Court Opinion

ID: 9744992
Source: CourtListenerOpinion
Date Created: 2023-08-26 22:27:48.052076+00
Date Added: 2024-06-11T07:24:54.336093
License: Public Domain

REEVES, District Judge
(concurring).
I concur in the very clear and able opinion of Judge VAN VALKENBURGH, *554presiding judge, but in doing so desire to express the following:
At the first trial of these cases this court erred in striking out an averment in the several petitions to the effect that the Secretary of Agriculture had not personally considered and promulgated what he regarded as his reasonable commission rates. We sustained the rates prescribed by the Secretary of Agriculture. The Supreme Court reversed the cases. Morgan v. United States, 298 U.S. 468, 56 S.Ct. 906, 80 L.Ed. 1288.
Upon a second trial, after the averments were restored, we again found that there was substantial testimony to support the reasonableness of the rates prescribed by the Secretary. However, on the second appeal, the Supreme Court found that the Secretary had not granted the full hearing contemplated by the Packers and Stockyards Act and held invalid the challenged order of the Secretary made June 14, 1933. We had previously enjoined the enforcement of the order until the question of its validity could be determined on its merits.
When the case was reversed the last time (Morgan v. United States, 304 U.S. 1, 58 S.Ct. 773, 999, 82 L.Ed. 1129), this court ordered distribution of the funds impounded by a previous order to the several marketing agents who are plaintiffs. An appeal was taken from this order, and the Supreme Court again reversed our order. United States v. Morgan, 307 U.S. 183, 59 S.Ct. 795, 83 L.Ed. 1211.
In this last decision the court held that before distribution should be made it was within the right and proper function of the Secretary of Agriculture to investigate, and (307 U.S. page 190, 59 S.Ct. page 799, 83 L.Ed. 1211) “if the Secretary shall determine that the rates exacted by aid of the court, and paid into its registry, are excessive,” then (307 U.S. page 198, 59 S.Ct. page 803, 83 L.Ed. 1211) “his determination, if supported by evidence and made in a proceeding conducted in conformity with the statute and due process, will afford the appropriate basis for action in the district court in making distribution of the fund in its custody.”
The decision of the court was handed down on May 15, 1939. Immediately thereafter the Secretary of Agriculture reopened the case for further hearing, and among other things ordered as follows:
“It is also ordered that the ‘Proceedings, Findings of Fact, Conclusion and order’, as issued by the Secretary of Agriculture on June 14, 1933, be served upon said market agencies as the tentative findings of fact, conclusion and order of the Secretary of Agriculture in this proceeding; and
“It is further ordered that said market agencies be and they are hereby given thirty (30) days from the date of service hereof within which to file exceptions to said tentative findings of fact, conclusion and order, in accordance with the rules of practice adopted by the Secretary of Agriculture, governing the procedure in such cases, and within which to make any appropriate motions or objections with respect to further proceedings in this case.”
Pursuant to this order the case was “reopened” and additional testimony submitted by petitioners, not by the government.
The opinion of the Supreme Court reported 304 U.S. 1, 58 S.Ct. 773, 999, 82 L. Ed. 1129, was rendered April 25, 1938. It was in that opinion the court held that the Secretary of Agriculture had not given full and fair hearing as required by the law.
On May 8, 1938, a letter from the Secretary appeared on the editorial page of the New York Times wherein he used the following language: “Actually, (referring to the opinion of the Supreme Court) the effect is to give to the Kansas City commission men and their attorneys $700,000 of impounded money which rightfully belongs to the farmers.”
In this hearing or trial, counsel for the petitioners have again raised sundry questions. It is contended by them that the Secretary failed to find the rates in force unreasonable as of the date he prescribed his rates, and that the rates so “prescribed” are themselves not reasonable and not supported by the testimony in the case. Moreover, it is contended that the Secretary again failed to give the full hearing contemplated by law and that he did not exercise a judicial disinterestedness, but, on the contrary, was clearly biased and therefore disqualified to hear the case. These will be briefly considered:
1. One of the contentions made by the petitioners is that the rates prescribed were identical with those found invalid by the Supreme Court and that same were based upon opinion evidence and on evidence in the nature of a forecast predicated upon prior experience over a period of years immediately preceding the said order of June 14, 1933.
*555Since the period covered by the order had elapsed it is the contention of the petitioners that the actual experience of the companies was not only available, but easily ascertainable by the Secretary, and that, if such experience had been carefully studied, it would have revealed the utter inadequacy of the rates prescribed by the Secretary and the reasonableness ■ of the rates in force.
It appeared from the evidence that the Secretary relied upon the same evidence presented to him at the original hearing, and that he made but scant reference to the actual experience of the company during the period the excess commission rates were impounded.
Mr. Justice Cardozo, in West Ohio Gas. Co. v. Public Utilities Commission of Ohio, 294 U.S. 79, 55 S.Ct. 324, loc. cit. 325, 79 L.Ed. 773, loc. cit. 82, expressed the proper rule by saying that a prophesy should not be given first place over actual experience: “A forecast gives us one rate. A survey gives another. To prefer the forecast to the survey is an arbitrary judgment.”
In this case it was undoubtedly the duty of the Secretary to disregard- the opinion evidence and forecasts which formed the basis for his original order and to adhere completely and entirely to the evidence which revealed the actual experience of the market agencies during the time the excess commissions were collected and impounded. So far as the market agencies were concerned, the income used by them was precisely that prescribed by the Secretary. The practical effect of such rates in their business operations would have disclosed their reasonableness or the opposite.
