Legal Document

371 U.S. 245 83 Supreme Court Reporter 426 9 United States Reports Lawyer’s Edition 2d Series KF101.8 U54 292 Charles PAUL, Director of Agriculture California, et al., Appellants,v.UNITED STATES. Number 19. Argued Oct. 17 and 18, 1962. Decided Jan. 14, 1963. [Syllabus from pages 245-246 intentionally omitted] John Fourt, Sacramento, Cal., for appellants. Archibald Cox, Sol. Gen., appellee. [Amicus Curiae 246-247 Mr. Justice DOUGLAS delivered the opinion Court. 1 The main question in this case is whether California can enforce her minimum wholesale price regulations as respects milk sold to at three military installations1 (Travis Air Force Base, Castle Oakland Army Terminal) located within used strictly consumption, resale federal commissaries consumption or various clubs post exchanges. Milk first two categories use paid with appropriated funds, while that exchanges purchased nonappropriated funds. Prior January 1959, supplies funds those installations were obtained a result competitive bidding on terms below prices prescribed by California. advised distributors State's applicable sales Travis. Subsequently bids milk-supply contracts Travis strict compliance California's regulations, added cost Federal Government being about $15,000 month. Later year instituted civil action state courts against cooperative had supplied price, seeking penalties an injunction. Thereafter brought suit District complaint alleged regulation Travis, enclave, was barred Constitution, since subject exclusive jurisdiction States.2 It also such unconstitutional burden exercise its constitutional power establish maintain Armed Forces acquire manage enclave. asked three-judge court be convened. 2 Meanwhile, warned would enforced Oakland. Bids thereafter received all above price; accordingly they rejected. A new invitation issued, one minimum. Thereupon sued successful bidder injunction; later it other like bidders. similar experience Oakland; rejected, contract distributor prior period extended months estimated saving over $30,000. again enjoin supplier selling established prices. amended include purchases Castle. As commenced separate substantially identical one; consolidated. 3 Appellants denied these enclaves giving there any conflict between regulatory scheme procurement policy. moved stay actions pending determination state-law questions actions. 4 refused proceedings granted motion summary judgment. 190 F.Supp. 645. We postponed merits. Paul versus States, 368 965, 82 437, 7 394. I. 5 Here, Georgia Public Service Comm., 285, 397, 'required' heard meaning 28 Code KF62 § 1253, Annotated KF65 U5 1253 therefore properly here direct appeal. Apart areas issue not burdened powers Services regulate territory substantial question, Penn Dairies, Inc., Control Comm. Pennsylvania, 318 261, 63 617, 87 L.Ed. 748; Utilities State 355 534, 78 446, 470, supra, make clear. required even if issues might pass muster their own tendered. See 2281, 2281; Florida Lime & Avocado Growers, Jacobsen, 362 73, 80 568, 568. II. 6 Act authorizes prescribe retail prices3 'at which fluid cream shall stores, restaurants, confectioneries places premises.'4 prohibitions run both purchases;5 criminal are provided.6 prices, promulgated Agriculture, have been respect already noted. In we held policy, general rule negotiated purchase exception, prevailed regulated rate system. That case, concerned transportation commodities. But policy times relevant same services. statutes effect time Commission still basic provisions governing out They require placed bidding, award 'to responsible whose bid * will most advantageous factors considered.'7 There statutory exceptions, ones follows: 8 '(a) Purchases property services covered chapter made formal advertising cases method feasible practicable under existing conditions circumstances. If practicable, head agency, requirements determinations findings section 2310, may negotiate contract, if- '(8) authorized resale; 10 '(9) perishable nonperishable subsistence supplies; 11 '(10) impracticable obtain competition; 12 '(15) he determines after unreasonable part requirements, independently reached open competition, (A) has notified each intention given him reasonable opportunity negotiate; (B) lower than lowest rejected bidder, determined agency; (C) offered supplier.'8 13 Procurement Regulation speaks unambiguous Government-price, quality, considered.'9 states, 'Such basis, negotiation, maximum extent *.'10 Whatever used-formal negotiation-'competitive proposals' must 'solicited qualified sources deemed necessary contracting officer assure full free competition contract-price, considered.'11 used, awarded bidder.'12 Moreover, when standards relaxed. procure fair calculated ultimate over-all Government.'13 'The fact does relax competition.'14 'Whenever procured quotations solicited end best advantage Government, considered.'15 then specifies 20 considerations selection procurement.16 'comparison quoted.'17 14 said enough show more authorize officers rates. directs negotiations or, wherever possible, reflect active so receive contract. 