Court Opinion

ID: 9424015
Source: CourtListenerOpinion
Date Created: 2023-08-02 23:09:55.457232+00
Date Added: 2024-06-11T17:22:47.626605
License: Public Domain

Mr. Justice Black,
with whom Mr. Justice Brennan and Mr. Justice Marshall join,
concurring in the result.
I agree with Parts II and III of the prevailing opinion of Mr. Justice Fortas, holding that the Excelsior requirement 1 that an employer supply the union with the names and addresses of its employees prior to an election is valid on its merits and can be enforced by a subpoena. But I cannot subscribe to the criticism in that opinion of the procedure followed by the Board in adopting that requirement in the Excelsior case, 156 N. L. R. B. 1236 (1966). Nor can I accept the novel theory by which the opinion manages to uphold enforcement of the Excelsior practice in spite of what it considers to be statutory violations present in the procedure by which the requirement was adopted. Although the opinion is apparently *770intended to rebuke the Board and encourage it to follow the plurality’s conception of proper administrative practice, the result instead is to free the Board from all judicial control whatsoever regarding compliance with procedures specifically required by applicable federal statutes such as the National Labor Relations Act, 29 U. S. C. § 151 et seq., and the Administrative Procedure Act, 5 U. S. C. § 551 et seq. Apparently, under the prevailing opinion, courts must enforce any requirement announced in a purported “adjudication” even if it clearly was not adopted as an incident to the decision of a case before the agency, and must enforce “rules” adopted in a purported “rule making” even if the agency materially violated the specific requirements that Congress has directed for such proceedings in the Administrative Procedure Act. I for one would not give judicial sanction to any such illegal agency action.
In the present case, however, I am convinced that the Excelsior practice was adopted by the Board as a legitimate incident to the adjudication of a specific case before it, and for that reason I would hold that the Board properly followed the procedures applicable to “adjudication” rather than “rule making.” Since my reasons for joining in reversal of the Court of Appeals differ so substantially from those set forth in the prevailing opinion, I will spell them out at some length.
Most administrative agencies, like the Labor Board here, are granted two functions by the legislation creating them: (1) the power under certain conditions to make rules having the effect of laws, that is, generally speaking, quasi-legislative power; and (2) the power to hear and adjudicate particular controversies, that is quasi-judicial power. The line between these two functions is not always a clear one and in fact the two functions merge at many points. For example, in exercising its quasi-judicial function an agency must frequently *771decide controversies on the basis of new doctrines, not theretofore applied to a specific problem, though drawn to be sure from broader principles reflecting the purposes of the statutes involved and from the rules invoked in dealing with related problems. If the agency decision reached under the adjudicatory power becomes a precedent, it guides future conduct in much the same way as though it were a new rule promulgated under the rule-making power, and both an adjudicatory order and a formal “rule” are alike subject to judicial review. Congress gave the Labor Board both of these separate but almost inseparably related powers.2 No language in the National Labor Relations Act requires that the grant or the exercise of one power was intended to exclude the Board’s use of the other.
Nor does any language in the Administrative Procedure Act require such a conclusion. The Act does specify the procedure by which the rule-making power is to be exercised, requiring publication of notice for the benefit of interested parties and provision of an opportunity for them to be heard, and, after establishment of a rule as provided in the Act, it is then to be published in the Federal Register. Congress had a laudable purpose in prescribing these requirements, and it was evidently contemplated that administrative agencies like the Labor Board would follow them when setting out to announce a new rule of law to govern parties in the future. In this same statute, however, Congress also conferred on the affected administrative agencies the power to proceed by adjudication, and Congress specified a distinct procedure by which this adjudicatory power is to be exercised.3 The Act defines “adjudication” as *772“agency process for the formulation of an order,” and “order” is defined as “the whole or a part of a final disposition, whether affirmative, negative, injunctive, or declaratory in form, of an agency in a matter other than rule making but including licensing.” 5 U. S. C. §§551 (7), (6). Thus, although it is true that the adjudicatory approach frees an administrative agency from the procedural requirements specified for rule making, the Act permits this to be done whenever the action involved can satisfy the definition of “adjudication” and then imposes separate procedural requirements that must be met in adjudication. Under these circumstances, so long as the matter involved can be dealt with in a way satisfying the definition of either “rule making” or “adjudication” under the Administrative Procedure Act, that Act, along with the Labor Relations Act, should be read as conferring upon the Board the authority to decide, within its informed discretion, whether to proceed by rule making or adjudication. Our decision in SEC v. Chenery Corp., 332 U. S. 194 (1947), though it did not involve the Labor Board or the Administrative Procedure Act, is nonetheless equally applicable here. As we explained in that case, “the choice made between proceeding by general rule or by individual, ad hoc litigation is one that lies primarily in the informed discretion of the administrative agency.” Id., at 203.
