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ARROW TRANSPORTATION CO. et al. v. SOUTHERN RAILWAY CO. et al.
No. 430.
Argued January 10, 1963.
Decided April 15, 1963.
John C. Lovett argued the cause for petitioners. With him on the briefs was Donald Macleay.
Dean Acheson argued the cause for respondent Southern Railway Co. With him on the brief was Francis M. Shea.
Ralph S. Spritzer, by special leave of Court, argued the cause for the United States, as amicus curiae, urging reversal. With him on the brief were Solicitor General Cox, Assistant Attorney General Loevinger and Lionel Kestenbaum.
Briefs of amici curiae, urging affirmance, were filed by Whiteford S. Blakeney for Statesville Flour Mills; by John W. Vardaman for Walley Milling Company; by Eugene Cook, Attorney General of Georgia, Paul Rodgers, Assistant Attorney General, and Walter R. McDonald for the Southern Governors’ Conference et al.; and by Austin L. Roberts, Jr. and R. Everette Kreeger for the National Association of Railroad.and Utilities Commissioners.
Mr. Justice Brennan
delivered the opinion of the Court.
A schedule of reduced rates proposed by the respondent rail carriers was suspended by the Interstate Commerce Commission for the maximum statutory period of seven months pending a determination whether the reduction was lawful. The statute expressly provides that “the proposed change of rate . . . shall go into effect,” if the Commission’s proceeding has not been concluded and an order made within the period of suspension. The Commission did not reach a decision within seven months, or within the following five months during which the respondents voluntarily postponed the change, and the respondents announced that the reduced rates would be put in effect. Thereupon the petitioners brought this action in the District Court for the Northern District of Alabama to enjoin the respondents from making the change effective pending the Commission’s decision. The District Court concluded after examination of the pleadings and a brief hearing that “there is grave danger that irreparable injury, loss or damage may be inflicted on ... [petitioners] if the proposed rates go into effect... for which . . . [petitioners] will have no adequate remedy at law.” The court held, however, that § 15 (7) vested exclusive power in the Commission to suspend a change of rate for a limited time and thereby precluded District Court jurisdiction to grant injunctive relief extending the statutory period. The Court of Appeals for the Fifth Circuit affirmed, stating, “Congress, in its wisdom, has fixed seven months as the maximum period of suspension. It seems clear to us that if the courts extend that period, they are in effect amending the statute and that is a matter beyond their power.” 308 F. 2d 181, 186. We granted certiorari, 371 U. S. 859. We affirm the judgment of the Court of Appeals.
I.
The Interstate Commerce Commission was granted no power to suspend proposed rate changes in the original Act of 1887. That power first appeared among the 1910 amendments introduced by the Mann-Elkins Act. The problem as to whether the application of new rates might be stayed pending decision as to their lawfulness first emerged after the Commission was empowered by the Hepburn Act of 1906 to determine the validity of proposed rates. In the absence of any suspension power in the Commission, shippers turned to the courts for injunc-tive relief. The results were not satisfactory. The lower federal courts evinced grave doubt whether they possessed any equity jurisdiction to grant such injunctions, and the availability of relief depended on the view of a particular court on this much controverted issue. The Interstate Commerce Commission was more concerned, however, with certain practical consequences of leaving the question with the courts. In its Annual Reports for the three years before 1910 the Commission had directed attention to the fact that such courts as entertained jurisdiction were reaching diverse results, which engendered confusion and produced competitive inequities. The large expense entailed in prosecuting an action and financing a substantial bond proved prohibitive for many small shippers of modest means. Even when a large shipper secured an injunction, the scope of its relief often protected only that particular shipper, leaving his weaker competitors at the mercy of the new rate. Therefore, the Commission reported to Congress, . . as a practical matter the small shipper who can not file the bond can not and does not continue in business under the higher rate.” I. C. C. Annual Report, 1908, p. 12. As an equally serious consequence, the regulatory goal of uniformity was jeopardized by the diverse conclusions reached by different District Courts — even, it appears, as to the reasonableness of a particular rate change. This resulted in disparity of treatment as between different shippers, carriers, and sections of the country, causing in turn “discrimination and hardship to the general public.” I. C. C. Annual Report, 1907, p. 10.
It cannot be said that the legislative history of the grant of the suspension power to the Commission includes unambiguous evidence of a design to extinguish whatever judicial power may have existed prior to 1910 to suspend proposed rates. However, we cannot suppose that Congress, by vesting the new suspension power in the Commission, intended to give backhanded approval to the exercise of a judicial power which had brought the whole problem to a head.
Moreover, Congress engaged in a protracted controversy concerning the period for which the Commission might suspend a change of rates. Such a controversy would have been a futile exercise unless the Congress also meant to foreclose judicial power to extend that period. This controversy spanned nearly two decades. At the outset in 1910, the proposal for conferring any such power on the Commission was strenuously opposed. The carriers contended that any postponement of rate changes would result in loss of revenue or competitive advantages fairly due them in the interim if the rates were finally determined to be lawful. But this opposition eventually took the form of efforts to limit the time for which suspension might be ordered by the Commission. The Mann-Elkins Act authorized a suspension for an initial period not to exceed 120 days with a discretionary power in the Commission to extend the period for a maximum additional six months. Ten years later the Esch-Cum-mins Act of 1920 cut the authorized period of extension from six months to 30 days, thus reducing from 10 to five months the overall period for which the Commission might order a suspension. Congress was aware throughout the consideration of these measures that some shippers might for a time have to pay unlawful rates because a proceeding might not be concluded and an order made within the reduced time. To mitigate that hardship, the 1920 amendments authorized the Commission in such cases to require the carriers to keep detailed accounts of charges collected and to order refunds of excess charges if the Commission ultimately found the rates to be unlawful. The suspension provisions took their present form, vesting authority in the Commission to suspend for a maximum period of seven months, in the Act of 1927. The accounting and refund provisions of the 1920 law remained. Thus, as we have observed before, the present limitation was “formed after much experimentation with the period of suspension . . . Interstate Commerce Comm’n v. Inland Waterways Corp., 319 U. S. 671, 689.
We cannot believe that Congress would have given such detailed consideration to the period of suspension unless it meant thereby to vest in the Commission the sole and exclusive power to suspend and to withdraw from the judiciary any pre-existing power to grant injunctive relief. This Court has previously indicated its view that the present section had that effect. In Board of Railroad Comm’rs v. Great Northern R. Co., 281 U. S. 412, 429, Chief Justice Hughes said for the Court: “This power of suspension was entrusted to the Commission only.” The lower federal courts have also said as much. And the commentators on the matter have consistently supported the soundness of that view.
There is, of course, a close nexus between the suspension power and the Commission’s primary jurisdiction to determine the lawfulness and reasonableness of rates, a jurisdiction to which this Court had, even in 1910, already given the fullest recognition. Texas & Pacific R. Co. v. Abilene Cotton Oil Co., 204 U. S. 426. This relationship suggests it would be anomalous if a Congress which created a power of suspension in the Commission because of the dissonance engendered by recourse to the injunction nevertheless meant the judicial remedy to survive. The more plausible inference is that Congress meant to foreclose a judicial power to interfere with the timing of rate changes which would be out of harmony with the uniformity of rate levels fostered by the doctrine of primary jurisdiction.
It must be admitted that Congress dealt with the problem as it affected the relations between shippers and carriers, making no express reference to the interests of competing carriers and their customers such as are involved in the instant case. We see no warrant in that omission, however, for a difference in result. Conflicts over rates between competing carriers were familiar to the Commission long before 1910; indeed, the struggle between competing barge and rail carriers has been going on almost since railroads came onto the national scene. Indeed, in another provision of the very same statute Congress in 1910 dealt explicitly with the reduction of rates by railroads competing with water carriers: Section 4 (2) of the Act forbids a rail carrier competing with a water carrier to increase rates once reduced on a competitive service, unless “after hearing by the Commission it shall be found that such proposed increase rests upon changed conditions other than the elimination of water competition.” 49 U. S. C. § 4 (2). In addition § 8 of the Act, 49 U. S. C. § 8, creates a private right of action for damages — based upon conduct violative of the Act — which might be available, though we have no occasion here to decide the question, to a competitor claiming that a proposed rate reduction had been grossly discriminatory. Our holding today therefore means only that the injunction remedy is not available to these petitioners, just as it is unavailable to shippers.
II.
Our conclusion from the history of the suspension power is buttressed by a consideration of the undesirable consequences which would necessarily attend the survival of the injunction remedy. A court’s disposition of an application for injunctive relief would seem to require at least some consideration of the applicant’s claim that the carrier’s proposed rates are unreasonable. But such consideration would create the hazard of forbidden judicial intrusion into the administrative domain. Judicial cognizance of reasonableness of rates has been limited to carefully defined statutory avenues of review. These considerations explain why courts consistently decline to suspend rates when the Commission has refused to do so, or to set aside an interim suspension order of the Commission. If an independent appraisal of the reasonableness of rates might be made for the purpose of deciding applications for injunctive relief, Congress would have failed to correct the situation so hazardous to uniformity which prompted its decision to vest the suspension power in the Commission. Moreover, such a procedure would permit a single judge to pass before final Commission action upon the question of reasonableness of a rate, which the statute expressly entrusts only to a court of three judges reviewing the Commission’s completed task.
Nor is the situation different in this case if it be suggested that a court of equity might rely upon the Commission’s finding of unreasonableness which preceded the Commission’s suspension ordfer. The Commission’s consideration of the question, through its Suspension Board, involves only a brief and informal hearing. Automatic judicial acceptance of a finding reached in that way would delegate greater effect to such an administrative process than the process itself warrants. As the basis for a judicial decree of a single district judge, such a procedure would be inconsistent with § 15 (1) of the Act, which provides that effective rates may be struck down as unlawful after a “full hearing” by the Commission.
III.
The petitioners contend that in any event injunctive relief is authorized in this case to enforce the National Transportation Policy. They argue that when the rail carriers’ rates go into effect the barge line will inevitably and immediately be driven out of business, contrary to the paramount concern of the policy for the protection of water carriers threatened by rail competition. Apart from the absence of any decisive showing that the barge line would suffer this misfortune, it is clear that nothing in the National Transportation Policy, enacted many years after the 1927 revision of § 15 (7), indicates that Congress intended to revive a judicial power which we have found was extinguished when the suspension power was vested in the Commission. Cf. United States v. Borden Co., 308 U. S. 188, 198-199. Indeed, if anything, the policy reinforces our conclusion. The mandate to achieve a balance between competing forms of transportation is directed not to the courts but to the Commission. It is reasonable to suppose that had Congress felt that balance to be in danger of distortion, it would have addressed itself to our problem directly by enhancing the powers granted the Commission to enforce the policy. Surely Congress would not have meant its silence alone to imply the revival of a judicial remedy the exercise of which might well defeat rather than promote the objectives of the National Transportation Policy.
Affirmed.
49 U. S. C. §15 (7):
“Whenever there shall be filed with the Commission any schedule stating a new . . . rate . . . the Commission shall have . . . authority, either upon complaint or upon its own initiative without complaint, at once ... to enter upon a hearing concerning the lawfulness of such rate . . . and pending such hearing and the decision thereon the Commission, upon filing with such schedule and delivering to the carrier or carriers affected thereby a statement in writing of its reasons for such suspension, may from time to time suspend the operation of such schedule and defer the use of such rate . . . but not for a longer period than seven months beyond the time when it would otherwise go into effect; and after full hearing, whether completed before or after the rate . . . goes into effect, the Commission may make such order with reference thereto as would be proper in a proceeding initiated after it had become effective. If the proceeding has not been concluded and an order made within the period of suspension, the proposed change of rate . . . shall go into effect at the end of such period . . . .”
The petitioners are a barge line, Arrow Transportation Co., a competitor of the respondent railroads for grain carriage; a municipality, Guntersville, Alabama, served by Arrow; a grain merchant, O. J. Walls, located in that municipality; and a grain consumer, John D. Bagwell Farms & Hatchery, Inc., which receives its grain by truck from Guntersville. The rate reductions which respondents have filed cover the shipment of grain to various points in the Southeastern United States, but apply only to multiple-car shipments from certain Mississippi and Ohio River ports. The Commission, following a complaint by competing barge lines and other parties, and on the basis of a recommendation of its Suspension Board, made a tentative finding that the proposed rates would be “unjust and unreasonable, in violation of the Interstate Commerce Act,” and would “constitute unfair and destructive competitive practices in contravention of the National Transportation Policy.” After the full hearing, however, Division 2 of the Commission, on January 21, 1963, concluded that Southern’s rates at least were compensatory and reasonable, Grain in Multiple-Car Shipments — River Crossings to the South, I. & S. Docket No. 7656. That decision is now awaiting reconsideration by the full Commission.
The four petitioners have contended throughout this litigation that the application of the proposed new rail rates will irreparably injure their respective economic interests, particularly because they threaten to force Arrow out of business. Petitioners further contend that the proposed rates, being substantially lower than the competitive barge rates in effect at the time of filing, unlawfully discriminate against a competing form of transportation. The reductions, in petitioners’ view, will benefit only those users of grain who are equipped to receive very large rail shipments, to the detriment of all receivers off the rail routes, and the smaller rail-side purchasers who lack facilities for receipt and storage of multiple-car shipments. Southern responds that its reductions, at least, were made possible by technological innovations and efficiencies culminating in the inauguration of new aluminum freight cars designed especially for carriage of large grain shipments. Southern also maintains that the proposed rates are both nondiscriminatory and compensatory, and have been necessitated by vigorous competition- against the railroads by unregulated motor carriers on certain routes which the barge lines do not serve.
In the course of the hearings before the Commission, the proposed rates were supported by representatives of the United States Department of Agriculture, the Southern Governors’ Conference, the Southeastern Association of Railroad and Utilities Commissioners, and by various receivers and users of grain throughout the Southeast. On the other hand, the rates were protested by certain barge lines besides Arrow, several receivers of grain by barge, the Tennessee Valley Authority, flour milling interests and certain boards of trade outside the Southeast.
The District Court concluded in its memorandum following an oral argument:
“. . . I have convinced myself that should this Court have jurisdiction of this matter, it should consider all of these matters most carefully and deliberately before denying injunctive relief to plaintiffs. At this time I am of the opinion that the ends of justice would be best served by granting temporary injunctive relief for a limited period of time, not to urge the Commission to greater speed in determining this issue but to be sure that the parties conclude the hearings as speedily as possible. However, lacking jurisdiction, I find myself powerless to grant the relief sought; therefore, at this time it is the judgment of the Court that the motion for preliminary injunction be, and the same is hereby denied. At the same time I am denying defendants’ motion to dismiss this ease.”
The District Court’s formal order, entered the following day, denied both the petitioners’ motion for a preliminary injunction and the respondents’ motion to dismiss.
One judge of the Court of Appeals granted petitioners’ motion for a temporary restraining order on August 3, 1962, the day on which the order of the District Court issued. On August 8, however, a panel of the Court of Appeals denied petitioners’ application for a restraining order pending decision of the appeal. Thereafter, but before oral argument in the Court of Appeals, MR. Justice BlacK issued an order extending the Court of Appeals’ restraining order pending the presentation and disposition by this Court of a petition for certiorari. The Court of Appeals rendered its opinion on September 7, 1962, and we granted certiorari on October 15. We invited the Solicitor General to file a brief expressing the views of the United States, and he filed a brief for the United States as amicus curiae. Southern was the only railroad which opposed certiorari or argued the merits of the case before this Court.
36 Stat. 552.
The cases decided between 1906 and 1910 disclose the judicial uncertainty about the availability of any equitable relief. Compare, e. g., Northern Pac. R. Co. v. Pacific Coast Lumber Mfrs. Assn., 165 F. 1 (C. A. 9th Cir. 1908); Jewett Bros. & Jewett v. Chicago, M. & St. P. R. Co., 156 F. 160 (C. C. D. S. D. 1907) with, e. g., Atlantic Coast Line R. Co. v. Macon Grocery Co., 166 F. 206 (C. A. 5th Cir. 1909), aff'd on other grounds, 215 U. S. 501; and Wickwire Steel Co. v. New York Cent. & H. R. R. Co., 181 F. 316 (C. A. 2d Cir. 1910). See for a contemporary view that courts lacked such injunctive powers over proposed rates, 1 Drinker, The Interstate Commerce Act (1909), §243.
See In re Advances in Bates — Western Case, 20 I. C. C. 307, 313-314; Dixon, The Mann-Elkins Act, 24 Quarterly Journal of Economics, August 1910, p. 593, at 603; Crook, The Interstate Commerce Commission, 194 North American Review, December 1911, p. 858, at 867.
The Administration originally recommended a period of 60 days; congressional proponents of suspension urged in response an unlimited suspension power, see 45 Cong. Rec. 6409. The Commission itself originally proposed a period of 120 days; the Senate Committee which reported on the Senate version of the bill recommended 90 days, S. Rep. No. 355, 61st Cong., 2d Sess. 9. For other stages of the legislative give-and-take which finally produced a period of 10 months as the maximum suspension term, see 45 Cong. Rec. 3373-3374, 3472, 4109-4110, 6500-6501, 6503, 6509, 6510-6511, 6783-6784, 6787-6788, 6900-6901, 6915-6921, 8239, 8473.
36 Stat. 552.
41 Stat. 486-487. Section 418 of the Esch-Cummins Act also added an express provision that if the hearing had not been concluded at the expiration of the 30-day extension period, “the proposed change of rate, fare, charge, classification, regulation, or practice shall go into effect at the end of such period . . . .”
See, e. g., Statement of Commissioner Clark, Hearings on H. R. 4378 before House Committee on Interstate and Foreign Commerce, 66th Cong., 1st Sess. 91, 2944; H. R. Rep. No. 456, 66th Cong., 1st Sess. 20-21. President Taft’s 1910 message expressly adverted to the possibility that the hearings might outlast the suspension period. 45 Cong. Ree. 380.
A recent summary indicates that only about three-fifths of the investigation and suspension proceedings are completed within the seven-month period, but only four percent of such cases require more than a year. Remarks of Commissioner Charles A. Webb, in Expedition of Commission Proceedings, A Panel Discussion, 27 I. C. C. Prac. J. 15, 16 (1959). Professor Sharfman is authority that at the time he wrote it was invariably the practice of carriers voluntarily to extend the period at least with respect to proposed increases. 1 Sharfman, The Interstate Commerce Commission (1931), 203.
Section 418 of the Transportation Act of 1920, 41 Stat. 484, 486-487, amending § 15 of the Interstate Commerce Act.
44 Stat. 1447-1448. See S. Rep. No. 1508, 69th Cong., 2d Sess. 4. Since the enactment of §15 (7), similar suspension provisions have been included in numerous other regulatory statutes. See 49 U. S. C. §§316 (g), 318 (c) (Motor Carrier Act); 49 U. S. C. § 907 (g), (i) (Water Carrier Act); 49 U. S. C. § 1006 (e) (Freight Forwarders Act); 47 U. S. C. § 204 (Federal Communications Act); 16 U. S. C. § 824d (e) (Federal Power Act); 15 U. S. C. § 717c (e) (Natural Gas Act); and 49 U. S. C. § 1482 (g) (Federal Aviation Act). The terms of these later statutes are virtually identical to those of § 15 (7), although the length of the prescribed suspension period varies. However, it should be apparent that nothing we hold with respect to § 15 (7) necessarily governs the construction and application of these other suspension provisions.
Great Northern held only that the District Court lacked power to enjoin intrastate rates which had been duly prescribed by a state regulatory agency and which the railroads were protesting before the Interstate Commerce Commission as discriminatory against interstate commerce. Although, unlike this case, the situation there involved a danger of direct conflict between federal and state regulation, see 281 U. S., at 426-430, the reasoning there does suggest the Court was of the view that even in the absence of such a direct conflict, the federal courts might not enjoin proposed rates when the Commission lacked either the inclination or the power to do so.
E. g., M. C. Kiser Co. v. Central of Ca. R. Co., 236 F. 573 (D. C. S. D. Ga.), aff’d, 239 F. 718 (C. A. 5th Cir.); Freeport Sulphur Co. v. United States, 199 F. Supp. 913, 916 (D. C. S. D. N. Y.); Luckenbach S. S. Co. v. United States, 179 F. Supp. 605, 609-610 (D. C. D. Del.), vacated in part as moot, 364 U. S. 280; cf. Manhattan Transit Co. v. United States, 24 F. Supp. 174, 177 (D. C. D. Mass.). See also Director General v. Viscose Co., 254 U. S. 498, 502, recognizing on similar grounds that under the Transportation Act of 1920 the District Courts lacked power to enjoin the action of the Director General of Railroads in instituting changes of commodity classifications and similar terms: “[T]here was ample and specific provision made therein for dealing with the situation through the Commission, — for suspending the supplement or rule . . . .” 254 U. S., at 502. Cantlay & Tanzola, Inc., v. United States, 115 F. Supp. 72 (D. C. S. D. Calif.), upon which petitioners rely, is not contrary. There the District Court found no need to enjoin or suspend the proposed rates because, pendente lite, the carriers had voluntarily restored the previous schedule. But the court said: “The Congressional intent [underlying § 15 (7)] plainly is that the courts not interfere to suspend carrier-made rates ‘prior to an appropriate finding by the Interstate Commerce Commission.’ ” 115 F. Supp., at 83.
See, e. g., Professor Sharfman’s view that “[u]pon failure of the Commission to issue an order within this prescribed period, the proposed changes in rates were automatically to become effective, although the Commission might continue its investigation and bring it to decision.” 1 Sharfman, The Interstate Commerce Commission (1931), 202. A contemporary commentator’s view of the operation of the new statute was as follows: “In other words, the Commission may suspend rates for ten months beyond their effective date but no longer, and if the investigation is not then complete, the rates automatically go into effect.” Dixon, The Mann-Elkins Act, 24 Quarterly Journal of Economics, August 1910, p. 593, at 604. For a current view, see Brooks and Daily, The Commission’s Power of Suspension and Judicial Review Thereof, 27 I. C. C. Prac. J. 589, 599 (1960).
See also Board of Railroad Comm’rs v. Great Northern R. Co., supra, at 429-430; Director General v. Viscose Co., 254 U. S. 498, 504; In re Advances in Rates — Western Case, 20 I. C. C. 307, 313-314; Brooks and Daily, supra, note 16, at 605.
See Commissioner Eastman’s description of the evolution of this competition, Petroleum Products from New Orleans, La., Group, 194 I. C. C. 31, 44.
See Texas & Pacific R. Co. v. Abilene Cotton Oil Co., supra, at 440-441; Director General v. Viscose Co., 254 U. S. 498; Baltimore & O. R. Co. v. Pitcairn Coal Co., 215 U. S. 481, 493-495. It has been pointed out that “the agencies, through their power to suspend or deny suspension, often make final determinations of what the rates shall be during the suspension period . . . .” 1 Davis, Administrative Law (1958), 442.
28 U. S. C. § 2325 requires the convening of a three-judge District Court pursuant to 28 U. S. C. § 2284 to enjoin even temporarily the operation or execution “of any order of the Interstate Commerce Commission
The Court of Appeals also suggested — though the suggestion has not been challenged before this Court — that § 16 of the Clayton Act, 15 U. S. C. § 26, might independently bar the injunctive relief sought here. 308 F. 2d, at 185. That section restricts to the United States, in suits for violations of the antitrust laws, the right to seek injunctive relief against any common carrier “in respect of any matter subject to the regulation, supervision, or other jurisdiction of the Interstate Commerce Commission.” Its applicability would, of course, depend upon whether or not the petitioners’ action rests upon claimed violations of the antitrust laws. Cf. Central Transfer Co. v. Terminal Bailroad Assn., 288 U. S. 469.
See, e. g., Carlsen v. United States, 107 F. Supp. 398 (D. C. S. D. N. Y.); Bison S. S. Corp. v. United States, 182 F. Supp. 63 (D. C. N. D. Ohio); Luckenbach S. S. Co. v. United States, 179 F. Supp. 605 (D. C. D. Del.). But cf. Amarillo-Borger Express, Inc., v. United States, 138 F. Supp. 411 (D. C. N. D. Tex.), vacated as moot, 352 U. S. 1028; Seatrain Lines, Inc., v. United States, 168 F. Supp. 819 (D. C. S. D. N. Y.). Compare generally Goodman, The History and Scope of Federal Power to Delay Changes in Transportation Rates, 27 I. C. C. Prac. J. 245 (1959), with Brooks and Daily, The Commission’s Power of Suspension and Judicial Review Thereof, id., 589 (1960).
Thus we do not reflect in any way upon decisions which have recognized a limited judicial power to preserve the court’s jurisdiction or maintain the status quo by injunction pending review of an agency’s action through the prescribed statutory channels. Cf., e. g., Scripps-Howard Radio, Inc., v. Federal Communications Comm’n, 316 U. S. 4; West India Fruit & S. S. Co. v. Seatrain Lines, Inc., 170 F. 2d 775; Board of Governors v. Transamerica Corp., 184 F. 2d 311. Such power has been deemed merely incidental to the courts’ jurisdiction to review final agency action, and has never been recognized in derogation of such a clear congressional purpose to oust judicial power as that manifested in the Interstate Commerce Act.
It has also been suggested that a judicial power of this sort may have survived by reason of the “saving clause” of the statute, 49 U. S. C. §22 (1). That conclusion would, of course, follow only if prior to the adoption of the Act there had been a clearly recognized equitable power to enjoin proposed rate changes. This, as we have already indicated, was not the case. Moreover, we have generally rejected such constructions of this and similar saving clauses, see, e. g., Texas & Pacific R. Co. v. Abilene Cotton Oil Co., supra; T. I. M. E., Inc., v. United States, 359 U. S. 464, 472-474.
See North Carolina Natural Gas Corp. v. United States, 200 F. Supp. 745, 750 (D. C. D. Del.). The Commission’s regulations and rules contemplate only an informal hearing before the Suspension Board upon a protest, of which no transcript is to be made, although reconsideration may be requested. She 49 CFR §§ 1.42,1.200; see also 1 Davis, Administrative Law (1958), 441: “Although a hearing cannot be held on the question whether to suspend pending hearing, in many cases hurried conferences are held, which provide substantial safeguard against arbitrary action.” The practice of the Civil Aeronautics Board under a virtually identical suspension statute appears to be more formal, 14 CFR § 302.505; see Air Freight Forwarder Assn., 8 C. A. B. 469; 474.
We suggest no lack of congressional power to grant either administrative or judicial authority to extend a suspension period prior to completion of the administrative proceeding. Under other statutes Congress has evinced a clear intention to vest the courts with such power. The National Labor Relations Board, for example, has expressly been authorized to apply to the courts for “appropriate temporary relief or restraining order” pending the Board’s decision of an unfair labor practice case. 29 U. S. C. §160 (j). Cf. Transpacific Freight Conference v. Federal Maritime Board, 112 U. S. App. D. C. 290, 295, 302 F. 2d 875, 880.
54 Stat. 899, which has been inserted before .Part I of the Interstate Commerce Act.
Schaffer Transportation Co. v. United States, 355 U. S. 83, 87-88; Arrow Transportation Co. v. United States, 176 F. Supp. 411, 416 (D. C. N. D. Ala.), aff’d per curiam sub nom. State Corporation Comm’n v. Arrow Transportation Co., 361 U. S. 353. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
65
] |
McLEOD, REGIONAL DIRECTOR, NATIONAL LABOR RELATIONS BOARD v. GENERAL ELECTRIC CO. et al.
No. 645.
Decided January 16, 1967.
Solicitor General Marshall, Richard A. Posner, Arnold Ordman, Dominick L. Manoli and Norton J. Come for petitioner in No. 645.
Irving Abramson and Ruth Weyand for petitioner in No. 774 and for respondent International Union of Electrical, Radio & Machine Workers, AFL-CIO, in No. 645.
David L. Benetar for respondent General Electric Co. in both cases.
Together with No. 774, International Union of Electrical, Radio & Machine Workers, AFL-CIO v. General Electric Co. et al., also on petition for writ of certiorari to the same court.
Per Curiam.
The petitions for certiorari are granted. The judgment of the Court of Appeals for the Second Circuit is set aside with direction to that court to enter a new judgment consistent with this opinion.
The Regional Director of the Second Region of the National Labor Relations Board issued a complaint and notice of hearing upon a charge filed by the International Union of Electrical, Radio & Machine Workers, AFL-CIO (IUE). The charge alleged that General Electric Company violated §§ 8 (a)(1) and (5) of the National Labor Relations Act, as amended, 61 Stat. 140, 29 U. S. C. §§ 158 (a)(1) and (5), in refusing to bargain upon the renewal of an expiring collective bargaining agreement because of “the inclusion among the persons designated by the Union to represent it ... of persons who also represented other labor organizations which engaged in collective bargaining with” the company. Pursuant to § 10 (j) of the Act the Regional Director also obtained a temporary injunction in the District Court for the Southern District of New York restraining the company from “[fjailing or refusing to meet, confer and bargain collectively in good faith with . . . [IUE], by declining to meet with the selected representatives of . . . [IUE] because of the presence of any representatives of other unions whom IUE and its constituent locals have invited to attend for the purpose of participating in the discussion and advising ór consulting with IUE and its constituent locals.” The Court of Appeals for the Second Circuit reversed. 366 F. 2d 847. Mr. Justice Harlan stayed the Court of Appeals’ judgment pending action on the petition for writ of certiorari filed in No. 645.
The District Court and the Court of Appeals differed regarding the proper standard which should be determinative of the right to injunctive relief under § 10 (j). The District Court applied a dual test: (1) whether “the impact upon the public interest is grave enough to justify swifter corrective action than the normal process of Board adjudication and court enforcement,” 257 F. Supp. 690, 708, and (2) “whether the Board has ‘reasonable cause to believe’ that the accused party has been guilty of unfair labor practices.” 257 F. Supp., at 709. The Court of Appeals on the other hand considered the proper standard to be whether the Board had “demonstrated that an injunction is necessary to preserve the status quo or to prevent any irreparable harm.” 366 F. 2d, at 850.
We do not think it appropriate however to decide at this time the proper construction of § 10 (j). For on October 14, 1966, after the decision of the Court of Appeals, the company and IUE agreed upon a three-year collective bargaining agreement to replace the expired contract. We think th$t the District Court should determine in the first instance the effect of this supervening event upon the appropriateness of injunctive relief. The controversy over the proper standard for injunctive relief is immaterial if such relief is now improper whichever standard is applied. We therefore dissolve the stay granted by Mr. Justice Harlan and set.aside the judgment of the Court of Appeals with direction to enter a new judgment setting aside the order of the District Court and remanding to that court for such further proceedings as may be appropriate in light of the supervening event. See Calhoun v. Latimer, 377 U. S. 263; Scranton v. Drew, 379 U. S. 40.
It is so ordered. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
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"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
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"Federal Parole Board",
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"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
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"Comptroller General",
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"Department or Secretary of Health and Human Services",
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"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
81
] |
CUOZZO SPEED TECHNOLOGIES, LLC, Petitioner
v.
Michelle K. LEE, Under Secretary of Commerce for Intellectual Property and Director, Patent and Trademark Office.
No. 15-446.
Supreme Court of the United States
Argued April 25, 2016.
Decided June 20, 2016.
Garrard R. Beeney, New York, NY, for petitioner.
Curtis E. Gannon, Washington, DC, for respondent.
Garrard R. Beeney, Stephen J. Elliott, James T. Williams, Sullivan & Cromwell LLP, New York, NY, Jeffrey B. Wall, Sullivan & Cromwell LLP, Washington, DC, for petitioner.
Sarah Harris, General Counsel, Thomas W. Krause, Acting Solicitor, Scott C. Weidenfeller, Acting Deputy Solicitor, Robert J. McManus, Associate Solicitor, United States Patent and, Trademark Office, Alexandria, VA, Donald B. Verrilli, Jr., Solicitor General, Benjamin C. Mizer, Principal Deputy Assistant, Attorney General, Malcolm L. Stewart, Deputy Solicitor General, Beth S. Brinkmann, Deputy Assistant Attorney, General, Curtis E. Gannon, Assistant to the Solicitor General, Mark R. Freeman, Melissa N. Patterson, Attorneys, Department of Justice, Washington, DC, for respondent.
Justice BREYER delivered the opinion of the Court.
The Leahy-Smith America Invents Act, 35 U.S.C. § 100 et seq., creates a process called "inter partes review." That review process allows a third party to ask the U.S. Patent and Trademark Office to reexamine the claims in an already-issued patent and to cancel any claim that the agency finds to be unpatentable in light of prior art. See § 102 (requiring "novel[ty]"); § 103 (disqualifying claims that are "obvious").
We consider two provisions of the Act. The first says:
"No Appeal.-The determination by the Director [of the Patent Office] whether to institute an inter partes review under this section shall be final and non-appealable." § 314(d).
Does this provision bar a court from considering whether the Patent Office wrongly "determin[ed] ... to institute an inter partes review," ibid., when it did so on grounds not specifically mentioned in a third party's review request?
The second provision grants the Patent Office the authority to issue
"regulations ... establishing and governing inter partes review under this chapter." § 316(a)(4).
Does this provision authorize the Patent Office to issue a regulation stating that the agency, in inter partes review,
"shall [construe a patent claim according to] its broadest reasonable construction in light of the specification of the patent in which it appears"? 37 CFR § 42.100(b) (2015).
We conclude that the first provision, though it may not bar consideration of a constitutional question, for example, does bar judicial review of the kind of mine-run claim at issue here, involving the Patent Office's decision to institute inter partes review. We also conclude that the second provision authorizes the Patent Office to issue the regulation before us. See, e.g., United States v. Mead Corp., 533 U.S. 218, 229, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001) ; Chevron, U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984).
I
A
An inventor obtains a patent by applying to the Patent Office. A patent examiner with expertise in the relevant field reviews an applicant's patent claims, considers the prior art, and determines whether each claim meets the applicable patent law requirements. See, e.g., 35 U.S.C. §§ 101, 102, 103, 112. Then, the examiner accepts a claim, or rejects it and explains why. See § 132(a).
If the examiner rejects a claim, the applicant can resubmit a narrowed (or otherwise modified) claim, which the examiner will consider anew, measuring the new claim against the same patent law requirements. If the examiner rejects the new claim, the inventor typically has yet another chance to respond with yet another amended claim. Ultimately, the Patent Office makes a final decision allowing or rejecting the application. The applicant may seek judicial review of any final rejection. See §§ 141(a), 145.
For several decades, the Patent Office has also possessed the authority to reexamine-and perhaps cancel-a patent claim that it had previously allowed. In 1980, for example, Congress enacted a statute providing for "ex parte reexamination." Act to Amend the Patent and Trademark Laws, 35 U.S.C. § 301 et seq. That statute (which remains in effect) gives "[a]ny person at any time" the right to "file a request for reexamination" on the basis of certain prior art "bearing on the patentability" of an already-issued patent. §§ 301(a)(1), 302. If the Patent Office concludes that the cited prior art raises "a substantial new question of patentability," the agency can reexamine the patent. § 303(a). And that reexamination can lead the Patent Office to cancel the patent (or some of its claims). Alternatively, the Director of the Patent Office can, on her "own initiative," trigger such a proceeding. Ibid . And, as with examination, the patent holder can seek judicial review of an adverse final decision. § 306.
In 1999 and 2002, Congress enacted statutes that established another, similar procedure, known as "inter partes reexamination ." Those statutes granted third parties greater opportunities to participate in the Patent Office's reexamination proceedings as well as in any appeal of a Patent Office decision. See, e.g., American Inventors Protection Act of 1999, § 297 et seq. (2006 ed.) (superseded).
In 2011, Congress enacted the statute before us. That statute modifies "inter partes reexamination, " which it now calls "inter partes review ." See H.R.Rep. No. 112-98, pt. 1, pp. 46-47 (2011) (H.R. Rep.). Like inter partes reexamination, any third party can ask the agency to initiate inter partes review of a patent claim. But the new statute has changed the standard that governs the Patent Office's institution of the agency's process. Instead of requiring that a request for reexamination raise a "substantial new question of patentability," it now requires that a petition show "a reasonable likelihood that" the challenger "would prevail." Compare § 312(a) (2006 ed.) (repealed) with § 314(a) (2012 ed.).
The new statute provides a challenger with broader participation rights. It creates within the Patent Office a Patent Trial and Appeal Board (Board) composed of administrative patent judges, who are patent lawyers and former patent examiners, among others. § 6. That Board conducts the proceedings, reaches a conclusion, and sets forth its reasons. See ibid .
The statute sets forth time limits for completing this review. § 316(a)(11). It grants the Patent Office the authority to issue rules. § 316(a)(4). Like its predecessors, the statute authorizes judicial review of a "final written decision" canceling a patent claim. § 319. And, the statute says that the agency's initial decision "whether to institute an inter partes review" is "final and nonappealable." § 314(d) ; compare ibid. with §§ 312(a), (c) (2006 ed.) (repealed) (the "determination" that a petition for inter partes reexamination "raise[s]" "a substantial new question of patentability" is "final and non-appealable"), and § 303(c) (2012 ed.) (similar in respect to ex parte reexamination).
B
In 2002, Giuseppe A. Cuozzo applied for a patent covering a speedometer that will show a driver when he is driving above the speed limit. To understand the basic idea, think of the fact that a white speedometer needle will look red when it passes under a translucent piece of red glass or the equivalent (say, red cellophane). If you attach a piece of red glass or red cellophane to a speedometer beginning at 65 miles per hour, then, when the white needle passes that point, it will look red. If we attach the red glass to a plate that can itself rotate, if we attach the plate to the speedometer, if we connect the plate to a Global Positioning System (GPS) receiver, and if we enter onto a chip or a disk all the speed limits on all the Nation's roads, then the GPS can signal where the car is, the chip or disk can signal the speed limit at that place, and the plate can rotate to the right number on the speedometer. Thus, if the speed limit is 35 miles per hour, then the white speedometer needle will pass under the red plate at 35, not 65, and the driver will know if he is driving too fast.
In 2004, the Patent Office granted the patent. See U.S. Patent No. 6,778,074 (Cuozzo Patent). The Appendix contains excerpts from this patent, offering a less simplified (and more technical) description.
C
Petitioner Cuozzo Speed Technologies, LLC (Cuozzo), now holds the rights to the Cuozzo Patent. In 2012, Garmin International, Inc., and Garmin USA, Inc., filed a petition seeking inter partes review of the Cuozzo Patent's 20 claims. Garmin backed up its request by stating, for example, that the invention described in claim 17 was obvious in light of three prior patents, the Aumayer, Evans, and Wendt patents. U.S. Patent No. 6,633,811 ; U.S. Patent No. 3,980,041 ; and U.S. Patent No. 2,711,153. Cf. Goodyear Tire & Rubber Co. v. Ray-O-Vac Co., 321 U.S. 275, 280, 64 S.Ct. 593, 88 L.Ed. 721 (1944) (Black, J., dissenting) ("[S]omeone, somewhere, sometime, made th [is] discovery [but] I cannot agree that this patentee is that discoverer").
