounding waters by the Presidents proclamation, is fully sustained.” Alaska Pacific Fisheries v. United States, 240 F. 274 | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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25
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TOILET GOODS ASSOCIATION, INC., et al. v. GARDNER, SECRETARY OF HEALTH, EDUCATION, AND WELFARE, et al.
No. 336.
Argued January 16, 1967.
Decided May 22, 1967.
Edward J. Boss argued the cause and filed a brief for petitioners.
Nathan Lewin argued the cause for respondents. With him on the briefs were Solicitor General Marshall, Assistant Attorney General Vinson, Beatrice Rosenberg, Jerome M. Feit and William W. Goodrich.
Mr. Justice Harlan
delivered the opinion of the Court.
Petitioners in this case are the Toilet Goods Association, an organization of cosmetics manufacturers accounting for some 90% of annual American sales in this field, and 39 individual cosmetics manufacturers and distributors. They brought this action in the United States District Court for the Southern District of New York seeking declaratory and injunctive relief against the Secretary of Health, Education, and Welfare and the Commissioner of Food and Drugs, on the ground that certain regulations promulgated by the Commissioner exceeded his statutory authority under the Color Additive Amendments to the Federal Food, Drug, and Cosmetic Act, 74 Stat. 397, 21 U. S. C. §§ 321-376. The District Court held that the Act did not prohibit this type of pre-enforcement suit, that a case and controversy existed, that the issues presented were justiciable, and that no reasons had been presented by the Government to warrant declining jurisdiction on discretionary grounds. 235 F. Supp. 648. Recognizing that the subsequent decision of the Court of Appeals for the Third Circuit in Abbott Laboratories v. Celebrezze, 352 F. 2d 286, appeared to conflict with its holding, the District Court reaffirmed its earlier rulings but certified the question of jurisdiction to the Court of Appeals for the Second Circuit under 28 U. S. C. § 1292 (b). The Court of Appeals affirmed the judgment of the District Court that jurisdiction to hear the suit existed as to three of the challenged regulations, but sustained the Government’s contention that judicial review was improper as to a fourth. 360 F. 2d 677.
Each side below sought review here from the portions of the Court of Appeals’ decision adverse to it, the Government as petitioner in Gardner v. Toilet Goods Assn., No. 438, and the Toilet Goods Association and other plaintiffs in the present case. We granted certiorari in both instances, 385 U. S. 813, as we did in Abbott Laboratories v. Gardner, No. 39, 383 U. S. 924, because of the apparent conflict between the Second and Third Circuits. The two Toilet Goods cases were set and argued together with Abbott Laboratories.
In our decisions reversing the judgment in Abbott Laboratories, ante, p. 136, and affirming the judgment in Gardner v. Toilet Goods Assn., post, p. 167, both decided today, we hold that nothing in the Food, Drug, and Cosmetic Act, 52 Stat. 1040, as amended, bars a pre-enforcement suit under the Administrative Procedure Act, 5 U. S. C. §§ 701-704 (1964 ed., Supp. II), and the Declaratory Judgment Act, 28 U. S. C. § 2201. We nevertheless agree with the Court of Appeals that judicial review of this particular regulation in this particular context is inappropriate at this stage because, applying the standards set forth in Abbott Laboratories v. Gardner, the controversy is not presently ripe for adjudication.
The regulation in issue here was promulgated under the Color Additive Amendments of 1960, 74 Stat. 397, 21 U. S. C. §§ 321-376, a statute that revised and somewhat broadened the authority of the Commissioner to control the ingredients added to foods, drugs, and cosmetics that impart color to them. The Commissioner of Food and Drugs, exercising power delegated by the Secretary, 22 Fed. Reg. 1051, 25 Fed. Reg. 8625, under statutory authority “to promulgate regulations for the efficient enforcement” of the Act, § 701 (a), 21 U. S. C. § 371 (a), issued the following regulation after due public notice, 26 Fed. Reg. 679, and consideration of comments submitted by interested parties:
“(a) When it appears to the Commissioner that a person has:
“(4) Refused to permit duly authorized employees of the Food and Drug Administration free access to all manufacturing facilities, processes, and formulae involved in the manufacture of color additives and intermediates from which such color additives are derived;
“he may immediately suspend certification service to such person and may continue such suspension until adequate corrective action has been taken.” 28 Fed. Reg. 6445-6446; 21 CFR § 8.28.
The petitioners maintain that this regulation is an impermissible exercise of authority, that the FDA has long sought congressional authorization for free access to facilities, processes, and formulae (see, e. g., the proposed “Drug and Factory Inspection Amendments of 1962,” H. R. 11581, 87th Cong., 2d Sess.; Hearings before the House Committee on Interstate and Foreign Commerce on H. R. 11581 and H. R. 11582, 87th Cong., 2d Sess., 67-74; H. R. 6788, 88th Cong., 1st Sess.), but that Congress has always denied the agency this power except for prescription drugs. § 704, 21 U. S. C. § 374. Framed in this way, we agree with petitioners that a “legal” issue is raised, but nevertheless we are not persuaded that the present suit is properly maintainable.
In determining whether a challenge to an administrative regulation is ripe for review a twofold inquiry must be made: first to determine whether the issues tendered are appropriate for judicial resolution, and second to assess the hardship to the parties if judicial relief is denied at that stage.
As to the first of these factors, we agree with the Court of Appeals that the legal issue as presently framed is not appropriate for judicial resolution. This is not because the regulation is not the agency’s considered and formalized determination, for we are in agreement with petitioners that under this Court’s decisions in Frozen Food Express v. United States, 351 U. S. 40, and United States v. Storer Broadcasting Co., 351 U. S. 192, there can be no question that this regulation — promulgated in a formal manner after notice and evaluation of submitted comments — is a “final agency action” under § 10 of the Administrative Procedure Act, 5 U. S. C. § 704. See Abbott Laboratories v. Gardner, ante, p. 136. Also, we recognize the force of petitioners’ contention that the issue as they have framed it presents a purely legal question : whether the regulation is totally beyond the agency’s power under the statute, the type of legal issue that courts have occasionally dealt-with without requiring a specific attempt at enforcement, Columbia Broadcasting System v. United States, 316 U. S. 407; cf. Pierce v. Society of Sisters, 268 U. S. 510, or exhaustion of administrative remedies, Allen v. Grand Central Aircraft Co., 347 U. S. 535; Skinner & Eddy Corp. v. United States, 249 U. S. 557.
These points which support the appropriateness of judicial resolution are, however, outweighed by other considerations. The regulation serves notice only that the Commissioner may under certain circumstances order inspection of certain facilities and data, and that further certification of additives may be refused to those who decline to permit a duly authorized inspection until they have complied in that regard. At this juncture we have no idea whether or when such an inspection will be ordered and what reasons the Commissioner will give to justify his order. The statutory authority asserted for the regulation is the power to promulgate regulations “for the efficient enforcement” of the Act, § 701 (a). Whether the regulation is justified thus depends not only, as petitioners appear to suggest, on whether Congress refused to include a specific section of the Act authorizing such inspections, although this factor is to be sure a highly relevant one, but also on whether the statutory scheme as a whole justified promulgation of the regulation. See Wong Yang Sung v. McGrath, 339 U. S. 33, 47. This will depend not merely on an inquiry into statutory purpose, but concurrently on an understanding of what types of enforcement problems are encountered by the FDA, the need for various sorts of supervision in order to effectuate the goals of the Act, and the safeguards devised to protect legitimate trade secrets (see 21 CFR § 130.14 (c)). We believe that judicial appraisal of these factors is likely to stand on a much surer footing in the context of a specific application of this regulation than could be the case in the framework of the generalized challenge made here.
We are also led to this result by considerations of the effect on the petitioners of the regulation, for the test of ripeness, as we have noted, depends not only on how adequately a court can deal with the legal issue presented, but also on the degree and nature of the regulation's present effect on those seeking relief. The regulation challenged here is not, analogous to those that were involved in Columbia Broadcasting System, supra, and Storer, supra, and those other color additive regulations with which we deal in Gardner v. Toilet Goods Assn., post, p. 167, where the impact of the administrative action could be said to be felt immediately by those subject to it in conducting their day-to-day affairs. See also Federal Communications Comm’n v. American Broadcasting Co., 347 U. S. 284.
This is not a situation in which primary conduct is affected — when contracts must be negotiated, ingredients tested or substituted, or special records compiled. This regulation merely states that the Commissioner may authorize inspectors to examine certain processes or formulae; no advance action is required of cosmetics manufacturers, who since the enactment of the 1938 Act have been under a statutory duty to permit reasonable inspection of a “factory, warehouse, establishment, or vehicle and all pertinent equipment, finished and unfinished materials; containers, and labeling therein.” § 704 (a). Moreover, no irremediable adverse consequences flow from requiring a later challenge to this regulation by a manufacturer who refuses to allow this type of inspection. Unlike the other regulations challenged in this action, in which seizure of goods, heavy fines, adverse publicity for distributing “adulterated” goods, and possible criminal liability might penalize failure to comply, see Gardner v. Toilet Goods Assn., post, p. 167, a refusal to admit an inspector here would at most lead only to a suspension of certification services to the particular party, a determination that can then be promptly challenged through an administrative procedure, which in turn is reviewable by a court. Such review will provide an adequate forum for testing the regulation in a concrete situation.
It is true that the administrative hearing will deal with the “factual basis” of the suspension, from which petitioners infer that the Commissioner will not entertain and consider a challenge to his statutory authority to promulgate the regulation. Whether or not this assumption is correct, given the fact that only minimal, if any, adverse consequences will face petitioners if they challenge the regulation in this manner, we think it wiser to require them to exhaust this administrative process through which the factual basis of the inspection order will certainly be aired and where more light may be thrown on the Commissioner’s statutory and practical justifications for the regulation. Compare Federal Security Adm’r v. Quaker Oats Co., 318 U. S. 218. Judicial review will then be available, and a court at that juncture will be in a better position to deal with the question of statutory authority. Administrative Procedure Act § 10 (e) (B)(3), 5 U. S. C. § 706 (2)(C).
For these reasons the judgment of the Court of Appettls is
Affirmed.
Mr. Justice Douglas dissents for the reasons stated by Judge Tyler of the District Court, 235 F. Supp. 648, 651-652.
Mr. Justice Brennan took no part in the consideration or decision of this case.
[For concurring opinion of Mr. Justice Fortas, see post, p. 174.]
The Color Additive Amendments provide for listings of color additives by the Secretary “if and to the extent that such additives are suitable and safe . . . .” § 706 (b) (1), 21 U. S. C. § 376 (b)(1). The Secretary is further authorized to provide “for the certification, with safe diluents or without diluents, of batches of color additives . . . §706 (c), 21 U. S. C. §376 (c). A color additive is “deemed unsafe” unless it is either from a certified batch or exempted from the certification requirement, §706 (a), 21 U. S. C. §376 (a). A cosmetic containing such an “unsafe” additive is deemed to be adulterated, §601 (e), 21 U. S. C. §361 (e), and is prohibited from interstate commerce. § 301 (a), 21 U. S. C. § 331 (a).
See 21 CFR §§ 8.28(b), 130.14r-130.26. We recognize that a denial of certification might under certain circumstances cause inconvenience and possibly hardship, depending upon such factors as how large a supply of certified additives the particular manufacturer may have, how rapidly the administrative hearing and judicial review are conducted, and what temporary remedial or protective provisions, such as compliance with a reservation pending litigation, might be available to a manufacturer testing the regulation. In the context of the present case we need only say that such inconvenience is speculative and we have been provided with no information that would support an assumption that much weight should be attached to this possibility.
The statute and regulations are not explicit as to whether review would lie, as Judge Friendly suggested, 360 F. 2d, at 687, to a court of appeals under §§ 701 (f) and 706 (d) of the Act, or to a district court as an appeal from the Commissioner’s “final order,” 21 CFR § 130.26, under § 10 of the Administrative Procedure Act. See 21 CFR § 130.31; compare §505, 21 U. S. C. §355. For purposes of this ease it is only necessary to ascertain that judicial review would be available to challenge any specific order of the Commisioner denying certification services to a particular drug manufacturer, and we therefore need not decide the statutory question of which forum would be appropriate for such review.
Petitioners also cite the Commissioner’s refusal, in the context of a public hearing on certain drug regulations, to entertain objections to his statutory authority to promulgate them on the ground that “This is a question of law and cannot be resolved by the taking of evidence at a public hearing.” 31 Fed. Reg. 7174.
See 3 Davis, Administrative Law Treatise §20.03, at 69 (1958). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
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"Civil Service Commission, U.S.",
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"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
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"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
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"Internal Revenue Service, Collector, Commissioner, or District Director of",
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"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
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"National Security Agency",
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"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
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"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
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"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
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"Unidentifiable",
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"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
61
] | sc_adminaction |
CISNEROS, SECRETARY OF HOUSING AND URBAN DEVELOPMENT, et al. v. ALPINE RIDGE GROUP et al.
No. 92-551.
Argued March 30, 1993 —
Decided May 3, 1993
Michael R. Dreeben argued the cause for petitioners. With him on the briefs were Solicitor General Starr, Acting Solicitor General Wallace, Assistant Attorney General Gerson, Deputy Solicitor General Roberts, Douglas Letter, Howard M. Schmeltzer, and Barton Shapiro.
Warren J. Daheim argued the cause for respondents. With him on the brief for respondent Alpine Ridge Group was Donald W. Hanford. Milton Eisenberg and Leonard A. Zax filed a brief for respondents Acacia Villa et al.
Robert M. Weinberg and Laurence Gold filed a brief for the American Federation of Labor and Congress of Industrial Organizations as amicus curiae urging reversal.
Briefs of amici curiae urging affirmance were filed for Charter Federal Savings Bank by Thomas M. Buchanan; for the National Association of Home Builders et al. by Ronda L. Daniels; for Southwind Acres Associates et al. by Larry Derryberry; and for Statesman Savings Holding Corp. et al. by Charles J. Cooper, Robert J. Cynkar, and Michael A Carvin.
Justice White
delivered the opinion of the Court.
The question presented in this case is whether § 801 of the Department of Housing and Urban Development Reform Act of 1989, 103 Stat. 2057, violates the Due Process Clause of the Fifth Amendment by abrogating respondents’ contract rights to certain rental subsidies.
I
A
In 1974, Congress amended the United States Housing Act of 1937 (Housing Act) to create what is known as the Section 8 housing program. Through the Section 8 program, Congress hoped to “ai[d] low-income families in obtaining a decent place to live,” 42 U. S. C. § 1437f(a) (1988 ed., Supp. III), by subsidizing private landlords who would rent to low-income tenants. Under the program, tenants make rental payments based on their income and ability to pay; the Department of Housing and Urban Development (HUD) then makes “assistance payments” to the private landlords in an amount calculated to make up the difference between the tenant’s contribution and a “contract rent” agreed upon by the landlord and HUD. As required by the statute, this contract rent is, in turn, to be based upon “the fair market rental” value of the dwelling, allowing for some modest increase over market rates to account for the additional expense of participating in the Section 8 program. See §1437f(c)(l).
The statute, as originally enacted, further provided that monthly rents for Section 8 housing would be adjusted at least annually as follows:
“(A) The assistance contract shall provide for adjustment annually or more frequently in the maximum monthly rents for units covered by the contract to reflect changes in the fair market rentals established in the housing area for similar types and sizes of dwelling units or, if the Secretary determines, on the basis of a reasonable formula.
“(C) Adjustments in the maximum rents as herein-before provided shall not result in material differences between the rents charged for assisted and comparable unassisted units, as determined by the Secretary.” 42 U. S. C. §§ 1437f(c)(2)(A) and (C) (1982 ed.).
The respondents in this ease are private developers who entered into long-term contracts with HUD — known as Housing Assistance Payments (HAP) Contracts or “assistance contracts” — to lease newly constructed apartment units to Section 8 tenants. Their contracts established initial contract rents for each unit and provided, consistent with the statutory authorization, that these rents would be adjusted regularly, on the basis of a reasonable formula, to keep pace with changes in rental values in the private housing market. Section 1.9b of their contracts provides:
“b. Automatic Annual Adjustments
“(1) Automatic Annual Adjustment Factors will be determined by the Government at least annually; interim revisions may be made as market conditions warrant. Such Factors and the basis for their determination will be published in the Federal Register. . . .
“(2) On each anniversary date of the Contract, the Contract Rents shall be adjusted by applying the applicable Automatic Annual Adjustment Factor most recently published by the Government. Contract Rents may be adjusted upward or downward, as may be appropriate; however, in no case shall the adjusted Contract Rents be less than the Contract Rents on the effective date of the Contract.” App. to Brief for Petitioners 8a.
The Automatic Annual Adjustment Factors to which the contracts refer are developed by HUD based upon market trends recorded by the Consumer Price Index and the Bureau of the Census American Housing Surveys.
Section 1.9d of the contracts, in part tracking the language of § 8(c)(2)(C) of the Housing Act, 42 U. S. C. § 1437f(c)(2)(C) (1988 ed., Supp. III), provides:
“d. Overall Limitation. Notwithstanding any other provisions of this Contract, adjustments as provided in this Section shall not result in material differences between the rents charged for assisted and comparable unassisted units, as determined by the Government; provided that this limitation shall not be construed to prohibit differences in rents between assisted and comparable unassisted units to the extent that such differences may have existed with respect to the initial Contract Rents.” App. to Brief for Petitioners 8a-9a.
B
In the early 1980’s, HUD began to suspect that the assistance payments it was making to some landlords under the Section 8 program were well above prevailing market rates for comparable housing. Accordingly, the agency began to conduct independent “comparability studies” in certain real estate markets where it believed that contract rents, adjusted upward by the automatic adjustment factors, were materially out of line with market rents. Under these studies, HUD personnel would select between three and five other apartment buildings they considered comparable to the Section 8 building and compare their rents. The private market rents would then serve as an independent cap limiting the rent payments HUD would make under the Section 8 contracts.
After several landlords brought suit, the Court of Appeals for the Ninth Circuit ruled in 1988 that the standard assistance contracts described above prohibited the use of comparability studies as an independent cap on rents. In Rainier View Associates v. United States, 848 F. 2d 988, the Court of Appeals reasoned that HUD, having contracted to increase rents automatically each year based upon a reasonable formula (the second of the two alternative approaches permitted by § 8(c)(2)(A) of the Housing Act, see supra, at 12-13), could not thereafter limit those increases by means of a market survey (the first of the two statutory alternatives). “Having made its choice,” the court wrote, “HUD cannot now change its mind.” 848 F. 2d, at 991.
After this Court denied certiorari to review the Rainier View decision, 490 U. S. 1066 (1989), HUD made clear its intention not to adhere to that decision’s interpretation of its contracts outside the Ninth Circuit. Faced with the prospect of inconsistent application of Government contracts depending solely upon geography, Congress attempted to resolve the matter through amendments to the Housing Act in late 1989. Section 801 of the Department of Housing and Urban Development Reform Act (Reform Act), 103 Stat. 2057, amended § 8(c)(2)(C) of the Housing Act to provide explicitly that HUD may limit automatic rent adjustments in the future through the use of independent comparability-studies. In an apparent compromise, however, the same section also sought to restore to Section 8 project owners a portion of the automatic rent adjustments they had been denied through the use of comparability studies prior to the enactment of the 1989 amendments. The amendments thus offered Section 8 project owners a partial retroactive remedy for lost rent attributable to comparability studies while at the same time affirming HUD’s authorization to employ such studies to cap future rent adjustments.
c
In this litigation, respondents have alleged that §801 of the Reform Act violates the Due Process Clause of the Fifth Amendment by stripping them of their vested rights under the assistance contracts to annual rent increases based on the automatic adjustment factors alone. In separate lawsuits, the United States District Courts for the Western District of Washington and the Central District of California each granted summary judgment for respondents. The Court of Appeals for the Ninth Circuit, in a consolidated appeal, affirmed both judgments. Alpine Ridge Group v. Kemp, 955 F. 2d 1382 (1992). Refusing to reconsider its earlier holding in Rainier View, supra, the court first reaffirmed that the assistance contracts prohibited HUD from capping rents based on independent comparability studies. See 955 F. 2d, at 1384-1385. The court then held that Congress’ attempt to authorize such caps through the Reform Act unconstitutionally deprived respondents of their “vested property interest in formula-based rent adjustments pursuant to their section 8 contracts.” Id., at 1387.
We granted certiorari, 506 U. S. 984 (1992), and now reverse.
II
We begin our analysis of respondents’ due process claim with the assistance contracts. Because we find that those contracts do not prohibit the use of comparability studies to impose an independent cap on the formula-based rent adjustments, our analysis ends there as well.
In our view, respondents’ claimed entitlement to formula-based rent adjustments without regard to independent comparisons to private-market rents is precluded by the plain language of the assistance contracts. To be sure, § 1.9b(2) of those contracts provides that the contract rents “shall be adjusted [annually] by applying the applicable Automatic Annual Adjustment Factor most recently published by the Government.” Section 1.9d of the contracts, however, imposes what is labeled an “[ojverall [ljimitation” on the formula-based adjustments provided by § 1.9b. It provides that u[n]otwithstanding any other provisions of this Contract, adjustments as provided in this Section shall not result in material differences between the rents charged for assisted and comparable unassisted units, as determined by the Government” (emphasis added). As we have noted previously in construing statutes, the use of such a “notwithstanding” clause clearly signals the drafter’s intention that the provisions of the “notwithstanding” section override conflicting provisions of any other section. See Shomberg v. United States, 348 U. S. 540, 547-548 (1955). Likewise, the Courts of Appeals generally have “interpreted similar ‘notwithstanding’ language... to supersede all other laws, stating that ‘“[a] clearer statement is difficult to imagine.”’” Liberty Maritime Corp. v. United States, 289 U. S. App. D. C. 1, 4, 928 F. 2d 413, 416 (1991) (quoting Crowley Caribbean Transport, Inc. v. United States, 275 U. S. App. D. C. 182, 184, 865 F. 2d 1281, 1283 (1989) (in turn quoting Illinois National Guard v. FLRA, 272 U. S. App. D. C. 187, 194, 854 F. 2d 1396, 1403 (1988))); see also Bank of New England Old Colony, N. A. v. Clark, 986 F. 2d 600, 604 (CA1 1993); Dean v. Veterans Admin. Regional Office, 943 F. 2d 667, 670 (CA6 1991), vacated and remanded on other grounds, 503 U. S. 902 (1992); In re FCX, Inc., 853 F. 2d 1149, 1154 (CA4 1988), cert. denied sub nom. Universal Cooperatives, Inc. v. FCX, Inc., 489 U. S. 1011 (1989); Multi-State Communications, Inc. v. FCC, 234 U. S. App. D. C. 285, 291, 728 F. 2d 1519, 1525, cert. denied, 469 U. S. 1017 (1984); New Jersey Air National Guard v. FLRA, 677 F. 2d 276, 283 (CA3), cert. denied sub nom. Government Employees v. New Jersey Air National Guard, 459 U. S. 988 (1982). Thus, we think it clear beyond peradventure that § 1.9d provides that contract rents “shall not” be adjusted so as to exceed materially the rents charged for “comparable unassisted units” on the private rental market — even if other provisions of the contracts might seem to require such a result. This limitation is plainly consistent with the Housing Act itself, which provides that “[ajdjustments in the maximum rents,” whether based on market surveys or on a reasonable formula, “shall not result in material differences” between Section 8 rents and the rents for comparable housing on the private market. 42 U. S. C. § 1437f(e)(2)(C) (1988 ed., Supp. III).
In its Rainier View decision, the Court of Appeals read § 1.9d’s “overall limitation” as empowering HUD only to make prospective changes in the automatic adjustment factors where it discovered that those factors were producing materially inflated rents; under the court’s view, § 1.9d would not permit “abandonment of the formula method whenever application of the formula would result in a disparity between section 8 and other rents.” 848 F. 2d, at 991. But this reading of the contract — under which Section 8 project owners could demand payment of materially inflated rents until the Secretary could publish revised automatic adjustment factors aimed at curing the overpayment — is almost precisely backwards. It would entitle project owners to collect the formula-based adjustments promised by § 1.9b notwithstanding that those adjustments were resulting in the sort of material differences in rents prohibited by § 1.9d.
Reading § 1.9d’s “overall limitation” as allowing rent caps based on comparability studies does not, as the Rainier View court supposed, “render the formula method authorized by the statute and elected in the contract a nullity.” Ibid. The rent adjustments indicated by the automatic adjustment factors remain the presumptive adjustment called for under the contract. It is only in those presumably exceptional eases where the Secretary has reason to suspect that the adjustment factors are resulting in materially inflated rents that a comparability study would ensue. Because the automatic adjustment factors are themselves geared to reflect trends in the local or regional housing market, theoretically it should not be often that the comparability studies would suggest material differences between Section 8 and private-market rents.
Respondents assert that “the automatic adjustment provision was a central provision of the HAP Contracts and that the owners would not have signed contracts that expressly contained the [comparability] provision HUD asks the Court to imply.” Brief for Respondents Acacia Village et al. 22. They urge us to eschew any interpretation of the contracts that would allow the displacement of the “automatic” adjustments for which they bargained by a “project-by-project comparability process” that “would leave [project owners] at the mercy of minor HUD officials.” Brief for Respondent Alpine Ridge Group 30-31. At bottom, many of respondents’ arguments in support of the decision below seem to circle back to their vigorous contention that HUD’s comparability studies have been poorly conceived and executed, resulting in faulty and misleading comparisons. But the integrity with which the agency has carried out its comparability studies is an entirely separate matter from its contractual authority to employ such studies at all. Even if it could be demonstrated that HUD’s studies have been unreliable, this would in no way suggest that the contract forbids HUD to cap rents based on accurate and fair comparability studies. If respondents have been denied formula-based rent increases based on shoddy comparisons, their remedy is to challenge the particular study, not to deny HUD’s authority to make comparisons.
In sum, we think that the contract language is plain that no project owner may claim entitlement to formula-based rent adjustments that materially exceed market rents for comparable units. We also think it clear that § 1.9d — which by its own terms clearly envisions some comparison “between the rents charged for assisted and comparable unassisted units” — affords the Secretary sufficient discretion to design and implement comparability studies as a reasonable means of effectuating its mandate. In this regard, we observe that § 1.9d expressly assigns to “the Government” the determination of whether there exist material differences between the rents charged for assisted and comparable unassisted units. Because we find that respondents have no contract right to unobstructed formula-based rent adjustments, we have no occasion to consider whether §801 of the Reform Act unconstitutionally abrogated such a right.
Ill
For these reasons, the judgment of the Court of Appeals for the Ninth Circuit is
Reversed.
Section 8(c)(2)(C) of the Housing Act, as amended by §801 of the Reform Act, now provides: “(C) Adjustments in the maximum rents under subparagraphs (A) and (B) shall not result in material differences between the rents charged for assisted units and unassisted units of similar quality, type, and age in the same market area, as determined by the Secretary. In implementing the limitation established under the preceding sentence, the Secretary shall establish regulations for conducting comparability studies for projects where the Secretary has reason to believe that the application of the formula adjustments under subparagraph (A) would result in such material differences. The Secretary shall conduct such studies upon the request of any owner of any project, or as the Secretary determines to be appropriate by establishing, to the extent practicable, a modified annual adjustment factor for such market area, as the Secretary shall designate, that is geographically smaller than the applicable housing area used for the establishment of the annual adjustment factor under subparagraph (A). The Secretary shall establish such modified annual adjustment factor on the basis of the results of a study conducted by the Secretary of the rents charged, and any change in such rents over the previous year, for assisted units and unassisted units of similar quality, type, and age in the smaller market area. Where the Secretary determines that such modified annual adjustment factor cannot be established or that such factor when applied to a particular project would result in material differences between the rents charged for assisted units and unassisted units of similar quality, type, and age in the same market area, the Secretary may apply an alternative methodology for conducting comparability studies in order to establish rents that are not materially different from rents charged for comparable unassisted units. If the Secretary or appropriate State agency does not complete and submit to the project owner a comparability study not later than 60 days before the anniversazy date of the assistance contact under this section, the automatic annual adjustment factor shall be applied. The Secretary may not reduce the contact rents in effect on or after April 15, 1987, for newly constructed, substantially rehabilitated, or moderately rehabilitated projects assisted under this section (including projects assisted under this section as in effect prior to November 30,1983), uzzless the project has been refizianeed in a maimer that reduces the periodic payments of the owner. Any maximum monthly rent that has been reduced by the Secretary after April 14, 1987, and prior to November 7, 1988, shall be restored to the maximum monthly rent in effect on April 15,1987. For any project which has had its maximum monthly rents reduced after April 14, 1987, the Secretary shall make assistance payments (from amounts reserved for the original contract) to the owner of such project in an amount equal to the difference between the maximum monthly rents in effect on April 15,1987, and the reduced maximum monthly rents, multiplied by the number of months that the reduced maximum monthly rents were in effect.” 42 U. S. C. § 1437f(c)(2)(C) (1988 ed., Supp. III). HUD has now published proposed regulations governing the future use of comparability studies, as required by this provision. See 57 Fed. Reg. 49120 (1992).
The Rainier View court also suggested that HUD’s own regulations had interpreted the assistance contracts as barring adjustments to contract rents independent of the published factors. The court quoted 24 CFR §888.204 (1987), which states that the agency “'will consider establishing separate or revised Automatic Annual Adjustment Factors for [a] particular area'” if project owners can demonstrate that application of the formula would result in Section 8 rents substantially below market rents for comparable units. See 848 F. 2d, at 991. Although this regulation is certainly consistent with respondents’ view of the contracts, we do not believe that it is inconsistent with our understanding of the contracts’ plain language: The regulation acknowledges revision of the adjustment factors as a means of remedying material differences in rents but it does not foreclose corrective adjustments independent of the factors.
Petitioners acknowledge that “[a] comparability study must... satisfy requirements of administrative reasonableness and ‘is reviewable under administrative law principles.’” Reply Brief for Petitioners 16, n. 23 (quoting Sheridan Square Partnership v. United, States, 761 F. Supp. 738, 745, n. 3 (Colo. 1991)). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
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"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
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] | [
63
] | sc_adminaction |
WHITE, SECRETARY OF STATE OF TEXAS, et al. v. REGESTER et al.
No. 72-147.
Argued February 26, 1973
Decided June 18, 1973
White, J., delivered the opinion of the Court, in Parts I, III, and IV of which all Members joined, and in Part II of which Burger, C. J., and Stewart, Blackmun, Powell, and Rehnquist, JJ., joined. BreNNAN, J., filed an opinion concurring in part and dissenting in part, in which Douglas and Marshall, JJ., joined, post, p. 772.
Leon Jaworski, Special Assistant Attorney General of Texas, argued the cause for appellants. With him on the briefs were John L. Hill, Attorney General, Larry York, Executive Assistant Attorney General, Alton F. Gurry, Special Assistant Attorney General, and Lewis A. Jones, Assistant Attorney General.
David B. Richards argued the cause for appellees Regester et al. With him on the brief were Ronald L. Glower and James A. Mattox. Ed Idar, Jr., argued the cause for appellees Bernal et al. With him on the brief were Mario Obledo, George J. Korbel, and Frank Hernandez. Thomas Gibbs Gee argued the cause for appellees Willeford et al. With him on the brief was William Terry Bray. J. Douglas McGuire filed a brief for appellees Van Henry Archer, Jr., et al. D. Marcus Ranger and E. Brice Cunningham filed a brief for ap-pellees Washington et al.
William A. Dobrovir filed a brief for League of Women Voters of the United States et al. as amici curiae urging affirmance.
Mr. Justice White
delivered the opinion of the Court.
This case raises two questions concerning the validity of the reapportionment plan for the Texas House of Representatives adopted in 1970 by the State Legislative Redistricting Board: First, whether there were unconstitutionally large variations in population among the districts defined by the plan; second, whether the multimember districts provided for Bexar and Dallas Counties were properly found to have been invidiously discriminatory against cognizable racial or ethnic groups in those counties.
The Texas Constitution requires the state legislature to reapportion the House and Senate at its first regular session following the decennial census. Tex. Const., Art. Ill, § 28. In 1970, the legislature proceeded to reapportion the House of Representatives but failed to agree on a redistricting plan for the Senate. Litigation was immediately commenced in state court challenging the constitutionality of the House reapportionment. The Texas Supreme Court held that the legislature’s plan for the House violated the Texas Constitution. Smith v. Craddick, 471 S. W. 2d 375 (1971). Meanwhile, pursuant to the requirements of the Texas Constitution, a Legislative Redistricting Board had been formed to begin the task of redistricting the Texas Senate. Although the Board initially confined its work to the reapportionment of the Senate, it was eventually ordered, in light of the judicial invalidation of the House plan, to also reapportion the House. Mauzy v. Legislative Redistricting Board, 471 S. W. 2d 570 (1971).
On October 15, 1971, the Redistricting Board’s plan for the reapportionment of the Senate was released, and, on October 22, 1971, the House plan was promulgated. Only the House plan remains at issue in this case. That plan divided the 150-member body among 79 single-member and 11 multimember districts. Four lawsuits, eventually consolidated, were filed challenging the Board’s Senate and House plans and asserting with respect to the House plan that it contained impermissible deviations from population equality and that its multi-member districts for Bexar County and Dallas County operated to dilute the voting strength of racial and ethnic minorities.
A three-judge District Court sustained the Senate plan, but found the House plan unconstitutional. Graves v. Barnes, 343 F. Supp. 704 (WD Tex. 1972). The House plan was held to contain constitutionally impermissible deviations from population equality, and the multimember districts in Bexar and Dallas Counties were deemed constitutionally invalid. The District Court gave the Texas Legislature until July 1, 1973, to reapportion the House, but the District Court permitted the Board’s plan to be used for purposes of the 1972 election, except for requiring that the Dallas County and Bexar County multimember districts be reconstituted into single-member districts for the 1972 election.
Appellants appealed the statewide invalidation of the House plan and the substitution of single-member for multimember districts in Dallas County and Bexar County. Mr. Justice Powell denied a stay of the judgment of the District Court, 405 U. S. 1201, and we noted probable jurisdiction sub nom. Bullock v. Regester, 409 U. S. 840.
I
We deal at the outset with the challenge to our jurisdiction over this appeal under 28 U. S. C. § 1253, which permits injunctions in suits required to be heard and determined by a three-judge district court to be appealed directly to this Court. It is first suggested that the case was not one required to be heard by a three-judge court. The contention is frivolous. A statewide reapportionment statute was challenged and injunctions were asked against its enforcement. The constitutional questions raised were not insubstantial on their face, and the complaint clearly called for the convening of a three-judge court. That the court declared the entire apportionment plan invalid, but entered an injunction only with respect to its implementation for the 1972 elections in Dallas and Bexar Counties, in no way indicates that the case required only a single judge. Appellants are therefore properly here on direct appeal with respect to the injunction dealing with Bexar and Dallas Counties, for the order of the court directed at those counties was literally an order “granting . . . an . . . injunction in any civil action . . . required ... to be heard and determined by a district court of three judges” within the meaning of § 1253.
We also hold that appellants, because they appealed from the entry of an injunction, are entitled to review of the District Court’s accompanying declaration that the proposed plan for the Texas House of Representatives, including those portions providing for multimember districts in Dallas and Bexar Counties, was invalid statewide. This declaration was the predicate for the court’s order requiring Dallas and Bexar Counties to be reapportioned into single districts; for its order that “unless the Legislature of the State of Texas on or before July 1,1973, has adopted a plan to reapportion the legislative districts within the State in accordance with the constitutional guidelines set out in this opinion this Court will so reapportion the State of Texas”; and for its order that the Secretary of State “adopt and implement any and all procedures necessary to properly effectuate the orders of this Court in conformance with this Opinion . . . 343 F. Supp., at 737. In these circumstances, although appellants could not have directly appealed to this Court the entry of a declaratory judgment unaccompanied by any injunctive relief, Gunn v. University Committee, 399 U. S. 383 (1970); Mitchell v. Donovan, 398 U. S. 427 (1970), we conclude that we have jurisdiction of the entire appeal. Roe v. Wade, 410 U. S. 113 (1973); Florida Lime & Avocado Growers v. Jacobsen, 362 U. S. 73 (1960). With the Texas reapportionment plan before it, it was in the interest of judicial economy and the avoidance of piecemeal litigation that the three-judge District Court have jurisdiction over all claims raised against the statute when a substantial constitutional claim was alleged, and an appeal to us, once properly here, has the same reach. Roe v. Wade, supra, at 123; Carter v. Jury Comm’n, 396 U. S. 320 (1970); Florida Lime & Avocado Growers v. Jacobsen, supra, at 80.
II
The reapportionment plan for the Texas House of Representatives provides for 150 representatives to be selected from 79 single-member and 11 multimember districts. The ideal district is 74,645 persons. The districts range from 71,597 to 78,943 in population per representative, or from 5.8% overrepresentation to 4.1% underrepresentation. The total variation between the largest and smallest district is thus 9.9%
The District Court read our prior cases to require any deviations from equal population among districts to be justified by “acceptable reasons” grounded in state policy; relied on Kirkpatrick v. Preisler, 394 U. S. 526 (1969), to conclude that the permissible tolerances suggested by Reynolds v. Sims, 377 U. S. 533 (1964), had been substantially eroded; suggested that Abate v. Mundt, 403 U. S. 182 (1971), in accepting total deviations of 11.9% in a county reapportionment was sui generis; and considered the “critical issue” before it to be whether “the State [has] justified any and all variances, however small, on the basis of a consistent, rational State policy.” 343 F. Supp., at 713. Noting the single fact that the total deviation from the ideal between District 3 and District 85 was 9.9%, the District Court concluded that justification by appellants was called for and could discover no acceptable state policy to support the deviations. The District Court was also critical of the actions and procedures of the Legislative Reapportionment Board and doubted “that [the] board did the sort of deliberative job .. . worthy of judicial abstinence.” Id., at 717. It also considered the combination of single-member and multimember districts in the House plan “haphazard,” particularly in providing single-member districts in Houston and multimember districts in other metropolitan areas, and that this “irrationality, without reasoned justification, may be a separate and distinct ground for declaring the plan unconstitutional.” Ibid. Finally, the court specifically invalidated the use of multi-member districts in Dallas and Bexar Counties as unconstitutionally discriminatory against a racial or ethnic group.
The District Court’s ultimate conclusion was that "the apportionment plan for the State of Texas is unconstitutional as unjustifiably remote from the ideal of 'one man, one vote,’ and that the multi-member districting schemes for the House of Representatives as they relate specifically to Dallas and to Bexar Counties are unconstitutional in that they dilute the votes of racial minorities.” Id., at 735.
Insofar as the District Court’s judgment rested on the conclusion that the population differential of 9.9% from the ideal district between District 3 and District 85 made out a prima facie equal protection violation under the Fourteenth Amendment, absent special justification, the court was in error. It is plain from Mahan v. Howell, 410 U. S. 315 (1973), and Gaffney v. Cummings, ante, p. 735, that state reapportionment statutes are not subject to the same strict standards applicable to reapportionment of congressional seats. Kirkpatrick v. Preisler did not dilute the tolerances contemplated by Reynolds v. Sims with respect to state districting, and we did not hold in Swann v. Adams, 385 U. S. 440 (1967), or Kilgarlin v. Hill, 386 U. S. 120 (1967), or later in Mahan v. Howell, supra, that any deviations from absolute equality, however small, must be justified to the satisfaction of the judiciary to avoid invalidation under the Equal Protection Clause. For the reasons set out in Gaffney v. Cummings, supra, we do not consider relatively minor population deviations among state legislative districts to substantially dilute the weight of individual votes in the larger districts so as to deprive individuals in these districts of fair and effective representation. Those reasons are as applicable to Texas as they are to Connecticut; and we cannot glean an equal protection violation from the single fact that two legislative districts in Texas differ from one another by as much as 9.9%, when compared to the ideal district. Very likely, larger differences between districts would not be tolerable without justification “based on legitimate considerations incident to the effectuation of a rational state policy,” Reynolds v. Sims, 377 U. S., at 579 ; Mahan v. Howell, supra, at 325, but here we are confident that appellees failed to carry their burden of proof insofar as they sought to establish a violation of the Equal Protection Clause from population variations alone. The total variation between two districts was 9.9%, but the average deviation of all House districts from the ideal was 1.82%. Only 23 districts, all single-member, were overrepresented or underrepresented by more than 3%, and only three of those districts by more than 5%. We are unable to conclude from these deviations alone that appellees satisfied the threshold requirement of proving a prima facie case of invidious discrimination under the Equal Protection Clause. Because the District Court had a contrary view, its judgment must be reversed in this respect.
III
We affirm the District Court’s judgment, however, insofar as it invalidated the multimember districts in Dallas and Bexar Counties and ordered those districts to be redrawn into single-member districts. Plainly, under our cases, multimember districts are not per se unconstitutional, nor are they necessarily unconstitutional when used in combination with single-member districts in other parts of the State. Whitcomb v. Chavis, 403 U. S. 124 (1971); Mahan v. Howell, supra; see Burns v. Richardson, 384 U. S. 73 (1966); Fortson v. Dorsey, 379 U. S. 433 (1965); Lucas v. Colorado General Assembly, 377 U. S. 713 (1964); Reynolds v. Sims, supra. But we have entertained claims that multimember districts are being used invidiously to cancel out or minimize the voting strength of racial groups. See Whitcomb v. Chavis, supra; Burns v. Richardson, supra; Fortson v. Dorsey, supra. To sustain such claims, it is not enough that the racial group allegedly discriminated against has not had legislative seats in proportion to its voting potential. The plaintiffs’ burden is to produce evidence to support findings that the political processes leading to nomination and election were not equally open to participation by the group in question — that its members had less opportunity than did other residents in the district to participate in the political processes and to elect legislators of their choice. Whitcomb v. Chavis, supra, at 149-150.
With due regard for these standards, the District Court first referred to the history of official racial discrimination in Texas, which at times touched the right of Negroes to register and vote and to participate in the democratic processes. 343 F. Supp., at 725. It referred also to the Texas rule requiring a majority vote as a prerequisite to nomination in a primary election and to the so-called “place” rule limiting candidacy for legislative office from a multimember district to a specified “place” on the ticket, with the result being the election of representatives from the Dallas multimember district reduced to a head-to-head contest for each position. These characteristics of the Texas electoral system, neither in themselves improper nor invidious, enhanced the opportunity for racial discrimination, the District Court thought. More fundamentally, it found that since Reconstruction days, there have been only two Negroes in the Dallas County delegation to the Texas House of Representatives and that these two were the only two Negroes ever slated by the Dallas Committee for Responsible Government (DCRG), a white-dominated organization that is in effective control of Democratic Party candidate slating in Dallas County. That organization, the District Court found, did not need the support of the Negro community to win elections in the county, and it did not therefore exhibit good-faith concern for the political and other needs and aspirations of the Negro community. The court found that as recently as 1970 the DCRG was relying upon “racial campaign tactics in white precincts to defeat candidates who had the overwhelming support of the black community.” Id., at 727. Based on the evidence before it, the District Court concluded that “the black community has been effectively excluded from participation in the Democratic primary selection process,” id., at 726, and was therefore generally not permitted to enter into the political process in a reliable and meaningful manner. These findings and conclusions are sufficient to sustain the District Court’s judgment with respect to the Dallas multimember district and, on this record, we have no reason to disturb them.
IV
The same is true of the order requiring disestablishment of the multimember district in Bexar County. Consistently with Hernandez v. Texas, 347 U. S. 475 (1954), the District Court considered the Mexican-Americans in Bexar County to be an identifiable class for Fourteenth Amendment purposes and proceeded to inquire whether the impact of the multimember district on this group constituted invidious discrimination. Surveying the historic and present condition of the Bexar County Mexican-American community, which is concentrated for the most part on the west side of the city of San Antonio, the court observed, based upon prior cases and the record before it, that the Bexar community, along with other Mexican-Americans in Texas, had long "suffered from, and continues to suffer from, the results and effects of invidious discrimination and treatment in the fields of education, employment, economics, health, politics and others.” 343 F. Supp., at 728. The bulk of the Mexican-American community in Bexar County occupied the Barrio, an area consisting of about 28 contiguous census tracts in the city of San Antonio. Over 78% of Barrio residents were Mexican-Americans, making up 29% of the county’s total population. The Barrio is an area of poor housing; its residents have low income and a high rate of unemployment. The typical Mexican-American suffers a cultural and language barrier that makes his participation in community processes extremely difficult, particularly, the court thought, with respect to the political life of Bexar County. “[A] cultural incompatability . . . conjoined with the poll tax and the most restrictive voter registration procedures in the nation have operated to effectively deny Mexican-Americans access to the political processes in Texas even longer than the Blacks were formally denied access by the white primary.” 343 F. Supp., at 731. The residual impact of this history reflected itself in the fact that Mexican-American voting registration remained very poor in the county and that only five Mexican-Americans since 1880 have served in the Texas Legislature from Bexar County. Of these, only two were from the Barrio area. The District Court also concluded from the evidence that the Bexar County legislative delegation in the House was insufficiently responsive to Mexican-American interests.
Based on the totality of the circumstances, the District Court evolved its ultimate assessment of the multi-member district, overlaid, as it was, on the cultural and economic realities of the Mexican-American community in Bexar County and its relationship with the rest of the county. Its judgment was that Bexar County Mexican-Americans “are effectively removed from the political processes of Bexar [County] in violation of all the Whitcomb standards, whatever their absolute numbers may total in that County.” Id., at 733. Single-member districts were thought required to remedy “the effects of past and present discrimination against Mexican-Americans,” ibid., and to bring the community into the full stream of political life of the county and State by encouraging their further registration, voting, and other political activities.
The District Court apparently paid due heed to Whitcomb v. Chavis, supra, did not hold that every racial or political group has a constitutional right to be represented in the state legislature, but did, from its own special vantage point, conclude that the multimember district, as designed and operated in Bexar County, invidiously excluded Mexican-Americans from effective participation in political life, specifically in the election of representatives to the Texas House of Representatives. On the record before us, we are not inclined to overturn these findings, representing as they do a blend of history and an intensely local appraisal of the design and impact of the Bexar County multimember district in the light of past and present reality, political and otherwise.
Affirmed in part, reversed in part, and remanded.
APPENDIX TO OPINION OF THE COURT
Article III, § 28, of the Texas Constitution provides:
“The Legislature shall, at its first regular session after the publication of each United States decennial census, apportion the state into senatorial and representative districts, agreeable to the provisions of Sections 25, 26, and 26-a of this Article. In the event the Legislature shall at any such first regular session following the publication of a United States decennial census, fail to make such apportionment, same shall be done by the Legislature Redistricting Board of Texas, which is hereby created, and shall be composed of five (5) members, as follows: The Lieutenant Governor, the Speaker of the House of Representatives, the Attorney General, the Comptroller of Public Accounts and the Commissioner of the General Land Office, a majority of whom shall constitute a quorum. Said Board shall assemble in the City of Austin within ninety (90) days after the final adjournment of such regular session. The Board shall, within sixty (60) days after assembling, apportion the state into senatorial and representative districts, or into senatorial or representative districts, as the failure of action of such Legislature may make necessary. Such apportionment shall be in writing and signed by three (3) or more of the members of the Board duly acknowledged as the act and deed of such Board, and, when so executed and filed with the Secretary of State, shall have force and effect of law. Such apportionment shall become effective at the next succeeding statewide general election. The Supreme Court of Texas shall have jurisdiction to compel such Commission [Board] to perform its duties in accordance with the provisions of this section by writ of mandamus or other extraordinary writs conformable to the usages of law. The Legislature shall provide necessary funds for clerical and technical aid and for other expenses incidental to the work of the Board, and the Lieutenant Governor and the Speaker of the House of Representatives shall be entitled to receive per diem and travel expense during the Board’s session in the same manner and amount as they would receive while attending a special session of the Legislature. This amendment shall become effective January 1, 1951. As amended Nov. 2. 1948.”
The Court held that the plan violated Art. III, § 26, of the Texas Constitution, which provides:
“The members of the House of Representatives shall be apportioned among the several counties, according to the number of population in each, as nearly as may be, on a ratio obtained by dividing the population of the State, as ascertained by the most recent United States census, by the number of members of which the House is composed; provided, that whenever a single county has sufficient population to be entitled to a Representative, such county shall be formed into a separate Representative District, and when two or more counties are required to make up the ratio of representation, such counties shall be contiguous to each other; and when any one county has more than sufficient population to be entitled to one or more Representatives, such Representative or Representatives shall be apportioned to such county, and for any surplus of population it may be joined in a Representative District with any other contiguous county or counties.”
In a separate appeal, we summarily affirmed that portion of the judgment of the District Court upholding the Senate plan. Archer v. Smith, 409 U. S. 808 (1972).
Title 28 U. S. C. § 1253 provides:
“Except as otherwise provided by law, any party may appeal to the Supreme Court from an order granting or denying, after notice and hearing, an interlocutory or permanent injunction in any civil action, suit or proceeding required by any Act of Congress to be heard and determined by a district court of three judges.”
See Appendix to opinion of the Court, post, p. 770.
It may be, although we are not sure, that the District Court would have invalidated the plan statewide because of what it thought was an irrational mixture of multimember and single-member districts. Thus, in questioning the use of single-member districts in Houston but multimember districts in all other urban areas, and remarking that the State had provided neither “compelling” nor “rational” explanation for the differing treatment, the District Court merely concluded that this classification “may be” an independent ground for invalidating the plan. But there are no authorities in this Court for the proposition that the mere mixture of multimember and single-member districts in a single plan, even among urban areas, is invidiously discriminatory, and we construe the remarks not as part of the District Court’s declaratory judgment invalidating the state plan but as mere advance advice to the Texas Legislature as to what would or would not be acceptable to the District Court.
The District Court also concluded, contrary to the assertions of certain plaintiffs, that the Senate districting scheme for Bexar County did not “unconstitutionally dilute the votes of any political faction or party.” 343 F. Supp. 704, 735. The majority of the District Court also concluded that the Senate districting scheme for Harris County did not dilute black votes.
The court’s conclusion that the variations in this case were not justified by a rational state policy would, in any event, require reconsideration and reversal under Mahan v. Howell, 410 U. S. 315 (1973). The Texas Constitution, Art. III, §26, expresses the state policy against cutting county lines wherever possible in forming representative districts. The District Court recognized the policy but, without the benefit of Mahan v. Howell, may have thought the variations too great to be justified by that policy. It perhaps thought also that the policy had not been sufficiently or consistently followed here. But it appears to us that to stay within tolerable population limits it was necessary to cut some county lines and that the State achieved a constitutionally acceptable accommodation between population principles and its policy against cutting county lines in forming representative districts.
See Whitcomb v. Chavis, 403 U. S. 124, 141-148 (1971), and the cases discussed in n. 22 of that opinion, including Kilgarlin v. Hill, 386 U. S. 120 (1967), where we affirmed the District Court's rejection of petitioners’ contention that the combination of single-member, multimember, and floterial districts in a single reapportionment plan was “an unconstitutional ‘crazy quilt.’ ” Id., at 121.
There is no requirement that candidates reside in subdistricts of the multimember district. Thus, all candidates may be selected from outside the Negro residential area.
The District Court found that “it is extremely difficult to secure either a representative seat in the Dallas County delegation or the Democratic primary nomination without the endorsement of the Dallas Committee for Responsible Government.” 343 F. Supp., at 726.
Mexican-Americans constituted approximately 20% of the population of the State of Texas.
The District Court found that “[t]he fact that [Mexican-Americans] are reared in a sub-culture in which a dialect of Spanish is the primary language provides permanent impediments to their educational and vocational advancement and creates other traumatic problems.” 343 F. Supp., at 730.
Two other residents of the Barrio, a Negro and an Anglo-American, have also served in the Texas Legislature. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
116
] | sc_adminaction |
GOSS et al. v. LOPEZ et al.
No. 73-898.
Argued October 16, 1974
Decided January 22, 1975
White, J., delivered the opinion of the Court, in which Douglas, Brennan, Stewart, and Marshall, JJ., joined. Powell, J., filed a dissenting opinion, in which Burger, C. J., and Blackmun and Rehnquist, JJ., joined, post, p. 584.
Thomas A. Bustin argued the cause for appellants. With him on the briefs were James J. Hughes, Jr., Robert A. Bell, and Patrick M. McGrath.
Peter D. Roos argued the cause for appellees. With him on the brief were Denis Murphy and Kenneth C. Curtin
John F. Lewis filed a brief for the Buckeye Association of School Administrators et al. as amici curiae urging reversal.
Briefs of amici curiae urging affirmance were filed by David Bonderman, Peter Van N. Lockwood, Paid L. Tractenberg, David Rubin, and W. William Hodes for the National Committee for Citizens in Education et al.; by Alan H. Levine, Melvin L. Wulf, and Joel M. Gora for the American Civil Liberties Union; by Robert H. Kapp, R. Stephen Browning, and Nathaniel R. Jones for the National Association for the Advancement of Colored People et al.; and by Marian Wright Edelman for the Children’s Defense Fund of the Washington Research Project, Inc., et al.
MR. Justice White
delivered the opinion of the Court.
This appeal by various administrators of the Columbus, Ohio, Public School System (CPSS) challenges the judgment of a three-judge federal court, declaring that appellees — various high school students in the CPSS— were denied due process of law contrary to the command of the Fourteenth Amendment in that they were temporarily suspended from their high schools without a hearing either prior to suspension or within a reasonable time thereafter, and enjoining the administrators to remove all references to such suspensions from the students' records.
I
Ohio law, Rev. Code Ann. § 3313.64 (1972), provides for free education to all children between the ages of six and 21. Section 3313.66 of the Code empowers the principal of an Ohio public school to suspend a pupil for misconduct for up to 10 days or to expel him. In either case, he must notify the student’s p'arents within 24 hours and state the reasons for his action. A pupil who is expelled, or his parents, may appeal the decision to the ■Board of Education and in connection therewith shall be permitted to be heard at the board meeting. The Board may reinstate the pupil following the hearing. No similar procedure is provided in § 3313.66 or any other provision of state law for a suspended student. Aside from a regulation tracking the statute, at the time of the imposition of the suspensions in this case the CPSS itself had not issued any written procedure applicable to suspensions. Nor, so far as the record reflects, had any of the individual high schools involved in this case. Each, however, had formally or informally described the conduct for which suspension could be imposed.
The nine named appellees, each of whom alleged that he or she had been suspended from public high school in Columbus for up to 10 days without a hearing pursuant to § 3313.66, filed an action under 42 U. S. C. § 1983 against the Columbus Board of Education and various administrators of the CPSS. The complaint sought a declaration that § 3313.66 was unconstitutional in that it permitted public school administrators to deprive plaintiffs of their rights to an education without a hearing of any kind, in violation of the procedural due process component of the Fourteenth Amendment. It also sought to enjoin the public school officials from issuing future suspensions pursuant to § 3313.66 and to require them to remove references to the past suspensions from the records of the students in question.
The proof below established that the suspensions arose out of a period of widespread student unrest in the CPSS during February and March 1971. Six of the named plaintiffs, Rudolph Sutton, Tyrone Washington, Susan Cooper, Deborah Fox, Clarence Byars, and Bruce Harris, were students at the Marion-Franklin High School and were each suspended for 10 days on account of disruptive or disobedient conduct committed in the presence of the school administrator who ordered the suspension. One of these, Tyrone Washington, was among a group of students demonstrating in the school auditorium while a class was being conducted there. He was ordered by the school principal to leave, refused to do so, and was suspended. Rudolph Sutton, in the presence of the principal, physically attacked a police officer who was attempting to remove Tyrone Washington from the auditorium. He was immediately suspended. The other four Marion-Franklin students were suspended for similar conduct. None was given a hearing to determine the operative facts underlying the suspension, but each, together with his or her parents, was offered the opportunity to attend a conference, subsequent to the effective date of the suspension, to discuss the student’s future.
Two named plaintiffs, Dwight Lopez and Betty Crome, were students at the Central High School and McGuffey Junior High School, respectively. The former was suspended in connection with a disturbance in the lunchroom which involved some physical damage to school property. Lopez testified that at least 75 other students were suspended from his school on the same day. He also testified below that he was not a party to the destructive conduct but was instead an innocent bystander. Because no one from the school testified with regard to this incident, there is no evidence in the record indicating the official basis for concluding otherwise. Lopez never had a hearing.
Betty Crome was present at a demonstration at a high school other than the one she was attending. There she was arrested together with others, taken to the police station, and released without being formally charged. Before she went to school on the following day, she was notified that she had been suspended for a 10-day period. Because no one from the school testified with respect to this incident, the record does not disclose how the McGuffey Junior High School principal went about making the decision to suspend Crome, nor does it disclose on what information the decision was based. It is clear frdm the record that no hearing was ever held.
There was no testimony with respect to the suspension of the ninth named plaintiff, Carl Smith. The school files were also silent as to his suspension, although as to some, but not all, of the other named plaintiffs the files contained either direct references to their suspensions or copies of letters sent to their parents advising them of the suspension.
On the basis of this evidence, the three-judge court declared that plaintiffs were denied due process of law because they were “suspended without hearing prior to suspension or within a reasonable time thereafter,” and that Ohio Rev. Code Ann. § 3313.66 (1972) and regulations issued pursuant thereto were unconstitutional in permitting such suspensions. It was ordered that all references to plaintiffs’ suspensions be removed from school files.
Although not imposing upon the Ohio school administrators any particular disciplinary procedures and leaving them “free to adopt regulations providing for fair suspension procedures which are consonant with the educational goals of their schools and reflective of the characteristics of their school and locality,” the District Court declared that there were “minimum requirements of notice and a hearing prior to suspension, except in emergency situations.” In explication, the court stated that relevant case authority would: (1) permit “[ijmmediate removal of a student whose conduct disrupts the academic atmosphere of the school, endangers fellow students, teachers or school officials, or damages property”; (2) require notice of suspension proceedings to be sent to the student’s parents within 24 hours of the decision to conduct them; and (3) require a hearing to be held, with the student present, within 72 hours of his removal. Finally, the court stated that, with respect to the nature of the hearing, the relevant cases required that statements in support of the charge be produced, that the student and others be permitted to make statements in defense or mitigation, and that the school need not permit attendance by counsel.
The defendant school administrators have appealed the three-judge court’s decision. Because the order below granted plaintiffs’ request for an injunction — ordering defendants to expunge their records — this Court has jurisdiction of the appeal pursuant to 28 XL S. C. § 1253. We affirm.
II
At the outset, appellants contend that because there is no constitutional right to an education at public expense, the Due Process Clause does not protect against expulsions from the public school system. This position misconceives the nature of the issue and is refuted by prior decisions. The Fourteenth Amendment forbids the State to deprive any person of life, liberty, or property without due process of law. Protected interests in property are normally “not created by the Constitution. Rather, they are created and their dimensions are defined” by an independent source such as state statutes or rules entitling the citizen to certain benefits. Board of Regents v. Roth, 408 U. S. 564, 577 (1972).
Accordingly, a state employee who under state law, or rules promulgated by state officials, has a legitimate claim of entitlement to continued employment absent sufficient cause for discharge may demand the procedural protections of due process. Connell v. Higginbotham, 403 U. S. 207 (1971); Wieman v. Updegraff, 344 U. S. 183, 191-192 (1952); Arnett v. Kennedy, 416 U. S. 134, 164 (Powell, J., concurring), 171 (White, J., concurring and dissenting) (1974). So may welfare recipients who have statutory rights to welfare as long as they maintain the specified qualifications. Goldberg v. Kelly, 397 U. S. 254 (1970). Morrissey v. Brewer, 408 U. S. 471 (1972), applied the limitations of the Due Process Clause to governmental decisions to revoke parole, although a parolee has no constitutional right to that status. In like vein was Wolff v. McDonnell, 418 U. S. 539 (1974), where the procedural protections of the Due Process Clause were triggered by official cancellation of a prisoner’s good-time credits accumulated under state law, although those benefits were not mandated by the Constitution.
Here, on the basis of state law, appellees plainly had legitimate claims of entitlement to a public education. Ohio Rev. Code Ann. §§ 3313.48 and 3313.64 (1972 and Supp. 1973) direct local authorities to provide a free education to all residents between five and 21 years of age, and a compulsory-attendance law requires attendance for a school year of not less than 32 weeks. Ohio Rev. Code Ann. §3321.04 (1972). It is true that §3313.66 of the Code permits school principals to suspend students for up to 10 days; but suspensions may not be imposed without any grounds whatsoever. All of the schools had their own rules specifying the grounds for expulsion or suspension. Having chosen to extend the right to an education to people of appellees’ class generally, Ohio may not withdraw that right on grounds of misconduct, absent fundamentally fair procedures to determine whether the misconduct has occurred. Arnett v. Kennedy, supra, at 164 (Powell, J., concurring), 171 (White, J., concurring and dissenting), 206 (Marshall, J., dissenting).
Although Ohio may not be constitutionally obligated to establish and maintain a public school system, it has nevertheless done so and has required its children to attend. Those young people do not “shed their constitutional rights” at the schoolhouse door. Tinker v. Des Moines School Dist., 393 U. S. 503, 506 (1969). “The Fourteenth Amendment, as now applied to the States, protects the citizen against the State itself and all of its creatures — Boards of Education not excepted.” West Virginia Board of Education v. Barnette, 319 U. S. 624, 637 (1943). The authority possessed by the State to prescribe and enforce standards of conduct in its schools although concededly very broad, must be exercised consistently with constitutional safeguards. Among other things, the State is constrained to recognize a student’s legitimate entitlement to a public education as a property interest which is protected by the Due Process Clause and which may not be taken away for misconduct without adherence to the minimum procedures required by that Clause.
The Due Process Clause also forbids arbitrary deprivations of liberty. “Where a person’s good name, reputation, honor, or integrity is at stake because of what the government is doing to him,” the minimal requirements of the Clause must be satisfied. Wisconsin v. Constantineau, 400 U. S. 433, 437 (1971); Board of Regents v. Roth, supra, at 573. School authorities here suspended appellees from school for periods of up to 10 days based on charges of misconduct. If sustained and recorded, those charges could seriously damage the students’ standing with their fellow pupils and their teachers as well as interfere with later opportunities for higher education and employment. It is apparent that the claimed right of the State to determine unilaterally and without process whether that misconduct has occurred immediately collides with the requirements of the Constitution.
Appellants proceed to argue that even if there is a right to a public education protected by the Due Process Clause generally, the Clause comes into play only when the State subjects a student to a “severe detriment or grievous loss.” The loss of 10 days, it is said, is neither severe nor grievous and the Due Process Clause is therefore of no relevance. Appellants’ argument is again refuted by our prior decisions; for in determining “whether due process requirements apply in the first place, we must look not to the ‘weight’ but to the nature of the interest at stake.” Board of Regents v. Roth, supra, at 570-571. Appellees were excluded from school only temporarily, it is true, but the length and consequent severity of a deprivation, while another factor to weigh in determining the appropriate form of hearing, “is not decisive of the basic right” to a hearing of some kind. Fuentes v. Shevin, 407 U. S. 67, 86 (1972). The Court’s view has been that as long as a property deprivation is not de minimis, its gravity is irrelevant to the question whether account must be taken of the Due Process Clause. Sniadach v. Family Finance Corp., 395 U. S. 337, 342 (1969) (Harlan, J., concurring) ; Boddie v. Connecticut, 401 U. S. 371, 378-379 (1971); Board of Regents v. Roth, supra, at 570 n. 8. A 10-day suspension from school is not de minimis in our view and may not be imposed in complete disregard of the Due Process Clause.
A short suspension is, of course, a far milder deprivation than expulsion. But, “education is perhaps the most important function of state and local governments,” Brown v. Board of Education, 347 U. S. 483, 493 (1954), and the total exclusion from the educational process for more than a trivial period, and certainly if the suspension is for 10 days, is a serious event in the life of the suspended child. Neither the property interest in educational benefits temporarily denied nor the liberty interest in reputation, which is also implicated, is so insubstantial that suspensions may constitutionally be imposed by any procedure the school chooses, no matter how arbitrary.
III
“Once it is determined that due process applies, the question remains what process is due.” Morrissey v. Brewer, 408 U. S., at 481. We turn to that question, fully realizing as our cases regularly do that the interpretation and application of the Due Process Clause are intensely practical matters and that “[t]he very nature of due process negates any concept of inflexible procedures universally applicable to every imaginable situation.” Cafeteria Workers v. McElroy, 367 U. S. 886, 895 (1961). We are also mindful of our own admonition:
“Judicial interposition in the operation of the public school system of the Nation raises problems requiring care and restraint.... By and large, public education in our Nation is committed to the control of state and local authorities.” Epperson v. Arkansas, 393 U.S. 97, 104 (1968).
There are certain bench marks to guide us, however. Mullane v. Central Hanover Trust Co., 339 U. S. 306 (1950), a case*often invoked by later opinions, said that “[m]any controversies have raged about the cryptic and abstract words of the Due Process Clause but there can be no doubt that at a minimum they require that deprivation of life, liberty or property by adjudication be preceded by notice and opportunity for hearing appropriate to the nature of the case.” Id., at 313. “The fundamental requisite of due process of law is the opportunity to be heard,” Grannis v. Ordean, 234 U. S. 385, 394 (1914), a right that “has little reality or worth unless one is informed that the matter is pending and can choose for himself whether to... contest.” Mullane v. Central Hanover Trust Co., supra, at 314. See also Armstrong v. Manzo, 380 U. S. 545, 550 (1965); Anti-Fascist Committee v. McGrath, 341 U. S. 123, 168-169 (1951) (Frankfurter, J., concurring). At the very minimum, therefore, students facing suspension and the consequent interference with a protected property interest must be given some kind of notice and afforded some kind of hearing. “Parties whose rights are to be affected are entitled to be heard; and in order that they may enjoy that right they must first be notified.” Baldwin v. Hale, 1 Wall. 223, 233 (1864).
It also appears from our cases that the timing and content of the notice and the nature of the hearing will depend on appropriate accommodation of the competing interests involved. Cafeteria Workers v. McElroy, supra, at 895; Morrissey v. Brewer, supra, at 481. The student’s interest is to avoid unfair or mistaken exclusion from the educational process, with all of its unfortunate consequences. The Due Process Clause will not shield him from suspensions properly imposed, but it disserves both his interest and the interest of the State if his suspension is in fact unwarranted. The concern would be mostly academic if the disciplinary process were a totally accurate, unerring process, never mistaken and never unfair. Unfortunately, that is not the case, and no one suggests that it is. Disciplinarians, although proceeding in utmost good faith, frequently act on the reports and advice of others; and the controlling facts and the nature of the conduct under challenge are often disputed. The risk of error is not at all trivial, and it should be guarded against if that may be done without prohibitive cost or interference with the educational process.
The difficulty is that our schools are vast and complex. Some modicum of discipline and order is essential if the educational function is to be performed. Events calling for discipline are frequent occurrences and sometimes require immediate, effective action. Suspension is considered not only to be a necessary tool to maintain order but a valuable educational device. The prospect of imposing elaborate hearing requirements in every suspension case is viewed with great concern, and many school authorities may well prefer the untrammeled power to act unilaterally, unhampered by rules about notice and hearing. But it would be a strange disciplinary system in an educational institution if no communication was sought by the disciplinarian with the student in an effort to inform him of his dereliction and to let him tell his side of the story in order to make sure that an injustice is not done. “[F] airness can rarely be obtained by secret, one-sided determination of facts decisive of rights....” “Secrecy is not congenial to truth-seeking and self-righteousness gives too slender an assurance of rightness. No better instrument has been dévised for arriving at truth than to give a person in jeopardy of serious loss notice of the case against him and opportunity to meet it.” Anti-Fascist Committee v. McGrath, supra, at 170, 171-172 (Frankfurter, J., concurring).
We do not believe that school authorities must be totally free from notice and hearing requirements if their schools are to operate with acceptable efficiency. Students facing temporary suspension have interests qualifying for protection of the Due Process Clause, and due process requires, in connection with a suspension of 10 days or less, that the student be given oral or written notice of the charges against him and, if he denies them, an explanation of the evidence the authorities have and an opportunity to present his side of the story. The Clause requires at least these rudimentary precautions against unfair or mistaken findings of misconduct and arbitrary exclusion from school.
There need be no delay between the time “notice” is given and the time of the hearing. In the great majority of cases the disciplinarian may informally discuss the alleged misconduct with the student minutes after it has occurred. We hold only that, in being given an opportunity to explain his version of the facts at this discussion, the student first be told what he is accused of doing and what the basis of the accusation is. Lower courts which have addressed the question of the nature of the procedures required in short suspension cases have reached the same conclusion. Tate v. Board of Education, 453 F. 2d 975, 979 (CA8 1972); Vail v. Board of Education, 354 F. Supp. 592, 603 (NH 1973). Since the hearing may occur almost immediately following the misconduct, it follows that as a general rule notice and hearing should precede removal of the student from school. We agree with the District Court, however, that there are recurring situations in which prior notice and hearing cannot be insisted upon. Students whose presence poses a continuing danger to persons or property or an ongoing threat of disrupting the academic process may be immediately removed from school. In such cases, the necessary notice and rudimentary hearing should follow as soon as practicable, as the District Court indicated.
In holding as we do, we do not believe that we have imposed procedures on school disciplinarians which are inappropriate in a classroom setting. Instead we have imposed requirements which are, if anything, less than a fair-minded school principal would impose upon himself in order to avoid unfair suspensions. Indeed, according to the testimony of the principal of Marion-Franklin High School, that school had an informal procedure, remarkably similar to that which we now require, applicable to suspensions generally but which was not followed in this case. Similarly, according to the most recent memorandum applicable to the entire CPSS, see n. 1, supra, school principals in the CPSS are now required by local rule to provide at least as much as the constitutional minimum which we have described.
We stop short of construing the Due Process Clause to require, countrywide, that hearings in connection with short suspensions must afford the student the opportunity to secure counsel, to confront and cross-examine witnesses supporting the charge, or to call his own witnesses to verify his version of the incident. Brief disciplinary suspensions are almost countless. To impose in each such case even truncated trial-type procedures might well overwhelm administrative facilities in many places and, by diverting resources, cost more than it would save in educational effectiveness. Moreover, further formalizing the suspension process and escalating its formality and adversary nature may not only make it too costly as a regular disciplinary tool but also destroy its effectiveness as part of the teaching process.
On the other hand, requiring effective notice and informal hearing permitting the student to give his version of the events will provide a meaningful hedge against erroneous action. At least the disciplinarian will be alerted to the existence of disputes about facts and arguments about cause and effect. He may then determine himself to summon the accuser, permit cross-examination, and allow the student to present his own witnesses. In more difficult cases, he may permit counsel. In any event, his discretion will be more informed and we think the risk of error substantially reduced.
Requiring that there be at least an informal give-and-take between student and disciplinarian, preferably prior to the suspension, will add little to the factfinding function where the disciplinarian himself has witnessed the conduct forming the basis for the charge. But things are not always as they seem to be, and the student will at least have the opportunity to characterize his conduct arid put it in what he deems the proper context.
We should also make it clear that we have addressed ourselves solely to the short suspension, not exceeding 10 days. Longer suspensions or expulsions for the remainder of the school term, or permanently, may require more formal procedures. Nor do we put aside the possibility that in unusual situations, although involving only a short suspension, something more than the rudimentary procedures will be required.
IV
The District Court found each of the suspensions involved here to have occurred without a hearing, either before or after the suspension, and that each suspension was therefore invalid and the statute unconstitutional insofar as it permits such suspensions without notice or hearing. Accordingly, the judgment is
Affirmed
At the time of the events involved in this case, the only administrative regulation on this subject was § 1010.04 of the Administrative Guide of the Columbus Public Schools which provided: “Pupils may be suspended or expelled from school in accordance with the provisions of Section 3313.66 of the Revised Code.” Subsequent to the events involved in this lawsuit, the Department of Pupil Personnel of the CPSS issued three memoranda relating to suspension procedures, dated August 16, 1971, February 21, 1973, and July 10, 1973, respectively. The first two are substantially similar to each other and require no factfinding hearing at any time in connection with a suspension. The third, which was apparently in effect when this case was argued, places upon the principal the obligation to “investigate” “before commencing suspension procedures”; and provides as part of the procedures that the principal shall discuss the case with the pupil, so that the pupil may “be heard with respect to the alleged offense,” unless the pupil is “unavailable” for such a discussion or “unwilling” to participate in it. The suspensions involved in this case occurred, and records thereof were made, prior to the effective date of these memoranda. The District Court’s judgment, including its expunction order, turns on the propriety of the procedures existing at the time the-suspensions were ordered and by which they were imposed.
According to the testimony of Phillip Fulton, the principal of one of the high schools involved in this case, there was an informal procedure applicable at the Marion-Franklin High School. It provided that in the routine case of misconduct, occurring in the presence of a teacher, the teacher would describe the misconduct on a form provided for that purpose and would send the student, with the form, to the principal’s office. There, the principal would obtain the student’s version of the story, and, if it conflicted with the teacher’s written version, would send for the teacher to obtain the teacher’s oral version — apparently in the presence of the student. Mr. Fulton testified that, if a discrepancy still existed, the teacher’s version would be believed and the principal would arrive at a disciplinary decision based on it.
The plaintiffs sought to bring the action on behalf of all students of the Columbus Public Schools suspended on or after February 1971, and a class action was declared accordingly. Since the complaint sought to restrain the “enforcement” and “operation” of a state statute “by restraining the action of any officer of such state in the enforcement or execution of such statute,” a three-judge court was requested pursuant to 28 U. S. C. §2281 and convened. The students also alleged that the conduct for which they could be suspended was not adequately defined by Ohio law. This vagueness and overbreadth argument was rejected by the court below and the students have not appealed from this part of the court’s decision.
Fox was given two separate 10-day suspensions for misconduct occurring on two separate occasions — the second following immediately upon her return to school. In addition to his suspension, Sutton was transferred to another school.
Lopez was actually absent from school, following his suspension, for over 20 days. This seems to have occurred because of a misunderstanding as to the length of the suspension. A letter sent to Lopez after he had been out for over 10 days purports to assume that, being over compulsory school age, he was voluntarily staying away. Upon asserting that this was not the case, Lopez was transferred to another school.
In its judgment, the court stated that the statute is unconstitutional in that it provides “for suspension... without first affording the student due process of law.” (Emphasis supplied.) However, the language of the judgment must be read in light of the language in the opinion which expressly contemplates that under some circumstances students may properly be removed from school before a hearing is held, so long as the hearing follows promptly.
Appellees assert in their brief that four of 12 randomly selected Ohio colleges specifically inquire of the high school of every applicant for admission whether the applicant has ever been suspended. Brief for Appellees 34-35 and n. 40. Appellees also contend that many employers request similar information. Ibid.
Congress has recently enacted legislation limiting access to information contained in the files of a school receiving federal funds. Section 513 of the Education Amendments of 1974, Pub. L. 93-380, 88 Stat. 571, 20 U. S. C. § 1232g (1970 ed., Supp. IV), adding § 438 to the General Education Provisions Act. That section would preclude release of “verified reports of serious or recurrent behavior patterns” to employers without written consent of the student’s parents. While subsection (b)(1)(B) permits release of such information to “other schools... in which the student intends to enroll,” it does so only upon condition that the parent be advised of the release of the information and be given an opportunity at a hearing to challenge the content of the information ■ to insure against inclusion of inaccurate or misleading information. The statute does not expressly state whether the parent can contest the underlying basis for a suspension, the fact of which is contained in the student’s school record.
Since the landmark decision of the Court of Appeals for the Fifth Circuit in Dixon v. Alabama State Board of Education, 294 F. 2d 150, cert. denied, 368 U. S. 930 (1961), the lower federal courts have uniformly held the Due Process Clause applicable to decisions made by tax-supported educational institutions to remove a student from the institution long enough for the removal to be classified as an expulsion. Hagopian v. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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116
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HAWAIIAN AIRLINES, INC. v. NORRIS
No. 92-2058.
Argued April 28, 1994
Decided June 20, 1994
Blackmun, J., delivered the opinion for a unanimous Court.
Kenneth B. Hipp argued the cause for petitioners. With him on the briefs were David J. Dezzani and Margaret C. Jenkins.
Susan Oki Mollway argued the cause for respondent. With her on the brief were Edward DeLappe Boyle, Marsha S. Berzon, Mark Schneider, and Laurence Gold.
Richard H. Seamon argued the cause for the United States as amicus curiae urging affirmance. On the brief were Solicitor General Days, Assistant Attorney General Hunger, Deputy Solicitor General Kneedler, John F. Manning, and William Ranter,
Together with Finazzo et al. v. Norris, also on certiorari to the same court (see this Court’s Rule 12.2).
Briefs of amici curiae urging reversal were filed for the State of New Jersey by Deborah T. Poritz, Attorney General, Andrea M. Silkowitz, Assistant Attorney General, and Eldad Philip Isaac, Deputy Attorney General; for the Air Transport Association of America by Charles A Shanor, John J. Gallagher, and Margaret H. Spurlin; and for the National Railway Labor Conference by Ralph J. Moore, Jr., I. Michael Greenberger, and David P. Lee.
Briefs of amici curiae urging affirmance were filed for the State of Hawaii et al. by Robert A Marks, Attorney General of Hawaii, and Steven S. Michaels, Deputy Attorney General, Grant Woods, Attorney General of Arizona, Richard Blumenthal, Attorney General of Connecticut, Robert A Butterworth, Attorney General of Florida, Roland W. Burris, Attorney General of Illinois, Pamela Fanning Carter, Attorney General of Indiana, Robert T. Stephan, Attorney General of Kansas, Michael E. Carpenter, Attorney General of Maine, Frank J. Kelley, Attorney General of Michigan, Jeremiah W. (Jay) Nixon, Attorney General of Missouri, Joseph P. Mazurek, Attorney General of Montana, Tom Udall, Attorney General of New Mexico, Ernest D. Preate, Jr., Attorney General of Pennsylvania, Darrell V. McGraw, Jr., Attorney General of West Virginia, and Richard Weil, Acting Attorney General of the Northern Mariana Islands; for the Allied Educational Foundation by Bertram R. Gelfand and Jeffrey C. Dannenberg; for the National Employment Lawyers Association by Mary Ann B. Oakley, Janette Johnson, and Robert B. Fitzpatrick; and for the Railway Labor Executives’ Association by John O’B. Clarke, Jr.
Justice Blackmun
delivered the opinion of the Court.
This action involves the scope of federal pre-emption under the Railway Labor Act (RLA), 45 U. S. C. § 151 et seq. The RLA, which was extended in 1936 to cover the airline industry, see Act of Apr. 10, 1936, ch. 166, 49 Stat. 1189; 45 U. S. C. §§ 181-188, sets up a mandatory arbitral mechanism to handle disputes “growing out of grievances or out of the interpretation or application of agreements concerning rates of pay, rules, or working conditions,” 45 U. S. C. § 153 First (i). The question in this case is whether an aircraft mechanic who claims that he was discharged for refusing to certify the safety of a plane that he considered unsafe and for reporting his safety concerns to the Federal Aviation Administration may pursue available state-law remedies for wrongful discharge, or whether he may seek redress only through the RLA’s arbitral mechanism. We hold that the RLA does not pre-empt his state-law causes of action.
I
' Respondent Grant Norris is an aircraft mechanic licensed by the Federal Aviation Administration (FAA). His aircraft mechanic’s license authorizes him to approve an airplane and return it to service after he has made, supervised, or inspected certain repairs performed on that plane. See Certification: Airmen Other Than Flight Crewmembers, 14 CFR §§ 65.85 and 65.87 (1987). If he were to approve any aircraft on which the repairs did not conform to FAA safety regulations, the FAA could suspend or revoke his license. See Maintenance, Preventive Maintenance, Rebuilding and Alteration, 14 CFR §43.12 (1992).
On February 2, 1987, respondent was hired by petitioner Hawaiian Airlines, Inc. (HAL). Many of the terms of his employment were governed by a collective-bargaining agreement (CBA) negotiated between the carrier and the International Association of Machinists and Aerospace Workers. Under the CBA, respondent’s duties included inspecting and repairing all parts of a plane and its engine. On July 15, 1987, during a routine preflight inspection of a DC-9 plane, he noticed that one of the tires was worn. When he removed the wheel, respondent discovered that the axle sleeve, which should have been mirror smooth, was scarred and grooved. This damaged sleeve could cause the landing gear to fail. Respondent recommended that the sleeve be replaced, but his supervisor ordered that it be sanded and returned to the plane. This was done, and the plane flew as scheduled. At the end of the shift, respondent refused to sign the maintenance record to certify that the repair had been performed satisfactorily and that the airplane was fit to fly. See 14 CFR § 43.9(a) (1992). The supervisor immediately suspended him pending a termination hearing. Respondent immediately went home and called the FAA to report the problem with the sleeve.
Respondent then invoked the grievance procedure outlined in the CBA, and a “Step 1” grievance hearing was held on July 31, 1987. Petitioner HAL accused respondent of insubordination, claiming that his refusal to sign the record violated the CBA’s provision that an aircraft mechanic “may be required to sign work records in connection with the work he performs.” Respondent relied on the CBA’s guarantees that an employee may not be discharged without just cause and may not be disciplined for refusing to perform work that is in violation of health or safety laws. The hearing officer terminated respondent for insubordination.
Still conforming to the CBA procedures, respondent appealed his termination, seeking a “Step 3” grievance hearing. Before this hearing took place, HAL offered to reduce respondent’s punishment to suspension without pay, but warned him that “any further instance of failure to perform [his] duties in a responsible manner” could result in discharge. Respondent did not respond to this offer, nor, apparently, did he take further steps to pursue his grievance through the CBA procedures.
On December 18, 1987, respondent filed suit against HAL in Hawaii Circuit Court. His complaint included two wrongful-discharge torts — discharge in violation of the public policy expressed in the Federal Aviation Act of 1958 and implementing regulations, and discharge in violation of Hawaii’s Whistleblower Protection Act, Haw. Rev. Stat. §§ 378-61 to 378-69 (1988). He also alleged that HAL had breached the CBA. HAL removed the action to the United States District Court for the District of Hawaii, which dismissed the breach-of-contract claim as pre-empted by the RLA, and remanded the other claims to the state trial court. The trial court then dismissed respondent’s claim of discharge in violation of public policy, holding that it, too, was pre-empted by the RLA’s provision of exclusive arbitral procedures. The state court certified its order as final to permit respondent to take an immediate appeal.
In the meantime, respondent had filed a second lawsuit in state court, naming as defendants three of HAL’s officers who allegedly directed, confirmed, or ratified the claimed retaliatory discharge. He again sought relief for, among other things, discharge in violation of public policy and of the Hawaii Whistleblower Protection Act. The Hawaii trial court dismissed these two counts as pre-empted by the RLA and certified the case for immediate appeal.
The Supreme Court of Hawaii reversed in both cases, concluding that the RLA did not pre-empt respondent’s state tort actions. Norris v. Hawaiian Airlines, Inc., 74 Haw. 235, 842 P. 2d 634 (1992); 74 Haw. 648, 847 P. 2d 263 (1993). That court concluded that the plain language of § 153 First (i) does not support pre-emption of disputes independent of a labor agreement, 74 Haw., at 251, 842 P. 2d, at 642, and interpreted the opinion in Consolidated Rail Corporation v. Railway Labor Executives’ Assn., 491 U. S. 299 (1989) (Conrail), to limit RLA pre-emption to “disputes involving contractually defined rights.” 74 Haw., at 250, 842 P. 2d, at 642. The court rejected petitioners’ argument that the retaliatory discharge claims were pre-empted because determining whether HAL discharged respondent for insubordination, and thus for just cause, required construing the CBA. The court pointed to Lingle v. Norge Div. of Magic Chef, Inc., 486 U. S. 399 (1988), a case involving § 301 of the Labor-Management Relations Act, 1947 (LMRA), 29 U. S. C. § 185, in which the Court held that a claim of wrongful termination in retaliation for filing a state worker’s compensation claim did not require interpretation of a CBA, but depended upon purely factual questions concerning the employee’s conduct and the employer’s motive. Because the same was true in this action, said the Supreme Court of Hawaii, respondent’s state tort claims were not pre-empted.
We granted certiorari in these consolidated cases, 510 U. S. 1083 (1994).
II
A
Whether federal law pre-empts a state law establishing a cause of action is a question of congressional intent. See Allis-Chalmers Corp. v. Lueck, 471 U. S. 202, 208 (1985). Pre-emption of employment standards “within the traditional police power of the State” “should not be lightly inferred.” Fort Halifax Packing Co. v. Coyne, 482 U. S. 1, 21 (1987); see also Hillsborough County v. Automated Medical Laboratories, Inc., 471 U. S. 707, 715 (1985) (a federal statute will be read to supersede a State’s historic powers only if this is “‘the clear and manifest purpose of Congress’ ”).
Congress’ purpose in passing the RLA was to promote stability in labor-management relations by providing a comprehensive framework for resolving labor disputes. Atchison, T.& S. F. R. Co. v. Buell, 480 U. S. 557, 562 (1987); see also 45 U. S. C. § 151a. To realize this goal, the RLA establishes a mandatory arbitral mechanism for “the prompt and orderly settlement” of two classes of disputes. 45 U. S. C. § 151a. The first class, those concerning “rates of pay, rules or working conditions,” ibid., are deemed “major” disputes. Major disputes relate to “‘the formation of collective [bargaining] agreements or efforts to secure them.’” Conrail, 491 U. S., at 302, quoting Elgin, J. & E. R. Co. v. Burley, 325 U. S. 711, 723 (1945). The second class of disputes, known as “minor” disputes, “gro[w] out of grievances or out of the interpretation or application of agreements covering rates of pay, rules, or working conditions.” 45 U. S. C. § 151a. Minor disputes involve “controversies over the meaning of an existing collective bargaining agreement in a particular fact situation.” Trainmen v. Chicago R. & I. R. Co., 353 U. S. 30, 33 (1957). Thus, “major disputes seek to create contractual rights, minor disputes to enforce them.” Conrail, 491 U. S., at 302, citing Burley, 325 U. S., at 723.
Petitioners contend that the conflict over respondent’s firing is a minor dispute. If so, it must be resolved only through the RLA mechanisms, including the carrier’s internal dispute-resolution processes and an adjustment board established by the employer and the unions. See 45 U. S. C. § 184; Buell, 480 U. S., at 563; Conrail, 491 U. S., at 302. Thus, a determination that respondent’s complaints constitute a minor dispute would pre-empt his state-law actions.
B
The Court’s inquiry into the scope of minor disputes begins, of course, with the text of the statute. Petitioners point out that the statute defines minor disputes to include “disputes... growing out of grievances, or out of the interpretation or application of [CBA’s].” Petitioners argue that this disjunctive language must indicate that “grievances” means something other than labor-contract disputes, else the term “grievances” would be superfluous. Accordingly, petitioners suggest that “grievances” should be read to mean all employment-related disputes, including those based on statutory or common law. Evén if we were persuaded that the word “or” carried this weight, but cf. United States v. Olano, 507 U. S. 725, 732 (1993) (reading “error or defect” to create one category of “error”), citing United States v. Young, 470 U. S. 1, 15, n. 12 (1985); McNally v. United States, 483 U. S. 350, 358-359 (1987) (second phrase in disjunctive added simply to make the meaning of the first phrase “unmistakable”), petitioners’ interpretation produces an overlap not unlike the one it purports to avoid. Their expansive definition of “grievances” necessarily encompasses disputes growing out of “the interpretation or application” of CBA’s. Thus, in attempting to save the term “grievances” from superfluity, petitioners would make the phrase after the “or” mere surplusage.
We think it more likely that “grievances,” like disputes over “the interpretation or application” of CBA’s, refers to disagreements over how to give effect to the bargained-for agreement. The use of “grievance” to refer to a claim arising out of a CBA is common in the labor-law context in general, see, e. g., Paperworkers v. Misco, Inc., 484 U. S. 29, 36 (1987), and it has been understood in this way in the RLA context. See H. R. Rep. No. 1944, 73d Cong., 2d Sess., 2-3 (1934) (referring to RLA settlement of “minor disputes known as ‘grievances,’ which develop from the interpretation and/or application of the contracts between the labor unions and the carriers”). Significantly, the adjustment boards charged with administration of the minor-dispute provisions have understood these provisions as pertaining only to disputes invoking contract-based rights. See, e.g., NRAB Fourth Div. Award No. 4548 (1987) (function of the National Rail Adjustment Board (Board) is to decide disputes in accordance with the controlling CBA); NRAB Third Div. Award No. 24348 (1983) (issues not related to the interpretation or application of contracts are outside the Board’s authority); NRAB Third Div. Award No. 19790 (1973) (“[T]his Board lacks jurisdiction to enforce rights created by State or Federal Statutes and is limited to questions arising out of interpretations and application of Railway Labor Agreements”); Northwest Airlines/Airline Pilots Assn., Int’l System Bd. of Adjustment, Decision of June 28, 1972, p. 13 (“[B]oth the traditional role of the arbitrator and admonitions of the courts require the Board to refrain from attempting to construe any of the provisions of the [RLA]”); United Airlines, Inc., 48 LA 727, 733 (BNA) (1967) (“The jurisdiction of this System Board does not extend to interpreting and applying the Civil Rights Act”).
Accordingly, we believe that the most natural reading of the term “grievances” in this context is as a synonym for disputes involving the application or interpretation of a CBA. See Webster’s Third New International Dictionary 1585 (1986) (the word “or” may be used to indicate “the synonymous, equivalent, or substitutive character of two words or phrases”). Nothing in the legislative history of the RLA or other sections of the statute undermines this conclusion. But even accepting that § 151a is susceptible of more than one interpretation, no proposed interpretation demonstrates a clear and manifest congressional purpose to create a regime that broadly pre-empts substantive protections extended by the States, independent of any negotiated labor agreement.
C
Our case law confirms that the category of minor disputes contemplated by § 151a are those that are grounded in the CBA. We have defined minor disputes as those involving the interpretation or application of existing labor agreements. See, e. g., Conrail, 491 U. S., at 805 (“The distinguishing feature of [a minor dispute] is that the dispute may be conclusively resolved by interpreting the existing [CBA]”); Pittsburgh & Lake Erie R. Co. v. Railway Labor Executives’ Assn., 491 U. S. 490, 496, n. 4 (1989) (“Minor disputes are those involving the interpretation or application of existing contracts”); Trainmen, 358 U. S., at 33 (minor disputes are “controversies over the meaning of an existing collective bargaining agreement”); Slocum v. Delaware, L. & W. R. Co., 339 U. S. 239, 243 (1950) (RLA arbitral mechanism is meant to provide remedies for “adjustment of railroad-employee disputes growing out of the interpretation of existing agreements”).
Moreover, we have held that the RLA’s mechanism for resolving minor disputes does not pre-empt causes of action to enforce rights that are independent of the CBA. More than 60 years ago, the Court rejected a railroad’s argument that the existence of the RLA arbitration scheme preempted a state statute regulating the number of workers required to operate certain equipment. Missouri Pacific R. Co. v. Norwood, 283 U. S. 249, 258 (1931) (“No analysis or discussion of the provisions of the Railway Labor Act of 1926 is necessary to show that it does not conflict with the Arkansas statutes under consideration”). Not long thereafter, the Court rejected a claim that the RLA pre-empted an order by the Illinois Commerce Commission requiring cabooses on all trains; the operative CBA required cabooses only on some of the trains. Terminal Railroad Assn. of St. Louis v. Train men, 318 U. S. 1 (1943). Although the Court assumed that a railroad adjustment board would have jurisdiction under the RLA over this dispute, id., at 6, it concluded that the state law was enforceable nonetheless:
“State laws have long regulated a great variety of conditions in transportation and industry, such as sanitary facilities and conditions, safety devices and protections, purity of water supply, fire protection, and innumerable others. Any of these matters might, we suppose, be the subject of a demand by work[ers] for better protection and upon refusal might be the subject of a labor dispute which would have such effect on interstate commerce that federal agencies might be invoked to deal with some phase of it.... But it cannot be said that the minimum requirements laid down by state authority are all set aside. We hold that the enactment by Congress of the [RLA] was not a preemption of the field of regulating working conditions themselves....” Id., at 6-7.
Thus, under Norwood, substantive protections provided by state law, independent of whatever labor agreement might govern, are not pre-empted under the RLA.
Although Norwood and Terminal Railroad involved state workplace safety laws, the Court has taken a consistent approach in the context of state actions for wrongful discharge. In Andrews v. Louisville & Nashville R. Co., 406 U. S. 320 (1972), the Court held that a state-law claim of wrongful termination was pre-empted, not because the RLA broadly pre-empts state-law claims based on discharge or discipline, but because the employee’s claim was firmly rooted in a breach of the CBA itself. He asserted no right independent of that agreement:
“Here it is conceded by all that the only source of [Andrews’] right not to be discharged, and therefore to treat an alleged discharge as a ‘wrongful’ one that entitles him to damages, is the [CBA]____[T]he disagreement turns on the extent of [the railroad’s] obligation to restore [Andrews] to his regular duties following injury in an automobile accident. The existence and extent of such an obligation in a case such as this will depend on the interpretation of the [CBA]. Thus [Andrews’] claim, and [the railroad’s] disallowance of it, stem from differing interpretations of the [CBA].... His claim is therefore subject to the Act’s requirement that it be submitted to the Board for adjustment.” Id., at 324 (emphasis added).
Here, in contrast, the CBA is not the “only source” of respondent’s right not to be discharged wrongfully. In fact, the “only source” of the right respondent asserts in this action is state tort law. Wholly apart from any provision of the CBA, petitioners had a state-law obligation not to fire respondent in violation of public policy or in retaliation for whistle-blowing. The parties’ obligation under the RLA to arbitrate disputes arising out of the application or interpretation of the CBA did not relieve petitioners of this duty.
Atchison, T. & S. F. R. Co. v. Buell, 480 U. S. 557 (1987), confirms that “minor disputes” subject to RLA arbitration are those that involve duties and rights created or defined by the CBA. In Buell, a railroad employee sought damages for workplace injuries under the Federal Employers’ Liability Act (FELA), 45 U. S. C. § 51 et seq., which provides a remedy for a railroad worker injured through an employer’s or co-worker’s negligence. The railroad argued that, because the alleged injury resulted from conduct that was subject to the CBA, the employee’s sole remedy was through RLA arbitration. The Court unanimously rejected this argument, emphasizing that the rights derived from the FELA were independent of the CBA:
“The fact that an injury otherwise compensable under the FELA was caused by conduct that may have been subject to arbitration under the RLA does not deprive an employee of his opportunity to bring an FELA action for damages.... The FELA not only provides railroad workers with substantive protection against negligent conduct that is independent of the employer’s obligations under its collective-bargaining agreement, but also affords injured workers a remedy suited to their needs, unlike the limited relief that seems to be available through the Adjustment Board. It is inconceivable that Congress intended that a worker who suffered a disabling injury would be denied recovery under the FELA simply because he might also be able to process a narrow labor grievance under the RLA to a successful conclusion.” 480 U. S., at 564-565.
It likened Buell to other cases in which the Court had concluded that “notwithstanding the strong policies encouraging arbitration, ‘different considerations apply where the employee’s claim is based on rights arising out of a statute designed to provide minimum substantive guarantees to individual workers,’” id., at 565, quoting Barrentine v. Arkansas-Best Freight System, Inc., 450 U. S. 728, 737 (1981), and distinguished it from Andrews, which involved a state wrongful-discharge claim “based squarely” on an alleged breach of a CBA, 480 U. S., at 566.
D
The pre-emption standard that emerges from the line of cases leading to Buell — that a state-law cause of action is not pre-empted by the RLA if it involves rights and obligations that exist independent of the CBA — is virtually identical to the pre-emption standard the Court employs in cases involving § 301 of the LMRA, 29 U. S. C. § 185. In Allis-Chalmers Corp. v. Lueck, 471 U. S. 202 (1985), the Court applied § 301 pre-emption to a state-law claim for bad-faith handling of a worker’s compensation claim because the duties the employer owed the employee, including the duty of good faith, were rooted firmly in the CBA. Its pre-emption finding was based on the fact that “the right asserted not only derives from the contract, but is defined by the contractual obligation of good faith, [so that] any attempt to assess liability here inevitably will involve contract interpretation.” Id., at 218.
It cautioned, however, that other state-law rights, those that existed independent of the contract, would not be similarly pre-empted:
“Of course, not every dispute concerning employment, or tangentially involving a provision of a collective-bargaining agreement, is pre-empted by §301 or other provisions of the federal labor law.... Nor is there any suggestion that Congress, in adopting §301, wished to give the substantive provisions of private agreements the force of federal law, ousting any inconsistent state regulation.... Clearly, § 301 does not grant the parties to a collective-bargaining agreement the ability to contract for what is illegal under state law. In extending the pre-emptive effect of §301 beyond suits for breach of contract, it would be inconsistent with congressional intent under that section to pre-empt state rules that proscribe conduct, or establish rights and obligations, independent of a labor contract.” Id., at 211-212.
In a case remarkably similar to the case before us now, this Court made clear that the existence of a potential CBA-based remedy did not deprive an employee of independent remedies available under state law. In Lingle v. Norge Div. of Magic Chef, Inc., 486 U. S. 399 (1988), an employee covered by a labor agreement was fired for filing an allegedly false worker’s compensation claim. After filing a grievance pursuant to her CBA, which protected employees against discharge except for “proper” or “just” cause, she filed a complaint in state court, alleging that she had been discharged for exercising her rights under Illinois worker’s compensation laws. The state court had held her state-law claim preempted because “the same analysis of the facts” was required in both the grievance proceeding and the state-court action. This Court reversed.
It recognized that where the resolution of a state-law claim depends on an interpretation of the CBA, the claim is preempted. Id., at 405-406, citing Lueck, supra; Teamsters v. Lucas Flour Co., 369 U. S. 95 (1962). It observed, however, that “purely factual questions” about an employee’s conduct or an employer’s conduct and motives do not “requir[e] a court to interpret any term of a collective-bargaining agreement.” 486 U. S., at 407. The state-law retaliatory discharge claim turned on just this sort of purely factual question: whether the employee was discharged or threatened with discharge, and, if so, whether the employer’s motive in discharging her was to deter or interfere with her exercise of rights under Illinois worker’s compensation law.
While recognizing that “the state-law analysis might well involve attention to the same factual considerations as the contractual determination of whether Lingle was fired for just cause,” id., at 408, the Court disagreed that
“such parallelism rendered] the state-law analysis dependent upon the contractual analysis. For while there may be instances in which the National Labor Relations Act pre-empts state law on the basis of the subject matter of the law in question, § 301 pre-emption merely ensures that federal law will be the basis for interpreting collective-bargaining agreements, and says nothing about the substantive rights a State may provide to workers when adjudication of those rights does not depend upon the interpretation of such agreements. In other words, even if dispute resolution pursuant to a collective-bargaining agreement, on the one hand, and state law, on the other, would require addressing precisely the same set of facts, as long as the state-law claim can be resolved without interpreting the agreement itself, the claim is ‘independent’ of the agreement for §301 pre-emption purposes.” Id., at 408-410.
The Court’s ruling in Lingle that the LMRA pre-empts state law only if a state-law claim is dependent on the interpretation of a CBA is fully consistent with the holding in Buell, 480 U. S., at 564-565, that the RLA does not pre-empt “substantive protection... independent of the [CBA],” with the holding in Terminal Railroad, 318 U. S., at 7, that the RLA does not pre-empt basic “protection.... laid down by state authority,” with the conclusion in Andrews, 406 U. S., at 324, that a state-law claim is pre-empted where it “depend[s] on the interpretation” of the CBA, and with the description in Conmil, 491 U. S., at 305, of a minor dispute as one that can be “conclusively resolved” by reference to an existing CBA. Lingle, in fact, expressly relied on Buell, see 486 U. S., at 411-412, just as earlier RLA cases have drawn analogies to LMRA principles, see, e. g., Machinists v. Central Airlines, Inc., 372 U. S. 682, 692 (1963). Given this convergence in the pre-emption standards under the two statutes, we conclude that Lingle provides an appropriate framework for addressing pre-emption under the RLA, and we adopt the Lingle standard to resolve claims of RLA pre-emption.
E
In reaching this conclusion, we reject petitioners’ suggestion that this contract-dependent standard for minor disputes is inconsistent with two of our prior cases, Elgin, J & E. R. Co. v. Burley, 325 U. S. 711 (1945), and | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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33
] | sc_adminaction |
WESTERN PACIFIC RAILROAD CO. et al. v. UNITED STATES et al.
No. 12.
Argued October 19, 1965.
Decided December 7, 1965.
Paul Bender, pro hac vice, by special leave of Court, and Walter G. Treanor argued the cause for appellants. With Mr. Bender on the brief for the United States were Acting Solicitor General Spritzer, Assistant Attorney General Turner, Lionel Kestenbaum, Jerry Z. Pruzansky and John H. Dougherty. With Mr. Treanor on the briefs for Western Pacific Railroad Co. et al. were E. L. Van Dellen and E. Barrett Prettyman, Jr.
Robert W. Oinnane argued the cause for appellee Interstate Commerce Commission. With him on the brief was Robert S. Burk. Frank S. Farrell argued the cause for appellees Northern Pacific Railway Co. et al. With him on the brief were William P. Higgins, Charles W. Burkett and Earl F. Requa.
Mr. Justice Stewart
delivered the opinion of the Court.
Section 3 (4) of the Interstate Commerce Act, as amended, 54 Stat. 902, 49 U. S. C. § 3 (4) (1964 ed.), commands that “All carriers subject to the provisions of this chapter . . . shall not discriminate in their rates, fares, and charges between connecting lines . ...” The meaning of the term “connecting lines” is the crucial question in this controversy between the Western Pacific Railroad Company, on the one hand, and the Union Pacific Railroad Company and the Northern Pacific Railway Company, on the other. Western Pacific contends that it is a “connecting line” in relation to these carriers and that, therefore, it is entitled to invoke against them the provisions of § 3 (4) prohibiting discriminatory rates. The Interstate Commerce Commission and the District Court held otherwise.
Western Pacific filed a complaint with the Commission, alleging, in part, that Union Pacific and Northern Pacific practice rate discrimination against it. The alleged discrimination consists in the refusal of these carriers, except with respect to a few commodities, to enter into joint through rates via Portland, Oregon, with the route of which Western Pacific is part, although they maintain a full line of such rates with a competitor, the Southern Pacific Company. The hearing examiner found in favor of Western Pacific, but Division 2 of the Commission reversed. The Division found both that Western Pacific could not invoke the provisions of § 3 (4) because it was not a “connecting line,” and that, even if it were, the evidence did not establish the “similarity of circumstances and conditions” that would compel rate treatment equal to that accorded to Southern Pacific. The Division refused to accord Western Pacific “connecting line” status on the ground that it neither physically connects with the allegedly discriminating carriers at the point of discrimination, nor participates in existing through routes with them through that point. Western Pacific R. Co. v. Camas Prairie R. Co., 316 I. C. C. 795. When the full Commission denied further hearing, Western Pacific brought this action in the United States District Court for the Northern District of California to set aside the Commission’s order. The three-judge court dismissed the complaint solely on the ground that Western Pacific was not a “connecting line.” Western Pacific R. Co. v. United States, 230 F. Supp. 852. It agreed with the Commission’s limited definition of the term and said, “Any further liberalization of the present definition will have to come from the Supreme Court.” Id., at 855. We noted probable jurisdiction. 379 U. S. 956.
Analysis of “connecting line” status in this case is closely tied to the geographical, structural, and economic relationships among the railroads involved. Union Pacific, Northern Pacific and their short-line connections provide exclusive rail service between many points in the Pacific Northwest and Portland, Oregon. From Portland, the two competitive routes in question descend, at times parallel, at times intertwined, to Southern California. The route closest to the seacoast consists largely of Southern Pacific. To the east of this route lies the so-called Bieber route whose completion in 1931 was authorized by the Commission to provide competition with Southern Pacific. The Bieber route is composed of the end-to-end connections of three different companies: the Great Northern Railway from Portland to Bieber, California; the Western Pacific from Bieber to Stockton; and the Atchison, Topeka & Santa Fe from Stockton to Southern California. Thus the Bieber route and Southern Pacific both connect with the allegedly-discriminating carriers at Portland where facilities for the interchange of traffic exist.
The Bieber route carriers presently enjoy joint through rates among themselves. Moreover, the other two participants in that route have expressed willingness to join with Western Pacific in the joint rates it seeks with Union Pacific and Northern Pacific. Union Pacific and Northern Pacific, for over 50 years, have maintained through routes and a full line of joint rates with Southern Pacific via Portland. They have refused, however, except for a few commodities, to offer through routes and joint rates on traffic moving on the. Bieber route through Portland. The joint rates established with Southern Pacific are lower than the combination of local rates that would otherwise apply. Since the Bieber route carriers can offer joint rates only with respect to a few commodities, they cannot match the lower rates offered by Southern Pacific to shippers of most commodities between points in California and points in the Pacific Northwest exclusively served by Union Pacific and Northern Pacific via Portland.
The Commission and the District Court held, however, that even under these circumstances, Western Pacific is not a “connecting line” eligible to complain of the alleged discrimination. In argument here the Commission and the appellee railroads contend that to qualify for that status Western Pacific must show more than that it participates in an established through route that connects with Union Pacific and Northern Pacific, and that all the participants in the route stand willing to cooperate with these carriers in establishing joint through rates. We are urged to hold that to qualify under § 3 (4) as a complainant “connecting line” a railroad must either itself make a direct connection with the discriminating carrier, or be part of a through route that already includes the carrier. We cannot accept such a construction of the statute.
The literal meaning of the statute does not require-that construction. To be sure, the term, “connecting lines” suggests the requirement of an actual physical connection between the complainant and the discriminating carrier. The term “line,” however, admits of more than a single meaning limited to the track owned exclusively by one railroad company. It may also be interpreted reasonably to include a functional railroad unit such as the Bieber through route involved here. Moreover, all parties in this litigation recognize that in Atlantic Coast Line R. Co. v. United States, 284 U. S. 288, this Court rejected the contention that “connecting line” is a term limited to the meaning that the statutory language might initially suggest. Mr. Justice Brandéis, speaking for a unanimous Court, wrote, “There is no warrant for limiting the meaning of 'connecting lines’ to those having a direct physical connection .... The term is commonly used as referring to all the lines making up a through route.” Id., at 293.
There also is no warrant for limiting the meaning of “connecting lines” to the lines making up a through route that already includes the discriminating carrier. We have been referred to no previous judicial or administrative decisions compelling that conclusion. The Atlantic Coast Line case, supra, imposes no such limitation. It established that the term “connecting lines” extends beyond physical connection to encompass lines participating in a through route, but it does not even hint of any limitation on the nature of the thrbugh route, much less hold that the through route must already include the discriminating carrier. Our subsequent definition of “through route” in Thompson v. United States, 343 U. S. 549, adds no more to an analysis of “connecting line” under § 3 (4). In that case, which arose under §§15 (3) and 15 (4) of the Act, we held that the Commission had improperly applied the test of the existence of a through route: “. . . whether the participating carriers hold themselves out as offering through transportation service.” 343 U. S., at 557. Section 3 (4) does not use the term “through route.” But even if, after Atlantic Coast Line, a carrier may qualify as a “connecting line” if it is one of the “lines making up a through route,” 284 U. S., at 293, the Thompson test offers no solution to the problem presented here. It simply does not speak to the question whether the discriminating carrier must be one of the participating carriers offering through service in conjunction with the carrier seeking “connecting line” status.
The reason the issue presented in this case has not been decided before now may be that discrimination of the sort complained of here is uncommon. In most instances it is to the advantage of railroads such as Union Pacific and Northern Pacific to encourage the movement of traffic over their lines from as many sources as possible. Moreover, when such discrimination does occur the railroad connecting directly with the discriminating carrier is likely to take the lead as complainant.
In the absence of any settled construction of § 3 (4), then, its manifest purpose to deprive railroads of discretion to apportion economic advantage among competitors at a common interchange must be the basic guide to decision. Just such discretion would be conferred upon railroads in a position to discriminate if we were to hold that their decisions not to enter through route relationships with connecting through routes could bar nonadjacent participants in such through routes from eligibility to complain. Indeed such a holding would result in an anomalous set of circumstances clearly illustrated in the present context. No one doubts that Southern Pacific, by virtue of its direct physical connection, would be eligible to complain of rate discrimination if it were practiced in favor of the Bieber route. It is also undisputed that Great Northern would be eligible to complain of the present discrimination, not merely as it affects its segment of the Bieber route, but on behalf of the route as a whole. Moreover, it is clear that if Union Pacific and Northern Pacific had entered a through route relationship with the Bieber route and then had decided to abandon it, or to set rates somewhat higher than those set for Southern Pacific, any participant in the Bieber route could complain of that discrimination. We cannot therefore construe § 3 (4) to bar these participants from eligibility to complain solely because they have been put to an even greater competitive disadvantage by the refusal of the allegedly discriminating carriers to enter a through route relationship with them comparable to the one established with Southern Pacific. Hence, we hold that to qualify as a “connecting line,” in the absence of physical connection, a carrier need only show that it participates in an established through route, making connection at the point of common interchange, all of whose participants stand willing to cooperate in the arrangements necessary to eliminate the alleged discrimination.
Such a construction of “connecting line” does not interfere with the function of the Commission under § 15 (3) of the Act, 54 Stat. 911, 49 U. S. C. § 15 (3) (1964 ed.), to require the establishment of through routes and joint rates “in the public interest.” Section 3 (4) is applicable only to a narrower range of situations involving discrimination at a common interchange. Moreover, the remedy in § 3 (4) situations need not entail the establishment of through routes, joint rates, or indeed any particular form of relief. All that is required is the elimination of discriminatory treatment. See Chicago, Indianapolis & Louisville R. Co. v. United States, 270 U. S. 287, 292-293; United States v. Illinois Central R. Co., 263 U. S. 515, 520-521. Finally, our holding does no more than to define the characteristics of a carrier eligible to complain. Relief is warranted only if it also appears that differential treatment is not justified by differences in operating conditions that substantially affect the allegedly discriminating carrier. See United States v. Illinois Central R. Co., supra, at p. 521; Atchison, Topeka & Santa Fe R. Co. v. United States, 218 F. Supp. 359, 369.
In the present case, having found that Western Pacific was not eligible to complain, the District Court did not reach the question whether it was entitled to relief. We therefore vacate the judgment and remand this case to the District Court for further proceedings consistent with this opinion.
It is so ordered.
Section 3 (4) provides in full:
"All carriers subject to the provisions of this chapter shall, according to their respective powers, afford all reasonable, proper, and equal facilities for the interchange of traffic between their respective lines and connecting lines, and for the receiving, forwarding, and delivering of passengers or property to and from connecting lines; and shall not discriminate in their rates, fares, and charges between connecting lines, or unduly prejudice any connecting line in the distribution of traffic that is not specifically routed by the shipper. As used in this paragraph the term ‘connecting line’ means the connecting line of any carrier subject to the provisions of this chapter or any common carrier by water subject to chapter 12 of this title.”
Western Pacific and its subsidiaries named as defendants: The Northern Pacific Railway Company, The Union Pacific Railroad Company, and certain of their short-line connections. These railroads denied the allegations of the complaint. The Southern Pacific Company intervened in opposition to the complaint. The complaint also named as defendants: The Atchison, Topeka & Santa Fe Railway Company, The Great Northern Railway Company, and certain short-line connections. These railroads answered expressing willingness to join in the relief sought by Western Pacific.
The complaint also alleged violation of § 1 (4) of the Act which requires, in part, that railroads establish “reasonable through routes” with other carriers and “just and reasonable rates, fares, charges, and classifications applicable thereto . . . .” When such routes are not established voluntarily, the Commission has authority under §15 (3), to prescribe them “in the public interest.” This authority is subject to the short-haul limitation embodied in §15(4). Although the complainants indicated a willingness to rely solely on the alleged violation of § 3 (4), the Commission found against them on the § 1 (4) allegation as well. No question under § 1 (4) is presented here.
Great Northern R. Co. Construction, 166 I. C. C. 3, 39; 170 I. C. C. 399.
Pursuant to 28 U. S. C. § 2322 (1964 ed.), the United States was named as defendant in the District Court. It did not, however, join with the Commission in defense of the Commission’s order, and it supports Western Pacific in this Court.
In the Atlantic Coast Line case, certain railroads leasing the Carolina, Clinchfield & Ohio Railway with the approval of the Commission filed restrictive schedules designed ultimately to exclude an as yet incomplete extension of the Georgia & Florida Railroad from participating, when completed, in joint rates over the Clinchfield. The Commission ordered the schedules canceled on the ground that they violated terms in the lease, accepted by the lessees, on which the Commission had conditioned its approval. One condition required the lessees to permit the Clinchfield to be used as a link for through traffic with “such other carriers, now connecting, or which may hereafter connect, with [it] . . . .” 284 U. S., at 292, note 3. The extension of the Georgia & Florida made connection with the Clinchfield only via the rails of an intermediate carrier. This Court sustained the Commission’s order, however, and held that the Georgia & Florida was a carrier connecting with the Clinchfield because it was one of the “lines making up a through route.” 284 U. S., at 293. Even assuming that the through route referred to was not one limited to the complaining carrier and the intermediate carrier, it is clear that this Court was not faced with the question whether the complaining railroad would be regarded as a “connecting line” if the through route establishing the connection did not also encompass the Clinchfield. In short, Atlantic Coast Line did not present the issue squarely before us now.
Although we do not regard Chicago, Indianapolis & Louisville R. Co. v. United States, 270 U. S. 287, as dispositive of the question presented, that case, on its facts, supports the conclusion we reach.
In response to an inquiry at oral argument, the parties have submitted memoranda agreeing that through routes and joint rates are ordinarily established by voluntary agreement, and that a railroad usually interchanges traffic on a comparable basis with competing railroads at a common interchange. See also Thompson v. United States, 343 U. S. 549, 554.
Section 15 (3) provides in relevant part:
“The Commission may, and it shall whenever deemed by it to be necessary or desirable in the public interest, after full hearing upon complaint or upon its own initiative without complaint, establish through routes, joint classifications, and joint rates, fares, or charges, applicable to the transportation of passengers or property by carriers subject to this chapter ... or the maxima or minima, or maxima and minima, to be charged, and the divisions of such rates, fares, or charges as hereinafter provided, and the terms and conditions under which such through routes shall be operated.” | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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65
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NEW JERSEY v. T. L. O.
No. 83-712.
Argued March 28, 1984
Reargued October 2, 1984
Decided January 15, 1985
White, J., delivered the opinion of the Court, in which Burger, C. J., and Powell, Rehnquist, and O’Connor, JJ., joined, and in Part II of which Brennan, Marshall, and Stevens, JJ., joined. Powell, J., filed a concurring opinion, in which O’Connor, J., joined, post, p. 348. Blackmun, J., filed an opinion concurring in the judgment, post, p. 351. Brennan, J., filed an opinion concurring in part and dissenting in part, in which Marshall, J., joined, post, p. 353. Stevens, J., filed an opinion concurring in part and dissenting in part, in which Marshall, J., joined, and in Part I of which Brennan, J., joined, post, p. 370.
Allan J. Nodes, Deputy Attorney General of New Jersey, reargued the cause for petitioner. With him on the brief on reargument were Irwin J. Kimmelman, Attorney General, and Victoria Curtis Bramson, Linda L. Yoder, and Gilbert G. Miller, Deputy Attorneys General. With him on the briefs on the original argument were Mr. Kimmelman and Ms. Bramson.
Lois De Julio reargued the cause for respondent. With her on the briefs were Joseph H. Rodriguez and Andrew Dillmann.
Briefs of amici curiae urging reversal were filed for the United States by Solicitor General Lee, Deputy Solicitor General Frey, and Kathryn'A. Oberly; for the National Association of Secondary School Principals et al. by Ivan B. Gluckman; for the National School Boards Association by Gwendolyn H. Gregory, August W. Steinhilber, and Thomas A. Shannon; for the Washington Legal Foundation by Daniel J. Popeo and Paul D. Kamenar; and for the New Jersey School Boards Association by Paula A. Mullaly and Thomas F. Scully.
Briefs of amici curiae urging affirmance were filed for the American Civil Liberties Union et al. by Mary L. Heen, Burt Neubome, E. Richard Larson, Barry S. Goodman, and Charles S. Sims; and for the Legal Aid Society of the City of New York et al. by Janet Fink and Henry Weintraub.
Julia Penny Clark and Robert Chanin filed a brief for the National Education Association as amicus curiae.
Justice White
delivered the opinion of the Court.
We granted certiorari in this case to examine the appropriateness of the exclusionary rule as a remedy for searches carried out in violation of the Fourth Amendment by public school authorities. Our consideration of the proper application of the Fourth Amendment to the public schools, however, has led us to conclude that the search that gave rise to the case now before us did not violate the Fourth Amendment. Accordingly, we here address only the questions of the proper standard for assessing the legality of searches conducted by public school officials and the application of that standard to the facts of this case.
I
On March 7, 1980, a teacher at Piscataway High School in Middlesex County, N. J., discovered two girls smoking in a lavatory. One of the two girls was the respondent T. L. 0., who at that time was a 14-year-old high school freshman. Because smoking in the lavatory was a violation of a school rule, the teacher took the two girls to the Principal’s office, where they met with Assistant Vice Principal Theodore Choplick. In response to questioning by Mr. Choplick, T. L. O.’s companion admitted that she had violated the rule. T. L. 0., however, denied that she had been smoking in the lavatory and claimed that she did not smoke at all.
Mr. Choplick asked T. L. O. to come into his private office and demanded to see her purse. Opening the purse, he found a pack of cigarettes, which he removed from the purse and held before T. L. O. as he accused her of having lied to him. As he reached into the purse for the cigarettes, Mr. Choplick also noticed a package of cigarette rolling papers. In his experience, possession of rolling papers by high school students was closely associated with the use of marihuana. Suspecting that a closer examination of the purse might yield further evidence of drug use, Mr. Choplick proceeded to search the purse thoroughly. The search revealed a smáll amount of marihuana, a pipe, a number of empty plastic bags, a substantial quantity of money in one-dollar bills, an index card that appeared to be a list of students who owed T. L. O. money, and two letters that implicated T. L. O. in marihuana dealing.
Mr. Choplick notified T. L. O.’s mother and the police, and turned the evidence of drug dealing over to the police. At the request of the police, T. L. O.’s mother took her daughter to police headquarters, where T. L. O. confessed that she had been selling marihuana at the high school. On the basis of the confession and the evidence seized by Mr. Choplick, the State brought delinquency charges against T. L. O. in the Juvenile and Domestic Relations Court of Middlesex County. Contending that Mr. Choplick’s search of her purse violated the Fourth Amendment, T. L. O. moved to suppress the evidence found in her purse as well as her confession, which, she argued, was tainted by the allegedly unlawful search. The Juvenile Court denied the motion to suppress. State ex rel. T. L. O., 178 N. J. Super. 329, 428 A. 2d 1327 (1980). Although the court concluded that the Fourth Amendment did apply to searches carried out by school officials, it held that
“a school official may properly conduct a search of a student’s person if the official has a reasonable suspicion that a crime has been or is in the process of being committed, or reasonable cause to believe that the search is necessary to maintain school discipline or enforce school policies.” Id., at 341, 428 A. 2d, at 1333 (emphasis in original).
Applying this standard, the court concluded that the search conducted by Mr. Choplick was a reasonable one. The initial decision to open the purse was justified by Mr. Choplick’s well-founded suspicion that T. L. O. had violated the rule forbidding smoking in the lavatory. Once the purse was open, evidence of marihuana violations was in plain view, and Mr. Choplick was entitled to conduct a thorough search to determine the nature and extent of T. L. O.’s drug-related activities. Id., at 343, 428 A. 2d, at 1334. Having denied the motion to suppress, the court on March 23, 1981, found T. L. O. to be a delinquent and on January 8, 1982, sentenced her to a year’s probation.
On appeal from the final judgment of the Juvenile Court, a divided Appellate Division affirmed the trial court’s finding that there had been no Fourth Amendment violation, but vacated the adjudication of delinquency and remanded for a determination whether T. L. O. had knowingly and voluntarily waived her Fifth Amendment rights before confessing. State ex rel. T. L. O., 185 N. J. Super. 279, 448 A. 2d 493 (1982). T. L. O. appealed the Fourth Amendment ruling, and the Supreme Court of New Jersey reversed the judgment of the Appellate Division and ordered the suppression of the evidence found in T. L. O.’s purse. State ex rel. T. L. O., 94 N. J. 331, 463 A. 2d 934 (1983).
The New Jersey Supreme Court agreed with the lower courts that the Fourth Amendment applies to searches conducted by school officials. The court also rejected the State of New Jersey’s argument that the exclusionary rule should not be employed to prevent the use in juvenile proceedings of evidence unlawfully seized by school officials. Declining to consider whether applying the rule to the fruits of searches by school officials would have any deterrent value, the court held simply that the precedents of this Court establish that “if an official search violates constitutional rights, the evidence is not admissible in criminal proceedings.” Id., at 341, 463 A. 2d, at 939 (footnote omitted).
With respect to the question of the legality of the search before it, the court agreed with the Juvenile Court that a warrantless search by a school official does not violate the Fourth Amendment so long as the official “has reasonable grounds to believe that a student possesses evidence of illegal activity or activity that would interfere with school discipline and order.” Id., at 346, 463 A. 2d, at 941-942. However, the court, with two justices dissenting, sharply disagreed with the Juvenile Court’s conclusion that the search of the purse was reasonable. According to the majority, the contents of T. L. O.’s purse had no bearing on the accusation against T. L. 0., for possession of cigarettes (as opposed to smoking them in the lavatory) did not violate school rules, and a mere desire for evidence that would impeach T. L. O.’s claim that she did not smoke cigarettes could not justify the search. Moreover, even if a reasonable suspicion that T. L. O. had cigarettes in her purse would justify a search, Mr. Choplick had no such suspicion, as no one had furnished him with any specific information that there were cigarettes in the purse. Finally, leaving aside the question whether Mr. Choplick was justified in opening the purse, the court held that the evidence of drug use that he saw inside did not justify the extensive “rummaging” through T. L. O.’s papers and effects that followed. Id., at 347, 463 A. 2d, at 942-943.
We granted the State of New Jersey’s petition for certio-rari. 464 U. S. 991 (1983). Although the State had argued in the Supreme Court of New Jersey that the search of T. L. O.’s purse did not violate the Fourth Amendment, the petition for certiorari raised only the question whether the exclusionary rule should operate to bar consideration in juvenile delinquency proceedings of evidence unlawfully seized by a school official without the involvement of law enforcement officers. When this case was first argued last Term, the State conceded for the purpose of argument that the standard devised by the New Jersey Supreme Court for determining the legality of school searches was appropriate and that the court had correctly applied that standard; the State contended only that the remedial purposes of the exclusionary rule were not well served by applying it to searches conducted by public authorities not primarily engaged in law enforcement.
Although we originally granted certiorari to decide the issue of the appropriate remedy in juvenile court proceedings for unlawful school searches, our doubts regarding the wisdom of deciding that question in isolation from the broader question of what limits, if any, the Fourth Amendment places on the activities of school authorities prompted us to order reargument on that question. Having heard argument on the legality of the search of T. L. O.’s purse, we are satisfied that the search did not violate the Fourth Amendment.
II
In determining whether the search at issue in this case violated the Fourth Amendment, we are faced initially with the question whether that Amendment’s prohibition on unreasonable searches and seizures applies to searches conducted by public school officials. We hold that it does.
It is now beyond dispute that “the Federal Constitution, by virtue of the Fourteenth Amendment, prohibits unreasonable searches and seizures by state officers.” Elkins v. United States, 364 U. S. 206, 213 (1960); accord, Mapp v. Ohio, 367 U. S. 643 (1961); Wolf v. Colorado, 338 U. S. 25 (1949). Equally indisputable is the proposition that the Fourteenth Amendment protects the rights of students against encroachment by public school officials:
“The Fourteenth Amendment, as now applied to the States, protects the citizen against the State itself and all of its creatures — Boards of Education not excepted. These have, of course, important, delicate, and highly discretionary functions, but none that they may not perform within the limits of the Bill of Rights. That they are educating the young for citizenship is reason for scrupulous protection of Constitutional freedoms of the individual, if we are not to strangle the free mind at its source and teach youth to discount important principles of our government as mere platitudes.” West Virginia State Bd. of Ed. v. Barnette, 319 U. S. 624, 637 (1943).
These two propositions — that the Fourth Amendment applies to the States through the Fourteenth Amendment, and that the actions of public school officials are subject to the limits placed on state action by the Fourteenth Amendment — might appear sufficient to answer the suggestion that the Fourth Amendment does not proscribe unreasonable searches by school officials. On reargument, however, the State of New Jersey has argued that the history of the Fourth Amendment indicates that the Amendment was intended to regulate only searches and seizures carried out by law enforcement officers; accordingly, although public school officials are concededly state agents for purposes of the Fourteenth Amendment, the Fourth Amendment creates no rights enforceable against them.
It may well be true that the evil toward which the Fourth Amendment was primarily directed was the resurrection of the pre-Revolutionary practice of using general warrants or “writs of assistance” to authorize searches for contraband by officers of the Crown. See United States v. Chadwick, 433 U. S. 1, 7-8 (1977); Boyd v. United States, 116 U. S. 616, 624-629 (1886). But this Court has never limited the Amendment’s prohibition on unreasonable searches and seizures to operations conducted by the police. Rather, the Court has long spoken of the Fourth Amendment’s strictures as restraints imposed upon “governmental action” — that is, “upon the activities of sovereign authority.” Burdeau v. McDowell, 256 U. S. 465, 475 (1921). Accordingly, we have held the Fourth Amendment applicable to the activities of civil as well as criminal authorities: building inspectors, see Camara v. Municipal Court, 387 U. S. 523, 528 (1967), Occupational Safety and Health Act inspectors, see Marshall v. Barlow’s, Inc., 436 U. S. 307, 312-313 (1978), and even firemen entering privately owned premises to battle a fire, see Michigan v. Tyler, 436 U. S. 499, 506 (1978), are all subject to the restraints imposed by the Fourth Amendment. As we observed in Camara v. Municipal Court, supra, “[t]he basic purpose of this Amendment, as recognized in countless decisions of this Court, is to safeguard the privacy and security of individuals against arbitrary invasions by governmental officials.” 387 U. S., at 528. Because the individual’s interest in privacy and personal security “suffers whether the government’s motivation is to investigate violations of criminal laws or breaches of other statutory or regulatory standards,” Marshall v. Barlow’s, Inc., supra, at 312-313, it would be “anomalous to say that the individual and his private property are fully protected by the Fourth Amendment only when the individual is suspected of criminal behavior.” Camara v. Municipal Court, supra, at 530.
Notwithstanding the general applicability of the Fourth Amendment to the activities of civil authorities, a few courts have concluded that school officials are exempt from the dictates of the Fourth Amendment by virtue of the special nature of their authority over schoolchildren. See, e. g., R. C. M. v. State, 660 S. W. 2d 552 (Tex. App. 1983). Teachers and school administrators, it is said, act in loco parentis in their dealings with students: their authority is that of the parent, not the State, and is therefore not subject to the limits of the Fourth Amendment. Ibid.
Such reasoning is in tension with contemporary reality and the teachings of this Court. We have held school officials subject to the commands of the First Amendment, see Tinker v. Des Moines Independent Community School District, 393 U. S. 503 (1969), and the Due Process Clause of the Fourteenth Amendment, see Goss v. Lopez, 419 U. S. 565 (1975). If school authorities are state actors for purposes of the constitutional guarantees of freedom of expression and due process, it is difficult to understand why they should be deemed to be exercising parental rather than public authority when conducting searches of their students. More generally, the Court has recognized that “the concept of parental delegation” as a source of school authority is not entirely “consonant with compulsory education laws.” Ingraham v. Wright, 430 U. S. 651, 662 (1977). Today’s public school officials do not merely exercise authority voluntarily conferred on them by individual parents; rather, they act in furtherance of publicly mandated educational and disciplinary policies. See, e. g., the opinion in State ex rel. T. L. O., 94 N. J., at 343, 463 A. 2d, at 934, 940, describing the New Jersey statutes regulating school disciplinary policies and establishing the authority of school officials over their students. In carrying out searches and other disciplinary functions pursuant to such policies, school officials act as representatives of the State, not merely as surrogates for the parents, and they cannot claim the parents’ immunity from the strictures of the Fourth Amendment.
Ill
To hold that the Fourth Amendment applies to searches conducted by school authorities is only to begin the inquiry into the standards governing such searches. Although the underlying command of the Fourth Amendment is always that searches and seizures be reasonable, what is reasonable depends on the context within which a search takes place. The determination of the standard of reasonableness governing any specific class of searches requires “balancing the need to search against the invasion which the search entails.” Camara v. Municipal Court, supra, at 536-537. On one side of the balance are arrayed the individual’s legitimate expectations of privacy and personal security; on the other, the government’s need for effective methods to deal with breaches of public order.
We have recognized that even a limited search of the person is a substantial invasion of privacy. Terry v. Ohio, 392 U. S. 1, 24-25 (1967). We have also recognized that searches of closed items of personal luggage are intrusions on protected privacy interests, for “the Fourth Amendment pro-' vides protection to the owner of every container that conceals" its contents from plain view.” United States v. Ross, 456 U. S. 798, 822-823 (1982). A search of a child’s person or of' a closed purse or other bag carried on her person, no less than a similar search carried out on an adult, is undoubtedly a severe violation of subjective expectations of privacy.
. Of course, the Fourth Amendment does not protect subjective expectations of privacy that are unreasonable or otherwise “illegitimate.” See, e. g., Hudson v. Palmer, 468 U. S. 517 (1984); Rawlings v. Kentucky, 448 U. S. 98 (1980). To receive the protection of the Fourth Amendment, an expectation of privacy must be one that society is “prepared to recognize as legitimate.” Hudson v. Palmer, supra, at 526. The State of New Jersey has argued that because of the pervasive supervision to which children in the schools are necessarily subject, a child has virtually no legitimate expectation of privacy in articles of personal property “unnecessarily” carried into a school. This argument has two factual premises: (1) the fundamental incompatibility of expectations of privacy with the maintenance of a sound educational environment; and (2) the minimal interest of the child in bringing any items of personal property into the school. Both premises are severely flawed.
Although this Court may take notice of the difficulty of maintaining discipline in the public schools today, the situation is not so dire that students in the schools may claim no legitimate expectations of privacy. We have recently recognized that the need to maintain order in a prison is such that prisoners retain no legitimate expectations of privacy in their cells, but it goes almost without saying that “[tjhe prisoner and the schoolchild stand in wholly different circumstances, separated by the harsh facts of criminal conviction and incarceration.” Ingraham v. Wright, supra, at 669. We are not yet ready to hold that the schools and the prisons need be equated for purposes of the Fourth Amendment.