15 While demands milk, effectively eliminates competition. defeats command having fix basis specified law. supply because 'it competition,' words,18 seller, prevails. collision clear acute rates supra. existing, involved, 'sanction(ed) negotiating shipment entrust(ed) discretion determine accepted negotiation undertaken.' U.S., 542-543, S.Ct., 452. 16 Incorporated opposed. noted Congress, Dairies decision before revised restated stated House Report,19 '* bill represents comprehensive revision restatement laws War Navy Departments. holds time-tested bidding. At puts framework law almost century's accumulation incorporates safeguards designed eliminate abuses, assures affords equal suppliers compete share Government's business.' controlling stated, present Act, market where 'impracticable secure competition.' 277, 624. But, unlike Regulation, earlier declared situation arose 'when fixed federal, state, municipal competent legal authority.' Ibid. further should comply price-fixing judicially latter government (id., 276, 624), provision manifested 'hands off' respecting States. Id., 278, 625. 18 makes no allowances, contains qualifications, provides exception. Its unqualified commands basis; has, course, force 451-452. opposed rate-making 19 Policy-wise, better systems honored officials. urged done substandard producers some lose enjoy Congress could course write requirement into written certain character. contractors manufacturers pay less wage Secretary Labor prevailing wage; building wages laborers mechanics; laborer mechanic doing work subcontractors permitted eight hours day, unless half overtime.20 inclusion provisions, aimed working conditions, shows alert problem. Their eloquent omission argued September 10, 1962, 76 Statutes-at-Large 528, changed situation. points 2306(f), requires submit pricing data but goes lift 'prices (are) set regulation.' say, equivocally, abandon 'set rule, seen. Section 2306(f) only waiver 'cost data' kinds commodities included as, if, accept regulation,' need follow concerning data.' 21 cites builds argument around 2304(g), now suggested 2304(g) rate-fixing price-fixing. part: 22 'In procurements excess $2,500 delivery permit, proposals number consistent nature procured, oral discussions conducted offerors who range, considered *.' 23 Here again, purport say 'fixed regulation' govern procurement. discussed length force. eliminated construed manifest litigation started 1962 passed unequivocally extent,' well permit circumstances state-fixed word legislative history Act21 indicates congressional uproot change it. was, indeed, repeatedly approved. S. Rep.No.1884, 87th Cong., Sess.; H.R.Rep.No.1638, Sess., Parts N Dec. Immigration Nationality Decisions II; Cong. Rec., June 7, Page 9231 seq. Four years cannot preclude This once questioned though instant litigated during entire period. reflects effort provide collateral accommodations follows mandate 2305(a), 2305(a) unequivocal; exceptions contained 2304(a), above, remain unchanged. 24 fails purpose On contrary purpose, S.Rep.No.1884, increase efficacy system 25 Not cited approval, aim described terms: 26 general, objectives changes are- 27 '(1) To encourage accomplish advertising; '(2) clearer justification authorities used; 29 '(3) procurement; 30 '(4) inflated estimates contracts.' 1. 31 equally explanation floor manager bill: 32 '(T)his chief purchasing. (O)nly percent purchasing sealed clearly enough. Competition increased; purchasing; reduced.' Cong.Rec., 9234. 33 desire bow face expressed believe differently stated. sum, references merely minor situations where, limits official decides practical way following pricefixing 34 however, says whatever mess-hall use, stand different footing. These 'arms essential performance governmental functions' 'partake immunities' 'may constitution statutes.' Cf. Standard Oil company Johnson, 316 481, 485, 62 1168, 1170, 86 1611. funds; act do use. out, statute resale, rather advertising22-a quoted 'are generally specifications brand names.'23 Milk, fit category exception designed. permissive; 'may' articles resold do. He 'will States.'24 Whether negotiates uses dependent his informed discretion, policies. negotiates, noted, 'from demed considered.'25 And, repeat, controlled factors, quoted,'26 none relates manner whatsoever policies State. 