The Board agreed to reexamine claim 17, as well as claims 10 and 14. The Board recognized that Garmin had not expressly challenged claim 10 and claim 14 on the same obviousness ground. But, believing that "claim 17 depends on claim 14 which depends on claim 10," the Board reasoned that Garmin had "implicitly" challenged claims 10 and 14 on the basis of the same prior inventions, and it consequently decided to review all three claims together. App. to Pet. for Cert. 188a.
After proceedings before the Board, it concluded that claims 10, 14, and 17 of the Cuozzo Patent were obvious in light of the earlier patents to which Garmin had referred. The Board explained that the Aumayer patent "makes use of a GPS receiver to determine ... the applicable speed limit at that location for display," the Evans patent "describes a colored plate for indicating the speed limit," and the Wendt patent "describes us[ing] a rotatable pointer for indicating the applicable speed limit." Id., at 146a-147a. Anyone, the Board reasoned, who is "not an automaton"-anyone with "ordinary skill" and "ordinary creativity"-could have taken the automated approach suggested by the Aumayer patent and applied it to the manually adjustable signals described in the Evans and Wendt patents. Id., at 147a. The Board also concluded that Cuozzo's proposed amendments would not cure this defect, id., at 164a-166a, and it consequently denied Cuozzo's motion to amend its claims. Ultimately, it ordered claims 10, 14, and 17 of the Cuozzo Patent canceled, id., at 166a.
Cuozzo appealed to the United States Court of Appeals for the Federal Circuit. Cuozzo argued that the Patent Office improperly instituted inter partes review, at least in respect to claims 10 and 14, because the agency found that Garmin had only implicitly challenged those two claims on the basis of the Aumayer, Evans, and Wendt patents, while the statute required petitions to set forth the grounds for challenge "with particularity." § 312(a)(3). Cuozzo also argued that the Board, when construing the claims, improperly used the interpretive standard set forth in the Patent Office's regulation (i.e., it gave those claims their "broadest reasonable construction," 37 CFR § 42.100(b) ), when it should have applied the standard that courts normally use when judging a patent's validity (i.e., it should have given those claims their "ordinary meaning ... as understood by a person of skill in the art," Phillips v. AWH Corp., 415 F.3d 1303, 1314 (C.A.Fed.2005) (en banc)).
A divided panel of the Court of Appeals rejected both arguments. First, the panel majority pointed out that 35 U.S.C. § 314(d) made the decision to institute inter partes review "nonappealable." In re Cuozzo Speed Technologies, LLC, 793 F.3d 1268, 1273 (C.A.Fed.2015) (internal quotation marks omitted). Second, the panel majority affirmed the application of the broadest reasonable construction standard on the ground (among others) that the regulation was a reasonable, and hence lawful, exercise of the Patent Office's statutorily granted rulemaking authority. Id., at 1278-1279 ; see § 314(a)(4). By a vote of 6 to 5, the Court of Appeals denied Cuozzo's petition for rehearing en banc. In re Cuozzo Speed Technologies, LLC, 793 F.3d 1297, 1298 (C.A.Fed.2015).
We granted Cuozzo's petition for certiorari to review these two questions.
II
Like the Court of Appeals, we believe that Cuozzo's contention that the Patent Office unlawfully initiated its agency review is not appealable. For one thing, that is what § 314(d) says. It states that the "determination by the [Patent Office] whether to institute an inter partes review under this section shall be final and nonappealable. " (Emphasis added.)
For another, the legal dispute at issue is an ordinary dispute about the application of certain relevant patent statutes concerning the Patent Office's decision to institute inter partes review. Cuozzo points to a related statutory section, § 312, which says that petitions must be pleaded "with particularity." Those words, in its view, mean that the petition should have specifically said that claims 10 and 14 are also obvious in light of this same prior art. Garmin's petition, the Government replies, need not have mentioned claims 10 and 14 separately, for claims 10, 14, and 17 are all logically linked; the claims "rise and fall together," and a petition need not simply repeat the same argument expressly when it is so obviously implied. See 793 F.3d, at 1281. In our view, the "No Appeal" provision's language must, at the least, forbid an appeal that attacks a "determination ... whether to institute" review by raising this kind of legal question and little more. § 314(d).
Moreover, a contrary holding would undercut one important congressional objective, namely, giving the Patent Office significant power to revisit and revise earlier patent grants. See H.R. Rep., at 45, 48 (explaining that the statute seeks to "improve patent quality and restore confidence in the presumption of validity that comes with issued patents"); 157 Cong. Rec. 9778 (2011) (remarks of Rep. Goodlatte) (noting that inter partes review "screen[s] out bad patents while bolstering valid ones"). We doubt that Congress would have granted the Patent Office this authority, including, for example, the ability to continue proceedings even after the original petitioner settles and drops out, § 317(a), if it had thought that the agency's final decision could be unwound under some minor statutory technicality related to its preliminary decision to institute inter partes review.
Further, the existence of similar provisions in this, and related, patent statutes reinforces our conclusion. See § 319 (limiting appellate review to the "final written decision"); § 312(c) (2006 ed.) (repealed) (the "determination" that a petition for inter partes reexamination "raise[s]" a "substantial new question of patentability" is "final and non-appealable"); see also § 303(c) (2012 ed.); In re Hiniker Co., 150 F.3d 1362, 1367 (C.A.Fed.1998) ("Section 303 ... is directed toward the [Patent Office's] authority to institute a reexamination, and there is no provision granting us direct review of that decision").
The dissent, like the panel dissent in the Court of Appeals, would limit the scope of the "No Appeal" provision to interlocutory appeals, leaving a court free to review the initial decision to institute review in the context of the agency's final decision. Post, at 2148 - 2149, 2150 - 2151 (ALITO, J., concurring in part and dissenting in part); 793 F.3d, at 1291 (Newman, J., dissenting). We cannot accept this interpretation. It reads into the provision a limitation (to interlocutory decisions) that the language nowhere mentions and that is unnecessary. The Administrative Procedure Act already limits review to final agency decisions. 5 U.S.C. § 704. The Patent Office's decision to initiate inter partes review is "preliminary," not "final." Ibid . And the agency's decision to deny a petition is a matter committed to the Patent Office's discretion. See § 701(a)(2); 35 U.S.C. § 314(a) (no mandate to institute review); see also post, at 2153, and n. 6. So, read as limited to such preliminary and discretionary decisions, the "No Appeal" provision would seem superfluous. The dissent also suggests that its approach is a "familiar practice," consistent with other areas of law. Post, at 2152. But the kind of initial determination at issue here-that there is a "reasonable likelihood" that the claims are unpatentable on the grounds asserted-is akin to decisions which, in other contexts, we have held to be unreviewable. See Kaley v. United States, 571 U.S. ----, ----, 134 S.Ct. 1090, 1097-1098, 188 L.Ed.2d 46 (2014) ("The grand jury gets to say-without any review, oversight, or second-guessing-whether probable cause exists to think that a person committed a crime").
We recognize the "strong presumption" in favor of judicial review that we apply when we interpret statutes, including statutes that may limit or preclude review. Mach Mining, LLC v. EEOC, 575 U.S. ----, ----, 135 S.Ct. 1645, 1650-1651, 191 L.Ed.2d 607 (2015) (internal quotation marks omitted). This presumption, however, may be overcome by " 'clear and convincing' " indications, drawn from "specific language," "specific legislative history," and "inferences of intent drawn from the statutory scheme as a whole," that Congress intended to bar review. Block v. Community Nutrition Institute, 467 U.S. 340, 349-350, 104 S.Ct. 2450, 81 L.Ed.2d 270 (1984). That standard is met here. The dissent disagrees, and it points to Lindahl v. Office of Personnel Management, 470 U.S. 768, 105 S.Ct. 1620, 84 L.Ed.2d 674 (1985), to support its view that, in light of this presumption, § 314(d) should be read to permit judicial review of any issue bearing on the Patent Office's preliminary decision to institute inter partes review. See post, at 2150 - 2151. Lindahl is a case about the judicial review of disability determinations for federal employees. We explained that a statute directing the Office of Personnel Management to " 'determine questions of disability,' " and making those decisions " 'final,' " " 'conclusive,' " and " 'not subject to review,' " barred a court from revisiting the "factual underpinnings of ... disability determinations"-though it permitted courts to consider claims alleging, for example, that the Office of Personnel Management " 'substantial[ly] depart[ed] from important procedural rights.' " 470 U.S., at 771, 791, 105 S.Ct. 1620. Thus, Lindahl 's interpretation of that statute preserved the agency's primacy over its core statutory function in accord with Congress' intent. Our interpretation of the "No Appeal" provision here has the same effect. Congress has told the Patent Office to determine whether inter partes review should proceed, and it has made the agency's decision "final" and "nonappealable." § 314(d). Our conclusion that courts may not revisit this initial determination gives effect to this statutory command. Moreover, Lindahl 's conclusion was consistent with prior judicial practice in respect to those factual agency determinations, and legislative history "strongly suggest[ed]" that Congress intended to preserve this prior practice. Id., at 780, 105 S.Ct. 1620. These features, as explained above, also support our interpretation: The text of the "No Appeal" provision, along with its place in the overall statutory scheme, its role alongside the Administrative Procedure Act, the prior interpretation of similar patent statutes, and Congress' purpose in crafting inter partes review, all point in favor of precluding review of the Patent Office's institution decisions.
Nevertheless, in light of § 314(d)'s own text and the presumption favoring review, we emphasize that our interpretation applies where the grounds for attacking the decision to institute inter partes review consist of questions that are closely tied to the application and interpretation of statutes related to the Patent Office's decision to initiate inter partes review. See § 314(d) (barring appeals of "determinations ... to initiate an inter partes review under this section " (emphasis added)). This means that we need not, and do not, decide the precise effect of § 314(d) on appeals that implicate constitutional questions, that depend on other less closely related statutes, or that present other questions of interpretation that reach, in terms of scope and impact, well beyond "this section." Cf. Johnson v. Robison, 415 U.S. 361, 367, 94 S.Ct. 1160, 39 L.Ed.2d 389 (1974) (statute precluding review of "any question of law or fact under any law administered by the Veterans' Administration" does not bar review of constitutional challenges (emphasis deleted and internal quotation marks omitted)); Traynor v. Turnage, 485 U.S. 535, 544-545, 108 S.Ct. 1372, 99 L.Ed.2d 618 (1988) (that same statute does not bar review of decisions made under different statutes enacted at other times). Thus, contrary to the dissent's suggestion, we do not categorically preclude review of a final decision where a petition fails to give "sufficient notice" such that there is a due process problem with the entire proceeding, nor does our interpretation enable the agency to act outside its statutory limits by, for example, canceling a patent claim for "indefiniteness under § 112" in inter partes review. Post, at 2153 - 2155. Such "shenanigans" may be properly reviewable in the context of § 319 and under the Administrative Procedure Act, which enables reviewing courts to "set aside agency action" that is "contrary to constitutional right," "in excess of statutory jurisdiction," or "arbitrary [and] capricious." Compare post, at 2155, with 5 U.S.C. §§ 706(2)(A)-(D).
By contrast, where a patent holder merely challenges the Patent Office's "determin[ation] that the information presented in the petition ... shows that there is a reasonable likelihood" of success "with respect to at least 1 of the claims challenged," § 314(a), or where a patent holder grounds its claim in a statute closely related to that decision to institute inter partes review, § 314(d) bars judicial review. In this case, Cuozzo's claim that Garmin's petition was not pleaded "with particularity" under § 312 is little more than a challenge to the Patent Office's conclusion, under § 314(a), that the "information presented in the petition" warranted review. Cf. United States v. Williams, 504 U.S. 36, 54, 112 S.Ct. 1735, 118 L.Ed.2d 352 (1992) ("A complaint about the quality or adequacy of the evidence can always be recast as a complaint that the ... presentation was 'incomplete' or 'misleading' "). We therefore conclude that § 314(d) bars Cuozzo's efforts to attack the Patent Office's determination to institute inter partes review in this case.
III
Cuozzo further argues that the Patent Office lacked the legal authority to issue its regulation requiring the agency, when conducting an inter partes review, to give a patent claim "its broadest reasonable construction in light of the specification of the patent in which it appears." 37 CFR § 42.100(b). Instead, Cuozzo contends that the Patent Office should, like the courts, give claims their "ordinary meaning ... as understood by a person of skill in the art." Phillips, 415 F.3d, at 1314.
The statute, however, contains a provision that grants the Patent Office authority to issue "regulations ... establishing and governing inter partes review under this chapter." 35 U.S.C. § 316(a)(4). The Court of Appeals held that this statute gives the Patent Office the legal authority to issue its broadest reasonable construction regulation. We agree.
A
We interpret Congress' grant of rulemaking authority in light of our decision in Chevron, U.S.A. Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694. Where a statute is clear, the agency must follow the statute. Id., at 842-843, 104 S.Ct. 2778. But where a statute leaves a "gap" or is "ambigu [ous]," we typically interpret it as granting the agency leeway to enact rules that are reasonable in light of the text, nature, and purpose of the statute. Mead Corp., 533 U.S., at 229, 121 S.Ct. 2164 ; Chevron, U.S.A. Inc., supra, at 843, 104 S.Ct. 2778. The statute contains such a gap: No statutory provision unambiguously directs the agency to use one standard or the other. And the statute "express[ly] ... authoriz[es] [the Patent Office] to engage in the process of rulemaking" to address that gap. Mead Corp., supra, at 229, 121 S.Ct. 2164. Indeed, the statute allows the Patent Office to issue rules "governing inter partes review," § 316(a)(4), and the broadest reasonable construction regulation is a rule that governs inter partes review.
Both the dissenting judges in the Court of Appeals and Cuozzo believe that other ordinary tools of statutory interpretation, INS v. Cardoza-Fonseca, 480 U.S. 421, 432, and n. 12, 107 S.Ct. 1207, 94 L.Ed.2d 434 (1987), lead to a different conclusion. The dissenters, for example, point to cases in which the Circuit interpreted a grant of rulemaking authority in a different statute, § 2(b)(2)(A), as limited to procedural rules. See, e.g., Cooper Technologies Co. v. Dudas, 536 F.3d 1330, 1335 (C.A.Fed.2008). These cases, however, as we just said, interpret a different statute. That statute does not clearly contain the Circuit's claimed limitation, nor is its language the same as that of § 316(a)(4). Section 2(b)(2)(A) grants the Patent Office authority to issue "regulations" "which ... shall govern ... proceedings in the Office " (emphasis added), but the statute before us, § 316(a)(4), does not refer to "proceedings"-it refers more broadly to regulations "establishing and governing inter partes review." The Circuit's prior interpretation of § 2(b)(2)(A) cannot magically render unambiguous the different language in the different statute before us.
Cuozzo and its supporting amici believe we will reach a different conclusion if we carefully examine the purpose of inter partes review. That purpose, in their view, is to modify the previous reexamination procedures and to replace them with a " 'trial, adjudicatory in nature.' " Brief for Petitioner 26 (quoting Google Inc. v. Jongerius Panoramic Techs., LLC, IPR 2013-00191, Paper No. 50, p. 4 (PTAB, Feb. 13, 2014)). They point out that, under the statute, an opposing party can trigger inter partes review. Parties can engage in "discovery of relevant evidence," including "deposition[s], ... affidavits or declarations" as well as anything "otherwise necessary in the interest of justice." § 316(a)(5). Parties may present "factual evidence and expert opinions" to support their arguments. § 316(a)(8). The challenger bears the burden of proving unpatentability. § 318(e). And, after oral argument before a panel of three of the Board's administrative patent judges, it issues a final written decision. §§ 6, 316(a)(10), 318. Perhaps most importantly, a decision to cancel a patent normally has the same effect as a district court's determination of a patent's invalidity.
In light of these adjudicatory characteristics, which make these agency proceedings similar to court proceedings, Congress, in Cuozzo's view, must have designed inter partes review as a "surrogate for court proceedings." Brief for Petitioner 28. Cuozzo points to various sources of legislative history in support of its argument. See H.R. Rep., at 48 (Inter partes review is a "quick and cost effective alternativ[e] to litigation"); id., at 46-47 ("The Act converts inter partes reexamination from an examinational to an adjudicative proceeding"); see also S.Rep. No. 110-259, p. 20 (2008) (Inter partes review is "a quick, inexpensive, and reliable alternative to district court litigation"); 157 Cong. Rec. 3429-3430 (2011) (remarks of Sen. Kyl) ("Among the reforms that are expected to expedite these proceedings [is] the shift from an examinational to an adjudicative model"). And, if Congress intended to create a "surrogate" for court proceedings, why would Congress not also have intended the agency to use the claim construction standard that district courts apply (namely, the ordinary meaning standard), rather than the claim construction standard that patent examiners apply (namely, the broadest reasonable construction standard)?
The problem with Cuozzo's argument, however, is that, in other significant respects, inter partes review is less like a judicial proceeding and more like a specialized agency proceeding. Parties that initiate the proceeding need not have a concrete stake in the outcome; indeed, they may lack constitutional standing. See § 311(a) ; cf. Consumer Watchdog v. Wisconsin Alumni Research Foundation, 753 F.3d 1258, 1261-1262 (C.A.Fed.2014). As explained above, challengers need not remain in the proceeding; rather, the Patent Office may continue to conduct an inter partes review even after the adverse party has settled. § 317(a). Moreover, as is the case here, the Patent Office may intervene in a later judicial proceeding to defend its decision-even if the private challengers drop out. And the burden of proof in inter partes review is different than in the district courts: In inter partes review, the challenger (or the Patent Office) must establish unpatentability "by a preponderance of the evidence"; in district court, a challenger must prove invalidity by "clear and convincing evidence." Compare § 316(e) with Microsoft Corp. v. i4i Ltd. Partnership, 564 U.S. 91, 95, 131 S.Ct. 2238, 180 L.Ed.2d 131 (2011).
Most importantly, these features, as well as inter partes review's predecessors, indicate that the purpose of the proceeding is not quite the same as the purpose of district court litigation. The proceeding involves what used to be called a reexamination (and, as noted above, a cousin of inter partes review, ex parte reexamination, 35 U.S.C. § 302 et seq., still bears that name). The name and accompanying procedures suggest that the proceeding offers a second look at an earlier administrative grant of a patent. Although Congress changed the name from "reexamination" to "review," nothing convinces us that, in doing so, Congress wanted to change its basic purposes, namely, to reexamine an earlier agency decision. Thus, in addition to helping resolve concrete patent-related disputes among parties, inter partes review helps protect the public's "paramount interest in seeing that patent monopolies ... are kept within their legitimate scope." Precision Instrument Mfg. Co. v. Automotive Maintenance Machinery Co., 324 U.S. 806, 816, 65 S.Ct. 993, 89 L.Ed. 1381 (1945) ; see H.R. Rep., at 39-40 (Inter partes review is an "efficient system for challenging patents that should not have issued").
Finally, neither the statutory language, its purpose, or its history suggest that Congress considered what standard the agency should apply when reviewing a patent claim in inter partes review. Cuozzo contends that § 301(d), explaining that the Patent Office should "determine the proper meaning of a patent claim," reinforces its conclusion that the ordinary meaning standard should apply. But viewed against a background of language and practices indicating that Congress designed a hybrid proceeding, § 301(d)'s reference to the "proper meaning" of a claim is ambiguous. It leaves open the question of which claim construction standard is "proper."
The upshot is, whether we look at statutory language alone, or that language in context of the statute's purpose, we find an express delegation of rulemaking authority, a "gap" that rules might fill, and "ambiguity" in respect to the boundaries of that gap. Mead Corp., 533 U.S., at 229, 121 S.Ct. 2164 ; see Chevron U.S.A. Inc., 467 U.S., at 843, 104 S.Ct. 2778. We consequently turn to the question whether the Patent Office's regulation is a reasonable exercise of its rulemaking authority.
B
We conclude that the regulation represents a reasonable exercise of the rulemaking authority that Congress delegated to the Patent Office. For one thing, construing a patent claim according to its broadest reasonable construction helps to protect the public. A reasonable, yet unlawfully broad claim might discourage the use of the invention by a member of the public. Because an examiner's (or reexaminer's) use of the broadest reasonable construction standard increases the possibility that the examiner will find the claim too broad (and deny it), use of that standard encourages the applicant to draft narrowly. This helps ensure precision while avoiding overly broad claims, and thereby helps prevent a patent from tying up too much knowledge, while helping members of the public draw useful information from the disclosed invention and better understand the lawful limits of the claim. See § 112(a) ; Nautilus, Inc. v. Biosig Instruments, Inc., 572 U.S. ----, ----, 134 S.Ct. 2120, 2129, 189 L.Ed.2d 37 (2014) ; see also In re Yamamoto, 740 F.2d 1569, 1571 (C.A.Fed.1984).
For another, past practice supports the Patent Office's regulation. See 77 Fed.Reg. 48697 (2012). The Patent Office has used this standard for more than 100 years. 793 F.3d, at 1276. It has applied that standard in proceedings, which, as here, resemble district court litigation. See Bamberger v. Cheruvu, 55 U.S.P.Q.2d 1523, 1527 (BPAI 1998) (broadest reasonable construction standard applies in interference proceedings); Brief for Generic Pharmaceutical Association et al. as Amici Curiae 7-16 (describing similarities between interference proceedings and adjudicatory aspects of inter partes review); see also In re Yamamoto, supra, at 1571 (broadest reasonable construction standard applies in reexamination). It also applies that standard in proceedings that may be consolidated with a concurrent inter partes review. See 77 Fed.Reg. 48697-48698.
Cuozzo makes two arguments in response. First, Cuozzo says that there is a critical difference between the Patent Office's initial examination of an application to determine if a patent should issue, and this proceeding, in which the agency reviews an already-issued patent. In an initial examination of an application for a patent the examiner gives the claim its broadest reasonable construction. But if the patent examiner rejects the claim, then, as described above, Part I-A, supra, the applicant has a right to amend and resubmit the claim. And the examiner and applicant may repeat this process at least once more. This system-broad construction with a chance to amend-both protects the public from overly broad claims and gives the applicant a fair chance to draft a precise claim that will qualify for patent protection. In inter partes review, however, the broadest reasonable construction standard may help protect certain public interests, but there is no absolute right to amend any challenged patent claims. This, Cuozzo says, is unfair to the patent holder.
The process however, is not as unfair as Cuozzo suggests. The patent holder may, at least once in the process, make a motion to do just what he would do in the examination process, namely, amend or narrow the claim. § 316(d) (2012 ed.). This opportunity to amend, together with the fact that the original application process may have presented several additional opportunities to amend the patent, means that use of the broadest reasonable construction standard is, as a general matter, not unfair to the patent holder in any obvious way.
Cuozzo adds that, as of June 30, 2015, only 5 out of 86 motions to amend have been granted. Brief for Petitioner 30; see Tr. of Oral Arg. 30 (noting that a sixth motion had been granted by the time of oral argument in this case). But these numbers may reflect the fact that no amendment could save the inventions at issue, i.e., that the patent should have never issued at all.
To the extent Cuozzo's statistical argument takes aim at the manner in which the Patent Office has exercised its authority, that question is not before us. Indeed, in this particular case, the agency determined that Cuozzo's proposed amendment "enlarge[d]," rather than narrowed, the challenged claims. App. to Pet. for Cert. 165a-166a; see § 316(d)(3). Cuozzo does not contend that the decision not to allow its amendment is "arbitrary" or "capricious," or "otherwise [un]lawful." 5 U.S.C. § 706(2)(a).
Second, Cuozzo says that the use of the broadest reasonable construction standard in inter partes review, together with use of an ordinary meaning standard in district court, may produce inconsistent results and cause added confusion. A district court may find a patent claim to be valid, and the agency may later cancel that claim in its own review. We recognize that that is so. This possibility, however, has long been present in our patent system, which provides different tracks-one in the Patent Office and one in the courts-for the review and adjudication of patent claims. As we have explained above, inter partes review imposes a different burden of proof on the challenger. These different evidentiary burdens mean that the possibility of inconsistent results is inherent to Congress' regulatory design. Cf. One Lot Emerald Cut Stones v. United States, 409 U.S. 232, 235-238, 93 S.Ct. 489, 34 L.Ed.2d 438 (1972) (per curiam ).
Moreover, the Patent Office uses the broadest reasonable construction standard in other proceedings, including interference proceedings (described above), which may implicate patents that are later reviewed in district court. The statute gives the Patent Office the power to consolidate these other proceedings with inter partes review. To try to create uniformity of standards would consequently prove difficult. And we cannot find unreasonable the Patent Office's decision to prefer a degree of inconsistency in the standards used between the courts and the agency, rather than among agency proceedings. See 77 Fed.Reg. 48697-48698.
Finally, Cuozzo and its supporting amici offer various policy arguments in favor of the ordinary meaning standard. The Patent Office is legally free to accept or reject such policy arguments on the basis of its own reasoned analysis. Having concluded that the Patent Office's regulation, selecting the broadest reasonable construction standard, is reasonable in light of the rationales described above, we do not decide whether there is a better alternative as a policy matter. That is a question that Congress left to the particular expertise of the Patent Office.
* * *
For the reasons set forth above, we affirm the judgment of the Court of Appeals for the Federal Circuit.
It is so ordered.
APPENDIX
SPEED LIMIT INDICATOR AND METHOD FOR DISPLAYING SPEED AND THE RELEVANT SPEED LIMIT
* * *
DESCRIPTION OF THE CURRENT EMBODIMENT
"In FIG. 1 , a new and improved speed limit indicator and method for displaying speed and the relevant speed limit 10 ... is illustrated.... More particularly, the speed limit indicator and method for displaying speed and the relevant speed limit 10 has a speedometer 12 mounted on a dashboard 26 . [The] [s]peedometer 12 has a backplate 14 made of plastic, speed denoting markings 16 painted on [that] backplate 14 , a colored display 18 made of a red plastic filter, and a plastic needle 20 rotably mounted in the center of [the] backplate 14 . A [GPS] receiver 22 is positioned adjacent to the speedometer 12 . Other gauges 24 typically present on a dashboard 26 are shown.
.....
"[I]n FIG. 4 , a new and improved speed limit indicator and method for displaying speed and the relevant speed limit 10 ...
is illustrated.... More particularly, the speed limit indicator and method for displaying speed and the relevant speed limit 10 has a backplate 14 , colored display 18 , housing 28 , and axle 30 .
.....
"I claim:
.....
"10 . A speed limit indicator comprising:
"a [GPS] receiver;
"a display controller connected to said [GPS] receiver, wherein said display controller adjusts a colored display in response to signals from said [GPS] receiver to continuously update the delineation of which speed readings are in violation of the speed limit at a vehicle's present location; and
"a speedometer integrally attached to said colored display.
.....
"14 . The speed limit indicator as defined in claim 10 , wherein said colored display is a colored filter.
.....
"17 . The speed limit indicator as defined in claim 14 , wherein said display controller rotates said colored filter independently of said speedometer to continuously update the delineation of which speed readings are in violation of the speed limit at a vehicles present location." Cuozzo Patent. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
93
] |
UNION ELECTRIC CO. v. ENVIRONMENTAL PROTECTION AGENCY et al.
No. 74-1542.
Argued January 21, 1976
Decided June 25, 1976
Marshall, J., delivered the opinion for a unanimous Court. Powell, J., filed a concurring opinion, in which Burger, C. J., joined, post, p. 269.
William H. Ferrell argued the cause and filed briefs for petitioner.
Assistant Attorney General Taft argued the cause for respondent Environmental Protection Agency. With him on the brief were Solicitor General Bork, Deputy Solicitor General Randolph, and Edmund B. Clark. John C. Danforth, Attorney General of Missouri, pro se, and Walter W. Nowotny, Jr., and Dan Summers, Assistant Attorneys General, filed briefs for respondents Dan-forth et al.
Briefs of amici curiae urging reversal were filed by H. Edward Dunkelberger, Jr., Theodore L. Garrett, and A. Joseph Dowd for the Appalachian Power Co. et al.; by Cameron F. MacRae, Harry H. Voigt, and Henry V. Nickel for the Edison Electric Institute; and by Ronald A. Zumbrun and Raymond M. Momboisse for the Pacific Legal Foundation.
Lewis C. Green filed a brief for Coalition for the Environment, St. Louis Region, as amicus curiae urging affirmance.
Mr. Justice Marshall
delivered the opinion of the Court.
After the Administrator of the Environmental Protection Agency (EPA) approves a state implementation plan under the Clean Air Act, the plan may be challenged in a court of appeals within 30 days, or after 30 days have run if newly discovered or available information justifies subsequent review. We must decide whether the operator of a regulated emission source, in a petition for review of an EPA-approved state plan filed after the original 30-day appeal period, can raise the claim that it is economically or technologically infeasible to comply with the plan.
I
We have addressed the history and provisions of the Clean Air Amendments of 1970, Pub. L. 91-604, 84 Stat. 1676, in detail in Train v. Natural Resources Defense Council (NRDC), 421 U. S. 60 (1975), and will not repeat that discussion here. Suffice it to say that the Amendments reflect congressional dissatisfaction with the progress of existing air pollution programs and a determination to “tak[e] a stick to the States,” id., at 64, in order to guarantee the prompt attainment and maintenance of specified air quality standards. The heart of the Amendments is the requirement that each State formulate, subject to EPA approval, an implementation plan designed to achieve national primary ambient air quality standards — those necessary to protect the public health — “as expeditiously as practicable but . . . in no case later than three years from the date of approval of such plan.” § 110 (a) (2) (A) of the Clean Air Act, as added, 84 Stat. 1680, 42 U. S. C. § 1857&-5 (a) (2) (A). The plan must also provide for the attainment of national secondary ambient air quality standards'— those necessary to protect the public welfare — within a “reasonable time.” Ibid. Each State is given wide discretion in formulating its plan, and the Act provides that the Administrator “shall approve” the proposed plan if it has been adopted after public notice and hearing and if it meets eight specified criteria. § 110 (a) (2).
On April 30, 1971, the Administrator promulgated national primary and secondary standards for six air pollutants he found to have an adverse effect on the public health and welfare. 40 CFR pt. 50 (1975). See § 108 (a) of the Act, as added, 84 Stat. 1678, 42 U. S. C. § 1857c-3 (a). Included among them was sulfur dioxide, at issue here. 40 CFR §§ 50.4-50.5 (1975). After the promulgation of the national standards, the State of Missouri formulated its implementation plan and submitted it for approval. Since sulfur dioxide levels exceeded national primary standards in only one of the State’s five air quality regions — the Metropolitan St. Louis Interstate region, 40 CFR § 52.1321 (1975)- — the Missouri plan concentrated on a control strategy and regulations to lower emissions in that area. The plan’s emission limitations were effective at once, but the State retained authority to grant variances to particular sources that could not immediately comply. Mo. Rev. Stat. §203.110 (1972). The Administrator approved the plan on May 31, 1972. See 40 CFR § 52.1320 et seq. (1975).
Petitioner is an electric utility company servicing the St. Louis metropolitan area, large portions of Missouri, and parts of Illinois and Iowa. Its three coal-fired generating plants in the metropolitan St. Louis area are subject to the sulfur dioxide restrictions in the Missouri implementation plan. Petitioner did not seek review of the Administrator’s approval of the plan within 30 days, as it was entitled to do under § 307 (b)(1) of the Act, as added, 84 Stat. 1708, 42 U. S. C. § 1857h-5 (b) (1), but rather applied to the appropriate state and county agencies for variances from the emission limitations affecting its three plants. Petitioner received one-year variances, which could be extended upon reapplication. The variances on two of petitioner’s three plants had expired and petitioner was applying for extensions when, on May 31, 1974, the Administrator notified petitioner that sulfur dioxide emissions from its plants violated the emission limitations contained in the Missouri plan. See 40 Fed. Reg. 3566 (1975). Shortly thereafter petitioner filed a petition in the Court of Appeals for the Eighth Circuit for review of the Administrator’s 1972 approval of the Missouri implementation plan.
Section 307 (b)(1) allows petitions for review to be filed in an appropriate court of appeals more than 30 days after the Administrator’s approval of an implementation plan only if the petition is "based solely on grounds arising- after such 30th day.” Petitioner claimed to meet this requirement by asserting, inter alia, that various economic and technological difficulties had arisen more than 30 days after the Administrator’s approval and that these difficulties made compliance with the emission limitations impossible. The Court of Appeals ordered briefing on the question of its subject-matter jurisdiction to hear the case and, after argument, granted the motions of the EPA and intervenor-respond-ents, the Attorney General of Missouri and the Missouri Air Conservation Commission, to dismiss the petition for review for lack of jurisdiction.
The court held that “only matters which, if known to the Administrator at the time of his action [in approving a state implementation plan], would justify setting aside that action are properly re viewable after the initial 30 day review period.” 515 F. 2d 206, 216 (1975). Since, in the court’s view, claims of economic and technological infeasibility could not properly provide a basis for the Administrator’s rejecting a plan, such claims could not serve — at any time — as the basis for a court’s overturning an approved plan. Accordingly, insofar as petitioner’s claim of newly discovered or available information was grounded on an assertion of economic and technological infeasibility, the court held itself to be without jurisdiction to consider the petition for review, and so dismissed the petition. In so holding the Court of Appeals considered and rejected the contrary or partially contrary holdings of three other Circuits. Buckeye Power, Inc. v. EPA, 481 F. 2d 162, 168-169 (CA6 1973) (but see id., at 173); Appalachian Power Co. v. EPA, 477 F. 2d 495, 505-507 (CA4 1973); Duquesne Light Co. v. EPA, 481 F. 2d 1 (CA3 1973); Getty Oil Co. v. Ruckelshaus, 467 F. 2d 349 (CA3 1972), cert. denied, 409 U. S. 1125 (1973). See also St. Joe Minerals Corp. v. EPA, 508 F. 2d 743, 746-749 (CA3 1975), vacated and remanded, 425 U. S. 987 (1976); Duquesne Light Co. v. EPA, 522 F. 2d 1186 (CA3 1975), cert. pending, No. 75-736. On the other hand, the Eighth Circuit found support for its position in the decisions of several other Circuits. South Terminal Corp. v. EPA, 504 F. 2d 646, 675-676 (CA1 1974); Texas v. EPA, 499 F. 2d 289, 317 (CA5 1974); Natural Resources Defense Council v. EPA, 507 F. 2d 905, 914 (CA9 1974). See also Indiana & Michigan Electric Co. v. EPA, 509 F. 2d 839, 843-845 (CA7 1975). Cf. Buckeye Power, Inc. v. EPA, 525 F. 2d 80 (CA6 1975). We granted certiorari to resolve the conflict among the Circuits, 423 U. S. 821 (1975), and we now affirm.
II
A
We reject at the outset petitioner’s suggestion that a claim of economic or technological infeasibility may be considered upon a petition for review based on new information and filed more than 30 days after approval of an implementation plan even if such a claim could not be considered by the Administrator in approving a plan or by a court in reviewing a plan challenged within the original 30-day appeal period. In pertinent part § 307 (b)(1) provides:
“A petition for review of the Administrator’s action in approving or promulgating any implementation plan under section 110 .. . may be filed only in the United States Court of Appeals for the appropriate circuit. Any such petition shall be filed within 30 days from the date of such promulgation or approval, or after such date if such petition is based solely on grounds arising after such 30th day.”
Regardless of when a petition for review is filed under i 307 (b)(1), the court is limited to reviewing “the Administrator’s action in approving . . . [the] implementation plan . . . Accordingly, if new “grounds” are alleged, they must be such that, had they been known at the time the plan was presented to the Administrator for approval, it would have been an abuse of discretion for the Administrator to approve the plan. To hold otherwise would be to transfer a substantial responsibility in administering the Clean Air Act from the Administrator and the state agencies to the federal courts.
B
Since a reviewing court — regardless of when the petition for review is filed — may consider claims of economic and technological infeasibility only if the Administrator may consider such claims in approving or rejecting a state implementation plan, we must address ourselves to the scope of the Administrator’s responsibility. The Administrator’s position is that he has no power whatsoever to reject a state implementation plan on the ground that it is economically or technologically infeasible, and we have previously accorded great deference to the Administrator’s construction of the Clean Air Act. See Train v. NRDC, 421 U. S., at 75. After surveying the relevant provisions of the Clean Air Amendments of 1970 and their legislative history, we agree that Congress intended claims of economic and technological infeasibility to be wholly foreign to the Administrator’s consideration of a state implementation plan.
As we have previously recognized, the 1970 Amendments to the Clean Air Act were a drastic remedy to what was perceived as a serious and otherwise uncheckable problem of air pollution. The Amendments place the primary responsibility for formulating pollution control strategies on the States, but nonetheless subject the States to strict minimum compliance requirements. These requirements are of a "technology-forcing character,” Train v. NRDC, supra, at 91, and are expressly designed to force regulated sources to develop pollution control devices that might at the time appear to be economically or technologically infeasible.
This approach is apparent on the face of § 110 (a)(2). The provision sets out eight criteria that an implementation plan must satisfy, and provides that if these criteria are met and if the plan was adopted after reasonable notice and hearing, the Administrator "shall approve” the proposed state plan. The mandatory "shall” makes it quite clear that the Administrator is not to be concerned with factors other than those specified, Train v. NRDC, supra, at 71 n. 11, 79, and none of the eight factors appears to permit consideration of technological or economic infeasibility. Nonetheless, if a basis is to be found for allowing the Administrator to consider such claims, it must be among the eight criteria, and so it is here that the argument is focused.
It is suggested that consideration of claims of technological and economic infeasibility is required by the first criterion — that the primary air quality standards be met “as expeditiously as practicable but... in no case later than three years . . .” and that the secondary air quality standards be met within a “reasonable time.” §110 (a)(2)(A). The argument is that what is “practicable” or “reasonable” cannot be determined without assessing whether what is proposed is possible. This argument does not survive analysis.
Section 110 (a)(2)(A)’s three-year deadline for achieving primary air quality standards is central to the Amendments’ regulatory scheme and, as both the language and the legislative history of the requirement make clear, it leaves no room for claims of technological or economic infeasibility. The 1970 congressional debate on the Amendments centered on whether technology forcing was necessary and desirable in framing and attaining air quality standards sufficient to protect the public health, standards later termed primary standards. The House version of the Amendments was quite moderate in approach, requiring only that health-related standards be met “within a reasonable time.” H. R. 17255, 91st Cong., 2d Sess., § 108 (c)(1)(C)(i) (1970). The Senate bill, on the other hand, flatly required that, possible or not, health-related standards be met “within three years.” S. 4358, 91st Cong., 2d Sess., § 111 (a)(2) (A) (1970).
The Senate’s stiff requirement was intended to foreclose the claims of emission sources that it would be economically or technologically infeasible for them to achieve emission limitations sufficient to protect the public health within the specified time. As Senator Muskie, manager of the Senate bill, explained to his chamber:
“ ‘The first responsibility of Congress is not the making of technological or economic judgments— or even to be limited by what is or appears to be technologically or economically feasible. Our responsibility is to establish what the public interest requires to protect the health of persons. This may mean that people and industries will be asked to do what seems to be impossible at the present time.5 ” 116 Cong. Rec. 32901-32902 (1970).