Nor does the State’s suggestion that children have no legitimate need to bring personal property into the schools seem well anchored in reality. Students at a minimum must bring to school not only the supplies needed for their studies, but also keys, money, and the necessaries of personal hygiene and grooming. In addition, students may carry on their persons or in purses or wallets such nondisruptive yet highly personal items as photographs, letters, and diaries. Finally, students may have perfectly legitimate reasons to carry with them articles of property needed in connection with extracurricular or recreational activities. In short, schoolchildren may find it necessary to carry with them a variety of legitimate, noncontraband items, and there is no reason to conclude that they have necessarily waived all rights to privacy in such items merely by bringing them onto school grounds.
Against the child’s interest in privacy must be set the substantial interest of teachers and administrators in maintaining discipline in the classroom and on school grounds. Maintaining order in the classroom has never been easy, but in recent years, school disorder has often taken particularly ugly forms: drug use and violent crime in the schools have become major social problems. See generally 1 NIE, U. S. Dept, of Health, Education and Welfare, Violent Schools— Safe Schools: The Safe School Study Report to the Congress (1978). Even in schools that have been spared the most severe disciplinary problems, the preservation of order and a proper educational environment requires close supervision of schoolchildren, as well as the enforcement of rules against conduct that would be perfectly permissible if undertaken by an adult. “Events calling for discipline are frequent occurrences and sometimes require immediate, effective action.” Goss v. Lopez, 419 U. S., at 580. Accordingly, we have recognized that maintaining security and order in the schools requires a certain degree of flexibility in school disciplinary procedures, and we have respected the value of preserving the informality of the student-teacher relationship. See id., at 582-583; Ingraham v. Wright, 430 U. S., at 680-682.
How, then, should we strike the balance between the schoolchild’s legitimate expectations of privacy and the school’s equally legitimate need to maintain an environment in which learning can take place? It is evident that the school setting requires some easing of the restrictions to which searches by public authorities are ordinarily subject. The warrant requirement, in particular, is unsuited to the school environment: requiring a teacher to obtain a warrant before searching a child suspected of an infraction of school rules (or of the criminal law) would unduly interfere with the maintenance of the swift and informal disciplinary procedures needed in the schools. Just as we have in other cases dispensed with the warrant requirement when “the burden of obtaining a warrant is likely to frustrate the governmental purpose behind the search,” Camara v. Municipal Court, 387 U. S., at 532-533, we hold today that school officials need not obtain a warrant before searching a student who is under their authority.
The school setting also requires some modification of the level of suspicion of illicit activity needed to justify a search. Ordinarily, a search — even one that may permissibly be carried out without a warrant — must be based upon “probable cause” to believe that a violation of the law has occurred. See, e. g., Almeida-Sanchez v. United States, 413 U. S. 266, 273 (1973); Sibron v. New York, 392 U. S. 40, 62-66 (1968). However, “probable cause” is not an irreducible requirement of a valid search. The fundamental command of the Fourth Amendment is that searches and seizures be reasonable, and although “both the concept of probable cause and the requirement of a warrant bear on the reasonableness of a search,... in certain limited circumstances neither is required.” Almeida-Sanchez v. United States, supra, at 277 (Powell, J., concurring). Thus, we have in a number of cases recognized the legality of searches and seizures based on suspicions that, although “reasonable,” do not rise to the level of probable cause. See, e. g., Terry v. Ohio, 392 U. S. 1 (1968); United States v. Brignoni-Ponce, 422 U. S. 873, 881 (1975); Delaware v. Prouse, 440 U. S. 648, 654-655 (1979); United States v. Martinez-Fuerte, 428 U. S. 543 (1976); cf. Camara v. Municipal Court, supra, at 534-539. Where a careful balancing of governmental and private interests suggests that the public interest is best served by a Fourth Amendment standard of reasonableness that stops short of probable cause, we have not hesitated to adopt such a standard.
We join the majority of courts that have examined this issue in concluding that the accommodation of the privacy interests of schoolchildren with the substantial need of teachers and administrators for freedom to maintain order in the schools does not require strict adherence to the requirement that searches be based on probable cause to believe that the subject of the search has violated or is violating the law. Rather, the legality of a search of a student should depend simply on the reasonableness, under all the circumstances, of the search. Determining the reasonableness of any search involves a twofold inquiry: first, one must consider “whether the... action was justified at its inception,” Terry v. Ohio, 392 U. S., at 20; second, one must determine whether the search as actually conducted “was reasonably related in scope to the circumstances which justified the interference in the first place,” ibid. Under ordinary circumstances, a search of a student by a teacher or other school official will be “justified at its inception” when there are reasonable grounds for suspecting that the search will turn up evidence that the student has violated or is violating either the law or the rules of the school. Such a search will be permissible in its scope when the measures adopted are reasonably related to the objectives of the search and not excessively intrusive in light of the age and sex of the student and the nature of the infraction.
This standard will, we trust, neither unduly burden the efforts of school authorities to maintain order in their schools nor authorize unrestrained intrusions upon the privacy of schoolchildren. By focusing attention on the question of reasonableness, the standard will spare teachers and school administrators the necessity of schooling themselves in the niceties of probable cause and permit them to regulate their conduct according to the dictates of reason and common sense. At the same time, the reasonableness standard should ensure that the interests of students will be invaded no more than is necessary to achieve the legitimate end of preserving order in the schools.
IV
There remains the question of the legality of the search in this case. We recognize that the “reasonable grounds” standard applied by the New Jersey Supreme Court in its consideration of this question is not substantially different from the standard that we have adopted today. Nonetheless, we believe that the New Jersey court’s application of that standard to strike down the search of T. L. O.’s purse reflects a somewhat crabbed notion of reasonableness. Our review of the facts surrounding the search leads us to conclude that the search was in no sense unreasonable for Fourth Amendment purposes.
The incident that gave rise to this case actually involved two separate searches, with the first — the search for cigarettes — providing the suspicion that gave rise to the second — the search for marihuana. Although it is the fruits of the second search that are at issue here, the validity of the search for marihuana must depend on the reasonableness of the initial search for cigarettes, as there would have been no reason to suspect that T. L. O. possessed marihuana had the first search not taken place. Accordingly, it is to the search for cigarettes that we first turn our attention.
The New Jersey Supreme Court pointed to two grounds for its holding that the search for cigarettes was unreasonable. First, the court observed that possession of cigarettes was not in itself illegal or a violation of school rules. Because the contents of T. L. O.’s purse would therefore have “no direct bearing on the infraction” of which she was accused (smoking in a lavatory where smoking was prohibited), there was no reason to search her purse. Second, even assuming that a search of T. L. O.’s purse might under some circumstances be reasonable in light of the accusation made against T. L. 0., the New Jersey court concluded that Mr. Choplick in this particular case had no reasonable grounds to suspect that T. L. O. had cigarettes in her purse. At best, according to the court, Mr. Chopliek had “a good hunch.” 94 N. J., at 347, 463 A. 2d, at 942.
Both these conclusions are implausible. T. L. O. had been accused of smoking, and had denied the accusation in the strongest possible terms when she stated that she did not smoke at all. Surely it cannot be said that under these circumstances, T. L. O.’s possession of cigarettes would be irrelevant to the charges against her or to her response to those charges. T. L. O.’s possession of cigarettes, once it was discovered, would both corroborate the report that she had been smoking and undermine the credibility of her defense to the charge of smoking. To be sure, the discovery of the cigarettes would not prove that T. L. O. had been smoking in the lavatory; nor would it, strictly speaking, necessarily be inconsistent with her claim that she did not smoke at all. But it is universally recognized that evidence, to be relevant to an inquiry, need not conclusively prove the ultimate fact in issue, but only have “any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” Fed. Rule Evid. 401. The relevance of T. L. O.’s possession of cigarettes to the question whether she had been smoking and to the credibility of her denial that she smoked supplied the necessary “n | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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116
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ELKINS, PRESIDENT, UNIVERSITY OF MARYLAND v. MORENO et al.
No. 77-154.
Argued February 22, 1978
Decided April 19, 1978
Brennan, J., delivered the opinion of the Court, in which Stewart, White, Marshall, Blackmun, Powell, and Stevens, JJ., joined. Rehnquist, J., filed a dissenting opinion, in which Burger, C. J., joined, post, p. 669.
David H. Feldman, Assistant Attorney General of Maryland, argued the cause for petitioner. With him on the briefs were Francis B. Burch, Attorney General, George A. Nilson, Deputy Attorney General, and Robert A. Zarnoch, Assistant Attorney General.
Alfred L. Scanlan argued the cause for respondents. With him on the brief was James R. Bieke.
A brief for the American Council on Education et al. as amici curiae urging reversal was filed by Sheldon Elliot Steinbach and by the Attorneys General of their respective States as follows: Robert F. Stephens of Kentucky, Francis X. Bellotti of Massachusetts, Anthony F. Troy of Virginia, Avrum Gross of Alaska, Carl R. Ajello of Connecticut, Richard R. Wier, Jr., of Delaware, Arthur K. Bolton of Georgia, Wayne L. Kidwell of Idaho, Theodore L. Sendak of Indiana, William J. Guste, Jr., of Louisiana, Joseph E. Brennan of Maine, A. F. Summer of Mississippi, Jphñ D. Ashcroft of Missouri, Paul L. Douglas of Nebraska, Robert List of Nevada, David H. Souter of New Hampshire, William F. Hyland of New Jersey, Toney Anaya of New Mexico, Louis J. Lefkowitz of New York, Rufus L. Edmisten of North Carolina, Allen I. Olson of North Dakota, James A. Redden of Oregon, Daniel R. McLeod of South Carolina, William Janklow of South Dakota, Robert B. Hansen of Utah, M. Jerome Diamond of Vermont, Chauncey H. Browning, Jr., of West Virginia, and V, Frank Mendicino of Wyoming.
Mr. Justice Brennan
delivered the opinion of the Court.
Respondents, representing a class of nonimmigrant alien residents of Maryland, brought this action against the University of Maryland and its President, petitioner Elkins, alleging that the University’s failure to grant respondents “in-state” status for tuition purposes violated various federal laws, the Due Process and Equal Protection Clauses of the Fourteenth Amendment, and the Supremacy Clause. The District Court held for respondents on the ground that the University’s procedures for determining in-state status violated principles established in Vlandis v. Kline, 412 U. S. 441 (1973), and the Court of Appeals affirmed. Moreno v. University of Maryland, 420 F. Supp. 541 (Md. 1976), affirmance order, 556 F. 2d 573 (CA4 1977). We granted certiorari to consider whether this decision was in conflict with Weinberger v. Salfi, 422 U. S. 749 (1975). 434 U. S. 888 (1977).
Because we find that the federal constitutional issues in this case cannot be resolved without deciding an important issue of Maryland law “as to which it appears... there is no controlling precedent in the Court of Appeals of [Maryland]/’ Md. Cts. & Jud. Proc. Code Ann. § 12-601 (1974), we first decide some preliminary issues of federal law and then certify the question of state law set out infra, at 668-669, to the Maryland Court of Appeals.
I
In 1973 the University of Maryland adopted a general policy statement with respect to “In-State Status for Admission, Tuition, and Charge-Differential Purposes.” In relevant part, this statement provides:
“1. It is the policy of the University of Maryland to grant in-state status for admission, tuition and charge-differential purposes to United States citizens, and to immigrant aliens lawfully admitted for permanent residence in accordance with the laws of the United States, in the following cases:
“a. Where a student is financially dependent upon a parent, parents, or spouse domiciled in Maryland for at least six consecutive months prior to the last day available for registration for the forthcoming semester.
“b. Where a student is financially independent for at least the preceding twelve months, and provided the student has maintained his domicile in Maryland for at least six consecutive months immediately prior to the last day available for registration for the forthcoming semester.” Brief for Petitioner 7.
The term “domicile” is defined as “a person’s permanent place of abode; namely, there must be demonstrated an intention to live permanently or indefinitely in Maryland.” Id., at 8. The policy statement also sets out eight factors to be considered in determining domicile, of which one is whether a student, or the persons on whom he is dependent, pays “Maryland income tax on all earned income including all taxable income earned outside the State.” Id., at 9.
In addition to establishing criteria for conferring in-state status, the general policy statement establishes an administrative regime in which a person seeking in-state status initially files documentary information setting out the basis for his claim of domicile. See id., at 8-9. If the claim is denied, the person seeking in-state status may appeal, first through a personal interview with a “campus classification officer,” then to an “Intercampus Review Committee (IRC),” and finally to petitioner Elkins, as President of the University. See id., at
In 1974, respondents Juan C. Moreno and Juan P. Otero applied for in-state status under the general policy statement. Each respondent was a student at the University of Maryland and each was dependent on a parent who held a “G-4 visa,” that is, a nonimmigrant visa granted to “officers, or employees of... international organizations, and the members of their immediate families” pursuant to 8 U. S. C. § 1101. (a) (15) (G) (iv) (1976 ed.). Initially, respondent Moreno was denied in-state status because “neither Mr. Manuel Moreno nor his son, Juan Carlos, are Maryland domiciliarles.” Record 41. Respondent Otero was denied in-state status because he was neither a United States citizen nor an alien admitted for permanent residence. Id., at 80.
These respondents took a “consolidated appeal” to the IRC, which also denied them in-state status in a letter which stated:
“The differential in tuition for in-state and out-of-state fees is based upon the principle that the State of Maryland should subsidize only those individuals who are subject to the full scope of Maryland tax liability. Such taxes support in part the University. The University of Maryland’s present classification policies rest upon this principle of cost equalization. In examining the particulars of your case it is felt that neither you nor your parents are subject to' the full range of Maryland taxes (e. g., income tax) and therefore the University must classify you as out-of-state with the consequential higher tuition rate.
“You have raised the question of domicile. It is our opinion that a holder of a G-4 visa cannot acquire the requisite intent to reside permanently in Maryland, such intent being necessary to establish domicile.” Id., at 51, 86.
A final appeal was made to President Elkins, who advised Moreno and Otero as follows:
“It is the policy of the University of Maryland to grant in-state status for admission, tuition and charge-differential purposes only to United States citizens and to immigrant aliens lawfully admitted for permanent residence. Furthermore, such individuals (or their parents) must display Maryland domicile. This classification policy reflects the desire to equalize, as far as possible, the cost of education between those who support the University of Maryland through payment of the full spectrum of Maryland taxes, and those who do not. In reviewing these cases, it does not appear that the parents pay Maryland income tax. It is my opinion, therefore, that the aforesaid purpose of the policy, as well as the clear language of the policy, requires the classification of Mr. Moreno and Mr. Otero as 'out-of-state.’
“The University’s classification policy also distinguishes between domiciliaries and non-domiciliaries of Maryland. In this regard, it is my opinion, and the position of the University, that the terms and conditions of a G-4 non-immigrant visa preclude establishing the requisite intent necessary for Maryland domicile. Thus, because Mr. Moreno and Mr. Otero are not domiciliaries of Maryland, and because of the underlying principle of cost equalization, I am denying the requests for reclassification.” App. 12A.
Respondent Clare B. Hogg’s experience was similar. Her application for in-state status was initially rejected because:
''[T]he policy for the determination of in-state status limits the ability to establish an in-state classification to United States citizens and immigrant aliens admitted to the United States for permanent residence. As the person upon whom you are dependent holds a G--4 visa, and as you hold a G-4 visa, in my judgment you are not eligible for an in-state classification.
''Also, the person upon whom you are dependent does not pay Maryland income tax on all earned income, including income earned outside the state. I feel this further weakens your request for reclassification as this is an important criteria [sic] in determination of domicile.” Record 106.
However, the IRC stated on appeal:
"It is the opinion of the IRC that a holder of a non-immigrant visa, including the G-4 visa you hold, cannot acquire the requisite intent to reside permanently in Maryland, such intent being necessary to establish domicile.” Id., at 111.
No mention was made of failure to pay taxes or of respondents’ nonimmigrant status. See ibid. Yet on final appeal to President Elkins, these reasons, as well as respondent Hogg’s lack of domicile,, were recited in a letter virtually identical to those sent respondents Moreno and Otero as grounds for denying in-state status. See App. 13A.
Unable to obtain in-state status through the University’s administrative machinery, respondents filed a class action against the University and petitioner Elkins, seeking a declaration that the class.should be granted in-state status and seeking permanently to enjoin the University from denying in-state status to any present or future class member on the ground that such class member or a parent on whom such class member might be financially dependent
“(a) is the holder of a G-4 visa; (b) pays no Maryland State income tax on a salary or wages from an international organization under the provisions of an international treaty to which the United States is a party; or (c) is not domiciled in the State of Maryland by reason of holding such a visa or paying no Maryland State income tax on such salary or wages under the provisions of such a treaty.” Id., at 11A.
The District Court, on cross-motions for summary judgment, limited the relief granted to a declaration and enforcing injunction restraining petitioner Elkins from denying respondents “the opportunity to establish ‘in-state’ status” solely because of an “irrebuttable presumption of non-domicile.” 420 F. Supp., at 565. The court specifically refused to grant respondents in-state status, holding that the facts with respect to the respondents’ fathers, on whom each respondent was dependent, were in dispute. Id., at 564^565. Similarly, the court did not indicate whether the University could or could not exclude respondents because their fathers paid no Maryland state income taxes.
With respect to the “irrebuttable presumption” issue, the District Court first held that, although each respondent had been allowed to submit a complete statement of facts supporting his or her claim of domicile to University authorities, there had been no individualized hearing because the University had a “predetermined conclusion concerning the domicile of a G-4 alien,” id., at 555, namely, that a G-4 could not have the requisite intent to establish domicile. It then ruled that aliens holding G-4 visas could as a matter of Maryland common law become Maryland domiciliarles so long as such aliens were legally capable of changing domicile as a matter of federal law. See id., at 555-556. An examination of the Immigration and Nationality Act of 1952,66 Stat. 163, as amended, 8 U. S. C. § 1101 et seq., demonstrated that G-4 aliens, as distinguished from some other classes of aliens, had the legal capacity to change domicile as a matter of federal law. See 420 F. Supp., at 556-559. Accordingly, the University’s irrebuttable presumption that G-4 aliens could not become Maryland domiciliarles was not universally true. Since “reasonable alternative means of making the crucial [domicile] determination,” Vlandis v. Kline, 412 U. S., at 452, were readily at hand, the University’s policy violated the Due Process Clause of the Fourteenth Amendment. See 420 F. Supp., at 559-560. These conclusions were affirmed by the Court of Appeals for the Fourth Circuit, which adopted the reasoning of the District Court. App. to Pet. for Cert. 54a-55a.
Ill
A
In this Court, petitioner argues that the University’s instate policy should have been tested under standards set out in Weinberger v. Salfi, 422 U. S. 749 (1975), and its progeny, since in petitioner’s view these cases have effectively overruled Vlandis. As an alternative argument, petitioner asserts that the District Court should be reversed because its conclusions on points of Maryland and federal law were erroneous and in fact it is universally true that a G-4 visa holder cannot become a Maryland domiciliary.
Respondents reply that Vlandis was distinguished, not overruled, by Salfi, and, as distinguished, Vlandis covers this case. Moreover, they assert that the District Court correctly interpreted federal and Maryland law. Because the University’s policy would on this view discriminate against a class of aliens who could become Maryland domiciliarles, they also argue, as they did in the District Court, that they should prevail on equal protection grounds even if they cannot prevail under Vlandis. Cf. Nyquist v. Mauclet, 432 U. S. 1 (1977).
Although the parties argue this case in terms of due process, equal protection, and Vlandis versus Salfi, the gravamen of their dispute is unquestionably whether, as a matter of federal and Maryland law, G-4 aliens can form the intent necessary to allow them to become domiciliarles of Maryland. The University has consistently maintained throughout this litigation that, notwithstanding other possible interpretations of its policy statement, its “paramount” and controlling concern is with domicile as defined by the courts of Maryland. It has eschewed any interest in creating a classwide exclusion based solely on nonimmigrant status or, apparently, on the fact that many G-4 aliens receive earned income that is exempt from Maryland taxation. Because petitioner makes domicile the “paramount” policy consideration and because respondents’ contention is that they can be domiciled in Maryland but are conclusively presumed to be unable to do so, this case is squarely within Vlandis as limited by Salfi to those situations in which a State “purport[s] to be concerned with [domicile, but] at the same time den[ies] to one seeking to meet its test of [domicile] the opportunity to show factors clearly bearing on that issue.” Weinberger v. Salfi, 422 U. S., at 771.
If we are to reverse the courts below, therefore, we must overrule or further limit Vlandis as, of course, petitioner has asked us to do. Before embarking on a review of the constitutional principles underlying Vlandis, however, proper concern for stare decisis joins with our longstanding policy of avoiding unnecessary constitutional decisions to counsel that a decision on the continuing vitality of Vlandis be avoided unless it is really necessary. See, e. g., Bellotti v. Baird, 428 U. S. 132, 146-151 (1976); Reetz v. Bozanich, 397 U. S. 82 (1970); Harman v. Forssenius, 380 U. S. 528, 534 (1965); Harrison v. NAACP, 360 U. S. 167, 177 (1959); Railroad Comm’n v. Pullman Co., 312 U. S. 496 (1941); cf. Ashwander v. TV A, 297 U. S. 288, 346-347 (1936) (Brandeis, J., concurring). So far, no such showing of necessity has been made out: If G-4 aliens cannot become domiciliaries, then respondents have no due process claim under either Vlandis or Saif, for any “irrebuttable presumption” wotild be universally true. On the other hand, the University apparently has no interest in continuing to deny in-state status to G-4 aliens as a class if they can become Maryland domiciliaries since it has indicated both here and in the District Court that it would redraft its policy “to accommodate” G-4 aliens were the Maryland courts to hold that G-4 aliens can have the requisite intent.
Accordingly, the question whether G-4 aliens have the capacity to acquire Maryland domicile is potentially dispositive of this case. Since the resolution of this question turns on federal statutory law and Maryland common law as to each of which there are no controlling precedents, we first set out the correct meaning of federal law in this area and then sua sponte certify this case to the Court of Appeals of Maryland in order to clarify state-law aspects of the domicile question.
B
Petitioner has argued, and respondents do not appear to disagree, that, if as a matter of federal law a nonimmigrant alien is required to maintain a permanent residence abroad or must state that he will leave the United States at a certain future date, then such an alien’s subjective intent to reside permanently or indefinitely in a State would not create the sort of intent needed to acquire domicile. It is not clear whether this argument is based on an understanding of the common law of Maryland defining intent or whether it is based on an argument that federal law creates a “legal disability,” see Restatement (Second) of Conflict of Laws § 15 (1) (1971), which States are bound to recognize under the Supremacy Clause. See Nyquist v. Mauclet, 432 U. S., at 4; id., at 20 n. 3 (Rehnquist, J., dissenting); Seren v. Douglas, 30 Colo. App. 110, 114-115, 489 P. 2d 601, 603 (1971) (semble); Gosschalk v. Gosschalk, 48 N. J. Super. 566, 574-575, 138 A. 2d 774, 779 (semble), aff’d, 28 N. J. 73, 145 A. 2d 327 (1958); Gosschalk v. Gosschalk, 28 N. J. 73, 75-82, 145 A. 2d 327, 328-331 (1958) (dissenting opinion). But cf. Williams v. Williams, 328 F. Supp. 1380, 1383 (V. I. 1971). In any case, we need not decide the effect of a federal law restricting nonimmigrant aliens postulated above, since it is clear that Congress did not require G-4 aliens to maintain a permanent residence abroad or to pledge to leave the United States at a date certain.
After extensive study, Congress passed the Immigration and Nationality Act of 1952, 66 Stat. 163, as amended, 8 U. S. C. § 1101 et seq. (1976 ed.), as a comprehensive and complete code covering all aspects of admission of aliens to this country,, whether for business or pleasure, or as immigrants seeking to become permanent residents. See H. R. Rep. No. 1365, 82d Cong., 2d Sess., 27 (1962); S. Rep. No-. 1137, 82d Cong., 2d Sess., 1-2 (1952). As amended in 1976, the Act establishes two immigration quotas, one for the Eastern and one for the Western Hemisphere. The object of the quotas is to limit the number of aliens who can be admitted to the United States for permanent residence. To this end, the Act divides aliens into two classes. The first class, immigrant aliens, includes every alien who does not fall into an exclusion established by § 101 (a) (15) of the Act, 66 Stat. 167, as amended, 8 U. S. C. §1101 (a)(15) (1976 ed.). Except for immigrant aliens who are “immediate relatives of United States citizens” or “special immigrants defined in section 101 (a) (27),” each alien admitted for permanent residence or who- later becomes eligible for permanent residence is chargeable against a quota and no alien can be granted permanent residence status unless a quota allocation is available. However, it is important to note that there is no requirement in the Act that an immigrant alien have an intent to- stay permanently in the United States.
The second class of aliens, nonimmigrant aliens, is established by § 101 (a) (15) of the Act. This section creates 12 subcategories of aliens who may come to the United States without need for a quota allocation. See §§ 101 (a)(15)(A)-(L). Congress defined nonimmigrant classes to provide for the needs of international diplomacy, tourism, and commerce, each of which requires that aliens be admitted to the United States from time to time and all of which would be hampered if every alien entering the United States were subject to a quota and to the more strict entry conditions placed on immigrant ■ aliens.
Although nonimmigrant aliens can generally be viewed as temporary visitors to the United States, the nonimmigrant classification is by no means homogeneous with respect to the terms on which a nonimmigrant enters the United States. For example, Congress expressly conditioned admission for some purposes on an intent not to abandon a foreign residence or, by implication, on an intent not to seek domicile in the United States. Thus, the 1952 Act defines a visitor to the United States as “an alien... having a residence in a foreign country which he has no intention of abandoning” and who is coming to the United States for business or pleasure. § 101 (a) (15) (B). Similarly, a nonimmigrant student is defined as “an alien having a residence in a foreign country which he has no intention of abandoning... and who seeks to enter the United States temporarily and solely for the purpose of pursuing... a course of study....” § 101 (a)(15)(F). See also § 101 (a)(15)(C) (aliens in “immediate and continuous transit”); § 101 (a) (15) (D) (vessel crewman “who intends to land temporarily”); § 101 (a)(15)(H) (temporary worker having residence in foreign country “which he has no intention of abandoning”).
By including restrictions on intent in the definition of some nonimmigrant classes, Congress must have meant aliens to be barred from these classes if their real purpose in coming to the United States was to immigrate permanently. Moreover, since a nonimmigrant alien who does not maintain the conditions attached to his status can be deported, see § 241 (a) (9) of the 1952 Act, 66 Stat. 206, 8 U. S. C. § 1251 (a)(9) (1976 ed.), it is also clear that Congress intended that, in the absence of an adjustment of status (discussed below), nonimmigrants in restricted classes who sought to establish domicile would be deported.
But Congress did not restrict every nonimmigrant class. In particular, no restrictions on a nonimmigrant’s intent were placed on aliens admitted under § 101 (a)(15)(G)(iv). Since the 1952 Act was intended to be a comprehensive and complete code, the conclusion is therefore inescapable that, where as with the G-4 class Congress did not impose restrictions on intent, this was deliberate. Congress’ silence is therefore pregnant, and we read it to mean that Congress, while anticipating that permanent immigration would normally occur through immigrant channels, was willing to allow nonrestricted nonimmigrant aliens to adopt the United States as their domicile. Congress’ intent is confirmed by the regulations of the Immigration and Naturalization Service, which provide that G-4 aliens are admitted for an indefinite period— so long as they are recognized by the Secretary of State to be employees or officers (or immediate family members of such employees or officers) of an international treaty organization. See 8 CFR § 214.2 (g) (1977); 1 C. Gordon & H. Rosenfield, Immigration Law and Procedure § 2.13b, p. 2-101 (rev. ed. 1977). Whether such an adoption would confer domicile in a State would, of course, be a question to be decided by the State.
Under present law, therefore, were a G-4 alien to' develop a subjective intent to stay indefinitely in the United States, he would be able to do so without violating either the 1952 Act, the Service’s regulations, or the terms of his visa. Of course, should a G-4 alien terminate his employment with an international treaty organization, both he and his family would lose their G-4 status. Ibid. Nonetheless, such an alien would not necessarily be subject to deportation nor would he have to leave and re-enter the country in order to become an immigrant.
Beginning with the 1952 Act, Congress created a mechanism, “adjustment of status,” through which an alien already in the United States could apply for permanent residence status. See § 245 of the 1952 Act, 66 Stat. 217, as amended, 8 U. S. C. § 1255 (1976 ed.). Prior to that time, aliens in the United States who were not immigrants had to leave the country and apply for an immigrant visa at a consulate abroad. See 2 Gordon & Rosenfield, supra, at § 7.7. Although adjustment of status is a matter of grace, not right, the most recent binding decision of the Board of Immigration Appeals states:
“Where adverse factors are present in a given application, it may be necessary for the applicant to offset these by a showing of unusual or even outstanding equities. Generally, favorable factors such as family ties, hardship, length of residence in the United States, etc., will be considered as countervailing factors meriting favorable exercise of administrative discretion. In the absence of adverse factors, adjustment will ordinarily be granted, still as a matter of discretion.” Matter of Arai, 13 I. & N. Dec. 494, 496 (1970) (emphasis added), modifying Matter of Ortiz-Prieto, 11 I. & N. Dec. 317 (BIA 1965).
The adverse factors referred to by the Board include such things as entering the United States under fraudulent circumstances or committing crimes while in the United States. There is no indication that any named respondent is subject to any such adverse factor, and, given each named respondent’s alleged length of residence in the United States, it would appear that any respondent could adjust his or her status to that of a permanent resident without difficulty.
C
For the reasons stated above, the question whether G-4 aliens can become domiciliaries of Maryland is potentially dis-positive of this case and is purely a matter of state law. Therefore, pursuant to Subtit. 6 of Tit. 12 of the Md. Cts. & Jud. Proc. Code, the following question is certified to the Court of Appeals of Maryland:
“Are persons residing in Maryland who hold or are named in a visa under 8 U. S. C. § 1101 (a) (15) (G) (iv) (1976 ed.), or who are financially dependent upon a person holding or named in such a visa, incapable as a matter of state law of becoming domiciliaries of Maryland?”
So ordered.
The class certified by the District Court differs from that alleged in the complaint. As certified, the class is defined as:
“All persons now residing in Maryland who are current students at the University of Maryland, or who chose not to apply to the University of Maryland because of the challenged policies but would now be interested in attending if given an opportunity to establish in-state status, or who are currently students in senior high schools in Maryland, and who
“(a) hold or are named within a visa under 8 U. S. C. § 1101 (a) (15) (G) (iv) or are financially dependent upon a person holding or named within such a visa.” Moreno v. University of Maryland, 420 F. Supp. 541, 564 (Md. 1976).
The University was dismissed from the suit on the authority of Monroe v. Pape, 365 U. S. 167 (1961). See 420 F. Supp., at 548-550.
The complaint alleged that petitioner’s conduct violated 42 U. S. C. §§ 1981, 1983, 2000a, 2000a-1, 2000a-3, 2000d. App. 3A. Jurisdiction was predicated on 28 U. S. C. §§ 1343 (3), 1343 (4). The District Court proceeded on the premise that 42 U. S. C. § 1983 and the cited sections of Title 28 gave jurisdiction and a cause of action. See 420 F. Supp., at 548. Neither of these rulings is now in dispute.
“(15) The term ‘immigrant’ means every alien except an alien who is within one of the following classes of nonimmigrant aliens—
“(G)... (iv) officers, or employees of... international organizations [recognized under the International Organizations Immunities Act, 59 Stat. 669, 22 U. S. C. §288 et seql], and the members of their immediate families.”
Respondents Moreno and Otero are dependents of employees of the Inter-American Development Bank. App. 6A, 7A. Respondent Hogg is the dependent of an employee of the International Bank for Reconstruction and Development. Id,., at 9A. The complaint states that respondent Moreno has resided in Maryland for 15 years, Otero for 10 years, and Hogg for 5 years. Id., at 4A.
The District Court did not set out reasons | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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116
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ASTORIA FEDERAL SAVINGS & LOAN ASSOCIATION v. SOLIMINO
No. 89-1895.
Argued April 17, 1991
Decided June 10, 1991
Paul J. Siegel argued the cause for petitioner. With him on the brief were Roger S. Kaplan and Anthony H. Atlas.
Leonard N. Flamm argued the cause for respondent. With him on the brief was Joseph J. Gentile.
Amy L. Wax argued the cause pro hac vice for the United States as amicus curiae urging affirmance. On the brief were Solicitor General Starr, Assistant Attorney General Gerson, Deputy Solicitor General Roberts, Robert A. Long, Jr., Donald R. Livingston, Gwendolyn Young Reams, and Lamont N. White.
Briefs of amici curiae urging reversal were filed for the Atlantic Legal Foundation by Martin S. Kaufman and Douglas Foster; and for the Equal Employment Advisory Council by Robert E. Williams and Douglas S. McDowell.
Briefs of amici curiae urging affirmance were filed for the New York State Division of Human Rights by Robert Abrams, Attorney General, 0. Peter Sherwood, Solicitor General, and Sanford M. Cohen and Marjorie Fujiki, Assistant Attorneys General; and for the American Association of Retired Persons by Cathy Ventrell-Monsees.
Justice Souter
delivered the opinion of the Court.
The question presented is whether claimants under the Age Discrimination in Employment Act of 1967 (Age Act or Act), 81 Stat. 602, as amended, 29 U. S. C. § 621 et seq., are collaterally estopped to relitigate in federal court the judicially unreviewed findings of a state administrative agency made with respect to an age-discrimination claim. We hold that such findings have no preclusive effect on federal proceedings.
Respondent Angelo Solimino had worked for petitioner Astoria Federal Savings and Loan Association for almost 40 years when at age 63 he was dismissed from his position as a vice president in the mortgage department. Less than two weeks later, on March 18, 1982, he filed a charge of age discrimination with the Equal Employment Opportunity Commission (EEOC). Under a worksharing agreement between it and the state agency, see 29 CFR § 1626.10 (1990), the EEOC referred.the matter to the New York State Division of Human Rights, which is responsible for preliminary investigation and disposition of age-discrimination cases under New York’s Human Rights Law. On January 25, 1983, after a hearing at which both parties were represented by counsel, the state agency found no probable cause to believe that petitioner had terminated respondent because of his age. The ruling was affirmed on review for abuse of discretion by the State Human Rights Appeal Board on May 30, 1984. Although both the Division and the Appeal Board entertained respondent’s complaint only on state-law grounds, neither party suggests that the elements of an age-discrimination claim differ as between the state and federal statutes.
Respondent did not seek review of the board’s in state court, but instead filed an Age Act suit in the United States District Court for the Eastern District of New York grounded on the same factual allegations considered in the state administrative proceedings. The District Court granted petitioner’s motion for summary judgment, 715 F. Supp. 42 (1989), and relied heavily on the decision in Stillians v. Iowa, 843 F. 2d 276 (CA8 1988), in holding the common-law presumption of administrative estoppel to prevail by virtue of Congress’ failure in either the language or legislative history of the Age Act “actually [to] addres[s] the issue.” 715 F. Supp., at 47. It ruled accordingly that the determination of the State’s Human Rights Division that petitioner had not engaged in age discrimination precluded federal litigation of the claim. The Court of Appeals for the Second Circuit reversed, 901 F. 2d 1148 (1990), inferring from the Act’s structure a legislative intent to deny preclusive effect to such state administrative proceedings. We granted certiorari, 498 U. S. 1023 (1991), to resolve the conflict between the ruling here under review, see also Duggan v. Board of Education of East Chicago Heights, Dist. No. 169, Cook County, Ill., 818 F. 2d 1291 (CA7 1987), and those of the Eighth Circuit in Stillians, supra, and of the Ninth Circuit in Mack v. South Bay Beer Distributors, Inc., 798 F. 2d 1279 (1986).
We have long favored application of the common-law doctrines of collateral estoppel (as to issues) and res judicata (as to claims) to those determinations of administrative bodies that have attained finality. “When an administrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate, the courts have not hesitated to apply res judicata to enforce repose.” United States v. Utah Constr. & Mining Co., 384 U. S. 394, 422 (1966). Such repose is justified on the sound and obvious principle of judicial policy that a losing litigant deserves no rematch after a defeat fairly suffered, in adversarial proceedings, on an issue identical in substance to the one he subsequently seeks to raise. To hold otherwise would, as a general matter, impose unjustifiably upon those who have already shouldered their burdens, and drain the resources of an adjudicatory system with disputes resisting resolution. See Parklane Hosiery Co. v. Shore, 439 U. S. 322, 326 (1979). The principle holds true when a court has resolved an issue, and should do so equally when the issue has been decided by an administrative agency, be it state or federal, see University of Tennessee v. Elliott, 478 U. S. 788, 798 (1986), which acts in a judicial capacity.
Courts do not, of course, have free to impose preclusion, as a matter of policy, when the interpretation of a statute is at hand. In this context, the question is not whether administrative estoppel is wise but whether it is intended by the legislature. The presumption holds nonetheless, for Congress is understood to legislate against a background of common-law adjudicatory principles. See Briscoe v. LaHue, 460 U. S. 325 (1983); United States v. Turley, 352 U. S. 407, 411 (1957). Thus, where a common-law principle is well established, as are the rules of preclusion, see, e. g., Parklane Hosiery, supra; Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U. S. 313 (1971); Chicot County Drainage Dist. v. Baxter State Bank, 308 U. S. 371 (1940), the courts may take it as given that Congress has legislated with an expectation that the principle will apply except “when a statutory purpose to the contrary is evident.” Isbrandtsen Co. v. Johnson, 343 U. S. 779, 783 (1952).
This interpretative presumption is not, however, one that entails a requirement of clear statement, to the effect that Congress must state precisely any intention to overcome the presumption’s application to a given statutory scheme. Rules of plain statement and strict construction prevail only to the protection of weighty and constant values, be they constitutional, see, e. g., Atascadero State Hosp. v. Scanlon, 473 U. S. 234, 243 (1985) (requiring plain statement of intention to abrogate immunity of States under the Eleventh Amendment), or otherwise, see, e. g., EEOC v. Arabian American Oil Co., 499 U. S. 244, 248 (1991) (requiring plain statement of extraterritorial statutory effect, “to protect against unintended clashes between our laws and those of other nations which could result in international discord”). See generally Eskridge, Public Values in Statutory Interpretation, 137 U. Pa. L. Rev. 1007 (1989). “In traditionally sensitive areas, . . . the requirement of clear statement assures that the legislature has in fact faced, and intended to bring into issue, the critical matters involved in the judicial decision.” United States v. Bass, 404 U. S. 336, 349 (1971). Similar superior values, of harmonizing different statutes and constraining judicial discretion in the interpretation of the laws, prompt the kindred rule that legislative repeals by implication will not be recognized, insofar as two statutes are capable of coexistence, “absent a clearly expressed congressional intention to the contrary.” Morton v. Mancari, 417 U. S. 535, 551 (1974).
But the possibility of such an implied repeal does not cast its shadow here. We do not have before us the judgment of a state court, which would by law otherwise be accorded “the same full faith and credit in every court within the United States ... as [it has] by law or usage in the courts of such State.” 28 U. S. C. § 1738. In the face of § 1738, we have found state-court judgments in the closely parallel context of Title VII of the Civil Rights Acts of 1964, 78 Stat. 253, as amended, 42 U. S. C. §2000e et seq., see Lorillard v. Pons, 434 U. S. 575, 584 (1978), to enjoy preclusive effect in the federal courts. See Kremer v. Chemical Constr. Corp., 456 U. S. 461 (1982); see also Allen v. McCurry, 449 U. S. 90 (1980). This case, by contrast, implicates no such implied repeal, as § 1738 is inapplicable to the judicially unreviewed findings of state administrative bodies. See Elliott, supra, at 794. Nor does administrative preclusion represent independent values of such magnitude and constancy as to justify the protection of a clear-statement rule. Although administrative estoppel is favored as a matter of general policy, its suitability may vary according to the specific context of the rights at stake, the power of the agency, and the relative adequacy of agency procedures. Cf. Alexander v. Gardner-Denver Co., 415 U. S. 36, 57-58 (1974); Pearson v. Williams, 202 U. S. 281, 285 (1906). The presumption here is thus properly accorded sway only upon legislative default, applying where Congress has failed expressly or impliedly to evince any intention on the issue.
In Elliott, which also dealt with Title VII, the test for the presumption’s application was thus framed as the question “whether a common-law rule of preclusion would be consistent with Congress’ intent in enacting [the statute].” 478 U. S., at 796. See also Brown v. Felsen, 442 U. S. 127, 136 (1979); Restatement (Second) of Judgments § 83(4)(a) (1982). In contrast to 42 U. S. C. §1983, in which the Court discerned ‘“[n]othing . . . remotely expressing] any congressional intent to contravene the common-law rules of preclusion,”’ 478 U. S., at 797 (quoting Allen v. McCurry, 449 U. S. 90, 97-98 (1980)), Title VII was found by implication to comprehend just such a purpose in its direction that the EEOC accord “‘substantial weight to final findings and orders made by State or local authorities in proceedings commenced under State or local [employment discrimination] law.’” Elliott, supra, at 795 (quoting 42 U. S. C. § 2000e-5(b)). What does not preclude a federal agency cannot preclude a federal court, see Kremer, supra, at 470, and n. 7; Duggan, 818 F. 2d, at 1294; we accordingly held that in the district courts the “substantial weight” standard allowed clearly for something less than preclusion. Elliott, supra, at 795.
We reach the same result here, for the Age Act, too, carries an implication that the federal courts should recognize no preclusion by state administrative findings with respect to age-discrimination claims. While the statute contains no express delimitation of the respect owed to state agency findings, its filing requirements make clear that collateral estop-pel is not to apply. Section 14(b) requires that where a State has its own age-discrimination law, a federal Age Act complainant must first pursue his claim with the responsible state authorities before filing in federal court. 29 U. S. C. § 633(b); Oscar Mayer & Co. v. Evans, 441 U. S. 750 (1979). It further provides that “no suit may be brought under [the Age Act] before the expiration of sixty days after proceedings have been commenced under the State law, unless such proceedings have been earlier terminated.” The deadline for filing with the EEOC likewise refers to the termination of prior state administrative action, § 7(d)(2) providing that where § 14(b) applies “[s]uch a charge shall be filed . . . within 300 days after the alleged unlawful practice occurred, or within 30 days after receipt by the individual of notice of termination of proceedings under State law, whichever is earlier.” 29 U. S. C. § 626(d)(2). Both provisions plainly assume the possibility of federal consideration after state agencies have finished theirs.
And yet such federal proceedings would be strictly pro forma if state administrative findings were given preclusive effect. It goes without saying that complainants who succeed in state proceedings will not pursue suit in federal court (except perhaps when the state remedy, or its enforcement, is thought to be inadequate); § 14(b)’s requirement that claimants file with state authorities before doing so in federal court was in fact “intended to screen from the federal courts those discrimination complaints that might be settled to the satisfaction of the grievant in state proceedings.” Oscar Mayer, supra, at 756. A complainant who looks to a federal court after termination of state proceedings will therefore ordinarily do so only when the state agency has held against him. In such a case, however, the employer would likely enjoy an airtight defense of collateral estoppel if a state agency determination on the merits were given preclusive effect. Cf. Kremer, supra, at 479-480. Insofar as applying preclusion would thus reduce to insignificance those cases in which federal consideration might be pursued in the wake of the completed proceedings of state agencies, § 14(b)’s provision for just such consideration would be left essentially without effect. But of course we construe statutes, where possible, so as to avoid rendering superfluous any parts thereof. See, e. g., United States v. Menasche, 348 U. S. 528, 538-539 (1955).
That the Age Act lacks the Title VII’s § 2000e-5(b) stressed in Elliott is immaterial. There was nothing talismanic about that language; it was “simply the most obvious piece of evidence that administrative res judicata does not operate in a Title VII suit.” Duggan, supra, at 1297. It would indeed be ironic if that section were to make the difference between that statute and the Age Act insofar as preclusion in federal courts is concerned, for the language was added to Title VII not because the EEOC was applying administrative preclusion, or “giving state administrative decisions too much weight, but because it was affording them too little.” Kremer, supra, at 471, n. 8. Similar provision has been unnecessary in the Age Act, for as to age-discrimination claims the EEOC of its own accord came to extend some level of deference to the determinations of state authorities. See Brief for United States et al. as Amici Curiae 24. It is, in any event, fair to say that even without Title VIPs “substantial weight” requirement the Court would have found no administrative preclusion in that context. Title VII’s § 706(c), 42 U. S. C. §2000e-5(c), which also provides for federal court action in the aftermath of terminated state proceedings and is nearly identical to the Age Act’s § 14(b), see Oscar Mayer, supra, at 755, would have provided yet further support for the Court’s result there.
Thus § 14(b) suffices to outweigh the lenient presumption in favor of administrative estoppel, a holding that also comports with the broader scheme of the Age Act and the provisions for its enforcement. Administrative findings with respect to the age-discrimination claims of federal employees enjoy no preclusive effect in subsequent judicial litigation, see Rosenfeld v. Department of Army, 769 F. 2d 237 (CA4 1985); Nabors v. United States, 568 F. 2d 657 (CA9 1978); cf. Chandler v. Roudebush, 425 U. S. 840 (1976) (same, with respect to Title VII claims), and since there is no reason to believe federal enforcement agencies are any less competent than their state counterparts, it would be anomalous to afford more deference to one than the other. It would, indeed, invite further capricious anomalies as well, for whether age-discrimination claims are investigated first by the EEOC or by state authorities is a matter over which the complainant has no control, see 29 CFR §§1626.9, 1626.10 (1990); whether or not he might receive his day in court (complete with jury, see 29 U. S. C. § 626(c)(2)), would then depend, under petitioner’s theory, on bureaucratic chance. Petitioner’s reading would also lead to disparities from State to State, depending on whether a given jurisdiction had an age-discrimination statute of its own. See § 633(b). Moreover, on the assumption that claimants fare better in federal court than before state agencies, and in light of § 14(a)’s provision that state proceedings are superseded upon commencement of federal action, see § 633(a), a recognition of administrative estoppel here would induce all claimants to initiate federal suit at the earliest opportunity after filing the state complaint, thereby defeating the purpose of deferral to resolve complaints outside the federal system. See Oscar Mayer, supra, at 755-756.
Finally, although the wisdom of Congress’ decision against according preclusive effect to state agency rulings has no bearing upon the disposition of the case, that choice has plausible policy support. Although it is true that there will be some duplication of effort, the duplication need not be great. We speak, after all, only of agency determinations not otherwise subjected to judicial review; our reading of the statute will provide no more than a second chance to prove the claim, and even then state administrative findings may be entered into evidence at trial. See Chandler, supra, at 863, n. 39. It also may well be that Congress thought state agency consideration generally inadequate to ensure full protection against age discrimination in employment. In this very case, the New York Division of Human Rights, which ruled against respondent on the merits, has itself appeared as ami-cus on his behalf, highlighting the shortfalls of its procedures and resources. See Brief for New York State Division of Human Rights as Amicus Curiae 18-22. Alternatively, by denying preclusive effect to any such agency determination, Congress has eliminated litigation that would otherwise result, from State to State and case to case, over whether the agency has in fact “act[ed] in a judicial capacity” and afforded the parties “an adequate opportunity to litigate,” Utah Constr. Co., 384 U. S., at 422, so as to justify application of a normal rule in favor of estoppel.
For these reasons, the District Court’s grant of motion for summary judgment was erroneous on the grounds stated. The judgment of the Court of Appeals is affirmed, and the case is remanded to the District Court for proceedings consistent with this opinion.
It is so | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
116
] | sc_adminaction |
ASTRUP v. IMMIGRATION AND NATURALIZATION SERVICE
No. 840.
Argued April 20, 1971
Decided May 24, 1971
Black, J., delivered the opinion for a unanimous Court.
Paul N. Halvonik argued the cause for petitioner. With him on the brief was Marshall W. Krause.
Richard B. Stone argued the cause for respondent. With him on the brief were Solicitor General Griswold, Assistant Attorney General Wilson, and Charles Gordon.
Mr. Justice Black
delivered the opinion of the Court.
The issue in this case is exceedingly simple. By signing SSS Form 130 — Application by Alien for Relief from Training and Service in the Armed Forces — the petitioner, lb Otto Astrup, a native of Denmark, agreed to give up his right to become an American citizen, and in exchange, the United States, pursuant to § 4 (a) of the Selective Service Act of 1948, 62 Stat. 605, 50 U. S. C. App. §454 (a) (1946 ed., Supp. Ill), agreed to give up the right to induct Astrup into the United States armed forces. Congress later repealed the law under which Astrup was exempted from military service, reneging on its part of the bargain with him. Universal Military Training and Service Act § 4 (a), 65 Stat. 76, 50 U. S. C. App. §454 (a) (1952 ed.). Thereafter the Selective Service System attempted to draft Astrup and would have succeeded in putting him into uniform but for the fact that he was found to be physically unfit for the draft. Later, when Astrup decided that he would like to become an American citizen, the Government attempted to enforce Astrup’s promise even though it was unwilling to keep its own promise. When Astrup petitioned for naturalization, the United States District Court for the Northern District of California denied his petition on the ground that he was debarred from citizenship. The Court of Appeals for the Ninth Circuit affirmed. 432 F. 2d 438 (1970). We granted Astrup’s petition for cer-tiorari, 400 U. S. 1008 (1971), and now reverse.
In support of the decision below the United States emphasizes the fact that Astrup admitted having read a notice proclaiming that:
“Any citizen of a foreign country . . . shall be relieved from liability for training and service under this title if, prior to his induction into the armed forces, he has made application to be relieved from such liability . . . ; but any person who makes such application shall thereafter be debarred from becoming a citizen of the United States.” Form SSS 130, quoting Selective Service Act of 1948, § 4 (a), 62 Stat. 606, 50 U. S. C. App. § 454 (a) (1946 ed., Supp. III).
He further admitted having signed a statement saying, “I understand that I will forever lose my rights to become a citizen of the United States . . . .” Upon the basis of these statements and § 4 (a) of the Selective Service Act of 1948, the United States argues that the case is controlled by our decision in Ceballos v. Shaughnessy, 352 U. S. 599 (1957), in which we enforced similar citizenship debarment provisions in a deportation case arising under the Immigration Act of 1917, § 19 (c), 39 Stat. 889, as amended, 54 Stat. 672, 62 Stat. 1206, 8 U. S. C. § 155 (c) (1946 ed., Supp. V). Ceballos, however, does not govern this case. In Ceballos the Court specifically held that § 315 of the Immigration and Nationality Act of 1952, 66 Stat. 242, 8 U. S. C. § 1426, was inapplicable because of the effective date of the 1952 Act and because § 315 was expressly inapplicable to deportation proceedings under the 1917 Act. 352 U. S., at 606 n. 17.
Astrup, unlike Ceballos, is not involved in a deportation proceeding under the Immigration Act of 1917 and consequently the saving clause of the Immigration and Nationality Act of 1952, § 405, 66 Stat. 280, is inapplicable. See note following 8 U. S. C. § 1101. Moreover, Astrup petitioned for naturalization under § 316 of the 1952 Act. Therefore, § 315 of the 1952 Act, not § 4 (a) of the Selective Service Act of 1948, determines the effect to be given to Astrup’s 1950 application for exemption from military service. Section 315 provides:
“Notwithstanding the provisions of section 405 (b) of this Act, any alien who applies or has applied for exemption or discharge from training or service in the Armed Forces or in the National Security Training Corps of the United States on the ground that he is an alien, and is or was relieved or discharged from such training or service on such ground, shall be permanently ineligible to become a citizen of the United States.” 66 Stat. 242, 8 U. S. C. § 1426. (Emphasis added.)
This is a two-pronged prerequisite for the loss of eligibility for United States citizenship. The alien must be one who “applies or has applied for exemption or discharge” from military service and “is or was relieved or discharged” from that service. There is no question that Astrup applied for an exemption. The United States argues that he was temporarily released from military service but recognizes that the release was not permanent. And even the Government is forced to concede that temporary release from military service is not by itself sufficient to debar an alien from a later claim to naturalized citizenship, because the Government recognizes the correctness of the Second Circuit's decision in United States v. Hoellger, 273 F. 2d 760 (1960), that if an alien is once relieved from service but is later compelled to perform military service the bar to citizenship does not arise.
Other courts have distinguished the Hoellger holding from the situation where an alien is once relieved from military service but later reclassified for service which he never performs because of intervening circumstances such as physical unfitness. See Lapenieks v. Immigration and Naturalization Service, 389 F. 2d 343 (1968); United States v. Hoellger, supra, at 762 n. 2. However, there is nothing in the language of § 315 which leads us to believe that Congress intended such harsh and bizarre consequences to flow from an individual’s failure to pass a physical examination. We think that Congress used the words “is or was relieved” to provide that an alien who requests exemption from the military service be held to his agreement to relinquish all claims to naturalized citizenship only when the Government abides by its part of the agreement and completely exempts him from service in our armed forces.
Consequently, the United States District Court erred in denying Astrup’s petition for naturalization on the ground that he was barred from citizenship because he had once claimed an exemption from military service as an alien. The decision of the Court of Appeals for the Ninth Circuit affirming the District Court is reversed and the case is remanded to the District Court for further proceedings on Astrup’s petition for naturalization.
It is so ordered.
Astrup was lawfully admitted to the United States for permanent residence on February 20, 1950. On November 14, 1950, he executed SSS Form 130, requesting an exemption from military service on the ground of alienage. At that time the Selective Service Act of 1948, §4 (a), 62 Stat. 605, 50 U. S. C. App. § 454 (a) (1946 ed., Supp. Ill), provided such an exemption for any alien. The Universal Military Training and Service Act § 4 (a), 65 Stat. 76, 50 U. S. C. App. § 454 (a) (1952 ed.), which became effective June 19, 1951, amended the earlier provision relating to exemptions for aliens so that the exemption was not available to aliens who were permanent residents of this country.
The United States argues that the saving clause of the 1952 Act is applicable, citing United States v. Menasche, 348 U. S. 528 (1955), and Shomberg v. United States, 348 U. S. 540 (1955). In Menasche the Court held that an alien who had filed a declaration of intention to become an American citizen had a “right in the process of acquisition” preserved by the saving clause which provided: “Nothing contained in [the 1952] Act, unless otherwise specifically provided therein, shall be construed to affect the validity of any declaration of intention . . . .” The Court there found nothing in the 1952 Act that specifically nullified Menasche’s declaration. In Shomberg, on the other hand, the Court found in § 318 of the 1952 Act, 66 Stat. 244, 8 U. S. C. § 1429, a specific bar to final determination of a naturalization petition by an alien against whom there was an outstanding deportation proceeding. This case is more like Shom-berg than Menasche in that § 315 is addressed to events which may have occurred before the effective date of the 1952 Act and refers specifically to the saving clause as, at least partially, inapplicable.
We find no merit in the Government’s contention that Astrup was effectively relieved from military service on account of alienage merely because he was found to be medically qualified for the draft on October 11, 1950, before he claimed an exemption and was later found to be medically unfit for the draft, after the Government repudiated its part of the bargain. The quality of pre-induction physical examinations varies widely and the standards of medical fitness are frequently revised. In any event, the examination is primarily for the benefit of the United States, insuring that those inducted are physically capable of performing adequately and that the United States does not become legally obligated to provide medical treatment for conditions not caused by military service.
Cf. Federal Power Comm’n v. Tuscarora Indian Nation, 362 U. S. 99, 142 (1960) (Black, J., dissenting): “Great nations, like great men, should keep their word.” | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
106
] | sc_adminaction |
NATIONAL LABOR RELATIONS BOARD v. TRANSPORTATION MANAGEMENT CORP.
No. 82-168.
Argued March 28, 1983
Decided June 15, 1983
White, J., delivered the opinion for a unanimous Court.
Deputy Solicitor General Wallace argued the cause for petitioner. With him on the brief were Solicitor General Lee, Carolyn F. Corwin, Norton J. Come, and Linda Sher.
Martin Ames argued the cause and filed briefs for respondent.
Briefs of amici curiae urging affirmance were filed by John W. Noble, Jr., and Stephen A. Bokat for the Chamber of Commerce of the United States; and by Joseph D. Alviani for the New England Legal Foundation et al.
Briefs of amici curiae were filed by J. Albert Woll, Michael H. Gottes-man, Robert M. Weinberg, and Laurence Gold for the American Federation of Labor and Congress of Industrial Organizations; and by Gerard C. Smetana and Gary L. Starkman for the Council on Labor Law Equality.
Justice White
delivered the opinion of the Court.
The National Labor Relations Act (NLRA or Act), 29 U. S. C. § 151 ei seq. (1976 ed. and Supp. V), makes unlawful the discharge of a worker because of union activity, §§ 8(a)(1), (3), as amended, 61 Stat. 140,29 U. S. C. §§ 158(a)(1), (3), but employers retain the right to discharge workers for any number of other reasons unrelated to the employee’s union activities. When the General Counsel of the National Labor Relations Board (Board) files a complaint alleging that an employee was discharged because of his union activities, the employer may assert legitimate motives for his decision. In Wright Line, 251 N. L. R. B. 1083 (1980), enf’d, 662 F. 2d 899 (CA1 1981), cert. denied, 455 U. S. 989 (1982), the Board reformulated the allocation of the burden of proof in such cases. It determined that the General Counsel carried the burden of persuading the Board that an antiunion animus contributed to the employer’s decision to discharge an employee, a burden that does not shift, but that the employer, even if it failed to meet or neutralize the General Counsel’s showing, could avoid the finding that it violated the statute by demonstrating by a preponderance of the evidence that the worker would have been fired even if he had not been involved with the union. The question presented in this case is whether the burden placed on the employer in Wright Line is consistent with §§ 8(a)(1) and 8(a)(3), as well as with § 10(c) of the NLRA, 29 U. S. C. § 160(c), which provides that the Board must find an unfair labor practice by a “preponderance of the testimony.”
Prior to his discharge, Sam Santillo was a busdriver for respondent Transportation Management Corp. On March 19, 1979, Santillo talked to officials of the Teamster’s Union about organizing the drivers who worked with him. Over the next four days Santillo discussed with his fellow drivers the possibility of joining the Teamsters and distributed authorization cards. On the night of March 23, George Patterson, who supervised Santillo and the other drivers, told one of the drivers that he had heard of Santillo’s activities. Patterson referred to Santillo as two-faced, and promised to get even with him.
Later that evening Patterson talked to Ed West, who was also a busdriver for respondent. Patterson asked, “What’s with Sam and the Union?” Patterson said that he took Santillo’s actions personally, recounted several favors he had done for Santillo, and added that he would remember San-tillo’s activities when Santillo again asked for a favor. On Monday, March 26, Santillo was discharged. Patterson told Santillo that he was being fired for leaving his keys in the bus and taking unauthorized breaks.
Santillo filed a complaint with the Board alleging that he had been discharged because of his union activities, contrary to §§ 8(a)(1) and 8(a)(3) of the NLRA. The General Counsel issued a complaint. The Administrative Law Judge (ALJ) determined by a preponderance of the evidence that Patterson clearly had an antiunion animus and that Santillo’s discharge was motivated by a desire to discourage union activities. The ALJ also found that the asserted reasons for the discharge could not withstand scrutiny. Patterson’s disapproval of Santillo’s practice of leaving his keys in the bus was clearly a pretext, for Patterson had not known about Santillo’s practice until after he had decided to discharge San-tillo; moreover, the practice of leaving keys in buses was commonplace among respondent’s employees. Respondent identified two types of unauthorized breaks, coffeebreaks and stops at home. With respect to both coffeebreaks and stopping at home, the ALJ found that Santillo was never cautioned or admonished about such behavior, and that the employer had not followed its customary practice of issuing three written warnings before discharging a driver. The ALJ also found that the taking of coffeebreaks during working hours was normal practice, and that respondent tolerated the practice unless the breaks interfered with the driver’s performance of his duties. In any event, said the ALJ, respondent had never taken any adverse personnel action against an employee because of such behavior. While acknowledging that Santillo had engaged in some unsatisfactory conduct, the ALJ was not persuaded that Santillo would have been fired had it not been for his union activities.
The Board affirmed, adopting with some clarification the ALJ’s findings and conclusions and expressly applying its Wright Line decision. It stated that respondent had failed to carry its burden of persuading the Board that the discharge would have taken place had Santillo not engaged in activity protected by the Act. The Court of Appeals for the First Circuit, relying on its previous decision rejecting the Board’s Wright Line test, NLRB v. Wright Line, 662 F. 2d 899 (1981), refused to enforce the Board’s order and remanded for consideration of whether the General Counsel had proved by a preponderance of the evidence that Santillo would not have been fired had it not been for his union activities. 674 F. 2d 130 (1982). We granted certiorari, 459 U. S. 1014 (1982), because of conflicts on the issue among the Courts of Appeals. We now reverse.
Employees of an employer covered by the NLRA have the right to form, join, or assist labor organizations. NLRA § 7, 29 U. S. C. § 157. It is an unfair labor practice to interfere with, restrain, or coerce the exercise of those rights, NLRA § 8(a)(1), 29 U. S. C. § 158(a)(1), or by discrimination in hire or tenure “to encourage or discourage membership in any labor organization,” NLRA § 8(a)(3), 29 U. S. C. § 158(a)(3).
Under these provisions it is undisputed that if the employer fires an employee for having engaged in union activities and has no other basis for the discharge, or if the reasons that he proffers are pretextual, the employer commits an unfair labor practice. He does not violate the NLRA, however, if any antiunion animus that he might have entertained did not contribute at all to an otherwise lawful discharge for good cause. Soon after the passage of the Act, the Board held that it was an unfair labor practice for an employer to discharge a worker where antiunion animus actually contributed to the discharge decision. Consumers Research, Inc., 2 N. L. R. B. 57, 73 (1936); Louisville Refining Co., 4 N. L. R. B. 844, 861 (1938), enf’d, 102 F. 2d 678 (CA6), cert. denied, 308 U. S. 568 (1939); Dow Chemical Co., 13 N. L. R. B. 993, 1023 (1939), enf’d in relevant part, 117 F. 2d 455 (CA6 1941); Republic Creosoting Co., 19 N. L. R. B. 267, 294 (1940). In Consumers Research, the Board rejected the position that “antecedent to a finding of violation of the Act, it must be found that the sole motive for discharge was the employee’s union activity.” It explained that “[s]uch an interpretation is repugnant to the purpose and meaning of the Act, and . . . may not be made.” 2 N. L. R. B., at 73. In its Third Annual Report, the Board stated: “Where the employer has discharged an employee for two or more reasons, and one of them is union affiliation or activity, the Board has found a violation [of § 8(a)(3)].” 3 NLRB Ann. Rep. 70 (1938). In the following year in Dow Chemical Co., supra, the Board stated that a violation could be found where the employer acted out of antiunion bias “whether or not the [employer] may have had some other motive . . . and without regard to whether or not the [employer’s] asserted motive was lawful.” 13 N. L. R. B., at 1023. This construction of the Act — that to establish an unfair labor practice the General Counsel need show by a preponderance of the evidence only that a discharge is in any way motivated by a desire to frustrate union activity — was plainly rational and acceptable. The Board has adhered to that construction of the Act since that time.
At the same time, there were decisions indicating that the presence of an antiunion motivation in a discharge case was not the end of the matter. An employer could escape the consequences of a violation by proving that without regard to the impermissible motivation, the employer would have taken the same action for wholly permissible reasons. See, e. g., Eagle-Picher Mining & Smelting Co., 16 N. L. R. B. 727, 801 (1939), enf’d in relevant part, 119 F. 2d 903 (CA8 1941); Borden Mills, Inc., 13 N. L. R. B. 459, 474-475 (1939); Robbins Tire & Rubber Co., 69 N. L. R. B. 440, 454, n. 21 (1946), enf’d, 161 F. 2d 798 (CA5 1947).
The Courts of Appeals were not entirely satisfied with the Board’s approach to dual-motive cases. The Board’s Wright Line decision in 1980 was an attempt to restate its analysis in a way more acceptable to the Courts of Appeals. The Board held that the General Counsel of course had the burden of proving that the employee’s conduct protected by § 7 was a substantial or a motivating factor in the discharge. Even if this was the case, and the employer failed to rebut it, the employer could avoid being held in violation of §§ 8(a)(1) and 8(a)(3) by proving by a preponderance of the evidence that the discharge rested on the employee’s unprotected conduct as well and that the employee would have lost his job in any event. It thus became clear, if it was not clear before, that proof that the discharge would have occurred in any event and for valid reasons amounted to an affirmative defense on which the employer carried the burden of proof by a preponderance of the evidence. “The shifting burden merely requires the employer to make out what is actually an affirmative defense . . . .” Wright Line, 251 N. L. R. B., at 1088, n. 11; see also id., at 1084, n. 5.
The Court of Appeals for the First Circuit refused enforcement of the Wright Line decision because in its view it was error to place the burden on the employer to prove that the discharge would have occurred had the forbidden motive not been present. The General Counsel, the Court of Appeals held, had the burden of showing not only that a forbidden motivation contributed to the discharge but also that the discharge would not have taken place independently of the protected conduct of the employee. The Court of Appeals was quite correct, and the Board does not disagree, that throughout the proceedings, the General Counsel carries the burden of proving the elements of an unfair labor practice. Section 10(c) of the Act, 29 U. S. C. § 160(c), expressly directs that violations may be adjudicated only “upon the preponderance of the testimony” taken by the Board. The Board’s rules also state that “[t]he Board’s attorney has the burden of pro[ving] violations of Section 8.” 29 CFR § 101.10(b) (1982). We are quite sure, however, that the Court of Appeals erred in holding that § 10(c) forbids placing the burden on the employer to prove that absent the improper motivation he would have acted in the same manner for wholly legitimate reasons.
As we understand the Board’s decisions, they have consistently held that the unfair labor practice consists of a discharge or other adverse action that is based in whole or in part on antiunion animus — or as the Board now puts it, that the employee’s protected conduct was a substantial or motivating factor in the adverse action. The General Counsel has the burden of proving these elements under § 10(c). But the Board’s construction of the statute permits an employer to avoid being adjudicated a violator by showing what his actions would have been regardless of his forbidden motivation. It extends to the employer what the Board considers to be an affirmative defense but does not change or add to the elements of the unfair labor practice that the General Counsel has the burden of proving under § 10(c). We assume that the Board could reasonably have construed the Act in the manner insisted on by the Court of Appeals. We also assume that the Board might have considered a showing by the employer that the adverse action would have occurred in any event as not obviating a violation adjudication but as going only to the permissible remedy, in which event the burden of proof could surely have been put on the employer. The Board has instead chosen to recognize, as it insists it has done for many years, what it designates as an affirmative defense that the employer has the burden of sustaining. We are unprepared to hold that this is an impermissible construction of the Act. “[T]he Board’s construction here, while it may not be required by the Act, is at least permissible under it. . . ,” and in these circumstances its position is entitled to deference. NLRB v. J. Weingarten, Inc., 420 U. S. 251, 266-267 (1975); NLRB v. Erie Resistor Corp., 373 U. S. 221, 236 (1963).
The Board’s allocation of the burden of proof is clearly reasonable in this context, for the reason stated in NLRB v. Remington Rand, Inc., 94 F. 2d 862, 872 (CA2), cert. denied, 304 U. S. 576 (1938), a case on which the Board relied when it began taking the position that the burden of persuasion could be shifted. E. g., Eagle-Picker Mining & Smelting, 16 N. L. R. B., at 801. The employer is a wrongdoer; he has acted out of a motive that is declared illegitimate by the statute. It is fair that he bear the risk that the influence of legal and illegal motives cannot be separated, because he knowingly created the risk and because the risk was created not by innocent activity but by his own wrongdoing.
In Mt. Healthy City Board of Education v. Doyle, 429 U. S. 274 (1977), we found it prudent, albeit in a case implicating the Constitution, to set up an allocation of the burden of proof which the Board heavily relied on and borrowed from in its Wright Line decision. There, we held that the plaintiff had to show that the employer’s disapproval of his First Amendment protected expression played a role in the employer’s decision to discharge him. If that burden of persuasion were carried, the burden would be on the defendant to show by a preponderance of the evidence that he would have reached the same decision even if, hypothetically, he had not been motivated by a desire to punish plaintiff for exercising his First Amendment rights. The analogy to Mt. Healthy drawn by the Board was a fair one.
For these reasons, we conclude that the Court of Appeals erred in refusing to enforce the Board’s orders, which rested on the Board’s Wright Line decision.
The Board was justified in this case in concluding that Santillo would not have been discharged had the employer not considered his efforts to establish a union. At least two of the transgressions that purportedly would have in any event prompted Santillo’s discharge were commonplace, and yet no transgressor had ever before received any kind of discipline. Moreover, the employer departed from its usual practice in dealing with rules infractions; indeed, not only did the employer not warn Santillo that his actions would result in being subjected to discipline, it also never even expressed its disapproval of his conduct. In addition, Patterson, the person who made the initial decision to discharge Santillo, was obviously upset with Santillo for engaging in such protected activity. It is thus clear that the Board’s finding that San-tillo would not have been fired if the employer had not had an antiunion animus was “supported by substantial evidence on the record considered as a whole,” 29 U. S. C. § 160(f).
Accordingly, the judgment is
Reversed.
Section 8(a), as set forth in 29 U. S. C. § 158(a), provides, in relevant part:
“It shall be an unfair labor practice for an employer—
“(1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 157 of this title;
“(3) by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization . . . .”
Section 10(c) provides, in relevant part:
“If upon the preponderance of the testimony taken the Board shall be of the opinion that any person named in the complaint has engaged in or is engaging in any such unfair labor practice, then the Board shall state its findings of fact and shall issue and cause to be served on such person an order requiring such person to cease and desist from such unfair labor practice, and to take such affirmative action including reinstatement of employees with or without back pay, as will effectuate the policies of this subchapter .... If upon the preponderance of the testimony taken the Board shall not be of the opinion that the person named in the complaint has engaged in or is engaging in any such unfair labor practice, then the Board shall state its findings of fact and shall issue an order dismissing the said complaint. No order of the Board shall require the reinstatement of any individual as an employee who has been suspended or discharged, or the payment to him of any back pay, if such individual was suspended or discharged for cause.” 29 U. S. C. § 160(c).
The Board’s Wright Line decision has been rejected by the Second and Third Circuits, see NLRB v. New York University Medical Center, 702 F. 2d 284 (CA21983), cert. pending, No. 82-1705; Behring International, Inc. v. NLRB, 675 F. 2d 83 (CA3 1982), cert. pending, No. 82-438, as well as by the First. Several Circuits have expressly approved the Wright Line test. See NLRB v. Senftner Volkswagen Corp., 681 F. 2d 557, 560 (CA8 1982); NLRB v. Nevis Industries, Inc., 647 F. 2d 905, 909 (CA9 1981); Peavey Co. v. NLRB, 648 F. 2d 460 (CA7 1981).
The Board argues that its approach to mixed-motive cases was known to Congress and ratified by the passage of the Labor Management Relations Act (LMRA), 61 Stat. 136, which reenacted §§ 8(a)(1) and 8(a)(3) almost without material change. We need not pass on this submission, since we find nothing in the legislative history of the LMRA that calls into question the decisions of the Board relevant to the issue before us now. The issue after, as well as before, the passage of the LMRA is whether the Board’s construction of § 8(a) is sufficiently rational to be acceptable in the courts. We do note that nowhere in the legislative history is reference made to any of the mixed-motive cases decided by the Board or by the courts, see, e. g., NLRB v. Remington Rand, Inc., 94 F. 2d 862, 872 (CA2) (L. Hand, J.) (“[S]ince the refusal [to negotiate] was at least one cause of the strike, and was a tort... it rested upon the tortfeasor to disentangle the consequences for which it was chargeable from those from which it was immune”), cert. denied, 304 U. S. 576 (1938); NLRB v. Stackpole Carbon Co., 105 F. 2d 167, 176 (CA3), cert. denied, 308 U. S. 605 (1939); Borden Mills, Inc., 13 N. L. R. B., at 474-475 (dicta); Davis Precision Machine Co., 64 N. L. R. B. 529, 537 (1945); Wright-Hibbard Industrial Electric Truck Co., 67 N. L. R. B. 897, 908, n. 15 (1946); Robbins Tire and Rubber Co.. 69 N. L. R. B.. at 454. n. 21.
The Board has not purported to shift the burden of persuasion on the question of whether the employer fired Santillo at least in part because he engaged in protected activities. The General Counsel satisfied his burden in this respect and no one disputes it. Thus, Texas Department of Community Affairs v. Burdine, 450 U. S. 248 (1981), is inapposite. In that case, which involved a claim of racial discrimination in violation of Title VII of the Civil Rights Act of 1964, 42 U. S. C. § 2000e et seq. (1976 ed. and Supp. V), the question was who had “[t]he ultimate burden of persuading the trier of fact that the defendant intentionally discriminated against the plaintiff. . . 450 U. S-, at 253. The Court discussed only the situation in which the issue is whether either illegal or legal motives, but not both, were the “true” motives behind the decision. It thus addressed the pretext case.
The language of the NLRA requiring that the Board act on a preponderance of the testimony taken was added by the LMRA, 61 Stat. 136, in 1947. A closely related provision directed that no order of the Board reinstate or compensate any employee who was fired for cause. Section 10(c) places the burden on the General Counsel only to prove the unfair labor practice, not to disprove an affirmative defense. Furthermore, it is clear from the legislative history of the LMRA that the drafters of § 10(c) were not thinking of the mixed-motive case. Their discussions reflected the assumption that discharges were either “for cause” or punishment for protected activity. Read fairly, the legislative history does not indicate whether, in mixed-motive eases, the employer or the General Counsel has the burden of proof on the issue of what would have happened if the employer had not been influenced by his unlawful motives; on that point the legislative history is silent.
The “for cause” proviso was not meant to apply to cases in which both legitimate and illegitimate causes contributed to the discharge, see infra. The amendment was sparked by a concern over the Board’s perceived practice of inferring from the fact that someone was active in a union that he was fired because of antiunion animus even though the worker had been guilty of gross misconduct. The House Report explained the change in the following terms:
“A third change forbids the Board to reinstate an individual unless the weight of the evidence shows that the individual was not suspended or discharged for cause. In the past, the Board, admitting that an employee was guilty of gross misconduct, nevertheless frequently reinstated him, ‘inferring’ that, because he was a member or an official of a union, this, not his misconduct, was the reason for his discharge.” H. R. Rep. No. 245, 80th Cong., 1st Sess., 42 (1947) (emphasis added).
The proviso was thus a reaction to the Board’s readiness to infer antiunion animus from the fact that the discharged person was active in the union, and thus has little to do with the situation in which the Board has soundly concluded that the employer had an antiunion animus and that such feelings played a role in a worker’s discharge.
Respondent also argues that placement of the burden of persuasion on the employer contravenes § 10(b) of the Act and § 7(c) of the Administrative Procedure Act, 5 U. S. C. § 556(d). Section 10(b) provides that the Federal Rules of Evidence apply to Board proceedings insofar as practicable. Respondent contends that Federal Rule of Evidence 301 requires that the burden of persuasion rest on the General Counsel. Rule 301 provides:
“In all civil actions and proceedings not otherwise provided for by Act of Congress or by these rules, a presumption imposes on the party against whom it is directed the burden of going forward with evidence to rebut or meet the presumption, but does not shift to such party the burden of proof in the sense of the risk of nonpersuasion, which remains throughout the trial upon the party on whom it was originally cast.”
The Rule merely defines the term “presumption.” It in no way restricts the authority of a court or an agency to change the customary burdens of persuasion in a manner that otherwise would be permissible. Indeed, were respondent correct, we could not have assigned to the defendant the burden of persuasion on one issue in Mt. Healthy City Board of Education v. Doyle, 429 U. S. 274 (1977).
Section 7(c) of the Administrative Procedure Act, 5 U. S. C. § 556(d), provides that the proponent of an order has the burden of proof. Since the General Counsel is the proponent of the order, asserts respondent, the General Counsel must bear the burden of proof. Section 7(c), however, determines only the burden of going forward, not the burden of persuasion. Environmental Defense Fund, Inc. v. EPA, 179 U. S. App. D. C. 43, 49, 58-60, 548 F. 2d 998, 1004, 1013-1015 (1976), cert. denied sub nom. Velsicol Chemical Corp. v. EPA, 431 U. S. 925 (1977). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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81
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FLEMMING, SECRETARY OF HEALTH, EDUCATION, AND WELFARE, v. FLORIDA CITRUS EXCHANGE et al.
No. 27.
Argued November 17, 1958.
Decided December 15, 1958.
William W. Goodrich argued the cause for petitioner. With him on the briéf were Solicitor General Rankin, Assistant Attorney General Anderson and Beatrice Rosenberg.
J. Hardin Peterson argued the cause and filed a brief for the Florida Citrus Exchange et al., respondents.
/. Lewis Hall argued the cause for Schell, respondent. With him on the brief was Morris E. White.
Richard W. Ervin, Attorney General, filed a brief for the State of Florida, as amicus curiae, urging affirmance.
Mr. Justice Brennan
delivered the opinion of the Court.
Commercially grown Florida and Texas oranges have for many years been colored with a red coal-tar color. In 1939 the Food and Drug Administration, after testing and pursuant to § 406 (b) of the Federal Food, Drug, and Cosmetic Act, certified this color, FD&C Red No. 32 (hereafter Red 32), to be harmless and suitable for use in food. However, the Secretary of Health, Education, and Welfare, on November 10,1955, ordered Red 32 and two other coal-tar colors to be removed from the certified list, after new tests in 1951-1953 cast doubt whether Red 32 was harmless, and after public hearings were held upon the matter on notice published in the Federal Register. The consequence of the Secretary’s order was that under § 402 (c) of the Act any food bearing or containing such colors would be deemed to be adulterated.
The validity of the Secretary’s order was attacked in petitions under § 701 (f) of the Act filed in several Courts of Appeals by persons and organizations claiming to be adversely affected. The Court of Appeals for the Second Circuit sustained the order against a general attack. Certified Color Industry Comm. v. Secretary of Health, Education and Welfare, 236 P. 2d 866. In the instant case, however, the Court of Appeals for the Fifth Circuit, by a divided vote, set aside the order insofar as it removed the certification of Red 32 as harmless and suitable for use as external coloring on Florida and Texas oranges. 246 F. 2d 850.
The Secretary did not determine that Red 32 in the quantities used in color-added oranges was harmful for human consumption, but rather determined on the basis of the 1951-1953 tests only that Red 32 and the other suspect coal-tar colors were toxic and therefore not “harmless and suitable for use in food.” The Court of Appeals held that the 1939 finding that Red 32 was harmless “should not be supplanted” by a contrary finding “unless there is evidence that, in the amounts used, and in the manner of use, oranges colored with Red 32 are unsafe for human consumption.” 246 F. 2d, at 861-862. The word “harmless” was construed to be a term “of relation,” preventing the Secretary from denying the continued use of Red 32 in the quantities used in color-added oranges in the absence of evidence that such quantities could not be consumed “without risk of injury or harm.” Id., at 858. The Court of Appeals held further that in light of its premise that “harmless” was a term of relation and because two congressional Committees had found that the practice of adding the color to oranges was an economic necessity, it would be incumbent upon the Secretary to determine whether the use of the color was “required in the production” of food within the meaning of § 406 (a), and if so, to promulgate a safe tolerance for Red 32 on oranges pursuant to that section. Until such a tolerance was promulgated, the court held that the Secretary was required to certify Red 32 as a safe color for use on oranges without one. Id., at 860-862. We granted certiorari to determine this controversial question of construction of this important statute designed for the protection of the public health. 356 U. S. 911.
Senate and House Committees have reported that the practice of adding color is an economic necessity in the production of Florida and Texas oranges for market. When mature oranges are removed from the tree, their skins, for botanical reasons unnecessary to detail here, are frequently green in color. Since the consumer would be prone incorrectly to interpret this greenness as a sign of immaturity, oranges are put through a “degreening” process which involves exposure to ethylene gas. In the case of certain California oranges, this gas process is sufficient to turn a green orange into one of the desired orange color. But the degreening process does not produce the desired color in Florida and Texas oranges; a light yellow shade results. The more desired color is therefore produced by immersing the oranges in, or spraying them with, a solution containing Red 32. The evidence at the hearings held by the Secretary was that the process infuses the peel of an orange with 0.0017% to 0.0034% of Red 32. Other evidence indicated that oranges taken as a whole, and candied peel, marmalade and orange juice would contain less — in many cases, much less — of the coal-tar color. It is conceded by the Secretary that there is no evidence that the level of ingestion of Red 32 involved in human consumption of color-added oranges is harmful.
However, the evidence at the Secretary’s hearing did indicate that Red 32 had a poisonous effect on animals. Feeding the color to rats in quantities as small as 0.1% of their diet was deleterious and often fatal, with liver damage and enlargement of the heart in evidence. In larger quantities, 1.0% and 2.0% of the diet, ingestion of Red 32 by rats caused death within twelve days and a week, respectively. The health of dogs taking 0.2% of the color in their diets deteriorated rapidly; that of those taking 0.04% somewhat more slowly, but definitely; and ill effects were indicated at a feeding level as low as 0.01% of the diet. No safe level of administration of Red 32 to the test animals was established. These and similar tests, involving the administration of Red 32 and the other coal-tar colors involved to test animals generally as an item of diet, were the basis on which the Secretary’s order rested.
The Secretary argues that the legislative history and the consistent administrative interpretation of the Act establish that his authority to list or continue the listing of coal-tar colors is confined to his authority under § 406 (b) to certify “harmless” coal-tar colors, those which are wholly innocuous and demonstrated to be without adverse physiological effect. The argument runs that a toxic coal-tar color, such as the Court of Appeals agreed that Red 32 was, was to be prohibited completely without regard to whether it might possibly be used in safe amounts on a particular food product. The Secretary argues further that since Congress made known its will specifically and precisely in § 406 (b) that a toxic coal-tar color, that is, one not “harmless,” was not to be certified under any circumstances, the tolerance provisions of § 406 (a) have no relevance to the validity of his order.
We are of the opinion that the Court of Appeals erred and that its judgment cannot stand.
First. The provisions of §§402 (c) and 406 (b) dealing expressly with coal-tar colors were innovations in the Federal Food, Drug, and Cosmetic Act of 1938; there were no counterpart provisions in the original 1906 food and drug legislation. By these provisions, Congress carefully distinguished the treatment to be given by the Secretary to toxic coal-tar colors. The original Act dealt generally with poisonous and other deleterious substances in food, as are now treated under § 402 (a), but it did not deal specifically with coal-tar colors. Section 7 of the original Food and Drugs Act, 34 Stat. 769, provided that an article of food should be deemed adulterated “If it contain any added poisonous or other added deleterious ingredient which may render such article injurious to health....” This Court held in United States v. Lexington Mill & Elevator Co., 232 U. S. 399, following the “plain meaning” of the statutory language, that this placed the burden upon the Government of establishing that the added substance was such as might render the food to which it was added injurious to health. This rule applied without distinction where coal-tar colors were involved. Congress was aware of the difficulties of this test which required that the questioned food product be evaluated as a whole, and of the existence in this area of an informal certification practice under the 1906 Act under which not food products but the coal-tar colors themselves were subjected to test to determine their poisonous or harmful character. Cf. S. Rep. No. 361, 74th Cong., 1st Sess., pp. 7-8. Of course, when litigation occurred, the Lexington. Mill standard was applied. See W. B. Wood Manufacturing Co. v. United States, 286 F. 84, 86-87.
It was against this background that the 1938 statute was proposed and enacted. It is obvious to us that an approach different from the rule in Lexington Mill was intended by Congress when in § 402 (c) and § 406 (b) it addressed itself to the severable and narrow problem of coal-tar colors. The- language involved in Lexington Mill survived generally in the Act’s broadest and most general test of food adulteration, § 402 (a)(1), Section 402 (c) provided a separate test: that a food should be deemed adulterated “If it bears or contains a coal-tar color other than one from a batch that has been certified in accordance with regulations as provided by section 406....” Plainly Congress banned any addition to foods of coal-tar colors not certified by the Secretary. The standard established for the Secretary was set forth in § 406 (b): “The Secretary shall promulgate regulations providing for the listing of coal-tar colors which are harmless and suitable for use in food and for the certification of batches of such colors... There appears in Senator Copeland’s memorandum on the first of the bills which led to the 1938 Act, S. 1944, 73d Cong., Ist Sess., which contained new provisions on coal-tar colors similar to the ones in the Act as finally passed, a clear indication that one of the purposes of these provisions was to do away, in this area, with the Lexington Mill approach. 77 Cong. Rec. 5721. This had the effect of making the certification system, in which analysis concentrated on the color substances themselves, rather than an examination of the effect of the use of the colors in the context of the food products involved, the conclusive test of adulteration. Thus it is that the test of certification laid down in § 406 (b) concentrates on the color substance itself; it is to be listed only if it is harmless. The Secretary is to address himself to the harmless character of the substance first; once this is assured, the statutory plan is that it may be freely used in foods, subject to the provisions of the other sections of the Act. Clearly such a plan is a rational one to ascribe to Congress. It is true that the ultimate purpose here concerned of the adulteration provisions of the Act is to protect health, and that no one makes the color substances by themselves an item of diet. But it certainly was competent for Congress, in the light of what were recognized problems to health in the use of such added colors, to adopt a rule of caution in treating this recognized and definable problem area. This rule of caution is here one which relieves the Secretary from the burden of showing in each case that a food containing them raises a possibility of injury to health, and requires that the color stuffs, whose positive values are only visual and which are not naturally found in foods, not be added unless they could pass a higher standard.
The significance of such an approach is demonstrated here. No safe level for ingestion of Red 32 has been established, either in respect of humans or of animals. No one contends that it is impossible that ill effects will be experienced in human beings if unrestricted use of the substance is permitted in articles of food. On the other hand, no instance of a harmful use of Red 32 in a particular food was established in the record. These questions present broad inquiries, difficult of proof, and doubtless apt to be more long-drawn-out in investigation than even the ones which the Secretary pursued. Yet it has been shown that the color of itself has poisonous properties. In the light of the over-all purpose of the Act, cf. United States v. Dotterweich, 320 U. S. 277, 280, and the specific terms here involved, it seems to us that Congress did not intend that a verdict of “not proven” on the questions mentioned should preclude the Government from preventing the use of substances like the one in question when they were shown to have poisonous effects by themselves.
We are not persuaded by the respondents’ argument, adopted by the Court of Appeals, that the words “harmless” and “poisonous” are relative words, referring not to the effect of a substance in vacuo, but to its effect, taken in a particular way and in particular quantities, on an organic system. Of course this is so, but the question before us certainly does not depend on it. This is not a case like the examples put which remind us that pure water would be deleterious if taken at the rate of four gallons an hour or common table salt at several ounces. The color substances appear to have been administered at toxicologically significant levels; they played a relatively small part in the diets of the test animals, generally less, and frequently much less, than 1%. Obviously if the color substances themselves are made an item of diet in the trifling percentages used on the test animals, their effect is poisonous. Congress may have intended “harmless” in a relative sense, but we think it was in relation to such laboratory tests as the ones the Secretary performed that Congress was speaking when it required that coal-tar colors be “harmless.” We do not believe that Congress required the Secretary first to attempt to analyze the uses being made of the colors in the market place, and then feed them experimentally only in the proportions in which they appeared in certain of the food products in which the colors were used. This appears to be the very procedure on which Congress turned its back in the 1938 Act.
The respondents contend that since the Secretary himself maintains various lists of certified colors, one containing colors harmless and suitable for all food, drug and cosmetic uses, another of colors harmless and suitable for general use in drugs and cosmetics, and a third of colors harmless and suitable for external use in drugs and cosmetics, 21 CFR §§ 9.3, 9.4, 9.5, he has recognized that “harmless,” as used in the statute, does not bear the “absolute” meaning he is alleged to give it. From this it is said to follow that the Secretary must, in forbidding the use of colors in foods, restrict his prohibition to specific food uses in which the color is shown to be capable of a deleterious effect. We do not draw this inference. Provisions similar to those dealing with the use of coal-tar colors in foods are repeated in the portions of the Act dealing with drugs and with cosmetics. Section 501 (a)(4), 52 Stat. 1049, 21 U. S. C. §351 (a)(4), proscribes the use of uncertified colors in drugs for the purpose of coloring, and refers to § 504, 52 Stat. 1052, 21 U. S. C. § 354, which authorizes the listing and certification of coal-tar colors which are "harmless and suitable for use in drugs.” Comparable provisions are found with respect to cosmetics in §§ 601 (e) and 604, 52 Stat. 1054, 1055, 21 U. S. C. §§ 361 (e), 364. It is clear from these provisions that Congress contemplated that a color might be harmless in respect of drugs or cosmetics but not of foods. And the fact that the Secretary has established a further category, distinguishing between colors intended for external and for general use, we do not think inconsistent with our interpretation of the Act. These distinctions can be established through tests run on the color substance as such, in the way in which the Secretary has conducted the tests in the matter before us. It is a far cry from saying that the Act permits a generic distinction capable of laboratory proof, between external and internal uses of a color, to say that it commands that the colors cannot be inquired of at all except in the specific contexts of their use in food, drug and cosmetic products.
Second. But even if the Secretary’s approach of viewing the harmlessness of coal-tar colors in terms of the colors themselves, rather than in their specific applications, is correct, the respondents insist, as the court below indicated, that the Secretary should establish tolerances for the use of colors in food, even though not found to be “harmless.” The respondents point to § 406 (a) of the Act which allows the Secretary to establish tolerances for poisonous substances added to food where the substance is “required in the production” of the food or “cannot be avoided by good manufacturing practice.” They argue that this provision should be used by the Secretary to establish a maximum tolerance for the application of Red 32 to the skins of oranges, either because it applies by its own terms or it is applicable by analogy. The Secretary contends that he is without power to permit the use of harmful coal-tar colors in specific foods through a system of tolerances. We believe he is correct.
The Federal Food, Drug, and Cosmetic Act is a detailed and thorough piece of legislation. Its treatment of many public health and food problems is quite specific, and of course it is the duty of the courts in construing it to be mindful of its approach in terms of draftsmanship. Here again, in our construction of this explicit Act, we must be sensitive to what Congress has written, and recall that “It is for us to ascertain — neither to add nor to subtract, neither to delete nor to distort.” 62 Cases of Jam v. United States, 340 U. S. 593, 596. Section 406 (a), which provides for the system of tolerances, constitutes by its terms a definition of the term “unsafe,” which appears in § 402 (a) (2), a prohibition on foods which bear or contain “any added poisonous or added deleterious substance... which is unsafe within the meaning of section 406.” This is a prohibition entirely separate and distinct from the prohibitions of § 402 (c) on foods containing or bearing uncertified coal-tar colors. The existence of a tolerance is specifically stated in § 406 (a) only to give sanction to what would otherwise amount to adulteration within the terms of § 402 (a)(1). Accordingly, it is obvious from the language of the statute that the provisions authorizing the establishment of tolerances apply only to § 402 (a)(1) and (2) and do not apply to § 402 (c)’s flat prohibition against the use of uncertified colors. Respondents do not direct us to any substantial contrary indication in the legislative history. Nor can the tolerance provisions be applied to coal-tar colors through some form of analogy. The command of the statute is plain: where a coal-tar color is not harmless, it is not to be certified; if it is not certified, it is not to be used at all. In this regard also, an approach in terms of the toxicity of the coloring ingredient, rather than of the food product as a whole was chosen by Congress. It evidently took the view that unless coal-tar colors were harmless, the considerations of the benefits of visual appeal that might be urged in favor of their use should not prevail, in the light of the considerations of the public health. In the case of other sorts of added poisons, though only where they were required in the production of the food concerned or could not under good manufacturing practice be avoided, a different congressional policy was expressed in the 1938 enactment. It is the duty of the Secretary to give effect to this distinction; he has done so with apparent substantial uniformity and has done so here.
Third. After the promulgation of the Secretary’s order, Congress afforded temporary relief to those economically interested in the coloring of oranges with Red 32. Legislation was enacted in the summer of 1956 to afford a period of approximately three years (until March 1, 1959) during which use of the color would be allowed solely in application to the skins of oranges. The statute does not, in our view, affect the situation presented to the courts for judicial review; the Secretary’s order remains to be tested under the permanent provisions of the Act, insofar as they will affect respondents after March 1, 1959. The statute accordingly operates as a legislatively ordained stay of the Secretary’s order insofar as it affects the present respondents and those similarly situated. See H. R. Rep. No. 1982, p. 3, and S. Rep. No. 2391, p. 3, 84th Cong., 2d Sess. In view of the very temporary nature of this legislative “stay,” the automatic resumption of the status quo upon its expiration, and the effect of the order on the respondents, even during the legislative stay, we agree with the parties that the matter before us is not moot. The Secretary’s order was the promulgation of a general rule, prospective in operation, and the facts of the respondents’ business are such that if the order is upheld, there will be a practical effect on them even during the span of the temporary legislation. Accordingly, the respondents remain persons adversely affected by the Secretary’s order, and it is proper for us now to determine the legal situation in regard to them when the temporary legislation expires. Under the permanent provisions of §§ 402 and 406 the Secretary’s order was lawful, and the respondents present no grounds on which they can legally object to its application to them. The judgment of the Court of Appeals, setting the Secretary’s order aside in part, must be
Reversed.
The Act, as amended, is 52 Stat. 1040, 21 U. S. C. § 301 et seq. Section 406 (b), 52 Stat. 1049, 21 U. S. C. §346 (b) provides:
“The Secretary shall promulgate regulations providing for the listing of coal-tar colors which are harmless and suitable for use in food and for the certification of batches of such colors, with or without harmless diluents.”
Section 402 (c), 52 Stat. 1047, 21 U. S. C. §342 (c), provides that a food shall be deemed to be adulterated “If it bears or contains a coal-tar color other than one from a batch that has been certified in accordance with regulations as provided by section 406....”
Section 301 of the Act prohibits the introduction or delivery for introduction into interstate commerce, or the receipt in interstate commerce, and the delivery thereof, of adulterated food, or the adulteration of food in interstate commerce. 52 Stat. 1042, 21 U. S. C. § 331. Sanctions for the prohibited acts, in the form of injunction proceedings, criminal prosecutions, and seizure actions, are provided in §§ 302-304, 52 Stat. 1043, 1044, 21 U. S. C. §§ 332-334.
“In a case of actual controversy as to the validity of any order under subsection (e), any person who will be adversely affected by such order if placed in effect may at any time prior to the ninetieth day after such order is issued file a petition with the United States Court of Appeals for the circuit wherein such person resides or has his principal place of business, for a judicial review of such order. The summons and petition may be served at any place in the United States. The Secretary, promptly upon service of the summons and petition, shall certify and file in the court the transcript of the proceedings and the record on which the Secretary based his order.” 52 Stat. 1055, 21 U. S. C. §371 (f).
Review was sought in three Courts of Appeals in all. In the Court of Appeals for the Seventh Circuit, a petition was dismissed before it was adjudicated.
The persons and firms who are respondents here are all engaged in the growing, packing or marketing of Florida or Texas oranges. One is also interested in the patented process whereby the Red 32 color is applied to the skins of oranges.
The Court of Appeals set aside the order:
“... in so far as said order removes the coal-tar color FD&C Red No. 32 from the list of colors which may be certified for use in coloring the skin of oranges meeting minimum maturity standards prescribed in the State of Florida and Texas; provided, that nothing herein or in the judgment of this Court entered pursuant hereto shall restore said coal-tar color to the list of colors which may be certified for unrestricted use in food, drugs and cosmetics but shall operate to authorize the certification of batches of said color conforming to the specifications for the color appearing at 21 C. F. R. 135.3 (1949 ed.) for the purpose of coloring the skin of mature oranges only; provided further, that the Secretary shall be required to certify only sufficient batches of FD&C Red No. 32 as may be necessary to color the skin of mature oranges from time to time; provided further, that the certificates issued for batches of FD&C Red No. 32 may be limited by their certificate for use in coloring mature oranges only; and provided further, that nothing herein or in the judgment of this Court entered pursuant hereto shall be deemed to restrict the Secretary from making further investigations and conducting hearings for a determination of whether the use of Red 32 is required in the production of oranges and to determine the tolerances, if any, that are safe and harmless, as harmless is herein construed and defined.” 246 F. 2d, at 862.
52 Stat. 1049, 21 U. S. C. § 346 (a), which provides:
“(a) Any poisonous or deleterious substance added to any food, except where such substance is required in the production thereof or cannot be avoided by good manufacturing practice shall be deemed to be unsafe for purposes of the application of clause (2) of section 402 (a); but when such substance is so required or cannot be so avoided, the Secretary shall promulgate regulations limiting the quantity therein or thereon to such extent as he finds necessary for the protection of public health, and any quantity exceeding the limits so fixed shall also be deemed to be unsafe for purposes of the application of clause (2) of section 402 (a). While such a regulation is in effect limiting the quantity of any such substance in the case of any food, such food shall not, by reason of bearing or containing any added amount of such substance, be considered to be adulterated within the meaning of clause (1) of section 402 (a). In determining the quantity of such added substance to be tolerated in or on different articles of food the Secretary shall take into account the extent to which the use of such substance is required or cannot be avoided in the production of each such article, and the other ways in which the consumer may be affected by the same or other poisonous or deleterious substances.”
S. Rep. No. 2391, 84th Cong., 2d Sess., p. 1; H. R. Rep. No. 1982, 84th Cong., 2d Sess., p. 2.
The 1938 enactment contained a proviso to § 402 (c).. That this paragraph shall not apply to citrus fruit bearing or containing a coal-tar color if application for listing of such color has been made under this Act and such application has not been acted on by the Secretary, if such color was commonly used prior to the enactment of this Act for the purpose of coloring citrus fruit.” 52 Stat. 1047, 21 U. S. C. §342 (c). Respondents suggest that this proviso somehow suggests a congressional intent to deal with their color more leniently under the present circumstances, but we can draw no such inference.
Section 402 (a) (2), with its reference to § 406, see note 7, supra, revised the rule of the Lexington Mill case substantially in its own factual context, that of added poisonous substances in food. Section 402 (a) (2) has been the subject of subsequent revisions itself, the latest one of which is § 3 of the Food Additives Amendment of 1958, Public Law 85-929, September 6, 1958, 72 Stat. 1784. See note 12, infra.
Considerably more of the color was regularly produced before the entry of the Secretary’s order than could be accounted for as actually being on the skins of oranges. Neither the Government nor the respondents account for the difference more than speculatively. The Government urges that the difference must have been used in other food products. Respondents emphasize the inevitable waste of quantities of the color during the orange-coloring process. To us this underlines the approach of the provisions in question; where a color is found to be harmless in itself, no further inquiry can be made of it; if it is harmful, none need be.
A single dose of 100 milligrams of the color substance (0.0035 oz. avoirdupois, or y3 the weight of a standard aspirin tablet) produced a rapid diarrheic effect in test dogs.
One respondent assails the validity, even within the framework of the Secretary’s interpretation of the statute, of the tests performed on the experimental animals. The Court of Appeals found that the evidence justified the Secretary’s finding that the color was poisonous, 246 F. 2d, at 859, and we are in agreement.
The Court of Appeals’ judgment had the effect of staying the Secretary’s order in toto as it affected orange coloring until he developed a tolerance. The Secretary argues here that even if he is authorized to establish a tolerance for the use of Red 32 on oranges, his order should stand until he has established it. In the view of the case that we take, we do not reach this contention.
The Act of July 9, 1956, c. 530, 70 Stat. 512, added the following proviso to §402 (c) of the Act:
“Provided further, That this paragraph shall not apply to oranges meeting minimum maturity standards established by or under the laws of the States in which the oranges were grown and not intended for processing (other than oranges designated by | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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61
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NATIONAL LABOR RELATIONS BOARD v. CROMPTON-HIGHLAND MILLS, INC.
No. 197.
Argued January 31, 1949.
Decided May 31, 1949.
David P. Findling argued the cause for petitioner. With him on the brief were Solicitor General Perlman, Ruth Weyand and Bernard Dunau.
Ralph 'Williams argued the cause for respondent. With him on the brief was S. Y. Austin, Jr....
Mr. Justice Burton
delivered the opinion of the Court.
In this case a collective bargaining representative was certified, under the National Labor Relations Act, to represent all employees working in a certain appropriate bargaining unit. Their employer engaged in extended negotiations with this representative as to many matters-, including rates of pay. December 19, 1945, the negotiations reached something of an impasse. The question here presented is whether this employer engaged in an unfair labor practice when, on January 1, 1946, it put into effect as of December 31, 1945, without prior consultation with the bargaining representative, a general -increase in the rates of pay applicable to most of the employees who had- been represented in thé negotiations. This increase was a substantially greater one than any which the employer had offered during the negotiations. For the reasons to be stated, we hold that, under the circumstances, this action constituted an unfair labor practice and that a decree should be entered enforcing an order prohibiting such conduct. The case also raises questions as to the nature of the-impasse which was reached and as to the proper scope and terms of the enforcement decree.
August 13,1945, the Textile Workers Union of America, Congress of Industrial Organizations, following an election under the statute, was certified as the exclusive collective bargaining representative for about 800. employees of Crompton-Highland Mills, respondent herein. These employees included most of its production and maintenance employees at Griffin, Georgia, where it manufactured cotton and other goods. Much of the material entering into those goods and most of the finished goods there produced were bought, sold or transported in interstate commerce, so that the unfair labor practice, if any, concededly affected such commerce. From August 31, 1945, at least until December 19, a committee of this union engaged in collective bargaining with the respondent on numerous appropriate subjects, including rates of pay. Many tentative agreements were reached.
January 1, 1946, without prior -consultation with any'member of the bargaining committee, the employer announced a general and substantial increase in the rates,of pay of its employees, amounting to about two to six cents an hour, effective as of December 31, 1945. This increase applied to. most, but not all, of the employees in the bargaining unit. Simultaneously with its posting of the announcement of this increase, the employer told the employee members of the bargaining committee about it. At the same time, the employer mailed an announeement of it to one of the two nonémployee members of the bargaining committee.
January 31, 1946, the National Labor Relations Board, petitioner herein, in response to charges made by the union, filed a complaint against the employer, alleging several unfair labor practices. These included the above-described increase in rates of pay. After hearings before a trial examiner and consideration of that examiner's intermediate report, the employer’s exceptions and brief relating to that report and the entire record ahd oral arguments, the Board, on August 21, 19' 6, issued a cease and desist order. 70 N. L. R. B. 206 The Court of Appeals for the Fifth Circuit denied a petition for enforcement. 167 F. 2d 662.' Because of the importance of the issue in the administration of the labor relation's statutes, we granted certiorari. 335 U. S. 812.
The precise issue presented is what decree, if any, should be issued by the Court of Appeals for the enforcement of the order of the National Labor Relations Board. If a decree is to be issued, its scope and terms should be based upon such part, or all, of the Board’s cease and desist order as is supported by its findings of fact. Those findings are binding upon us to the extent that they are sustained by substantial evidence. We are satisfied that there is substantial evidence to support the material.findings of fact made by the Board as to the issue before us and, therefore, see no need to set forth that evidence here. The primary issue for discussion is, rather, the extent to which the Board’s findings of fact support its cease and desist order and justify a decree for the enforcement of that order.
The controlling specific findings of the Board are as follows:
“As fully discussed in the Intermediate Report, the respondent,'during the course of negotiations with the Union, refused to accede to the Union’s wage demands and it was not until their last conference on December 19,1945', that the respondent made its first and only counterproposal of approximately 1 to 1% cents an hour raise, which the Union rejected. Thereafter, the respondent made no further effort to settle the'wage dispute but, instead, on January 1, 1946, only 12 days later, granted.its employees a substantially larger increase than that previously offered. to the Union, without consulting the Union or affording it an opportunity to negotiate with respect thereto. In our opinion, such action taken as [so] soon after the Union was attempting through ^the bargaining process to reach an agreement with the respondent-,- among other things, on wages, clearly shows that the respondent was not acting in good faith during the negotiations, and is manifestly in consistent with the principle of collective bargaining. Nor are we impressed with the respondent’s attempted justification for its action on the ground that the Union broke off negotiations on December 19 and that the respondent was therefore relieved of the obligation to deal with it. Concededly, the respondent never proposed to the Union as a possible basis of agreement a wage increase comparable to that granted on January 1, 1946. Moreover, the record fails to support the respondent’s contention that the Union’s representatives assumed an unequivocal position at the last meeting which foreclosed further bargaining concerning wages or other terms or conditions of employment. Under these circumstances, we find, as did the Trial Examiner, that the respondent, by its action with respect to the wage increase, failed to perform its statutory duty to bargain collectively with the Union and thereby interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in the Act.” (Emphasis supplied.) 70 N. L. R. B. at pp. 206-207.
I. The employer engaged in an unfair labor practice when, without consulting the employees’ collective bargaining representative, it put into effect, for most of its employees who had been represented in the bargaining negotiations, a general increase in rates of pay which was substantially greater than any that the employer had offered.
The specific findings of the Board, coupled with the findings adopted by it from the trial examiner’s report, leave no room for doubt as to the adequacy of the facts upon which its cease and desist order was based. For significant findings adopted from the examiner’s report, see Appendix B, injra, pp. 230-234. The facts so found distinguish this case from any in which no collective bargaining representative has been certified or otherwise authorized to represent the employees in an appropriate unit. In the instant case, the wish of the employees to be consulted and to bargain collectively as to the terms of any general wage increase is established by the findings and the negotiations. Cf. Labor Board v. Columbian Enameling & Stamping Co., 306 U. S. 292, 297. We do not.have here a case where the bargaining had come to a complete-termination cutting off the outstanding invitation of the certified collective bargaining representative to bargain as to any new issue on such a matter as rates of pay, Cf. Labor Board v. Sands Mfg. Co., 306 U. S. 332. The opening which a raise in pay makes for the correction of existing inequities among employees and for the possible substitution of shorter hours, vacations or sick leaves, in lieu of some part of the proposed increase in pay, suggests the infinite opportunities for bargaining that are inherent in an announced readiness of an employer to increase generally the pay of its employees. The occasion is so appropriate for collective bargaining that it is difficult to infer an intent to cut off the opportunity for bargaining and yet be consistent with the purposes of the National Labor Relations Act.
We do not here have a unilateral grant of an increase in pay made by an employer after the same proposal has been made by the employer in the coúrse of collective bargaining but has been left unaccepted or even rejected in those "negotiations. Such a grant might well carry no disparagement,.of the collective bargaining proceedings. Instead of-being regarded as an unfair labor practice, it' might be welcomed by the bargaining representative, without prejudice to the rest of the negotiations. See In the Matter of W. W. Cross & Co., 77 N. L. R. B. 1162; In the Matter of Exposition Cotton Mills Co., 76 N. L. R. B. 1289; In the Matter of Southern Prison Co., 46 N. L. R. B. 1268.
We hold that the Board’s order to cease and desist is justified, under the circumstances of this case, to the extent that the order requires the employer to cease and desist from refusing to bargain collectively by taking action, without prior consultation with the authorized collective bargaining representative of the employees, with respect to general rates of pay which are substantially different from, or greater than, any which the employer has proposed during its negotiations with such representative. • The need for this order depends in part upon the Board’s finding that the action by the employer, on January 1, 1946, taken so soon after the meeting of December 19, 1945, showed that “the respondent [employer] was not acting in good faith during the negotiations, and is manifestly inconsistent with the principle of collective bargaining.” 70 N. L. R. B. at p. 207. See May Dept. Stores Co. v. Labor Board, 326 U. S. 376; Medo Photo Supply Corp. v. Labor Board, 321 U. S. 678; Labor Board v. Newark Morning Ledger Co., 120 F. 2d 262; Jeffery-DeWitt Insulator Co. v. Labor Board, 91 F. 2d 134.
II. The decree of'ienf or cement should not extend further than necessary to prevent the taking of the prohibited action by the employer.
There are no findings by the Board that establish a lack of good faith or lack of consistency with the principle of collective bargaining on the part of the employer other than in the connection above discussed. The Board declined to uphold the trial examiner in his findings and recommendations as to several alleged unfair labor practices other than this one. The Board’s own finding as to the employer’s interference with, and restraint and coercion of, its employees is expressly limited to this one item. It reads:
“Under these circumstances, we find, as did the Trial Examiner, that the respondent, by its action with respect to the wage increase, failed to perform its'statutory duty to bargain collectively with the Union and thereby interfered with, restrained, and coerced its employees in the exercise of the rights guaranteed in the Act.” (Emphasis supplied.) Id. at p.-207.
Accordingly, there appears no reason for enlarging the scope of the enforcement decree beyond that feature, and little, if any, need for orders requiring either specific affirmative action to be taken by the employer or the posting of any notices by it.
For these reasons, the judgment is reversed and the cause is remanded to the Court of Appeals for action consistent with this opinion.
It is so ordered.
Mr. Justice Douglas, Mr. Justice Murphy and Mr. Justice Rutledge join in Part I of this opinion, but think the Board’s order should be enforced without modification.
APPENDIX A.
Order of National Labor Relations Board In the Matter of Crompton-Highland Mills, Inc., and Textile Workers Union of America, CIO, Case No. 10-C-1812. — Decided August 21, 1946.
“ORDER
“Upon the entire record in the case, and pursuant to Section 10 (c) of the National Labor Relations Act,!he National Labor Relations Board hereby orders that the respondent, Crompton-Highland Mills, Inc., Griffin, Georgia, and its officers, agents, successors and assigns shall:
“1. Cease and desist from:
“(a) Refusing to bargain collectively with Textile Workers Union of America, CIO, as the exclusive representative of the respondent’s production and maintenance employees at the Griffin plant, including watchmen, but excluding office, clerical, technical, and laboratory employees, section men in the spinning room, head loom fixers in the weave room, head fixers in the card room, all supervisory employees of the grade of second hand and above, and all other supervisory employees with authority to hire, promote, discharge, discipline, or otherwise effect changes in the status of employees, or effectively recommend such action, by taking action, without prior consultation with said organization, with respect to rates of pay, wages, hours of employment, and other conditions' of employment.
“(b) In any manner interfering with the efforts of Textile Workers Union of America, CIO, to bargain collectively with it as the representative of its employees' in the appropriate unit described above.
“2. Take the following affirmative action, which the Board finds will effectuate the policies of the Act:
\ “(a) Upon request, bargain collectively with Textile Workers Union of America, CIO, as. the'exclusive representative of all its employees in the appropriate unit described above with respect to rates of pay, wages, hours of employment, aiid other conditions of employment;
“(b) Post at its plant at Griffin, Georgia, copies of the notice attached hereto, marked ‘Appendix A.’ Copies of such notice, to be furnished by the Regional Director for the Tenth Region, shall, after being duly signed by the respondent’s representative, be posted by the respondent immediately upon receipt thereof, and maintained by it for sixty (60) consecutive days thereafter, in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall b. taken by the respondent to insure that said notices are not altered, defaced, or covered by any other material;
“(c) Notify the Regional Director for the Tenth Region (Atlanta, Georgia), in writing, within ten (10) days from the date of this Order, what steps the respondent has taken to comply herewith.” 70 N. L. R. B. at pp. 208-209.
“Appendix A
“Nptice to All Employees
“Pursuant to a Decision and Order of the National Labor Relations Board, and in order to effectuate the policies of the National Labor Relations Act, we hereby notify our employees that:
“We will bargain collectively with Textile Workers Union of America, CIO, as the exclusive representative of all employees in the bargaining unit described below, with respect to rates of pay, wages, hours of employment, and other conditions of employment.
“We will not make any changes with respect to rates of pay, wages, hours of employment, or other conditions of employment of our employees in the bargaining unit described below, without prior consultation with Textile Workers Union of America, CIO.
“We will not in any manner interfere with the efforts of Textile Workers Union of America, CIO, as the exclusive representative of our employees in the unit described below, to bargain collectively with us.
“The bargaining unit is: All production and maintenance employees at our Griffin plant, including watchmen, but excluding office, clerical, technical and laboratory employees; section men in the spinning room, head loom fixers in the weave room, head fixers in the card room, all supervisory employees of the grade'of second hand and above, and all other supervisory employees with authority to hire, promote, discharge, discipline, ov otherwise effect, changes in the status of employees, or effectively recommend such action.
“Crompton-Highland Mills,' Inc.
“By..........................
“Dated (representative.) (title.)
“This notice must remain posted for 60 days from the date hereof, and must not be altered, defaced, or covered by any other material.”'Id. at pp. 210-211.
APPENDIX B.
Quotations from the “Findings of Fact” as to — “iii. the unfair labor practices, A. The refusal to bargain”, as stated in the Intermediate Report of the Trial Examiner, adopted by the National Labor Relations Board and printed by the Board following its Decision and Order.
“No further conference was held until December 19, when-a meeting was held at the request of the Union.
“The issues upon which the parties were still in disagreement at this time involyed wages, work assignments, insurance provisions, severance pay, vacations, union security, arbitration, union activity upon company time, and the preamble of the contract, in which the respondent sought to define the parties to the agreement as the respondent and the 'employees’ in the appropriate unit, as opposed to the Union’s position that the Union be denominated as party to the contract. On the issue of union security, although the Union had offered to compromise for maintenance of membership, the respondent refused to grant any form of security. As to wages, although it-had originally rejected the Union’s proposals for any wage increase, it proposed what amounted to an increase of about one or one and one-half cents per hour at this time.
“On January 1, 1946, the members of the union negotiation committee,, employed at the plant, were summoned to the officeof Plant Manager Pickford and informed that the respondent was granting a general wage increase to all employees, amounting to about 2 to 6 cents per hour. Pickford read to the committee the following letter under that date, addressed to Union Director Douty:
“In the course of our extended contract negotiations we have repeatedly told you that our mill would be among the first to make wage adjustments in this locality. We have learned that certain of the mills in this locality are about to adjust their wages and we are, therefore, making comparable adjustments in our wage rates effective Monday,^ December 31st, 1945. A copy of the notice which has been posted in the mill today outlining the various rate adjustments is attachéd hereto.,
“Attached to the letter were notices directed to the respective departments listing the various wage increases. The letter was received by Douty the next day. While the negotiating committee was in Pickford’s office, copies of the notices announcing the wage increases were being posted on the bulletin boards in the respective departments.
“It will be seen from the foregoing that neither the Union nor the negotiating committee was consulted from December 19, the date of the last conference, to January 1, 1946, the date of the granting of the wage increase. Nor was the committee consulted on the latter date. The respondent merely presented it with a fait accompli, without affording the Union an opportunity to negotiate, with respect to the amount of the increase, the employees to whom the increase would be applicable, the effective date of the increase or any of the factors normally envisaged in the collective bargaining process.
“It cannot be disputed, nor does the respondent deny, that the granting of the wage increase at that time, constituted unilateral action....
“While it is evident that the Union was insistent in its demand for some form of union security during its negotiations with the respondent, the preponderance of the credible evidence does not support the respondent’s position that the Union had, in effect, presented an ultimatum that no contract would be consummated which did not afford union security. As has already been indicated, union security was only one of several matters, aside from the wage question, upon which agreement had not yet been reached. If, as the respondent contends, it had left no doubt as to its position on the issue of union security in ihe conferences of October 17 and 18, and it was convinced that the Union was adamant on this issue, it seems unlikely that the parties would have conferred on November 7 and 8, and again on December 19, when the Union submitted a written wage proposal.
“It is clear, therefore, and the undersigned finds, that, although the parties had reached a temporary impasse on December 19 on some issues, principally wages, union security, and check-off, there is no substantial basis for concluding that the Union had abandoned negotiations at this time. • Moreover, even if the parties had reached an impasse in their negotiations, this obviously could not affect the Union’s status as majority representative. The principle that 'a bargaining relationship once rightly established must be permitted to exist and function for a reasonable period in which it can be given a fair chance to succeed,’, is well-established. Equally clear is the proposition that the granting of a unilateral wage increase or other concession by an employer to his employees while the designated union is attempting to bargain concerning the same subject matter, constitutes a violation of the employer’s duty to bargain with the union. It is not a question; contrary to the respondent’s argument) of giving the Union credit for a wage increase which it did not obtain, but rather of the conduct of the respondent in granting the increase in derogation of the Union’s status as statutory representative, by depriving the Union of its right to bargain with respect to such increase.
“Upon the basis of the foregoing, and upon the entire record, the undersigned concludes and further finds that, by failing and refusing to furnish' the Union with essential and pertinent information relating to the respondent’s wage structure under its 'point plan,’ job specifications, work assignments, and information appertaining thereto, and by granting its employees a unilateral wage increase on January 1, 1946, the respondent has from August 31, 1945, to December 19, 1945, and thereafter to date, including January 1, 1946, failed and refused to bargain with the Union as the exclusive collective bargaining representative of the employees in the appropriate unit above described, and has thereby interfered with, restrained, and coerced its employees in the exercise, of the rights guaranteed under the Act.” (Emphasis in this paragraph is supplied;) 70 N. L. R. B. at pp. 220-221, 222, 223-224.
The Board left no doubt that it relied solely on the granting of the wage increase, when it issued its decision and order in this case. This appears from the following express statement in the Board’s decision and order:
“1. The.Trial Examiner found that the respondent, in violation of Section 8 (1) ancj (5) of.the Act, failed to bargain collectively with the Union as the statutory representative :of the respondent’s employees by refusing to furnish the Union with certain detailed information relating to the.incentive wage plan and by granting a wage increase to its employees without consulting the Union. ■Although we agree with the Trial Examiner’s conclusion, we, however, rest our determination solely on the latter ground.” (Emphasis supplied.) Id. at p. 206.
§ 9 of the National. Labor Relations- Act, 49 Stat. 453, 29 U. S. C. (1940 ed.). § 159; In the Matter of Crompton-Highland Mills, 62 N L. R. B. 1346.
Under §§ 7, 8 (1) and (5), and 10 of the Nationa Labor Relations Act, 49 Stat. 452-455, 29 U. S. C. (1940 ed'.j §§ 157, 158 (1) and (5), and 160.
For the Board’s order, see Appendix A, infra, pp. 227-229.
“The findings of the Board as to the facts, if Supported by evidence, shall be conclusive.” § 10 (e) of the National Labor Relations Act, 49 Stat. 454, 29 U. S. C. (1940 ed.) § 160 (e). “The findings of the Board with respect to questions of fact if supported by substantial evidence on the record considered as a whole shall be conclusive.” § 10 (e), as amended by the Labor Management Relations Act, 1947, G1 Stat. 148, 29 U. S. C. (1946 ed., Supp. I) § 160 (e).
“We'have repeatedly held that Congress, by providing, § 10 (c), (e) and (f), of the National Labor Relations Act, that the Board’s findings ‘as to the facts, if supported by evidence, shall be conclusive,’ precludes the courts from weighing evidence 'in reviewing the Board’s orders, and if the findings of the Board are supported by evidence the courts are not free to set them aside, even though the Board could have drawn different inferences.” Labor Board v. Nevada Consolidated Copper Corp., 316 U. S. 105, 106-107.,
See also, Medo Photo Supply Corp. v. Labor Board, 321 U. S. 678, 681, n. 1; Consolidated Edison Co. v. Labor Board, 305 U. S. 197 229 Washington, V. & M. Coach, Co. v. Labor Board, 301 U. S. 142, 146-147.
In addition to its own findings, quoted in the text, the Board adopted, in general terms, all of the findings of the trial examiner, with certain modifications and exceptions not here material. A number of such adopted findings, which are of significance in securing a full appreciation of the basis for the Board’s order, are set forth in Appendix B, infra, pp. 230-234.
The increase in pay was explained by Herbert A. Pickford, manager of the respondent, as follows in his testimony before the trial examiner:
“Q. Mr. Pickford, explain why you made the wage increase on January 1, 1946. — A. We had heard the end of the previous week that numerous ■mills throughout the state had made wage adjustments, and we heard through rumor, more or less through the grape vine, that local mills were planning to make wage adjustments. I checked into that rumor with various mills and found that wage adjustments were going to be made, although I didn’t get any specific dates as to when they would be made.
“We had steadfastly said throughout our bargaining conferences, that if and when wage increases in our area were1 made, we would be amongst the first, as we had always been, to make such increases. And when we heard that wage increases were to take place, we. wanted to maintain our position as being amongst the first to make the increase and also maintain our position in the local labor market by making an increase ourselves.
“Q. Do you know, Mr. Pickford, what wage increases were made by any of the other mills in Griffin? — A. I do not know the definite figures aside from what I saw in the paper.
“Q. Did you join with any mills.in making any announcement about a wage increase? — A. No; we did not. We made our announcement independently of anyone else, as we have always done.”
“Sec. 8. It shall be an unfair labor practice for an employer—
.“(5) To refuse to bargain collectively with the representatives of his employees, subject to the provisions of Section 9 (a).” 49 Stat. 452-453,.and also in 61 Stat. 140-141, 29 U. S. C. (1946 ed., Supp. I) §158.
“Sec. 9. (a) Representatives designated or selected for the purposes of collective bargaining by the majority of the employees in a unit appropriate for such purposes, shall be the exclusive representatives of all the employees in such.unit for the purposes of collective bargaining in respect to rates of-pay, wages, hours of employment, or other conditions of employment:..” '49 Stat..453, apd also in 61 Stát, 143, 29 U/ S. C. (1946 ed., Supp. II § 159 (a).
Even though the employer, since January 1, 1946, may have carried on collective bargaining in good faith as to rates of pay and other matters, a decree enforcing the original order against making a general increase without consulting the collective bargaining representatives is justifiable. "... an order of the character made by the Board, lawful when made, does not become moot because it is obeyed or because changing circumstances indicate that the need for it may be less than when made.” Labor Board v. Pennsylvania Greyhound Lines, 303 U. S. 261, 271. See also, Federal Trade Commn v. Goodyear Tire & Rubber Co., 304 U. S. 257.
“... The breadth of the order, like the injunction of a court, must depend upon the circumstances of each case, the purpose being to prevent violations, the threat of which in the future is indicated because of their similarity or relation to those unlawful acts which the Board has found to have been committed by the employer in the past.... We hold only that the National Labor Relations Act does not give the Board an authority, which courts cannot rightly exercise, to enjoin violations of all the provisions of the statute merely because the violation of one has been found. To justify an order restraining other violations it must appear that they bear some resemblance to that which the employer has committed or that danger of their commission in the future is to be anticipated from the course of his conduct in the past. That justification is lacking here.” Labor Board v. Express Pub. Co., 312 U. S. 426, 436-437, and see pp. 438-439.
See also, May Dept. Stores Co. v. Labor Board, 326 U. S. 376, 392-393; J. I. Case Co. v. Labor Board, 321 U. S. 332, 341-342.
As will be seen, certain employees were not included in the wage increase.”
“19 The increase did not affect janitors, sweepers, scrubbers, outside help, and various other categories of employees included in the unit represented by the Union.”
“20 See Franks Bros. Co. v. N. L. R. B., 321 U. S. 702, 705.”
“21 See Aluminum Ore Company v. N. L. R. B., 131 F. (2d) 485, 487, (C. C. A. 7), enf’g. 39 N. L. R. B. 1286, 1295-1299; May Department Stores v. N. L. R. B., 326 U. S. 376. See also, Majority Rule in Collective Bargaining, by Ruth Weyand, Columbia Law Review, Vol. XLV, 579-583, and footnotes at 581, | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
81
] | sc_adminaction |
UNITED STATES et al. v. FLORIDA EAST COAST RAILWAY CO. et al.
No. 70-279.
Argued December 7, 1972
Decided January 22, 1973
Rehnquist, J., delivered the opinion of the Court, in which Burger, C. J., and BreNNan, White, Marshall, and Blackmun, JJ., joined. Douglas, J., filed a dissenting opinion, in which Stewart, J., joined, post, p. 246. Powell, J., took no part in the consideration or decision of the case.
Samuel Huntington argued the cause for the United States et al. With him on the briefs were Solicitor General Griswold, Assistant Attorney General Kauper, Fritz R. Kahn, and Leonard S. Goodman.
A. Alvis Layne argued the cause for appellee Florida East Coast Railway Co. With him on the brief was Walter G. Arnold. Richard A. Hollander argued the cause and filed a brief for appellee Seaboard Coast Line Railroad Co.
Mr. Justice Rehnquist
delivered the opinion of the Court.
Appellees, two railroad companies, brought this action in the District Court for the Middle District of Florida to set aside the incentive per diem rates established by appellant Interstate Commerce Commission in a rule-making proceeding. Incentive Per Diem Charges — 1968, Ex parte No. 252 (Sub-No. 1), 337 I. C. C. 217 (1970). They challenged the order of the Commission on both substantive and procedural grounds. The District Court sustained appellees’ position that the Commission had failed to comply with the applicable provisions of the Administrative Procedure Act, 5 U. S. C. § 551 et seq., and therefore set aside the order without dealing with the railroads’ other contentions. The District Court held that the language of § 1 (14) (a) of the Interstate Commerce Act, 24 Stat. 379, as amended, 49 U. S. C. § 1 (14) (a), required the Commission in a proceeding such as this to act in accordance with the Administrative Procedure Act, 5 U. S. C. § 556 (d), and that the Commission’s determination to receive submissions from the appellees only in written form was a violation of that section because the appellees were “prejudiced” by that determination within the meaning of that section.
Following our decision last Term in United States v. Allegheny-Ludlum Steel Corp., 406 U. S. 742 (1972), we noted probable jurisdiction, 407 U. S. 908 (1972), and requested the parties to brief the question of whether the Commission’s proceeding was governed by 5 U. S. C. § 553, or by §§ 556 and 557, of the Administrative Procedure Act. We here decide that the Commission’s proceeding was governed only by § 553 of that Act, and that appellees received the “hearing” required by § 1 (14) (a) of the Interstate Commerce Act. We, therefore, reverse the judgment of the District Court and remand the case to that court for further consideration of appellees’ other contentions that were raised there, but which we do not decide.
I. Background op Chronic Freight Car Shortages
This case arises from the factual background of a chronic freight-car shortage on the Nation’s railroads, which we described in United States v. Allegheny-Ludlum Steel Corp., supra. Judge Simpson, writing for the District Court in this case, noted that “[f]or a number of years portions of the nation have been plagued with seasonal shortages of freight cars in which to ship goods.” 322 F. Supp. 725, 726 (MD Fla. 1971). Judge Friendly, writing for a three-judge District Court in the Eastern District of New York in the related case of Long Island R. Co. v. United States, 318 F. Supp. 490, 491 (EDNY 1970), described the Commission’s order as “the latest chapter in a long history of freight-car shortages in certain regions and seasons and of attempts to ease them.” Congressional concern for the problem was manifested in the enactment in 1966 of an amendment to §1 (14) (a) of the Interstate Commerce Act, enlarging the Commission’s authority to prescribe per diem charges for the use by one railroad of freight cars owned by another. Pub. L. 89-430, 80 Stat. 168. The Senate Committee on Commerce stated in its report accompanying this legislation:
“Car shortages, which once were confined to the Midwest during harvest seasons, have become increasingly more frequent, more severe, and nationwide in scope as the national freight car supply has plummeted.” S. Rep. No. 386, 89th Cong., 1st Sess., 1-2.
The Commission in 1966 commenced an investigation, Ex parte No. 252, Incentive Per Diem Charges, “to determine whether information presently available warranted the establishment of an incentive element increase, on an interim basis, to apply pending further study and investigation.” 332 I. C. C. 11, 12 (1967). Statements of position were received from the Commission staff and a number of railroads. Hearings were conducted at which witnesses were examined. In October 1967, the Commission rendered a decision discontinuing the earlier proceeding, but announcing a program of further investigation into the general subject.
In December 1967, the Commission initiated the rule-making procedure giving rise to the order that appellees here challenge. It directed Class I and Class II line-haul railroads to compile and report detailed information with respect to freight-car demand and supply at numerous sample stations for selected days of the week during 12 four-week periods, beginning January 29, 1968.
Some of the affected railroads voiced questions about the proposed study or requested modification in the study procedures outlined by the Commission in its notice of proposed rulemaking. In response to petitions setting forth these carriers’ views, the Commission staff held an informal conference in April 1968, at which the objections and proposed modifications were discussed. Twenty railroads, including appellee Seaboard, were represented at this conference, at which the Commission’s staff sought to answer questions about reporting methods to accommodate individual circumstances of particular railroads. The conference adjourned on a note that undoubtedly left the impression that hearings would be held at some future date. A detailed report of the conference was sent to all parties to the proceeding before the Commission.
The results of the information thus collected were analyzed and presented to Congress'by the Commission during a hearing before the Subcommittee on Surface Transportation of the Senate Committee on Commerce in May 1969. Members of the Subcommittee expressed dissatisfaction with the Commission’s slow pace in exercising the authority that had been conferred upon it by the 1966 Amendments to the Interstate Commerce Act. Judge Simpson in his opinion for the District Court said:
“Members of the Senate Subcommittee on Surface Transportation expressed considerable dissatisfaction with the Commission’s apparent inability to take effective steps toward eliminating the national shortage of freight cars. Comments were general that the Commission was conducting too many hearings and taking too little action. Senators pressed for more action and less talk, but Commission counsel expressed doubt respecting the Commission’s statutory power to act without additional hearings.” 322 F. Supp., at 727.
Judge Friendly, describing the same event in Long Island R. Co. v. United States, supra, said:
“To say that the presentation was not received with enthusiasm would be a considerable understatement. Senators voiced displeasure at the Commission’s long delay at taking action under the 1966 amendment, engaged in some (merriment over what was regarded as an unintelligible discussion of methodology... and expressed doubt about the need for a hearing.... But the Commission’s general counsel insisted that a hearing was needed... and the Chairman of the Commission agreed....” 318 F. Supp., at 494.
The Commission, now apparently imbued with a new sense of mission, issued in December 1969 an interim report announcing its tentative decision to adopt incentive per diem charges on standard boxcars based on the information compiled by the railroads. The substantive decision reached by the Commission was that so-called “incentive” per diem charges should be paid by any railroad using on its lines a standard boxcar owned by another railroad. Before the enactment of the 1966 amendment to the Interstate Commerce Act, it was generally thought that the Commission’s authority to fix per diem payments for freight car use was limited to setting an amount that reflected fair return on investment for the owning railroad, without any regard being had for the desirability of prompt return to the owning line or for the encouragement of additional purchases of freight cars by the railroads as a method of investing capital. The Commission concluded, however, that in view of the 1966 amendment it could impose additional “incentive” per diem charges to spur prompt return of existing cars and to make acquisition of new cars financially attractive to the railroads. It did so by means of a proposed schedule that established such charges on an across-the-board basis for all common carriers by railroads subject to the Interstate Commerce Act. Embodied in the report was a proposed rule adopting the Commission’s tentative conclusions and a notice to the railroads to file statements of position within 60 days, couched in the following language:
“That verified statements of facts, briefs, and statements of position respecting the tentative conclusions reached in the said interim report, the rules and regulations proposed in the appendix to this order, and any other pertinent matter, are hereby invited to be submitted pursuant to the filing schedule set forth below by an interested person whether or not such person is already a party to this proceeding.