In the present case there is no dispute that all the procedural safeguards required for “adjudication” were fully satisfied in connection with the Board’s Excelsior decision, and it seems plain to me that that decision did *773constitute “adjudication” within the meaning of the Administrative Procedure Act, even though the requirement was to be prospectively applied. See Great Northern R. Co. v. Sunburst Co., 287 U. S. 358 (1932). The Board did not abstractly decide out of the blue to announce a brand new rule of law to govern labor activities in the future, but rather established the procedure as a direct consequence of the proper exercise of its adjudicatory powers. Sections 9(c)(1) and (2) of the Labor Relations Act empower the Board to conduct investigations, hold hearings, and supervise elections to determine the exclusive bargaining representative that the employees wish to represent them. This is a key provision of the plan Congress adopted to settle labor quarrels that might interrupt the free flow of commerce. A controversy arose between the Excelsior Company and its employees as to the bargaining agent the employees desired to act for them. The Board’s power to provide the procedures for the election was invoked, an election was held, and the losing unions sought to have that election set aside. Undoubtedly the Board proceeding for determination of whether to confirm or set aside that election was “agency process for the formulation of an order” and thus was “adjudication” within the meaning of the Administrative Procedure Act.
The prevailing opinion seems to hold that the Excelsior requirement cannot be considered the result of adjudication because the Board did not apply it to the parties in the Excelsior case itself, but rather announced that it would be applied only to elections called 30 days after the date of the Excelsior decision. But the Excelsior order was nonetheless an inseparable part of the adjudicatory process. The principal issue before the Board in the Excelsior case was whether the election should be set aside on the ground, urged by the unions, that the employer had refused to make the employee lists avail*774able to them. See 156 N. L. R. B., at 1236-1238. The Board decided that the election involved there should not be set aside and thus rejected the contention of the unions. In doing so, the Board chose to explain the reasons for its rejection of their claim, and it is this explanation, the Board’s written opinion, which is the source of the Excelsior requirement. The Board’s opinion should not be regarded as any less an appropriate part of the adjudicatory process merely because the reason it gave for rejecting the unions’ position was not that the Board disagreed with them as to the merits of the disclosure procedure but rather, see 156 N. L. R. B., at 1239, 1240, n. 5, that while fully agreeing that disclosure should be required, the Board did not feel that it should upset the Excelsior Company’s justified reliance on previous refusals to compel disclosure by setting aside this particular election.
Apart from the fact that the decisions whether to accept a “new” requirement urged by one party and, if so, whether to apply it retroactively to the other party are inherent parts of the adjudicatory process, I think the opposing theory accepted by the Court of Appeals and by the prevailing opinion today is a highly impractical one. In effect, it would require an agency like the Labor Board to proceed by adjudication only when it could decide, prior to adjudicating a particular case, that any new practice to be adopted would be applied retroactively. Obviously, this decision cannot properly be made until all the issues relevant to adoption of the practice are fully considered in connection with the final decision of that case. If the Board were to decide, after careful evaluation of all the arguments presented to it in the adjudicatory proceeding, that it might be fairer to apply the practice only prospectively, it would be faced with the unpleasant choice of either starting all *775over again to evaluate the merits of the question, this time in a “rule-making” proceeding, or overriding the considerations of fairness and applying its order retroactively anyway, in order to preserve the validity of the new practice and avoid duplication of effort. I see no good reason to impose any such inflexible requirement on the administrative agencies.
For all of the foregoing reasons I would hold that the Board acted well within its discretion in choosing to proceed as it did, and I would reverse the judgment of the Court of Appeals on this basis.

 This requirement first announced in the Excelsior case, 156 N. L. R. B. 1236 (1966), has often been referred to by the Board, the lower courts, and the commentators as “the Excelsior rule.” I understand the use of the word “rule” in this context to imply simply that the requirement is a rule of law such as would be announced in a court opinion and not necessarily that it is the kind of “rule” required to be promulgated in accordance with the “rule-making” procedures of the Administrative Procedure Act. For the sake of clarity, however, I have chosen in this opinion to avoid use of the word “rule” when referring to the procedure required by the Excelsior decision.

 See National Labor Relations Act §§ 6, 9 (c) (1), 10; 29 U. S. C. §§ 156, 159 (c)(1), 160.

 The procedure to be followed in “adjudication,” which includes notice of the issues, an opportunity for responsive pleadings, a hear*772ing, and decision, is specified in 5 U. S. C. §§ 554, 556, and 557. The Administrative Procedure Act expressly exempts proceedings for “the certification of worker representatives” from these requirements, 5 U. S. C. §§554 (a) (6), 556 (a), 557 (a), and these proceedings are therefore governed only by the requirements specified in the National Labor Relations Act, 29 U. S. C. § 151 et seq.