See also id., at 32919 (remarks of Sen. Cooper); 33115 (remarks of Sen. Prouty). This position reflected that of the Senate committee:
“In the Committee discussions, considerable concern was expressed regarding the use of the concept of technical feasibility as the basis of ambient air standards. The Committee determined that 1) the health of people is more important than the question of whether the early achievement of ambient air quality standards protective of health is technically feasible; and 2) the growth of pollution load in many areas, even with application of available technology, would still be deleterious to public health.
“Therefore, the Committee determined that existing sources of pollutants either should meet the standard of the law or be closed down ....” S. Rep. No. 91-1196, pp. 2-3 (1970).
The Conference Committee and, ultimately, the entire Congress accepted the Senate’s three-year mandate for the achievement of primary air quality standards, and the clear import of that decision is that the Administrator must approve a plan that provides for attainment of the primary standards in three years even if attainment does not appear feasible. In rejecting the House’s version of reasonableness, however, the conferees strengthened the Senate version. The Conference Committee made clear that the States could not procrastinate until the deadline approached. Rather, the primary standards had to be met in less than three years if possible; they had to be met “as expeditiously as practicable.” § 110 (a)(2)(A). Whatever room there is for considering claims of infeasibility in the attainment of primary standards must lie in this phrase, which is, of course, relevant only in evaluating those implementation plans that attempt to achieve the primary standard in less than three years.
It is argued that when such a state plan calls for proceeding more rapidly than economics and the available technology appear to allow, the plan must be rejected as not “practicable.” Whether this is a correct reading of § 110 (a) (2) (A) depends on how that section’s “as expeditiously as practicable” phrase is characterized. The Administrator’s position is that § 110 (a) (2) (A) sets only a minimum standard that the States may exceed in their discretion, so that he has no power to reject an infeasible state plan that surpasses the minimum federal requirements — a plan that reflects a state decision to engage in technology forcing on its own and to proceed more expeditiously than is practicable. On the other hand, petitioner and amici supporting its position argue that § 110 (a) (2) (A) sets a mandatory standard that the States must meet precisely, and conclude that the Administrator may reject a plan for being too strict as well as for being too lax. Since the arguments supporting this theory are also made to show that the Administrator must reject a state plan that provides for achieving more than the secondary air quality standards require, we defer consideration of this question in order to outline the development and content of the secondary standards provision of § 110 (a)(2)(A).
Secondary air quality standards, those necessary to protect the public welfare, were subject to far less legislative debate than the primary standards. The House version of the Amendments treated welfare-related standards together with health-related standards, and required both to be met "within a reasonable time.” H. R. 17255, 91st Cong., 2d Sess., §§ 107 (e)(1), 108 (c) (l)(C)(i) (1970). The Senate bill, on the other hand, treated health- and welfare-related standards separately and did not require that welfare-related standards be met in any particular time at all, S. 4358, 91st Cong., 2d Sess., §§ 110 (a)(3), 110 (b), 111 (a)(2)(A) (1970), although the Committee Report expressed the desire that they be met “as rapidly as possible.” S. Rep. No. 91-1196, p. 11 (1970). The final Amendments also separated welfare-related standards from health-related standards, labeled them secondary air quality standards, and adopted the House’s requirement that they be met within a “reasonable time.” §§ 109 (b), 110 (a)(2)(A). Thus, technology forcing is not expressly required in achieving standards to protect the public welfare.
It does not necessarily follow, however, that the Administrator may consider claims of impossibility in assessing a state plan for achieving secondary standards. As with plans designed to achieve primary standards in less than three years, the scope of the Administrator’s power to reject a plan depends on whether the State itself may decide to engage in technology forcing and adopt a plan more stringent than federal law demands.
Amici Appalachian Power Co. et al. argue that the Amendments do not give such broad power to the States. They claim that the States are precluded from submitting implementation plans more stringent than federal law demands by § 110 (a) (2)’s second criterion — that the plan contain such control devices “as may be necessary” to achieve the primary and secondary air quality standards. §110(a)(2)(B). The contention is that an overly restrictive plan is not “necessary” for attainment of the national standards and so must be rejected by the Administrator.
The principal support for this theory of amici lies in the fact that while the House and Senate versions of §110 (a)(2) both expressly provided that the States could submit for the Administrator’s approval plans that were stricter than the national standards required, see H. R. 17255, 91st Cong., 2d Sess., § 108 (c) (1970); S. 4358, 91st Cong., 2d Sess., § 111 (a)(1) (1970), the section as enacted contains no such express language. Amici argue that the Conference Committee must have decided to require state implementation plans simply — and precisely — to meet the national standards. The argument of amici proves too much. A Conference Committee lacks power to make substantive changes on matters about which both Houses agree. 2 U. S. C. § 190c (a) (Senate Conference Reports); Rule XXVIII (3), Rules of the House of Representatives, and § 546, Jefferson’s Manual, H. R. Doc. No. 384, 92d Cong., 2d Sess., 526, 270-271 (1972); National Coal Operators’ Assn. v. Kleppe, 423 U. S. 388, 401 n. 10 (1976). Here the Conference Report expressly notes that both the Senate and House bills would allow States to submit plans more stringent than the national standards demand, and offers no suggestion that the Conference bill intended to change that result, even if it could. H. R. Conf. Rep. No. 91-1783, p. 45 (1970). And while the final language of § 110 (a) (2)(B) may be less explicit than the versions originally approved by the House and the Senate, the most natural reading of the “as may be necessary” phrase in context is simply that the Administrator must assure that the minimal, or “necessary,” requirements are met, not that he detect and reject any state plan more demanding than federal law requires.
This reading is further supported by practical considerations. Section 116 of the Clean Air Act, as added, 84 Stat. 1689, 42 U. S. C. § 1857d-l (1970 ed., Supp. IV), provides that the States may adopt emission standards stricter than the national standards. Amici argue that such standards must be adopted and enforced independently of the EPA-approved state implementation plan. This construction of §§ 110 and 116, however, would not only require the Administrator to expend considerable time and energy determining whether a state plan was precisely tailored to meet the federal standards, but would simultaneously require States desiring stricter standards to enact and enforce two sets of emission standards, one federally approved plan and one stricter state plan. We find no basis in the Amendments for visiting such wasteful burdens upon the States and the Administrator, and so we reject the argument of amici.
We read the “as may be necessary” requirement of § 110 (a) (2) (B) to demand only that the implementation plan submitted by the State meet the “minimum conditions” of the Amendments. Train v. NRDC, 421 U. S., at 71 n. 11. Beyond that, if a State makes the legislative determination that it desires a particular air quality by a certain date and that it is willing to force technology to attain it — or lose a certain industry if attainment is not possible — such a determination is fully consistent with the structure and purpose of the Amendments, and § 110 (a) (2) (B) provides no basis for the EPA Administrator to object to the determination on the ground of infeasibility. See Train v. NRDC, supra, at 79.
In sum, we have concluded that claims of economic or technological infeasibility may not be considered by the Administrator in evaluating a state requirement that primary ambient air quality standards be met in the mandatory three years. And, since we further conclude that the States may submit implementation plans more stringent than federal law requires and that the Administrator must approve such plans if they meet the minimum requirements of § 110 (a)(2), it follows that the language of §110 (a)(2)(B) provides no basis for the Administrator ever to reject a state implementation plan on the ground that it is economically or technologically infeasible. Accordingly, a court of appeals reviewing an approved plan under § 307 (b) (1) cannot set it aside on those grounds, no matter when they are raised.
Ill
Our conclusion is bolstered by recognition that the Amendments do allow claims of technological and economic infeasibility to be raised in situations where consideration of such claims will not substantially interfere with the primary congressional purpose of prompt attainment of the national air quality standards. Thus, we do not hold that claims of infeasibility are never of relevance in the formulation of an implementation plan or that sources unable to comply with emission limitations must inevitably be shut down.
Perhaps, the most important forum for consideration of claims of economic and technological infeasibility is before the state agency formulating the implementation plan. So long as the national standards are met, the State may select whatever mix of control devices it desires, Train v. NRDC, supra, at 79, and industries with particular economic or technological problems may seek special treatment in the plan itself. Cf. 40 CFR §§51.2 (b), (d) (1975); S. Rep. No. 91-1196, p. 36 (1970). Moreover, if the industry is not exempted from, or accommodated by, the original plan, it may obtain a variance, as petitioner did in this case; and the variance, if granted after notice and a hearing, may be submitted to the EPA as a revision of the plan. § 110 (a) (3) (A), as amended, 88 Stat. 256, 42 U. S. C. § 1857c-5 (a) (3) (A) (1970 ed., Supp. IY). Lastly, an industry denied an exemption from the implementation plan, or denied a subsequent variance, may be able to take its claims of economic or technological infeasibility to the state courts. See, e. g., Mo. Rev. Stat. §203.130 (1972); Cal. Health & Safety Code § 39506 (West 1973); Pa. Stat. Ann., Tit. 71, § 1710.41 (1962).
While the State has virtually absolute power in allocating emission limitations so long as the national standards are met, if the state plan cannot meet the national standards, the EPA is implicated in any postponement procedure. There are two ways that a State can secure relief from the EPA for individual emission sources, or classes of sources, that cannot meet the national standards. First, if the Governor of the State so requests at the time the original implementation plan is submitted, and if the State provides reasonable interim controls, the Administrator may allow a two-year extension of the three-year deadline for attainment of primary air quality standards if he finds, inter alia, that it is technologically infeasible for the source to comply. § 110 (e). Second, again upon application of the Governor of the State, the Administrator may allow a one-year postponement of any compliance date in an implementation plan if he finds, inter alia, that compliance is technologically infeasible and that “the continued operation of [the emission source] is essential to national security or to the public health or welfare . . . § 110 (f). See Train v. NRDC, 421 U. S., at 81.
Even if the State does not intervene on behalf of an emission source, technological and economic factors may be considered in at least one other circumstance. When a source is found to be in violation of the state implementation plan, the Administrator may, after a conference with the operator, issue a compliance order rather than seek civil or criminal enforcement. Such an order must specify a “reasonable” time for compliance with the relevant standard, taking into account the seriousness of the violation and “any good faith efforts to comply with applicable requirements.” § 113 (a)(4) of the Clean Air Act, as added, 84 Stat. 1686, 42 U. S. C. § 1857o-8 (a) (4). Claims of technological or economic infeasibility, the Administrator agrees, are relevant to fashioning an appropriate compliance order under § 113 (a) (4). Brief for Respondent EPA 36 n. 34.
In short, the Amendments offer ample opportunity for consideration of claims of technological and economic infeasibility. Always, however, care is taken that consideration of such claims will not interfere substantially with the primary goal of prompt attainment of the national standards. Allowing such claims to be raised by appealing the Administrator’s approval of an implementation plan, as petitioner suggests, would frustrate congressional intent. It would permit a proposed plan to be struck down as infeasible before it is given a chance to work, even though Congress clearly contemplated that some plans would be infeasible when proposed. And it would permit the Administrator or a federal court to reject a State’s legislative choices in regulating air pollution, even though Congress plainly left with the States, so long as the national standards were met, the power to determine which sources would be burdened by regulation and to what extent. Technology forcing is a concept somewhat new to our national experience and it necessarily entails certain risks. But Congress considered those risks in passing the 1970 Amendments and decided that the dangers posed by uncontrolled air pollution made them worth taking. Petitioner’s theory would render that considered legislative judgment a nullity, and that is a result we refuse to reach.
Affirmed.
Section 110 (a) (2), 42 U. S. C. § 1857c-5 (a) (2), provides in full:
“The Administrator shall, within four months after the date required for submission of a plan under paragraph (1), approve or disapprove such plan or each portion thereof. The Administrator shall approve such plan, or any portion thereof, if he determines that it was adopted after reasonable notice and hearing and that—
“(A) (i) in the case of a plan implementing a national primary ambient air quality standard, it provides for the attainment of such primary standard as expeditiously as practicable but (subject to subsection (e)) in no case later than three years from the date of approval of such plan (or any revision thereof to take account of a revised primary standard); and (ii) in the case of a plan implementing a national secondary ambient air quality standard, it specifies a reasonable time at which such secondary standard will be attained;
“(B) it includes emission limitations, schedules, and timetables for compliance with such limitations, and such other measures as may be necessary to insure attainment and maintenance of such primary or secondary standard, including, but not limited to, land-use and transportation controls;
“(C) it includes provision for establishment and operation of appropriate devices, methods, systems, and procedures necessary to (i) monitor, compile, and analyze data on ambient air quality and, (ii) upon request, make such data available to the Administrator;
“(D) it includes a procedure, meeting the requirements of paragraph (4), for review (prior to construction or modification) of the location of new sources to which a standard of performance will apply;
“(E) it contains adequate provisions for intergovernmental cooperation, including measures necessary to insure that emissions of air pollutants from sources located in any air quality control region will not interfere with the attainment or maintenance of such primary or secondary standard in any portion of such region outside of such State or in any other air quality control region;
“(F) it provides (i) necessary assurances that the State will have adequate personnel, funding, and authority to carry out such implementation plan, (ii) requirements for installation of equipment by owners or operators of stationary sources to monitor emissions from such sources, (iii) for periodic reports on the nature and amounts of such emissions; (iv) that such reports shall be correlated by the State agency with any emission limitations or standards established pursuant to this Act, which reports shall be available at reasonable times for public inspection; and (v) for authority comparable to that in section 303, and adequate contingency plans to implement such authority;
“(G) it provides, to the extent necessary and practicable, for periodic inspection and testing of motor vehicles to enforce compliance with applicable emission standards; and
“(H) it provides for revision, after public hearings, of such plan (i) from time to time as may be necessary to take account of revisions of such national primary or secondary ambient air quality standard or the availability of improved or more expeditious methods of achieving such primary or secondary standard; or (ii) whenever the Administrator finds on the basis of information available to him that the plan is substantially inadequate to achieve the national ambient air quality primary or secondary standard which it implements.”
The plan was designed to attain primary and secondary air quality standards in the Metropolitan St. Louis Interstate region by July 1975. See 40 CFR § 52.1332 (1975).
The notice included all three plants, even though the variance on one of them had not yet expired, because the one variance still in effect had not been submitted to the EPA as a plan revision under § 110 (a) (3) (A), as amended, 88 Stat. 256, 42 U. S. C. § 1857c-5 (a)(3)(A) (1970 ed., Supp. IV), and therefore was not part of the applicable implementation plan. See n. 15, infra,
Petitioner also claimed that the presence of sulfur dioxide in the ambient air should no longer be regarded as a health hazard and that compliance with the Missouri implementation plan was not necessary for attainment of national primary or secondary air quality standards. The Court of Appeals found that these claims were not sufficient to establish jurisdiction under §307 (b)(1).
The court held that the challenge to the validity of regulating sulfur dioxide was not properly before it because the alleged new information had not previously been presented to the Administrator for action, a procedure the court held was necessary for the exercise of its jurisdiction. 515 F. 2d 206, 220 (1975). See also Oljato Chapter of Navajo Tribe v. Train, 169 U. S. App. D. C. 195, 515 F. 2d 654 (1975). In any case, the court held, the challenge was to a national air quality standard and as such could be brought only in the Court of Appeals for the District of Columbia Circuit under §307 (b)(1). 515 F. 2d, at 220. While petitioner sought certiorari on this ruling, our grant of the writ was limited to the question whether claims of economic or technical infeasibility could be raised in a challenge to a state implementation plan. 423 U. S. 821 (1975).
The Court of Appeals also found that no claim was stated by petitioner’s assertion that the Missouri standards exceeded those necessary for compliance with the national standards because, the court held, the States are free to adopt stricter standards than the national standards under § 116 of the Clean Air Act, as amended, 84 Stat. 1689 and 88 Stat. 259, 42 ü. S. C. § 1857d-l (1970 ed., Supp. IV). 515 F. 2d, at 220. While certiorari was not sought on this question, it has been briefed for us and we find it necessary to resolve it in deciding this case. See infra, at 261-266.
See n. 1, supra. Comparison of the eight criteria of § 110 (a) (2) with other provisions of-the Amendments bolsters this conclusion. Where Congress intended the Administrator to be concerned about economic and technological infeasibility, it expressly so provided. Thus, §§110 (e), 110 (f), 111 (a)(1), 202 (a), 211 (c)(2)(A), and 231 (b) of the Amendments all expressly permit consideration, e. g., “of the requisite technology, giving appropriate consideration to the cost of compliance.” §231 (b), as added, 84 Stat. 1704, 42 U. S. C. § 1857f-9 (b). See also 42 U. S. C. §§ 1857c-5 (e), 1857c-5 (f), 1857c-6 (a) (1), 1857f-1 (a), 1857f-6c (c) (2) (A). Section 110 (a) (2) contains no such language.
The Administrator appears to take this position in his guidelines for attaining secondary standards. See 40 CFR § 51.13 (b) (1975).
A different question would be presented if the Administrator drafted the plan himself pursuant to § 110(c). Cf. District of Columbia v. Train, 172 U. S. App. D. C. 311, 521 F. 2d 971 (1975); South Terminal Corp. v. EPA, 504 F. 2d 646 (CA1 1974). Whether claims of economic or technical infeasibility must be considered by the Administrator in drafting an implementation plan is a question we do not reach.
See n. 1, supra.
Amici not only argue that the Administrator must reject state plans that attempt to attain the primary standards more rapidly than “practicable” or the secondary standards in less than a “reasonable time,” but also that he must reject state implementation plans that call for more quantitative emission controls than those necessary to meet the national primary and secondary standards. This argument adds nothing to deciding whether claims of economic or technological infeasibility can be raised. If quantitatively stiffer standards are barred, all plans containing them must be rejected, whether infeasible or not. In any case, as we make clear below, the States may adopt such more rigorous emission standards, and the Administrator must approve plans containing them if the minimum federal requirements are satisfied.
Subsequent legislation confirms that this was Congress’ original intent. In response to the fuel shortages of late 1973, Congress enacted the Energy Supply and Environmental Coordination Act of 1974, Pub. L. 93-319, 88 Stat. 246. The Act allows the Administrator to review state implementation plans and notify the States if their restrictions on fuel-burning stationary sources may be relaxed without interfering with timely attainment and maintenance of national air quality standards. 42 U. S. C. § 1857c-5 (3) (B) (1970 ed., Supp. IV). The decision whether to relax restrictions, however, is left to the States. The Act shows congressional awareness and approval of the fact that federally approved implementation plans may be stricter than necessary for attainment of national standards.
Section 116, 42 U. S. C. § 1857d-1 (1970 ed., Supp. IV), provides:
“Except as otherwise provided in sections 119 (c), (e), and (f), 209, 211 (c)(4), and 233 (preempting certain State regulation of moving sources) nothing in this Act shall preclude or deny the right of any State or political subdivision thereof to adopt or enforce (1) any standard or limitation respecting emissions of air pollutants or (2) any requirement respecting control or abatement of air pollution; except that if an emission standard or limitation is in effect under an applicable implementation plan or under section 111 or 112, such State or political subdivision may not adopt or enforce any emission standard or limitation which is less stringent than the standard or limitation under such plan or section.”
This burden would be particularly onerous in view of the facts that Congress gave the Administrator only four months in which to evaluate each plan submitted, § 110 (a) (2), and that all state plans are submitted at approximately the same time. §110 (a)(1).
Economic and technological factors may be relevant in determining whether the minimum conditions are met. Thus, the Administrator may consider whether it is economically or technologically possible for the state plan to require more rapid progress than it does. If he determines that it is, he may reject the plan as not meeting the requirement that primary standards be achieved “as expeditiously as practicable” or as failing to provide for attaining secondary standards within “a reasonable time.”
In a literal sense, of course, no plan is infeasible since offending sources always have the option of shutting down if they cannot otherwise comply with the standard of the law. Thus, there is no need for the Administrator to reject an economically or technologically “infeasible” state plan on the ground that anticipated noncompliance will cause the State to fall short of the national standards. Sources objecting to such a state scheme must seek their relief from the State.
A variance approved as a revision of a plan under § 110 (a) (3) (A) will be honored by the EPA as part of an applicable implementation plan, § 110 (d), a matter of no little import to those granted variances. See n. 3, supra.
Of course, the Amendments do not require the States to formulate their implementation plans with deference to claims of technological or economic infeasibility, to grant variances on those or any other grounds, or to provide judicial review of such actions. Consistent with Congress’ recognition of the primary role of the States in controlling air pollution, the Amendments leave all such decisions to the States, which have typically responded in the manner described in the text. Cf. 40 CFR §§51.2 (b), (d) (1975).
Section 110 (e) itself convincingly demonstrates that the statutory scheme did not contemplate the Administrator’s rejecting state implementation plans as infeasible. There would be little purpose in providing noncomplying sources with § 110 (e)’s limited mechanism for postponing infeasible plans — dependent upon the cooperation of the State — if the sources had the option of going to court instead and freeing themselves entirely of the plan by having it struck down as infeasible.
If he chooses not to seek a compliance order, or if an order is issued and violated, the Administrator may institute a civil enforcement proceeding. § 113 (b). Additionally, violators of an implementation plan are subject to criminal penalties under § 113 (c) and citizen enforcement suits under § 304, as added, 84 Stat. 1706, 42 U. S. C. § 1857h-2. Some courts have suggested that in criminal or civil enforcement proceedings the violator may in certain circumstances raise a defense of economic or technological infeasibility. See Buckeye Power, Inc. v. EPA, 481 F. 2d 162, 173 (CA6 1973); Indiana & Michigan Electric Co. v. EPA, 509 F. 2d 839, 847 (CA7 1975). We do not address this question here.
Petitioner has briefed its contention that the Due Process Clause of the Fifth Amendment demands that at some time it be afforded the opportunity to raise before a court claims of economic and technological impossibility. This claim was neither presented to, nor considered by, the Court of Appeals, and we declined to grant certiorari on the question. 423 U. S. 821 (1975). In any case, we could not resolve petitioner’s claim here, for there has been no showing that a §307 (b)(1) appeal would be the only opportunity for petitioner to raise before a court its claims of economic and technological impossibility. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
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"Federal Energy Administration",
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"Federal Housing Administration",
"Federal Home Loan Bank Board",
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"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
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"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
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"Postal Service and Post Office, or Postmaster General, or Postmaster",
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"Unidentifiable",
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"NO Admin Action",
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] | [
32
] |
WHEELING STEEL CORP. v. GLANDER, TAX COMMISSIONER OF OHIO.
NO. 447.
Argued March 29, 1949.
Decided June 20, 1949.
John M. Caren argued the cause for appellant in No. 447. With him on the brief were Carlton S. Dargusch, Wright Hugus and J. E. Bruce.
Charles H. Tuttle argued the cause for appellant in No. 448. With him on the brief were Isadore Topper., R. Brooke Alloway and Paul L. Peyton.
W. H. Annat, Assistant Attorney General of Ohio, argued the cause for appellee. With him on the briefs was Herbert S. Duffy, Attorney General.
Mr. Justice Jackson
delivered the opinion of the Court.
The State of Ohio has laid an ad valorem tax against certain intangible property, consisting of notes, accounts receivable and prepaid insurance, .owned by foreign corporations. As applied to appellants in these two cases, the tax is challenged as violating the Federal Constitution on several grounds which may conveniently be considered in a single opinion. Facts are not in dispute.
Appellant Wheeling Steel Corporation is organized under the laws of Delaware, where it maintains á statutory office. Ohio has authorized it to do business in that State and four of its eight manufacturing plants are located there. General offices, from which its entire business is controlled and conducted, are in Wheeling, West Virginia. Its officers there have custody of its money, notes and books of account. In twelve other states, including Ohio, it maintains sales offices which solicit and receive orders for its products subject to acceptance or rejection at the Wheeling .office, to which all are forwarded. From this office only may credit be extended to purchasers. Accounts are billed and collected from the Wheeling office and the sales offices have no powers or duties with respect to collection. All accounts or notes receivable are payable at Wheeling, where the written evidences thereof are kept.. Proceeds from receivables are taken into appellant’s treasury at Wheeling and there applied to general purposes of the business.
Appellant National Distillers Products Corporation is organized under the laws of Virginia, where it has a statutory office and holds annual stockholders meetings. It is admitted to do business in Ohio, where.it maintains a distillery, or. rectifying plant, and warehouse, as it does also in six- other states. Pay roll checks for plant employees are drawn on funds deposited in banks in the locality of the plant. Appellant also is licensed to do business in New York, where it maintains its principal business office and conducts its fiscal affairs and from which all business activities are directed and controlled. The corporation maintains regional sales offices in various of those states which permit private distribution of liquor. In such states customers are solicited and orders taken, subject to acceptance or rejection at New York'. It maintains no sales office in Ohio, where dispensing liquor is a state monopoly. Orders from Ohio state authorities are forwarded directly to the offices in New York and are subject to acceptance or rejection there. When the New York office accepts an order from any source, it sends shipping orders, to various plants, none of which makes any shipments except upon such orders. Only in New York can any credits be approved and all books, records and evidences of accounts receivable are kept there. Collections are managed from New York, which, is the place of payment of all receivables. During the tax year in question, the corporation solicited and took orders through agents in states other than Ohio for a large quantity of liquor shipped from its plants and warehouses in Ohio to customers elsewhere.
It is stipulated that appellahts each paid all franchise or other taxes required by Ohio for admission to do business in the State and paid all taxes assessed upon real and personal property located in said State.
The Wheeling Company also paid to the State of West Virginia, for the year in question, ad valorem taxes on all of its receivables, including those sought to be taxed by -Ohio,' pursuant.to this Court’s decision'in Wheeling Steel Corp. v. Fox, 298 U. S. 193. Neither Virginia nor New York has sought to tax the accounts receivable of National Distillers involved • herein.
The Ohio Tax Commissioner, applying §§5328-1 and 5328-2 of the General Code of Ohio, assessed for taxation in Ohio a large amount of notes and accounts receivable which each appellant derived from shipments originating at Ohio manufacturing plants. The specific ground stated for assessment was that such receivables “result from the sale of property from a stock of goods maintained within this state.”
The Board of Tax Appeals affirmed both assessments and in the Distiller’s case set forth the above-mentioned statutes and pointed out wherein its own views' and practices as to their application to accounts receivable had been modified by decisions of the Ohio Supreme Court, whose interpretations, for our purposes, become a part of the statutes. The Board said:
“. . . On a consideration of the statutory provisions above noted, the Board of Tax Appeals was of the view that before a business situs of . accounts receivable and other intangible property, for purposes of taxation, could be given to a state other than the state of the domicile of the taxpayer, it must appear that such receivables or other intangible property not only arose in the conduct of the business of the taxpayer in such other state,. but were therein so used as to become an integral part of the business carried on in such other state; and that it was not sufficient that such accounts receivable and other intangible property be used in business generally by the taxpayer. And on this view the Board held that the accounts receivable there in question, although they arose in the conduct of taxpayer’s business in the States of Indiana and Michigan, did not have a business situs in such states, and that such accounts receivable were taxable in Ohio.
“On the appeal of the decision of the Board of Tax Appeals in The Ransom & Randolph Co. case to the Supreme Court of Ohio, that Court reversed the decision of the Board of Tax Appeals upon the point above indicated. 142 Ó. S. 398, 404, That. Court, upon consideration of the applicable provisions of section 5328-2 and related sections of the General Code above noted, held that the accounts receivable of a taxpayer which arose in the conduct of its business in a state or states other than the state in which it had its domicile or place of residence, had a business situs in such other state or states if such accounts receivable or the avails thereof are being applied or are intended to be applied in the conduct of the taxpayer’s business, whether in this State or elsewhere. This view of the Supreme Court as to the construction -to be placed upon the statutory provisions here in question was later followed by that Court in its decisions in the cases of The Haverfield Company v. Evatt, Tax Commr., 143 O. S. 58, and National Cash Register Company v. Evatt, Tax Commr., 145 O. S. 597.
“. . . In this situation, and applying the statutory provisions here in question as the same havé been construed by the Supreme Court of this State, it follows that since the accounts receivable of the appellant corporation -involved in this case arose— as this Board hereby find — , in the conduct of its business in the State of Ohio by the sale of its products from a stock of goods located in this State, and since, further, such accounts receivable or the avails thereof were .used or were intended to be used by the appellant in its business, whether in this State or elsewhere, such accounts receivable have a business and taxable situs in the State of Ohio, as found and determined by the tax commissioner.
“With respect to a question such as that here presented, to wit, that as to the • taxation of the accounts receivable of a foreign corporation arising in the conduct of its business in this State, the applicatión of the above noted provisions of sections 5328-1, 5328-2 and other related sections of the General Code, as the same have been construed by the Supreme Court, presents, to our mind, a serious question as to the constitutionality of said statutory provisions as so construed under the Due Process of Law clause of the Federal Constitution.....”
The Ohio Supreme Court affirmed in both cases, which were brought here by. appeals.
' Appellants urge that the question which the Board of Tax Appeals regarded as serious should be resolved against the State on the ground that these intangibles had no situs in Ohio to sustain its power under the Due Process Clause so to tax them and also that to do so imposes an undue burden on interstate commerce in violation of the Commerce Clause. They point out that the credits sought to be taxed , here wbre not created in Ohio, not payable there, and neither the payor nor payee, debtor nor creditor, was resident there. Moreover, the receivables arose from a contract for sale of goods, but the contracts were not made in Ohio nor performed in Ohio, and neither buyer nor seller resided there. On the assumption that Ohio could not follow tangible goods into a foreign state and tax them, either in the hands of the vendor before delivery or in the hands of a vendee after delivery, it is argued that she has no greater power to tax intangibles substituted in a foreign state for them and has no right to tax intangible proceeds of the sale of tangible goods that had passed beyond her taxing power.
In their original application of the statutory scheme the taxing authorities sought to overcome this hurdle by requiring an additional and more substantial connection between the taxed intangibles and the state taxing power. For purpose of an Ohio tax the Board of Tax Appeals held intangibles to have a situs in that State only when and to the extent “so Used as to become an integral part of the business carried on” in Ohio. It was this requirement which the Supreme Court of the State eliminated by Ransom & Randolph Co. v. Evatt, 142 Ohio St. 398, 52 N. E. 2d 738, when it held that any use of the intangibles in the general business was sufficient to make them taxable: Thus was cut the connection which the Board of . Tax Appeals originally invoked to confer jurisdiction to tax, and thus was raised the question of constitutionality regarded by the Board as serious.
However, we find it inappropriate to decide the Due Process question. The state action, which is reviewable under the Fourteenth Amendment, is the composite result of both legislation and its judicial interpretation. Ohio does not attempt and has not asserted power to tax all such intangibles, but only those owned by nonresidents and foreign corporations. It has given no indication that it intends to or would reach out to tax such intangibles as we have here unless it may at the same time exempt identical ones owned by its residents and domestic corporations. The contrary is indicated by § 5328-2, which makes the two inseparable! We deal with the taxing plan as an entirety as we find it in operation and. pass only on the constitutionality of that which the State has asserted power and purpose to do.
The state action and policy resulting from statute and decisions is certified to us by the appellee, the Tax Commissioner of Ohio, to be as follows:
. . since the decision of the Supreme Court of Ohio in Ransom & Randolph v. Evatt, 142 Ohio State 398 (January 12, 1944), and in obedience thereto, it has been the policy and practice of the Department of Taxation, of Ohio to construe and apply sections 5328-1 and 5328-2 of the General Code of Ohio
“(A) so as to exempt from taxation in Ohio accounts receivable of Ohio residents, including domestic corporations, which arise
“(1) from a sale of goods by an agent having an office in another state, even' though such goods be shipped from Ohio, or
“(2) from a sale of goods shipped from another state, even though such goods be sold by an agent having an office in Ohio:
“(B) so as to tax in Ohio accounts receivable of non-residents of Ohio, including foreign corporations, which arise either
“(1). from a sale of goods shipped from Ohio, even though such goods be sold by an agent having an office in another state, or
“(2) from a sale of goods by an agent having an office in Ohio, even though such goods be shipped from another state:
“That the foregoing have been iñ effect as the only tests of taxability of accounts receivable in Ohio since the decision of the Supreme Court of Ohio in the case of Ransom & Randolph v. Evatt, 142 Ohio State 398, and that' said tests have been applied-without deviation both by affiant and by his predecessor in office, William S. Evatt, as the result of the holding in that case.”
Under long-settled principles of our Federation, Ohio was not required to admit these foreign corporations to carry on intrastate business within its borders. The State may arbitrarily exclude them or may license them upon any terms it sees fit, apart from exacting surrender of rights derived from the Constitution of the United States. Hanover Insurance Co. v. Harding, 272 U. S. 494, 507; Connecticut General Co. v. Johnson, 303 U. S. 77, 79-80. Ohio elected, however, to admit these corporations to transact businesses and operate manufacturing plants in the State.- For that privilege they have paid all that the State required by way of franchise or'privilege tax, which includes in its measure the value of all property owned and business done in Ohio. § § 5495, 5497, 5498 and 5499 of the Ohio General Code. See International Harvester Co. v. Evatt, 329 U. S. 416. After a state has. chosen to domesticate foreign corporations, the adopted corporations are entitled to equal protection with the state’s own corporate progeny, at least to the extent that their property is entitled to an equally favorable ad valorem tax basis. Hanover Insurance Co. v. Harding, 272 U. S. 494, 510-511; Power Co. v. Saunders, 274 U. S. 490, 493, 497. Ohio holds this tax on intangibles to be an ad valorem property tax, Bennett v. Evatt, 145 Ohio St. 587, 62 N. E. 2d 345, and in no sense a franchise, privilege, occupation or income tax.
The Ohio statutory scheme assimilates its own corporate creations to natural residents and all others to nonresidents. While this classification is a permissible basis for some different rights and liabilities, we have held, as to taxation of intangibles, that the federal right of a nonresident “is the right to equal treatment.” Hillsborough v. Cromwell, 326 U. S, 620, 623.
The certificate of the Tax Commissioner discloses how fundamentally discriminatory is the application of this ad valorem tax to intangibles when owned by a resident or a domestic corporation as contrasted with its application when those are owned by a domesticated corporation or a nonresident. If on the taxing date one of these petitioners and an Ohio competitor each owns an account receivable of the same amount from the same out-of-state customer for the same kind of commodity, both shipped from a manufacturing plant in Ohio and both sold out of Ohio by an agent having an office out of the State, appellant’s account receivable would be subject to Ohio’s ad valorem tax and the one held by the competing domestic corporation would not. It. seems obvious that appellants are not accorded equal treatment, and the inequality is not because of the slightest difference in Ohio’s relation to the decisive transaction, but solely because of the different residence of the owner.
The State does not seriously deny this unequal application of its own tax but claims that reciprocity provisions of the statute reestablish equality: Those provisions therefore require scrutiny.
This entire taxing plan rests on a statutory formula for fixing situs of intangible property both within and without the State. .This is provided by § 5328-2 of the Code. These intangibles “shall be considered to arise out of business transacted in a state other than that in which the owner thereof resides” under certain circumstances. (Emphasis supplied.) This basic rule separates the situs of intangibles from the residence of their owner whereas it has traditionally been at such residence, though with some exceptions. The effect is that intangibles of nonresident owners are assigned a situs within the taxing reach of Ohio while those of its residents are assigned a situs without. The plan may be said to be logically consistent in that, while it draws all such intangibles of nonresidents within the taxing power of Ohio, it by the same formula excludes those of residents. The exempted intangibles of residents are offered up to the taxing power of other states which may embrace this doctrine of a tax situs separate from residence. This is what is meant here by reciprocity, and the two provisions are declared inseparable; so that if the formula by which Ohio takes unto itself the accounts of nonresidents is held invalid, “such decision shall be deemed also to affect such provision as applied to property of a resident.”
It is hard to see that this offer of reciprocity restores to appellants any of the equality which the application of the Ohio tax, considered alone, so obviously denies. There is no indication of a readiness by other states to copy Ohio’s situs scheme so as to tax that which Ohio exempts. The proffered exchange of residents for intangible tax purposes may not commend itself as an even bargain between states. Ohio, being large, populous and highly industrialized, with heavy and basic industries, may well have much more to gain from a plan the effect of which is to tax credit exports to other states, than most states would have from a privilege to tax its own exports into Ohio. In the several years that the Ohio statute has been on the books, no other state has sought to take advantage of the “reciprocity” proffer. And if it did, the equality of rates which would also be necessary to equalize the burden between nonresidents and their resident competitors could be hardly expected nor is it provided for. Far from acceding to the situs doctrine which allocates these receivables to Ohio, the State of West Virginia stands on the very different situs doctrine approved by this Court in Wheeling Steel Corp. v. Fox, 298 U. S. 193, and under its authority has for the year in question taxed all of the receivables of the Wheeling Company, including those Ohio seeks to claim as having situs in Ohio. It is clear that this plan of “reciprocity” is not one which by credits or otherwise protects the nonresident or foreign- corporation against the discriminations apparent in the Ohio statute. We think these discriminations deny appellants equal protection of Ohio law.
The judgments are reversed and the causes remanded for proceedings not inconsistent herewith.
Reversed.
By Mr. Justice Jackson.
The writer of the Court’s opinion deems it necessary to complete the record by pointing out why, in writing by assignment for the Court, he assumed without discussion that the protections, of the Fourteenth Amendment are available to a corporation. It was not questioned by the State in this case, nor was it considered by the courts below. It has consistently been held by this Court that the Fourteenth Amendment assures corporations equal protection of the láws, at least since 1886, Santa Clara County v. Southern Pacific R. Co., 118 U. S. 394, 396, and that it entitles them to due process of law, at least since 1889, Minneapolis & St. L. R. Co. v. Beckwith, 129 U. S. 26, 28.
It is true that this proposition was once challenged by one Justice. Connecticut General Co. v. Johnson, 303 U. S. 77, 83 (dissenting opinion). But the challenge did not commend itself, even to such consistent liberals as Mr. Justice Brandéis and Mr. Justice Stone, and I had supposed it was no longer pressed. See the same Justice’s separate opinion in International Shoe Co. v. Washington, 326 U. S. 310, 322, making no mention of this issue.
Without pretending to a complete analysis, I find that in at least two cases during this current term the same question was appropriate for consideration, as here. In Railway Express Agency v. New York, 336 U. S. 106, a corporation claimed to be deprived of both due process and equal protection of the law, and in Ott v. Mississippi Barge Line, 336 U. S. 169, a corporation claimed to be denied due process of law. At prior terms, in many cases the question was also inherent, for corporations made similar claims under the Fourteenth Amendment. See, e. g., Illinois Central R. Co. v. Minnesota, 309 U. S. 157; Lincoln Life Insurance Co. v. Read, 325 U. S. 673; Queenside Hills Co. v. Saxl, 328 U. S. 80. Although the author of the present dissent was the writer of each of the cited Court’s opinions, it was not intimated therein that there was even doubt whether the corporations had standing to raise the questions or were entitled to protection of the Amendment. Instead, in each case the author, as I have done in this case, proceeded to discuss and dispose of the corporation’s contentions on their merits, a quite improper procedure, I should think, if the corporation had no standing to raise the constitutional questions. . Indeed, if the corporation had no such right, it is difficult to see how this Court would have jurisdiction to consider the case at all.
