Court Opinion

ID: 9419303
Source: CourtListenerOpinion
Date Created: 2023-08-02 22:48:34.890638+00
Date Added: 2024-06-11T17:22:17.335719
License: Public Domain

Mr. Justice Douglas,
concurring:
While I concur in the result and in most of the opinion of the Court, I am in disagreement with the majority on one phase of the case.
I do not think that the maximum allowance made by the Commission for fees and expenses is subject to review by the District Court. Sec. 77 (e) (2) now provides that the judge shall approve the plan if satisfied that the amounts to be paid for fees and expenses have been disclosed, “are reasonable, are within such maximum limits as are fixed by the Commission, and are within such maximum limits to be subject to the approval of the judge.” Prior to the 1935 amendments to § 77, that provision, then contained in subsection (g) (2), read differently. Though subsection (f) then stated that the Commission had to “fix the maximum compensation and reimbursement” which might be allowed by the court, subsection (g) (2) provided for approval of the plan by the judge if he was satisfied that all such amounts “have been *172fully disclosed and are reasonable, or are to be subject to the approval of the judge.” The changes made by the 1935 amendments are significant. The total amount of fees and expenses fixed by the Commission became a ceiling beneath which the judge could make readjustments but above which he could not go. Prior to those amendments judicial review of the maximum fixed by the Commission might have been permissible. But the changes made in 1935 clearly indicate, as Judge Evans said in In re Chicago, M., St. P. & P. R. Co., 121 F. 2d 371, 374, that the “court was ultimately to determine the amount of the fees,” its action however being “limited by the maximum fixed by the Commission.” The legislative history of the 1935 amendments supports that view.1 Indeed the Com*173mittee Reports stated* 2 that the “allowances to be made by the court” were to be “within the maximum prescribed by the Commission.” H. Rep. No. 1283, 74th Cong., 1st Sess., p. 3; S. Rep. No. 1336, 74th Cong., 1st Sess., p. 4.
That construction also squares with other provisions of § 77. Thus subsection (c) (12) provides that the judge may make an allowance “within such maximum limits as are fixed by the Commission.” It also requires the Commission to “fix the maximum allowances which may be allowed by the court.” They indicate to me that in line with the minority views in United States v. Chicago, M., St. P. & P. R. Co., 282 U. S. 311, which § 77 adopted (see Congressman LaGuardia, 76th Cong. Rec., 72nd Cong., 2d Sess., p. 5358), the drain on the cash resources of railroads was to be controlled by entrusting to the Commission the responsibility for determining the total amount of cash which should be expended for fees and expenses. Within those limits the courts could make a fair allocation among *174the various claimants. But beyond those limits the courts could not go. There might of course be questions of law affecting the aggregate maximum allowances made by the Commission which the District Court could review. Thus if in this ease the Commission had held that the services rendered by respondent were not within the scope of § 77 (c) (12), that ruling could be reviewed and the matter would then have to be remanded to the Commission for a new determination. § 77 (e). But apart from such instances, the Commission’s finding as to the aggregate maximum allowances is conclusive.
It is of course the duty of the Commission not only to fix the maximum amount of the aggregate allowances for fees and expenses but also to determine in the first instance how much each claimant should receive. That is made evident not only by subsection (c) (12) but also by subsection (d) which requires the Commission in its approval of a plan to find that it meets the requirements of subsections (b) and (e). The latter, as has been noted, requires that the amounts to be paid by the debtor or the reorganized company for expenses and fees be “reasonable” as well as “within such maximum limits as are fixed by the Commission.” Since the main services rendered in connection with a plan of reorganization under § 77 occur before the Commission, it is in a much better position than the District Court to determine the value, if any, of the services rendered by each claimant. That fact gives great weight to the findings made by the Commission on each claim. But the requirement in subsection (e) (2) that the judge find that the awards are “reasonable” negatives the idea that the findings of the Commission are conclusive. Hence within the maximum limits of the total allowances for fees and expenses the judge can make readjustments — increasing or decreasing amounts awarded to the various claimants or granting allowances where none were made by the Commission. The contrary view was *175adopted in In re Chicago, M., St. P. & P. R. Co., supra, pp. 374-375. The court felt that since subsection (c) (12) spoke of the “maximum limits” and “maximum allowances” fixed by the Commission, the findings of the Commission as to the maximum amount which each claimant could receive were conclusive. But that interpretation is difficult to reconcile with the requirement of subsection (e) (2) that the judge must find the allowances “reasonable.” The use of the plural in subsection (e) (12) only indicates that the maximum allowance for fees and the maximum allowance for expenses are both to be fixed by the Commission.
My conclusion that the aggregate maximum allowances fixed by the Commission are not reviewable does not make § 77 (c) (12) and (e) (2) unconstitutional. It is Congress which has the power under the Constitution to establish “uniform Laws on the subject of Bankruptcies throughout the United States.” Article I, § 8, Cl. 4. The scope of the bankruptcy power is not restricted to that which has been exercised. Continental Bank v. Chicago, R. I. & P. Ry. Co., 294 U. S. 648, 670-671. The fact that Congress has customarily entrusted administration of the various bankruptcy acts to the courts does not mean that it must do so. As stated by Judge Evans in In re Chicago, M., St. P. & P. R. Co., supra, p. 375, “the power of Congress to deal with bankruptcy carries with it the right to select the tribunal, even going outside of courts, to administer debtors’ estates.” When it comes to fees for services rendered or expenses incurred in connection with bankruptcy proceedings, Congress has plenary power. In § 48 of the general bankruptcy Act Congress has prescribed the schedule of fees for receivers, marshals, and trustees. It could provide that no fees for services rendered during the bankruptcy proceedings might be paid from the estate. The 1935 amendments to § 77 originally were recommended by the committees *176on that basis. H. Rep. No. 1283, supra, p. 3; S. Rep. No. 1336, supra, p. 4. Having that power Congress could fix fees for attorneys and others on a per diem or other basis. Cf. Hines v. Lowrey, 305 U. S. 85. In lieu of any such rigid system of control it could bring to its aid the services of the Commission and vest in it complete authority over all allowances. That clearly would not involve any question of delegation of judicial power. See Sunshine Coal Co. v. Adkins, 310 U. S. 381, 400. Hence, when Congress granted the Commission exclusive authority over the maximum amount of allowances, it did not give § 77 a constitutional infirmity.
Mr. Justice Black joins in this opinion.

