Court Opinion

ID: 9446464
Source: CourtListenerOpinion
Date Created: 2023-08-03 21:54:37.981248+00
Date Added: 2024-06-11T17:30:39.231129
License: Public Domain

FINNEGAN, Circuit Judge
(concurring).
This matter first came to our Court on a petition to review a decision and order, dated September 25, 1956, of the Judicial Officer1 of the United States Department of Agriculture. At the administrative level this was a disciplinary proceeding under the Commodity Exchange Act.2 All of the respondents joined in a 62-page petition for reconsideration and reargument submitted to the Judicial Officer, after his Decision and Order was issued for the Department of Agriculture, expressly seeking inter alia reconsideration of “the extent of penalties assessed.” Counsel for the Commodity Exchange Authority filed an answer to that petition before the Secretary of Agriculture.
Point V of the brief filed on the merits for the United States and the Secretary of Agriculture, in our Court on October 31, 1957, was: “The Administrative Sanction should be Sustained;” and the point was briefed and authorities in support discussed. Petitioners’ original brief filed August 2, 1957 in our Court is silent on the “sanctions.” Apparently it was not until three judges of our Court denied the petition for review that G. H. Miller and Company and Gilbert H. Miller decided there was little else left to do but attack the administrative remedy invoked against them.
Section 6(b) of the Commodity Exchange Act3 provides:
“If the Secretary of Agriculture has reason to believe that any person (other than a contract market) *298the provisions of this chapter, or any of the rules and regulations made pursuant to its requirements, or has manipulated or is attempting to manipulate the market price of any commodity, in interstate commerce, or for future delivery on or subject to the rules of any board of trade, he may serve upon such person a complaint stating his charges in that respect, to which complaint shall be attached or contained therein a notice of hearing, specifying a day and place not less than three days after the service thereof, requiring such person to show cause why an order should not be made directing that all contract markets until further notice of the Secretary of Agriculture refuse all trading privileges to such person, and to show cause why the registration of such person, if registered as futures commission merchant or as floor broker hereunder, should not be suspended or revoked. Said hearing may be held in Washington, District of Columbia, or elsewhere, before the Secretary of Agriculture, or before a referee designated by the Secretary of Agriculture, which referee shall cause all evidence to be reduced to writing and forthwith transmit the same to the Secretary of Agriculture. Upon evidence received, the Secretary of Agriculture may require all contract markets to refuse such person all trading privileges thereon for such period as may be specified in the order, and, if such person is registered as futures commission merchant or as floor broker hereunder, may suspend, for a period not to exceed six months, or revoke, the registration of such person. Notice of such order shall be sent forthwith by registered mail or delivered to the offending person and to the governing boards of said contract markets.
“After the issuance of the order by the Secretary of Agriculture, as aforesaid, the person against whom it is issued may obtain a review of such order or such other equitable relief as to the court may seem just by filing in the United States court of appeals of the circuit in which the petitioner is doing business a written petition praying that the order of the Secretary of Agriculture be set aside. A copy of such petition shall be forthwith served upon the Secretary of Agriculture by delivering such copy to him, and thereupon, the Secretary of Agriculture shall forthwith certify and file in the court a transcript of the record theretofore made, including evidence received. Upon the filing of the transcript the court shall have jurisdiction to affirm, to set aside, or modify the order of the Secretary of Agriculture, and the findings of the Secretary of Agriculture as to the facts, if supported by the weight of evidence, shall in like manner be conclusive.”
That the remedies used at the administrative level in this case are within the statutory range of § 6(b) was and still is uncontested. When G. H. Miller and Company and Gilbert H. Miller filed their consolidated petition for “Rehearing and Modification,” on January 22, 1958, they asked for a modification of the “excessive penalties assessed against” the petitioners. That petition was the aftermath of the unanimous opinion reported beginning at page -, ante. An opinion on rehearing was filed February 26, 1958, later implemented, by an order, showing that Judges Major and Schnack-enberg agreed the “penalties” imposed were “too severe” and “too harsh.” Judge Parkinson who wrote the initial opinion, dissented to the opinion of February 26, 1958. Judges Major and Schnackenberg voted to deny the Millers’ petition for rehearing on all other points presented; Judge Parkinson unqualifiedly voted to deny that petition for rehearing.