It may be said that in the foregoing cases other grounds might have been' found upon which to defeat the corporations’ claims, while in the present case apparently there is none.'
However, in at least two cases this Court, joined by both Justices now asserting that corporations have no rights under the Fourteenth Amendment, recently has granted relief to corporations by striking down state action as conflicting with corporate rights under that Amendment. In Times-Mirror Co. v. Superior Court, companion case to Bridges v. California, 314 U. S. 252, a newspaper corporation persuaded this Court that a $500 fine assessed against it violated its rights under the Fourteenth Amendment. In Pennekamp v. Florida, 328 U. S. 331, a newspaper corporation was convicted along with an individual defendant, and'this Court set aside the conviction upon the ground that the Fourteenth Amendment prohibited such state action. In neither of these cases was the corporation’s right to raise the issue questioned and the result in each case was irreconcilable with the position now asserted in dissent.
It cannot be suggested that in cases where the author is the mere instrument of the Court he must forego expression of his own convictions. Mr. Justice Cardozo taught us how Justices may write for the Court and still reserve their own positions, though overruled. Helvering v. Davis, 301 U. S. 619, 639.
In view of this record I did not, and still do not, consider it necessary for the Court opinion to review the considerations which justify the assumption that, these corporations have standing to raise the issues decided.
Pertinent parts of the Ohio law read as follows:
“Sec. 5328-1. . . . Property of the kinds and classes mentioned in section 5328-2 of the General Code, used in and arising out of business transacted in this state by, for or on behalf of a non-resident person . . . shall be subject to taxation; and all such property of persons residing in this state used in and arising out of business transacted outside of this state by, for or on behalf of such persons . . . shall not be subject to taxation.....
“Sec. 5328-2. . . . Property of the kinds and classes herein mentioned, when used in business, shall be considered to arise out of business transacted in a state other than that in which the owner thereof resides in the cases and under the circumstances following:
“In the case of accounts receivable, when resulting from the sale of property sold by an agent ‘having an office in such other state or from a stock of goods maintained therein, or from services performed by an officer, agent or employe connected with, sent from, or reporting to any officer or at any office located in such other state.
“The provisions of this section shall be reciprocally applied, to the end that all property of the kinds and classes mentioned in this section having a business situs in this state shall be taxed herein and no property of such kinds and classes belonging to a person residing in this state and having a business "situs outside of this state shall be taxed. It is hereby declared that the assignment of a business situs outside of this state to property of a person residing in this state in any case and under any circumstances mentioned in this section is inseparable from the assignment of such situs in this state to property of a person residing outside of this state in a like case and under similar circumstances. . . .”
“Sec. 5325-1. . . . Moneys, deposits, investments, accounts receivable and prepaid items, and other taxable intangibles shall be considered to be ‘used’ when they or the avails thereof are being applied, or are intended to be applied in the conduct of the business, whether in this state or elsewhere. . . .
■ “Sec. 5638. . . . Annual taxes are hereby levied on the kinds and classes of intangible property, hereinafter enumerated, on the classified tax list in the offices of the county auditors and duplicates thereof in .the offices of the county treasurers at the following rates, to wit:
“. . . moneys, credits and all other taxable intangibles so listed, three mills on the dollar.....”
“Sec. 5327. . . . The term ‘credits’ as so used, means the excess of the sum of all current accounts receivable and prepaid items [used] in business when added together estimating every such account and item at its true value in money, over and above the sum of current accounts payable of the business; other than taxes and assessments. . . .” Ohio Gen. Code Ann. (1945).
150 Ohio St. 229, 80 N. E. 2d 863.
28U.S.C.§ 1257 (2). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
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"Central Intelligence Agency",
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"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
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"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
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"Comptroller General",
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"Department or Secretary of Health and Human Services",
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"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
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"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
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"National Security Agency",
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"Office of Personnel Management",
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"Occupational Safety and Health Review Commission",
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"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
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"Provider Reimbursement Review Board",
"Renegotiation Board",
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"Railroad Retirement Board",
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"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
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"Unidentifiable",
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"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
116
] |
COSTELLO v. IMMIGRATION AND NATURALIZATION SERVICE.
No. 83.
Argued December 12, 1963.
Decided February 17, 1964.
Edward Bennett Williams argued the cause for petitioner. With him on the briefs was Harold Ungar.
Wayne G. Barnett argued the cause for respondent. With him on the brief were Solicitor General Gox, Assistant Attorney General Miller, Stephen J. Poliak and Beatrice Rosenberg.
Mr. Justice Stewart
delivered the opinion of the Court.
Section 241 (a) (4) of the Immigration and Nationality Act of 1952 provides that “Any alien in the United States . . . shall, upon the order of the Attorney General, be deported who ... at any time after entry is convicted of two crimes involving moral turpitude . ...” The single question to be decided in the present case is whether this provision applies to a person who was a naturalized citizen at the time he was convicted of the crimes, but was later denaturalized.
The petitioner, born in Italy in 1891, was brought to the United States when he was four years old and has lived here ever since. He became a naturalized citizen in 1925. In 1954 he was convicted of two separate offenses of income tax evasion, and the convictions were ultimately affirmed by this Court. Costello v. United States, 350 U. S. 359. In 1959 his citizenship was revoked and his certificate of naturalization canceled on the ground that his citizenship had been acquired by willful misrepresentation. This Court affirmed the judgment of denat-uralization. Costello v. United States, 365 U. S. 265.
In 1961 the Immigration and Naturalization Service commenced proceedings to deport the petitioner under § 241 (a) (4), and it is those proceedings which have culminated in the case now before us. The Special Inquiry Officer found the petitioner deportable; the Board of Immigration Appéals affirmed; and the Court of Appeals dismissed the petition for review, holding that the petitioner was subject to deportation under § 241 (a) (4) even though the two convictions relied upon to support deportation both occurred at a time when he was a naturalized citizen. 311 F. 2d 343. We granted certiorari to consider an important question of federal law. For the reasons which follow, we reverse the judgment of the Court of Appeals.
At a semantic level, the controversy centers around the use of the present tense “is” in the clause “[[a]ny alien] who at any time after entry is convicted . . . .” The petitioner argues that this language permits deportation only of one who was an alien at the time of his convictions. The Court of Appeals totally rejected such a contention, holding that this statutory language, considered along with the phrase “at any time after entry” and with the broad legislative history, clearly permits deportation of a person now an alien who was convicted of the two crimes in question while he was a naturalized citizen. “There is no ambiguity,” the court wrote, and “no room for interpretation or construction.” 311 F. 2d, at 345. The court found additional support for its conclusion in Eichenlaub v. Shaughnessy, 338 U. S. 521, a case which held that under a 1920 deportation law aliens who had been convicted of specified offenses were deport-able even though the convictions had occurred at a time when the aliens held certificates of naturalization.
We take a different view. The statute construed in Eichenlaub differs from § 241 (a) (4) in several important respects. The law there involved was the Act of May 10, 1920, which provided that “All aliens who since August 1, 1914, have been or may hereafter be convicted” of violations of the Espionage Act of 1917, as amended, were to be deported, provided the Secretary of Labor after a hearing found them to be undesirable residents of the United States. The Court read this language as unambiguously authorizing deportation; regardless of the aliens’ status at the time they were convicted. It is evident from what was said in the opinion that the Court was aided considerably in its search for the proper construction of the statute by Congress’ use of the past tense in the phrase “have been or may hereafter be,” and the fact that the only limitation which Congress placed upon the time of conviction was that it be “since August 1, 1914.” The Court also found specific legislative history to support its conclusion. As the Congressional Committee Reports demonstrated, the 1920 law was a special statute dealing with sabotage and espionage, originally enacted in order to deport “some or all of about 500 aliens who were then interned as dangerous enemy aliens and who might be found, after hearings, to be undesirable residents, and also to deport some or all of about 150 other aliens who, during World War I, had been convicted of violations of the Espionage Act or other national security measures, and who might be found, after hearings, to be undesirable residents.” 338 U. S., at 532. The Court therefore concluded that Congress, when it enacted the statute, had expressed a clear intent to group together denaturalized citizens along with aliens who had never acquired citizenship and to deport them for specific crimes involving national security occurring after a specific date at the beginning of World War I.
Neither the language nor the history of § 241 (a) (4) lends itself so easily to a similar construction. The subsection employs neither a past tense verb nor a single specific time limitation. The petitioner’s construction— that the language permits deportation only of a person who was an alien at the time of his convictions, and the Court of Appeals’ construction — that the language permits deportation of a person now an alien who at any time after entry has been convicted of two crimes, regardless of his status at the time of the convictions — are both possible readings of the statute, as the respondent has conceded in brief and oral argument.
We agree with the Court of Appeals that the tense of the verb “be” is not, considered alone, dispositive. On the other hand, we disagree with that court’s reliance on the phrase “at any time after entry” in § 241 (a) (4) to support the conclusion that an alien is deportable for post-entry conduct whether or not he was an alien at the time of conviction. Since § 212 (a)(9) provides for the exclusion of aliens convicted of crimes of moral turpitude, and any excludable alien who nevertheless enters the country is deportable under § 241 (a)(1), it seems just as logical to conclude that the purpose of the phrase “at any time after entry” in § 241 (a) (4) was simply to make clear that § 241 (a) (4) authorizes the deportation of aliens who were not originally excludable, but were convicted after entry.
There is nothing in the legislative history of § 241 (a) (4) of so specific a nature as to resolve the ambiguity of the statutory language. The general legislative purpose underlying enactment of § 241 (a) (4) was to broaden the provisions governing deportation, “particularly those referring to criminal and subversive aliens.” But reference to such a generalized purpose does little to promote resolution of the specific problem before us, of which there was absolutely no mention in the Committee Reports or other legislative materials concerning §241 (a)(4).
Although no legislative history illumines our problem, considerable light is forthcoming from another provision of the statute itself. Section 241 (b)(2), made specifically applicable to § 241 (a)(4), provides that deportation shall not take place “if the court sentencing such alien for such crime shall make, at the time of first imposing judgment or passing sentence, or within thirty days thereafter, a recommendation . . . that such alien not be deported.” As another court has correctly observed, “It seems plain that the qualifying provisions of subsection (b) are an important part of the legislative scheme expressed in subsection (a) (4). While that section makes a conviction there referred to ground for deportation, it is qualified in an important manner by the provision of subsection (b) (2) that if the court sentencing the alien makes the recommendation mentioned, then the provisions of subsection (a) (4) do not apply.” Gubbels v. Hoy, 261 F. 2d 952, 954.
Yet if § 241 (a)(4) were construed to apply to those convicted when they were naturalized citizens, the protective provisions of § 241 (b) (2) would, as to them, become a dead letter. A naturalized citizen would not “at the time of first imposing judgment or passing sentence,” or presumably “within thirty days thereafter,” be an “alien” who could seek to invoke the protections of this section of the law. Until denaturalized, he would still be a citizen for all purposes, and a sentencing court would lack jurisdiction to make the recommendation provided by § 241 (b)(2). We would hesitate long before adopting a construction of § 241 (a) (4) which would, with respect to an entire class of aliens, completely nullify a procedure so intrinsic a part of the legislative scheme.
If, however, despite the impact of §241 (b)(2), it should still be thought that the language of § 241 (a)(4) itself and the absence of legislative history continued to leave the matter in some doubt, we would nonetheless be constrained by accepted principles of statutory construction in this area of the law to resolve that doubt in favor of the petitioner. As the Court has emphasized, “deportation is a drastic measure and at times the equivalent of banishment or exile, Delgadillo v. Carmichael, 332 U. S. 388. It is the forfeiture for misconduct of a residence in this country. Such a forfeiture is a penalty. To construe this statutory provision less generously to the alien might find support in logic. But since the stakes are considerable for the individual, we will not assume that Congress meant to trench on his freedom beyond that which is required by the narrowest of several possible meanings of the words used.” Fong Haw Tan v. Phelan, 333 U. S. 6, 10.
Adoption of the petitioner’s construction of § 241 (a) (4) does not end our inquiry, however, for the respondent urges affirmance of the finding of deportability on an alternative ground, not reached by the Court of Appeals. The argument is that the petitioner is deportable because § 340 (a) of the Immigration and Nationality Act of 1952, under which the petitioner’s citizenship was canceled, provides that an order of denaturalization “shall be effective as of the original date” of the naturalization order. Under this so-called “relation-back” theory, it is said that cancellation of the petitioner’s certificate of naturalization was “effective” as of 1925, the year of his original naturalization, that he was therefore an alien as a matter of law at the time of his convictions in 1954, and that he is accordingly deportable under § 241 (a) (4) even if that provision requires alienage at the time of the convictions.
We reject this theory for much the same reasons which have prompted our construction of § 241 (a)(4). There is nothing in the language of § 340 (a), and not a single indication in the copious legislative history of the 1952 Act, to suggest that Congress intended the relation-back language of § 340 (a) to apply to the general deportation provisions of the Act. In view of the complete absence of any indication to the contrary, it would appear that in adopting the relation-back language of § 340 (a) Congress intended to do no more than to codify existing case law. Several cases before 1952 had held that an order of denaturalization made the original naturalization a nullity, Johannessen v. United States, 225 U. S. 227, and that, for the purpose of determining rights of derivative citizenship, denaturalization related back to the date of naturalization. Battaglino v. Marshall, 172 F. 2d 979, 981; Rosenberg v. United States, 60 F. 2d 475.
The Second Circuit was alone among the federal courts in thinking that this nunc pro tunc concept which had been judicially developed in the denaturalization cases could properly be related to the task of construing a deportation statute. Eichenlaub v. Watkins, 167 F. 2d 659; Willumeit v. Watkins, 171 F. 2d 773. And when those cases came here, this Court pointedly declined to adopt the Second Circuit’s reasoning. Eichenlaub v. Shaugh-nessy, 338 U. S. 521, 529-530. Following this Court’s decision in Eichenlaub, the Sixth Circuit expressly refused to apply to a general deportation statute the relation-back principle of the denaturalization cases, in determining when there had been an “entry” for purposes of the predecessor of § 241 (a) (4) in the 1917 Act. Bran-cato v. Lehmann, 239 F. 2d 663.
The relation-back concept is a legal fiction at best, and even the respondent concedes that it cannot be “mechanically applied.” With respect to denaturalization itself, Congress clearly adopted the concept in enacting § 340 (a). But in the absence of specific legislative history to the contrary, we are unwilling to attribute to Congress a purpose to extend this fiction to the deportation provisions of § 241 (a) (4). This Court declined to apply the fiction in a deportation context in the Eichenlaub case, and we decline to do so now.
The argument is made that it is anomalous to hold that a person found to have procured his naturalization by willful misrepresentation is not subject to deportation, although he would be deportable if he had never been naturalized at all. But it is not at all certain that this petitioner would be deportable today if he had never acquired naturalized citizenship. The petitioner points out that if he had held alienage status at the time of his trial for income tax evasion, he could have offered to plead guilty to one count of the indictment in return for a nolle prosequi of the other counts, and that conviction on but one count would not have made him subject to deportation under § 241 (a) (4). Even more important, had petitioner been an alien at the time of his convictions, he could have availed himself of the supplementary relief procedure provided for in § 241 (b)(2). In other words, to hold that under the relation-back language of § 340 (a) the petitioner was an “alien” at the time of his convictions would go much further than merely preventing him from benefiting from his invalid naturalization; it would put him in a much more disadvantageous position than he would have occupied if he had never acquired a naturalization certificate at all.
Moreover, if the relation-back doctrine were applicable in this case, it would be applicable as well, as the respondent’s counsel conceded in oral argument, in the case of one whose original naturalization was not fraudulent, but simply legally invalid upon some technical ground. In this area of the law, involving as it may the equivalent of banishment or exile, we do well to eschew technicalities and fictions and to deal instead with realities. The reality is that the petitioner’s convictions occurred when he was a naturalized citizen, as he had been for almost 30 years.
If Congress had wanted the relation-back doctrine of § 340 (a) to apply to the deportation provisions of § 241 (a)(4), and thus to render nugatory and meaningless for an entire class of aliens the protections of §241 (b)(2), Congress could easily have said so. But there is no evidence whatever that the question was even considered. If and when Congress gives thought to the matter, it might well draw distinctions based upon the ground for denaturalization, the nature of the criminal convictions, and the time interval between naturalization and conviction, or between conviction and denaturalization. But such differentiations are not for this Court to make.
Reversed.
Mr. Justice Harlan took no part in the consideration or decision of this case.
“(a) Any alien in the United States (including an alien crewman) shall, upon the order of the Attorney General, be deported who—
“(4) is convicted of a crime involving moral turpitude committed within five years after entry and either sentenced to confinement or confined therefor in a prison or corrective institution, for a year or more, or who at any time after entry is convicted of 'two crimes involving moral turpitude, not arising out of a single scheme of criminal misconduct, regardless of whether confined therefor and regardless of whether the convictions were in a single trial;” 66 Stat. 204, as amended, 8 U. S. C. § 1251 (a) (4).
The grant of certiorari was “limited to Question 1 presented by the petition which reads as follows:
“ ‘Whether the provision of § 241 (a) (4) of the Immigration and Nationality Act of 1952 for deportation of an “alien . . . who at any time after entry is convicted of two crimes” applies to an individual who was a naturalized citizen when convicted.’ ” 372 U. S. 975.
The relevant paragraphs of the Act of May 10, 1920, read as follows:
“. . . That aliens of the following classes, in addition to those for whose expulsion from the United States provision is made in the existing law, shall, upon the warrant of the Secretary of Labor, be taken into his custody and deported ... if the Secretary of Labor, after hearing, finds that such aliens are undesirable residents of the United States, to wit:
“(1) All aliens who are now interned under section 4067 of the Revised Statutes ....
“(2) All aliens who since August 1, 1914, have been or may hereafter be convicted of any violation or conspiracy to violate any of the following Acts . . . namely:
“ (a) An Act entitled ‘An Act to punish acts of interference with the foreign relations, the neutrality, and the foreign commerce of the United States, to punish espionage, and better to enforce the criminal laws ....’” 41 Stat. 593-594. See 8 U. S. C. § 157 (1926 ed.).
“The proper scope of the Act of 1920 as applied to these cases is found in the ordinary meaning of its words.” 338 U. S., at 527u. “The statutory language which says that ‘aliens who since August 1, 1914, have been or may hereafter be convicted . . .’ (emphasis supplied) refers to the requirement that the deportations be applicable to all persons who had been convicted of certain enumerated offenses since about the beginning of World War I (August 1, 1914), whether those convictions were had before or after May 10, 1920.” 338 U. S., at 530.
Comparing the “is” of § 241 (a) (4) with the various forms of “be” employed in other subsections of § 241 (a) is hardly helpful. It is as likely that the differences in wording found in these subsections reflect differences in style attributable to the various antecedents of the several provisions, as it is that the use of the present tense in § 241 (a) (4) reflects a specific congressional intent that that particular subsection, in contrast to the others, was not to be applied to people in the petitioner’s position.
8 U. S. C. §1182 (a)(9).
8 U. S. C. §1251 (a)(1).
See Commentary on the Immigration and Nationality Act, Walter M. Besterman, Legislative Assistant to the House Committee on the Judiciary, 8 U. S. C. A., pt. I, p. 61. This commentator makes no reference to the problem before us, although he does refer to several innovations in the Act broadening its scope: “Many of the grounds for deportation specified in the new law are retroactive in effect. They apply to the alien notwithstanding the fact that he may have entered the United States prior to the enactment of the 1952 law. Also, he may be found now to be deportable by reason of facts which occurred prior to the enactment of this Act [June 27, 1952].” Besterman, ibid.
See H. R. Rep. No. 1365, 82d Cong., 2d Sess., 60 (1952); S. Rep. No. 1515, 81st Cong., 2d Sess., 390-392 (1950); S. Rep. No. 1137, 82d Cong., 2d Sess., 21 (1952); H. R. Rep. No. 2096 (Conference Report), 82d Cong., 2d Sess., 127 (1952). See also Immigration and Naturalization Service, Analysis of S. 3455, 81st Cong., 2d Sess. (1950), Vol. 5, pp. 241-3 through 241-6; and Analysis of S. 716, 82d Cong., 1st Sess. (1951), Yol. 4, pp. 241-2 through 241-4. See generally, Besterman, note 8, supra, pp. 1-91.
“The provisions of subsection (a) (4) of this section respecting the deportation of an alien convicted of a crime or crimes shall not apply ... (2) if the court sentencing such alien for such crime shall make, at the time of first imposing judgment or passing sentence, or within thirty days thereafter, a recommendation to the Attorney General that such alien not be deported, due notice having been given prior to making such recommendation to representatives of the interested State, the Service, and prosecution authorities, who shall be granted an opportunity to make representations in the matter.” 8 U. S. C. §1251 (b).
In Gubbels the Court of Appeals for the Ninth Circuit held that court-martial convictions could not provide a basis for deportation under § 241 (a) (4) because a military court is not so constituted as to make the privilege accorded by § 241 (b) (2) available to a convicted alien.
It has been suggested that the petitioner, or one similarly situated, was at the time of the conviction chargeable with knowledge that he had procured his naturalization illegally, and that he could have therefore proceeded to seek a recommendation from the sentencing judge under §241 (b)(2). This suggestion seems not only practically unrealistic, but technically untenable. It has been held that only a competent court in appropriate proceedings can nullify a status of naturalized citizenship. United States v. Stephan, 50 F. Supp. 445.
The Eichenlaub statute carried with it no such qualifying provision, which reinforces the conclusion that the decision in Eichenlaub is of no basic relevance to the issue here. See note 3, supra. Section 19 of the Immigration Act of 1917, 39 Stat. 874, the predecessor of §241 (a)(4), on the other hand, did contain a relief provision similar to § 241 (b) (2). See 39 Stat. 889-890.
“It shall be the duty of the United States district attorneys for the respective districts ... to institute proceedings ... for the purpose of revoking and setting aside the order admitting such person to citizenship and canceling the certificate of naturalization . . ., and such revocation and setting aside of the order admitting such person to citizenship and such canceling of certificate of naturalization shall be effective as of the original date of the order and certificate, respectively . . . .” 66 Stat. 260, 8 U. S. C. § 1451 (a).
The companion case, Willumeit v. Shaughnessy, was decided in the same opinion. 338 U. S. 521.
Brancato first entered the United States in 1914; he was naturalized in 1929; he then left the United States and returned in 1930; he was convicted of a crime involving moral turpitude in 1932; he was denaturalized in 1939. The question was whether his conviction in 1932 was within five years after an “entry,” as defined by the statute. The Court of Appeals held that the cancellation of his citizenship in 1939 related back to 1929 for purposes of denaturalization, but not for purposes of the deportation statute, and that his return to the United States in 1930 was therefore not an “entry” in that year.
Section 340 (a) was amended in 1961 to provide for cancellation of citizenship on the ground that it was “illegally procured.” Act of September 26, 1961, § 18, 75 Stat. 656. In Brancato v. Lehmann, 239 F. 2d 663, the appellant’s citizenship had been canceled because his original petition for naturalization “was not verified by the affidavits of two credible witnesses,” as required by the 1906 Act.
See Mr. Justice Frankfurter’s dissenting opinion in Eichenlaub v. Shaughnessy, 338 U. S., at 533, 536-537. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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"NO Admin Action",
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] | [
6
] |
NATIONAL LABOR RELATIONS BOARD v. KATZ et al.
No. 222.
Argued March 22, 1962.
Decided May 21, 1962.
Solicitor General Cox argued the cause for petitioner. With him on the briefs were Stuart Rothman, Dominick L. Manoli, Norton J. Come, Frederick U. Reel and Stephen J. Poliak.
Sidney O. Raphael argued the cause for respondents. With him on the briefs was Leo M. Drachsler.
Mb. Justice Brennan
delivered the opinion of the Court.
Is it a violation of the duty “to bargain collectively” imposed by § 8 (a) (5) of the National Labor Relations Act for an employer, without first consulting a union with which it is carrying on bona fide contract negotiations, to institute changes regarding matters which are subjects of mandatory bargaining under § 8 (d) and which are in fact under discussion? The National Labor Relations Board answered the question affirmatively in this case, in a decision which expressly disclaimed any finding that the totality of the respondents’ conduct manifested bad faith in the pending negotiations. 126 N. L. R. B. 288. A divided panel of the Court of Appeals for the Second Circuit denied enforcement of the Board's cease- and-desist order, finding in our decision in Labor Board v. Insurance Agents’ Union, 361 U. S. 477, a broad rule that the statutory duty to bargain cannot be held to be violated, when bargaining is in fact being carried on, without a finding of the respondent’s subjective bad faith in negotiating. 289 F. 2d 700. The Court of Appeals said:
“We are of the opinion that the unilateral acts here complained of, occurring as they did during the negotiating of a collective bargaining agreement, do not per se constitute a refusal to bargain collectively and per se are not violative of § 8 (a) (5). While the subject is not generally free from doubt, it is our conclusion that in the posture of this case a necessary requisite of a Section 8 (a)(5) violation is a finding that the employer failed to bargain in good faith.” 289 F. 2d, at 702-703.
We granted certiorari, 368 U. S. 811, in order to consider whether the Board’s decision and order were contrary to Insurance Agents. We find nothing in the Board’s decision inconsistent with Insurance Agents and hold that the Court of Appeals erred in refusing to enforce the Board’s order.
The respondents are partners engaged in steel fabricating under the firm name of Williamsburg Steel Products Company. Following a consent election in a unit consisting of all technical employees at the company’s plant, the Board, on July 5, 1956, certified as their collective bargaining representative Local 66 of the Architectural and Engineering Guild, American Federation of Technical Engineers, AFL-CIO. The Board simultaneously certified the union as representative of similar units at five other companies which, with the respondent company, were members of the Hollow Metal Door' & Buck Association. The certifications related to separate units at the several plants and did not purport to establish a multi-employer bargaining unit.'
On July 11,1956, the union sent identical letters to each of the six companies, requesting collective bargaining. Negotiations were invited on either an individual or “association wide” basis, with the reservation that wage rates and increases would have to be discussed with each employer separately. A follow-up letter of July 19, 1956, repeated the request for contract negotiations and enumerated proposed subjects for discussion. Included were merit increases, general wage levels and increases, and a sick-leave proposal.
The first meeting between the company and the union took place on August 30, 1956. On this occasion, as at the ten other conferences held between October 2, 1956, and May 13, 1957, all six companies were in attendance and represented by the same counsel. It is undisputed that the subject of merit increases was raised at the August 30, 1956, meeting although there is an unresolved conflict as to whether an agreement was reached on joint participation by the company and the union in merit reviews, or whether the subject was simply mentioned and put off for discussion at a later date. It is also clear that proposals concerning sick leave were made. Several meetings were held during October and one in November, at which merit raises and sick leave were each discussed on at least two occasions. It appears, however, that little progress was made.
On December 5, a meeting was held at the New York State Mediation Board attended by a mediator of that agency, who was at that time mediating a contract negotiation between the union and Aetna Steel Products Corporation, a member of the Association bargaining separately from the others; and a decision was reached to recess the negotiations involved here pending the results of the Aetna negotiation. When the mediator called the next meeting on March 29, 1957, the completed Aetna contract was introduced . into the discussion. At a resumption of bargaining on April 4, the company, along with the other employers, offered a three-year agreement with certain initial and prospective automatic wage increases. The offer was rejected. Further meetings with the mediator on April 11, May 1, and May 13, 1957, produced no agreement, and no further meetings were held.
Meanwhile, on April 16, 1957, the union had filed the charge upon which the General Counsel’s complaint later issued. As amended and amplified, at the hearing and construed by the Board, the complaint’s charge of unfair labor practices particularly referred to three acts by the company: unilaterally granting numerous merit increasés in October 1956 and January 1957; unilaterally announcing a change in sick-leave policy in March 1957; and unilaterally instituting a new system of automatic wage increases during April 1957. As the ensuing litigation has developed, the company has defended against the charges along two fronts: First, it asserts that the unilateral changes occurred after a bargaining impasse had developed through the union’s fault in adopting obstructive tactics. According to the Board,, however, “the evidence is clear that the Respondent undertook its unilateral actions before negotiations were discontinued in May-1957, or before, as we find on the record, the existence of any possible impasse.” 126 N. L. R. B., at 289-290. There is ample support in the record considered as a whole for this finding of fact, which is consistent with the Examiner’s Intermediate Report, 126 N. L. R. B., at 295-296, and which the Court of Appeals did not question.
The second line of defense was that the Board could not hinge a conclusion that §8 (a)(5) had been violated on unilateral actions alone, without making a finding of the employer’s subjective bad faith at the bargaining table; and that the unilateral actions were merely evidence relevant to the issue of subjective good faith. This argument prevailed in the Court of Appeals which remanded the cases to the Board saying:
“Although we might ... be justified in denying enforcement without remand, . . . since the Board’s finding of an unfair labor practice impliedly proceeds from an erroneous view that specific unilateral acts, regardless of bad faith, may constitute violations of § 8 (a) (5), the case should be remanded to the Board in order that it may have an opportunity to take additional evidence, and make such findings as may be warranted by the record.” 289 F. 2d, at 709.
The duty “to bargain collectively” enjoined by § 8 (a) (5) is defined by § 8 (d) as the duty to “meet . . . and confer in good faith with respect to wages, hours, and other terms and conditions of employment.” Clearly, the duty thus defined may be violated without a general failure of subjective good faith; for there is no occasion to consider the issue of good faith if a party has refused even to negotiate in fact — “to meet . . . and confer” — about any of the mandatory subjects. A refusal to negotiate in fact as to any subject which is within § 8 (d), and about which the union seeks to negotiate, violates § 8 (a) (5) though the employer has every desire to reach agreement with the union upon an over-all collective agreement and earnestly and in all good faith bargains to that end. We hold that an employer’s unilateral change in conditions of employment under negotiation is similarly a violation of §8 (a)(5), for it is a circumvention of the duty to negotiate which frustrates the objectives of § 8 (a) (5) much as does a flat refusal.
The unilateral actions of the respondent illustrate the policy and practical considerations which support our conclusion.
We consider first the matter of sick leave. A sick-leave plan had been in effect since May 1956, under which employees were allowed ten paid sick-leave days annually and could accumulate half the unused days, or up to five days each year. Changes in the plan were sought and proposals and counterproposals had come up at three bargaining conferences. In March 1957, the company, without first notifying or consulting the union, announced changes in the plan, which reduced from ten to five the number of paid sick-leave days per year, but allowed accumulation of twice the unused days, thus increasing to ten the number of days which might be carried over. This action plainly frustrated the statutory objective of establishing working conditions through bargaining. Some employees might view the change to be a diminution' of benefits. Others, more interested in accumulating sick-leave days, might regard the change as an improvement. If one view or the other clearly prevailed among the employees, the unilateral action might well mean that the employer had either uselessly dissipated trading material or aggravated the sick-leave issue: On the. other hand, if the employees were more evenly divided on the merits of the company’s changes, the union negotiators, beset by conflicting factions, might be led to adopt a protective vagueness- on the issue of sick leave, which also would inhibit the useful discussion contemplated by Congress in imposing the specific obligation to bargain collectively.
Other considerations appear from consideration of the respondents’ unilateral action in increasing wages. At the April 4, 1957, meeting the employers offered, and the union rejected, a three-year contract with an immediate across-the-board increase of $7.50 per week, to be followed at the end of the first year and again at the end of the second by further increases of $5 for employees earning less than $90 at those times. Shortly thereafter, without having advised or consulted with the union, the company announced a new system of automatic wage increases whereby there would be an increase of $5 every three months up to $74.99 per week; an increase of $5 every six months between $75 and $90 per week; and a merit review every six months for employees earning over $90 per week. It is clear at a glance that the automatic wage increase system which was instituted unilaterally was considerably more generous than that which had shortly theretofore been offered to and rejected by the union. Such action conclusively manifested bad faith in the negotiations, Labor Board v. Crompton-Highland Mills, 337 U. S. 217, and so would have violated § 8 (a) (5) even on the Court of Appeals’ interpretation, though no additional evidence of bad faith appeared. An employer is not required to' lead with his best offer; he is free to bargain. But even after an impasse is reached he has no license to grant wage increases greater than any he has ever offered the union at the bargaining table, for such action is necessarily inconsistent with a sincere desire to conclude an agreement with the union.
The respondents’ third unilateral action related to merit increases, which are also a subject of mandatory bargaining. Labor Board v. Allison & Co., 165 F. 2d 766. The matter of merit increases had been raised at three of the conferences during 1956 but no final understanding had been reached. In January 1957, the company, without notice to the union, granted merit increases to 20 employees out of the approximately 50 in the unit, the increases ranging between $2 and $10. This action too must be viewed as tantamount to an outright refusal to negotiate on that subject, and therefore as a violation of § 8 (a)(5), unless the fact that the January raises were in line with the company’s long-standing practice of granting quarterly or semiannual merit reviews — in effect, were a mere continuation of the status quo — differentiates them from the wage increases and the changes in the sick-leave plan. We do not think it does. Whatever might be the case as to so-called “merit raises” which are in fact simply automatic increases to which the employer has already committed himself, the raises here in question were in no sense automatic, but were informed by a large measure of discretion. There simply is no way in such case for a union to know whether or not there has been a substantial departure from past practice, and therefore the union may properly insist that the company negotiate as to the procedures and criteria for determining such increases.
It is apparent from what we have said why we see nothing in Insurance Agents contrary to the Board’s decision. The union in that case had not in any way whatever foreclosed discussion of any issue, by unilateral actions or otherwise. The conduct complained of consisted of partial-strike tactics designed to put pressure on the employer to come to terms with the union negotiators. We held that Congress had not, in § 8 (b) (3), the counterpart of § 8 (a)(5), empowered the Board to pass judgment on the legitimacy of any particular economic weapon used in support of genuine negotiations. But the Board is authorized to order the cessation of behavior which is in effect a refusal to negotiate, or which directly obstructs or inhibits the actual process of discussion, or which reflects a cast of mind against reaching agreement. Unilateral action by an employer without prior discussion with the union does amount to a refusal to negotiate about the affected conditions of employment under negotiation, and must of necessity obstruct bargaining, contrary to the congressional policy. It will often disclose an unwillingness to agree with the union. It will rarely be justified by any reason of substance. It follows that the Board may hold such unilateral action to be an unfair labor practice in violation of §8 (a)(5), without also finding the employer guilty of over-all subjective bad faith. While we do not foreclose the possibility that there might be circumstances which the Board could or should accept as excusing or justifying unilateral action, no such case is presented here.
The judgment of the Court of Appeals is reversed and the case is remanded with direction to the court to enforce the Board’s order.
It is so ordered.
Mr. Justice Frankfurter took no part in the decision of this case.
Mr. Justice White took no part in the consideration or decision of this case.
National Labor Relations Act § 8 (a) (5), 49 Stat. 452-453, as amended, 29 U. S. C. § 158 (a) (5):
“It shall be an unfair labor practice for an employer ... to refuse to bargain collectively with the representatives of his employees, subject to the provisions of section 159 (a) of this title.”
National Labor Relations Act §8(d), added by 61 Stat. 142, 29 U. S. C. § 158 (d):
“For the purposes of this section, to. bargain collectively is the performance of the mutual obligation of the employer and the representative of the employees to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment . . . .” See Labor Board v. Borg-Warner Corp., 356 U. S. 342, 348-349.
For earlier Board decisions in accord, see, e. g., Chambers Mfg. Corp., 124 N. L. R. B. 721; Bonham Cotton Mills, Inc., 121 N. L. R. B. 1235, 1236.
The Board’s order herein, in pertinent part, ordered that the respondents
“1. Cease and desist from:
“(a) Unilaterally changing wages, rates of pay, or sick leave, or granting merit increases, or in any similar or related manner refusing to bargain collectively with Architectural and Engineering Guild, Local 66, American Federation of Technical Engineers, AFL-CIO . . . .
“(b) Refusing to bargain collectively concerning rates of pay, wages, hours of employment, and other conditions of employment with the Union . . . .”
Accord: Labor Board v. Cascade Employers Assn., Inc., 296 F. 2d 42 (C. A. 9th Cir.).
By their references to “association wide bargaining” the parties appear to mean negotiations at which the six members of the Association for whose employees the union had received certifications on July 5, 1956, would be concurrently represented.
On one occasion in November 1956, a representative of the company conferred individually with the union about job classifications.
Particularizations of this charge are that the union adamantly insisted that the employers agree to a contract identical with that entered into by Aetna because the Aetna agreement contained a “most favored nation” clause; that the union evasively vacillated between insistence on individual and group negotiations; and that the conduct of negotiations by the union created unrest impairing the efficiency of the company’s operations and causing valued employees to quit.
The Board found as a fact that the introduction of the Aetna agreement did not create any impasse at least until after the unilateral actions here in issue. The Board adopted the Examiner’s finding that the company and not the union was responsible for any confusion over individual as opposed to assoeiation-wide bargaining. The unrest seems to have been a concomitant of the assertion by the employees of their rights to organize and negotiate a collective agreement, and could not justify a refusal of the company to bargain, at least in the absence of conduct of the union which amounted to an unfair labor practice.
The Examiner rejected the company’s offer to prove union-instigated slowdowns. But such proof would not have justified the company’s refusal to bargain. Since, as we held in Labor Board v. Insurance Agents’ Union, 361 U. S. 477, the Board may not brand partial strike activity as illegitimate and forbid its use in support of bargaining, an employer cannot be free to refuse to negotiate when the union resorts to such tactics. Engaging in partial strikes is not inherently inconsistent with a continued willingness to negotiate; and as long as there is such willingness and no impasse has developed, the employer’s obligation continues.
See Universal Camera Corp. v. Labor Board, 340 U. S. 474.
The Board had also found the company’s actions violative of § 8 (a) (1), 49 Stat. 462, as amended, 29 -U. S. C. § 158 (a) (1), but the Court of Appeals held that those findings were merely derivative of the Board’s conclusions regarding § 8 (a) (5) and so rejected them. We need not consider this question because the Board’s order presents no separate issue as to § 8 (a) (1). It requires the company to cease and desist from refusing to bargain collectively, and to bargain collectively on request. It imposes no broader obligation either in the language of, or by reference to, § 8 (a) (1).
See, e. g., Labor Board v. Allison & Co., 165 F. 2d 766.
Compare Medo Corp. v. Labor Board, 321 U. S. 678; May Department Stores v. Labor Board, 326 U. S. 376; Labor Board v. Crompton-Highland Mills, 337 U. S. 217.
In Medo, the Court held that the employer interfered with his employees’ right to bargain collectively through a chosen representative, in violation of §8 (1), 49 Stat. 452 (now §8 (a)(1)), when it treated directly with employees and granted them a wage increase in return for their promise to repudiate the union they had designated as their representative. It further held that the employer violated the statutory duty to bargain when he refused to negotiate with the union after the employees had carried out their promise.
May held that the employer violated § 8 (1) when, after having unequivocally refused to bargain with a certified union on the ground that the unit was inappropriate, it announced that it had applied to the War Labor Board for permission to grant a wage increase to all its employees except those whose wages had been fixed by “closed shop agreements.”