“That any party requesting oral hearing shall set forth with specificity the need therefor and the evidence to be adduced.” 337 I. C. C. 183, 213.
Both appellee railroads filed statements objecting to the Commission’s proposal and requesting an oral hearing, as did numerous other railroads. In April 1970, the Commission, without having held further “hearings,” issued a supplemental report making some modifications in the tentative conclusions earlier reached, but overruling in toto the requests of appellees.
The District Court held that in so doing the Commission violated § 556 (d) of the Administrative Procedure Act, and it was on this basis that it set aside the order of the Commission.
II. Applicability op Administrative Procedure Act
In United States v. Allegheny-Ludlum Steel Corp., supra, we held that the language of § 1 (14) (a) of the Interstate Commerce Act authorizing the Commission to act “after hearing” was not the equivalent of a requirement that a rule be made “on the record after opportunity for an agency hearing” as the latter term is used in § 553 (c) of the Administrative Procedure Act. Since the 1966 amendment to § 1 (14) (a), under which the Commission was here proceeding, does not by its terms add to the hearing requirement contained in the earlier language, the same result should obtain here unless that amendment contains language that is tantamount to such a requirement. Appellees contend that such language is found in the provisions of that Act requiring that:
“[T]he Commission shall give consideration to the national level of ownership of such type of freight car and to other factors affecting the adequacy of the national freight car supply, and shall, on the basis of such consideration, determine whether compensation should be computed...
While this language is undoubtedly a mandate to the Commission to consider the factors there set forth in reaching any conclusion as to imposition of per diem incentive charges, it adds to the hearing requirements of the section neither expressly nor by implication. We know of no reason to think that an administrative agency in reaching a decision cannot accord consideration to factors such as those set forth in the 1966 amendment by means other than a trial-type hearing or the presentation of oral argument by the affected parties. Congress by that amendment specified necessary components of the ultimate decision, but it did not specify the method by which the Commission should acquire information about those components.
Both of the district courts that reviewed this order of the Commission concluded that its proceedings were governed by the stricter requirements of §§ 556 and 557 of the Administrative Procedure Act, rather than by the provisions of § 553 alone. The conclusion of the District Court for the Middle District of Florida, which we here review, was based on the assumption that the language in § 1 (14) (a) of the Interstate Commerce Act requiring rulemaking under that section to be done “after hearing” was the equivalent of a statutory requirement that the rule “be made on the record after opportunity for an agency hearing.” Such an assumption is inconsistent with our decision in Allegheny-Ludlum, supra.
The District Court for the Eastern District of New York reached the same conclusion by a somewhat different line of reasoning. That court felt that because §1(14) (a) of the Interstate Commerce Act had required a “hearing,” and because that section was originally enacted in 1917, Congress was probably thinking in terms of a “hearing” such as that described in the opinion of this Court in the roughly contemporaneous case of ICC v. Louisville & Nashville R. Co., 227 U. S. 88, 93 (1913). The ingredients of the “hearing” were there said to be that “[a] 11 parties must be fully apprised of the evidence submitted or to be considered, and must be given opportunity to cross-examine witnesses, to inspect documents and to offer evidence in explanation or rebuttal.” Combining this view of congressional understanding of the term “hearing” with comments by the Chairman of the Commission at the time of the adoption of the 1966 legislation regarding the necessity for “hearings,” that court concluded that Congress had, in effect, required that these proceedings be “on the record after opportunity for an agency hearing” within the meaning of § 553 (c) of the Administrative Procedure Act.
Insofar as this conclusion is grounded on the belief that the language “after hearing” of § 1 (14) (a), without more, would trigger the applicability of §§ 556 and 557, it, too, is contrary to our decision in Allegheny-Ludlum, supra. The District Court observed that it was “rather hard to believe that the last sentence of § 553 (c) was directed only to the few legislative sports where the words ‘on the record’ or their equivalent had found their way into the statute book.” 318 F. Supp., at 496. This is, however, the language which Congress used, and since there are statutes on the books that do use these very words, see, e. g., the Fulbright Amendment to the Walsh-Healey Act, 41 U. S. C. § 43a, and 21 U. S. C. §371 (e)(3), the regulations provision of the Food and Drug Act, adherence to that language cannot be said to render the provision nugatory or ineffectual. We recognized in Allegheny-Ludlum that the actual words “on the record” and “after... hearing” used in § 553 were not words of art, and that other statutory language having the same meaning could trigger the provisions of §§ 556 and 557 in rulemaking proceedings. But we adhere to our conclusion, expressed in that case, that the phrase “after hearing” in § 1 (14) (a) of the Interstate Commerce Act does not have such an effect.
III. “Hearing” Requirement op § 1 (14) (a) op the Interstate Commerce Act
Inextricably intertwined with the hearing requirement of the Administrative Procedure Act in this case is the meaning to be given to the language “after hearing” in § 1 (14) (a) of the Interstate Commerce Act. Appellees, both here and in the court below, contend that the Commission procedure here fell short of that mandated by the “hearing” requirement of § 1 (14)(a), even though it may have satisfied § 553 of the Administrative Procedure Act. The Administrative Procedure Act states that none of its provisions “limit or repeal additional requirements imposed by statute or otherwise recognized by law.” 5 U. S. C. § 559. Thus, even though the Commission was not required to comply with §§ 556 and 557 of that Act, it was required to accord the “hearing^ specified in § 1 (14) (a) of the Interstate Commerce Act. Though the District Court did not pass on this contention, it is so closely related to the claim based on the Administrative Procedure Act that we proceed to decide it now.
If we were to agree with the reasoning of the District Court for the Eastern District of New York with respect to the type of hearing required by the Interstate Commerce Act, the Commission’s action might well violate those requirements, even though it was consistent with the requirements of the Administrative Procedure Act.
The term “hearing” in its legal context undoubtedly has a host of meanings. Its meaning undoubtedly will vary, depending on whether it is used in the context of a rulemaking-type proceeding or in the context of a proceeding devoted to the adjudication of particular disputed facts. It is by no means apparent what the drafters of the Esch Car Service Act of 1917, 40 Stat. 101, which became the first part of § 1 (14) (a) of the Interstate Commerce Act, meant by the term. Such an intent would surely be an ephemeral one if, indeed, Congress in 1917 had in mind anything more specific than the language it actually used, for none of the parties refer to any legislative history that would shed light on the intended meaning of the words “after hearing.” What is apparent, though, is that the term was used in granting authority to the Commission to make rules and regulations of a prospective nature.
Appellees refer us to testimony of the Chairman of the Commission to the effect that if the added authority ultimately contained in the 1966 amendment were enacted, the Commission would proceed with “great caution” in imposing incentive per diem rates, and to statements of both Commission personnel and Members of Congress as to the necessity for a “hearing” before Commission action. Certainly, the lapse of time of more than three years between the enactment of the 1966 amendment and the Commission’s issuance of its tentative conclusions cannot be said to evidence any lack of caution on the part of that body. Nor do generalized references to the necessity for a hearing advance our inquiry, since the statute by its terms requires a “hearing”; the more precise inquiry of whether the hearing requirements necessarily include submission of oral testimony, cross-examination, or oral arguments is not resolved by such comments as these.
Under these circumstances, confronted with a grant of substantive authority made after the Administrative Procedure Act was enacted, we think that reference to that Act, in which Congress devoted itself exclusively to questions such as the nature and scope of hearings, is a satisfactory basis for determining what is meant by the term “hearing” used in another statute. Turning to that Act, we are convinced that the term “hearing” as used therein does not necessarily embrace either the right to present evidence orally and to cross-examine opposing witnesses, or the right to present oral argument to the agency’s decisionmaker.
Section 553 excepts from its requirements rulemaking devoted to “interpretative rules, general statements 'of policy, or rules of agency organization, procedure, or practice,” and rulemaking “when the agency for good cause finds... that notice and public procedure thereon are impracticable, unnecessary, or contrary to the public interest.” This exception does not apply, however, “when notice or hearing is required by statute”; in those cases, even though interpretative rulemaking be involved, the requirements of § 553 apply. But since these require-merits themselves do not mandate any oral presentation, see Allegheny-Ludlum, supra, it cannot be doubted that a statute that requires a “hearing” prior to rulemaking may in some circumstances be satisfied by procedures that meet only the standards of § 553. The Court’s opinion in FPC v. Texaco Inc., 377 U. S. 33 (1964), supports such a broad definition of the term “hearing.”
Similarly, even where the statute requires that the rulemaking procedure take place “on the record after opportunity for an agency hearing,” thus triggering the applicability of § 556, subsection (d) provides that the agency may proceed by the submission of all or part of the evidence in written form if a party will not be “prejudiced thereby.” Again, the Act makes it plain that a specific statutory mandate that the proceedings take place on the record after hearing may be satisfied in some circumstances by evidentiary submission in written form only.
We think this treatment of the term “hearing” in the Administrative Procedure Act affords a sufficient basis for concluding that the requirement of a “hearing” contained in § 1 (14) (a), in a situation where the Commission was acting under the 1966 statutory rulemaking authority that Congress had conferred upon it, did not by its own force require the Commission either to hear oral testimony, to permit cross-examination of Commission witnesses, or to hear oral argument. Here, the Commission promulgated a tentative draft of an order, and accorded all interested parties 60 days in which to file statements of position, submissions of evidence, and other relevant observations. The parties had fair notice of exactly what the Commission proposed to do, and were given an opportunity to comment, to object, or to make some other form of written submission. The final order of the Commission indicates that it gave consideration to the statements of the two appellees here. Given the “open-ended” nature of the proceedings, and the Commission’s announced willingness to consider proposals for modification after operating experience had been acquired, we think the hearing requirement of § 1 (14) (a) of the Act was met.
Appellee railroads cite a number of our previous decisions dealing in some manner with the right to a hearing in an administrative proceeding. Although appellees have asserted no claim of constitutional deprivation in this proceeding, some of the cases they rely upon expressly speak in constitutional terms, while others are less than clear as to whether they depend upon the Due Process Clause of the Fifth and Fourteenth Amendments to the Constitution, or upon generalized principles of administrative law formulated prior to the adoption of the Administrative Procedure Act.
Morgan v. United States, 304 U. S. 1 (1938), is cited in support of appellees’ contention that the Commission’s proceedings were fatally deficient. That opinion describes the proceedings there involved as “quasi-judicial,” id., at 14, and thus presumably distinct from a rulemaking proceeding such as that engaged in by the Commission here. But since the order of the Secretary of Agriculture there challenged did involve a form of ratemaking, the case bears enough resemblance to the facts of this case to warrant further examination of appellees’ contention. The administrative procedure in Morgan was held to be defective primarily because the persons who were to be affected by the Secretary’s order were found not to have been adequately apprised of what the Secretary proposed to do prior to the time that he actually did it. Illustrative of the Court’s reasoning is the following passage from the opinion:
“The right to a hearing embraces not only the right to present evidence but also a reasonable opportunity to know the claims of the opposing party and to meet them. The right to submit argument implies that opportunity; otherwise the right may be but a barren one. Those who are brought into contest with the Government in a quasi-judicial proceeding aimed at the control of their activities are entitled to be fairly advised of what the Government proposes and to be heard upon its proposals before it issues its final command.” Id., at 18-19.
The proceedings before the Secretary of Agriculture had been initiated by a notice of inquiry into the reasonableness of the rates in question, and the individuals being regulated suffered throughout the proceeding from its essential formlessness. The Court concluded that this formlessness denied the individuals subject to regulation.-.the “full hearing” that the statute had provided.
Assuming, arguendo, that the statutory term “full hearing” does not differ significantly from the hearing requirement of §1(14) (a), we do not believe that the proceedings of the Interstate Commerce Commission before us suffer from the defect found to be fatal in Morgan. Though the initial notice of the proceeding by no means set out in detail what the Commission proposed to do, its tentative conclusions and order of December 1969, could scarcely have been more explicit or detailed. All interested parties were given 60 days following the issuance of these tentative findings and order in which to make appropriate objections. Appellees were “fairly advised” of exactly what the Commission proposed to do sufficiently in advance of the entry of the final order to give them adequate time to formulate and to present objections to the Commission’s proposal. Morgan, therefore, does not aid appellees.
ICC v. Louisville & Nashville R. Co., 227 U. S. 88 (1913), involved what the Court there described as a “quasi-judicial” proceeding of a quite different nature from the one we review here. The provisions of the Interstate Commerce Act, 24 Stat. 379, as amended, and of the Hepburn Act, 34 Stat. 584, in effect at the time that case was decided, left to the railroad carriers the “primary right to make rates,” 227 U. S., at 92, but granted to the Commission the authority to set them aside, if after, hearing, they were shown to be unreasonable. The proceeding before the Commission in that case had been instituted by the New Orleans Board of Trade complaint that certain class and commodity rates charged by the Louisville & Nashville Railroad from New Orleans to other points were unfair, unreasonable, and discriminatory. 227 U. S., at 90. The type of proceeding there, in which the Commission adjudicated a complaint by a shipper that specified rates set by a carrier were unreasonable, was sufficiently different from the nationwide incentive payments ordered to be made by all railroads in this proceeding so as to make the Louisville Nashville opinion inapplicable in the case presently before us.
The basic distinction between rulemaking and adjudication is illustrated by this Court’s treatment of two related cases under the Due Process Clause of the Fourteenth Amendment. In Londoner v. Denver, cited in oral argument by appellees, 210 U. S. 373 (1908), the Court held that due process had not been accorded a landowner who objected to the amount assessed against his land as its share of the benefit resulting from the paving of a street. Local procedure had accorded him the right to file a written complaint and objection, but not to be heard orally. This Court held that due process of law required that he “have the right to support his allegations by argument however brief, and, if need be, by proof, however informal.” Id., at 386. But in the later case of Bi-Metallic Investment Co. v. State Board of Equalization, 239 U. S. 441 (1915), the Court held that no hearing at all was constitutionally required prior to a decision by state tax officers in Colorado to increase the valuation of all taxable property in Denver by a substantial percentage. The Court distinguished Londoner by stating that there a small number of persons “were exceptionally affected, in each case upon individual grounds.” Id., at 446.
Later decisions have continued to observe the distinction adverted to in Bi-Metallic Investment Co., supra. In Ohio Bell Telephone Co. v. Public Utilities Comm’n, 301 U. S. 292, 304-305 (1937), the Court noted the fact that the administrative proceeding there involved was designed to require the utility to refund previously collected rate charges. The Court held that in such a proceeding the agency could not, consistently with due process, act on the basis of undisclosed evidence that was never made a part of the record before the agency. The Case is thus more akin to Louisville & Nashville R. Co., supra, than it is to this case. FCC v. WJR, 337 U. S. 265 (1949), established that there was no across-the-board constitutional right to oral argument in every administrative proceeding regardless of its nature. While the line dividing them may not always be a bright one, these decisions represent a recognized distinction in administrative law between proceedings for the purpose of promulgating policy-type rules or standards, on the one hand, and proceedings designed to adjudicate disputed facts in particular cases on the other.
Here, the incentive payments proposed by the Commission in its tentative order, and later adopted in its final order, were applicable across the board to all of the common carriers by railroad subject to the Interstate Commerce Act. No effort was made to single out any particular railroad for special consideration based on its own peculiar circumstances. Indeed, one of the objections of appellee Florida East Coast was that it and other terminating carriers should have been treated differently from the generality of the railroads. But the fact that the order may in its effects have been thought more disadvantageous by some railroads than by others does not change its generalized nature. Though the Commission obviously relied on factual inferences as a basis for its order, the source of these factual inferences was apparent to anyone who read the order of December 1969. The factual inferences were used in the formulation of a basically legislative-type judgment, for prospective application only, rather than in adjudicating a particular set of disputed facts.
The Commission’s procedure satisfied both the provisions of §1(14) (a) of the Interstate Commerce Act and of the Administrative Procedure Act, and were not inconsistent with prior decisions of this Court. We, therefore, reverse the judgment of the District Court, and remand the case so that it may consider those contentions of the parties that are not disposed of by this opinion.
It is so ordered.
Me. Justice Powell took no part in the consideration or decision of this case.
Section. 1 (14) (a) provides:
“The Commission may, after hearing, on a complaint or upon its own initiative without complaint, establish reasonable rules, regulations, and practices with respect to ear service by common carriers by railroad subject to this chapter, including the compensation to be paid and other terms of any contract, agreement, or arrangement for the use of any locomotive, car, or other vehicle not owned by the carrier using it (and whether or not owned by another carrier), and the penalties or other sanctions for nonobservance of such rules, regulations, or practices. In fixing such compensation to be paid for the use of any type of freight car, the Commission shall give consideration to the national level of ownership of such type of freight car and to other factors affecting the adequacy of the national freight car supply, and shall, on the basis of such consideration, determine whether compensation should be computed solely on the basis of elements of ownership expense involved in owning and maintaining such type of freight car, including a fair return on value, or whether such compensation should be increased by such incentive element or elements of compensation as in the Commission’s judgment will provide just and reasonable compensation to freight car owners, contribute to sound car service practices (including efficient utilization and distribution of cars), | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
65
] | sc_adminaction |
UNITED STATES v. BINGHAMTON CONSTRUCTION CO., INC.
No. 65.
Argued December 1, 1953.
Decided March 8, 1954.
Assistant Attorney General Burger argued the cause for the United States. With him on the brief were Acting Solicitor General Stern, Paul A. Sweeney and Hubert H. Margolies.
Jerome Beaudrias argued the cause for respondent. With him on the brief was Malcolm A. MacIntyre.
Me. Chief Justice Warren
delivered the opinion of the Court.
This case is before us on writ of certiorari to the Court of Claims. The question presented is whether the schedule of minimum wage rates included in a Government construction contract, as required by the Davis-Bacon Act, is a representation or warranty as to the prevailing wage rates in the contract area. We hold that it is not.
The Davis-Bacon Act requires that the wages of workmen on a Government construction project shall be “not less” than the “minimum wages” specified in a schedule furnished by the Secretary of Labor. The schedule “shall be based upon the wages that will be determined by the Secretary of Labor to be prevailing” for corresponding work on similar projects in the area. The Act also provides for penalties, including termination of the contract, if it is found that the contractor is paying less than the schedule rate.
The respondent, a construction company, was the successful bidder for a Government flood control project on the Chemung River at Elmira, New York. On January 31, 1941, at the request of the Corps of Engineers, the Secretary of Labor submitted a schedule of minimum wages for the project. This schedule set the minimum hourly wage rate at $1.00 for carpenters and $.50 for laborers. On March 29, 1941, the Corps of Engineers issued an invitation for bids. Pursuant to the Davis-Bacon Act, supra, the Secretary’s wage schedule was included in the contract specifications furnished to respondent, prior to the computation of its bid. On May 14, 1941, respondent’s bid of $232,669.30 was accepted and a written contract was executed, incorporating the specifications and subject only to formal approval by the Government. The contract provided that respondent was to pay wages “not less than those stated in the specifications . . for breach of this provision, the Government was authorized to terminate the contract. On June 3, 1941, the contract was formally approved; and on June 5, 1941, respondent received notice to proceed with the work.
On October 22, 1940, the local carpenters’ union had notified the contracting officer that the hourly wage scale for carpenters would be increased from $1.00 to $1,125 as of January 1, 1941. On March 4, 1941, some three weeks prior to the invitation for bids on the project involved here, the Secretary of Labor had furnished another Government agency, the Federal Works Agency, a schedule of minimum wages for inclusion in the specifications for a federal housing project in Elmira. This schedule set the minimum hourly wage rate at $1,125 for carpenters and $.55 for laborers. On April 1, 1941, the union hourly rate for laborers was increased from $.55 to $.625.
In the performance of the contract, respondent paid the union rates then in effect — $1,125 for carpenters and $.625 for laborers. On June 16, 1941, respondent protested to the contracting officer that it was unable to obtain workmen at the rates specified in the contract schedule and demanded an adjustment of compensation, on the theory that the schedule was an affirmative representation as to the prevailing wage rates in the area and that respondent was entitled to rely on this representation in the computation of its bid. The contracting officer denied relief and the Chief of Engineers dismissed respondent’s appeal.
Respondent thereupon brought this action in the Court of Claims, seeking damages for the alleged misrepresentation as well as other relief. The court specifically found that an investigation by respondent would have revealed that the prevailing rates were higher than the rates specified in the schedule. Nevertheless, it allowed respondent a recovery of $7,363.22, consisting of the difference between the rates specified in the contract schedule ($1.00 for carpenters and $.50 for laborers) and the rates specified in the Secretary of Labor’s determination for the Federal Works Agency ($1,125 for carpenters and $.55 for laborers). The court held that the contract schedule misrepresented — although inadvertently — the prevailing wage rate in the Elmira area, since, prior to the invitation to bid, the Secretary of Labor had made a higher determination and the contracting officer could have ascertained that fact. Respondent, the court held, was entitled to rely on the schedule “as the Secretary’s latest determination — as a representation of the wages it would have to pay when the work was to be done.” We granted review because of the obvious importance of the decision in the administration of the Davis-Bacon Act.
The Act itself confers no litigable rights on a bidder for a Government construction contract. The language of the Act and its legislative history plainly show that it was not enacted to benefit contractors, but rather to protect their employees from substandard earnings by fixing a floor under wages on Government projects. Congress sought to accomplish this result by directing the Secretary of Labor to determine, on the basis of prevailing rates in the locality, the appropriate minimum wages for each project. The correctness of the Secretary’s determination is not open to attack on judicial review.
The Court of Claims nevertheless awarded respondent damages on the ground that the Government, through the Corps of Engineers, had falsely represented the prevailing rates in the Elmira area. The short answer to this is that the Government made no such representation. Neither the contract nor the specifications refers to “prevailing” rates. The contract speaks only of “wage rates not less than those stated in the specifications.” The specifications in turn speak only of “minimum wage rates applicable in the locality.” The only reference to “prevailing” rates appears in the statute itself, which provides that the minimum wage rates are to be “based upon . . . the wages . . . determined by the Secretary of Labor to be prevailing.” But this provision in the Act cannot convert the contractor’s obligation to pay not less than the minimum into a Government representation that the contractor will not have to pay more. On its face, the Act is a minimum wage law designed for the benefit of construction workers. The Act does not authorize or contemplate any assurance to a successful bidder that the specified minima will in fact be the prevailing rates. Indeed, its requirement that the contractor pay “not less” than the specified minima presupposes the possibility that the contractor may have to pay higher rates. Under these circumstances, even assuming a representation by the Government as to the prevailing rate, respondent’s reliance on the representation in computing its bid cannot be said to have been justified.
The Government further contends that the Secretary of Labor was justified in fixing different minimum rates for the housing and flood control projects according to the degree of skill required by each project, and that respondent is estopped to claim misrepresentation because of its failure to make an investigation of labor costs before submitting its bid. Because of our disposition of the case, we find it unnecessary to reach these issues. The portion of the judgment on which the Government sought review is
Reversed.
Act of March 3, 1931, c. 411, § 1, 4& Stat. 1494, as amended by the Act of August 30, 1935, c. 825, 49 Stat. 1011, 40 U. S. C. §§ 276a-276a-5.
49 Stat. 1011, 40 U. S. C. § 276a:
“. . . That the advertised specifications for every contract in excess of $2,000, to which the United States or the District of Columbia is a party, for construction, ... of public buildings or public works of the United States . . . which requires or involves the employment of mechanics and/or laborers shall contain a provision stating the minimum wages to be paid various classes of laborers and mechanics which shall be based upon the wages that will be determined by the Secretary of Labor to be prevailing for the corresponding classes of laborers and mechanics employed on projects of a character similar to the contract work in the city, town, village, or other civil subdivision of the State in which the work is to be performed . . . ; and every contract based upon these specifications shall contain a stipulation that the contractor or his subcontractor shall pay all mechanics and laborers employed directly upon the site of the work ... the full amounts accrued at time of payment, computed at wage rates not less than those stated in the advertised specifications . . . .”
49 Stat. 1011, 40 U. S. C. § 276a-1.
The invitation provided in part:
“Investigation of Conditions. — Bidders are expected to visit the locality of the work and to make their own estimates of the facilities needed, the difficulties attendiig the execution of the proposed contract, including local conditions, availability of labor, uncertainties of weather, and other contingencies. In no case will the Government assume any responsibility whatever for any interpretation, deduction, or conclusion drawn from the examination of the site. . . . Failure to acquaint himself with all available information concerning these conditions will not relieve the successful bidder of responsibility for estimating the difficulties and costs of successfully performing the complete work.”
The specifications contained the following provision:
“1-31. Wage and Labor Provisions, (a) The Secretary of Labor has determined the minimum wage rates applicable in the locality for the labor classifications anticipated to be used on the work. In accordance with Article 17 of the contract, employees at the site shall be paid not less than these wages as listed below:
“Designation Wage rate — hourly
Carpenters, Journeymen. $1.00
Laborers, unskilled. P o
Laborers, Concrete Puddlers P o
Article 17 of the contract reads m part as follows:
“(a) The contractor or his subcontractor shall pay all mechanics and laborers employed directly upon the site of the work . . . the full amounts accrued at time of payment, computed at wage rates not less than those stated in the specifications ....
“(6) In the event it is found by the contracting officer that any laborer or mechanic employed by the contractor or any subcontractor directly on the site of the work covered by the contract has been or is being paid a rate of wages less than the rate of wages required by the contract to be paid as aforesaid, the Government may, by written notice to the contractor, terminate his right to proceed with the work or such part of the work as to which there has been a failure to pay said required wages and prosecute the work to completion by contract or otherwise, and the contractor and his sureties shall be liable to the Government for any excess costs occasioned the Government thereby.”
The Chief of Engineers advised respondent: “There is no authority in law for this office to question the correctness of any determination made by the Secretary of Labor pursuant to the provisions of the above cited act [the Davis-Bacon Act].” Later, in refusing to reconsider respondent’s appeal, the Chief of Engineers stated: “. . . The contract by Article 17 and by paragraph 1-31 of the specifications provides that wages not less than those specified shall be paid. The contract makes no representation as to the availability of labor nor as to the actual wage scales that would be in effect. The alleged increased costs did not result from your contract obligation but from economic conditions which are ordinary contingencies contemplated under the terms of the contract.”
123 Ct. Cl. 804, 810-811, 107 F. Supp. 712, 716:
“If plaintiffs president had investigated wage rates, he could have ascertained that the prevailing rate for carpenters was $1,125 per hour, and that the prevailing rate for unskilled labor was $.55 per hour, with an advance to $.625 per hour, effective as of April 1, 1941. Also, before inviting bids on this project, the District Engineer could have ascertained that the Secretary of Labor had made a new determination of the prevailing wage rates for Elmira on March 4, 1941.”
On all other claims of respondent, the Court of Claims denied recovery. That part of the court’s judgment is the subject of respondent’s petition for writ of certiorari in No. 78, this Term. [Certiorari denied, post, p. 926.]
123 Ct. Cl. 804, 836-837, 107 F. Supp. 712, 731, relying on Albert & Harrison, Inc. v. United States, 107 Ct. Cl. 292, 308-309, 68 F. Supp. 732, 734, cert. denied, 331 U. S. 810.
346 U. S. 809.
Compare 49 Stat. 1011, 40 U. S. C. §276a-2 (b), conferring a right of action on employees to recover from the contractor the amount due the employees under the minimum wage schedule.
United States v. Morley Const. Co., 98 F. 2d 781, 788, cert. denied, 305 U. S. 651; Gillioz v. Webb, 99 F. 2d 585; Winn-Senter Const. Co. v. United States, 110 Ct. Cl. 34, 61, 75 F. Supp. 255, 257-258; cf. Perkins v. Lukens Steel Co., 310 U. S. 113, 128; Endicott Johnson Corp. v. Perkins, 317 U. S. 501, 507. See also H. R. Rep. No. 1756, 74th Cong., 1st Sess.; S. Rep. No. 1155, 74th Cong., 1st Sess.; S. Rep. No. 1445, 71st Cong., 3d Sess.
Alliance Const. Co. v. United States, 79 Ct. Cl. 730. Cf., concerning the related Walsh-Healey Public Contracts Act, Perkins v. Lukens Steel Co., 310 U. S. 113, and Endicott Johnson Corp. v. Perkins, 317 U. S. 501.
See note 6, supra.
See note 5, supra. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
70
] | sc_adminaction |
COMMISSIONER OF INTERNAL REVENUE v. INDIANAPOLIS POWER & LIGHT CO.
No. 88-1319.
Argued October 31, 1989
Decided January 9, 1990
Blackmun, J., delivered the opinion for a unanimous Court.
Deputy Solicitor General Wallace argued the cause for petitioner. With him on the briefs were Solicitor General Starr, Acting Assistant Attorney General Knapp, Alan I. Horowitz, Jonathan S. Cohen, and William A. Whitledge.
Larry J. Stroble argued the cause for respondent. With him on the brief was Stanley C. Fickle.
Briefs of amici curiae urging affirmance were filed for American Information Technologies Corporation et al. by Jerome B. Libin, Bradley M. Seltzer, Jim J. Kilpatric, and Lawrence H. Coken; for El Paso Electric Company by Stephen R. Nelson; for Oak Industries, Inc., and Subsidiaries by John P. Warner and Samuel M. Maraca; and for Wisconsin Electric Power Co. and Affiliated Companies by Joseph E. Tierney, Jr., and Margaret T. Lund.
Justice Blackmun
delivered the opinion of the Court.
Respondent Indianapolis Power & Light Company (IPL) requires certain customers to make deposits with it to assure payment of future bills for electric service. Petitioner Commissioner of Internal Revenue contends that these deposits are advance payments for electricity and therefore constitute taxable income to IPL upon receipt. IPL contends otherwise.
I — I
IPL is a regulated Indiana corporation that generates and sells electricity in Indianapolis and its environs. It keeps its books on the accrual and calendar year basis. During the years 1974 through 1977, approximately 5% of IPL’s residential and commercial customers were required to make deposits “to insure prompt payment,” as the customers’ receipts stated, of future utility bills. These customers were selected because their credit was suspect. Prior to March 10, 1976, the deposit requirement was imposed on a case-by-case basis. IPL relied on a credit test but employed no fixed formula. The amount of the required deposit ordinarily was twice the customer’s estimated monthly bill. IPL paid 3% interest on a deposit held for six months or more. A customer could obtain a refund of the deposit prior to termination of service by requesting a review and demonstrating acceptable credit. The refund usually was made in cash or by check, but the customer could choose to have the amount applied against future bills.
In March 1976, IPL amended its rules governing the deposit program. See 170 Ind. Admin. Code §4-1-15 (1988). Under the amended rules, the residential customers from whom deposits were required were selected on the basis of a fixed formula. The interest rate was raised to 6% but was payable only on deposits held for 12 months or more. A deposit was refunded when the customer made timely payments for either 9 consecutive months, or for 10 out of 12 consecutive months so long as the 2 delinquent months were not themselves consecutive. A customer could obtain a refund prior to that time by satisfying the credit test. As under the previous rules, the refund would be made in cash or by check, or, at the customer’s option, applied against future bills. Any deposit unclaimed after seven years was to escheat to the State. See Ind. Code §32-9-l-6(a) (1988).
IPL did not treat these deposits as income at the time of receipt. Rather, as required by state administrative regulations, the deposits were carried on its books as current liabilities. Under its accounting system, IPL recognized income when it mailed a monthly bill. If the deposit was used to offset a customer’s bill, the utility made the necessary accounting adjustments. Customer deposits were not physically segregated in any way from the company’s general funds. They were commingled with other receipts and at all times were subject to IPL’s unfettered use and control. It is undisputed that IPL’s treatment of the deposits was consistent with accepted accounting practice and applicable state regulations.
Upon audit of respondent’s returns for the calendar years 1974 through 1977, the Commissioner asserted deficiencies. Although other items initially were in dispute, the parties were able to reach agreement on every issue except that of the proper treatment of customer deposits for the years 1975, 1976, and 1977. The Commissioner took the position that the deposits were advance payments for electricity and therefore were taxable to IPL in the year of receipt. He contended that the increase or decrease in customer deposits outstanding at the end of each year represented an increase or decrease in IPL’s income for the year. IPL disagreed and filed a petition in the United States Tax Court for re-determination of the asserted deficiencies.
In a reviewed decision, with one judge not participating, a unanimous Tax Court ruled in favor of IPL. 88 T. C. 964 (1987). The court followed the approach it had adopted in City Gas Co. of Florida v. Commissioner, 74 T. C. 386 (1980), rev’d, 689 F. 2d 943 (CA11 1982). It found it necessary to “continue to examine all of the facts and circumstances,” 88 T. C., at 976, and relied on several factors in concluding that the deposits in question were properly excluded from gross income. It noted, among other things, that only 5% of IPL’s customers were required to make deposits; that the customer rather than the utility controlled the ultimate disposition of a deposit; and that IPL consistently treated the deposits as belonging to the customers, both by listing them as current liabilities for accounting purposes and by paying interest. Id., at 976-978.
The United States Court of Appeals for the Seventh Circuit affirmed the Tax Court’s decision. 857 F. 2d 1162 (1988). The court stated that “the proper approach to determining the appropriate tax treatment of a customer deposit is to look at the primary purpose of the deposit based on all the facts and circumstances . . . Id., at 1167. The court appeared to place primary reliance, however, on IPL’s obligation to pay interest on the deposits. It asserted that “as the interest rate paid on a deposit to secure income begins to approximate the return that the recipient would be expected to make from ‘the use’ of the deposit amount, the deposit begins to serve purposes that comport more squarely with a security deposit.” Id., at 1169. Noting that IPL had paid interest on the customer deposits throughout the period in question, the court upheld, as not clearly erroneous, the Tax Court’s determination that the principal purpose of these deposits was to serve as security rather than as prepayment of income. Id., at 1170.
Because the Seventh Circuit was in specific disagreement with the Eleventh Circuit’s ruling in City Gas Co. of Florida, supra, we granted certiorari to resolve the conflict. 490 U. S. 1033 (1989).
II
We begin with the common ground. IPL acknowledges that these customer deposits are taxable as income upon receipt if they constitute advance payments for electricity to be supplied. The Commissioner, on his part, concedes that customer deposits that secure the performance of non-income-producing covenants — -such as a utility customer’s obligation to ensure that meters will not be damaged — are not taxable income. And it is settled that receipt of a loan is not income to the borrower. See Commissioner v. Tufts, 461 U. S. 300, 307 (1983) (“Because of [the repayment] obligation, the loan proceeds do not qualify as income to the taxpayer”); James v. United States, 366 U. S. 213, 219 (1961) (accepted definition of gross income “excludes loans”); Commissioner v. Wilcox, 327 U. S. 404, 408 (1946). IPL, stressing its obligation to refund the deposits with interest, asserts that the payments are similar to loans. The Commissioner, however, contends that a deposit which serves to secure the payment of future income is properly analogized to an advance payment for goods or services. See Rev. Rui. 72-519, 1972-2 Cum. Bull. 32, 33 (“[W]hen the purpose of the deposit is to guarantee the customer’s payment of amounts owed to the creditor, such a deposit is treated as an advance payment, but when the purpose of the deposit is to secure a property interest of the taxpayer the deposit is regarded as a true security deposit”).
In economic terms, to be sure, the distinction between a loan and an advance payment is one of degree rather than of kind. A commercial loan, like an advance payment, confers an economic benefit on the recipient: a business presumably does not borrow money unless it believes that the income it can earn from its use of the borrowed funds will be greater than its interest obligation. See Illinois Power Co. v. Commissioner, 792 F. 2d 683, 690 (CA7 1986). Even though receipt of the money is subject to a duty to repay, the borrower must regard itself as better off after the loan than it was before. The economic benefit of a loan, however, consists entirely of the opportunity to earn income on the use of the money prior to the time the loan must be repaid. And in that context our system is content to tax these earnings as they are realized. The recipient of an advance payment, in contrast, gains both immediate use of the money (with the chance to realize earnings thereon) and the opportunity to make a profit by providing goods or services at a cost lower than the amount of the payment.
The question, therefore, cannot be resolved simply by noting that respondent derives some economic benefit from receipt of these deposits. Rather, the issue turns upon the nature of the rights and obligations that IPL assumed when the deposits were made. In determining what sort of economic benefits qualify as income, this Court has invoked various formulations. It has referred, for example, to “undeniable accessions to wealth, clearly realized, and over which the taxpayers have complete dominion.” Commissioner v. Glenshaw Glass Co., 348 U. S. 426, 431 (1955). It also has stated: “When a taxpayer acquires earnings, lawfully or unlawfully, without the consensual recognition, express or implied, of an obligation to repay and without restriction as to their disposition, ‘he has received income . . . James v. United States, 366 U. S., at 219, quoting North American Oil Consolidated v. Burnet, 286 U. S. 417, 424 (1932). IPL hardly enjoyed “complete dominion” over the customer deposits entrusted to it. Rather, these deposits were acquired subject to an express “obligation to repay,” either at the time service was terminated or at the time a customer established good credit. So long as the customer fulfills his legal obligation to make timely payments, his deposit ultimately is to be refunded, and both the timing and method of that refund are largely within the control of the customer.
The Commissioner stresses the fact that these deposits were not placed in escrow or segregated from IPL’s other funds, and that IPL therefore enjoyed unrestricted use of the money. That circumstance, however, cannot be dispositive. After all, the same might be said of a commercial loan; yet the Commissioner does not suggest that a loan is taxable upon receipt simply because the borrower is free to use the funds in whatever fashion he chooses until the time of repayment. In determining whether a taxpayer enjoys “complete dominion” over a given sum, the crucial point is not whether his use of the funds is unconstrained during some interim period. The key is whether the taxpayer has some guarantee that he will be allowed to keep the money. IPL’s receipt of these deposits was accompanied by no such guarantee.
Nor is it especially significant that these deposits could be expected to generate income greater than the modest interest IPL was required to pay. Again, the same could be said of a commercial loan, since, as has been noted, a business is unlikely to borrow unless it believes that it can realize benefits that exceed the cost of servicing the debt. A bank could hardly operate profitably if its earnings on deposits did not surpass its interest obligations; but the deposits themselves are not treated as income. Any income that the utility may earn through use of the deposit money of course is taxable, but the prospect that income will be generated provides no ground for taxing the principal.
The Commissioner’s advance-payment analogy seems to us to rest upon a misconception of the value of an advance payment to its recipient.. An advance payment, like the deposits at issue here, concededly protects the seller against the risk that it would be unable to collect money owed it after it has furnished goods or services. But an advance payment does much more: it protects against the risk that the purchaser will back out of the deal before the seller performs. From the moment an advance payment is made, the seller is assured that, so long as it fulfills its contractual obligation, the money is its to keep. Here, in contrast, a customer submitting a deposit made no commitment to purchase a specified quantity of electricity, or indeed to purchase any electricity at all. IPL’s right to keep the money depends upon the customer’s purchase of electricity, and upon his later decision to have the deposit applied to future bills, not merely upon the utility’s adherence to its contractual duties. Under these circumstances, IPL’s dominion over the fund is far less complete than is ordinarily the case in an advance-payment situation.
The Commissioner emphasizes that these deposits frequently will be used to pay for electricity, either because the customer defaults on his obligation or because the customer, having established credit, chooses to apply the deposit to future bills rather than to accept a refund. When this occurs, the Commissioner argues, the transaction, from a cash-flow standpoint, is equivalent to an advance payment. In his view this economic equivalence mandates identical tax treatment.
Whether these payments constitute income when received, however, depends upon the parties’ rights and obligations at the time the payments are made. The problem with petitioner’s argument perhaps can best be understood if we imagine a loan between parties involved in an ongoing commercial relationship. At the time the loan falls due, the lender may decide to apply the money owed him to the purchase of goods or services rather than to accept repayment in cash. But this decision does not mean that the loan, when made, was an advance payment after all. The lender in effect has taken repayment of his money (as was his contractual right) and has chosen to use the proceeds for the purchase of goods or services from the borrower. Although, for the sake of convenience, the parties may combine the two steps, that decision does not blind us to the fact that in substance two transactions are involved. It is this element of choice that distinguishes an advance payment from a loan. Whether these customer deposits are the economic equivalents of advance payments, and therefore taxable upon receipt, must be determined by examining the relationship between the parties at the time of the deposit. The individual who makes an advance payment retains no right to insist upon the return of the funds; so long as the recipient fulfills the terms of the bargain, the money is its to keep. The customer who submits a deposit to the utility, like the lender in the previous hypothetical, retains the right to insist upon repayment in cash; he may choose to apply the money to the purchase of electricity, but he assumes no obligation to do so, and the utility therefore acquires no unfettered “dominion” over the money at the time of receipt.
When the Commissioner examines privately structured transactions, the true understanding of the parties, of course, may not be apparent. It may be that a transfer of funds, though nominally a loan, may conceal an unstated agreement that the money is to be applied to the purchase of goods or services. We need not, and do not, attempt to devise a test for addressing those situations where the nature of the parties’ bargain is legitimately in dispute. This particular respondent, however, conducts its business in a heavily regulated environment; its rights and obligations vis-a-vis its customers are largely determined by law and regulation rather than by private negotiation. That the utility’s customers, when they qualify for refunds of deposits, frequently choose to apply those refunds to future bills rather than taking repayment in cash does not mean that any customer has made an unspoken commitment to do so.
Our decision is also consistent with the Tax Court’s longstanding treatment of lease deposits — perhaps the closest analogy to the present situation. The Tax Court traditionally has distinguished between a sum designated as a prepayment of rent — which is taxable upon receipt — and a sum deposited to secure the tenant’s performance of a lease agreement. See, e. g., J. & E. Enterprises, Inc. v. Commissioner, 26 TCM 944 (1967). In fact, the customer deposits at issue here are less plausibly regarded as income than lease deposits would be. The typical lease deposit secures the tenant’s fulfillment of a contractual obligation to pay a specified rent throughout the term of the lease. The utility customer, however, makes no commitment to purchase any services at all at the time he tenders the deposit.
We recognize that IPL derives an economic benefit from these deposits. But a taxpayer does not realize taxable income from every event that improves his economic condition. A customer who makes this deposit reflects no commitment to purchase services, and IPL’s right to retain the money is contingent upon events outside its control. We hold that such dominion as IPL has over these customer deposits is insufficient for the deposits to qualify as taxable income at the time they are made.
The judgment of the Court of Appeals is affirmed.
It is so ordered.
During the years 1974 through 1977, the total amount that escheated to the State was less than $9,325. Stipulation of Facts ¶25.
The parties’ stipulation sets forth the balance in IPL’s customer-deposit account on December 31 of each of the years 1954,1974,1975,1976, and 1977. In his notice of deficiency, the Commissioner concluded that IPL was required to include in income for 1975 the increase in the account between December 31, 1954, and December 31, 1975. For 1976 and 1977, IPL was allowed to reflect in income the respective decreases in the account during those years.
This Court has held that an accrual-basis taxpayer is required to treat advance payments as income in the year of receipt. See Schlude v. Commissioner, 372 U. S. 128 (1963); American Automobile Assn. v. United States, 367 U. S. 687 (1961); Automobile Club of Michigan v. Commissioner, 353 U. S. 180 (1957). These cases concerned payments —nonrefundable fees for services — that indisputably constituted income; the issue was when that income was taxable. Here, in contrast, the issue is whether these deposits, as such, are income at all.
See Illinois Power Co. v. Commissioner, 792 F. 2d 683, 690 (CA7 1986). See also Burke & Friel, Recent Developments in the Income Taxation of Individuals, Tax-Free Security: Reflections on Indianapolis Power & Light, 12 Rev. of Taxation of Individuals 157, 174 (1988) (arguing that economic-benefit approach is superior in theory, but acknowledging that “an economic-benefit test has not been adopted, and it is unlikely that such an approach will be pursued by the Service or the courts”).
Cf. Rev. Rui. 71-189, 1971-1 Cum. Bull. 32 (inactive deposits are not income until bank asserts dominion over the accounts). See also Fidelity-Philadelphia Trust Co. v. Commissioner, 23 T. C. 527 (1954).
A customer, for example, might terminate service the day after making the deposit. Also, IPL’s dominion over a deposit remains incomplete even after the customer begins buying electricity. As has been noted, the deposit typically is set at twice the customer’s estimated monthly bill. So long as the customer pays his bills in a timely fashion, the money he owes the utility (for electricity used but not yet paid for) almost always will be less than the amount of the deposit. If this were not the case, the deoosit would provide inadequate protection. Thus, throughout the period the deposit is held, at least a portion is likely to be money that IPL has no real assurance of ever retaining.
The Commissioner is unwilling, however, to pursue this line of reasoning to the limit of its logic. He concedes that these deposits would not be taxable if they were placed in escrow, Tr. of Oral Arg. 4; but from a cash-flow standpoint it does not make much difference whether the money is placed in escrow or commingled with the utility’s other funds. In either case, the utility receives the money and allocates it to subsequent purchases of electricity if the customer defaults or-chooses to apply his refund to a future bill.
The Commissioner contends that a customer’s decision to take his refund while making a separate payment for services, rather than applying the deposit to his bill, would amount to nothing more than an economically meaningless “exchange of checks.” But in our view the “exchange of cheeks,” while less convenient, more accurately reflects the economic substance of the transactions.
In J. & E. Enterprises the Tax Court stated: “If a sum is received by a lessor at the beginning of a lease, is subject to his unfettered control, and is to be applied as rent for a subsequent period during the term of the lease, such sum is income in the year of receipt even though in certain circumstances a refund thereof may be required. ... If, on the other hand, a sum is deposited to secure the lessee’s performance under a lease, and is to be returned at the expiration thereof, it is not taxable income even though the fund is deposited with the lessor instead of in escrow and the lessor has temporary use of the money. ... In this situation the acknowledged liability of the lessor to account for the deposited sum on the lessee’s performance of the lease covenants prevents the sum from being taxable in the year of receipt.” 26 TCM, at 945-946.
In Rev. Rui. 72-519, 1972-2 Cum. Bull. 32, the Commissioner relied in part on J. & E. Enterprises as authority for the proposition that deposits intended to secure income-producing covenants are advance payments taxable as income upon receipt, while deposits intended to secure nonincome-producing covenants are not. 1972-2 Cum. Bull., at 33. In our view, neither J. & E. Enterprises nor the other cases cited in the Revenue Ruling support that distinction. See Hirsch Improvement Co. v. Commissioner, 143 F. 2d 912 (CA2), cert. denied, 323 U. S. 750 (1944); Mantell v. Commissioner, 17 T. C. 1143 (1952); Gilken Corp. v. Commissioner, 10 T. C. 445 (1948), aff’d, 176 F. 2d 141 (CA6 1949). These cases all distinguish between advance payments and security deposits, not between deposits that do and do not secure income-producing covenants. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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68
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DEPARTMENT OF REVENUE OF WASHINGTON v. ASSOCIATION OF WASHINGTON STEVEDORING COMPANIES et al.
No. 76-1706.
Argued January 16-17, 1978
Decided April 26, 1978
Blackmun, J., delivered the opinion of the Court, in which Burger, C. J., and Stewart, White, Marshall, Rehnquist, and Stevens, JJ., joined, and in all but Part III-B of which Powell, J., joined. Powell, J., filed an opinion concurring in part and concurring in the result, post, p. 761. Brennan, J., took no part in the consideration or decision of the case.
Slade Gorton, Attorney General of Washington, argued the cause for petitioner. With him on the briefs were Richard H. Holmquist, Senior Assistant Attorney General, and Matthew J. Coyle, Assistant Attorney General.
John T. Piper argued the cause for respondents. With him on the brief was D. Michael Young.
Mr. Justice Blackmun
delivered the opinion of the Court.
For the second time in this century, the State of Washington would apply its business and occupation tax to stevedoring. The State’s first application of the tax to stevedoring was unsuccessful, for it was held to be unconstitutional as violative of the Commerce Clause of the United States Constitution. Puget Sound Stevedoring Co. v. State Tax Comm’n, 302 U. S. 90 (1937). The Court now faces the question whether Washington’s second attempt violates either the Commerce Clause or the Import-Export Clause.
I
Stevedoring is the business of loading and unloading cargo from ships. Private stevedoring companies constitute respondent Association of Washington Stevedoring Companies; respondent Washington Public Ports Association is a nonprofit corporation consisting of port authorities that engage in stevedoring activities. App. 3. In 1974 petitioner Department of Revenue of the State of Washington adopted Revised Rule 193, pt. D, Wash. Admin. Code 458-20-193-D, to implement the State’s 1% business and occupation tax on services, set forth in Wash. Rev. Code §§82.04.220 and 82.04.290 (1976) The Rule applies the tax to stevedoring and reads in pertinent part as set forth in the margin.
Revised Rule 193D restores the original scope of the Washington business and occupation tax. After initial imposition of the tax in 1935, the then State Tax Commission adopted Rule 198 of the Rules and Regulations Relating to the Revenue Act of 1935. That Rule permitted taxpayers to deduct certain income received from interstate and foreign commerce. Income from stevedoring, however, was not described as deductible. When, in 1937, this Court in Puget Sound invalidated the application of the tax to stevedoring, the Commission complied by adding stevedoring income to the list of deductions. The deduction for stevedoring remained in effect until the revision of Rule 193 in 1974.
Seeking to retain their theretofore-enjoyed exemption from the tax, respondents in January 1975 sought from the Superior Court of Thurston County, Wash., a declaratory judgment to the effect that Revised Rule 193D violated both the Commerce Clause and the Import-Export Clause. They urged that the case was controlled by Puget Sound, which this Court had reaffirmed in Joseph v. Carter & Weekes Stevedoring Co., 330 U. S. 422, 433 (1947) (together, the Stevedoring Cases). Absent a clear invitation from this Court, respondents submitted that the Superior Court could not avoid the force of the Stevedoring Cases, which had never been overruled. Record 9. Petitioner replied that this Court had invited rejection of those cases by casting doubt on the Commerce Clause analysis that distinguished between direct and indirect taxation of interstate commerce. Id., at 25-37, citing, e. g., Interstate Pipe Line Co. v. Stone, 337 U. S. 662 (1949); Western Live Stock v. Bureau of Revenue, 303 U. S. 250 (1938). Petitioner also argued that the Rule did not violate- the Commerce Clause because it taxed only intrastate activity, namely, the loading and unloading of ships, Record 17-20, and because it levied only a nondiscriminatory tax apportioned to the activity within the State. Id., at 20-22. The Rule did not impose any “Imposts or Duties on Imports or Exports” because it taxed merely the stevedoring services and not the- goods themselves, id., at 22-25, citing Canton R. Co. v. Rogan, 340 U. S. 511 (1951). The Superior Court, however, not surprisingly, considered itself bound by the Stevedoring Cases. It therefore issued a declaratory judgment that Rule 193D was invalid to the extent it related to stevedoring in interstate or foreign commerce. App. 17-18.
Petitioner appealed to the Washington Court of Appeals. Record 77. That court certified the case for direct appeal to the State’s Supreme Court, citing Wash. Rev. Code § 2.06.030 (c) (1976), and Wash. Supreme Court Rule on Appeal 1-14 (1)(c) (now Rule 4.2 (a)(2), Wash. Rules of Court (1977)). After accepting certification, the Supreme Court, with two justices dissenting, affirmed the judgment of the Superior Court. 88 Wash. 2d 315, 559 P. 2d 997 (1977). The majority considered petitioner’s argument that recent cases had eroded the holdings in the Stevedoring Cases. It concluded, nonetheless:
“[W]e must hold the tax invalid; we do so in recognition of our duty to abide by controlling United States Supreme Court decisions construing the federal constitution. Hence, we find it unnecessary to discuss the aforementioned cases beyond the fact that nowhere in them do we find language criticizing, expressly contradicting, or overruling (even impliedly) the stevedoring cases.
“Fully mindful of our prior criticism of the principles and reasoning of the stevedore cases (see Washington-Oregon Shippers Cooperative Ass’n v. Schumacher, 59 Wn. 2d 159, 167, 367 P. 2d 112, 115-116 (1961)), we must nevertheless hold the instant tax on stevedoring invalid.” 88 Wash. 2d, at 318-320, 559 P. 2d, at 998-999.
The two dissenting justices would have upheld the tax against the Commerce Clause attack on the ground that recent cases had eroded the direct-indirect taxation analysis employed in the Stevedoring Cases. They found no violation of the Import-Export Clause because the State had taxed only the activity of stevedoring, not the imports or exports themselves. Even if stevedoring were considered part of interstate or foreign commerce, the Washington tax was valid because it did not discriminate against importing or exporting, did not impair transportation, did not impose multiple burdens, and did not regulate commerce. 88 Wash. 2d, at 320-322, 559 P. 2d, at 999-1000.
Because of the possible impact on the issues made by our intervening decision in Complete Auto Transit, Inc. v. Brady, 430 U. S. 274 (1977), filed after the Washington Supreme Court’s ruling, we granted certiorari. 434 U. S. 815 (1977).
II
The Commerce Clause
A
In Puget Sound Stevedoring Co. v. State Tax Comm’n, the Court invalidated the Washington business and occupation tax on stevedoring only because it applied directly to interstate commerce. Stevedoring was interstate commerce, according to the Court, because:
“Transportation of a cargo by water is impossible or futile unless the thing to be transported is put Aboard the ship and taken off at destination. A stevedore who in person or by servants does work so indispensable is as much an agency of commerce as shipowner or master.” 302 U. S., at 92.
Without further analysis, the Court concluded:
“The business of loading and unloading being interstate or foreign commerce, the State of Washington is not at liberty to tax the privilege of doing it by exacting in return therefor a percentage of the gross receipts. Decisions to that effect are many and controlling.” Id., at 94.
The petitioners (officers of New York City) in Joseph v. Carter & Weekes Stevedoring Co., urged the Court to overrule Puget Sound. They argued that intervening cases had permitted local taxation of gross proceeds derived from interstate commerce. They concluded, therefore, that the Commerce Clause did not preclude the application to stevedoring of the New York City business tax on the gross receipts of a stevedoring corporation. The Court disagreed on the theory that the intervening cases permitted taxation only of local activity separate and distinct from interstate commerce. 330 U. S., at 430-433. This separation theory was necessary, said the Court, because it served to diminish the threat of multiple taxation on commerce; if the tax actually fell on intrastate activity, there was less likelihood that other taxing jurisdictions could duplicate the levy. Id., at 429. Stevedoring, however, was not separated from interstate commerce because, as previously enunciated in Puget Sound, it was interstate commerce:
“Stevedoring, we conclude, is essentially a part of the commerce itself and therefore a tax upon its gross receipts or upon the privilege of conducting the business of stevedoring for interstate and foreign commerce, measured by those gross receipts, is invalid. We reaffirm the rule of Puget Sound Stevedoring Company. What makes the tax invalid is the fact that there is interference by a State with the freedom of interstate commerce.’ Freeman v. Hewit [329 U. S. 249,] 256.” 330 U. S., at 433.
Because the tax in the present case is indistinguishable from the taxes at issue in Puget Sound and in Carter & Weekes, the Stevedoring Cases control today’s decision on the Commerce Clause issue unless more recent precedent and a new analysis require rejection of their reasoning.
We conclude that Complete Auto Transit, Inc. v. Brady, where the Court held that a State under appropriate conditions may tax directly the privilege of conducting interstate business, requires such rejection. In Complete Auto, Mississippi levied a gross-receipts tax on the privilege of doing business within the State. It applied the tax to the appellant, a Michigan corporation transporting motor vehicles manufactured outside Mississippi. After the vehicles were shipped into Mississippi by railroad, the appellant moved them by truck to Mississippi dealers. This Court assumed that appellant’s activity was in interstate commerce. 430 U. S., at 276 n. 4.
The Mississippi tax survived the Commerce Clause attack. Absolute immunity from state tax did not exist for interstate businesses because it “ ‘ “was not the purpose of the commerce clause to relieve those engaged in interstate commerce from their just share of state tax burden even though it increases the cost of doing business.” ’ ” Id., at 288, quoting Western Live Stock v. Bureau of Revenue, 303 U. S., at 254, and Colonial Pipeline Co. v. Traigle, 421 U. S. 100, 108 (1975). The Court therefore specifically overruled Spector Motor Service, Inc. v. O’Connor, 340 U. S. 602 (1951), where a direct gross-receipts tax on the privilege of engaging in interstate commerce had been invalidated. 430 U. S., at 288-289.
The principles of Complete Auto also lead us now to question the underpinnings of the Stevedoring Cases. First, Puget Sound invalidated the Washington tax on stevedoring activity only because it burdened the privilege of engaging in interstate commerce. Because Complete Auto permits a State properly to tax the privilege of engaging in interstate commerce, the basis for the holding in Puget Sound is removed completely.
Second, Carter & Weekes supported its reaffirmance of Puget Sound by arguing that a direct privilege tax would threaten multiple burdens on interstate commerce to a greater extent than would taxes on local activity connected to commerce. But Complete Auto recognized that errors of apportionment that may lead to multiple burdens may be corrected when they occur. 430 U. S., at 288-289, n. 15.
The argument of Carter ■& Weekes was an abstraction. No multiple burdens were demonstrated. When a general business tax levies only on the value of services performed within the State, the tax is properly apportioned and multiple burdens logically cannot occur. The reasoning of Carter & Weekes, therefore, no longer supports automatic tax immunity for stevedoring from a levy such as the Washington business and occupation tax.
Third, Carter & Weekes reaffirmed Puget Sound on a basis rejected by Complete Auto and previous cases. Carter & Weekes considered any direct tax on interstate commerce to be unconstitutional because it burdened or interfered with commerce. 330 U. S., at 433. In support of that conclusion, the Court there cited only Southern Pacific Co. v. Arizona ex rel. Sullivan, 325 U. S. 761, 767 (1945), the case where Arizona’s limitations on the length of trains were invalidated. In Southern Pacific, however, the Court had not struck down the legislation merely because it burdened interstate commerce. Instead, it weighed the burden against the State’s interests in limiting the size of trains:
“The decisive question is whether in the circumstances the total effect of the law as a safety measure in reducing accidents and casualties is so slight or problematical as not to outweigh the national interest in keeping interstate commerce free....” Id., at 775-776.
Only after concluding that railroad safety was not advanced by the regulations, did the Court invalidate them. They contravened the Commerce Clause because the burden on interstate commerce outweighed the State’s interests.
Although the balancing of safety interests naturally differs from the balancing of state financial needs, Complete Auto recognized that a State has a significant interest in exacting from interstate commerce its fair share of the cost of state government. 430 U. S., at 288. Accord, Colonial Pipeline Co. v. Traigle, 421 U. S., at 108; Western Live Stock v. Bureau of Revenue, 303 U. S., at 254. All tax burdens do not impermissibly impede interstate commerce. The Commerce Clause balance tips against the tax only when it unfairly burdens commerce by exacting more than a just share from the interstate activity. Again, then, the analysis of Carter & Weekes must be rejected.
B
Respondents’ additional arguments do not demonstrate the wisdom of, or need for, preserving the Stevedoring Cases. First, respondents attempt to distinguish so-called movement cases, in which tax immunity has been broad, from nonmovement cases, in which the immunity traditionally has been narrower. Brief for Respondents 23-28. Movement cases involve taxation on transport, such as the Texas tax on a natural gas pipeline in Michigan-Wisconsin Pipe Line Co. v. Calvert, 347 U. S. 157 (1954). Nonmovement cases involve taxation on commerce that does not move goods, such as the New Mexico tax on publishing newspapers and magazines in Western Live Stock v. Bureau of Revenue. This distinction, however, disregards Complete Auto, a movement case which held that a state privilege tax oar the business of moving goods in interstate commerce is not per se unconstitutional.
Second, respondents would distinguish Complete Auto on the ground that it concerned only intrastate commerce, that is, the movement of vehicles from a Mississippi railhead to Mississippi dealers. Brief for Respondents 26-28. This purported distinction ignores two facts. In Complete Auto, we expressly assumed that the activity was interstate, a segment of the movement of vehicles from the out-of-state manufacturer to the in-state dealers. 430 U. S., at 276 n. 4. Moreover, the stevedoring activity of respondents occurs completely within the State of Washington, even though the activity is a part of interstate or foreign commerce. The situation was the same in Complete Auto, and that case, thus, is not distinguishable from the present one.
Third, respondents suggest that what they regard as such an important change in Commerce Clause jurisprudence should come from Congress and not from this Court. To begin with, our rejection of the Stevedoring Cases does not effect a significant present change in the law. The primary alteration occurred in Complete Auto. Even if this case did effect an important change, it would not offend the sepa.ration-of-powers principle because it does not restrict the ability of Congress to regulate commerce. The Commerce Clause does not state a prohibition; it merely grants specific power to Congress. The prohibitive effect of the Clause on state legislation results from the Supremacy Clause and the decisions of this Court. See, e. g., Cooley v. Board of Wardens, 12 How. 299 (1852); Gibbons v. Ogden, 9 Wheat. 1 (1824). If Congress prefers less disruption of interstate commerce, it will act.
Consistent with Complete Auto, then, we hold that the Washington business and occupation tax does not violate the Commerce Clause by taxing the interstate commerce activity of stevedoring. To the extent that Puget Sound Stevedoring Co. v. State Tax Comm’n and Joseph v. Carter & Weekes Stevedoring Co. stand to the contrary, each is overruled.
C
With the distinction between direct and indirect taxation of interstate commerce thus discarded, the constitutionality under the Commerce Clause of the application of the Washington business and occupation tax to stevedoring depends upon the practical effect of the exaction. As was recognized in Western Live Stock v. Bureau of Revenue, 303 U. S. 250 (1938), interstate commerce must bear its fair share of the state tax burden. The Court repeatedly has sustained taxes that are applied to activity with a substantial nexus with the State, that are fairly apportioned, that do not discriminate against interstate commerce, and that are fairly related to the services provided by the State. E. g., General Motors Corp. v. Washington, 377 U. S. 436 (1964); Northwestern Cement Co. v. Minnesota, 358 U. S. 450 (1959); Memphis Gas Co. v. Stone, 335 U. S. 80 (1948); Wisconsin v. J. C. Penney Co., 311 U. S. 435 (1940); see Complete Auto Transit, Inc. v. Brady, 430 U. S., at 279, and n. 8.
Respondents proved no facts in the Superior Court that, under the above test, would justify invalidation of the Washington tax. The record contains nothing that minimizes the obvious nexus between Washington and respondents; indeed, respondents conduct their entire stevedoring operations within the State. Nor have respondents successfully attacked the apportionment of the Washington system. The tax under challenge was levied solely on the value of the loading and unloading that occurred in Washington. Although the rate of taxation varies with the type of business activity, respondents have not demonstrated how the 1% rate, which applies to them and generally to businesses rendering services, discriminates against interstate commerce. Finally, nothing in the record suggests that the tax is not fairly related to services and protection provided by the State. In short, because respondents relied below on the per se approach of Puget Sound and Carter & Weekes, they developed no factual basis on which to declare the Washington tax unconstitutional as applied to their members and their stevedoring activities.
Ill
The Import-Export Clause
Having decided that the Commerce Clause does not per se invalidate the application of the Washington tax to stevedoring, we must face the question whether the tax contravenes the Import-Export Clause. Although the parties dispute the meaning of the prohibition of “Imposts or Duties on Imports or Exports,” they agree that it differs from the ban the Commerce Clause erects against burdens and taxation on interstate commerce. Brief for Petitioner 32-33; Brief for Respondents 9-10; Tr. of Oral Arg. 13, 22. The Court has noted before that the Import-Export Clause states an absolute ban, whereas the Commerce Clause merely grants power to Congress. Richfield Oil Corp. v. State Board, 329 U. S. 69, 75 (1946). On the other hand, the Commerce Clause touches all state taxation and regulation of interstate and foreign commerce, whereas the Import-Export Clause bans only “Imposts or Duties on Imports or Exports.” Michelin Tire Corp. v. Wages, 423 U. S. 276, 279, 290-294 (1976). The resolution of the Commerce Clause issue, therefore, does not dispose of the Import-Export Clause question.
A
In Michelin the Court upheld the application of a general ad valorem property tax to imported tires and tubes. The Court surveyed the history and purposes of the Import-Export-Clause to determine, for the first time, which taxes fell within the absolute ban on “Imposts or Duties.” Id., at 283-286. Previous eases had assumed that all taxes on imports and exports and on the importing and exporting processes were banned by the Clause. See, e. g., Department of Revenue v. James B. Beam Distilling Co., 377 U. S. 341, 343 (1964); Richfield Oil Corp. v. State Board, 329 U. S., at 76; Joseph v. Carter & Weekes Stevedoring Co., 330 U. S., at 445 (Douglas, J., dissenting in part); Anglo-Chilean Corp. v. Alabama, 288 U. S. 218, 226-227 (1933); License Cases, 5 How. 504, 575-576 (1847) (opinion of Taney, C. J.). Before Michelin, the primary consideration was whether the tax under review reached imports or exports. With respect to imports, the analysis applied the original-package doctrine of Brown v. Maryland, 12 Wheat. 419 (1827); see, e. g., Department of Revenue v. James B. Beam Distilling Co.; Anglo-Chilean Corp. v. Alabama; Low v. Austin, 13 Wall. 29 (1872), overruled in Michelin Tire Corp. v. Wages. So long as the goods retained their status as imports by remaining in their import packages, they enjoyed immunity from state taxation. With respect to exports, the dispositive question was whether the goods had entered the “export stream,” the final, continuous journey out of the country. Kosydar v. National Cash Register Co., 417 U. S. 62, 70-71 (1974); Empresa Siderurgica v. County of Merced, 337 U. S. 154, 157 (1949); A. G. Spalding & Bros. v. Edwards, 262 U. S. 66, 69 (1923); Coe v. Errol, 116 U. S. 517, 526, 527 (1886). As soon as the journey began, tax immunity attached.
Michelin initiated a different approach to Import-Export Clause cases. It ignored the simple question whether the tires and tubes were imports. Instead, it analyzed the nature of the tax to determine whether it was an “Impost or Duty.” 423 U. S., at 279, 290-294. Specifically, the analysis examined whether the exaction offended any of the three policy considerations leading to the presence of the Clause:
“The Framers of the Constitution thus sought to alleviate three main concerns... : the Federal Government must speak with one voice when regulating commercial relations with foreign governments, and tariffs, which might affect foreign relations, could not be implemented by the States consistently with that exclusive power; import revenues were to be the major source of revenue of the Federal Government and should not be diverted to the States; and harmony among the States might be disturbed unless seaboard States, with their crucial ports of entry, were prohibited from levying taxes on citizens of other States by taxing goods merely flowing through their ports to the other States not situated as favorably geographically.” Id., at 285-286 (footnotes omitted).
The ad valorem property tax there at issue offended none of these policies. It did not usurp the Federal Government’s authority to regulate foreign relations since it did not “fall on imports as such because of their place of origin.” Id., at 286. As a general tax applicable to all property in the State, it could not have been used to create special protective tariffs and could not have been applied selectively to encourage or discourage importation in a manner inconsistent with federal policy. Further, the tax deprived the Federal Government of no revenues to which it was entitled. The exaction merely paid for services, such as fire and police protection, supplied by the local government. Although the tax would increase the cost of the imports to consumers, its effect on the demand for Michelin tubes and tires was insubstantial. The tax, therefore, would not significantly diminish the number of imports on which the Federal Government could levy import duties and would not deprive it of income indirectly. Finally, the tax would not disturb harmony among the States because the coastal jurisdictions would receive compensation only for services and protection extended to the imports. Although intending to prevent coastal States from abusing their geographical positions, the Framers also did not expect residents of the ports to subsidize commerce headed inland. The Court therefore concluded that the Georgia ad valorem property tax was not an “Impost or Duty,” within the meaning of the Import-Export Clause, because it offended none of the policies behind that Clause.
A similar approach demonstrates that the application of the Washington business and occupation tax to stevedoring threatens no Import-Export Clause policy. First, the tax does not restrain the ability of the Federal Government to conduct foreign policy. As a general business tax that applies to virtually all businesses in the State, it has not created any special protective tariff. The assessments in this case are only upon business conducted entirely within Washington. No foreign business or vessel is taxed. Respondents, therefore, have demonstrated no impediment posed by the tax upon the regulation of foreign trade by the United States.
Second, the effect of the Washington tax on federal import revenues is identical to the effect in Michelin. The tax merely compensates the State for services and protection extended by Washington to the stevedoring business. Any indirect effect on the demand for imported goods because of the tax on the value of loading and unloading them from their ships is even less substantial than the effect of the direct ad valorem property tax on the imported goods themselves.
Third, the desire to prevent interstate rivalry and friction does not vary significantly from the primary purpose of the Commerce Clause. See P. Hartman, State Taxation of Interstate Commerce 2-3 (1953). The third Import-Export Clause policy, therefore, is vindicated if the tax falls upon a taxpayer with reasonable nexus to the State, is properly apportioned, does not discriminate, and relates reasonably to services provided by the State. As has been explained in Part II-C, supra, the record in this case, as presently developed, reveals the presence of all these factors.
Under the analysis of Michelin, then, the application of the Washington business and occupation tax to stevedoring violates no Import-Export Clause policy and therefore should not qualify as an “Impost or Duty” subject to the absolute ban of the Clause.
B
The Court in Michelin qualified its holding with the observation that Georgia had applied the property tax to goods “no longer in transit.” 423 U. S., at 302. Because the goods were no longer in transit, however, the Court did not have to face the question whether a tax relating to goods in transit would be an “Impost or Duty” even if it offended none of the policies behind the Clause. Inasmuch as we now face this inquiry, we note two distinctions between this case and Michelin. First, the activity taxed here occurs while imports and exports are in transit. Second, however, the tax does not fall on the goods themselves. The levy reaches only the business of loading and unloading ships or, in other words, the business of transporting cargo within the State of Washington. Despite the existence of the first distinction, the presence of the second leads to the conclusion that the Washington tax is not a prohibited “Impost or Duty” when it violates none of the policies.
In Canton R. Co. v. Rogan, 340 U. S. 511 (1951), the Court upheld a gross-receipts tax on a steam railroad operating exclusively within the Port of Baltimore. The railroad operated a marine terminal and owned rail lines connecting the docks to the trunk lines of major railroads. It switched and pulled cars, stored imports and exports pending transport, supplied wharfage, weighed imports and exports, and rented a stevedoring crane. Somewhat less than half of the company’s 1946 gross receipts were derived from the transport of imports or exports. The company contended that this income was immune, under the Import-Export Clause, from the state tax. The Court rejected that argument primarily on the ground that immunity of services incidental to importing and exporting was not so broad as the immunity of the goods themselves:
“The difference is that in the present case the tax is not on the goods but on the handling of them at the port. An article may be an export and immune from a tax long before or long after it reaches the port. But when the tax is on activities connected with the export or import the range of immunity cannot be so wide.
"... The broader definition which appellant tenders distorts the ordinary meaning of the terms. It would lead back to every forest, mine, and factory in the land and create a zone of tax immunity never before imagined.” Id., at 514 — 515 (emphasis in original).
In Canton R. Co. the Court did not have to reach the question about taxation of stevedoring because the company did not load or unload ships. As implied in the opinion, however, id., at 515, the only distinction between stevedoring and the railroad services was that the loading and unloading of ships crossed the waterline. This is a distinction without economic significance in the present context. The transportation services in both settings are necessary to the import-export process. Taxation in neither setting relates to the value of the goods, and therefore in neither can it be considered taxation upon the goods themselves. The force of Canton R. Co. therefore prompts the conclusion that the Michelin policy analysis should not be discarded merely because the goods are in transit, at least where the taxation falls upon a service distinct from the goods and their value.
C
Another factual distinction between this case and Michelin is that here the stevedores load and unload imports and exports whereas in Michelin the Georgia tax touched only imports. As noted in Part III-A, supra, the analysis in the export cases has differed from that in the import cases. In the former, the question was when did the export enter the | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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116
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BROTHERHOOD OF RAILWAY & STEAMSHIP CLERKS, FREIGHT HANDLERS, EXPRESS & STATION EMPLOYEES v. ASSOCIATION FOR THE BENEFIT OF NON-CONTRACT EMPLOYEES.
No. 138.
Argued March 4, 1965.
Decided April 28, 1965
James L. Highsaw, Jr., argued the cause for petitioner in No. 138. With him on the brief were Milton Kramer and William J. Donlon.
Stuart Bernstein argued the cause for petitioner in No. 139. With him on the brief were H. Templeton Brown and Robert L. Stern.
Solicitor General Cox argued the cause for petitioners in No. 369 and respondents in No. 139. With him on the briefs were Assistant ¡Attorney General Douglas, Daniel M. Friedman, Morton Hollander and John C. Eldridge.
Alex L. Arguello argued the cause for respondent in Nos. 138 and 369. With him on the brief was Jerome C. Muys.
Clarence M. Mulholland and Edward J. Hickey, Jr., filed a brief for the Railway Labor Executives’ Association, as amicus curiae, urging reversal in Nos. 138 and 369 and affirmance in No. 139.
Together with No. 139, United Air Lines, Inc. v. National Mediation Board et al. and No. 369, National Mediation Board et al. v. Association for the Benefit of Non-Contract Employees, also on certiorari to the same court.
Mr. Justice Clark
delivered the opinion of the Court.
These consolidated cases involve claims of United Air Lines (United) and the Association for the Benefit of Non-Contract Employees of United (the Association), attacking the form of ballot that the Board intends to use in a representation election among United’s employees under § 2, Ninth» of the Railway Labor Act, 44 Stat. 577, as amended, 45 U. S. C. § 152, Ninth (1958 ed.). United also contends that the National Mediation Board (Board) should hold a hearing under the same section, with its participation, to determine the appropriate craft or class in which the election should be held. Before the Board the conflicting unions — Brotherhood of Railway and Steamship Clerks (Brotherhood) and International Association of Machinists (Machinists) — agreed that the appropriate craft or class in which the election should be held was “clerical, office, stores, fleet and passenger service employees” ; over the objection of United the Board ordered an election in this unit to determine which union, if either, would be its bargaining representative. United then filed suit against the Board raising the questions it presses here. This case was dismissed and is here, after affirmance by the Court of Appeals, as No. 139. After this dismissal the Association filed suit against the Board, the Brotherhood being permitted to intervene, and raised substantially the same claims. The District Court enjoined the Board from conducting an election with a ballot that did not permit an employee to cast a vote against collective bargaining representation; the other issues were remanded to the Board for further consideration. 218 F. Supp. 114. The Court of Appeals affirmed these cases by a divided court and they are here as Nos. 138 and 369. 117 U. S. App. D. C. 387, 330 F. 2d 853. Judge Wright, dissenting, thought the District Court was without jurisdiction to enjoin the Board from conducting a representation election, citing Switchmen’s Union v. National Mediation Board, 320 U. S. 297 (1943). We granted certiorari in all three of the cases. 379 U. S. 814.
We hold that the Board satisfied its statutory duty to investigate the dispute; that United is not entitled to be a party to proceedings by which the Board determines the scope of the appropriate craft or class; and that the Board’s choice of ballot for its future elections does not exceed its statutory authority and is therefore not open to judicial review.
1. The Facts.
In January 1947, after lengthy hearings in which United and other airlines participated at the request of the Board, it was determined that the “clerical, office, stores, fleet and passenger service” grouping of employees constituted an appropriate craft or class, within the meaning of the Act, for collective bargaining purposes. Case No. R-1706, N. M. B. Determinations of Craft or Class 423 (1948). All of the parties here, save the Association, participated in this public hearing. Since that time they have participated in other cases involving the same questions decided in R-1706, but, with some exceptions, the Board has continued through the years to hold elections in that craft or class.
In August 1962 the Brotherhood filed with the Board an application under § 2, Ninth to investigate a representation dispute among employees of United. In its original application the Brotherhood proposed to exclude those stores and fleet service personnel then represented by the Machinists. After the Board had advised United and the Machinists of the Brotherhood’s application each informed the Board that in its opinion the application should be dismissed because it did not conform to what the Board had found to constitute a craft or class in Case No. R-1706, supra. Alternatively, United requested that if dismissal was not in order the Board should hold hearings to determine the proper craft or class in which the election should be held. Upon receiving notice of this opposition the Brotherhood amended its application to include the full craft or class approved in R-1706. The Machinists then agreed that this was the appropriate unit in which to conduct the election.
The Board concluded that a dispute existed requiring an election and scheduled one for January 1963. It proposed to use its standard form of ballot which provided for the printing of the names of the labor organizations— in this case, the Brotherhood and the Machinists — with a box below each name for the employee to check the representative preferred. A third space was provided in which the employee could write in the name of any other organization or individual he wished to represent him. There was not a place on the ballot in which the employee could vote specifically for “no union.”
The Board, on December 19, 1962, directed that a list of the employees involved be supplied by United not later than January 14, 1963. On January 11 United advised that the request was premature and requested a hearing as to the scope of the unit involved in the Brotherhood’s amended application. It outlined in some detail the past practices of the Board in dealing with such requests and attacked the continued suitability of the R-1706 determination, asking that the case be re-opened and that the group be divided into three separate crafts or classes. On January 17 the Board denied this request. It pointed out that United on September 7, 1962, had objected to the craft proposed in the Brotherhood’s original application on the sole ground that it did not conform to R-1706; that the Brotherhood had then amended its request to conform with R-1706; that United had been notified of this change on October 8, 1962; that on October 24 the Board had requested United to furnish the number of employees in the craft or class as amended and that it had furnished this information on November 2, stating that there were 12,451 as of a given date; and that it had failed to furnish the names of the employees. The Board then commented that “the carrier is not a party to this representation dispute”; that “no request for a review of... Case No. R-1706, et al. has been received from either organization party to NMB Case No. 3590” (the pending application of the Brotherhood); and that United’s request was “not timely made, since the Board, on December 19, 1962, found that a representation dispute existed among the employees in this craft or class, and has authorized an election.” United requested reconsideration of this decision, but without success.
Meanwhile, on January 18, 1963, when United advised the Board that it was “willing to allow a ballot box election on Company property provided the ballot follows the form used by the National Labor Relations Board,” i. e., the ballot “would have a space for the employee to vote against representation as well as space for the employee to vote for representation” by the Brotherhood or the Machinists. (Emphasis in the original.) The Board replied that its form of ballot had been used since 1934 and that it saw no reason to depart from it. Thereafter United advised that it would furnish the list of employees by February 11, but on that date the list was refused and action was begun the next day against the Board in the District Court for the District of Columbia. This case was later dismissed, as we have noted.
It appears that while the election was being delayed the Association was being organized among United’s employees. By March 1963 it claimed 6,400 members, about 50% of the total number of United’s employees. It sought, like United, to be heard in a craft or class proceeding and to have the ballot amended. It stated, however, that it did not seek recognition as a bargaining representative, and it did not want its name on the ballot. It intended to dissolve after the election. The Board denied the applications.
After United’s case was dismissed, the Association filed a similar suit in the same court, seeking substantially the same relief. The Brotherhood was permitted to intervene, and it filed a separate appeal from that of the Board after the court had disposed of the case as we have already stated.
After we granted certiorari, the Board adopted an amended form of ballot on which there appears the following directly above the names of the unions seeking election as representative:
“INSTRUCTIONS FOR VOTING
“No employee is required to vote. If less than a majority of the employees cast valid ballots, no representative will be certified.”
In effect, this amended ballot stated on its face what has been the practice of the Board in these elections since its inception. The Board has announced its intention to use this form of ballot in future representation elections, including any that may be held in this particular matter.
2. The Purposes of the Act and the Board’s Function.
The major objective of the Railway Labor Act, 44 Stat. 577, as amended, 45 U. S. C. §§ 151-188 (1958 ed.), was “the avoidance of industrial strife, by conference between the authorized representatives of employer and employee.” Virginian R. Co. v. System Federation No. 40, 300 U. S. 515, 547 (1937). Section 2, Ninth set up the machinery for the selection of the representatives of employees. It authorized the National Mediation Board, upon request, to investigate disputes over representation; to “designate” those who were affected; to use a secret ballot or any other appropriate means of ascertaining the choice of employees; to establish rules governing elections and to certify the representatives so chosen to represent the employees in negotiations. Upon the issuance of this certificate the employer, under the Act, is required to “treat” with the representative certified to it by the Board. As we said in Virginian R. Co.: “The statute does not undertake to compel agreement between the employer and employees, but it does command those preliminary steps without which no agreement can be reached. It at least requires the employer to meet and confer with the authorized representative of its employees, to listen to their complaints, to make reasonable effort to compose differences — in short, to enter into a negotiation for the settlement of labor disputes such as is contemplated by § 2, First.” Id., at 548.
In Switchmen’s Union v. National Mediation Board, 320 U. S. 297 (1943), the petitioner sued for the cancellation of a Board representation certificate. The Court held that the Act precluded review of the Board’s certification of a collective bargaining representative under § 2, Ninth. The case involved a question of statutory construction, i. e., whether the Act permitted the division of crafts or classes of a single carrier into smaller units for collective bargaining purposes. The Court refused to consider the merits of the claim, holding that it was for the Board, not the courts, finally to resolve such questions. “The Act in § 2, Fourth,” the Court said, “writes into law the 'right’ of the'majority of any craft or class of employees’ to 'determine who shall be the representative of the craft or class for the purposes of this Act.’ That 'right’ is protected by § 2, Ninth which gives the Mediation Board the power to resolve controversies concerning it and as an incident thereto to determine what is the appropriate craft or class in which the election should be held.” Id., at 300-301. The Court goes on to note that Congress decided on the method which might be employed to protect this “right”; and that where Congress “has not expressly authorized judicial review,” id., at 301, “this Court has often refused to furnish one even where questions of law might be involved,” id., at 303. The Court’s conclusion was that “the intent seems plain — the dispute was to reach its last terminal point when the administrative finding was made. There was to be no dragging out of the controversy into other tribunals of law.” Id., at 305. Thus, the Court held there could be no judicial review.
It is sometimes said that in Leedom v. Kyne, 358 U. S. 184 (1958), the Court created an “exception” to the doctrine of Switchmen’s Union. In Kyne, it was held that the law afforded a remedy in the courts when unlawful action by the National Labor Relations Board inflicted injury on one of the parties to a bargaining dispute. But this was no exception to Switchmen’s Union. Rather the Court was careful to note that “[t]his suit is not one to ‘review,’ in the sense of that term as used in the Act, a decision of the Board made within its jurisdiction. Rather it is one to strike down an order of the Board made in excess of its delegated powers and contrary to a specific prohibition in the Act.” Leedom v. Kyne, 358 U. S. 184, 188. (Emphasis supplied.) The limited nature of this holding was re-emphasized only last Term where we referred to the “narrow limits” and “painstakingly delineated procedural boundaries of Kyne.” Boire v. Greyhound Corp., 376 U. S. 473, 481 (1964). It is with these principles in mind that we turn to the questions in the instant cases.
3. The Craft or Class Determination.
The order of the District Court in Nos. 138 and 369 enjoins the Board from conducting an election “in which the form of the ballot does not permit a voting employee to cast a vote against collective bargaining representation....” The Association concedes that the order does not enjoin the holding of the election until the Board reconsiders its craft or class determination; nor has it petitioned here for a review of that portion of the decision.' Thus, we need not reach the question of the Association’s right to demand or participate in proceedings leading to such a determination.
The same is not true of United, however, for it specifically sought and was denied such relief, and it comes here contending that this denial constituted error. United argues that since the Act compels it to treat with the representative chosen by the majority of its employees in the craft or class in which the election is held, it has a direct and substantial interest in the scope of that unit; and that since the Act provides for no administrative or judicial review, due process requires that it be accorded an opportunity to participate in the proceedings by which the Board determines which employees may participate.
It also contends that the Board, in designating the employees who could participate in the election, did not do so as a result of the statutorily required investigation— which, United contends, requires that the Board take evidence and make findings — but made an arbitrary determination, relying solely on the agreement of the unions.
United’s position is that Switchmen’s Union does not control a claim that the Board has ignored an express command of the Act. This particular question was reserved in the 1943 cases. In General Committee v. Missouri-Kansas-Texas R. Co., 320 U. S. 323 (1943), a companion case to Switchmen’s Union, the Court stated: “Whether judicial power may ever be exerted to require the Mediation Board to exercise the 'duty’ imposed upon it under § 2, Ninth and, if so, the type or types of situations in which it may be invoked present questions not involved here.” Id,., at 336, n. 12. We think that the Board’s action here is reviewable only to the extent that it bears on the question of whether it performed its statutory duty to “investigate” the dispute. Reviewing that action, however, we conclude that the contention is completely devoid of merit.
Section 2, Ninth makes it the duty of the Board to “investigate” a representation dispute and “to certify to both parties, in writing, within thirty days after the receipt of the invocation of its services, the name or names of the individuals or organizations that have been designated and authorized to represent the employees involved in the dispute, and certify the same to the carrier.” This command is broad and sweeping. We should note at the outset that the Board’s duty to investigate is a duty to make such investigation as the nature of the case requires. An investigation is “essentially informal, not adversary” ; it is “not required to take any particular form.” Inland Empire District Council v. Millis, 325 U. S. 697, 706 (1945). These principles are particularly apt here where Congress has simply told the Board to investigate and has left to it the task of selecting the methods and procedures which it should employ in each case.
In dealing with the sufficiency of the investigation it is necessary to examine the experience of the Board through the years in resolving questions of craft or class appropriateness. That experience, insofar as it concerns the unit involved here, dates back to 1946 in Case No. R-1706, supra, when it was called upon for the first time to apply the craft or class principle of representation to the airline industry. At that time it had before it a fledgling industry, a relatively new statutory command and a huge group of employees for whom there were no recognized crafts or classes within the meaning of the Act. At least five unions were involved, all urging different employee groupings, and all of the major airlines were invited to participate in an extended public hearing. United was among those participating and in fact supported the very craft or class unit which the Board eventually decided upon and to which it has adhered here. Because it was the first time the Board had recognized such a craft or class, it cautiously provided in denying reconsideration of its determination that it was subject to future re-examination where to do so would further the purposes of the Act.
Thereafter began a period in which the workability of the R-1706 determination was tested in practice, and it did not go completely unchallenged. In 1948 United voluntarily recognized the Machinists as the collective bargaining representative for its ramp and stores employees. It supplied the Board with evidence upon which this recognition was based and its reasons for departing from its usual policy. It is noteworthy that the Board replied that voluntary recognition would not preclude future determination by the Board of the proper craft or class to which those employees would belong. In 1951 the determination of R-1706 withstood challenge in Matter of Representation of Employees of Northwest Airlines, Inc., Case No. R-2357, 2 N. M. B. Determinations of Craft or Class 60 (1955). United submitted a statement in this proceeding, emphasizing its disagreement with the R-1706 decision and requesting that it be disregarded. The Board refused to do so, but it did reiterate what it had implied in 1947 — that it was “of the opinion that upon proper application... it will be advisable to reexamine the determination in case R-J.706 et al., with the view of making such modifications as may be found to be justified at that time.” Id., at 67. We note that in both cases — R-1706 and R-2357 — the unions competing for representative status were in disagreement as to the appropriate unit in which elections should be held. Again in 1952, in Case No. R-2482, 2 N. M. B. Determinations of Craft or Class 72 (1955), United participated when the Air Line Dispatch Clerks Association sought to represent its general dispatch clerks, dispatch clerks A, B, and C and crew schedulers; the Brotherhood there disputed the grouping, contending that R-1706 established the scope of the election. The Board sustained this position, which was also that of United, and held that R-1706 should be adhered to. United had argued that the dispatch clerks and schedulers were not a separate craft or class but merely components of the R-1706 unit, and that representation could be had only through investigation and election in that group. The Board ultimately discussed the application in these terms:
“The precedents heretofore established by the Board, however, cannot be disregarded. Moreover, the record of stable industrial relations which has followed in the years since the Determination in R-1706 must be given due and careful consideration.
“... In an industry which is still expanding, the agency charged with the duty of certifying designated representatives for collective bargaining must of necessity hesitate before acquiescing In the desires of certain employees to establish small segregated groups, because by that very course it may retard, or even destroy job opportunities. Flexibility in the use of employee talent carries just as many advantages for the employees as it does for the carrier. The Board is fully aware that the action taken herein will have, as an end result, the withholding of an immediate opportunity to select a collective-bargaining agent by this group of employees, but nevertheless, it is convinced that the basic purposes of the Railway Labor Act will be better served by adherence to the policy of preserving established crafts or classes.” Id,., at 76.
Nor do the subsequent cases brought to our attention strip the R-1706 decision of its continuing validity. In both these matters — Cases No. C-2252 and C-2389, 3 N. M. B. Determinations of Craft or Class 16 (1961) — the Board determined that stock and storeroom employees were separate crafts or classes of employees at North Central and Trans-Texas Air Lines. Neither of these airlines had participated in the 1946 proceedings. Both were feeder lines, and in both cases the contending unions disagreed as to the appropriate unit in which the election should be held. In any event, the Board was simply pursuing the policy it had announced when it decided R-1706 — that it would re-examine craft or class determinations when it thought the purpose of the Act would be furthered thereby. This in itself belies the notion that the Board has blindly followed the R-1706 ruling.
It is in light of this background that we must decide whether the Board’s reaffirmation of the R-1706 determination in these cases was made after a sufficient investigation, within the meaning of the Act. We reject the contention that it adhered solely to the craft or class chosen by the unions. Time and again it has acknowledged that it has the task of determining the appropriateness of a craft or class, and nothing in this case suggests that it abdicated that responsibility here. Where units untested by actual collective bargaining have been proposed by the unions involved the Board has consistently held hearings to determine the propriety of holding elections in those crafts or classes. But where the unions have agreed and the unit they have agreed upon has been one well-established in industry bargaining circles, it has. usually held elections without full-scale hearings, not simply because the unions agree but because the unit upon which they agree is one that is well-recognized under prior determinations of the Board and has proven satisfactory in actual experience. This is what it did here.
The Board received the Brotherhood’s application; it requested, received and considered statements from the carrier and the Machinists. On the basis of these preliminary actions, it scheduled an election. But it continued to correspond with United, accepting and studying its detailed application for reconsideration of the Board’s decision to proceed to election in the R-1706 craft or class. Viewed alongside prior experience with the R-1706 grouping in the air transport industry this procedure clearly complied with the statutory command that the Board “investigate” the dispute. The only missing element of the required investigation is the election and that can now be held promptly.
United sought to have the District Court require the Board to hold a hearing on the craft or class issue in which it would participate as a “party in interest.” But the Act does not require a hearing when the Board itself designates those who may participate in the election. It provides that “the Board shall designate who may participate in the election..., or may appoint a committee of three neutral persons who after hearing shall within ten days designate the employees who may participate in the election.” (Emphasis supplied.) Indeed, United seems aware of this, for it stated in its brief that if “the Railway Labor Act does not specifically require a hearing, it does require an ‘investigation,’ ” and that United must be heard in the course of that proceeding. Clearly, then, the Board cannot be required to hold a hearing.
Nor does the Act require that United be made a party to whatever procedure the Board uses to define the scope of the electorate. This status is accorded only to those organizations and individuals who seek to represent the employees, for it is the employees’ representative that is to be chosen, not the carriers’. Whether and to what extent carriers will be permitted to present their views on craft or class questions is a matter that the Act leaves solely in the discretion of the Board.
The gist of United’s claim, therefore, is that it should be accorded a greater role in the Board’s investigation. This argument must be rejected. Here United participated in the proceeding establishing the craft or class in question as a cognizable grouping of employees, and it has had opportunities since that time to present further evidence. It must be remembered that United is under no compulsion to reach an agreement with the certified representative. As Chief Justice Stone said in Virginian R. Co. v. System Federation No. 40, supra, “The quality of the action compelled, its reasonableness, and therefore the lawfulness of the compulsion, must be judged in the light of the conditions which have occasioned the exercise of governmental power.” Id., at 558-559. Likewise, as the Court observed in Hannah v. Larche, 363 U. S. 420, 442 (1960), the procedural requirements in a particular proceeding depend on “[t]he nature of the alleged right involved, the nature of the proceeding, and the possible burden on that proceeding....” The Board, as we noted in Switchmen’s Union, performs the “function of a referee.” It does not select one organization or another; it simply investigates, defines the scope of the electorate, holds the election and certifies the winner. Thus, while the Board’s investigation and resolution of a dispute in one craft or class rather than another might impose some additional burden upon the carrier, we cannot say that the latter’s interest rises to a status which requires the full panoply of procedural protections. We find support for this conclusion when we consider the burden that acceptance of United’s contentions would visit upon the administration of the Act. To require full-dress hearings on craft or class in each representation dispute would fly in the face of Congress’ instruction that representatives should be certified within 30 days of invocation of the Board’s services. It places beyond reach the speed which the Act’s framers thought an objective of the first order.
In view of these considerations, we hold that the Board performed its statutory duty to conduct an investigation and designate the craft or class in which the election should be held and that it did so in a manner satisfying any possible constitutional requirements that might exist. Its determination, therefore, is not subject to judicial review. Switchmen’s Union v. National Mediation Board, supra. As was pointed out there, the “highly selective manner in which Congress has provided for judicial review of administrative orders or determinations under the Act,” id., at 305, indicates the confidence that it reposed in the Board. In turn the fair and equitable manner in which the Board has discharged its difficult function is attested by the admirable results- it has attained.
4. The Form of the Ballot.
As we have noted the District Court enjoined the Board from conducting an election with a ballot that did not permit an employee to cast a vote against collective representation. We believe this was error. Section 2, Ninth empowers the Board to establish the rules governing elections. Moreover, it provides that in resolving representation disputes the Board is authorized “to take a secret ballot of the employees involved, or to utilize any other appropriate method of ascertaining the names of their duly designated and authorized representatives in such manner as shall insure the choice of representatives by the employees without interference, influence, or coercion exercised by the carrier.” Thus, not only does the statute fail to spell out the form of any ballot that might be used but it does not even require selection by ballot. It leaves the details to the broad discretion of the Board with only the caveat that it “insure” freedom from carrier interference. That the details of ■ selecting representatives were to be left for the final determination of the Board is buttressed by legislative history clearly indicating as much. See Hearings on H. R. 7650, House Committee on Interstate and Foreign Commerce, 73d Cong., 2d Sess., 34^35.
In summary, then, the selection of a ballot is a necessary incident of the Board’s duty to resolve disputes. The Act expressly says as much, instructing the Board alone to establish the rules governing elections. Thus, it is clear that its decision on the matter is not subject to judicial review where there is no showing that it has acted in excess of its statutory authority.
United and the Association, however, apparently relying on Leedom v. Kyne, supra, contend that the Board has exceeded its statutory authority in selecting the proposed ballot. The argument is that § 2, Fourth, which provides that “[t]he majority of any craft or class of employees shall have the right to determine whp shall be the representative of the craft or class” requires a ballot with a “no union” box. They urge that in Virginian B. Co. v. System Federation No. 40, supra, at 560, certification on the basis of a majority of the votes cast, rather than a majority of the eligible voters, was upheld on the ground that nonvoters “are presumed to assent to the expressed will of the majority of those voting.” And they say that the Board’s ballot is inconsistent with this rationale. But the Board has not followed the presumption of Virginian R. Co. Indeed | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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82
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SHERBERT v. VERNER et al., MEMBERS OF SOUTH CAROLINA EMPLOYMENT SECURITY COMMISSION, et al.
No. 526.
Argued April 24, 1963.
Decided June 17, 1963.
William D. Donnelly argued the cause and filed briefs for appellant.
Daniel R. McLeod, Attorney General of South Carolina, argued the cause for appellees'. With him on the brief was Victor S. Evans, Assistant Attorney General.
Briefs of amici curiae, urging reversal, were filed by Morris B. Abram, Edwin J. Lukas, Arnold Forster, Melvin' L. Wulf, Paul Hartman, Theodore Leskes and Sol Rabkin for the American Jewish Committee et al., and by Leo Pfeffer, Lewis H. Weinstein, Albert'Wald, Shad Polier, Ephraim S. London, Samuel Láwrence Brennglass and Jacob Sheinkman for the Synagogue Council of America et al.
Mr. Justice Brennan
delivered the opinion of the Court.
Appellant, a member of the Seventh-day Adventist Church, was discharged by her South Carolina employer because she would not work on- Saturday, the Sabbath Day of her faith. When she was unable to obtain' other employment because from conscientious scruples' she would not take Saturday work, she filed a claim for unemployment compensation benefits under the South Carolina Unemployment -Compensation Act. That law provides that, to be eligible for benefits, a claimant must be “able to work and . . . available for work’.'; and, further, that a claimant is ineligible for benefits “ [i] f . . .-he has failed, without good causé . . . to accept available suitable work when offered him by the employment office or the employer . . . The appellee Employment Secu-. rity Commission, in administrative proceedings under the statute, found that appellant’s restriction upon her availability for Saturday work brought 'her within the provision disqualifying for benefits insured workers who fail, without good cause, to accept “suitable work when offered ... by the employment office or thé employer .'...” The Commission’s finding was sustained by the Court of Common Pleas for Spartanburg County.. That court’s judgment was* in turn affirmed by the South Carolina Supreme Court, which rejected appellant’s contention that, as applied to her, the disqualifying provisions of the South Carolina statute abridged her right to the free exercise of her religion secured under the Free Exercise Clause of the First Amendment through the Fourteenth Amendment. The State Supreme Court held specifically that appellant’s ineligibility infringed no constitutional -liberties because such, a construction of the statute “places no restriction upon the appellant’s freedom .of religion nor does it in any way prevent her in the exercise of her right and freedom to observe her religious beliefs in accordance with the dictates of her conscience.” 240 S. C. 286, 303-304, 125 S. E. 2d 737, 746 We noted probable jurisdiction of appellant’s appeal. 371 TJ. S. 938. We reverse the judgmént of the South Carolina Supreme Court and remand for further proceedings not inconsistent with this opinion.
I.
The door of the Free Exercise Clause stands tightly-closed against any governmental regulation of religious beliefs as such, Cantwell v. Connecticut, 310 U. S. 296, 303. Government may neither compel affirmation of a repugnant belief, Torcaso v. Watkins, 367 U. S. 488; nor penalize or discriminate against individuals or groups because they hold religious views abhorrent to the authorities, Fowler v. Rhode Island, 345 U. S. 67; nor employ the taxing power to inhibit the dissemination of particular religious views, Murdock v. Pennsylvania, 319 U. S. 105; Follett v. McCormick, 321 U. S. 573; cf. Grosjean v. American Press Co., 297 U. S. 233. On the other hand, the Court has rejected challenges under the Free Exercise Clause to governmental regulation of certain overt acts prompted by religious beliefs or principles, for “even when the action is in accord with one’s religious convictions, [it] is not totally free from legislative restrictions.” Braunfeld v. Brown, 366 U. S. 599, 603. The conduct or actions so regulated have invariably posed some substantial threat to public safety, peace or order. See, e. g., Reynolds v. United States, 98 U. S. 145; Jacobson v. Massachusetts, 197 U. S. 11; Prince v. Massachusetts, 321 U. S. 158; Cleveland v. United States, 329 U. S. 14.
Plainly enough, appellant’s conscientious objection to Saturday work constitutes no conduct prompted by religious principles of a kind within the reach of state legislation. If, therefore, the decision of the South Carolina Supreme Court is to withstand appellant’s constitutional challenge, it must be either because her disqualification as a beneficiary represents no infringement by the State of her constitutional rights of free exercise, or because any incidental burden on the free exercise of appellant’s religion may be justified by a “compelling state interest in the regulation of a subject within the State’s constitutional power to regulate . . . .” NAACP v. Button, 371 U. S. 415, 438.
II.
We turn first to the question whether the disqualification for benefits imposes any burden on the free exercise of appellant’s religion. We think it is clear that it does. In a sense the consequences of such a disqualification to religious principles and practices may be only an indirect result of welfare legislation within the State’s general competence to enact; it is true that no criminal sanctions directly compel appellant to work a six-day week. But this is only the beginning, not the end, of our inquiry. For “[i]f the purpose &r effect of a law is to impede the* observance of one or all religions or is to discriminate invidiously between religions, that law is constitutionally invalid even though the burden may be characterized as being only indirect.” Braunfeld v. Brown, supra, at 607. Here not only is it apparent that appellant’s declared ineligibility for benefits derives solely from the practice of her religion, but the pressure upon her to forego that practice is unmistakable. The ruling forces her to choose between following the precepts of her religion and forfeiting benefits, on the one hand, and abandoning one of the precepts of her religion in order to accept work, on the other hand. Governmental imposition of such a choice puts the same kind of burden upon the free exercise of religion as would a fine imposed against appellant for her Saturday worship.
Nor may the South Carolina court’s construction of the statute be saved from constitutional infirmity on the ground that unemployment compensation benefits are not appellant’s “right” but merely a “privilege.” It is too late in the day to doubt that the liberties of religion and expression may be infringed by the denial of or placing of conditions upon a benefit or privilege. American Communications Assn. v. Douds, 339 U. S. 382, 390; Wieman v. Updegraff, 344 U. S. 183, 191-192; Hannegan v. Esquire, Inc., 327 U. S. 146,155-156. For example, in Flemming v. Nestor, 363 U. S. 603, 611, the Court recognized with respect to Federal Social Security benefits that “[t]he interest of a covered employee under the Act is of sufficient substance to fall within the protection from arbitrary governmental action afforded by the Due Process Clause.” In Speiser v. Randall, 357 U. S. 513, we emphasized that conditions upon public benefits cannot be sustained if they so operate, whatever their purpose, as to inhibit or deter the exercise of First Amendment freedoms. We there struck down a condition which limited the availability of a tax exemption to those members of the exempted class who affirmed their loyalty to the state government granting the exemption. While the State was surely under no obligation to afford such an exemption, we held that the imposition of such a condition upon even a gratuitous benefit inevitably deterred or discouraged the exercise of First Amendment rights of expression and thereby threatened to “produce a result which .the State could not command directly.” 357 U. S., at 526. “To deny an exemption to claimants who engage in certain forms of speech is in effect to penalize them for such speech.” Id., at 518. Likewise, to condition the availability of benefits upon this appellant’s willingness to violate a cardinal principle of her religious faith effectively penalizes the free exercise of her constitutional liberties.
Significantly South Carolina expressly saves the Sunday worshipper from having to make the kind of choice which we here hold infringes the Sabbatarian’s religious liberty. When in times of “national emergency” the textile plants are authorized by the State Commissioner of Labor to operate on Sunday, “no employee shall be required to work on Sunday,. . . who is conscientiously opposed to Sunday work; and if any employee should refuse to work on Sunday on account of conscientious . . objections he or she shall not jeopardize his or her seniority by such refusal or be discriminated against in any other manner.” S. C. Code, § 64-4. No question of.the disqualification of a Sunday worshipper for benefits is likely to arise, since we cannot suppose that an employer will discharge him in violation of this statute. The unconstitutionality of the disqualification of the Sabbatarian is thus 'Compounded by the religious discrimination which South Carolina’s general statutory scheme necessarily effects.
III.
We must next consider whether some compelling state interest enforced in the eligibility provisions of the South Carolina statute justifies the substantial infringement of appellant’s First- Amendment right. It is basic that no showing merely of a rational relationship to some colorable state interest would suffice; in this highly sensitive constitutional area, “[o]nly the gravest abuses, endangering paramount interests, give occasion for permissible limitation,” Thomas v. Collins, 323 U. S. 516, 530. No such abuse or danger has been advanced in the present caso. The appellees suggest no more than a possibility that the filing of fraudulent claims by unscrupulous claimants feigning religious objections to Saturday work might not only dilute the unemployment compensation fund but also hinder the scheduling by employers of necessary Saturday work. But that possibility is not apposite here because no such objection appears to have been made before the South Carolina Supreme Court, and we are unwilling to assess the importance of an asserted state interest without the views of' the state court. Nor,' if the contention had been made below, would the record appear to sustain it; there is no proof whatever to warrant such fears of malingering or deceit as those which the respondents now advance. Even if consideration of such. evidence is not foreclosed by the prohibition against judicial inquiry into the truth or falsity of religious beliefs, United States v. Ballard, 322 U. S. 78 — a question- as to which we intimate no view since it is not before us — it is highly doubtful whether such evidence would be sufficient to warrant a substantial infringement of religious liberties. For-even if the possibility of spurious claims did threaten to dilute the fund and disrupt the scheduling of work, it would plainly be incumbent upon the appellees to demonstrate that no alternative form's of regulation would combat such abuses without infringing First Amendment rights. Cf. Shelton v. Tucker, 364 U. S. 479, 487-490; Talley v. California, 362 U. S. 60, 64; Schneider v. State, 308 U. S. 147, 161; Martin v. Struthers, 319 U. S. 141, 144-149.
In these respects, then, the state interest asserted in the present case is wholly dissimilar to the interests which were found to justify the less direct burden upon religious practices in Braunfeld v. Brown, supra. The Court recognized that the Sunday closing law which that decision sustained undoubtedly served “to make the practice of [the Orthodox Jewish merchants’] . . . religious beliefs more expensive,” 366 U. S., at 605. But the statute was nevertheless saved by a countervailing factor which finds no equivalent in the instant case — a strong state interest in providing one uniform day of pest for all workers. That secular objective could be achieved, the Court found, only by declaring Sunday to be that day of rest. Requiring exemptions for Sabbatarians, while theoretically possible, appeared to present an administrative problem of such magnitude, or to afford the exempted class so great a competitive advantage, that such a requirement would have rendered the- entire statutory-scheme unworkable. In the present case no such justifications underlie the determination of the state court that appellant’s religion makes her ineligible to receive benefits.
IV.
In holding as we do, plainly we are not fostering the “establishment” of the Seventh-day Adventist religion in South Carolina, for the extension of unemployment benefits to Sabbatarians in common with Sunday worshippers reflects nothing more than the governmental obligation of neutrality in the face of religious differences, and does not represent that involvement of religious with secular institutions which it is the object of the Establishment Clause to forestall. See School District of Abington Township v. Schempp, ante, p. 203. Nor does the recognition of the appellant’s right to unemployment benefits under the state statute serve to abridge any other person’s religious liberties. 'Nor do we, by our decision today, declare the existence of a constitutional right to unemployment benefits on the part of all persons whose religious convictions are the cause of their unemployment. This is not a case in which an employee’s religious convictions serve to make him a nonproductive member of society. See note 2, supra. Finally, nothing we say today constrains the States to adopt any particular form or scheme of unemployment compensation. Our holding today is only that South Carolina may not constitutionally apply the eligibility provisions so as to constrain a. worker to abandon his religious convictions respecting the day of rest. This holding but reaffirms a principle that we announced a decade and a half ago, namely that no State may “exclude individual Catholics, Lutherans, Mohammedans, Baptists, Jews, Methodists, Non-believers, Presbyterians, or the members of any other faith, because of their faith, or lack of it, from receiving the benefits of public welfare legislation:” Everson v. Board of Education, 330 U. S. 1, 16.
In view of the result we have reached under the First and Fourteenth Amendments’ guarantee of free exercise of religion, we have no occasion to- consider appellant’s claim that the denial of benefits also deprived her of the equal protection of the laws in violation of the Fourteenth Amendment.
The judgment of the South Carolina Supreme Court is reversed and the case is remanded for further proceedings not inconsistent with this opinion.
It is so ordered.
Appellant became a member of the Seventh-day Adventist Church in 1957, at a time when her employer, a textile-mill operator, permitted her to work a five-day week. It was not until 1959 that the work week was changed to six days, including Saturday, for all three shifts in the employer’s mill. No question has been raised in this case concerning the sincerity of appellant’s religious beliefs. Nor is there any doubt that the prohibition against Saturday labor is a basic tenet of the Seventh-day Adventist creed, based upon, that religion’s interpretation of the Holy Bible.
After her discharge, appellant sought employment with three other mills in the Spartanburg area, but found no suitable five-day work available at any of the mills. In filing her claim with the Commission, she expressed a willingness to accept employment at other mills, or even in another industry, so long as Saturday work was not required. The record indicates that of the 150 or more'Seventh-day Adventists in the Spartanburg area, only appellant and one other have been unable to find suitable non-Saturd'ay employment.
The pertinent sections of the South Carolina Unemployment Compensation Act (S. C. Code, Tit. 68, §§ 68-1 to 68-404) are as follows:
.“§ 68-113. Conditions of eligibility for benefits. — An unemployed insured worker shall be eligible to receive benefits with respect to any week only if the Commission finds that: ...
“(3) He is able to work and is available for work, but no claimant shall be considered available for work if engaged in self-employment of such nature as to return or promise remuneration in excess of' the weekly benefit amounts he would have received if otherwise unemployed over such period of time.....
“§ 68-114. Disqualification for benefits. — Any insured worker shall be ineligible -for benefits: . . .
“'(2) Discharge for misconduct. — If the Commission finds that he has been discharged for misconduct connected with his most recent work prior to filing a request for determination of insured status or a request for initiation of a claim series within an established benefit year, with such ineligibility beginning with the effective date of such request, and continuing not less than five nor more than the next twenty-two consecutive weeks (in addition to the waiting period), as determined by the- Commission in each case according to the seriousness of the misconduct ....
“(3) Failure to accept work. — (a) If the Commission finds'that he has failed, without good cause, (i) either to apply for available suitable work, when so directed by the employment office or the Commission, (ii) to accept available suitable work when offered him by the employment office or the employer or (iii) to return to his customary self-employment (if any) when so directed by the Commission, such ineligibility shall continue for a period of five weeks (the week in which- such failure occurred and the next four weeks in addition to the waiting period) as determined by the Commission according to the circumstances in each case ....
“(b) In determining whether or not any work is suitable for an individual, the Commission shall consider the degree of risk involved to his health, safety and morals, his physical fitness and prior training, his experience and prior earnings, his length of unemployment and prospects for securing local work in his customary occupation and the distance of the available work from his residence.”
It has been suggested that appellant is not within the elass entitled to benefits under the South Carolina statute because her unemployment did not result from discharge or layoff due to lack of work. It is true that unavailability for work for some personal reasons not having to do with matters of conscience or religion has been held to be a basis of disqualification for benefits. See, e. g., Judson Mills v. South Carolina Unemployment Compensation Comm’n, 204 S. C. 37, 28 S. E. 2d 535; Stone Mfg. Co. v. South Carolina Employment Security Comm’n, 219 S. C. 239, 64 S. E. 2d 644. But appellant claims that the Free Exercise Clause prevents the State from basing the denial of benefits upon the “personal reason” she gives for not working on Saturday. Where the consequence of disqualification so directly affects First Amendment rights, surely we should not conclude that every “personal reason” is a basis for disqualification in the absence of explicit language to that effect in the statute or decisions of the South Carolina Supreme Court. Nothing we have found in the statute or in the cited decisions, cf. Lee v. Spartan Mills, 7 CCH Unemployment Ins. Rep. S. C. ¶ 8156 (C. P. 1944), and certainly nothing in the South Carolina Court’s opinion in this case so construes the statute. Indeed, the contrary seems to have been that court’s basic assumption, for if the eligibility provisions were thus limited, it would have been unnecessary for the court to have decided appellant’s constitutional challenge to the application of the statute under the Free Exercise Clause.
Likewise, the decision of the State Supreme Court does not rest upon a finding, that appellant was disqualified for benefits because she had been “discharged for misconduct” — by reason of her Saturday absences — within the meaning of §68-114(2). That ground was not adopted by the South Carolina Supreme Court, and the appellees do not urge in this Court that the disqualification rests upon that ground.
In a closely analogous context, this Court said:
“. . . the fact that no direct restraint or punishment is imposed upon speech or assembly does not determine the free speech question. Under some circumstances, indirect ‘discouragements’ undoubtedly have the same coercive effect upon the exercise of First Amendment rights as imprisonment, fines, injunctions or taxes. A requirement that adherents of particular religious faiths or political parties wear identifying arm-bands, for example, is obviously of this nature.” American Communications Assn. v. Douds, 339 U. S. 382, 402. Cf. Smith v. California, 361 U. S. 147, 153-155.
See for examples of conditions and qualifications upon governmental privileges and benefits which have been invalidated because of their tendency to inhibit constitutionally protected activity, Steinberg v. United States, 143 Ct. Cl. 1, 163 F. Supp. 590; Syrek v. Cali fornia Unemployment Ins. Board, 54 Cal. 2d 519, 354 P. 2d 625; Fino v. Maryland Employment Security Board, 218 Md. 504, 147 A. 2d 738; Chicago Housing Authority v. Blackman, 4 Ill. 2d 319, 122 N. E. 2d 522; Housing Authority of Los Angeles v. Cordova, 130 Cal. App. 2d 883, 279 P. 2d 215; Lawson v. Housing Authority of Milwaukee, 270 Wis. 269, 70 N. W. 2d 605; Danskin v. San Diego Unified School District, 28 Cal. 2d 536, 171 P. 2d 885; American Civil Liberties Union v. Board of Education, 55 Cal. 2d 167, 359 P. 2d 45; cf. City of Baltimore v. A. S. Abell Co., 218 Md. 273, 145 A. 2d 111. See also Willcox, Invasions of the First Amendment Through Conditioned Public Spending, 41 Cornell L. Q. 12 (1955); Emerson, Toward a General Theory of the First Amendment, 72 Yale L. J. 877, 942-943 (1963); 36 N. Y. U. L. Rev. 1052 (1961); 9 Kan. L. Rev. 346 (1961); Note, Unconstitutional Conditions, 73 Harv. L. Rev. 1595, 1599-1602 (1960).
We note that before the instant decision, state supreme courts had, without exception, granted benefits to persons who were physically available for work but unable to find suitable employment solely because of a religious prohibition against Saturday work. E. g., In re Miller, 243 N. C. 509, 91 S. E. 2d 241; Swenson v. Michigan Employment Security Comm’n, 340 Mich. 430, 65 N. W. 2d 709; Tary v. Board of Review, 161 Ohio St. 251, 119 N. E. 2d 56. Cf. Kut v. Albers Super Markets, Inc., 146 Ohio St. 522, 66 N. E. 2d 643, appeal dismissed sub nom. Kut v. Bureau of Unemployment Compensation, 329 U. S. 669. One author has observed, “the law was settled that conscientious objections to work on the Sabbath made such work unsuitable and that such objectors were nevertheless available for work. .... A contrary opinion would make the unemployment compensation law unconstitutional, as a violation of freedom of religion. Religious convictions, strongly held, are so impelling as to constitute good cause for refusal. Since availability refers to suitable work, religious observers were not unavailable because they excluded Sabbath work.” Altman, Availability for Work: A Study in Unemployment Compensation (1950), 187. See also Sanders, Disqualification for Unemployment Insurance, 8 Vand. L. Rev. 307, 327-328 (1955); 34 N. C. L. Rev. 591 (1956); cf. Freeman, Able To Work and Available for Work, 55 Yale L. J. 123, 131 (1945). Of the 47 States which have- eligibility provisions similar to those of- the South Carolina statute, only 28 appear to have given administrative rulings concerning the eligibility of persons whose religious convictions prevented them from accepting available work. Twenty-two of those States have held such persons entitled to benefits, although apparently only one such decision rests exclusively upon the federal constitutional ground which constitutes -the basis of our decision. See 111 U. of Pa. L. Rev. 253, and n. 3 (1962); 34 N. C. L. Rev. 591, 602, n. 60 (1956).
See Note, State Sunday Laws and the Religious Guarantees of the Federal Constitution, 73 Harv. L. Rev. 729, 741-745 (1960).
These considerations also distinguish the quite different case of Flemming v. Nestor, supra, upon which appellees rely. In that case the Court found that the compelling federal interests which underlay the decision of Congress to impose such a disqualification justified whatever effect the denial of social security benefits may have had upon the disqualified class. See 363 U. S., at 612. And compare Torcaso v. Watkins, supra, in which an undoubted state interest in ensuring the veracity and trustworthiness of Notaries Public was held insufficient to justify the substantial infringement upon the religious freedom of applicants for -that position which resulted from a required oath of belief in God. See 74 Harv. L. Rev. 611, 612-613 (1961); 109 U. of Pa. L. Rev. 611, 614-616 (1961). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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116
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NATIONAL LABOR RELATIONS BOARD v. ROBBINS TIRE & RUBBER CO.
No. 77-911.
Argued April 26, 1978
Decided June 15, 1978
MARSHALL, J., delivered the opinion of the Court, in which Burger, C. J., and Stewart, White, Blackmiun, Rehnquist, and Stevens, JJ., joined. Stevens, J., filed a concurring opinion, in which Burger, C. J., and Rehnquist, J., joined, post, p. 243. Powell, J., filed an opinion concurring in part and dissenting in part, in which Brennan, J., joined, post, p. 243.
Carl L. Taylor argued the cause for petitioner. With him on the brief were Solicitor General McCree, John 8. Irving, Norton J. Come, and Carol A. De Deo.
William M. Earnest argued the cause for respondent. With him on the brief was Charles A. Poellnitz.
Briefs of amici curiae urging affirmance were filed by Stephen A. Bokat and Stanley T. Kaleczyc for the Chamber of Commerce of the United States; by Robert E. Williams, Douglas S. McDowell, and Frank C. Morris, Jr., for the Equal Employment Advisory Council; and by Alan B. Morrison for the Freedom of Information Clearinghouse.
Me. Justice Marshall
delivered the opinion of the Court.
The question presented is whether the Freedom of Information Act (FOIA), 5 U. S. C. § 552 (1976 ed.), requires the National Labor Relations Board to disclose, prior to its hearing on an unfair labor practice complaint, statements of witnesses whom the Board intends to call at the hearing. Resolution of this question depends on whether production of the material prior to the hearing would “interfere with enforcement proceedings” within the meaning of Exemption 7 (A) of FOIA, 5 U. S. C. § 552 (b) (7) (A) (1976 ed.).
I
Following a contested representation election in a unit of respondent’s employees, the Acting Regional Director of the NLRB issued an unfair labor practice complaint charging respondent with having committed numerous violations of § 8 (a)(1) of the National Labor Relations Act (NLRA), 29 U. S. C. §158 (a)(1), during the pre-election period. A hearing on the complaint was scheduled for April 27, 1976. On March 31, 1976, respondent wrote to the Acting Regional Director and requested, pursuant to FOIA, that he make available for inspection and copying, at least seven days prior to the hearing, copies of all potential witnesses’ statements collected during the Board’s investigation. The Acting Regional Director denied this request on April 2, on the ground that this material was exempt from the disclosure requirements of FOIA by various provisions of the Act, see 5 U. S. C. §§ 552 (b)(5), (7)(A), (C), (D) (1976 ed.). He placed particular reliance on Exemption 7 (A), which provides that disclosure is not required of “matters that are... investigatory records compiled for law enforcement purposes, but only to the extent that the production of such records would... interfere with enforcement proceedings.” 5 U. S. C. § 552 (b)(7)(A) (1976 ed.).
Respondent appealed to the Board’s General Counsel. Before expiration of the 20-day period within which FOIA requires such appeals to be decided, 5 U. S. C. § 552 (a)(6) (A)(ii) (1976 ed.), respondent filed this action in the United States District Court for the Northern District of Alabama, pursuant to 5 U. S. C. § 552 (a) (4) (B) (1976 ed.). The complaint sought not only disclosure of the statements, but also a preliminary injunction against proceeding with the unfair labor practice hearing pending final adjudication of the FOIA claim and a permanent injunction against holding the hearing until the documents had been disclosed. At argument in the District Court, the Board contended, inter alia, that these statements were exempt from disclosure under Exemption 7 (A), because their production would “interfere” with a pending enforcement proceeding. The District Court held that, since the Board did not claim that release of the documents at issue would pose any unique or unusual danger of interference with this particular enforcement proceeding, Exemption 7 (A) did not apply. App. 62, 91. It therefore directed the Board to provide the statements for copying on or before April 22, 1976, or at least five days before any hearing where the person making the statement would be called as a witness.
On the Board’s appeal, the United States Court of Appeals for the Fifth Circuit commenced its discussion by observing that while “[t]his is a [FOIA] case,... it takes on the troubling coloration of a dispute about the discovery rights... in [NLRB] proceedings.” 563 F. 2d 724, 726 (1977). It concluded first that the legislative history of certain amendments to FOIA in 1974 demonstrated that Exemption 7 (A) was to be available only where there was a specific evidentiary showing of the possibility of actual interference in an individual case. Id., at 728. It therefore framed the Exemption 7 (A) issue as “whether pre-hearing disclosure of the contents of statements made by those prepared to testify in support of the Board’s case would actually 'interfere’ with the Board’s case.” Id., at 727.
In addressing this question, the Court of Appeals rejected the Board’s argument that the premature revelation of its case that would flow from production of the statements prior to the hearing was the kind of “interference” that would justify nondisclosure under the 1974 amendments. Reasoning that the only statements sought were those of witnesses whose prior statements would, under the Board’s own rules, be disclosed to respondent following the witnesses’ hearing testimony, the court also rejected as inapplicable the argument that potential witnesses would refrain from giving statements at all if pre-hearing disclosure were available. Id., at 729-731. Finally, while the Court of Appeals agreed with the Board that there was “some risk of interference... in the form of witness intimidation” during the five-day period between disclosure and the hearing under the District Court’s order, it held that the Board had failed to sustain its burden of demonstrating the availability of Exemption 7 (A), because it had “introduced [no] evidence tending to show that this kind of intimidation” was in fact likely to occur in this particular case. Id., at 732. Rejecting the Board’s other claimed bases of exemption, the Court of Appeals affirmed.
The Board filed a petition for a writ of certiorari, seeking review, inter alia, of the Exemption 7 (A) ruling below, on the ground that the decision was in conflict with the weight of Circuit authority that had followed the lead of the United States Court of Appeals for the Second Circuit in Title Guarantee Co. v. NLRB, 534 F. 2d 484, cert. denied, 429 U. S. 834 (1976). There, on similar facts, the court held that statements of employees and union representatives obtained in an NLRB investigation leading to an unfair labor practice charge were exempt from disclosure under Exemption 7 (A) until the completion of all reasonably foreseeable administrative and judicial proceedings on the charge. Rejecting the employer’s contention that the Board must make a particularized showing of likely interference in each individual case, the Second Circuit found that such interference would “necessarily” result from the production of the statements. 534 F. 2d, at 491.
We granted certiorari to resolve the conflict among the Circuits on this important question of federal statutory law. 434 U. S. 1061 (1978). We now reverse the judgment of the Fifth Circuit.
II
We have had several occasions recently to consider the history and purposes of the original FOIA of 1966. See EPA v. Mink, 410 U. S. 73, 79-80 (1973); Renegotiation Board v. Bannercraft Clothing Co., 415 U. S. 1 (1974); NLRB v. Bears, Roebuck & Co., 421 U. S. 132 (1975); Department of Air Force v. Rose, 425 U. S. 352 (1976). As we have repeatedly emphasized, “the Act is broadly conceived,” EPA v. Mink, supra, at 80, and its “basic policy” is in favor of disclosure, Department of Air Force v. Rose, supra, at 361. In 5 U. S. C. § 552 (b) (1976 ed.), Congress carefully structured nine exemptions from the otherwise mandatory disclosure requirements in order to protect specified confidentiality and privacy interests. But unless the requested material falls within one of these nine statutory exemptions, FOIA requires that records and material in the possession of federal agencies be made available on demand to any member of the general public.
Exemption 7 as originally enacted permitted nondisclosure of “investigatory files compiled for law enforcement purposes except to the extent available by law to a private party.” 80 Stat. 251. In 1974, this exemption was rewritten to permit the nondisclosure of “investigatory records compiled for law enforcement purposes,” but only to the extent that producing such records would involve one of six specified dangers. The first of these, with which we are here concerned, is that production of the records would “interfere with enforcement proceedings.”
The Board contends that the original language of Exemption 7 was expressly designed to protect existing NLRB policy forbidding disclosure of statements of prospective witnesses until after they had testified at unfair labor practice hearings. In its view, the 1974 amendments preserved Congress’ original intent to protect witness statements in unfair labor practice proceedings from premature disclosure, and were directed primarily at case law that had applied Exemption 7 too broadly to cover any material, regardless of its nature, in an investigatory file compiled for law enforcement purposes. The Board urges that a particularized, case-by-case showing is neither required nor practical, and that witness statements in pending unfair labor practice proceedings are exempt as a matter of law from disclosure while the hearing is pending.
Respondent disagrees with the Board’s analysis of the 1974 amendments. It argues that the legislative history conclusively demonstrates that the determination of whether disclosure of any material would “interfere with enforcement proceedings” must be made on an individual, case-by-case basis. While respondent agrees that the statements sought here are “investigatory files compiled for law enforcement purposes,” and that they are related to an imminent enforcement proceeding, it argues that the Board’s failure to make a specific factual showing that their release would interfere with this proceeding defeats the Board’s Exemption 7 claim.
A
The starting point of our analysis is with the language and structure of the statute. We can find little support in the language of the statute itself for respondent’s view that determinations of “interference” under Exemption 7 (A) can be made only on a case-by-case basis. Indeed, the literal language of Exemption 7 as a whole tends to suggest that the contrary is true. The Exemption applies to:
“investigatory records compiled for law enforcement purposes, but only to the extent that the production of such records would (A) interfere with enforcement proceedings, (B) deprive a person of a right to a fair trial or an impartial adjudication, (C) constitute an unwarranted invasion of personal privacy, (D) disclose the identity of a confidential source and, in the case of a record compiled by a criminal law enforcement authority in the course of a criminal investigation, or by an agency conducting a lawful national security intelligence investigation, confidential information furnished only by the confidential source, (E) disclose investigative techniques and procedures, or (F) endanger the life or physical safety of law enforcement personnel.”
There is a readily apparent difference between subdivision (A) and subdivisions (B), (C), and (D). The latter subdivisions refer to particular cases — “a person,” “an unwarranted invasion,” “a confidential source” — and thus seem to require a showing that the factors made relevant by the statute are present in each distinct situation. By contrast, since subdivision (A) speaks in the plural voice about “enforcement proceedings,” it appears to contemplate that certain generic determinations might be made.
Respondent points to other provisions of FOIA in support of its interpretation. It suggests that, because FOIA expressly provides for disclosure of segregable portions of records and for in camera review of documents, and because the statute places the burden of justifying nondisclosure on the Government, 5 U. S. C. §§ 552 (a) (4) (B), (b) (1976 ed.), the Act necessarily contemplates that the Board must specifically demonstrate in each case that disclosure of the particular witness’ statement would interfere with a pending enforcement proceeding. We cannot agree. The in camera review provision is discretionary by its terms, and is designed to be invoked when the issue before the District Court could not be otherwise resolved; it thus does not mandate that the documents be individually examined in every case. Similarly, although the segregability provision requires that nonexempt portions of documents be released, it does not speak to the prior question of what material is exempt. Finally, the mere fact that the burden is on the Government to justify nondisclosure does not, in our view, aid the inquiry as to what kind of burden the Government bears.
We thus agree with the parties that resolution of the question cannot be achieved through resort to the language of the statute alone. Accordingly, we now turn to an examination of the legislative history.
B
In originally enacting Exemption 7, Congress recognized that law enforcement agencies had legitimate needs to keep certain records confidential, lest the agencies be hindered in their investigations or placed at a disadvantage when it came time to present their cases. Foremost among the purposes of this Exemption was to prevent “harm [to] the Government’s case in court,” S. Rep. No. 813, 89th Cong., 1st Sess. (1965), reprinted in Freedom of Information Act Source Book, Subcommittee on Administrative Practice & Procedure, Senate Judiciary Committee, S. Doc. No. 93-82, p. 44 (1974) (hereinafter cited as 1974 Source Book), by not allowing litigants “earlier or greater access” to agency investigatory files than they would otherwise have, H. R. Rep. No. 1497, 89th Cong., 2d Sess. (1966), reprinted in 1974 Source Book 32. Indeed, in an unusual, post-passage reconsideration vote, the Senate modified the language of this Exemption specifically to meet Senator Humphrey’s concern that it might be construed to require disclosure of “statements of agency witnesses” prior to the time they were called on to testify in agency proceedings. Id., at 110.
Senator Humphrey was particularly concerned that the initial version of the Exemption passed by the Senate might be “susceptible to the interpretation that once a complaint of unfair labor practice is filed by the General Counsel of the NLRB, access could be had to the statements of all witnesses, whether or not these statements are relied upon to support the complaint.” Ibid. He argued against this, noting that “[witnesses would be loath to give statements if they knew that their statements were going to be made known to the parties before the hearing,” id., at 111, and proposed adding another exemption to make clear that “statements of agency witnesses” would be exempt “until such witnesses are called to testify in an action or proceeding,” id., at 110. In direct response to what he described as Senator Humphrey’s “valuable suggestion,” Senator Long offered an amendment resulting in the version of Exemption 7 actually passed in 1966, which Senator Humphrey agreed would "take care of the situation.” Id., at 111.
In light of this history, the Board is clearly correct that the 1966 Act was expressly intended to protect against the mandatory disclosure through FOIA of witnesses’ statements prior to an unfair labor practice proceeding. From one of the first reported decisions under FOIA, Barceloneta Shoe Corp. v. Compton, 271 F. Supp. 591 (PR 1967), through the time of the 1974 amendments, the courts uniformly recognized this purpose. Thus, in Wellman Industries, Inc. v. NLRB, 490 F. 2d 427 (CA4), cert. denied, 419 U. S. 834 (1974), the Court of Appeals held that affidavits obtained by an NLRB investigator during an inquiry into union objections to a representation election, which ultimately led to the filing of an unfair labor practice charge, were exempt from disclosure sought by the employer prior to the hearing on the complaint. It noted that employees might become unwilling to make “ ‘uninhibited and non-evasive statement [s]’ ” if disclosure were granted, 490 F. 2d,'at 431, quoting NLRB v. National Survey Service, Inc., 361 F. 2d 199, 206 (CA7 1966), and emphasized that application of the exemption was “necessary in order to prevent premature disclosure of an investigation so that the Board can present its strongest case in court.” 490 F. 2d, at 431. Accord, NLRB v. Clement Bros. Co., 407 F. 2d 1027, 1031 (CA5 1969).
C
In 1974 Congress acted to amend FOIA in several respects. The move to amend was prompted largely by congressional disapproval of our decision in EPA v. Mink, 410 U. S. 73 (1973), regarding the availability of in camera review of classified documents. Congress was also concerned that administrative agencies were being dilatory in complying with the spirit of the Act and with court decisions interpreting FOIA to mandate disclosure of information to the public. See, e. g., Administration of the Freedom of Information Act, H. R. Rep. No. 92-1419 (1972), reprinted in 1975 Source Book 18, 79-80. As the amending legislation was reported out of the respective Committees, no change in Exemption 7 was recommended. See n. 14, infra. The 1974 amendment of Exemption 7 resulted instead from a proposal on the floor by Senator Hart during Senate debate.
Senator Hart, in introducing his floor amendment, noted that the original intent of the 1966 Congress “was to prevent harm to the Government's case in court by not allowing an opposing litigant earlier or greater access to investigatory files than he would otherwise have.” 1975 Source Book 332. He indicated his continued agreement with this purpose, id., at 333, but stated that recent court decisions had gone beyond this original intent by shielding from disclosure information that Congress had not intended to protect. Senator Hart emphasized his concern that “material cannot be and ought not be exempt merely because it can be categorized as an investigatory file compiled for law enforcement purposes.” Ibid.