Furthermore, according to the undisputed testimony, as well as facts admitted by the government, radical changes in business operations due to extrinsic factors were effected immediately following the promulgation of the rates of June 14, 1933. Prior to that time marketing agencies had. received livestock largely by carload shipments, but subsequent to that time the use of the automobile truck became a strong and potent factor. Consignments were therefore in much smaller lots and market salesmen were required to devote the same time, energy and skill for the disposal of a small consignment as had been given previously to carload shipments.
These business variations necessarily and inevitably wrought great changes in the market agency operations and required a greater marketing force and more intense activity. It does not seem reasonable that the trial examiner could have been accurate in his tentative report when he found that the new rates prescribed by the Secretary would check to the penny with the rates prescribed in the invalidated order.
2. There were market agencies operating at the stockyards which conformed to the schedules prescribed by the Secretary. Evidence that these agencies became involved in financial difficulties was rejected by the Secretary on the ground that it did not appear definitely that such financial difficulties arose from the new rates. It would seem that this evidence was competent, at least for the purpose of showing what the experiences of the agencies were in their operations, to the end that the Secretary might have been informed as to the part his rates may have played in the financial difficulties of those agencies.
3. On the question of a fair and full hearing, it appeared that the Secretary was disposed to enforce the original rates prescribed by him. His order reopening the case confirmed that, although at that time the actual experience of the market agencies would have properly supplanted all prophecies and predictions and opinion evidence. The Secretary notified the market agencies that “the proceedings, findings of fact, conclusion and order of June 14, 1933,” should again be served upon them “as the tentative findings of fact, conclusion and order of the Secretary of Agriculture in this proceeding.”
The plaintiffs, or petitioners, were then given a limited time “within which to file exceptions to said tentative findings of fact, conclusion and order,” etc.
A schedule derived from a hearing previously condemned by the Supreme Court as violative of due process was again put forward as a challenge to the petitioners to find fault with it. The offer of the petitioners to direct the inquiry into a reliable and dependable field of inquiry was unavailing. To refuse to consider competent evidence and to disregard the ordinary rules of logic and common experience is just as harmful to a litigant as if a tribunal clothed with quasi judicial authority had refused to hear the evidence at all.
4. The attitude of the Secretary was disclosed by his letter printed in the New York Times, as follows: “Actually, the effect is to give to the Kansas City commis*556sion men and their attorneys $700,000 of impounded money which rightfully belongs to the farmers.” In addition to this, at the trial there was lack of frankness on the part of the government and a disposition not to make full disclosure of all the facts.
It is my view that the order of the Secretary is unreasonable and that it was without evidentiary support. Furthermore, the Secretary did not grant to the petitioners the full and fair hearing contemplated by law, and he was disposed too strongly in favor of one side in the controversy.
5. However this proceeding is no longer an administrative matter under the Packers and Stockyards Act, but it is now simply a question as to who in equity and good conscience should have the impounded funds. On technical grounds the order of the Secretary of June 14, 1933 was invalidated, but notwithstanding this fact it is contended that the order was meritorious and that the facts duly considered would support it.
On this equitable issue the Secretary again tenders as reasonable a schedule of rates based upon a forecast derived from past experience, and asks that these be made to prevail over facts showing actual experience in substantially and radically altered conditions and circumstances. Clearly the rates thus derived are not now dependable and should be rejected as inapplicable to the facts and as unreasonable in the light of the actual facts.
Moreover, the Supreme Court did not intend by its last opinion to order a new trial, but simply that this court should determine the equities of the parties. This could have been accomplished by quick reference to the experience of the petitioners over the period June 14, 1933, to November 1, 1937, without the necessity of using opinion or speculative evidence.
The case of Atlantic Coast Line R. Co. v. Florida, 295 U.S. 301, 55 S.Ct. 713, 79 L.Ed. 1451, is decisive upon the facts here presented. The court, in referring to the authority of the Interstate Commerce Commission under practically identical circumstances (295 U.S. loc. cit. 312, 55 S.Ct. loc. cit. 718, 79 L.Ed. 1451), said: “The Commission was without power to give reparation for the injustice of the past, but it was not without power to inquire whether injustice had been done and to make report accordingly.”
In doing this, the court further said (295 U.S. loc. cit. 318, 55 S.Ct. loc. cit. 720, 79 L.Ed. 1451): “The claimants do not sustain the burden that is theirs by showing that the master set up a reasonable schedule. They must show that the other schedule, the one set up by the Commission, is unreasonable
Even before that, 295 U.S. loc cit. 317, 55 S.Ct. loc. cit. 720, 79 L.Ed. 1451, the court said significantly: “There is a zone of reasonableness within which judgment is at large.”
Therefore, according to the last opinion of the Supreme Court, 307 U.S. 183, 59 S. Ct. 795, 83 L.Ed. 1211, the Secretary cannot prescribe a retroactive schedule of rates, but he may only challenge the reasonableness of the rates in force. The court said, 307 U.S. loc. cit. 198, 59 S.Ct. loc. cit. 803, 83 L.Ed. 1211: “A proceeding is now pending before the Secretary in which, as we have seen, he is free to determine the reasonableness of the rates.”
This relates to the rates actually charged by the marketing agencies. It does not follow that the rates collected are unreasonable because the Secretary finds a different schedule reasonable, and particularly since the Secretary’s schedule is predicated upon the assumption of facts admittedly no longer existing.