Crompton-Highland Mills sustained the Board’s conclusion that the employer’s unilateral grant of a wage increase substantially greater than any it had offered to the union during negotiations which had ended in impasse clearly manifested bad faith and violated the employer’s duty to bargain.
Of course, there is no resemblance between this situation and one wherein an employer, after notice and consultation, “unilaterally” institutes a wage increase identical with one which the union has rejected as too low. See Labor Board v. Bradley Washfountain Co., 192 F. 2d 144, 150-152; Labor Board v. Landis Tool Co., 193 F. 2d 279.
The Board also concluded that the company had violated § 8 (a) (5) by granting 34 merit increases in October 1956. However, it appears from a stipulation in the record and from the Board’s reply brief that the latter increases occurred on October 1, 1956, while the charge on which the instant complaint issued was not filed until April 16,1957, more than six months thereafter. Section 10 (b) of the Act, as amended, 61 Stat. 146, 29 U. S. C. §160 (b), provides that “no complaint shall issue based upon any unfair labor practice occurring more than six months prior to the filing of the charge with the Board .• . . .” Therefore, we disregard the October 1956 increases as independently constituting an unfair labor practice. Nor do we find it necessary to decide whether they may be considered as evidence in connection with the Board’s suggestion that the merit increases of October 1956 and January 1957 should be viewed as together amounting to a general wage increase.
See Armstrong Cork Co. v. Labor Board, 211 F. 2d 843, 847; Labor Board v. Dealers Engine Rebuilders, Inc., 199 F. 2d 249. Compare the isolated individual wage adjustments held not to be unfair labor practices in Labor Board v. Superior Fireproof Door & Sash Co., 289 F. 2d 713, 720, and White v. Labor Board, 255 F. 2d 564, 565.
The Court expressly left open the question which would be raised by a union’s attempt to impose new working conditions unilaterally. 361 U. S., at 496-497, n. 28.
The company urges that, because of the lapse of time between the occurrence of the unfair labor practices and the Board’s final decision and order, and because the union was repudiated by the employees subsequently to the events recounted in this opinion, enforcement should be either denied altogether Or conditioned on the holding of a new election to determine whether the union is still the employees’ choice as a bargaining representative. The argument has no merit. Franks Bros. Co. v. Labor Board, 321 U. S. 702; Labor Board v. P. Lorillard Co., 314 U. S. 512; Labor Board v. Mexia Textile Mills, Inc., 339 U. S. 563, 568. Inordinate delay in any case is regrettable, but Congress has introduced no time limitation into the Act except that in § 10 (b). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
81
] |
COMMISSIONER OF INTERNAL REVENUE v. DUBERSTEIN et ux.
No. 376.
Argued March 23, 1960.
Decided June 13, 1960.
Philip Elman argued the cause for petitioner in No. 376. On the brief were Solicitor General Rankin, Assistant Attorney General Rice and Wayne G. Barnett.
Clendon H. Lee argued the cause for petitioners in No. 546. With him on the brief were John C. Farber, William F. Snyder and Theodore Q. Childs.
Sidney G. Kusworm argued the cause and filed a brief for respondents in No. 376.
Wayne G. Barnett argued the cause for the United States in No. 546. With him on the brief were Solicitor General Rankin and Assistant Attorney General Rice.
Together with No. 546, Stanton et ux. v. United States, on certiorari to the United States Court of Appeals for the Second Circuit, argued March 24, 1960.
Mr. Justice Brennan
delivered the opinion of the Court.
These two cases concern the provision of the Internal Revenue Code which excludes from the gross income of an income taxpayer “the value of property acquired by gift.” They pose the frequently recurrent question whether a specific transfer to a taxpayer in fact amounted to a “gift” to him within the meaning of the statute. The importance to decision of the facts of the cases requires that we state them in some detail.
No. 376, Commissioner v. Duberstein. The taxpayer, Duberstein, was president of the Duberstein Iron & Metal Company, a corporation with headquarters in Dayton, Ohio. For some years the taxpayer’s company had done business with Mohawk Metal Corporation, whose headquarters were in New York City. The president of Mohawk was one Berman. The taxpayer and Berman had generally used the telephone to transact their companies' business with each other, which consisted of buying and selling metals. The taxpayer testified, without elaboration, that he knew Berman “personally” and had known him for about seven years. From time to time in their telephone conversations, Ber-man would ask Duberstein whether the latter knew of potential customers for some of Mohawk’s products in which Duberstein’s company itself was not interested. Duberstein provided the names of potential customers for these items.
One day in 1951 Berman telephoned Duberstein and said that the information Duberstein had given him had proved so helpful that he wanted to give the latter a present. Duberstein stated that Berman owed him nothing. Berman said that he had a Cadillac as a gift for Duberstein, and that the latter should send to New York for it; Berman insisted that Duberstein accept the car, and the latter finally did so, protesting however that he had not intended to be compensated for the information. At the time Duberstein already had a Cadillac and an Oldsmobile, and felt that he did not need another car. Duberstein testified that he did not think Berman would have sent him the Cadillac if he had not furnished him with information about the customers. It appeared that Mohawk later deducted the value of the Cadillac as a business expense on its corporate income tax return.
Duberstein did not include the value of the Cadillac in gross income for 1951, deeming it a gift. The Commissioner asserted a deficiency for the car’s value against him, and in proceedings to review the deficiency the Tax Court affirmed the Commissioner’s determination. It said that “The record is significantly barren of evidence revealing any intention on the part of the payor to make a gift. . . . The only justifiable inference is that the automobile was intended by the payor to be remuneration for services rendered to it by Duberstein.” The Court of Appeals for the Sixth Circuit reversed. 265 F. 2d 28.
No. 546, Stanton v. United States. The taxpayer, Stanton, had been for approximately 10 years in the employ of Trinity Church in New York City. He was comptroller of the Church corporation, and president of a corporation, Trinity Operating Company, the church set up as a fully owned subsidiary to manage its real estate holdings, which were more extensive than simply the church property. His salary by the end of his employment there in 1942 amounted to $22,500 a year. Effective November 30, 1942, he resigned from both positions to go into business for himself. The Operating Company’s directors, who seem to have included the rector and vestrymen of the church, passed the following resolution upon his resignation: “Be it Resolved that in appreciation of the services rendered by Mr. Stanton ... a gratuity is hereby awarded to him of Twenty Thousand Dollars, payable to him in equal instalments of Two Thousand Dollars at the end of each and every month commencing with the month of December, 1942; provided that, with the discontinuance of his services, the Corporation of Trinity Church is released from all rights and claims to pension and retirement benefits not already accrued up to November 30, 1942.”
The Operating Company’s action was later explained by one of its directors as based on the fact that, “Mr. Stanton was liked by all of the Vestry personally. He had a pleasing personality. He had come in when Trinity’s affairs were in a difficult situation. He did a splendid piece of work, we felt. Besides that ... he was liked by all of the members of the Vestry personally.” And by another: “[W]e were all unanimous in wishing to make Mr. Stanton a gift. Mr. Stanton had loyally and faithfully served Trinity in a very difficult time. We thought of him in the highest regard. We understood that he was going in business for himself. We felt that he was entitled to that evidence of good will.”
On the other hand, there was a suggestion of some ill-feeling between Stanton and the directors, arising out of the recent termination of the services of one Watkins, the Operating Company’s treasurer, whose departure was evidently attended by some acrimony. At a special board meeting on October 28, 1942, Stanton had intervened on Watkins’ side and asked reconsideration of the matter. The minutes reflect that “resentment was expressed as to the 'presumptuous’ suggestion that the action of the Board, taken after long deliberation, should be changed.” The Board adhered to its determination that Watkins be separated from employment, giving him an opportunity to resign rather than be discharged. At another special meeting two days later it was revealed that Watkins had not resigned; the previous resolution terminating his services was then viewed as effective; and the Board voted the payment of six months’ salary to Watkins in a resolution similar to that quoted in regard to Stanton, but which did not use the term “gratuity.” At the meeting, Stanton announced that in order to avoid any such embarrassment or question at any time as to his willingness to resign if the Board desired, he was tendering his resignation. It was tabled, though not without dissent. The next week, on November 5, at another special meeting, Stanton again tendered his resignation which this time was accepted.
The “gratuity” was duly paid. So was a smaller one to Stanton's (and the Operating Company's) secretary, under a similar resolution, upon her resignation at the same time. The two corporations shared the expense of the payments. There was undisputed testimony that there were in fact no enforceable rights or claims to pension and retirement benefits which had not accrued at the time of the taxpayer’s resignation, and that the last proviso of the resolution was inserted simply out of an abundance of caution. The taxpayer received in cash a refund of his contributions to the retirement plans, and there is no suggestion that he was entitled to more. He was required to perform no further services for Trinity after his resignation.
The Commissioner asserted a deficiency against the taxpayer after the latter had failed to include the payments in question in gross income. After payment of the deficiency and administrative rejection of a refund claim, the taxpayer sued the United States for a refund in the District Court for the Eastern District of New York. The trial judge, sitting without a jury, made the simple finding that the payments were a “gift,” and judgment was entered for the taxpayer. The Court of Appeals for the Second Circuit reversed. 268 F. 2d 727.
The Government, urging that clarification of the problem typified by these two eases was necessary, and that the approaches taken by the Courts of Appeals for the Second and the Sixth Circuits were in conflict, petitioned for certiorari in No. 376, and acquiesced in the taxpayer’s petition in No. 546. On this basis, and because of the importance of’the question in the administration of the income tax laws, we granted certiorari in both cases. 361 U. S. 923.
The exclusion of property acquired by gift from gross income under the federal income tax laws was made in the first income tax statute passed under the authority of the Sixteenth Amendment, and has been a feature of the income tax statutes ever since. The meaning of the term “gift” as applied to particular transfers has always been a matter of contention. Specific and illuminating legislative history on the point does not appear to exist. Analogies and inferences drawn from other revenue provisions, such as the estate and gift taxes, are dubious. See Lockard v. Commissioner, 166 F. 2d 409. The meaning of the statutory term has been shaped largely by the decisional law. With this, we turn to the contentions made by the Government in these cases.
First. The Government suggests that we promulgate a new “test” in this area to serve as a standard to be applied by the lower courts and by the Tax Court in dealing with the numerous cases that arise. We reject this invitation. We are of opinion that the governing principles are necessarily general and have already been spelled out in the opinions of this Court, and that the problem is one which, under the present statutory framework, does not lend itself to any more definitive statement that would produce a talisman for the solution of concrete cases. The cases at bar are fair examples of the settings in which the problem usually arises. They present situations in which payments have been made in a context with business overtones — an employer making a payment to a retiring employee; a businessman giving something of value to another businessman who has been of advantage to him in his business. In this context, we review the law as established by the prior cases here.
The course of decision here makes it plain that the statute does not use the term “gift” in the common-law sense, but in a more colloquial sense. This Court has indicated that a voluntary executed transfer of his property by one to another, without any consideration or compensation therefor, though a common-law gift, is not necessarily a “gift” within the meaning of the statute. For the Court has shown that the mere absence of a legal or moral obligation to make such a payment does not establish that it is a gift. Old Colony Trust Co. v. Commissioner, 279 U. S. 716, 730. And, importantly, if the payment proceeds primarily from “the constraining force of any moral or legal duty,” or from “the incentive of anticipated benefit” of an economic nature, Bogardus v. Commissioner, 302 U. S. 34, 41, it is not a gift. And, conversely, “[w]here the.payment is in return for services rendered, it is irrelevant that the donor derives no economic benefit from it.” Robertson v. United States, 343 U. S. 711, 714. A gift in the statutory sense, on the other hand, proceeds from a “detached and disinterested generosity,” Commissioner v. LoBue, 351 U. S. 243, 246; “out of affection, respect, admiration, charity or like impulses.” Robertson v. United States, supra, at 714. And in this regard, the most critical consideration, as the Court was agreed in the leading case here, is the transferor’s “intention.” Bogardus v. Commissioner, 302 U. S. 34, 43. “What controls is the intention with which payment, however voluntary, has been made.” Id., at 45 (dissenting opinion) ,
The Government says that this “intention” of the transferor cannot mean what the cases on the common-law concept of gift call “donative intent.” With that we are in agreement, for our decisions fully support this. Moreover, the Bogardus case itself makes it plain that the donor’s characterization of his action is not determinative — that there must be an objective inquiry as to whether what is called a gift amounts to it in reality. 302 U. S., at 40. It scarcely needs adding that the parties’ expectations or hopes as to the tax treatment of their conduct in themselves have nothing to do with the matter.
It is suggested that the Bogardus criterion would be more apt if rephrased in terms of “motive” rather than “intention.” We must confess to some skepticism as to whether such a verbal mutation would be of any practical consequence. We take it that the proper criterion, established by decision here, is one that inquires what the basic reason for his conduct was in fact — the dominant reason that explains his action in making the transfer. Further than that we do not think it profitable to go.
Second. The Government’s proposed “test,” while apparently simple and precise in its formulation, depends frankly on a set of “principles” or “presumptions” derived from the decided cases, and concededly subject to various exceptions; and it involves various corollaries, which add to its detail. Were we to promulgate this test as a matter of law, and accept with it its various presuppositions and stated consequences, we would be passing far beyond the requirements of the cases before us, and would be painting on a large canvas with indeed a broad brush. The Government derives its test from such propositions as the following: That payments by an employer to an employee, even though voluntary, ought, by and large, to be taxable ; that the concept of a gift is inconsistent with a payment’s being a deductible business expense; that a gift involves “personal” elements; that a business corporation cannot properly make a gift of its assets. The Government admits that there are exceptions and qualifications to these propositions. We think, to the extent they are correct, that these propositions are not principles of law but rather maxims of experience that the tribunals which have tried the facts of cases in this area have enunciated in explaining their factual determinations. Some of them simply represent truisms: it doubtless is, statistically speaking, the exceptional payment by an employer to an employee that amounts to a gift. Others are overstatements of possible evidentiary inferences relevant to a factual determination on the totality of circumstances in the case: it is doubtless relevant to the over-all inference that the transferor treats a payment as a business deduction, or that the transferor is a corporate entity. But these inferences cannot be stated in absolute terms. Neither factor is a shibboleth. The taxing statute does not make nondeductibility by the transferor a condition on the “gift” exclusion; nor does it draw any distinction, in terms, between transfers by corporations and individuals, as to the availability of the “gift” exclusion to the transferee. The conclusion whether a transfer amounts to a “gift” is one that must be reached on consideration of all the factors.
Specifically, the trier of fact must be careful not to allow trial of the issue whether the receipt of a specific payment is a gift to turn into a trial of the tax liability, or of the propriety, as a matter of fiduciary or corporate law, attaching to the conduct of someone else. The major corollary to the Government’s suggested “test” is that, as an ordinary matter, a payment by a corporation cannot be a gift, and, more specifically, there can be no such thing as a “gift” made by a corporation which would allow it to take a deduction for an ordinary and necessary business expense. As we have said, we find no basis for such a conclusion in the statute; and if it were applied as a determinative rule of “law,” it would force the tribunals trying tax cases involving the donee’s liability into elaborate inquiries into the local law of corporations or into the peripheral deductibility of payments as business expenses. The former issue might make the tax tribunals the most frequent investigators of an important and difficult issue of the laws of the several States, and the latter inquiry would summon one difficult and delicate problem of federal tax law as an aid to the solution of another. Or perhaps there would be required a trial of the vexed issue whether there was a “constructive” distribution of corporate property, for income tax purposes, to the corporate agents who had sponsored the transfer. These considerations, also, reinforce us in our conclusion that while the principles urged by the Government may, in nonabsolute form as crystallizations of experience, prove persuasive to the trier of facts in a particular case, neither they, nor any more detailed statement than has been made, can be laid down as a matter of law.
Third. Decision of the issue presented in these cases must be based ultimately on the application of the fact-finding tribunal’s experience with the mainsprings of human conduct to the totality of the facts of each case. The nontechnical nature of the statutory standard, the close relationship of it to the data of practical human experience, and the multiplicity of relevant factual elements, with their various combinations, creating the necessity of ascribing the proper force to each, confirm us in our conclusion that primary weight in this area must be given to the conclusions of the trier of fact. Baker v. Texas & Pacific R. Co., 359 U. S. 227; Commissioner v. Heininger, 320 U. S. 467, 475; United States v. Yellow Cab Co., 338 U. S. 338, 341; Bogardus v. Commissioner, supra, at 45 (dissenting opinion).
This conclusion may not satisfy an academic desire for tidiness, symmetry and precision in this area, any more than a system based on the determinations of various fact-finders ordinarily does. But we see it as implicit in the present statutory treatment of the exclusion for gifts, and in the variety of forums in which federal income tax cases can be tried. If there is fear of undue uncertainty or overmuch litigation, Congress may make more precise its treatment of the matter by singling out certain factors and making them determinative of the matter, as it has done in one field of the “gift” exclusion’s former application, that of prizes and awards. Doubtless diversity of result will tend to be lessened somewhat since federal income tax decisions, even those in tribunals of first instance turning on issues of fact, tend to be reported, and since there may be a natural tendency of professional triers of fact to follow one another’s determinations, even as to factual matters. But the question here remains basically one of fact, for determination on a case-by-case basis.
One consequence of this is that appellate review of determinations in this field must be quite restricted. Where a jury has tried the matter upon correct instructions, the only inquiry is whether it cannot be said that reasonable men could reach differing conclusions on the issue. Baker v. Texas & Pacific R. Co., supra, at 228. Where the trial has been by a judge without a jury, the judge’s findings must stand unless “clearly erroneous.” Fed. Rules Civ. Proc., 52 (a). “A finding is 'clearly erroneous’ when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.” United States v. United States Gypsum Co., 333 U. S. 364, 395. The rule itself applies also to factual inferences from undisputed basic facts, id., at 394, as will on many occasions be presented in this area. Cf. Graver Tank & Mfg. Co. v. Linde Air Products Co., 339 U. S. 605, 609-610. And Congress has in the most explicit terms attached the identical weight to the findings of the Tax Court. I. R. C., § 7482 (a).
Fourth. A majority of the Court is in accord with the principles just outlined. And, applying them to the Duberstein case, we are in agreement, on the evidence we have set forth, that it cannot be said that the conclusion of the Tax Court was “clearly erroneous.” It seems to us plain. that as .trier of the facts it was warranted in concluding that despite the characterization of the transfer of the Cadillac by the parties and the absence of any obligation, even of a moral nature, to make it, it was at bottom a recompense for Duberstein’s past services, or an inducement for him to be of further service in the future. We cannot say with the Court of Appeals that such a conclusion was “mere suspicion” on the Tax Court’s part. To us it appears based in the sort of informed experience with human affairs that fact-finding tribunals should bring to this task.
As to Stanton, we are in disagreement. To four of us, it is critical here that the District Court as trier of fact made only the simple and unelaborated finding that the transfer in question was a “gift.” To be sure, conciseness is to be strived for, and prolixity avoided, in findings; but, to the four of us, there comes a point where findings become so sparse and conclusory as to give no revelation of what the District Court’s concept of the determining facts and legal standard may be. See Matton Oil Transfer Corp. v. The Dynamic, 123 F. 2d 999, 1000-1001. Such conclusory, general findings do not constitute compliance with Rule 52’s direction to “find the facts specially and state separately . . . conclusions of law thereon.” While the standard of law in this area is not a complex one, we four think the unelaborated finding of ultimate fact here cannot stand as a fulfillment of these requirements. It affords the reviewing court not the semblance of an indication of the legal standard with which the trier of fact has approached his task. For all that appears, the District Court may have viewed the form of the resolution or the simple absence of legal consideration as conclusive. While the judgment of the Court of Appeals cannot stand, the four of us think there must be further proceedings in the District Court looking toward new and adequate findings of fact. In this, we are joined by Mr. Justice Whittaker, who agrees that the findings were inadequate, although he does not concur generally in this opinion.
Accordingly, in No. 376, the judgment of this Court is that the judgment of the Court of Appeals is reversed, and in No. 546, that the judgment of the Court of Appeals is vacated, and the case is remanded to the District Court for further proceedings not inconsistent with this opinion.
It is so ordered.
Mr. Justice Harlan concurs in the result in No. 376. In No. 546, he would affirm the judgment of the Court of Appeals for the reasons stated by Mr. Justice Frankfurter.
Mr. Justice Whittaker, agreeing with Bogardus that whether a particular transfer is or is not a “gift” may involve “a mixed question of law and fact,” 302 U. S., at 39, concurs only in the result of this opinion.
Mr. Justice Douglas dissents, since he is of the view that in each of these two cases there was a gift under the test which the Court fashioned nearly a quarter of a century ago in Bogardus v. Commissioner, 302 U. S. 34.
The operative provision in the cases at bar is § 22 (b) (3) of the 1939 Internal Revenue Code. The corresponding provision of the present Code is § 102 (a).
In both cases the husband will be referred to as the taxpayer, although his wife joined with him in joint tax returns.
See note 14, infra.
§ H.B., c. 16, 38 Stat. 167.
The first case of the Board of Tax Appeals officially reported in fact deals with the problem. Parrott v. Commissioner, 1 B. T. A. 1.
The Government’s proposed test,is stated: “Gifts should be defined as transfers of property made for personal as distinguished from business reasons.”
The cases including “tips” in gross income are classic examples of this. See, e. g., Roberts v. Commissioner, 176 F. 2d 221.
The parts of the Bogardus opinion which we touch on here are the ones we take to be basic to its holding, and the ones that we read as stating those governing principles which it establishes. As to them we see little distinction between the views of the Court and those taken in dissent in Bogardus. The fear expressed by the dissent at 302 U. S., at 44, that the prevailing opinion “seems” to hold “that every payment which in any aspect is a gift is . . . relieved of any tax” strikes us now as going beyond what the opinion of the Court held in fact. In any event, the Court’s opinion in Bogardus does not seem to have been so interpreted afterwards. The principal difference, as we see it, between the Court’s opinion and the dissent lies in the weight to be given the findings of the trier of fact.
Justice Cardozo once described in memorable language the inquiry into whether an expense was an “ordinary and necessary” one of a business: “One struggles in vain for any verbal formula that will supply a ready touchstone. The standard set up by the statute is not a rule of law; it is rather a way of life. Life in all its fullness must supply the answer to the riddle.” Welch v. Helvering, 290 U. S. 111, 115. The same comment well fits the issue in the cases at bar.
Cf., e. g., Nelson v. Commissioner, 203 F. 2d 1.
In Bogardus, the Court was divided 5 to 4 as to the scope of review to be extended the fact-finder’s determination as to a specific receipt, in a context like that of the instant cases. The majority held that such a determination was “a conclusion of law or at least a determination of a mixed question of law and fact.” 302 U. S., at 39. This formulation it took as justifying it in assuming a fairly broad standard of review. The dissent took a contrary view. The approach of this part of the Court’s ruling in Bogardus, which we think was the only part on which there was real division among the Court, see note 8, supra, has not been afforded subsequent respect here. In Heininger, a question presenting at the most elements no more factual and untechnical than those here — that of the “ordinary and necessary” nature of a business expense — was treated as one of fact. Cf. note 9, supra. And in Dobson v. Commissioner, 320 U. S. 489, 498, n. 22, Bogardus was adversely criticized, insofar as it treatsd the matter as reviewable as one of law. While Dobson is, of course, no longer the law insofar as it ordains a greater weight to be attached to the findings of the Tax Court than to those of any other fact-finder in a tax litigation, see note 13, infra, we think its criticism of this point in the Bogardus opinion is sound in view of the dominant importance of factual inquiry to decision of these cases.
I. R. C., § 74, which is a provision new with the 1954 Code. Previously, there had been holdings that such receipts as the “Pot O’ Gold” radio giveaway, Washburn v. Commissioner, 5 T. C. 1333, and the Ross Essay Prize, McDermott v. Commissioner, 80 U. S. App. D. C. 176, 150 F. 2d 585, were “gifts.” Congress intended to obviate such rulings. S. Rep. No. 1622, 83d Cong., 2d Sess., p. 178. We imply no approval of those holdings under the general standard of the “gift” exclusion. Cf. Robertson v. United States, supra.
“The United States Courts of Appeals shall have exclusive jurisdiction to review the decisions of the Tax Court ... in the same manner and to the same extent as decisions of the district courts in civil actions tried without a jury. . . .” The last words first came into the statute through an amendment to § 1141 (a) of the 1939 Code in 1948 (§36 of the Judicial Code Act, 62 Stat. 991). The purpose of the 1948 legislation was to remove from the law the favored position (in comparison with District Court and Court of Claims rulings in tax matters) enjoyed by the Tax Court under this Court’s ruling in Dobson v. Commissioner, 320 U. S. 489. Cf. note 11, supra. See Grace Bros., Inc., v. Commissioner, 173 F. 2d 170, 173.
The “Findings of Fact and Conclusions of Law” were made orally, and were simply: “The resolution of the Board of Directors of the Trinity Operating Company, Incorporated, held November 19, 1942, after the resignations had been accepted of the plaintiff from his positions as controller of the corporation of the Trinity Church, and the president of the Trinity Operating Company, Incorporated, whereby a gratuity was voted to the plaintiff, Allen [sfc] D. Stanton, in the amount of $20,000 payable to him in monthly installments of $2,000 each, commencing with the month of December, 1942, constituted a gift to the taxpayer, and therefore need not have been reported by him as income for the taxable years 1942, or 1943.” | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
68
] |
NATIONAL LABOR RELATIONS BOARD v. LOCAL 476, UNITED ASSOCIATION OF JOURNEYMEN OF THE PLUMBING AND PIPEFITTING INDUSTRY, AFL-CIO, et al.
No. 39.
Decided January 15, 1962.
Solicitor General Rankin, Stuart Rothman, Dominick L. Manoli and Norton J. Come for petitioner.
Martin F. O’Donoghue for respondents.
Per Curiam.
The petition for a writ of certiorari is granted. In unfair labor practice proceedings before the National Labor Relations Board respondents did not except to the terms of an order dirécting them to cease and desist from certain practices found to violate §8 (b)(4) (A) of the National Labor Relations Act, 29 U. S. C. § 158 (b)(4)(A), as regards the employees of a named employer “or any other employer” where an object is to force or require the named employer “or any other employer or person” to cease doing business with a named primary contractor. The Court of Appeals in enforcement proceedings modified the order, among other ways, by striking the references to “any other employer” and to “any other employer or person.” 283 F. 2d 26. The judgment of the Court of Appeals is reversed and the case is remanded with directions that a judgment be entered which affirms and enforces the Board order after restoring these deleted provisions. Labor Board v. Cheney California Lumber Co., 327 U. S. 385; § 10 (e), 49 Stat. 454, as amended, 29 U. S. C. § 160 (e). See also Labor Board v. Ochoa Fertilizer Corp., ante, p. 318. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
81
] |
STANDARD OIL CO. v. FEDERAL TRADE COMMISSION.
No. 1.
Argued January 9-10, 1950.
Reargued October 9, 1950.
Decided January 8, 1951.
Howard Ellis argued the cause for petitioner. With him on the brief were Weymouth Kirkland, Hammond E. Chaffetz, W. H. Van Oosterhout, Arthur J. Abbott, Thomas E. Sunderland and Gordon E. Taypan.
By special leave of Court, William Simon argued the cause and filed a brief for the Empire State Petroleum Association, Inc. et al., as amici curiae, urging reversal.
James W. Cassedy argued the cause for respondent. With him on the brief was W. T. Kelley.
By special leave of Court, Cyrus Austin argued the cause and filed a brief for the Retail Gasoline Dealers Association of Michigan, Inc. et al., as amici curiae, urging affirmance.
Raoul Berger filed a brief for the Citrin-Kolb Oil Company, as amicus curiae, urging reversal.
Me. Justice Burton
delivered the opinion of the Court.
In this case the Federal Trade Commission challenged the right of the Standard Oil Company, under the Robinson-Patman Act, to sell gasoline to four comparatively large “jobber” customers in Detroit at a less price per gallon than it sold like gasoline to many comparatively small service station customers in the same area. The company’s defenses were that (1) the sales involved were not in interstate commerce and (2) its lower price to the jobbers was justified because made to retain them as customers and in good faith to meet an equally low price of a competitor. The Commission, with one member dissenting, ordered the company to cease and desist from making such a price differential. 43 F. T. C. 56. The Court of Appeals slightly modified the order and required its enforcement as modified. 173 F. 2d 210. We granted certiorari on petition of the company because the case presents an important issue under the Robinson-Patman Act which has not been settled by this Court. 338 U. S. 865. The case was argued at our October Term, 1949, and reargued at this term. 339 U. S. 975.
For the reasons hereinafter stated, we agree with the court below that the sales were made in interstate commerce but we agree with petitioner that, under the Act, the lower price to the jobbers was justified if it was made to retain each of them as a customer and in good faith to meet an equally low price of a competitor.
I. Facts.
Reserving for separate consideration the facts determining the issue of interstate commerce, the other material facts are summarized here on the basis of the Commission’s findings. The sales described are those of Red Crown gasoline because those sales raise all of the material issues and constitute about 90% of petitioner’s sales in the Detroit area.
Since the effective date of the Robinson-Patman Act, June 19, 1936, petitioner has sold its Red Crown gasoline to its “jobber” customers at its tank-car prices. Those prices have been 1 y2$ per gallon less than its tank-wagon prices to service station customers for identical gasoline in the same area. In practice, the service stations have resold the gasoline at the prevailing retail service station prices. Each of petitioner’s so-called “jobber” customers has been free to resell its gasoline at retail or wholesale. Each, at some time, has resold some of it at retail. One now resells it only at retail. The others now resell it largely at wholesale. As to resale prices, two of the “jobbers” have resold their gasoline only at the prevailing wholesale or retail rates. The other two, however, have reflected, in varying degrees, petitioner’s reductions in the cost of the gasoline to them by reducing their resale prices of that gasoline below the prevailing rates. The effect of these reductions has thus reached competing retail service stations in part through retail stations operated by the “jobbers” and in part through retail stations which purchased gasoline from the “jobbers” at less than the prevailing tank-wagon prices. The Commission found that such reduced resale prices “have resulted in injuring, destroying, and preventing competition between said favored dealers and retail dealers in respondent’s [petitioner’s] gasoline and other major brands of gasoline . . . .” 41 E. T. C. 263, 283. The distinctive characteristics of these “jobbers” are that each (1) maintains sufficient bulk storage to take delivery of gasoline in tank-car quantities (of 8,000 to 12,000 gallons) rather than in tank-wagon quantities (of 700 to 800 gallons) as is customary for service stations; (2) owns and operates tank wagons and other facilities for delivery of gasoline to service stations; (3) has an established business sufficient to insure purchases of from one to two million gallons a year; and (4) has adequate credit responsibility. While the cost of petitioner’s sales and deliveries of gasoline to each of these four “jobbers” is no doubt less, per gallon, than the cost of its sales and deliveries of like gasoline to its service station customers in the same area, there is no finding that such difference accounts for the entire reduction in price made by petitioner to these “jobbers,” and we proceed on the assumption that it does not entirely account for that difference.
Petitioner placed its reliance upon evidence offered to show that its lower price to each jobber was made in order to retain that jobber as a customer and in good faith to meet an equally low price offered by one or more competitors. The Commission, however, treated such evidence as not relevant.
II. The Sales Were Made in Interstate Commerce.
In order for the sales here involved to come under the Clayton Act, as amended by the Robinson-Patman Act, they must have been made in interstate commerce. The Commission and the court below agree that the sales were so made. 41 F. T. C. 263, 271, 173 F. 2d 210, 213-214.
Facts determining this were found by the Commission as follows: Petitioner is an Indiana corporation, whose principal office is in Chicago. Its gasoline is obtained from fields in Kansas, Oklahoma, Texas and Wyoming. Its refining plant is at Whiting, Indiana. It distributes its products in 14 middle western states, including Michigan. The gasoline sold by it in the Detroit, Michigan, area, and involved in this case, is carried for petitioner by tankers on the Great Lakes from Indiana to petitioner’s marine terminal at River Rouge, Michigan. Enough gasoline is accumulated there during each navigation season so that a winter’s supply, is available from the terminal. The gasoline remains for varying periods at the terminal or in nearby bulk storage stations, and while there it is under the ownership of petitioner and en route from petitioner’s refinery in Indiana to its market in Michigan. “Although the gasoline was not brought to River Rouge pursuant to orders already taken, the demands of the Michigan territory were fairly constant, and the petitioner’s customers’ demands could be accurately estimated, so the flow of the stream of commerce kept surging from Whiting to Detroit.” 173 F. 2d at 213-214. Gasoline delivered to customers in Detroit, upon individual orders for it, is taken from the gasoline at the terminal in interstate commerce en route for delivery in that area. Such sales are well within the jurisdictional requirements of the Act. Any other conclusion would fall short of the recognized purpose of the Robinson-Patman Act to reach the operations of large interstate businesses in competition with small local concerns. Such temporary storage of the gasoline as occurs within the Detroit area does not deprive the gasoline of its interstate character. Stafford v. Wallace, 258 U. S. 495. Compare Walling v. Jacksonville Paper Co., 317 U. S. 564, 570, with Atlantic Coast Line R. Co. v. Standard Oil Co., 275 U. S. 257, 268.
III. There Should Be a Finding as to Whether or Not Petitioner’s Price Reduction Was Made in Good Faith to Meet a Lawful Equally Low Price of a Competitor.
Petitioner presented evidence tending to prove that its tank-car price was made to each “jobber” in order to retain that “jobber” as a customer and in good faith to meet a lawful and equally low price of a competitor. Petitioner sought to show that it succeeded in retaining these customers, although the tank-car price which it offered them merely approached or matched, and did not undercut, the lower prices offered them by several competitors of petitioner. The trial examiner made findings on the point but the Commission declined to do so, saying:
“Based on the record in this case the Commission concludes as a matter of law that it is not material whether the discriminations in price granted by the respondent to the said four dealers were made to meet equally low prices of competitors. The Commission further concludes as a matter of law that it is unnecessary for the Commission to determine whether the alleged competitive prices were in fact available or involved gasoline of like grade or quality or of equal public acceptance. Accordingly the Commission does not attempt to find the facts regarding those matters because, even though the lower prices in question may have been made by respondent in good faith to meet the lower prices of competitors, this does not constitute a defense in the face of affirmative proof that the effect of the discrimination was to injure, destroy and prevent competition with the retail stations operated by the said named dealers and with stations operated by their retailer-customers.” 41 F. T. C. 263, 281-282.
The court below affirmed the Commission’s position. There is no doubt that under the Clayton Act, before its amendment by the Robinson-Patman Act, this evidence would have been material and, if accepted, would have established a complete defense to the charge of unlawful discrimination. At that time the material provisions of § 2 were as follows:
“Sec. 2. That it shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly to discriminate in price between different purchasers of commodities . . . where the effect of such discrimination may be to substantially lessen competition or tend to create a monopoly in any line of commerce: Provided, That nothing herein contained shall prevent discrimination in price between purchasers of commodities on account of differences in the grade, quality, or quantity of the commodity sold, or that makes only due allowance for difference in the cost of selling or transportation, or discrimination in price in the same or different communities made in good faith to meet competition: And provided further, That nothing herein contained shall prevent persons engaged in selling goods, wares, or merchandise in commerce from selecting their own customers in bona fide transactions and not in restraint of trade.” (Emphasis added within the first proviso.) 38 Stat. 730-731, 15 U. S. C. (1934 ed.) § 13.
The question before us, therefore, is whether the amendments made by the Robinson-Patman Act deprived those facts of their previously recognized effectiveness as a defense. The material provisions of § 2, as amended, are quoted below, showing in italics those clauses which bear upon the proviso before us. The modified provisions are distributed between the newly created subsections (a) and (b). These must be read together and in relation to the provisions they supersede. The original phrase “that nothing herein contained shall prevent” is still used to introduce each of the defenses. . The defense relating to the meeting of the price of a competitor appears only in subsection (b). There it is applied to discriminations in services or facilities as well as to discriminations in price, which alone are expressly condemned in subsection (a). In its opinion in the instant case, the Commission recognizes that it is an absolute defense to a charge of price discrimination for a seller to prove, under § 2 (a), that its price differential makes only due allowances for differences in cost or for price changes made in response to changing market conditions. 41 F. T. C. at 283. Each of these three defenses is introduced by the same phrase “nothing . . . shall prevent,” and all are embraced in the same word “justification” in the first sentence of § 2 (b). It is natural, therefore, to conclude that each of these defenses is entitled to the same effect, without regard to whether there also appears an affirmative showing of actual or potential injury to competition at the same or a lower level traceable to the price differential made by the seller. The Commission says, however, that the proviso in § 2 (b) as to a seller meeting in good faith a lower competitive price is not an absolute defense if an injury to competition may result from such price reduction. We find no basis for such a distinction between the defenses in § 2 (a) and (b).
The defense in subsection (b), now before us, is limited to a price reduction made to meet in good faith an equally low price of a competitor. It thus eliminates certain difficulties which arose under the original Clayton Act. For example, it omits reference to discriminations in price “in the same or different communities . . .” and it thus restricts the proviso to price differentials occurring in actual competition. It also excludes reductions which undercut the “lower price” of a competitor. None of these changes, however, cut into the actual core of the defense. That still consists of the provision that wherever a lawful lower price of a competitor threatens to deprive a seller of a customer, the seller, to retain that customer, may in good faith meet that lower price. Actual competition, at least in this elemental form, is thus preserved.
Subsections 2 (a) and (b), as amended, are as follows:
“Sec. 2. (a) That it shall be unlawful for any person engaged in commerce, in the course of such commerce, either directly or indirectly, to discriminate in price between different purchasers of commodities of like grade and quality . . . where the effect of such discrimination may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them: Provided, That nothing herein contained shall prevent differentials which make only due allowance for differences in the cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which such commodities are to such purchasers sold or delivered: . . . And provided further, That nothing herein contained shall prevent price changes from time to time ... in response to changing conditions affecting the market for or the marketability of the goods concerned ....
“(b) Upon proof being made, at any hearing on a complaint under this section, that there has been discrimination in price or services or facilities furnished, the burden of rebutting the prima-facie case thus made by showing justification shall be upon the person charged with a violation of this section, and unless justification shall be affirmatively shown, the Commission is authorized to issue an order terminating the discrimination: Provided, however, That nothing herein contained shall prevent a seller rebutting the prima-facie case thus made by showing that his lower price or the furnishing of services or facilities to any purchaser or purchasers was made in good faith to meet an equally low price of a competitor, or the services or facilities furnished by a competitor.” (Emphasis added in part.) 49 Stat. 1526, 15 U. S. C. § 13 (a) and (b).
This right of a seller, under § 2 (b), to meet in good faith an equally low price of a competitor has been considered here before. Both in Corn Products Refining Co. v. Federal Trade Comm’n, 324 U. S. 726, and in Federal Trade Comm’n v. Staley Mfg. Co., 324 U. S. 746, evidence in support of this defense was reviewed at length. There would have been no occasion thus to review it under the theory now contended for by the Commission. While this Court did not sustain the seller’s defense in either case, it did unquestionably recognize the relevance of the evidence in support of that defense. The decision in each case was based upon the insufficiency of the seller’s evidence to establish its defense, not upon the inadequacy of its defense as a matter of law.