In colloquy with Senator Kennedy on the floor, Senator Hart stated specifically, id., at 349, that the amendment's purpose was to respond to four decisions of the District of Columbia Circuit, commencing with the en banc decision in Weisberg v. United States Dept. of Justice, 160 U. S. App. D. C. 71, 489 F. 2d 1195 (1973), cert. denied, 416 U. S. 993 (1974). There, the plaintiff had sought disclosure of certain material in investigatory files relating to the assassination of President Kennedy, files that had been compiled 10 years before. Although the court acknowledged that no enforcement proceedings were then pending or contemplated, it held that all the agency need show to be entitled to withhold under Exemption 7 was that the records were investigatory in nature and had been compiled for law enforcement purposes. 160 U. S. App. D. C., at 74, 489 F. 2d, at 1198. The court adhered to this holding in Aspin v. Department of Defense, 160 U. S. App. D. C. 231, 237, 491 F. 2d 24, 30 (1973), stating that even “after the termination of investigation and enforcement proceedings,” material found in an investigatory file is entirely exempt. In Ditlow v. Brinegar, 161 U. S. App. D. C. 154, 494 F. 2d 1073 (1974), the court indicated that, after Weisberg, the only question before it was whether the requested material was found in an investigatory file compiled for law enforcement purposes. Finally, in Center for National Policy Review on Race and Urban Issues v. Weinberger, 163 U. S. App. D. C. 368, 502 F. 2d 370 (1974), the court held that the investigatory file exemption was available even if an enforcement proceeding were neither imminent nor likely either at the time of the compilation or at the time disclosure was sought. These four cases, in Senator Hart’s view, erected a “stone wall” against public access to any material in an investigatory file. 1975 Source Book 332.
Senator Hart believed that his amendment would rectify these erroneous judicial interpretations and clarify Congress’ original intent in two ways. First, by substituting the word “records” for “files,” it would make clear that courts had to consider the nature of the particular document as to which exemption was claimed, in order to avoid the possibility of impermissible “commingling” by an agency’s placing in an investigatory file material that did not legitimately have to be kept confidential. Id., at 451. Second, it would explicitly enumerate the purposes and objectives of the Exemption, and thus require reviewing courts to “loo;[k] to the reasons” for allowing withholding of investigatory files before making their decisions. Id., at 334. The “woode[n] and mechanica[l]” approach taken by the D. C. Circuit and disapproved by Congress would thereby be eliminated. Id., at 335 (remarks of Sen. Kennedy). As Congressman Moorhead explained to the House, the Senate amendment was needed to address “recent court decisions” that had applied the exemptions to investigatory files “even if they ha[d] long since lost any requirement for secrecy.” Id., at 378.
Thus, the thrust of congressional concern in its amendment of Exemption 7 was to make clear that the Exemption did not endlessly protect material simply because it was in an investigatory file. Although, as indicated previously, no change in this section was reported out of committee, both Senate and House Committees had considered proposals to amend the provision. The Hart amendment was identical in respects here relevant to a proposal submitted during the hearings by the Administrative Law Division of the American Bar Association. 2 Senate Hearings 158, The purpose of this proposal, according to the Chairman of the ABA Administrative Law Division, was to indicate that “with passage of time,... when the investigation is all over and the purpose and point of it has expired, it would no longer be an interference with enforcement proceedings and there ought to be disclosure.” Id., at 149. The tenor of this description of the statutory-language clearly suggests that the release of information in investigatory files prior to the completion of an actual, contemplated enforcement proceeding was precisely the kind of interference that Congress continued to want to protect against. Indeed, Senator Hart stated specifically that Exemption 7 (A) would apply “whenever the Government’s case in court— a concrete prospective law enforcement proceeding — would be harmed by the premature release of evidence or information....” 1975 Source Book 333.
That the 1974 Congress did not mean to undercut the intent of the 1966 Congress with respect to Senator Humphrey’s concern about interference with pending NLRB enforcement proceedings is apparent from the emphasis that both Senators Kennedy and Hart, the leaders in the debate on Exemption 7, placed on the fact that the amendment represented no radical departure from prior case law. While the D. C. Circuit decisions discussed above were repeatedly mentioned and condemned in the debates, nowhere do the floor debates or Committee Reports condemn the decisions holding that Exemption 7 protected witnesses’ statements in pending NLRB proceedings from disclosure, see supra, at 226, although Congress was clearly aware of these decisions. As Senator Hart concluded in his introductory remarks in support of the amendment:
“This amendment is by no means a radical departure from existing case law under the Freedom of Information Act. Until a year ago the courts looked to the reasons for the seventh exemption before allowing the withholding of documents. That approach is in keeping with the intent of Congress and by this amendment we wish to reinstall it as the basis for access to information.” 1975 Source Book 334.
Senator Kennedy confirmed that “by accepting [this] amendment we will be reemphasizing and clarifying what the law presently requires.” Id., at 336. The emphasis that was placed on the limited scope of the amendment makes it more than reasonable to conclude that Congress intended to preserve existing law relating to NLRB proceedings — case law that had looked to the “reasons” for the Exemption and found them to be present where an unfair labor practice proceeding was pending and the documents sought were potential witnesses’ statements.
D
In the face of this history, respondent relies on Senator Hart’s floor statement that “it is only relevant” to determine whether an interference would result “in the context of the particular enforcement proceeding.” Id., at 333. Respondent argues that this statement means that in each case the court must determine whether the material of which disclosure is sought would actually reveal the Government’s case prematurely, result in witness intimidation, or otherwise create a demonstrable interference with the particular case.
We believe that respondent’s reliance on this statement is misplaced. Although Congress could easily have required in so many words that the Government in each case show a particularized risk to its individual “enforcement proceed-in[g],” it did not do so; the statute, if anything, seems to draw a distinction in this respect between subdivision (A) and subdivisions (B), (C), and (D), see supra, at 223-224. Senator Hart’s words are ambiguous, moreover, and must be read in light of his primary concern: that by extending blanket protection to anything labeled an investigatory file, the D. C. Circuit had ignored Congress’ original intent. His remarks plainly do not preclude a court from considering whether “particular” types of enforcement proceedings, such as NLRB unfair labor practice proceedings, will be interfered with by particular types of disclosure.
Respondent also relies on President Ford’s message accompanying his veto of this legislation, and on the debate which led to Congress’ override of the veto. The President’s primary concern was with the congressional response to this Court’s decision in EPA v. Mink, 410 U. S. 73 (1973), concerning in camera judicial review of classified documents under Exemption 1. In addition, however, the President cited what in his view were the onerous new requirements of Exemption 7 that would require the Government to “prove... — separately for each paragraph of each document — that disclosure 'would’ cause” a specific harm. 1975 Source Book 484. The leading supporters of the 1974 amendments, however, did not accept the President’s characterization; instead they indicated, with regard to the amended Exemption 7, that the President’s suggestions were “ludicrous,” id., at 406 (remarks of Rep. Moorhead), and that the “burden is substantially less than we would be led to believe by the President’s message,” id., at 450 (remarks of Sen. Hart).
What Congress clearly did have in mind was that Exemption 7 permit nondisclosure only where the Government “specif [ies] ” that one of the six enumerated harms is present, id., at 413 (remarks of Rep. Reid), and the court, reviewing the question de novo, agrees that one of those six “reasons” for nondisclosure applies. See supra, at 232. Thus, where an agency fails to “demonstrat[e] that the... documents [sought] relate to any ongoing investigation or... would jeopardize any future law enforcement proceedings,” Exemption 7 (A) would not provide protection to the agency’s decision. 1975 Source Book 440 (remarks of Sen. Kennedy). While the Court of Appeals was correct that the amendment of Exemption 7 was designed to eliminate “blanket exemptions” for Government records simply because they were found in investigatory files compiled for law enforcement purposes, we think it erred in concluding that no generic determinations of likely interference can ever be made. We conclude that Congress did not intend to prevent the federal courts from determining that, with respect to particular kinds of enforcement proceedings, disclosure of particular kinds of investigatory records while a case is pending would generally “interfere with enforcement proceedings.”
Ill
The remaining question is whether the Board has met its burden of demonstrating that disclosure of the potential witnesses’ statements at this time “would interfere with enforcement proceedings.” A proper resolution of this question requires us to weigh the strong presumption in favor of disclosure under FOIA against the likelihood that disclosure at this time would disturb the existing balance of relations in unfair labor practice proceedings, a delicate balance that Congress has deliberately sought to preserve and that the Board maintains is essential to the effective enforcement of the NLRA. Although reasonable arguments can be made on both sides of this issue, for the reasons that follow we conclude that witness statements in pending unfair labor practice proceedings are exempt from FOIA disclosure at least until completion of the Board’s hearing.
Historically, the NLRB has provided little prehearing discovery in unfair labor practice proceedings and has relied principally on statements such as those sought here to prove its case. While the NLRB’s discovery policy has been criticized, the Board’s position that § 6 of the NLRA, 29 U. S. C. § 156, commits the formulation of discovery practice to its discretion has generally been sustained by the lower courts. A profound alteration in the Board’s trial strategy in unfair labor practice cases would thus be effectuated if the Board were required, in every case in which witnesses’ statements were sought under FOIA prior to an unfair labor practice proceeding, to make a particularized showing that release of these statements would interfere with the proceeding.
Not only would this change the substantive discovery rules, but it would do so through mechanisms likely to cause substantial delays in the adjudication of unfair labor practice charges. In addition to having a duty under FOIA to provide public access to its processess, the NLRB is charged with the duty of effectively investigating and prosecuting violations of the labor laws | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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81
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HOSANNA-TABOR EVANGELICAL LUTHERAN CHURCH AND SCHOOL v. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION et al.
No. 10-553.
Argued October 5, 2011
Decided January 11, 2012
Douglas Laycock argued the cause for petitioner. With him on the briefs were Kevin J. Hasson, Eric C. Rassbach, Hannah C. Smith, Luke W. Goodrich, Lori H. Windham, and James W. Erwin.
Leondra R. Kruger argued the cause for the federal respondent. With her on the brief were Solicitor General Verrilli, Assistant Attorney General Perez, Joseph R. Pal-more, Dennis J. Dimsey, Sharon M. McGowan, P. David Lopez, Lorraine C. Davis, and Carolyn L. Wheeler. Walter Dellinger argued the cause for respondent Perich. With him on the brief were Sri Srinivasan, Anton Metlit-sky, Loren L. Alikhan, James E. Roach, and Robert M. Vercruysse.
Briefs of amici curiae urging reversal were filed for the American Association of Christian Schools by Robert J. McCully; for the American Bible Society et al. by Stuart J. Lark; for the American Center for Law and Justice et al. by Jay Alan Sekulow, Stuart J. Roth, Colby M. May, James M. Henderson, Sr., David French, Walter M. Weber, and Michael S. Anderson; for the American Jewish Committee et al. by David Dunn and Marc Stern; for the Council for Christian Colleges and Universities by Aaron D. Lindstrom and Matthew T. Nelson; for the Evangelical Covenant Church et al. by Michael W. McConnell; for the International Mission Board of the Southern Baptist Convention et al. by Gene C. Schaerr, Stef-fen N. Johnson, Michael T. Morley, Linda T. Coberly, and William R Fer-ranti; for the Jewish Educational Center et al. by Kelly J. Shackelford and' Hiram S. Sasser III; for the Justice and Freedom Fund by James L. Hirsen and Deborah J. Dewart; for the Lutheran Church — Missouri Synod by Christopher C. Lund and T. Michael Ward; for the Muslim-American Public Affairs Council et al. by Douglas R. Bush and Eric S. Baxter; for the National Jewish Commission on Law and Public Affairs by Nathan Lewin and Alyza D. Lewin; for Religious Organizations and Institutions by Carter G. Phillips, Edward R. McNicholas, David S. Petron, and Gor don D. Todd; for Religious Tribunal Experts by Megan L. Brown; for Trinity Baptist Church of Jacksonville, Inc., by Edward H. Trent and Joseph W. Hatchett; for the United States Conference of Catholic Bishops et al. by Kevin T. Baine, Anthony R. Picarello, Jr., Jeffrey Hunter Moon, Michael F. Moses, Von G. Keetch, and R. Shawn Gunnarson; and for Wall-Builders, Inc. by Steven W. Fitschen.
Briefs of amici curiae urging affirmance were filed for the American Humanist Association et al. by Elizabeth L. Hileman; for Americans United for Separation of Church and State et al. by Ayesha N. Khan, Gregory M. Lipper, Steven R. Shapiro, Daniel Mach, and Michael J. Stein-berg; for the NAACP Legal Defense Fund et al. by Kevin K. Russell, John Payton, Debo P. Adegbile, ReNika C. Moore, Ray P McClain, Linda D. Kilb, Fatima Goss Graves, Dina Lassow, Judith L. Lichtman, and Sarah C. Crawford; for the National Employment Lawyers Association by Eric Schnapper and Rebecca M. Hamburg; for the People for the American Way Foundation by David J. Bederman and Margery F. Baker; and for Neil H. Cogan by Mr. Cogan, pro se.
Briefs of amici curiae were filed for the State of Michigan et al. by Bill Schuette, Attorney General of Michigan, John J. Bursch, Solicitor General, and B. Eric Restuccia, Deputy Solicitor General, and by the Attorneys General for their respective States as follows: Duther Strange of Alabama, Pamela Jo Bondi of Florida, Gregory F. Zoeller of Indiana, James D. “Buddy” Caldwell of Louisiana, Wayne Stenehjem of North Dakota, E. Scott Pruitt of Oklahoma, and Greg Abbott of Texas; for the Anti-Defamation League by Ian Scharfman, Steven M. Freeman, and Steven C. Sheinberg; for Antitrust Professors and Scholars by Harry First, pro se; for BishopAccountability.org et al. by Marci A. Hamilton; for the International Center for Law and Religion Studies at Brigham Young University by W. Cole Durham, Jr., and Robert T. Smith; for Law and Religion Professors by Leslie C. Griffin; for The Rutherford Institute by John W. Whitehead, Bradley J. Andreozzi, and Jason P. Gosselin; and for Eugene Volokh et al. by Thomas C. Berg, Carl H. Esbeck, Richard W Gar-nett, K. Hollyn Hollman, Melissa Rogers, and Kimberlee Wood Colby.
CHIEF Justice Roberts
delivered the opinion of the Court.
Certain employment discrimination laws authorize employees who have been wrongfully terminated to sue their employers for reinstatement and damages. The question presented is whether the Establishment and Free Exercise Clauses of the First Amendment bar such an action when the employer is a religious group and the employee is one of the group’s ministers.
I
A
Petitioner Hosanna-Tabor Evangelical Lutheran Church and School is a member congregation of the Lutheran Church — Missouri Synod, the second largest Lutheran denomination in America. Hosanna-Tabor operated a small school in Redford, Michigan, offering a “Christ-centered education” to students in kindergarten through eighth grade. 582 F. Supp. 2d 881, 884 (ED Mich. 2008) (internal quotation marks omitted).
The Synod classifies teachers into two categories: “called” and “lay.” “Called” teachers are regarded as having been called to their vocation by God through a congregation. To be eligible to receive a call from a congregation, a teacher must satisfy certain academic requirements. One way of doing so is by completing a “colloquy” program at a Lutheran college or university. The program requires candidates to take eight courses of theological study, obtain the endorsement of their local Synod district, and pass an oral examination by a faculty committee. A teacher who meets these requirements may be called by a congregation. Once called, a.teacher receives the formal title “Minister of Religion, Commissioned.” App. 42, 48. A commissioned minister serves for an open-ended term; at Hosanna-Tabor, a call could be rescinded only for cause and by a supermajority vote of the congregation.
“Lay” or “contract” teachers, by contrast, are not required to be trained by the Synod or even to be Lutheran. At Hosanna-Tabor, they were appointed by the school board, without a vote of the congregation, to one-year renewable terms. Although teachers at the school generally performed the same duties regardless of whether they were lay or called, lay teachers were hired only when called teachers were unavailable.
Respondent Cheryl Perich was first employed by Hosanna-Tabor as a lay teacher in 1999. After Perich completed her colloquy later that school year, Hosanna-Tabor asked her to become a called teacher. Perich accepted the call and received a “diploma of vocation” designating her a commissioned minister. Id., at 42.
Perich taught kindergarten during her first four years at Hosanna-Tabor and fourth grade during the 2003-2004 school year. She taught math, language arts, social studies, science, gym, art, and music. She also taught a religion class four days a week, led the students in prayer and devotional exercises each day, and attended a weekly school-wide chapel service. Perich led the chapel service herself about twice a year.
Perich became ill in June 2004 with what was eventually diagnosed as narcolepsy. Symptoms included sudden and deep sleeps from which she could not be roused. Because of her illness, Perich began the 2004-2005 school year on disability leave. On January 27, 2005, however, Perich notified the school principal, Stacey Hoeft, that she would be able to report to work the following month. Hoeft responded that the school had already contracted with a lay teacher to fill Perich’s position for the remainder of the school year. Hoeft also expressed concern that Perich was not yet ready to return to the classroom.
On January 30, Hosanna-Tabor held a meeting of its congregation at which school administrators stated that Perich was unlikely to be physically capable of returning to work that school year or the next. The congregation voted to offer Perich a “peaceful release” from her call, whereby the congregation would pay a portion of her health insurance premiums in exchange for her resignation as a called teacher. Id., at 178, 186. Perich refused to resign and produced a note from her doctor stating that she would be able to return to work on February 22. The school board urged Perich to reconsider, informing her that the school no longer had a position for her, but Perich stood by her decision not to resign.
On the morning of February 22 — the first day she was medically cleared to return to work — Perich presented herself at the school. Hoeft asked her to leave but she would not do so until she obtained written documentation that she had reported to work. Later that afternoon, Hoeft called Perich at home and told her that she would likely be fired. Perich responded that she had spoken with an attorney and intended to assert her legal rights.
Following a school board meeting that evening, board chairman Scott Salo sent Perich a letter stating that Hosanna-Tabor was reviewing the process for rescinding her call in light of her “regrettable” actions. Id., at 229. Salo subsequently followed up with a letter advising Perich that the congregation would consider whether to rescind her call at its next meeting. As grounds for termination, the letter cited Perich’s “insubordination and disruptive behavior” on February 22, as well as the damage she had done to her “working relationship” with the school by “threatening to take legal action.” Id., at 55. The congregation voted to rescind Perich’s call on April 10, and Hosanna-Tabor sent her a letter of termination the next day.
B
Perich filed a charge with the Equal Employment Opportunity Commission, alleging that her employment had been terminated in violation of the Americans with Disabilities Act of 1990, 104 Stat. 327, 42 U. S. C. § 12101 et seq. The ADA prohibits an employer from discriminating against a qualified individual on the basis of disability. § 12112(a). It also prohibits an employer from retaliating “against any individual because such individual has opposed any act or practice made unlawful by [the ADA] or because such individual made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under [the ADA].” § 12203(a).
The EEOC brought suit against Hosanna-Tabor, alleging that Perich had been fired in retaliation for threatening to file an ADA lawsuit. Perich intervened in the litigation, claiming unlawful retaliation under both the ADA and the Michigan Persons with Disabilities Civil Rights Act, Mich. Comp. Laws § 37.1602(a) (1979). The EEOC and Perich sought Perich’s reinstatement to her former position (or frontpay in lieu thereof), along with backpay, compensatory and punitive damages, attorney’s fees, and other injunctive relief.
Hosanna-Tabor moved for summary judgment. Invoking what is known as the “ministerial exception,” the Church argued that the suit was barred by the First Amendment because the claims at issue concerned the employment relationship between a religious institution and one of its ministers. According to the Church, Perich was a minister, and she had been fired for a religious reason — namely, that her threat to- sue the Church violated the Synod’s belief that Christians should resolve their disputes internally.
The District Court agreed that the suit was barred by the ministerial exception and granted summary judgment in Hosanna-Tabor’s favor. The court explained that “Hosanna-Tabor treated Perich like a minister and held her out to the world as such long before this litigation began,” and that the “facts surrounding Perich’s employment in a religious school with a sectarian mission” supported the Church’s characterization. 582 F. Supp. 2d, at 891-892. In light of that determination, the court concluded that it could “inquire no further into her claims of retaliation.” Id., at 892.
The Court of Appeals for the Sixth Circuit vacated and remanded, directing the District Court to proceed to the merits of Perich’s retaliation claims. The Court of Appeals recognized the existence of a ministerial exception barring certain employment discrimination claims against religious institutions — an exception “rooted in the First Amendment’s guarantees of religious freedom.” 597 F. 3d 769, 777 (2010). The court concluded, however, that Perich did not qualify as a “minister” under the exception, noting in particular that her duties as a called teacher were identical to her duties as a lay teacher. Id., at 778-781. Judge White concurred. She viewed the question whether Perich qualified as a minister to be closer than did the majority, but agreed that the “fact that the duties of the contract teachers are the same as the duties of the called teachers is telling.” Id., at 782, 784. We granted certiorari. 563 U. S. 903 (2011).
II
The First Amendment provides, in part, that Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof.” We have said that these two Clauses “often exert conflicting pressures,” Cutter v. Wilkinson, 544 U. S. 709, 719 (2005), and that there can be “internal tension... between the Establishment Clause and the Free Exercise Clause,” Tilton v. Richardson, 403 U. S. 672, 677 (1971) (plurality opinion). Not so here. Both Religion Clauses bar the government from interfering with the decision of a religious group to fire one of its ministers.
A
Controversy between church and state over religious offices is hardly new. In 1215, the issue was addressed in the very first clause of Magna Carta. There, King John agreed that “the English church shall be free, and shall have its rights undiminished and its liberties unimpaired.” The King in particular accepted the “freedom of elections,” a right “thought to be of the greatest necessity and importance to the English church.” J. Holt, Magna Carta App. IV, p. 317, cl. 1 (1965).
That freedom in many cases may have been more theoretical than real. See, e. g., W. Warren, Henry II 312 (1973) (recounting the writ sent by Henry II to the electors of a bishopric in Winchester, stating: “I order you to hold a free election, but forbid you to elect anyone but Richard my clerk”). In any event, it did not survive the reign of Henry VIII, even in theory. The Act of Supremacy of 1534, 26 Hen. 8, ch. 1, made the English monarch the supreme head of the Church, and the Act in Restraint of Annates, 25 Hen. 8, ch. 20, passed that same year, gave him the authority to appoint the Church’s high officials. See G. Elton, The Tudor Constitution: Documents and Commentary 331-332 (1960). Various Acts of Uniformity, enacted subsequently, tightened further the government’s grip on the exercise of religion. See, e. g., Act of Uniformity, 1559, 1 Eliz., ch. 2; Act of Uniformity, 1549, 2 & 3 Edw. 6, ch. 1. The Uniformity Act of 1662, for instance, limited service as a minister to those who formally assented to prescribed tenets and pledged to follow the mode of worship set forth in the Book of Common Prayer. Any minister who refused to make that pledge was “deprived of all his Spiritual Promotions.” Act of Uniformity, 1662, 14 Car. 2, ch. 4.
Seeking to escape the control of the national church, the Puritans fled to New England, where they hoped to elect their own ministers and establish their own modes of worship. See T. Curry, The First Freedoms: Church and State in America to the Passage of the First Amendment 3 (1986); McConnell, The Origins and Historical Understanding of Free Exercise of Religion, 103 Harv. L. Rev. 1409, 1422 (1990). William Penn, the Quaker proprietor of what would eventually become Pennsylvania and Delaware, also sought independence from the Church of England. The charter creating the province of Pennsylvania contained no clause establishing a religion. See S. Cobb, The Rise of Religious Liberty in America 440-441 (1970).
Colonists in the South, in contrast, brought the Church of England with them. But even they sometimes chafed at the control exercised by the Crown and its representatives over religious offices. In Virginia, for example, the law vested the governor with the power to induct ministers presented to him by parish vestries, 2 Hening’s Statutes at Large 46 (1642), but the vestries often refused to make such presentations and instead chose ministers on their own. See H. Eck-enrode, Separation of Church and State in Virginia 13-19 (1910). Controversies over the selection of ministers also arose in other Colonies with Anglican establishments, including North Carolina. See C. Antieau, A. Downey, & E. Roberts, Freedom From Federal Establishment: Formation and Early History of the First Amendment Religion Clauses 10-11 (1964). There, the royal governor insisted that the right of presentation lay with the Bishop of London, but the colonial assembly enacted laws placing that right in the vestries. Authorities in England intervened, repealing those laws as inconsistent with the rights of the Crown. See id., at 11; Weeks, Church and State in North Carolina, Johns Hopkins U. Studies in Hist. & Pol. Sci., 11th Ser., Nos. 5-6, pp. 29-36 (1893).
It was against this background that the First Amendment was adopted. Familiar with life under the established Church of England, the founding generation sought to foreclose the possibility of a national church. See 1 Annals of Cong. 730-731 (1789) (remarks of J. Madison) (noting that the Establishment Clause addressed the fear that “one sect might obtain a pre-eminence, or two combine together, and establish a religion to which they would compel others to conform”). By forbidding the “establishment of religion” and guaranteeing the “free exercise thereof,” the Religion Clauses ensured that the new Federal Government — unlike the English Crown — would have no role in filling ecclesiastical offices. The Establishment Clause prevents the Government from appointing ministers, and the Free Exercise Clause prevents it from interfering with the freedom of religious groups to select their own.
This understanding of the Religion Clauses was reflected in two events involving James Madison, “ ‘the leading architect of the religion clauses of the First Amendment.’ ” Arizona Christian School Tuition Organization v. Winn, 563 U. S. 125, 141 (2011) (quoting Flast v. Cohen, 392 U. S. 83, 103 (1968)). The first occurred in 1806, when John Carroll, the first Catholic bishop in the United States, solicited the Executive’s opinion on who should be appointed to direct the affairs of the Catholic Church in the territory newly acquired by the Louisiana Purchase. After consulting with President Jefferson, then-Seeretary of State Madison responded that the selection of church “functionaries” was an “entirely ecclesiastical” matter left to the Church’s own judgment. Letter from James Madison to Bishop Carroll (Nov. 20, 1806), reprinted in 20 Records of the American Catholic Historical Society 63 (1909). The “scrupulous policy of the Constitution in guarding against a political interference with religious affairs,” Madison explained, prevented the Government from rendering an opinion on the “selection of ecclesiastical individuals.” Id., at 63-64.
The second episode occurred in 1811, when Madison was President. Congress had passed a bill incorporating the Protestant Episcopal Church in the town of Alexandria in what was then the District of Columbia. Madison vetoed the bill, on the ground that it “exceeds the rightful authority to which Governments are limited, by the essential distinction between civil and religious functions, and violates, in particular, the article of the Constitution of the United States, which declares, that ‘Congress shall make no law respecting a religious establishment.’” 22 Annals of Cong. 982-983 (1811). Madison explained:
“The bill enacts into, and establishes by law, sundry rules and proceedings relative purely to the organization and polity of the church incorporated, and comprehending even the election and removal of the Minister of the same; so that no change could be made therein by the particular society, or by the general church of which it is a member, and whose authority it recognises.” Id., at 983 (emphasis added).
B
Given this understanding of the Religion Clauses — and the absence of government employment regulation generally — it was some time before questions about government interference with a church’s ability to select its own ministers came before the courts. This Court touched upon the issue indirectly, however, in the context of disputes over church property. Our decisions in that area confirm that it is impermissible for the government to contradict a church’s determination of who can act as its ministers.
In Watson v. Jones, 13 Wall. 679 (1872), the Court considered a dispute between antislavery and proslavery factions over who controlled the property of the Walnut Street Presbyterian Church in Louisville, Kentucky. The General Assembly of the Presbyterian Church had recognized the antislavery faction, and this Court — applying not the Constitution but a “broad and sound view of the relations of church and state under our system of laws” — declined to question that determination. Id., at 727. We explained that “whenever the questions of discipline, or of faith, or ecclesiastical rule, custom, or law have been decided by the highest of [the] church judicatories to which the matter has been carried, the legal tribunals must accept such decisions as final, and as binding on them.” Ibid. As we would put it later, our opinion in Watson “radiates... a spirit of freedom for religious organizations, an independence from secular control or manipulation — in short, power to decide for themselves, free from state interference, matters of church government as well as those of faith and doctrine.” Kedroff v. Saint Nicholas Cathedral of Russian Orthodox Church in North America, 344 U. S. 94, 116 (1952).
Confronting the issue under the Constitution for the first time in Kedroff, the Court recognized that the “[f]reedom to select the clergy, where no improper methods of choice are proven,” is “part of the free exercise of religion” protected by the First Amendment against government interference. Ibid. At issue in Kedroff was the right to use a Russian Orthodox cathedral in New York City. The Russian Orthodox churches in North America had split from the Supreme Church Authority in Moscow, out of concern that the Authority had become a tool of the Soviet Government. The North American churches claimed that the right to use the cathedral belonged to an archbishop elected by them; the Supreme Church Authority claimed that it belonged instead to an archbishop appointed by the patriarch in Moscow. New York’s highest court ruled in favor of the North American churches, based on a state law requiring every Russian Orthodox church in New York to recognize the determination of the governing body of the North American churches as authoritative. Id., at 96-97, 99, n. 3, 106, n. 10.
This Court reversed, concluding that the New York law violated the First Amendment. Id., at 107. We explained that the controversy over the right to use the cathedral was “strictly a matter of ecclesiastical government, the power of the Supreme Church Authority of the Russian Orthodox Church to appoint the ruling hierarch of the archdiocese of North America.” Id., at 115. By “passing] the control of matters strictly ecclesiastical from one church authority to another,” the New York law intruded the “power of the state into the forbidden area of religious freedom contrary to the principles of the First Amendment.” Id., at 119. Accordingly, we declared the law unconstitutional because it “directly prohibited] the free exercise of an ecclesiastical right, the Church’s choice of its hierarchy.” Ibid.
This Court reaffirmed these First Amendment principles in Serbian Eastern Orthodox Diocese for United States and Canada v. Milivojevich, 426 U. S. 696 (1976), a case involving a dispute over control of the American-Canadian Diocese of the Serbian Orthodox Church, including its property and assets. The Church had removed Dionisije Milivojevich as bishop of the American-Canadian Diocese because of his defiance of the church hierarchy. Following his removal, Dio-nisije brought a civil action in state court challenging the Church’s decision, and the Illinois Supreme Court “purported in effect to reinstate Dionisije as Diocesan Bishop,” on the ground that the proceedings resulting in his removal failed to comply with church laws and regulations. Id., at 708.
Reversing that judgment, this Court explained that the First Amendment “permit[s] hierarchical religious organizations to establish their own rules and regulations for internal discipline and government, and to create tribunals for adjudicating disputes over these matters.” Id., at 724. When ecclesiastical tribunals decide such disputes, we further explained, “the Constitution requires that civil courts accept their decisions as binding upon them.” Id., at 725. We thus held that by inquiring into whether the Church had followed its own procedures, the State Supreme Court had “unconstitutionally undertaken the resolution of quintessentially religious controversies whose resolution the First Amendment commits exclusively to the highest ecclesiastical tribunals” of the Church. Id., at 720.
C
Until today, we have not had occasion to consider whether this freedom of a religious organization to select its ministers is implicated by a suit alleging discrimination in employment. The Courts of Appeals, in contrast, have had extensive experience with this issue. Since the passage of Title VII of the Civil Rights Act of 1964, 42 U. S. C. §2000e et seq., and other employment discrimination laws, the Courts of Appeals have uniformly recognized the existence of a “ministerial exception,” grounded in the First Amendment, that precludes application of such legislation to claims concerning the employment relationship between a religious institution and its ministers.
We agree that there is such a ministerial exception. The members of a religious group put their faith in the hands of their ministers. Requiring a church to accept or retain an unwanted minister, or punishing a church for failing to do so, intrudes upon more than a mere employment decision. Such action interferes with the internal governance of the church, depriving the church of control over the selection of those who will personify its beliefs. By imposing an unwanted minister, the state infringes the Free Exercise Clause, which protects a religious group’s right to shape its own faith and mission through its appointments. According the state the power to determine which individuals will minister to the faithful also violates the Establishment Clause, which prohibits government involvement in such ecclesiastical decisions.
The EEOC and Perich acknowledge that employment discrimination laws would be unconstitutional as applied to religious groups in certain circumstances. They grant, for example, that it would violate the First Amendment for courts to apply such laws to compel the ordination of women by the Catholic Church or by an Orthodox Jewish seminary. Brief for Federal Respondent 31; Brief for Respondent Perich 35-36. According to the EEOC and Perich, religious organizations could successfully defend against employment discrimination claims in those circumstances by invoking the constitutional right to freedom of association — a right “implicit” in the First Amendment. Roberts v. United States Jaycees, 468 U. S. 609, 622 (1984). The EEOC and Perich thus see no need — and no basis — for a special rule for ministers grounded in the Religion Clauses themselves.
We find this position untenable. The right to freedom of association is a right enjoyed by religious and secular groups alike. It follows under the EEOC’s and Perich’s view that the First Amendment analysis should be the same, whether the association in question is the Lutheran Church, a labor union, or a social club. See Perich Brief 31; Tr. of Oral Arg. 28. That result is hard to square with the text of the First Amendment itself, which gives special solicitude to the rights of religious organizations. We cannot accept the remarkable view that the Religion Clauses have nothing to say about a religious organization’s freedom to select its own ministers.
The EEOC and Perich also contend that our decision in Employment Div., Dept, of Human Resources of Ore. v. Smith, 494 U. S. 872 (1990), precludes recognition of a ministerial exception. In Smith, two members of the Native American Church were denied state unemployment benefits after it was determined that they had been fired from their jobs for ingesting peyote, a crime under Oregon law. We held that this did not violate the Free Exercise Clause, even though the peyote had been ingested for sacramental purposes, because the “right of free exercise does not relieve an individual of the obligation to comply with a valid and neutral law of general applicability on the ground that the law proscribes (or prescribes) conduct that his religion prescribes (or proscribes).” Id., at 879 (internal quotation marks omitted).
It is true that the ADA’s prohibition on retaliation, like Oregon’s prohibition on peyote use, is a valid and neutral law of general applicability. But a church’s selection of its ministers is unlike an individual’s ingestion of peyote. Smith involved government regulation of only outward physical acts. The present case, in contrast, concerns government interference with an internal church decision that affects the faith | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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31
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FEDERAL POWER COMMISSION v. IDAHO POWER CO.
No. 12.
Argued October 20-21, 1952.
Decided November 10, 1952.
Philip Elman argued the cause for petitioner. With him on the brief were Acting Solicitor General Stern, Assistant Attorney General Baldridge, Paul A. Sweeney, Morton Liftin, Bradford Ross and Willard W. Gatchell.
Harry A. Poth, Jr. and A. C. Inman argued the cause and filed a brief for respondent.
Mr. Justice Douglas
delivered the opinion of the Court.
Respondent applied to petitioner under § 4 (e) of the Federal Power Act, 41 Stat. 1065, 49 Stat. 840, 16 U. S. C. § 797 (e), for a license to construct, operate, and maintain a hydroelectric project (known as the Bliss development) on the Snake River in southern Idaho. This project included a dam and power plant occupying some 500 acres of lands of the United States and two transmission lines. These lines for most of their length crossed lands of the United States and joined the company’s interconnected primary transmission system.
The United States has power projects in this area; and the Bureau of Reclamation and the Bonneville Power Administration were contemplating the construction of a transmission line which would connect the same areas as respondent’s proposed lines. Therefore the Federal Power Commission, on the suggestion of the Secretary of the Interior, authorized the project on conditions specified in paragraph (F) of the order. These conditions, in summary, were that the licensee permit the interconnection of transmission facilities of the United States with the two transmission lines, and the transfer over those lines of energy generated in power plants owned by the United States “in such amounts as will not unreasonably interfere” with the licensee’s use of the lines, the United States to pay the licensee for government power so transmitted.
Respondent petitioned for review of the Commission’s order. The Court of Appeals held that the Commission had no authority to attach the condition. It entered a judgment that the Commission’s order “be modified” and that the cause be remanded to the Commission “for the entry of an order in accordance with the opinion of this Court.” That was on May 10, 1951. 89 U. S. App. D. C. 1, 189 F. 2d 665. The Commission moved for a clarification of the judgment. On September 21, 1951, the Court of Appeals entered a new judgment, stating that the order of the Commission “be, and it is hereby, modified by striking therefrom paragraph (F) thereof, and that the order of the Federal Power Commission herein as thus modified be, and it is hereby, affirmed.” The petition for certiorari was filed within 90 days of the amended order but more than 90 days after the first order. The question which therefore lies at the threshold of the case is whether the petition is timely. See 28 U. S. C. §2101 (c).
First. If the court did no more by the second judgment than to restate what it had decided by the first one, Department of Banking v. Pink, 317 U. S. 264, would apply and the 90 days would start to run from the first judgment. But the court by the second judgment undertook to modify the license. By the first judgment it did no more than keep the Commission within the bounds set by its opinion. On remand the Commission might have reissued the order without the contested conditions or it might have withheld its consent to any license. It is the Commission’s judgment on which Congress has placed its reliance for control of licenses. See §§ 6, 10 (a), 10 (g). When the court decided that the license should issue without the conditions, it usurped an administrative function. There doubtless may be situations where the provision excised from the administrative order is separable from the remaining parts or so minor as to make remand inappropriate. But the guiding principle, violated here, is that the function of the reviewing court ends when an error of law is laid bare. At that point the matter once more goes to the Commission for reconsideration. See Federal Communications Commission v. Pottsville Broadcasting Co., 309 U. S. 134; Federal Trade Commission v. Morton Salt Co., 334 U. S. 37. The Court, it is true, has power “to affirm, modify, or set aside” the order of the Commission “in whole or in part.” § 313 (b). But that authority is not power to exercise an essentially administrative function. See Ford Motor Co. v. Labor Board, 305 U. S. 364, 373-374; Siegel Co. v. Federal Trade Commission, 327 U. S. 608. The nature of the determination is emphasized by § 10 (a) which specifies that the project adopted “shall be such as in the judgment of the Commission will be best adapted to a comprehensive plan ... for the improvement and utilization of water-power development, and for other beneficial public uses.” Whether that objective may be achieved if the contested conditions are stricken from the order is an administrative, not a judicial, decision.
Second. The power of Congress over public lands, conferred by Art. IV, § 3 of the Constitution, is “without limitations,” as we stated in United States v. San Francisco, 310 U. S. 16, 29. The Court of Appeals, while recognizing that principle, held that Congress had not granted the Commission authority to condition the use of public lands by requiring a public utility to carry government power. It relied on § 201 (f) of the Act which says that “No provision in this Part shall apply to . . . the United States . . . .” The Part referred to is Part II of the Act which set up a system of control over the transmission of electric energy in interstate commerce. It. granted the Commission authority, among other things, to direct a public utility to establish physical connection of its transmission facilities with the facilities of other persons engaged in the transmission or sale of electric energy. § 202 (b). Since that power was not extended to the United States, the court concluded that a license under Part I of the Act could not be conditioned on an interconnection with federal power.
Part I and Part II provide different regulatory schemes. Part II is an exercise of the commerce power over public utilities engaged in the interstate transmission and sale of electric energy. See S. Rep. No. 621, 74th Cong., 1st Sess., p. 17. Part II does not undertake to regulate public lands or the use of navigable streams. That function is covered by Part I, which dates back to the Federal Water Power Act of 1920, 41 Stat. 1063. Section 4 (e) of Part I gives the Commission power to issue licenses to private or public bodies for the purpose of “constructing, operating, and maintaining dams, water conduits, reservoirs, power houses, transmission lines, or other project works necessary or convenient for the development and improvement of navigation and for the development, transmission, and utilization of power across, along, from, or in any of the streams or other bodies of water over which Congress has jurisdiction under its authority to regulate commerce with foreign nations and among the several States, or upon any part of the public lands and reservations of the United States . . . (Italics added.)
By § 4 (g) the Commission is given authority to investigate the actual or intended occupancy of “public lands” for the purpose of developing electric power and to issue such order as it may find “appropriate, expedient, and in the public interest to conserve and utilize the . . . water-power resources of the region.” As already noted, § 10 (a) provides that no license shall be granted unless in the judgment of the Commission the project “will be best adapted to a comprehensive plan ... for the improvement and utilization of water-power development, and for other beneficial public uses . . .; and if necessary in order to secure such plan the Commission shall have authority to require the modification of any project . . . before approval.”
Under these sections the Commission is plainly made the guardian of the public domain. The requirement that existing lines be fully utilized before additional lines are authorized would seem to be relevant to a decision under § 10 (a) that the project submitted was consonant with the “comprehensive plan” for the waterway. And the Commission might well determine under § 4 (g) that if public lands are to be used for the transmission of power, conservation of the “water-power resources of the region” requires that public power as well as private power be transmitted over them.
Sections 4 and 10 speak specifically of the public domain — waterways and public lands. Section 6 makes each license subject to all the terms and conditions of the Act and to “such further conditions, if any, as the Commission shall prescribe in conformity with this Act . . . .” Section 6, read in the context of §§ 4 and 10, would seem to give ample authority to the Commission to attach the conditions imposed here. Protection of the public domain, conservation of water-power resources, development of comprehensive plans for the waterways — each of these might on the facts of a case be sufficient to authorize the grant of permission to a public utility company to use the public domain provided it agreed to use its excess capacity to transmit government power.
It is difficult for us to read § 201 (f) as in any way affecting that power. Sections 201 (f) and 202 deal with interconnections of facilities generally. They do not extend the new powers granted by Part II to government lines. On the other hand they do not purport to change or alter any power granted under Part I. They do not deal with the grant of licenses. They do not purport to lay down conditions for the issuance of licenses for use of the public domain. We therefore cannot construe the limitation on the new powers conferred by Part II as a repeal by implication of the powers over licensees that are deeply engrained in Part I of the Act and put there by the Congress for the purpose of protecting the public domain.
Reversed.
Mr. Justice Burton and Mr. Justice Clark took no part in the consideration or decision of this case.
An argument is made that the Commission’s motion for clarification was untimely under the rules of the Court of Appeals governing petitions for rehearing. Assuming, arguendo, that the motion was a petition for rehearing within the meaning of those rules, it was entertained and considered on the merits (cf. Bowman v. Loperena, 311 U. S. 262; Pfister v. Finance Corp., 317 U. S. 144, 149) and the new judgment entered was erroneous.
Sections 4 (e) and 10 (a) appeared in the Federal Water Power Act of 1920, 41 Stat. 1063, 1065, 1068. Section 4 (g) was added by the Public Utility Holding Company Act of 1935, 49 Stat. 838, 841. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
51
] | sc_adminaction |
AMERICAN MEDICAL ASSOCIATION et al. v. FEDERAL TRADE COMMISSION
No. 80-1690.
Argued January 11, 1982
Decided March 23, 1982
Newton N. Minow argued the cause for petitioners. With him on the briefs were Jack R. Bierig, David W. Carpenter, William J. Doyle, and Linda L. Randell.
Howard E. Shapiro argued the cause for respondent. With him on the brief were Solicitor General Lee, Assistant Attorney General Baxter, Deputy Solicitor General Shapiro, Elliott Schulder, March Coleman, and L. Barry Costilo
Peter M. Sfikas filed a brief for the American Dental Association as amicus curiae urging reversal.
A brief for the’ State of Ohio et al. as amici curiae urging affirmance was. filed by William J. Brown, Attorney General of Ohio, and Eugene F. McShane, Charles.D. Weller, and Clifton E. Johnson, Assistant Attorneys General; Robert K. Corbin, Attorney General of Arizona; J. D. MacFarlane, Attorney General of Colorado, and Thomas P. McMahon, Assistant Attorney General; Carl R. Ajello, Attorney General of Connecticut, and Robert M. Larger and John R. Lacey, Assistant Attorneys General; Thomas J. Miller, Attorney General of Iowa, and John R. Perkins, Assistant Attorney General; Stephen H. Sachs, Attorney General of Maryland, and Charles 0. Monk II and Naomi F. Samet, Assistant Attorneys General; Warren Spannaus, Attorney General of Minnesota, and Stephen P. Kilgrijf, Special Assistant Attorney General; Paul L. Douglas, Attorney General of Nebraska, and Dale A. Comer, Assistant Attorney General; JejfBingaman, Attorney General of New Mexico, and James J. Wechsler and Richard H. Levin, Assistant Attorneys General; Robert Abrams, Attorney General of New York, and Lloyd Constantine, Assistant Attorney General; Rufus L. Edmisten, Attorney General of North Carolina, H. A. Cole, Jr., Special Deputy Attorney General, and Fred R. Gamin, Assistant Attorney General; Leroy S. Zimmerman, Attorney General of Pennsylvania, and Carl S. Hisiro, Deputy Attorney General; Dennis J. Roberts II, Attorney General of Rhode Island, and Patrick J. Quinlan, Special Assistant Attorney General; and Chauncey H. Browning, Attorney General of West Virginia, and Charles G. Brown, Deputy Attorney General.
Per Curiam.
The judgment is affirmed by an equally divided Court.
Justice Blackmun took no part in the consideration or decision of this case. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
56
] | sc_adminaction |
TRAVELERS HEALTH ASSOCIATION et al. v. VIRGINIA ex rel. STATE CORPORATION COMMISSION.
No. 76.
Argued November 15, 1949. —
-Reargued April 17, 1950.—
Decided June 5, 1950.
Moses G. Hubbard, Jr. argued the cause for appellants. With him on the brief was Thomas B. Gay.
Walter E. Rogers, Assistant Attorney General of Virginia, argued the cause for appellee. With him on the brief was J. Lindsay Almond, Jr., Attorney General.
A brief supporting appellee was filed as amici curiae by Nathaniel L. Goldstein, Attorney General, Wendell P. Brown, Solicitor General, and John C. Crary, Jr., Assistant Attorney General, for the State of New York; William L. Phinney, Attorney General, for the State of New Hampshire; and Hall Hammond, Attorney General, for the State of Maryland.
Mr. Justice Black
delivered the opinion of the Court.
In an effort to protect its citizens from “unfairness, imposition or fraud” in sales of certificates of insurance and other forms of securities, the Virginia “Blue Sky Law” requires those selling or offering such securities to obtain a permit from the State Corporation Commission. Applicants for permits must meet comprehensive conditions: they must, for example, provide detailed information concerning their solvency, and must agree that suits can be filed against them in Virginia by service of process on the Secretary of the Commonwealth.
While violation of the Act is a misdemeanor punishable by criminal sanctions, § 6 provides another method for enforcement. After notice and a hearing “on the merits,” the State Corporation Commission is authorized to issue a cease and desist order restraining violations of the Act. The section also provides for service by registered mail where other types of service are unavailable “because the offering is by advertisement and/or solicitation through periodicals, mail, telephone, telegraph, radio, or other means of communication from beyond the limits of the State The highest court of Virginia rejected contentions that this section violates constitutional requirements of due process, and the case is properly here on appeal under 28 U. S. C. § 1257 (2).
In this case cease and desist proceedings under § 6 were instituted by the State Corporation Commission against Travelers Health Association and against R. E. Pratt, as treasurer of the Association and in his personal capacity. Having received notice by registered mail only, they appeared “specially” for “the sole purpose of objecting to the alleged jurisdiction of the Commonwealth of Virginia and of its State Corporation Commission, and of moving to set aside, and quash service of summons The agreed stipulation of facts and certain exhibits offered by the state can be summarized as follows:
The appellant Travelers Health Association was incorporated in Nebraska as a nonprofit membership association in 1904. Since that time its only office has been located in Omaha, from which it has conducted a mail-order health insurance business. New members pay an initiation fee and obligate themselves to pay periodic assessments at the Omaha office. The funds so collected are used for operating expenses and sick benefits to members. The Association has no paid agents; its new members are usually obtained through the unpaid activities of those already members, who are encouraged to recommend the Association to friends and submit their names to the home office. The appellant Pratt in Omaha mails solicitations to these prospects. He encloses blank applications which, if signed and returned to the home office with the required fee, usually result in election of applicants as members. Certificates are then mailed, subject to return within 10 days “if not satisfactory.” Travelers has solicited Virginia members in this manner since 1904, and has caused many sick benefit claims to be investigated. When these proceedings were instituted, it had approximately 800 Virginia members.
The Commission, holding that the foregoing facts supported the state’s power to act in § 6 proceedings, overruled appellants’ objection to jurisdiction and their motion to quash service. The Association and its treasurer were ordered to cease and desist from further solicitations or sales of cértificates to Virginia residents “through medium of any advertisement from within or from without the State, and/or through the mails or otherwise, by intra- or inter-state communication, . . . unless and until” it obtained authority in accordance with the “Blue Sky Law.” This order was affirmed by the Virginia Court of Appeals. 188 Va. 877, 882, 51 S. E. 2d 263, 271.
Appellants do not question the validity of the Virginia law “to the extent that it provides that individual and corporate residents of other states shall not come into the State for the purpose of doing business there without first submitting to the regulatory authority of the State.” As to such state power see, e. g., Hall v. Geiger-Jones Co., 242 U. S. 539. Their basic contention is that all their activities take place in Nebraska, and that consequently Virginia has no power to reach them in cease and desist proceedings to enforce any part of its regulatory law. We cannot agree with this general due process objection, for we think the state has power to issue a “cease and desist order” enforcing at least that regulatory provision requiring the Association to accept service of process by Virginia claimants on the Secretary of the Commonwealth.
Appellants’ chief reliance for the due process contention is on Minnesota Assn. v. Benn, 261 U. S. 140. There a Minnesota association obtained members in Montana by the same mail solicitation process used by Travelers to get Virginia members. The certificates issued to Montana members also reserved the right to investigate claims, although the Court pointed out that Benn’s claim had not been investigated. This Court held that since the contracts were “executed and to be performed” in Minnesota, the Association was not “doing business” in Montana and therefore could not be sued in /Montana courts unless “consent” to Montana suits could be implied. The Court found the circumstances under which the insurance transactions took place insufficient to support such an implication.
But where business activities reach out beyond one state and create continuing relationships and obligations with citizens of another state, courts need not resort to a fictional “consent” in order to sustain the jurisdiction of regulatory agencies in the latter state. And in considering what constitutes “doing business” sufficiently to justify regulation in the state where the effects of the “business” are felt, the narrow grounds relied on by the Court in the Benn case cannot be deemed controlling.
In Osborn v. Ozlin, 310 U. S. 53, 62, we recognized that a state has a legitimate interest in all insurance policies protecting its residents against risks, an interest which the state can protect even though the “state action may have repercussions beyond state lines . . . .” And in Hoope ston Canning Co. v. Cullen, 318 U. S. 313, 316, we rejected the contention, based on the Benn case among others, that a state’s power to regulate must be determined by a “conceptualistic discussion of theories of the place of contracting or of performance.” Instead we accorded “great weight” to the “consequences” of the contractual obligations in the state where the insured resided and the “degree of interest” that state had in seeing that those obligations were faithfully carried out. And in International Shoe Co. v. Washington, 326 U. S. 310, 316, this Court, after reviewing past cases, concluded: “due process requires only that in order to subject a defendant to a judgment in personam, if he be not present within the territory of the forum, he have certain minimum contacts with it such that the maintenance of the suit does not offend 'traditional notions of fair play and substantial justice.’ ”
Measured by the principles of the Osborn, Hoopeston and International Shoe cases, the contacts and ties of appellants with Virginia residents, together with that state’s interest in faithful observance of the certificate obligations, justify subjecting appellants to cease and desist proceedings under § 6. The Association did not engage in mere isolated or short-lived transactions. Its insurance certificates, systematically and widely delivered in Virginia following solicitation based on recommendations of Virginians, create continuing obligations between the Association and each of the many certificate holders in the state. Appellants have caused claims for losses to be investigated and the Virginia courts were available to them in seeking to enforce obligations created by the group of certificates. See International Shoe Co. v. Washington, supra, at 320.
Moreover, if Virginia is without power to require this Association to accept service of process on the Secretary of the Commonwealth, the only forum for injured certificate holders might be Nebraska. Health benefit claims are seldom so large that Virginia policyholders could afford the expense and trouble of a Nebraska law suit. In addition, suits on alleged losses can be more conveniently tried in Virginia where witnesses would most likely live and where claims for losses would presumably be investigated. Such factors have been given great weight in applying the doctrine of jorum non conveniens. See Gulj Oil Co. v. Gilbert, 330 U. S. 501, 508. And prior decisions of this Court have referred to the unwisdom, unfairness and injustice of permitting policyholders to . seek redress only in some distant state where the insurer is incorporated. The Due Process Clause does not forbid a state to protect its citizens from such injustice.
There is, of course, one method by which claimants could recover from appellants in Virginia courts without the aid of substituted service of process: certificate holders in Virginia could all be garnished to the extent of their obligations to the Association. See Huron Corp. v. Lincoln Co., 312 U. S. 183, 193. While such an indirect procedure would undeniably be more troublesome to claimants than the plan adopted by the state in its “Blue Sky Law,” it would clearly be even more harassing to the Association and its Virginia members. Metaphysical concepts of “implied consent” and “presence” in a state should not be solidified into a constitutional barrier against Virginia’s simple, direct and fair plan for service of process on the Secretary of the Commonwealth.
We hold that Virginia’s subjection of this Association to the jurisdiction of that State’s Corporation Commission in a § 6 proceeding is consistent with “fair play and substantial justice,” and is not offensive to the Due Process Clause.
Appellants also contend that § 6 as here applied violates due process because the Commission order attempts to “destroy or impair” their right to make contracts in Nebraska with Virginia residents. Insofar as this contention can be raised in a special appearance merely to contest jurisdiction, it is essentially the same as the due process issue discussed above. For reasons just given, Virginia has power to subject Travelers to the jurisdiction of its Corporation Commission, and its cease and desist provisions designed to accomplish this purpose “can not be attacked merely because they affect business activities which are carried on outside the state.” Hoopeston Canning Co. v. Cullen, supra, 320-321. See also Osborn v. Ozlin, 310 U. S. 53, 62. These two opinions make clear that Allgeyer v. Louisiana, 165 U. S. 578, requires no different result.
Appellants concede that in the Osborn and Hoopeston cases we sustained state laws providing protective standards for policyholders in those states, even though compliance with those standards by the insurance companies could have repercussions on similar out-of-state contracts. It is argued, however, that those cases are distinguishable because they both involved companies which were “licensed to do business in the state of the forum and were actually doing business within the state . . . .” But while Hoopeston Canning Co. had done business in New York under an old law, it brought the case here to challenge certain provisions of a new licensing law with which it had to comply if it was to do business there in the future. Thus it was seeking the same kind of relief that appellants seek here, and for the same general purpose. What we there said as to New York’s power is equally applicable to Virginia’s power here.
It is also suggested that service of process on appellants by registered mail does not meet due process requirements. What we have said answers this contention insofar as it alleges a lack of state jurisdiction because appellants were served outside Virginia. If service by mail is challenged as not providing adequate and reasonable notice, the contention has been answered by International Shoe Co. v. Washington, supra, 320-321. See also Mullane v. Central Hanover Bank, 339 U. S. 306.
The due process questions we have already discussed are the only alleged errors relied on in appellants’ brief, and appellants’ special appearance only challenged state jurisdiction and the service of process. We therefore have no occasion to discuss the scope of the Commission’s order, or the methods by which the state might attempt to enforce it.
Affirmed.
Acts of the General Assembly of Virginia, 1928, c. 529, p. 1373, as amended, Acts of 1932, c. 236, p. 434; Michie’s 1942 Code of Virginia, § 3848 (47) et seq.
Michie §3848 (51), (55).
Lumbermen’s Ins. Co. v. Meyer, 197 U. S. 407, 418, 419; Mutual Life Ins. Co. v. Spratley, 172 U. S. 602, 619; cf. International Shoe Co. v. Washington, 326 U. S. 310, 319.
One federal question suggested in the appellants’ statement of jurisdiction was that § 6 as interpreted by the state court infringed federal control of the mails delegated to Congress by Art. I, § 8, cl. 7 of the United States Constitution. But appellants’ brief on submission of the ease does not include this question in the “specifications of errors relied upon” and does not even mention that constitutional clause.
For examples of problems which might be raised by attempts to impose punishment for violation of the order, see Strassheim v. Daily, 221 U. S. 280, 284-285; cf. Hyatt v. Corkran, 188 U. S. 691, 712, 719. Section 6 itself provides no method for enforcement, except insofar as such stature might be attributed to its provision for giving a cease and desist order “publicity ... to the public through the press or otherwise as the commission may, in its discretion, determine to be advisable for the reasonable information and protection of the public.” | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
116
] | sc_adminaction |
NORTHWEST CENTRAL PIPELINE CORP. v. STATE CORPORATION COMMISSION OF KANSAS et al.
No. 86-1856.
Argued November 29, 1988
Decided March 6, 1989
Brennan, J., delivered the opinion for a unanimous Court.
Harold, L. Talisman argued the cause for appellant. With him on the briefs were Bobby Potts, Lewis A. Posekany, Jr., John H. Cary, Jeffrey D. Komarow, Michael E. Small, and Mark H. Adams II.
Frank A. Caro, Jr., argued the cause for appellee. With him on the brief was Shari M. Feist.
Michael R. Lazerwitz argued the cause for the United States and the Federal Energy Regulatory Commission as amici curiae urging affirmance. With him on the brief were Solicitor General Fried, Deputy Solicitor General Merrill, Harriet S. Shapiro, Catherine C. Cook, Jerome M. Feit, John H. Conway, and Timm L. Abendroth.
Briefs of amici curiae urging affirmance were filed for the Council of State Governments et al. by Benna Ruth Solomon; Beate Bloch, and Robert F. Shapiro; for the Interstate Oil Compact Commission by Richard C. Byrcl and IT. Timothy Dowd; and for the Railroad Commission of Texas et al. by Hal Stratton, Attorney General of New Mexico, Robert G. Stovall, Assistant Attorney General, Nicholas J. Spaeth, Attorney General of North Dakota, Lindil C. Fowler, Jr., G. Gail Watkins, and David B. Robinson.
Justice Brennan
delivered the opinion of the Court.
In this appeal, we must decide whether a regulation adopted by the State Corporation Commission of Kansas (KCC) to govern the timing of production of natural gas from the Kansas-Hugoton field violates either the Supremacy or the Commerce Clause of the Constitution. We hold that it does not.
I
At issue is a KCC regulation providing for the permanent cancellation of producers’ entitlements to quantities of Kansas-Hugoton gas. Designed as a counterweight to market, contractual, and regulatory forces that have led interstate pipelines to cut back purchases from Kansas-Hugoton producers, the KCC’s regulation seeks to encourage timely production of gas quotas by providing that the right to extract assigned amounts of gas will permanently be lost if production is too long delayed. Appellant Northwest Central Pipeline Corporation, an interstate pipeline, argues that the KCC’s regulation is pre-empted by federal regulation of the interstate natural gas business because it exerts pressure on pipelines to increase purchases from Hugoton producers and so affects their purchase mixes and cost structures, and because it impinges on exclusive federal control over the abandonment of gas reserves dedicated to interstate commerce. Northwest Central also urges that the regulation violates the Commerce Clause because it coerces pipelines to give Kansas producers a larger share of the interstate gas market at the expense of producers in other States, or, alternatively, causes the diversion of gas from the interstate to the intrastate market.
A
Kansas’ regulation of the Hugoton field is an effort to solve perplexing problems in assigning and protecting property rights in a common pool of gas and in preventing waste of limited natural resources. Gas migrates from high-pressure areas of a pool around shut-in (or slow-producing) wells to low-pressure areas around producing (or faster producing) wells. As a consequence of this phenomenon a single producing well might exhaust an entire gas pool, though rights in the pool belong to many different owners. Absent countervailing regulation or agreement among all owners, the fact that gas migrates to low-pressure, heavily produced areas creates an incentive for an owner to extract gas as fast as possible, in order both to prevent other owners draining gas it might otherwise produce, and to encourage migration to its own wells that will enable it to capture a disproportionate share of the pool. A rush to produce, however, may cause waste. For example, gas may be produced in excess of demand; more wells may be drilled than are necessary for the efficient production of the pool; or the field may be depleted in such a way that it is impossible to recover all potentially available mineral resources (in particular oil, which is recovered using reservoir energy often supplied by associated natural gas reserves). See generally McDonald, Prorationing of Natural Gas Production: An Economic Analysis, 57 U. Colo. L. Rev. 153 (1985-1986).
The common-law rule of capture, whereby gas was owned by whoever produced it from the common pool, left unchecked these twin problems of perceived inequities between owners of rights in the pool and of waste resulting from strong economic disincentives to conserve resources. Ibid. In response, producing States like Kansas have abandoned the rule of capture in favor of assigning more equitable correlative rights among gas producers and of directly regulating production so as to prevent waste. Kansas by statute prohibits waste, Kan. Stat. Ann. §55-701 (1983); directs the KCC to “regulate the taking of natural gas from any and all common sources of supply within this state in order to prevent the inequitable or unfair taking of natural gas from a common source of supply,” Kan. Stat. Ann. §55-703(a) (Supp. 1987); and gives content to the concept of equitable taking of natural gas by obliging the KCC to regulate so that producers
“may produce only that portion of all the natural gas that may be currently produced without waste and to satisfy the market demands, as will permit each developed lease to ultimately produce approximately the amount of gas underlying the developed lease and currently produce proportionately with other developed leases in the common source of supply without uncompensated cognizable drainage between separately-owned, developed leases or parts thereof.” Ibid.
Pursuant to statutory authority, the KCC in 1944 adopted the Basic Proration Order for the Hugoton field, after finding that uncompensated drainage caused by disproportionate production had impaired the correlative rights of owners of developed Hugoton leases. See Basic Proration Order ¶¶ (d) — (f), App. 9-11. The object of the order was to fix a formula for determining well production quotas or “allow-ables” at such a level that, without waste, “each developed lease will be enabled to currently produce its... allowable so that ultimately such developed lease will have an opportunity to produce approximately the amount of gas which underlies such lease.” App. 7; see also Basic Proration Order ¶(j), App. 17. To this end, the KCC was to set a monthly gas production ceiling for the Kansas-Hugoton field based on estimates of market demand, and to assign a portion of this production to individual wells as an allowable in an amount keyed to the acreage served by the well and to the well’s “deliverability,” or ability to put gas into a pipeline against pipeline pressure (a factor that increases with wellhead pressure). Id., ¶¶(g) — (1), App. 11-22.
The Hugoton Basic Proration Order also allows for tolerances in the production of a well’s allowable to account for underproduction or overproduction, which may be caused by variations in demand for a producer’s gas. If a well produces less than its allowable it accrues an “underage.” If it produces more than its allowable it accrues an “overage.” Kansas’ achievement of its goal that each well should have the opportunity eventually to produce approximately the gas underlying the developed lease depends upon drainage occurring over time to compensate for any accrued underage or overage. At issue in this case is the constitutionality of the regulation the KCC adopted in 1983 to encourage production of, and hence compensating drainage for, vast underages that it found had accrued as a result of pipelines’ decisions to.use the Hugoton field for storage while taking gas for current needs from elsewhere.
Prior to the 1983 amendment, the Basic Proration Order for the Hugoton field provided that underages were canceled after they reached six or nine times the monthly allowable, depending upon the adjusted deliverability of the well, but that canceled underages could readily be reinstated so as in effect to be available for use at any time. Id., ¶(p), App. 23-24. Under this regulatory scheme, however, the Hugo-ton field had become greatly underproduced, with noncan-celed underages totaling 204 billion cubic feet and canceled and unreinstated underages totaling 314 billion cubic feet as of September 1, 1982. App. to Juris. Statement 74a, 76a. It also appeared that the field was seriously imbalanced, because some producers had accrued substantial overages during the same period. App. 128-130.
This underproduction and imbalance resulted from a combination of interrelated market, contractual, and regulatory factors. Kansas-Hugoton gas is substantially dedicated by long-term contract to five interstate pipelines, including appellant Northwest Central. These pipelines purchase gas from Kansas producers for transportation and resale outside the State. A sixth major purchaser of Kansas-Hugoton gas is the Kansas Power and Light Company, which buys gas for the intrastate market.
The interstate pipelines generally entered into their current contracts to purchase Kansas-Hugoton gas at a time when the market was little developed and oligopsonic. These contracts usually provide for relatively low prices and do not contain “take-or-pay” provisions requiring the purchaser to pay for some minimum quantity of gas irrespective of whether it takes current delivery. Since these contracts were made, however, the gas market has gone through considerable changes. See Pierce, State Regulation of Natural Gas in a Federally Deregulated Market: The Tragedy of the Commons Revisited, 73 Cornell L. Rev. 15, 18-20 (1987). Following a period of federal maintenance of low wellhead price ceilings under the Natural Gas Act (NGA), 52 Stat. 821, as amended, 15 U. S. C. § 717 et seq., an acute shortage of natural gas during the 1970’s prompted Congress to enact the Natural Gas Policy Act of 1978 (NGPA), 92 Stat. 3352, 15 U. S. C. §3301 et seq. To encourage production, the NGPA took wellhead sales of “new” and “high-cost” gas outside the coverage of the NGA, § 601(a)(1)(B), 15 U. S. C. § 3431(a) (1)(B), and provided instead for market-driven wellhead pricing, at first up to a high ceiling, and later with no ceiling. See § 102(b), 15 U. S. C. § 3312(b) (new gas ceilings); § 103(b), 15 U. S. C. § 3313(b) (high-cost gas ceilings); §121, 15 U. S. C. §3331 (elimination of price controls). Many pipelines responded to the availability of new, higher priced deregulated gas by committing themselves to long-term contracts at high prices that required them to take-or-pay for a large part of a producer’s contractually dedicated gas reserves. When the market dwindled in the early 1980’s, interstate pipelines reduced their takes under contracts with Kansas-Hugoton producers for “old,” low-priced gas, in large part because these contracts included no take-or-pay penalty. As a result, production from parts of the field fell. In effect, interstate purchasers began to use the Hugoton field for storage while they took gas for their immediate needs from elsewhere — a practice facilitated by paragraph (p) of the Hugoton Basic Proration Order, which permitted stored gas to be produced more or less at any time.
At the same time, however, Kansas-Hugoton producers dependent upon other purchasers in different contractual and market situations suffered no cutback in takes and indeed accumulated substantial overages. See Pierce, 73 Cornell L. Rev., at 47. For example, wells produced by Mesa Petroleum Company delivering gas for the intrastate market to the Kansas Power and Light Company were overproduced by 2.6 billion cubic feet by late 1982. Northwest Central Pipeline Corp. v. Kansas Corp. Comm’n, 237 Kan. 248, 252, 699 P. 2d 1002, 1008 (1985). See App. 128-130.
The substantial Hugoton underages and field imbalance prompted a KCC investigation. After conducting a hearing, the KCC, on February 16, 1983, issued the order challenged in this case, amending paragraph (p) of the Basic Proration Order to provide for the permanent cancellation of underages in certain circumstances. The KCC determined that the imbalance between overproduced and underproduced Hugo-ton wells was causing drainage between wells that posed a threat to the correlative rights of producers. The KCC further found that, were permanent cancellation of underages the alternative to their timely production, existing underages might be reduced, future underages deterred, and balance restored to the field. App. to Juris. Statement 72a-75a. As Mr. Ron Cook, a member of the KCC’s staff, explained in his testimony at the hearing, producers that had accrued substantial underages might never be able to produce them without a rule change, and hence might not be able to benefit from their correlative rights to a proportionate share of the field’s reserves:
“Correlative rights have been and are currently being violated by the uncompensated drainage that is occurring due to the unratable taking of allowables between offsetting leases. Future projection of gas production from the Hugoton Field indicate [s] that this trend of accumulating more underage and cancelled underage will continue for a number of years.
“There is a definite possibility that near the end of many of the wells[’] productive li[ves], there will be a tremendous amount of cancelled underage that will never be reinstated due to the physical inability of the wells to make up such underage. This will result in a greater violation of correlative rights, because under the present provisions of Paragraph P of the basic order, there is no incentive to reinstate cancelled underage in a timely manner in order to prevent the large volumes of underage which will be cancelled permanently at the time the well is abandoned.
“Therefore, it is the intent of the staff’s proposed amendment to paragraph (p)] to provide an incentive for the producer and purchaser to run more gas in order to prevent more underage being cancelled and to establish... a timely manner in which to begin reinstating and making up previously cancelled underage.” App. 35-36; see also Pierce, 73 Cornell L. Rev., at 47.
Thus, the purpose of the new regulation was to “instill the incentive for the purchasers and the producers to run more gas out of the field,” App. 44, in order that Kansas producers with underages might produce their current allowables and accumulated underage and obtain compensating drainage, id., at 49, prior to the field’s exhaustion, see id., at 48.
B
The natural gas industry is subject to interlocking regulation by both federal and state authorities. The NGA continues to govern federal regulation of “old” gas — gas already dedicated to interstate commerce when the NGPA was enacted and not otherwise excluded from federal regulation— including most Kansas-Hugoton gas. NGA § 1(b), 15 U. S. C. § 717(b), provides for exclusive Federal Energy Regulatory Commission (FERC) jurisdiction over “the transportation of natural gas in interstate commerce,... the sale in interstate commerce of natural gas for resale..., and... natural-gas companies engaged in such transportation or sale.” This jurisdiction encompasses regulation of market entry through FERC’s authority to issue certificates of public convenience and necessity authorizing pipelines to transport and sell gas in interstate commerce, NGA §7(e), 15 U. S. C. §717f(e), and of market exit through FERC’s control over the abandonment of certificated interstate service. NGA § 7(b), 15 U. S. C. §717f(b). FERC’s powers also extend to enforcing wellhead price ceilings for old gas, now set forth in §§ 104 and 106(a) of the NGPA, 15 U. S. C. §§3314 and 3316(a); and to regulating other terms of sales of regulated gas for resale, ensuring that rates, and practices and contracts affecting rates, are just and reasonable. NGA §§4 and 5, 15 U. S. C. §§ 717c and 717d; see NGPA § 601(a), 15 U. S. C. § 3431(a). Pursuant to these powers FERC regulates the mix of purchases by natural gas pipelines. See, e. g., Northwest Central Pipeline Corp., 44 FERC ¶ 61,222 (1988), aff’g 33 FERC ¶63,067 (1985) (finding various of appellant’s purchasing practices to be prudent). A pipeline’s purchase mix affects both its costs and the prices for which it sells its gas, see, e. g., Columbia Gas Transmission Corp., 43 FERC ¶61,482 (1988) (average cost of gas purchases passed through to pipeline’s customers), and so comes within FERC’s exclusive authority under the NGA “to regulate the wholesale pricing of natural gas in the flow of interstate commerce from wellhead to delivery to consumers.” Maryland v. Louisiana, 451 U. S. 725, 748 (1981).
Section 1(b) of the NGA, 15 U. S. C. § 717(b), also expressly carves out a regulatory role for the States, however, providing that the States retain jurisdiction over intrastate transportation, local distribution, and distribution facilities, and over “the production or gathering of natural gas.”
Relying on Northern Natural Gas Co. v. State Corporation Comm’n of Kansas, 372 U. S. 84, 90-93 (1963), for the proposition that the federal regulatory scheme pre-empts state regulations that may have either a direct or indirect effect on matters within federal control, Northwest Central challenged the new paragraph (p) of the Basic Proration Order on the grounds that, though directed to producers, it impermis-sibly affects interstate pipelines’ purchasing mix and hence price structures, and requires the abandonment of gas dedicated to interstate commerce, both matters within FERC’s jurisdiction under the NGA. On rehearing, the KCC dismissed this challenge, distinguishing Northern Natural because the rule at issue there had directly regulated purchasers; the purpose of the amendment to paragraph (p), on the other hand, “is to prevent waste, protect the correlative rights of mineral interests owners and promote the orderly-development of the field, functions clearly reserved to the states under the production exemption of the [NGA]. The February 16th order does not require pipelines purchasers to do anything or refrain from doing anything.” App. to Juris. Statement 87a. On petition for judicial review, the District Court of Gray County, Kansas, found that the change in paragraph (p) would provide an incentive to purchasers to take more Kansas-Hugoton gas, and as a result would “cause a change in the'mix’ of natural gas which pipelines transport for sale many miles away.” Id., at 58a. But despite the new order’s probable consequences for pipeline purchasing practices and price structures, the District Court held that it fell within the production and gathering exemption of NGA § 1(b), 15 U. S. C. § 717(b), because it was directed to gas producers, which were the subject of the threatened cancellation of allowables. Id., at 59a. The Kansas Supreme Court affirmed on the same ground. Northwest Central Pipeline Corp. v. Kansas Corp. Comm’n, 237 Kan. 248, 699 P. 2d 1002 (1985). It stated that the challenged order “obviously is intended for purchasers.” Id., at 266, 699 P. 2d, at 1017. Nevertheless, the court held that because the order directly related to producers’ allowables, and because “the matter of allowables must be construed to pertain to production^ t]he rules on underages are a part of production regulation and thus are not violative of the [NGA], even though purchasers are indirectly caught in the backwash.” Id., at 267, 699 P. 2d, at 1017.
We vacated the Kansas Supreme Court’s judgment, Northwest Central Pipeline Corp. v. Corporation Comm’n of Kansas, 475 U. S. 1002 (1986), and remanded for further consideration in light of our decision in Transcontinental Pipe Line Corp. v. State Oil and Gas Bd. of Mississippi, 474 U. S. 409 (1986) (Transco) — a case in which we had declared the post-NGPA vitality of Northern Natural’s holding that state regulations requiring purchasers to take gas ratably from producers are pre-empted by the federal regulatory power over pipelines’ costs and purchasing patterns. See n. 8, supra. On remand, the Kansas Supreme Court reaffirmed its prior decision, distinguishing Transco, as it had Northern Natural, on the ground that the state regulation in that case governed the actions of purchasers rather than producers. It held that as a regulation of producers, aimed primarily at the production of gas rather than at its marketing, paragraph (p), as amended, was not pre-empted. 240 Kan. 638, 645-646, 732 P. 2d 775, 780 (1987). We noted probable jurisdiction, 486 U. S. 1021 (1988), and now affirm.
II
Congress has the power under the Supremacy Clause of Article VI of the Constitution to pre-empt state law. Determining whether it has exercised this power requires that we examine congressional intent. In the absence of explicit statutory language signaling an intent to pre-empt, we infer such intent where Congress has legislated comprehensively to occupy an entire field of regulation, leaving no room for the States to supplement federal law, Rice v. Santa Fe Elevator Corp., 331 U. S. 218 (1947), or where the state law at issue conflicts with federal law, either because it is impossible to comply with both, Florida Lime & Avocado Growers, Inc. v. Paul, 373 U. S. 132, 142-143 (1963), or because the state law stands as an obstacle to the accomplishment and execution of congressional objectives, Hines v. Davidowitz, 312 U. S. 52, 67 (1941). See Schneidewind v. ANR Pipeline Co., 485 U. S. 293, 299-300 (1988); Louisiana Public Service Comm’n v. FCC, 476 U. S. 355, 368-369 (1986); Pacific Gas & Electric Co. v. State Energy Resources Conservation and Development Comm’n, 461 U. S. 190, 203-204 (1983). Paragraph (p) of the Hugoton Basic Proration Order regulates in a field that Congress expressly left to the States; it does not conflict with the federal regulatory scheme; hence it is not pre-empted.
A
We first consider appellant’s claim that Kansas’ paragraph (p) regulates in a field occupied by Congress, because it intrudes upon FERC’s continuing authority under the NGA and NGPA comprehensively to regulate the transportation and prices of “old” gas sold in interstate commerce and to oversee interstate pipelines’ purchasing mixes.
When it enacted the NGA, Congress carefully divided up regulatory power over the natural gas industry. It “did not envisage federal regulation of the entire natural-gas field to the limit of constitutional power. Rather it contemplated the exercise of federal power as specified in the Act.” FPC v. Panhandle Eastern Pipe Line Co., 337 U. S. 498, 502-503 (1949). Indeed, Congress went so far in § 1(b) of the NGA, 15 U. S. C. § 717(b), as to prescribe not only “the intended reach of the [federal] power, but also [to] specif [y] the areas into which this power was not to extend.” 337 U. S., at 503. Section 1(b) conferred on federal authorities exclusive jurisdiction “over the sale and transportation of natural gas in interstate commerce for resale,” Northern Natural, 372 U. S., at 89, at the same time expressly reserving to the States the power to regulate, among other things “the production or gathering of natural gas,” that is, “the physical acts of drawing gas from the earth and preparing it for the first stages of distribution.” Id., at 90.
It has long been recognized that absent pre-emptive federal legislation or regulation, States may govern the production of natural resources from a common pool, in order to curb waste and protect the correlative rights of owners, by prorating production among the various wells operating in a field. See Champlin Refining Co. v. Corporation Comm’n of Oklahoma, 286 U. S. 210 (1932); Thompson v. Consolidated Gas Utilities Corp., 300 U. S. 55 (1937). The power “to allocate and conserve scarce natural resources” remained with the States after the enactment of the NGA, as a result of the system of dual state and federal regulation established in § 1(b) of that Act. Northern Natural, supra, at 93. The terms “production and gathering” in § 1(b) are sufficient in themselves to reserve to the States not merely “control over the drilling and spacing of wells and the like,” Colorado Interstate Gas Co. v. FPC, 324 U. S. 581, 603 (1945), but also the power to regulate rates of production over time — a key element, after all, in efforts to prevent waste and protect correlative rights. In any event, the legislative history of the NGA, explored at length in our decision in Panhandle Eastern, supra, makes plain Congress’ intent not to interfere with the States’ power in that regard. The Solicitor of the Federal Power Commission (FPC), the predecessor of FERC, assured Congress that an earlier bill substantially similar to the NGA did “not attempt to regulate the gathering rates” of gas producers, that being a matter of purely local concern. Hearings on H. R. 11662 before a Subcommittee of the House Committee on Interstate and Foreign Commerce, 74th Cong., 2d Sess., 34 (1936); see Panhandle Eastern, supra, at 505, n. 7. And more generally, the legislative history of the NGA is replete with assurances that the Act “takes nothing from the State [regulatory] commissions: they retain all the State power they have at the present time,” 81 Cong. Rec. 6721 (1937); see also Panhandle Eastern, supra, at 509-512, and n. 15 — power that included the proration of gas production in aid of conservation and the protection of correlative rights.
In considering whether Kansas in amending paragraph (p) has moved into a field that Congress has marked out for comprehensive and exclusive federal control, we naturally must remember the express jurisdictional limitation on FERC’s powers contained in § 1(b) of the NGA. Cf. Louisiana Public Service Comm’n, 476 U. S., at 370. That section fences off from FERC’s reach the regulation of rates of gas production in “language... certainly as sweeping as the wording of the provision declaring... [FERC’s] role.” Ibid. The NGA “was designed to supplement state power and to produce a harmonious and comprehensive regulation of the industry. Neither state nor federal regulatory body was to encroach upon the jurisdiction of the other.” FPC v. Panhandle Eastern Pipeline Co., 337 U. S., at 513 (footnotes omitted). To avoid encroachment on the powers Congress intended to reserve to the States, we must be careful that we do not “by an extravagant... mode of interpretation push powers granted over transportation and rates so as to include production.” Id., at 513-514.
To find that Congress occupies the field in which Kansas’ regulation operates would be to engage in just such an extravagant interpretation of the scope of federal power. Paragraph (p) is directed to the behavior of gas producers, and regulates their rates of production as a means of exercising traditional state control over the conservation of natural resources and the protection of correlative rights. To be sure, it specifically provides that producers’ accrued under-ages will be canceled if not used within a certain period, and it is expected that this may result in pipelines making purchasing decisions that have an effect on their cost structures and hence on interstate rates. But paragraph (p) operates as one element in a proration scheme of precisely the sort that Congress intended by § 1(b) to leave within a State’s authority, and in fact amounts to an effort to encourage producers to extract the allowables assigned under that pro-ration scheme. It would be strange indeed to hold that Congress intended to allow the States to take measures to prorate production and set allowables in furtherance of legitimate conservation goals and in order to protect property rights, but that — because enforcement might have some effect on interstate rates —it did not intend that the States be able to enforce these measures by encouraging actual production of allowables. In analyzing whether Kansas entered a pre-empted field, we must take seriously the lines Congress drew in establishing a dual regulatory system, and we conclude that paragraph (p) is a regulation of “production or gathering” within Kansas’ power under the NGA.
By paying due attention to-Congress’ intent that the States might continue to regulate rates of production in aid of conservation goals and the protection of producers’ correlative rights, we may readily distinguish Northern Natural and Transco, upon which appellant mainly relies. In both those cases we held state regulations requiring gas purchasers to take gas ratably from producers were pre-empted, because they impinged on the comprehensive federal scheme regulating interstate transportation and rates. Northern Natural, 372 U. S., at 91-93; Transco, 474 U. S., at 422-424. In Northern Natural, we held that ratable-take orders “invalidly invade[d] the federal agency’s exclusive domain” precisely because they were “unmistakably and unambiguously directed at purchasers.” 372 U. S., at 92 (emphasis in original). Interstate pipelines operate within the field reserved under the NGA for federal regulation, buying gas in one State and transporting it for resale in another, so inevitably the States are pre-empted from directly regulating these pipelines in such a way as to affect their cost structures. Ibid. Likewise in Transco, in which we considered whether the rule in Northern Natural had survived deregulation of many interstate rates by the NGPA, we held that federal authority over transportation and rates — now expressed in a determination that rates should be unregulated and settled by market forces — continued to occupy the field and to preempt state ratable-take orders directed | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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116
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McWILLIAMS v. COMMISSIONER OF INTERNAL REVENUE.
NO. 945.
Argued May 8,1947. —
Decided June 16, 1947.
John A. Hadden argued the cause for petitioners. With him on the brief was John S. Beard, Jr.
Arnold Raum argued the cause for respondent. With him on the brief were Acting Solicitor General Washington, Sewall Key, Lee A. Jackson and Morton K. Rothschild.
Mr. Chief Justice Vinson
delivered the opinion of the Court.
The facts of these cases are not in dispute. John P. McWilliams, petitioner in No. 945, had for a number of years managed the large independent estate of his wife, petitioner in No. 947, as well as his own. On several occasions in 1940 and 1941 he ordered his broker to sell certain stock for the account of one of the two and to buy the same number of shares of the same stock for the other, at as nearly the same price as possible. He told the broker that his purpose was to establish tax losses. On each occasion the sale and purchase were promptly negotiated through the Stock Exchange, and the identity of the persons buying from the selling spouse and of the persons selling to the buying spouse was never known. Invariably, however, the buying spouse received stock certificates different from those which the other had sold. Petitioners filed separate income tax returns for these years, and claimed the losses which he or she sustained on the sales as deductions from gross income.
The Commissioner disallowed these deductions on the authority of § 24 (b) of the Internal Revenue Code, which prohibits deductions for losses from “sales or exchanges of property, directly or indirectly . . . Between members of a family,” and between certain other closely related individuals and corporations.
On the taxpayers’ applications to the Tax Court, it held § 24 (b) inapplicable, following its own decision in Ickelheimer v. Commissioner, and expunged the Commissioner’s deficiency assessments. The Circuit Court of Appeals reversed the Tax Court and we granted certiorari because of a conflict between circuits and the importance of the question involved.
Petitioners contend that Congress could not have intended to disallow losses on transactions like those described above, which, having been made through a public market, were undoubtedly bona fide sales, both in the sense that title to property was actually transferred, and also in the sense that a fair consideration was paid in exchange. They contend that the disallowance of such losses would amount, pro tanto, to treating husband and wife as a single individual for tax purposes.
In support of this contention, they call our attention to the pre-1934 rule, which applied to all sales regardless of the relationship of seller and buyer, and made the deductibility of the resultant loss turn on the “good faith” of the sale, i. e., whether the seller actually parted with title and control. They point out that in the case of the usual intra-family sale, the evidence material to this issue was peculiarly within the knowledge and even the control of the taxpayer and those amenable to his wishes, and inaccessible to the Government. They maintain that the only purpose of the provisions of the 1934 and 1937 Revenue Acts — the forerunners of § 24 (b) — was to overcome these evidentiary difficulties by disallowing losses on such sales irrespective of good faith. It seems to be petitioners’ belief that the evidentiary difficulties so contemplated were only those relating to proof of the parties’ observance of the formalities of a sale and of the fairness of the price, and consequently that the legislative remedy applied only to sales made immediately from one member of a family to another, or mediately through a controlled intermediary.
We are not persuaded that Congress had so limited an appreciation of this type of tax avoidance problem. Even assuming that the problem was thought to arise solely out of the taxpayer’s inherent advantage in a contest concerning the good or bad faith of an intra-family sale, deception could obviously be practiced by a buying spouse’s agreement or tacit readiness to hold the property sold at the disposal of a selling spouse, rather more easily than by a pretense of a sale where none actually occurred, or by an unfair price. The difficulty of determining the finality of an intra-family transfer was one with which the courts wrestled under the pre-1934 law, and which Congress undoubtedly meant to overcome by enacting the provisions of § 24 (b) ,
It is clear, however, that this difficulty is one which arises out of the close relationship of the parties, and would be met whenever, by prearrangement, one spouse sells and another buys the same property at a common price, regardless of the mechanics of the transaction. Indeed, if the property is fungible, the possibility that a sale and purchase may be rendered nugatory by the buying spouse’s agreement to hold for the benefit of the selling spouse, and the difficulty of proving that fact against the taxpayer, are equally great when the units of the property which the one buys are not the identical units which the other sells.
Securities transactions have been the most common vehicle for the creation of intra-family losses. Even if we should accept petitioners’ premise that the only purpose of § 24 (b) was to meet an evidentiary problem, we could agree that Congress did not mean to reach the transactions in this case only if we thought it completely indifferent to the effectuality of its solution.
Moreover, we think the evidentiary problem was not the only one which Congress intended to meet. Section 24 (b) states an absolute prohibition — not a presumption — against the allowance of losses on any sales between the members of certain designated groups. The one common characteristic of these groups is that their members, although distinct legal entities, generally have a near-identity of economic interests. It is a fair inference that even legally genuine intra-group transfers were not thought to result, usually, in economically genuine realizations of loss, and accordingly that Congress did not deem them to be appropriate occasions for the allowance of deductions.
The pertinent legislative history lends support to this inference. The Congressional Committees, in reporting the provisions enacted in 1934, merely stated that “the practice of creating losses through transactions between members of a family and close corporations has been frequently utilized for avoiding the income tax,” and that these provisions were proposed to “deny losses to be taken in the case of [such] sales” and “to close this loophole of tax avoidance.” Similar language was used in reporting the 1937 provisions. Chairman Doughton of the Ways and Means Committee, in explaining the 1937 provisions to the House, spoke of “the artificial taking and establishment of losses where property was shuffled back and forth between various legal entities owned by the same persons or person,” and stated that “these transactions seem to occur at moments remarkably opportune to the real party in interest in reducing his tax liability but, at the same time allowing him to keep substantial control of the assets being traded or exchanged.”
We conclude that the purpose of § 24 (b) was to put an end to the right of taxpayers to choose, by intra-family transfers and other designated devices, their own time for realizing tax losses on investments which, for most practical purposes, are continued uninterrupted.
We are clear as to this purpose, too, that its effectuation obviously had to be made independent of the manner in which an intra-group transfer was accomplished. Congress, with such purpose in mind, could not have intended to include within the scope of § 24 (b) only simple transfers made directly or through a dummy, or to exclude transfers of securities effected through the medium of the Stock Exchange, unless it wanted to leave a loop-hole almost as large as the one it had set out to close.
Petitioners suggest that Congress, if it truly intended to disallow losses on intra-family transactions through the market, would probably have done so by an amendment to the wash sales provisions, making them applicable where the seller and buyer were members of the same family, as well as where they were one and the same individual. This extension of the wash sales provisions, however, would bar only one particular means of accomplishing the evil at which § 24 (b) was aimed, and the necessity for a comprehensive remedy would have remained.
Nor can we agree that Congress’ omission from § 24 (b) of any prescribed time interval, comparable in function to that in the wash sales provisions, indicates that § 24 (b) was not intended to apply to intra-family transfers through the Exchange. Petitioners’ argument is predicated on the difficulty which courts may have in determining whether the elapse of certain periods of time between one spouse’s sale and the other’s purchase of like securities on the Exchange is of great enough importance in itself to break the continuity of the investment and make § 24 (b) inapplicable.
Precisely the same difficulty may arise, however, in the case of an intra-family transfer through an individual intermediary, who, by pre-arrangement, buys from one spouse at the market price and a short time later sells the identical certificates to the other at the price prevailing at the time of sale. The omission of a prescribed time interval negates the applicability of § 24 (b) to the former type of transfer no more than it does to the latter. But if we should hold that it negated both, we would have converted the section into a mere trap for the unwary.
Petitioners also urge that, whatever may have been Congress’ intent, its designation in § 24 (b) of sales “between” members of a family is not adequate to comprehend the transactions in this case, which consisted only of a sale of stock by one of the petitioners to an unknown stranger, and the purchase of different certificates of stock by the other petitioner, presumably from another stranger.
We can understand how this phraseology, if construed literally and out of context, might be thought to mean only direct intra-family transfers. But petitioners concede that the express statutory reference to sales made “directly or indirectly” precludes that construction. Moreover, we can discover in this language no implication whatsoever that an indirect intra-family sale of fungibles is outside the statute unless the units sold by one spouse and those bought by the other are identical. Indeed, if we accepted petitioners’ construction of the statute, we think we would be reading into it a crippling exception which is not there.
Finally, we must reject petitioners’ assertion that the Dobson rule controls this case. The Tax Court found the facts as we stated them, and then overruled the Commissioner’s determination because it thought that § 24 (b) had no application to a taxpayer’s sale of securities on the Exchange to an unknown purchaser, regardless of what other circumstances accompanied the sale. We have decided otherwise, and on our construction of the statute, and the conceded facts, the Tax Court could not have reached a result contrary to our own.
Affirmed.
MR. Justice Burton took no part in the consideration or decision of these cases.
The material parts of § 24 (b) are as follows:
“(b) Losses from Sales or Exchanges of Property.—
“(1) Losses Disallowed. — In computing net income no deduction shall in any case be allowed in respect of losses from sales or exchanges of property, directly or indirectly—
“(A) Between members of a family, as defined in paragraph (2) (D);
“(B) Except in the case of distributions in liquidation, between an individual and a corporation more than 50 per centum in value of the outstanding stock of which is owned, directly or indirectly, by or for such individual;
“(C) Except in the case of distributions in liquidation, between two corporations more than 50 per centum in value of the outstanding stock of each of which is owned, directly or indirectly, by or for the same individual, if either one of such corporations, with respect to the taxable year of the corporation preceding the date of the sale or exchange was, under the law applicable to such taxable year, a personal holding company or a foreign personal holding company;
“(D) Between a grantor and a fiduciary of any trust ;
“(E) Between the fiduciary of a trust and the fiduciary of another trust, if the same person is a grantor with respect to each trust; or
“(F) Between a fiduciary of a trust and a beneficiary of such trust.”
Section 24 (b) (2) (D) defines the family of an individual to include “only his brothers and sisters (whether by the whole or half blood), spouse, ancestors, and lineal descendants; . . . .”
45 B. T. A. 478, affirmed, 132 F. 2d 660 (C. C. A. 2).
5 T. C. 623.
158 F. 2d 637 (C. C. A. 6).
330 U. S. 814. In No. 946, the petition for certiorari of the Estate of Susan P. McWilliams, the deceased mother of John P. McWilliams, was granted at the same time as the petitions in Nos. 945 and 947, and the three cases were consolidated in this Court. As all three present the same material facts and raise precisely the same issues, no further reference will be made to the several cases separately.
The decision of the Circuit Court of Appeals for the Second Circuit in Commissioner v. Ickelheimer, supra, note 2, is in conflict on this point with the decision of the Circuit Court of Appeals for the Sixth Circuit in the present case, and also with that of the Circuit Court of Appeals for the Fourth Circuit in Commissioner v. Kohn, 158 F. 2d 32.
Commissioner v. Hale, 67 F. 2d 561 (C. C. A. 1); Zimmermann v. Commissioner, 36 B. T. A. 279, reversed on other grounds, 100 F. 2d 1023 (C. C. A. 3); Uihlein v. Commissioner, 30 B. T. A. 399, affirmed, 82 F. 2d 944 (C. C. A. 7).
See H. Rep. No. 1546, 75th Cong., 1st Sess., p. 26 (1939-1 Cum. Bull. (Part 2) 704, 722-723). See also cases cited in note 7, supra.
The provisions of §24 (b) (1) (A) and (B) of the Internal Revenue Code originated in § 24 (a) (6) of the Revenue Act of 1934, 48 Stat. 680, 691. These provisions were reenacted without change as § 24 (a) (6) of the Revenue Act of 1936,.49 Stat. 1648, 1662, and the provisions of §24 (b) (1) (C), (D), (E), and (F) of the Code were added by § 301 of the 1937 Act, 50 Stat. 813,827.
Cf. Shoenberg v. Commissioner, 77 F. 2d 446 (C. C. A. 8); Cole v. Helburn, 4 F. Supp. 230; Zimmermann v. Commissioner, supra, note 7.
See H. Rep. No. 1546, 75th Cong., 1st Sess., p. 26, supra, note 8.
See the text of § 24 (b) (1), quoted in note 1.
H. Rep. No. 704, 73d Cong., 2d Sess., p. 23 (1939-1 Cum. Bull. (Part 2) 554, 571); S. Rep. No. 558, 73d Cong., 2d Sess., p. 27 (1939-1 Cum. Bull. (Part 2) 586, 607).
The type of situations to which these provisions applied was described as being that “in which, due to family relationships or friendly control, artificial losses might be created for tax purposes.” H. Rep. No. 1546, 75th Cong., 1st Sess., p. 28 (1939-1 Cum. Bull. (Part 2) 704,724).
81 Cong. Rec. 9019. Representative Hill, chairman of a House subcommittee on the income-tax laws, explained to the House with reference to the 1934 provisions that the Committee had “provided in this bill that transfers between members of the family for the purpose of creating a loss to be offset against ordinary income shall not be recognized for such deduction purposes.” 78 Cong. Rec. 2662.
Sec. 118 of the Internal Revenue Code, which first appeared in its present form as § 118 of the Revenue Act of 1932, 47 Stat. 169, 208, provides in part as follows:
“SEC. 118. LOSS FROM WASH SALES OF STOCK OR SECURITIES.
“(a) In the case of any loss claimed to have been sustained from any sale or other disposition of shares of stock or securities where it appears that, within a period beginning 30 days before the date of such sale or disposition and ending 30 days after such date, the taxpayer has acquired (by purchase or by an exchange upon which the entire amount of gain or loss was recognized by law), or has entered into a contract or option so to acquire, substantially identical stock or securities, then no deduction for the loss shall be allowed under section 23 (e) (2); nor shall such deduction be allowed under section 23 (f) unless the claim is made by a corporation, a dealer in stocks or securities, and with respect to a transaction made in the ordinary course of its business.”
We have noted petitioners’ suggestion that a taxpayer is assured, under the wash sales provisions, of the right to deduct the loss incurred on a sale of securities, even though he himself buys similar securities thirty-one days later; and that he should certainly not be precluded by § 24 (b) from claiming a similar loss if the taxpayer’s spouse, instead of the taxpayer, makes the purchase under the same circumstances. We do not feel impelled to comment on these propositions, however, in a case in which the sale and purchase were practically simultaneous and the net consideration received by one spouse and that paid by the other differed only in the amount of brokers’ commissions and excise taxes.
Dobson v. Commissioner, 320 U. S. 489.
Cf. Trust of Bingham v. Commissioner, 325 U. S. 365. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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68
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ALLIED STRUCTURAL STEEL CO. v. SPANNAUS, ATTORNEY GENERAL OF MINNESOTA, et al.
No. 77-747.
Argued April 25, 1978
Decided June 28, 1978
Stewart, J., delivered the opinion of the Court, in which Burger, C. J., and Powell, RehNquist, and SteveNS, JJ., joined. BrenNAN, J., filed a dissenting opinion, in which White and Marshall, JJ., joined, post, p. 251. BlackmuN, J., took no part in the consideration or decision of the case.
George B. Christensen argued the cause for appellant. With him on the briefs were Chester W. Nosal and John R. Kenefick.
Byron E. Starns, Chief Deputy Attorney General of Minnesota, argued the cause for appellees. With him on the brief were Warren Spannaus, Attorney General, pro se, Richard B. Allyn, Solicitor General, and Kent G. Harbison, Richard A. Lockridge, and Jon K. Murphy, Special Assistant Attorneys General.
Peter G. Nash, Eugene B. Granof, and Stanley T. Kaleczyc filed a brief for the Chamber of Commerce of the United States as amicus curiae urging reversal.
Mr. Justice Stewart
delivered the opinion of the Court.
The issue in this case is whether the application of Minnesota’s Private Pension Benefits Protection Act to the appellant violates the Contract Clause of the United States Constitution.
I
In 1974 appellant Allied Structural Steel Co. (company), a corporation with its principal place of business in Illinois, maintained an office in Minnesota with 30 employees. Under the company’s general pension plan, adopted in 1963 and qualified as a single-employer plan under § 401 of the Internal Revenue Code, 26 U. S. C. §401 (1976 ed.), salaried employees were covered as follows: At age 65 an employee was entitled to retire and receive a monthly pension generally computed by multiplying 1 % of his average monthly earnings by the total number of his years of employment with the company. Thus, an employee aged 65 or more could retire without satisfying any particular length-of-service requirement, but the size of his pension would reflect the length of his service with the company. An employee could also become entitled to receive a pension, payable in full at age 65, if he met any one of the following requirements: (1) he had worked 15 years for the company and reached the age of 60; or (2) he was at least 55 years old and the sum of his age and his years of service with the company was at least 75; or (3) he was less than 55 years old but the sum of his age and his years of service with the company was at least 80. Once an employee satisfied any one of these conditions, his pension right became vested in the sense that any subsequent termination of employment would not affect his right to receive a monthly pension when he reached 65. Those employees who quit or were discharged before age 65 without fulfilling one of the other three conditions did not acquire any pension rights.
The company was the sole contributor to the pension trust fund, and each year it made contributions to the fund based on actuarial predictions of eventual payout needs. Although those contributions once made were irrevocable, in the sense that they remained part of the pension trust fund, the plan neither required the company to make specific contributions nor imposed any sanction on it for failing to contribute adequately to the fund.
The company not only retained a virtually unrestricted right to amend the plan in whole or in part, but was also free to terminate the plan and distribute the trust assets at any time and for any reason. In the event of a termination, the assets of the fund were to go, first, to meet the plan’s obligation to those employees already retired and receiving pensions; second, to those eligible for retirement; and finally, if any balance remained, to the other employees covered under the plan whose pension rights had not yet vested. Employees within each of these categories were assured payment only to the extent of the pension assets.
The plan expressly stated:
“No employee shall have any right to, or interest in, any part of the Trust’s assets upon termination of his employment or otherwise, except as provided from time to time under this Plan, and then only to the extent of the benefits payable to such employee out of the assets of the Trust. All payments of benefits as provided for in this Plan shall be made solely out of the assets of the Trust and neither the employer, the trustee, nor any member of the Committee shall be liable therefor in any manner.”
The plan also specifically advised employees that neither its existence nor any of its terms were to be understood as implying any assurance that employees could not be dismissed from their employment with the company at any time.
In sum, an employee who did not die, did not quit, and was not discharged before meeting one of the requirements of the plan would receive a fixed pension at age 65 if the company remained in business and elected to continue the pension plan in essentially its existing form.
On April 9, 1974, Minnesota enacted the law here in question, the Private Pension Benefits Protection Act, Minn. Stat. §§ 181B.01-181B.17. Under the Act, a private employer of 100 employees or more — at least one of whom was a Minnesota resident — who provided pension benefits under a plan meeting the qualifications of § 401 of the Internal Revenue Code, was subject to a “pension funding charge” if he either terminated the plan or closed a Minnesota office. The charge was assessed if the pension funds were not sufficient to cover full pensions for all employees who had worked at least 10 years. The Act required the employer to satisfy the deficiency by purchasing deferred annuities, payable to the employees at their normal retirement age. A separate provision specified that periods of employment prior to the effective date of the Act were to be included in the 10-year employment criterion.
During the summer of 1974 the company began closing its Minnesota office. On July 31, it discharged 11 of its 30 Minnesota employees, and the following month it notified the Minnesota Commissioner of Labor and Industry, as required by the Act, that it was terminating an office in the State. At least nine of the discharged employees did not have any vested pension rights under the company’s plan, but had worked for the company for 10 years or more and thus qualified as pension obligees of the company under the law that Minnesota had enacted a few months earlier. On August 18, the State notified the company that it owed a pension funding charge of approximately $185,000 under the provisions of the Private Pension Benefits Protection Act.
The company brought suit in a Federal District Court asking- for injunctive and declaratory relief. It claimed that the Act unconstitutionally impaired its contractual obligations to its employees under its pension agreement. The three-judge court upheld the constitutional validity of the Act as applied to the company, Fleck v. Spannaus, 449. F. Supp. 644, and an appeal was brought to this Court under 28- U. S. C.. § 1253 (1976 ed.). We noted probable jurisdiction. 434 U. S.. 1045.
II
A
There can be no question of the impact of the Minnesota Private Pension Benefits Protection Act upon the company’s contractual relationships with its employees. The Act substantially altered those relationships by superimposing pension obligations upon the company conspicuously beyond those that it had voluntarily agreed to undertake. But it does not inexorably follow that the Act, as applied to the company, violates the Contract Clause of the Constitution.
The language of the Contract Clause appears unambiguously absolute: “No State shall... pass any... Law impairing the Obligation of Contracts.” U. S. Const., Art. I, § 10. The Clause is not, however, the Draconian provision that its words might seem to imply. As the Court has recognized, “literalism in the construction of the contract clause... would make it destructive of the publie interest by depriving the State of its prerogative of self-protection.” W. B. Worthen Co. v. Thomas, 292 U. S. 426, 433.
Although it was perhaps the strongest single constitutional check on state legislation during our early years as a Nation, the Contract Clause receded into comparative desuetude with the adoption of the Fourteenth Amendment, and particularly with the development of the large body of jurisprudence under the Due Process Clause of that Amendment in modern constitutional history. Nonetheless, the Contract Clause remains part of the Constitution. It is not a dead letter. And its basic contours are brought into focus by several of this Court’s 20th-century decisions.
First of all, it is to be accepted as a commonplace that the Contract Clause does not operate to obliterate the police power of the States. “It is the settled law of this court that the interdiction of statutes impairing the obligation of contracts does not prevent the State from exercising such powers as are vested in it for the promotion of the common weal, or are necessary for the general good of the public, though contracts previously entered into between individuals may thereby be affected. This power, which in its various ramifications is known as the police power, is an exercise of the sovereign right of the Government to protect the lives, health, morals, comfort and general welfare of the people, and is paramount to any rights under contracts between individuals.” Manigault v. Springs, 199 U. S. 473, 480. As Mr. Justice Holmes succinctly put the matter in his opinion for the Court in Hudson Water Co. v. McCarter, 209 U. S. 349, 357: “One whose rights, such as they are, are subject to state restriction, cannot remove them from the power of the State by making a contract about them. The contract will carry with it the infirmity of the subject matter.”
B
If the Contract Clause is to retain any meaning at all, however, it must be understood to impose some limits upon the power of a State to abridge existing contractual relationships, even in the exercise of its otherwise legitimate police power. The existence and nature of those limits were clearly indicated in a series of cases in this Court arising from the efforts of the States to deal with the unprecedented emergencies brought on by the severe economic depression of the early 1930’s.
In Home Building & Loan Assn. v. Blaisdell, 290 U. S. 398, the Court upheld against a Contract Clause attack a mortgage moratorium law that Minnesota had enacted to provide relief for homeowners threatened with foreclosure. Although the legislation conflicted directly with lenders’ contractual foreclosure rights, the Court there acknowledged that, despite the Contract Clause, the States retain residual authority to enact laws “to safeguard the vital interests of [their] people.” Id., at 434. In upholding the state mortgage moratorium law, the Court found five factors significant. First, the state legislature had declared in the Act itself that an emergency need for the protection of homeowners existed. Id., at 444. Second, the state law was enacted to protect a basic societal interest, not a favored group. Id., at 445. Third, the relief was appropriately tailored to the emergency that it was designed to meet. Ibid. Fourth, the imposed conditions were reasonable. Id., at 445-447. And, finally, the legislation was limited to the duration of the emergency. Id., at 447.
The Blaisdell opinion thus clearly implied that if the Minnesota moratorium legislation had not possessed the characteristics attributed to it by the Court, it would have been invalid under the Contract Clause of the Constitution. These implications were given concrete force in three cases that followed closely in Blaisdell’s wake.
In W. B. Worthen Co. v. Thomas, 292 U. S. 426, the Court dealt with an Arkansas law that exempted the proceeds of a life insurance policy from collection by the beneficiary’s judgment creditors. Stressing the retroactive effect of the state law, the Court held that it was invalid under the Contract Clause, since it was not precisely and reasonably designed to meet a grave temporary emergency in the interest of the general welfare. In W. B. Worthen Co. v. Kavanaugh, 295 U. S. 56, the Court was confronted with another Arkansas law that diluted the rights and remedies of mortgage bondholders. The Court held the law invalid under the Contract Clause. “Even when the public welfare is invoked as an excuse,” Mr. Justice Cardozo wrote for the Court, the security of a mortgage cannot be cut down “without moderation or reason or in a spirit of oppression.” Id., at 60. And finally, in Treigle v. Acme Homestead Assn., 297 U. S. 189, the Court held invalid under the Contract Clause a Louisiana law that modified the existing withdrawal rights of the members of a building and loan association. “Such an interference with the right of contract,” said the Court, “cannot be justified by saying that in the public interest the operations of building associations may be controlled and regulated, or that in the same interest their charters may be amended.” Id., at 196.
The most recent Contract Clause case in this Court was United States Trust Co. v. New Jersey, 431 U. S. 1. In that case the Court again recognized that although the absolute language of the Clause must leave room for “the ‘essential attributes of sovereign power,’... necessarily reserved by the States to safeguard the welfare of their citizens,” id., at 21, that power has limits when its exercise effects substantial modifications of private contracts. Despite the customary deference courts give to state laws directed to social and economic problems, “[1] egislation adjusting the rights and responsibilities of contracting parties must be upon reasonable conditions and of a character appropriate to the public purpose justifying its adoption.” Id., at 22. Evaluating with particular scrutiny a modification of a contract to which the State itself was a party, the Court in that case held that legislative alteration of the rights and remedies of Port Authority bondholders violated the Contract Clause because the legislation was neither necessary nor reasonable.
Ill
In applying these principles to the present case, the first inquiry must be whether the state law has, in fact, operated as a substantial impairment of a contractual relationship. The severity of the impairment measures the height of the hurdle the state legislation must clear. Minimal alteration of contractual obligations may end the inquiry at its first stage. Severe impairment, on the other hand, will push the inquiry to a careful examination of the nature and purpose of the state legislation.
The severity of an impairment of contractual obligations can be measured by the factors that reflect the high value the Framers placed on the protection of private contracts. Contracts enable individuals to order their personal and business affairs according to their particular needs and interests. Once arranged, those rights and obligations are binding under the law, and the parties are entitled to rely on them.
Here, the company's contracts of employment with its employees included as a fringe benefit or additional form of compensation, the pension plan. The company’s maximum obligation was to set aside each year an amount based on the plan’s requirements for vesting. The plan satisfied the current federal income tax code and was subject to no other legislative requirements. And, of course, the company was free to amend or terminate the pension plan at any time. The company thus had no reason to anticipate that its employees’ pension rights could become vested except in accordance with the terms of the plan. It relied heavily, and reasonably, on this legitimate contractual expectation in calculating its annual contributions to the pension fund.
The effect of Minnesota’s Private Pension Benefits Protection Act on this contractual obligation was severe. The company was required in 1974 to have made its contributions throughout the pre-1974 life of its plan as if employees’ pension rights had vested after 10 years, instead of vesting in accord with the terms of the plan. Thus a basic term of the pension contract — one on which the company had relied for 10 years — was substantially modified. The result was that, although the company’s past contributions were adequate when made, they were not adequate when computed under the 10-year statutory vesting requirement. The Act thus forced a current recalculation of the past 10 years’ contributions based on the new, unanticipated 10-year vesting requirement.
Not only did the state law thus retroactively modify the compensation that the company had agreed to pay its employees from 1963 to 1974, but also it did so by changing the company’s obligations in an area where the element of reliance was vital — the funding of a pension plan. As the Court has recently recognized:
“These [pension] plans, like other forms of insurance, depend on the accumulation of large sums to cover contingencies. The amounts set aside are determined by a painstaking assessment of the insurer’s likely liability. Risks that the insurer foresees will be included in the calculation of liability, and the rates or contributions charged will reflect that calculation. The occurrence of major unforeseen contingencies, however, jeopardizes the insurer’s solvency and, ultimately, the insureds’ benefits. Drastic changes in the legal rules governing pension and insurance funds, like other unforeseen events, can have this effect.” Los Angeles Dept. of Water & Power v. Manhart, 435 U. S. 702, 721.
Moreover, the retroactive state-imposed vesting requirement was applied only to those employers who terminated their pension plans or who, like the company, closed their Minnesota offices. The company was thus forced to make all the retroactive changes in its contractual obligations at one time. By simply proceeding to close its office in Minnesota, a move that had been planned before the passage of the Act, the company was assessed an immediate pension funding charge of approximately $185,000.
Thus, the statute in question here nullifies express terms of the company’s contractual obligations and imposes a completely unexpected liability in potentially disabling amounts. There is not even any provision for gradual applicability or grace periods. Cf. the Employee Retirement Income Security Act of 1974 (ERISA), 29 U. S. C. §§ 1061 (b)(2), 1086 (b), and 1144 (1976 ed.). See n. 23, infra. Yet there is no showing in the record before us that this severe disruption of contractual expectations was necessary to meet an important general social problem. The presumption favoring “legislative judgment as to the necessity and reasonableness of a particular measure,” United States Trust Co., 431 U. S., at 23, simply cannot stand in this case.
The only indication of legislative intent in the record before us is to be found in a statement in the District Court’s opinion:
“It seems clear that the problem of plant closure and pension plan termination was brought to the attention of the Minnesota legislature when the Minneapolis-Moline Division of White Motor Corporation closed one of its Minnesota plants and attempted to terminate its pension plan.” 449 F. Supp., at 651.
But whether or not the legislation was aimed largely at a single employer, it clearly has an extremely narrow focus. It applies only to private employers who have at least 100 employees, at least one of whom works in Minnesota, and who have established voluntary private pension plans, qualified under § 401 of the Internal Revenue Code. And it applies only when such an employer closes his Minnesota office or terminates his pension plan. Thus, this law can hardly be characterized, like the law at issue in the Blaisdell case, as one enacted to protect a broad societal interest rather than a narrow class.'
Moreover, in at least one other important respect the Act does not resemble the mortgage moratorium legislation whose constitutionality was upheld in the Blaisdell case. This legislation, imposing a sudden, totally unanticipated, and substantial retroactive obligation upon the company to its employees, was not enacted to deal with a situation remotely approaching the broad and desperate emergency economic conditions of the early 1930’s — conditions of which the Court in Blaisdell took judicial notice.
Entering a field it had never before sought to regulate, the Minnesota Legislature grossly distorted the company’s existing contractual relationships with its employees by superimposing retroactive obligations upon the company substantially beyond the terms of its employment contracts. And that burden was imposed upon the company only because it closed its office in the State.
This Minnesota law simply does not possess the attributes of those state laws that in the past have survived challenge under the Contract Clause of the Constitution. The law was not even purportedly enacted to deal with a broad, generalized economic or social problem. Cf. Home Building & Loan Assn. v. Blaisdell, 290 U. S., at 445. It did not operate in an area already subject to state regulation at the time the company’s contractual obligations were originally undertaken, but invaded an area never before subject to regulation by the State. Cf. Veix v. Sixth Ward Building Loan Assn., 310 U. S. 32, 38. It did not effect simply a temporary alteration of the contractual relationships of those within its coverage, but worked a severe, permanent, and immediate change in those relationships — irrevocably and retroactively. Cf. United States Trust Co. v. New Jersey, 431 U. S., at 22. And its narrow aim was leveled, not at every Minnesota employer, not even at every Minnesota employer who left the State, but only at those who had in the past been sufficiently enlightened as voluntarily to agree to establish pension plans for their employees.
“Not Blaisdell’s case, but Worthen’s (W. B. Worthen Co. v. Thomas, [292 U. S. 426]) supplies the applicable rule” here. W. B. Worthen Co. v. Kavanaugh, 295 U. S., at 63. It is not necessary to hold that the Minnesota law impaired the obligation of the company’s employment contracts “without moderation or reason or in a spirit of oppression.” Id., at' 60. But we do hold that if the Contract Clause means anything at all, it means that Minnesota could not constitutionally do what it tried to do to the company in this case.
The judgment of the District Court is reversed.
It is so ordered.
Mr. Justice Blackmun took no part in the consideration or decision of this case.
Minn. Stat. § 181B.01 et seq. (1974). This is the same Act that was considered in Malone v. White Motor Corp., 435 U. S. 497, a case presenting a quite different legal issue.
The plan was not the result of a collective-bargaining agreement, and no such agreement is at issue in this case.
The employee could elect to receive instead a lump-sum payment.
Thus, an employee whose average monthly earnings were $800 and who retired at 65 would receive eight dollars monthly if he had worked one year for the company and $320 monthly if he had worked for the company for 40 years.
Apart from termination of the fund and distribution of the trust assets, there was no other situation in which employees in this third category would receive anything from the pension fund.
Although the company had only 30 employees in Minnesota, it was subject to the Act because it had over 100 employees altogether.
Entitled “Nonvested Benefits Prior to Act,” Minn. Stat. § 181B.04 provided:
“Every employer who hereafter ceases to operate a place of employment or a pension plan within this state shall owe to his employees covered by sections 181B.01 to 181B.17 a pension funding charge which shall be equal to the present value of the total amount of nonvested pension benefits based upon service occurring before April 10, 1974 of such employees of the employer who have completed ten or more years of any covered service under the pension plan of the employer and whose nonvested pension benefits have been or will be forfeited because of the employer’s ceasing to operate a place of employment or a pension plan, less the amount of such nonvested pension benefits which are compromised or settled to the satisfaction of the commissioner as provided in sections 181B.01 to 181B.17.”
According to the stipulated facts, the closing of the company’s Minnesota office resulted from a shift of that office’s duties to the main company office in Illinois the previous December. The closing was not completed until February 1975, by which time the Minnesota Act had been pre-empted by federal law. See Malone v. White Motor Corp., 435 U. S., at 499. We deal here solely with the application of the Minnesota Act to the 11 employees discharged in July 1974.
The claims of Walter Fleck and the other two individual plaintiffs were dismissed by the District Court for lack of standing, Fleck v. Spannaus, 421 F. Supp. 20, leaving only the company as an appellant. Warren Spannaus, the Attorney General of Minnesota, is an appellee.
See generally B. Schwartz, A Commentary on the Constitution of the United States, Pt. 2, The Rights of Property 266-306 (1965); B. Wright, The Contract Clause of the Constitution (1938).
Perhaps the best known of all Contract Clause cases of that era was Dartmouth College v. Woodward, 4 Wheat. 518.
Indeed, at least one commentator has suggested that “the results might be the same if the contract clause were dropped out of the Constitution, and the challenged statutes all judged as reasonable or unreasonable deprivations of property.” Hale, The Supreme Court and the Contract Clause: III, 57 Harv. L. Rev. 852, 890-891 (1944).
In Veix v. Sixth Ward Building & Loan Assn., 310 U. S. 32, 38, the Court took into account still another consideration in upholding a state law against a Contract Clause attack: the petitioner had “purchased into an enterprise already regulated in the particular to which he now objects.”
See also El Paso v. Simmons, 379 U. S. 497. There the Court held that a Texas law shortening the time within which a defaulted land claim could be reinstated did not violate the Contract Clause. “We do not believe that it can seriously be contended that the buyer was substantially induced to enter into these contracts on the basis of a defeasible right to reinstatement... or that he interpreted that right to be of everlasting effect. At the time the contract was entered into the State’s policy was to sell the land as quickly as possible Id., at 514. In sum, “[t]he measure taken... was a mild one indeed, hardly burdensome to the purchaser... but nonetheless an important one to the State’s interest.” Id., at 516-517.
The Court indicated that impairments of a State’s own contracts would face more stringent examination under the Contract Clause than would laws regulating contractual relationships between private parties, 431 U. S., at 22-23, although it was careful to add that “private contracts are not subject to unlimited modification under the police power.” Id., at 22.
The novel construction of the Contract Clause expressed in the dissenting opinion is wholly contrary to the decisions of this Court. The narrow view that the Clause forbids only state laws that diminish the duties of a contractual obligor and not laws that increase them, a view arguably suggested by Satterlee v. Matthewson, 2 Pet. 380, has since been expressly repudiated. Detroit United R. Co. v. Michigan, 242 U. S. 238; Georgia R. & Power Co. v. Decatur, 262 U. S. 432. See also, e. g., Sherman v. Smith, 1 Black 587; Bernheimer v. Converse, 206 U. S. 516, 530; Henley v. Myers, 215 U. S. 373; National Surety Co. v. Architectural Decorating Co., 226 U. S. 276; Columbia R., Gas & Electric Co. v. South Carolina, 261 U. S. 236; Stockholders of Peoples Banking Co. v. Sterling, 300 U. S. 175. Moreover, in any bilateral contract the diminution of duties on one side effectively increases the duties on the other.
The even narrower view that the Clause is limited in its application to state laws relieving debtors of obligations to their creditors is, as the dissent recognizes, post, at 257 n. 5, completely at odds with this Court's decisions. See Dartmouth College v. Woodward, 4 Wheat. 518; Wood v. Lovett, 313 U. S. 362; El Paso v. Simmons, supra. See generally Hale, The Supreme Court and the Contract Clause, 57 Harv. L. Rev. 512, 514-516 (1944).
See n. 14, supra.
In some situations the element of reliance may cut both ways. Here, the company had relied upon the funding obligation of the pension plan for more than a decade. There was no showing of reliance to the contrary by its employees. Indeed, Minnesota did not act to protect any employee reliance interest demonstrated on the record. Instead, it compelled the employer to exceed bargained-for expectations and nullified an express term of the pension plan.
The Minnesota Supreme Court, Fleck v. Spannaus, 312 Minn. 223, 251 N. W. 2d 334, engaged in mere speculation as to the state legislature’s purpose.
In Malone v. White Motor Corp., 435 U. S., at 501 n. 5, the Court noted that the White Motor Corp., an employer of more than 1,000 Minnesota employees, had been prohibited from terminating its pension plan until the expiration date of its collective-bargaining agreement, May 1, 1974. International Union, UAW v. White Motor Corp., 505 F. 2d 1193 (CA8). On April 9, 1974, the Minnesota Act was passed, to become effective the following day. When White Motor proceeded to terminate its collectively bargained pension plan at the earliest possible date, May 1, 1974, the State assessed a deficiency of more than $19 million, based upon the Act’s 10-year vesting requirement.
Not only did the Act have an extremely narrow aim, but also its effective life was extremely short. The United States House of Representatives had passed a version of the Employee Retirement Income Security Act of 1974, 29 U. S. C. § 1001 et seq. (1976 ed.), on February 28, 1974, 120 Cong. Rec. 4781-4782 (1974), and the Senate on March 4, 1974, id., at 5011. Both versions expressly pre-empted state laws. That the Minnesota Legislature was aware of the impending federal legislation is reflected in the explicit provision of the Act that it will “become null and void upon the institution of a mandatory plan of termination insurance guaranteeing the payment of a substantial portion of an employee’s vested pension benefits pursuant to any law of the United States.” Minn. Stat. § 181B.17. ERISA itself, effective January 1, 1975 | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
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] | [
116
] | sc_adminaction |
BRENNAN et al. v. ARMSTRONG et al.
No. 76-809.
Decided June 29, 1977
Per Curiam.
This school desegregation case involves the school system in the city of Milwaukee, Wis. The District Court here made various findings of segregative acts on the part of petitioner School Board members, appointed a Special Master “to develop a plan for the desegregation of the Milwaukee public school system,” and certified its order for interlocutory appeal to the Court of Appeals for the Seventh Circuit. Amos v. Board of School Directors, 408 F. Supp. 765. The Court of Appeals, observing that there was “an unexplained hiatus between specific findings of fact and conclusory findings of segregative intent,” stated that the District Court is “entitled to a presumption of consistency” and concluded that the findings of the District Court were not clearly erroneous. 539 F. 2d 625. Neither the District Court in ordering development of a remedial plan, nor the Court of Appeals in affirming, addressed itself to the inquiry mandated by our opinion in Dayton Board of Education v. Brinkman, ante, p. 406, in which we said:
“If such violations are found, the District Court in the first instance, subject to review by the Court of Appeals, must determine how much incremental segrega-tive effect these violations had on the racial distribution of the Dayton school population as presently constituted, when that distribution is compared to what it would have been in the absence of such constitutional violations. The remedy must be designed to redress that difference, and only if there has been a systemwide impact may there be a systemwide remedy.” Ante, at 420.
The petition for certiorari is accordingly granted, the judgment of the Court of Appeals is .vacated, and the case is remanded for reconsideration in the light of Arlington Heights v. Metropolitan Housing Dev. Corp., 429 U. S. 252 (1977), and Dayton. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
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] | [
116
] | sc_adminaction |
NATIONAL LABOR RELATIONS BOARD v. A. J. TOWER CO.
No. 60.
Argued November 21, 1946.
Decided December 23, 1946.
Gerhard P. Van Arkel argued the cause for petitioner. With him on the briefs were Solicitor General McGrath, Assistant Solicitor General Washington, Morris P. Glush-ien, Ruth Weyand and Joseph B. Robison.
John T. Noonan argued the cause for respondent. With him on the brief was Malcolm Donald.
Mr. Justice Murphy
delivered the opinion of the Court.
The issue here concerns the procedure used in elections under the National Labor Relations Act in which employees choose a statutory representative for purposes of collective bargaining. Specifically, we must determine the propriety of the National Labor Relations Board’s refusal to accept an employer’s post-election challenge to the eligibility of a voter who participated in a consent election.
The respondent and a union entered into an agreement to conduct an election by secret ballot on May 5, 1944, under the supervision of the Board’s regional director, to determine whether the employees at respondent’s Roxbury plant in the unit defined in the agreement desired to be represented by the union. The agreement was approved by the regional director and provided that the election was to be held “in accordance with the National Labor Relations Act, the Board’s Rules and Regulations, and the customary procedures and policies of the Board.”
The agreement set forth the qualifications for participation in the election. Only those who appeared on the pay-roll on April 21, 1944, were eligible; included were those employees who did not work at the time because they were ill, or on vacation, or temporarily laid off, or in the armed forces. The respondent had the duty of furnishing the regional director with an accurate list of the eligible voters, together with a list of the ineligible employees. The list of eligible voters was duly submitted on May 1, 1944.
The agreement further provided that both the union and the respondent could have observers at the polling places to assist in the handling of the election, to challenge the eligibility of voters and to -verify the tally. If challenges were made and if they were determinative of the results of the election, the regional director was to investigate the challenges and issue a report thereon. All objections “to the conduct of the ballot” or “to a determination of representatives based on the results thereof” were to be filed with the regional director within five days after issuance of the “Tally of Ballots.” If the regional director sustained the objections, he had the power to void the results and order a new election. The determination of the regional director was to be final and binding upon any question, “including questions as to the eligibility of voters, raised by any party hereto relating in any manner to the election.” Cf. Article III, §§10 and 12, of the Board’s Rules and Regulations (Series 3, effective Nov. 26, 1943),
The balloting took place on May 5 in accordance with this agreement. After the ballots were counted, the union and the respondent signed a “Tally of Ballots,” in which the regional director certified that, of the 230 valid votes counted, 116 were cast for the union and 114 against’it, with one other ballot being challenged by the union. Four days later, on May 9, respondent’s counsel wrote the regional director that subsequent to the election “it came to the attention of the management of the Company that Mrs. Jennie A. Kane, one of the persons who voted at the election, was not at the time an employee of the Company.” The letter explained that Mrs. Kane was employed by respondent from March 16, 1943, through March 24, 1944, but that after the latter date she had never reported again for work and had never appeared at the plant except for purposes of voting on May 5. It was admitted that the respondent, “not being advised by Mrs. Kane of any intention on her part to leave their employ, assumed that she was ill and continued her among their list of employees and, therefore, did not exclude her from the list of employees they believed eligible to vote.” The letter accordingly challenged Mrs. Kane’s right to vote, as well as the ballot cast by her. A hearing was requested for the purpose of passing upon the one ballot challenged by the union. If that challenge were not sustained and the ballot proved to be a vote against the union, Mrs. Kane’s ballot would become material to the result of the election; on that condition, the respondent requested' a hearing on its challenge to Mrs. Kane’s vote.
A hearing on the matters raised by this letter was held before the regional director. He subsequently made a report in which he found that respondent included Mrs. Kane’s name on the list of eligible voters submitted on May 1 on the assumption that she was ill and had not quit her job; that respondent made no attempt between May 1 and May 5 to remove Mrs. Kane’s name from the list, although prior to the election respondent received by mail a notice of Mrs. Kane’s claim for unemployment compensation; that respondent’s observers at the polls had not challenged Mrs. Kane when she voted in their presence; and that these observers certified before the ballots were counted that the election had been properly conducted. The regional director also found that the evidence was conflicting as to Mrs. Kane’s actual status. But he concluded that under the circumstances the respondent had waived its right to challenge her vote or to object to the election on this ground. This determination made it unnecessary for him to rule on the ballot previously challenged by the union, since it could not affect the result. He thus found that the union had received a majority of the valid votes cast and was the exclusive representative of the employees in the appropriate unit.
The respondent thereafter refused to bargain with the union in question. Upon a complaint issued by the Board, the respondent admitted its refusal but denied that the union had ever been designated by a majority of the employees in the appropriate unit. It asserted that the election of May 5 was inconclusive on the subject because if Mrs. Kane’s ballot were subtracted from the union’s total and if the ballot challenged by the union were opened upon overruling the challenge and proved to be against the union, the outcome of the election would be a tie vote. The Board, after the usual proceedings, held that it would not disturb the rulings of a regional director on questions arising out of a consent election “unless such rulings appear to be unsupported by substantial evidence or are arbitrary or capricious” and that no such grounds for disturbing the ruling were present in the instant case. As an alternative ground for its action, the Board held that the regional director’s refusal ünder the circumstances to permit an attack on Mrs. Kane’s status as a voter after the results of the election had been announced “is in complete accord with the established principles and policy of the Board”— which excluded post-election challenges “because of our belief that otherwise an election could be converted from a definitive resolution of preference into a protracted resolution of objections disregarded or suppressed against the contingency of an adverse result.” See also Matter of Norris, Inc., 63 N. L. R. B. 502, 512. The Board accordingly ordered respondent to cease and desist from its unfair labor practice and to take the affirmative action of bargaining collectively with the union. 60 N. L. R. B. 1414.
The First Circuit Court of Appeals, however, set aside the Board’s order. 152 F. 2d 275. It construed the Act as making it a jurisdictional prerequisite to a determination that an employer has committed the unfair labor practice of refusing to bargain collectively that the union with which he has refused to deal should have been chosen by a majority of those voting who were in fact employees. It held that since the vote challenged by the union may have been cast against it and since Mrs. Kane was not found to have been an employee on the crucial date, there may have been a tie vote and the Board was without jurisdiction to find the respondent guilty of a violation of § 8 (5). We granted certiorari because of the importance of the matter in the administration of the Act and because of a conflict between the result below and that reached by the Sixth Circuit Court of Appeals in Labor Board v. Capitol Greyhound Lines, 140 F. 2d 754.
As we have noted before, Congress has entrusted the Board with a wide degree of discretion in establishing the procedure and safeguards necessary to insure the fair and free choice of bargaining representatives by employees. Southern S. S. Co. v. Labor Board, 316 U. S. 31, 37; Labor Board v. Waterman S. S. Co., 309 U. S. 206, 226; Labor Board v. Falk Corp., 308 U. S. 453, 458. Section 9 (c) of the Act authorizes the Board to “take a secret ballot of employees, or utilize any other suitable method to ascertain such representatives.” In carrying out this task, of course, the Board must act so as to give effect to the principle of majority rule set forth in § 9 (a), a rule that “is sanctioned by our governmental practices, by business procedure, and by the whole philosophy of democratic institutions.” S. Rep. No. 573, 74th Cong., 1st Sess., p. 13. It is within this democratic framework that the Board must adopt policies and promulgate rules and regulations in order that employees’ votes may be recorded accurately, efficiently and speedily.
The principle of majority rule, however, does not foreclose practical adjustments designed to protect the election machinery from the ever-present dangers of abuse and fraud. Indeed, unless such adjustments are made, the democratic process may be perverted and the election may fail to reflect the will of the majority of the electorate. One of the commonest protective devices is to require that challenges to the eligibility of voters be made prior to the actual casting of ballots, so that all uncontested votes are given absolute finality. In political elections, this device often involves registration lists which are closed some time prior to election day: all challenges as to registrants must be made during the intervening period or at the polls. Thereafter it is too late. The fact that cutting off the right to challenge conceivably may result in the counting of some ineligible votes is thought to be far outweighed by the dangers attendant upon the allowance of indiscriminate challenges after the election. To permit such challenges, it is said, would invade the secrecy of the ballot, destroy the finality of the election result, invite unwarranted and dilatory claims by defeated candidates and “keep perpetually before the courts the same excitements, strifes, and animosities which characterize the hustings, and which ought, for the peace of the community, and the safety and stability of our institutions, to terminate with the close of the polls.” Cooley, Constitutional Limitations (8th ed., 1927), p. 1416.
Long experience has demonstrated the fairness and effi-caciousness of the general rule that once a ballot has been cast without challenge and its identity has been lost, its validity cannot later be challenged. This rule is universally recognized as consistent with the democratic process. And it is generally followed in corporate elections. The Board’s adoption of the rule in elections under the National Labor Relations Act is therefore in accord with the principles which Congress indicated should be used in securing the fair and free choice of collective bargaining representatives.
Moreover, the rule in question is one that is peculiarly appropriate to the situations confronting the Board in these elections. In an atmosphere that may be charged with animosity, post-election challenges would tempt a losing union or an employer to make undue attacks on the eligibility of voters so as to delay the finality and statutory effect of the election results. Such challenges would also extend an opportunity for the inclusion of ineligible pro-union or anti-union men on the pay-roll list in the hope that they might escape challenge before voting, thereafter giving rise to a charge that the election was void because of their ineligibility and the possibility that they had voted with the majority and were a decisive factor. The privacy of the voting process, which is of great importance in the industrial world, would frequently be destroyed by post-election challenges. And voters would often incur union or employer disfavor through their reaction to the inquiries.