Understandably, the government petitioned for rehearing before the full Court *299sitting en banc and the current array of opinions flows from this last hearing.
The significance of this historical background lies in the fact that the initial unanimous opinion, handed down January 8, 1958, was by three Judges who flatly refused to set aside the order of the Secretary of Agriculture and it is that order which underlies the administrative “penalties”, so-called, subsequently modified by two members of the original division of this Court, who first heard the petition for review of the Secretary’s order.
I.
Consequently, the question now before us, as I view it, is just how much we can tinker with the Secretary’s legal suspension and revocation of trading privileges —concededly within the statutory range —based upon the judicially approved administrative order issued by the Secretary. Indeed, § 6(b) states, inter alia: “ * * * the findings of the Secretary of Agriculture as to the facts, if supported by the weight of evidence shall in like manner be conclusive.” The three judges of our Court recognized this provision in their first opinion, and refused to disturb that phase of the case on rehearing number one.
Civil remedies and criminal punishments are both prescribed by the Commodity Exchange Act. See 7 U.S.C.A. § 13 and it must be borne in mind that we are not here concerned with a criminal case. Regardless of dramatic catch phrases, i. e., “economic death,” we are confronted only with statutory devices committed by the Congress to the Secretary’s discretion, for the purpose of policing the market place. To be sure, revocation is a drastic step yet it must be assayed in the environment of the Commodity Exchange Act and the fact these petitioners were exercising a privilege. Another proceeding, Nelson v. Secretary of Agriculture, 7 Cir., 1943, 133 F.2d 453, 456, under the Commodity Exchange Act gave rise to proceedings to set aside an order of the Secretary of Agriculture and Judge Lindley, writing for the division of Judges, said:
“In permitting petitioner to buy and sell grain for future delivery on contract markets, the Government has in effect granted him a privilege. Suspension of such a privilege for failure to comply with the statutory standard is merely withdrawal by the Government of permission to engage in a business affected with the national public interest in which the person has no inherent right to engage, but in which he may participate only upon compliance with conditions imposed by Congress in the exercise of its power over commerce. Inasmuch as Congress has the power to fix conditions upon which petitioner may engage in trading on the market * * * it may, through an administrative agency, withdraw the privilege for violation of these conditions * * * ”
A similar position was taken by the First Circuit in Nichols & Co. v. Secretary of Agriculture, 1 Cir., 1942, 131 F.2d 651, 659: “We believe that suspension of a registrant is not primarily punishment for a past offense but it is necessary power granted to the Secretary of Agriculture to assure a proper adherence to the provisions of the Act.”
Chief Judge Duffy has followed the same line of thinking when reviewing a suspension order of a Judicial Officer of the United States Department of Agriculture, issued under the Packers and Stockyards Act, 7 U.S.C.A. § 181 et seq., in Cella v. United States, 7 Cir., 1953, 208 F.2d 783, 789.
Celia was cited and quoted in the brief filed for the government in Daniels v. United States, 7 Cir., 1957, 242 F.2d 39, and used in that opinion by Chief Judge Duffy. Under “contested issues” in the Daniels’ brief is this one: “3. The final issue is whether or not the suspension order should be set aside at this time on the grounds that, even under the present record, it is excessively harsh and oppressive.” It was to this point then, that Chief Judge Duffy stated: “The Administrative decision as to the remedy should be sustained unless the *300remedy selected has no reasonable relation to the practice found to exist * * * In view of respondent’s previous violations, the order, including the sanctions, should be approved.” 242 F.2d 39, 42.