In the Corn Products case, supra, after recognizing that the seller had allowed differentials in price in favor of certain customers, this Court examined the evidence presented by the seller to show that such differentials were justified because made in good faith to meet equally low prices of a competitor. It then said:
“Examination of the testimony satisfies us, as it did the court below, that it was insufficient to sustain a finding that the lower prices allowed to favored customers were in fact made to meet competition. Hence petitioners jailed to sustain the. burden of showing that the price discriminations were granted for the purpose of meeting competition.” (Emphasis added.) 324 U. S. at 741.
In the Staley case, supra, most of the Court’s opinion is devoted to the consideration of the evidence introduced in support of the seller’s defense under § 2 (b). The discussion proceeds upon the assumption, applicable here, that if a competitor’s “lower price” is a lawful individual price offered to any of the seller’s customers, then the seller is protected, under § 2 (b), in making a counteroffer provided the seller proves that its counteroffer is made to meet in good faith its competitor’s equally low price. On the record in the Staley case, a majority of the Court of Appeals, in fact, declined to accept the findings of the Commission and decided in favor of the accused seller. This Court, on review, reversed that judgment but emphatically recognized the availability of the seller’s defense under § 2 (b) and the obligation of the Commission to make findings upon issues material to that defense. It said:
"Congress has left to the Commission the determination of fact in each case whether the person, charged with making discriminatory prices, acted in good faith to meet a competitor’s equally low prices. The determination of this fact from the evidence is for the Commission. See Federal Trade Commission v. Pacific States Paper Trade Assn., 273 U. S. 52, 63; Federal Trade Commission v. Algoma Lumber Co., 291 U. S. 67, 73. In the present case, the Commission’s finding that respondents’ price discrimina-tions were not made to meet a 'lower’ price and consequently were not in good faith, is amply supported by the record, and we think the Court of Appeals erred in setting aside this portion of the Commission’s order to cease and desist.
“In appraising the evidence, the Commission recognized that the statute does not place an impossible burden upon sellers, but it emphasized the good faith requirement of the statute, which places the burden of proving good faith on the seller, who has made the discriminatory prices. . . .
“. . . We agree with the Commission that the statute at least requires the seller, who has knowingly discriminated in price, to show the existence of facts which would lead a reasonable and prudent person to believe that the granting of. a lower price would in fact meet the equally low price of a competitor. Nor was the Commission wrong in holding that respondents failed to meet this burden.” 324 U. S. at 758, 759-760.
See also, Federal Trade Comm’n v. Cement Institute, 333 U. S. 683, 721-726; Federal Trade Comm’n v. Morton Salt Co., 334 U. S. 37, 43; and United States v. United States Gypsum Co., 340 U. S. 76, 92. All that petitioner asks in the instant case is that its evidence be considered and that findings be made by the Commission as to the sufficiency of that evidence to support petitioner’s defense under § 2 (b).
In addition, there has been widespread understanding that, under the Robinson-Patman Act, it is a complete defense to a charge of price discrimination for the seller to show that its price differential has been made in good faith to meet a lawful and equally low price of a competitor. This understanding is reflected in actions and statements of members and counsel of the Federal Trade Commission. Representatives of the Department of Justice have testified to the effectiveness and value of the defense under the Robinson-Patman Act. We see no reason to depart now from that interpretation.
The heart of our national economic policy long has been faith in the value of competition. In the Sherman and Clayton Acts, as well as in the Robinson-Patman Act, “Congress was dealing with competition, which it sought to protect, and monopoly, which it sought to prevent.” Staley Mjg. Co. v. Federal Trade Comm’n, 135 F. 2d 453, 455. We need not now reconcile, in its entirety, the economic theory which underlies the Robinson-Pat-man Act with that of the Sherman and Clayton Acts. It is enough to say that Congress did not seek by the Robinson-Patman Act either to abolish competition or so radically to curtail it that a seller would have no substantial right of self-defense against a price raid by a competitor. For example, if a large customer requests his seller to meet a temptingly lower price offered to him by one of his seller’s competitors, the seller may well find it essential, as a matter of business survival, to meet that price rather than to lose the customer. It might be that this customer is the seller’s only available market for the major portion of the seller’s product, and that the loss of this customer would result in forcing a much higher unit cost and higher sales price upon the seller’s other customers. There is nothing to show a congressional purpose, in such a situation, to compel the seller to choose only between ruinously cutting its prices to all its customers to match the price offered to one, or refusing to meet the competition and then ruinously raising its prices to its remaining customers to cover increased unit costs. There is, on the other hand, plain language and established practice which permits a seller, through § 2 (b), to retain a customer by realistically meeting in good faith the price offered to that customer, without necessarily changing the seller’s price to its other customers.
In a case where a seller sustains the burden of proof placed upon it to establish its defense under § 2 (b), we find no reason to destroy that defense indirectly, merely because it also appears that the beneficiaries of the seller’s price reductions may derive a competitive advantage from them or may, in a natural course of events, reduce their own resale prices to their customers. It must have been obvious to Congress that any price reduction to any dealer may always affect competition at that dealer’s level as well as at the dealer’s resale level, whether or not the reduction to the dealer is discriminatory. Likewise, it must have been obvious to Congress that any price reductions initiated by a seller’s competitor would, if not met by the seller, affect competition at the beneficiary’s level or among the beneficiary’s customers just as much as if those reductions had been met by the seller. The proviso in § 2 (b), as interpreted by the Commission, would not be available when there was or might be an injury to competition at a resale level. So interpreted, the proviso would have such little, if any, applicability as to be practically meaningless. We may, therefore, conclude that Congress meant to permit the natural consequences to follow the seller’s action in meeting in good faith a lawful and equally low price of‘its competitor.
In its argument here, the Commission suggests that there may be some situations in which it might recognize the proviso in § 2 (b) as a complete defense, even though the .seller’s differential in price did injure competition. In support of this, the Commission indicates that in each case it must weigh the potentially injurious effect of a seller’s price reduction upon competition at all lower levels against its beneficial effect in permitting the seller to meet competition at its own level. In the absence of more explicit requirements and more specific standards of comparison than we have here, it is difficult to see how an injury to competition at a level below that of the seller can thus be balanced fairly against a justification for meeting the competition at the seller’s level. We hesitate to accept § 2 (b) as establishing such a dubious defense. On the other hand, the proviso is readily understandable as simply continuing in effect a defense which is equally absolute, but more limited in scope than that which existed under § 2 of the original Clayton Act.
The judgment of the Court of Appeals, accordingly, is reversed and the case is remanded to that court with instructions to remand it to the Federal Trade Commission to make findings in conformity with this opinion.
It is so ordered.
Me. Justice Minton took no part in the consideration or decision of this case.
Specifically under § 2 of the Clayton Act, as amended by the Robinson-Patman Act, 49 Stat. 1526, 15 U. S. C. § 13. For the material text of § 2 (a) and (b) see pp. 242-243, infra.
The company contended before the Commission that the price differential allowed by it to the jobbers made only due allowance for differences in the cost of sale and delivery of gasoline to them. It did not, however, pursue this defense in the court below and does not do so here.
About 150 of these stations are owned or leased by the customers independently of petitioner. Their operators buy all of their gasoline from petitioner under short-term agreements. The other 208 stations are leased or subleased from petitioner for short terms.
Not denying the established industry practice of recognizing such dealers as a distinctive group for operational convenience, the Commission held that petitioner’s classification of these four dealers as “jobbers” was arbitrary because it made “no requirement that said jobbers should sell only at wholesale.” 41 F. T. C. at 273. We use the term “jobber” in this opinion merely as one of convenience and identification, because the result here is the same whether these four dealers are wholesalers or retailers.
Section 2 (a) of the Clayton Act, as amended, relates only to persons “engaged in commerce, in the course of such commerce . . . where either or any of the purchases involved ... are in commerce . . . .” 49 Stat. 1526, 15 U. S. C. §13 (a). “Commerce” is defined in § 1 of the Clayton Act as including “trade or commerce among the several States . . . .” 38 Stat. 730, 15 U. S. C. § 12.
The Fair Labor Standards Act cases relied on by petitioner are not inconsistent with this result. They hold that, for the purposes of that statute, interstate commerce ceased on delivery to a local distributor. Higgins v. Carr Bros. Co., 317 U. S. 572; Walling v. Jacksonville Paper Co., supra. The sales involved here, on the other hand, are those of an interstate producer and refiner to a local distributor.
The trial examiner concluded:
“The recognition by respondent [petitioner] of Ned’s Auto Supply Company as a jobber or wholesaler [which carried with it the tank-car price for gasoline], was a forced recognition given to retain that company’s business. Ned’s Company at the time of recognition, and ever since, has possessed all qualifications required by respondent [petitioner] for recognition as a jobber and the recognition was given and has ever since been continued in transactions between the parties, believed by them to be bona fide in all respects (Conclusion of Fact 2, under § IX, R. 5098-5099.)
“The differentials on its branded gasolines respondent [petitioner] granted Ned’s Auto Supply Company, at all times subsequent to March 7, 1938, and Stikeman Oil Company, Citrin-Kolb Oil Company and the Wayne Company [the four jobbers], at all times subsequent to June 19, 1936, were granted to meet equally low prices offered by competitors on branded gasolines of comparable grade and quality.” (Conclusion of Fact, under § X, R. 5104.)
“Now as to the contention that the discriminatory prices here complained of were made in good faith to meet a lower price of a competitor. While the Commission made no finding on this point, it assumed its existence but held, contrary to the petitioner’s contention, that this was not a defense.
“We agree with the Commission that the showing of the petitioner that it made the discriminatory price in good faith to meet competition is not controlling in view of the very substantial evidence that its discrimination was used to affect and lessen competition at the retail level.” 173 F. 2d at 214,217.
In contrast to that factual situation, the trial examiner for the Commission in the instant case has found the necessary facts to sustain the seller’s defense (see note 7, supra), and yet the Commission refuses, as a matter of law, to give them consideration.
In the Corn Products ease, the same point of view was expressed by the Court of Appeals below: “We think the evidence is insufficient to sustain this affirmative defence.” 144 F. 2d 211, 217 (C. A. 7th Cir.). The Court of Appeals also indicated that, to sustain this defense, it must appear not only that the competitor’s lower price was met in good faith but that such price was lawful.
The Staley case was twice before the Court of Appeals for the Seventh Circuit. In 1943 the case was remanded by that court to the Commission for findings as to wherein the discriminations occurred and how they substantially lessened competition and promoted monopoly and also “for consideration of the defense [under §2 (b)] urged by the petitioners, and for findings in relation thereto.” 135 F. 2d 453, 456. In 1944, a majority of the court decided in favor of the seller. 144 F. 2d 221. One judge held that the complaint was insufficient under § 2 (a) and that, therefore, he need not reach the seller’s defense under § 2 (b). He expressly stated, however, that he did not take issue with the basis for the conclusion that the seller’s price was made in good faith to meet an equally low price of a competitor. Id., at 227-231. His colleague held squarely that the seller’s defense of meeting competition in good faith under § 2 (b) had been established. Id., at 221-225. The third judge found against the seller both under § 2 (a) and (b). Id., at 225-227. The important point for us is that the Court of Appeals, as well as this Court, unanimously recognized in that ease the materiality of the seller’s evidence in support of its defense under § 2 (b), even though the “discriminations ‘have resulted, and do result, in substantial injury to competition among purchasers ....’” Id., at 222.
In cease and desist orders, issued both before and after the order in the instant case, the Commission has inserted saving clauses which recognize the propriety of a seller making a price reduction in good faith to meet an equally low price of a competitor, even though the seller’s discrimination may have the effect of injuring competition at a lower level. See In re Ferro Enamel Corp., 42 F. T. C. 36; In re Anheuser-Busch, Inc., 31 F. T. C. 986; In re Bausch & Lomb Optical Co., 28 F. T. C. 186.
See also, the statement filed by Walter B. Wooden, Assistant Chief Counsel, and by Hugh E. White, Examiner for the Commission, with the Temporary National Economic Committee in 1941:
“The amended Act now safeguards the right of a seller to discriminate in price in good faith to meet an equally low price of a competitor, but he has the burden of proof on that question. This right is guaranteed by statute and could not be curtailed by any mandate or order of the Commission. . . . The right of self defense against competitive price attacks is as vital in a competitive economy as the right of self defense against personal attack.” The Basing Point Problem 139 (TNEC Monograph 42,1941).
In regard to the Commission’s position on § 2 (b), urged in the instant case, Allen C. Phelps, Assistant Chief Trial Counsel and Chief of the Export Trade Division of the Commission, testified before the Subcommittee on Trade Policies of the Senate Committee on Interstate and Foreign Commerce in January, 1949, that “This position, if upheld in the courts, in my judgment will effectively and completely erase section 2 (b) from the Robinson-Patman Act.” Hearings before a Subcommittee of the Senate Committee on Interstate and Foreign Commerce on S. 236, 81st Cong., 1st Sess. 66. See also, pp. 274r-275.
Herbert A. Bergson, then Assistant Attorney General, testifying for the Department, January 25, 1949, said: “The section [2 (b)] presently permits sellers to justify otherwise forbidden price discrimi-nations on the ground that the lower prices to one set of buyers were made in good faith to meet the equally low prices of a competitor.” Hearings before a Subcommittee of the Senate Committee on Interstate and Foreign Commerce on S. 236, 81st Cong., 1st Sess. 77. See also, report on S. 236 by Peyton Ford, The Assistant to the Attorney General, to the Senate Committee on Interstate and Foreign Commerce. Id., at 320. Mr. Bergson added the following in June, 1949: “While we recognize the competitive problem which arises when one purchaser obtains advantages denied to other purchasers, we do not believe the solution to this problem lies in denying to sellers the opportunity to make sales in good faith competition with other sellers.” Hearings before Subcommittee No. 1 of the House Committee on the Judiciary on S. 1008, 81st Cong., 1st Sess. 12.
Attention has been directed again to the legislative history of the proviso. This was “considered in the Corn Products and Staley cases. See especially, 324 U. S. at 752-753. We find that the legislative history, at best, is inconclusive. It indicates that it was the purpose of Congress to limit, but not to abolish, the essence of the defense recognized as absolute in § 2 of the original Clayton Act, 38 Stat. 730, where a seller’s reduction in price had been made “in good faith to meet competition . . . .” For example, the legislative history recognizes that the Robinson-Patman Act limits that defense to price differentials that do not undercut the competitor’s price, and the amendments fail to protect differentials between prices in different communities where those prices are not actually competitive. There is also a suggestion in the debates, as well as in the remarks of this Court in the Staley case, supra, that a competitor’s lower price, which may be met by a seller under the protection of §2 (b), must be a lawful price. And see, S. Res. 224, 70th Cong., 1st Sess., directing the Federal Trade Commission to investigate and report to it on chain-store operators and F. T. C. Final Report on the Chain-Store Investigation, S. Doc. No. 4, 74th Cong., 1st Sess.
In the report of the Judiciary Committee of the House of Representatives, which drafted the clause which became § 2 (b), there appears the following explanation of it:
“This proviso represents a contraction of an exemption now contained in section 2 of the Clayton Act which permits discriminations without limit where made in good faith to meet competition. It should be noted that while the seller is permitted to meet local competition, it does not permit him to cut local prices until his competitor has first offered lower prices, and then he can go no further than to meet those prices. If he goes further, he must do so likewise with all his other customers, or make himself liable to all of the penalties of the act, including treble damages. In other words, the proviso permits the seller to meet the price actually previously offered by a local competitor. It permits him to go no further.” H. R. Rep. No. 2287,74th Cong., 2d Sess. 16.
See also, 80 Cong. Rec. 6426, 6431-6436, 8229, 8235.
Somewhat changing this emphasis, there was a statement made by the managers on the part of the House of Representatives, accompanying the conference report, which said that the new clause was a “provision relating to the question of meeting competition, intended to operate only as a rule of evidence in a proceeding before the Federal Trade Commission . . . .” Ii. R. Rep. No. 2951,74th Cong., 2d Sess. 7. The Chairman of the House Conferees also received permission to print in the Record an explanation of the proviso. 80 Cong. Rec. 9418. This explanation emphasizes the same interpretation as that put on the proviso in the Staley case to the effect that the lower price which lawfully may be met by a seller must be a lawful price. That statement, however, neither justifies disregarding the proviso nor failing to make findings of fact where evidence is offered that the prices met by the seller are lawful prices and that the meeting of them is in good faith.
It has been suggested that, in theory, the Robinson-Patman Act as a whole is inconsistent with the Sherman and Clayton Acts. See Adelman, Effective Competition and the Antitrust Laws, 61 Harv. L. Rev. 1289, 1327-1350; Burns, The Anti-Trust Laws and the Regulation of Price Competition, 4 Law & Contemp. Prob. 301; Learned & Isaacs, The Robinson-Patman Law: Some Assumptions and Expectations, 15 Harv. Bus. Rev. 137; McAllister, Price Control by Law in the United States: A Survey, 4 Law & Contemp. Prob. 273. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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56
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FIRST NATIONAL BANK IN PLANT CITY v. DICKINSON, COMPTROLLER OF FLORIDA, et al.
No. 19.
Argued October 16, 1969
Decided December 9, 1969
Robert S. Edwards argued the cause and filed briefs for petitioner in No. 19. Deputy Solicitor General Springer argued the cause for petitioner in No. 34. With him on the briefs were Solicitor General Griswold, Assistant Attorney General Ruckelshaus, Robert V. Zener, and Robert E. Kopp.
William Reece Smith, Jr., argued the cause for respondents in both cases. With him on the brief was V. Carroll Webb.
James F. Bell, by special leave of Court, argued the cause for the National Association of Supervisors of State Banks as amicus curiae urging affirmance in both cases. With him on the brief was Brian C. Elmer.
E. Barrett Prettyman, Jr., filed a brief for the First National Bank of Cornelia, Georgia, et al. as amici curiae urging reversal in both cases.
Briefs of amici curiae urging affirmance in both cases were filed by Arthur K. Bolton, Attorney General of Georgia, Harold N. Hill, Jr., Executive Assistant Attorney General, J. Robert Coleman and Robert J. Castellani, Assistant Attorneys General, Robert Morgan, Attorney General of North Carolina, and Millard R. Rich, Jr., Assistant Attorney General, for the States of Georgia and North Carolina, and by Horace R. Hansen for the Independent Bankers Association of America et al.
Together with No. 34, Camp, Comptroller of the Currency v. Dickinson, Comptroller of Florida, et al., also on writ of certiorari to the same court.
Mr. Chief Justice Burger
delivered the opinion of the Court.
In these cases we are called upon to construe § 7 of the McFadden Act of 1927, 44 Stat. 1228, as amended, 12 U. S. C. § 36, as it relates to the definition of a branch bank for the purpose of determining the scope of branch banking available to a national bank in a State that prohibits branches for state banks.
12 U. S. C. § 36 (f) provides in pertinent part:
“(f) The term ‘branch' as used in this section shall be held to include any branch bank, branch office, branch agency, additional office, or any branch place of business ... at which deposits are received, or checks paid, or money lent.”
Florida prohibits all branch banking by state chartered banks; by statute a Florida bank may “have only one place of doing business,” and all the business of the bank is to be carried on at that place “and not elsewhere.” The issue must be resolved by determining what constitutes a “branch” or “additional office”; there is a threshold question of the extent to which this is governed by federal law.
The First National Bank in Plant City, Florida, is a national banking association organized and operated pursuant to the National Bank Act, 12 U. S. C. § 21 et seq.; it sought and received from the United States Comptroller of the Currency permission to operate two services for the convenience of customers; one was an armored car messenger service and the other an off-premises receptacle for the receipt of packages containing cash or checks for deposit. The Comptroller’s letter authorizing the armored car messenger service relied upon paragraph 7490 of the Comptroller’s Manual for National Banks, a relatively recent ruling which specifically authorizes such a service. A second letter authorizing construction of an off-premises receptacle authorized such a service “as an incident to” the bank’s ordinary business. Both letters contained explicit instructions to First National designed to insure that deposits so received would not become bank liabilities until actually in the hands of the bank teller at the chartered office or regular “banking house”; and that checks cashed for customers would be deemed paid at the bank when the cash was handed to the messenger, not when the cash was delivered to the customer by the armored car teller.
Relying on these letters, First National offered an armored car service and a secured receptacle for receipt of monies intended as deposits. The bank advertised “Full Service Banking at your doorstep . . .” and a “mobile drive-in . . . where customers may be served . . . .” A more detailed examination of the services shows that customers having an account with First National could, upon signing a “Comprehensive Dual Control Contract,” arrange to have the armored car call at their place of business to pick up cash and checks for deposit, or to bring cash to them in exchange for checks delivered to the armored car teller. The contract provided that in each situation the bank’s armored car messenger would be the agent of the customer. Additionally, proffered deposits were accompanied by a transmittal slip upon which the customer itemized the funds being deposited in the same manner as with deposits made at the chartered office of the bank. The transmittal slip contained a “Contract” which provided that in this off-premises transaction the bank was the agent of the customer, and that “the transmittal of said currency, coin and checks, shall not be deemed to be a deposit until delivered into the hands of the bank’s tellers at the said banking house.” Sums of cash for transmission to the customer were accompanied by a charge slip indicating that the customer’s account had been charged for the amount of the order.
The armored car was owned and controlled by the bank; the teller and driver-guard in the car were bank employees. The bank paid the cost of armored car operations and assumed complete responsibility for the monies, checks, and deposits during transit by means of an insurance policy bought and paid for by it to protect the customer and the bank. The armored car service operated six days per week in Plant City and the surrounding trade area in Hillsborough and Polk Counties. The armored car had a plate glass window, a sliding drawer, and a counter on one side where customers might be served. The truck bore the name of the bank and had two-way radiophone communication with the bank. All movements and routing of the armored car were directed by the bank. First National handled about $1,000,000 per week through the armored car.
The stationary off-premises receptacle for receipt of monies intended for deposit was located in a shopping center one mile from First National’s banking house in a space leased by the bank. The facility consisted of a secured receptacle for monies and night bags, together with a writing table supplied with envelopes and transmittal slips identical to those used by the armored car messenger service. The envelopes recited that the funds transported were accepted in accordance with the contract printed on the transmittal slip. A sign at the receptacle recited that the messenger who collected the funds acted as agent for the customer, that funds would not be deemed to have been deposited until delivered at the bank’s premises, and that insurance on the funds was provided by the bank. Customers maintaining an account with the bank who had signed the Comprehensive Dual Control Contract were issued a key to open the off-premises depository to drop off the night pouches in the receptacle. The armored car serviced the receptacle daily. The armored car teller, upon making pickups of such night pouches, promptly identified all monies and other items placed in the depository and immediately recorded them by the depositor’s number. The driver-guard verified all items collected by the teller and signed the written bank record identifying the monies obtained at the stationary depository.
On September 28, 1966, the Comptroller of the State of Florida, respondent herein, addressed a letter to First National advising it that the proposed depository then under construction and the provision of an armored car messenger service would each violate the prohibition under Florida law against branch banking. The letter requested that First National cease and desist all such operations.
First National then sued in the United States District Court for the Northern District of Florida seeking declaratory and injunctive relief against respondent. The United States Comptroller intervened as plaintiff on the side of First National; several state banks intervened to support the Florida Comptroller. The District Court granted judgment for petitioners, 274 F. Supp. 449 (D. C. N. D. Fla. 1967). The Court of Appeals reversed, 400 F. 2d 548 (C. A. 5th Cir. 1968). We affirm the Court of Appeals.
Federal Statute and Policy
The conditions under which national banks may establish branches are embodied in § 7 of the McFadden Act, 44 Stat. 1228, as amended, codified in 12 U. S. C. § 36. One such condition is that a “branch” may be established only when, where, and how state law would authorize a state bank to establish and operate such a branch, 12 U. S. C. §36 (c). First National Bank of Logan v. Walker Bank & Trust Co., 385 U. S. 252 (1966).
We have noted that the State of Florida permits no branch banking under a statute providing that banks are to “have only one place of doing business”; the business of the bank may be transacted at that place “and not elsewhere.” The parties agree generally that the McFadden Act permits national banks to branch if and only if the host State would permit one of its own banks to branch; the Florida Bank Comptroller insists that the State of Florida unequivocally forbids off-premises banking of any kind. Thus the lines are clearly drawn; the question presented is whether the activities of First National authorized by the United States Comptroller are branch banking.
At the outset we note that, while Congress has absolute authority over national banks, the federal statute has incorporated by reference the limitations which state law places on branch banking activities by state banks. Congress has deliberately settled upon a policy intended to foster “competitive equality.” Walker Bank, 385 U. S., at 261. State law has been utilized by Congress to provide certain guidelines to implement its legislative policy.
We need not review the legislative history of the McFadden Act and prior national bank legislation as it relates to this problem; that task was performed by Mr. Justice Clark in Walker Bank, supra, where a unanimous Court noted that the McFadden Act was a response to the competitive tensions inherent in a dual banking structure where state and national banks coexist in the same area. That Act reflects the congressional concern that neither system have advantages over the other in the use of branch banking. A House Report shows that in 1926 there was congressional concern to protect national banks from the unrestricted branch bank competition of state banks:
“The present situation is intolerable to the national banking system. The bill proposes the only practicable solution by stopping the further extension of state-wide branch banking in the Federal reserve system by State member banks and by permitting national banks to have branches in those cities where State banks are allowed to have them under State laws.” H. R. Rep. No. 83, 69th Cong., 1st Sess., 7 (1926).
The bill to which this report was addressed failed to pass in the Senate. In tracing the legislative history of the bill which passed the following year, this Court in Walker Bank, supra, observed:
“The intent of the Congress to leave the question of the desirability of branch banking up to the States is indicated by the fact that the Senate struck from the House bill the time limitation, thus permitting a subsequent change in state law to have a corresponding effect on the authority of national banks to engage in branching. The Senate Report concluded that the Act should permit ‘national banks to have branches in those cities where State banks are allowed to have them under State laws.’ ” 385 U. S., at 258, quoting from S. Rep. No. 473, 69th Cong., 1st Sess., 14 (1926).
At the time of its enactment into law, Representative McFadden stated that:
“As a result of the passage of this act, the national bank act has been so amended that national banks are able to meet the needs of modern industry and commerce and competitive equality has been established . . . .” 68 Cong. Rec. 5815 (1927). (Emphasis supplied.)
When the economic depression of the 1930’s brought on widespread bank failures, Congress responded by amending the McFadden Act with the passage of the Banking Act of 1933, which further strengthened the policy of competitive equality. Some Members argued that bank failures were due to the undercapitalization of small rural banks and sought to authorize national banks to engage in branch banking without regard to state law; but that approach was rejected. As finally passed, the Act was reported to the House by one of the members of the Conference Committee, Representative Luce, with this statement:
“In the controversy over the respective merits of what are known as ‘unit banking’ and ‘branch banking’ . . . branch banking has been steadily gaining in favor. It is not, however, here proposed to give the advocates of branch banking any advantage. We do not go an inch beyond saying that the two ideas shall compete on equal terms and only where the States make the competition possible by letting their oiun institutions have branches.’’ 385 U. S., at 260, quoting from 77 Cong. Rec. 5896 (1933). (Emphasis supplied.)
The policy of competitive equality is therefore firmly embedded in the statutes governing the national banking system. The mechanism of referring to state law is simply one designed to implement that congressional intent and build into the federal statute a self-executing provision to accommodate to changes in state regulation.
We reject the contention made by amicus curiae National Association of Supervisors of State Banks to the effect that state law definitions of what constitutes “branch banking” must control the content of the federal definition of § 36 (f). Admittedly, state law comes into play in deciding how, where, and when branch banks may be operated, Walker Bank, supra, for in § 36 (c) Congress entrusted to the States the regulation of branching as Congress then conceived it. But to allow the States to define the content of the term “branch” would make them the sole judges of their own powers. Congress did not intend such an improbable result, as appears from the inclusion in § 36 of a general definition of “branch.” On this point the language of the Court of Appeals perhaps overstated the relation of state law to the problem, since the threshold question is to be determined as a matter of federal law, having in mind the congressional intent that so far as branch banking is concerned “the two ideas shall compete on equal terms and only where the States [allow] their own institutions [to] have branches.” In short, the definition of “branch” in § 36 (f) must not be given a restrictive meaning which would frustrate the congressional intent this Court found to be plain in Walker Bank, supra
Federal Definition of Branch Bank
Against this background, we turn to the question whether the off-premises business activities conducted by First National amounted to “branch” banking within the meaning of the McFadden Act. Since national banks are “necessarily subject to the paramount authority of the United States,” First National Bank in St. Louis v. Missouri, 263 U. S. 640, 656 (1924), we consult that part of the McFadden Act that defines the term “branch.” 12 U. S. C. § 36 (f) provides:
“(f) The term ‘branch’ as used in this section shall be held to include any branch bank, branch office, branch agency, additional office, or any branch place of business ... at which deposits are received, or checks paid, or money lent.”
Although the definition may not be a model of precision, in part due to its circular aspect, it defines the minimum content of the term “branch”; by use of the word “include” the definition suggests a calculated indefiniteness with respect to the outer limits of the term. However, the term “branch bank” at the very least includes any place for receiving deposits or paying checks or lending money apart from the chartered premises; it may include more. It should be emphasized that, since § 36 (f) is phrased in the disjunctive, the offering of any one of the three services mentioned in that definition will provide the basis for finding that “branch” banking is taking place. Thus not only the taking of deposits but also the paying of checks or the lending of money could equally well provide the basis for such a finding. Although the District Court briefly discussed the possibility that checks were being paid, we confine ourselves to the question of whether deposits were received. Specifically, we must resolve the question whether the mobile armored car service and stationary deposit receptacle singly or together fall within the ambit of that section. As to the receiving of deposits, the functions of the two facilities are essentially the same, hence they may be considered together.
First National and the Comptroller of the Currency urge that the challenged activity does not amount to branch banking under § 36 (f). First National relies heavily, if indeed not entirely, upon carefully drawn contracts with its customers who use armored car or deposit receptacle services. The bank urges that, “deposit” being a word of art, the determination of when a deposit is made is not a casual one inasmuch as that determination fixes important legal relationships of the parties.
The bank also urges that creation of a deposit being purely a matter of intent, the issue is governed exclusively by the private contract. Since these contracts must be interpreted under state law, the argument runs, no “deposit” is actually received as such until monies delivered to the armored car or the receptacle are physically delivered into the hands of a bank teller at the chartered premises. Until such time the bank may not, under the contracts, be held to account for the customer’s funds.
We have no difficulty accepting the bank’s argument that the debtor-creditor relationship is a creature of contract and that the parties can agree that until monies are physically delivered to the bank no deposit will be credited to the customer’s account. We are satisfied, however, that the contracts have no significant purpose other than to remove the possibility that the monies received will become “deposits” in the technical and legal sense until actually delivered to the chartered premises of the bank.
We do not challenge the right of the contracting parties to fix rights and risks as between themselves; nothing in the law precludes the parties from agreeing, for example, that the bank does not assume the status of bailee, with liability for loss of money in transit. But while the contracting parties are free to arrange their private rights and liabilities as they see fit, it does not follow that private contractual arrangements, binding on the parties under state law, determine the meaning of the language or the reach of § 36 (f).
Because the purpose of the statute is to maintain competitive equality, it is relevant in construing “branch” to consider, not merely the contractual rights and liabilities created by the transaction, but all those aspects of the transaction that might give the bank an advantage in its competition for customers. Unquestionably, a competitive advantage accrues to a bank that provides the service of receiving money for deposit at a place away from its main office; the convenience to the customer is unrelated to whether the relationship of debtor and creditor is established at the moment of receipt or somewhat later.
We need not characterize the contracts as a sham or subterfuge in order to conclude that the conduct of the parties and the nature of their relations bring First National’s challenged activities within the federal definition ,of branch banking. Here, penetrating the form of the contracts to the underlying substance of the transaction, we are satisfied that at the time a customer delivers a sum of money either to the armored truck or the stationary receptacle, the bank has, for all purposes contemplated by Congress in § 36 (f), received a deposit. The money is given and received for deposit even though the parties have agreed that its technical status as a “deposit” which may be drawn on is to remain inchoate for the brief period of time it is in transit to the chartered bank premises. The intended deposits are delivered and received as part of a large-scale continuing mode of conducting the banking business designed to bring basic bank services to the customers.
Since the putative deposits are in fact “received” by a bank facility apart from its chartered place of business, we are compelled, in construing § 36 (f), to view the place of delivery of the customer’s cash and checks accompanied by a deposit slip as an “additional office, or . . . branch place of business ... at which deposits are received.”
Here we are confronted by a systematic attempt to secure for national banks branching privileges which Florida denies to competing state banks. The utility of the armored car service and deposit receptacle are obvious; many States permit state chartered banks to use this eminently sensible mode of operations, but Florida’s policy is not open to judicial review any more than is the congressional policy of “competitive equality.” Nor is the congressional policy of competitive equality with its deference to state standards open to modification by the Comptroller of the Currency.
Affirmed.
Florida Stat. § 659.06 (1) (a) (1965) provides:
“659.06 Place of transacting business; school savings; drive-in facilities.—
“(1) (a) Any bank or trust company shall have only one place of doing business, which shall be located in the community specified in its original articles of incorporation, and the business of the bank or trust company shall be transacted at its banking house so located in said community specified, and not elsewhere. . . .
“(2) With the prior written approval of the commissioner a bank may operate a drive-in facility or walk-up facility providing one or more tellers to serve patrons in vehicles and on foot. It shall not be necessary that such facility be a part of or physically connected to the main banking room or building of the bank if the facility is located on the property on which the main banking house is situated or on property contiguous thereto. Property which is separated from the property on which the main banking house is situated only by a street, walkway or alleyway shall, for the purposes of this subsection, be deemed contiguous to the property on which the main banking house is situated.
“The operation of any drive-in or walk-up facility which is not located on the property on which the main banking house is situated or on property contiguous thereto shall constitute a violation of subsection (1); provided, however, subsection (2) shall not apply to any facilities existing on or prior to January 1, 1965.”
Comptroller’s Manual for National Banks ¶ 7490.
“Messenger Service
“To meet the requirements of its customers, a national bank may provide messenger service by means of an armored car or otherwise, pursuant to an agreement wherein it is specified that the messenger is the agent of the customer rather than of the bank. Deposits collected under this arrangement are not considered as having been received by the bank until they are actually delivered to the teller at the bank’s premises. Similarly, a check is considered as having been paid at the bank when the money is handed to the messenger as agent for the customer.”
“Comprehensive Dual Control Contract
“As agent for the undersigned depositor, The First National Bank Messenger will transport monies of the depositor to and from the banking house.
“Under the Comprehensive Dual Control Contract, all monies, transported solely in padlocked money bags furnished by bank, shall be opened only under the dual control of two bank’s tellers. For this purpose, bank will retain a pass key for depositor’s bag(s); a key for each bag will be furnished depositor. The depositor expressly authorizes the service described and agrees to accept the bank’s count of monies as final.
“The First National Bank in Plant City maintains hazard insurance covering holdup, employee fidelity, etc., for the benefit of the depositor for all amounts delivered to bank’s messenger for delivery to bank and for all amounts requisitioned by depositor for delivery from bank to depositor. Unless otherwise authorized in writing, only the undersigned shall be permitted to receipt the bank’s messenger for monies delivered to depositor. . . .”
“Contract
“First National Bank, Plant City, Fla., as messenger and agent for Principal named on front side hereof, agrees to transmit the currency, coin and checks detailed on the front side hereof to the bank’s offices at 302 West Haines Street, Plant City, Fla. for deposit to Principal’s account. It is agreed and understood by Principal and the bank that in transmitting said currency, coin and checks, the bank is acting solely as agent for said Principal and that the transmittal of said currency, coin and checks, shall not be deemed to be a deposit until delivered into the hands of the bank’s tellers at the said banking house.
“The bank maintains hazard insurance covering holdup, employee fidelity, etc. for the protection of the Principal for all amounts and items delivered to the bank’s messenger by said Principal.”
The National Bank Act, 44 Stat. 1228, 12 U. S. C. §§ 36 (c) (1) and (2) provides:
“(e) A national banking association may, with the approval of the Comptroller of the Currency, establish and operate new branches: (1) Within the limits of the city, town or village in which said association is situated, if such establishment and operation are at the time expressly authorized to State banks by the law of the State in question; and (2) at any point within the State in which said association is situated, if such establishment and operation are at the time authorized to State banks by the statute law of the State in question by language specifically granting such authority affirmatively and not merely by implication or recognition, and subject to the restrictions as to location imposed by the law of the State on State banks.”
See n. 1, supra.
In their briefs before this Court, the litigants are all in agreement that federal law alone applies to resolve the threshold question whether the challenged activity falls within the definition of “branch.” Reply Brief for the Comptroller of the Currency 2; Respondents’ Brief 41, 44.
Representative McFadden described the definitional section of the Act as providing that:
“Any place outside of or away from the main office where the bank carries on its business of receiving deposits, paying checks, lending money, or transacting any business carried on at the main office, is a branch.” 68 Cong. Rec. 5816 (1927).
5A A. Michie on Banks and Banking §§ 4a, 5, 14, 15 and 17 (1950); 10 Am. Jur. 2d Banks § 358 (1963); 9 C. J. S. Banks and Banking §269 (1938).
We need not here try to draw fine distinctions around relatively isolated, sporadic, and inconsequential transactions where a bank employee carries cash to a customer to cash a check, or secures a signature on a note in exchange for a check delivered off premises.
In 1963 Comptroller Saxon, author of ¶ 7490 in the Comptroller’s Manual for National Banks, supra, n. 2, declared that “[t]he branching powers of National Banks should, in my judgment, not be limited according to those policies which the individual States find appropriate to meet their local needs through State-chartered banks.” Saxon, Branching Powers and the Dual Banking System, 101 Comp. Currency Ann. Rep. 316, 318 (1963).
During the course of the congressional debates over what became the McFadden Act, Representative Stevenson remarked:
“[Y]ou have branches in the Federal reserve system established by the dictum of the Comptroller of the Currency, who has assumed to say that he can allow a national bank to establish as many agencies for receiving deposits and paying checks as he sees fit. . . . I will show presently that we cut that out, root and branch.” 66 Cong. Rec. 1627. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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"Federal Reserve System",
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"Comptroller General",
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"Department or Secretary of Health and Human Services",
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"Multistate Tax Commission",
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"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
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"United States Sentencing Commission",
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"Unidentifiable",
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"NO Admin Action",
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] | [
116
] |
James L. KISOR, Petitioner
v.
Robert WILKIE, Secretary of Veterans Affairs
No. 18-15
Supreme Court of the United States.
Argued March 27, 2019
Decided June 26, 2019
Paul W. Hughes, Washington, DC, for the petitioner.
Solicitor General Noel G. Francisco, for the respondent.