We are unable to say, therefore, that the Board’s prohibition of post-election challenges is without justification in law or in reason. It gives a desirable and necessary finality to elections, yet affords all interested parties a reasonable period in which to challenge the eligibility of any voter. And an exception to the rule is recognized where the Board’s agents or the parties benefiting from the Board’s refusal to entertain the issue know of the voter’s ineligibility and suppress the facts. The Board thus appears to apply the prohibition fairly and equitably in light of the realities involved.
The reliance of the court below upon the asserted jurisdictional requirement was misplaced. It is true that it is an unfair labor practice for an employer to refuse to bargain with a union only if that union was chosen by a majority of the voting employees. But the determination of whether a majority in fact voted for the union must be made in accordance with such formal rules of procedure as the Board may find necessary to adopt in the sound exercise of its discretion. The rule prohibiting post-election challenges is one of those rules. When it is applied properly, it cannot deprive the Board of jurisdiction to find an unlawful failure to bargain collectively. That is true even where it subsequently is ascertainable that some of the votes cast were in fact ineligible and that the result of the election might have been different had the truth previously been known. The rule does not pretend to be an absolute guarantee that only those votes will be counted which are in fact eligible. It is simply a justifiable and reasonable adjustment of the democratic process.
There is no basis in the instant case for disregarding the Board’s policy in this respect. The fact that the respondent may have been honestly mistaken as to the status of Mrs. Kane has no relevance whatever to the justification for the use of the policy. And nothing in the consent agreement constituted a waiver of the policy by the Board. On the contrary, the agreement expressly stated that the election was to be held in accordance with “the customary procedures and policies of the Board,” which would include the policy prohibiting post-election challenges. The provision as to the filing of objections "to the conduct of the ballot” and “to a determination of representatives based on the results thereof” within five days after issuance of the “Tally of Ballots,” a provision which was quite separate from that relating to challenges, obviously has no application here. Objections and challenges are two different things in electoral parlance. Objections relate to the working of the election mechanism and to the process of counting the ballots accurately and fairly. Challenges, on the other hand, concern the eligibility of prospective voters. The Board uses this clear distinction as a matter of policy and we are not free to disregard it.
Neither the record in this case nor the past history of the policy against post-election challenges justifies an assumption that the interests of the anti-union employees in this election were inadequately protected. Due notice of the manner and conduct of the election was given to all employees; and, despite the lack of any affirmative provisions in the consent agreement, there was no indication that any of the employees were prohibited from examining the eligibility list or from challenging any prospective voter. Nor was there competent evidence that any anti-union employee made any objection, either before or after the election, to the procedure adopted or to the casting of any ballots. Moreover, the representatives of the Board, as well as those of the respondent, were bound to perform their electoral functions on behalf of all employees, including those with anti-union sentiments. In the absence of any evidence that such representatives discriminated against the anti-union employees in preparing the eligibility list or in raising timely eligibility issues, we cannot say that the interests of those employees were inadequately represented.
Since we rest our decision solely on the propriety of the Board’s policy against post-election challenges, it is unnecessary to discuss the effect to be given by the Board to the regional director’s ruling that the respondent waived its right to challenge Mrs. Kane’s vote or the effect to be given to the terms of the consent election agreement apart from the general policy.
It follows that the court below erred in refusing to enforce the Board’s order in full.
Reversed.
Mr. Justice Frankfurter concurs in the result.
49 Stat. 449,29 U. S. C. § 151, et seq.
Among the ineligible persons were those who had quit or been discharged for cause and had not been rehired or reinstated prior to the date of the election.
It was unnecessary to rule on the challenged ballot since it could not affect the result of the election, even though the ballot proved to be against the union.
The letter recited that “It has now come to their attention, however, that on April 28, 1944, Mrs. Kane filed with the Division of Employment Security of the Commonwealth of Massachusetts a claim for unemployment benefits stating, in connection with that claim, that she had left the employ of the A. J. Tower Company in March, 1944, and that her reason for leaving was that she ‘could not continue to do heavy work of carrying bundles which was part of her job.’ The Company has also learned that on the same day, April 28, 1944, Mrs. Kane visited the United States Employment Office and was placed on its list of persons available for employment.”
An agent of the Board interviewed Mrs. Kane and was told by her that: “On April 28, 1944,1 applied for Unemployment Compensation benefits, thinking I was entitled to such because of my illness. At no time, prior or since, have I considered myself not an employee of the A. J. Tower Co. I have never requested my release of the A. J. Tower Co. and in fact I intend to return to the Company when I have regained my strength. I did not think that my application for unemployment benefits would be considered a termination from the Company. ... On May 5, 1944, when1 I presented myself at the election polls at the A. J. Tower Co., I considered myself an employee of the Company and therefore entitled to cast a ballot. I still consider myself an employee of the A. J. Tower Co.”
But the regional director pointed out that, despite this statement, subsequent investigation confirmed the fact that Mrs. Kane advised the Division of Employment Security on April 28, 1944, that she had left her employment with the respondent in March because of the heavy work in carrying bundles. See note 4, supra.
See Matter of Hale, 62 N. L. R. B. 1393; Matter of Beggs & Cobb, Inc., 62 N. L. R. B. 193.
“The Board follows a policy of differentiating between objections to the conduct of an election and challenges [to] the eligibility of voters and it does not ordinarily permit challenges under the guise of objections after the election.” Matter of Norris, Inc., 63 N. L. R. B. 502, 512. Cf. Matter of Great Lakes Steel Corporation, 15 N. L. R. B. 510.
The respondent’s factory superintendent testified that an unidentified employee came to him and “objected to the vote of this Jennie Kane” several days after the election and even longer after the receipt by respondent of the notice of Mrs. Kane’s unemployment compensation claim, which had been mailed to respondent before the election. This testimony was admitted merely to show “how the company became interested in the question” of Mrs. Kane’s eligibility. The Board, of course, was not compelled to accept this testimony as proof of an objection to Mrs. Kane’s vote by an anti-union employee or as an indication that the interests of anti-union employees may have been inadequately represented. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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81
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ATLANTIC REFINING CO. v. FEDERAL TRADE COMMISSION.
No. 292.
Argued March 30, 1965.
Decided June 1, 1965.
Frederic L. Ballard, Jr., argued the cause for petitioner in No. 292. With him on the briefs were Charles I. Thompson, Jr., Tyson W. Coughlin, Roy W. Johns, Joel L. Carr and Harry W. Gill, Jr.
John F. Sonnett argued the cause for petitioner in No. 296. With him on the briefs were Arthur Mermin, David Ingraham and Marshall H. Cox, Jr.
Daniel M. Friedman argued the cause for respondent in both cases. With him on the brief were Solicitor General Cox, Assistant Attorney General Orrick, Lionel Kestenbaum, James Mel. Henderson, Alvin L. Berman and Lester A. Klaus.
Cecil E. Munn filed a brief for Champlin Petroleum Co., as amicus curiae, urging reversal in No. 292.
Harold T. Halfpenny and Mary M. Shaw filed a brief for the Automotive Service Industry Association, as amicus curiae, urging affirmance in No. 292.
William F. Kenney, William Simon and John Bodner, Jr., filed a brief for Shell Oil Co., as amicus curiae, in both cases.
Together with No. 296, Goodyear Tire & Rubber Co. v. Federal Trade Commission, also on certiorari to the same court.
Mr. Justice Clark
delivered the opinion of the Court.
The Federal Trade Commission has found that an agreement between the Atlantic Refining Company (Atlantic) and the Goodyear Tire & Rubber Company (Goodyear), under which the former “sponsors” the sale of the tires, batteries and accessory (TBA) products of the latter to its wholesale outlets and its retail service station dealers, is an unfair method of competition in violation of § 5 of the Federal Trade Commission Act, 38 Stat. 719, as amended, 15 U. S. C. § 45 (1964 ed.). Under the plan Atlantic sponsors the sale of Goodyear products to its wholesale and retail outlets on an overall commission basis. Goodyear is responsible for its sales and sells at its own price to Atlantic wholesalers and dealers for resale; it bears all of the cost of distribution through its warehouses, stores and other supply points and carries on a joint sales promotion program with Atlantic. The latter, however, is primarily responsible for promoting the sale of Goodyear products to its dealers and assisting them in their resale; for this it receives a commission on all sales made to its wholesalers and dealers. The hearing examiner, with the approval of the Commission and the Court of Appeals, enjoined the use of direct methods of coercion on the part of Atlantic upon its dealers in the inauguration and promotion of the plan. Atlantic does not seek review of this phase of the case. However, the Commission considered the coercive practices to be symptomatic of a more fundamental restraint of trade and found the sales-commission plan illegal in itself as “a classic example of the use of economic power in one market... to destroy competition in another market... 58 F. T. C. 309, 367. It prohibited Atlantic from participating in any such commission arrangement. Similarly, it forbade Goodyear from continuing the arrangement with Atlantic or any other oil company. Goodyear and Atlantic filed separate appeals. The Court of Appeals approved the findings of the Commission and affirmed its order. “Appraising the broader aspects of the system [used by Atlantic and Goodyear] as a tying arrangement,” it agreed with the Commission that it injured “competition in the distribution of TBA at the manufacturing, wholesale, and retail levels.” 331 F. 2d 394,402. We granted certiorari, 379 U. S. 943, because of the importance of the questions raised and especially in light of the holding of the Court of Appeals for the District of Columbia Circuit in Texaco, Inc. v. Federal Trade Comm’n, 118 U. S. App. D. C. 366, 336 F. 2d 754, which is in apparent conflict with these cases. We affirm the judgments of the Court of Appeals.
I.
Since Atlantic has not sought review of paragraphs 5 and 6 of the Commission’s order as to its use of overt acts of coercion on its wholesalers and retailers those portions of the order are final. We therefore do not set out in detail all of the facts which are so carefully examined in the opinion of the Court of Appeals.
Atlantic is a major producer, refiner and distributor of oil and its by-products. Its market is confined to portions of 17 States along the eastern seaboard. Its distribution system consists of wholesale distributors who purchase gasoline and lubricants in large quantities and retail service station operators who do business either as lessees of Atlantic or as contract dealers selling its products. In 1955 Atlantic had 2,493 lessee dealers, who purchased 39.1% of its gasoline sales, and 3,044 contract dealers, who bought 18.1 %. About half of the contract dealers were service station operators; the remainder were operators of garages, grocery stores and other outlets which sell gasoline but do not handle tires, batteries and accessories.
Goodyear is the largest manufacturer of rubber products in the United States with sales of over $1,000,000,000 in 1954. It distributes tires, tubes and accessories through 57 warehouses located throughout the country. It doés not warehouse batteries; “Goodyear” batteries are tradenamed by it but manufactured and directly distributed to Goodyear outlets by the Electric Auto-Lite Company and Gould-National Batteries, Inc. Goodyear also sells its products at wholesale and retail through about 500 company-owned stores and through numerous independent dealers. These independent franchised dealers number more than 12,000, there being among them a number of Atlantic wholesale petroleum distributors and retail petroleum jobbers. Goodyear has also had a substantial number of nonfranchised dealers which includes most service station customers, including the Atlantic stations involved here.
Gasoline service stations are particularly well suited to sell tires, batteries and accessories. They constitute a large and important market for those products. Since at least 1932 Atlantic has been distributing such products to its dealers. In 1951 it inaugurated the sales-commission plan. Its contract with Goodyear covered three regions: Philadelphia-New Jersey, New York State and New England.
The Goodyear-Atlantic agreement required Atlantic to assist Goodyear “to the fullest practicable extent in perfecting sales, credit, and merchandising arrangements” with all of Atlantic’s outlets. This included announcement to its dealers of its sponsorship of Goodyear products followed by a field representative’s call to “suggest... the maintenance of adequate stocks of merchandise” and “maintenance of proper identification and advertising” of such merchandise. Atlantic was to instruct its salesmen to urge dealers to “vigorously” represent Goodyear, and to “cooperate with and assist” Goodyear in its “efforts to promote and increase the sale” by Atlantic dealers of Goodyear products. And it was to “maintain adequate dealer training programs in the sale of tires, batteries, and accessories.” In addition, the companies organized joint sales organization meetings at which plans were made for perfecting the sales plan. One project was a “double teaming” solicitation of Atlantic outlets by representatives of both companies to convert them to Goodyear products. They were to call on the dealers together, take stock orders, furnish initial price lists and project future quotas of purchases of Goodyear products. Goodyear also required that each Atlantic dealer be assigned to a supply point maintained by it, such as a warehouse, Goodyear store, independent dealer or designated Atlantic distributor or retail dealer. Atlantic would not receive any commission on purchases made outside of an assigned supply point. Its commission of 10% on sales to Atlantic dealers and 7.5% on sales to its wholesalers was paid on the basis of a master sheet prepared by Goodyear and furnished Atlantic each month. This list was broken down so as to show the individual purchases of each dealer (except those whose supply points for Goodyear products were Atlantic wholesalers). Under this reporting technique, the Commission found, “Atlantic may determine the exact amount of sponsored TBA purchased by each Atlantic outlet... 58 F. T. C. 309, 351. Goodyear also furnished, this time at the specific request of Atlantic, a list of the latter’s recalcitrant dealers who refused to be identified with the “Goodyear Program.” These lists Atlantic forwarded to its district offices for “appropriate action.” On one occasion a list of 46 such dealers was furnished Atlantic officials by Goodyear. The Commission found that “the entire group... was thereafter signed to Goodyear contracts and Goodyear advertising signs were installed at their stations.” Id., at 346-347.
The effectiveness of the program is evidenced by the results. Within seven months after the agreement Goodyear had signed up 96% and 98%, respectively, of Atlantic’s dealers in two of the three areas assigned to it. In 1952 the sale of Goodyear products to Atlantic dealers was $4,175,890 — 40% higher than Atlantic’s sales during the last year of its purchase-resale plan with Lee tires and Exide batteries. By 1955 these sales of Goodyear products amounted to $5,700,121. Total sales of Goodyear and Firestone products from June 1950 to June 1956 were over $52,000,000. This enormous increase, the findings indicate, was the result of the effective policing of the plan. The reports of sales by Goodyear to Atlantic enabled it to know exactly the amount of Goodyear products the great majority of its dealers were buying.
The Commission stressed the evidence showing that “Atlantic dealers have been orally advised by sales officials of the oil company that their continued status as Atlantic dealers and lessees will be in jeopardy if they do not purchase sufficient quantities of sponsored” tires, batteries and accessories. Id,., at 342. Indeed, some dealers lost their leases after being reported for not complying with the Goodyear sales program. But we need not detail this feature of the case since Atlantic has conceded the point by not perfecting an appeal thereon.
II.
Section 5 of the Federal Trade Commission Act declares “[ujnfair methods of competition in commerce, and unfair... acts or practices in commerce... unlawful.” In a broad delegation of power it empowers the Commission, in the first instance, to determine whether a method of competition or the act or practice complained of is unfair. The Congress intentionally left development of the term “unfair” to the Commission rather than attempting to define “the many and variable unfair practices which prevail in commerce....” S. Rep. No. 592, 63d Cong., 2d Sess., 13. As the conference report stated, unfair competition could best be prevented “through the action of an administrative body of practical men... who will be able to apply the rule enacted by Congress to particular business situations, so as to eradicate evils with the least risk of interfering with legitimate business operations.” H. R. Conf. Rep. No. 1142, 63d Cong., 2d Sess., 19. In thus divining that there is no limit to business ingenuity and legal gymnastics the Congréss displayed much foresight. See Federal Trade Comm’n v. Cement Institute, 333 U. S. 683, 693 (1948). Where the Congress has provided that an administrative agency initially apply a broad statutory term to a particular situation, our function is limited to determining whether the Commission’s decision “has ‘warrant in the record’ and a reasonable basis in law.” Labor Board v. Hearst Publications, Inc., 322 U. S. 111, 131 (1944). While the final word is left to the courts, necessarily “we give great weight to the Commission’s conclusion....” Federal Trade Comm’n v. Cement Institute, supra, at 720.
III.
Certainly there is “warrant in the record” for the findings of the Commission here. Substantial evidence supports the conclusion that notwithstanding Atlantic’s contention that it and its dealers are mutually dependent upon each other, they simply do not bargain as equals. Among the sources of leverage in Atlantic’s hands are its lease and equipment loan contracts with their cancellation and short-term provisions. Only last Term we described the power implications of such arrangements in Simpson v. Union Oil Co., 377 U. S. 13 (1964), and we need not repeat that discussion here. It must also be remembered that Atlantic controlled the supply of gasoline and oil to its wholesalers and dealers. This was an additional source of economic leverage, United States v. Loew’s, Inc., 371 U. S. 38, 45 (1962), as was its extensive control of all advertising on the premises of its dealers.
Furthermore, there was abundant evidence that Atlantic, in some instances with the aid of Goodyear, not only exerted the persuasion that is a natural incident of its economic power, but coupled with it direct and overt threats of reprisal such as are now enjoined by paragraphs 5 and 6 of the order. Indeed, the Commission could properly have concluded that it was for this bundle of persuasion that Goodyear paid Atlantic its commission. We will not repeat the manner in which this sponsorship was carried out. It is sufficient to note that the most impressive evidence of its effectiveness was its undeniable success within a short time of its inception. In 1951, seven months after the sales-commission plan had gone into effect, Goodyear had enjoyed great success in signing contracts with Atlantic dealers despite the fact that a 1946-1949 survey had shown that 67% of the dealers had preferred Lee tires and 76% Exide batteries.
With this background in mind, we consider whether there was a “reasonable basis in law” for the Commission’s ultimate conclusion that the sales-commission plan constituted an unfair method of competition.
> H-1
At the outset we must stress what we do not find present here. We recognize that the Goodyear-Atlantic contract is not a tying arrangement. Atlantic is not required to tie its sale of gasoline and other petroleum products to purchases of Goodyear tires, batteries and accessories. Nor does it expressly require such purchases of its dealers. But neither do we understand that either the Commission or the Court of Appeals held that the sales-commission arrangement was a tying scheme. What they did find was that the central competitive characteristic was the same in both cases — the utilization of economic power in one market to curtail competition in another. Here that lever was bolstered by actual threats and coercive practices. As our cases hold, all that is necessary in § 5 proceedings to find a violation is to discover conduct that “runs counter to the public policy declared in the” Act. Fashion Originators’ Guild v. Federal Trade Comm’n, 312 U. S. 457, 463 (1941). But this is of necessity, and was intended to be, a standard to which the Commission would give substance. In doing so, its use as a guideline of recognized violations of the antitrust laws was, we believe, entirely appropriate. It has long been recognized that there are many unfair methods of competition that do not assume the proportions of antitrust violations. Federal Trade Comm’n v. Motion Picture Advertising Service Co., 344 U. S. 392, 394 (1953). When conduct does bear the characteristics of recognized antitrust violations it becomes suspect, and the Commission may properly look to cases applying those laws for guidance.
Although the Commission relied on such cases here, it expressly rejected a mechanical application of the law of tying arrangements. Rather it looked to the entire record as a basis for its conclusion that the activity of Goodyear and Atlantic impaired competition at three levels of the tires, batteries and accessories industry. It found that wholesalers and manufacturers of competing brands, and even Goodyear wholesalers who were not authorized supply points, were foreclosed from the Atlantic market. In addition, it recognized the obvious fact that Firestone and Goodyear were excluded from selling to Atlantic’s dealers in each other’s territories. Both of these effects on competition flowed from the contract itself. It also found that the plight of Atlantic wholesalers and retailers was equally clear. They had to compete with other wholesalers and retailers who were free to stock several brands, but they were effectively foreclosed from selling brands other than Goodyear. This restraint is in this respect broader than the one found in International Salt Co. v. United States, 332 U. S. 392 (1947), where the dealers could stock other salt if they could buy it at lower prices. Here the dealers could buy only at Goodyear’s price.
Thus the Commission was warranted in finding that the effect of the plan was as though Atlantic had agreed with Goodyear to require its dealers to buy Goodyear products and had done so. It is beyond question that the effect on commerce was not insubstantial. In International Salt Co., the market foreclosed was $500,000 annually. Firestone and Goodyear sales alone exceeded $11,000,000 in 1955 and $50,000,000 in six years, and more than 5,500 retailers and wholesalers were affected.
Goodyear and Atlantic contend that the Commission should have made a far more extensive economic analysis of the competitive effect of the sales-commission plan, examining the entire market in tires, batteries and accessories. But just as the effect of this plan is similar to that of a tie-in, so is it unnecessary to embark upon a full-scale economic analysis of competitive effect. We think it enough that the Commission found that a not insubstantial portion of commerce is affected. See United States v. Loew’s, Inc., 371 U. S. 38, 45, n. 4 (1962); International Salt Co. v. United States, 332 U. S. 392 (1947).
Nor can we say that the Commission erred in refusing to consider evidence of economic justification for the program. While these contracts may well provide Atlantic with an economical method of assuring efficient product distribution among its dealers they also amount to a device that permits suppliers of tires, batteries and accessories, through the use of oil company power, to effectively sew up large markets. Upon considering the destructive effect on commerce that would result from the widespread use of these contracts by major oil companies and suppliers, we conclude that the Commission was clearly justified in refusing the participants an opportunity to offset these evils by a showing of economic benefit to themselves. Northern Pacific R. Co. v. United States, 356 U. S. 1, 6-7 (1958).
The short of it is that Atlantic, with Goodyear’s encouragement and assistance, has marshaled its full economic power in a continuing campaign to force its dealers and wholesalers to buy Goodyear products. The anticom-petitive effects of this program are clear on the record and render unnecessary extensive economic analysis of market percentages or business justifications in determining whether this was a method of competition which Congress has declared unfair and therefore unlawful.
V.
We now turn to the matter of relief. ■ As we have said, the Commission’s order forbids Atlantic’s participation in any contract with any supplier of tires, batteries and accessories whereby it receives anything of value in connection with the sale of such products by any marketer. It also prohibits Goodyear from continuing or effecting any contract with Atlantic, “or with any other marketing oil company,” whereby Goodyear pays 'anything of value to the oil company in connection with the sale of tires, batteries and accessories by Goodyear to wholesalers or retailers of the oil company.
1. We first consider Atlantic, whose major argument is that the order is arbitrary and goes too far. It disallows the sales-commission plan, Atlantic says, but permits reinstitution of thé old purchase-resale plan even though the latter has the same anticompetitive effects and is a less effective method of distribution. This position flows from the language of the order which prohibits Atlantic’s receipt of anything of value in connection with the sale of tires, batteries and accessories by any marketer “other than The Atlantic Refining Company.” The merits of the purchase-resale plan, however, were not before the Commission and we therefore have no occasion to pass upon them. Nor do we believe that the order is too broad. Section 5 (b) empowers the Commission to issue a cease-and-desist order against anyone using an unfair method of competition in commerce. The Commission was of the opinion that to enjoin the use of overt coercive tactics was insufficient. We think it was justified in this conclusion. The long existence of the plan itself, coupled with the coercive acts practiced by Atlantic pursuant to it, warranted a decision to require more. The Commission could have decided that to uproot the practice required its complete prohibition; otherwise dealers would not enjoy complete freedom from unfair practices which the Act condemns. These are matters well within the ambit of the Commission’s authority.
2. As for Goodyear we hold that the order is entirely within the power of the Commission. Both the Commission and the Court of Appeals stressed that the sales-commission plan enabled Goodyear “to integrate [into] its own nationwide distribution system the economic power possessed by Atlantic over its wholesale and retail petroleum outlets.” 58 F. T. C., at 348. In addition, the Commission dedicated a considerable portion of its opinion to Goodyear’s role in carrying it out. Thus, although it is the oil company’s power and overt acts toward its outlets that outlaw the commission plan, the Commission was not restricted solely to an examination of its activity. Rather, in deciding upon the relief to be entered against Goodyear, it could appropriately consider its propensity for harnessing and utilizing that power. Because of the relevance of that evidence to our present inquiry we will consider it here in some detail.
Goodyear was no silent or inactive partner in the implementation of the sales-commission plan. It did not simply sit back and passively accept whatever benefits might accrue to it from the Atlantic contract. Indeed, the most striking aspect of the program, in the Commission’s view, was the degree to which the petitioners worked together to achieve the program’s success. A.Goodyear representative put it very neatly when he said: “After years of courtship Atlantic and Goodyear have wed.... We welcome wholeheartedly this merger.”
Examples of this close cooperation were numerous. Atlantic had a rather large turnover in dealerships, as well as a substantial number of new station openings each year. With the selection of persons to man these stations,-Goodyear supply points were notified by Atlantic before they actually began operations, thus allowing Atlantic-Goodyear teams an opportunity to call on the prospective dealer, to get initial orders before local competitors and to condition acceptance of the Goodyear line. Goodyear brands were used for demonstration in Atlantic training schools for these new dealers, and discussions of tires, batteries and accessories at these schools were often conducted by representatives of both Atlantic and Goodyear.
Moreover, Atlantic gave Goodyear lists of its dealers so that the latter could remove advertising for other products and replace it with its own. Goodyear sent lists of dealers refusing to accept its advertising to Atlantic for “appropriate action”; and it will be recalled that on one occasion when a list of 46 such dealers was forwarded to Atlantic, all soon fell into line. This is a particularly impressive example of Goodyear’s inclination to use Atlantic’s power for its own benefit. And there are more.
The reporting technique used by petitioners was especially revealing. Through it, Atlantic could determine the exact amount of sponsored products purchased by each Atlantic retail outlet from its assigned supply point. Goodyear supplied this information sua sponte insofar as the record shows. Ostensibly it was used in determining commissions due Atlantic. What makes it suspect is the detail with which it was compiled — wholly unnecessary for commission-payment purposes. Its potential use for channeling pressures upon recalcitrant dealers is obvious. And when considered alongside the admitted overt coercive practices of Atlantic, this list becomes a potent device in ensuring the success of the program.
The Commission also found that Goodyear and Atlantic concluded that the most effective merchandising tactic was dual solicitation or so-called “double-teaming.” Goodyear relied heavily on this technique and had urged it on the oil companies in a 1951 letter from its sales-commission program manager. The Commission found that “Goodyear thus appeared confident that the presence of an Atlantic salesman together with the Goodyear representative would render unnecessary any higgling or haggling over price before obtaining an initial order for TBA from Atlantic dealers.” 58 F. T. C., at 355. (Emphasis in original.) Goodyear’s confidence was justified, for as the Commission observed, the annual dealer evaluation by Atlantic salesmen carried substantial weight when the district managers decided upon annual lease extensions, and dealers were therefore understandably susceptible to the encouragement of Goodyear salesmen when Atlantic men were nearby looking over their shoulders. Thus, the Commission was well justified in concluding that Goodyear had in effect purchased a “captive market.”
With the preceding discussion in mind, we turn to Goodyear’s relationships with other oil companies. As of December 1964 it had sales-commission agreements with 20 other oil companies. Nine of these contracts were before the Commission in the instant case and were found to be “in all material respects identical with the Goodyear-Atlantic contract.” Id., at 352. They similarly require the companies to assist actively in the “selling and promotion” of Goodyear products. There is specific evidence in the record of the short-term lease agreements used by Shell, Sinclair and Sherwood Bros., three of the companies with which Goodyear has such agreements. Moreover, there was some indication that only three oil companies use three-year leases. Furthermore, there was evidence of practices by at least four oil companies and Goodyear similar to those existing under the Atlantic arrangement. These included threats as well as more subtle pressures.
Goodyear complains that there is no evidence of the economic power of many of the companies with which it has sales-commission plans. However, the Commission’s order does not directly restrict the activities of these companies. Goodyear, on the other hand, was before the Commission and was found to be a transgressor. There was substantial evidence of its propensity to use the power structure of Atlantic and at least four other oil companies to further its own distribution program. Nor is it any objection for Goodyear to claim that it did not exert any overt coercive pressures on the oil companies’ outlets. It is of little consequence that Atlantic actually applied the pressure. For so close was the teamwork of the two companies that, even with blinders on, Goodyear could not have been ignorant of those practices. It is difficult to escape the conclusion that there would have been little point in paying substantial commissions to oil companies were it not for their ability to exert power over their wholesalers and dealers — an ability adequately demonstrated on this record. Its allowance of these substantial overriding commissions in fact paid off handsomely. Goodyear’s sales under its various sales-commission contracts rose from $16,700,000 in 1961 to $36,000,000 in 1965.
The Commission, of course, has “wide discretion in its choice of a remedy deemed adequate to cope with... unlawful practices....” Jacob Siegel Co. v. Federal Trade Comm’n, 327 U. S. 608, 611 (1946). Furthermore, it acts within the limits of its authority when it bars repetitions of similar conduct with other parties. Federal Trade Comm’n v. Henry Broch & Co., 368 U. S. 360, 364 (1962). There was ample evidence establishing on Goodyear’s part a course of conduct lasting over 14 years aimed at utilizing oil company power structures to curtail competition in tires, batteries and accessories. We think that the Commission could appropriately conclude that this course of conduct required forbidding the use of sales-commission plans by Goodyear completely.
This order does not necessarily prohibit Goodyear from making contracts, with companies not possessed of economic power over their dealers. The evidence in this particular record, however, does involve relationships such as It has enjoyed with Atlantic and its propensity to use those relationships for an unfair competitive advantage. Goodyear offered no evidence that it has arrangements differing from those mentioned in the instant case. In these circumstances it is sufficient to point out that in the event it has such a contract with such a company it may seek a reopening of the order approved today. The Commission has statutory power to reopen and modify its orders at all times. But Congress has placed in the Commission in the first instance the power to shape the remedy necessary to deal with unfair methods of competition. We will interfere ohly where there is no reasonable relation between the remedy and the violation. Federal Trade Comm’n v. Ruberoid Co., 343 U. S. 470, 473 (1952). On this record we cannot say that the Commission’s remedy is unreasonable and the judgments are therefore
Affirmed.
Section 5 provides in pertinent part:
“(a) (1) Unfair methods of competition in commerce, and unfair... acts or practices in commerce, are declared unlawful
“(6) The Commission is empowered and directed to prevent persons, partnerships, or corporations... from using unfair methods of competition in commerce and unfair... acts or practices in commerce.
“(b) Whenever the Commission shall have reason to believe that any such person, partnership, or corporation has been or is using any unfair method of competition or unfair... act or practice in commerce, and if it shall appear to the Commission that a proceeding by it in respect thereof would be to the interest of the public, it shall issue and serve upon such person,' partnership, or corporation a complaint stating its charges in that respect and containing a notice of a hearing upon a day and at a place therein fixed- at least thirty days after the service of said complaint.... If upon such hearing the Commission shall be of the opinion that the method of competition or the act or practice in question is prohibited by [this Act], it shall make a report in writing in which it shall state its findings as to the facts and shall issue and cause to be served on such person, partnership, or corporation an order requiring such person, partnership, or corporation to cease and desist from using such method of competition or such act or practice.... After the expiration of the time allowed for filing a petition for review, if no such petition has been duly filed within such time, the Commission may at any time, after notice and opportunity for hearing, reopen and alter, modify, or set aside, in whole or in part, any report or order made or issued by it under this section, whenever in the opinion of the Commission conditions of fact or of law have so changed as to require such action or if the public interest shall so require....”
Atlantic was ordered to cease and desist from:
“1. Entering [into] or continuing in operation or effect any contract, agreement or combination, express or implied, with The Goodyear Tire & Rubber Company, or The Goodyear Tire | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
56
] | sc_adminaction |
FEDERAL ENERGY REGULATORY COMMISSION, Petitioner
v.
ELECTRIC POWER SUPPLY ASSOCIATION, et al.
EnerNOC, Inc., et al., Petitioners
v.
Electric Power Supply Association, et al.
Nos. 14-840
14-841.
Supreme Court of the United States
Argued Oct. 14, 2015.
Decided Jan. 25, 2016.
As Revised Jan. 28, 2016.
Donald B. Verrilli, Jr., Solicitor General, for Federal Energy Regulatory Commission.
Carter G. Phillips, Washington, DC, for EnerNOC, Inc., et al.
Arocles Aguilar, General Counsel, Harvey Y. Morris, Assistant General Counsel, Elizabeth Dorman, Principal Counsel, California Public, Utilities Commission, San Francisco, CA, for Respondent.
Carter G. Phillips, C. Frederick Beckner III, Sidley Austin LLP, Washington, DC, Matthew J. Cushing, EnerNOC, Inc., Boston, MA, for EnerNOC, Inc.
Marvin T. Griff, Husch Blackwell LLP, Washington, DC, for EnergyConnect, Inc.
Robert A. Weishaar, Jr., McNees Wallace & Nurick LLC, Washington, DC, for the Coalition of MISO Transmission Customers, and PJM Industrial, Customer Coalition.
Allen M. Freifeld, Philadelphia, PA, for Viridity Energy, Inc.
Cynthia S. Bogorad, William S. Huang, Katharine M. Mapes, Jessica R. Bell, Spiegel & McDiarmid LLP, Washington, DC, for Respondents Midwest Load-Serving Entities.
Roger E. Collanton, General Counsel, Burton Gross, Assistant General Counsel, Daniel J. Shonkwiler, Lead Counsel, California Independent System Operator Corp., Folsom, CA, Catherine E. Stetson, Counsel of Record, Elizabeth Austin Bonner, Hogan Lovells US LLP, Washington, DC, for Respondent.
Elizabeth Dorman, Counsel of Record, Principal Counsel, California Public Utilities Commission, San Francisco, CA, H. Robert Erwin, Jr., General Counsel, Ransom E. Davis, Associate General Counsel, Public Service Commission of Maryland, Baltimore, MA, Bohdan R. Pankiw, Chief Counsel, Kriss E. Brown, Assistant Counsel, Pennsylvania Public Utility Commission, Harrisburg, PA, for joint states.
David L. Morenoff, General Counsel, Robert H. Solomon, Solicitor, Holly E. Cafer, Attorney, Federal Energy Regulatory Commission, Washington, DC, Donald B. Verrilli, Jr., Solicitor General, Counsel of Record, Edwin S. Kneedler, Deputy Solicitor General, John F. Bash, Assistant to the Solicitor General, Department of Justice, Washington, DC, for Petitioner.
Vincent P. Duane, Senior Vice President and General Counsel, PJM Interconnection, L.L.C., Audubon, PA, Craig Glazer, Vice President-Federal Government Policy, PJM Interconnection, L.L.C., Washington, DC, Barry S. Spector, Counsel of Record, Paul M. Flynn, Wright & Talisman, P.C., Washington, DC, for Respondent PJM Interconnection, L.L.C.
Ashley C. Parrish, David G. Tewksbury, King & Spalding LLP, Washington, DC, for Electric Power Supply Association.
Paul D. Clement, Counsel of Record, Erin E. Murphy, Bancroft PLLC, Washington, DC, for all respondents joining this brief.
Harvey L. Reiter, Adrienne E. Clair, Stinson Leonard Street LLP, Washington, DC, for American Public Power Association, National Rural Electric Cooperative Association, and Old Dominion Electric Cooperative.
David B. Raskin, Steptoe & Johnson LLP, Washington, DC, for Edison Electric Institute.
Sandra E. Rizzo, Arnold & Porter LLP, Washington, DC, for PPL Electric Utilities Corporation, PPL, EnergyPlus, LLC, PPL Brunner Island, LLC, PPL, Holtwood, LLC, PPL Martins Creek, LLC, PPL, Maine, LLC, PPL Montour, LLC, PPL Susquehanna, LLC, Lower Mount Bethel Energy, LLC, and PJM Power Providers Group.
Paul Breakman, National Rural Electric, Cooperative Association, Arlington, VA, for National Rural Electric Cooperative Association.
Edward H. Comer, Henri D. Bartholomot, Edison Electric Institute, Washington, DC, for Edison Electric Institute.
Delia D. Patterson, Randolph Lee Elliott, American Public Power Association, Arlington, VA, for American Public Power Association.
Jesse A. Dillon, Talen Energy, Allentown, PA, for Talen Energy Marketing, LLC, Brunner Island, LLC, Holtwood, LLC, Martins Creek, LLC, Talen Maine, LLC, Montour, LLC, Susquehanna Nuclear, LLC, and Lower Mount Bethel Energy, LLC.
Michael A. McGrail, PPL Services Corporation, Allentown, PA, for PPL Electric Utilities Corporation.
Justice KAGAN delivered the opinion of the Court.
The Federal Power Act (FPA or Act), 41 Stat. 1063, as amended, 16 U.S.C. § 791a et seq., authorizes the Federal Energy Regulatory Commission (FERC or Commission) to regulate "the sale of electric energy at wholesale in interstate commerce," including both wholesale electricity rates and any rule or practice "affecting" such rates. §§ 824(b), 824e(a). But the law places beyond FERC's power, and leaves to the States alone, the regulation of "any other sale"-most notably, any retail sale-of electricity. § 824(b). That statutory division generates a steady flow of jurisdictional disputes because-in point of fact if not of law-the wholesale and retail markets in electricity are inextricably linked.
These cases concern a practice called "demand response," in which operators of wholesale markets pay electricity consumers for commitments not to use power at certain times. That practice arose because wholesale market operators can sometimes-say, on a muggy August day-offer electricity both more cheaply and more reliably by paying users to dial down their consumption than by paying power plants to ramp up their production. In the regulation challenged here, FERC required those market operators, in specified circumstances, to compensate the two services equivalently-that is, to pay the same price to demand response providers for conserving energy as to generators for making more of it.
Two issues are presented here. First, and fundamentally, does the FPA permit FERC to regulate these demand response transactions at all, or does any such rule impinge on the States' authority? Second, even if FERC has the requisite statutory power, did the Commission fail to justify adequately why demand response providers and electricity producers should receive the same compensation? The court below ruled against FERC on both scores. We disagree.
I
A
Federal regulation of electricity owes its beginnings to one of this Court's decisions. In the early 20th century, state and local agencies oversaw nearly all generation, transmission, and distribution of electricity. But this Court held in Public Util. Comm'n of R.I. v. Attleboro Steam & Elec. Co., 273 U.S. 83, 89-90, 47 S.Ct. 294, 71 L.Ed. 549 (1927), that the Commerce Clause bars the States from regulating certain interstate electricity transactions, including wholesale sales (i.e., sales for resale) across state lines. That ruling created what became known as the "Attleboro gap"-a regulatory void which, the Court pointedly noted, only Congress could fill. See id., at 90, 47 S.Ct. 294.
Congress responded to that invitation by passing the FPA in 1935. The Act charged FERC's predecessor agency with undertaking "effective federal regulation of the expanding business of transmitting and selling electric power in interstate commerce." New York v. FERC, 535 U.S. 1, 6, 122 S.Ct. 1012, 152 L.Ed.2d 47 (2002) (quoting Gulf States Util. Co. v. FPC, 411 U.S. 747, 758, 93 S.Ct. 1870, 36 L.Ed.2d 635 (1973) ). Under the statute, the Commission has authority to regulate "the transmission of electric energy in interstate commerce" and "the sale of electric energy at wholesale in interstate commerce." 16 U.S.C. § 824(b)(1).
In particular, the FPA obligates FERC to oversee all prices for those interstate transactions and all rules and practices affecting such prices. The statute provides that "[a]ll rates and charges made, demanded, or received by any public utility for or in connection with" interstate transmissions or wholesale sales-as well as "all rules and regulations affecting or pertaining to such rates or charges"-must be "just and reasonable." § 824d(a). And if "any rate [or] charge," or "any rule, regulation, practice, or contract affecting such rate [or] charge[,]" falls short of that standard, the Commission must rectify the problem: It then shall determine what is "just and reasonable" and impose "the same by order." § 824e(a).
Alongside those grants of power, however, the Act also limits FERC's regulatory reach, and thereby maintains a zone of exclusive state jurisdiction. As pertinent here, § 824(b)(1) -the same provision that gives FERC authority over wholesale sales-states that "this subchapter," including its delegation to FERC, "shall not apply to any other sale of electric energy." Accordingly, the Commission may not regulate either within-state wholesale sales or, more pertinent here, retail sales of electricity (i.e., sales directly to users). See New York, 535 U.S., at 17, 23, 122 S.Ct. 1012. State utility commissions continue to oversee those transactions.
Since the FPA's passage, electricity has increasingly become a competitive interstate business, and FERC's role has evolved accordingly. Decades ago, state or local utilities controlled their own power plants, transmission lines, and delivery systems, operating as vertically integrated monopolies in confined geographic areas. That is no longer so. Independent power plants now abound, and almost all electricity flows not through "the local power networks of the past," but instead through an interconnected "grid" of near-nationwide scope. See id., at 7, 122 S.Ct. 1012 ("electricity that enters the grid immediately becomes a part of a vast pool of energy that is constantly moving in interstate commerce," linking producers and users across the country). In this new world, FERC often forgoes the cost-based rate-setting traditionally used to prevent monopolistic pricing. The Commission instead undertakes to ensure "just and reasonable" wholesale rates by enhancing competition-attempting, as we recently explained, "to break down regulatory and economic barriers that hinder a free market in wholesale electricity." Morgan Stanley Capital Group Inc. v. Public Util. Dist. No. 1 of Snohomish Cty., 554 U.S. 527, 536, 128 S.Ct. 2733, 171 L.Ed.2d 607 (2008).
As part of that effort, FERC encouraged the creation of nonprofit entities to manage wholesale markets on a regional basis. Seven such wholesale market operators now serve areas with roughly two-thirds of the country's electricity "load" (an industry term for the amount of electricity used). See FERC, Energy Primer: A Handbook of Energy Market Basics 58-59 (Nov. 2015) (Energy Primer). Each administers a portion of the grid, providing generators with access to transmission lines and ensuring that the network conducts electricity reliably. See ibid. And still more important for present purposes, each operator conducts a competitive auction to set wholesale prices for electricity.
These wholesale auctions serve to balance supply and demand on a continuous basis, producing prices for electricity that reflect its value at given locations and times throughout each day. Such a real-time mechanism is needed because, unlike most products, electricity cannot be stored effectively. Suppliers must generate-every day, hour, and minute-the exact amount of power necessary to meet demand from the utilities and other "load-serving entities" (LSEs) that buy power at wholesale for resale to users. To ensure that happens, wholesale market operators obtain (1) orders from LSEs indicating how much electricity they need at various times and (2) bids from generators specifying how much electricity they can produce at those times and how much they will charge for it. Operators accept the generators' bids in order of cost (least expensive first) until they satisfy the LSEs' total demand. The price of the last unit of electricity purchased is then paid to every supplier whose bid was accepted, regardless of its actual offer; and the total cost is split among the LSEs in proportion to how much energy they have ordered. So, for example, suppose that at 9 a.m. on August 15 four plants serving Washington, D.C. can each produce some amount of electricity for, respectively, $10/unit, $20/unit, $30/unit, and $40/unit. And suppose that LSEs' demand at that time and place is met after the operator accepts the three cheapest bids. The first three generators would then all receive $30/unit. That amount is (think back to Econ 101) the marginal cost-i.e., the added cost of meeting another unit of demand-which is the price an efficient market would produce. See 1 A. Kahn, The Economics of Regulation: Principles and Institutions 65-67 (1988). FERC calls that cost (in jargon that will soon become oddly familiar) the locational marginal price, or LMP.
As in any market, when wholesale buyers' demand for electricity increases, the price they must pay rises correspondingly; and in those times of peak load, the grid's reliability may also falter. Suppose that by 2 p.m. on August 15, it is 98 degrees in D.C. In every home, store, or office, people are turning the air conditioning up. To keep providing power to their customers, utilities and other LSEs must ask their market operator for more electricity. To meet that spike in demand, the operator will have to accept more expensive bids from suppliers. The operator, that is, will have to agree to the $40 bid that it spurned before-and maybe, beyond that, to bids of $50 or $60 or $70. In such periods, operators often must call on extremely inefficient generators whose high costs of production cause them to sit idle most of the time. See Energy Primer 41-42. As that happens, LMP-the price paid by all LSEs to all suppliers-climbs ever higher. And meanwhile, the increased flow of electricity through the grid threatens to overload transmission lines. See id., at 44. As every consumer knows, it is just when the weather is hottest and the need for air conditioning most acute that blackouts, brownouts, and other service problems tend to occur.
Making matters worse, the wholesale electricity market lacks the self-correcting mechanism of other markets. Usually, when the price of a product rises, buyers naturally adjust by reducing how much they purchase. But consumers of electricity-and therefore the utilities and other LSEs buying power for them at wholesale-do not respond to price signals in that way. To use the economic term, demand for electricity is inelastic. That is in part because electricity is a necessity with few ready substitutes: When the temperature reaches 98 degrees, many people see no option but to switch on the AC. And still more: Many State regulators insulate consumers from short-term fluctuations in wholesale prices by insisting that LSEs set stable retail rates. See id., at 41, 43-44. That, one might say, short-circuits the normal rules of economic behavior. Even in peak periods, as costs surge in the wholesale market, consumers feel no pinch, and so keep running the AC as before. That means, in turn, that LSEs must keep buying power to send to those users-no matter that wholesale prices spiral out of control and increased usage risks overtaxing the grid.
But what if there were an alternative to that scenario? Consider what would happen if wholesale market operators could induce consumers to refrain from using (and so LSEs from buying) electricity during peak periods. Whenever doing that costs less than adding more power, an operator could bring electricity supply and demand into balance at a lower price. And simultaneously, the operator could ease pressure on the grid, thus protecting against system failures. That is the idea behind the practice at issue here: Wholesale demand response, as it is called, pays consumers for commitments to curtail their use of power, so as to curb wholesale rates and prevent grid breakdowns. See id., at 44-46.
These demand response programs work through the operators' regular auctions. Aggregators of multiple users of electricity, as well as large-scale individual users like factories or big-box stores, submit bids to decrease electricity consumption by a set amount at a set time for a set price. The wholesale market operators treat those offers just like bids from generators to increase supply. The operators, that is, rank order all the bids-both to produce and to refrain from consuming electricity-from least to most expensive, and then accept the lowest bids until supply and demand come into equipoise. And, once again, the LSEs pick up the cost of all those payments. So, to return to our prior example, if a store submitted an offer not to use a unit of electricity at 2 p.m. on August 15 for $35, the operator would accept that bid before calling on the generator that offered to produce a unit of power for $40. That would result in a lower LMP-again, wholesale market price-than if the market operator could not avail itself of demand response pledges. See ISO/RTO Council, Harnessing the Power of Demand: How ISOs and RTOs Are Integrating Demand Response Into Wholesale Electricity Markets 40-43 (2007) (estimating that, in one market, a demand response program reducing electricity usage by 3% in peak hours would lead to price declines of 6% to 12%). And it would decrease the risk of blackouts and other service problems.
Wholesale market operators began using demand response some 15 years ago, soon after they assumed the role of overseeing wholesale electricity sales. Recognizing the value of demand response for both system reliability and efficient pricing, they urged FERC to allow them to implement such programs. See, e.g., PJM Interconnection, L.L.C., Order Accepting Tariff Sheets as Modified, 95 FERC ¶ 61,306 (2001) ; California Independent System Operator Corp., Order Conditionally Accepting for Filing Tariff Revisions, 91 FERC ¶ 61,256 (2000). And as demand response went into effect, market participants of many kinds came to view it-in the words of respondent Electric Power Supply Association (EPSA)-as an "important element[ ] of robust, competitive wholesale electricity markets." App. 94, EPSA, Comments on Proposed Rule on Demand Response Compensation in Organized Wholesale Energy Markets (May 12, 2010).
Congress added to the chorus of voices praising wholesale demand response. In the Energy Policy Act of 2005, 119 Stat. 594 (EPAct), it declared as "the policy of the United States" that such demand response "shall be encouraged." § 1252(f), 119 Stat. 966, 16 U.S.C. § 2642 note. In particular, Congress directed, the deployment of "technology and devices that enable electricity customers to participate in... demand response systems shall be facilitated, and unnecessary barriers to demand response participation in energy... markets shall be eliminated." Ibid.
*771B
Spurred on by Congress, the Commission determined to take a more active role in promoting wholesale demand response programs. In 2008, FERC issued Order No. 719, which (among other things) requires wholesale market operators to receive demand response bids from aggregators of electricity consumers, except when the state regulatory authority overseeing those users' retail purchases bars such demand response participation. See 73 Fed. Reg. 64119, ¶ 154 (codified 18 CFR § 35.28(g)(1) (2015) ). That original order allowed operators to compensate demand response providers differently from generators if they so chose. No party sought judicial review.
Concerned that Order No. 719 had not gone far enough, FERC issued the rule under review here in 2011, with one commissioner dissenting. See Demand Response Competition in Organized Wholesale Energy Markets, Order No. 745, 76 Fed. Reg. 16658 (Rule) (codified 18 CFR § 35.28(g)(1)(v) ). The Rule attempts to ensure "just and reasonable" wholesale rates by requiring market operators to appropriately compensate demand response providers and thus bring about "meaningful demand-side participation" in the wholesale markets. 76 Fed. Reg. 16658, ¶ 1, 16660, ¶ 10 ; 16 U.S.C. § 824d(a). The Rule's most significant provision directs operators, under two specified conditions, to pay LMP for any accepted demand response bid, just as they do for successful supply bids. See 76 Fed. Reg. 16666-16669, ¶¶ 45-67. In other words, the Rule requires that demand response providers in those circumstances receive as much for conserving electricity as generators do for producing it.
The two specified conditions ensure that a bid to use less electricity provides the same value to the wholesale market as a bid to make more. First, a demand response bidder must have "the capability to provide the service" offered; it must, that is, actually be able to reduce electricity use and thereby obviate the operator's need to secure additional power. Id., at 16666, ¶¶ 48-49. Second, paying LMP for a demand response bid "must be cost-effective," as measured by a standard called "the net benefits test." Ibid., ¶ 48. That test makes certain that accepting a lower-priced demand response bid over a higher-priced supply bid will actually save LSEs (i.e., wholesale purchasers) money. In some situations it will not, even though accepting a lower-priced bid (by definition) reduces LMP. That is because (to oversimplify a bit) LSEs share the cost of paying successful bidders, and reduced electricity use makes some LSEs drop out of the market, placing a proportionally greater burden on those that are left. Each remaining LSE may thus wind up paying more even though the total bill is lower; or said otherwise, the costs associated with an LSE's increased share of compensating bids may exceed the savings that the LSE obtains from a lower wholesale price.
The net benefits test screens out such counterproductive demand response bids, exempting them from the Rule's compensation requirement. See id., at 16659, 16666-16667, ¶¶ 3, 50-53. What remains are only those offers whose acceptance will result in actual savings to wholesale purchasers (along with more reliable service to end users). See id., at 16671, ¶¶ 78-80.
The Rule rejected an alternative scheme for compensating demand response bids. Several commenters had urged that, in paying a demand response provider, an operator should subtract from the ordinary wholesale price the savings that the provider nets by not buying electricity on the retail market. Otherwise, the commenters claimed, demand response providers would receive a kind of "double-payment" relative to generators. See id., at 16663, ¶ 24. That proposal, which the dissenting commissioner largely accepted, became known as LMP minus G, or more simply LMP-G, where "G" stands for the retail price of electricity. See id., at 16668, ¶ 60, 16680 (Moeller, dissenting). But FERC explained that, under the conditions it had specified, the value of an accepted demand response bid to the wholesale market is identical to that of an accepted supply bid because each succeeds in cost-effectively "balanc[ing] supply and demand." Id., at 16667, ¶ 55. And, the Commission reasoned, that comparable value is what ought to matter given FERC's goal of strengthening competition in the wholesale market: Rates should reflect not the costs that each market participant incurs, but instead the services it provides. See id., at 16668, ¶ 62. Moreover, the Rule stated, compensating demand response bids at their actual value-i.e., LMP-will help overcome various technological barriers, including a lack of needed infrastructure, that impede aggregators and large-scale users of electricity from fully participating in demand response programs. See id., at 16667-16668, ¶¶ 57-58.
The Rule also responded to comments challenging FERC's statutory authority to regulate the compensation operators pay for demand response bids. Pointing to the Commission's analysis in Order No. 719, the Rule explained that the FPA gives FERC jurisdiction over such bids because they "directly affect [ ] wholesale rates." Id., at 16676, ¶ 112 (citing 74 id., at 37783, ¶ 47, and 16 U.S.C. § 824d ). Nonetheless, the Rule noted, FERC would continue Order No. 719's policy of allowing any state regulatory body to prohibit consumers in its retail market from taking part in wholesale demand response programs. See 76 Fed. Reg. 16676, ¶ 114 ; 73 id., at 64119, ¶ 154. Accordingly, the Rule does not require any "action[ ] that would violate State laws or regulations." 76 id., at 16676, ¶ 114.
C
A divided panel of the Court of Appeals for the District of Columbia Circuit vacated the Rule as "ultra vires agency action." 753 F.3d 216, 225 (2014). The court held that FERC lacked authority to issue the Rule even though "demand response compensation affects the wholesale market." Id., at 221. The Commission's "jurisdiction to regulate practices 'affecting' rates," the court stated, "does not erase the specific limit[ ]" that the FPA imposes on FERC's regulation of retail sales. Id., at 222. And the Rule, the court concluded, exceeds that limit: In "luring... retail customers" into the wholesale market, and causing them to decrease "levels of retail electricity consumption," the Rule engages in "direct regulation of the retail market." Id., at 223-224.
The Court of Appeals held, alternatively, that the Rule is arbitrary and capricious under the Administrative Procedure Act, 5 U.S.C. § 706(2)(A), because FERC failed to "adequately explain[ ]" why paying LMP to demand response providers "results in just compensation." 753 F.3d, at 225. According to the court, FERC did not "properly consider" the view that such a payment would give those providers a windfall by leaving them with "the full LMP plus... the savings associated with" reduced consumption. Ibid. (quoting Demand Response Competition in Organized Wholesale Energy Markets: Order on Rehearing and Clarification, Order No. 745-A (Rehearing Order), 137 FERC ¶ 61,215, p. 62,316 (2011) (Moeller, dissenting)). The court dismissed out of hand the idea that "comparable contributions [could] be the reason for equal compensation." 753 F.3d, at 225.
Judge Edwards dissented. He explained that the rules governing wholesale demand response have a "direct effect... on wholesale electricity rates squarely within FERC's jurisdiction." Id., at 227. And in setting those rules, he argued, FERC did not engage in "direct regulation of the retail market"; rather, "[a]uthority over retail rates... remains vested solely in the States." Id., at 234 (internal quotation marks omitted). Finally, Judge Edwards rejected the majority's view that the Rule is arbitrary and capricious. He noted the substantial deference due to the Commission in cases involving ratemaking, and concluded that FERC provided a "thorough" and "reasonable" explanation for choosing LMP as the appropriate compensation formula. Id., at 236-238.
We granted certiorari, 575 U.S. ----, 135 S.Ct. 2049, 191 L.Ed.2d 954 (2015), to decide whether the Commission has statutory authority to regulate wholesale market operators' compensation of demand response bids and, if so, whether the Rule challenged here is arbitrary and capricious. We now hold that the Commission has such power and that the Rule is adequately reasoned. We accordingly reverse.
II
Our analysis of FERC's regulatory authority proceeds in three parts. First, the practices at issue in the Rule-market operators' payments for demand response commitments-directly affect wholesale rates. Second, in addressing those practices, the Commission has not regulated retail sales. Taken together, those conclusions establish that the Rule complies with the FPA's plain terms. And third, the contrary view would conflict with the Act's core purposes by preventing all use of a tool that no one (not even EPSA) disputes will curb prices and enhance reliability in the wholesale electricity market.
A
The FPA delegates responsibility to FERC to regulate the interstate wholesale market for electricity-both wholesale rates and the panoply of rules and practices affecting them. As noted earlier, the Act establishes a scheme for federal regulation of "the sale of electric energy at wholesale in interstate commerce." 16 U.S.C. § 824(b)(1) ; see supra, at 767. Under the statute, "[a]ll rates and charges made, demanded, or received by any public utility for or in connection with" interstate wholesale sales "shall be just and reasonable"; so too shall "all rules and regulations affecting or pertaining to such rates or charges." § 824d(a). And if FERC sees a violation of that standard, it must take remedial action. More specifically, whenever the Commission "shall find that any rate [or] charge"-or "any rule, regulation, practice, or contract affecting such rate [or] charge"-is "unjust [or] unreasonable," then the Commission "shall determine the just and reasonable rate, charge[,] rule, regulation, practice or contract" and impose "the same by order." § 824e(a). That means FERC has the authority-and, indeed, the duty-to ensure that rules or practices "affecting" wholesale rates are just and reasonable.
Taken for all it is worth, that statutory grant could extend FERC's power to some surprising places. As the court below noted, markets in all electricity's inputs-steel, fuel, and labor most prominent among them-might affect generators' supply of power. See 753 F.3d, at 221 ; id., at 235 (Edwards, J., dissenting). And for that matter, markets | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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43
] | sc_adminaction |
WOOD et al. v. STRICKLAND et al.
No. 73-1285.
Argued October 16, 1974
Decided February 25, 1975
G. Ross Smith argued the cause for petitioners. With him on the brief was Herschel H. Friday.
Ben Gore argued the cause and filed a brief for respondents.
F. Raymond Marks filed a brief for the Childhood and Government Project as amicus curiae.
Mr. Justice White
delivered the opinion of the Court.
Respondents Peggy Strickland and Virginia Crain brought this lawsuit against petitioners, who were members of the school board at the time in question, two school administrators, and the Special School District of Mena, Ark., purporting to assert a cause of action under 42 U. S. C. § 1983, and claiming that their federal constitutional rights to due process were infringed under color of state law by their expulsion from the Mena Public High School on the grounds of their violation of a school regulation prohibiting the use or possession of intoxicating beverages at school or school activities. The complaint as amended prayed for compensatory and punitive damages against all petitioners, injunctive relief allowing respondents to resume attendance, preventing petitioners from imposing any sanctions as a result of the expulsion, and restraining enforcement of the challenged regulation, declaratory relief as to the constitutional invalidity of the regulation, and expunction of any record of their expulsion. After the declaration of a mistrial arising from the jury’s failure to reach a verdict, the District Court directed verdicts in favor of petitioners on the ground that petitioners were immune from damages suits absent proof of malice in the sense of ill will toward respondents. 348 F. Supp. 244 (WD Ark. 1972). The Court of Appeals, finding that the facts showed a violation of respondents’ rights to “substantive due process,” reversed and remanded for appropriate injunctive relief and a new trial on the question of damages. 485 F. 2d 186 (CA8 1973). A petition for rehearing en banc was denied, with three judges dissenting. See id., at 191. Certiorari was granted to consider whether this application of due process by the Court of Appeals was warranted and whether that court’s expression of a standard governing immunity for school board members from liability for compensatory damages under 42 U. S. C. § 1983 was the correct one. 416 U. S. 935 (1974).
I
The violation of the school regulation prohibiting the use or possession of intoxicating beverages at school or school activities with which respondents were charged concerned their “spiking” of the punch served at a meeting of an extracurricular school organization attended by parents and students. At the time in question, respondents were 16 years old and were in the 10th grade. The relevant facts begin with their discovery that the punch had not been prepared for the meeting, as previously planned. The girls then agreed to “spike” it. Since the county in which the school is located is “dry,” respondents and a third girl drove across the state border into Oklahoma and purchased two 12-ounce bottles of “Right Time,” a malt liquor. They then bought six 10-ounce bottles of a soft drink, and, after having mixed the contents of the eight bottles in an empty milk carton, returned to school. Prior to the meeting, the girls experienced second thoughts about the wisdom of their prank, but by then they were caught up in the force of events and the intervention of other girls prevented them from disposing of the illicit punch. The punch was served at the meeting, without apparent effect.
Ten days later, the teacher in charge of the extracurricular group and meeting, Mrs. Curtis Powell, having heard something about the “spiking,” questioned the girls about it. Although first denying any knowledge, the girls admitted their involvement after the teacher said that she would handle the punishment herself. The next day, however, she told the girls that the incident was becoming increasingly the subject of talk in the school and that the principal, P. T. Waller, would probably hear about it. She told them that her job was in jeopardy but that she would not force them to admit to Waller what they had done. If they did not go to him then, however, she would not be able to help them if the incident became “distorted.” The three girls then went to Waller and admitted their role in the affair. He suspended them from school for a maximum two-week period, subject to the decision of the school board. Waller also told them that the board would meet that night, that the girls could tell their parents about the meeting, but that the parents should not contact any members of the board.
Neither the girls nor their parents attended the school board meeting that night. Both Mrs. Powell and Waller, after making their reports concerning the incident, recommended leniency. At this point, a telephone call was received by S. L. Inlow, then the superintendent of schools, from Mrs. Powell’s husband, also a teacher at the high school, who reported that he had heard that the third girl involved had been in a fight that evening at a basketball game. Inlow informed the meeting of the news, although he did not mention the name of the girl involved. Mrs. Powell and Waller then withdrew their recommendations of leniency, and the board voted to expel the girls from school for the remainder of the semester, a period of approximately three months.
The board subsequently agreed to hold another meeting on the matter, and one was held approximately two weeks after the first meeting. The girls, their parents, and their counsel attended this session. The board began with a reading of a written statement of facts as it had found them. The girls admitted mixing the malt liquor into the punch with the intent of “spiking” it, but asked the board to forgo its rule punishing such violations by such substantial suspensions. Neither Mrs. Powell nor Waller was present at this meeting. The board voted not to change its policy and, as before, to expel the girls for the remainder of the semester.
II
The District Court instructed the jury that a decision for respondents had to be premised upon a finding that petitioners acted with malice in expelling them and defined “malice” as meaning “ill will against a person— a wrongful act done intentionally without just cause or excuse.” 348 F. Supp., at 248. In ruling for petitioners after the jury had been unable to agree, the District Court found “as a matter of law” that there was no evidence from which malice could be inferred. Id., at 253.
The Court of Appeals, however, viewed both the instruction and the decision of the District Court as being erroneous. Specific intent to harm wrongfully, it held, was not a requirement for the recovery of damages. Instead, “[i]t need only be established that the defendants did not, in the light of all the circumstances, act in good faith. The test is an objective, rather than a subjective, one.” 485 F. 2d, at 191 (footnote omitted).
Petitioners as members of the school board assert here, as they did below, an absolute immunity from liability under § 1983 and at the very least seek to reinstate the judgment of the District Court. If they are correct and the District Court’s dismissal should be sustained, we need go no further in this case. Moreover, the immunity question involves the construction of a federal statute, and our practice is to deal with possibly dispositive statutory issues before reaching questions turning on the construction of the Constitution. Cf. Hagans v. Lavine, 415 U. S. 528, 549 (1974). We essentially sustain the position of the Court of Appeals with respect to the immunity issue.
The nature of the immunity from awards of damages under § 198-3 available to school administrators and school board members is not a question which the lower federal courts have answered with a single voice. There is general agreement on the existence of a “good faith” immunity, but the courts have either emphasized different factors as elements of good faith or have not given specific content to the good-faith standard.
This Court has decided three cases dealing with the scope of the immunity protecting various types of governmental officials from liability for damages under § 1983. In Tenney v. Brandhove, 341 U. S. 367 (1951), the question was found to be one essentially of statutory construction. Noting that the language of § 1983 is silent with respect to immunities, the Court concluded that there was no basis for believing that Congress intended to eliminate the traditional immunity of legislators from civil liability for acts done within their sphere of legislative action. That immunity, “so well grounded in history and reason...,” 341 U. S., at 376, was absolute and consequently did not depend upon the motivations of the legislators. In Pierson v. Ray, 386 U. S. 547, 554 (1967), finding that “[t]he legislative record gives no clear indication that Congress meant to abolish wholesale all common-law immunities" in enacting § 1983, we concluded that the common-law doctrine of absolute judicial immunity survived. Similarly, § 1983 did not preclude application of the traditional rule that a policeman, making an arrest in good faith and with probable cause, is not liable for damages, although the person arrested proves innocent. Consequently the Court said: “Although the matter is not entirely free from doubt, the same consideration would seem to require excusing him from liability for acting under a statute that he reasonably believed to be valid but that was later held unconstitutional, on its face or as applied.” 386 U. S., at 555 (footnote omitted). Finally, last Term we held that the chief executive officer of a State, the senior and subordinate officers of the State’s National Guard, and the president of a state-controlled university were not absolutely immune from liability under § 1983, but instead were entitled to immunity, under prior precedent and in light of the obvious need to avoid discouraging effective official action by public officers charged with a considerable range of responsibility and discretion, only if they acted in good faith as defined by the Court:
“[I]n varying scope, a qualified immunity is available to officers of the executive branch of government, the variation being dependent upon the scope of discretion and responsibilities of the office and all the circumstances as they reasonably appeared at the time of the action on which liability is sought to be based. It is the existence of reasonable grounds for the belief formed at the time and in light of all the circumstances, coupled with good-faith belief, that affords a basis for qualified immunity of executive officers for acts performed in the course of official conduct.” Scheuer v. Rhodes, 416 U. S. 232, 247-248 (1974).
Common-law tradition, recognized in our prior decisions, and strong public-policy reasons also lead to a construction of § 1983 extending a qualified good-faith immunity to school board members from liability for damages under that section. Although there have been differing emphases and formulations of the common-law immunity of public school officials in cases of student expulsion or suspension, state courts have generally recognized that such officers should be protected from tort liability under state law for all good-faith, nonmalicious action taken to fulfill their official duties.
As the facts of this case reveal, school board members function at different times in the nature of legislators and adjudicators in the school disciplinary process. Each of these functions necessarily involves the exercise of discretion, the weighing of many factors, and the formulation of long-term policy. “Like legislators and judges, these officers are entitled to rely on traditional sources for the factual information on which they decide and act.” Scheuer v. Rhodes, supra, at 246 (footnote omitted). As with executive officers faced with instances of civil disorder, school officials, confronted with student behavior causing or threatening disruption, also have an “obvious need for prompt action, and decisions must be made in reliance on factual information supplied by others.” Ibid.
Liability for damages for every action which is found subsequently to have been violative of a student's constitutional rights and to have caused compensable injury would unfairly impose upon the school decisionmaker the burden of mistakes made in good faith in the course of exercising his discretion within the scope of his official duties. School board members, among other duties, must judge whether there have been violations of school regulations and, if so, the appropriate sanctions for the violations. Denying any measure of immunity in these circumstances “would contribute not to principled and fearless decision-making but to intimidation.” Pierson v. Ray, supra, at 554. The imposition of monetary costs for mistakes which were not unreasonable in the light of all the circumstances would undoubtedly deter even the most conscientious school decisionmaker from exercising his judgment independently, forcefully, and in a manner best serving the long-term interest of the school and the students. The most capable candidates for school board positions might be deterred from seeking office if heavy burdens upon their private resources from monetary liability were a likely prospect during their tenure.
These considerations have undoubtedly played a prime role in the development by state courts of a qualified immunity protecting school officials from liability for damages in lawsuits claiming improper suspensions or expulsions. But at the same time, the judgment implicit in this common-law development is that absolute immunity would not be justified since it would not sufficiently increase the ability of school officials to exercise their discretion in a forthright manner to warrant the absence of a remedy for students subjected to intentional or otherwise inexcusable deprivations.
Tenney v. Brandhove, Pierson v. Ray, and Scheuer v. Rhodes drew upon a very similar background and were animated, by a very similar judgment in construing § 1983. Absent legislative guidance, we now rely on those same sources in determining whether and to what extent school officials are immune from damage suits under § 1983. We think there must be a degree of immunity if the work of the schools is to go forward; and, however worded, the immunity must be such that public school officials understand that action taken in the good-faith fulfillment of their responsibilities and within the bounds of reason under all the circumstances will not be punished and that they need not exercise their discretion with undue timidity.
“Public officials, whether governors, mayors or police, legislators or judges, who fail to make decisions when they are needed or who do not act to implement decisions when they are made do not fully and faithfully perform the duties of their offices. Implicit in the idea that officials have some immunity-— absolute or qualified — for their acts, is a recognition that they may err. The concept of immunity assumes this and goes on to assume that it is better to risk some error and possible injury from such error than not to decide or act at all.” Scheuer v. Rhodes, 416 U. S., at 241-242 (footnote omitted).
The disagreement between the Court of Appeals and the District Court over the immunity standard in this case has been put in terms of an “objective” versus a “subjective” test of good faith. As we see it, the appropriate standard necessarily contains elements of both. The official himself must be acting sincerely and with a belief that he is doing right, but an act violating a student's constitutional rights can be no more justified by ignorance or disregard of settled, indisputable law on the part of one entrusted with supervision of students’ daily lives than by the presence of actual malice. To be entitled to a special exemption from the categorical remedial language of § 1983 in a case in which his action violated a student’s constitutional rights, a school board member, who has voluntarily undertaken the task of supervising the operation of the school and the activities of the students, must be held to a standard of conduct based not only on permissible intentions, but also on knowledge of the basic, unquestioned constitutional rights of his charges. Such a standard imposes neither an unfair burden upon a person assuming a responsible public office requiring a high degree of intelligence and judgment for the proper fulfillment of its duties, nor an unwarranted burden in light of the value which civil rights have in our legal system. Any lesser standard would deny much of the promise of § 1983. Therefore, in the specific context of school discipline, we hold that a school board member is not immune from liability for damages under § 1983 if he knew or reasonably should have known that the action he took within his sphere of official responsibility would violate the constitutional rights of the student affected, or if he took the action with the malicious intention to cause a deprivation of constitutional rights or other injury to the student. That is not to say that school board members are “charged with predicting the future course of constitutional law.” Pierson v. Ray, 386 U. S., at 557. A compensatory award will be appropriate only if the school board member has acted with such an impermissible motivation or with such disregard of the student’s clearly established constitutional rights that his action cannot reasonably be characterized as being in good faith.
Ill
The Court of Appeals, based upon its review of the facts but without the benefit of the transcript of the testimony given at the four-day trial to the jury in the District Court, found that the board had made its decision to expel the girls on the basis of no evidence that the school regulation had been violated:
“To justify the suspension, it was necessary for the Board to establish that the students possessed or used an ‘intoxicating’ beverage at a school-sponsored activity. No evidence was presented at either meeting to establish the alcoholic content of the liquid brought to the campus. Moreover, the Board made no finding that the liquid was intoxicating. The only evidence as to the nature of the drink was that supplied by the girls, and it is clear that they did not know whether the beverage was intoxicating or not.” 485 F. 2d, at 190.
Although it did not cite the case as authority, the Court of Appeals was apparently applying the due process rationale of Thompson v. City of Louisville, 362 U. S. 199, 206 (1960), to the public school disciplinary process. The applicability of Thompson in this setting, however, is an issue that need not be reached in this case. The record reveals that the decision of the Court of Appeals was based upon an erroneous construction of the school regulation in question. Once that regulation is properly-construed, the Thompson issue disappears.
The Court of Appeals interpreted the school regulation prohibiting the use or possession of intoxicating beverages as being linked to the definition of “intoxicating liquor” under Arkansas statutes which restrict the term to beverages with an alcoholic content exceeding 5% by weight. Testimony at the trial, however, established convincingly that the term “intoxicating beverage” in the school regulation was not intended at the time of its adoption in 1967 to be linked to the definition in the state statutes or to any other technical definition of “intoxicating.” The adoption of the regulation was at a time when the school board was concerned with a previous beer-drinking episode. It was applied prior to respondents’ case to another student charged with possession of beer. In its statement of facts issued prior to the onset of this litigation, the school board expressed its construction of the regulation by finding that the girls had brought an “alcoholic beverage” onto school premises. The girls themselves admitted knowing at the time of the incident that they were doing something wrong which might be punished. In light of this evidence, the Court of Appeals was ill advised to supplant the interpretation of the regulation of those officers who adopted it and are entrusted with its enforcement. Cf. Grayned v. City of Rockford, 408 U. S. 104, 110 (1972).
When the regulation is construed to prohibit the use and possession of beverages containing alcohol, there was no absence of evidence before the school board to prove the charge against respondents. The girls had admitted that they intended to “spike” the punch and that they had mixed malt liquor into the punch that was served. The third girl estimated at the time of their admissions to Waller that the malt liquor had an alcohol content of 20%. After the expulsion decision had been made and this litigation had begun, it was conclusively determined that the malt liquor in fact had an alcohol content not exceeding 3.2% by weight. Testimony at trial put the alcohol content of the punch served at 0.91%.
Given the fact that there was evidence supporting the charge against respondents, the contrary judgment of the Court of Appeals is improvident. It is not the role of the federal courts to set aside decisions of school administrators which the court may view as lacking a basis in wisdom or compassion. Public high school students do have substantive and procedural rights while at school. See Tinker v. Des Moines Independent Community School District, 393 U. S. 503 (1969); West Virginia State Board of Education v. Barnette, 319 U. S. 624 (1943); Goss v. Lopez, 419 U. S. 565 (1975). But § 1983 does not extend the right to relitigate in federal court evidentiary questions arising in school disciplinary proceedings or the proper construction of school regulations. The system of public education that has evolved in this Nation relies necessarily upon the discretion and judgment of school administrators and school board members, and § 1983 was not intended to be a vehicle for federal-court corrections of errors in the exercise of that discretion which do not rise to the level of violations of specific constitutional guarantees. See Epperson v. Arkansas, 393 U. S. 97, 104 (1968); Tinker, supra, at 507.
IY
Respondents’ complaint alleged that their procedural due process rights were violated by the action taken by petitioners. App. 9. The District Court did not discuss this claim in its final opinion, but the Court of Appeals viewed it as presenting a substantial question. It concluded that the girls were denied procedural due process at the first school board meeting, but also intimated that the second meeting may have cured the initial procedural deficiencies. Having found a substantive due process violation, however, the court did not reach a conclusion on this procedural issue. 485 F. 2d, at 190.
Respondents have argued here that there was a procedural due process violation which also supports the result reached by the Court of Appeals. Brief for Respondents 27-28, 36. But because the District Court did not discuss it, and the Court of Appeals did not decide it, it would be preferable to have the Court of Appeals consider the issue in the first instance.
The judgment of the Court of Appeals is vacated and the case remanded for further proceedings consistent with this opinion.
So ordered.
The Court of Appeals affirmed the directed verdicts awarded by the District Court to P. T. Waller, the principal of Mena Public High School at the time in question, S. L. Inlow, then superintendent of schools, and the Mena Special School District. 485 F. 2d 186, 191 (CA8 1973). Since respondents have not cross-petitioned, the cases of these three parties are not before the Court.
The Court of Appeals noted that reinstatement was no longer possible since the term of expulsion had ended, but that the respondents were entitled to have the records of the expulsions expunged and to be relieved of any other continuing punishment, if any. Id.., at 190.
“3. Suspension
"b. Valid causes for suspension from school on first offense: Pupils found to be guilty of any of the following shall be suspended from school on the first offense for the balance of the semester and such suspension will be noted on the permanent record of the student along with reason for suspension.
“(4) The use of intoxicating beverage or possession of same at school or at a school sponsored activity.” App. 102.
“FACTS FOUND BY SCHOOL BOARD
“1. That Virginia Crain, Peggy Strickland and Jo Wall are students of Mena High School and subject to the governing rules and policies of Mena High School.
“2. That on or about February 7, 1972 these three girls were charged with the responsibility of providing refreshments for a school function, being a gathering of students of the Home Economic class and some of their parents, on school premises, being the auditorium building of Mena High School, and being under the direction of Mrs. Curtis Powell.
“3. That the three girls in question traveled to Oklahoma, purchased a number of bottles of malt liquor, a beer type beverage, and later went onto school premises with the alcoholic beverage and put two or more of the bottles of the drink into the punch or liquid refreshment which was to be served to members of the class and parents.” App. 137.
The Court of Appeals in its statement of the facts observed that the malt liquor and soft drinks were mixed by the girls prior to their return to school, 485 F. 2d, at 187, and petitioners in their brief recite the facts in this manner. Brief for Petitioners 5. This discrepancy in the board’s findings of fact is not material to any issue now before the Court.
By taking a correspondence course and an extra course later, the girls were able to graduate with their class. Tr. of Oral Arg. 38-39.
In their original complaint, respondents sought only injunctive and declaratory relief. App. 11-12. In their amended complaint, they added a prayer for compensatory and punitive damages. Id., at 92. Trial was to a jury; and the District Court in ruling on motions after declaring a mistrial appears to have treated the ease as having developed into one for damages only since it entered judgment for petitioners and dismissed the complaint on the basis of their good-faith defense. In a joint motion for a new trial, respondents specifically argued that the District Court had erred in treating the case as one for the recovery of damages only and in failing to give them a trial and ruling on their claims for injunctive and declaratory relief. Id,., at 131. The District Court denied the motion. Id., at 133. Upon appeal, respondents renewed these contentions, and the Court of Appeals, after finding a substantive due process violation, directed the District Court to give respondents an injunction requiring ex-punction of the expulsion records and restraining any further continuing punishment. 485 F. 2d, at 190. Petitioners urge that we reverse the Court of Appeals and order the complaint dismissed. Brief for Petitioners 48. Respondents, however, again stress that the relief they sought included equitable relief. Brief for Respondents 47-48, 50.
In light of the record in this case, we are uncertain as to the basis for the District Court’s judgment, for immunity from damages does not ordinarily bar equitable relief as well. The opinion of the Court of Appeals does not entirely dispel this uncertainty. With the case in this posture, it is the better course to proceed directly to the question of the immunity of school board members under § 1983.
In McLaughlin v. Tilendis, 398 F. 2d 287, 290-291 (CA7 1968), a case relied upon by the Court of Appeals below, the immunity was extended to school board members and the superintendent of schools only to the extent that they could establish that their decisions were founded on “justifiable grounds.” Cf. Scoville v. Board of Ed. of Joliet Township, 425 F. 2d 10, 15 (CA7), cert. denied, 400 U. S. 826 (1970). In Smith v. Losee, 485 F. 2d 334, 344 (CA10 1973) (en banc), cert. denied, 417 U. S. 908 (1974), the immunity protecting university officials was described as one of good faith and the absence of malice where the facts before the officials “showed a good and valid reason for the decision although another reason or reasons advanced for nonrenewal or discharge may have been constitutionally impermissible.” The District Court in Kirstein v. Rector and Visitors of University of Virginia, 309 F. Supp. 184, 189 (ED Va. 1970), extended the immunity to action taken in good faith and in accordance with “long standing legal principle.” See also Skehan v. Board of Trustees of Bloomsburg State College, 501 F. 2d 31, 43 (CA3 1974); Handverger v. Harvill, 479 F. 2d 513, 516 (CA9), cert. denied, 414 U. S. 1072 (1973); Wood v. Goodman, 381 F. Supp. 413, 419 (Mass. 1974); Thonen v. Jenkins, 374 F. Supp. 134, 140 (EDNC 1974); Taliaferro v. State Council of Higher Education, 372 F. Supp. 1378, 1382-1383 (ED Va. 1974); Vanderzanden v. Lowell School District No. 71, 369 F. Supp. 67, 72 (Ore. 1973); Jones v. Jefferson County Board of Education, 359 F. Supp. 1081, 1083-1084 (ED Tenn. 1972); Adamian v. University of Nevada, 359 F. Supp. 825, 834 (Nev. 1973); Boyd v. Smith, 353 F. Supp. 844, 845-846 (ND Ind. 1973); Hayes v. Cape Henlopen School District, 341 F. Supp. 823, 829 (Del. 1972); Schreiber v. Joint School District No. 1, Gibraltar, Wis., 335 F. Supp. 745, 748 (ED Wis. 1972); Endicott v. Van Petten, 330 F. Supp. 878, 885-886 (Kan. 1971); Holliman v. Martin, 330 F. Supp. 1, 13 (WD Va. 1971); McDonough v. Kelly, 329 F. Supp. 144, 150-151 (NH 1971); Cordova v. Chonko, 315 F. Supp. 953, 964 (ND Ohio 1970); Gouge v. Joint School District No. 1, 310 F. Supp. 984, 990, 992-993 (WD Wis. 1970).
"Did Congress by the general language of its 1871 statute mean to overturn the tradition of legislative freedom achieved in England by Civil War and carefully preserved in the formation of State and National Governments here? Did it mean to subject legislators to civil liability for acts done within the sphere of legislative activity? Let us assume, merely for the moment, that Congress has constitutional power to limit the freedom of State legislators acting within their traditional sphere. That would be a big assumption. But we would have to make an even rasher assumption to find that Congress thought it had exercised the power. These are difficulties we cannot hurdle. The limits of §§ | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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116
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UNITED STATES v. SIOUX NATION OF INDIANS et al.
No. 79-639.
Argued March 24, 1980
Decided June 30, 1980
Blackmun, J., delivered the opinion of the Court, in which Burger, C. J., and Brennan, Stewart, Marshall, Powell, and Stevens, JJ., joined, and in Parts III and V of which White, J., joined. White, J., filed an opinion concurring in part and concurring in the judgment, post, p. 424. Rehnquist, J;, filed a dissenting opinion, post, p. 424.
Deputy Solicitor General Claiborne argued the cause for the United States. With him on the briefs were Solicitor General McCree, Assistant Attorney General Moorman, William Alsup, Dirk D. Snel, and Martin W. Matzen.
Arthur Lazarus, Jr., argued the cause for respondents. With him on the brief were Marvin J. Sonosky, Reid P. Chambers, Harry R. Sachse, and William Howard Payne.
Steven M. Tvllberg and Robert T. Coulter filed a brief for the Indian Law Resource Center as amicus curiae.
Mr. Justice Blackmun
delivered the opinion of the Court.
This case concerns the Black Hills of South Dakota, the Great Sioux Reservation, and a colorful, and in many respects tragic, chapter in the history of the Nation’s West. Although the litigation comes down to a claim of interest since 1877 on an award of over $17 million, it is necessary, in order to understand the controversy, to review at some length the chronology of the case and its factual setting.
I
For over a century now the Sioux Nation has claimed that the United States unlawfully abrogated the Fort Laramie Treaty of April 29, 1868, 15 Stat. 635, in Art. II of which the United States pledged that the Great Sioux Reservation, including the Black Hills, would be “set apart for the absolute and undisturbed use and occupation of the Indians herein named.” Id., at 636. The Fort Laramie Treaty was concluded at the culmination of the Powder River War of 1866-1867, a series of military engagements in which the Sioux tribes, led by their great chief, Red Cloud, fought to protect the integrity of earlier-recognized treaty lands from the incursion of white settlers.
The Fort Laramie Treaty included several agreements central to the issues presented in this case. First, it established the Great Sioux Reservation, a tract of land bounded on the east by the Missouri River, on the south by the northern border of the State of Nebraska, on the north by the forty-sixth parallel of north latitude, and on the west by the one hundred and fourth meridian of west longitude, in addition to certain reservations already existing east of the Missouri. The United States “solemnly agree [d]” that no unauthorized persons “shall ever be permitted to pass over, settle upon, or reside in [this] territory.” Ibid.
Second, the United States permitted members of the Sioux tribes to select lands within the reservation for cultivation. Id., at 637. In order to assist the Sioux in becoming civilized farmers, the Government promised to provide them with the necessary services and materials, and with subsistence rations for four years. Id., at 639.
Third, in exchange for the benefits conferred by the treaty, the Sioux agreed to relinquish their rights under the Treaty of September 17, 1851, to occupy territories outside the reservation, while reserving their “right to hunt on any lands north of North Platte, and on the Republican Fork of the Smoky Hill river, so long as the buffalo may range thereon in such numbers as to justify the chase.” Ibid. The Indians also expressly agreed to withdraw all opposition to the building of railroads that did not pass over their reservation lands, not to engage in attacks on settlers, and to withdraw their opposition to the military posts and roads that had been established south of the North Platte River. Ibid.
Fourth, Art. XII of the treaty provided:
“No treaty for the cession of any portion or part of the reservation herein described which may be held in common shall be of any validity or force as against the said Indians, unless executed and signed by at least three fourths of all the adult male Indians, occupying or interested in the same.” Ibid.
The years following the treaty brought relative peace to the Dakotas, an era of tranquility that was disturbed, however, by renewed speculation that the Black Hills, which were included in the Great Sioux Reservation, contained vast quantities of gold and silver. In 1874 the Army planned and undertook an exploratory expedition into the Hills, both for the purpose of establishing a military outpost from which to control those Sioux who had not accepted the terms of the Fort Laramie Treaty, and for the purpose of investigating “the country about which dreamy stories have been told.” D. Jackson, Custer’s Gold 14 (1966) (quoting the 1874 annual report of Lieutenant General Philip H. Sheridan, as Commander of the Military Division of the Missouri, to the Secretary of War). Lieutenant Colonel George Armstrong Custer led the expedition of close to 1,000 soldiers and teamsters, and a substantial number of military and civilian aides. Custer’s journey began at Fort Abraham Lincoln on the Missouri River on July 2, 1874. By the end of that month they had reached the Black Hills, and by mid-August had confirmed the presence of gold fields in that region. The discovery of gold was widely reported in newspapers across the country. Custer’s florid descriptions of the mineral and timber resources of the Black Hills, and the land’s suitability for grazing and cultivation, also received wide circulation, and had the effect of creating an intense popular demand for the “opening” of the Hills for settlement. The only obstacle to “progress” was the Fort. Laramie Treaty that reserved occupancy of the Hills to the Sioux.
Having promised the Sioux, that the Black Hills were reserved to them, the United States Army was placed in the position of having to threaten military force, and occasionally to use it, to prevent prospectors and settlers from trespassing on lands reserved to the Indians. For example, in September 1874, General Sheridan sent instructions to Brigadier General Alfred H. Terry, Commander of the Department of Dakota, at Saint Paul, directing him to use force to prevent companies of prospectors from trespassing on the Sioux Reservation. At the same time, Sheridan let it be known that he would "give a cordial support to the settlement of the Black Hills,” should Congress decide to “open up the country for settlement, by extinguishing the treaty rights of the Indians.” App. 62-63. Sheridan’s instructions were published in local newspapers. See id., at 63.
Eventually, however, the Executive Branch of the Government decided to abandon the Nation’s treaty obligation to preserve the integrity of the Sioux territory. In a letter dated November 9, 1875, to Terry, Sheridan reported that he had met with President Grant, the Secretary of the Interior, and the Secretary of War, and that the President had decided that the military should make no further resistance to the occupation of the Black Hills by miners, “it being his belief that such resistance only increased their desire and complicated the troubles.” Id., at 59. These orders were to be enforced “quietly,” ibid., and the President’s decision was to remain “confidential.” Id., at 59-60 (letter from Sheridan to Sherman).
With the Army’s withdrawal from its role as enforcer of the Port Laramie Treaty, the influx of settlers into the Black Hills increased. The Government concluded that the only practical course was to secure to the citizens of the United States the right to mine the Black Hills for gold. Toward that end, the Secretary of the Interior, in the spring of 1875, appointed a commission to negotiate with the Sioux. The commission was headed by William B. Allison. The tribal leaders of the Sioux were aware of the mineral value of the Black Hills and refused to sell the land for a price less than $70 million. The commission offered the Indians an annual rental of $400,000, or payment of $6 million for absolute relinquishment of the Black Hills. The negotiations broke down.
In the winter of 1875-1876, many of the Sioux were hunting in the unceded territory north of the North Platte River, reserved to them for that purpose in the Fort Laramie Treaty. On December 6, 1875, for reasons that are not entirely clear, the Commissioner of Indian Affairs sent instructions to the Indian agents on the reservation to notify those hunters that if they did not return to the reservation agencies by January 31, 1876, they would be treated as “hostiles.” Given the severity of the winter, compliance with these instructions was impossible. On February 1, the Secretary of the Interior nonetheless relinquished jurisdiction over all hostile Sioux, including those Indians exercising their treaty-protected hunting rights, to the War Department. The Army’s campaign against the “hostiles” led to Sitting Bull’s notable victory over Custer’s forces at the battle of the Little Big Horn on June 25. That victory, of course, was short-lived, and those Indians who surrendered to the Army were returned to the reservation, and deprived of their weapons and horses, leaving them completely dependent for survival on rations provided them by the Government.
In the meantime, Congress was becoming increasingly dissatisfied with the failure of the Sioux living on the reservation to become self-sufficient. The Sioux’ entitlement to subsistence rations under the terms of the Fort Laramie Treaty had expired in 1872. Nonetheless, in each of the two following years, over $1 million was appropriated for feeding the Sioux. In August 1876, Congress enacted an appropriations bill providing that “hereafter there shall be no appropriation made for the subsistence” of the Sioux, unless they first relinquished their rights to the hunting grounds outside the reservation, ceded the Black Hills to the United States, and reached some accommodation with the Government that would be calculated to enable them to become self-supporting. Act of Aug. 15, 1876, 19 Stat. 176, 192. Toward this end, Congress requested the President to appoint another commission to negotiate with the Sioux for the cession of the Black Hills.
This commission, headed by George Manypenny, arrived in the Sioux country in early September and commenced meetings with the head men of the various tribes. The members of the commission impressed upon the Indians that the United States no longer had any obligation to provide them with subsistence rations. The commissioners brought with them the text of a treaty that had been prepared in advance. The principal provisions of this treaty were that the Sioux would relinquish their rights to the Black Hills and other lands west of the one hundred and third meridian, and their rights to hunt in the unceded territories to the north, in exchange for subsistence rations for as long as they would be needed to ensure the Sioux’ survival. In setting out to obtain the tribes’ agreement to this treaty, the commission ignored the stipulation of the Fort Laramie Treaty that any cession of the lands contained within the Great Sioux Reservation would have to be joined in by three-fourths of the adult males. Instead, the treaty was presented just to Sioux chiefs and their leading men. It was signed by only 10% of the adult male Sioux population.
Congress resolved the impasse by enacting the 1876 “agreement” into law as the Act of Feb. 28, 1877 (1877 Act). 19 Stat. 254. The Act had the effect of abrogating the earlier Fort Laramie Treaty, and of implementing the terms of the Manypenny Commission’s “agreement” with the Sioux leaders.
The passage of the 1877 Act legitimized the settlers’ invasion of the Black Hills, but throughout the years it has been regarded by the Sioux as a breach of this Nation’s solemn obligation to reserve the Hills in perpetuity for occupation by the Indians. One historian of the Sioux Nation commented on Indian reaction to the Act in the following words:
“The Sioux thus affected have not gotten over talking about that treaty yet, and during the last few years they have maintained an organization called the Black Hills Treaty Association, which holds meetings each year at the various agencies for the purpose of studying the treaty with the intention of presenting a claim against the government for additional reimbursements for the territory ceded under it. Some think that Uncle Sam owes them about $9,000,000 on the deal, but it will probably be a hard matter to prove it.” F. Fiske, The Taming of the Sioux 132 (1917).
Fiske’s words were to prove prophetic.
II
Prior to 1946, Congress had not enacted any mechanism of general applicability by which Indian tribes could litigate treaty claims against the United States. The Sioux, however, after years of lobbying, succeeded in obtaining from Congress the passage of a special jurisdictional Act which provided them a forum for adjudication of all claims against the United States “under any treaties, agreements, or laws of Congress, or for thé misappropriation of any of the funds or lands of said tribe or band or bands thereof.” Act of June 3, 1920, ch. 222, 41 Stat. 738. Pursuant to this statute, the Sioux, in 1923, filed a petition with the Court of Claims alleging that the Government had taken the Black Hills without just compensation, in violation of the Fifth Amendment. This claim was dismissed by that court in 1942. In a lengthy and unanimous opinion, the court concluded that it was not authorized by the Act of June 3, 1920, to question whether the compensation afforded the Sioux by Congress in 1877 was an adequate price for the Black Hills, and that the Sioux’ claim in this regard was a moral claim not protected by the Just Compensation Clause. Sioux Tribe v. United States, 97 Ct. Cl. 613 (1942), cert. denied, 318 U. S. 789 (1943).
In 1946, Congress passed the Indian Claims Commission Act, 60 Stat. 1049, 25 U. S. C. § 70 et seq., creating a new forum to hear and determine all tribal grievances that had arisen previously. In 1950, counsel for the Sioux resubmitted the Black Hills claim to the Indian Claims Commission. The Commission initially ruled that the Sioux had failed to prove their case. Sioux Tribe v. United States, 2 Ind. Cl. Comm’n 646 (1954), aff’d, 146 F. Supp. 229 (Ct. Cl. 1956). The Sioux filed a motion with the Court of Claims to vacate its judgment of affirmance, alleging that the Commission’s decision had been based on a record that was inadequate, due to the failings of the Sioux’ former counsel. This motion was granted and the Court of Claims directed the Commission to consider whether the case should be reopened for the presentation of additional evidence. On November 19, 1958, the Commission entered an order reopening the case and announcing that it would reconsider its prior judgment on the merits of the Sioux claim. App. 265-266; see Sioux Tribe v. United States, 182 Ct. Cl. 912 (1968) (summary of proceedings).
Following the Sioux’ filing of an amended petition, claiming again that the 1877 Act constituted a taking of the Black Hills for which just compensation had not been paid, there ensued a lengthy period of procedural sparring between the Indians and the Government. Finally, in October 1968, the Commission set down three questions for briefing and determination: (1) What land and rights did the United States acquire from the Sioux by the 1877 Act? (2) What, if any, consideration was given for that land and those rights? And (3) if there was no consideration for the Government’s acquisition of the land and rights under the 1877 Act, was there any payment for such acquisition? App. 266.
Six years later, by a 4-to-l vote, the Commission reached a preliminary decision on these questions. Sioux Nation v. United States, 33 Ind. Cl. Comm’n 151 (1974). The Commission first held that the 1942 Court of Claims decision did not bar the Sioux’ Fifth Amendment taking claim through application of the doctrine of res judicata. The Commission concluded that the Court of Claims had dismissed the earlier suit for lack of jurisdiction, and that it had not determined the merits of the Black Hills claim. The Commission then went on to find that Congress, in 1877, had made no effort to give the Sioux full value for the ceded reservation lands. The only new obligation assumed by the Government in exchange for the Black Hills was its promise to provide the Sioux with subsistence rations, an obligation that was subject to several limiting conditions. See n. 14, supra. Under these circumstances, the Commission concluded that the consideration given the Indians in the 1877 Act had no relationship to the value of the property acquired. Moreover, there was no indication in the record that Congress ever attempted to relate the value of the rations to the value of the Black Hills Applying the principles announced by the Court of Claims in Three Tribes of Fort Berthold Reservation v. United States, 182 Ct. Cl. 543, 390 F. 2d 686 (1968), the Commission concluded that Congress had acted pursuant to its power of eminent domain when it passed the 1877 Act, rather than as a trustee for the Sioux, and that the Government must pay the Indians just compensation for the taking of the Black Hills.
The Government filed an appeal with the Court of Claims from the Commission’s interlocutory order, arguing alternatively that the Sioux’ Fifth Amendment claim should have been barred by principles of res judicata and collateral estop-pel, or that the 1877 Act did not effect a taking of the Black Hills for which just compensation was due. Without reaching the merits, the Court of Claims held that the Black Hills claim was barred by the res judicata effect of its 1942 decision. United States v. Sioux Nation, 207 Ct. Cl. 234, 518 F. 2d 1298 (1975). The court’s majority recognized that the practical impact of the question presented was limited to a determination of whether or not an award of interest would be available to the Indians. This followed from the Government’s failure to appeal the Commission’s holding that it had acquired the Black Hills through a course of unfair and dishonorable dealing for which the Sioux were entitled to damages, without interest, under § 2 of the Indian Claims Commission Act, 60 Stat. 1050, 25 U. S. C. § 70a (5). Only if the acquisition of the Black Hills amounted to an unconstitutional taking would the Sioux be entitled to interest. 207 Ct. Cl., at 237, 518 F. 2d, at 1299.
The court affirmed the Commission’s holding that a want of fair and honorable dealings in this case was evidenced, and held that the Sioux thus would be entitled to an award of at least $17.5 million for the lands surrendered and for the gold taken by trespassing prospectors prior to passage of the 1877 Act. See n. 16, supra. The court also remarked upon President Grant’s duplicity in breaching the Government’s treaty obligation to keep trespassers out of the Black Hills, and the pattern of duress practiced by the Government on the starving Sioux to get them to agree to the sale of the Black Hills. The court concluded: “A more ripe and rank case of dishonorable dealings will never, in all probability, be found in our history, which is not, taken as a whole, the disgrace it now pleases some persons to believe.” 207 Ct. Cl., at 241, 518 F. 2d, at 1302.
Nonetheless, the court held that the merits of the Sioux’ taking claim had been reached in 1942, and whether resolved “rightly or wrongly,” id., at 249, 518 F. 2d, at 1306, the claim was now barred by res judicata. The court observed that interest could not be awarded the Sioux on judgments obtained pursuant to the Indian Claims Commission Act, and that while Congress could correct this situation, the court could not. Ibid. The Sioux petitioned this Court for a writ of certiorari, but that petition was denied. 423 U. S. 1016 (1975).
The case returned to the Indian Claims Commission, where the value of the rights-of-way obtained by the Government through the 1877 Act was determined to be $3,484, and where it was decided that the Government had made no payments to the Sioux that could be considered as offsets. App. 316. The Government then moved the Commission to enter a final award in favor of the Sioux in the amount of $17.5 million, see n. 16, supra, but the Commission deferred entry of final judgment in view of legislation then pending in Congress that dealt with the case.
On March 13, 1978, Congress passed a statute providing for Court of Claims review of the merits of the Indian Claims Commission's judgment that the 1877 Act effected a taking of the Black Hills, without regard to the defenses of res judicata and collateral estoppel. The statute authorized the Court of Claims to take new evidence in the case, and to conduct its review of the merits de novo. Pub. L. 95-243, 92 Stat. 153, amending § 20 (b) of the Indian Claims Commission Act. See 25 U. S. C. § 70s (b) (1976 ed., Supp. II).
Acting pursuant to that statute, a majority of the Court of Claims, sitting en banc, in an opinion by Chief Judge Friedman, affirmed the Commission's holding that the 1877 Act effected a taking of the Black Hills and of rights-of-way across the reservation. 220 Ct. Cl. 442, 601 F. 2d 1157 (1979). In doing so, the court applied the test it had earlier articulated in Fort Berthold, 182 Ct. Cl., at 553, 390 F. 2d, at 691, asking whether Congress had made “a good faith effort to give the Indians the full value of the land,” 220 Ct. Cl., at 452, 601 F. 2d, at 1162, in order to decide whether the 1877 Act had effected a taking or whether it had been a noncompensable act of congressional guardianship over tribal property. The court characterized the Act as a taking, an exercise of Congress’ power of eminent domain over Indian property. It distinguished broad statements seemingly leading to a contrary result in Lone Wolf v. Hitchcock, 187 U. S. 553 (1903), as inapplicable to a case involving a claim for just compensation. 220 Ct. Cl., at 465, 601 F. 2d, at 1170.
The court thus held that the Sioux were entitled to an award of interest, at the annual rate of 5%, on the principal sum of $17.1 million, dating from 1877.
We granted the Government's petition for a writ of certio-rari, 444 U. S. 989 (1979), in order to review the important constitutional questions presented by this case, questions not only of longstanding concern to the Sioux, but also of significant economic import to the Government.
Ill
Having twice denied petitions for certiorari in this litigation, see 318 U. S. 789 (1943); 423 U. S. 1016 (1975), we are confronted with it for a third time as a result of the amendment, above noted, to the Indian Claims Commission Act of 1946, 25 U. S. C. § 70s (b) (1976 ed., Supp. II), which directed the Court of Claims to review the merits of the Black Hills takings claim without regard to the defense of res judicata. The amendment, approved March 13, 1978, provides:
“Notwithstanding any other provision of law, upon application by the claimants within thirty days from the date of the enactment of this sentence, the Court of Claims shall review on the merits, without regard to the defense of res judicata or collateral estoppel, that portion of the determination of the Indian Claims Commission entered February 15, 1974, adjudging that the Act of February 28, 1877 (19 Stat. 254), effected a taking of the Black Hills portion of the Great Sioux Reservation in violation of the fifth amendment, and shall enter judgment accordingly. In conducting such review, the Court shall receive and consider any additional evidence, including oral testimony, that either party may wish to provide on the issue of a fifth amendment taking and shall determine that issue de novo.” 92 Stat. 153.
Before turning to the merits of the Court of Claims’ conclusion that the 1877 Act effected a taking of the Black Hills, we must consider the question whether Congress, in enacting this 1978 amendment, “has inadvertently passed the limit which separates the legislative from the judicial power.” United States v. Klein, 13 Wall. 128, 147 (1872).
A
There are two objections that might be raised to the constitutionality of this amendment, each framed in terms of the doctrine of separation of powers. The first would be that Congress impermissibly has disturbed the finality of a judicial decree by rendering the Court of Claims’ earlier judgments in this case mere advisory opinions. See Hayburn’s Case, 2 Dall. 409, 410-414 (1792) (setting forth the views of three Circuit Courts, including among their complements Mr. Chief Justice Jay, and Justices Cushing, Wilson, Blair, and Iredell, that the Act of Mar. 23, 1792, 1 Stat. 243, was unconstitutional because it subjected the decisions of the Circuit Courts concerning eligibility for pension benefits to review by the Secretary of War and the Congress). The objection would take the form that Congress, in directing the Court of Claims to reach the merits of the Black Hills claim, effectively reviewed and reversed that court’s 1975 judgment that the claim was barred by res judicata, or its 1942 judgment that the claim was not cognizable under the Fifth Amendment. Such legislative review of a judicial decision would interfere with the independent functions of the Judiciary.
The second objection would be that Congress overstepped its bounds by granting the Court of Claims jurisdiction to decide the merits of the Black Hills claim, while prescribing a rule for decision that left the court no adjudicatory function to perform. See United States v. Klein, 13 Wall., at 146; Yakus v. United States, 321 U. S. 414, 467-468 (1944) (Rutledge, J., dissenting). Of course, in the context of this amendment, that objection would have to be framed in terms of Congress’ removal of a single issue from the Court of Claims’ purview, the question whether res judicata or collateral estoppel barred the Sioux’ claim. For in passing the amendment, Congress left no doubt that the Court of Claims was free to decide the merits of the takings claim in accordance with the evidence it found and applicable rules of law. See n. 23, infra.
These objections to the constitutionality of the amendment were not raised by the Government before the Court of Claims. At oral argument in this Court, counsel for the United States, upon explicit questioning, advanced the position that the amendment was not beyond the limits of legislative power. The question whether the amendment impermissibly interfered with judicial power was debated, however, in the House of Representatives, and that body concluded that the Government’s waiver of a “technical legal defense’’ in order to permit the Court of Claims to reconsider the merits of the Black Hills claim was within Congress’ power to enact.
The question debated on the floor of the House is one the answer to which is not immediately apparent. It requires us to examine the proper role of Congress and the courts in recognizing and determining claims against the United States, in light of more general principles concerning the legislative and judicial roles in our tripartite system of government. Our examination of the amendment’s effect, and of this Court’s precedents, leads us to conclude that neither of the two separation-of-powers objections described above is presented by this legislation.
B
Our starting point is Cherokee Nation v. United States, 270 U. S. 476 (1926). That decision concerned the Special Act of Congress, dated March 3, 1919, 40 Stat. 1316, conferring jurisdiction upon the Court of Claims “to hear, consider, and determine the claim of the Cherokee Nation against the United States for interest, in addition to all other interest heretofore allowed and paid, alleged to be owing from the United States to the Cherokee Nation on the funds arising from the judgment of the Court of Claims of May eighteenth, nineteen hundred and five.” In the judgment referred to by the Act, the Court of Claims had allowed 5% simple interest on four Cherokee claims, to accrue from the date of liability. Cherokee Nation v. United States, 40 Ct. Cl. 252 (1905). This Court had affirmed that judgment, including the interest award. United States v. Cherokee Nation, 202 U. S. 101, 123-126 (1906). Thereafter, and following payment of the judgment, the Cherokee presented to Congress a new claim that they were entitled to compound interest on the lump sum of principal and interest that had accrued up to 1895. It was this claim that prompted Congress, in 1919, to reconfer jurisdiction on the Court of Claims to consider the Cherokee’s entitlement to that additional interest.
Ultimately, this Court held that the Cherokee were not entitled to the payment of compound interest on the original judgment awarded by the Court of Claims. 270 U. S., at 487-496. Before turning to the merits of the interest claim, however, the Court considered “the effect of the Act of 1919 in referring the issue in this case to the Court of Claims.” Id., at 485-486. The Court’s conclusion concerning that question bears close examination:
“The judgment of this Court in the suit by the Cherokee Nation against the United States, in April, 1906 (202 U. S. 101), already referred to, awarded a large amount of interest. The question of interest was considered and decided, and it is quite clear that but for the special Act of 1919, above quoted, the question here mooted would have been foreclosed as res judicata. In passing the Act, Congress must have been well advised of this, and the only possible construction therefore to be put upon it is that Congress has therein expressed its desire, so far as the question of interest is concerned, to waive the effect of the judgment as res judicata, and to direct the Court of Claims to re-examine it and | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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66
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SQUARE D CO. et al. v. NIAGARA FRONTIER TARIFF BUREAU, INC., et al.
No. 85-21.
Argued March 3, 1986
Decided May 27, 1986
Stevens, J., delivered the opinion of the Court, in which Burger, C. J., and Brennan, White, Blackmun, Powell, Rehnquist, and O’Connor, JJ., joined. Marshall, J., filed a dissenting opinion, post, p. 424.
Douglas V. Rigler argued the cause for petitioners. With him on the briefs were Linda Heller Kamm, Michael Fischer, Joseph E. Zdarsky, H. Laddie Montague, Arnold Levin, and Howard Sedran.
Deputy Solicitor General Wallace argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General Fried, Assistant Attorney General Ginsburg, Deputy Assistant Attorney General Cannon, Jerrold J. Ganzfried, Robert B. Nicholson, Robert S. Burk, Henri F. Rush, Timm L. Abendroth, and Jim J. Marquez.
Donald L. Flexner argued the cause for respondents. With him on the brief were Clifton S. Elgarten, Peter A. Greene, Charles L. Freed, John W. Bryant, Bryce Rea, Jr., Donald E. Cross, Lester M. Bridgeman, Louis E. Emery, and Joel B. Harris.
Briefs of amici curiae urging affirmance were filed for the Association of American Railroads by Richard T. Conway, Ralph J. Moore, Jr., John Townsend Rich, Stephen J. Hadley, and Kenneth P. Kolson; and for the National Motor Freight Traffic Association, Inc., et al. by Patrick Mc-Eligot, William W. Pugh, and Kevin M. Williams.
Briefs of amici curiae were filed for American Information Technologies Corp. et al. by J. Paul McGrath; for C. D. Ambrosia Trucking Co., Inc., et al. by Lawrence R. Velvet and Bruce J. Ennis, Jr.; and for the Western Fuels Association, Inc., et al. by Frederick L. Miller, Jr.
Justice Stevens
delivered the opinion for the Court.
Petitioners have alleged that rates filed with the Interstate Commerce Commission by respondent motor carriers during the years 1966 through 1981 were fixed pursuant to an agreement forbidden by the Sherman Act, 26 Stat. 209, as amended, 15 U. S. C. § 1 et seq. The question presented is whether the carriers are subject to treble-damages liability in a private antitrust action if the allegation is true.
The question requires us to give careful consideration to the way in which Congress has accommodated the sometimes conflicting policies of the antitrust laws and the Interstate Commerce Act, 49 U. S. C. § 10101 et seq. (1982 ed. and Supp. II). Our analysis of the question will include three components: (1) the sufficiency of the complaint allegations in light of the bare language of the relevant statutes; (2) the impact of the Court’s decision of an analogous question in 1922 in Keogh v. Chicago & Northwestern R. Co., 260 U. S. 156; and (3) the extent to which the rule of the Keogh case remains part of our law today.
I
Two class-action complaints making parallel allegations against the same six defendants were filed in the United States District Court for the District of Columbia and then transferred to Buffalo, New York, where a similar action brought by the United States was pending. The Government case was ultimately settled by the entry of a consent decree; after the two private actions had been consolidated, the District Court granted a motion to dismiss the complaints. We therefore take the well-pleaded facts as true.
Five of the respondents are Canadian motor carriers engaged in the transportation of freight between the United States and Canada. They are subject to regulation by the Ontario Highway Transport Board, and by the Interstate Commerce Commission (ICC). They are all members of the Niagara Frontier Tariff Bureau, Inc. (NFTB), which is also a defendant. NFTB is a nonprofit corporation organized to engage in collective ratemaking activities pursuant to an agreement filed with and approved by the ICC.
Petitioners are corporations that have utilized respondents’ services to ship goods between the United States and Canada for many years. In their complaints, they allege that, at least as early as 1966 and continuing at least into 1981, respondents engaged in a conspiracy “to fix, raise and maintain prices and to inhibit or ehminate competition for the transportation of freight by motor carrier between the United States and the Province of Ontario, Canada without complying with the terms of the NFTB agreement and by otherwise engaging in conduct that either was not or could not be approved by the ICC.”
The complaints allege five specific actions in furtherance of this conspiracy. First, senior management officials of the NFTB used a “Principals Committee,” which was not authorized by the NFTB agreement, to set rates and to inhibit competition. Second, respondents set and controlled NFTB rate levels without complying with the notice, publication, public hearing, and recordkeeping requirements of the NFTB agreement and ICC regulations. Third, respondents planned threats, retaliation, and coercion against NFTB members to inhibit independent actions. Fourth, respondents actually used pressures, threats, and retaliation to interfere with independent actions. Finally, still in furtherance of the conspiracy, respondents filed tariffs with the ICC.
Because of respondents’ unlawful conduct, the complaints continue, petitioners and the members of the large class of shippers that they represent have paid higher rates for motor carrier freight transport than they would have paid in a freely competitive market. They seek treble damages measured by that difference, as well as declaratory and injunctive relief.
The legal theory of the complaints is that respondents’ conspiracy is not exempted from a private antitrust, treble-damages action even though the rates that respondents charged were filed with the ICC, as required by law. The complaints note that the ICC requires motor carriers to file tariffs containing all their rates, to make the tariffs available for public inspection, and to give advance notice of any changes in the filed rates. Although the ICC has the power to determine those rates, the rates are set by the carriers, not the ICC, in the first instance. The Reed-Bulwinkle Act, enacted in 1948, expressly authorizes the ICC to grant approval to agreements establishing rate bureaus for the purpose of setting rates collectively. The joint setting of rates pursuant to such agreements is exempted from the antitrust laws, but the statute strictly limits the exemption to actions that conform to the terms of the agreement approved by the ICC. In this case, according to the theory of the complaints, the activities of respondents were not authorized by the NFTB agreement; hence the alleged conspiracy was not exempt from the antitrust laws, and, indeed, blatantly violated those laws.
Under the plain language of the relevant statutes, it would appear that petitioners have alleged a valid antitrust action. The stated activities are clearly within the generally applicable language of the antitrust laws; nothing in the language of the Interstate Commerce Act, moreover, necessarily precludes a private antitrust treble-damages remedy for actions that are not specifically immunized within the terms of the Reed-Bulwinkle Act.
The District Court nevertheless dismissed the complaints on the authority of the Keogh case. 596 F. Supp. 153 (WDNY 1984). The Court of Appeals for the Second Circuit affirmed insofar as the District Court’s judgment dismissed the claims for treble damages based on respondents’ filed rates, but remanded for a further hearing to determine whether petitioners are entitled to injunctive relief and to give them an opportunity to amend their complaints to state possible claims for damages not arising from the filed tariffs. 760 F. 2d 1347 (1985). We granted certiorari to consider whether the rule of the Keogh case was correctly applied in barring a treble-damages action based on the filed tariffs, and, if so, whether that case should be overruled. 474 U. S. 815 (1985).
II
In Keogh, as in this case, a shipper’s complaint alleged that rates filed with the ICC by the defendants had been fixed pursuant to an agreement prohibited by the Sherman Act. The rates had been set by an agreement among executives of railroad companies “which would otherwise be competing carriers,” 260 U. S., at 160. They were “higher than the rates would have been if competition had not been thus eliminated.” Ibid. The shipper claimed treble damages measured by the difference between the rates set pursuant to agreement and those that had previously been in effect.
In their special plea, defendants averred that every rate complained of had been filed with the ICC and that, after hearings in which Keogh had participated, the rates had been approved by the Commission. That approval established that the fixed rates were “reasonable and non-discriminatory,” id., at 161, but it did not foreclose the possibility that slightly lower rates would also have been within the zone of reasonableness that the Commission would also have found lawful under the Interstate Commerce Act. Nor did the ICC’s approval require rejection of Keogh’s contention that the combination among the railroads violated the Sherman Act. The Court nevertheless held that Keogh, a private shipper, could not “recover damages under § 7 because he lost the benefit of rates still lower, which, but for the conspiracy, he would have enjoyed.” Id., at 162.
The Court reasoned that the ICC’s approval had, in effect, established the lawfulness of the defendant’s rates, and that the legal right of the shippers against the carrier had to be measured by the published tariff. It therefore concluded that the shipper could not have been “injured in his business or property” within the meaning of § 7 of the Sherman Act by paying the carrier the rate that had been approved by the ICC. Justice Brandéis explained:
“Section 7 of the Anti-Trust Act gives a right of action to one who has been ‘injured in his business or property.’ Injury implies violation of a legal right. The legal rights of shipper as against carrier in respect to a rate are measured by the published tariff. Unless and until suspended or set aside, this rate is made, for all purposes, the legal rate, as between carrier and shipper. The rights as defined by the tariff cannot be varied or enlarged by either contract or tort of the carrier. Texas & Pacific R. R. Co. v. Mugg, 202 U. S. 242; Louisville & Nashville R. R. Co. v. Maxwell, 237 U. S. 94; Atchison, Topeka & Santa Fe Ry. Co. v. Robinson, 233 U. S. 173; Dayton Iron Co. v. Cincinnati, New Orleans & Texas Pacific Ry. Co., 239 U. S. 446; Erie R. R. Co. v. Stone, 244 U. S. 332. And they are not affected by the tort of a third party. Compare Pittsburgh, Cincinnati, Chicago & St. Louis Ry. Co. v. Fink, 250 U. S. 577. This stringent rule prevails, because otherwise the paramount purpose of Congress — prevention of unjust discrimination-might be defeated.” Id., at 163.
In this case, unlike Keogh, respondents’ rates, established in the tariffs that had been filed with the ICC, were not challenged in a formal ICC hearing before they were allowed to go into effect. They were, however, duly submitted, lawful rates under the Interstate Commerce Act in the same sense that the rates filed in Keogh were lawful. Under the Court’s holding in that case, it therefore follows that petitioners may not bring a treble-damages antitrust action. The question, then, is whether we should continue to respect the rule of Keogh.
Ill
Petitioners, supported by the Solicitor General of the United States, ask us to overrule Keogh. They submit that Keogh was implicitly rejected in the Reed-Bulwinkle Act and in the Motor Carrier Act of 1980, Pub. L. 96-296, 94 Stat. 793; that Keogh in effect created an implied immunity from the antitrust laws and that its reasoning is thus inconsistent with later cases, particularly Carnation Co. v. Pacific Westbound Conference, 383 U. S. 213 (1966); and that the rationales of the Keogh decision are no longer valid.
Petitioners argue that the Reed-Bulwinkle Act, by delineating an antitrust immunity for specific ratemaking activities, repudiated Keogh’s holding that shippers may not bring treble-damages actions in connection with ICC-filed tariffs. In our view, however, it is not proper to read that statute as supplanting the Keogh rule with a narrow, express exemption from the antitrust laws.
The legislative history of Reed-Bulwinkle explains that it was enacted, at least in part, in response to this Court’s decision in Georgia v. Pennsylvania R. Co., 324 U. S. 439 (1945). In that case, after restating the holding in Keogh, the Court held that, although Georgia could not maintain a suit under the antitrust laws to obtain damages, it could obtain injunctive relief against the collective ratemaking procedures employed by the railroads. The Reed-Bulwinkle Act thus created an absolute immunity from the antitrust laws for approved collective ratemaking activities.
Nothing in the Act or in its legislative history, however, indicates that Congress intended to change or supplant the Keogh rule that other tariff-related claims, while subject to governmental and injunctive antitrust actions, did not give rise to treble-damages antitrust actions. On the contrary, the House Report expressly stated that, except for creating the new exemption, the bill left the antitrust laws applicable to carriers unchanged “so far as they are now applicable.” Particularly because the legislative history reveals clear congressional awareness of Keogh, far from supporting petitioners’ position, the fact that Congress specifically addressed this area and left Keogh undisturbed lends powerful support to Keogh’s continued viability.
Similarly, petitioners and the Solicitor General argue that private treble-damages actions would further the congressional policy of promoting competition in the transportation industry reflected in the Motor Carrier Act of 1980. We may assume that this is the case — indeed, we may. assume that petitioners are correct in arguing that the Keogh decision was unwise as a matter of policy — but it nevertheless remains true that Congress must be presumed to have been fully cognizant of this interpretation of the statutory scheme, which had been a significant part of our settled law for over half a century, and that Congress did not see fit to change it when Congress carefully reexamined this area of the law in 1980. Petitioners have pointed to no specific statutory provision or legislative history indicating a specific congressional intention to overturn the longstanding Keogh construction; harmony with the general legislative purpose is inadequate for that formidable task.
Petitioners’ reliance on Carnation Co. v. Pacific Westbound Conference, 383 U. S. 213 (1966), is also unavailing. In Carnation, a shipper of evaporated milk brought an antitrust treble-damages action against an association of shipping companies that had established higher rates for transportation between the west coast of the United States and the Philippine Islands. The defendants contended that the Shipping Act of 1916 had repealed all antitrust regulation of rate-making activities in the shipping industry. Section 15 of the Shipping Act did create an express exemption for collective ratemaking pursuant to agreements that had been approved by the Federal Maritime Commission, but the defendants had not obtained any such approval. They nevertheless contended that the structure of the entire Shipping Act, read against its legislative history, demonstrated an intent to free the ratemaking activities of the shipping industry from the antitrust laws. The Court unanimously rejected the argument, explaining:
“We recently said: ‘Repeals of the antitrust laws by implication from a regulatory statute are strongly disfavored, and have only been found in cases of plain repugnancy between the antitrust and regulatory provisions.’ United States v. Philadelphia National Bank, 374 U. S. 321, 350-351. We have long recognized that the antitrust laws represent a fundamental national economic policy and have therefore concluded that we cannot lightly assume that the enactment of a special regulatory scheme for particular aspects of an industry was intended to render the more general provisions of the antitrust laws wholly inapplicable to that industry. We have, therefore, declined to construe special industry regulations as an implied repeal of the antitrust laws even when the regulatory statute did not contain an accommodation provision such as the exemption provisions of the Shipping and Agricultural Acts. See, e. g., United States v. Philadelphia National Bank, supra.” Id., at 217-218.
Petitioners correctly point out that cases like Carnation make it clear that collective ratemaking activities are not immunized from antitrust scrutiny simply because they occur in a regulated industry, and that exemptions from the antitrust laws are strictly construed and strongly disfavored. Nevertheless, even if we agreed that Keogh should be viewed as an “antitrust immunity” case, we would not conclude that later cases emphasizing the necessity to strictly construe such immunity rendered Keogh invalid. For Keogh represents a longstanding statutory construction that Congress has consistently refused to disturb, even when revisiting this specific area of law.
We disagree, however, with petitioners’ view that the issue in Keogh and in this case is properly characterized as an “immunity” question. The alleged collective activities of the defendants in both cases were subject to scrutiny under the antitrust laws by the Government and to possible criminal sanctions or equitable relief. Keogh simply held that an award of treble damages is not an available remedy for a private shipper claiming that the rate submitted to, and approved by, the ICC was the product of an antitrust violation. Such a holding is far different from the creation of an antitrust immunity, and makes the challenge to Keogh’s role in the settled law of this area still more doubtful.
Finally, petitioners point to various developments, discussed by the Court of Appeals, that seem to undermine some of the reasoning in Justice Brandéis’ Keogh opinion— the development of class actions, which might alleviate the expressed concern about unfair rebates; the emergence of precedents permitting treble-damages remedies even when there is a regulatory remedy available; the greater sophistication in evaluating damages, which might mitigate the expressed fears about the speculative nature of such damages; and the development of procedures in which judicial proceedings can be stayed pending regulatory proceedings. Even if it is true that these developments cast Justice Brandéis’ reasons in a different light, however, it is also true that the Keogh rule has been an established guidepost at the intersection of the antitrust and interstate commerce statutory regimes for some 6/4 decades. The emergence of subsequent procedural and judicial developments does not minimize Keogh’s role as an essential element of the settled legal context in which Congress has repeatedly acted in this area.
IV
The Court of Appeals, in Judge Friendly’s characteristically thoughtful and incisive opinion, suggested that, in view of subsequent developments, this Court might be prepared to overrule Keogh. We conclude, however, that the developments in the six decades since Keogh was decided are insufficient to overcome the strong presumption of continued validity that adheres in the judicial interpretation of a statute. As Justice Brandéis himself observed, a decade after his Keogh decision, in commenting on the presumption of stability in statutory interpretation: “Stare decisis is usually the wise policy because in most matters, it is more important that the applicable rule of law be settled than that it be settled right.... This is commonly true, even where the error is a matter of serious concern, provided correction can be had by legislation.” We are especially reluctant to reject this presumption in an area that has seen careful, intense, and sustained congressional attention. If there is to be an overruling of the Keogh rule, it must come from Congress, rather than from this Court.
The judgment of the Court of Appeals is affirmed.
It is so ordered.
The consent decree enjoins respondents from “harassing, discouraging, coercing, or threatening in any way any motor carrier to withdraw, forbear from filing, or modify in any way said carrier’s planned or actual independent rates,” and from discussing rates except “within an authorized ratemaking body of a rate bureau with a rate agreement.” United States v. Niagara Frontier Tariff Bureau, Inc., 1984-2 Trade Cases ¶66,167, pp. 66,533-66,535 (WDNY 1984).
See Hishon v. King & Spalding, 467 U. S. 69, 73 (1984); McLain v. Real Estate Bd. of New Orleans, 444 U. S. 232, 246 (1980); Hospital Building Co. v. Trustees of Rex Hospital, 425 U. S. 738, 746 (1976); Scheuer v. Rhodes, 416 U. S. 232, 236 (1974); Conley v. Gibson, 355 U. S. 41, 45-46 (1957).
See Niagara Frontier Tariff Bureau, Inc. —Agreement, 297 I. C. C. 494 (1955).
Square D complaint, ¶ 22, App. 11; Big D complaint, ¶ 19, App. 24.
Square D complaint, 123(a), App. 12; Big D complaint, 120(a), App. 24.
Square D complaint, 123(b), App. 12; Big D complaint, 120(b), App. 24.
Square D complaint, 123(c), App. 12; Big D complaint, 120(c), App. 24.
Square D complaint, ¶ 23(d), App. 12; Big D complaint, ¶ 20(d), App. 25.
Square D complaint, ¶ 23(e), App..12; Big D complaint, ¶ 20(e), App. 25.
Square D complaint, 1ffl24(a)-(d), App. 12-13; Big D complaint, ¶¶ 21(a)-(c), App. 25.
Square D complaint, ¶ 16, App. 9 (citing 49 U. S. C. § 10762); Big D complaint, ¶ 13, App. 22 (same).
Square D complaint, ¶ 16, App. 9 (citing 49 U. S. C. § 10704); Big D complaint, ¶ 13, App. 22 (same).
Square D complaint, ¶ 17, App. 10 (citing 49 U. S. C. § 5b, now codified at 49 U. S. C. § 10706(b)(2)); Big D complaint, ¶ 14, App. 22 (same).
Under the Reed-Bulwinkle Act, as currently codified, “[i]f the [Interstate Commerce] Commission approves the agreement, it may be made and carried out under its terms and under the conditions required by the Commission, and the antitrust laws, as defined in the first section of the Clayton Act (15 U. S. C. 12), do not apply to parties and other persons with respect to making or carrying out the agreement.” 49 U. S. C. § 10706(b)(2).
See, e. g., 15 U. S. C. § 1 (“Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal”).
See n. 14, supra.
“All the rates fixed were reasonable and non-discriminatory. That was settled by the proceedings before the Commission. Los Angeles Switching Case, 234 U. S. 294. But under the Anti-Trust Act, a combination of carriers to fix reasonable and non-discriminatory rates may be illegal; and if so, the Government may have redress by criminal proceedings under § 3, by injunction under § 4, and by forfeiture under § 6. That was settled by United States v. Trans-Missouri Freight Association, 166 U. S. 290, and United States v. Joint Traffic Association, 171 U. S. 505. The fact that these rates had been approved by the Commission would not, it seems, bar proceedings by the Government.” 260 U. S., at 161-162.
“A rate is not necessarily illegal because it is the result of a conspiracy in restraint of trade in violation of the Anti-Trust Act. What rates are legal is determined by the Act to Regulate Commerce. Under § 8 of the latter act the exaction of any illegal rate makes the carrier liable to the ‘person injured thereby for the full amount of damages sustained in consequence of any such violation’ together with a reasonable attorney’s fee. Sections 9 and 16 provide for the recovery of such damages either by complaint before the Commission or by an action in a federal court. If the conspiracy here complained of had resulted in rates which the Commission found to be illegal because unreasonably high or discriminatory, the full amount of the damages sustained, whatever their nature, would have been recoverable in such proceedings. Louisville & Nashville R. R. Co. v. Ohio Valley Tie Co., 242 U. S. 288. Can it be that Congress intended to provide the shipper, from whom illegal rates have been exacted, with an additional remedy under the Anti-Trust Act? See Meeker v. Lehigh Valley R. R. Co., 162 Fed. 354. And if no remedy under the Anti-Trust Law is given where the injury results from the fixing of rates which are illegal, because too high or discriminatory, may it be assumed that Congress intended to give such a remedy where, as here, the rates complained of have been found by the Commission to be legal and while in force had to be collected by the carrier?” Id., at 162.
In their brief, petitioners argue that, even under Keogh, their treble-damages action should not have been dismissed because there was no ICC hearing in this case and because Keogh did not involve allegations of the type of covert legal violations at issue here. Brief for Petitioners 10-11. The Court of Appeals, however, properly concluded that Keogh was not susceptible to such a narrow reading: “Rather than limiting its holding to cases where, as in Keogh, rates had been investigated and approved by the ICC, the Court said broadly that shippers could not recover treble-damages for overcharges whenever tariffs have been filed.” 760 F. 2d, at 1351.
See ch. 491, 62 Stat. 472, now codified at 49 U. S. C. § 10706(b).
See, e. g., H. R. Rep. No. 1100, 80th Cong., 1st Sess., 4 (1947) (citing “[t]he Georgia suit” and other eases, and emphasizing “[t]hese developments have caused grave concern among all those having direct interest in transportation, who see in the situation a threat to long-standing practices in the transportation industry that were developed in cooperation with the shippers and have proved their worth”). See also 760 F. 2d, at 1356-1360 (reviewing legislative history of Reed-Bulwinkle Act).
“We think it is clear from the Keogh case alone that Georgia may not recover damages even if the conspiracy alleged were shown to exist. That was a suit for damages under § 7 of the Sherman Act. 26 Stat. 210. The Court recognized that although the rates fixed had been found reasonable and non-discriminatory by the Commission, the United States was not barred from enforcing the remedies of the Sherman Act. 260 U. S. pp. 161-162. It held, however, that for purposes of a suit for damages a rate was not necessarily illegal because it was the result of a conspiracy in restraint of trade. The legal rights of a shipper against a carrier in respeet to a rate are to be measured by the published tariff. That rate until suspended or set aside was for all purposes the legal rate as between shipper and carrier and may not be varied or enlarged either by the contract or tort of the carrier.... The reasoning and precedent of that case apply with full force here. But it does not dispose of the main prayer of the bill, stressed at the argument, which asks for relief by way of injunction.” 324 U. S., at 453.
“The bill here reported leaves the antitrust laws to apply with full force and effect to carriers, so far as they are now applicable, except as to such joint agreements or arrangements between them as may have been submitted to the Interstate Commerce Commission and approved by that body upon a finding that, by reason of furtherance of the national transportation policy as declared in the Interstate Commerce Act, relief from the antitrust laws should be granted.” H. R. Rep. No. 1100, 80th Cong., 2d Sess., 5 (1947) (emphasis added).
See 760 F. 2d, at 1359-1360 (reviewing attention to Keogh in the congressional consideration of the the Reed-Bulwinkle Act).
As we recently pointed out, the “legislative history of the Act is clear that, beyond the bounds of immunity granted in § 10706(b)(3), Congress wanted the forces of competition to determine motor-carrier tariffs.” ICC v. American Trucking Assns., Inc., 467 U. S. 354, 367 (1984). See also H. R. Rep. No. 96-1069, pp. 27-28 (1980); 126 Cong. Ree. 7777 (1980) (statement of Sen. Cannon).
See Cannon v. University of Chicago, 441 U. S. 677, 696-697 (1979) (“It is always appropriate to assume that our elected representatives, like other citizens, know the law”). See also Director, OWCP v. Perini North River Associates, 459 U. S. 297, 319 (1983); Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Curran, 456 U. S. 353, 379 (1982); Albernaz v. United States, 450 U. S. 333, 341 (1981).
The Motor Carrier Act did change the terms of the Reed-Bulwinkle Act in significant respects, see ICC v. American Trucking Assns., Inc., 467 U. S., at 356-357, but it did not address the Keogh rule. For the same | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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65
] | sc_adminaction |
NATIONAL LABOR RELATIONS BOARD v. GREAT DANE TRAILERS, INC.
No. 781.
Argued April 19, 1967.
Decided June 12, 1967.
Arnold Ordman argued the cause for petitioner. With him on the brief were Solicitor General Marshall, Dominick L. Manoli and Norton J. Come.
O. R. T. Bowden argued the cause and filed a brief for respondent.
MR. Chief Justice Warren
delivered the opinion of the Court.
The issue here is whether, in the absence of proof of an antiunion motivation, an employer may be held to have violated §§ 8 (a)(3) and (1) of the National Labor Relations Act when it refused to pay striking employees vacation benefits accrued under a terminated collective bargaining agreement while it announced an intention to pay such benefits to striker replacements, returning strikers, and nonstrikers who had been at work on a certain date during the strike.
The respondent company and the union entered into a collective bargaining agreement which was effective by its terms until March 31,1963. The agreement contained a commitment by the company to pay vacation benefits to employees who met certain enumerated qualifications. In essence, the company agreed to pay specified vacation benefits to employees who, during the preceding year, had worked at least 1,525 hours. It was also provided that, in the case of a “lay-off, termination or quitting,” employees who had served more than 60 days during the year would be entitled to pro rata shares of their vacation benefits. Benefits were to be paid on the Friday nearest July 1 of each year.