35 products benefits commissary purchasers agency. payment funds.27 dealing expressly them 'for funds.'28 sure, provided 'unless Defense certified items normally stores otherwise available distance satisfactory quality quantity civilian employees Department Defense.'29 what 'reasonable price' left officer. directed removed purview policies; nor adopted comes otherwise. III. 36 What dispose brings us 'exclusive legislation' Article I, 8, cl. 17, reads Power Legislation Cases whatsoever' Columbia Authority Places Consent Legislature Same be, Erection Forts, Magazines, Arsenals, dock-Yards, needful Buildings.' 37 come scope obviously Columbia. grant 'exclusive' meet weight, bars without specific action. squarely presented Pacific Coast Dairy 628, 761, litigation, attempt Moffett Field. 'sales consummated enclave regulated' lands consent 294, 630), conflicting Regulation. 38 Thus 'purchased Legislature' 17. 39 land condemnation established. Kohl 91 367, 371, 449, 451. 'consent' possession simply ordinary proprietor. James Dravo Contracting Co., 302 134, 141-142, 58 208, 212, 155. event, Fort Leavenworth R. Lowe, 114 525, 541, 542, 995, 1004, 264, complete 'a cession authority political jurisdiction.' 40 acquires legislature borders purposes mentioned acquired gives 'consent,' becomes 'exclusive.' Since 1940 assent transfer property, however acquired.30 either event-whether hand other-a condition upon retention 146-149, 214-216. Stewart Sadrakula, 309 94, 99-100, 60 431, 433-434, 84 596: 41 Constitution every vestige former sovereignty vanish. language long interpreted continuance until abrogated rules surrender rights occupants transferred. area small developed private rights.' 42 several our problem One pertained acquisition through 'purchase condemnation.'31 Another 'ceded granted' States.32 43 Those codified 1943, acquisitions condemnation' appearing section33 another.34 codification, stating 'cedes' jurisdiction' 'held, occupied, reserved' defense,' description metes bounds map plat 'shall filed proper office record county situated.'35 44 Most transactions creating took place 1942 1944, 194636 later. 45 question. Silas Mason Tax Commission, 186, 197, 233, 239, 187: 46 territorial distinct. assumes absence interference functions debar exercising including taxing police relation activities individuals corporations territory. title sufficient exclusion. appear State, cession, transferred residuum exercise. instance, Washington yielded Government. involving necessarily question.' 47 'cedes filed.37 earnestly argues context includes 'purchases' 'acquisitions condemnation.' consistently drawn line other. gist recent Attorney General treats alternative ways means filed.38 seems provisions. 48 Acts,39 consented 'the purposes, undertake future legislate reserved right gave remains enforceable, subsequent laws. supra; Arlington Hotel Fant, 278 439, 49 227, 73 447. price-control apply lands,40 fours tracts spite express therein 293, 630) control enforceable 'long sovereignty.' 630. seeks shelter saying trying current scheme, made. Yet time, fail see why one, albeit form reach conclude controls sales, authorizing acquisitions. remand resolve precise evolution scheme. another uncertainty dispute Each numerous units times, be. claims jurisdiction. She claim Castle, 50 vacate judgment insofar respective effect. so, class not, particularized Constitution. 51 decree modified producers, noted.41 52 Accordingly affirmed vacated remanded. 53 ordered. 54 Judgment 55 STEWART, whom HARLAN GOLDBERG join, dissenting part. 56 doubt war power1 virtue Supremacy Clause2 valid affecting installations. agree so. am unable find legislation evidence immunize regulations. regulating industry admittedly health welfare people, serve important function insuring stability production vital commodity. 748, emphasized '(a)n unexpressed aside states internal affairs lightly inferred ought implied command, read light history, ambiguous.' 275, 623. think ambiguous-that presumption undermined Government.3 57 Pennsylvania marketing establishment. override type. 272-275, 622-623. intrastate carriage strategic peculiarly burdensome involved kind freight, stressing difficulty delays classifying goods tariffs, importance national security secrecy rapid movement. 544-546, 453-454. Regardless impact costs, therefore, enforcement constituted function. M'Culloch Maryland, Wheat. 316, 579. 1947 Act,4 nowhere rested. Rather, distinguished ground subjected National restraints, did legislation. 