Kenneth M. Carpenter, Carpenter Chartered, Topeka, KS, Eugene R. Fidell, Yale Law School Supreme Court Clinic, New Haven, CT, Paul W. Hughes, Michael B. Kimberly, Andrew J. Pincus, Charles A. Rothfeld, E. Brantley Webb, Andrew A. Lyons-Berg, Mayer Brown LLP, Washington, DC, Rachel R. Siegel, Mayer Brown LLP, New York, NY, for Petitioner.
Noel J. Francisco, Solicitor General, Joseph H. Hunt, Assistant Attorney General, Jeffrey B. Wall, Deputy Solicitor General, Hashim M. Mooppan, Deputy Assistant Attorney General, Matthew Guarnieri, Assistant to the Solicitor General, Mark B. Stern, Daniel Aguilar, Joshua Revesz, Attorneys, Department of Justice, Washington, D.C., for Respondent.
Justice KAGAN announced the judgment of the Court and delivered the opinion of the Court with respect to Parts I, II-B, III-B, and IV, and an opinion with respect to Parts II-A and III-A, in which Justice GINSBURG, Justice BREYER, and Justice SOTOMAYOR join.
This Court has often deferred to agencies' reasonable readings of genuinely ambiguous regulations. We call that practice Auer deference, or sometimes Seminole Rock deference, after two cases in which we employed it. See Auer v. Robbins , 519 U.S. 452, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997) ; Bowles v. Seminole Rock & Sand Co. , 325 U.S. 410, 65 S.Ct. 1215, 89 L.Ed. 1700 (1945). The only question presented here is whether we should overrule those decisions, discarding the deference they give to agencies. We answer that question no. Auer deference retains an important role in construing agency regulations. But even as we uphold it, we reinforce its limits. Auer deference is sometimes appropriate and sometimes not. Whether to apply it depends on a range of considerations that we have noted now and again, but compile and further develop today. The deference doctrine we describe is potent in its place, but cabined in its scope. On remand, the Court of Appeals should decide whether it applies to the agency interpretation at issue.
I
We begin by summarizing how petitioner James Kisor's case made its way to this Court. Truth be told, nothing recounted in this Part has much bearing on the rest of our decision. The question whether to overrule Auer does not turn on any single application, whether right or wrong, of that decision's deference doctrine. But a recitation of the facts and proceedings below at least shows how the question presented arose.
Kisor is a Vietnam War veteran seeking disability benefits from the Department of Veterans Affairs (VA). He first applied in 1982, alleging that he had developed post-traumatic stress disorder (PTSD) as a result of his participation in a military action called Operation Harvest Moon. The report of the agency's evaluating psychiatrist noted Kisor's involvement in that battle, but found that he "d[id] not suffer from PTSD." App. 12, 14. The VA thus denied Kisor benefits. There matters stood until 2006, when Kisor moved to reopen his claim. Based on a new psychiatric report, the VA this time agreed that Kisor suffered from PTSD. But it granted him benefits only from the date of his motion to reopen, rather than (as he requested) from the date of his first application.
The Board of Veterans' Appeals-a part of the VA, represented in Kisor's case by a single administrative judge-affirmed that timing decision, based on its interpretation of an agency rule. Under the VA's regulation, the agency could grant Kisor retroactive benefits if it found there were "relevant official service department records" that it had not considered in its initial denial. See 38 C.F.R. § 3.156(c)(1) (2013). The Board acknowledged that Kisor had come up with two new service records, both confirming his participation in Operation Harvest Moon. But according to the Board, those records were not "relevant" because they did not go to the reason for the denial-that Kisor did not have PTSD. See App. to Pet. for Cert. 43a ("[The] documents were not relevant to the decision in May 1983 because the basis of the denial was that a diagnosis of PTSD was not warranted, not a dispute as to whether or not the Veteran engaged in combat"). The Court of Appeals for Veterans Claims, an independent Article I court that initially reviews the Board's decisions, affirmed for the same reason.
The Court of Appeals for the Federal Circuit also affirmed, but it did so based on deference to the Board's interpretation of the VA rule. See Kisor v. Shulkin , 869 F.3d 1360, 1368 (2017). Kisor had argued to the Federal Circuit that to count as "relevant," a service record need not (as the Board thought) "counter[ ] the basis of the prior denial"; instead, it could relate to some other criterion for obtaining disability benefits. Id., at 1366 (internal quotation marks omitted). The Federal Circuit found the regulation "ambiguous" as between the two readings. Id., at 1367. The rule, said the court, does not specifically address "whether 'relevant' records are those casting doubt on the agency's prior [rationale or] those relating to the veteran's claim more broadly." Ibid. So how to choose between the two views? The court continued: "Both parties insist that the plain regulatory language supports their case, and neither party's position strikes us as unreasonable." Id. , at 1368. Because that was so, the court believed Auer deference appropriate: The agency's construction of its own regulation would govern unless "plainly erroneous or inconsistent with the VA's regulatory framework." Ibid. (internal quotation marks omitted). Applying that standard, the court upheld the Board's reading-and so approved the denial of retroactive benefits.
We then granted certiorari to decide whether to overrule Auer and (its predecessor) Seminole Rock . 586 U. S. ----, 139 S.Ct. 657, 202 L.Ed.2d 491 (2018).
II
Before addressing that question directly, we spend some time describing what Auer deference is, and is not, for. You might view this Part as "just background" because we have made many of its points in prior decisions. But even if so, it is background that matters. For our account of why the doctrine emerged-and also how we have limited it-goes a long way toward explaining our view that it is worth preserving.
A
Begin with a familiar problem in administrative law: For various reasons, regulations may be genuinely ambiguous. They may not directly or clearly address every issue; when applied to some fact patterns, they may prove susceptible to more than one reasonable reading. Sometimes, this sort of ambiguity arises from careless drafting-the use of a dangling modifier, an awkward word, an opaque construction. But often, ambiguity reflects the well-known limits of expression or knowledge. The subject matter of a rule "may be so specialized and varying in nature as to be impossible"-or at any rate, impracticable-to capture in its every detail. SEC v. Chenery Corp. , 332 U.S. 194, 203, 67 S.Ct. 1760, 91 L.Ed. 1995 (1947). Or a "problem[ ] may arise" that the agency, when drafting the rule, "could not [have] reasonably foresee[n]." Id., at 202, 67 S.Ct. 1760. Whichever the case, the result is to create real uncertainties about a regulation's meaning.
Consider these examples:
• In a rule issued to implement the Americans with Disabilities Act (ADA), the Department of Justice requires theaters and stadiums to provide people with disabilities "lines of sight comparable to those for members of the general public." 28 C.F.R. pt. 36, App. A, p. 563 (1996). Must the Washington Wizards construct wheelchair seating to offer lines of sight over spectators when they rise to their feet? Or is it enough that the facility offers comparable views so long as everyone remains seated? See Paralyzed Veterans of Am. v. D. C. Arena L. P. , 117 F.3d 579, 581-582 (CADC 1997).
• The Transportation Security Administration (TSA) requires that liquids, gels, and aerosols in carry-on baggage be packed in containers smaller than 3.4 ounces and carried in a clear plastic bag. Does a traveler have to pack his jar of truffle pâté in that way? See Laba v. Copeland , 2016 WL 5958241, *1 (WDNC, Oct. 13, 2016).
• The Mine Safety and Health Administration issues a rule requiring employers to report occupational diseases within two weeks after they are "diagnosed." 30 C.F.R. § 50.20(a) (1993). Do chest X-ray results that "scor[e]" above some level of opacity count as a "diagnosis"? What level, exactly? See American Min. Congress v. Mine Safety and Health Admin. , 995 F.2d 1106, 1107-1108 (CADC 1993).
• An FDA regulation gives pharmaceutical companies exclusive rights to drug products if they contain "no active moiety that has been approved by FDA in any other" new drug application. 21 C.F.R. § 314.108(a) (2010). Has a company created a new "active moiety" by joining a previously approved moiety to lysine through a non-ester covalent bond? See Actavis Elizabeth LLC v. FDA , 625 F.3d 760, 762-763 (CADC 2010) ; Tr. of Oral Arg. 12, 35.
• Or take the facts of Auer itself. An agency must decide whether police captains are eligible for overtime under the Fair Labor Standards Act. According to the agency's regulations, employees cannot receive overtime if they are paid on a "salary basis." 29 C.F.R. § 541.118(a) (1996). And in deciding whether an employee is salaried, one question is whether his pay is "subject to reduction" based on performance. Ibid. A police department's manual informs its officers that their pay might be docked if they commit a disciplinary infraction. Does that fact alone make them "subject to" pay deductions? Or must the department have a practice of docking officer pay, so that the possibility of that happening is more than theoretical? 519 U.S. at 459-462, 117 S.Ct. 905.
In each case, interpreting the regulation involves a choice between (or among) more than one reasonable reading. To apply the rule to some unanticipated or unresolved situation, the court must make a judgment call. How should it do so?
In answering that question, we have often thought that a court should defer to the agency's construction of its own regulation. For the last 20 or so years, we have referred to that doctrine as Auer deference, and applied it often. But the name is something of a misnomer. Before the doctrine was called Auer deference, it was called Seminole Rock deference-for the 1945 decision in which we declared that when "the meaning of [a regulation] is in doubt," the agency's interpretation "becomes of controlling weight unless it is plainly erroneous or inconsistent with the regulation." 325 U.S. at 414, 65 S.Ct. 1215.
And Seminole Rock itself was not built on sand. Deference to administrative agencies traces back to the late nineteenth century, and perhaps beyond. See United States v. Eaton , 169 U.S. 331, 343, 18 S.Ct. 374, 42 L.Ed. 767 (1898) ("The interpretation given to the regulations by the department charged with their execution ... is entitled to the greatest weight"); see Brief for Administrative Law Scholars as Amici Curiae 5, n. 3 (collecting early cases); Brief for AFL-CIO as Amicus Curiae 8 (same).
We have explained Auer deference (as we now call it) as rooted in a presumption about congressional intent-a presumption that Congress would generally want the agency to play the primary role in resolving regulatory ambiguities. See Martin v. Occupational Safety and Health Review Comm'n , 499 U.S. 144, 151-153, 111 S.Ct. 1171, 113 L.Ed.2d 117 (1991). Congress, we have pointed out, routinely delegates to agencies the power to implement statutes by issuing rules. See id., at 151, 111 S.Ct. 1171. In doing so, Congress knows (how could it not?) that regulations will sometimes contain ambiguities. See supra, at 2410. But Congress almost never explicitly assigns responsibility to deal with that problem, either to agencies or to courts. Hence the need to presume, one way or the other, what Congress would want. And as between those two choices, agencies have gotten the nod. We have adopted the presumption-though it is always rebuttable-that "the power authoritatively to interpret its own regulations is a component of the agency's delegated lawmaking powers." Martin , 499 U.S. at 151, 111 S.Ct. 1171. Or otherwise said, we have thought that when granting rulemaking power to agencies, Congress usually intends to give them, too, considerable latitude to interpret the ambiguous rules they issue.
In part, that is because the agency that promulgated a rule is in the "better position [to] reconstruct" its original meaning. Id., at 152, 111 S.Ct. 1171. Consider that if you don't know what some text (say, a memo or an e-mail) means, you would probably want to ask the person who wrote it. And for the same reasons, we have thought, Congress would too (though the person is here a collective actor). The agency that "wrote the regulation" will often have direct insight into what that rule was intended to mean. Mullins Coal Co. of Va. v. Director, Office of Workers' Compensation Programs , 484 U.S. 135, 159, 108 S.Ct. 427, 98 L.Ed.2d 450 (1987). The drafters will know what it was supposed to include or exclude or how it was supposed to apply to some problem. To be sure, this justification has its limits. It does not work so well, for example, when the agency failed to anticipate an issue in crafting a rule (e.g., if the agency never thought about whether and when chest X-rays would count as a "diagnosis"). See supra, at 2410. Then, the agency will not be uncovering a specific intention; at most (though this is not nothing), it will be offering insight into the analogous issues the drafters considered and the purposes they designed the regulation to serve. And the defense works yet less well when lots of time has passed between the rule's issuance and its interpretation-especially if the interpretation differs from one that has come before. All that said, the point holds good for a significant category of "contemporaneous" readings. Lyng v. Payne , 476 U.S. 926, 939, 106 S.Ct. 2333, 90 L.Ed.2d 921 (1986). Want to know what a rule means? Ask its author.
In still greater measure, the presumption that Congress intended Auer deference stems from the awareness that resolving genuine regulatory ambiguities often "entail[s] the exercise of judgment grounded in policy concerns." Thomas Jefferson Univ. v. Shalala , 512 U.S. 504, 512, 114 S.Ct. 2381, 129 L.Ed.2d 405 (1994) (internal quotation marks omitted). Return to our TSA example. See supra, at 2410. In most of their applications, terms like "liquids" and "gels" are clear enough. (Traveler checklist: Pretzels OK; water not.) But resolving the uncertain issues-the truffle pâtés or olive tapenades of the world-requires getting in the weeds of the rule's policy: Why does TSA ban liquids and gels in the first instance? What makes them dangerous? Can a potential hijacker use pâté jars in the same way as soda cans? Or take the less specialized-seeming ADA example. See supra, at 2410. It is easy enough to know what "comparable lines of sight" means in a movie theater-but more complicated when, as in sports arenas, spectators sometimes stand up. How costly is it to insist that the stadium owner take that sporadic behavior into account, and is the viewing value received worth the added expense? That cost-benefit calculation, too, sounds more in policy than in law. Or finally, take the more technical "moiety" example. See supra, at 2410 - 2411. Or maybe, don't. If you are a judge, you probably have no idea of what the FDA's rule means, or whether its policy is implicated when a previously approved moiety is connected to lysine through a non-ester covalent bond.
And Congress, we have thought, knows just that: It is attuned to the comparative advantages of agencies over courts in making such policy judgments. Agencies (unlike courts) have "unique expertise," often of a scientific or technical nature, relevant to applying a regulation "to complex or changing circumstances." Martin , 499 U.S. at 151, 111 S.Ct. 1171 ; see Thomas Jefferson , 512 U.S. at 512, 114 S.Ct. 2381. Agencies (unlike courts) can conduct factual investigations, can consult with affected parties, can consider how their experts have handled similar issues over the long course of administering a regulatory program. See Long Island Care at Home, Ltd. v. Coke , 551 U.S. 158, 167-168, 127 S.Ct. 2339, 168 L.Ed.2d 54 (2007). And agencies (again unlike courts) have political accountability, because they are subject to the supervision of the President, who in turn answers to the public. See Free Enterprise Fund v. Public Company Accounting Oversight Bd. , 561 U.S. 477, 499, 130 S.Ct. 3138, 177 L.Ed.2d 706 (2010) ; Pauley v. BethEnergy Mines, Inc. , 501 U.S. 680, 696, 111 S.Ct. 2524, 115 L.Ed.2d 604 (1991) (discussing as a matter of democratic accountability the "proper roles of the political and judicial branches" in filling regulatory gaps). It is because of those features that Congress, when first enacting a statute, assigns rulemaking power to an agency and thus authorizes it to fill out the statutory scheme. And so too, when new issues demanding new policy calls come up within that scheme, Congress presumably wants the same agency, rather than any court, to take the laboring oar.
Finally, the presumption we use reflects the well-known benefits of uniformity in interpreting genuinely ambiguous rules. We have noted Congress's frequent "preference for resolving interpretive issues by uniform administrative decision, rather than piecemeal by litigation." Ford Motor Credit Co. v. Milhollin , 444 U.S. 555, 568, 100 S.Ct. 790, 63 L.Ed.2d 22 (1980). That preference may be strongest when the interpretive issue arises in the context of a "complex and highly technical regulatory program." Thomas Jefferson , 512 U.S. at 512, 114 S.Ct. 2381. After all, judges are most likely to come to divergent conclusions when they are least likely to know what they are doing. (Is there anything to be said for courts all over the country trying to figure out what makes for a new active moiety?) But the uniformity justification retains some weight even for more accessible rules, because their language too may give rise to more than one eminently reasonable reading. Consider Auer itself. See supra, at 2411 - 2412. There, four Circuits held that police captains were "subject to" pay deductions for disciplinary infractions if a police manual said they were, even if the department had never docked anyone. Two other Circuits held that captains were "subject to" pay deductions only if the department's actual practice made that punishment a realistic possibility. See Auer , 519 U.S. at 460, 117 S.Ct. 905. Had the agency issued an interpretation before all those rulings (rather than, as actually happened, in a brief in this Court), a deference rule would have averted most of that conflict and uncertainty. See Christopher v. SmithKline Beecham Corp. , 567 U.S. 142, 158, n. 17, 132 S.Ct. 2156, 183 L.Ed.2d 153 (2012) (noting for this reason that Auer deference imparts "predictability to the administrative process" (internal quotation marks omitted)). Auer deference thus serves to ensure consistency in federal regulatory law, for everyone who needs to know what it requires.
B
But all that said, Auer deference is not the answer to every question of interpreting an agency's rules. Far from it. As we explain in this section, the possibility of deference can arise only if a regulation is genuinely ambiguous. And when we use that term, we mean it-genuinely ambiguous, even after a court has resorted to all the standard tools of interpretation. Still more, not all reasonable agency constructions of those truly ambiguous rules are entitled to deference. As just explained, we presume that Congress intended for courts to defer to agencies when they interpret their own ambiguous rules. See supra, at 2411 - 2414. But when the reasons for that presumption do not apply, or countervailing reasons outweigh them, courts should not give deference to an agency's reading, except to the extent it has the "power to persuade." Christopher , 567 U.S. at 159, 132 S.Ct. 2156 (quoting Skidmore v. Swift & Co. , 323 U.S. 134, 140, 65 S.Ct. 161, 89 L.Ed. 124 (1944) ). We have thus cautioned that Auer deference is just a "general rule"; it "does not apply in all cases." Christopher , 567 U.S. at 155, 132 S.Ct. 2156. And although the limits of Auer deference are not susceptible to any rigid test, we have noted various circumstances in which such deference is "unwarranted." Ibid . In particular, that will be so when a court concludes that an interpretation does not reflect an agency's authoritative, expertise-based, "fair[, or] considered judgment." Ibid. (quoting Auer , 519 U.S. at 462, 117 S.Ct. 905 ); cf. United States v. Mead Corp. , 533 U.S. 218, 229-231, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001) (adopting a similar approach to Chevron deference).
We take the opportunity to restate, and somewhat expand on, those principles here to clear up some mixed messages we have sent. At times, this Court has applied Auer deference without significant analysis of the underlying regulation. See, e.g., United States v. Larionoff , 431 U.S. 864, 872, 97 S.Ct. 2150, 53 L.Ed.2d 48 (1977) (stating that the Court "need not tarry" over the regulation's language given Seminole Rock ). At other times, the Court has given Auer deference without careful attention to the nature and context of the interpretation.
See, e.g., Thorpe v. Housing Authority of Durham , 393 U.S. 268, 276, and nn. 22-23, 89 S.Ct. 518, 21 L.Ed.2d 474 (1969) (deferring to an agency's view as expressed in letters to third parties). And in a vacuum, our most classic formulation of the test-whether an agency's construction is "plainly erroneous or inconsistent with the regulation," Seminole Rock , 325 U.S. at 414, 65 S.Ct. 1215 -may suggest a caricature of the doctrine, in which deference is "reflexive." Pereira v. Sessions , 585 U. S. ----, ----, 138 S.Ct. 2105, 2120, 201 L.Ed.2d 433 (2018) (KENNEDY, J., concurring). So we cannot deny that Kisor has a bit of grist for his claim that Auer "bestows on agencies expansive, unreviewable" authority. Brief for Petitioner 25. But in fact Auer does no such thing: It gives agencies their due, while also allowing-indeed, obligating-courts to perform their reviewing and restraining functions. So before we turn to Kisor's specific grievances, we think it worth reinforcing some of the limits inherent in the Auer doctrine.
First and foremost, a court should not afford Auer deference unless the regulation is genuinely ambiguous. See Christensen v. Harris County , 529 U.S. 576, 588, 120 S.Ct. 1655, 146 L.Ed.2d 621 (2000) ; Seminole Rock , 325 U.S. at 414, 65 S.Ct. 1215 (deferring only "if the meaning of the words used is in doubt"). If uncertainty does not exist, there is no plausible reason for deference. The regulation then just means what it means-and the court must give it effect, as the court would any law. Otherwise said, the core theory of Auer deference is that sometimes the law runs out, and policy-laden choice is what is left over. See supra, at 2412 - 2413. But if the law gives an answer-if there is only one reasonable construction of a regulation-then a court has no business deferring to any other reading, no matter how much the agency insists it would make more sense. Deference in that circumstance would "permit the agency, under the guise of interpreting a regulation, to create de facto a new regulation." See Christensen , 529 U.S. at 588, 120 S.Ct. 1655. Auer does not, and indeed could not, go that far.
And before concluding that a rule is genuinely ambiguous, a court must exhaust all the "traditional tools" of construction. Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc. , 467 U.S. 837, 843, n. 9, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984) (adopting the same approach for ambiguous statutes). For again, only when that legal toolkit is empty and the interpretive question still has no single right answer can a judge conclude that it is "more [one] of policy than of law." Pauley , 501 U.S. at 696, 111 S.Ct. 2524. That means a court cannot wave the ambiguity flag just because it found the regulation impenetrable on first read. Agency regulations can sometimes make the eyes glaze over. But hard interpretive conundrums, even relating to complex rules, can often be solved. See id., at 707, 111 S.Ct. 2524 (SCALIA, J., dissenting) (A regulation is not ambiguous merely because "discerning the only possible interpretation requires a taxing inquiry"). To make that effort, a court must "carefully consider[ ]" the text, structure, history, and purpose of a regulation, in all the ways it would if it had no agency to fall back on. Ibid. Doing so will resolve many seeming ambiguities out of the box, without resort to Auer deference.
If genuine ambiguity remains, moreover, the agency's reading must still be "reasonable." Thomas Jefferson , 512 U.S. at 515, 114 S.Ct. 2381. In other words, it must come within the zone of ambiguity the court has identified after employing all its interpretive tools. (Note that serious application of those tools therefore has use even when a regulation turns out to be truly ambiguous. The text, structure, history, and so forth at least establish the outer bounds of permissible interpretation.) Some courts have thought (perhaps because of Seminole Rock 's "plainly erroneous" formulation) that at this stage of the analysis, agency constructions of rules receive greater deference than agency constructions of statutes. See, e.g., Ohio Dept. of Medicaid v. Price , 864 F.3d 469, 477 (CA6 2017). But that is not so. Under Auer , as under Chevron , the agency's reading must fall "within the bounds of reasonable interpretation." Arlington v. FCC , 569 U.S. 290, 296, 133 S.Ct. 1863, 185 L.Ed.2d 941 (2013). And let there be no mistake: That is a requirement an agency can fail.
Still, we are not done-for not every reasonable agency reading of a genuinely ambiguous rule should receive Auer deference. We have recognized in applying Auer that a court must make an independent inquiry into whether the character and context of the agency interpretation entitles it to controlling weight. See Christopher , 567 U.S. at 155, 132 S.Ct. 2156 ; see also Mead , 533 U.S. at 229-231, 236-237, 121 S.Ct. 2164 (requiring an analogous though not identical inquiry for Chevron deference). As explained above, we give Auer deference because we presume, for a set of reasons relating to the comparative attributes of courts and agencies, that Congress would have wanted us to. See supra, at 2411 - 2414. But the administrative realm is vast and varied, and we have understood that such a presumption cannot always hold. Cf. Mead , 533 U.S. at 236, 121 S.Ct. 2164 ("tailor[ing] deference to [the] variety" of administrative action); Arlington , 569 U.S. at 309-310, 133 S.Ct. 1863 (BREYER, J., concurring in part and concurring in judgment) (noting that "context-specific[ ] factors" may show that "Congress would [not] have intended the agency to resolve [some] ambiguity"). The inquiry on this dimension does not reduce to any exhaustive test. But we have laid out some especially important markers for identifying when Auer deference is and is not appropriate.
To begin with, the regulatory interpretation must be one actually made by the agency. In other words, it must be the agency's "authoritative" or "official position," rather than any more ad hoc statement not reflecting the agency's views. Mead , 533 U.S. at 257-259, and n. 6, 121 S.Ct. 2164 (SCALIA, J., dissenting). That constraint follows from the logic of Auer deference-because Congress has delegated rulemaking power, and all that typically goes with it, to the agency alone. Of course, the requirement of "authoritative" action must recognize a reality of bureaucratic life: Not everything the agency does comes from, or is even in the name of, the Secretary or his chief advisers. So, for example, we have deferred to "official staff memoranda" that were "published in the Federal Register," even though never approved by the agency head. Ford Motor Credit , 444 U.S. at 566, n. 9, 567, n. 10, 100 S.Ct. 790 (declining to "draw a radical distinction between" agency heads and staff for Auer deference). But there are limits. The interpretation must at the least emanate from those actors, using those vehicles, understood to make authoritative policy in the relevant context. See, e.g., Paralyzed Veterans , 117 F.3d at 587 (refusing to consider a "speech of a mid-level official" as an "authoritative departmental position"); N. Y. State Dept. of Social Servs. v. Bowen , 835 F.2d 360, 365-366 (CADC 1987) (rejecting the idea that an "informal memorandum" recounting a telephone conversation between employees could count as an "authoritative pronouncement"); Exelon Generation Co. v. Local 15, Int'l Brotherhood of Elec. Workers, AFL-CIO , 676 F.3d 566, 576-578 (CA7 2012) (declining deference when the agency had itself "disclaimed the use of regulatory guides as authoritative"). If the interpretation does not do so, a court may not defer.
Next, the agency's interpretation must in some way implicate its substantive expertise. Administrative knowledge and experience largely "account [for] the presumption that Congress delegates interpretive lawmaking power to the agency." Martin , 499 U.S. at 153, 111 S.Ct. 1171. So the basis for deference ebbs when "[t]he subject matter of the [dispute is] distan[t] from the agency's ordinary" duties or "fall[s] within the scope of another agency's authority." Arlington , 569 U.S. at 309, 133 S.Ct. 1863 (opinion of BREYER, J.). This Court indicated as much when it analyzed a "split enforcement" scheme, in which Congress divided regulatory power between two entities. Martin , 499 U.S. at 151, 111 S.Ct. 1171. To decide "whose reasonable interpretation" of a rule controlled, we "presum[ed] Congress intended to invest interpretive power" in whichever actor was "best position[ed] to develop" expertise about the given problem. Id. , at 149, 153, 111 S.Ct. 1171. The same idea holds good as between agencies and courts. "Generally, agencies have a nuanced understanding of the regulations they administer." Brief for Respondent 33. That point is most obvious when a rule is technical; think back to our "moiety" or "diagnosis" examples. See supra , at 2410 - 2411. But more prosaic-seeming questions also commonly implicate policy expertise; consider the TSA assessing the security risks of pâté or a disabilities office weighing the costs and benefits of an accommodation. See ibid. Once again, though, there are limits. Some interpretive issues may fall more naturally into a judge's bailiwick. Take one requiring the elucidation of a simple common-law property term, see Jicarilla Apache Tribe v. FERC , 578 F.2d 289, 292-293 (CA10 1978), or one concerning the award of an attorney's fee, see West Va. Highlands Conservancy, Inc. v. Norton , 343 F.3d 239 (CA4 2003). Cf. Adams Fruit Co. v. Barrett , 494 U.S. 638, 649-650, 110 S.Ct. 1384, 108 L.Ed.2d 585 (1990) (declining to award Chevron deference when an agency interprets a judicial-review provision). When the agency has no comparative expertise in resolving a regulatory ambiguity, Congress presumably would not grant it that authority.
Finally, an agency's reading of a rule must reflect "fair and considered judgment" to receive Auer deference. Christopher , 567 U.S. at 155, 132 S.Ct. 2156 (quoting Auer , 519 U.S. at 462, 117 S.Ct. 905 ). That means, we have stated, that a court should decline to defer to a merely "convenient litigating position" or "post hoc rationalizatio[n] advanced" to "defend past agency action against attack." Christopher , 567 U.S. at 155, 132 S.Ct. 2156 (quoting Bowen v. Georgetown Univ. Hospital , 488 U.S. 204, 213, 109 S.Ct. 468, 102 L.Ed.2d 493 (1988) and Auer , 519 U.S. at 462, 117 S.Ct. 905 ). And a court may not defer to a new interpretation, whether or not introduced in litigation, that creates "unfair surprise" to regulated parties. Long Island Care , 551 U.S. at 170, 127 S.Ct. 2339. That disruption of expectations may occur when an agency substitutes one view of a rule for another. We have therefore only rarely given Auer deference to an agency construction "conflict[ing] with a prior" one. Thomas Jefferson , 512 U.S. at 515, 114 S.Ct. 2381. Or the upending of reliance may happen without such an explicit interpretive change. This Court, for example, recently refused to defer to an interpretation that would have imposed retroactive liability on parties for longstanding conduct that the agency had never before addressed. See Christopher , 567 U.S. at 155-156, 132 S.Ct. 2156. Here too the lack of "fair warning" outweighed the reasons to apply Auer. Id., at 156, 132 S.Ct. 2156 (internal quotation marks omitted).
* * *
The upshot of all this goes something as follows. When it applies, Auer deference gives an agency significant leeway to say what its own rules mean. In so doing, the doctrine enables the agency to fill out the regulatory scheme Congress has placed under its supervision. But that phrase "when it applies" is important-because it often doesn't. As described above, this Court has cabined Auer 's scope in varied and critical ways-and in exactly that measure, has maintained a strong judicial role in interpreting rules. What emerges is a deference doctrine not quite so tame as some might hope, but not nearly so menacing as they might fear.
III
That brings us to the lone question presented here-whether we should abandon the longstanding doctrine just described. In contending that we should, Kisor raises statutory, policy, and constitutional claims (in that order). But he faces an uphill climb. He must first convince us that Auer deference is wrong. And even then, he must overcome stare decisis -the special care we take to preserve our precedents. In the event, Kisor fails at the first step: None of his arguments provide good reason to doubt Auer deference. And even if that were not so, Kisor does not offer the kind of special justification needed to overrule Auer, and Seminole Rock, and all our many other decisions deferring to reasonable agency constructions of ambiguous rules.
A
Kisor first attacks Auer as inconsistent with the judicial review provision of the Administrative Procedure Act (APA). See 5 U.S.C. § 706. As Kisor notes, Congress enacted the APA in 1946-the year after Seminole Rock -to serve as "the fundamental charter of the administrative state." Brief for Petitioner 26 (internal quotation marks omitted). Section 706 of the Act, governing judicial review of agency action, states (among other things) that reviewing courts shall "determine the meaning or applicability of the terms of an agency action" (including a regulation). According to Kisor, Auer violates that edict by thwarting "meaningful judicial review"
of agency rules. Brief for Petitioner 29. Courts under Auer , he asserts (now in the language of Section 706 ), "abdicate their office of determining the meaning" of a regulation. Id., at 27 (internal quotation marks omitted).
To begin with, that argument ignores the many ways, discussed above, that courts exercise independent review over the meaning of agency rules. See supra, at 2415 - 2418. As we have explained, a court must apply all traditional methods of interpretation to any rule, and must enforce the plain meaning those methods uncover. There can be no thought of deference unless, after performing that thoroughgoing review, the regulation remains genuinely susceptible to multiple reasonable meanings and the agency's interpretation lines up with one of them. And even if that is the case, courts must on their own determine whether the nature or context of the agency's construction reverses the usual presumption of deference. Most notably, a court must consider whether the interpretation is authoritative, expertise-based, considered, and fair to regulated parties. All of that figures as "meaningful judicial review." Brief for Petitioner 29.
And even when a court defers to a regulatory reading, it acts consistently with Section 706. That provision does not specify the standard of review a court should use in "determin[ing] the meaning" of an ambiguous rule. 5 U.S.C. § 706. One possibility, as Kisor says, is to review the issue de novo . But another is to review the agency's reading for reasonableness. To see the point, assume that a regulatory (say, an employment) statute expressly instructed courts to apply Auer deference when reviewing an agency's interpretations of its ambiguous rules. Nothing in that statute would conflict with Section 706. Instead, the employment law would simply make clear how a court is to "determine the meaning" of such a rule-by deferring to an agency's reasonable reading. Ibid . Of course, that is not the world we know: Most substantive statutes do not say anything about Auer deference, one way or the other. But for all the reasons spelled out above, we have long presumed (subject always to rebuttal) that the Congress delegating regulatory authority to an agency intends as well to give that agency considerable latitude to construe its ambiguous rules. See supra, at 2411 - 2414. And that presumption operates just like the hypothesized statute above. Because of it, once again, courts do not violate Section 706 by applying Auer. To the contrary, they fulfill their duty to "determine the meaning" of a rule precisely by deferring to the agency's reasonable reading. See Sunstein & Vermeule, The Unbearable Rightness of Auer , 84 U. Chi. L. Rev. 297, 306 (2017) (If Congress intends "that the meaning of a regulation turns on the agency's interpretation of its meaning," then courts comply with Section 706 's command to " 'determine the meaning' [of the regulation] by deferring to that view"); cf. Arlington , 569 U.S. at 317, 133 S.Ct. 1863 (ROBERTS, C. J., dissenting) (similarly addressing why Chevron deference comports with Section 706 ). Section 706 and Auer thus go hand in hand.
That is especially so given the practice of judicial review at the time of the APA's enactment. Section 706 was understood when enacted to "restate[ ] the present law as to the scope of judicial review." See Dept. of Justice, Attorney General's Manual on the Administrative Procedure Act 108 (1947); see also Vermont Yankee Nuclear Power Corp. v. Natural Resources Defense Council, Inc. , 435 U.S. 519, 546, 98 S.Ct. 1197, 55 L.Ed.2d 460 (1978) (noting that this Court gives some deference to the Manual "because of the role played by the Department of Justice in drafting the legislation"). We have thus interpreted the APA not to "significantly alter the common law of judicial review of agency action." Heckler v. Chaney , 470 U.S. 821, 832, 105 S.Ct. 1649, 84 L.Ed.2d 714 (1985) (internal quotation marks omitted). That pre-APA common law included Seminole Rock itself (decided the year before) along with prior decisions foretelling that ruling. See supra, at 2411. Even assume that the deference regime laid out in those cases had not yet fully taken hold. At a minimum, nothing in the law of that era required all judicial review of agency interpretations to be de novo . Cf. Manning, Constitutional Structure and Judicial Deference to Agency Interpretations of Agency Rules, 96 Colum. L. Rev. 612, 635-636 (1996) (arguing that courts before the APA used "flexible, common law methods to review administrative action"). And so nothing suggests that Section 706 imposes that requirement. Or otherwise said: If Section 706 did not change the law of judicial review (as we have long recognized), then it did not proscribe a deferential standard then known and in use.
Kisor next claims that Auer circumvents the APA's rulemaking requirements. Section 553, as Kisor notes, mandates that an agency use notice-and-comment procedures before issuing legislative rules. See 5 U.S.C. §§ 553(b), (c). But the section allows agencies to issue "interpret[ive]" rules without notice and comment. See § 553(b)(A). A key feature of those rules is that (unlike legislative rules) they are not supposed to "have the force and effect of law"-or, otherwise said, to bind private parties. Perez v. Mortgage Bankers Assn. , 575 U. S. 92, ----, 135 S.Ct. 1199, 1204, 191 L.Ed.2d 186 (2015) (internal quotation marks omitted). Instead, interpretive rules are meant only to "advise the public" of how the agency understands, and is likely to apply, its binding statutes and legislative rules. Ibid. But consider, Kisor argues, what happens when a court gives Auer deference to an interpretive rule. The result, he asserts, is to make a rule that has never gone through notice and comment binding on the public. See Brief for Petitioner 21, 29. Or put another way, the interpretive rule ends up having the "force and effect of law" without ever paying the procedural cost. Mortgage Bankers , 575 U. S., at ----, 135 S.Ct., at 1204.
But this Court rejected the identical argument just a few years ago, and for good reason. In Mortgage Bankers , we held that interpretive rules, even when given Auer deference, do not have the force of law. See 575 U. S., at ----, and n. 4, 135 S.Ct., at 1208, and n. 4. An interpretive rule itself never forms "the basis for an enforcement action"-because, as just noted, such a rule does not impose any "legally binding requirements" on private parties. National Min. Assn. v. McCarthy , 758 F.3d 243, 251 (CADC 2014). An enforcement action must instead rely on a legislative rule, which (to be valid) must go through notice and comment. And in all the ways discussed above, the meaning of a legislative rule remains in the hands of courts, even if they sometimes divine that meaning by looking to the agency's interpretation. See supra, at 2415 - 2418. Courts first decide whether the rule is clear; if it is not, whether the agency's reading falls within its zone of ambiguity; and even if the reading does so, whether it should receive deference. In short, courts retain the final authority to approve-or not-the agency's reading of a notice-and-comment rule. See Mortgage Bankers, 575 U. S., at ----, n. 4, 135 S.Ct., at 1208, n. 4 ("[I]t is the court that ultimately decides whether a given regulation means what the agency says"). No binding of anyone occurs merely by the agency's say-so.
And indeed, a court deciding whether to give Auer deference must heed the same procedural values as Section 553 reflects.
Remember that a court may defer to only an agency's authoritative and considered judgments. See supra, at 2416 - 2418. No ad hoc statements or post hoc rationalizations need apply. And recall too that deference turns on whether an agency's interpretation creates unfair surprise or upsets reliance interests. See supra, at 2417 - 2418. So an agency has a strong incentive to circulate its interpretations early and widely. In such ways, the doctrine of Auer deference reinforces, rather than undermines, the ideas of fairness and informed decisionmaking at the core of the APA.
To supplement his two APA arguments, Kisor turns to policy, leaning on a familiar claim about the incentives Auer creates. According to Kisor, Auer encourages agencies to issue vague and open-ended regulations, confident that they can later impose whatever interpretation of those rules they prefer. See Brief for Petitioner 37-41. That argument received its fullest elaboration in a widely respected law review article pre-dating Auer . See Manning, 96 Colum. L. Rev., at 654-669. More recently, the concern about such self-delegation has appeared in opinions from this Court, starting with several from Justice SCALIA calling for Auer 's reconsideration. See, e.g., Christopher, 567 U.S. at 158, 132 S.Ct. 2156 (citing Manning, supra, at 655-668 ); Decker v. Northwest Environmental Defense Center , 568 U.S. 597, 620-621, 133 S.Ct. 1326, 185 L.Ed.2d 447 (2013) (SCALIA, J., concurring in part and dissenting in part) (citing Manning, supra ); Talk America, Inc. v. Michigan Bell Telephone Co. , 564 U.S. 50, 69, 131 S.Ct. 2254, 180 L.Ed.2d 96 (2011) (SCALIA, J., concurring) (principally relying on Manning, supra ).