“Equitable relief” mentioned in § 6 (b), is not, in my opinion, Congressional authority for substituting our subjective attitudes concerning the quantum of sanction or duration of suspension of trading privileges for that of the Secretary. A common sense approach, I should think, shows this to be nothing more than a recognition of the common garden variety of temporary injunction. Congress, in my view, simply recognized the usual questions arising in connection with enjoining orders of administrative agencies and made it clear that equitable relief could be invoked against the government. See e. g., Davis, Administrative Law § 213 and § 217, Statutory Limitations on Enjoining Administrative Action. I do not believe “equitable relief” means we are to decide the extent of sanction for that power is expressly conferred on the Secretary (not the Courts) by § 6(b), and as I view it his power is so potent—and necessarily so to achieve the aims of this legislation— that injunctive relief is expressly authorized in order that the basis in fact for administrative action can be probed expeditiously, in appropriate cases, rather than await the run of a calendar of cases for review.
“Modify” is the target word lurking in § 6(b). What has been done in this case was to treat “modify” as a third exclusive remedy on a petition for review of the Secretary’s order, i. e., approve his order and modify his order of suspension or revocation of registration. At best, I think the general principles of administrative law would permit modification, by a Court of Appeals, only to the extent of unlawfulness of the Secretary’s ruling or order. But so long as the Secretary makes findings of fact and they are based on evidence conforming to the statutory standards and he acts infra vires the relevant acts of Congress we cannot, in my opinion, modify sanctions because we personally think them “too harsh” “too severe.” To do otherwise ignores the expertise of the Secretary in the complexities of trading in futures. We can abdicate our judicial function by usurpation just as well as by abandonment to administrative agencies. Obviously all this goes further. Without the word “modify” in § 6(b), Courts of Appeal would have only two alternatives regarding the Secretary’s final orders—-affirm or set aside. But by using “modify” Congress allows some play in the joints, enabling a reviewing court to send back an order for further administrative action based upon some modification. Even a cursory reading of the first portion of § 6(b) reveals the numerous grounds of administrative action, any one of which could be the basis of a lengthy record and detailed order. Rather than have an order set aside and the proceedings annulled, the word “modify” allows for adjustment between Court, parties and Secretary on some aspects of the order. There is nothing in § 6(b) indicating that the scope of judicial review has been enlarged to the point where periods of suspension, for example, can be either increased, or decreased, or that revocations can be judicially converted into suspensions.
Much lays in the balance here if we merely glance at the word “modify” and let quick reaction turn us away from the broader question demanding our judicial attention. As part of his dissent to the majority in United States v. Monia, 1943, 317 U.S. 424, 431-432, 63 S.Ct. 409, 412, 87 L.Ed. 376, Mr. Justice Frankfurter, caught the theme implicit in statutory interpretation problems:
“The notion that because the words of a statute are plain, its meaning is also plain, is merely pernicious oversimplification. It is a wooden English doctrine of rather recent vintage [citing], to which lip service has on occasion been given here, but which since the days of Marshall this Court has rejected, especially in practice, [citing] A statute, like other living organisms, *301derives significance and sustenance from its environment, from which it cannot be severed without being mutilated. Especially is this true where the statute, like the one before us, is part of a legislative process having a history and a purpose. The meaning of such a statute cannot be gained by confining inquiry within its four corners. * * * ”
Though I have quoted from a dissent the concept and grasp of the problem is diminished not one whit because the author was not with the majority. Yet, if it be insisted only majority opinions deserve mention, then what Mr. Justice Reed wrote for the majority of a divided court in United States v. American Trucking Associations, 1940, 310 U.S. 534, 542-544, 60 S.Ct. 1059, 1063, 84 L.Ed. 1345, will serve the purpose:
“In the interpretation of statutes, the function of the courts is easily stated. It is to construe the language so as to give effect to the intent of Congress. There is no invariable rule for the discovery of that intention. To take a few words from their context and with them thus isolated to attempt to determine their meaning, certainly would not contribute greatly to the discovery of the purpose of the draftsmen of a statute, particularly in a law drawn to meet many needs of a major occupation.