543-544, 452-453. today abandons distinction suggests decision. novel interpretation procurement, military,5 incorrect ever existed score laid rest amendment enacted last session Congress.6 59 support pertinent materials conclusion solely order save few dollars, intended agencies subvert nondiscriminatory measures promote health, safety, economic conditions. Indeed, evidenced directly intention. Of demonstrates, allowed impair fulfillment appropriate functions, military; similarly, bind inhibit activities. presents problems. bypass conduct proposed jointly During World II, Departments operations relatively First Powers 838, U.S.C.A.Appendix, 601 placement regard procedures. Production Board early traditional unsatisfactory wartime, practice placing suppliers.7 When ended return peacetime introduced fill need. departments thought prewar weer 'woefully inadequate supplying tremendously expanding needs equipment,'8 total reversion methods unfortunate extreme severely handicap *.'9 61 Reflecting attitude, stressed major proposed: '1. modernize methods; '2. unify buying; 64 '3. suspension declaration emergency.'10 65 third suspend emergency, crisis thus enable defense establishment respond immediately emergencies.11 second, branch armed governed separate, sometimes unique, substitute single procurement.12 66 proposal 'modernize' primarily relax, situations, very requiring Experience shown formalized ritual often unwieldy uneconomical. For example, suited secret projects, effective sellers. types suppliers. heart 2(c), list bidding.13 67 reported essentially proposed. Both Senate remained same. Report began saying, 'This uniform Navy, reestablishes advertising-competitive followed great majority services.'14 went acknowledge limited (in which) public interest advertising,' listed Departments.15 point, describing previously rigid summed up Departments.' 6.16 68 background abundantly 'revision restatement' formulation absolutely nothing dealt us. dissatisfaction centered lack uniformity apparent insistence procedures unsuited. Neither concerns touched case-whether undermine price.17 69 Evidence lacking, attitude problem, presumed applicability. 70 First, itself willing social blind pursuit possible price. consider many addition Walsh-Healey Davis-Bacon Eight Hour Law.18 And 2(b) proportion business.19 71 Secondly, priceregulated industries, acknowledgment business statements relate 2(c)(10) enacted, 2304(a) (10), 2304(a)(10). subsection agency employ advertised 72 normal procedure Appropriations 1901, 905. Until applied services.20 explaining subject, Under Royall Department, spokesman remarks: 74 'As deals originally appeared March 2, 1901 (31 1905; 1201 (10 1201)), highly restrictive administrative interpretations. my opinion, least situations: 75 Where service person furnish it, patented article. legally fixed. 77 difficult real bids.' (Emphasis added.)21 acknowledged applicability 79 experiences fields stevedoring, ship repairs, chartering vessels, regulation, source supply, competitive-bid-advertising frequently always operate interests Government.' added.)22 plain assumed purchases. Unless assumption made, reason believing 'impracticable' areas. For, absent duty advertise 81 import references, significant note sponsoring committees aware fixing affect contracts. spokesmen mention decision, hardly unaware.23 testified law.24 Despite authorization 'negotiate' allow bargain agencies.25 go arguable inference defined 'negotiation.'26 Just year, 'negotiation' time. Although definition adopts implements word-to price-it excepts price-regulated transactions. '(g) considered. *'27 added.) words House, excepted 'instances futile discussions.'28 short, explicitly adumbrated Act-that applicability.29 Court's discusses resting reading executive issued errs-for reasons. view recognizes immunized legislation, completely invalid. Williamson 207 425, 462, 163, 177, 278; Lynch Tilden Produce 265 315, 321-322, 488, 489-490, 1034; Barnard, Cir., 255 Reporter, 2nd 583, 588-589. relies speak voice believe. application says, words, disregard regulation. 85 Part III final resolution take immune 761. Even enclaves, moot substance antedated concept 'has 99, 434, 596. priority decided us, resolution, law, finding imposed became mean regardless validly stabilize economically sound producing commodity people. abandoned constitutionally processing ultimately abandonment confession error assert immunity matter appears 'fluid milk' cream,' encompassing base, pertain milk.' facts, involves bases involved. 'To Calif.Agr.Code, 4350. 4352. 4361. 4410. 2305(c), 2305(c). recodification 1947. S.Rep. 2484, 84th Sess. 19, 20-21. 2304(a)(8)(9)(10)(15). (revised April 20, 1959), 1-301. 1-302.2. 3-801.1. 3-101(a) (Army Procedure). 3-101. 