The agreement was temporarily extended beyond its termination date, but on April 30, 1963, the union gave the required 15 days’ notice of intention to strike over issues which remained unsettled at the bargaining table. Accordingly, on May 16, 1963, approximately 350 of the company’s 400 employees commenced a strike which lasted until December 26, 1963. The company continued to operate during the strike, using nonstrikers, persons hired as replacements for strikers, and some original strikers who had later abandoned the strike and returned to work. On July 12, 1963, a number of the strikers demanded their accrued vacation pay from the company. The company rejected this demand, basing its response on the assertion that all contractual obligations had been terminated by the strike and, therefore, none of the company’s employees had a right to vacation pay. Shortly thereafter, however, the company announced that it would grant vacation pay — in the amounts and subject to the conditions set out in the expired agreement— to all employees who had reported for work on July 1, 1963. The company denied that these payments were founded on the agreement and stated that they merely reflected a new “policy” which had been unilaterally adopted.
The refusal to pay vacation benefits to strikers, coupled with the payments to nonstrikers, formed the bases of an unfair labor practice complaint filed with the Board while the strike was still in progress. Violations of §§ 8 (a)(3) and (1) were charged. A hearing was held before a trial examiner who found that the company's action in regard to vacation pay constituted a discrimination in terms and conditions of employment which would discourage union membership, as well as an unlawful interference with protected activity. He held that the company had violated §§ 8 (a)(3) and (1) and recommended that it be ordered to cease and desist from its unfair labor practice and to pay the accrued vacation benefits to strikers. The Board, after reviewing the record, adopted the Trial Examiner’s conclusions and remedy.
A petition for enforcement of the order was filed in the Court of Appeals for the Fifth Circuit. That court first dealt with the company’s contention that the Board had lacked jurisdiction and that the union should have been relegated either to the bargaining table or to a lawsuit under § 301 of the Act, since the basic question was one of contract interpretation and application. It noted that the company’s announced policy relating to vacation pay clearly concerned a “term or condition of employment”; since it was alleged that the company had discriminated between striking and nonstriking employees in regard to that term or condition of employment, the complaint stated “an unfair labor practice charge in simplest terms” and the Board had properly exercised its jurisdiction. Reviewing the substantive aspects of the Board's decision next, the Court of Appeals held that, although discrimination between striking and nonstriking employees had been proved, the Board’s conclusion that the company had committed an unfair labor practice was not well-founded inasmuch as there had been no affirmative showing of an unlawful motivation to discourage union membership or to interfere with the exercise of protected rights. Despite the fact that the company itself had not introduced evidence of a legitimate business purpose underlying its discriminatory action, the Court of Appeals speculated that it might have been motivated by a desire “(1) to reduce expenses; (2) to encourage longer tenure among present employees; or (3) to discourage early leaves immediately before vacation periods.” Believing that the possibility of the existence of such motives was sufficient to overcome the inference of an improper motive which flowed from the conduct itself, the court denied enforcement of the order. 363 F. 2d 130 (1966). We granted certiorari to determine whether the treatment of the motivation issue by the Court of Appeals was consistent with recent decisions of this Court. 385 U. S.. 1000 (1967).
The unfair labor practice charged here is grounded primarily in §8 (a) (3) which requires specifically that the Board find a discrimination and a resulting discouragement of union membership. American Ship Building Co. v. Labor Board, 380 U. S. 300, 311 (1965). There is little question but that the result of the company’s refusal to pay vacation benefits to strikers was discrimination in its simplest form. Compare Republic Aviation Corp. v. Labor Board, 324 U. S. 793 (1945), with Teamsters Union v. Labor Board, 365 U. S. 667 (1961). Some employees who met the conditions specified in the expired collective bargaining agreement were paid accrued vacation benefits in the amounts set forth in that agreement, while other employees who also met the conditions but who had engaged in protected concerted activity were denied such benefits. Similarly, there can be no doubt but that the discrimination was capable of discouraging membership in a labor organization within the meaning of the statute. Discouraging membership in a labor organization “includes discouraging participation in concerted activities . . . such as a legitimate strike.” Labor Board v. Erie Resistor Corp., 373 U. S. 221, 233 (1963). The act of paying accrued benefits to one group of employees while announcing the extinction of the same benefits for another group of employees who are distinguishable only by their participation in protected concerted activity surely may have a discouraging effect on either present or future concerted activity.
But inquiry under § 8 (a) (3) does not usually stop at this point. The statutory language “discrimination . . . to . . . discourage” means that the finding of a violation normally turns on whether the discriminatory conduct was motivated by an antiunion purpose. American Ship Building Co. v. Labor Board, 380 U. S. 300 (1965). It was upon the motivation element that the Court of Appeals based its decision not to grant enforcement, and it is to that element which we now turn. In three recent opinions we considered employer motivation in the context of asserted § 8 (a) (3) violations. American Ship Building Co. v. Labor Board, supra; Labor Board v. Brown, 380 U. S. 278 (1965); and Labor Board v. Erie Resistor Corp., supra. We noted in Erie Resistor, supra, at 227, that proof of an antiunion motivation may make unlawful certain employer conduct which would in other circumstances be lawful. Some conduct, however, is so “inherently destructive of employee interests” that it may be deemed proscribed without need for proof of an underlying improper motive. Labor Board v. Brown, supra, at 287; American Ship Building Co. v. Labor Board, supra, at 311. That is, some conduct carries with it “unavoidable consequences which the employer not only foresaw but which he must have intended” and thus bears “its own indicia of intent.” Labor Board v. Erie Resistor Corp., supra, at 228, 231. If the conduct in question falls within this “inherently destructive” category, the employer has the burden of explaining away, justifying or characterizing “his actions as something different than they appear on their face,” and if he fails, “an unfair labor practice charge is made out.” Id., at 228. And even if the employer does come forward with counter explanations for his conduct in this situation, the Board may nevertheless draw an inference of improper motive from the conduct itself and exercise its duty to strike the proper balance between the asserted business justifications and the invasion of employee rights in light of the Act and its policy. Id., at 229. On the other hand, when “the resulting harm to employee rights is . . . comparatively slight, and a substantial and legitimate business end is served, the employers’ conduct is prima facie lawful,” and an affirmative showing of improper motivation must be made. Labor Board v. Brown, supra, at 289; American Ship Building Co. v. Labor Board, supra, at 311-313.
From this review of our recent decisions, several principles of controlling importance here can be distilled. First, if it can reasonably be concluded that the employer’s discriminatory conduct was “inherently destructive” of important employee rights, no proof of an anti-union motivation is needed and the Board can find an unfair labor practice even if the employer introduces evidence that the conduct was motivated by business considerations. Second, if the adverse effect of the discriminatory conduct on employee rights is “comparatively slight,” an antiunion motivation must be proved to sustain the charge if the employer has come forward with evidence of legitimate and substantial business justifications for the conduct. Thus, in either situation, once it has been proved that the employer engaged in discriminatory conduct which could have adversely affected employee rights to some extent, the burden is upon the employer to establish that he was motivated by legitimate objectives since proof of motivation is most accessible to him.
Applying the principles to this case then, it is not necessary for us to decide the degree to which the challenged conduct might have affected employee rights. As the Court of Appeals correctly noted, the company came forward with no evidence of legitimate motives for its discriminatory conduct. 363 F. 2d, at 134. The company simply did not meet the burden of proof, and the Court of Appeals misconstrued the function of judicial review when it proceeded nonetheless to speculate upon what might have motivated the company. Since discriminatory conduct carrying a potential for adverse effect upon employee rights was proved and no evidence of a proper motivation appeared in the record, the Board’s conclusions were supported by substantial evidence, Universal Camera Corp. v. Labor Board, 340 U. S. 474 (1951), and should have been sustained.
The judgment of the Court of Appeals is reversed and the case is remanded with directions to enforce the Board’s order.
It is so ordered.
National Labor Relations Act, as amended, §§8 (a)(3) and (1), 61 Stat. 140-141, 29 U. S. C. §§ 158 (a)(3) and (1).
Local 26, International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, AFL-CIO.
Article VIII of the collective bargaining agreement was entitled “Vacations.” It read, in pertinent part:
“(a) Each qualified employee covered by this agreement shall be entitled after one (1) year of continuous employment, at a time agreeable to the Company, to a vacation of seven (7) consecutive days with pay for forty (40) hours at the rate of pay existing for such employee at the time of the beginning of his vacation. Each employee, after five (5) years’ continuous service, shall be entitled to a vacation of fourteen (14) consecutive days, with pay for eighty (80) hours. Any employee entitled to a vacation with pay may waive the right, if his services are needed by the employer, to such vacation during the period of this agreement, and in such cases shall be entitled to receive in lieu thereof, at the time he becomes entitled to the vacation, the amount of vacation pay such employee would otherwise have received over and above the wages received for work performed during the vacation period.
“(b) To qualify for the said vacation, it is necessary that an employee shall have worked a total of fifteen hundred twenty-five (1525) hours in the said year; any time lost, however, because of an industrial accident while employed by this Company to count as part of the qualifying time.
“(d) Employees who have served less than sixty (60) days on the next July 1 after date of employment will receive no vacation pay on that date but on the following July 1 will receive the vacation due in accordance with the above qualifying requirements, plus extra amount due in accordance with hours worked.
“(e) In case of lay-off, termination or quitting, an employee who has served more than sixty (60) days shall receive pro rata share of vacation.
“(f) All vacation pay shall be paid on Friday nearest July 1st, except as outlined in paragraph (d).”
All strikers had been replaced by October 8, 1963. After their replacement, some strikers were rehired by the company, apparently as new employees.
The complaint also charged independent violations of § 8 (a) (1). These were rejected by the Trial Examiner and by the Board.
§ 301, Labor Management Relations Act, 1947, 61 Stat. 156, 29 U. S. C. § 185.
In this Court the company apparently abandoned the argument under § 301. In any event, we agree with the Court of Appeals that the complaint, alleging as it did a discrimination in regard to a term or condition of employment, stated an unfair labor practice charge. The fact that the conduct complained of might also have supported an action under § 301 did not deprive the Board of jurisdiction. NLRB v. C & C Plywood Corp., 385 U. S. 421 (1967); Mastro Plastics Corp. v. Labor Board, 350 U. S. 270 (1956). Cf. Smith v. Evening News Assn., 371 U. S. 195 (1962). This, of course, is not to say that every breach of a collective bargaining agreement-may be the subject of an unfair labor practice proceeding. But when the elements of an unfair labor practice are present in a breach of contract, the injured party is not automatically deprived by § 301 of his right to proceed before the Board where his remedy may be speedier and less expensive than a lawsuit. NLRB v. C & C Plywood Corp., supra, at 429-430.
National Labor Relations Act, as amended, §2(3), 61 Stat. 137, 29 U. S. C. § 152 (3), declares:
"The term 'employee’. . . shall include any individual whose work has ceased as a consequence of, or in connection with, any current labor dispute . . . and who has not obtained any other regular and substantially equivalent employment . . . ,” | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
81
] | sc_adminaction |
WATT, SECRETARY OF THE INTERIOR, et al. v. ENERGY ACTION EDUCATIONAL FOUNDATION et al.
No. 80-1464.
Argued October 5, 1981
Decided December 1, 1981
O’Connor, J., delivered the opinion for a unanimous Court.
Deputy Solicitor General Claiborne argued the cause for petitioners. With him on the briefs were Solicitor General Lee, former Solicitor General McCree, Assistant Attorney General Dinkins, Harriet S. Shaprio, Anne S. Almy, Edward J. Schawaker, and Bruce C. Rashkow.
John Silard argued the cause for respondents. With him on the brief was Joseph L. Rauh, Jr
E. Edward, Bruce filed a brief for Atlantic Richfield Co. et al. as amici curiae urging reversal.
Justice O’Connor
delivered the opinion of the Court.
We are asked to review a decision of the United States Court of Appeals for the District of Columbia Circuit compelling the Secretary of the Interior to experiment with the use of certain statutorily defined bidding systems in awarding leases for oil and gas exploration and development on the Outer Continental Shelf. Because the decision below incorrectly construes the Outer Continental Shelf Lands Act Amendments of 1978, 92 Stat. 629, 43 U. S. C. § 1331 et seq. (1976 ed. and Supp. Ill), we reverse.
HH
The Outer Continental Shelf Lands Act of 1953 (OCS Lands Act), 67 Stat. 462, as amended, 92 Stat. 629, 43 U. S. C. § 1331 et seq. (1976 ed. and Supp. Ill), authorizes the Secretary of the Interior to lease tracts of the Outer Continental Shelf (OCS) for the exploration and development of mineral resources, including oil and gas. As originally passed, the OCS Lands Act authorized the Secretary to solicit sealed bids either by fixing a royalty rate of not less than 1272%, and requiring bids on the amount of an initial “cash bonus” to be paid at the time the lease was awarded, or by fixing the amount of the cash bonus, and requiring bids on the royalty rate. 43 U. S. C. § 1337(a). The OCS Lands Act vested complete discretion in the Secretary to choose between these two bidding systems. In practice, prior to 1978 virtually all tracts were leased on the basis of a fixed royalty of 16%% of the gross value of production, with bidding on the amount of the cash bonus. See H. R. Rep. No. 95-590, p. 138 (1977); S. Rep. No. 95-284, p. 72 (1977).
During the mid-1970’s, the Nation’s increasing dependence on imported oil focused public attention on the OCS as a potential source, of domestic petroleum and natural gas. See H. R. Rep. No. 95-590, supra, at 53-54. At the same time, the traditional OCS bidding procedures came under close scrutiny because dramatic increases in petroleum prices made existing cash bonuses seem miserly relative to the revenues generated from wells on OCS leaseholds. Members of Congress began to express reservations about the ability of the traditional cash bonus, fixed royalty system to assure a fair return to the Government, principally because it appeared that only the major oil companies could risk paying a large cash bonus to lease a tract of unknown value. Because the number of bidders was often limited to a handful of giant concerns, competition for the leases seemed tepid, and there was no assurance that the ultimate return to the Government was adequate. See, e. g., id., at 47, 54.
Responding to these and other pressures for modernization of the OCS Lands Act, Congress passed the Outer Continental Shelf Lands Act Amendments of 1978 (1978 Amendments), Pub. L. 95-372, 92 Stat. 629. Through the 1978 Amendments, Congress sought to experiment with alternatives to the traditional bidding system. To this end, it increased the number of authorized bidding systems from 2 to 10, 43 U. S. C. § 1337(a)(1) (1976 ed., Supp. Ill), and directed the Secretary of the Interior to develop a 5-year plan of experimentation with the new systems. §§ 1337(a)(5)(B), 1344. Four of the newly authorized systems use a cash bonus bid (including the cash bonus, fixed royalty system, which was specifically retained in § 1337(a)(1)(A)), three use a royalty rate bid, one uses a “profit-share” bid, and two use a “work-commitment” bid.
Although the 1978 Amendments, like the original OCS Lands Act, give the Secretary of the Interior the discretion to select among the various authorized bidding systems, that discretion is no longer total. The statute now requires the Secretary to experiment with the nine nontraditional systems in “not less than 20 per centum and not more than 60 per centum of the total area offered for leasing each year,” § 1337(a)(5)(B), unless he determines that those percentage requirements are “inconsistent with the purposes and policies” of the 1978 Amendments.
The 1978 Amendments assure ongoing congressional oversight of the Secretary of the Interior’s leasing activities by requiring frequent reports to Congress on the operation of the bidding systems. For example, the Secretary of Energy, who has responsibility for issuing regulations governing OCS bidding, must report within six months of the end of each fiscal year “with respect to the use of [the] various bidding options,” including, “if applicable, the reasons why a particular bidding system has not been or will not be utilized.” § 1337(a)(9). In addition, the Secretary of the Interior must submit each fiscal year a report that includes “an evaluation of the competitive bidding systems permitted under [the 1978 Amendments], and, if applicable, the reasons why a particular bidding system has not been utilized,” as well as “an evaluation of alternative bidding systems not permitted under [the 1978 Amendments], and why such system or systems should or should not be utilized.” §§ 1343(2)(A) and (B).
To date, the Secretary of Energy has issued regulations for a number of the bidding systems, including three of the four systems using cash bonus bidding, 10 CFR §§375, 376 (1981) (the cash bonus bid, fixed royalty system and the cash bonus bid, fixed sliding-scale royalty system); §§376, 390 (the cash bonus bid, fixed net profit-share system), as well as the royalty bid, fixed cash bonus system, §§375, 376, the net profit-share bid, fixed cash bonus system, §§376, 390, and the work-commitment bid, fixed cash bonus and fixed royalty system, 46 Fed. Reg. 35614 (1981) (to be codified in 10 CFR §§376, 390). For his part, the Secretary of the Interior has prepared a 5-year program for the period from June 1980 to May 1985, calling for 36 sales, each involving a number of tracts. Brief for Petitioners 7. The Secretary of the Interior has so far used the nontraditional bidding systems in leases covering 49% of the total area offered, but has experimented with only two of the nine authorized alternative bidding systems: the cash bonus bid, fixed profit-share system, and the cash bonus bid, fixed sliding-scale royalty system. Id., at 8, and n. 12. The Secretary of the Interior has not experimented, however, with any of the systems using a factor other than the size of a cash bonus as the bidding variable.
II
This litigation grows out of the Secretary of the Interiors continued reliance on cash bonus bidding systems. The respondents here, nine consumer groups, two state governmental entities, and three private citizens, brought suit against the United States, the Secretary of the Interior and the Secretary of Energy, alleging that the Secretaries had abused their discretion by failing to experiment with bidding systems that do not use the size of a cash bonus as the bidding variable. In essence, they complained that bonus bidding cannot generate adequate competition to yield a fair market return for OCS oil and gas as required by the 1978 Amendments. They sought declaratory and injunctive relief prohibiting further lease sales until the Secretary of Energy promulgated regulations for each of the alternative bidding systems, and prohibiting the further use of the cash bonus, low royalty bidding systems.
Three days after they filed suit and four days before a planned lease sale, the respondents filed a motion for a preliminary injunction barring all further lease sales until regulations had been promulgated for each of the bidding options contained in the 1978 Amendments. The District Court denied the motion because the respondents had not shown a likelihood of prevailing on the merits, and because the pace at which the Secretary of Energy was issuing regulations was not unlawfully slow in light of the complexity involved in preparing such regulations. The Court of Appeals affirmed the District Court’s ruling and remanded the case for further proceedings. Energy Action Educational Foundation v. Andrus, 203 U. S. App. D. C. 169, 631 F. 2d 751 (1979).
On remand, both parties moved for summary judgment, and the respondents renewed their motion for a preliminary injunction barring future lease sales until additional bidding system regulations had been issued. The District Court denied all motions for summary judgment as well as the respondents’ motion for a preliminary injunction, 516 F. Supp. 90 (DC 1980), and the respondents once more appealed.
This time, the Court of Appeals affirmed the District Court only to the extent that it refused to enjoin lease sales scheduled for September, October, and November 1980. Turning to the underlying dispute, the court concluded both that the 1978 Amendments require the Secretary of the Interior to experiment with at least some of the bidding systems that do not use the size of a cash bonus as the bidding variable, and that the Secretary of Energy must issue appropriate regulations for the alternative bidding systems. Energy Action Educational Foundation v. Andrus, 210 U. S. App. D. C. 20, 654 F. 2d 735 (1980).
We granted the Government’s petition for certiorari to review this construction of the 1978 Amendments. 450 U. S. 1040.
Ill
Before examining the merits, we must consider the petitioners’ contention that the respondents do not have standing to challenge the Secretary of the Interior’s choice of bidding systems.
There are three groups of plaintiffs in this litigation: (1) the State of California, which claims standing as an involuntary “partner” with the Federal Government in the leasing of OCS tracts in which the underlying pool of gas and oil lies under both the OCS and the 3-mile coastal belt controlled by California; (2) California and the city of Long Beach, which compete with the Federal Government in the leasing of off-shore oil and gas properties; and (3) consumers of oil and gas and of oil- and gas-derived products. Because we find California has standing, we do not consider the standing of the other plaintiffs. See Arlington Heights v. Metropolitan Housing Development Corp., 429 U. S. 252, 264, and n. 9 (1977); Buckley v. Valeo, 424 U. S. 1, 12 (1976) (per curiam).
The 1978 Amendments require the Federal Government to turn over a fair share of the revenues of an OCS lease to the neighboring coastal State whenever the Federal Government and the State own adjoining portions of an OCS oil and gas pool. See 43 U. S. C. § 1337(g)(4) (1976 ed., Supp. III). California thus has a direct financial stake in federal OCS leasing off the California coast. In alleging that the bidding systems currently used by the Secretary of the Interior are incapable of producing a fair market return, California clearly asserts the kind of “distinct and palpable injury,” Warth v. Seldin, 422 U. S. 490, 501 (1975), that is required for standing.
To demonstrate that it has standing, however, California must also show that there is a “fairly traceable” causal connection between the injury it claims and the conduct it challenges, Arlington Heights v. Metropolitan Housing Development Corp., supra, at 261, so that if the relief sought is granted, the injury will be redressed, Simon v. Eastern Ky. Welfare Rights Org., 426 U. S. 26, 41-46 (1976). The petitioners argue that the relief California seeks — experimental use on some OCS lease tracts of non-cash-bonus bidding systems — will not ensure that the Secretary will try these systems on parcels leased off the California coast. According to the petitioners, even if California were to win its suit, cash bonus systems might nevertheless still be used to lease tracts overlying California’s pools. The petitioners assert that California therefore lacks standing because it has failed to show that the relief requested would cause the Secretary of the Interior to use non-cash-bonus bidding systems on California’s parcels.
The essence of California’s complaint, however, is that the Secretary of the Interior, by failing to test non-cash-bonus systems, has breached a statutory obligation to determine through experiment which bidding system works best. According to California, only by testing non-cash-bonus systems can the Secretary of the Interior carry out his duty to use the best bidding systems and thereby assure California a fair return for its resources. The petitioners’ argument, California contends, improperly assumes that the Secretary of the Interior would perversely refuse to adopt a non-cash-bonus bidding system proved by experiment to be superior to the cash bonus alternatives.
We share California’s confidence that, after experimentation, the Secretary would use the' most successful bidding system on all suitable OCS lease tracts, including those off the California coast. For this reason, we agree with California that it has standing to challenge the Secretary of the Interior’s refusal to experiment with non-cash-bonus bidding systems. Therefore, we proceed to the merits.
> HH
In passing the 1978 Amendments, Congress committed the Government to the goal of obtaining fair market value for OCS oil and gas resources. The 1978 Amendments themselves proclaim this intention, and the legislative history is replete with references to this purpose. The respondents urge that non-cash-bonus bidding systems are more likely to achieve the statutory objectives than the cash bonus systems used to date, so that the Secretary of the Interior’s continued reliance on cash bonus bidding violates the statutory scheme.
A
We begin, as always in a case in which the meaning of a statute is at issue, by examining Congress’ language. If Congress meant to restrain the Secretary of the Interior’s discretion in experimenting with the various alternative bidding systems, we can expect the statute to reflect that intent. But it does not.
Despite the various reservations concerning the traditional cash bonus bidding system recorded in the legislative history of the 1978 Amendments, Congress not only failed to repudiate the traditional cash bonus, fixed royalty system specified in § 1337(a)(1)(A), but affirmatively directed that the Secretary of the Interior use that system in the bidding for tracts covering at least 40% of the total area leased in each year of the 5-year plan. § 1337(a)(5)(B). The only express limitation Congress put on the use of the traditional system was that it not be used on more than 80% of the total area offered each year. Ibid. In short, Congress can hardly be said to have rejected even the traditional cash bonus system. Moreover, among the experimental bidding alternatives listed in the 1978 Amendments, Congress expressly specified cash bonus as the bid variable in three systems. Most significantly, Congress left to “the discretion of the Secretary,” § 1337(a)(1), the choice among the various nontraditional alternatives, evidently leaving to his expert administrative determination the complex, technical problem of deciding which alternative bidding systems are more likely to further the statute’s objectives. In addition, Congress granted the Secretary further discretion to abandon the statutory requirements for the percentage use of the nontraditional alternatives, should he determine that those requirements are inconsistent with the statutory purposes and policies. § 1337(a)(5)(B).
The respondents argue that the Secretary’s discretion is limited by § 1344(a)(4), which directs that “[l]easing activities shall be conducted to assure receipt of fair market value for the lands leased and the rights conveyed by the Federal Government.” According to the respondents, the Secretary is violating § 1344(a)(4) by refusing to try non-cash-bonus bidding, because cash bonus bidding allegedly does not assure that fair market value is received for the Government’s resources.
Section 1344(a)(4) cannot support the weight the respondents attach to it. Section 1344 directs the Secretary of the Interior to “prepare and periodically revise, and maintain an oil and gas leasing program” consistent with the “principles” enumerated in §§ 1344(a)(l)-(4). The receipt of fair market value, the fourth listed principle, is only one of many general considerations commended to the Secretary’s attention. The section directs that the Secretary’s entire leasing program be consistent with the principles enumerated. Yet elsewhere the statute requires the Secretary’s program to use the traditional cash bonus, fixed royalty system on as much as 80%, and on no less than 40%, of the acreage leased. § 1337(a)(5)(B). So Congress cannot have considered the traditional cash bonus system incapable of providing a fair market return, for that is the one system Congress required the Secretary to use. We therefore conclude that §1344 (a)(4) cannot fairly be read to constrain indirectly the Secretary’s discretion in choosing to use the alternative cash bonus bidding systems.
The only express statutory check on the Secretary of the Interior’s discretion is the requirement that he periodically report to the Congress his reasons for failing to use any of the alternative bidding systems. The statute thus recognizes that, in appropriate circumstances, some of the alternative bidding systems may not be used. Plainly, Congress considered close congressional scrutiny to be sufficient restraint on the Secretary’s discretion to choose among the statutory options.
In short, nothing in the statute suggests that Congress intended to channel the Secretary of the Interior’s discretion in choosing among the alternative bidding systems, and nothing in the statute singles out the non-cash-bonus systems for special consideration. Therefore, we conclude that the language of the 1978 Amendments requires experimentation with at least some of the new bidding systems, but leaves the details to the Secretary’s discretion.
B
According to the respondents, however, the legislative history of the 1978 Amendments mandates constraints on the Secretary of the Interior’s discretion not expressly stated in the statute. In particular, the respondents cite the repeated, unfavorable references to “cash bonus” bidding found throughout the legislative history to support their contention that Congress intended to direct the Secretary of the Interior to experiment with bidding systems in which the bidding variable is not the size of a cash bonus.
What clearly emerges from the legislative history, however, is not congressional dissatisfaction with all forms of cash bonus bidding, but rather with large front-end payments. Plainly, Congress intended to encourage more competitive bidding by requiring experimentation with bidding alternatives, regardless of the bid variable involved, that would reduce the size of the front-end payments associated with the traditional cash bonus bid, fixed royalty system. Such a reduction of the front-end payments can be achieved, however, with any bidding system that increases the amount of the payments made throughout the life of a lease, since a bidder wall be willing to pay less “up front” if he expects to pay more “downstream.” This inverse relationship between the size of up-front and downstream payments holds true, of course, regardless of which factor is used as a bidding variable. Congress plainly understood this relationship, because it expressly included three new cash bonus bid systems among the experimental alternatives intended to reduce large front-end payments.
Contrary to the respondents’ suggestions, Congress’ references to “bonus bidding” and the “cash bonus system,” when seen in context, are merely a shorthand description of the traditional cash bonus bid, fixed royalty system that was the only system that had been extensively used at the time the 1978 Amendments were under consideration. That the term “bonus bidding” in context refers only to the traditional system is evident because Congress pointedly and repeatedly contrasted the perceived disadvantages of “bonus bidding” with its hopes for the alternatives listed in §§ 1387(a) (1)(B)-(G), although three of those enumerated alternatives retain the size of a cash bonus as the bidding variable. Congressional references to the “cash bonus system” thus implicate only the traditional system described in § 1337(a) (1)(A).
V
In sum, we are unable to find anything, either in the legislative history or in the 1978 Amendments themselves, that compels the conclusion that the Congress as a whole intended to limit the Secretary of the Interior’s discretion to choose among the various experimental bidding systems. It is not for us, or for the Court of Appeals, to decide whether the Secretary of the Interior is well advised to forgo experimentation with the non-cash-bonus alternatives. That question is for Congress alone to answer in the exercise of its oversight powers.
For these reasons, the judgment of the Court of Appeals compelling the use of non-cash-bonus bidding systems is hereby reversed.
It is so ordered.
The Outer Continental Shelf is defined by statute to mean “all submerged lands lying seaward and outside of the area of lands beneath navigable waters... and of which the subsoil and seabed appertain to the United States and are subject to its jurisdiction and control.” 43 U. S. C. § 1331(a). The term “lands beneath navigable waters” is itself given an extensive definition in 43 U. S. C. § 1301, but generally means the undersea lands within three miles of the coastline.
The “basic purpose” of the 1978 Amendments was to “promote the swift, orderly and efficient exploitation of our almost untapped domestic oil and gas resources in the Outer Continental Shelf,” H. R. Rep. No. 95-590, p. 53 (1977), and the Amendments were broadly designed to achieve that aim. We are concerned here, however, only with those provisions of the 1978 Amendments having to do with bidding systems for OCS leases.
Title 43 U. S. C. § 1337(a)(1) (1976 ed., Supp. Ill) authorizes: (1) a “cash bonus bid with a royalty at not less than 1272 per centum fixed by the Secretary in amount or value of the production saved, removed, or sold,” § 1337(a)(1)(A); (2) a “cash bonus bid... and a diminishing or sliding royalty based on such formulae as the Secretary shall determine as equitable to encourage continued production from the lease area as resources diminish, but not less than 12V2 per centum at the beginning of the lease period in amount or value of the production saved, removed, or sold,” § 1337(a) (1)(C); (3) a “cash bonus bid with a fixed share of the net profits of no less than 30 per centum to be derived from the production of oil and gas from the lease area,” § 1337(a)(1)(D); and (4) a “cash bonus bid with a royalty at no less than 1272 per centum fixed by the Secretary in amount or value of the production saved, removed, or sold and a fixed per centum share of net profits of no less than 30 per centum to be derived from the production of oil and gas from the lease area,” § 1337(a)(1)(F).
Section 1337(a)(1)(B) authorizes: a “variable royalty bid based on a per centum in amount or value of the production saved, removed, or sold, with either [1] a fixed work commitment based on dollar amount for exploration or [2] a fixed cash bonus as determined by the Secretary, or [3] both.”
Section 1337(a)(1)(E) authorizes a “fixed cash bonus with the net profit share reserved as the bid variable.”
Section 1337(a)(1) authorizes: (1) a “work commitment bid based on a dollar amount for exploration with a fixed cash bonus, and a diminishing or sliding scale royalty based on such formulae as the Secretary shall determine as equitable to encourage continued production from the lease area as resources diminish, but not less than 12V2 per centum at the beginning of the lease period in amount or value of the production saved, removed, or sold,” § 1337(a)(1)(C); and (2) a “work commitment bid based on a dollar amount for exploration with a fixed cash bonus and a fixed royalty in amount or value of the production saved, removed, or sold,” § 1337(a) (1)(G).
Section 1337(a)(9)(E) requires that his determination be explained to Congress.
Under the 1978 Amendments, the Secretaries of the Interior and of Energy work together on the OCS leasing program. Competitive bidding for OCS leases is to be carried out pursuant to “regulations promulgated in advance,” § 1337(a)(1), and the Department of Energy Organization Act, 42 U. S. C. §§ 7152(b), 7153 (1976 ed., Supp. Ill), gives the Secretary of Energy the responsibility for issuing such regulations in consultation with the Secretary of the Interior. The Secretary of Energy also has authority to develop bidding systems other than the 10 specifically enumerated in § 1337(a)(1), provided any new system has no more than one bidding variable and is not disapproved by Congress. §§ 1337(a)(1)(H), (a)(4)(A).
During the course of the present litigation, the Secretary of the Interior filed an affidavit with the District Court stating that he does not intend to use either profit-share or work-commitment bidding because he does “not believe the purposes of the OCS Lands Act or the best interests of the nation would be served by the use” of either system. Affidavit of James G. Watt, Secretary of the Interior, Energy Action Educational Foundation v. Watt, No. 79-1633 (DC) (sworn May 8, 1981), reprinted in App. to Brief for Respondents 2a-3a. The Department of the Interior is on record as disfavoring royalty-share bidding as well. See Energy Action Educational Foundation v. Andrus, 210 U. S. App. D. C. 20, 28, and n. 44, 654 F. 2d 735, 743, and n. 44 (1980).
As reported to Congress, the bidding systems used during fiscal years 1978 through 1980 were as follows. In fiscal year 1978, three lease sales were held, with 218 tracts leased. Of those, 30 tracts were leased under the fixed cash bonus, royalty bid system, 41 under the cash bonus bid, sliding-scale royalty system, and the remainder under the traditional cash bonus bid, fixed 16%% royalty system. Department of the Interior, OCS Oil and Gas Leasing: An Annual Report on the Leasing and Production Program, Fiscal Year 1978. In fiscal year 1979, five lease sales were held, with 290 tracts leased. Of those, 161 were leased under the traditional cash bonus bid, 16%% royalty system, and 129 under the cash bonus bid, sliding-scale royalty system. Department of the Interior, OCS Oil and Gas Leasing: An Annual Report on the Leasing and Production Program, Fiscal Year 1979. In fiscal year 1980, four lease sales were held, with 293 tracts leased. Of those, 136 tracts were leased under the traditional cash bonus bid, 16%% royalty system, 120 under the cash bonus bid, sliding-scale royalty system, 23 under the cash bonus bid, fixed net profit-share system, and 14 under a cash bonus bid, fixed 33%% royalty system. Department of the Interior, Outer Continental Shelf Oil and Gas Leasing and Production Program, Annual Report, Fiscal Year 1980.
479 F. Supp. 62 (DC 1979).
On remand to the District Court, the parties stipulated to the entry of an order requiring the Department of Energy to issue final regulations for the net profit-share bid, fixed cash bonus system and the work-commitment bid, fixed cash bonus and fixed royalty system. Brief for Petitioners 9; Brief for Respondents 5, n. 1; see also 46 Fed. Reg. 35614, 35615 (1981) (to be codified in 10 CFR §§ 376, 390). Thus, no question is now presented concerning the Secretary of Energy's duty to issue these regulations. The Court of Appeals and the respondents based their conclusion that the Secretary of Energy must issue regulations for the alternative systems on the theory that the Secretary of the Interior must use them, the issue under consideration here.
In their initial complaint, the individual respondents also claimed standing as taxpayers, but have not pressed that claim here. The 1978 Amendments contain a provision which permits suit by those having “a valid legal interest.” § 1349(a)(1).
Section 1344(a)(4) states that “[l]easing activities shall be conducted to assure receipt of fair market value for the lands leased and the rights conveyed by the Federal Government.”
See, e. g., H. R. Rep. No. 95-590, pp. 47, 54 (1977); S. Rep. No. 95-284, pp. 46, 73 (1977).
Those three are the cash bonus bid, diminishing or sliding-scale royalty system, § 1337(a)(1)(C), the cash bonus bid, fixed net profit-share system, § 1337(a)(1)(D), and the cash bonus bid, fixed royalty and fixed net profit-share system, § 1337(a)(1)(F).
Also included, for example, are the “economic, social, and environmental values of the renewable and nonrenewable resources contained in the outer Continental Shelf.” § 1344(a)(1). In addition, the Conference Report indicates that providing a fair return to the Federal Government is only one of many considerations the Secretary of the Interior is to weigh:
“The conferees intend that in utilizing the new bidding alternatives, a variety of considerations should be taken into account, including but not limited to: (i) Providing a fair return to the Federal Government; (ii) increasing competition; (iii) assuring competent and safe operations; (iv) avoiding undue speculation; (v) avoiding unnecessary delays in exploration, development, and production; (vi) discovering and recovering oil and gas; (vii) developing new oil and gas resources in an efficient and timely manner; and (viii) limiting administrative burdens on government and industry.” | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
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] | [
25
] | sc_adminaction |
TAYLOR v. McELROY et al.
No. 504.
Argued March 31-April 1, 1959.
Decided June 29, 1959.
Joseph L. Rauh, Jr. argued the cause for petitioner. With him on the brief were John Silard, Eugene Gressman, Harold* A. Cranefield, Daniel H. Pollitt and Richard Lipsitz. .
Solicitor General Rankin argued the cause for respondents. With him on the brief were Assistant Attorney General Doub, Samuel D. Slade and Bernard Cedarbaum.
J. Albert Woll, Robert C. Mayer, Theodore J. St. Antoine and Thomas E. Harris filed a brief for the American Federation of Labor and Congress of Industrial Organizations, as amicus curiae, urging reversal.
Per‘.Curiam!
This is a-companion case to Greene v. McElroy, ante, p. 474, decided today, and concerns an industrial worker who was denied clearance to classified defense information and consequently discharged from his employment as a lathe operator and tool and die maker at a plant which manufactured aircraft for the Government.
Prior to 1956, petitioner had a Confidential clearance. In that year, he was denied Secret clearance and his Confidential clearance was suspended. He demanded and was accorded a hearing similar to the one afforded petitioner in Greene v. McElroy, supra. The Hearing Board concluded that petitioner’s access to classified defense information was “not clearly consistent with the interests of national security.” Later, he was afforded another hearing with similar results. Petitioner then filed an .action asking for a declaration that he was entitled to a hearing at which he could confront the informants whose statements were used against him, a declaration that the denial of clearance violated his rights under the Fifth Améndment, and an injunction restraining respondents from enforcing the decision denying clearance. Respondents prevailed on a motion for summary judgment and, on December 15, 1958, we granted certiorari to the Court of Appeals before argument was had in that court because of the pendency.here of Greene v. McElroy, supra. 358 U. S. 918.
On December 31, 1958, the Department of Defense notified all interested parties, including petitioner, his counsel, and his ex-employer, that the Secretary of Defense hád^determined “that the granting of clearance to Mr. Charles Allen Taylor for access to Secret defense information is in the national interest.” On January 9, 1959, respondents filed a suggestion of mootness. We postponed consideration of that question to the hearing of the case on the merits. 359 U. S. 901.
At the oral argument in this case, the Solicitor General made the following representations:
1. The Secretary of Defense in determining that petitioner was eligible for clearance to obtain access to information classified “Secret” did not intend by his reference to “the national interest” to differentiate between petitioner’s status and that of other employees whose eligibility for clearance has been found to be “clearly consistent with the interests of national security.”
2. The findings of the various Hearing Boards which passed on petitioner’s fitness for clearance have been expunged from all records and no longer have any vitality or effect.
3. Petitioner was afforded clearance on December 31, 1958, after having been denied clearance for over two years, because of a change in applicable Department of Defense regulations.
4. Pursuant to existing Department of Defense procedures, the evidence in petitioner’s file will not be used again as a basis for revoking petitioner’s clearance.
■5. Petitioner is eligible under applicable regulations for compensation for wages lost during the time he was unemployed due to the clearance revocation and denial.
In view of the fact that petitioner has received clearance, the ultimate relief which he demanded, and in view of the representations of the Solicitor General to the effect that petitioner stands in precisely the same position as all others who have been granted clearance, that the evidence in petitioner’s file will hot be used against him in the future, and that the findings against petitioner have been expunged, this case is moot.
The judgment of the District Court is vacated and the case is remanded to that court with instructions to dismiss the complaint as moot.
It is so ordered.
The respondents have filed a letter in this Court from the General Counsel of the Department of Defense which makes an identical representation. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
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"NO Admin Action",
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] | [
23
] | sc_adminaction |
STONE v. IMMIGRATION AND NATURALIZATION SERVICE
No. 93-1199.
Argued November 28, 1994
Decided April 19, 1995
Kennedy, J., delivered the opinion of the Court, in which Rehnquist, C. J., and Stevens, Scalia, Thomas, and Ginsbukg, JJ., joined. Breyer, J., filed a dissenting opinion, in which O’Connor and Souter, JJ., joined, post, p. 406.
Alan B. Morrison argued the cause for petitioner. On the briefs was David Eric Funke.
Beth S. Brinkmann argued the cause for respondent. With her on the brief were Solicitor General Days, Assistant Attorney General Hunger, and Deputy Solicitor General Kneedler.
Justice Kennedy
delivered the opinion of the Court.
We consider whether the filing of a timely motion for reconsideration of a decision by the Board of Immigration Appeals tolls the running of the 90-day period for seeking judicial review of the decision.
I
Petitioner, Marvin Stone, is a citizen of Canada and a businessman and lawyer by profession. He entered the United States in 1977 as a nonimmigrant visitor for business and has since remained in the United States.
On January 3,1983, Stone was convicted of conspiracy and mail fraud, in violation of 18 U. S. C. §§ 371 and 1341. He served 18 months of a 3-year prison terrti. In March 1987, after his release, the Immigration and Naturalization Service (INS) served him with an order to show cause why he should not be deported as a nonimmigrant who had remained in the United States beyond the period authorized by law. In January 1988, after a series of hearings, an Immigration Judge ordered Stone deported. The IJ concluded that under the regulations in effect when Stone entered the United States, an alien on a nonimmigrant for business visa could remain in the country for an initial period not to exceed six months with the privilege of seeking extensions, which could be granted in 6-month increments. 8 CFR §214.2 (b) (1977). The IJ ordered deportation under 8 U. S. C. § 1251(a)(2) (now § 1251(a)(1)(B) (1988 ed., Supp. V)) based on petitioner’s testimony that he had remained in the United States since 1977 without seeking any extension. The IJ denied Stone’s application for suspension of deportation under 8 U. S. C. § 1254(a)(1), concluding that Stone’s conviction of mail fraud and 18-month incarceration barred him, as a matter of law, from establishing “good moral character” as required by § 1254. See § 1101(f)(7).
Stone’s administrative appeals were as follows: he appealed to the Board of Immigration Appeals, which affirmed the IJ’s determinations and dismissed the appeal on July 26, 1991; he filed a “Motion to Reopen and/or to Reconsider” with the BIA in August 1991; on February 3, 1993, some 17 months later, the BIA denied the reconsideration motion as frivolous.
Judicial review was sought next. The record does not give the precise date, but, sometime in February or March 1993, Stone petitioned the Court of Appeals for the Sixth Circuit for review of both the July 26, 1991, deportation order and the February 3, 1993, order denying reconsideration. The Court of Appeals dismissed the petition for want of jurisdiction to the extent the petition sought review of the July 26, 1991, order, the underlying deportation determination. The court held that the filing of the reconsideration motion did not toll the running of the 90-day filing period for review of final deportation orders. 13 F. 3d 934, 938-939 (1994). We granted certiorari, 511 U. S. 1105 (1994), to resolve a conflict among the Circuits on the question, compare Akrap v. INS, 966 F. 2d 267, 271 (CA7 1992), and Nocon v. INS, 789 F. 2d 1028, 1033 (CA3 1986) (agreeing that the filing of a reconsideration motion does not toll the statutory time limit for seeking review of a deportation order), with Fleary v. INS, 950 F. 2d 711, 713 (CA11 1992), Pierre v. INS, 932 F. 2d 418, 421 (CA5 1991) (per curiam), Attoh v. INS, 606 F. 2d 1273, 1275, n. 15 (CADC 1979), and Bregman v. INS, 351 F. 2d 401, 402-403 (CA9 1965) (holding that a petition to review a deportation order is timely if filed within the statutory period following the disposition of a timely filed reconsideration motion). We now affirm.
II
A
Section 106(a)(1) of the Immigration and Nationality Act (INA) specifies that “a petition for review [of a final deportation order] may be filed not later than 90 days after the date of the issuance of the final deportation order, or, in the case of an alien convicted of an aggravated felony, not later than 30 days after the issuance of such order.” 8 U. S. C. § 1105a(a)(1) (1988 ed. and Supp. V). The clause pertaining to an “aggravated felony” is not a factor in the analysis, petitioner’s offense not being within that defined term. See § 1101(a)(43). He had the benefit of the full 90-day filing period. There is no dispute that a deportation order “become[s] final upon dismissal of an appeal by the Board of Immigration Appeals,” 8 CFR § 243.1 (1977), and, the parties agree, the 90-day period started on July 26, 1991.
The parties disagree, however, regarding the effect that petitioner’s later filing of a timely motion to reconsider had on the finality of the order. Petitioner contends that a timely motion to reconsider renders the underlying order nonfinal, and that a petition seeking review of both the order and the reconsideration denial is timely if filed (as this petition was) within 90 days of the reconsideration denial. The INS argues that the finality and reviewability of an order are unaffected by the filing of a motion to reconsider or to reopen. In its view the Court of Appeals had jurisdiction to review the denial of the motion to reconsider but not to review the original order.
We considered the timeliness of a review petition where there is a motion to reconsider or reopen an agency’s order in ICC v. Locomotive Engineers, 482 U. S. 270 (1987). The Interstate Commerce Commission’s governing statute provided that, with certain exceptions, judicial review of ICC orders would be governed by the Hobbs Administrative Orders Review Act, 28 U. S. C. § 2341 et seq. See Locomotive Engineers, 482 U. S., at 277. We held that “the timely petition for administrative reconsideration stayed the running of the Hobbs Act’s limitation period until the petition had been acted upon by the Commission.” Id., at 284. Our conclusion, we acknowledged, was in some tension with the language of both the Hobbs Act, which permits an aggrieved party to petition for review “within 60 days after [the] entry” of a final order, 28 U. S. C. § 2344, and of 49 U. S. C. § 10327(i), “which provides that, ‘Notwithstanding’ the provision authorizing the Commission to reopen and reconsider its orders (§ 10327(g)), ‘an action of the Commission... is final on the date on which it is served, and a civil action to enforce, enjoin, suspend, or set aside the action may be filed after that date.’” Locomotive Engineers, supra, at 284. We found the controlling language similar to the corresponding provision of the Administrative Procedure Act (APA), 5 U. S. C. §704, which provides that “agency action otherwise final is final for the purposes of this section [entitled ‘Actions Reviewable’] whether or not there has been presented or determined an application for... any form of reconsideratio[n]”— “language [that] has long been construed... merely to relieve parties from the requirement of petitioning for rehearing before seeking judicial review... but not to prevent petitions for reconsideration that are actually filed from rendering the orders under reconsideration nonfinal.” Locomotive Engineers, supra, at 284-285 (citation omitted).
In support of that longstanding construction of the APA language, we cited dicta in two earlier cases, American Farm Lines v. Black Ball Freight Service, 397 U. S. 532, 541 (1970); CAB v. Delta Air Lines, Inc., 367 U. S. 316, 326-327 (1961), and the holding in Outland v. CAB, 284 F. 2d 224, 227 (CADC 1960), a decision cited with approval in both Black Ball and Delta. Outland justified treating orders as non-final for purposes of review during the pendency of a motion for reconsideration in terms of judicial economy: “[WJhen the party elects to seek a rehearing there is always a possibility that the order complained of will be modified in a way which renders judicial review unnecessary.” Outland, supra, at 227.
As construed in Locomotive Engineers both the APA and the Hobbs Act embrace a tolling rule: The timely filing of a motion to reconsider renders the underlying order nonfinal for purposes of judicial review. In consequence, pendency of reconsideration renders the underlying decision not yet final, and it is implicit in the tolling rule that a party who has sought rehearing cannot seek judicial review until the rehearing has concluded. 4 K. Davis, Administrative Law Treatise § 26:12 (2d ed. 1988); United Transportation Union v. ICC, 871 F. 2d 1114, 1118 (CADC 1989); BellSouth Corp. v. FCC, 17 F. 3d 1487, 1489-1490 (CADC 1994). Indeed, those Circuits that apply the tolling rule have so held. See Fleary, 950 F. 2d, at 711-712 (deportation order not reviewable during pendency of motion to reopen); Hyun Joon Chung v. INS, 720 F. 2d 1471, 1474 (CA9 1984) (same).
Section 106 of the INA provides that “[t]he procedure prescribed by, and all the provisions of chapter 158 of title 28, shall apply to, and shall be the sole and exclusive procedure for, the judicial review of all final orders of deportation....” 8 U. S. C. § 1105a(a) (1988 ed. and Supp. V). The reference to chapter 158 of Title 28 is a reference to the Hobbs Act. In light of our construction of the Hobbs Act in Locomotive Engineers, had Congress used that Act to govern review of deportation orders without further qualification, it would follow that the so-called tolling rule applied.
The INS, however, proffers a different reading of Locomotive Engineers. Relying on our statement that the provision of the APA, 5 U. S. C. § 704, has been construed “not to prevent petitions for reconsideration that are actually filed from rendering the orders under reconsideration nonfinal,” 482 U. S., at 285 (emphasis supplied), the INS understands Locomotive Engineers to set forth merely a default rule from which agencies may choose to depart. It argues that it did so here.
If the case turned on this theory, the question would arise whether an agency subject to either the APA or the Hobbs Act has the authority to specify whether the finality of its orders for purposes of judicial review is affected by the filing of a motion to reconsider. The question is not presented here. Both the Hobbs Act and the APA are congressional enactments, and Congress may alter or modify their application in the case of particular agencies. We conclude that in amending the INA Congress chose to depart from the ordinary judicial treatment of agency orders under reconsideration.
B
Congress directed that the Hobbs Act procedures would govern review of deportation orders, except for 10 specified qualifications. See 8 U. S. C. § 1105a(a). Two of those exceptions are pertinent. The first, contained in § 106(a)(1) of the INA, provides an alien with 90 days to petition for review of a final deportation order (30 days for aliens convicted of an aggravated felony), instead of the Hobbs Act’s 60-day period. See 8 U. S. C. § 1105a(a)(l) (1988 ed., Supp. V). The second and decisive exception is contained in § 106(a)(6), a provision added when Congress amended the INA in 1990. The section provides:
“[Wjhenever a petitioner seeks review of an order under this section, any review sought with respect to a motion to reopen or reconsider such an order shall be consolidated with the review of the order.” 8 U. S. C. § 1105a(a)(6).
By its terms, § 106(a)(6) contemplates two petitions for review and directs the courts to consolidate the matters. The words of the statute do not permit us to say that the filing of a petition for reconsideration or reopening dislodges the earlier proceeding reviewing the underlying order. The statute, in fact, directs that the motion to reopen or reconsider is to be consolidated with the review of the order, not the other way around. This indicates to us that the action to review the underlying order remains active and pending before the court. We conclude that the statute is best understood as reflecting an intent on the part of Congress that deportation orders are to be reviewed in a timely fashion after issuance, irrespective of the later filing of a motion to reopen or reconsider.
Were a motion for reconsideration to render the underlying order nonfinal, there would be, in the normal course, only one petition for review filed and hence nothing for the judiciary to consolidate. As in Locomotive Engineers itself, review would be sought after denial of reconsideration, and both the underlying order and the denial of reconsideration would be reviewed in a single proceeding, insofar, at least, as denial of reconsideration would be reviewable at all. See Locomotive Engineers, 482 U. S., at 280. Indeed, the Ninth Circuit, which before the 1990 amendment had held that pendency of a reconsideration motion did render a deportation order nonfinal, understood that the tolling rule contemplates just one petition for review: “Congress visualized a single administrative proceeding in which all questions relating to an alien’s deportation would be raised, and resolved, followed by a single petition in a court of appeals for judicial review....” Yamada v. INS, 384 F. 2d 214, 218 (CA9 1967). The tolling rule is hard to square with the existence of two separate judicial review proceedings.
Under the no-tolling rule, by contrast, two separate petitions for review will exist in the normal course. An order would be final when issued, irrespective of the later filing of a reconsideration motion, and the aggrieved party would seek judicial review of the order within the specified period. Upon denial of reconsideration, the petitioner would file a separate petition to review that second final order. Because it appears that only the no-tolling rule could give rise to two separate petitions for review simultaneously before the courts, which it is plain § 106(a)(6) contemplates, it would seem that only that rule gives meaning to the section.
Although the consolidation provision does not mention tolling, see post, at 408 (Breyer, J., dissenting), tolling would be the logical consequence if the statutory scheme provided for the nonfinality of orders upon the filing of a reconsideration motion. Locomotive Engineers’ conclusion as to tolling followed as a necessary consequence from its conclusion about finality. Finality is the antecedent question, and as to that matter the consolidation provision speaks volumes. All would agree that the provision envisions two petitions for review. See post, at 408 (Breyer, J., dissenting). Because only “final deportation order[s]” may be reviewed, 8 U. S. C. § 1105a(a)(1), it follows by necessity that the provision requires for its operation the existence of two separate final orders, the petitions for review of which could be consolidated. The two orders cannot remain final and hence the subject of separate petitions for review if the filing of the reconsideration motion rendered the original order nonfinal. It follows that the filing of the reconsideration motion does not toll the time to petition for review. By speaking to finality, the consolidation provision does say quite a bit about tolling.
Recognizing this problem, petitioner at oral argument sought to give meaning to § 106(a)(6) by offering a different version of what often might occur. Petitioner envisioned an alien who petitioned for review of a final deportation order, and, while the petition was still pending, went back to the agency to seek its reconsideration or, if new evidence had arisen, reopening. If, upon denial of reconsideration or reopening, the alien sought review, and the review of the original order were still pending, § 106(a)(6) would apply and the two petitions would be consolidated. The dissent relies on the same assumed state of events. See post, at 409-410.
That construct, however, is premised on a view of finality quite inconsistent with the tolling rule petitioner himself proposes. If, as petitioner advocates, the filing of a timely petition for reconsideration before seeking judicial review renders the underlying order nonfinal, so that a reviewing court would lack jurisdiction to review the order until after disposition of the reconsideration motion, one wonders how a court retains jurisdiction merely because the petitioner delays the reconsideration motions until after filing the petition for judicial review of the underlying order. The policy supporting the nonfinality rule — that “when the party elects to seek a rehearing there is always a possibility that the order complained of will be modified in a way which renders judicial review unnecessary,” Outland, 284 F. 2d, at 227 — applies with equal force where the party seeks agency rehearing after filing a petition for judicial review. Indeed, the Court of Appeals for the District of Columbia Circuit, whose decision in Outland we cited in support of our construction in Locomotive Engineers, has so held in the years following our decision. See Wade v. FCC, 986 F. 2d 1433, 1434 (1993) (per curiam) (“The danger of wasted judicial effort... arises whether a party seeks agency reconsideration before, simultaneous with, or after filing an appeal or petition for judicial review”) (citations omitted). The Wade holding rested on, and is consistent with, our decision in a somewhat analogous context that the filing of a Federal Rule of Civil Procedure 59 motion to alter or amend a district court’s judgment strips the appellate court of jurisdiction, whether the Rule 59 motion is filed before or after the notice of appeal. See Griggs v. Provident Consumer Discount Co., 459 U. S. 56, 61 (1982) (per curiam). Our decision, based on a construction of Federal Rule of Appellate Procedure 4(a)(4), noted the “theoretical inconsistency” of permitting the district court to retain jurisdiction to decide the Rule 59 motion while treating the notice of appeal as “adequate for purposes of beginning the appeals process.” Griggs, supra, at 59.
We need not confirm the correctness of the Wade decision, but neither should we go out of our way to say it is incorrect, as petitioner and the dissent would have us do. The inconsistency in petitioner’s construction of § 106(a)(6) is the same inconsistency that we noted in Griggs. Petitioner assumes that a reconsideration motion renders the underlying order nonfinal if the motion is filed before a petition for review, but that finality is unaffected if the reconsideration motion is filed one day after the petition for review. It is implausible that Congress would direct different results in the two circumstances. At any rate, under petitioner’s construction the consolidation provision would have effect only in the rarest of circumstances.
When Congress acts to amend a statute, we presume it intends its amendment to have real and substantial effect. See Reiter v. Sonotone Corp., 442 U. S. 330, 339 (1979) (Court must construe statute to give effect, if possible, to every provision); Moskal v. United States, 498 U. S. 103, 109-111 (1990) (same). Had Congress intended review of INS orders to proceed in a manner no different from review of other agencies, as petitioner appears to argue, there would have been no reason for Congress to have included the consolidation provision. The reasonable construction is that the amendment was enacted as an exception, not just to state an already existing rule. Section 106(a)(6) is an explicit exception to the general applicability of the Hobbs Act procedures, so it must be construed as creating a procedure different from normal practice under the Act. We conclude, as did the Court of Appeals, see 13 F. 3d, at 938, and the Seventh Circuit, see Akrap, 966 F. 2d, at 271, that the consolidation provision Congress inserted when it amended the Act in 1990 is best understood as reflecting its expectation that in the particular context of INS deportation orders the normal tolling rule will not apply.
C
Underlying considerations of administrative and judicial efficiency, as well as fairness to the alien, support our conclusion that Congress intended to depart from the conventional tolling rule in deportation cases.
Deportation orders are self-executing orders, not dependent upon judicial enforcement. This accounts for the automatic stay mechanism, the statutory provision providing that service of the petition for review of the deportation order stays the deportation absent contrary direction from the court or the alien’s aggravated felony status. See 8 U. S. C. § 1105a(a)(3). The automatic stay would be all but a necessity for preserving the jurisdiction of the court, for the agency might not otherwise refrain from enforcement. Indeed, the INA provides that “nothing in this section [Judicial review of orders of deportation and exclusion] shall be construed to require the Attorney General to defer deportation of an alien after the issuance of a deportation order because of the right of judicial review of the order granted by this section.” 8 U. S. C. § 1105a(a)(8) (1988 ed., Supp. V). And it has been the longstanding view of the INS, a view we presume Congress understood when it amended the Act in 1990, that a motion for reconsideration does not serve to stay the deportation order. 8 CFR §3.8 (1977). Cf. Delta Air Lines, 367 U. S., at 325-327 (certificate of public convenience and necessity effective when issued though not final for purposes of judicial review because of pendency of reconsideration motion).
Were the tolling rule to apply here, aliens subject to deportation orders might well face a Hobson’s choice: petition for agency reconsideration at the risk of immediate deportation, or forgo reconsideration and petition for review to obtain the automatic stay. The choice is a hard one in deportation cases, in that the consequences of deportation are so final, unlike orders in some other administrative contexts. Once an alien has been deported, the courts lack jurisdiction to review the deportation order’s validity. See 8 U. S. C. § 1105a(c). This choice is one Congress might not have wished to impose on the alien.
An alien who had filed for agency reconsideration might seek to avoid immediate deportation by seeking a judicial stay. At oral argument, petitioner suggested a habeas corpus action as one solution to the dilemma. Even on the assumption that a habeas corpus action would be available, see § 1105a(a) (Exclusiveness of procedure), the solution is unsatisfactory. In evaluating those stay applications the courts would be required to assess the probability of the alien’s prevailing on review, turning the stay proceedings into collateral previews of the eventual petitions for review — indeed a preview now implicating the district court, not just the court of appeals. By inviting duplicative review in multiple courts, the normal tolling rule would frustrate, rather than promote, its stated goal of judicial economy.
From an even more fundamental standpoint, the policies of the tolling rule are at odds with Congress’ policy in adopting the judicial review provisions of the INA. The tolling rule reflects a preference to postpone judicial review to ensure completion of the administrative process. Reconsideration might eliminate the need for judicial intervention, and the resultant saving in judicial resources ought not to be diminished by premature adjudication. By contrast, Congress’ “fundamental purpose” in enacting § 106 of the INA was “to abbreviate the process of judicial review... in order to frustrate certain practices... whereby persons subject to deportation were forestalling departure by dilatory tactics in the courts.” Foti v. INS, 375 U. S. 217, 224 (1963). Congress’ concern reflected the reality that “in a deportation proceeding... as a general matter, every delay works to the advantage of the deportable alien who wishes merely to remain in the United States.” INS v. Doherty, 502 U. S. 314, 321-325 (1992). Congress’ intent in adopting and then amending the INA was to expedite both the initiation and the completion of the judicial review process. The tolling rule’s policy of delayed review would be at odds with the congressional purpose.
The dissent does not dispute that a principal purpose of the 1990 amendments to the INA was to expedite petitions for review and to redress the related problem of successive and frivolous administrative appeals and motions. In the Immigration Act of 1990, Pub. L. 101-649, 104 Stat. 5048, Congress took five steps to reduce or eliminate these abuses. First, it directed the Attorney General to promulgate regulations limiting the number of reconsideration and reopening motions that an alien could file. § 545(b). Second, it instructed the Attorney General to promulgate regulations specifying the maximum time period for the filing of those motions, hinting that a 20-day period would be appropriate. See ibid. Third, Congress cut in half the time for seeking judicial review of the final deportation order, from 180 to 90 days. See ibid. Fourth, Congress directed the Attorney General to define “frivolous behavior for which attorneys may be sanctioned” in connection with administrative appeals and motions. See § 545(a). In the dissent’s view, a fifth measure, the consolidation provision, was added for no apparent reason and bears no relation to the other amendments Congress enacted at the same time. It is more plausible that when Congress took the first four steps to solve a problem, the fifth — the consolidation provision — was also part of the solution, and not a step in the other direction. By envisioning that a final deportation order will remain final and reviewable for 90 days from the date of its issuance irrespective of the later filing of a reconsideration motion, Congress’ amendment eliminates much if not all of the incentive to file a meritless reconsideration motion, and, like the other amendments adopted at the same time, expedites the time within which the judicial review process of the deportation order begins.
D
A consideration of the analogous practice of appellate court review of district court judgments confirms the correctness of our construction of Congress’ language. The closest analogy to the INS’ discretionary petition for agency reconsideration is the motion for relief from judgment under Federal Rule of Civil Procedure 60(b). The effect of Rule 60(b) motions (at least when made more than 10 days after judgment, an exception discussed below), on the finality and appealability of district court judgments is comparable, to the effect of reconsideration motions on INS orders. With the exception noted, the filing of a Rule 60(b) motion does not toll the running of the time for taking an appeal, see Fed. Rule Civ. Proc. 60(b); 11 C. Wright & A. Miller, Federal Practice and Procedure § 2871 (1973) (Wright & Miller), and the pendency of the motion before the district court does not affect the continuity of a prior-taken appeal. See ibid. And last but not least, the pendency of an appeal does not affect the district court’s power to grant Rule 60 relief. See Standard Oil Co. of Cal. v. United States, 429 U. S. 17, 18-19 (1976) (per curiam); Wright & Miller § 2873 (1994 Supp.). A litigant faced with an unfavorable district court judgment must appeal that judgment within the time allotted by Federal Rule of Appellate Procedure 4, whether or not the litigant first files a Rule 60(b) motion (where the Rule 60 motion is filed more than 10 days following judgment). Either before or after filing his appeal, the litigant may also file a Rule 60(b) motion for relief with the district court. The denial of the motion is appealable as a separate final order, and if the original appeal is still pending it would seem that the court of appeals can consolidate the proceedings. In each of these respects, the practice of litigants under Rule 60(b) is, under our construction, identical to that of aliens who file motions for reconsideration before the BIA. In each case two separate postdecision appeals are filed.
For reasons not relevant here, in 1991 the Rules of Appellate Procedure were amended to provide that Rule 60(b) motions filed within 10 days of a district court’s judgment do toll the time for taking an appeal. See Fed. Rule App. Proc. 4(a)(4)(F). That amendment added Rule 60(b) motions filed within 10 days of judgment to a list of other post-trial motions that toll the running of the time for appeal, a list that includes Rule 59 motions to alter or amend a judgment. See Fed. Rule App. Proc. 4(a)(4)(C). A consideration of this provision of the appellate rules is quite revealing. The list of post-trial motions that toll the time for appeal is followed, and hence qualified, by the language interpreted in Griggs, language that provides in express terms that these motions also serve to | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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6
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LOGAN v. ZIMMERMAN BRUSH CO. et al.
No. 80-5950.
Argued October 14, 1981
Decided February 24, 1982
Blackmun, J., delivered the opinion of the Court, in which Burger, C. J., and Brennan, White, Marshall, and Stevens, JJ., joined. Blackmun, J., also filed a separate opinion, in which Brennan, Marshall, and O’Connor, JJ., joined, post, p. 438. Powell, J., filed an opinion concurring in the judgment, in which Rehnquist, J., joined, post, p. 443.
Gary H. Palm argued the cause and filed briefs for appellant. Tyrone C. Fahner, Attorney General of Illinois, filed a brief for the Illinois Human Rights Commission et al. as ap-pellees under this Court’s Rule 10.4 in support of appellants. With him on the brief were Paul J. Bargiel and Russell C. Grimes, Jr., Assistant Attorneys General.
Jay A. Cartel argued the cause and filed briefs for appellee Zimmerman Brush Co.
James D. Weill filed a brief for the Congress of Organizations of the Physically Handicapped et al. as amici curiae urging reversal.
Justice Blackmun
delivered the opinion of the Court.
The issue in this case is whether a State may terminate a complainant’s cause of action because a state official, for reasons beyond the complainant’s control, failed to comply with a statutorily mandated procedure.
I
A
The Illinois Fair Employment Practices Act (FEPA or Act), Ill. Rev. Stat., ch. 48, ¶851 et seq. (1979), barred employment discrimination on the basis of “physical... handicap unrelated to ability.” ¶853(a). It also established a comprehensive scheme for adjudicating allegations of discrimination. To begin the process, a complainant had to bring a charge of unlawful conduct before the Illinois Fair Employment Practices Commission (Commission) within 180 days of the occurrence of the allegedly discriminatory act. ¶ 858(a). The statute—in the provision directly at issue here—then gave the Commission 120 days within which to convene a factfinding conference designed to obtain evidence, ascertain the positions of the parties, and explore the possibility of a negotiated settlement. ¶ 858(b). If the Commission found “substantial evidence” of illegal conduct, it was to attempt to “eliminate the effect thereof... by means of conference and conciliation,” 1858(c), and, if that proved impossible, to issue a formal complaint against the employer within 180 days after the expiration of the 120-day period. 1858(d). A formal adversary hearing was then to be held before a commissioner or duly appointed adjudicator, who was to make findings and who was empowered to recommend reinstatement, backpay, and reasonable attorney’s fees. 1858.01. If the commissioner or adjudicator did not find substantial evidence of discrimination, he was to recommend dismissal of the charge. Ibid.
The findings and recommended order were to be filed with the Commission. A complainant was entitled to obtain review by the full Commission of any of the possible dispositions of his charge, including an initial determination that the evidence did not justify a complaint. The Commission was to file a written order and decision. 1858.02; Illinois Fair Employment Practices Commission, Rules and Regulations, §4.5 (1979). If still not satisfied, the complainant could seek judicial review of any Commission order. 1860.
B
On November 9, 1979, appellant Láveme L. Logan, a probationary employee hired one month previously, was discharged by appellee Zimmerman Brush Company, purportedly because Logan’s short left leg made it impossible for him to perform his duties as a shipping clerk. Five days later, Logan, acting pro se, filed a charge with the Commission alleging that his employment had been unlawfully terminated because of his physical handicap. App. 3. This triggered the Commission’s statutory obligation under ¶ 858(b) to convene a factfinding conference within 120 days; in Logan’s case, this meant by March 13,1980. Apparently through inadvertence, the Commission’s representative scheduled the conference for March 18, five days after expiration of the statutory period. Notice of the meeting, which was mailed to both parties in January 1980, specified the hearing’s date and location and declared that attendance was “required.” It, however, did not allude to the FEPA’s 120-day time limit. App. 5. The Commission also asked the company to complete a short questionnaire concerning its employment practices, and directed that it submit its answers by March 10. Ibid. The company did this without objection.
When the conference date arrived, the company moved that Logan’s charge be dismissed because the Commission had failed to hold the conference within the statutorily mandated 120-day period. Id., at 12. This request was rejected. Id., at 16. The company thereupon petitioned the Supreme Court of Illinois for an original writ of prohibition. That court stayed proceedings on Logan’s complaint pending decision on the request for a writ. Id., at 24. Logan meanwhile obtained counsel, and — because 180 days had not yet passed since the occurrence of the allegedly discriminatory act — filed a second charge with the Commission. Id., at 26.
Before the Illinois Supreme Court, Logan argued that terminating his claim because of the Commission’s failure to convene a timely conference — a matter beyond Logan’s, or indeed the company’s, control — would violate his federal rights to due process and equal protection of the laws. But the court noted that the statutory provision at issue, ¶ 858(b), declared: “Within 120 days of the proper filing of a charge, the Commission shall convene a fact finding conference....” (Emphasis added.) The Illinois court found this legislative language to be mandatory, and accordingly it held that failure to comply deprived the Commission of jurisdiction to consider Logan’s charge. Zimmerman Brush Co. v. Fair Employment Practices Comm’n, 82 Ill. 2d 99, 411 N. E. 2d 277 (1980).
The court found controlling its decision in Springfield-Sangamon County Regional Planning Comm’n v. Fair Employment Practices Comm’n, 71 Ill. 2d 61, 373 N. E. 2d 1307 (1978), where it had determined that ¶ 858(c)’s 180-day deadline for issuing a complaint was mandatory; since the state legislature wrote ¶ 858(b) after the Spring fie Id-S angamon decision, and used language similar to that employed in ¶ 858(c), it must have intended the 120-day time limit to be jurisdictional as well. This result, reasoned the court, comported with the statute’s purposes by facilitating the “just and expeditious resolutions of employment disputes,” 82 Ill. 2d, at 107, 411 N. E. 2d, at 282, while protecting employers “‘from unfounded charges of discrimination,’” id., at 106, 411 N. E. 2d, at 281, quoting ¶ 851.
The Illinois Supreme Court summarily rejected Logan’s argument that his due process and equal protection rights would be violated were the Commission’s error allowed to extinguish his cause of action. The state legislature had established the right to redress for discriminatory employment practices, it was said, and “[t]he legislature could establish reasonable procedures to be followed upon a charge....” Id., at 108, 411 N. E. 2d, at 282. The court then went on to rule that Logan could not file a second charge with the Commission based upon the same act of alleged discrimination, for to allow the second complaint to proceed would circumvent the design of the Act and frustrate the public interest in an expeditious resolution, of disputes. Id., at 108-109, 411 N. E. 2d, at 282-283.
Logan appealed, bringing his federal claims to this Court. We noted probable jurisdiction. 450 U. S. 909 (1981).
a
>
Justice Jackson, writing for the Court in Mullane v. Central Hanover Bank & Trust Co., 339 U. S. 306 (1950), observed: “Many controversies have raged about the cryptic and abstract words of the Due Process Clause but there can be no doubt that at a minimum they require that deprivation of life, liberty or property by adjudication be preceded by notice and opportunity for hearing appropriate to the nature of the case.” Id., at 313. At the outset, then, we are faced with what has become a familiar two-part inquiry: we must determine whether Logan was deprived of a protected interest, and, if so, what process was his due.
The first question, we believe, was affirmatively settled by the Mullane case itself, where the Court held that a cause of action is a species of property protected by the Fourteenth Amendment’s Due Process Clause. There, the Court confronted a challenge to a state law that provided for the settlement of common trust fund accounts by fiduciaries, upon notice given through newspaper publication. The effect of the statute was to terminate “every right which beneficiaries would otherwise have against the trust company... for improper management of the common trust fund.” Id,., at 311. This, the Court concluded, worked to deprive the beneficiaries of property by, among other things, “cut[ting] off their rights to have the trustee answer for negligent or illegal impairments of their interests.” Id., at 313. Such a result was impermissible unless constitutionally adequate notice and hearing procedures were established before the settlement process went into effect. Id., at 315. Despite appel-lee Zimmerman Brush Company’s arguments to the contrary, we see no meaningful distinction between the cause of action at issue in Mullane and Logan’s right to use the FEPA’s adjudicatory procedures.
This conclusion is hardly a novel one. The Court traditionally has held that the Due Process Clauses protect civil litigants who seek recourse in the courts, either as defendants hoping to protect their property or as plaintiffs attempting to redress grievances. In Societe Internationale v. Rogers, 357 U. S. 197 (1958), for example — where a plaintiff’s claim had been dismissed for failure to comply with a trial court’s order — the Court read the “property” component of the Fifth Amendment’s Due Process Clause to impose “constitutional limitations upon the power of courts, even in aid of their own valid processes, to dismiss an action without affording a party the opportunity for a hearing on the merits of his cause.” Id., at 209. See also Hammond Packing Co. v. Arkansas, 212 U. S. 322, 349-351 (1909) (power to enter default judgment); Hovey v. Elliott, 167 U. S. 409 (1897) (same); Windsor v. McVeigh, 93 U. S. 274 (1876) (same). Cf. Wolff v. McDonnell, 418 U. S. 539, 558 (1974). Similarly, the Fourteenth Amendment’s Due Process Clause has been interpreted as preventing the States from denying potential litigants use of established adjudicatory procedures, when such an action would be “the equivalent of denying them an opportunity to be heard upon their claimed right[s].” Boddie v. Connecticut, 401 U. S. 371, 380 (1971).
In any event, the view that Logan’s FEPA claim is a constitutionally protected one follows logically from the Court’s more recent cases analyzing the nature of a property interest. The hallmark of property, the Court has emphasized, is an individual entitlement grounded in state law, which cannot be removed except “for cause.” Memphis Light, Gas & Water Div. v. Craft, 436 U. S. 1, 11-12 (1978); Goss v. Lopez, 419 U. S. 565, 573-574 (1975); Board of Regents v. Roth, 408 U. S. 564, 576-578 (1972). Once that characteristic is found, the types of interests protected as “property” are varied and, as often as not, intangible, relating “to the whole domain of social and economic fact.” National Mutual Insurance Co. v. Tidewater Transfer Co., 337 U. S. 582, 646 (1949) (Frankfurter, J., dissenting); Arnett v. Kennedy, 416 U. S. 134, 207-208, and n. 2 (1974) (Marshall, J., dissenting); Board of Regents v. Roth, 408 U. S., at 571-572, 576-577. See, e. g., Barry v. Barchi, 443 U. S. 55 (1979) (horse trainer’s license protected); Memphis Light, Gas & Water Div. v. Craft, supra (utility service); Mathews v. Eldridge, 424 U. S. 319 (1976) (disability benefits); Goss v. Lopez, supra (high school education); Connell v. Higginbotham, 403 U. S. 207 (1971) (government employment); Bell v. Burson, 402 U. S. 535 (1971) (driver’s license); Goldberg v. Kelly, 397 U. S. 254 (1970) (welfare benefits).
The right to use the FEPA’s adjudicatory procedures shares these characteristics. A claimant has more than an abstract desire or interest in redressing his grievance: his right to redress is guaranteed by the State, with the adequacy of his claim assessed under what is, in essence, a “for cause” standard, based upon the substantiality of the evidence. And an FEPA claim, which presumably can be surrendered for value, is at least as substantial as the right to an education labeled as property in Goss v. Lopez, supra. Certainly, it would require a remarkable reading of a “broad and majestic ter[m],” Board of Regents v. Roth, 408 U. S., at 571, to conclude that a horse trainer’s license is a protected property interest under the Fourteenth Amendment, while a state-created right to redress discrimination is not.
The Illinois Supreme Court nevertheless seemed to believe that no individual entitlement could come into being under the FEPA until the Commission took appropriate action within the statutory deadline. Because the entitlement arises from statute, the court reasoned, it was the legislature’s prerogative to establish the “procedures to be followed upon a charge.” 82 Ill. 2d, at 108, 411 N. E. 2d, at 282. This analysis, we believe, misunderstands the nature of the Constitution’s due process guarantee.
Each of our due process cases has recognized, either explicitly or implicitly, that because “minimum [procedural] requirements [are] a matter of federal law, they are not diminished by the fact that the State may have specified its own procedures that it may deem adequate for determining the preconditions to adverse official action.” Vitek v. Jones, 445 U. S. 480, 491 (1980). See Arnett v. Kennedy, 416 U. S., at 166-167 (Powell, J., concurring in part); id., at 211 (Marshall, J., dissenting). Indeed, any other conclusion would allow the State to destroy at will virtually any state-created property interest. The Court has considered and rejected such an approach: “While the legislature may elect not to confer a property interest,... it may not constitutionally authorize the deprivation of such an interest, once conferred, without appropriate procedural safeguards.... [T]he adequacy of statutory procedures for deprivation of a statutorily created property interest must be analyzed in constitutional terms.’” Vitek v. Jones, 445 U. S., at 490-491, n. 6, quoting Arnett v. Kennedy, 416 U. S., at 167 (opinion concurring in part).
Of course, the State remains free to create substantive defenses or immunities for use in adjudication — or to eliminate its statutorily created causes of action altogether — just as it can amend or terminate its welfare or employment programs. The Court held as much in Martinez v. California, 444 U. S. 277 (1980), where it upheld a California statute granting officials immunity from certain types of state tort claims. We acknowledged that the grant of immunity arguably did deprive the plaintiffs of a protected property interest. But they were not thereby deprived of property without due process, just as a welfare recipient is not deprived of due process when the legislature adjusts benefit levels. Cf. U. S. Railroad Retirement Bd. v. Fritz, 449 U. S. 166, 174 (1980); Hisquierdo v. Hisquierdo, 439 U. S. 572, 575 (1979); Flemming v. Nestor, 363 U. S. 603, 609-610 (1960); Chase Securities Corp. v. Donaldson, 325 U. S. 304, 312, n. 8, 315-316 (1945). In each case, the legislative determination provides all the process that is due, see Bi-Metallic Investment Co. v. State Bd. of Equalization, 239 U. S. 441, 445-446 (1915); it “remain[s] true that the State’s interest in fashioning its own rules of tort law is paramount to any discernible federal interest, except perhaps an interest in protecting the individual citizen from state action that is wholly arbitrary or irrational.” Martinez v. California, 444 U. S., at 282. Indeed, as was acknowledged in Martinez, it may well be that a substantive “immunity defense, like an element of the tort claim itself, is merely one aspect of the State’s definition of that property interest.” Id., at 282, n. 5. Cf. Ferri v. Ackerman, 444 U. S. 193, 198 (1979).
The 120-day limitation in the FEPA, ¶ 858(b), of course, involves no such thing. It is a procedural limitation on the claimant’s ability to assert his rights, not a substantive element of the FEPA claim. Because the state scheme has deprived Logan of a property right, then, we turn to the determination of what process is due him.
B
As our decisions have emphasized time and again, the Due Process Clause grants the aggrieved party the opportunity to present his case and have its merits fairly judged. Thus it has become a truism that “some form of hearing” is required before the owner is finally deprived of a protected property interest. Board of Regents v. Roth, 408 U. S., at 570-571, n. 8 (emphasis in original). And that is why the Court has stressed that, when a “statutory scheme makes liability an important factor in the State’s determination..., the State may not, consistent with due process, eliminate consideration of that factor in its prior hearing.” Bell v. Burson, 402 U. S., at 541. To put it as plainly as possible, the State may not finally destroy a property interest without first giving the putative owner an opportunity to present his claim of entitlement. See id., at 542.
On the other hand, the Court has acknowledged that the timing and nature of the required hearing “will depend on appropriate accommodation of the competing interests involved.” Goss v. Lopez, 419 U. S., at 579. These include the importance of the private interest and the length or finality of the deprivation, see Memphis Light, Gas & Water Div. v. Craft, 436 U. S., at 19, and Mathews v. Eldridge, 424 U. S., at 334-335; the likelihood of governmental error, see id., at 335; and the magnitude of the governmental interests involved, see ibid., and Wolff v. McDonnell, 418 U. S., at 561-563.
Each of these factors leads us to conclude that appellant Logan is entitled to have the Commission consider the merits of his charge, based upon the substantiality of the available evidence, before deciding whether to terminate his claim. Logan’s interests in retaining his employment, in disproving his employer’s charges of incompetence or inability, and— more intangibly — in redressing an instance of alleged discrimination, are all substantial. At the same time, the deprivation here is final; Logan, unlike a claimant whose charge is dismissed on the merits for lack of evidence, cannot obtain judicial review of the Commission action. A system or procedure that deprives persons of their claims in a random manner, as is apparently true of ¶ 858(b), necessarily presents an unjustifiably high risk that meritorious claims will be terminated. And the State’s interest in refusing Lo» gan’s procedural request is, on this record, insubstantial.
There has been no suggestion that any great number of claimants are in Logan’s position, or that directing the State to consider the merits of Logan’s claim will be unduly burdensome. In any event, the State by statute has eliminated the mandatory hearing requirement, see n. 1, supra, demonstrating that it no longer has any appreciable interest in defending the procedure at issue.
Despite appellee Zimmerman Brush Company’s arguments, the recent decision in Parratt v. Taylor, 451 U. S. 527 (1981), is not to the contrary. There, a state employee negligently lost a prisoner’s hobby kit; while the Court concluded that the prisoner had suffered a deprivation of property within the meaning of the Fourteenth Amendment, it held that all the process due was provided by the State’s tort claims procedure. In such a situation, the Court observed, “[i]t is difficult to conceive of how the State could provide a meaningful hearing before the deprivation takes place.” Id., at 541. The company suggests that Logan is complaining of the same type of essentially negligent deprivation, and that he therefore should be remitted to the tort remedies provided by the Illinois Court of Claims Act, Ill. Rev. Stat., ch. 37, ¶439.1 et seq. (1979). That statute allows an action “against the State for damages in cases sounding in tort, if a like cause of action would lie against a private person.¶439.8(d).
This argument misses Parrott’s point. In Parrott, the Court emphasized that it was dealing with “a tortious loss of... property as a result of a random and unauthorized act by a state employee... not a result of some established state procedure.” 451 U. S., at 541. Here, in contrast, it is the state system itself that destroys a complainant’s property interest, by operation of law, whenever the Commission fails to convene a timely conference — whether the Commission’s action is taken through negligence, maliciousness, or otherwise. Parratt was not designed to reach such a situation. See id., at 545 (second concurring opinion). Unlike the complainant in Parratt, Logan is challenging not the Commission’s error, but the “established state procedure” that destroys his entitlement without according him proper procedural safeguards.
In any event, the Court’s decisions suggest that, absent “the necessity of quick action by the State or the impracticality of providing any predeprivation process,” a postdeprivation hearing here would be constitutionally inadequate. Parratt, 451 U. S., at 539. See Memphis Light, Gas & Water Div. v. Craft, 436 U. S., at 19-20; Board of Regents v. Roth, 408 U. S., at 570, n. 7; Bell v. Burson, 402 U. S., at 542; Boddie v. Connecticut, 401 U. S., at 379. Cf. Barry v. Barchi, 443 U. S., at 64-65 (post-termination hearing permitted where the decision to terminate was based on a reliable pretermination finding); Mathews v. Eldridge, 424 U. S., at 343-347 (same). That is particularly true where, as here, the State’s only post-termination process comes in the form of an independent tort action. Seeking redress through a tort suit is apt to be a lengthy and speculative process, which in a situation such as this one will never make the complainant entirely whole: the Illinois Court of Claims Act does not provide for reinstatement — as appellee Zimmerman Brush Company conceded at oral argument, Tr. of Oral Arg. 39— and even a successful suit will not vindicate entirely Logan’s right to be free from discriminatory treatment.
Obviously, nothing we have said entitles every civil litigant to a hearing on the merits in every case. The State may erect reasonable procedural requirements for triggering the right to an adjudication, be they statutes of limitations, cf. Chase Securities Corp. v. Donaldson, 325 U. S., at 314-316, or, in an appropriate case, filing fees. United States v. Kras, 409 U. S. 434 (1973). And the State certainly accords due process when it terminates a claim for failure to comply with a reasonable procedural or evidentiary rule. Hammond Packing Co. v. Arkansas, 212 U. S., at 351; Windsor v. McVeigh, 93 U. S., at 278. What the Fourteenth Amendment does require, however, “is ‘an opportunity... granted at a meaningful time and in a meaningful manner,’ Armstrong v. Manzo, 380 U. S. 545, 552 (1965) (emphasis added), ‘for [a] hearing appropriate to the nature of the case,’ Mullane v. Central Hanover Tr. Co., supra, at 313.” Boddie v. Connecticut, 401 U. S., at 378. It is such an opportunity that Logan was denied.
Ill
The judgment of the Supreme Court of Illinois, accordingly, is reversed, and the case is remanded for further proceedings not inconsistent with this opinion.
It is so ordered.
Justice Blackmun,
with whom Justice Brennan, Justice Marshall, and Justice O’Connor join.
The Court’s opinion, ante, considers appellant Logan’s due process claim and decides that issue in his favor. As has been noted, Logan also raised an equal protection claim and that issue has been argued and briefed here. Although the Court considered that it was unnecessary to discuss and dispose of the equal protection claim when the due process issue was being decided in Logan’s favor, I regard the equal protection issue as sufficiently important to require comment on my part, particularly inasmuch as a majority of the Members of the Court are favorably inclined toward the claim, although, to be sure, that majority is not the one that constitutes the Court for the controlling opinion.
On its face, Logan’s equal protection claim is an unconventional one. The Act’s ¶ 858(b) establishes no explicit classifications and does not expressly distinguish between claimants, and the company therefore argues that Logan has no more been deprived of equal protection than anyone would be who is injured by a random act of governmental misconduct. As the Illinois Supreme Court interpreted the statute, however, ¶ 858(b) unambiguously divides claims—and thus, necessarily, claimants—into two discrete groups that are accorded radically disparate treatment. Claims processed within 120 days are given full consideration on the merits, and complainants bringing such charges are awarded the opportunity for full administrative and judicial review. In contrast, otherwise identical claims that do not receive a hearing within the statutory period are unceremoniously, and finally, terminated. Because the Illinois court recognized, in so many words, that the FEPA establishes two categories of claims, one may proceed to determine whether the classification drawn by the statute is consistent with the Fourteenth Amendment.
For over a century, the Court has engaged in a continuing and occasionally almost metaphysical effort to identify the precise nature of the Equal Protection Clause’s guarantees. At the minimum level, however, the Court “consistently has required that legislation classify the persons it affects in a manner rationally related to legitimate governmental objectives.” Schweiker v. Wilson, 450 U. S. 221, 230 (1981). This is not a difficult standard for a State to meet when it is attempting to act sensibly and in good faith. But the “rational-basis standard is ‘not a toothless one,”’ id., at 234, quoting Mathews v. Lucas, 427 U. S. 495, 510 (1976); the classificatory scheme must “rationally advanc[e] a reasonable and identifiable governmental objective.” Schweiker v. Wilson, 450 U. S., at 235. I see no need to explore the outer bounds of this test, for I find that the Illinois statute runs afoul of the lowest level of permissible equal protection scrutiny.
The FEPA itself has two express purposes: eliminating employment discrimination, and protecting employers and other potential defendants “from unfounded charges of discrimination.” ¶ 851. It is evident at a glance that neither of these objectives is advanced by ¶ 858(b)’s deadline provision. Terminating potentially meritorious claims in a random manner obviously cannot serve to redress instances of discrimination. And it cannot protect employers from unfounded charges, for the frivolousness of a claim is entirely unrelated to the length of time the Commission takes to process that claim. So far as this purpose is concerned, ¶ 858(b) stands on precisely the same footing as the state statute invalidated in Lindsey v. Normet, 405 U. S. 56 (1972). There, the Court struck down a provision requiring a tenant to post a double bond before appealing an adverse forcible entry judgment. “The claim that the double-bond requirement operates to screen out frivolous appeals is unpersuasive,” the Court noted, “for it not only bars nonfrivolous appeals by those who are unable to post the bond but also allows meritless appeals by others who can afford the bond.” Id., at 78. Accord, Rinaldi v. Yeager, 384 U. S. 305, 310 (1966). Here, of course, the FEPA may operate to terminate meritorious claims without any hearing at all, while allowing frivolous complaints to proceed through the entire administrative and judicial review process. While it may well be true that “[n]o bright line divides the merely foolish from the arbitrary law,” Schweiker v. Wilson, 450 U. S., at 243 (dissenting opinion), I have no doubt that ¶ 858(b) is patently irrational in the light of its stated purposes.
In its opinion, however, the Illinois Supreme Court recognized a third rationale for ¶ 858(b): that provision, according to the court, was designed to further the “just and expeditious resolutio[n]” of employment disputes. Zimmerman Brush Co. v. Fair Employment Practices Comm’n, 82 | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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116
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GULF STATES UTILITIES CO. v. FEDERAL POWER COMMISSION et al.
No. 71-1178.
Argued December 5, 1972
Decided May 14, 1973
Blackmun, J., delivered the opinion of the Court, in which Burger, C. J., and Douglas, Brennan, White, and Marshall, JJ., joined. Powell, J., filed a dissenting opinion, in which Stewart and Rehnquist, JJ., joined, post, p. 764.
Benny Harry Hughes argued the cause for petitioner. With him on the briefs was Benjamin D. Or gain.
Leo E. Forquer argued the cause for respondent Federal Power Commission in support of petitioner. With him on the brief was George W. McHenry, Jr.
Robert C. McDiarmid argued the cause for respondent cities of Lafayette and Plaquemine, Louisiana. With him on the brief was George Spiegel.
Howard E. Shapiro argued the cause for the United States as amicus curiae urging affirmance. With him on the brief were Solicitor General Griswold, Assistant Attorney General Kauper, Samuel Huntington, and Robert B. Nicholson.
Howard E. Wahrenbrock filed briefs for Public Service Company of Indiana, Inc., as amicus curiae urging reversal.
Briefs of amici curiae urging affirmance were filed by Northcutt Ely for the American Public Power Assn., and by Charles J. McCarthy for Dow Chemical Co.
Mr. Justice Blackmun
delivered the opinion of the Court.
This case presents the question whether, when a public utility applies to the Federal Power Commission for authority to issue a security, as the utility is required to do under § 204 of the Federal Power Act, 49 Stat. 850, 16 U. S. C. § 824c, the Commission, in passing upon the application, must consider the issue’s anticompetitive effect in determining whether it is “compatible with the public interest,” as that phrase is employed in § 204 (a).
I
In October 1970, Gulf States Utilities Company applied to the Federal Power Commission for authority to issue for cash, on competitive bidding, $30,000,000 first mortgage 30-year bonds for the purpose of refunding part of Gulf’s then-outstanding commercial paper and short-term notes.
Gulf, a Texas corporation qualified to do business in Louisiana, is a public utility within the meaning of § 201 (e) of the Federal Power Act, 16 U. S. C. § 824 (e). It is engaged principally in the business of generating, distributing, and selling electric energy in southeastern Texas and south central Louisiana in an area of approximately 28,000 square miles with a population of about 1,225,000. Gulf sells electric energy at retail in numerous communities in that market and, at the time of the application, was providing electric energy for resale to nine municipal systems, 11 rural electric cooperatives (one serving four municipal systems), and one other utility.
The Commission filed notice of Gulf’s application. 35 Fed. Reg. 16649 (1970). Thereupon the cities of Lafayette and Plaquemine, Louisiana (Cities) filed a protest and petition to intervene in the proceedings before the Commission and requested a formal hearing on Gulf’s application. The Cities alleged that Gulf, in concert with two other investor-owned utilities, Louisiana Power and Light Company (LP&L) and Central Louisiana Electric Company (CLECO), had engaged in activities “apparently violative of the anti-trust laws,” as well as of § 10 (h) of the Federal Power Act, 16 U. S. C. § 803 (h), and of the Public Utility Holding Company Act of 1935, 49 Stat. 838, 15 U. S. C. § 79 et seq.; that these activities, in effect, would be “financed or refinanced by the bonds here proposed”; and that the utilities’ activities were incompatible with the public interest. The Cities opposed the requested authorization “unless and until Gulf States purges itself of these past violations, or unless the Commission conditions its authorization.”
The Cities’ claim centered on and stressed a 1968 interconnection and pooling agreement between the Cities, Dow Chemical Company, and Louisiana Electric Cooperative, Inc. (LEC). Dow has a plant near the Cities; the plant has generating capacity that could be used by the other members of the pool as emergency stabilizing capacity. LEC is a generation and transmission electric cooperative financed by the Rural Electrification Administration (REA); it is a super-cooperative composed of 12 electric distribution cooperatives, all located in the area served by the three utilities.
In 1964, the REA was considering loans to LEC for the construction of a generation station and transmission lines through which LEC would be able to serve eight of its 12 member organizations. These members were then purchasing their power from the three utilities. The Cities claimed that the three utilities had attempted to destroy LEC, and pointed to a history of “extraordinary litigation” instituted by the utilities between 1964 and 1970 to prevent the construction of the station and the lines, and in fact delaying that construction for five years. The arrangement proposed by the 1968 agreement would assure a market for the parties’ surplus capacity and would coordinate, at substantial savings, the construction of new generators by the parties. The three utilities, correspondingly, would lose substantial business if the 1968 arrangement were carried out. Accordingly, Cities alleged, the three utilities engaged in frivolous and repetitive litigation and launched a public relations and lobbying drive against LEC in order to block the loan and prevent fulfillment of the agreement. Cf. California Transport v. Trucking Unlimited, 404 U. S. 508 (1972).
The REA loan was effected, however, in 1969. But by that time the loan was sufficient only for the generating facilities exclusive of the lines. Cities, Dow, and LEC, then were forced to negotiate with the three utilities for the use of the utilities’ lines to transmit their power. Cities contended that the three utilities continued, through the course of the negotiations, to block or limit the pool by agreeing only to provide transmission services to some of the pool members; by refusing to supply transmission facilities between pool members unless the 1968 pooling agreement were canceled; and by demanding that LEC limit its power capacity to the wattage already planned, thus giving the three utilities the exclusive right to supply all further power needs of LEC’s 12 cooperatives and precluding further expansion by LEC.
Cities, by their proposed intervention, would bring these allegations before the Federal Power Commission in the § 204 proceeding. They claimed that such anti-competitive conduct was properly the subject of a § 204 proceeding and that, under § 204 (b), 16 U. S. C. § 824c (b), the Commission may condition its approval of the bond issue accordingly and place restrictions on Gulf’s use of the proceeds.
By its answer, Gulf denied any violation of the antitrust laws, of the Federal Power Act, or of the Public Utility Holding Company Act of 1935. It alleged that the purpose of § 204 of the Federal Power Act was “to prevent unsound financing which might impair the financial integrity of public utilities,” and that even if the allegations of the Cities were accepted as true by the Commission, those matters were “irrelevant to this application.”
By order issued December 3, 1970, 44 F. P. C. 1524, the Commission granted the Cities permission to intervene. It denied their request for a hearing, however, and it authorized the issuance and sale of the bonds. The order recited:
“The requested approval of the issuance of the Bonds allow [sic] the Company only to change the form of a portion of its outstanding indebtedness, it does not call for the initiation of any construction or other program by the Company which might effect [sic] the interest of the Petitioners. The alleged violations which petitioners attempt to raise in this proceeding are irrelevant to a requested authorization of securities. There is no relief that the Commission can order in authorizing the issuance of the Bonds for refinancing purposes that would have any effect on the interest of the Petitioners, or solve any of the problems outlined by them.” Id., at 1525.
The Commission specifically found:
“The matters asserted and activities alleged in the filed protest and petition to intervene by the Cities of Lafayette and Plaquemine, Louisiana, are irrelevant to the purpose of issuing bonds to refund short-term indebtedness heretofore authorized by this Commission.” Id., at 1526.
The petition for rehearing required by § 313 (a) of the Act, 16 U. S. C. § 825l (a), see Department of Fish & Game v. FPC, 359 F. 2d 165, 168-169 (CA9), cert, denied, 385 U. S. 932 (1966), was filed by the Cities, and was denied.
Review was sought pursuant to § 313 (b) of the Act, 16 U. S. C. § 825l (b), in the United States Court of Appeals for the District of Columbia Circuit. A unanimous panel of that court disagreed with the Commission and remanded the case to it for consideration of the claims raised by the Cities, sub nom. City of Lafayette v. SEC, 147 U. S. App. D. C. 98, 454 F. 2d 941 (1971). The court recognized that the Commission’s contention that Gulf’s operations “could have no meaningful relation to an application that only sought to replace short-term notes with long term bonds” was “not without appeal, and also not without problems.” Id., at 109, 454 F. 2d, at 952. The court concluded, however, that the “cryptic statement of the FPC does not permit us to conclude with reasonable confidence that this was the position taken by the FPC.” Ibid. It observed that the Commission may have rejected the Cities’ allegations out of hand upon the authority of its earlier decision in Pacific Power & Light Co., 27 F. P. C. 623 (1962), a position the Court of Appeals viewed as untenable under this Court’s subsequent decision in Denver & R. G. W. R. Co. v. United States, 387 U. S. 485 (1967).
Inasmuch as the decision of the Court of Appeals raised issues of potential and recurring importance with respect to the authorization of securities by the Federal Power Commission, we granted certiorari. 406 U. S. 956 (1972). The Commission took the position that the Court of Appeals was in error, but nevertheless opposed the grant.
II
The mandate that § 204 of the Federal Power Act, 16 U. S. C. § 824c, imposes upon the Commission is a broad and impressive one. Section 204 (a) empowers the Commission to authorize the issue of a security by a public utility only “if it finds that such issue... is for some lawful object, within the corporate purposes of the applicant and compatible with the public interest.” This requires the Commission to inquire into and to be satisfied with the purposes of the issue and its lawfulness. And even if its “object” is lawful, the necessary inquiry is not ended, for, in addition, the object must be “compatible with the public interest.”
In making its determination under § 204 (a), the Commission is given broad powers of inquiry and enforcement. By § 204 (b) it may hold hearings on the application, may grant the application “in whole or in part,” may modify it, and may impose such terms or conditions “as it may find necessary or appropriate.” After opportunity for hearing, and for good cause shown, it also may supplement, modify, or condition any previous order “as it may find necessary or appropriate.” Ibid. Section 204 (c) grants the Commission authority to specify the purpose to which the proceeds of the security may be applied and the amount allowed for that purpose. While, as Gulf observes, §§ 204 (e) and (f) exempt from § 204 (a) certain transactions that concern short-term obligations as well as public utilities that are “organized and operating in a State under the laws of which its security issues are regulated by a State commission,” these exemptions do not significantly detract from the sweeping powers and responsibilities of the Commission with respect to public utility security issues generally.
We are asked to hold that the Commission’s responsibilities under § 204 do not extend to consideration on its part of possible anticompetitive consequences flowing from the issuance of a security. Gulf and the Commission both argue that administrative inquiry under § 204 is to be narrowly confined to the prevention of the issuance of a security that might impair the utility’s financial integrity or its ability to perform its public utility service and responsibilities. Exactly this interpretation was placed on § 204 by the Commission in 1962 in Pacific Power & Light Co., 27 F. P. C., at 626. Gulf and the Commission contend that antitrust considerations of the kind asserted by the Cities do not fall within the limited scope of § 204 as thus defined, and consideration by the Commission of such broad-ranging issues would be incompatible with the need for relatively fast action by the Commission when it passes upon a proposed security issue. It is said that allegations of anticompetitive conduct properly may be raised and fully considered in other proceedings related to interconnections under § 202 of the Act, 16 U. S. C. § 824a, to dispositions and mergers under § 203, 16 U. S. C. § 824b, to rates and rate-making practices under §§ 205 and 206, 16 U. S. C. §§ 824d and 824e, and to adequacy of service under § 207,16 U. S. C. § 824f.
Although allegations similar to those raised here may, indeed, be made in such other proceedings under the Federal Power Act, we do not regard that fact as determinative of the scope of Commission inquiry under § 204. Instead, the Commission’s broad authority to consider anticompetitive and other conduct touching the “public interest” under the other sections of the Act emphasizes the breadth of its authority under the public interest standard generally and as embodied in § 204. This statute was enacted as part of Tit. II of the Public Utility Act of 1935, 49 Stat. 803, 850. The Act had two primary and related purposes: to curb abusive practices of public utility companies by bringing them under effective control, and to provide effective federal regulation of the expanding business of transmitting and selling electric power in interstate commerce. 49 Stat. 803-804, 847-848; S. Rep. No. 621, 74th Cong., 1st Sess., 1-4, 17-20; H. R. Rep. No. 1318, 74th Cong., 1st Sess., 3, 7-8; Jersey Central Co. v. FPC, 319 U. S. 61, 67-68 (1943); see North American Co. v. SEC, 327 U. S. 686 (1946). The Act was passed in the context of, and in response to, great concentrations of economic and even political power vested in power trusts, and the absence of antitrust enforcement to restrain the growth and practices of public utility holding companies. See S. Rep. No. 621, supra, at 11-12; Utility Corporations — Summary Report, 70th Cong., 1st Sess., S. Doc. No. 92, Part 73-A, pp. 47-54; 79 Cong. Rec. 8392 (1935).
In order to achieve federal regulation of these and other perceived problems on the operational level of the interstate public utility business, Tit. II was enacted. S. Rep. No. 621, supra, at 17; H. R. Rep. No. 1318, supra, at 7. Part II of Tit. II was denominated the Federal Power Act, 49 Stat. 863. Title II certainly did not preclude the operation of the antitrust laws, and it vested the Federal Power Commission with important and broad regulatory power in the areas described above. See Otter Tail Power Co. v. United States, 410 U. S. 366 (1973); Meeks, Concentration in the Electric Power Industry: The Impact of Antitrust Policy, 72 Col. L. Rev. 64 (1972). This power clearly carries with it the responsibility to consider, in appropriate circumstances, the anti-competitive effects of regulated aspects of interstate utility operations pursuant to § § 202 and 203, and under like directives contained in §§205, 206, and 207. The Act did not render antitrust policy irrelevant to the Commission’s regulation of the electric power industry. Indeed, within the confines of a basic natural monopoly structure, limited competition of the sort protected by the antitrust laws seems to have been anticipated. See Otter Tail Power Co. v. United States, supra, at 373-374; California v. FPC, 369 U. S. 482 (1962); S. Rep. No. 621, supra, at 12; Hearings before the House Committee on Interstate and Foreign Commerce on H. R. 5423, 74th Cong., 1st Sess., 157-159 (1935); Summary Report, supra, at 52; Meeks, supra.
Nothing in the Act suggests that the “public interest” standard of § 204 contains any less broad directive than that contained in the other similarly worded and adjacent sections. Under the express language of § 204 the public interest is stressed as a governing factor. There is nothing that indicates that the meaning of that term is to be restricted to financial considerations, with every other aspect of the public interest ignored. Further, there is the section’s requirement that the object of the issue be lawful. The Commission is directed to inquire into and to evaluate the purpose of the issue and the use to which its proceeds will be put. Without a more definite indication of contrary legislative purpose, we shall not read out of § 204 the requirement that the Commission consider matters relating to both the broad purposes of the Act and the fundamental national economic policy expressed in the antitrust laws. See FMC v. Svenska Amerika Linien, 390 U. S. 238, 244 (1968); California v. FPC, 369 U. S., at 484-485; FCC v. RCA Communications, Inc., 346 U. S. 86, 94 (1953); McLean Trucking Co. v. United States, 321 U. S. 67, 80 (1944). Cf. Report of National Power Policy Committee on Public-Utility Holding Companies, in S. Rep. No. 621, supra, at 55, 59 (App.). Consideration of antitrust and anticompetitive issues by the Commission, moreover, serves the important function of establishing a first line of defense against those competitive practices that might later be the subject of antitrust proceedings. This is particularly significant in the context of a security issue under § 204, for appropriate consideration at a pre-issue stage may avoid the need later to unravel complex transactions in granting relief under the antitrust laws or other sections of the Federal Power Act.
Our conclusion is reinforced by the decision in Denver & R. G. W. R. Co. v. United States, 387 U. S. 485 (1967). In that case the Court concluded that the Interstate Commerce Commission, in performing its duty under § 20a (2) of the Interstate Commerce Act, 49 U. S. C. § 20a (2), to determine whether the issuance of a particular security is “for some lawful object... and compatible with the public interest,” is required, as a general rule, to consider the anticompetitive consequences of the issue. Section 204 of the Federal Power Act was modeled upon § 20a of the Interstate Commerce Act. The initial draft of § 204 was without any broad reference to the public interest. Instead, it identified four specific purposes for which a utility could issue a security (property acquisition; expansion or improvement of facilities or service; discharge or lawful refunding of obligations; and reimbursement of other expenditures for such purposes). H. R. 5423, § 206, 74th Cong., 1st Sess., 108-109; S. 1725, § 206, 74th Cong., 1st Sess., 109-110. This provision intentionally was replaced with the broader language now contained in § 204 in order “to attain greater flexibility and workability than would have been possible under the original section. The language defining the purposes for which securities may be issued has been taken substantially from section 20a of the Interstate Commerce Act, which has proved its usefulness.” S. Rep. No. 621, supra, at 20. There was, thus, a departure from the specific, and a selection of the general. We perceive no reason to view the responsibility placed on the FPC under § 204 differently from the ICC’s responsibility under § 20a of the Interstate Commerce Act. Each agency possesses broad regulatory authority. Each is charged with responsibility for considering antitrust policy under its statute. And § 204 and § 20a are virtually identical in language. The fact that the ICC has a specific obligation under § 11 (a) of the Clayton Act, 15 U. S. C. § 21 (a), to enforce § 7 of that Act, as well as a responsibility to advance the National Transportation Policy, did not control the decision in the Denver case, see 387 U. S., at 492-493, and the absence of a parallel reference in § 11 of the Clayton Act with respect to the FPC is not to be deemed controlling. Cf. California v. FPC, 369 U. S. 482 (1962).
Ill
Our conclusion that the FPC must consider anticompetitive aspects of a security issue to which § 204 applies does not end the inquiry, for two subordinate questions remain: whether the agency abused its authority in refusing to hold a hearing on the Cities’ objections, and whether, on the facts of this case, the Commission improperly rejected the Cities’ allegations out of hand on the ground that they were irrelevant to the security issue for which Gulf sought approval.
Gulf asserts that even if the Commission is required to investigate and to consider the Cities’ objections under § 204, its refusal to do so here was not error, for the Commission may summarily dispose of objections of this kind without a hearing and extended investigation. Our conclusion that, as a general rule, the Commission must consider anticompetitive consequences of a security issue under § 204 does not mean that the Commission must hold a hearing on objections in every case. Neither does it mean that every allegation must be fully investigated regardless of its facial merit, or that consideration of the allegations may not, in appropriate circumstances, be deferred, or that the major portion of a securities issue may not forthwith be authorized and only the remainder withheld for further study. So strict a rule would unduly limit the discretion the Commission must have in order to mold its procedures to the exigencies of the particular case, and would be unrealistic in the light of the nature of a proceeding under § 204. The need for flexibility, planning, and rapid coordinated action is particularly acute with respect to the sale of a security on the market. But where the Commission summarily disposes of proffered objections, or where it exercises its discretion to approve an issue without considering its anti-competitive consequences, “the reviewing court must closely scrutinize its action in light of the... statutory obligations to protect the public interest and to enforce the antitrust laws. Whether or not an abuse of discretion is present must ultimately depend upon the transaction approved, its possible consequences, and any justifications for the deferral” or summary treatment. Denver, 387 U. S., at 498. Denver, as we have noted, concerned the ICC, but the foregoing quotation from that opinion has equally forceful application in the FPC context.
Gulf also strenuously urges that the Commission in fact did consider Cities’ allegations, although summarily, and properly rejected them on their merits as having no relation to the security issue or to any possible future anticompetitive conduct in which Gulf might engage. We have noted above that the Court of Appeals observed, 147 U. S. App. D. C., at 109, 454 F. 2d, at 952, that certain aspects of this argument are not without substantial appeal. On the basis of the record before us, we cannot say that, upon consideration of the objections raised by the Cities, the Commission would not be justified in rejecting them summarily. But such summary action may not go unexplained in the face of the statutory obligation placed on the Commission under § 204. The decision the Commission thus far has made provides us with an inadequate explanation of its reasons for disposing of the Cities’ objections on their merits, if that in fact is what occurred. We are provided with no explanation of why summary action was warranted, and we are provided with no reason for the Commission’s possible conclusion that the objections were meritless. Without more, we are unable “closely [to] scrutinize” the Commission’s action. Nor may we supply an alternative, unstated ground to support an agency’s decision if that ground is one that “the agency alone is authorized to make.” SEC v. Chenery Corp., 318 U. S. 80, 88 (1943).
The decision of the Court of Appeals in remanding the case to the Federal Power Commission is
Affirmed.
Ҥ824e. Issuance of securities; assumption of liabilities; filing duplicate reports with Securities and Exchange Commission.
“(a) No public utility shall issue any security... unless and until, and then only to the extent that, upon application by the public utility, the Commission by order authorizes such issue.... The Commission shall make such order only if it finds that such issue... (a) is for some lawful object, within the corporate purposes of the applicant and compatible with the public interest, which is necessary or appropriate for or consistent with the proper performance by the applicant of service as a public utility and which will not impair its ability to perform that service, and (b) is reasonably necessary or appropriate for such purposes....
“(b) The Commission, after opportunity for hearing, may grant any application under this section in whole or in part, and with such modifications and upon such terms and conditions as it may find necessary or appropriate, and may from time to time, after opportunity for hearing and for good cause shown, make such supplemental orders in the premises as it may find necessary or appropriate, and may by any such supplemental order modify the provisions of any previous order as to the particular purposes, uses, and extent to which, or the conditions under which, any security so theretofore authorized or the proceeds thereof may be applied, subject always to the requirements of subsection (a) of this section.
“(c) No public utility shall, without the consent of the Commission, apply any security or any proceeds thereof to any purpose not specified in the Commission’s order, or supplemental order, or to any purpose in excess of the amount allowed for such purpose in such order, or otherwise in contravention of such order.”
Gulf, in its Securities and Exchange Commission registration statement for the bonds, stated that the proceeds received from the notes to be refinanced had been used “in connection with the Company’s construction program and for other corporate purposes.” App. 162. The notes themselves had been issued upon the authority of an uncontested order in FPC Docket E-7509. The Commission in that proceeding authorized a total of $80,000,000 in short-term debt. Only $55,000,000 of this was outstanding at the time of Gulf’s bond authorization proceeding. Thus, apart from the bond issue, Gulf could have borrowed another $25,000,000 in short-term credit without further Commission authorization.
“Combinations, agreements, arrangements, or understandings, express or implied, to limit the output of electrical energy, to restrain trade, or to fix, maintain, or increase prices for electrical energy or service are hereby prohibited.”
Cities also opposed an application of LP&L for approval by the Securities and Exchange Commission of bond and stock issues, the proceeds of which were to be used to repay short-term obligations and for other corporate purposes. Cities contended that the proceeds of these issues would be used for the construction of facilities that would further the unlawful objectives of LP&L, Gulf, and CLEC, and asked that approval by the SEC be conditioned on cessation of the illegal activities and the establishment of a program to remedy the damage already done.
The jurisdiction of the SEC in this instance was based on §§ 6 and 7 of the Public Utility Holding Company Act of 1935, 15 U. S. C. §§ 79f and 79g, which are part of Tit. I of the Public Utility Act of 1935, 49 Stat. 803, 814-817. Sections 6 and 7 contain a number of requirements that must be met for SEC approval of a security issue. The most relevant of these is in § 7 (d), which requires that the SEC “shall permit a declaration... to become effective unless the Commission finds that —... (6) the terms and conditions of the issue or sale of the security are detrimental to the public interest or the interest of investors or consumers.”
The SEC refused to entertain the Cities’ protest, concluding that its authority under § 7 (d) (6) related solely to the terms and conditions of the security to be issued, and did not extend to collateral and unrelated controversies in which LP&L might be engaged. The Cities petitioned the United States Court of Appeals for the District of Columbia Circuit for review of the SEC orders, and the matter was consolidated with the present case. The Court of Appeals affirmed the SEC orders, but remanded Gulf’s case to the FPC. It explained this diverse treatment as follows:
“Where an agency has some regulatory jurisdiction over operations, it must consider whether there is a reasonable nexus between the matters subject to its surveillance and those under attack on anti-competitive grounds. But the general doctrine requiring an agency to take account of antitrust considerations does not extend to a case like the one before us where the antitrust problem arises out of operations of the regulated company (past and projected) and the agency, here the SEC, has not been given any regulatory jurisdiction over operations of the company. The SEC has no jurisdiction over operations and stands in a different posture from the FPC which, as we have already noted, has regulatory jurisdiction over operations in view of its authority, inter alia, to direct utilities to interconnect on- reasonable.terms, or to prohibit a utility from discriminating in rates and facilities against its municipal customers” 147 U. S. App. D. C. 98, 112-113, 454 F. 2d 941, 955- | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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51
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VOINOVICH, GOVERNOR OF OHIO, et al. v. QUILTER, SPEAKER PRO TEMPORE OF OHIO HOUSE OF REPRESENTATIVES, et al.
No. 91-1618.
Argued December 8, 1992
Decided March 2, 1993
O’CONNOR, J., delivered the opinion for a unanimous Court.
N. Victor Goodman argued the cause for appellants. With him on the briefs were Orla E. Collier III, Mark D. Tucker, and David L. Shapiro.
Thomas G. Hungar argued the cause pro hac vice for the United States as amicus cuhriae urging reversal. With him on the brief were Solicitor General Starr, Assistant Attorney General Dunne, Deputy Solicitor General Roberts, Deputy Assistant Attorney General Turner, David K. Flynn, and Mark L. Gross.
Armistead W. Gilliam, Jr., argued the cause for appellees. With him on the briefs was Thomas I. Atkins
Briefs of amici curiae urging affirmance were filed for the NAACP Legal Defense and Educational Fund, Inc., et al. by Julius L. Chambers, Charles Stephen Ralston, C. Lani Guinier, and Pamela S. Karlan; and for Congressman Louis Stokes et al. by Abbe David Lowell and Jeffrey M. Wice.
Justice O’Connor
delivered the opinion of the Court.
This is yet another dispute arising out of legislative redistricting and reapportionment. See, e. g., Growe v. Emison, ante, p. 25. Today we consider whether Ohio’s creation of several legislative districts dominated by minority voters violated §2 of the Voting Rights Act of 1965, 79 Stat. 437, as amended, 42 U. S. C. § 1973.
I
Under the Ohio Constitution, the state apportionment board must reapportion electoral districts for the state legislature every 10 years. Ohio Const., Art. XI, § 1. In 1991, the board selected James Tilling to draft a proposed apportionment plan. After conducting public hearings and meeting with members of historically underrepresented groups, Tilling drafted a plan that included eight so-called majority-minority districts — districts in which a majority of the population is a member of a specific minority group. The board adopted the plan with minor amendments by a 3-to-2 vote along party lines. The board’s three Republican members voted for the plan; the two Democrats voted against it. 794 F. Supp. 695, 698, 716-717 (ND Ohio 1992); App. to Juris. Statement 160a-167a, 183a.
Appellees Barney Quilter and Thomas Ferguson, the two Democratic members of the board who voted against the plan, and various Democratic electors and legislators filed this lawsuit in the United States District Court for the Northern District of Ohio seeking the plan’s invalidation. They alleged that the plan violated § 2 of the Voting Rights Act of 1965, as amended, 42 U. S. C. § 1973, and the Fourteenth and Fifteenth Amendments to the United States Constitution. 794 F. Supp., at 695-696. According to appellees, the plan “packed” black voters by creating districts in which they would constitute a disproportionately large majority. This, appellees contended, minimized the total number of districts in which black voters could select their candidate of choice. In appellees’ view, the plan should have created a larger number of “influence” districts — districts in which black voters would not constitute a majority but in which they could, with the help of a predictable number of crossover votes from white voters, elect their candidates of choice. See App. to Juris. Statement 141a-142a. Appellants, by contrast, argued that the plan actually enhanced the strength of black voters by providing “safe” minority-dominated districts. The plan, they pointed out, compared favorably with the 1981 apportionment and had the backing of the National Association for the Advancement of Colored People, Ohio Conference of Branches (Ohio NAACP). 794 F. Supp., at 706.
A three-judge District Court heard the case and held for appellees. Relying on various statements Tilling had made in the course of the reapportionment hearings, the court found that the board had created minority-dominated districts “whenever possible.” Id., at 698. The District Court rejected appellants’ contention that §2 of the Voting Rights Act of 1966, as amended, 42 U. S. C. § 1973, requires that such districts be created wherever possible. 794 F. Supp., at 699. It further held that §2 actually prohibits the “wholesale creation of majority-minority districts” unless necessary to “ ‘remedy’ ” a § 2 violation. Id., at 701. The District Court therefore ordered the board to draft a new plan or demonstrate that it was remedying a §2 violation. Id., at 702.
Judge Dowd dissented, arguing that the majority’s analysis “place[d] the cart before the horse.” Id., at 709. In his view, § 2 does not require the State to show a violation before creating a majority-minority district. Rather, the State may create any district it might desire, so long as minority voting strength is not diluted as a result. Because appellees failed to demonstrate that the 1991 plan diluted the balloting strength of black voters, Judge Dowd thought their challenge should fail. Id., at 710.
The apportionment board responded by creating a record that, in its view, justified the creation of majority-minority districts. The board also adjusted the plan to correct “technical” errors that the Ohio Supreme Court had identified in its independent review of the plan. This revised 1992 plan created only five majority-black districts. App. to Juris. Statement 258a-263a. The District Court, however, was not satisfied with the board’s proof. In an order issued on March 10, 1992, it held that “the [bjoard fail[ed] once again to justify its wholesale creation of majority-minority districts, thus rendering the plan, as submitted, violative of the Voting Rights Act of 1965.” 794 F. Supp. 756, 757 (ND Ohio). The court then appointed a special master to prepare a redistricting plan. Ibid. Once again, Judge Dowd dissented. Id., at 758.
Nine days later, on March 19, 1992, the District Court issued an order reaffirming its view that the creation of majority-minority districts is impermissible under § 2 unless necessary to remedy a statutory violation. App. to Juris. Statement 128a-141a. The order also restated the court’s conclusion that the board had failed to prove a violation. Specifically, it noted “the absence of racial bloc voting, the [ability of black voters] to elect both black and white candidates of their choice, and the fact that such candidates ha[d] been elected over a sustained period of time.” Id:, at 130a. In addition, the order rejected as “clever sophistry” appellants’ argument that the District Court should not have invalidated the 1991 plan without finding that, under the totality of the circumstances, it diluted minority voting strength:
“Having implemented the Voting Rights Act remedy in the absence of a violation, [appellants] suggest that we are now required to establish a violation as a prerequisite to removing the remedy. Actually, however, this task is not as difficult as it seems. The totality of circumstances reveals coalitional voting between whites and blacks. As a result, black candidates have been repeatedly elected from districts with only a 35% black population. Against this background, the per se requirement of the creation of majority-minority districts has a dilutive effect on black votes . . . Id., at 141a, 142a (footnotes omitted).
The District Court further concluded that, because the board had applied the “ ‘remedy’ intentionally” and for the purpose of political advantage, it had violated not only §2 but the Fifteenth Amendment as well. Id., at 142a-143a. Finally, the court held that the plan violated the Fourteenth Amendment because it departed from the requirement that all districts be of nearly equal population. Id., at 146a-148a.
On March 31, 1992, the District Court ordered that the primary elections for Ohio’s General Assembly be rescheduled. 794 F. Supp. 760 (ND Ohio). On April 20, 1992, this Court granted appellants’ application for a stay of the District Court’s orders, 503 U. S. 979; and on June 1, 1992, we noted probable jurisdiction, 504 U. S. 954. We now reverse the judgment of the District Court and remand only for further proceedings on whether the plan’s deviation from equal population among districts violates the Fourteenth Amendment.
II
Congress enacted §2 of the Voting Rights Act of 1965, 42 U. S. C. § 1973, to help effectuate the Fifteenth Amendment’s guarantee that no citizen’s right to vote shall “be denied or abridged ... on account of race, color, or previous condition of servitude,” U. S. Const., Arndt. 15. See NAACP v. New York, 413 U. S. 345, 350 (1973). Section 2(a) of the Act prohibits the imposition of any electoral practice or procedure that “results in a denial or abridgement of the right of any citizen ... to vote on account of race or color.” Section 2(b), in relevant part, specifies that § 2(a) is violated if:
“[BJased on the totality of circumstances, it is shown that the political processes leading to nomination or election in the State or political subdivision are not equally open to participation by members of a class of citizens protected by subsection (a) of this section in that its members have less opportunity than other members of the electorate to participate in the political process and to elect representatives of their choice.” 42 U. S. C. § 1973(b).
Section 2 thus prohibits any practice or procedure that, “interact[ing] with social and historical conditions,” impairs the ability of a protected class to elect its candidate of choice on an equal basis with other voters. Thornburg v. Gingles, 478 U. S. 30, 47 (1986).
A
In the context of single-member districts, the usual device for diluting minority voting power is the manipulation of district lines. A politically cohesive minority group that is large enough to constitute the majority in a single-member district has a good chance of electing its candidate of choice, if the group is placed in a district where it constitutes a majority. Dividing the minority group among various districts so that it is a majority in none may prevent the group from electing its candidate of choice: If the majority in each district votes as a bloc against the minority candidate, the fragmented minority group will be unable to muster sufficient votes in any district to carry its candidate to victory.
This case focuses not on the fragmentation of a minority group among various districts but on the concentration of minority voters within a district. How such concentration or “packing” may dilute minority voting strength is not difficult to conceptualize. A minority group, for example, might have sufficient numbers to constitute a majority in three districts. So apportioned, the group inevitably will elect three candidates of its choice, assuming the group is sufficiently cohesive. But if the group is packed into two districts in which it constitutes a super-majority, it will be assured only two candidates. As a result, we have recognized that “[dilution of racial minority group voting strength may be caused” either “by the dispersal of blacks into districts in which they constitute an ineffective minority of voters or from the concentration of blacks into districts where they constitute an excessive majority.” Id., at 46, n. 11.
Appellees in this case, however, do not allege that Ohio’s creation of majority-black districts prevented black voters from constituting a majority in additional districts. Instead, they claim that Ohio’s plan deprived them of “influence districts” in which they would have constituted an influential minority. Black voters in such influence districts, of course, could not dictate electoral outcomes independently. But they could elect their candidate of choice nonetheless if they are numerous enough and their candidate attracts sufficient cross-over votes from white voters. We have not yet decided whether influence-dilution claims such as appellees’ are viable under § 2, Growe, ante, at 41, n. 5; see Gingles, supra, at 46-47, nn. 11-12 (leaving open the possibility of influence-dilution claims); nor do we decide that question today. Instead, we assume for the purpose of resolving this case that appellees in fact have stated a cognizable § 2 claim.
B
The practice challenged here, the creation of majority-minority districts, does not invariably minimize or maximize minority voting strength. Instead, it can have either effect or neither. On the one hand, creating majority-black districts necessarily leaves fewer black voters and therefore diminishes black-voter influence in predominantly white districts. On the other hand, the creation of majority-black districts can enhance the influence of black voters. Placing black voters in a district in which they constitute a sizeable and therefore “safe” majority ensures that they are able to elect their candidate of choice. Which effect the practice has, if any at all, depends entirely on the facts and circumstances of each case.
The District Court, however, initially thought it unnecessary to determine the effect of creating majority-black districts under the totality of the circumstances. In fact, the court did not believe it necessary to find vote dilution at all. It instead held that §2 prohibits the creation of majority-minority districts unless such districts are necessary to remedy a statutory violation. 794 F. Supp., at 701. We disagree. Section 2 contains no per se prohibitions against particular types of districts: It says nothing about majority-minority districts, districts dominated by certain political parties, or even districts based entirely on partisan political concerns. Instead, §2 focuses exclusively on the consequences of apportionment. Only if the apportionment scheme has the effect of denying a protected class the equal opportunity to elect its candidate of choice does it violate § 2; where such an effect has not been demonstrated, § 2 simply does not speak to the matter. See 42 U. S. C. § 1973(b). Indeed, in Gingles we expressly so held: “[Electoral devices . . . may not be considered per se violative of § 2. Plaintiffs must demonstrate that, under the totality of the circumstances, the devices result in unequal access to the electoral process.” 478 U. S., at 46. As a result, the District Court was required to determine the consequences of Ohio’s apportionment plan before ruling on its validity; the failure to do so was error.
The District Court’s decision was flawed for another reason as well. By requiring appellants to justify the creation of majority-minority districts, the District Court placed the burden of justifying apportionment on the State. Section 2, however, places at least the initial burden of proving an apportionment’s invalidity squarely on the plaintiff’s shoulders. Section 2(b) specifies that § 2(a) is violated if “it is shown” that a state practice has the effect of denying a protected group equal access to the electoral process. 42 U. S. C. § 1973(b) (emphasis added). The burden of “showing]” the prohibited effect, of course, is on the plaintiff; surely Congress could not have intended the State to prove the invalidity of its own apportionment scheme. See Gingles, 478 U. S., at 46 (plaintiffs must demonstrate that the device results in unequal access to the electoral process); id., at 49, n. 15 (plaintiffs must “prove their claim before they may be awarded relief”)- The District Court relieved appel-lees of that burden in this case solely because the State had created majority-minority districts. Because that departure from the statutorily required allocation of burdens finds no support in the statute, it was error for the District Court to impose it.
Of course, the federal courts may not order the creation of majority-minority districts unless necessary to remedy a violation of federal law. See Growe, ante, at 40-41. But that does not mean that the State’s powers are similarly limited. Quite the opposite is true: Federal courts are barred from intervening in state apportionment in the absence of a violation of federal law precisely because it is the domain of the States, and not the federal courts, to conduct apportionment in the first place. Time and again we have emphasized that “‘reapportionment is primarily the duty and responsibility of the State through its legislature or other body, rather than of a federal court.’” Growe, ante, at 34 (quoting Chapman v. Meier, 420 U. S. 1, 27 (1975)). Accord, Connor v. Finch, 431 U. S. 407, 414 (1977) (“We have repeatedly emphasized that ‘legislative reapportionment is primarily a matter for legislative consideration and determination’ ” (quoting Reynolds v. Sims, 377 U. S. 533, 586 (1964))). Because the “States do not derive their reapportionment authority from the Voting Rights Act, but rather from independent provisions of state and federal law,” Brief for United States as Amicus Curiae 12, the federal courts are bound to respect the States’ apportionment choices unless those choices contravene federal requirements. Cf. Katzenbach v. Morgan, 384 U. S. 641, 647-648 (1966) (“Under the distribution of powers effected by the Constitution, the States establish qualifications for voting for state officers” and such qualifications are valid unless they violate the Constitution or a federal statute).
Appellees’ complaint does not allege that the State’s conscious use of race in redistricting violates the Equal Protection Clause; the District Court below did not address the issue; and neither party raises it here. Accordingly, we express no view on how such a claim might be evaluated. We hold only that, under § 2 of the Voting Rights Act of 1965, as amended, 42 U. S. C. § 1973, plaintiffs can prevail on a dilution claim only if they show that, under the totality of the circumstances, the State’s apportionment scheme has the effect of diminishing or abridging the voting strength of the protected class.
C
In its order of March 19, 1992, the District Court found that the 1992 plan’s creation of majority-minority districts “ha[d] a dilutive effect on black votes.” App. to Juris. Statement 141a. Again we disagree.
In Thornburg v. Gingles, supra, this Court held that plaintiffs claiming vote dilution through the use of multimember districts must prove three threshold conditions. First, they must show that the minority group “ ‘is sufficiently large and geographically compact to constitute a majority in a single-member district.’” Second, they must prove that the minority group “ ‘is politically cohesive.’ ” Third, the plaintiffs must establish “ ‘that the white majority votes sufficiently as a bloc to enable it . . . usually to defeat the minority’s preferred candidate.’” Growe, ante, at 40 (quoting Gingles, supra, at 50-51). The District Court apparently thought the three Gingles factors inapplicable because Ohio has single-member rather than multimember districts. 794 F. Supp., at 699 (“Gingles’ preconditions are not applicable to the apportionment of single-member districts”). In Growe, however, we held that the Gingles preconditions apply in challenges to single-member as well as multimember districts. Ante, at 40-41.
Had the District Court employed the Gingles test in this case, it would have rejected appellees’ §2 claim. Of course, the Gingles factors cannot be applied mechanically and without regard to the nature of the claim. For example, the first Gingles precondition, the requirement that the group be sufficiently large to constitute a majority in a single district, would have to be modified or eliminated when analyzing the influence-dilution claim we assume, arguendo, to be actionable today. Supra, at 154. The complaint in such a case is not that black voters have been deprived of the ability to constitute a majority, but of the possibility of being a sufficiently large minority to elect their candidate of choice with the assistance of cross-over votes from the white majority. See ibid. We need not decide how Gingles’ first factor might apply here, however, because appellees have failed to demonstrate Gingles’ third precondition — sufficient white majority bloc voting to frustrate the election of the minority group’s candidate of choice. The District Court specifically found that Ohio does not suffer from “racially polarized voting.” 794 F. Supp., at 700-701. Accord, App. to Juris. Statement 132a-134a, and n. 2, 139a-140a. Even appellees agree. See Tr. of Oral Arg. 25. Here, as in Gingles, “in the absence of significant white bloc voting it cannot be said that the ability of minority voters to elect their chosen representatives is inferior to that of white voters.” Gingles, 478 U. S., at 49, n. 15. The District Court’s finding of a § 2 violation, therefore, must be reversed.
III
The District Court also held that the redistricting plan violated the Fifteenth Amendment because the apportionment board intentionally diluted minority voting strength for political reasons. App. to Juris. Statement 142a-143a. This Court has not decided whether the Fifteenth Amendment applies to vote-dilution claims; in fact, we never have held any legislative apportionment inconsistent with the Fifteenth Amendment. Beer v. United States, 425 U. S. 130, 142-143, n. 14 (1976). Nonetheless, we need not decide the precise scope of the Fifteenth Amendment’s prohibition in this case. Even if we assume that the Fifteenth Amendment speaks to claims like appellees’, the District Court’s decision still must be reversed: Its finding of intentional discrimination was clearly erroneous. See Mobile v. Bolden, 446 U. S. 55, 62 (1980) (plurality opinion); id., at 101-103 (White, J., dissenting); id., at 90-92 (Stevens, J., concurring in judgment); id., at 80 (Blackmun, J., concurring in result).
The District Court cited only two pieces of evidence to support its finding. First, the District Court thought it significant that the plan’s drafter, Tilling, disregarded the requirements of the Ohio Constitution where he believed that the Voting Rights Act of 1965 required a contrary result. App. to Juris. Statement 142a-143a, n. 8. But Tilling’s preference for federal over state law when he believed the two in conflict does not raise an inference of intentional discrimination; it demonstrates obedience to the Supremacy Clause of the United States Constitution. Second, the District Court cited Tilling’s possession of certain documents that, according to the court, were tantamount to “a road-map detailing how [one could] create a racial gerrymander.” Id., at 143a, n. 9. Apparently, the District Court believed that Tilling, a Republican, sought to minimize the Democratic Party’s power by diluting minority voting strength. See ibid. The District Court, however, failed to explain the nature of the documents. Contrary to the implication of the District Court opinion, the documents were not a set of Republican plans for diluting minority voting strength. In fact, they were not even created by Tilling or the Republicans. They were created by a Democrat who, concerned about possible Republican manipulation of apportionment, set out the various types of political gerrymandering in which he thought the Republicans might engage. App. 99-100. That Tilling possessed documents in which the opposing party speculated that he might have a discriminatory strategy does not indicate that Tilling actually had such a strategy. And nothing in the record indicates that Tilling relied on the documents in preparing the plan.