“There is, of course, no more persuasive evidence of the purpose of a statute than the words by which the legislature undertook to give expression to its wishes. Often these words are sufficient in and of themselves to determine the purpose of the legislation. In such cases we have followed their plain meaning. When that meaning has led to absurd or futile results, however, this Court has looked beyond the words to the purpose of the act. Frequently, however, even when the plain meaning did not produce absurd results but merely an unreasonable one ‘plainly at variance with the policy of the legislation as a whole’ this Court has followed that purpose, rather than the literal words. When aid to construction of the meaning of words, as used in the statute, is available, there certainly can be no ‘rule of law’ which forbids its use, however clear the words may appear on ‘superficial examination.’ The interpretation of the meaning of statutes, as applied to justiciable controversies, is exclusively a judicial function. This duty requires one body of public servants, the judges, to construe the meaning of what another body, the legislators, has said. Obviously there is danger that the courts’ conclusion as to legislative purpose will be unconsciously influenced by the judges’ own views or by factors not considered by the enacting body. A lively appreciation of the danger is the best assurance of escape from its threat but hardly justifies an acceptance of a literal interpretation dogma which withholds from the courts available information for reaching a correct conclusion. Emphasis should be laid, too, upon the necessity for appraisal of the purposes as a whole of Congress in analyzing the meaning of clauses or sections of general acts. A few words of general connotation appearing in the text of statutes should not be given a wide meaning, contrary to a settled policy, ‘excepting as a different purpose is plainly shown.’ ”
While it may be urged we are not barred legislatively on the bare word “modify” I think the temporary urgency characterized by these petitioners as an “economic death sentence,” fails in overriding broader principles controlling court-administrator relations. Virtually all final orders of federal administrative agencies have economic impact on the parties against whom they are directed; obviously such deprivations are the teeth in the statutes. Mr. Justice Douglas, delivering the Court’s opinion in Federal Power Commission v. Idaho Power Co., *3021952, 344 U.S. 17, 21, 73 S.Ct. 85, 87, 97 L.Ed. 15, wrote: “The Court, it is true, has power ‘to affirm, modify, or set aside’ the order of the Commission ‘in whole or in part.’ * * * But that authority is not power to exercise an essentially administrative function. See Ford Motor Co. v. National Labor Relations Board, 305 U.S. 364, 373-374, 59 S.Ct. 301, 306, 307, 83 L.Ed. 221; Siegel Co. v. Federal Trade Commission, 327 U.S. 608, 66 S.Ct. 758, 90 L.Ed. 888.”
Chief Judge Swan, speaking for a division of the Second Circuit, observed in Consumer Sales Corp. v. Federal Trade Commission, 2 Cir., 1952, 198 F.2d 404, 408: “Our power to modify an order such as this, once an illegal trade practice has been found, is severely circumscribed [citing cases in a marginal note], but even if it were not we could find nothing improper about the Commission’s efforts to prevent this scheme from reappearing in a slightly altered garb.”
“It is a fundamental principle * * * that where Congress has entrusted an administrative agency with.the responsibility of selecting the means of achieving the statutory policy ‘the relation of remedy to policy is peculiarly a matter for administrative competence.’ ” American Power & Light Co. v. S. E. C., 1946, 329 U.S. 90, 112, 67 S.Ct. 133, 146, 91 L.Ed. 103. One need only read § 5 of the Commodity Exchange Act, embodying the Congressional declaration of the “dangerous tendency of dealings in commodity futures,” to commence understanding the reason why it supplied the Secretary with such drastic remedies:
“Transactions in commodity involving the sale thereof for future delivery as commonly conducted on boards of trade and known as ‘futures’ are affected with a national public interest; such transactions are carried on in large volume by the public generally and by persons engaged in the business of buying and selling commodity and products and byproducts thereof in interstate commerce; the prices involved in such transactions are generally quoted and disseminated throughout the United States and in foreign countries as a basis for determining the prices to the producer and the consumer of commodity and the products and byproducts thereof and to facilitate the movements thereof in interstate commerce; such transactions are utilized by shippers, dealers, millers, and others engaged in handling commodity and the products and byproducts thereof in interstate commerce as a means of hedging themselves against possible loss through fluctuations in price; the transactions and prices of commodity on such boards of trade are susceptible to speculation, manipulation, and control, and sudden or unreasonable fluctuations in the prices thereof frequently occur as a result of such speculation, manipulation, or control, which are detrimental to the producer or the consumer and the persons handling commodity and products and byproducts thereof in interstate commerce, and such fluctuations in prices are an obstruction to and a burden upon interstate commerce in commodity and the products and byproducts thereof and render regulation imperative for the protection of such commerce and the national public interest therein.”