 The testimony of Mr. Craven, the draftsman of the bill, is illuminating:
“Mr. Burgess. That is the provision of this act that the maximum is to be approved by the Commission. The objection that I was making was directed to Commissioner Mahaffie’s addition to that. It seems to me that the provision for the approval is adequate. I am not sure whether that maximum is appealable. Are you, Mr. Craven? That is, can the fixation of a maximum by the Commission be appealed under this act?
Mr. Craven. I think not.
Mr. Burgess. You think not?
Mr. Craven. That is my recollection of it.
Mr. Celler. Even if the court would accept the maximum there would be no appeal from the court’s ruling?
Mr.. Burgess. I do not know of any appeal that you can take from the Commission’s fixation of a maximum under this act.
Mr. Celler. That does not seem right.
Mr. Burgess. That (sic) is an appeal from the court’s fixation, of course, but that would have to be within the maximum, so I do not know of any appeal.
Mr. Michener. There are a number of powers from which you cannot appeal so far as the decision of the Commission is concerned. They are really given more power in some particulars than the judge.
Mr. Celler. That leaves the entire matter in the hands of the Inter*173state Commerce Commission, practically speaking.
Mr. Michener. Yes.
Mr. Burgess. Yes.
Mr. Celler. With no right of appeal at all if the maximum is accepted by the court?
Mr. Burgess. That is my understanding. If Mr. Craven has a different view, I should be glad to accept his view.
Mr. Craven. That is my understanding of it.”
Hearings on H. R. 6249, House Committee on the Judiciary, 74th Cong., 1st Sess., Ser. 3, p. 86. And see the testimony of Commissioner Mahaffie at p. 70, which is also quoted in In re Chicago, M., St. P. & P. R. Co., supra, p. 374.

 The committee print of the bill provided for allowances of expenses and of compensation. See subsections (c)(12) and (e)(2) of H. R. 6249, 74th Cong., 1st Sess., Hearings on H. R. 6249, supra, pp. 6, 7. As recommended by both the House and Senate committees, allowances for expenses but not for compensation were provided. The provision for allowances of fees was later restored. 79 Cong. Rec., 74th Cong., 1st Sess., p. 13765.