Indeed, the record demonstrates that Tilling and the board relied on sources that were wholly unlikely to engage in or tolerate intentional discrimination against black voters, including the Ohio NAACP, the Black Elected Democrats of Ohio, and the Black Elected Democrats of Cleveland, Ohio. Tilling’s plan actually incorporated much of the Ohio NAACP’s proposed plan; the Ohio NAACP, for its part, fully supported the 1991 apportionment plan. 794 F. Supp., at 726-729; App. to Juris. Statement 164a-167a, 269a-270a. Because the evidence not only fails to support but also directly contradicts the District Court’s finding of discriminatory intent, we reverse that finding as clearly erroneous. In so doing, we express no view on the relationship between the Fifteenth Amendment and race-conscious redistricting. Cf. United Jewish Organizations of Williamsburgh, Inc. v. Carey, 430 U. S. 144, 155-165 (1977) (plurality opinion). Neither party asserts that the State’s conscious use of race by itself violates the Fifteenth Amendment. Instead, they dispute whether the District Court properly found that the State intentionally discriminated against black voters. On that question, we hold only that the District Court’s finding of discriminatory intent was clear error.
IV
Finally, the District Court held that the plan violated the Fourteenth Amendment because it created legislative districts of unequal size. App. to Juris. Statement 146a-148a. The Equal Protection Clause does require that electoral districts be “of nearly equal population, so that each person’s vote may be given equal weight in the election of representatives.” Connor, 431 U. S., at 416. But the requirement is not an inflexible one.
“[M]inor deviations from mathematical equality among state legislative districts are insufficient to make out a prima facie case of invidious discrimination under the Fourteenth Amendment so as to require justification by the State. Our decisions have established, as a general matter, that an apportionment plan with a maximum population deviation under 10% falls within this category of minor deviations. A plan with larger disparities in population, however, creates a prima facie case of discrimination and therefore must be justified by the State.” Brown v. Thomson, 462 U. S. 835, 842-843 (1983) (internal quotation marks and citations omitted).
Here, the District Court found that the maximum total deviation from ideal district size exceeded 10%. App. to Juris. Statement 148a. As a result, appellees established a prima facie case of discrimination, and appellants were required to justify the deviation. Appellants attempted to do just that, arguing that the deviation resulted from the State’s constitutional policy in favor of preserving county boundaries. See Ohio Const., Arts. VII-XI. The District Court therefore was required to decide whether the “plan ‘may reasonably be said to advance [the] rational state policy’ ” of preserving county boundaries “and, if so, ‘whether the population disparities among the districts that have resulted from the pursuit of th[e] plan exceed constitutional limits.’” Brown, supra, at 843 (quoting Mahan v. Howell, 410 U. S. 315, 328 (1973)). Rather than undertaking that inquiry, the District Court simply held that total deviations in excess of 10% cannot be justified by a policy of preserving the boundaries of political subdivisions. Our case law is directly to the contrary. See Mahan v. Howell, supra (upholding total deviation of over 16% where justified by the rational objective of preserving the integrity of political subdivision lines); see also Brown v. Thomson, supra. On remand, the District Court should consider whether the deviations from the ideal district size are justified using the analysis employed in Brown, supra, at 843-846, and Mahan, supra, at 325-330.
The judgment of the District Court is reversed, and the case is remanded for further proceedings in conformity with this opinion.
So ordered. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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NATIONAL MUFFLER DEALERS ASSN., INC. v. UNITED STATES
No. 77-1172.
Argued November 27, 1978
Decided March 20, 1979
Blackmun, J., delivered the opinion of the Court, in which Burger, C. J., and Brennan, White, Marshall, and Powell, JJ., joined. Stewart, J., filed a dissenting opinion, in which Rehnquist and Stevens, JJ., joined, post, p. 489.
Myron P. Gordon argued the cause for petitioner. With him on the briefs was Monte Engler.
Stuart A. Smith argued the cause for the United States. With him on the brief were Solicitor General McCree, Assistant Attorney General Ferguson, Leonard J. Henzke, Jr., and Robert T. Duffy
Robert J. Sisk and David B. Tillinghast filed a brief for the Pepsi-Cola Bottlers Assn., Inc., as amicus curiae urging reversal.
Mr. Justice Blacicmun
delivered the opinion of the Court.
Petitioner, National Muffler Dealers Association, Inc. (Association), as its name indicates, is a trade organization for muffler dealers. The issue in this case is whether the Association, which has confined its membership to dealers franchised by Midas International Corporation (Midas), and its activities to the Midas muffler business, and thus is not “industrywide,” is a “business league” entitled to the exemption from federal income tax provided by § 501 (c) (6) of the Internal Revenue Code of 1954, 26 U. S. C. § 501 (c)(6).
I
In 1971, during a contest for control of Midas, Midas muffler franchisees organized the Association under the New York Not-for-Profit Corporation Law. The Association’s purpose was to establish a group to negotiate unitedly with Midas management. Its principal activity has been to serve as a bargaining agent for its members in dealing with Midas. It has enrolled most Midas franchisees as members. The Association was successful in negotiating a new form of franchise agreement which prevents termination during its 20-year life except for cause. It also persuaded Midas to eliminate its requirement that a customer pay a service charge when a guaranteed Midas muffler is replaced. And the Association sponsors group insurance programs, holds an annual convention, and publishes a newsletter for members.
The Association sought the exemption from federal income tax which § 501 (c) (6) provides for a “business league.” Treasury Regulation § 1.501 (c) (6)-l, 26 GFR § 1.501 (c) (6)-l (1978), states that the activities of a tax exempt business league “should be directed to the improvement of business conditions of one or more lines of business.” In view of that requirement, the Internal Revenue Service initially rejected the Association’s exemption application, stating that § 501 (c) (6) “would not apply to an organization that is not industry wide.”
The Association then (in October 1972) amended its bylaws and eliminated the requirement that its members be Midas franchisees. Despite that amendment, and despite the Association’s announced purpose to promote the interests of individuals “engaged in business as muffler dealers,” it neither recruited nor acquired a member who was not a Midas franchisee.
In 1974, after the Internal Revenue Service had issued a final rejection of the Association’s exemption application, the Association filed income tax returns for its fiscal years 1971, 1972, and 1973, and, thereafter, claims for refund of the taxes paid with those returns. The 1972 claim was formally denied. Subsequent to that denial, and after more than six months had passed since the filing of the 1971 and 1973 claims, see § 6532 (a)(1) of the 1954 Code, 26 U. S. C. § 6532 (a)(1), the Association brought this suit in the United States District Court for the Southern District of New York asserting its entitlement to a refund for the income taxes paid for the three fiscal years. The District Court found: “There is no evidence that [the Association] confers a benefit on the muffler industry as a whole or upon muffler franchisees as a group.” App. to Pet. for Cert. 11a. It then concluded that “Midas Muffler franchisees do not constitute a 'line of business,’ ” and held that the Association was not a “business league” within the meaning of §501 (c)(6), and thus was not entitled to the claimed refund. App. to Pet. for Cert. 13a-14a.
The United States Court of Appeals for the Second Circuit affirmed. 565 F. 2d 845 (1977). It confronted what it called the “lexicographer’s task of deciding what is meant by a ‘business league.’ ” Id., at 846. Finding no direct guidance in the statute, the court applied the maxim noscitur a sociis (“[i]t is known from its associates,” Black’s Law Dictionary 1209 (Rev. 4th ed. 1968)), and looked “at the general characteristics of the organizations” with which business leagues were grouped in the statute, that is, chambers of commerce and boards of trade. The court agreed with the Service’s determination, in § 1.501 (c) (6) — 1 of the regulations, that a business league is an “organization of the same general class as a chamber of commerce or board of trade.” Reasoning that it was the “manifest intention” of Congress by the statute “to provide an exemption for organizations which promote some aspect of the general economic welfare rather than support particular private interests,” the court concluded that the “line of business” requirement set forth in the regulations is “well suited to assuring that an organization’s efforts do indeed benefit a sufficiently broad segment of the business community.” 565 F. 2d, at 846-847. The court noted that any success the Association might have in improving business conditions for Midas franchisees, and any advantage it might gain through tax exemption, would come at the expense of the rest of the muffler industry, and concluded that the Association’s purpose was too narrow to satisfy the line-of-business test.
The court, id., at 847 n. 1, explicitly refused to follow the decision in Pepsi-Cola Bottlers’ Assn. v. United States, 369 F. 2d 250 (CA7 1966). There, the Seventh Circuit, by a divided vote, had upheld the exempt status of an association composed solely of bottlers of a single brand of soft drink. It did so on the ground that the line-of-business requirement unreasonably narrowed the statute.
We granted certiorari to resolve this conflict. 436 U. S. 903 (1978).
II
The statute’s term “business league” has no well-defined meaning or common usage outside the perimeters of § 501 (c)(6). It is a term “so general... as to render an interpretive regulation appropriate.” Helvering v. Reynolds Co., 306 U. S. 110, 114 (1939). In such a situation, this Court customarily defers to the regulation, which, “if found to 'implement the congressional mandate in some reasonable manner,’ must be upheld.” United States v. Cartwright, 411 U. S. 546, 550 (1973), quoting United States v. Correll, 389 U. S. 299, 307 (1967).
We do this because “Congress has delegated to the [Secretary of the Treasury and his delegate, the] Commissioner [of Internal Revenue], not to the courts, the task of prescribing 'all needful rules and regulations for the enforcement’ of the Internal Revenue Code. 26 U. S. C. § 7805 (a).” United States v. Correll, 389 U. S., at 307. That delegation helps ensure that in “this area of limitless factual variations,” ibid., like cases will be treated alike. It also helps guarantee that the rules will be written by “masters of the subject,” United States v. Moore, 95 U. S. 760, 763 (1878), who will be responsible for putting the rules into effect.
In determining whether a particular regulation carries out the congressional mandate in a proper manner, we look to see whether the regulation harmonizes with the plain language of the statute, its origin, and its purpose. A regulation may have particular force if it is a substantially contemporaneous construction of the statute by those presumed to have been aware of congressional intent. If the regulation dates from a later period, the manner in which it evolved merits inquiry. Other relevant considerations are the length of time the regulation has been in effect, the reliance placed on it, the consistency of the Commissioner’s interpretation, and the degree of scrutiny Congress has devoted to the regulation during subsequent re-enactments of the statute. See Commissioner v. South Texas Lumber Co., 333 U. S. 496, 501 (1948); Helvering v. Winmill, 305 U. S. 79, 83 (1938).
Ill
A
The history of Treas. Reg. § 1.501 (c) (6)-l and its “line of business” requirement provides much that supports the Government’s view that the Association, which is not tied to a particular community and is not industrywide, should not be exempt. The exemption for “business leagues” from federal income tax had its genesis at the inception of the modern income tax system with the enactment of the Tariff Act of October 3, 1913, 38 Stat. 114, 172. In response to a House bill which would have exempted, among others, “labor, agricultural, or horticultural organizations,” the Senate Finance Committee was urged to add an exemption that would cover nonprofit business groups. Both the Chamber of Commerce of the United States and the American Warehousemen’s Association, a trade association for warehouse operators, submitted statements to the Committee. The Chamber’s spokesman said:
“The commercial organization of the present day is not organized for selfish purposes, and performs broad patriotic and civic functions. Indeed, it is one of the most potent forces in each community for the improvement of physical and social conditions. While its original reason for being is commercial advancement, it is not in the narrow sense of advantage to the individual, hut in the broad sense of building up the trade and commerce of the community as a whole....” (Emphasis added.) Briefs and Statements on H. R. 3321 filed with the Senate Committee on Finance, 63d Cong., 1st Sess., 2002 (1913) (hereinafter Briefs and Statements).
The Chamber’s written submission added:
“These organizations receive their income from dues... which business men pay that they may receive in common with all other members of their communities or of their industries the benefits of cooperative study of local development, of civic affairs, of industrial resources, and of local, national, and international trade.” (Emphasis added.) Id., at 2003.
The Committee was receptive to the idea, but rejected the Chamber's proposed broad language which would have exempted all “commercial organizations not organized for profit.” Instead, the Committee, and ultimately the Congress, provided that the tax would not apply to
“business leagues, nor to chambers of commerce or boards of trade, not organized for profit or no part of the net income of which inures to the benefit of the private stockholder or individual.” Tariff Act of Oct. 3, 1913, § IIG (a), 38 Stat. 172.
Congress has preserved this language, with few modifications, in each succeeding Revenue Act.
The Commissioner of Internal Revenue had little difficulty determining which organizations were “chambers of commerce” or “boards of trade” within the meaning of the statute. Those terms had commonly understood meanings before the statute was enacted. “Business league,” however, had no common usage, and in 1919 the Commissioner undertook to define its meaning by regulation. The initial definition was the following:
“A business league is an association of persons having some common business interest, which limits its activities to work for such common interest and does not engage in a regular business of a kind ordinarily carried on for profit. Its work need not be similar to that of a chamber of commerce or board of trade.” Treas. Regs. 45, Art. 518 (1919).
This language, however, proved too expansive to identify with precision the class of organizations Congress intended to exempt. The Service began to cut back on the last sentence of the material just quoted when, in 1924, the Solicitor of Internal Revenue invoked noscitur a sociis to deny an exemption requested by a stock exchange. He reasoned that, while a stock exchange conceivably could come within the definitions of a “business league” or “board of trade,” it lacked the characteristics that a “business league,” “chamber of commerce,” and “board of trade” share in common and that form the basis for the exemption. Congress must have used those terms, he said, “to indicate organizations of the same general class, having for their primary purpose the promotion of business welfare.” The primary purpose of the stock exchange, by contrast, was “to afford facilities to a limited class of people for the transaction of their private business.” L. 0. 1121, III — 1 Cum. Bull. 275, 280-281 (1924). The regulation was then amended so as specifically to exclude stock exchanges. T. D. 3746, IV-2 Cum. Bull. 77 (1925).
In 1927, the Board of Tax Appeals, in a reviewed decision with some dissents, applied the principle of noscitur a sociis and denied a claimed “business league” exemption to a corporation organized by associations of insurance companies to provide printing services for member companies. Uniform Printing & Supply Co. v. Commissioner, 9 B. T. A. 251, aff’d, 33 F. 2d 445 (CA7), cert. denied, 280 U. S. 591 (1929). In 1928, Congress revised the statute so as specifically to exempt real estate boards that local revenue agents had tried to tax. The exclusion of stock exchanges, however, was allowed to remain.
In 1929, the. Commissioner incorporated the principle of noscitur a sociis into the regulation itself. The sentence, “Its work need not be similar to that of a chamber of commerce or board of trade,” was dropped and was replaced with the following qualification:
“It is an organization of the same general class as a chamber of commerce or board of trade. Thus, its activities should be directed to the improvement of business conditions or to the promotion of the general objects of one or more lines of business as distinguished from the performance of particular services for individual persons.” Treas. Regs. 74, Art. 528 (1929).
This language has stood almost without change for half a century through several re-enactments and one amendment of the statute.
During that period, the Commissioner and the courts have been called upon to define “line of business” as that phrase is employed in the regulation. True to the representation made by the Chamber of Commerce, in its statement to the Senate in 1913, that benefits would be received “in common with all other members of their communities or of their industries,” supra, at 478, the term “line of business” has been interpreted to mean either an entire industry, see, e. g., American Plywood Assn. v. United States, 267 F. Supp. 830 (WD Wash. 1967); National Leather & Shoe Finders Assn. v. Commissioner, 9 T. C. 121 (1947), or all components of an industry within a geographic area, see, e. g., Commissioner v. Chicago Graphic Arts Federation, Inc., 128 F. 2d 424 (CA7 1942); Crooks v. Kansas City Hay Dealers’ Assn., 37 F. 2d 83 (CA8 1929); Washington State Apples, Inc. v. Commissioner, 46 B. T. A. 64 (1942).
Most trade associations fall within one of these two categories. The Commissioner consistently has denied exemption to business groups whose membership and purposes are narrower. Those who have failed to meet the “line of business” test, in the view of the Commissioner, include groups composed of businesses that market a single brand of automobile, or have licenses to a single patented product, or bottle one type of soft drink. The Commissioner has reasoned that these groups are not designed to better conditions in an entire industrial “line,” but, instead, are devoted to the promotion of a particular product at the expense of others in the industry.
In short, while the Commissioner’s reading of § 501 (c) (6) perhaps is not the only possible one, it does bear a fair relationship to the language of the statute, it reflects the views of those who sought its enactment, and it matches the purpose they articulated. It evolved as the Commissioner administered the statute and attempted to give to a new phrase a content that would reflect congressional design. The regulation has stood for 50 years, and the Commissioner infrequently but consistently has interpreted it to exclude an organization like the Association that is not industrywide. The Commissioner’s view therefore merits serious deference.
B
The Association contends, however, that the regulation is unreasonable because it unduly narrows the statute. This argument has three aspects: First, the Association argues that this Court need not defer to the regulation because, instead of being a contemporaneous construction of the statute, it is actually contrary to the regulation first in force from 1919 to 1929. Second, it argues that the addition in 1966 of professional football leagues to the statutory list of exempt organizations makes a new view of noscitur a sociis appropriate. Third, it contends that, if the maxim applies here, the Court should reach out beyond § 501 (c) (6) and take into account the fact that the Association’s bargaining function is much like that of a labor organization which would be exempt under § 501 (c)(5). We consider these arguments in turn.
1. As noted above, the Commissioner’s first definition of “business league” provided that its work “need not be similar to that of a chamber of commerce or board of trade.” Treas. Regs. 45, Art. 518 (1919) (emphasis added). The Association contends that, because this language differs from the language that replaced it in 1929, the latter is not a “contemporaneous construction” to which this Court should defer, Bingler v. Johnson, 394 U. S. 741, 749-750 (1969), but is instead an arbitrary narrowing of the statute. It is said that the earlier language rejects the rule of noscitur a sociis, and that it is the earlier language that should be treated by the Court as truly authoritative.
Contemporaneity, however, is only one of many considerations that counsel courts to defer to the administrative interpretation of a statute. It need not control here. Nothing in the regulations or case law, see Produce Exchange Stock Clearing Asnn. v. Helvering, 71 F. 2d 142 (CA2 1934), directly explains the regulatory shift. We do know, however, that the change in 1929 incorporated an interpretation thought necessary to match the statute’s construction to the original congressional intent. We would be reluctant to adopt the rigid view that an agency may not alter its interpretation in light of administrative experience. In Helvering v. Wilshire Oil Co., 308 U. S. 90, 101 (1939), the Court acknowledged the need for flexibility and applied a 1929 regulation to a taxpayer even though the taxpayer had acted in reliance on an opposite interpretation incorporated in an earlier regulation. Here, where there is no claim that the Association ever relied on the Commissioner’s prior view, the case for accepting the later regulation as authoritative is even stronger.
2. In 1966, Congress amended § 501 (c) (6) by adding to the list of exempt organizations “professional football leagues (whether or not administering a pension fund for football players).” Act of Nov. 8, 1966, Pub. L. 89-800, § 6 (a), 80 Stat. 1515. The Association contends that a professional football league is not of the same general character as a chamber of commerce or board of trade, and that a new view of noscitur a sociis is appropriate, one that would include the Association within the exemption. This, of course, is the complement to the first argument.
Nothing in the legislative history of the amendment, however, indicates that Congress objected to or endeavored to change the Commissioner’s position as to the class of organizations included in § 501 (c) (6). The purpose of the amendment was to forestall any claim that a football league’s pension plan would be considered inurement of benefits to a private individual. Congressman Mills stated flatly that “no inference is intended by this change as to the application of section 501(c)(6) to other types of organizations.” 112 Cong. Rec. 28228 (1966).
Nor does the Association share characteristics in common with a professional football league that would necessarily entitle it to exemption even if a new view of noscitur a sociis were applied. The teams in a football league depend on mutual cooperation to promote a common business purpose. They need a league to provide uniform rules of play. A franchisee, however, does not need another franchisee in order to bargain with its franchisor, even though joint bargaining may make them more powerful. Also, it is not without significance that the 1966 amendment was part of a large statutory package which paved the way for a merger which created an “industrywide" professional football league. It can hardly be read to evince a congressional intent that other associations that are not industrywide should- be afforded tax-exempt status.
3. The Association says that, if noscitur a sociis is to apply, then sound policy considerations support the reasonableness of searching for socii beyond the confines of §501 (c)(6). The Association draws a comparison to other exempt organizations, particularly labor unions that are exempt under § 501 (c)(5). The Association says that, like a labor union, it exists to redress unequal bargaining power in the marketplace. Some States have special legislation protecting franchisee associations. Employer bargaining associations that deal with unions in a particular industry are exempt “business leagues.” Rev. Rui. 65-14, 1965-1 Cum. Bull. 236, 238. It is argued that the Association meets all the regulation's requirements except the line-of-business test. Applying the thin logic of that requirement to tax a nonprofit organization like the Association, it is said, unreasonably will discourage joint action to improve shared business conditions and will yield only scant revenue to the Treasury. The Association concludes that it would be appropriate now to expand the “business league” exemption to embrace the modern phenomenon of franchisee associations that was unknown in 1913.
These arguments are not unlike those that persuaded the Senate to add the business-league exemption to the 1913 bill. See Briefs and Statements 2002-2003. Perhaps Congress would find them forceful today. The Association, however, needs more than a plausible policy argument to prevail here. Just last Term, in Fulman v. United States, 434 U. S. 528, 536 (1978), the Court upheld a regulation which had a “reasonable basis” in the statutory history, even though the taxpayer’s challenge to its policy had “logical force.” Id., at 534, 536, and 540 (dissenting opinion). The choice among reasonable interpretations is for the Commissioner, not the courts. Certainly, noscitur a sociis does not compel the Commissioner to draw comparisons that go beyond the text of the Senate’s amendment to the 1913 bill, particularly when the Senate Finance Committee, in drafting the amendment, rejected a broad proposal modeled on the same labor exemption the Association now wishes to incorporate.
In sum, the “line of business” limitation is well grounded in the origin of § 501 (c) (6) and in its enforcement over a long period of time. The distinction drawn here, that a tax exemption is not available to aid one group in competition with another within an industry, is but a particular manifestation of an established principle of tax administration. Because the Association has not shown that either the regulation or the Commissioner’s interpretation of it fails to “implement the congressional mandate in some reasonable manner,” United States v. Correll, 389 U. S., at 307, the Association's claim for a § 501 (c) (6) exemption must be denied.
The judgment of the Court of Appeals is affirmed.
It is so ordered.
The statute exempts:
“Business leagues, chambers of commerce, real-estate boards, boards of trade, or professional football leagues (whether or not administering a pension fund for football players) not organized for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual.”
The trial court, in focusing on the Association’s fiscal years ended November 30 in 1971, 1972, and 1973, found that 290 franchised Midas dealers were members of the Association. App. 18a. This was about 50% of the dealers. By the time of the trial in 1975, the Association included almost 80% of all Midas dealers. Id., at 49a.
The regulation, reads:
“A business league is an association of persons having some common business interest, the purpose of which is to promote such common interest and not to engage in a regular business of a kind ordinarily carried on for profit. It is an organization of the same general class as a chamber of commerce or board of trade. Thus, its activities should be directed to the improvement of business conditions of one or more lines of business as distinguished from the performance of particular services for individual persons.... A stock or commodity exchange is not a business league, a chamber of commerce, or a board of trade within the meaning of section 501 (c) (6) and is not exempt from tax....”
Letter dated March 28, 1972, from District Director (New York), Internal Revenue Service, to the Association. Complaint Exhibit C, Record Document No. 1.
Certificate of Incorporation of National Muffler Dealers Association, Inc., ¶3. App. 41a.
According to an Association survey, Midas has 21% of the replacement muffler business in 18 major metropolitan markets. See 565 F. 2d 845, 847 n. 2 (CA2 1977). A letter dated November 27, 1975, sent out by the Association’s president and seeking new members, contained the greeting, “Dear Fellow Midas Dealer.” In that letter, the Association’s president announced a joint endeavor with Midas “to improve the Midas program,” and stated, “I have been as loyal to the Midas business as I have to our-country.” App. 49a.
See Proceedings of the Twenty-Third Annual Meeting of the American Warehousemen’s Association (1913).
The Chamber’s statement and submission, and those of the American Warehousemen’s Association, Briefs and Statements 2040, assume an importance here beyond that usually afforded such documents in the interpretation of statutes. They do so for two reasons. First, the submissions are the only available evidence of the amendment’s purpose. The amendment was not discussed on the floor of either the House or the Senate, see J. Seidman, Legislative History of Federal Income Tax Laws 1002, 1003 (1938). and the Committee Reports do no more than state its text, see S. Rep. No. 80, 63d Cong., 1st Sess., 25-26 (1913); H. R. Conf. Rep. No. 86, 63d Cong., 1st Sess., 26 (1913). Second, the subsequent administrative interpretation of the statute directly parallels the language of the private submissions.
Revenue Act of 1916, §11 (a), Seventh, 39 Stat. 766 (punctuation added); Revenue Act of 1918, §231 (7), 40 Stat. 1076; Revenue Act of 1921, §231 (7), 42 Stat. 253; Revenue Act of 1924, §231 (7), 43 Stat. 282; Revenue Act of 1926, §231 (7), 44 Stat. 40; Revenue Act of 1928, § 103 (7), 45 Stat. 813 (real estate boards added); Revenue Act of 1932, §103 (7), 47 Stat. 193; Revenue Act of 1934, §101 (7), 48 Stat. 700; Revenue Act of 1936, § 101 (7), 49 Stat. 1674; Revenue Act of 1938, § 101 (7), 52 Stat. 481; Internal Revenue Code of 1939, § 101 (7), 53 Stat. 33; Internal Revenue Code of 1954, §501 (c)(6), 68A Stat. 164. See also Act of Nov. 8, 1966, Pub. L. No. 89-800, § 6 (a), 80 Stat. 1515 (reference to professional football leagues added).
Webster’s New International Dictionary 245, 366 (1913), defined the terms as follows:
board of trade: “In the United States, a body of men appointed for the advancement and protection of business interests. Cf. chamber of commerce.”
chamber of commerce: “[A] board or association to protect the interests of commerce, chosen from among the merchants and traders of a city. The term chamber of commerce is by some distinctively used of the bodies that are intrusted with the protection of general commercial interests, esp. in connection with foreign trade and board of trade for those dealing primarily with local commerce.”
In Retailers Credit Assn. v. Commissioner, 90 F. 2d 47, 51 (CA9 1937), an additional explanation of the difference between the two terms was offered:
“Although the terms ‘chamber of commerce’ and ‘board of trade’ are nearly synonymous, there is a slight distinction between their meanings. The former relates to all businesses in a particular geographic location, while the latter may relate to only one or more lines of business in a particular geographic location, but need not relate to all.”
In L. 0. 1121, III — 1 Cum. Bull. 275, 280 (1924), the Solicitor of Internal Revenue rejected an approach to the term “board of trade” that would have encompassed “organizations which provide conveniences or facilities to certain persons in connection with buying, selling, and exchanging | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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68
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UNITED STATES v. CLEVELAND INDIANS BASEBALL CO.
No. 00-203.
Argued February 27, 2001
Decided April 17, 2001
James A. Feldman argued the cause for the United States. With him on the briefs were Acting Solicitor General Underwood, former Solicitor General Waxman, Acting Assistant Attorney General Junghans, Deputy Solicitor General Wallace, Kent L. Jones, Kenneth L. Greene, and Robert W. Metzler.
Carter G. Phillips argued the cause for respondent. With him on the brief were Richard D. Bernstein, Stephen B. Kin-naird, and Anne Berleman Kearney.
Lawrence T. Perera filed a brief for the Major League Baseball Players Association as amicus curiae urging affirmance.
Justice Ginsburg
delivered the opinion of the Court.
The Federal Insurance Contributions Act (FICA) and the Federal Unemployment Tax Act (FUTA) impose excise taxes on employee wages to fund Social Security, Medicare, and unemployment compensation programs. This case concerns the application of FICA and FUTA taxes to payments of back wages. The Internal Revenue Service has consistently maintained that, for tax purposes, backpay awards should be attributed to the year the award is actually paid. Respondent Cleveland Indians Baseball Company (Company) urges, and the Court of Appeals for the Sixth Circuit held, that such awards must be allocated, as they are for purposes of Social Security benefits eligibility, to the periods in which the wages should have been paid. According due respect to the Service’s reasonable, longstanding construction of the governing statutes and its own regulations, we hold that back wages are subject to FICA and FUTA taxes by reference to the year the wages are in fact paid.
I
Pursuant to a settlement of grievances asserted by the Major League Baseball Players Association concerning players’ free agency rights, several Major League Baseball clubs agreed to pay $280 million to players with valid claims for salary damages. Under the agreement, the Company owed 8 players a total of $610,000 in salary damages for 1986, and it owed 14 players a total of $1,457,848 in salary damages for 1987. The Company paid the awards in 1994. No award recipient was a Company employee in that year.
This ease concerns the proper PICA and PUTA tax treatment of the 1994 payments. Under PICA, both employees and employers must pay tax on wages to fund Social Security and Medicare; under PUTA, employers (but not employees) must pay tax on wages to fund unemployment benefits. For purposes of this litigation, the Government and the Company stipulated that the settlement payments awarded to the players qualify as “wages” within the meaning of PICA and PUTA. The question presented is whether those payments, characterized as back wages, should be taxed by reference to the year they were actually paid (1994), as the Government urges, or by reference to the years they should have been paid (1986 and 1987), as the Company and its supporting amicus, the Major League Baseball Players Association, contend.
In any given year, the amount of FICA and PUTA tax owed depends on two determinants. The first is the tax rate. 26 U. S. C. §§ 3101,3111 (PICA), § 3301 (PUTA). The second is the statutory ceiling on taxable wages (also called the wage base), which limits the amount of annual wages subject to tax. § 3121(a)(1) (PICA), § 3306(b)(1) (PUTA). Both determinants have increased over time. In 1986, the Social Security tax on employees and employers was 5.7 percent on wages up to $42,000; in 1987, it was 5.7 percent on wages up to $43,800; and in 1994, 6.2 percent on wages up to $60,600. Although the Medicare tax on employees and employers remained constant at 1.45 percent from 1986 to 1994, the taxable wage base rose from $42,000 in 1986 to $43,800 in 1987, and by 1994, Congress had abolished the wage ceiling, thereby subjecting all wages to the Medicare tax. In 1986 and 1987, the FUTA tax was 6.0 percent on wages up to $7,000; in 1994, it was 6.2 percent on wages up to $7,000.
In this case, allocating the 1994 payments back to 1986 and 1987 works to the advantage of the Company and its former employees. The reason is that all but one of the employees who received back wages in 1994 had already collected wages from the Company exceeding the taxable maximum in 1986 and 1987. Because those employees as well as the Company paid the maximum amount of employment taxes chargeable in 1986 and 1987, allocating the 1994 payments back to those years would generate no additional FICA or FUTA tax liability. By contrast, treating the back wages as taxable in 1994 would subject both the Company and its former employees to significant tax liability. The Company paid none of the employees any other wages in 1994, and FICA and FUTA taxes attributable to that year would be calculated according to tax rates and wage bases higher than their levels in 1986 and 1987.
Uncertain about the proper rule of taxation, the Company paid its share of employment taxes on the back wages according to 1994 tax rates and wage bases. Its FICA payment totaled $99,382, and its FUTA payment totaled $1,008. After the Internal Revenue Service denied its claims for a refund of those payments, the Company initiated this action in District Court, relying on Bowman v. United States, 824 F. 2d 528 (CA6 1987). In Bowman, the Sixth Circuit held that "[a] settlement for back wages should not be allocated to the period when the employer finally pays but ‘should be allocated to the periods when the regular wages were not paid as usual.’ ” Id., at 530 (quoting Social Security Bd. v. Nierotko, 327 U.S. 358, 370 (1946)). The District Court, bound by Bowman, entered judgment for the Company and ordered the Government to refund $97,202 in FICA and FUTA taxes.
On appeal, the Government observed that two Courts of Appeals have held, in disagreement with Bowman, that under the law as implemented by Treasury Regulations, wages are to be taxed for FICA purposes in the year they are actually received. Walker v. United States, 202 F. 3d 1290, 1292-1293 (CA10 2000) (finding Nierotko “inapposite” and Bowman “unpersuasive”); Hemelt v. United States, 122 F. 3d 204, 210 (CA4 1997) (finding it “clear under the Treasury Regulations that ‘wages’ are to be taxed for FICA purposes in the year in which they are received”). The Court of Appeals for the Sixth Circuit nevertheless affirmed on the authority of Bowman. 215 F. 3d 1325 (2000) (judgt. order).
We granted certiorari to resolve the conflict among the Courts of Appeals, 531 U.S. 943 (2000), and now reverse the Sixth Circuit’s judgment.
II
The Internal Revenue Code imposes employment taxes “on every employer... equal to [a percentage of] wages... paid by him with respect to employment.” 26 U.S.C. §§ 3111(a), 3111(b), 3301. The Social Security tax provision, § 3111(a), contains a table prescribing tax rates applicable to “wages paid during” each year from 1984 onward (e. g., “In cases of wages paid during... 1990 or thereafter... [t]he rate shall be... 6.2 percent.”). The Medicare tax provision, § 3111(b)(6), says “with respect to wages paid after December 31,1985, the rate shall be 1.45 percent.” And the FUTA tax provision, 26 U. S. C. §3301 (1994 ed., Supp. IV), says the rate shall be “6.2 percent in the case of calendar years 1988 through 2007... of the total wages (as defined in section 3306(b)) paid by [the employer] during the calendar year.”
Section 3121(a) of the Code establishes the annual ceiling on wages subject to Social Security tax. It does so by defining “wages” to exclude any remuneration “paid to [an] individual by [an] employer during [a] calendar year” that exceeds “remuneration... equal to the contribution and benefit base... paid to [such] individual by [such] employer during the calendar year with respect to which such contribution and benefit base is effective.” Section 3306(b)(1) similarly limits annual wages subject to FUTA tax by excluding from “wages” any remuneration “paid to [an] individual by [an] employer during [a] calendar year” that exceeds “remuneration... equal to $7,000... paid to [such] individual by [such] employer during [the] calendar year.”
Both sides in this controversy have offered plausible interpretations of Congress’ design. We set out next the parties’ positions and explain why we ultimately defer to the Internal Revenue Service’s reasonable, consistent, and longstanding interpretation of the FICA and FUTA provisions in point. Under that interpretation, wages must be taxed according to the year they are actually paid.
A
In the Government’s view, the text of the controlling FICA and FUTA tax provisions explicitly instructs that employment taxes shall be computed by applying the tax rate and wage base in effect when wages are actually paid. In particular, the Government calls attention to the statute’s constant references to wages paid during a calendar year as the touchstone for determining the applicable tax rate and wage base. 26 U. S. C. § 3111(a) (setting Social Security tax rates for “wages paid during” particular calendar years); § 3121(a) (defining Social Security wage base in terms of “remuneration... paid... during the calendar year”); § 3301 (setting FUTA tax rate as a percentage of “wages... paid... during the calendar year”); § 3306(b)(1) (defining FUTA wage base in terms of “remuneration... paid... during any calendar year”). The meaning of this language, the Government contends, is plain: Wages are taxed according to the calendar year they are in fact paid, regardless of when they should have been paid.
In support of this reading, the Government observes that Congress chose the words in the current statute specifically to replace language in the original 1935 Social Security Act providing that FICA and FUTA tax rates applied to wages paid or received “with respect to employment during the calendar year” Social Security Act (1935 Act), §§801, 804, 901, 49 Stat. 636-637, 639 (emphasis added). The Treasury Department had interpreted this 1935 language to mean that wages are taxed at “the rate in effect at the time of the performance of the services for which the wages were paid.” Treas. Regs. 91, Arts. 202, 302 (1936) (emphasis added). In 1939, Congress amended the 1935 Act to provide that PICA and FUTA tax rates would no longer apply on the basis of when services were performed, but would instead apply “with respect to wages paid during the calendar yea[r]." Social Security Act Amendments of 1939 (1939 Amendments), §§604, 608, 53 Stat. 1383, 1387 (emphasis added). This 1939 language remains essentially unchanged in the current PICA and PUTA tax provisions, 26 U. S. C. §§ 3111(a) and 3301.
Acknowledging that the 1939 Amendments established a “wages paid” rule for PICA and PUTA taxation, the Company nevertheless argues that Social Security Bd. v. Nierotko, 327 U.S. 358 (1946), undermines the Government’s plain language argument. According due weight to our precedent, we agree.
In Nierotko, the National Labor Relations Board had ordered the reinstatement of a wrongfully discharged employee with “back pay” covering wages lost during the period from February 1937 to September 1939. Id., at 359. The employer paid the award in July 1941. Id., at 359-360. The primary question presented and aired in the Court’s opinion was whether backpay for a time in which the employee was not on the job should nevertheless count as “wages” in determining the employee’s eligibility for Social Security benefits. Id., at 359. Notwithstanding the contrary view of the Social Security Board and the Bureau of Internal Revenue, the Court held that backpay covering the wrongful discharge period met the definition of “wages” in the 1935 Act. Id., at 360-370.
In the final two paragraphs of the Nierotko opinion, the Court took up the question of how the backpay award should be allocated for purposes of determining the worker’s eligibility for benefits. As originally enacted, the Social Security Act extended benefits to persons over 65 who had earned at least $2,000 in wages in each of any five years after 1936. 1935 Act, §§ 201(a), 210(e), 49 Stat. 622,625. In 1939, however, Congress introduced a new scheme, which remains in place today, tying eligibility for benefits to the number of calendar-year “quarters of coverage” accumulated by an individual. 1939 Amendments, §§ 209(g), (h), 53 Stat. 1376-1377 (codified at 42 U.'S. C. §§ 413(a)(2), 414). Section 209(g) defined a “quarter of coverage” as either “a calendar quarter in which the individual has been paid not less than $50 in wages” or any quarter except the first “where an individual has been paid in a calendar year $3,000 or more in wages.” 53 Stat. 1377.
Nierotko swiftly dispatched the question whether “‘back pay’ must be allocated as wages... to the ‘calendar quarters’ of the year in which the money would have been earned, if the employee had not been wrongfully discharged.” 327 U. S., at 370. Rejecting the Government’s argument that such allocation was impermissible because the 1939 Amendments to the benefits scheme refer to “ ‘wages’ to be ‘paid’ in certain ‘quarters,’” id., at 370, and n. 25 (citing id., at 362, n.7 (citing § 209(g))), the Court concluded: “If, as we have held above, ‘back pa/ is to be treated as wages, we have no doubt that it should be allocated to the periods when the regular wages were not paid as usual.” Id., at 370.
Although the allocation question in Nierotko was a secondary issue addressed summarily by the Court, we think the Company is correct that Nierotko undercuts the plain meaning argument urged by the Government here. Nierotko found no conflict between an allocation-back rule for backpay and the language in § 209(g) tying benefits eligibility to the number of calendar quarters “in which” a minimum amount of “wages” “has been paid.” The Court’s allocation holding for benefits eligibility purposes, which the Government does not urge us to overrule, Tr. of Oral Arg. 9, thus turned on an implicit construction of §209(g)’s terms — “wages” “paid” “in” “a calendar quarter” — to include “regular wages” that Should have been paid but “were not paid as usual,” 327 U. S., at 370. Given this construction of § 209(g), now codified in 42 U. S. C. § 413(a)(2), we cannot say that the FICA and FUTA provisions prescribing tax rates based on wages paid during a calendar year, codified in 26 U. S. G. §§ 3111(a), 3301, have a plain meaning that precludes allocation of back-pay to the year it should have been paid. Gf. Hilton v. South Carolina Public Railways Comm’n, 502 U.S. 197, 205 (1991) (“stare decisis is most compelling” where “a pure question of statutory construction” is involved).
B
From here, we part ways with the Company. Although we agree that Nierotko blocks the Government’s argument that the “wages paid” formulation in 26 U. S. C. §§ 3111(a) and 3301 has a dispositively plain meaning, we reject the Company’s next contention. Because Nierotko read the 1939 “wages paid” language for benefits eligibility purposes to accommodate an allocation-back rule for backpay, the Company urges, the identical 1939 “wages paid” language for tax purposes must be read the same way. We do not agree that the latter follows from the former like the night, the day.
Nierotko dealt specifically and only with Social Security benefits eligibility, not with taxation. The Court’s allocation holding in Nierotko in all likelihood reflected concern that the benefits scheme created in 1939 would be disserved by allowing an employer’s wrongdoing to reduce the quarters of coverage an employee would otherwise be entitled to claim toward eligibility. No similar concern underlies the tax provisions. Although Social Security taxes are used to pay for Social Security benefits in the aggregate, there is no direct relation between taxes and benefits at the level of an individual employee. As the Company itself acknowledges, “Social Security tax ‘contributions,’ unlike private pension contributions, do not create in the contributor a property right to benefits against the government, and wages rather than [tax] contributions are the statutory basis for calculating an individual’s benefits.” Brief for Respondent 14.
Nierotko thus does not compel symmetrical construction of the “wages paid” language in the discrete taxation and benefits eligibility contexts. Although we generally presume that “identical words used in different parts of the same act are intended to have the same meaning,” Atlantic Cleaners & Dyers, Inc. v. United States, 286 U.S. 427, 433 (1932), the presumption “is not rigid,” and “the meaning [of the same words] well may vary to meet the purposes of the law,” ibid. Cf. Cook, “Substance” and “Procedure” in the Conflict of Laws, 42 Yale L. J. 333,337 (1933) (“The tendency to assume that a word which appears in two or more legal rules, and so in connection with more than one purpose, has and should have precisely the same scope in all of them... has all the tenacity of original sin and must constantly be guarded against.”). The benefits scheme delineated in Title 42 would “no doubt” be set awry without an allocation-back rule for back wages, notwithstanding “accounting difficulties.” Nierotko, 327 U.S., at 370. But that surely cannot be said for the taxation scheme described in Title 26, where Congress’ evident concern was not worker eligibility for benefits, but fiscal administrability.
The 1989 Amendments adopting the "wages paid” rule for taxation reflected Congress’ worry that, as tax rates increase from year to year, "difficulties and confusion” would attend the taxation of wages payable in one year, but not actually paid until another year. S. Rep. No. 734, 76th Cong., 1st Sess., 75-76; see also H. R. Rep. No. 728, 76th Cong., 1st Sess., 57-58. Congress understood that an employee’s annual compensation may be “based on a percentage of profits, or on future royalties, the amount of which cannot be determined until long after the close of the year.” S. Rep. No. 734, 76th Cong, 1st Sess., at 75. Requiring employers to "estimate unascertained amounts and pay taxes and contributions on that basis” would “cause a burden on employers and administrative authorities alike.” Id., at 75-76. Congress correctly anticipated that "[t]he placing of [FICA and FUTA] tax[es] on the ‘wages paid’ basis [would] relieve this situation.” Id., at 76. "Under the amendment the rate applicable would be the rate in effect at the time that the wages are paid and received without reference to the rate which was in effect at the time the services were performed.” H. R. Rep. No. 728, supra, at 58.
As an additional ground for construing the tax and benefits provisions in pari materia, the Company insists that Congress incorporated Nierotko’s treatment of backpay into the tax provisions when it amended the Social Security Act shortly after Nierotko was decided. Prior to 1946, the FICA and FUTA wage bases had been defined in terms of remuneration "paid... with respect to employment during” a given year. 1935 Act, § 811(a), 49 Stat. 639 (FICA); 1939 Amendments, §606, 53 Stat. 1383 (FUTA). Paralleling the 1939 Amendments to the tax rate provisions, Congress in 1946 established the current “wages paid” rule for identifying the wages that compose the FICA and FUTA wage bases in a given year. Social Security Act Amendments of 1946 (1946 Amendments), §§412, 414, 60 Stat. 989-991 (codified at 26 U. S. C. §§ 3121(a), 3306(b)(1)). The 1946 law amended § 209(a), which defines the Social Security wage base for purposes of benefits calculation, by adopting the “wages paid” language already present in § 209(g), the provision construed in Nierotko. §414, 60 Stat. 990-991. Congress also used identical “wages paid” language in redefining, the FICA and FUTA wage bases for tax purposes. §412, 60 Stat. 989. Relying on the presumption that § 209(a), as amended, incorporated Nierotko’s construction of § 209(g), see Cannon v. University of Chicago, 441 U. S. 677, 696-699 (1979), and observing that Congress redefined the wage bases for taxation to “eonforjm] with the changes in section 209(a),” S. Rep. No. 1862,79th Cong., 2d Sess., 36 (1946); H. R. Rep. No. 2447, 79th Cong., 2d Sess., 35 (1946), the Company urges that the amended benefits and tax provisions codified Nierotko’s backpay allocation rule.
We are unpersuaded. Even assuming that the benefits provision, § 209(a), is properly construed as incorporating Nierotko’s reading of § 209(g), we think the “conformity]” Congress sought to achieve between the tax and benefits provisions, S. Rep. No. 1862, supra, at 36; H. R. Rep. No. 2447, supra, at 35, had nothing to do with Nierotko’s treatment of backpay. The Committee Reports make clear that Congress’ purpose in amending the FICA and FUTA wage bases was to define the “yardstick” for measuring “wages” as “the amount paid during the calendar year..., without regard to the year in which the employment occurred.” S. Rep. No. 1862, supra, at 35 (emphasis added); H. R. Rep. No. 2447, supra, at 35 (emphasis added). It is with respect to this rule — measuring “wages” based on “the amount paid during the calendar year” — that Congress sought conformity between the Title 26 tax provisions and the Title 42 benefits provision. See S. Rep. No. 1862, supra, at 36 (tax wage base), 37 (benefits wage base); H. R. Rep. No. 2447, supra, at 35 (tax wage base), 36 (benefits wage base). Far from indicating an intent to codify Nierotko, those Reports suggest that Congress, if it considered Nierotko at all, considered it an exception to the general rule for measuring “wages” in a given year. Because the concern that animates Nierotko’s treatment of backpay in the benefits context has no relevance to the tax side, swpra, at 212-213, it makes no sense to attribute to Congress a desire for conformity not only with respect to the general rule for measuring “wages,” but also with respect to Nierotko’s backpay exception.
C
Were the Company to rely solely on arguments for symmetry in statutory construction, we would be inclined to conclude, given Nierotko’s lack of concern with taxation, that the tax provisions themselves, informed by legislative purpose, require back wages to be taxed according to the year they are actually paid. But the Company has one more arrow in its quiver.
Apart from its arguments for symmetry, the Company contends that the Government’s refusal to allocate back wages to the year they should have been paid creates inequities in, taxation and incentives for strategic behavior that Congress did not intend. This contention is not without force. Under the Government’s rule, an employee who should have been paid $100,000 in 1986, but is instead paid $50,000 in 1986 and $50,000 in backpay in 1994, would owe more tax than if she had been paid the full $100,000 due in 1986. Conversely, a wrongdoing employer who should have paid an employee $50,000 in each of five years covered by a $250,000 backpay award would pay only one year’s worth of employment taxes (limited by the annual ceilings on taxable wages) in the year the award is actually paid. The Government’s rule thus appears to exempt some wages that should be taxed and to tax some wages that should be exempt.
Applying the Government’s rule to other provisions of the Code produces similar anomalies. Section 3121(a)(4), for example, exempts disability benefits from FICA tax if paid by an employer to an employee more than six months after the employee worked for the employer. 26 U. S. C. § 3121(a)(4). Disability benefits included in a backpay award would be exempt from FICA tax if the employee had not worked for the employer for six months prior to the backpay award, even if the benefits should have been paid within six months after the employee stopped working for the employer. According to the Company, such results amount to tax windfalls and invite employers wrongfully to withhold pay or benefits in order to reap the advantages of a strategically timed payment. See Brief for Respondent 33-40 (additional examples of windfalls and avoidance schemes). These outcomes may be avoided, the Company argues, by construing the tax provisions to require taxation of back wages according to the year the wages should have been paid.
It is, of course, true that statutory construction “is a holistic endeavor” and that the meaning of a provision is “clarified by the remainder of the statutory scheme... [when] only one of the permissible meanings produces a substantive effect that is compatible with the rest of the law.” United Sav. Assn. of Tex. v. Timbers of Inwood Forest Associates, Ltd., 484 U. S. 365, 871 (1988). The Company’s examples leave little doubt that the Government’s rule generates a degree of arbitrariness in the operation of the tax statutes. But in Nierotko’s context, an inflexible rule allocating back-pay to the year it is actually paid would never work to the employee’s advantage; it could inure only to the detriment of the employee, counter to the thrust of the benefits eligibility provisions. In this case, by contrast, there is no comparable structural unfairness in taxation. The Government’s rule sometimes disadvantages the taxpayer, as in this ease. Other times it works to the disadvantage of the fisc, as the Company’s examples show. The anomalous results to which the Company points must be considered in light of Congress’ evident interest in reducing complexity and minimizing administrative confusion within the FICA and FUTA tax schemes. See supra, at 214. Given the practical administrability concerns that underpin the tax provisions, we cannot say that the Government’s rule is incompatible with the statutory scheme. The most we can say is that Congress intended the tax provisions to be both efficiently administrable and fair, and that this ease reveals the tension that sometimes exists when Congress seeks to meet those twin aims.
D
Confronted with this tension, “we do not sit as a committee of revision to perfect the administration of the tax laws.” United States v. Correll, 389 U.S. 299, 306-307 (1967). Instead, we defer to the Commissioner’s regulations as long as they “implement the congressional mandate in some reasonable manner.” Id., at 307. “We do this because Congress has delegated to the [Commissioner], not to the courts, the task of prescribing all needful rules and regulations for the enforcement‘of the Internal Revenue Code.” National Muffler Dealers Assn., Inc. v. United States, 440 U.S. 472, 477 (1979) (citing Correll, 389 U.S., at 307 (citing 26 U. S. C. § 7805(a))). This delegation “helps guarantee that the rules will be written by ‘masters of the subject’... who will be responsible for putting the rules into effect.” 440 U.S., at 477 (quoting United States v. Moore, 95 U.S. 760, 763 (1878)).
The Internal Revenue Service has long maintained regulations interpreting the FICA and FUTA tax provisions. In their current form, the regulations specify that the employer tax “attaches at the time that the wages are paid by the employer,” 26 CFR §31.3111-3 (2000) (emphasis added), and “is computed by applying to the wages paid by the employer the rate in effect at the time such wages are paid,” § 31.3111-2(c) (emphasis added); | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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68
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HOWELL CHEVROLET CO. v. NATIONAL LABOR RELATIONS BOARD.
No. 34.
Argued November 12, 1953.
Decided December 14, 1953.
Erwin Lerten argued the cause for petitioner. With him on the brief was Frederick A. Potruch.
Marvin E. Frankel argued the cause for respondent. With him on the brief were Acting Solicitor General Stern, George J. Bott, David P. Findling and Dominick L. Manoli.
Opinion of the Court by
Mr. Justice Black,
announced by Mr. Justice Reed.
The petitioner Howell Chevrolet Company retails Chevrolet automobiles and parts in Glendale, California. After hearings, the National Labor Relations Board found Howell guilty of unfair labor practices in refusing to bargain with its employees and intimidating them in various ways in violation of the National Labor Relations Act as amended. An appropriate order was issued. 95 N. L. R. B. 410. The Court of Appeals for the Ninth Circuit enforced the Board’s order, 204 F. 2d 79, rejecting the contention that the Act could not be applied to Howell. On similar facts the Sixth Circuit held that the Labor Board had no jurisdiction over a local Ford automobile dealer. Labor Board v. Bill Daniels, Inc., 202 F. 2d 579. We granted certiorari to consider the single question presented by petitioner — whether the Act is applicable to retail automobile dealers like Howell. 345 U. S. 955.
Sections 10 (a) and 2 (7) of the Labor Act empower the Board to prevent “any person” from adversely “affecting commerce” by unfair labor practices “tending to lead to a labor dispute burdening or obstructing commerce or the free flow of commerce.” The Board found that Howell’s unfair labor practices tended to do this. Among others, the following facts underlie that finding:
Howell bought its new Chevrolets from a General Motors assembly plant located in California and its spare parts and accessories were delivered to it from General Motors warehouses in California. Forty-three percent of all this merchandise was manufactured in other states and shipped into California for assembly or distribution. During 1949 Howell’s purchases from General Motors exceeded $1,000,000.
Howell’s local retail establishment was closely supervised by General Motors. Sweeping control of the business was reserved by General Motors in a “Direct Dealer Selling Agreement.” Howell had to sign this agreement to get his “non-exclusive privilege of selling new Chevrolet motor vehicles and chassis” and “parts and accessories.” The agreement required Howell to make varied and detailed reports about his business affairs, to devote full time to Chevrolet sales, to keep his sales facilities at a location and conduct the business in a manner that satisfied General Motors, to permit General Motors to inspect Howell’s books, accounts, facilities, stocks and accessories and to keep such uniform accounting systems as General Motors might prescribe. Many other terms of the agency agreement also emphasized the interdependence of Howell’s local and General Motors’ national activities.
All this evidence caused the Board to conclude that Howell was “an integral part” of General Motors’ national system of distribution. Under these circumstances the Board was justified in finding that Howell’s repeated unfair labor practices tended to lead to disputes burdening or obstructing commerce among the states. It follows that the Board had jurisdiction to act under the facts it found.
Affirmed.
Mr. Justice Douglas dissents.
61 Stat. 136, 29 U. S. C. (Supp. V) § 151 et seq. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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81
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LUDECKE v. WATKINS, DISTRICT DIRECTOR OF IMMIGRATION.
No. 723.
Argued May 3-4, 1948.
Decided June 21, 1948.
Stanley M. Silverberg argued the cause for respondent. With him on the brief were Solicitor General Perlman, Assistant Attorney General Morison, Samuel D. Slade and Melvin Richter.
George C. Dix filed a brief for unnamed enemy aliens, as amici curiae, in support of petitioner.
Mr. Justice Frankfurter
delivered the opinion of the Court.
The Fifth Congress committed to the President these powers:
“Whenever there is a declared war between the United States and any foreign nation or government, or any invasion or predatory incursion is perpetrated, attempted, or threatened against the territory of the United States by any foreign nation or government, and the President makes public proclamation of. the event, all natives, citizens, denizens, or subjects of the hostile nation or government, being of the age of fourteen years and upward, who shall be within the United States and not actually naturalized, shall be liable to be apprehended, restrained, secured, and removed as alien enemies. The President is authorized, in any such event, by his proclamation thereof, or other public act, to direct the conduct to be observed, on the part of the United States, toward the aliens who become so liable; the manner and degree of the restraint to which they shall be subject and in what cases, and upon what security their residence shall be permitted, and to provide for the removal of those who, not being permitted to reside within the United States, refuse or neglect to depart therefrom; and to establish any other regulations which are found necessary in the premises and for the public safety.” (Act of July 6, 1798, 1 Stat. 577, R. S. § 4067, as amended, 40 Stat. 531, 50 U. S. C. §21.)
This Alien Enemy Act has remained the law of the land, virtually unchanged since 1798. Throughout these one hundred and fifty years executive interpretation and decisions of lower courts have found in the Act an authority for the President which is now questioned, and the further claim is made that, if what the President did comes within the Act, the Congress could not give him such power. Obviously these are issues which properly brought the case here. 333 U. S. 865.
Petitioner, a German alien enemy, was arrested on December 8, 1941, and, after proceedings before an Alien Enemy Hearing Board on January 16, 1942, was interned by order of the Attorney General, dated February 9, 1942. Under authority of the Act of 1798, the President, on July 14, 1945, directed the removal from the United States of all alien enemies “who shall be deemed by the Attorney General to be dangerous to the public peace and safety of the United States.” Proclamation 2655,10 Fed. Reg. 8947. Accordingly, the Attorney General, on January 18, 1946, ordered petitioner’s removal. Denial of a writ of habeas corpus for release from detention under this order was affirmed by the court below. 163 F. 2d 143.
As Congress explicitly recognized in the recent Administrative Procedure Act, some statutes “preclude judicial review.” Act of June 11, 1946, § 10, 60 Stat. 237, 243. Barring questions of interpretation and constitutionality, the Alien Enemy Act of 1798 is such a statute. Its terms, purpose, and construction leave no doubt. The language employed by the Fifth Congress could hardly be made clearer, or be rendered doubtful, by the incomplete and not always dependable accounts we have of debates in the early years of Congress. That such was the scope of the Act is established by controlling contemporaneous construction. “The act concerning alien enemies, which confers on the president very great discretionary powers respecting their persons,” Marshall, C. J., in Brown v. United States, 8 Cranch 110, 126, “appears to me to be as unlimited as the legislature could make it.” Washington, J., in Lockington v. Smith, 15 Fed. Cas. No. 8448 at p. 760. The very nature of the President’s power to order the removal of all enemy aliens rejects the notion that courts may pass judgment upon the exercise of his discretion. This view was expressed by Mr. Justice Iredell shortly after the Act was passed, Case of Fries, 9 Fed. Cas. No. 5126, and every judge before whom the question has since come has held that the statute barred judicial review. We would so read the Act if it came before us without the impressive gloss of history.
The power with which Congress vested the President had to be executed by him through others. He provided for the removal of such enemy aliens as were “deemed by the Attorney General” to be dangerous. But such a finding, at the President’s behest, was likewise not to be subjected to the scrutiny of courts. For one thing, removal was contingent not upon a finding that in fact an alien was “dangerous.” The President was careful to call for the removal of aliens “deemed by the Attorney General to be dangerous.” But the short answer is that the Attorney General was the President’s voice and conscience. A war power of the President not subject to judicial review is not transmuted into a judicially reviewable action because the President chooses to have that power exercised within narrower limits than Congress authorized.
And so we reach the claim that while the President had summary power under the Act, it did not survive cessation of actual hostilities. This claim in effect nullifies the power to deport alien enemies, for such deportations are hardly practicable during the pendency of what is colloquially known as the shooting war. Nor does law lag behind common sense. War does not cease with a cease-fire order, and power to be exercised by the President such as that conferred by the Act of 1798 is a process which begins when war is declared but is not exhausted when the shooting stops. See United States v. Ander son, 9 Wall. 56, 70; The Protector, 12 Wall. 700; McElrath v. United States, 102 U. S. 426, 438; Hamilton v. Kentucky Distilleries Co., 251 U. S. 146, 167. “The state of war” may be terminated by treaty or legislation or Presidential proclamation. Whatever the mode, its termination is a political act. Ibid. Whether and when it would be open to this Court to find that a war though merely formally kept alive had in fact ended, is a question too fraught with gravity even to be adequately formulated when not compelled. Only a few months ago the Court rejected the contention that the state of war in relation to which the President has exercised the authority now challenged was terminated. Woods v. Miller Co., 333 U. S. 138. Nothing that has happened since calls for a qualification of that view. It is still true, as was said in the opinion in that case which eyed the war power most jealously, “We have armies abroad exercising our war power and have made no peace terms with our allies, not to mention our principal enemies.” Woods v. Miller Co., supra, at p. 147 (concurring opinion). The situation today is strikingly similar to that of 1919, where this Court observed: “In view of facts of public knowledge, some of which have been referred to, that the treaty of peace has not yet been concluded, that the railways are still under national control by virtue of the war powers, that other war activities have not been brought to a close, and that it can not even be said that the man power of the nation has been restored to a peace footing, we are unable to conclude that the act has ceased to be valid.” Hamilton v. Kentucky Distilleries Co., 251 U. S. at 163.
The political branch of the Government has not brought the war with Germany to an end. On the contrary, it has proclaimed that “a state of war still exists.” Presidential Proclamation 2714, 12 Fed. Reg. 1; see Woods v. Miller Co., supra, at p. 140; Fleming v. Mohawk Wrecking & Lumber Co., 331 U. S. 111, 116. The Court would be assuming the functions of the political agencies of the Government to yield to the suggestion that the unconditional surrender of Germany and the disintegration of the Nazi Reich have left Germany without a government capable of negotiating a treaty of peace. It is not for us to question a belief by the President that enemy aliens who were justifiably deemed fit subjects for internment during active hostilites do not lose their potency for mischief during the period of confusion and conflict which is characteristic of a state of war even when the guns are silent but the peace of Peace has not come. These are matters of political judgment for which judges have neither technical competence nor official responsibility.
This brings us to the final question. Is the statute valid as we have construed it? The same considerations of reason, authority, and history, that led us to reject reading the statutory language “declared war” to mean “actual hostilities,” support the validity of the statute. The war power is the war power. If the war, as we have held, has not in fact ended, so as to justify local rent control, a fortiori, it validly supports the power given to the President by the Act of 1798 in relation to alien enemies. Nor does it require protracted argument to find no defect in the Act because resort to the courts may be had only to challenge the construction and validity of the statute and to question the existence of the “declared war,” as has been done in this case. The Act is almost as old as the Constitution, and it would savor of doctrinaire audacity now to find the statute offensive to some emanation of the Bill of Rights. The fact that hearings are utilized by the Executive to secure an informed basis for the exercise of summary power does not argue the right of courts to retry such hearings, nor bespeak denial of due process to withhold such power from the courts.
Such great war powers may be abused, no doubt, but that is a bad reason for having judges supervise their exercise, whatever the legal formulas within which such supervision would nominally be confined. In relation to the distribution of constitutional powers among the three branches of the Government, the optimistic Eighteenth Century language of Mr. Justice Iredell, speaking of this very Act, is still pertinent:
“All systems of government suppose they are to be administered by men of common sense and common honesty. In our country, as all ultimately depends on the voice of the people, they have it in their power, and it is to be presumed they generally will choose men of this description; but if they will not, the case, to be sure, is without remedy. If they choose fools, they will have foolish laws. If they choose knaves, they will have knavish ones. But this can never be the case until they are generally fools or knaves themselves, which, thank God, is not likely ever to become the character of the American people.” (Case of Fries, supra, at p. 836.)
Accordingly, we hold that full responsibility for the just exercise of this great power may validly be left where the Congress has constitutionally placed it — on the President of the United States. The Pounders in their wisdom made him not only the Commander-in-Chief but also the guiding organ in the conduct of our foreign affairs. He who was entrusted with such vast powers in relation to the outside world was also entrusted by Congress, almost throughout the whole life of the nation, with the disposition of alien enemies during a state of war. Such a page of history is worth more than a volume of rhetoric.
Judgment affirmed and stay order entered February 2, 19¿¡.8, vacated.
There have been a few minor changes in wording. We have duly considered these in light of an argument in the brief of the amici curiae and deem them without significance.
We are advised that there are 530 alien enemies, ordered to depart from the United States, whose disposition awaits the outcome of this case.
The district court found that:
“The petitioner was born in Berlin, Germany, on February 5, 1890. He was out of Germany for most of the period of 1923 to March 1933. He returned to Germany in March 1933 and became a member of the Nazi party. Later he had some disagreements with other members and as a result he was sent to a German concentration camp, from which he escaped March 1, 1934, after being confined for over eight months. Sometime thereafter he came to this country and published a book, T Knew Hitler’ [‘The Story of a Nazi Who Escaped The Blood Purge’ — 'In memory of Captain Ernst Roehm and Gregor Strasser and many other Nazis who were betrayed, murdered, and traduced in their graves’], in 1937. His petition for naturalization as an American citizen was denied December 18,1939.”
The petitioner’s attitude was thus expressed in his brief before the district court:
“Fundamentally, it matters not where I live, for I can strive to live the right life and be of service where ever I am. Besides, it may well be a better thing to do the best I can while I can in the midst of a defeated people suffering in body and soul, than to be a futile and frustrated something in the midst of a triumphant people breathing the foul air of self-complacency, hypocrisy, and self-deceit.”
No question has been raised as to the validity of these administrative actions taken pursuant to Presidential Proclamation 2526, dated December 7, 1941, 6 Fed. Reg. 6321, 6323, issued under the authority of the Alien Enemy Act.
The order recited that the petitioner was deemed dangerous on the basis of the evidence adduced at hearings before the Alien Enemy Hearing Board on January 16, 1942, and the Repatriation Hearing Board on December 17, 1945. The district court which examined these proceedings found that petitioner had notice and a fair hearing and that the evidence was substantial. See also note 8, infra.
See, however, United States ex rel. Kessler v. Watkins, 163 F. 2d 140; Citizens Protective League v. Clark, 81 U. S. App. D. C. 116, 155 F. 2d 290.
“Such a construction would, in my opinion, be at variance with the spirit as well as with the letter of the law, the great object of which was to provide for the public safety, by imposing such restraints upon alien enemies, as the chief executive magistrate of the United States might think necessary, and of which his particular situation enabled him best to judge. ... I do not feel myself authorised to impose limits to the authority of the executive magistrate which congress, in the exercise of its constitutional powers, has not seen fit to impose. Nothing in short, can be more clear to my mind, from an attentive consideration of the act in all its parts, than that congress intended to make the judiciary auxiliary to the executive, in effecting the great objects of the law; and that each department was intended to act independently of the other, except that the former was to make the ordinances of the latter, the rule of its decisions.” Lockington v. Smith, supra, at p. 761.
Citizens Protective League v. Clark, 81 U. S. App. D. C. 116, 155 F. 2d 290; United States ex rel. Schlueter v. Watkins, 158 F. 2d 853; United States ex rel. Hack v. Clark, 159 F. 2d 552; United States ex rel. Kessler v. Watkins, 163 F. 2d 140; United States ex rel. Von Ascheberg v. Watkins, 163 F. 2d 1021; Minotto v. Bradley, 252 F. 600; see Lockington’s Case, Brightly (Pa.) 269, 280; Lockington v. Smith, 15 F. Cas. No. 8448, at p. 758; Ex parte Graber, 247 F. 882; De Lacey v. United States, 249 F. 625; Ex parte Fronklin, 253 F. 984; Grahl v. United States, 261 F. 487; cf. Banning v. Penrose, 255 F. 159; Ex parte Risse, 257 F. 102; Ex parte Gilroy, 257 F. 110; United States ex rel. De Cicco v. Longo, 46 F. Supp. 170; United States ex rel. Schwarzkopf v. Uhl, 137 F. 2d 898; United States ex rel. D’Esquiva v. Uhl, 137 F. 2d 903; United States ex rel. Knauer v. Jordan, 158 F. 2d 337. The one exception is the initial view taken by the district court in this case. It rejected the “contention that the only question that the Court may consider in this habeas corpus proceeding is the petitioner’s alien enemy status, although there are cases which give suppport to that view,” but held the petitioner had had a fair hearing before the Repatriation Board and that there was substantial evidence to support the Attorney General’s determination that petitioner was “dangerous.” On rehearing, the court noted that the Schlueter case, supra, foreclosed the issue.
If the President had not added this express qualification, but had conformed his proclamation to the statutory language, presumably the Attorney General would not have acted arbitrarily but would have utilized some such implied standard as “dangerous” in his exercise of the delegated power.
“The cessation of hostilities does not necessarily end the war power. It was stated in Hamilton v. Kentucky Distilleries & W. Co., 251 U. S. 146, 161, that the war power includes the power ‘to remedy the evils which have arisen from its rise and progress’ and continues during that emergency. Stewart v. Kahn, 11 Wall. 493, 507. Whatever may be the reach of that power, it is plainly adequate to deal with problems of law enforcement which arise during the period of hostilities but do not cease with them. No more is involved here.” Fleming v. Mohawk Wrecking & Lumber Co., 331 U. S. 111, 116.
The claim is said to be supported by the legislative history of the Act. We do not believe that the paraphrased expressions of a few members of the Fifth Congress could properly sanction at this late date a judicial reading of the statutory phrase “declared war” to mean “state of actual hostilities.” See p. 3, supra. Nothing needs to be added to the consideration which this point received from the court below in the Kessler case. Circuit Judge Augustus Hand, in this case speaking for himself and Circuit Judges L. Hand and Swan, said:
“Appellants’ counsel argues that the Congressional debates preceding the enactment of the Alien Law of 1798 by Gallatin, Otis and others, show that Congress intended that ‘war’ as used in the Alien Enemy Act should be war in fact. We cannot agree that the discussions had such an effect. Gallatin argued that Section 9 of Art. I of the Constitution allowing to the states the free ‘Migration or Importation’ of aliens until 1808 might stand in the way of the Act as proposed if it was not limited to a 'state of actual hostilities.’ It however was not so limited in the text of the act and it is hard to see how the failure to limit it in words indicated a disposition on the part of Congress to limit it by implication. Otis objected to limiting the exercise of the power to a state of declared war because he thought that the President should have power to deal with enemy aliens in the case of hostilities short of war and in cases where a war was not declared. That Otis wished to add ‘hostilities’ to the words ‘declared war,’ and failed in his attempt, does not show that Congress meant that when war was declared active hostilities must exist in order to justify the exercise of the power. The questions raised which were dealt with in the act as finally passed were not how long the power should last when properly invoked, but the conditions upon which it might be invoked. Those conditions were fully met in the present case and no question is raised by appellants’ counsel as to the propriety of the President’s Proclamation of War. There is no indication in the debates or in the terms of the statute that the exercise of the power, when properly invoked, should cease until peace was made, and peace has not been made in the present case. If the construction of the statute contended for by appellants’ counsel were adopted, the Executive would be powerless to carry out internment or deportation which was not exercised during active war and might be obliged to leave the country unprotected from aliens dangerous either because of secrets which they possessed or because of potential inimical activities. It seems quite necessary to suppose that the President could not carry out prior to the official termination of the declared state of war, deportations which the Executive regarded as necessary for the safety of the country but which could not be carried out during active warfare because of the danger to the aliens themselves or the interference with the effective conduct of military operations.” (United States ex rel. Kessler v. Watkins, 163 F. 2d at 142-43.)
It is suggested that a joint letter to the Chairman of a congressional committee by Attorney General Gregory and the Secretary of Labor in the Wilson administration reflects a contrary interpretation of this Act. But, as the Kessler opinion pointed out: “The letter of Attorney General Gregory referred to by appellants’ counsel does not affect our conclusions. When he said that there was no law to exclude aliens he was, in our opinion, plainly referring to conditions after the ratification of the peace treaty, and not to prior conditions.” Ibid. The text of the letter (dated Feb. 5, 1919) supports that observation: “There is no law now on the statute books under which these persons can be excluded from the country, nor under which they can be detained in custody after the ratification of the peace treaty. Unless the bill introduced by you, or one similar in character, is passed it will become necessary on the ratification of peace to set free all of these highly dangerous persons.” Hearings before the House Committee on Immigration and Naturalization on H. R. 6750, 66th Cong., 1st Sess., 42-43. And Attorney General Palmer made substantially the same statements to the Senate and House Committees on Immigration. See S. Rep. No. 283, 66th Cong., 1st Sess., 2; H. R. Rep. No. 143, 66th Cong., 1st Sess., 2.
But even if contradictory views were expressed by Attorney General Gregory, they plainly reflect political exigencies which from time to time guide the desire of an administration to secure what in effect is confirming legislation. The confusion of views is strikingly manifested by Attorney General Gregory’s recognition that the Act survived the cessation of actual hostilities so as to give authority to apprehend, restrain, and secure enemy aliens. See, generally, World War I cases cited note 8, supra. In any event, even if one view expressed by Attorney General Gregory, as against another expressed by him, could be claimed to indicate a deviation from an otherwise uniformly accepted construction of the Act before us, it would hardly touch the true meaning of the statute. As against the conflicting views of one Attorney General we have not only the view but the actions of the present Attorney General and of the President and their ratification by the present Congress. See note 19, infra.
Of course, there are statutes which have provisions fixing the date of the expiration of the war powers they confer upon the Executive. See, e. g., Hamilton v. Kentucky Distilleries Co., 251 U. S. 146, 167, n. 1 (collection of statutes providing that the authority terminates upon ratification of treaty of peace or by Presidential proclamation). Congress can, of course, provide either by a day certain or a defined event for the expiration of a statute. But when the life of a statute is defined by the existence of a war, Congress leaves the determination of when a war is concluded to the usual political agencies of the Government.
Cf., e. g., the President’s address to Congress on March 17, 1948, recommending the enactment of the European recovery program, universal military training, and the temporary reenactment of selective service legislation. H. Doc. No. 569, 80th Cong., 2d Sess. On May 10, 1948, by Executive Order 9957, 13 Fed. Reg. 2503, the President exercised his authority “in time of war, . . . through the Secretary of War, to take possession and assume control of any system or systems of transportation . . . .” (Act of August 29, 1916, 39 Stat. 619, 645, 10 U. S. C. § 1361.)
“Rapid changes are taking place in Europe which affect our foreign policy and our national security. . . . Almost 3 years have elapsed since the end of the greatest of all wars, but peace and stability have not returned to the world." H. Doc. No. 569, supra, at p. 1.
We should point out that it is conceded that a “state of war” was “formally declared” against Germany. Act of December 11, 1941, 55 Stat. 796.
The additional question as to whether the person restrained is in fact an alien enemy fourteen years of age or older may also be reviewed by the courts. See cases cited note 8, supra. This question is not raised in this case.
The Fifth Congress was also responsible for “An Act concerning Aliens,” approved June 25, 1798, 1 Stat. 570, and “An Act in addition to the act, entitled ‘An act for the punishment of certain crimes against the United States,’ ” approved July 14, 1798, 1 Stat. 596, as well as the instant “An Act respecting Alien Enemies,” approved July 6, 1798. It is significant that while the former statutes — -the Alien and Sedition Acts — were vigorously and contemporaneously attacked as unconstitutional, there was never any issue raised as to the validity of the Alien Enemy Act. James Madison, in his report on the Virginia Resolutions, carefully and caustically differentiated between friendly and enemy alien legislation, as follows: “The next observation to be made is, that much confusion and fallacy have been thrown into the question by blending the two cases of aliens, members of a hostile nation, and aliens, members of friendly nations. . . . With respect to alien enemies, no doubt has been intimated as to the Federal authority over them; the Constitution having expressly delegated to Congress the power to declare war against any nation, and, of course, to treat it and all its members as enemies.” 6 Writings of James Madison (Hunt, Editor) 360-61. Similarly, Thomas Jefferson, the author of the Kentucky Resolutions of 1798 and 1799, was careful to point out that the Alien Act under attack was the one “which assumes powers over alien friends.” 8 Writings of Thomas Jefferson (Ford, Editor) 466. There was never any questioning of the Alien Enemy Act of 1798 by either Jefferson or Madison nor did either ever suggest its repeal.
It is suggested that Congress ought to do something about correcting today’s decision. But the present Congress has apparently anticipated the decision. It has recognized that the President’s powers under the Alien Enemy Act of 1798 were not terminated by the cessation of actual hostilities by appropriating funds “. . . for all necessary expenses, incident to the maintenance, care, detention, surveillance, parole, and transportation of alien enemies and their wives and dependent children, including transportation and other expenses in the return of such persons to place of bona fide residence or to such other place as may be authorized by the Attorney General . . . .” 61 Stat. 279, 292. “And the appropriation by Congress of funds for the use of such agencies stands as confirmation and ratification of the action of the Chief Executive. Brooks v. Dewar, 313 U. S. 354, 361.” Fleming v. Mohawk Wrecking & Lumber Co., 331 U. S. 111, 116; see also Isbrandtsen-Moller Co. v. United States, 300 U. S. 139. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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26
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NEW YORK CITY TRANSIT AUTHORITY et al. v. BEAZER et al.
No. 77-1427.
Argued December 6, 1978
Decided March 21, 1979
SteveNS, J., delivered the opinion of the Court, in which BuRGER, C. J., and Stewart, Blackmun, and RehNquist, JJ., joined. Powell, J., filed an opinion concurring in part and dissenting in part, post, p. 594. BreN-NAN, J., filed a dissenting statement, post, p. 597. White, J., filed a dissenting opinion, in which Marshall, J., joined, post, p. 597.
Joan Offner argued the cause for petitioners. With her on the briefs were Al-phonse E. D’Ambrose and Helen R. Cassidy.
Deborah M. Greenberg argued the cause for respondents. With her on the brief were Eric D. Balber, Michael Meltsner, and Mark C. Morril.
W. Stell Huie and David E. Fox filed a brief for the American Public Transit Assn, as amicus curiae urging reversal.
Robert B. Stites filed a brief for the National Association of State Alcohol and Drug Abuse Directors as amicus curiae urging affirmance.
Stuart P. Herman filed a brief for the Western Law Center for the Handicapped as amicus curiae.
Mr. Justice Stevens
delivered the opinion of the Court.
The New York City Transit Authority refuses to employ persons who use methadone. The District Court found that this policy violates the Equal Protection Clause of the Fourteenth Amendment. In a subsequent opinion, the court also held that the policy violates Title VII of the Civil Rights Act of 1964. The Court of Appeals affirmed without reaching the statutory question. The departure by those courts from the procedure normally followed in addressing statutory and constitutional questions in the same case, as well as concern that the merits of these important questions had been decided erroneously, led us to grant certiorari. 438 U. S. 904. We now reverse.
The Transit Authority (TA) operates the subway system and certain bus lines in New York City. It employs about 47,000 persons, of whom many — perhaps most — are employed in positions that involve danger to themselves or to the public. For example, some 12,300 are subway motormen, towermen, conductors, or bus operators. The District Court found that these jobs are attended by unusual hazards and must be performed by “persons of maximum alertness and competence.” 399 F. Supp. 1032, 1052 (SDNY 1975). Certain other jobs, such as operating cranes and handling high-voltage equipment, are also considered “critical” or “safety sensitive,” while still others, though classified as “noncritical,” have a potentially important impact on the overall operation of the transportation system.
TA enforces a general policy against employing persons who use narcotic drugs. The policy is reflected in Rule 11 (b) of TA’s Rules and Regulations.
“Employees must not use, or have in their possession, narcotics, tranquilizers, drugs of the Amphetamine group or barbiturate derivatives or paraphernalia used to administer narcotics or barbiturate derivatives, except with the written permission of the Medical Director — Chief Surgeon of the System.”
Methadone is regarded as a narcotic within the meaning of Rule 11 (b). No written permission has ever been given by TA's medical director for the employment of a person using methadone.
The District Court found that methadone is a synthetic narcotic and a central nervous system depressant. If injected into the bloodstream with a needle, it produces essentially the same effects as heroin. Methadone has been used legitimately in at least three ways — as a pain killer, in “detoxification units” of hospitals as an immediate means of taking addicts off of heroin, and in long-range “methadone maintenance programs” as part of an intended cure for heroin addiction. See 21 CNR § 310.304 (b) (1978). In such programs the methadone is taken orally in regular doses for a prolonged period. As so administered, it does not produce euphoria or any pleasurable effects associated with heroin; on the contrary, it prevents users from experiencing those effects when they inject heroin, and also alleviates the severe and prolonged discomfort otherwise associated with an addict’s discontinuance of the use of heroin.
About 40,000 persons receive methadone maintenance treatment in New York City, of whom about 26,000 participate in the five major public or semipublic programs, and 14,000 are involved in about 25 private programs. The sole purpose of all these programs is to treat the addiction of persons who have been using heroin for at least two years.
Methadone maintenance treatment in New York is largely governed by regulations promulgated by the New York State Drug Abuse Control Commission. Under the regulations, the newly accepted addict must first be detoxified, normally in a hospital. A controlled daily dosage of methadone is then prescribed. The regulations require that six doses a week be administered at a clinic, while the seventh day’s dose may be taken at home. If progress is satisfactory for three months, additional doses may be taken away from the clinic, although throughout most of the program, which often lasts for several years, there is a minimum requirement of three clinic appearances a week. During these visits, the patient not only receives his doses but is also counseled and tested for illicit use of drugs.
The evidence indicates that methadone is an effective cure for the physical aspects of heroin addiction. But the District Court also found “that many persons attempting to overcome heroin addiction have psychological or life-style problems which reach beyond what can be cured by the physical taking of doses of methadone.” 399 F. Supp., at 1039. The crucial indicator of successful methadone maintenance is the patient’s abstinence from the illegal or excessive use of drugs and alcohol. The District Court found that the risk of reversion to drug or alcohol abuse declines dramatically after the first few months of treatment. Indeed, “the strong majority” of patients who have been on methadone maintenance for at least a year are free from illicit drug use. But a significant number are not. On this critical point, the evidence relied upon by the District Court reveals that even among participants with more than 12 months’ tenure in methadone maintenance programs, the incidence of drug and alcohol abuse may often approach and even exceed 25%.
This litigation was brought by the four respondents as a class action on behalf of all persons who have been, or would in the future be, subject to discharge or rejection as employees of TA by reason of participation in a methadone maintenance program. Two of the respondents are former employees of TA who were dismissed while they were receiving methadone treatment. The other two were refused employment by TA, one both shortly before and shortly after the successful conclusion of his methadone treatment, and the other while he was taking methadone. Their complaint alleged that TA’s blanket exclusion of all former heroin addicts receiving methadone treatment was illegal under the Civil Rights Act of 1866, Rev. Stat. § 1977, 42 U. S. C. § 1981, Title VII of the Civil Rights Act of 1964, 78 Stat. 253, as amended, 42 U. S. C. § 2000e et seg., and the Equal Protection Clause of the Fourteenth Amendment.
The trial record contains extensive evidence concerning the success of methadone maintenance programs, the employ-ability of persons taking methadone, and the ability of prospective employers to detect drug abuse or other undesirable characteristics of methadone users. In general, the District Court concluded that there are substantial numbers of methadone users who are just as employable as other members of the general population and that normal personnel-screening procedures — at least if augmented by some method of obtaining information from the staffs of methadone programs — would enable TA to identify the unqualified applicants on an individual basis. 399 F. Supp., at 1048-1051. On the other hand, the District Court recognized that at least one-third of the persons receiving methadone treatment — and probably a good many more — would unquestionably be classified as unemployable.
After extensively reviewing the evidence, the District Court briefly stated its conclusion that TA’s methadone policy is unconstitutional. The conclusion rested on the legal proposition that a public entity “cannot bar persons from employment on the basis of criteria which have no rational relation to the demands of the jobs to be performed.” Id., at 1057. Because it is clear that substantial numbers of methadone users are capable of performing many of the jobs at TA, the court held that the Constitution will not tolerate a blanket exclusion of all users from all jobs.
The District Court enjoined TA from denying employment to any person solely because of participation in a methadone maintenance program. Recognizing, however, the special responsibility for public safety borne by certain TA employees and the correlation between longevity in a methadone maintenance program and performance capability, the injunction authorized TA to exclude methadone users from specific categories of safety-sensitive positions and also to condition eligibility on satisfactory performance in a methadone program for at least a year. In other words, the court held that TA could lawfully adopt general rules excluding all methadone users from some jobs and a large number of methadone users from all jobs.
Almost a year later the District Court filed a supplemental opinion allowing respondents to recover attorney’s fees under 42 U. S. C. § 2000e-5 (k). This determination was premised on the court’s additional holding that TA’s drug policy violated Title VII. Having already concluded that the blanket exclusion was not rationally related to any business needs of TA, the court reasoned that the statute is violated if the exclusionary policy has a discriminatory effect against blacks and Hispanics. That effect was proved, in the District Court’s view, by two statistics: (1) of the employees referred to TA’s medical consultant for suspected violation of its drug policy, 81% are black or Hispanic; (2) between 62% and 65% of all methadone-maintained persons in New York City are black or Hispanic. 414 F. Supp. 277, 278-279 (SDNY 1976). The court, however, did not find that TA’s policy was motivated by any bias against blacks or Hispanics; indeed, it expressly found that the policy was not adopted with a discriminatory purpose. Id., at 279.
The Court of Appeals affirmed the District Court’s constitutional holding. 558 F. 2d 97. While it declined to reach the statutory issue, it also affirmed the award of attorney’s fees under the aegis of the recently enacted Civil Rights Attorney’s Fees Awards Act of 1976, 42 U. S. C. § 1988, which provides adequate support for an award of legal fees to a party prevailing on a constitutional claim.
After we granted certiorari, Congress amended the Rehabilitation Act of 1973, 87 Stat. 357, 29 U. S. C. § 701 et seq., to prohibit discrimination against a class of “handicapped individuals” that arguably includes certain former drug abusers and certain current users of methadone. Pub. L. 95-602, 92 Stat. 2984. Respondents argue that the amendment now mandates at least the prospective relief granted by the District Court and the Court of Appeals and that we should therefore dismiss the writ as improvidently granted. We are satisfied, however, that we should decide the constitutional question presented by the petition. Before doing so, we shall discuss (1) the effect of the Rehabilitation Act on this case; and (2) the error in the District Court's analysis of Title VII.
I
Respondents contend that the recent amendment to § 7 (6) of the Rehabilitation Act proscribes TA's enforcement of a general rule denying employment to methadone users. Even if respondents correctly interpret the amendment, and even if they have a right to enforce that interpretation, the case is not moot since their claims arose even before the Act itself was passed, and they have been awarded monetary relief. Moreover, the language of the statute, even after its amendment, is not free of ambiguity, and no administrative or judicial opinions specifically considering the impact of the statute on methadone users have been called to our attention. Of greater importance, it is perfectly clear that however we might construe the Rehabilitation Act, the concerns that prompted our grant of certiorari would still merit our attention. We therefore decline to give the statute its first judicial construction at this stage of the litigation.
II
Although respondents have consistently relied on both statutory and constitutional claims, the lower courts focused primarily on the latter. Thus, when the District Court decided the Title VII issue, it did so only as an afterthought in order to support an award of attorney's fees; the Court of Appeals did not even reach the Title VII issue. We do not condone this departure from settled federal practice. “If there is one doctrine more deeply rooted than any other in the process of constitutional adjudication, it is that we ought not to pass on questions of constitutionality... unless such adjudication is unavoidable.” Spector Motor Service, Inc. v. McLaughlin, 323 U. S. 101, 105. Before deciding the constitutional question, it was incumbent on those courts to consider whether the statutory grounds might be dispositive. Whatever their reasons for not doing so, we shall first dispose of the Title VII issue.
The District Court’s findings do not support its conclusion that TA’s regulation prohibiting the use of narcotics, or its interpretation of that regulation to encompass users of methadone, violated Title YII of the Civil Rights Act.
A prima facie violation of the Act may be established by statistical evidence showing that an employment practice has the effect of denying the members of one race equal access to employment opportunities. Even assuming that respondents have crossed this threshold, when the entire record is examined it is clear that the two statistics on which they and the District Court relied do not prove a violation of Title VII.
First, the District Court noted that 81% of the employees referred to TA’s medical director for suspected violation of its narcotics rule were either black or Hispanic. But respondents have only challenged the rule to the extent that it is construed to apply to methadone users, and that statistic tells us nothing about the racial composition of the employees suspected of using methadone. Nor does the record give us any information about the number of black, Hispanic, or white persons who were dismissed for using methadone.
Second, the District Court noted that about 63% of the persons in New York City receiving methadone maintenance in public programs — i. e., 63%- of the 65% of all New York City methadone users who are in such programs — are black or Hispanic. We do not know, however, how many of these persons ever worked or sought to work for TA. This statistic therefore reveals little if anything about the racial composition of the class of TA job applicants and employees receiving methadone treatment. More particularly, it tells us nothing about the class of otherwise-qualified applicants and employees who have participated in methadone maintenance programs for over a year — the only class improperly excluded by TA’s policy under the District Court’s analysis. The record demonstrates, in fact, that the figure is virtually irrelevant because a substantial portion of the persons included in it are either unqualified for other reasons — such as the illicit use of drugs and alcohol — or have received successful assistance in finding jobs with employers other than TA. Finally, we have absolutely no data on the 14,000 methadone users in the private programs, leaving open the possibility that the percentage of blacks and Hispanics in the class of methadone users is not significantly greater than the percentage of those minorities in the general population of New York City.
At best, respondents’ statistical showing is weak; even if it is capable of establishing a prima facie case of discrimination, it is assuredly rebutted by TA’s demonstration that its narcotics rule (and the rule’s application to methadone users) is “job related.” The District Court’s express finding that the rule was not motivated by racial animus forecloses any claim in rebuttal that it was merely a pretext for intentional discrimination. 414 F. Supp., at 279. We conclude that respondents failed to prove a violation of Title VII. We therefore must reach the constitutional issue.
Ill
The Equal Protection Clause of the Fourteenth Amendment provides that no State shall “deny to any person within its jurisdiction the equal protection of the laws.” The Clause announces a fundamental principle: the State must govern impartially. General rules that apply evenhandedly to all persons within the jurisdiction unquestionably comply with this principle. Only when a governmental unit adopts a rule that has a special impact on less than all the persons subject to its jurisdiction does the question whether this principle is violated arise.
In this case, TA’s Rule 11 (b) places a meaningful restriction on all of its employees and job applicants; in that sense the rule is one of general applicability and satisfies the equal protection principle without further inquiry. The District Court, however, interpreted the rule as applicable to the limited class of persons who regularly use narcotic drugs, including methadone. As so interpreted, we are necessarily confronted with the question whether the rule reflects an impermissible bias against a special class.
Respondents have never questioned the validity of a special rule for all users of narcotics. Rather, they originally contended that persons receiving methadone should not be covered by that rule; in other words, they should not be included within a class that is otherwise unobjectionable. Their constitutional claim was that methadone users are entitled to be treated like most other employees and applicants rather than like other users of narcotics. But the District Court’s findings unequivocally establish that there are relevant differences between persons using methadone regularly and persons who use no narcotics of any kind.
Respondents no longer question the need, or at least the justification, for special rules for methadone users. Indeed, they vigorously defend the District Court’s opinion which expressly held that it would be permissible for TA to have a special rule denying methadone users any employment unless they had been undergoing treatment for at least a year, and another special rule denying even the most senior and reliable methadone users any of the more dangerous jobs in the system.
The constitutional defect in TA’s employment policies, according to the District Court, is not that TA has special rules for methadone users, but rather that some members of the class should have been exempted from some requirements of the special rules. Left intact by its holding are rules requiring special supervision of methadone users to detect evidence of drug abuse, and excluding them from high-risk employment. Accepting those rules, the District Court nonetheless concluded that employment in nonsensitive jobs could not be denied to methadone users who had progressed satisfactorily with their treatment for one year, and who, when examined individually, satisfied TA’s employment criteria. In short, having recognized that disparate treatment of methadone users simply because they are methadone users is permissible — and having excused TA from an across-the-board requirement of individual consideration of such persons — the District Court construed the Equal Protection Clause as requiring TA to adopt additional and more precise special rules for that special class.
But any special rule short of total exclusion that TA might adopt is likely to be less precise — and will assuredly be more costly — than the one that it currently enforces. If eligibility is marked at any intermediate point — whether after one year of treatment or later — the classification will inevitably discriminate between employees or applicants equally or almost equally apt to achieve full recovery. Even the District Court’s opinion did not rigidly specify one year as a constitutionally mandated measure of the period of treatment that guarantees full recovery from drug addiction. The uncertainties associated with the rehabilitation of heroin addicts precluded it from identifying any bright line marking the point at which the risk of regression ends. By contrast, the “no drugs” policy now enforced by TA is supported by the legitimate inference that as long as a treatment program (or other drug use) continues, a degree of uncertainty persists. Accordingly, an employment policy that postpones eligibility until the treatment program has been completed, rather than accepting an intermediate point on an uncertain line, is rational. It is neither unprincipled nor invidious in the sense that it implies disrespect for the excluded subclass.
At its simplest, the District Court’s conclusion was that TA’s rule is broader than necessary to exclude those methadone users who are not actually qualified to work for TA. We may assume not only that this conclusion is correct but also that it is probably unwise for a large employer like TA to rely on a general rule instead of individualized consideration of every job applicant. But these assumptions concern matters of personnel policy that do not implicate the principle safeguarded by the Equal Protection Clause. As the District Court recognized, the special classification created by TA’s rule serves the general objectives of safety and efficiency. Moreover, the exclusionary line challenged by respondents “is not one which is directed 'against’ any individual or category of persons, but rather it represents a policy choice... made by that branch of Government vested with the power to make such choices.” Marshall v. United States, 414 U. S. 417, 428. Because it does not circumscribe a class of persons characterized by some unpopular trait or affiliation, it does not create or reflect any special likelihood of bias on the part of the ruling majority. Under these circumstances, it is of no constitutipnal significance that the degree of rationality is not as great with respect to certain ill-defined subparts of the classification as it is with respect to the classification as a whole. Mathews v. Diaz, 426 U. S. 67, 83-84.
No matter how unwise it may be for TA to refuse employment to individual car cleaners, track repairmen, or bus-drivers simply because they are receiving methadone treatment, the Constitution does not authorize a federal court to interfere in that policy decision. The judgment of the Court of Appeals is
Reversed.
This Court’s Rule 19 provides:
“Considerations governing review on certiorari
“1. A review on writ of certiorari is not a matter of right, but of sound judicial discretion, and will be granted only where there are special and important reasons therefor. The following, while neither controlling nor fully measuring the court’s discretion, indicate the character of reasons which wih be considered:
“(b) Where a court of appeals... has decided a federal question in a way in conflict with applicable decisions of this court; or has so far departed from the accepted and usual course of judicial proceedings, or so far sanctioned such a departure by a lower court, as to call for an exercise of this court’s power of supervision.”
Thus, about 13,400 employees are involved in the maintenance of subway cars, buses, track, tunnels, and structures. Another 5,600 work in subway stations, and over 2,000 are engaged in office tasks that include the handling of large sums of money. TA hires about 3,000 new employees each year.
By its terms, Rule 11 (b) does not apply to persons who formerly used methadone or any other drug, and the District Court did not find that TA had any general policy covering former users. On the contrary, the court found that “[t]he situation is not entirely clear with respect to the policy of the TA regarding persons who have successfully concluded participation in a methadone program.” 399 F. Supp., at 1036.
Although it did not settle the question of what policy TA enforces in this respect, the District Court included former users in the plaintiff class. It then afforded them relief from any blanket exclusionary policy that TA might enforce, although, again, the supporting factual findings were admittedly “not [based on] a great deal” of evidence. Id., at 1051.
TA contends that the meager evidence received at trial on the “former users” issue was insufficient to support either the class or relief determinations made with respect to those persons. We go further. As far as we are aware there was no evidence offered at trial, and certainly none relied upon by the District Court, that TA actually refused employment to any former user entitled to relief under the injunction ordered by that court. (As we point out in n. 12, infra, the one named plaintiff, Frasier, who was a former user when the complaint was filed was clearly a current user at the time he first applied for a job with TA and may well have been properly perceived as a current user when he next applied, notwithstanding his assertion of successful completion during the intervening three weeks. In any case, he had not completed a full year of methadone maintenance and could therefore be excluded under the District Court’s injunction.)
It follows that neither the' findings of fact, nor the record evidence, squarely presents any issue with respect to former users that must be resolved in order to dispose of this litigation. And, of course, it is those findings and that evidence, rather than statements of the parties on appeal and even offhand and clearly erroneous characterizations of the findings and evidence by the Court of Appeals, see opinion of MR. Justice Powell, post, at 594^595, that determine the issues properly before this Court. A policy excluding all former users would be harder to justify than a policy applicable only to persons currently receiving treatment. A court should not reach out to express an opinion on the constitutionality of such a policy unless necessary to adjudicate a concrete dispute between adverse litigants. We shall therefore confine our consideration to the legality of TA’s enforcement of its Rule 11 (b) against current users of methadone.
“Heroin is a narcotic which is generally injected into the bloodstream by a needle. It is a central nervous system depressant. The usual effect is to create a ‘high’ — euphoria, drowsiness — for about thirty minutes, which then tapers off over a period of about three or four hours. At the end of this time the heroin user experiences sickness and discomfort known as ‘withdrawal symptoms.’ There is intense craving for another shot of heroin, after which the cycle starts over again. A typical addict will inject heroin several times a day.” 399 F. Supp., at 1038.
The District Court found that detoxification is accomplished “by switching a heroin addict to methadone and gradually reducing the doses of methadone to zero over a period of about three weeks. The patient thus detoxified is drug free. Moreover, it is hoped that the program of gradually reduced doses of methadone leaves him without the withdrawal symptoms, or the ‘physical dependence’ on a narcotic.” Ibid.
“The five major public or semi-public methadone maintenance programs in New York City are:
“(1) The Beth Israel program... with 35 clinics treating 7100 patients;
“(2) A program administered by the City of New York with 39 clinics treating 12,400 patients (hereafter referred to as ‘the City program’);
“(3) A program administered by the Bronx State Hospital and the Albert Einstein College of Medicine, with 7 clinics treating about 2400 patients;
“ (4) A program operated by the Addiction Research and Treatment Center (ARTC) with 6 clinics treating about 1200 patients; and
“(5) A program operated by the New York State Drug Abuse Control Commission (DACC), with 8 clinics treating about 1100 patients.
“The total number of patients treated in public or semi-public programs is about 26,000. It appears that these programs are financed almost entirely by federal, state and city funds.” Id., at 1040.
“[V]ery little specific information was provided [at trial] regarding the private clinics.” Id., at 1046. What evidence there was indicated that those clinics were likely to be less successful and less able to provide accurate information about their clients than the public clinics. Id., at 1046, 1050.
Although the United States Food and Drug Administration has also issued regulations in this area, 21 CFR §§291.501, 291.505 (1978), the New York State regulations are as or more stringent and thus effectively-set the relevant standards for the authorized methadone maintenance programs involved in this case. Under those regulations, in-clinic ingestion of methadone must be observed by staff members, 14 NYCRR § 2021.13 (b) (1976), and must occur with a frequency of six days a week during the first three months, no less than three days a week thereafter through the second year of treatment, and two days a week thereafter. § 2021.13 (c) (1). Tests are required to prevent hoarding of take-home doses, excessive use of methadone, and illicit use of other drugs or alcohol, any of which, if found, can result in increased clinic-visit frequency or in separation from the program. §§2021.13 (c)(2), 2021.13 (g). The programs are also required to include “a comprehensive range of rehabilitative services on-site under professional supervision,” § 2021.13 (e), although participation in many of these services is voluntary and irregular.
“I conclude from all the evidence that the strong majority of methadone maintained persons are successful, at least after the initial period of adjustment, in keeping themselves free of the use of heroin, other illicit drugs, and problem drinking.” 399 F. Supp., at 1047.
Thus, for example:
“Dr. Trigg of Beth Israel testified that about 5,000 out of the 6,500-7,000 patients in his clinics have been on methadone maintenance for a year or more. He further testified that 75% of this 5,000 are free from illicit drug use.” Id., at 1046.
Similarly, although the figures may be somewhat higher for the city and Bronx State Hospital programs, only 70% of the ARTC patients with a year’s tenure or more were found to be free from illicit drug or alcohol use. It is reasonable to infer from this evidence that anywhere from 20% to 30% of those who have been on maintenance for over a year have drug or alcohol problems.
Respondent Beazer was dismissed in November 1971 when his heroin addiction became known to TA and shortly after he had enrolled in a methadone maintenance program; he successfully terminated his treatment in November 1973. Respondent Reyes began his methadone treatment in 1971 and was dismissed by TA in 1972. At the time of trial, in 1975, he was still participating in a methadone program.
Respondent Frasier was on methadone maintenance for only five months, from October 1972 until March 1973. TA refused to employ bim as a bus operator in March 1973 and as a bus cleaner in April 1973. Frasier did not participate in a methadone program for even half a year. Moreover, he tested positively for methadone use at the time of his March application and only a few weeks before his April application was rejected under Rule 11 (b). See 399 F. Supp | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
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"Department or Secretary of Education",
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"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
116
] | sc_adminaction |
NATIONAL LABOR RELATIONS BOARD v. J. H. RUTTER-REX MANUFACTURING CO., INC., et al.
No. 32.
Argued October 22, 1969
Decided December 15, 1969
Arnold Ordman argued the cause for petitioner. With him on the brief were Solicitor General Griswold, Peter L. Strauss, Dominick L. Manoli, Norton J. Gome, and Allison W. Brown, Jr.
Henry J. Read argued the cause for respondent J. H. Rutter-Rex Manufacturing Co., Inc. With him on the briefs were Peter H. Beer and Daniel Lund. Jacob Sheinkman, Ralph N. Jackson, and James J. Graham filed a brief for respondent Amalgamated Clothing Workers’ of America, AFL-CIO.
Mr. Justice Marshall
delivered the opinion of the Court.
This case presents the question whether, when an employer has improperly failed to reinstate striking employees, and the National Labor Relations Board has after considerable delay ordered back pay for those employees, a court of appeals may, on account of the delay, modify the Board’s order to provide an early cutoff date for back pay. In the circumstances of this case, we hold such a modification to be an unwarranted interference with the Board’s remedial power to implement the policies of the National Labor Relations Act.
I
The employees in question chose the Amalgamated Clothing Workers of America, AFL-CIO, as their bargaining representative in January 1954. After three bargaining' sessions between the union and the company, the employees went out on strike in April 1954. At that point and thereafter the company refused to bargain further with the union representatives. Charges of unfair labor practices, including a refusal to bargain in good faith, were filed against the company. In April 1955, while these charges were pending, the union terminated the strike and applied for the reinstatement of many of the strikers. The company reinstated some of these employees and failed to reinstate others.
In February 1956 the Board found that the company had indeed been guilty of an unlawful refusal to bargain. It ordered the company to offer reinstatement to all strikers who applied, and to “make such applicants whole for any loss of pay suffered by reason of the ... refusal, if any, to reinstate them.” J. H. Rutter-Rex Mfg. Co., 115 N. L. R. B. 388, 391 (1956). As is apparently the Board’s practice in reinstatement cases involving strikers, the order did not name the individuals covered, but left disputes over the details of reinstatement and back pay to the compliance stage of the proceedings. The Court of Appeals enforced the Board’s order, NLRB v. J. H. Rutter-Rex Mfg. Co., 245 F. 2d 594 (C. A. 5th Cir. 1957), and entered its decree on August 19, 1957.
On August 21, 1957, the Board’s regional office sent the company the standard letter describing compliance procedures, which included the following:
“When you have fully complied with the affirmative terms of the Decree and there are no violations of its negative provisions, you will be notified that the case has been closed. Until you receive such notice you will know that the case still remains open for all purposes as awaiting compliance.”
On November 7, 1957, the company wrote to the regional office stating that it had complied with “some of the provisions of the decree,” and asking that the regional office bring “any instance of a failure to fully comply with the order” to the company’s attention. The regional office did not answer this letter, and the company heard nothing until March 22, 1960, when a Board compliance officer notified the company that the case had been assigned to him, and requested payroll and other records necessary to determine the employment and back-pay rights of employees.
On November 16, 1961, the regional office filed a 428-page back-pay specification, alleging that the company owed more than $342,000 to some 207 strikers who had either not been reinstated within five days after applying, or who had never been reinstated, in violation of the Board and court orders. The company applied to the Court of Appeals for a permanent stay of further action in the back-pay proceedings, alleging that the Board had delayed improperly in issuing the specification. By affidavit, the Board explained that the delay was caused in part by the great complexity of the task of processing the claims of approximately 600 strikers, and in part by the extremely heavy caseload and severe limitations in staff that the New Orleans regional office experienced during the late 1950’s. The Court of Appeals noted that the delay was regrettable, but denied the requested stay. NLRB v. J. H. Rutter-Rex Mfg. Co., 305 F. 2d 242 (C. A. 5th Cir. 1962).
After a lengthy hearing, a Trial Examiner denied back pay to 35 of the 207 claimants, and reduced the amount due to just over $160,000. He determined that each employee should receive net back pay, computed according to the Board’s usual formula, for the period running from five days after his application for reinstatement until the company made a complying offer. Where no offer was made, the back pay was to accrue through the last quarter of 1961, the quarter in which the specification was filed. His findings and recommendations were adopted with minor modifications by the Board on June 6, 1966. J. H. Rutter-Rex Mfg. Co., 168 N. L. R. B. 1414 (1966). Both the Examiner and the Board considered and rejected the company’s contention that the delay in issuing the specification should bar the back-pay award, either in whole or in part.
On review, the Court of Appeals found that the Board had been guilty of “inordinate” delay, in violation of § 6 (a) of the Administrative Procedure Act, 60 Stat. 240, 5 U. S. C. § 1005 (a), now 5 U. S. C. § 555 (b) (1964 ed., Supp. IV), and to the prejudice of the company, which had been “lulled into the belief that the Board was satisfied and that no further action was to be expected.” J. H. Rutter-Rex Mfg. Co. v. NLRB, 399 F. 2d 356, 363 (C. A. 5th Cir. 1968). Arguing that the purpose of back-pay awards is to “deter unfair labor practices,” id., at 364, and believing that a substantial award of back pay would be sufficient to achieve such deterrent effect, the court modified the Board order to eliminate all back pay accruing after July 1, 1959, thus reducing the awards of some 37 strikers who had not yet received complying offers of reinstatement by that date. We granted certiorari to consider the propriety of this modification, 393 U. S. 1116 (1969), and we reverse the judgment below.
II
We start with the broad command of § 10 (c) of the National Labor Relations Act, as amended, 61 Stat. 147, 29 U. S. C. § 160 (c), that upon finding that an unfair labor practice has been committed, the Board shall order the violator “to take such affirmative action including reinstatement of employees with or without back pay, as will effectuate the policies” of the Act. This Court has stated that the remedial power of the Board is “a broad discretionary one, subject to limited judicial review.” Fibreboard Corp. v. NLRB, 379 U. S. 203, 216 (1964).
The legitimacy of back pay as a remedy for unlawful discharge or unlawful failure to reinstate is beyond dispute, Mastro Plastics Corp. v. NLRB, 350 U. S. 270, 278 (1956), and the purpose of the remedy is clear. “A back pay order is a reparation order designed to vindicate the public policy of the statute by making the employees whole for losses suffered on account of an unfair labor practice.” Nathanson v. NLRB, 344 U. S. 25, 27 (1952). As with the Board’s other remedies, the power to order back pay “is for the Board to wield, not for the courts.” NLRB v. Seven-Up Bottling Co., 344 U. S. 344, 346 (1953). “When the Board, ‘in the exercise of its informed discretion,’ makes an order of restoration by way of back pay, the order ‘should stand unless it can be shown that the order is a patent attempt to achieve ends other than those which can fairly be said to effectuate the policies of the Act.’ ” Id., at 346-347.
Here the Board ordered back pay through December 1961 for employees who had not yet received complying offers of reinstatement by that date. That order clearly falls within the general purpose of making the employees whole, and thus restoring the economic status quo that would have obtained but for the company’s wrongful refusal to reinstate them. The employees encompassed by the order earned less during the relevant quarterly periods than they would have, had they been reinstated in their old or substantially equivalent jobs with the company. Thus the Court of Appeals’ modification, cutting off the accrual of back pay at the arbitrary date of July 1, 1959, left the employees who had not been reinstated by that date worse off than they would have been but for the company’s wrongful action in refusing reinstatement. Either the company or the employees had to bear the cost of the Board’s delay. The Board placed that cost upon the company, which had wrongfully failed to reinstate the employees. In an effort to discipline the Board for its delay, the court shifted part of that cost from the wrongdoing company to the innocent employees.
The Court of Appeals justified the modification as a proper balancing of the interests of the company, which it found was prejudiced in litigating the back-pay claims by the Board’s delay, and the interests of the employees in full restitution. It found statutory support for the company’s position in what it took to be the Board’s violation of its duty under the Administrative Procedure Act to “proceed with reasonable dispatch to conclude any matter presented to it.” 5 U. S. C. § 1005 (a). Thus, the Court of Appeals reasoned, the case fell within the admonition that reviewing courts in labor cases not “rubber-stamp their affirmance of administrative decisions that they deem inconsistent with a statutory mandate or that frustrate the congressional policy underlying a statute.” NLRB v. Brown, 380 U. S. 278, 291 (1965).
Assuming without deciding that the delay in issuing the specification did violate the Board’s duty of prompt action under the Administrative Procedure Act, it does not follow that enforcement of the full back-pay remedy was an abuse of the Board’s discretion. Wronged employees are at least as much injured by the Board’s delay in collecting their back pay as is the wrongdoing employer. In view of “the economic hardship caused by many years of undeservedly substandard earnings,” lengthy delays “must render the back pay award a wholly inadequate and unsatisfactory remedy” to the employees for the company’s refusal to reinstate them. NLRB v. Mastro Plastics Corp., 354 E. 2d 170, 180 (C. A. 2d Cir. 1965). This Court has held before that the Board is not required to place the consequences of its own delay, even if inordinate, upon wronged employees to the benefit of wrongdoing employers. NLRB v. Electric Cleaner Co., 315 U. S. 685, 698 (1942); Labor Board v. Katz, 369 U. S. 736, 748 n. 16 (1962).
The Court of Appeals reasoned further that the purpose of the back-pay remedy is deterrence of unfair labor practices, and that the substantial back-pay award that it enforced would sufficiently serve that deterrent purpose. But the Board could properly conclude that back pay is not only punishment for an unfair labor practice, but is also a remedy designed to restore, so far as possible, the status quo that would have obtained but for the wrongful act. Cf. Phelps Dodge Corp. v. NLRB, 313 U. S. 177, 194 (1941).
Finally, the Court of Appeals reasoned that the company was “lulled into the belief that the Board was satisfied and that no further action was to be expected.” 399 F. 2d, at 363. We need not decide whether this sort of estoppel argument would justify a court in reducing a back-pay award, for no estoppel appears in this case. The Board clearly informed the company that this case would remain open as awaiting compliance until the company received a notice that the case was closed. No such closing notice was ever given. As the Court of Appeals itself stated, the company’s subsequent letter asking that violations of the order be called to its attention “could not shift or avoid its duty of compliance.” Ibid.
We do not mean that delay in the administrative process is other than deplorable. It is deplorable if, as the Court of Appeals thought, the company was hampered in the presentation of its defenses to the back-pay specification by the delay. It is even more deplorable if, as seems clear, innocent employees had to live for some years on reduced incomes as a combined result of the delay and the company’s illegal failure to reinstate them. It may be that the company could have, through the courts, compelled earlier Board action. But the Court of Appeals exceeded the narrow scope of review provided for the Board’s remedial orders when it shifted the cost of the delay from the company to the employees in this case.
Reversed.
NLRB v. Seven-Up Bottling Co., 344 U. S. 344, 345 (1953).
The Court of Appeals also reversed back-pay awards as to 10 strikers in their entirety, finding the awards not supported by substantial evidence. 399 F. 2d, at 365. Certiorari was not sought as to this modification of the Board’s order.
Section 10 (e) (A) of the Administrative Procedure Act, 5 U. S. C. § 1009 (e) (A), now 5 II. S. C. § 706 (1) (1964 ed., Supp. IV), provides that courts shall “compel agency action unlawfully withheld or unreasonably delayed.” | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
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"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
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"Patent Office, or Commissioner of, or Board of Appeals of",
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"Pension Benefit Guaranty Corporation",
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"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
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"NO Admin Action",
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] | [
81
] | sc_adminaction |
UNITED STATES et al. v. CONTRACT STEEL CARRIERS, INC.
No. 102.
Argued February 29, 1956.
Decided March 12, 1956.
Charles F. Barber argued the cause for appellants. With him on the brief were Solicitor General Sobeloff, Assistant Attorney General Barnes, William J. Lamont and Robert W. Ginnane.
Robert N. Burchmore argued the cause for appellee. With him on the brief was John S. Burchmore.
Per Curiam.
The Interstate Commerce Commission brings an appeal from a three-judge district court, 49 U. S. C. § 305 (g), that reversed an order of the ICC, 62 M. C. C. 413, directing appellee Contract Steel Carriers to cease operations as a common carrier by motor vehicle. 128 F. Supp. 25.
Appellee holds licenses covering different areas surrounding Chicago, Houston, and St. Louis. As these are substantially in the same form, a single illustration will suffice. It covers contract carriage of
“Steel articles, and such materials as are used or useful in highway construction projects, except cement, rock, sand, and gravel, over irregular routes, in connection with said carrier’s presently authorized operations,
“From points and places in the CHICAGO, ILL. COMMERCIAL ZONE, as defined by the Commission in 1 M. C. C. 673, to points and places in Arkansas, Iowa, Kansas, Missouri, Oklahoma, and Texas, and return with no transportation for compensation.” No. MC 96505 SUB 6.
The facts are fully set out in the reports referred to above. In essence they show that appellee, by active solicitation from 1951 to 1954 in the areas mentioned, had secured 69 contracts to serve shippers. These had been filed with the Commission and there is no charge of any violation of the restrictions of the license or the requirements of individual contracts except that the appellee has held itself out by its actions to be a common carrier.
The Commission found this holding-out from an advertisement, run without legal advice and since discontinued, offering its transportation service without mentioning whether it was contract or common carriage.
It was also charged that
“. . . the great increase in the number of contracts held by it are attributable in large degree to aggressive sales activities and affirmative precontract traffic solicitation, which amounts to a public offer or holding out. In this connection, it is also asserted that defendant maintained an employee in Des Moines, Iowa, whose duties included the active solicitation of traffic. . . . There is evidence that business has been lost by interveners after a representative of defendant called upon receivers of steel in Iowa, leaving a copy of defendant’s schedule of minimum rates and charges, and a copy of a blank contract to be executed by such shippers.” 62 M. C. C. 413, 41A-415.
It was concluded by the Commission:
“Although the facts here are meager in some respects, they reveal a pattern of extraordinary expansion in a period of approximately 8 months and an easy turnover of contracts thereafter. We believe that there is ample evidence to show that this expansion was brought about, to some extent at least, by indiscriminate solicitation and advertising, among other things.” Id., at 421.
In Craig Contract Carrier Application, 31 M. C. C. 705, 712, the ICC stated that the services of a contract carrier must be individual and specialized. A requirement of specialization is supported by respectable legislative history. See, e. g., 79 Cong. Rec. 5651. In this case the ICC found that appellee had not sufficiently specialized its operation. However, we conclude that if specialization is to be read into 49 U. S. C. § 303 (a) (15) by the legislative history, it is satisfied here since appellee hauls only strictly limited types of steel products under individual and continuing contractual agreements with a comparatively small number of shippers throughout a large area.
We hold also that the fact that appellee has actively solicited business within the bounds of his license does not support a finding that it was “holding itself out to the general public.” A contract carrier is free to aggressively search for new business within the limits of his license. Because the ICC’s order is not supported by evidence in the record and is contrary to the definitions of contract and common-carriers in §303 (14) and (15), we affirm the District Court.
Affirmed.
A common carrier is one “which holds itself out to the general public to engage in the transportation by motor vehicle ... of passengers or property.” A contract carrier is any “person which, under individual contracts or agreements, engages in” such transportation. 49 U. S. C. § 303 (a) (14), (15).
“Provided, however, That no terms, conditions, or limitations shall restrict the right of the carrier to substitute or add contracts within the scope of the permit, or to add to his or its equipment and facilities, within the scope of the permit, as the development of the business and the demands of the public may require." 49 U. S. C. §309 (b). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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"National Mediation Board",
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"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
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"Pension Benefit Guaranty Corporation",
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] | [
65
] | sc_adminaction |
AMERICAN SHIP BUILDING CO. v. NATIONAL LABOR RELATIONS BOARD.
No. 255.
Argued January 21, 1965.
Decided March 29, 1965.
William, 8. Tyson argued the cause for petitioner. With him on the brief was Charles Cavano.
Norton J. Come argued the cause for respondent. With him on the brief were Solicitor General Cox, Frank Goodman, Arnold Ordman and Dominick L. Manoli.
William B. Barton filed a brief for the Chamber of Commerce of the United States, as amicus curiae, urging reversal.
Briefs of amici curiae, urging affirmance, were filed by J. Albert Woll, Robert C. Mayer, Theodore J. St. Antoine and Thomas E. Harris for the American Federation of Labor and Congress of Industrial Organizations, and by Bernard M. Mamet for Local 374, International Brotherhood of Boilermakers.
Mr. Justice Stewart
delivered the opinion of the Court.
The American Ship Building Company seeks review of a decision of the United States Court of Appeals for the District of Columbia Circuit enforcing an order of the National Labor Relations Board which found that the company had committed an unfair labor practice under §§8(a)(1) and (3) of the National Labor Relations Act. The question presented is that expressly reserved in Labor Board v. Truck Drivers Local Union, 353 U. S. 87, 93; namely, whether an employer commits an unfair labor practice under these sections of the Act when he temporarily lays off or “locks out” his employees during a labor dispute to bring economic pressure in support of his bargaining position. To resolve an asserted conflict among the circuits upon this important question of federal labor law we granted certiorari, 379 U. S. 814.
The American Ship Building Company operates four shipyards on the Great Lakes — at Chicago, at Buffalo, and at Toledo and Lorain, Ohio. The company is primarily engaged in the repairing of ships, a highly seasonal business concentrated in the winter months when the freezing of the Great Lakes renders shipping impossible. What limited business is obtained during the shipping season is frequently such that speed of execution is of the utmost importance to minimize immobilization of the ships.
Since 1952 the employer has engaged in collective bargaining with a group of eight unions. Prior to the negotiations here in question, the employer had contracted with the unions on five occasions, each agreement having been preceded by a strike. The particular chapter of the collective bargaining history with which we are concerned opened shortly before May 1, 1961, when the unions notified the company of their intention to seek modification of the current contract, due to expire on August 1.
At the initial bargaining meeting on June 6, 1961, the company took the position that its competitive situation would not allow increased compensation. The unions countered with demands for increased fringe benefits and some unspecified wage increase. Several meetings were held in June and early July during which negotiations focussed upon the fringe benefit questions without any substantial progress. At the last meeting, the parties resolved to call in the Federal Mediation and Conciliation Service, which set the next meeting for July 19. At this meeting, the unions first unveiled their demand for a. 20-cents-an-hour wage increase and proposed a six-month extension of the contract pending continued negotiations. The employer rejected the proposed extension because it would have led to expiration during the peak season.
Further negotiations narrowed the dispute to five or six issues, all involving substantial economic differences. On July 31, the eve of the contract’s expiration, the employer made a proposal; the unions countered with another, revived their proposal for a six-month extension, and proposed in the alternative that the existing contract, with its no-strike clause, be extended indefinitely with the terms of the new contract to be made retroactive to August 1. After rejection of the proposed extensions, the employer’s proposal was submitted to the unions’ membership; on August 8 the unions announced that this proposal had been overwhelmingly rejected. The following day, the employer made another proposal which the unions refused to submit to their membership; the unions made no counteroffer and the parties separated without setting a date for further meetings, leaving this to the discretion of the conciliator.
Thus on August 9, after extended negotiations, the parties separated without having resolved substantial differences on the central issues dividing them and without having specific plans for further attempts to resolve them — a situation which the trial examiner found was an impasse. Throughout the negotiations, the employer displayed anxiety as to the unions’ strike plans, fearing that the unions would call a strike as soon as a ship entered the Chicago yard or delay negotiations into the winter to increase strike leverage. The union negotiator consistently insisted that it was his intention to reach an agreement without calling a strike; however, he did concede incomplete control over the workers — a fact borne out by the occurrence of a wildcat strike in February 1961. Because of the danger of an unauthorized strike and the consistent and deliberate use of strikes in prior negotiations, the employer remained apprehensive of the possibility of a work stoppage.
In light of the failure to reach an agreement and the lack of available work, the employer decided to lay off certain of its workers. On August 11 the employees received a notice which read: “Because of the labor dispute which has been unresolved since August 1, 1961, you are laid off until further notice.” The Chicago yard was completely shut down and all but two employees laid off at the Toledo yard. A large force was retained at Lorain to complete a major piece of work there and the employees in the Buffalo yard were gradually laid off as miscellaneous tasks were completed. Negotiations were resumed shortly after these layoffs and continued for the following two months until a two-year contract was agreed upon on October 27. The employees were recalled the following day.
Upon claims filed by the unions, the General Counsel of the Board issued a complaint charging the employer with violations of §§8 (a)(1), (3), and (5). The trial examiner found that although there had been no work in the Chicago yard since July 19, its closing was not due to lack of work. Despite similarly slack seasons in the past, the employer had for 17 years retained a nucleus crew to do maintenance work and remain ready to take such work as might come in. The examiner went on to find that the employer was reasonably apprehensive of a strike at some point. Although the unions had given assurances that there would be no strike, past bargaining history was thought to justify continuing apprehension that the unions would fail to make good their assurances. It was further found that the employer’s primary purpose in locking out its employees was to avert peculiarly harmful economic consequences which would be imposed on it and its customers if a strike were called either while a ship was in the yard during the shipping season or later when the yard was fully occupied. The examiner concluded that the employer:
“was economically justified and motivated in laying off its employees when it did, and that the fact that its judgment was partially colored by its intention to break the impasse which existed is immaterial in the peculiar and special circumstances of this case. Respondent, by its actions, therefore, did not violate Section 8 (a)(1), (3), and (5) of the Act.”
A three-to-two majority of the Board rejected the trial examiner’s conclusion that the employer could reasonably anticipate a strike. Finding the unions’ assurances sufficient to dispel any such apprehension, the Board was able to find only one purpose underlying the layoff: a desire to bring economic pressure to secure prompt settlement of the dispute on favorable terms. The Board did not question the examiner’s finding that the layoffs had not occurred until after a bargaining impasse had been reached. Nor did the Board remotely suggest that the company’s decision to lay off its employees was based either on union hostility or on a desire to avoid its bargaining obligations under the Act. The Board concluded that the employer “by curtailing its operations at the South Chicago yard with the consequent layoff of the employees, coerced employees in the exercise of their bargaining rights in violation of Section 8 (a)(1) of the Act, and discriminated against its employees within the meaning of Section 8 (a) (3) of the Act.” 142 N. L. R. B., at 136A-1365.
The difference between the Board and the trial examiner is thus a narrow one turning on their differing assessments of the circumstances which the employer claims gave it reason to anticipate a strike. Both the Board and the examiner assumed, within the established pattern of Board analysis, that if the employer had shut down its yard and laid off its workers solely for the purpose of bringing to bear economic pressure to break an impasse and secure more favorable contract terms, an unfair labor practice would be made out. “The Board has held that, absent special circumstances, an employer may not during bargaining negotiations either threaten to lock out or lock out his employees in aid of his bargaining position. Such conduct the Board has held presumptively infringes upon the collective-bargaining rights of employees in violation of Section 8 (a)(1) and the lockout, with its consequent layoff, amounts to discrimination within the meaning of Section 8 (a) (3). In addition, the Board has held that such conduct subjects the Union and the employees it represents to unwarranted and illegal pressure and creates an atmosphere in which the free opportunity for negotiation contemplated by Section 8 (a) (5) does not exist.” Quaker State Oil Refining Corp., 121 N. L. R. B. 334, 337.
The Board has, however, exempted certain classes of lockouts from proscription. “Accordingly, it has held that lockouts are permissible to safeguard against... loss where there is reasonable ground for believing that a strike was threatened or imminent.” Ibid. Developing this distinction in its rulings, the Board has approved lockouts designed to prevent seizure of a plant by a sitdown strike, Link-Belt Co., 26 N. L. R. B. 227; to forestall repetitive disruptions of an integrated operation by “quickie” strikes, International Shoe Co., 93 N. L. R. B. 907; to avoid spoilage of materials which would result from a sudden work stoppage, Duluth Bottling Assn., 48 N. L. R. B. 1335; and to avert the immobilization of automobiles brought in for repair, Betts Cadillac Olds, Inc., 96 N. L. R. B. 268. In another distinct class of cases the Board has sanctioned the use of the lockout by a multiemployer bargaining unit as a response to a whipsaw strike against one of its members. Buffalo Linen Supply Co., 109 N. L. R. B. 447, rev’d sub nom. Truck Drivers Union v. Labor Board, 231 F. 2d 110, rev’d, 353 U. S. 87.
In analyzing the status of the bargaining lockout under §§ 8 (a) (1) and (3) of the National Labor Relations Act, it is important that the practice with which we are here concerned be distinguished from other forms of temporary separation from employment. No one would deny that an employer is free to shut down his enterprise temporarily for reasons of renovation or lack of profitable work unrelated to his collective bargaining situation. Similarly, we put to one side cases where the Board has concluded on the basis of substantial evidence that the employer has used a lockout as a means to injure a labor organization or to evade his duty to bargain collectively. Hopwood Retinning Co., 4 N. L. R. B. 922; Scott Paper Box Co., 81 N. L. R. B. 535. What we are here concerned with is the use of a temporary layoff of employees solely as a means to bring economic pressure to bear in support of the employer’s bargaining position, after an impasse has been reached. This is the only issue before us, and all that we decide.
To establish that this practice is a violation of § 8 (a) (1), it must be shown that the employer has interfered with, restrained, or coerced employees in the exercise of some right protected by § 7 of the Act. The Board’s position is premised on the view that the lockout interferes with two of the rights guaranteed by § 7: the right to bargain collectively and the right to strike. In the Board’s view, the use of the lockout “punishes” employees for the presentation of and adherence to demands made by their bargaining representatives and so coerces them in the exercise of their right to bargain collectively. It is important to note that there is here no allegation that the employer used the lockout in the service of designs inimical to the process of collective bargaining. There was no evidence and no finding that the employer was hostile to its employees’ banding together for collective bargaining or that the lockout was designed to discipline them for doing so. It is therefore inaccurate to say that the employer’s intention was to destroy or frustrate the process of collective bargaining. What can be said is that it intended to resist the demands made of it in the negotiations and to secure modification of these demands. We cannot see that this intention is in any way inconsistent with the employees’ rights to bargain collectively.
Moreover, there is no indication, either as a general matter or in this specific case, that the lockout will necessarily destroy the unions’ capacity for effective and responsible representation. The unions here involved have vigorously represented the employees since 1952, and there is nothing to show that their ability to do so has been impaired by the lockout. Nor is the lockout one of those acts which are demonstrably so destructive of collective bargaining that the Board need not inquire into employer motivation, as might be the case, for example, if an employer permanently discharged his unionized staff and replaced them with employees known to be possessed of a violent antiunion animus. Cf. Labor Board v. Erie Resistor Corp., 373 U. S. 221. The lockout may well dissuade employees from adhering to the position which they initially adopted in the bargaining, but the right to bargain collectively does not entail any “right” to insist on one’s position free from economic disadvantage. Proper analysis of the problem demands that the simple intention to support the employer’s bargaining position as to compensation and the like be distinguished from a hostility to the process of collective bargaining which could suffice to render a lockout unlawful. See Labor Board v. Brown, ante, p. 278.
The Board has taken the complementary view that the lockout interferes with the right to strike protected under §§ 7 and 13 of the Act in that it allows the employer to pre-empt the possibility of a strike and thus leave the union with “nothing to strike against.” Insofar as this means that once employees are locked out, they are deprived of their right to call a strike against the employer because he is already shut down, the argument is wholly specious, for the work stoppage which would have been the object of the strike has in fact occurred. It is true that recognition of the lockout deprives the union of exclusive control of the timing and duration of work stoppages calculated to influence the result of collective bargaining negotiations, but there is nothing in the statute which would imply that the right to strike “carries with it” the right exclusively to determine the timing and duration of all work stoppages. The right to strike as commonly understood is the right to cease work — nothing more. No doubt a union’s bargaining power would be enhanced if it possessed not only the simple right to strike but also the power exclusively to determine when work stoppages should occur, but the Act’s provisions are not indefinitely elastic, content-free forms to be shaped in whatever manner the Board might think best conforms to the proper balance of bargaining power.
Thus, we cannot see that the employer’s use of a lockout solely in support of a legitimate bargaining position is in any way inconsistent with the right to bargain collectively or with the right to strike. Accordingly, we con-elude that on the basis of the findings made by the Board in this ease, there has been no violation of § 8 (a)(1).
Section 8 (a)(3) prohibits discrimination in regard to tenure or other conditions of employment to discourage union membership. Under the words of the statute there must be both discrimination and a resulting discouragement of union membership. It has long been established that a finding of violation under this section will normally turn on the employer’s motivation. See Labor Board v. Brown, ante, p. 278; Radio Officers’ Union v. Labor Board, 347 U. S. 17, 43; Labor Board v. Jones & Laughlin Steel Corp., 301 U. S. 1, 46. Thus when the employer discharges a union leader who has broken shop rules, the problem posed is to determine whether the employer has acted purely in disinterested defense of shop discipline or has sought to damage employee organization. It is likely that the discharge will naturally tend to discourage union membership in both cases, because of the loss of union leadership and the employees’- suspicion of the employer’s true intention. But we have consistently construed the section to leave unscathed a wide range of employer actions taken to serve legitimate lousiness interests in some significant fashion, even though the act committed may tend to discourage union membership. See, e. g., Labor Board v. Mackay Radio & Telegraph Co., 304 U. S. 333, 347. Such a construction of § 8 (a)(3) is essential if due protection is to be accorded the employer’s right to manage his enterprise. See Textile Workers v. Darlington Mfg. Co., ante, p. 263.
This is not to deny that there are some practices which are inherently so prejudicial to union interests and so devoid of significant economic justification that no specific evidence of intent to discourage union membership or other antiunion animus is required. In some cases, it may be that the employer’s conduct carries with it an inference of unlawful intention so compelling that it is justifiable to disbelieve the employer’s protestatiQns of innocent purpose. Radio Officers’ Union v. Labor Board, supra, at 44-45; Labor Board v. Erie Resistor Corp., supra. Thus where many have broken a shop rule, but only union leaders have been discharged, the Board need not listen too long to the plea that shop discipline was simply being enforced. In other situations, we have described the process as the “far more delicate task... of weighing the interests of employees in concerted activity against the interest of the employer in operating his business in a particular manner....” Labor Board v. Erie Resistor Corp., supra, at 229.
But this lockout does not fall into that category of cases arising under §8 (a)(3) in which the Board may truncate its inquiry into employer motivation. As this case well shows, use of the lockout does not carry with it any necessary implication that the employer acted to discourage union membership or otherwise discriminate against union members as such. The purpose and effect of the lockout were only to bring pressure upon the union to modify its demands. Similarly, it does not appear that the natural tendency of the lockout is severely to discourage union membership while serving no significant employer interest. In fact, it is difficult to understand what tendency to discourage union membership or otherwise discriminate against union members was perceived by the Board. There is no claim that the employer locked out only union members, or locked out any employee simply because he was a union member; nor is it alleged that the employer conditioned rehiring upon resignation from the union. It is true that the employees suffered economic disadvantage because of their union’s insistence on demands unacceptable to the employer, but this is also true of many steps which an employer may take during a bargaining conflict, and the existence of an arguable possibility that someone may feel himself discouraged in his union membership or discriminated against by reason of that membership cannot suffice to label them violations of § 8 (a) (3) absent some unlawful intention. The employer’s permanent replacement of strikers (Labor Board v. Mackay Radio & Telegraph Co., supra), his unilateral imposition of terms (Labor Board v. Tex-Tan, Inc., 318 F. 2d 472, 479-482), or his simple refusal to make a concession which would terminate a strike — all impose economic disadvantage during a bargaining conflict, but none is necessarily a violation of 18(a)(3).
To find a violation of § 8 (a) (3), then, the Board must find that the employer acted for a proscribed purpose. Indeed, the Board itself has always recognized that certain “operative” or “economic” purposes would justify a lockout. But the Board has erred in ruling that only these purposes will remove a lockout from the ambit of § 8 (a)(3), for that section requires an intention to discourage union membership or otherwise discriminate against the union. There was not the slightest evidence and there was no finding that the employer was actuated by a desire to discourage membership in the union as distinguished from a desire to affect the outcome of the particular negotiations in which it was involved. We recognize that the “union membership” which is not to be discouraged refers to more than the payment of dues and that measures taken to discourage participation in protected union activities may be found to come within the proscription. Radio Officers’ Union v. Labor Board, supra, at 39-40. However, there is nothing in the Act which gives employees the right to insist on their contract demands, free from the sort of economic disadvantage which frequently attends bargaining disputes. Therefore, we conclude that where the intention proven is merely to bring about a settlement of a labor dispute on favorable terms, no violation of § 8 (a)(3) is shown.