Since the Secretary’s order does not contravene any constitutional limitation, is within the constitutional and statutory authority of the Secretary, and is supported by the requisite quantum and quality of evidence, I fail to see how we can set the order aside in part pertaining to the legal sanction or remedy given him to exclude persons from the trading privileges. These remedies are matters left specifically by Congress to the discretion of the Secretary; we fully perform our function on review by a determination that there has been a fair hearing, correct application of the relevant statutory provisions, and nothing contravening constitutional rights.
*303II.
In C. E. Niehoff & Co. v. Federal Trade Commission, 7 Cir., 1957, 241 F.2d 37 the Commission’s opinion contains this factor: “Stating that an order requiring the respondent to terminate its unlawful discriminations will destroy the Niehoff business when its competitors are not likewise enjoined, appellant [Niehoff] requests that this proceeding be held in abeyance until the Commission can place all industry members under identical restrictions. The pricing practices used by the respondent, however, have been found to be in violation of law. Since their continuance by the respondent is likewise unlawful the Commission’s duty under the applicable statute is to require their termination forthwith * * * ” 51 F.T.C. 1114 (See also Transcript of Record filed on certiorari, at page 1026).
On review of that Niehoff order and opinion I dissented (241 F.2d 37, 43) because my two colleagues stated “the order against Niehoff is hereby modified by striking the word ‘forthwith’ therefrom and by adding to said order the following : ‘This cease and desist order shall take effect at such time in the future as the United States Court of Appeals for the Seventh Circuit may direct, sua spon-ie or upon motion of the Federal Trade Commission.’ As thus modified, the order is affirmed.” Judge Major and Judge Schnackenberg invoked § 11 of the Clayton Act, 15 U.S.C. § 21 as their authority for such modification, and, of course, the word “modify” appears in that section of the Clayton Act.
When the Solicitor General, on behalf of the Federal Trade Commission, sought issuance of a writ of certiorari to review ■our judgment in Niehoff, the question presented in the petition was stated as: “ * * * [W]hether the power of judicial review conferred by Section 11 of the Clayton Act authorizes the reviewing court to postpone the operative date of a Commission order adjudicated to be valid, for the declared purpose of rendering the order a nullity until like orders have been entered against respondent’s ‘competitors.’ ” (Petition for certiorari, p. 2.) The brief in opposition to the government’s petition responded to that issue and the question was thus crystallized for review by the Supreme Court. When certiorari was granted, both sides briefed that particular issue.
On review by the Supreme Court, Niehoff was taken together with Moog Industries, Inc., v. Federal Trade Commission, 1958, 355 U.S. 411, 414, 78 S.Ct. 377, 380, 2 L.Ed.2d 370, where, in a per curiam,, the Court ordered that the Niehoff judgment be “ * * * vacated and the cause remanded to the Court of Appeals [Seventh Circuit] with directions to affirm the order of the Commission in its entirety.” Reaching that result the salient portion of the per curiam opinion was as follows:
“In view of the scope of administrative discretion that Congress has given the Federal Trade Commission, it is ordinarily not for courts to modify ancillary features of a valid Commission order. This is but recognition of the fact that in the shaping of its remedies within the framework of regulatory legislation, an agency is called upon to exercise its specialized, experienced judgment. Thus, the decision as to whether or not an order against one firm to cease and desist from engaging in illegal price discrimination should go into effect before others are similarly prohibited depends on a variety of factors peculiarly within the expert understanding of the Commission. Only the Commission, for example, is competent to make an initial determination as to whether and to what extent there is a relevant ‘industry’ within which the particular respondent competes and whether or not the nature of that competition is such as to indicate identical treatment of the entire industry by an enforcement agency. Moreover, although an allegedly illegal practice may appear to be operative throughout an industry, whether such appearances reflect fact and whether all firms in the industry *304should be dealt within a single proceeding or should receive individualized treatment are questions that call for discretionary determination by the administrative agency. It is clearly within the special competence of the Commission to appraise the adverse effect on competition that might result from postponing a particular order prohibiting continued violations of the law. Furthermore, the Commission alone is empowered to develop that enforcement policy best calculated to achieve the ends contemplated by Congress and to allocate its available funds and personnel in such a way as to execute its policy efficiently and economically.