2304(a)(10), H.R.Rep.No.109, 80th 1st 6. 2304(f), (41 35-45, §§ 35-45), (40 276a, 276a), Law 324, 325a, 325a). ill cure service-employed process produce low Informal quotations, usually accompanied breakdown elements, secured practicable. Separate bidders undertaken reduce eliminating unnecessary unjustified charges. Comptroller condemned because: 'It itself, warrant curtailment offeror discussion offeror. (should conducted) considered.' H.R.Rep.No.1959, 86th S.Rep.No.1900, 27; 8-9, 21-22; 4-5. exact 'rates 'discussion' too short reference debates implies 'by attempting get offeror: 'Section (e) (§ 2304(g)) defines constitute negotiation. excepting instances discussions; ratemaking market, foodstuffs.' competition' linked (see 12), holding 451-452, impossible bidding-or prohibiting came statutes. 8. 'intended responsibility decisions hands concerned.' S.Rep.No.571, explained: typical article supplier. multiple nonetheless lacking.' 93 Cong.Rec. 2319. Negotiation exceptional 'promote id., 2316. allay fears 'means arbitrary able fear *,' explained that: 'Experience careful drafting suitable savings fact, employed promotes intensifies 2320. witnesses Committee Hearings enacting 2304(a)(10) indicated intend seek agencies. Clearly reinforce 'where H.R. 1366 Services, (July 1, 1947); 3394 29; Subcommittee 51, 521. suggest Government' (93 2319), imply accepted. From reports cited, report, decided, correctly interprets 2304(a)(10): 'An examination illustrative Exception readily reveals involve supply. Others offer 12. illustrations 'Stevedoring, terminal services, law.' 2304(a)(8), 2304(a)(8). 7. See, e. g., 377. 2303, 2303. 377-378. 255, 'Notwithstanding obtaining hereafter required; department independent may, deem desirable, immediate jurisdiction, custody, situated, partial, theretofore obtained, desirable indicate acceptance behalf filing notice Governor situated. aforesaid, conclusively accepted.' Cal.Stat.1939, 710, 34, provides: consents tract erecting forts, magazines, arsenals, dockyards, buildings, charged crime, served executed thereon mode reserves taxation levy collect taxes granted.' Ibid.: tax hereinabove shall, notwithstanding, ceded adopted, herein exercised States.' Calif.Gov.Code, 111. 113. 114. Oakland, 1949 enactment 1946 (Calif.Gov.Code, 126) expanded whereby acquisition' Lands hearings, met. parcels Note 35, Op.Atty.Gen.Calif. 14. 31, repealed subsequently reenacted. U.S.Const. VI, 2. themselves validity courts, acting members industry, review presented. deal 21, amended, 2301-2314, 2301-2314. likely large presently accomplished orders pursuant 8c Agricultural Adjustment 608c, 608c. Regulations 1001 typically producer turn, maintaining level handler Lehigh Valley Coop. Farmers, 370 76, 78-83, 1170-1172, 345. perhaps attack Calif ornia's case. position, contended maintenance how limit systems. Any somehow distinguishable supposes desired burdens acquiescing arise order-an incongruous inconsistent treat complementary parts '(I)n formulation, administration, programs relating handling agricultural thereof, (the directed) confer hold joint hearings duly cooperate 610(i), 610(i). academic. arisen unreported installation asserted district judge contention justified stable milk. Knudsen Bros. Dairy, Benson, Civil 8145 (D.C.D.Conn., August 1960). calls futuro injunction statutes, currently W.P.B.Directive 3, 1942. 469 (February 4, 1947). (Hereinafter February Hearings.) Hearings, (statement W. Judge Kenney, Assistant Navy). (June 24, 1947) Kenney). e.g., 469. 1382 (January 13, Robert KF135 P2 Patterson, War). 3. thing. 1-2. Nothing derived reactivating inevitably wartime regime 2304(f). 20. 2301, 2301. 521 Colonel Smith); Hearing July repeated colloquy Senators Byrd Kilgore. 23. Departments' request 'were 2304(a)(15), altogether collusive type violative antitrust explains: paragraph useful break follow-the-leader pricing, rotated bids, drawing lots, estimating systems, refusal classify buyer purchased, practices. inquire reasons securing call facts figures unwarranted charges, excessive contingencies, commissions brokerage profits. 'On added. suspected arrived laws.' 26; 9. testimony notes provided: 'All except 21. approximation proposing statement 'Negotiation effecting advertising.' 427. 87-653, 528. explains fills void created '(e)xisting define 'make advertising." 1884, H.R.Rep. 1638, subcommittee, committee counsel similarly 'negotiation meaningless.' 5532 5071 (April 1962). Further illumination furnished amending 2306, 2306. After providing certify correctness data, little price: 'Provided, subcontracts based adequate catalog commercial quantities public, waived writing determination.'

Classification Label: 8