The conclusions which we draw from analysis of §§8 (a)(1) and (3) are consonant with what little of relevance can be drawn from the balance of the statute and its legislative history. In the original version of the Act, the predecessor of § 8 (a)(1) declared it an unfair labor practice “[t]o attempt, by interference, influence, restraint, favor, coercion, or lockout, or by any other means, to impair the right of employees guaranteed in section 4.” Prominent in the criticism leveled at the bill in the Senate Committee hearings was the charge that it did not accord even-handed treatment to employers and employees because it prohibited the lockout while protecting the strike. In the face of such criticism, the Committee added a provision prohibiting employee interference with employer bargaining activities and deleted the reference to the lockout. A plausible inferenee to be drawn from this history is that the language was deleted to mollify those who saw in the bill an inequitable denial of resort to the lockout, and to remove any language which might give rise to fears that the lockout was being proscribed per se. It is in any event clear that the Committee was concerned with the status of the lockout and that the bill, as reported and as finally enacted, contained no prohibition on the use of the lockout as such.
Although neither § 8 (a)(1) nor § 8 (a)(3) refers specifically to the lockout, various other provisions of the National Labor Relations Act do refer to the lockout, and these references can be interpreted as a recognition of the legitimacy of the device as a means of applying economic pressure in support of bargaining positions. Thus 29 U. S. C. § 158 (d)(4) (1958 ed.) prohibits the use of a strike or lockout unless requisite notice procedures have been complied with; 29 U. S. C. § 173 (c) (1958 ed.) directs the Federal Mediation and Conciliation Service to seek voluntary resolution of labor disputes without resort to strikes or lockouts; and 29 U. S. C. §§ 176, 178 (1958 ed.), authorize procedures whereby the President can institute a board of inquiry to forestall certain strikes or lockouts. The correlative use of the terms "strike” and “lockout” in these sections contemplates that lockouts will be used in the bargaining process in some fashion. This is not to say that these provisions serve to define the permissible scope of a lockout by an employer. That, in the context of the present case, is a question ultimately to be resolved by analysis of §§ 8 (a)(1) and (3).
The Board has justified its ruling in this case and its general approach to the legality of lockouts on the basis of its special competence to weigh the competing interests of employers and employees and to accommodate these interests according to its expert judgment. "The Board has reasonably concluded that the availability of such a weapon would so substantially tip the scales in the employer’s favor as to defeat the Congressional purpose of placing employees on a par with their adversary at the bargaining table.” To buttress its decision as to the balance struck in this particular case, the Board points out that the employer has been given other weapons to counterbalance the employees’ power of strike. The employer may permanently replace workers who have gone out on strike, or, by stockpiling and subcontracting, maintain his commercial operations while the strikers bear the economic brunt of the work stoppage. Similarly, the employer can institute unilaterally the working conditions which he desires once his contract with the union has expired. Given these economic weapons, it is argued, the employer has been adequately equipped with tools of economic self-help.
There is of course no question that the Board is entitled to the greatest deference in recognition of its special competence in dealing with labor problems. In many areas its evaluation of the competing interests of employer, and employee should unquestionably be given conclusive effect in determining the application of §§ 8 (a)(1), (3), and (5). However, we think that the Board construes its functions too expansively when it claims general authority to define national labor policy by balancing the competing interests of labor and management.
While a primary purpose of the National Labor Relations Act was to redress the perceived imbalance of economic power between labor and management, it sought to accomplish that result by conferring certain affirmative rights on employees and by placing certain enumerated restrictions on the activities of employers. The Act prohibited acts which interfered with, restrained, or coerced employees in the exercise of their rights to organize a union, to bargain collectively, and to strike; it proscribed discrimination in regard to tenure and other conditions of employment to discourage membership in any labor organization. The central purpose of these provisions was to protect employee self-organization and the process of collective bargaining from disruptive interferences by employers. Having protected employee organization in countervailance to the employers’ bargaining power, and having established a system of collective bargaining whereby the newly coequal adversaries might resolve their disputes, the Act also contemplated resort to economic weapons should more peaceful measures not avail. Sections 8(a)(1) and (3) do not give the Board a general authority to assess the relative economic power of the adversaries in the bargaining process and to deny weapons to one party or the other because of its assessment of that party’s bargaining power. Labor Board v. Brown, ante, p. 278. In this case the Board has, in essence, denied the use of the bargaining lockout to the employer because of its conviction that use of this device would give the employer “too much power.” In so doing, the Board has stretched §§ 8 (a)(1) and (3) far beyond their functions of protecting the rights of employee organization and collective bargaining. What we have recently said in a closely related context is equally applicable here:
“•[W]hen the Board moves in this area... it is functioning as an arbiter of the sort of economic weapons the parties can use in seeking to gain acceptance of their bargaining demands. It has sought to introduce some standard of properly ‘balanced’ bargaining power, or some new distinction of justifiable and unjustifiable, proper and ‘abusive’ economic weapons into... the Act.... We have expressed our belief that this amounts to the Board’s entrance into the substantive aspects of the bargaining process to an extent Congress has not countenanced.” Labor Board v. Insurance Agents’ International Union, 361 U. S. 477, 497-498.
We are unable to find that any fair construction of the provisions relied on by the Board in this case can support its finding of an unfair labor practice. Indeed, the role assumed by the Board in this area is fundamentally inconsistent with the structure of the Act and the function of the sections relied upon. The deference owed to an expert tribunal cannot be allowed to slip into a judicial inertia which results in the unauthorized assumption by an agency of major policy decisions properly made by Congress. Accordingly, we hold that an employer violates neither § 8 (a)(1) nor § 8 (a) (3) when, after a bargaining impasse has been reached, he temporarily shuts down his plant and lays off his employees for the sole purpose of bringing economic pressure to bear in support of his legitimate bargaining position.
Reversed.
142 N. L. R. B. 1362, enforced, 118 U. S. App. D. C. 78, 331 F. 2d 839 (1964).
National Labor Relations Act, as amended, § 8 (a), 61 Stat 140, 29 U. S. C. § 158 (a) (1958 ed.): “It shall be an unfair labor practice for an employer—
“(1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 157 of this title;
“(3) by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization
National Labor Relations Act, as amended, §7, 61 Stat. 140, 29 U. S. C. § 157 (1958 ed.): “Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment
Compare Labor Board v. Dalton Brick & Tile Corp., 301 F. 2d 886 (C. A. 5th Cir. 1962); Morand Bros. Beverage Co. v. Labor Board, 190 F. 2d 576 (C. A. 7th Cir. 1951), 204 F. 2d 529 (1953), with Quaker State Oil Refining Corp. v. Labor Board, 270 F. 2d 40 (C. A. 3d Cir. 1959); Utah Plumbing & Heating Contractors Assn. v. Labor Board, 294 F. 2d 165 (C. A. 10th Cir. 1961).
The dissenting members of the Board took the view that the indefinite extension would not have afforded the employer enforeible protection against a strike. 142 N. L. R. B., at 1368.
The complaint was limited to the Chicago yard.
Although the complaint stated a violation of § 8 (a) (5) as well, the Board made no findings as to this claim, | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
81
] | sc_adminaction |
TRANSCONTINENTAL & WESTERN AIR, INC. v. CIVIL AERONAUTICS BOARD.
No. 387.
Argued February 8-9, 1949.
Decided April 18, 1949.
Gerald B. Brophy argued the cause for petitioner. With him on the brief were Charles Pickett and Joseph S. Iseman.
Emory T. Nunneley, Jr. argued the cause for respondent. With him on the brief were Solicitor General Perl-man, Stanley M. Silverberg and Warren L. Sharfman.
Charles H. Murchison filed a brief for Capital Airlines, Inc., as amicus curiae, urging reversal.
Mr. Justice Douglas
delivered the opinion of the Court.
The question in this case is whether the Civil Aeronautics Board has authority to fix a new mail rate for air carriers and to make it retroactive for a period in which a final rate previously fixed by the Board was in effect and unchallenged by the initiation of a mail rate proceeding. The answer turns primarily on the meaning of § 406 (a) of the Civil Aeronautics Act of 1938 as amended, 52 Stat. 998, 49 U. S. C. § 486 (a), which empowers the Board to fix and determine the fair and reasonable rates of compensation for the transportation of mail by aircraft and “to make such rates effective from such date as it shall determine to be proper . ...”
The Board in an order dated October 26, 1945, fixed a mail rate of 45 cents per mail ton-mile for petitioner. From that date until March 14, 1947, petitioner was paid at that rate for its air carrier services. During that time no action was taken by petitioner or by the government to initiate a change in that rate. On March 14, 1947, petitioner filed a petition with the Board alleging that its mail rate had not been fair and reasonable since January 1, 1946, and requesting the Board to fix a fair and reasonable rate “from and after January 1, 1946.” After hearing, the Board by a divided vote ruled that it had no authority to fix a mail rate for a period prior to March 14, 1947, and dismissed the petition insofar as it sought that relief. 8 C. A. B. 685. The Court of Appeals affirmed the order of the Board. 83 U. S. App. D. C. 358, 169 F. 2d 893. The case is here on a petition for a writ of certiorari which we granted because of the importance of the question to the carriers and public alike.
The language of § 406 (a), which empowers the Board to “fix and determine” after notice and hearing “the fair and reasonable rates of compensation” for the transportation of mail by aircraft, reads like a typical public utility rate-making authority. Both subdivisions (a) and (b) of § 406, to be sure, reflect some characteristics of rate-making which are peculiar to air carriers. That is true of the methods specified in § 406 (a) for ascertaining the rates of compensation — “aircraft-mile, pound-mile, weight, space, or any combination thereof, or otherwise . . . .” Special standards for rate-making are also prescribed. The Board is authorized to consider “the conditions peculiar to transportation by aircraft and to the particular air carrier or class of air carriers” in fixing different rates for different air carriers or classes of air carriers and different classes of service. § 406 (b). And the Board in determining the rate is authorized and directed to consider “the need of each such air carrier for compensation for the transportation of mail sufficient to insure the performance of such service, and, together with all other revenue of the air carrier, to enable such air carrier under honest, economical, and efficient management, to maintain and continue the development of air transportation to the extent and of the character and quality required for the commerce of the United States, the Postal Service, and the national defense.” §406 (b).
Considerable reliance is placed on this last provision for the view that the Board has authority under the “make effective” clause to order such retroactive adjustments of rates as the “need” of the air carrier makes appropriate. But such a standard has its counterparts in other legislation dealing with rate-making and does not necessarily mark a departure from the customary pattern of fixing rates prospectively. Yet, unless we found a congressional purpose to make a radical break with tradition, we would be most reluctant to give the “make effective” clause the broad meaning which petitioner urges. For the rates of carriers and other utilities fixed by public authorities, while usually prospective, are sometimes made retroactive to the date of the commencement of the rate-making proceeding. See United States v. New York Central R. Co., 279 U. S. 73. But, so far as we are aware, they have never been retroactive to an earlier date.
The language of the Act does not suggest that Congress intended to break with these traditions of rate-making. Moreover, the legislative history indicates that the “make effective” clause was inserted only to make clear that the rates could be made retroactive to the date of the application. Finally the scheme of the Act and its underlying policy seem to us to preclude the more expansive reading of the clause urged on üs by petitioner.
Petitioner’s reading of the Act would in practical effect have the tendency to transform it into a cost-plus system of regulation, a construction which would not harmonize with the apparent design of the Act. Thus § 406 (b) authorizes the Board to fix rates for “classes of air carriers.” It is plain that the uniform rate for the class is an important regulatory device. For § 2 (d) of the Act looks to the sound development of an air transportation system through competition. A uniform rate forces carriers within a given class to compete in securing revenue and in reducing or controlling costs. If the Board had authority on the basis of the carrier’s needs to make rates retroactive to any point of time, there would be a powerful incentive to seek relief from the uniform rate, not to live within it.
In sum a construction which would make it possible to revise rates retroactively to. any point of time would be a real innovation which should have a more solid basis than our own predilections. We cannot but feel that if the rate-making power were to be put to such a novel use, the purpose would have been made clear. It is too unprecedented a departure from the conventions of rate-making to rest on mere inference.
It is pointed out that the Board apparently considers past operating losses in fixing rates and that therefore it is a matter of no great consequence if the rates are made retroactive to one date rather than another. But the power to fix rates to recoup past losses is a distinct question not before us.
Affirmed.
Mr. Justice Reed took no part in the consideration or decision of this case.
Section 406 provides:
“(a) The Authority is empowered and directed, upon its own initiative or upon petition of the Postmaster General or an air carrier, (1) to fix and determine from time to time, after notice and hearing, the fair and reasonable rates of compensation for the transportation of mail by aircraft, the facilities used and useful therefor, and the services connected therewith (including the transportation of mail by an air carrier by other means than aircraft whenever such transportation is incidental to the transportation of mail by aircraft or is made necessary by conditions of emergency arising from aircraft operation), by each holder of a certificate authorizing the transportation of mail by aircraft, and to make such rates effective from such date as it shall determine to be proper; (2) to prescribe the method or methods, by aircraft-mile, pound-mile, weight, space, or any combination thereof, or otherwise, for ascertaining such rates of compensation for each air carrier or class of air carriers; and (3) to publish the same; and the rates so fixed and determined shall be paid by the Postmaster General from appropriations for the transportation of mail by aircraft.
“(b) In fixing and determining fair and reasonable rates of compensation under this section, the Authority, considering the conditions peculiar to transportation by aircraft and to the particular air carrier or class of air carriers, may fix different rates for different air carriers or classes of air carriers, and different classes of service. In determining the rate in each case, the Authority shall take into consideration, among other factors, the condition that such air carriers may hold and operate under certificates authorizing the carriage of mail only by providing necessary and adequate facilities and service for the transportation of mail; such standards respecting the character and quality of service to be rendered by air carriers as may be prescribed by or pursuant to law; and the need of each such air carrier for compensation for the transportation of mail sufficient to insure the performance of such service, and, together with all other revenue of the air carrier, to enable such air carrier under honest, economical, and efficient management, to maintain and continue the development of air transportation to the extent and of the character and quality required for the commerce of the United States, the Postal Service, and the national defense.”
The Civil Aeronautics Board took the place of the Authority on June 30,1940. See 54 Stat. 1235.
See 6 C. A. B. 595.
See note 1, supra.
See § 1 of Title I of the Transportation Act of 1940, 54 Stat. 899, 49 U. S. C., note prior to § 1: “It is hereby declared to be the national transportation policy of the Congress to provide for fair and impartial regulation of all modes of transportation subject to the provisions of this Act . . . to . . . foster sound economic conditions in transportation and among the several carriers; ... all to the end of developing, coordinating, and preserving a national transportation system by water, highway, and rail, as well as other means, adequate to meet the needs of the commerce of the United States, of the Postal Service, and of the national defense. All of the provisions of this Act shall be administered and enforced with a view to carrying out the above declaration of policy.”
The other rate-making provisions of the Act likewise follow the conventional pattern. See § 1002 (d) and (e).
The Interstate Commerce Commission in its administration of the Air Mail Act of 1934 as amended, 48 Stat. 933, 935, 49 Stat. 614, 616, had asserted the power to make its orders effective as of the date of initiation of the proceeding. But there was a sharp divergence of views within the Commission over its authority to do so. See Air Mail Compensation, 216 I. C. C. 166, 222 I. C. C. 602. The congressional committees seemed primarily concerned with that problem in their consideration of the “make effective” clause in the bills which preceded the ones resulting in the Act. See Senate Hearings, Committee on Interstate Commerce, on S. 2 and S. 1760, 75th Cong., 1st Sess. 179, 180, 239, 291, 343, 483-485, 523. And see H. R. Hearings, Committee on Interstate and Foreign Commerce, on H. R. 5234 and H. R. 4652, 75th Cong., 1st Sess. 325-327. The policy of adhering to conventional rate-making is suggested by H. R. Rep. No. 911, 75th Cong., 1st Sess. 18, and by the statements of Senator Truman who was in charge of the bill in the Senate. 81 Cong. Rec. 9202,9203,9204.
This history is relevant to our problem, for though it relates to the 1937 bill which was not passed, the “make effective” clause crystallized at that time and appeared in the 1938 bill which was enacted. The Conference Report on the latter bill is silent on the “make effective” clause, though the following passage from it, H. R. Rep. No. 2635, 75th Cong., 3d Sess. 71-72, by its brief exposition of the power conferred suggests that Congress did not depart from the conventional pattern of rate-making when it enacted the measure:
“This section [§ 406] empowers the Authority to fix mail rates and sets forth the congressional policy to guide the Authority in fixing such rates and enables the Authority to adjust rates so that the policy of Congress may be properly carried out in the case of each carrier or class of carriers according to the needs of the particular case.”
§ 406 (b) supra, note 1.
Section 2 provides :
“In the exercise and performance of its powers and duties under this Act, the [Board] shall consider the following, among other things, as being in the public interest, and in accordance with the public convenience and necessity—
“(d) Competition to the extent necessary to assure the sound development of an air-transportation system properly adapted to the needs of the foreign and domestic commerce of the United States, of the Postal Service, and of the national defense . . .
After the present case was argued in this Court, the Civil Aeronautics Board, on February 21, 1949, awarded a temporary mail rate increase to TWA effective March 14, 1947, to compensate it for losses sustained prior thereto as the result of grounding the Constellation aircraft. American Airlines, Inc., et al., Mail Rate Increases, C. A. B. Docket No. 2849, Serial No. E-2484 (Feb. 21, 1949). That action does not render the present case moot, for the new temporary mail rate covers only a part of the losses on the basis of which a rate increase was sought here. Nor do we have in this case any question concerning the power of the Board over temporary, as distinguished from final, mail rates. See Essair, Inc., Temporary Mail Rate, 6 C. A. B. 687, 690-691; In the Matter of National Airlines, Inc., C. A. B. Docket No. 3037, Serial No. E-1271, March 5, 1948. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
11
] | sc_adminaction |
UNITED STATES et al. v. STANLEY
No. 86-393.
Argued April 21, 1987
Decided June 25, 1987
Scalia, J., delivered the opinion of the Court, in which Rehnquist, C. J., and White, Blackmun, and Powell, JJ., joined, and in Part I of which Brennan, Marshall, Stevens, and O’Connor, JJ., joined. Brennan, J., filed an opinion concurring in part and dissenting in part, in which Marshall, J., joined, and in Part III of which Stevens, J., joined, post, p. 686. O’Connor, J., filed an opinion concurring in part and dissenting in part, post, p. 708.
Christopher J. Wright argued the cause for the United States. With him on the briefs were Solicitor General Fried, Assistant Attorney General Willard, Deputy Solicitor General Ayer, Barbara L. Herwig, and Mark W. Pennak.
Richard A. Kupfer argued the cause and filed a brief for respondent.
Justice Scalia
delivered the opinion of the Court.
In February 1958, James B. Stanley, a master sergeant in the Army stationed at Fort Knox, Kentucky, volunteered to participate in a program ostensibly designed to test the effectiveness of protective clothing and equipment as defenses against chemical warfare. He was released from his then-current duties and went to the Army’s Chemical Warfare Laboratories at the Aberdeen Proving Grounds in Maryland. Four times that month, Stanley was secretly administered doses of lysergic acid diethylamide (LSD), pursuant to an Army plan to study the effects of the drug on human subjects. According to his Second Amended Complaint (the allegations of which we accept for purposes of this decision), as a result of the LSD exposure, Stanley has suffered from hallucinations and periods of incoherence and memory loss, was impaired in his military performance, and would on occasion “awake from sleep at night and, without reason, violently beat his wife and children, later being unable to recall the entire incident.” App. 5. He was discharged from the Army in 1969. One year later, his marriage dissolved because of the personality changes wrought by the LSD.
On December 10, 1975, the Army sent Stanley a letter soliciting his cooperation in a study of the long-term effects of LSD on “volunteers who participated” in the 1958 tests. This was the Government’s first notification to Stanley that he had been given LSD during his time in Maryland. After an administrative claim for compensation was denied by the Army, Stanley filed suit under the Federal Tort Claims Act (FTCA), 28 U. S. C. § 2671 et seq., alleging negligence in the administration, supervision, and subsequent monitoring of the drug testing program.
The District Court granted the Government’s motion for summary judgment, finding that Stanley “was at all times on active duty and participating in a bona fide Army program during the time the alleged negligence occurred,” No. 78-8141-Civ-CF, p. 2 (SD Fla., May 14, 1979), and that his FTCA suit was therefore barred by the doctrine of Feres v. United States, 340 U. S. 135 (1950), which determined that “the Government is not liable under the Federal Tort Claims Act for injuries to servicemen where the injuries arise out of or are in the course of activity incident to service.” Id., at 146. The Court of Appeals for the Fifth Circuit agreed that the Feres doctrine barred Stanley’s FTCA suit against the United States, but held that the District Court should have dismissed for lack of subject-matter jurisdiction rather than disposing of the case on the merits. Stanley v. CIA, 639 F. 2d 1146 (1981). The Government contended that a remand would be futile, because Feres would bar any claims that Stanley could raise either under the FTCA or directly under the Constitution against individual officers under Bivens v. Six Unknown Fed. Narcotics Agents, 403 U. S. 388 (1971). The court concluded, however, that Stanley “has at least a colorable constitutional claim based on Bivens,” 639 F. 2d, at 1159, and remanded “for the consideration of the trial court of any amendment which the appellant may offer, seeking to cure the jurisdictional defect.” Id., at 1159-1160.
Stanley then amended his complaint to add claims against unknown individual federal officers for violation of his constitutional rights. He also specifically alleged that the United States’ failure to warn, monitor, or treat him after he was discharged constituted a separate tort which, because occurring subsequent to his discharge, was not “incident to service” within the Feres exception to the FTCA. See United States v. Brown, 348 U. S. 110 (1954). The District Court dismissed the FTCA claim because the alleged negligence was not “separate and distinct from any acts occurring before discharge, so as to give rise to a separate actionable tort not barred by the Feres doctrine.” 549 F. Supp. 327, 329 (SD Fla. 1982). It refused, however, to dismiss the Bivens claims. The court rejected, inter alia, the Government’s argument that the same considerations giving rise to the Feres exception to the FTCA should constitute “special factors” of the sort alluded to in Bivens, supra, at 396, and other cases as bars to a Bivens action. It cited as sole authority for that rejection the Court of Appeals for the Ninth Circuit’s decision in Wallace v. Chappell, 661 F. 2d 729 (1981). Sua sponte, the court certified its order for interlocutory appeal under 28 U. S. C. § 1292(b).
Following issuance of the order, the Government moved for partial final judgment pursuant to Federal Rule of Civil Procedure 54(b) on behalf of itself and three federal agencies that had (improperly) been named as FTCA defendants throughout the proceedings. The Government also argued that because no individual defendants had been named or served, and thus had neither appeared as parties nor sought representation from the Department of Justice, there was no one to seek interlocutory review of the court’s refusal to dismiss the Bivens actions. The court concluded that the Government’s contentions were “well taken,” Stanley v. CIA, 552 F. Supp. 619 (SD Fla. 1982), and on November 9, 1982, it granted the motion for partial final judgment, ordered the Clerk to “enter final judgment in favor of the United States forthwith,” ibid., and vacated the portion of its prior order ruling on the Bivens claims against the individual defendants, giving Stanley 90 days to serve at least one individual defendant. The docket sheet for the case reflects the terms of that order (“The clerk to enter final judgment in favor of USA,” App. to Brief in Opposition A4), but does not indicate that an additional “separate document,” Fed. Rule Civ. Proc. 58, containing the judgment was entered. See Fed. Rule Civ. Proc. 79(a).
Stanley then filed his Second Amended Complaint, naming as defendants nine individuals (seven of whom are before us as petitioners) and the Board of Regents of the University of Maryland, and asserting civil rights claims under 42 U. S. C. §§ 1983 and 1985. Motions to dismiss for lack of-personal jurisdiction and improper venue were filed on behalf of some of the defendants (it was alleged that proper service had not been made on the others), but before those motions were ruled on, we issued our decision in Chappell v. Wallace, 462 U. S. 296 (1983), holding that “enlisted military personnel may not maintain a suit to recover damages from a superior officer for alleged constitutional violations,” id., at 305, and reversing the sole authority cited by the District Court in its prior order refusing to dismiss Stanley’s Bivens claims. Stanley’s counsel brought the Chappell decision to the attention of the District Court, which, apparently treating the filing of the Second Amended Complaint as automatically reinstating its previously vacated order concerning the Bivens claims, sua sponte reconsidered and reaffirmed its prior decision. It concluded that, despite the broadly stated holding of the case, Chappell did not “totally ba[r] Bivens actions by servicemen for torts committed against them during their term of service.” 574 F. Supp. 474, 478 (1988). Rather, it said, Chappell only bars Bivens actions when “a member of the military brings a suit against a superior officer for wrongs which involve direct orders in the performance of military duty and the discipline and order necessary thereto,” 574 F. Supp., at 479, factors that in its view were not involved in Stanley’s claim. Nor could the court find in congressionally prescribed remedies, such as the Veterans’ Benefits Act, 38 U. S. C. §301 et seq., any expression of exclusivity of the sort Bivens contemplated would preclude recovery. See 403 U. S., at 397. The court again certified its order for interlocutory appeal under § 1292(b), which petitioners sought and the Court of Appeals for the Eleventh Circuit granted.
The Court of Appeals affirmed the conclusion that Chappell does not require dismissal of Stanley’s Bivens claims, on essentially the grounds relied upon by the District Court. 786 F. 2d 1490 (1986). The court did not think that Congress’ activity in the military justice field was a “special facto[r]” precluding Stanley’s claim, as “[t]hose intramilitary administrative procedures which the Court found adequate to redress the servicemen’s racial discrimination complaints in Chappell are clearly inadequate to compensate Stanley for the violations complained of here.” Id., at 1496.
Although the issue had not been addressed in the order from which the interlocutory appeal was taken, the Court of Appeals further determined that recent precedent in the Eleventh Circuit, including Johnson v. United States, 749 F. 2d 1530 (1985), rev’d, 481 U. S. 681 (1987), indicated that Stanley might have a viable FTC A claim against the United States, and that law-of-the-case principles therefore did not require adherence to the 1982 holding that Stanley’s FTCA claim was barred by Feres. It remanded with instructions to the District Court to “allow Stanley the opportunity to amend to plead consistent with recent precedent.” 786 F. 2d, at 1499.
Because the Courts of Appeals have not been uniform in their interpretation of the holding in Chappell, and because the Court of Appeals’ reinstatement of Stanley’s FTCA claims seems at odds with sound judicial practice, we granted certiorari. 479 U. S. 1005 (1986).
I
We first address the Court of Appeals’ instruction to the District Court to allow Stanley to replead his FTCA claim. While petitioners advance several reasons why that action was improper, and additional reasons can perhaps be found in our recent decision in United States v. Johnson, 481 U. S. 681 (1987), we find it necessary to discuss only one. The case did not come before the Court of Appeals on appeal from a final decision of the District Court under 28 U. S. C. § 1291. Rather, the Court of Appeals had jurisdiction pursuant to § 1292(b), which provides:
“When a district judge in making in a civil action an order not otherwise appealable under this section, shall be of the opinion that such order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from the order may materially advance the ultimate termination of the litigation, he shall so state in writing in such order. The Court of Appeals may thereupon, in its discretion, permit an appeal to be taken from such order....” (Emphasis added.)
An appeal under this statute is from the certified order, not from any other orders that may have been entered in the case. Even if the Court of Appeals’ jurisdiction is not confined to the precise question certified by the lower court (because the statute brings the “order,” not the question, before the court), that jurisdiction is confined to the particular order appealed from. Commentators and courts have consistently observed that “the scope of the issues open to the court of appeals is closely limited to the order appealed from [and] [t]he court of appeals will not consider matters that were ruled upon in other orders.” 16 C. Wright, A. Miller, E. Cooper, & E. Gressman, Federal Practice and Procedure § 3929, p. 143 (1977). See Pritchard-Keang Nam Corp. v. Jaworski, 751 F. 2d 277, 281, n. 3 (CA8 1984), cert. dism’d, 472 U. S. 1022 (1985); United States v. Bear Marine Services, 696 F. 2d 1117, 1119, n. 1 (CA5 1983); Time, Inc. v. Ragano, 427 F. 2d 219, 221 (CA5 1970).
Here, the “order appealed from” was an order refusing to dismiss Stanley’s Bivens claims on the basis of our holding in Chappell. The Court of Appeals therefore had no jurisdiction to enter orders relating to Stanley’s long-dismissed FTCA claims, whether or not, as Stanley argues, “the issues involved in the Bivens claim and the alleged immunity of the individual defendants closely parallels [sic] the government’s immunity due to the Feres doctrine... [and] that is what all parties were arguing about in the interlocutory appeal.” Brief for Respondent 17-18. The Court of Appeals’ action is particularly astonishing in light of the fact that the United States was not even a party to the appeal, which involved only Stanley and the individual Bivens defendants (Stanley’s Bivens claim against the United States having been dismissed by the District Court in 1982). We vacate that portion of the Court of Appeals’ judgment.
II
That leaves the Court of Appeals’ ruling that Stanley can proceed with his Bivens claims notwithstanding the decision in Chappell. In our view, the court took an unduly narrow view of the circumstances in which courts should decline to permit nonstatutory damages actions for injuries arising out of military service.
In Bivens, we held that a search and seizure that violates.the Fourth Amendment can give rise to an action for damages against the offending federal officials even in the absence of a statute authorizing such relief. We suggested in dictum that inferring such an action directly from the Constitution might not be appropriate when there are “special factors counselling hesitation in the absence of affirmative action by Congress,” 403 U. S., at 396, or where there is an “explicit congressional declaration that persons injured by a federal officer’s violation of the Fourth Amendment may not recover money damages from the agents, but must instead be remitted to another remedy, equally effective in the view of Congress.” Id., at 397. We subsequently held that actions for damages could be brought directly under the Due Process Clause of the Fifth Amendment, Davis v. Passman, 442 U. S. 228 (1979), and under the Eighth Amendment’s proscription against cruel and unusual punishment, Carlson v. Green, 446 U. S. 14 (1980), repeating each time the dictum that “special factors counselling hesitation” or an “explicit congressional declaration” that another remedy is exclusive would bar such an action. 442 U. S., at 246-247; 446 U. S., at 18-19. In Chappell (and in Bush v. Lucas, 462 U. S. 367 (1983), decided the same day), that dictum became holding. Chappell reversed a determination that no “special factors” barred a constitutional damages remedy on behalf of minority servicemen who alleged that because of their race their superior officers “failed to assign them desirable duties, threatened them, gave them low performance evaluations, and imposed penalties of unusual severity.” 462 U. S., at 297. We found “factors counselling hesitation” in “[t]he need for special regulations in relation to military discipline, and the consequent need and justification for a special and exclusive system of military justice....” Id., at 300. We observed that the Constitution explicitly conferred upon Congress the power, inter alia, “[t]o make Rules for the Government and Regulation of the land and naval Forces,” U. S. Const. Art. I, § 8, cl. 14, thus showing that “the Constitution contemplated that the Legislative Branch have plenary control over rights, duties, and responsibilities in the framework of the Military Establishment....” 462 U. S., at 301. Congress, we noted, had exercised that authority to “establish] a comprehensive internal system of justice to regulate military life, taking into account the special patterns that define the military structure.” Id., at 302. We concluded that “[t]aken together, the unique disciplinary structure of the Military Establishment and Congress’ activity in the field constitute ‘special factors’ which dictate that it would be inappropriate to provide enlisted military personnel a Bivenstype remedy against their superior officers.” Id., at 304.
Stanley seeks to distance himself from this holding in several ways. First, he argues that the defendants in this case were not Stanley’s superior military officers, and indeed may well have been civilian personnel, and that the chain-of-command concerns at the heart of Chappell and cases such as Gaspard v. United States, 713 F. 2d 1097, 1103-1104 (CA5 1983) (plaintiff was ordered to expose himself to radiation from nuclear test), cert. denied sub nom. Sheehan v. United States, 466 U. S. 975 (1984), are thus not implicated. Second, Stanley argues that there is no evidence that this injury was “incident to service,” because we do not know the precise character of the drug testing program, the titles and roles of the various individual defendants, or Stanley’s duty status when he was at the Maryland testing grounds. If that argument is sound, then even if Feres principles apply fully to Bivens actions, further proceedings are necessary to determine whether they apply to this case.
The second argument, however, is not available to Stanley here. The issue of service incidence, as that term is used in Feres, was decided adversely to him by the Court of Appeals in 1981, 639 F. 2d, at 1150-1153, and there is no warrant for reexamining that ruling here. See Allen v. McCurry, 449 U. S. 90, 94 (1980). As for his first argument, Stanley arid the lower courts may well be correct that Chappell implicated military chain-of-command concerns more directly than do the facts alleged here; in the posture of this case, one must assume that at least some of the defendants were not Stanley’s superior officers, and that he was not acting under orders from superior officers when he was administered LSD. It is therefore true that Chappell is not strictly controlling, in the sense that no holding can be broader than the facts before the court. It is even true that some of the language of Chappell, explicitly focusing on the officer-subordinate relationship that existed in the case at hand, would not be applicable here. To give controlling weight to those facts, however, is to ignore our plain statement in Chappell that “[t]he ‘special factors’ that bear on the propriety of respondents’ Bivens action also formed the basis of this Court’s decision in Feres v. United States,” 462 U. S., at 298, and that “[although this case concerns the limitations on the type of nonstatutory damages remedy recognized in Bivens, rather than Congress’ intent in enacting the Federal Tort Claims Act, the Court’s analysis in Feres guides our analysis in this case.” Id., at 299. Since Feres did not consider the officer-subordinate relationship crucial, but established instead an “incident to service” test, it is plain that our reasoning in Chappell does not support the distinction Stanley would rely on.
As we implicitly recognized in Chappell, there are varying levels of generality at which one may apply “special factors” analysis. Most narrowly, one might require reason to believe that in the particular case the disciplinary structure of the military would be affected — thus not even excluding all officer-subordinate suits, but allowing, for example, suits for officer conduct so egregious that no responsible officer would feel exposed to suit in the performance of his duties. Somewhat more broadly, one might disallow Bivens actions whenever an officer-subordinate relationship underlies the suit. More broadly still, one might disallow them in the officer-subordinate situation and also beyond that situation when it affirmatively appears that military discipline would be affected. (This seems to be the position urged by Stanley.) Fourth, as we think appropriate, one might disallow Bivens actions whenever the injury arises out of activity “incident to service.” And finally, one might conceivably disallow them by servicemen entirely. Where one locates the rule along this spectrum depends upon how prophylactic one thinks -the prohibition should be (i. e., how much occasional, unintended impairment of military discipline one is willing to tolerate), which in turn depends upon how harmful and inappropriate judicial intrusion upon military discipline is thought to be. This is essentially a policy judgment, and there is no scientific or analytic demonstration of the right answer. Today, no more than when we wrote Chappell, do we see any reason why our judgment in the Bivens context should be any less protective of military concerns than it has been with respect to FTCA suits, where we adopted an “incident to service” rule. In fact, if anything we might have felt freer to compromise military concerns in the latter context, since we were confronted with an explicit congressional authorization for judicial involvement that was, on its face, unqualified; whereas here we are confronted with an explicit constitutional authorization for Congress “[t]o make Rules for the Government and Regulation of the land and naval Forces,” U. S. Const., Art. I, § 8, cl. 14, and rely upon inference for our own authority to allow money damages. This is not to say, as Justice Brennan’s dissent characterizes it, post, at 707, that all matters within congressional power are exempt from Bivens. What is distinctive here is the specificity of that technically superfluous grant of power, and the insistence (evident from the number of Clauses devoted to the subject) with which the Constitution confers authority over the Army, Navy, and militia upon the political branches. All this counsels hesitation in our creation of damages remedies in this field.
The othér major factor determining at which point, along the spectrum of generality, one should apply Chappell’s “special factors” analysis consists of the degree of disruption which each of them will in fact produce. This is an analytic rather than a policy judgment —but once again we see no reason why it should differ in the Bivens and the Feres contexts. Stanley underestimates the degree of disruption that would be caused by the rule he proposes. A test for liability that depends on the extent to which particular suits would call into question military discipline and decisionmaking would itself require judicial inquiry into, and hence intrusion upon, military matters. Whether a case implicates those concerns would often be problematic, raising the prospect of compelled depositions and trial testimony by military officers concerning the details of their military commands. Even putting aside the risk of erroneous judicial conclusions (which would becloud military decisionmaking), the mere process of arriving at correct conclusions would disrupt the military regime. The “incident to service” test, by contrast, provides a line that is relatively clear and that can be discerned with less extensive inquiry into military matters.
Contrary to the view of the Court of Appeals, 786 F. 2d, at 1496, it is irrelevant to a “special factors” analysis whether the laws currently on the books afford Stanley, or any other particular serviceman, an “adequate” federal remedy for his injuries. The “special facto[r]” that “counsels] hesitation” is not the fact that Congress has chosen to afford some manner of relief in the particular case, but the fact that congressionally uninvited intrusion into military affairs by the judiciary is inappropriate. Similarly irrelevant is the statement in Chappell, erroneously relied upon by Stanley and the lower courts, that we have “never held, nor do we now hold, that military personnel are barred from all redress in civilian courts for constitutional wrongs suffered in the course of military service.” 462 U. S., at 304. As the citations immediately following that statement suggest, it referred to redress designed to halt or prevent the constitutional violation rather than the award of money damages. See Brown v. Glines, 444 U. S. 348 (1980); Parker v. Levy, 417 U. S. 733 (1974); Frontiero v. Richardson, 411 U. S. 677 (1973). Such suits, like the case of Wilkes v. Dinsman, 7 How. 89 (1849), distinguished in Chappell, 462 U. S., at 305, n. 2, sought traditional forms of relief, and “did not ask the Court to imply a new kind of cause of action.” Ibid.
We therefore reaffirm the reasoning of Chappell that the “special factors counselling hesitation” — “the unique disciplinary structure of the Military Establishment and Congress’ activity in the field,” id., at 304 — extend beyond the situation in which an officer-subordinate relationship exists, and require abstention in the inferring of Bivens actions as extensive as the exception to the FTCA established by Feres and United States v. Johnson. We hold that no Bivens remedy is available for injuries that “arise out of or are in the course of activity incident to service.” 340 U. S., at 146.
Part II of Justice Brennan’s opinion argues in essence that because the refusal to entertain a Bivens action has the same effect as a grant of unqualified immunity, we should find “special factors” sufficient to preclude a Bivens action only when our immunity decisions would absolutely foreclose a money judgment against the defendant officials. The short answer to this argument is that Chappell made no reference to immunity principles, and Bivens itself explicitly distinguished the question of immunity from the question whether the Constitution directly provides the basis for a damages action against individual officers. 403 U. S., at 397. The analytic answer is that the availability of a damages action under the Constitution for particular injuries (those incurred in the course of military service) is a question logically distinct from immunity to such an action on the part of particular defendants. When liability is asserted under a statute, for example, no one would suggest that whether a cause of action exists should be determined by consulting the scope of common-law immunity enjoyed by actors in the area to which the statute pertains. Rather, one applies that immunity (unless the statute says otherwise) to whatever actions and remedies the terms of the statute are found to provide. Similarly, the Bivens inquiry in this case — whether a damages action for injury in the course of military service can be founded directly upon the Constitution — is analytically distinct from the question of official immunity from Bivens liability.
We do not understand Justice Brennan to dispute this. Rather, he argues that the answer to the former inquiry should be such that it produces a result coextensive with the answer to the latter. That is of course quite possible to achieve, since one can adjust the definition of a cause of action to produce precisely the same results as a given definition of immunity. For example, if a State wanted to eliminate driver liability for automobile accidents, it could either prescribe that all automobile drivers are immune from suit for injuries caused by their negligent driving or prescribe that no cause of action exists for injuries caused by negligent driving. But what Justice Brennan fails to produce is any reason for creating such an equivalency in the present case (and, presumably, in all Bivens actions). In the sole case he relies upon for his novel analysis, Davis v. Passman, 442 U. S. 228 (1979), there was a reason. There the Constitution itself contained an applicable immunity provision — the Speech or Debate Clause, Art. I, § 6, cl. 1—which rendered Members of Congress immune from suit for their legislative activity. The Court held that the “special concerns counseling hesitation” in the inference of Bivens actions in that area “are coextensive with the protections afforded by the Speech or Debate Clause.” 442 U. S., at 246. That is to say, the Framers addressed the special concerns in that field through an immunity provision — and had they believed further protection was necessary they would have expanded that immunity provision. It would therefore have distorted their plan to achieve the same effect as more expansive immunity by the device of denying a cause of action for injuries caused by Members of Congress where the constitutionally prescribed immunity does not apply.
Thus, Davis v. Passman would be relevant here if the Constitution contained a grant of immunity to military personnel similar to the Speech or Debate Clause. It does not, of course, and so we are compelled in the military field, as in others, to make our own assessment of whether, given the “special concerns counseling hesitation,” Bivens actions will lie. There is no more reason why court-created rules of immunity (as opposed to immunity specifically prescribed in the Constitution) should be held a priori to describe the limit of those concerns here than in any other field. Thus, the rule Justice Brennan proposes is not an application but a repudiation of the “special factors” limitation upon the inference of Bivens actions. That limitation is quite hollow if it does nothing but duplicate pre-existing immunity from suit.
For the foregoing reasons, we vacate the Court of Appeals’ judgment that Stanley can assert an FTCA claim on remand to the District Court and reverse its judgment refusing to dismiss the Bivens claims against petitioners. The judgment of the Court of Appeals is reversed in part and vacated in part, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
Justice Stevens joins Part I of this opinion.
“When more than one claim for relief is presented..., the court may direct the entry of a final judgment as to one or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment.”
The named defendants are Joseph R. Bertino, M. D.; Board of Regents of the University of | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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5
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NATIONAL LABOR RELATIONS BOARD v. CATHOLIC BISHOP OF CHICAGO et al.
No. 77-752.
Argued October 30, 1978
Decided March 21, 1979
BüRger, C. J., delivered the opinion of the Court, in which Stewart, Powell, Rehnquist, and Stevens, JJ., joined. Brennan, J., filed a dissenting opinion, in which White, Marshall, and Blackmun, JJ., joined, post, p. 508.
Solicitor General McCree argued the cause for petitioner. With him on the briefs were Kenneth S. Getter, John S. Irving, Carl L. Taylor, Norton J. Come, and Carol A. De Deo.
Don H. Reuben argued the cause for respondents. With him on the brief were Lawrence Gunnels, James A. Serritella, James A. Klenk, and Jerome J. O’Dowd.
J. Albert Woll and Laurence Gold filed a brief for the American Federation of Labor and Congress of Industrial Organizations as amicus curiae urging reversal.
Briefs of amici curiae urging affirmance were filed by Leo Pfefjer and Earl W. Trent, Jr., for the Baptist Joint Committee on Public Affairs; by Thomas Stephen Neuberger for the Center for Law and Religious Freedom of the Christian Legal Society; by Warren L. Johns, Walter E. Carson, Lee Boothby, and Robert J. Hickey for the General Conference of Seventh-Day Adventists; and by David Goldberger and Barbara P. O’Toole for the Roger Baldwin Foundation of the American Civil Liberties Union, Inc., Illinois Division.
Briefs of amici curiae were filed by Lawrence A. Poltroch and Bruce E. Endy for the American Federation of Teachers (AFL-CIO); by Sharp Whitmore for certain Catholic High Schools in the Archdiocese of Los Angeles and the Diocese of Orange; and by George E. Reed and Patrick F. Geary for the United States Catholic Conference.
Mb. Chief Justice Burger
delivered the opinion of the Court.
This case arises out of the National Labor Relations Board’s exercise of jurisdiction over lay faculty members at two groups of Catholic high schools. We granted certiorari to consider two questions: (a) Whether teachers in schools operated by a church to teach both religious and secular subjects are within the jurisdiction granted by the National Labor Relations Act; and (b) if the Act authorizes such jurisdiction, does its exercise violate the guarantees of the Religion Clauses of the First Amendment? 434 U. S. 1061 (1978).
I
One group of schools is operated by the Catholic Bishop of Chicago, a corporation sole; the other group is operated by the Diocese of Fort Wayne-South Bend, Inc. The group operated by the Catholic Bishop of Chicago consists of two schools, Quigley North and Quigley South. Those schools are termed “minor seminaries” because of their role in educating high school students who may become priests. At one time, only students who manifested a positive and confirmed desire to be priests were admitted to the Quigley schools. In 1970, the requirement was changed so that students admitted to these schools need not show a definite inclination toward the priesthood. Now the students need only be recommended by their parish priest as having a potential for the priesthood or for Christian leadership. The schools continue to provide special religious instruction not offered in other Catholic secondary schools. The Quigley schools also offer essentially the same college-preparatory curriculum as public secondary schools. Their students participate in a variety of extracurricular activities which include secular as well as religious events. The schools are recognized by the State and accredited by a regional educational organization.
The Diocese of Fort Wayne-South Bend, Inc., has five high schools. Unlike the Quigley schools, the special recommendation of a priest is not a prerequisite for admission. Like the Quigley schools, however, these high schools seek to provide a traditional secular education but oriented to the tenets of the Roman Catholic faith; religious training is also mandatory. These schools are similarly certified by the State.
In 1974 and 1975, separate representation petitions were filed with the Board by interested union organizations for both the Quigley and the Fort Wayne-South Bend schools; representation was sought only for lay teachers. The schools challenged the assertion of jurisdiction on two grounds: (a) that they do not fall within the Board’s discretionary jurisdictional criteria; and (b) that the Religion Clauses of the First Amendment preclude the Board’s jurisdiction. The Board rejected the jurisdictional arguments on the basis of its decision in Roman Catholic Archdiocese of Baltimore, 216 N. L. R. B. 249 (1975). There the Board explained that its policy was to decline jurisdiction over religiously sponsored organizations “only when they are completely religious, not just religiously associated.” Id., at 250. Because neither group of schools was found to fall within the Board’s “completely religious” category, the Board ordered elections. Catholic Bishop of Chicago, 220 N. L. R. B. 359 (1975).
In the Board-supervised election at the Quigley schools, the Quigley Education Alliance, a union affiliated with the Illinois Education Association, prevailed and was certified as the exclusive bargaining representative for 46 lay teachers. In the Diocese of Fort Wayne-South Bend, the Community Alliance for Teachers of Catholic High Schools, a similar union organization, prevailed and was certified as the representative for the approximately 180 lay teachers. Notwithstanding the Board's order, the schools declined to recognize the unions or to bargain. The unions filed unfair labor practice complaints with the Board under §§8 (a)(1) and (5) of the National Labor Relations Act, 49 Stat. 452, as amended, 29 U. S. C. §§ 158 (a) (1) and (5). The schools opposed the General Counsel’s motion for summary judgment, again challenging the Board’s exercise of jurisdiction over religious schools on both statutory and constitutional grounds.
The Board reviewed the record of previous proceedings and concluded that all of the arguments had been raised or could have been raised in those earlier proceedings. Since the arguments had been rejected previously, the Board granted summary judgment, holding that it had properly exercised its statutory discretion in asserting jurisdiction over these schools. The Board concluded that the schools had violated the Act and ordered that they cease their unfair labor practices and that they bargain collectively with the unions. Catholic Bishop of Chicago, 224 N. L. R. B. 1221 (1976); Diocese of Fort Wayne-South Bend, Inc., 224 N. L. R. B. 1226 (1976).
II
The schools challenged the Board’s orders in petitions to the Court of Appeals for the Seventh Circuit. That court denied enforcement of the Board’s orders. 559 F. 2d 1112 (1977). The court considered the Board’s actions in relation to its discretion in choosing to extend its jurisdiction only to religiously affiliated schools that were not “completely religious.” It concluded that the Board had not properly exercised its discretion, because the Board’s distinction between “completely religious” and “merely religiously associated” failed to provide a workable guide for the exercise of discretion:
“We find the standard itself to be a simplistic black or white, purported rule containing no borderline demarcation of where 'completely religious’ takes over or, on the other hand, ceases. In our opinion the dichotomous 'completely religious — merely religiously associated’ standard provides no workable guide to the exercise of discretion. The determination that an institution is so completely a religious entity as to exclude any viable secular components obviously implicates very sensitive questions of faith and tradition. See, e. g., [Wisconsin v.] Yoder,... 406 U. S. 205 [(1972)].” Id., at 1118.
The Court of Appeals recognized that the rejection of the Board’s policy as to church-operated schools meant that the Board would extend its jurisdiction to all church-operated schools. The court therefore turned to the question of whether the Board could exercise that jurisdiction, consistent with constitutional limitations. It concluded that both the Free Exercise Clause and the Establishment Clause of the First Amendment foreclosed the Board’s jurisdiction. It reasoned that from the initial act of certifying a union as the bargaining agent for lay teachers the Board’s action would impinge upon the freedom of church authorities to shape and direct teaching in accord with the requirements of their religion. It analyzed the Board’s action in this way:
“At some point, factual inquiry by courts or agencies into such matters [separating secular from religious training] would almost necessarily raise First Amendment problems. If history demonstrates, as it does, that Roman Catholics founded an alternative school system for essentially religious reasons and continued to maintain them as an 'integral part of the religious mission of the Catholic Church,’ Lemon [v. Kurtzman, 403 U. S. 602], 616 [(1971)], courts and agencies would be hard pressed to take official or judicial notice that these purposes were undermined or eviscerated by the determination to offer such secular subjects as mathematics, physics, chemistry, and English literature.” Ibid.
The court distinguished local regulations which required fire inspections or state laws mandating attendance, reasoning that they did not “have the clear inhibiting potential upon the relationship between teachers and employers with which the present Board order is directly concerned.” Id., at 1124. The court held that interference with management prerogatives, found acceptable in an ordinary commercial setting, was not acceptable in an area protected by the First Amendment. “The real difficulty is found in the chilling aspect that the requirement of bargaining will impose on the exercise of the bishops’ control of the religious mission of the schools.” Ibid.
III
The Board’s assertion of jurisdiction over private schools is, as we noted earlier, a relatively recent development. Indeed, in 1951 the Board indicated that it would not exercise jurisdiction over nonprofit, educational institutions because to do so would not effectuate the purposes of the Act. Trustees of Columbia University in the City of New York, 97 N. L. R. B. 424. In 1970, however, the Board pointed to what it saw as an increased involvement in commerce by educational institutions and concluded that this required a different position on jurisdiction. In Cornell University, 183 N. L. R. B. 329, the Board overruled its Columbia University decision. Cornell University was followed by the assertion of jurisdiction over nonprofit, private secondary schools. Shattuck School, 189 N. L. R. B. 886 (1971). See also Judson School, 209 N. L. R. B. 677 (1974). The Board now asserts jurisdiction over all private, nonprofit, educational institutions with gross annual revenues that meet its jurisdictional requirements whether they are secular or religious. 29 CFR § 103.1 (1978). See, e. g., Academia San Jorge, 234 N. L. R. B. 1181 (1978) (advisory opinion stating that Board would not assert jurisdiction over Catholic educational institution which did not meet jurisdictional standards); Windsor School, Inc., 199 N. L. R. B. 457, 200 N. L. R. B. 991 (1972) (declining jurisdiction where private, proprietary school did not meet jurisdictional amounts).
That broad assertion of jurisdiction has not gone unchallenged. But the Board has rejected the contention that the Religion Clauses of the First Amendment bar the extension of its jurisdiction to church-operated schools. Where the Board has declined to exercise jurisdiction, it has done so only on the grounds of the employer’s minimal impact on commerce. Thus, in Association of Hebrew Teachers of Metropolitan Detroit, 210 N. L. R. B. 1053 (1974), the Board did not assert jurisdiction over the Association which offered courses in Jewish, culture in after-school classes, a nursery-school, and a college. The Board termed the Association an “isolated instance of [an] atypical employer.” Id., at 1058-1059. It explained: “Whether an employer falls within a given ‘class’ of enterprise depends upon those of its activities which are predominant and give the employing enterprise its character.... [T]he fact that an employer’s activity... is dedicated to a sectarian religious purpose is not a sufficient reason for the Board to refrain from asserting jurisdiction.” Id., at 1058. Cf. Board of Jewish Education of Greater Washington, D. C., 210 N. L. R. B. 1037 (1974). In the same year the Board asserted jurisdiction over an Association chartered by the State of New York to operate diocesan high schools. Henry M. Hald High School Assn., 213 N. L. R. B. 415 (1974). It rejected the argument that its assertion of jurisdiction would produce excessive governmental entanglement with religion. In the Board’s view, the Association had chosen to entangle itself with the secular world when it decided to hire lay teachers. Id., at 418 n. 7.
When it ordered an election for the lay professional employees at five parochial high schools in Baltimore in 1975, the Board reiterated its belief that exercise of its jurisdiction is not contrary to the First Amendment:
“[T]he Board’s policy in the past has been to decline jurisdiction over similar institutions only when they are completely religious, not just religiously associated, and the Archdiocese concedes that instruction is not limited to religious subjects. That the Archdiocese seeks to provide an education based on Christian principles does not lead to a contrary conclusion. Most religiously associated institutions seek to operate in conformity with their religious tenets.” Roman Catholic Archdiocese of Baltimore, 216 N. L. R. B., at 250.
The Board also rejected the First Amendment claims in Cardinal Timothy Manning, Roman Catholic Archbishop of the Archdiocese of Los Angeles, 223 N. L. R. B. 1218, 1218 (1976): “Regulation of labor relations does not violate the First Amendment when it involves a minimal intrusion on religious conduct and is necessary to obtain [the Act’s] objective.” (Emphasis added.)
The Board thus recognizes that its assertion of jurisdiction over teachers in religious schools constitutes some degree of intrusion into the administration of the affairs of church-operated schools. Implicit in the Board’s distinction between schools that are “completely religious” and those “religiously associated” is also an acknowledgment of some degree of entanglement. Because that distinction was measured by a school’s involvement with commerce, however, and not by its religious association, it is clear that the Board never envisioned any sort of religious litmus test for determining when to assert jurisdiction. Nevertheless, by expressing its traditional jurisdictional standards in First Amendment terms, the Board has plainly recognized that intrusion into this area could run afoul of the Religion Clauses and hence preclude jurisdiction on constitutional grounds.
IV
That there are constitutional limitations on the Board’s actions has been repeatedly recognized by this Court even while acknowledging the broad scope of the grant of jurisdiction. The First Amendment, of course, is a limitation on the power of Congress. Thus, if we were to conclude that the Act granted the challenged jurisdiction over these teachers we would be required to decide whether that was constitutionally permissible under the Religion Clauses of the First Amendment.
Although the respondents press their claims under the Religion Clauses, the question we consider first is whether Congress intended the Board to have jurisdiction over teachers in church-operated schools. In a number of cases the Court has heeded the essence of Mr. Chief Justice Marshall's admonition in Murray v. The Charming Betsy, 2 Cranch 64, 118 (1804), by holding that an Act of Congress ought not be construed to violate the Constitution if any other possible construction remains available. Moreover, the Court has followed this policy in the interpretation of the Act now before us and related statutes.
In Machinists v. Street, 367 U. S. 740 (1961), for example, the Court considered claims that serious First Amendment questions would arise if the Railway Labor Act were construed to allow compulsory union dues to be used to support political candidates or causes not approved by some members. The Court looked to the language of the Act and the legislative history and concluded that they did not permit union dues to be used for such political purposes, thus avoiding “serious doubt of [the Act’s] constitutionality.” Id., at 749.
Similarly in McCulloch v. Sociedad Nacional de Marineros de Honduras, 372 U. S. 10 (1963), a case involving the Board’s assertion of jurisdiction over foreign seamen, the Court declined to read the National Labor Relations Act so as to give rise to a serious question of separation of powers which in turn would have implicated sensitive issues of the authority of the Executive over relations with foreign nations. The international implications of the case led the Court to describe it as involving “public questions particularly high in the scale of our national interest.” Id., at 17. Because of those questions the Court held that before sanctioning the Board’s exercise of jurisdiction “ 'there must be present the affirmative intention of the Congress clearly expressed.’ ” Id., at 21-22 (quoting Benz v. Compania Naviera Hidalgo, 353 U. S. 138, 147 (1957)).
The values enshrined in the First Amendment plainly rank high “in the scale of our national values.” In keeping with the Court’s prudential policy it is incumbent on us to determine whether the Board’s exercise of its jurisdiction here would give rise to serious constitutional questions. If so, we must first identify “the affirmative intention of the Congress clearly expressed” before concluding that the Act grants jurisdiction.
y
In recent decisions involving aid to parochial schools we have recognized the critical and unique role of the teacher in fulfilling the mission of a church-operated school. What was said of the schools in Lemon v. Kurtzman, 403 U. S. 602, 617 (1971), is true of the schools in this case: “Religious authority necessarily pervades the school system.” The key role played by teachers in such a school system has been the predicate for our conclusions that governmental aid channeled through teachers creates an impermissible risk of excessive governmental entanglement in the affairs of the church-operated schools. For example, in Lemon, supra, at 617, we wrote:
“In terms of potential for involving some aspect of faith or morals in secular subjects, a textbook’s content is ascertainable, but a teacher’s handling of a subject is not. We cannot ignore the danger that a teacher under religious control and discipline poses to the separation of the religious from the purely secular aspects of pre-college education. The conflict of functions inheres in the situation.” (Emphasis added.)
Only recently we again noted the importance of the teacher’s function in a church school: “Whether the subject is'remedial reading,’ 'advanced reading,’ or simply'reading,’ a teacher remains a teacher, and the danger that religious doctrine will become intertwined with secular instruction persists.” Meek v. Pittenger, 421 U. S. 349, 370 (1975). Cf. Wolman v. Walter, 433 U. S. 229, 244 (1977). Good intentions by government — or third parties — can surely no more avoid entanglement with the religious mission of the school in the setting of mandatory collective bargaining than in the well-motivated legislative efforts consented to by the church-operated schools which we found unacceptable in Lemon, Meek, and Wolman.
The Board argues that it can avoid excessive entanglement since it will resolve only factual issues such as whether an anti-union animus motivated an employer’s action. But at this stage of our consideration we are not compelled to determine whether the entanglement is excessive as we would were we considering the constitutional issue. Rather, we make a narrow inquiry whether the exercise of the Board’s jurisdiction presents a significant risk that the First Amendment will be infringed.
Moreover, it is already clear that the Board’s actions will go beyond resolving factual issues. The Court of Appeals’ opinion refers to charges of unfair labor practices filed against religious schools. 559 F. 2d, at 1125, 1126. The court observed that in those cases the schools had responded that their challenged actions were mandated by their religious creeds. The resolution of such charges by the Board, in many instances, will necessarily involve inquiry into the good faith of the position asserted by the clergy-administrators and its relationship to the school’s religious mission. It is not only the conclusions that may be reached by the Board which may impinge on rights guaranteed by the Religion Clauses, but also the very process of inquiry leading to findings and conclusions.
The Board’s exercise of jurisdiction will have at least one other impact on church-operated schools. The Board will be called upon to decide what are “terms and conditions of employment” and therefore mandatory subjects of bargaining. See 29 U. S. C. § 158 (d). Although the Board has not interpreted that phrase as it relates to educational institutions, similar state provisions provide insight into the effect of mandatory bargaining. The Oregon Court of Appeals noted that “nearly everything that goes on in the schools affects teachers and is therefore arguably a ‘condition of employment/ ” Springfield Education Assn. v. Springfield School Dist. No. 19, 24 Ore. App. 751, 759, 547 P. 2d 647, 650 (1976).
The Pennsylvania Supreme Court aptly summarized the effect of mandatory bargaining when it observed that the “introduction of a concept of mandatory collective bargaining, regardless of how narrowly the scope of negotiation is defined, necessarily represents an encroachment upon the former autonomous position of management.” Pennsylvania Labor Relations Board v. State College Area School Dist., 461 Pa. 494, 504, 337 A. 2d 262, 267 (1975). Cf. Clark County School Dist. v. Local Government Employee-Management Relations Board, 90 Nev. 442, 447, 530 P. 2d 114, 117-118 (1974). See M. Lieberman & M. Moskow, Collective Negotiations for Teachers 221-247 (1966). Inevitably the Board’s inquiry will implicate sensitive issues that open the door to conflicts between clergy-administrators and the Board, or conflicts with negotiators for unions. What we said in Lemon, supra, at 616, applies as well here:
“[P]arochial schools involve substantial religious activity and purpose.
“The substantial religious character of these church-related schools gives rise to entangling church-state relationships of the kind the Religion Clauses sought to avoid.” (Footnote omitted.)
Mr. Justice Douglas emphasized this in his concurring opinion in Lemon, noting “the admitted and obvious fact that the raison d’etre of parochial schools is the propagation of a religious faith.” 403 U. S., at 628.
The church-teacher relationship in a church-operated school differs from the employment relationship in a public or other nonreligious school. We see no escape from conflicts flowing from the Board’s exercise of jurisdiction over teachers in church-operated schools and the consequent serious First Amendment questions that would follow. We therefore turn to an examination of the National Labor Relations Act to decide whether it must be read to confer jurisdiction that would in turn require a decision on the constitutional claims raised by respondents.
VI
There is no clear expression of an affirmative intention of Congress that teachers in church-operated schools should be covered by the Act. Admittedly, Congress defined the Board’s jurisdiction in very broad terms; we must therefore examine the legislative history of the Act to determine whether Congress contemplated that the grant of jurisdiction would include teachers in such schools.
In enacting the National Labor Relations Act in 1935; Congress sought to protect the right of American workers to bargain collectively. The concern that was repeated throughout the debates was the need to assure workers the right to organize to counterbalance the collective activities of employers which had been authorized by the National Industrial Recovery Act. But congressional attention focused on employment in private industry and on industrial recovery. See, e. g., 79 Cong. Rec. 7573 (1935) (remarks of Sen. Wagner), 2 National Labor Relations Board, Legislative History of the National Labor Relations Act, 1935, pp. 2341-2343 (1949).
Our examination of the statute and its legislative history indicates that Congress simply gave no consideration to church-operated schools. It is not without significance, however, that the Senate Committee on Education and Labor chose a college professor’s dispute with the college as an example of employer-employee relations not covered by the Act. S. Rep. No. 573, 74th Cong., 1st Sess., 7 (1935), 2 Legislative History, supra, at 2307.
Congress’ next major consideration of the jurisdiction of the Board came during the passage of the Labor Management Relations Act of 1947 — the Taft-Hartley Act. In that Act Congress amended the definition of “employer” in § 2 of the original Act to exclude nonprofit hospitals. 61 Stat. 137, 29 U. S. C. § 152 (2) (1970 ed.). There was some discussion of the scope of the Board’s jurisdiction but the consensus was that nonprofit institutions in general did not fall within the Board’s jurisdiction because they did not affect commerce. See H. R. 3020, 80th Cong., 1st Sess. (1947), 1 National Labor Relations Board, Legislative History of the Labor Management Relations Act, 1947, p. 34 (1948) (hereinafter Leg. Hist.); H. R. Rep. No. 245, 80th Cong., 1st Sess., 12 (1947), 1 Leg. Hist. 303; H. R. Conf. Rep. No. 510, 80th Cong., 1st Sess., 3, 32 (1947), 1 Leg. Hist. 507, 536; 93 Cong. Rec. 4997 (1947), 2 Leg. Hist. 1464 (remarks of Sens. Tydings and Taft).
The most recent significant amendment to the Act was passed in 1974, removing the exemption of nonprofit hospitals. Pub. L. 93-360, 88 Stat. 395. The Board relies upon that amendment as showing that Congress approved the Board’s exercise of jurisdiction over church-operated schools. A close examination of that legislative history, however, reveals nothing to indicate an affirmative intention that such schools be within the Board’s jurisdiction. Since the Board did not assert jurisdiction over teachers in a church-operated school until after the 1974 amendment, nothing in the history of the amendment can be read as reflecting Congress’ tacit approval of the Board’s action.
During the debate there were expressions of concern about the effect of the bill on employees of religious hospitals whose religious beliefs would not permit them to join a union. 120 Cong. Rec. 12946, 16914 (1974), Legislative History of the Coverage of Nonprofit Hospitals under the National Labor Relations Act, 1974, 93d Cong., 2d Sess., 118, 331-332 (1974) (remarks of Sen. Ervin and Rep. Erlenborn). The result of those concerns was an amendment which reflects congressional sensitivity to First Amendment guarantees:
“Any employee of a health care institution who is a member of and adheres to established and traditional tenets or teachings of a bona fide religion, body, or sect which has historically held conscientious objections to joining or financially supporting labor organizations shall not be required to join or financially support any labor organization as a condition of employment; except that such employee may be required, in lieu of periodic dues and initiation fees, to pay sums equal to such dues and initiation fees to a nonreligious charitable fund exempt from taxation under section 501 (c)(3) of title 26, chosen by such employee from a list of at least three such funds, designated in a contract between such institution and a labor organization, or if the contract fails to designate such funds, then to any such fund chosen by the employee.” 29 U. S. C. § 169.
The absence of an “affirmative intention of the Congress clearly expressed” fortifies our conclusion that Congress did not contemplate that the Board would require church-operated schools to grant recognition to unions as bargaining agents for their teachers.
The Board relies heavily upon Associated Press v. NLRB, 301 U. S. 103 (1937). There the Court held that the First Amendment was no bar to the application of the Act to the Associated Press, an organization engaged in collecting information and news throughout the world and distributing it to its members. Perceiving nothing to suggest that application of the Act would infringe First Amendment guarantees of press freedoms, the Court sustained Board jurisdiction. Id., at 131-132. Here, on the contrary, the record affords abundant evidence that the Board’s exercise of jurisdiction over teachers in church-operated schools would implicate the guarantees of the Religion Clauses.
Accordingly, in the absence of a clear expression of Congress’ intent to bring teachers in church-operated schools within the jurisdiction of the Board, we decline to construe the Act in a manner that could in turn call upon the Court to resolve difficult and sensitive questions arising out of the guarantees of the First Amendment Religion Clauses.
Affirmed.
APPENDIX TO OPINION OF THE COURT
Q. [by Hearing Officer] Now, we have had quite a bit of testimony already as to liturgies, and I don’t want to beat a dead horse; but let me ask you one question: If you know, how many liturgies are required at Catholic parochial high schools; do you know?
A. I think our first problem with that would be defining liturgies. That word would have many definitions. Do you want to go into that?
Q. I believe you defined it before, is that correct, when you first testified?
A. I am not sure. Let me try briefly to do it again, okay?
Q. Yes.
A. A liturgy can range anywhere from the strictest sense of the word, which is the sacrifice of the Mass in the Roman Catholic terminology. It can go from that all the way down to a very informal group in what we call shared prayer.
Two or three individuals praying together and reflecting their own reactions to a scriptural reading. All of these — and there is a big spectrum in between those two extremes — all of these are popularly referred to as liturgies.
Q. I see.
A. Now, possibly in repeating your question, you could give me an idea of that spectrum, I could respond more accurately.
Q. Well, let us stick with the formal Masses. If you know, how many Masses are required at Catholic parochial high schools?
A. Some have none, none required. Some would have two or three during the year where what we call Holy Days of Obligation coincide with school days. Some schools on those days prefer to have a Mass within the school day so the students attend there, rather than their parish churches. Some schools feel | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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81
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FUSARI, COMMISSIONER OF LABOR v. STEINBERG et al.
No. 73-848.
Argued October 15-16, 1974
Decided January 14, 1975
Powell, J., delivered the opinion for a unanimous Court. Burger, C. J., filed a concurring opinion, post, p. 390. •
Donald E. Wasik, Assistant Attorney General of Connecticut, argued the cause for appellant. With him on the brief was Robert K. Killian, Attorney General.
John M. Creane, by appointment of the Court, post, p. 990, argued the cause for appellees. With him on the brief were Raymond J. Kelly and John A. Dziamba
Dennis R. Yeager, E. Richard Larson, Stephen M. Randels, John M. Levy, Jerry L. Covington, Marttie Louis Thompson, Stephen E. Gottlieb, C. Christopher Brown, and C. Lyonel Jones filed a brief for the National Employment Law Project, Inc., et al. as amici curiae urging affirmance.
Stephen P. Berzon, Stefan M. Rosenzweig, J. Albert Woll, and Bernard Kleiman filed a brief for Ellenmae Crow et al. as amici curiae.
Mr. Justice Powell
delivered the opinion of the Court.
This case comes to us on appeal from a three-judge District Court determination that the Connecticut “seated interview” procedures for assessing continuing eligibility for unemployment compensation benefits violate the Due Process Clause of the Fourteenth Amendment. 364 F. Supp. 922 (Conn. 1973). Our independent examination of Connecticut law reveals that the State significantly revised its unemployment compensation system following the District Court’s decision. Some of the amendments are designed to ameliorate problems that the court identified. In these circumstances, we think it inappropriate to decide the issues tendered by the parties. We therefore vacate the decision of the District Court and remand for reconsideration in fight of the intervening changes in Connecticut law.
I
In Connecticut, unemployment compensation benefits are paid from a trust fund maintained by employer contributions. Appellant Fusari, State Commissioner of Labor and Administrator of the Unemployment Compensation Act, administers the fund.. Under the Connecticut statute, a claimant first must file an initiating claim and establish his general entitlement to receive state unemployment compensation benefits. Conn. Gen. Stat. Rev: §§ 31-230 and 31-235 (1973). Thereafter, the claimant must report to the local unemployment compensation office biweekly and demonstrate continued eligibility for benefits for the preceding two-week period. The claimant must submit forms swearing to his availability for work and to his reasonable efforts to obtain employment during the period in question. He also must submit a form listing the persons to whom he has applied for employment during the preceding two weeks.
Upon receipt of the forms, the paying official may make routine inquiries. If no serious question of eligibility arises, immediate payment is made. If, however, the forms or responses to questions raise suspicion of possible disqualification, the claimant is directed to a “seated interview” with a factfinding examiner for a more thorough inquiry into the possible factors that might render him ineligible for benefits. Although the claimant bears the burden of establishing eligibility, Northrup v. Administrator, 148 Conn. 475, 480, 172 A. 2d 390, 393 (1961); Waskiewicz v. Egan, 15 Conn. Supp. 286, 287 (1947), doubtful cases are to be decided in his favor. Conn. Gen. Stat. Rev. | 31-274 (c).
An examiner’s favorable determination of eligibility results in immediate payment of benefits. If, however, the examiner concludes that the claimant is ineligible, no payment is made. Within a few days the claimant receives a written statement indicating the reasons for disqualification and notifying him of the right to appeal. Benefits for the period in question normally are withheld pending resolution of the administrative appeal. The State’s policy, sometimes honored in the breach, is that pendency of an appeal does not affect the claimant’s eligibility to receive benefits for subsequent periods.
This, appeal arises from a class action challenging the legality of the procedures used for determining continued eligibility for benefits. Appellees asserted that Connecticut violated the federal statutory requirement that state procedures be designed reasonably to assure the payment of benefits “when due/’ 42 U. S. C. § 503 and also that the Connecticut seated-interview procedures were constitutionally defective in failing to provide a pretermination hearing satisfying the standards of Goldberg v. Kelly, 397 U. S. 254 (1970). At appellees’ request, a three-judge court was convened to hear the matter.
The District Court’s findings of fact provide some indication of the actual operation of the Connecticut system. The findings reveal that the reversal rate of appealed denials of benefits was significant, ranging from 19.4% to 26.1% during the periods surveyed. The District Court also found that a significant delay was required for obtaining administrative review of the examiner’s determination: 89.9% of the 461 intrastate appeals filed in the month of December 1972 required more than 100 days to resolve. The average delay during that period exceeded 126 days. Moreover, the court determined that the December 1972 figures probably were typical of the delays that might be encountered in other time periods.
The District Court expressed serious reservations whether the Connecticut system satisfied the “when due” requirement of federal law. It felt foreclosed from so ruling on this statutory issue, however, by this Court’s summary affirmance in Torres v. New York State Dept. of Labor, 405 U. S. 949 (1972). The District Court concluded that Torres was distinguishable on the constitutional issue, and held that the Connecticut procedures violated due process “because (a) a property interest has been denied (b) at an inadequate hearing (c) that is not reviewable de novo until an unreasonable length of time.” 364 F. Supp., at 937-938. After suggesting a number of alterations of the state system that might raise its operation to a constitutionally adequate level, the court enjoined appellant from denying unemployment benefits under then-existing procedures without first providing a constitutionally sufficient prior hearing. Id., at 938. At appellant’s request, the District Court stayed its injunction pending resolution of an appeal to this Court. We subsequently noted probable jurisdiction. 415 U. S. 912 (1974).
II
Following our notation of probable jurisdiction, the Connecticut Legislature enacted major revisions of the procedures by which unemployment compensation claims are determined. Conn. Pub. Act 74-339 (1974). Section 31-241, one of the sections under consideration in this appeal, was amended to require that examiners only consider evidence presented in person or in writing at a hearing provided for that purpose. Id., § 14, amending Conn. Gen. Stat. Rev. § 31-241. The legislature also completely altered the structure of the Connecticut system of administrative review, substituting a two-tiered Employment Security Appeals Division for the Unemployment Compensation Commission. Conn. Pub. Act 74^-339, supra, §§ 1-12.
The amended statute provides for the creation of a staff of referees to review the examiners’ decisions de novo. § 15. Referees are to be appointed by an Employment Security Board of Review, § 9, the three members of which are appointed by the Governor. § 3. The statute further provides that the referee section “shall consist of such referees as the board deems necessary for the prompt processing of appeals hearings and decisions and for the performance of the duties imposed by this act.” § 9. Appeals from the referees’ decisions are to be taken to the Employment Security Board of Review and thereafter to the state courts. §§15 and 21, amending Conn. Gen. Stat. Rev. §§ 31-242 and 31-248, and new § 25 added by the 1974 amendments.
The legislative history indicates that the Connecticut Legislature anticipated that these amendments would have a significant impact on the speed and fairness of the resolution of contested claims. Legislators repeatedly characterized the amendments as a “true reform” of important consequence. See Conn. S. Proc. 2578, 2624, 2629 (May 7, 1974). Particular emphasis was placed on the need to improve the State’s treatment of administrative appeals. It was recognized that Connecticut’s torpid system of administrative appeal was markedly inferior to those used in other States. Id., at 2578, 2621; Conn. H. Proc. 5133-5135, 5152 (May 2, 1974). Revision of the appellate system was designed to remedy that problem. In the words of one member of the House: “The bill . . . sets up a unique system which is designed to cut down that [appellate] backlog.” Id., at 5152.
Ill
.The amendments to the Connecticut statute, which became effective on July 1, 1974, Conn. Pub. Act 74-339, § 36 (1974), may alter significantly the character of the system considered by the District Court. Although the precise significance of the amendment to § 31-241 is unclear, the court’s concern for the absence of a right of confrontation, 364 F. Supp., at 935, may be diminished by the requirement that examiners base their decisions only on evidence submitted in person or in writing. Perhaps of greater importance is the revision of the State’s system of administrative appeal. Both in distinguishing Torres and in determining that the Connecticut system failed to satisfy the minimal requirements of procedural due process, the District Court placed substantial reliance on the length of time required to obtain administrative review of the examiner’s decision. The amendments to Connecticut law are designed to remedy this problem.
This Court must review the District Court’s judgment in light of presently existing Connecticut law, not the law in effect at the time that judgment was rendered. Diffenderfer v. Central Baptist Church, 404 U. S. 412, 414 (1972); Hall v. Beals, 396 U. S. 45, 48 (1969); United States v. Alabama, 362 U. S. 602, 604 (1960). We are unable meaningfully to assess the issues in this appeal on the present record.
Both the statutory and constitutional questions are significantly affected by the length of the period of deprivation of benefits. The basic thrust of the statutory “when due” requirement is timeliness. See California Human Resources Dept. v. Java, 402 U. S. 121, 130-133 (1971). While we can determine on this record that Connecticut’s previous system often failed to deliver benefits in a timely manner, we can only speculate how the new system might operate. And, assuming that the federal statutory requirements were satisfied, it would prove equally difficult to assess the question of procedural due process.
Identification of the precise dictates of due process requires consideration of both the governmental function involved and the private interests affected by official action. Cafeteria Workers v. McElroy, 367 U. S. 886, 895 (1961); Goldberg v. Kelly, 397 U. S., at 263-266. As the Court recognized in Boddie v. Connecticut, 401 U. S. 371, 378 (1971): “The formality and procedural requisites for [a due process] hearing can vary, depending upon the importance of the interests involved and the nature of the subsequent proceedings.” In this context, the possible length of wrongful deprivation of unemployment benefits is an important factor in assessing the impact of official action on the private interests. Cf. Arnett v. Kennedy, 416 U. S. 134, 168-169 (1974) (opinion of Powell, J.); id., at 190, 192 (White, J., concurring in part and dissenting in part). Prompt and adequate administrative review provides an opportunity for consideration and correction of errors made in initial eligibility determinations. Thus, the rapidity of administrative review is a significant factor in assessing the sufficiency of the entire process. The record, of course, provides no indication of the promptness and adequacy of review under the new system. We are unable, therefore, to decide this appeal on its merits.
The judgment of the District Court is vacated, and the case remanded for reconsideration in light of the intervening changes in Connecticut law.
It is so ordered.
Prior to the 1974 amendments, the Administrator could authorize payment of benefits during pendency of an administrative appeal if "good cause” was shown. Conn. Gen. Stat. Rev. § 31-241. The record provides no indication of the frequency of such authorizations. One of the 1974 amendments requires that benefits be paid in accordance with the Administrator’s determination, regardless of the filing of an appeal. The amendment removes the Administrator’s specific authority to award benefits during appeal for “good cause shown.” See Conn. Pub. Act 74-339, §14 (1974). We cannot determine whether this amendment was intended to deprive the Administrator of the power to award benefits for cause following an adverse ruling of eligibility.
The stipulation of facts indicates only that some claimants subsequently were denied benefits because they had appeals pending. App. 39a. It does not reveal the frequency of this occurrence.
Each of the named plaintiffs had filed a valid initiating claim and received benefits for a period of time. Each subsequently was denied benefits following a seated interview in which the examiner concluded that he or she had made insufficient efforts to obtain employment. The District Court defined the class to be all present and future unemployment benefit recipients whose benefits were or would be subject to termination without a prior hearing, excepting those persons whose benefits terminate due to exhaustion of entitlement. 364 F. Supp. 922, 927-928.
The “when due” requirement is one of a number of conditions imposed on state receipt of. federal assistance. The Federal Government plays a cooperative role in the implementation of state unemployment compensation programs, bearing the costs of administration of those programs that satisfy federal requirements. On determining that state laws and practices satisfy the standards of § 303 of the Social Security Act, 49 Stat. 626, as amended, 42 U. S. C. § 503, the Secretary of Labor must certify that the State should receive the amount that he considers necessary for the proper and efficient administration of such law during the fiscal year in which payment is made. § 502 (a).
In addition to imposing restrictions om-the fiscal administration of state unemployment compensation funds, § 303 establishes specific procedural safeguards for benefit claimants. 42 U. S. C. §§ 503 (a) (1) and (a)(3). It provides:
“(a) The Secretary of Labor shall make no certification for payment to any State unless he finds that the law of such State, approved by the Secretary of Labor under the Federal Unemployment Tax Act, includes provision for—
"(1) Such methods of administration (including after January!, 1940, methods relating to the establishment and maintenance of personnel standards on a merit basis, except that the Secretary of Labor shall exercise no authority with respect to the selection, tenure of office, and compensation of any individual employed in accordance with such methods) as are found by the Secretary of Labor to be reasonably calculated to insure full payment of unemployment compensation when due;
“(3) Opportunity for a fair hearing, before an impartial tribunal, for all individuals whose claims for unemployment compensation are denied.” (Emphasis added.)
The action was brought pursuant to 42 U. S. C. § 1983 and 28 U. S. C. §§2201 and 2202. Jurisdiction was alleged under 28 U. S. C. § 1343. This Court’s jurisdiction rests on 28 U. S. C. § 1253.
During the period July 1971 to June 1972, there were 6,534 appealed denials, of which 26.1% were reversed. The reversal rate for July to October 1972 remained at approximately 26%, but fell to 19.4% during the three-month period from January to March 1973. 364 F. Supp., at 936-937, n. 28. The director of the Waterbury office testified that the reversal rate had fallen to 18.8% by May 1973. See App. 215a.
A more complete assessment of the operation of the Connecticut system might be obtained by attempting to determine the overall error rate for all denials of benefits. The District Court made no finding on this point.
The State of Connecticut has entered into reciprocal agreements with other States, enabling claimants who have moved into Connecticut to rely on wage credits earned elsewhere. Appeals of denials of interstate claims often require transfer of information from the reciprocating State and thus consume a greater period of time.
In 1973, the Connecticut administrative appellate procedure was the slowest in the Nation. Statistics reveal that during that calendar year the Commission decided only 5.3% of the appeals within 30 days. During that same period the Commission decided only 15.5% of appeals within 45 days and resolved appeals within 75 days of filing in only 31.4% of the cases. See Unemployment Insurance Statistics, Table 17B — Appeals Decisions Under State Programs, Time Lapse Between Date of Filing Appeal and Date of Decisions, January-December 1973. U. S. Dept. of Labor, Manpower Administration (March-April 1974).
The record available to us suggests that the Department of Labor wds instrumental in encouraging reform. See Conn. H. Proc. 5132, 5151 (May 2, 1974). That re.cord is silent as to whether the District Court’s decision or this Court’s notation of jurisdiction provided additional encouragement.
As noted by the District Court, factfinding examiners often telephoned employers to obtain evidence relating to the validity of benefit claims. 364 F. Supp., at 925. The amendment appears designed to eliminate that practice.
Under Connecticut’s prior system, the Commissioners who decided appeals were appointed by the Governor. See Conn. Gen. Stat. Rev. § 31-238. The legislative debates indicate that they held other employment and served only on a part-time basis. See Conn. S. Proc. 2630; Conn. H. Proc. 5152. In revising the Connecticut system, the legislators expressed a desire to insulate the referee system from the influences of partisan politics. Conn. S. Proc. 2629; Conn. H. Proc. 5153-5154. The revised Connecticut system provides that referees must be members of the State’s civil service, Conn. Pub. Act 74-339, § 9 (1974), and the history of the amendments clearly indicates that the referees’ commitment to the processing of appeals will be full time. Conn. S. Proc. 2628, 2630; Conn. H. Proc. 5142, 5147.
Our determination of the existence and significance of Connecticut’s amendments to its unemployment compensation act was largely unassisted by counsel. Indeed, initial examination of the briefs and consideration of oral argument led us to believe that the system considered by the District Court remained substantially intact. We find it difficult to understand the failure of counsel fully to inform the Court of these amendments to Connecticut law.
The District Court ruled that our summary affirmance in Torres v. New York State Department of Labor, 405 U. S. 949 (1972), precluded any determination that the Connecticut system failed to satisfy the federal “when due” requirement. Appellees did not cross-appeal to question that ruling, and appellant maintains that the issue is not before the Court. We observed in United States v. Raines, 362 U. S. 17, 27 n. 7 (1960), that an appeal under 28 U. S. C. § 1252 brings the “whole case” before the Court. Thus, issues that might provide alternative grounds for support of the District Court judgment can be considered by this Court even though not specifically presented by cross-appeal. The same principle governs appeals brought under 28 U. S. C. § 1253. We therefore have jurisdiction to decide the point, and we would feel compelled to re-examine a statutory claim that may be dispositive before considering a difficult constitutional issue. See Rosado v. Wyman, 397 U. S. 397, 402 (1970); Harmon v. Brucker, 355 U. S. 579, 581 (1958).
See n. 4, supra.
The District Court interpreted our summary affirmance in Torres to indicate that benefits are not “due” under §303 until administratively deemed payable. 364 F. Supp., at 930. While this is a plausible reading of the evolution and affirmance of Torres, it is not one that we can endorse. Such a definition of the “when due” requirement of federal law would leave little vitality to Java and would nullify the congressional intention of requiring prompt administrative provision of unemployment benefits. See 402 U. S., at 130-133. By reading our summary affirmance in Torres at its broadest, the District Court heightened the tension between that judgment and our more considered disposition of Java. A narrower interpretation of Torres would have been appropriate.
Any statutory requirement that embodies notions of timeliness, accuracy, and administrative feasibility inevitably will generate fact-specific applications. In this instance, many of the factual distinctions that the District Court relied on to distinguish Torres on the constitutional issue apply equally to the “when due” question. For example, the delay in resolving administrative appeals is considerably greater in Connecticut than in the New York system, where administrative appeals were, resolved in an average of 45 days. See Torres v. New York State Dept. of Labor, 321 F. Supp. 432, 439 (SDNY 1971). And, as the District Court observed, the Torres court apparently did not consider the probable accuracy of the challenged procedure in determining whether it adequately assured delivery of benefits “when due.” See 364 F. Supp., at 936. We do not undertake to identify the combination of factors that justify the Torres decision. Having once decided the case summarily, we decline to do so again. We only indicate that the District Court should not have felt precluded from undertaking a more precise analysis of the statutory issue than it felt empowered to do in this case. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
116
] | sc_adminaction |
LAIRD, SECRETARY OF DEFENSE, et al. v. TATUM et al.
No. 71-288.
Argued March 27, 1972
Decided June 26, 1972
Burger, C. J., delivered the opinion of the Court, in which White, BlacicmuN, Powell, and RehNQUist, JJ., joined. Douglas, J., filed a dissenting opinion in which Marshall, J., joined, post, p. 16. BrenNAN, J., filed a dissenting opinion in which Stewart and Marshall, JJ., joined, post, p. 38.
Solicitor General Griswold argued the cause for petitioners. With him on the briefs were Assistant Attorney General Mardian and Robert L. Keuch.
Frank Askin argued the cause for respondents. With him on the brief was Melvin L. Wulf. ■
Sam J. Ervin, Jr., argued the cause for the Unitarian Universalist Assn, et al. as amici curiae urging affirmance. With him on the brief was Lawrence M. Baskir.
Burke Marshall and Arthur R. Miller filed a brief for a Group of Former Army Intelligence Agents as amici curiae urging affirmance.
Me. Chief Justice Buegee
delivered the opinion of the Court.
Respondents brought this class action in the District Court seeking declaratory and injunctive relief on their claim that their rights were being invaded by the Department of the Army's alleged “surveillance of lawful and peaceful civilian political activity.” The petitioners in response described the activity as “gathering by lawful means . . . [and] maintaining and using in their intelligence activities . . . information relating to potential or actual civil disturbances [or] street demonstrations.” In connection with respondents’ motion for a preliminary injunction and petitioners’ motion to dismiss the complaint, both parties filed a number of affidavits with the District Court and presented their oral arguments at a hearing on the two motions. On the basis of the pleadings, the affidavits before the court, and the oral arguments advanced at the hearing, the District Court granted petitioners’ motion to dismiss, holding that there was no justiciable claim for relief.
On appeal, a divided Court of Appeals reversed and ordered the case remanded for further proceedings. We granted certiorari to consider whether, as the Court of Appeals held, respondents presented a justiciable controversy in complaining of a “chilling” effect on the exercise of their First Amendment rights where such effect is allegedly caused, not by any “specific action of the Army against them, [but] only [by] the existence and operation of the intelligence gathering and distributing system, which is confined to the Army and related civilian investigative agencies.” 144 U. S. App. D. C. 72, 78, 444 F. 2d 947, 953. We reverse.
(1)
There is in the record a considerable amount of background information regarding the activities of which respondents complained; this information is set out primarily in the affidavits that were filed by the parties in connection with the District Court’s consideration of respondents’ motion for a preliminary injunction and petitioners’ motion to dismiss. See Fed. Rule Civ. Proc. 12(b). A brief review of that information is helpful to an understanding of the issues.
The President is authorized by 10 U. S. C. § 331 to make use of the armed forces to quell insurrection and other domestic violence if and when the conditions described in that section obtain within one of the States. Pursuant to those provisions, President Johnson ordered federal troops to assist local authorities at the time of the civil disorders in Detroit, Michigan, in the summer of 1967 and during the disturbances that followed the assassination of Dr. Martin Luther King. Prior to the Detroit disorders, the Army had a general contingency plan for providing such assistance to local authorities, but the 1967 experience led Army authorities to believe that more attention should be given to such preparatory planning. The data-gathering system here involved is said to have been established in'connection with the development of more detailed and specific contingency planning designed to permit the Army, when called upon to assist local authorities, to be able to respond effectively with a minimum of force. As the Court of Appeals observed,
“In performing this type function the Army is essentially a police force or the back-up of a local police force. To quell disturbances or to prevent further disturbances the Army needs the same tools and, most importantly, the same information to which local police forces have access. Since the Army is sent into territory almost invariably unfamiliar to most soldiers and their commanders, their need for information is likely to be greater than that of the hometown policeman.
“No logical argument can be made for compelling the military to use blind force. When force is employed it should be intelligently directed, and this depends upon having reliable information — in time. As Chief Justice John Marshall said of Washington, 'A general must be governed by his intelligence and must regulate his measures by his information. It is his duty to obtain correct information . . . .’ So we take it as undeniable that the military, i. e., the Army, need a certain amount of information in order to perform their constitutional and statutory missions.” 144 U. S. App. D. C., at 77-78, 444 F. 2d, at 952-953 (footnotes omitted).
The system put into operation as a result of the Army’s 1967 experience consisted essentially of the collection of information about public activities that were thought to have at least some potential for civil disorder, the reporting of that information to Army Intelligence headquarters at Fort Holabird, Maryland, the dissemination of these reports from headquarters to major Army posts around the country, and the storage of the reported information in a computer data bank located at Fort Holabird. The information itself was collected by a variety of means, but it is significant that the principal sources of information were the news media and publications in general circulation. Some of the information came from Army Intelligence agents who attended meetings that were open to the public and who wrote field reports describing the meetings, giving such data as the name of the sponsoring organization, the identity of speakers, the approximate number of persons in attendance, and an indication of whether any disorder occurred. And still other information was provided to the Army by civilian law enforcement agencies.
The material filed by the Government in the District Court reveals that Army Intelligence has field offices in various parts of the country; these offices are staffed in the aggregate with approximately 1,000 agents, 94% of whose time is devoted to the organization’s principal mission, which is unrelated to the domestic surveillance system here involved.
By early 1970 Congress became concerned with the scope of the Army’s domestic surveillance system; hearings on the matter were held before the Subcommittee on Constitutional Rights of the Senate Committee on the Judiciary. Meanwhile, the Army, in the course of a review of the system, ordered a significant reduction in its scope. For example, information referred to in the complaint as the “blacklist” and the records in the computer data bank at Fort Holabird were found unnecessary and were destroyed, along with other related records. One copy of all the material relevant to the instant suit was retained, however, because of the pend-ency of this litigation. The review leading to the destruction of these records was said at the time the District Court ruled on petitioners’ motion to dismiss to be a “continuing” one (App. 82), and the Army’s policies at that time were represented as follows in a letter from the Under Secretary of the Army to Senator Sam J. Ervin, Chairman of the Senate Subcommittee on Constitutional Rights:
“[R]eports concerning civil disturbances will be limited to matters of immediate concern to the Army- — that is, reports concerning outbreaks of violence or incidents with a high potential for violence beyond the capability of state and local police and the National Guard to control. These reports will be collected by liaison with other Government agencies and reported by teletype to the Intelligence Command. They will not be placed in a computer .... These reports are destroyed 60 days after publication or 60 days after the end of the disturbance. This limited reporting system will ensure that the Army is prepared to respond to whatever directions the President may issue in civil disturbance situations and without 'watching’ the lawful activities of civilians.” (App. 80.)
In briefs for petitioners filed with this Court, the Solicitor General has called our attention to certain directives issued by the Army and the Department of Defense subsequent to the District Court’s dismissal of the action; these directives indicate that the Army’s review of the needs of its domestic intelligence activities has indeed been a continuing one and that those activities have since been significantly reduced.
(2)
The District Court held a combined hearing on respondents’ motion for a preliminary injunction and petitioners’ motion for dismissal and thereafter announced its holding that respondents had failed to state a claim upon which relief could be granted. It was the view of the District Court that respondents failed to allege any action on the part of the Army that was unlawful in itself and further failed to allege any injury or any realistic threats to their rights growing out of the Army’s actions.
In reversing, the Court of Appeals noted that respondents “have some difficulty in establishing visible injury”:
“[They] freely admit that they complain of no specific action of the Army against them .... There is no evidence of illegal or unlawful surveillance activities. We are not cited to any clandestine intrusion by a military agent. So far as is yet shown, the information gathered is nothing more than a good newspaper reporter would be able to gather by attendance at public meetings and the clipping of articles from publications available on any newsstand.” 144 U. S. App. D. C., at 78, 444 F. 2d, at 953.
The court took note of petitioners’ argument “that nothing [detrimental to respondents] has been done, that nothing is contemplated to be done, and even if some action by the Army against [respondents] were possibly foreseeable, such would not present a presently justiciable controversy.” With respect to this argument, the Court of Appeals had this to say:
“This position of the [petitioners] does not accord full measure to the rather unique argument advanced by appellants [respondents]. While [respondents] do indeed argue that in the future it is possible that information relating to matters far beyond the responsibilities of the military may be misused by the military to the detriment of these civilian [respondents], yet [respondents] do not attempt to establish this as a definitely foreseeable event, or to base their complaint on this ground. Rather, [respondents] contend that the present existence of this system of gathering and distributing information, allegedly far beyond the mission requirements of the Army, constitutes an impermissible burden on [respondents] and other persons similarly situated which exercises a present inhibiting effect on their full expression and utilization of their First Amendment rights . . . Id., at 79, 444 F. 2d, at 954. (Emphasis in original.)
Our examination of the record satisfies us that the Court of Appeals properly identified the issue presented, namely, whether the jurisdiction of a federal court may be invoked by a complainant who alleges that the exercise of his First Amendment rights is being chilled by the mere existence, without more, of a governmental investigative and data-gathering activity that is alleged to be broader in scope than is reasonably necessary for the accomplishment of a valid governmental purpose. We conclude, however, that, having properly identified the issue, the Court of Appeals decided that issue incorrectly.
In recent years this Court has found in a number of cases that constitutional violations may arise from the deterrent, or “chilling,” effect of governmental regulations that fall short of a direct prohibition against the exercise of First Amendment rights. E. g., Baird v. State Bar of Arizona, 401 U. S. 1 (1971); Keyishian v. Board of Regents, 385 U. S. 589 (1967); Lamont v. Postmaster General, 381 U. S. 301 (1965); Baggett v. Bullitt, 377 U. S. 360 (1964). In none of these cases, however, did the chilling effect arise merely from the individual’s knowledge that a governmental agency was engaged in certain activities or from the individual’s concomitant fear that, armed with the fruits of those activities, the agency might in the future take some other and additional action detrimental to that individual. Rather, in each of these cases, the challenged exercise of governmental power was regulatory, proscriptive, or compulsory in nature, and the complainant was either presently or prospectively subject to the regulations, proscriptions, or compulsions that he was challenging.
For example, the petitioner in Baird v. State Bar of Arizona had been denied admission to the bar solely because of her refusal to answer a question regarding the organizations with which she had been associated in the past. In announcing the judgment of the Court, Mr. Justice Black said that "a State may not inquire about a man’s views or associations solely for the purpose of withholding a right or benefit because of what he believes.” 401 U. S., at 7. Some of the teachers who were the complainants in Keyishian v. Board of Regents had been discharged from employment by the State, and the others were threatened with such discharge, because of their political acts or associations. The Court concluded that the State’s “complicated and intricate scheme” of laws and regulations relating to teacher loyalty could not withstand constitutional scrutiny; it was not permissible to inhibit First Amendment expression by forcing a teacher to “guess what conduct or utterance” might be in violation of that complex regulatory scheme and might thereby “lose him his position.” 385 U. S., at 604. Lamont v. Postmaster General dealt with a governmental regulation requiring private individuals to make a special written request to the Post Office for delivery of each individual mailing of certain kinds of political literature addressed to them. In declaring the regulation invalid, the Court said: “The addressee carries an affirmative obligation which we do not think the Government may impose on him.” 381 U. S., at 307. Baggett v. Bullitt dealt with a requirement that an oath of vague and uncertain meaning be taken as a condition of employment by a governmental agency. The Court said: “Those with a conscientious regard for what they solemnly swear or affirm, sensitive to the perils posed by the oath’s indefinite language, avoid the risk of loss of employment, and perhaps profession, only by restricting their conduct to that which is unquestionably safe. Free speech may not be so inhibited.” 377 U. S., at 372.
The decisions in these cases fully recognize that governmental action may be subject to constitutional challenge even though it has only an indirect effect on the exercise of First Amendment rights. At the same time, however, these decisions have in no way eroded the
“established principle that to entitle a private individual to invoke the judicial power to determine the validity of executive or legislative action he must show that he has sustained or is immediately in danger of sustaining a direct injury as the result of that action . . . Ex parte Levitt, 302 U. S. 633, 634 (1937).
The respondents do not meet this test; their claim, simply stated, is that they disagree with the judgments made by the Executive Branch with respect to the type and amount of information the Army needs and that the very existence of the Army’s data-gathering system produces a constitutionally impermissible chilling effect upon the exercise of their First Amendment rights. That alleged “chilling” effect may perhaps be seen as arising from respondents’ very perception of the system as inappropriate to the Army’s role under our form of government, or as arising from respondents’ beliefs that it is inherently dangerous for the military to be concerned with activities in the civilian sector, or as arising from respondents’ less generalized yet speculative apprehensiveness that the Army may at some future date misuse the information in some way that would cause direct harm to respondents. Allegations of a subjective “chill” are not an adequate substitute for a claim of specific present objective harm or a threat of specific future harm; “the federal courts established pursuant to Article III of the Constitution do not render advisory opinions.” United Public Workers v. Mitchell, 330 U. S. 75, 89 (1947).
Stripped to its essentials, what respondents appear to be seeking is a broad-scale investigation, conducted by themselves as private parties armed with the subpoena power of a federal district court and the power of cross-examination, to probe into the Army's intelligence-gathering activities, with the district court determining at the conclusion of that investigation the extent to which those activities may or may not be appropriate to the Army’s mission. The following excerpt from the opinion of the Court of Appeals suggests the broad sweep implicit in its holding:
“Apparently in the judgment of the civilian head of the Army not everything being done in the operation of this intelligence system was necessary to the performance of the military mission. If the Secretary of the Army can formulate and implement such judgment based on facts within his De partmental knowledge, the United States District Court can hear evidence, ascertain the facts, and decide what, if any, further restrictions on the complained-of activities are called for to confine the military to their legitimate sphere of activity and to protect [respondents’] allegedly infringed constitutional rights.” 144 U. S. App. D. C., at 83, 444 F. 2d, at 958. (Emphasis added.)
Carried to its logical end, this approach would have the federal courts as virtually continuing monitors of the wisdom and soundness of Executive action; such a role is appropriate for the Congress acting through its committees and the “power of the purse”; it is not the role of the judiciary, absent actual present or immediately threatened injury resulting from unlawful governmental action.
We, of course, intimate no view with respect to the propriety or desirability, from a policy standpoint, of the challenged activities of the Department of the Army; our conclusion is a narrow one, namely, that on this record the respondents have not presented a case for resolution by the courts.
The concerns of the Executive and Legislative Branches in response to disclosure of the Army surveillance activities — and indeed the claims alleged in the complaint— reflect a traditional and strong resistance of Americans to any military intrusion into civilian affairs. That tradition has deep roots in our history and found early expression, for example, in the Third Amendment’s explicit prohibition against quartering soldiers in private homes without consent and in the constitutional provisions for civilian control of the military. Those prohibitions are not directly presented by this case, but their philosophical underpinnings explain our traditional insistence on limitations on military operations in peacetime. Indeed, when presented with claims of judicially cognizable injury resulting from military intrusion into the civilian sector, federal courts are fully empowered to consider claims of those asserting such injury; there is nothing in our Nation's history or in this Court’s decided cases, including our holding today, that can properly be seen as giving any indication that actual or threatened injury by reason of unlawful activities of the military would go unnoticed or unremedied.
Reversed.
The complaint filed in. the District Court, candidly asserted that its factual allegations were based on a magazine article: “The information contained in the foregoing paragraphs numbered five through thirteen [of the complaint] was published in the January 1970 issue of the magazine The Washington Monthly
"Whenever there is an insurrection in any State against its government, the President may, upon the request of its legislature or of its governor if the legislature cannot be convened, call into Federal service such of the militia of the other States, in the number requested by that State, and use such of the armed forces, as he considers necessary to suppress the insurrection.”
The constitutionality of this statute is not at issue here; the specific authorization of such use of federal armed forces, in addition to state militia, appears to have been enacted pursuant to Art. IV, § 4, of the Constitution, which provides that “[t]he United States . . . shall protect each of [the individual States] ... on Application of the Legislature, or of the Executive (when the Legislature cannot be convened) against domestic Violence.”
In describing the requirement of 10 U. S. C. § 331 for the use of federal troops to quell domestic disorders, Attorney General Ramsey Clark made the following statements in a letter sent to all state governors on August 7, 1967:
“There are three basic prerequisites to the use of Federal troops in a state in the event of domestic violence:
“(1) That a situation of serious 'domestic violence’ exists within the state. While this conclusion should be supported with a statement of factual details to the extent feasible under the circumstances, there is no prescribed wording.
“(2) That such violence cannot be brought under control by the law enforcement resources available to the governor, including local and State police forces and the National Guard. The judgment required here is that, there is a definite need for the assistance of Federal troops, taking into account the remaining time needed to move them into action at the scene of violence.
“(3) That the legislature or the governor requests the President to employ the armed forces to bring the violence under control. The element of request by the governor of a State is essential if the legislature cannot be convened. It may be difficult in the context of urban rioting, such as we have seen this summer, to convene the legislature.
“These three elements should be expressed in a written communication to the President, which of course may be a telegram, to support his issuance of a proclamation under 10 U. S. C. § 334 and commitment of troops to action. In case of extreme emergency, receipt of a written request will not be a prerequisite, to Presidential action. However, since it takes several hours to alert and move Federal troops, the few minutes needed to write and dispatch a telegram are not likely to cause any delay.
“Upon receiving the request from a governor, the President, under the terms of the statute and the historic practice, must exercise his own judgment as to whether Federal troops will be sent, and as to such questions as timing, size of the force, and federalization of the National Guard.
“Preliminary steps, such as alerting the troops, can be taken by the Federal government upon oral communications and prior to the governor’s determination that the violence cannot, be brought under control without the aid of Federal forces. Even such preliminary steps, however, represent a most serious departure from our traditions of local responsibility for law enforcement. They should not, be requested until there is a substantial likelihood that the Federal forces will be needed.”
This analysis of Attorney General Clark suggests the importance of the need for information to guide the intelligent use of military forces and to avoid "overkill.”
Translated in terms of personnel, this percentage figure suggests that the total intelligence operation concerned with potential civil disorders hardly merits description as “massive,” as one of the dissents characterizes it.
That principal mission was described in one of the documents filed with the District Court as the conducting of “investigations to determine whether uniformed members of the Army, civilian employees [of the Army] and contractors’ employees should be granted access to classified information.” App. 76-77.
In the course of the oral argument, the District Judge sought clarification from respondents' counsel as to the nature of the threats perceived by respondents; he asked what exactly it was in the Army’s activities that tended to chill respondents and others in the exercise of their constitutional rights. Counsel responded that it was
“precisely the threat in this case that in some future civil disorder of some kind, the Army is going to come in with its list of troublemakers . . . and go rounding up people and putting them in military prisons somewhere.” (Emphasis added.)
To this the court responded that “we still sit here with the writ of habeas corpus.” At another point, counsel for respondents took a somewhat different approach in arguing that
“we’re not quite sure exactly what they have in mind and that is precisely what causes the chill, the chilling effect.” (Emphasis added.)
Indeed, the Court of Appeals noted that it had reached a different conclusion when presented with a virtually identical issue in another of its recently decided cases, Davis v. Ichord, 143 U. S. App. D. C. 183, 442 F. 2d 1207 (1970). The plaintiffs in Davis were attacking the constitutionality of the House of Representatives Rule under which the House Committee on Internal Security conducts investigations and maintains files described by the plaintiffs as a “political blacklist.” The court noted that any chilling effect to which the plaintiffs were subject arose from the mere existence of the Committee and its files and the mere possibility of the misuse of those files. In affirming the dismissal of the complaint, the court-concluded that allegations of such a chilling effect could not be elevated to a justiciable claim merely by alleging as well that the challenged House Rule was overly broad and vague.
In deciding the case presently under review, the Court of Appeals distinguished Davis on the ground that the difference in the source of the chill in the two cases — a House Committee in Davis and the Army in the instant case — was controlling. We cannot agree that the jurisdictional question with which we are here concerned is to be resolved on the basis of the identity of the parties named as defendants in the complaint.
Not only have respondents left somewhat unclear the precise connection between the mere existence of the challenged system and their own alleged chill, but they have also cast considerable doubt on whether they themselves are in fact suffering from any such chill. Judge MacKinnon took cogent note of this difficulty-in dissenting from the Court of Appeals’ judgment, rendered as it was “on the facts of the case which emerge from the pleadings, affidavits and the admissions made to the trial court.” 144 U. S. App. D. C., at 84, 444 F. 2d, at 959. At the oral argument before the District Court, counsel for respondents admitted that his clients were “not people, obviously, who are cowed and chilled”; indeed, they were quite willing “to open themselves up to public investigation and public scrutiny.” But, counsel argued, these respondents must “represent millions of Americans not nearly as forward [and] courageous” as themselves. It was Judge MacKinnon’s view that this concession “constitutes a basic denial of practically their whole case.” Ibid. Even assuming a justiciable controversy, if respondents themselves are not chilled, but seek only to represent those “millions” whom they believe are so chilled, respondents clearly lack that “personal stake in the outcome of the controversy” essential to standing. Baker v. Carr, 369 U. S. 186, 204 (1962). As the Court recently observed in Moose Lodge No. 107 v. Irvis, 407 U. S. 163, 166, a litigant “has standing to seek redress for injuries done to him, but may not seek redress for injuries done to others.” | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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PLYLER, SUPERINTENDENT, TYLER INDEPENDENT SCHOOL DISTRICT, et al. v. DOE, GUARDIAN, et al.
No. 80-1538.
Argued December 1, 1981
Decided June 15, 1982
BRENNAN, J., delivered the opinion of the Court, in which Marshall, Blackmun, Powell, and Stevens, JJ., joined. Marshall, J., post, p. 230, Blackmun, J., post, p. 231, and Powell, J., post, p. 236, filed concurring opinions. Burger, C. J., filed a dissenting opinion, in which White, Rehnquist, and O’Connor, JJ., joined, post, p. 242.
John C. Hardy argued the cause for appellants in No. 80-1538. Richard Arnett, Assistant Attorney General of Texas, argued the cause for appellants in No. 80-1934. With them on the briefs were Mark White, Attorney General, John W. Fainter, Jr., First Assistant Attorney General, and Richard E. Gray III, Executive Assistant Attorney General.
Peter D. Roos argued the cause for appellees in No. 80-1538. With him on the brief were Larry Daves and Vilma S. Martinez. Peter A. Schey argued the cause for appellees in No. 80-1934. With him on the briefs were Al Campos, Larry Mealer, and Jane Swanson.
Solicitor General Lee, Assistant Attorney General Reynolds, and Edwin S. Kneedler filed a brief for the United States in No. 80-1934 and for the United States as amicus curiae in No. 80~1538.
Together with No. 80-1934, Texas et al. v. Certain Named and Unnamed Undocumented Alien Children et al., also on appeal from the same court.
Briefs of amici curiae urging reversal in both bases were filed by Travis Hiester, Orrin W. Johnson, Neal King, and Tony Martinez for the Harlingen Consolidated Independent School District et al.; and by John S. Aldridge for the Texas Association of School Boards. Ronald A. Zum-brun and John H. Findley filed a brief for the Pacific Legal Foundation as amicus curiae urging reversal in No. 80-1538.
Briefs of amid curiae urging affirmance in both cases were filed by James J. Orlow for the American Immigration Lawyers Association; by Samuel Rabinove for the American Jewish Committee; by Bill Lann Lee for the Asian American Legal Defense and Education Fund; by the Edgewood Independent School District; by Peter B. Sandmann for the Legal Aid Society of San Francisco; by Michael K. Suarez for the Mexican American Bar Association of Houston; by Robert J. Kenney, Jr., for the National Education Association et al.; by Fred Fuchs for Texas Impact; and by Daniel Marcus and John F. Cooney for the Washington Lawyers’ Committee for Civil Rights Under Law et al. Thomas M. Griffin filed a brief for the California State Board of Education as amicus curiae urging affirmance in No. 80-1538.
Briefs of amici curiae in both cases were filed by Joseph C. Zengerle for the Federation for American Immigration Reform; by David Crump for the Legal Foundation of America; and by Roger J. Marzulla and Maxwell A. Miller for the Mountain States Legal Foundation.
Briefs of amici curiae in No. 80-1934 were filed by Joyce D. Miller for the American Friends Service Committee et al.; and by Gwendolyn H. Gregory, Thomas A. Shannon, and August W. Steinhilber for the National School Boards Association.
Justice Brennan
delivered the opinion of the Court.
The question presented by these cases is whether, consistent with the Equal Protection Clause of the Fourteenth Amendment, Texas may deny to undocumented school-age children the free public education that it provides to children who are citizens of the United States or legally admitted aliens.
I
Since the late 19th century, the United States has restricted immigration into this country. Unsanctioned entry into the United States is a crime, 8 U. S. C. § 1325, and those who have entered unlawfully are subject to deportation, 8 U. S. C. §§ 1251,1252 (1976 ed. and Supp. IV). But despite the existence of these legal restrictions, a substantial number of persons have succeeded in unlawfully entering the United States, and now live within various States, including the State of Texas.
In May 1975, the Texas Legislature revised its education laws to withhold from local school districts any state funds for the education of children who were not “legally admitted” into the United States. The 1975 revision also authorized local school districts to deny enrollment in their public schools to children not “legally admitted” to the country. Tex. Educ. Code Ann. §21.031 (Vernon Supp. 1981). These cases involve constitutional challenges to those provisions.
No. 80-1538
Plyler v. Doe
This is a class action, filed in the United States District Court for the Eastern District of Texas in September 1977, on behalf of certain school-age children of Mexican origin residing in Smith County, Tex., who could not establish that they had been legally admitted into the United States. The action complained of the exclusion of plaintiff children from the public schools of the Tyler Independent School District. The Superintendent and members of the Board of Trustees of the School District were named as defendants; the State of Texas intervened as a party-defendant. After certifying a class consisting of all undocumented school-age children of Mexican origin residing within the School District, the District Court preliminarily enjoined defendants from denying a free education to members of the plaintiff class. In December 1977, the court conducted an extensive hearing on plaintiffs’ motion for permanent injunctive relief.
In considering this motion, the District Court made extensive findings of fact. The court found that neither §21.031 nor the School District policy implementing it had “either the purpose or effect of keeping illegal aliens out of the State of Texas.” 458 F. Supp. 569, 575 (1978). Respecting defendants’ further claim that §21.031 was simply a financial measure designed to avoid a drain on the State’s fisc, the court recognized that the increases in population resulting from the immigration of Mexican nationals into the United States had created problems for the public schools of the State, and that these problems were exacerbated by the special educational needs of immigrant Mexican children. The court noted, however, that the increase in school enrollment was primarily attributable to the admission of children who were legal residents. Id., at 575-576. It also found that while the “exclusion of all undocumented children from the public schools in Texas would eventually result in economies at some level,” id., at 576, funding from both the State and Federal Governments was based primarily on the number of children enrolled. In net effect then, barring undocumented children from the schools would save money, but it would “not necessarily” improve “the quality of education.” Id., at 577- The court further observed that the impact of §21.031 was borne primarily by a very small subclass of illegal aliens, “entire families who have migrated illegally and — for all practical purposes — permanently to the United States.” Id., at 578. Finally, the court noted that under current laws and practices “the illegal alien of today may well be the legal alien of tomorrow,” and that without an education, these undocumented children, “[a]lready disadvantaged as a result of poverty, lack of English-speaking ability, and undeniable racial prejudices,... will become permanently locked into the lowest socio-economic class.” Id., at 577.
The District Court held that illegal aliens were entitled to the protection of the Equal Protection Clause of the Fourteenth Amendment, and that §21.031 violated that Clause. Suggesting that “the state’s exclusion of undocumented children from its public schools... may well be the type of invidiously motivated state action for which the suspect classification doctrine was designed,” the court held that it was unnecessary to decide whether the statute would survive a “strict scrutiny” analysis because, in any event, the discrimination embodied in the statute was not supported by a rational basis. Id., at 585. The District Court also concluded that the Texas statute violated the Supremacy Clause. Id., at590-592.
The Court of Appeals for the Fifth Circuit upheld the District Court’s injunction. 628 F. 2d 448 (1980). The Court of Appeals held that the District Court had erred in finding the Texas statute pre-empted by federal law. With respect to equal protection, however, the Court of Appeals affirmed in all essential respects the analysis of the District Court, id., at 454-458, concluding that § 21.031 was "constitutionally infirm regardless of whether it was tested using the mere rational basis standard or some more stringent test,” id., at 458. We noted probable jurisdiction. 451 U. S. 968 (1981).
No. 80-1934
In re Alien Children Education Litigation
During 1978 and 1979, suits challenging the constitutionality of §21.031 and various local practices undertaken on the authority of that provision were filed in the United States District Courts for the Southern, Western, and Northern Districts of Texas. Each suit named the State of Texas and the Texas Education Agency as defendants, along with local officials. In November 1979, the Judicial Panel on Multi-district Litigation, on motion of the State, consolidated the claims against the state officials into a single action to be heard in the District Court for the Southern District of Texas. A hearing was conducted in February and March 1980. In July 1980, the court entered an opinion and order holding that §21.031 violated the Equal Protection Clause of the Fourteenth Amendment. In re Alien Children Education Litigation, 501 F. Supp. 544. The court held that “the absolute deprivation of education should trigger strict judicial scrutiny, particularly when the absolute deprivation is the result of complete inability to pay for the desired benefit.” Id., at 582. The court determined that the State’s concern for fiscal integrity was not a compelling state interest, id., at 582-583; that exclusion of these children had not been shown to be necessary to improve education within the State, id., at 583; and that the educational needs of the children statutorily excluded were not different from the needs of children not excluded, ibid. The court therefore concluded that §21.031 was not carefully tailored to advance the asserted state interest in an acceptable manner. Id., at 583-584. While appeal of the District Court’s decision was pending, the Court of Appeals rendered its decision in No. 80-1538. Apparently on the strength of that opinion, the Court of Appeals, on February 23,1981, summarily affirmed the decision of the Southern District. We noted probable jurisdiction, 452 U. S. 937 (1981), and consolidated this case with No. 80-1538 for briefing and argument.
H-Í HH
The Fourteenth Amendment provides that “[njo State shall... deprive any person of life, liberty, or property, without due process of law; nor deny to any person mthin its jurisdiction the equal protection of the laws.” (Emphasis added.) Appellants argue at the outset that undocumented aliens, because of their immigration status, are not “persons within the jurisdiction” of the State of Texas, and that they therefore have no right to the equal protection of Texas law. We reject this argument. Whatever his status under the immigration laws, an alien is surely a “person” in any ordinary sense of that term. Aliens, even aliens whose presence in this country is unlawful, have long been recognized as “persons” guaranteed due process of law by the Fifth and Fourteenth Amendments. Shaughnessy v. Mezei, 345 U. S. 206, 212 (1953); Wong Wing v. United States, 163 U. S. 228, 238 (1896); Yick Wo v. Hopkins, 118 U. S. 356, 369 (1886). Indeed, we have clearly held that the Fifth Amendment protects aliens whose presence in this country is unlawful from invidious discrimination by the Federal Government. Mathews v. Diaz, 426 U. S. 67, 77 (1976).
Appellants seek to distinguish our prior cases, emphasizing that the Equal Protection Clause directs a State to afford its protection to persons within its jurisdiction while the Due Process Clauses of the Fifth and Fourteenth Amendments contain no such assertedly limiting phrase. In appellants’ view, persons who have entered the United States illegally are not “within the jurisdiction” of a State even if they are present within a State’s boundaries and subject to its laws. Neither our cases nor the logic of the Fourteenth Amendment supports that constricting construction of the phrase “within its jurisdiction.” We have never suggested that the class of persons who might avail themselves of the equal protection guarantee is less than coextensive with that entitled to due process. To the contrary, we have recognized that both provisions were fashioned to protect an identical class of persons, and to reach every exercise of state authority.
“The Fourteenth Amendment to the Constitution is not confined to the protection of citizens. It says: ‘Nor shall any state deprive any person of life, liberty, or property without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.’ These provisions are universal in their application, to all persons within the territorial jurisdiction, without regard to any differences of race, of color, or of nationality; and the protection of the laws is a pledge of the protection of equal laws.” Yick Wo, supra, at 369 (emphasis added).
In concluding that “all persons within the territory of the United States,” including aliens unlawfully present, may invoke the Fifth and Sixth Amendments to challenge actions of the Federal Government, we reasoned from the understanding that the Fourteenth Amendment was designed to afford its protection to all within the boundaries of a State. Wong Wing, supra, at 238. Our cases applying the Equal Protection Clause reflect the same territorial theme:
“Manifestly, the obligation of the State to give the protection of equal laws can be performed only where its laws operate, that is, within its own jurisdiction. It is there that the equality of legal right must be maintained. That obligation is imposed by the Constitution upon the States severally as governmental entities, — each responsible for its own laws establishing the rights and duties of persons within its borders,” Missouri ex rel. Gaines v. Canada, 305 U. S. 337, 350 (1938).
There is simply no support for appellants’ suggestion that “due process” is somehow, of greater stature than “equal protection” and therefore available to a larger class of persons. To the contrary, each aspect of the Fourteenth Amendment reflects an elementary limitation on state power. To permit a State to employ the phrase “within its jurisdiction” in order to identify subclasses of persons whom it would define as beyond its jurisdiction, thereby relieving itself of the obligation to assure that its laws are designed and applied equally to those persons, would undermine the principal purpose for which the Equal Protection Clause was incorporated in the Fourteenth Amendment. The Equal Protection Clause was intended to work nothing less than the abolition, of all caste-based and invidious class-based legislation. That objective is fundamentally at odds with the power the State asserts here to classify persons subject to its laws as nonetheless excepted from its protection.
Although the congressional debate concerning §1 of the Fourteenth Amendment was limited, that debate clearly confirms the understanding that the phrase “within its jurisdiction” was intended in a broad sense to offer the guarantee of equal protection to all within a State’s boundaries, and to all upon whom the State would impose the obligations of its laws. Indeed, it appears from those debates that Congress, by using the phrase “person within its jurisdiction,” sought expressly to ensure that the equal protection of the laws was provided to the alien population. Representative Bingham reported to the House the draft resolution of the Joint Committee of Fifteen on Reconstruction (H. R. 63) that was to become the Fourteenth Amendment. Cong. Globe, 89th Cong., 1st Sess., 1033 (1866). Two days later, Bingham posed the following question in support of the resolution:
“Is it not essential to the unity of the people that the citizens of each State shall be entitled to all the privileges and immunities of citizens in the several States? Is it not essential to the unity of the Government and the unity of the people that all persons, whether citizens or strangers, within this land, shall have equal protection in every State in this Union in the rights of life and liberty and property?” Id., at 1090.
Senator Howard, also a member of the Joint Committee of Fifteen, and the floor manager of the Amendment in the Senate, was no less explicit about the broad objectives of the Amendment, and the intention to make its provisions applicable to all who “may happen to be” within the jurisdiction of a State:
“The last two clauses of the first section of the amendment disable a State from depriving not merely a citizen of the United States, but any person, whoever he may be, of life, liberty, or property without due process of law, or from denying to him the equal protection of the laws of the State. This abolishes all class legislation in the States and does away with the injustice of subjecting one caste of persons to a code not applicable to another.... It will, if adopted by the States, forever disable every one of them from passing laws trenching upon those fundamental rights and privileges which pertain to citizens of the United States, and to all persons who may happen to be within their jurisdiction” Id., at 2766 (emphasis added).
Use of the phrase “within its jurisdiction" thus does not detract from, but rather confirms, the understanding that the protection of the Fourteenth Amendment extends to anyone, citizen or stranger, who is subject to the laws of a State, and reaches into every corner of a State’s territory. That a person’s initial entry into a State, or into the United States, was unlawful, and that he may for that reason be expelled, cannot negate the simple fact of his presence within the State’s territorial perimeter. Given such presence, he is subject to the full range of obligations imposed by the State’s civil and criminal laws. And until he leaves the jurisdiction — either voluntarily, or involuntarily in accordance with the Constitution and laws of the United States — he is entitled to the equal protection of the laws that a State may choose to establish.
Our conclusion that the illegal aliens who are plaintiffs in these cases may claim the benefit of the Fourteenth Amendment’s guarantee of equal protection only begins the inquiry. The more difficult question is whether the Equal Protection Clause has been violated by the refusal of the State of Texas to reimburse local school boards for the education of children who cannot demonstrate that their presence within the United States is lawful, or by the imposition by those school boards of the burden of tuition on. those children. It is to this question that we now turn.
HH HH
The Equal Protection Clause directs that “all persons similarly circumstanced shall be treated alike.” F. S. Royster Guano Co. v. Virginia, 253 U. S. 412, 415 (1920). But so too, “[t]he Constitution does not require things which are different in fact or opinion to be treated in law as though they were the.same.” Tigner v. Texas, 310 U. S. 141, 147 (1940). The initial discretion to determine what is “different” and what is “the same” resides in the legislatures of the States. A legislature must have substantial latitude to establish classifications that roughly approximate the nature of the problem perceived, that accommodate competing concerns both public and private, and that account for limitations on the practical ability of the State to remedy every ill. In applying the Equal Protection Clause to most forms of state action, we thus seek only the assurance that the classification at issue bears some fair relationship to a legitimate public purpose.
But we would not be faithful to our obligations under the Fourteenth Amendment if we applied so deferential a standard to every classification. The Equal Protection Clause was intended as a restriction on state legislative action inconsistent with elemental constitutional premises. Thus we have treated as presumptively invidious those classifications that disadvantage a “suspect class,” or that impinge upon the exercise of a “fundamental right.” With respect to such classifications, it is appropriate to enforce the mandate of equal protection by requiring the State to demonstrate that its classification has been precisely tailored to serve a compelling governmental interest. In addition, we have recognized that certain forms of legislative classification, while not facially invidious, nonetheless give rise to recurring constitutional difficulties; in these limited circumstances we have sought the assurance that the classification reflects a reasoned judgment consistent with the ideal of equal protection by inquiring whether it may fairly be viewed as furthering a substantial interest of the State. We turn to a consideration of the standard appropriate for the evaluation of §21.031.
A
Sheer incapability or lax enforcement of the laws barring entry into this country, coupled with the failure to establish an effective bar to the employment of undocumented aliens, has resulted in the creation of a substantial “shadow population” of illegal migrants — numbering in the millions —within our borders. This situation raises the specter of a permanent caste of undocumented resident aliens, encouraged by some to remain here as a source of cheap labor, but nevertheless denied the benefits that our society makes available to citizens and lawful residents. The existence of such an underclass presents most difficult problems for a Nation that prides itself on adherence to principles of equality under law.
The children who are plaintiffs in these cases are special members of this underclass. Persuasive arguments support the view that a State may withhold its beneficence from those whose very presence within the United States is the product of their own unlawful conduct. These arguments do not apply with the same force to classifications imposing disabilities on the minor children of such illegal entrants. At the least, those who elect to enter our territory by stealth and in violation of our law should be prepared to bear the consequences, including, but not limited to, deportation. But the children of those illegal entrants are not comparably situated. Their “parents have the ability to conform their conduct to societal norms,” and presumably the ability to remove themselves from the State’s jurisdiction; but the children who are plaintiffs in these cases “can affect neither their parents’ conduct nor their own status.” Trimble v. Gordon, 430 U. S. 762, 770 (1977). Even if the State found it expedient to control the conduct of adults by acting against their children, legislation directing the onus of a parent’s misconduct against his children does not comport with fundamental conceptions of justice.
“[V]isiting... condemnation on the head of an infant is illogical and unjust. Moreover, imposing disabilities on the... child is contrary to the basic concept of our system that legal burdens should bear some relationship to individual responsibility or wrongdoing. Obviously, no child is responsible for his birth and penalizing the... child is an ineffectual — as well as unjust — way of deterring the parent.” Weber v. Aetna Casualty & Surety Co., 406 U. S. 164, 175 (1972) (footnote omitted).
Of course, undocumented status is not irrelevant to any proper legislative goal. Nor is undocumented status an absolutely immutable characteristic since it is the product of conscious, indeed unlawful, action. But §21.031 is directed against children, and imposes its discriminatory burden on the basis of a legal characteristic over which children can have little control. It is thus difficult to conceive of a rational justification for penalizing these children for their presence within the United States. Yet that appears to be precisely the effect of § 21.031.
Public education is not a “right” granted to individuals by the Constitution. San Antonio Independent School Dist. v. Rodriguez, 411 U. S. 1, 35 (1973). But neither is it merely some governmental “benefit” indistinguishable from other forms of social welfare legislation. Both the importance of education in maintaining our basic institutions, and the lasting impact of its deprivation on the life of the child, mark the distinction. The “American people have always regarded education and [the] acquisition of knowledge as matters of supreme importance.” Meyer v. Nebraska, 262 U. S. 390, 400 (1923). We have recognized “the public schools as a most vital civic institution for the preservation of a democratic system of government,” Abington School District v. Schempp, 374 U. S. 203, 230 (1963) (Brennan, J., concurring), and as the primary vehicle for transmitting “the values on which our society rests.” Ambach v. Norwich, 441 U. S. 68, 76 (1979). “[A]s... pointed out early in our history,... some degree of education is necessary to prepare citizens to participate effectively and intelligently in our open political system if we are to preserve freedom and independence.” Wisconsin v. Yoder, 406 U. S. 205, 221 (1972). And these historic “perceptions of the public schools as inculcating fundamental values necessary to the maintenance of a democratic political system have been confirmed by the observations of social scientists.” Ambach v. Norwich, supra, at 77. In addition, education provides the basic tools by which individuals might lead economically productive lives to the benefit of us all. In sum, education has a fundamental role in maintaining the fabric of our society. We cannot ignore the significant social costs borne by our Nation when select groups are denied the means to absorb the values and skills upon which our social order rests.
In addition to the pivotal role of education in sustaining our political and cultural heritage, denial of education to some isolated group of children poses an affront to one of the goals of the Equal Protection Clause: the abolition of governmental barriers presenting unreasonable obstacles to advancement on the basis of individual merit. Paradoxically, by depriving the children of any disfavored group of an education, we foreclose the means by which that group might raise the level of esteem in which it is held by the majority. But more directly, “education prepares individuals to be self-reliant and self-sufficient participants in society.” Wisconsin v. Yoder, supra, at 221. Illiteracy is an enduring disability. The inability to read and write will handicap the individual deprived of a basic education each and every day of his life. The inestimable toll of that deprivation on the social, economic, intellectual, and psychological well-being of the individual, and the obstacle it poses to individual achievement, make it most difficult to reconcile the cost or the principle of a status-based denial of basic education with the framework of equality embodied in the Equal Protection Clause. What we said 28 years ago in Brown v. Board of Education, 347 U. S. 483 (1954), still holds true:
“Today, education is perhaps the most important function of state and local governments. Compulsory school attendance laws and the great expenditures for education both demonstrate our recognition of the importance of education to our democratic society. It is required in the performance of our most basic public responsibilities, even service in the armed forces. It is the very foundation of good citizenship. Today it is a principal instrument in awakening the child to cultural values, in preparing him for later professional training, and in helping him to adjust normally to his environment. In these days, it is doubtful that any child may reasonably be expected to succeed in life if he is denied the opportunity of an education. Such an opportunity, where the state has undertaken to provide it, is a right which must be made available to all on equal terms.” Id., at 493.
B
These well-settled principles allow us to determine the proper level of deference to be afforded §21.031. Undocumented aliens cannot be treated as a suspect class because their presence in this country in violation of federal law is not a “constitutional irrelevancy.” Nor is education a fundamental right; a State need not justify by compelling necessity every variation in the manner in which education is provided to its population. See San Antonio Independent School Dist. v. Rodriguez, supra, at 28-39. But more is involved in these cases than the abstract question whether §21.031 discriminates against a suspect class, or whether education is a fundamental right. Section 21.031 imposes a lifetime hardship on a discrete class of children not accountable for their disabling status. The stigma of illiteracy will mark them for the rest of their lives. By denying these children a basic education, we deny them the ability to live within the structure of our civic institutions, and foreclose any realistic possibility that they will contribute in even the smallest way to the progress of our Nation. In determining the rationality of § 21.031, we may appropriately take into account its costs to the Nation and to the innocent children who are its victims. In light of these countervailing costs, the discrimination contained in §21.031 can hardly be considered rational unless it furthers some substantial goal of the State.
t — < C
It is the State’s principal argument, and apparently the view of the dissenting Justices, that the undocumented status of these children vel non establishes a sufficient rational basis for denying them benefits that a State might choose to afford other residents. The State notes that while other aliens are admitted “on an equality of legal privileges with all citizens under non-discriminatory laws,” Takahashi v. Fish & Game Comm’n, 334 U. S. 410, 420 (1948), the asserted right of these children to an education can claim no implicit congressional imprimatur. Indeed, in the State’s view, Congress’ apparent disapproval of the presence of these children within the United States, and the evasion of the federal regulatory program that is the mark of undocumented status, provides authority for its decision to impose upon them special disabilities. Faced with an equal protection challenge respecting the treatment of aliens, we agree that the courts must be attentive to congressional policy; the exercise of congressional power might well affect the State’s prerogatives to afford differential treatment to a particular class of aliens. But we are unable to find in the congressional immigration scheme any statement of policy that might weigh significantly in arriving at an equal protection balance concerning the State’s authority to deprive these children of an education.
The Constitution grants Congress the power to “establish an uniform Rule of Naturalization.” Art. I., § 8, cl. 4. Drawing upon this power, upon its plenary authority with respect to foreign relations and international commerce, and upon the inherent power of a sovereign to close its borders, Congress has developed a complex scheme governing admission to our Nation and status within our borders. See Mathews v. Diaz, 426 U. S. 67 (1976); Harisiades v. Shaughnessy, 342 U. S. 580, 588-589 (1952). The obvious need for delicate | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
116
] | sc_adminaction |
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