“The question, then, of whether orders such as those before us should be held in abeyance until the respondents’ competitors are proceeded against is for the Commission to decide. If the question has not been raised before the Commission, as was the situation in No. 77, a reviewing court should not in any event entertain it. If the Commission has decided the question, its discretionary determination should not be overturned in the absence of a patent abuse of discretion.”
Certainly that opinion shrivelled the word “modify” in the section of the Clayton Act concerning our reviewing powers and the result understandable when read with an acute awareness of our relationship to the Commission. No doubt the luster of “modify” in pre-Nie-hoff days would be blinding unless read in the broad context of the administrative law problem.
The word “modify” employed in § 6 (b) should not be construed to reach the statutory remedies given the Secretary unless those remedies, (called “penalties” when viewed from an offender’s position) are shown to be wholly without eviden-tiary support or ultra vires the enabling act of the Congress. Of course, if the order suspending a futures commission merchant or floor broker were unsupported by the “weight of evidence” we would be bound to set it aside. But “modifying” the remedy utilized by the Secretary when his order meets the statutory test, is unsound.
We should, I think, withhold substitution of our judgment of the extent of the Secretary’s remedy when he acts within the scope of his statutory standards and administrative discretion. Congress entrusted the Secretary with these remedies to cope with market problems arising within his jurisdiction. Clearly the question of remedy, whether suspension or revocation, is peculiar to this case and these facts and consequently we ought not to interfere with particularized application of § 6(b) when there is absent any constitutional impinge-ments and the Secretary’s compliance with relevant statutes is unchallenged.
Our personal powers of discrimination might well discredit the degree of remedy invoked by the Secretary because it does not square with our individual judgments. But this can arise from circular thinking enclosing the record and our personal predilections rather than combining all of that with the Secretary’s experience, knowledge and goal. After all this is a review, not a petition for enforcement of an administrative order. Here I do not wish to be misunderstood. I speak from a point of view confronting what I believe to be the judicial function in this situation which is not too well delineated by case precedent. On the record now before us the question is not whether the remedy is too harsh. Congress invested the Secretary with primary authority for selecting among statutory remedies the ones useful to achieve the purposes for which such power was granted. Whether facts found by the Secretary amount to a violation is a question of law for this Court. The initial judicial review answered that question favorably for the administrator going further when no other error of law has been urged invades the province of discretion granted the Secretary. To countenance judicial adjustment of sanctions imposed by the Secretary in this *305case makes a stalking horse out of the statutory word “modify.”

. The Judicial Officer acted for the Secretary of Agriculture pursuant to authority delegated to him. 10 F.R. 13769; 11 F.R. 177A-233; 18 F.R. 3219; 18 F.R. 3648; 19 F.R. 74.

. Act of September 21, 1922, c. 369, 42 Stat. 998, as amended by the Act of June 15, 1936, c. 545, 49 Stat. 149.1, as amended, 7 U.S.C.A. § 1 et seq. (1952 ed.) The phrase “to affirm, to set aside, or modify * * * ” has been in the Act since 1922. is violating or has violated any of

. 7 U.S.C.A. § 9.