But the claim has notable weaknesses, empirical and theoretical alike. First, it does not survive an encounter with experience. No real evidence-indeed, scarcely an anecdote-backs up the assertion. As two noted scholars (one of whom reviewed thousands of rules during four years of government service) have written: "[W]e are unaware of, and no one has pointed to, any regulation in American history that, because of Auer , was designed vaguely." Sunstein & Vermeule, 84 U. Chi. L. Rev., at 308. And even the argument's theoretical allure dissipates upon reflection. For strong (almost surely stronger) incentives and pressures cut in the opposite direction. "[R]egulators want their regulations to be effective, and clarity promotes compliance." Brief for Administrative Law Scholars as Amici Curiae 18-19. Too, regulated parties often push for precision from an agency, so that they know what they can and cannot do. And ambiguities in rules pose risks to the long-run survival of agency policy. Vagueness increases the chance of adverse judicial rulings. And it enables future administrations, with different views, to reinterpret the rules to their own liking. Add all of that up and Kisor's ungrounded theory of incentives contributes nothing to the case against Auer .
Finally, Kisor goes big, asserting (though fleetingly) that Auer deference violates "separation-of-powers principles." See Brief for Petitioner 43. In his view, those principles prohibit "vest[ing] in a single branch the law-making and law-interpreting functions." Id., at 45. If that objection is to agencies' usurping the interpretive role of courts, this opinion has already met it head-on. Properly understood and applied, Auer does no such thing. In all the ways we have described, courts retain a firm grip on the interpretive function. See supra, at 2415 - 2418; Mortgage Bankers, 575 U. S., at ----, n. 4, 135 S.Ct., at 1208, n. 4. If Kisor's objection is instead to the supposed commingling of functions (that is, the legislative and judicial) within an agency, this Court has answered it often before. See, e.g., Withrow v. Larkin , 421 U.S. 35, 54, 95 S.Ct. 1456, 43 L.Ed.2d 712 (1975) (permitting such a combination of functions); FTC v. Cement Institute , 333 U.S. 683, 702, 68 S.Ct. 793, 92 L.Ed. 1010 (1948) (same). That sort of mixing is endemic in agencies, and has been "since the beginning of the Republic." Arlington , 569 U.S. at 304-305, n. 4, 133 S.Ct. 1863. It does not violate the separation of powers, we have explained, because even when agency "activities take 'legislative' and 'judicial' forms," they continue to be "exercises of[ ] the 'executive Power' "-or otherwise said, ways of executing a statutory plan. Ibid. (quoting U. S. Const., Art. II, § 1, cl. 1 ). So Kisor's last argument to dispatch Auer deference fails as roundly as the rest.
B
If all that were not enough, stare decisis cuts strongly against Kisor's position. "Overruling precedent is never a small matter." Kimble v. Marvel Entertainment, LLC , 576 U. S. ----, ----, 135 S.Ct. 2401, 2409, 192 L.Ed.2d 463 (2015). Adherence to precedent is "a foundation stone of the rule of law." Michigan v. Bay Mills Indian Community , 572 U.S. 782, 798, 134 S.Ct. 2024, 188 L.Ed.2d 1071 (2014). "[I]t promotes the evenhanded, predictable, and consistent development of legal principles, fosters reliance on judicial decisions, and contributes to the actual and perceived integrity of the judicial process." Payne v. Tennessee , 501 U.S. 808, 827, 111 S.Ct. 2597, 115 L.Ed.2d 720 (1991). To be sure, stare decisis is "not an inexorable command." Id., at 828, 111 S.Ct. 2597. But any departure from the doctrine demands "special justification"-something more than "an argument that the precedent was wrongly decided." Halliburton Co. v. Erica P. John Fund, Inc. , 573 U.S. 258, 266, 134 S.Ct. 2398, 189 L.Ed.2d 339 (2014).
And that is even more than usually so in the circumstances here. First, Kisor asks us to overrule not a single case, but a "long line of precedents"-each one reaffirming the rest and going back 75 years or more. Bay Mills , 572 U.S. at 798, 134 S.Ct. 2024 ; see nn. 2, 3, supra . This Court alone has applied Auer or Seminole Rock in dozens of cases, and lower courts have done so thousands of times. Deference to reasonable agency interpretations of ambiguous rules pervades the whole corpus of administrative law. Second, because that is so, abandoning Auer deference would cast doubt on many settled constructions of rules. As Kisor acknowledged at oral argument, a decision in his favor would allow relitigation of any decision based on Auer , forcing courts to "wrestle [with] whether or not Auer " had actually made a difference. Tr. of Oral Arg. 30; see id., at 47 (Solicitor General agreeing that "every single regulation that's currently on the books whose interpretation has been established under Seminole Rock now [would have] to be relitigated anew"). It is the rare overruling that introduces so much instability into so many areas of law, all in one blow.
And third, even if we are wrong about Auer , "Congress remains free to alter what we have done." Patterson v. McLean Credit Union , 491 U.S. 164, 172-173, 109 S.Ct. 2363, 105 L.Ed.2d 132 (1989) (stating that when that is so, "[c]onsiderations of stare decisis have special force"). In a constitutional case, only we can correct our error. But that is not so here. Our deference decisions are "balls tossed into Congress's court, for acceptance or not as that branch elects." Kimble , 576 U. S., at ----, 135 S.Ct., at 2409. And so far, at least, Congress has chosen acceptance. It could amend the APA or any specific statute to require the sort of de novo review of regulatory interpretations that Kisor favors. Instead, for approaching a century, it has let our deference regime work side-by-side with both the APA and the many statutes delegating rulemaking power to agencies. It has done so even after we made clear that our deference decisions reflect a presumption about congressional intent. See Martin , 499 U.S. at 151, 111 S.Ct. 1171 ; supra , at 2411 - 2412. And it has done so even after Members of this Court began to raise questions about the doctrine. See, e.g., Talk America , 564 U.S. at 67-69, 131 S.Ct. 2254 (SCALIA, J., concurring). Given that history-and Congress's continuing ability to take up Kisor's arguments-we would need a particularly "special justification" to now reverse Auer.
Kisor offers nothing of that ilk. Nearly all his arguments about abandoning precedent are variants of his merits claims. We hear again, if in different parts of his briefs, that Auer deference frustrates "the policies embodied in the APA" and violates the separation of powers. Reply Brief 13, and n. 5; Brief for Petitioner 47-48. More generally, we learn that Seminole Rock was "wrong on its own terms" and "badly reasoned." Id., at 47 (internal quotation marks omitted). Of course, it is good-and important-for our opinions to be right and well-reasoned. But that is not the test for overturning precedent. Kisor does not claim that Auer deference is "unworkable," a traditional basis for overruling a case. Patterson , 491 U.S. at 173, 109 S.Ct. 2363. Nor does he point to changes in legal rules that make Auer a "doctrinal dinosaur." Kimble , 576 U. S., at ----, 135 S.Ct., at 2411. All he can muster is that "[t]he administrative state has evolved substantially since 1945." Brief for Petitioner 53. We do not doubt the point (although we note that Auer and other key deference decisions came along after most of that evolution took place). Still more, we agree with Kisor that administrative law doctrines must take account of the far-reaching influence of agencies and the opportunities such power carries for abuse. That is one reason we have taken care today to reinforce the limits of Auer deference, and to emphasize the critical role courts retain in interpreting rules. But it is no answer to the growth of agencies for courts to take over their expertise-based, policymaking functions. Who knows? Maybe in 1945, the FDA was not thinking about "active moieties." See supra, at 2410 - 2411. But still, today-just as Seminole Rock and Auer held-it should have leeway to say what that term means.
IV
With that, we can finally return to Kisor's own case. You may remember that his retroactive benefits depend on the meaning of the term "relevant" records in a VA regulation. See supra, at 2408 - 2409. The Board of Veterans' Appeals, through a single judge's opinion, understood records to be relevant only if they relate to the basis of the VA's initial denial of benefits. By contrast, Kisor argued that records are relevant if they go to any benefits criterion, even one that was uncontested. The Federal Circuit upheld the Board's interpretation based on Auer deference.
Applying the principles outlined in this opinion, we hold that a redo is necessary for two reasons. First, the Federal Circuit jumped the gun in declaring the regulation ambiguous. We have insisted that a court bring all its interpretive tools to bear before finding that to be so. See supra, at 2415 - 2416. It is not enough to casually remark, as the court did here, that "[b]oth parties insist that the plain regulatory language supports their case, and neither party's position strikes us as unreasonable." 869 F.3d at 1368 ; see supra, at 2415 - 2416. Rather, the court must make a conscientious effort to determine, based on indicia like text, structure, history, and purpose, whether the regulation really has more than one reasonable meaning. The Solicitor General argued in this Court that the Board's reading is the only reasonable one. See Brief for Respondent 49-50. Perhaps Kisor will make the converse claim below. Before even considering deference, the court must seriously think through those positions.
And second, the Federal Circuit assumed too fast that Auer deference should apply in the event of genuine ambiguity. As we have explained, that is not always true. A court must assess whether the interpretation is of the sort that Congress would want to receive deference. See supra, at 2416 - 2418. The Solicitor General suggested at oral argument that the answer in this case might be no. He explained that all 100 or so members of the VA Board act individually (rather than in panels) and that their roughly 80,000 annual decisions have no "precedential value." Tr. of Oral Arg. 64. He thus questioned whether a Board member's ruling "reflects the considered judgment of the agency as a whole." Ibid. ; cf. Mead , 533 U.S. at 233, 121 S.Ct. 2164 (declining to give Chevron deference to rulings "being churned out at a rate of 10,000 a year at an agency's 46 scattered offices"). We do not know what position the Government will take on that issue below. But the questions the Solicitor General raised are exactly the kind the court must consider in deciding whether to award Auer deference to the Board's interpretation.
We accordingly vacate the judgment below and remand the case for further proceedings.
It is so ordered.
Chief Justice ROBERTS, concurring in part.
I join Parts I, II-B, III-B, and IV of the Court's opinion. We took this case to consider whether to overrule Auer v. Robbins , 519 U.S. 452, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997), and Bowles v. Seminole Rock & Sand Co. , 325 U.S. 410, 65 S.Ct. 1215, 89 L.Ed. 1700 (1945). For the reasons the Court discusses in Part III-B, I agree that overruling those precedents is not warranted. I also agree with the Court's treatment in Part II-B of the bounds of Auer deference.
I write separately to suggest that the distance between the majority and Justice GORSUCH is not as great as it may initially appear. The majority catalogs the prerequisites for, and limitations on, Auer deference: The underlying regulation must be genuinely ambiguous; the agency's interpretation must be reasonable and must reflect its authoritative, expertise-based, and fair and considered judgment; and the agency must take account of reliance interests and avoid unfair surprise. Justice GORSUCH, meanwhile, lists the reasons that a court might be persuaded to adopt an agency's interpretation of its own regulation: The agency thoroughly considered the problem, offered a valid rationale, brought its expertise to bear, and interpreted the regulation in a manner consistent with earlier and later pronouncements. Accounting for variations in verbal formulation, those lists have much in common.
That is not to say that Auer deference is just the same as the power of persuasion discussed in Skidmore v. Swift & Co. , 323 U.S. 134, 65 S.Ct. 161, 89 L.Ed. 124 (1944) ; there is a difference between holding that a court ought to be persuaded by an agency's interpretation and holding that it should defer to that interpretation under certain conditions. But it is to say that the cases in which Auer deference is warranted largely overlap with the cases in which it would be unreasonable for a court not to be persuaded by an agency's interpretation of its own regulation.
One further point: Issues surrounding judicial deference to agency interpretations of their own regulations are distinct from those raised in connection with judicial deference to agency interpretations of statutes enacted by Congress. See Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc. , 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). I do not regard the Court's decision today to touch upon the latter question.
Justice GORSUCH, with whom Justice THOMAS joins, with whom Justice KAVANAUGH joins as to Parts I, II, III, IV, and V, and with whom Justice ALITO joins as to Parts I, II, and III, concurring in the judgment.
It should have been easy for the Court to say goodbye to Auer v. Robbins . In disputes involving the relationship between the government and the people, Auer requires judges to accept an executive agency's interpretation of its own regulations even when that interpretation doesn't represent the best and fairest reading. This rule creates a "systematic judicial bias in favor of the federal government, the most powerful of parties, and against everyone else." Nor is Auer 's biased rule the product of some congressional mandate we are powerless to correct: This Court invented it, almost by accident and without any meaningful effort to reconcile it with the Administrative Procedure Act or the Constitution. A legion of academics, lower court judges, and Members of this Court-even Auer 's author-has called on us to abandon Auer . Yet today a bare majority flinches, and Auer lives on.
Still, today's decision is more a stay of execution than a pardon. The Court cannot muster even five votes to say that Auer is lawful or wise. Instead, a majority retains Auer only because of stare decisis . And yet, far from standing by that precedent, the majority proceeds to impose so many new and nebulous qualifications and limitations on Auer that THE CHIEF JUSTICE claims to see little practical difference between keeping it on life support in this way and overruling it entirely. So the doctrine emerges maimed and enfeebled-in truth, zombified.
Respectfully, we owe our colleagues on the lower courts more candid and useful guidance than this. And judges owe the people who come before them nothing less than a fair contest, where every party has an equal chance to persuade the court of its interpretation of the law's demands. One can hope that THE CHIEF JUSTICE is right, and that whether we formally overrule Auer or merely neuter it, the results in most cases will prove the same. But means, not just ends, matter, and retaining even this debilitated version of Auer threatens to force litigants and lower courts to jump through needless and perplexing new hoops and in the process deny the people the independent judicial decisions they deserve. All to what end? So that we may pretend to abide stare decisis ?
Consider this case. Mr. Kisor is a Marine who lost out on benefits for post-traumatic stress disorder when the court of appeals deferred to a regulatory interpretation advanced by the Department of Veterans Affairs. The court of appeals was guilty of nothing more than faithfully following Auer . But the majority today invokes stare decisis , of all things, to vacate that judgment and tell the court of appeals to try again using its newly retooled, multi-factored, and far less determinate version of Auer . Respectfully, I would stop this business of making up excuses for judges to abdicate their job of interpreting the law, and simply allow the court of appeals to afford Mr. Kisor its best independent judgment of the law's meaning.
The Court's failure to be done with Auer , and its decision to adorn Auer with so many new and ambiguous limitations, all but guarantees we will have to pass this way again. When that day comes, I hope this Court will find the nerve it lacks today and inter Auer at last. Until then, I hope that our judicial colleagues on other courts will take courage from today's ruling and realize that it has transformed Auer into a paper tiger.
I. How We Got Here
Where did Auer come from? Not from the Constitution, some ancient common law tradition, or even a modern statute. Instead, it began as an unexplained aside in a decision about emergency price controls at the height of the Second World War. Even then, the dictum sat on the shelf, little noticed, for years. Only in the last few decades of the 20th century did lawyers and courts really begin to dust it off and shape it into the reflexive rule of deference to regulatory agencies we know today. And they did so without ever pausing to consider whether a rule like that could be legally justified or even made sense. Auer is really little more than an accident.
A
Before the mid-20th century, few federal agencies engaged in extensive rulemaking, and those that did rarely sought deference for their regulatory interpretations. But when the question arose, this Court did not hesitate to say that judges reviewing administrative action should decide all questions of law, including questions concerning the meaning of regulations. As Justice BRANDEIS put it, "[t]he inexorable safeguard which the due process clause assures is ... that there will be opportunity for a court to determine whether the applicable rules of law ... were observed." Unsurprisingly, the government's early, longstanding, and consistent interpretation of a statute, regulation, or other legal instrument could count as powerful evidence of its original public meaning. But courts respected executive interpretations only because and to the extent "they embodied understandings made roughly contemporaneously with ... enactment and stably maintained and practiced since that time," not "because they were executive as such."
Writing for four Members of the Court, Justice KAGAN suggests that Auer 's very different approach to the interpretation of agency regulations was foreshadowed as early as this Court's 1898 decision in United States v. Eaton . Ante , at ----. But this is mistaken. The question in that case was whether Mr. Eaton's appointment as temporary vice-consul to Siam was consistent with State Department regulations. After several pages of careful and independent legal analysis, the Court held that the regulations did authorize the appointment. That conclusion, the Court explained, was "rendered necessary by a consideration of the text." Only after reaching this conclusion did the Court observe that the State Department had previously adopted the same construction, noting along the way that the Department's views were "entitled to the greatest weight" and that the Court saw "no reason in this case to doubt [their] correctness." Eaton thus simply followed the well-worn path of acknowledging that an agency's interpretation of a regulation can supply evidence of its meaning. Nowhere did the Court even hint that it would have deferred to the State Department's views about the meaning of the law if its own independent textual analysis had not led it to the same conclusion.
All this is borne out by the Court's later teachings in Skidmore v. Swift & Co. in 1944. The question there was whether the time overnight employees spent waiting to respond to fire alarms could amount to compensable overtime under the Fair Labor Standards Act. The lower courts had held as a matter of law that it could not. In an opinion by Justice JACKSON, this Court reversed. The Court first held, based on its own independent analysis, that "no principle of law found either in the statute or in Court decisions precludes waiting time from also being working time." Only then did the Court consider "what, if any, deference courts should pay" to the views of the Administrator of the Labor Department's Wage and Hour Division. And on that question the Court reaffirmed the traditional rule that an agency's interpretation of the law is "not controlling upon the courts" and is entitled only to a weight proportional to "the thoroughness evident in its consideration, the validity of its reasoning, its consistency with earlier and later pronouncements, and all those factors which give it power to persuade." At the time, the influential administrative law scholar Kenneth Culp Davis considered this "[a]n entirely reliable statement" of the law.
B
In truth, the seeds of the Auer doctrine were first planted only in 1945, in Bowles v. Seminole Rock & Sand Co. That case involved regulations issued by the Office of Price Administration (OPA), which Congress had tasked with stabilizing the national economy during the Second World War through the use of emergency price controls. It was in that context that the Court declared-for the first time and without citing any authority-that "if the meaning of [the regulation were] in doubt," the agency's interpretation would merit "controlling weight unless it is plainly erroneous or inconsistent with the regulation."
Yet even then it was far from clear how much weight the Court really placed on the agency's interpretation. As it had in Eaton , the Court in Seminole Rock began with an extended discussion of "the plain words of the regulation," which led it to conclude that the text "clearly" supported the government's position. Only after reaching that conclusion based on its own independent analysis did the Court proceed to add that "[a]ny doubts ... are removed by reference to the administrative construction."
So confused was all this that readers at the time didn't perceive Seminole Rock 's dictum as changing anything. Professor Davis observed that the Court's discussion about giving "controlling weight" to the agency's interpretation was an unexplained aside that made no difference to the case's outcome. The dictum, too, was readily explained as reflecting the unusual factual context in which the case arose, involving an emergency government program created to deal with "unique circumstances of war and economic depression." And the Court decided Seminole Rock the same Term it issued Skidmore , where it reaffirmed the traditional rule that an agency's views about the law may persuade a court but can never control its judgment. In fact, the Court in Seminole Rock was careful to note that the OPA interpretation before it bore many of the characteristics Skidmore would have recognized as increasing its persuasive force: It had been announced concurrently with the regulation, disseminated widely to the regulated community, and adhered to consistently by the agency.
No wonder, then, that for many years after the decision, courts "connected Seminole Rock more closely with the deference framework ... under Skidmore " and generally engaged in a Skidmore -type analysis, accepting the agency's interpretation "only after independently examining the regulation and concluding that the agency interpretation was sound." If Seminole Rock 's "controlling weight" dictum was afforded any force, it was usually only in the price control context; even then it was ordinarily extended only to "official" agency interpretations that were published contemporaneously with the regulation and widely distributed. The Fourth Circuit exemplified the early understanding of Seminole Rock when it observed-citing both Seminole Rock and Skidmore -that "under settled principles" an official agency interpretation in an opinion letter was entitled only to "respectful consideration." The letter, the court stressed, did not "have the effect of law," and "[i]t would be absurd to hold that the courts must subordinate their judgment as to the meaning of a ... regulation to the mere unsupported opinion of an associate counsel in an administrative department."
C
This Court did not cite Seminole Rock 's "controlling weight" dictum again until 1965, in Udall v. Tallman . And though Tallman "did very little to advance the jurisprudential understanding of Seminole Rock ," it certainly helped fuel the expansion of so-called " Seminole Rock deference." From the 1960s on, this Court and lower courts began to cite the Seminole Rock dictum with increasing frequency and in a wider variety of circumstances, but still without much explanation. They also increasingly divorced Seminole Rock from Skidmore .
Auer represents the apotheosis of this line of cases. In the name of what some now call the Auer doctrine, courts have in recent years "mechanically applied and reflexively treated" Seminole Rock 's dictum "as a constraint upon the careful inquiry that one might ordinarily expect of courts engaged in textual analysis." Under Auer , judges are forced to subordinate their own views about what the law means to those of a political actor, one who may even be a party to the litigation before the court. After all, if the court agrees that the agency's reading is the best one, Auer does no real work; the doctrine matters only when a court would conclude that the agency's interpretation is not the best or fairest reading of the regulation.
To be sure, Justice KAGAN paints a very different picture of Auer , asking us to imagine it riding to the rescue only in cases where the scales of justice are evenly balanced between two equally persuasive readings. But that's a fantasy: "If nature knows of such equipoise in legal arguments, the courts at least do not." In the real world the judge uses his traditional interpretive toolkit, full of canons and tiebreaking rules, to reach a decision about the best and fairest reading of the law. Of course, there are close cases and reasonable judges will sometimes disagree. But every day, in courts throughout this country, judges manage with these traditional tools to reach conclusions about the meaning of statutes, rules of procedure, contracts, and the Constitution. Yet when it comes to interpreting federal regulations, Auer displaces this process and requires judges instead to treat the agency's interpretation as controlling even when it is "not ... the best one."
If that were not troubling enough, Auer has also become "a doctrine of uncertain scope and application." This Court has never offered meaningful guidance on how to decide whether the agency's reading is "reasonable" enough to demand judicial deference-and lower courts have drawn that line in wildly different places. Deepening the confusion, this Court and lower courts have, over time, tried to soften Auer 's rigidity by declaring that it "might" not apply in some ill-defined circumstances, such as when the agency's interpretation "conflicts with a prior interpretation" or reflects a "convenient litigating position" or a "post hoc rationalization" for past agency action. All this has resulted in "widespread confusion" about when and how to apply Auer deference.
In light of Auer 's many problems, it should come as no surprise that several Members of this Court, along with a great many lower court judges and members of the legal academy, have questioned Auer 's validity and pleaded with this Court to reconsider it.
D
That's where things stood when James Kisor asked the Department of Veterans Affairs to reopen his disability benefits claim. Mr. Kisor served as a United States Marine from 1962 through 1966 and saw combat in Vietnam. In the early 1980s, a VA counselor observed that Mr. Kisor was battling depression and suicidal thoughts and suggested he might be suffering from post-traumatic stress disorder. In light of this, Mr. Kisor filed a claim for disability benefits in 1982. But, in the end, the VA denied the claim.
In 2006, Mr. Kisor sought to reopen the matter. In connection with that request, he presented new evidence, including a psychiatrist's report diagnosing him with PTSD and additional records documenting his service in Vietnam. The VA reopened Mr. Kisor's claim and granted him disability benefits effective June 5, 2006, the date he had submitted his new request. Mr. Kisor argued that a VA regulation entitled him to an earlier effective date for disability benefits, one tracing back to his original submission in 1982. But the Board of Veterans Appeals concluded that the applicable regulation didn't authorize that relief.
Mr. Kisor appealed the Board's ruling all the way to the Federal Circuit, arguing that the Board had misinterpreted the relevant regulation. The Federal Circuit affirmed. Relying on the Auer doctrine, the court held that it had no choice but to treat the Board's interpretation as " 'controlling' " unless that interpretation was " 'plainly erroneous or inconsistent with the regulatio[n].' " Without even trying to determine who had the better reading of the regulation, the Board or Mr. Kisor, the court declared that "[t]he Board's interpretation does not strike us as either plainly erroneous or inconsistent with the VA's regulatory framework." Case closed.
Mr. Kisor sought and was denied rehearing en banc. Three judges dissented and joined those who have questioned "the logic behind continued adherence to the [ Auer ] doctrine"; they argued that, without Auer deference, Mr. Kisor's reading of the regulation would likely prevail. Mr. Kisor then asked us to grant certiorari to reconsider Auer . Thinking it past time to do so, we granted the petition.
II. The Administrative Procedure Act
When this Court speaks about the rules governing judicial review of federal agency action, we are not (or shouldn't be) writing on a blank slate or exercising some common-law-making power. We are supposed to be applying the Administrative Procedure Act. The APA is a "seminal" statute that Congress wrote to define the relationship between courts and agencies. Some have even described it as a kind of constitution for our "administrative state." Yet, remarkably, until today this Court has never made any serious effort to square the Auer doctrine with the APA. Even now, only four Justices make the attempt. And for at least two reasons, their arguments are wholly unpersuasive.
A
The first problem lies in § 706. That provision instructs reviewing courts to "decide all relevant questions of law" and "set aside agency action ... found to be ... not in accordance with law." Determining the meaning of a statute or regulation, of course, presents a classic legal question. But in case these directives were not clear enough, the APA further directs courts to "determine the meaning" of any relevant "agency action," including any rule issued by the agency. The APA thus requires a reviewing court to resolve for itself any dispute over the proper interpretation of an agency regulation. A court that, in deference to an agency, adopts something other than the best reading of a regulation isn't "decid[ing]" the relevant "questio[n] of law" or "determin[ing] the meaning" of the regulation. Instead, it's allowing the agency to dictate the answer to that question. In doing so, the court is abdicating the duty Congress assigned to it in the APA.
Justice KAGAN seeks to address the glaring inconsistency between our judge-made rule and the controlling statute this way. On her account, the APA tells a reviewing court to "determine the meaning" of regulations, but it does not tell the court "how " to do that. Thus, we are told, reading the regulation for itself and deferring to the agency's reading are just two equally valid ways for a court to fulfill its statutory duty to "determine the meaning" of the regulation. Ante , at 2419 - 2420.
But the APA isn't as anemic as that. Its unqualified command requires the court to determine legal questions-including questions about a regulation's meaning-by its own lights, not by those of political appointees or bureaucrats who may even be self-interested litigants in the case at hand. Nor can there be any doubt that, when Congress wrote the APA, it knew perfectly well how to require judicial deference to an agency when it wished-in fact, Congress repeatedly specified deferential standards for judicial review elsewhere in the statute. But when it comes to the business of interpreting regulations, no such command exists; instead, Congress told courts to "determine" those matters for themselves. Though one hardly needs to be an academic to recognize the point, "commentators in administrative law have 'generally acknowledged' that Section 706 seems to require de novo review on questions of law."
What the statutory language suggests, experience confirms. If Auer deference were really just another way for courts to "determine the meaning" of regulations under § 706, you might expect that a final judicial "determination" would at least settle, as a matter of precedent, the question of what the regulation "means." Of course, even after one court has spoken on a regulation's meaning, that court or another might properly give weight to a new agency interpretation as part of the court's own decision-making process. See supra , at 6. But in light of National Cable & Telecommunications Assn. v. Brand X Internet Services , courts have interpreted Auer as forbidding a court from ever "determin[ing] the meaning" of a regulation with the force that normally attaches to precedent, because an agency is always free to adopt a different view and insist on judicial deference to its new judgment. And if an agency can not only control the court's initial decision but also revoke that decision at any time, how can anyone honestly say the court, rather than the agency, ever really "determine[s]" what the regulation means?
To test the point further, consider a statute that tells a court to "determin[e]" an appropriate sentence in a criminal case. If the judge said he was sending a defendant to prison for longer than he believed appropriate only in deference to the government's "reasonable" sentencing recommendation, would anyone really think that complied with the law? Or take a statute that instructs a court to "determine" whether a consent judgment proposed by the government in a civil antitrust case "is in the public interest." If a court thought the proposed judgment harmful to the public but decided to defer to the government's "reasonable" contrary view anyway, would anyone suggest the court had complied with Congress's instruction?
Nor does Justice KAGAN's reading of § 706 offer any logical stopping point. If courts can "determine the meaning" of a regulation by deferring to any "reasonable" agency reading, then why not by deferring to any agency reading? If it were really true that the APA has nothing to say about how courts decide what regulations mean, then it would follow that the APA tolerates a rule that "the agency is always right." And if you find yourself in a place as absurd as that, you might want to consider whether you've taken a wrong turn along the way.
B
The problems don't end there. Auer is also incompatible with the APA's instructions in § 553. That provision requires agencies to follow notice-and-comment procedures when issuing or amending legally binding regulations (what the APA calls "substantive rules"), but not when offering mere interpretations of those regulations. An agency wishing to adopt or amend a binding regulation thus must publish a proposal in the Federal Register, give interested members of the public an opportunity to submit written comments on the proposal, and consider those comments before issuing the final regulation. Under the APA, that regulation then carries the force of law unless and until it is amended or repealed. By contrast, an agency can announce an interpretation of an existing substantive regulation without advance warning and in pretty much whatever form it chooses.
Auer effectively nullifies the distinction Congress drew here. Under Auer , courts must treat as "controlling" not only an agency's duly promulgated rules but also its mere interpretations-even ones that appear only in a legal brief, press release, or guidance document issued without affording the public advance notice or a chance to comment. For all practical purposes, "the new interpretation might as well be a new regulation." Auer thus obliterates a distinction Congress thought vital and supplies agencies with a shortcut around the APA's required procedures for issuing and amending substantive rules that bind the public with the full force and effect of law.
Think of it this way. We've held that the Constitution's specification of a "single, finely wrought" procedure for the enactment of statutes (bicameralism and presentment) necessarily implies that Congress cannot amend an enacted statute without following that procedure-say, by allowing a single House to change what the law requires. By the same logic, Congress's specification in the APA of procedures for the creation of new substantive rules (like notice and comment) necessarily implies that an agency cannot amend a substantive rule without following those procedures. To hold otherwise, as Auer demands, subverts the APA's design.
Certain amici contend this argument is "out of place" in this particular case because the VA happened to issue the interpretation challenged here in an adjudicative proceeding. But the premise on which they proceed-that the APA permits agencies to issue "controlling" amendments to their regulations in adjudicative proceedings-is not correct. Once an agency issues a substantive rule through notice and comment, it can amend that rule only by following the same notice-and-comment procedures. Whether an agency issues its interpretation in a press release or something it chooses to call an "adjudication," all we have is the agency's opinion about what an existing rule means, something that the APA tells us is not binding in a court of law or on the American people.
If that won't work, Justice KAGAN tries an alternative argument from nearly the opposite direction. She replies that affording Auer deference to an agency's interpretation of its own rules never offends the APA because the agency's interpretation lacks "the force of law" associated with substantive rules. Agency interpretations lack this force, we are told, because a court always retains the power to decide at least whether the interpretation is entitled to deference. Ante , at 2420 - 2421. But this argument rests on an implausibly narrow understanding of what it means for an agency action to bear the force of law. Under Justice KAGAN's logic, even a binding substantive rule would lack the force of law because a court retains the power to decide whether the rule is arbitrary and capricious and thus invalid under the APA. But no one believes that. While an agency interpretation, just like a substantive rule, "must meet certain conditions before it gets deference," "once it does so [ Auer makes it] every bit as binding as a substantive rule." To suggest that Auer does not make an agency's interpretive guidance "binding o[n] anyone," ante , at 2420 - 2421, is linguistic hocus-pocus.
C
If Auer cannot be squared with the text of the APA, Justice KAGAN suggests it at least conforms to a reasonable "presumption about congressional intent." Ante , at 2412. The theory seems to be that whenever Congress grants an agency "rulemaking power," it also implicitly gives the agency " 'the power authoritatively to interpret' " whatever rules the agency chooses to adopt. Ante , at 2412. But against the clear statutory commands Congress gave us in the APA, what sense does it make to "presume" that Congress really, secretly, wanted courts to treat agency interpretations as binding? Normally, this Court does not allow hidden legislative intentions to "muddy" such plainly expressed statutory directives.
Even on its own terms, too, this argument proves pretty muddy. It goes something like this: The drafters of the APA did not intend to " 'significantly alter' " established law governing judicial review of agency action as of 1946; the Auer doctrine was part of that established law; therefore, the APA implicitly requires courts to afford agencies Auer deference. Ante , at 2419 - 2420. But neither of this syllogism's essential premises stands on solid ground.
Take the major premise-that those who adopted the APA intended to work no change in the established law of judicial review of agency action. Justice KAGAN is right, of course, that Attorney General Clark claimed as much shortly after the APA's passage. Ante , at 2419 - 2420. But his view, which reflected the interests of the executive branch, was far from universally shared. Others, including many members of Congress, thought the APA would clarify, if not expand, the scope of judicial review. For example, Senator McCarran, the Chairman of the Judiciary Committee, wrote that it would be "hard ... for anyone to argue that this Act did anything other than cut down the 'cult of discretion' so far as federal law is concerned." And both the House and Senate reports on the APA said it was intended to "provid[e] that questions of law are for courts rather than agencies to decide in the last analysis."
Just five years after the APA's passage, this Court seemed to side with those who thought the APA was intended to do more than just summarize existing law. In an opinion by Justice FRANKFURTER, the Court opined that the APA required courts to assume "more responsibility" for reviewing agency decisions "than some courts ha[d] shown in the past." One early commentator likewise observed that the APA seemed designed to eliminate all doubt that questions of law "shall be decided by the reviewing Court for itself, and in the exercise of its own independent judgment"; "[m]ore explicit words to impose this mandate," he thought, "could hardly be found."
Justice KAGAN's syllogism runs into even more trouble with its minor premise-that the Auer doctrine was a well-established part of the common law background when Congress enacted the APA in 1946. As we've seen, this Court planted the seeds of Auer deference for the first time in dictum in Seminole Rock , just a year before Congress passed the APA. See Part I-B, supra . And that dictum did not somehow immediately become an entrenched part of the common law: For years following Seminole Rock , courts and "commentators largely ignored" it, and those who took notice weren't sure what to make of it. Professor Davis, for example, doubted that the dictum could be "taken at face value" given that it seemed "irreconcilable" with the Court's approach in other cases. In truth, when Congress passed the APA the law of judicial review of agency action was in a confused state. During the congressional hearings on the bill, one witness's suggestion that Congress should leave the scope of judicial review "as it now is" drew this fair reply from Representative Walter, chairman of the House Subcommittee on Administrative Law and author of the House Report on the APA: "You say 'as it now is.' Frankly, I do not know what it now is .... [T]he Supreme Court apparently changes its mind daily."
III. The Constitution
Not only is Auer incompatible with the APA; it also sits uneasily with the Constitution. Article III, § 1 provides that the "judicial Power of the United States" is vested exclusively in this Court and the lower federal courts. A core component of that judicial power is " 'the duty of interpreting [the laws] and applying them in cases properly brought before the courts.' " As Chief Justice MARSHALL put it, "[i]t is emphatically the province and duty of the judicial department to say what the law is." And never, this Court has warned, should the "judicial power ... be shared with [the] Executive Branch." Yet that seems to be exactly what Auer requires.
A
Our Nation's founders were painfully aware of the dangers of executive and legislative intrusion on judicial decision-making. One of the abuses of royal power that led to the American Revolution was King George's attempt to gain influence over colonial judges. Colonial legislatures, too, had interfered with the courts' independence "at the behest of private interests and factions." These experiences had taught the founders that " 'there is no liberty if the power of judgment be not separated from the legislative and executive powers.' " They knew that when political actors are left free not only to adopt and enforce written laws, but also to control the interpretation of those laws, the legal rights of "litigants with unpopular or minority causes or ... who belong to despised or suspect classes" count for little.
Maybe the powerful, well-heeled, popular, and connected can wheedle favorable outcomes from a system like that-but what about everyone else? They are left always a little unsure what the law is, at the mercy of political actors and the shifting winds of popular opinion, and without the chance for a fair hearing before a neutral judge. The rule of law begins to bleed into the rule of men.
Experiencing all this in their own time, the founders sought to ensure that those who came after them would not. Believing that "[n]o maxim was better established" than "that the power of making ought to be kept distinct from that of expounding, the laws," they designed a judiciary that would be able to interpret the laws "free from potential domination by other branches of government." To that end, they resisted proposals that would have subjected judicial decisions to review by political actors. And they rejected the British tradition of using the upper house of the legislature as a court of last resort, out of fear that a body with "even a partial agency in passing bad laws" would operate under the "same spirit" in "interpreting them." Instead, they gave federal judges life tenure, subject only to removal by impeachment; and they guaranteed that the other branches could not reduce judges' compensation so long as they remained in office.
The founders afforded these extraordinary powers and protections not for the comfort of judges, but so that an independent judiciary could better guard the people from the arbitrary use of governmental power. And sitting atop the judicial branch, this Court has always carried a special duty to "jealously guar[d]" the Constitution's promise of judicial independence. So we have long resisted any effort by the other branches to " 'usurp a court's power to interpret and apply the law to the circumstances before it.' " The judicial power to interpret the law, this Court has held, "can no more be shared with another branch than the Chief Executive, for example, can share with the Judiciary the veto power, or the Congress share with the Judiciary the power to override a Presidential veto."
Auer represents no trivial threat to these foundational principles. Under the APA, substantive rules issued by federal agencies through notice-and-comment procedures bear "the 'force and effect of law' " and are part of the body of federal law, binding on private individuals, that the Constitution charges federal judges with interpreting. Yet Auer tells the judge that he must interpret these binding laws to mean not what he thinks they mean, but what an executive agency says they mean. Unlike Article III judges, executive officials are not, nor are they supposed to be, "wholly impartial." They have their own interests, their own constituencies, and their own policy goals-and when interpreting a regulation, they may choose to "press the case for the side [they] represen[t]" instead of adopting the fairest and best reading. Auer thus means that, far from being "kept distinct," the powers of making, enforcing, and interpreting laws are united in the same hands-and in the process a cornerstone of the rule of law is compromised.
Consider an analogy. The Court has long held that Congress cannot " 'indirectly control the action of the courts, by requiring of them a construction of the law according to its own views.' " If Congress disagrees with how courts are interpreting an existing statute, it is free to amend the statute to establish a different rule going forward. What it cannot do is issue "a mandate ... to compel the courts to construe and apply [existing law], not according to the judicial, but according to the legislative judgment." As early as 1804, when a lawyer argued before this Court that an Act of the North Carolina legislature could not control the Court's construction of an earlier North Carolina statute because "[t]o declare what the law is, or has been, is a judicial power," not a legislative power, the Court stopped him, deeming the point too plain for argument.
But if the legislature can't control a judge's interpretation of an existing statute, how can an executive agency control a judge's interpretation of an existing and equally binding regulation? Auer allows an agency to do exactly what this Court has always said a legislature cannot do: "compel the courts to construe and apply" a law on the books, "not according to the judicial ... judgment," but according to the judgment of another branch. When we defer to an agency interpretation that differs from what we believe to be the best interpretation of the law, we compromise our judicial independence and deny the people who come before us the impartial judgment that the Constitution guarantees them. And we mislead those whom we serve by placing a judicial imprimatur on what is, in fact, no more than an exercise of raw political executive power.
B
What do our colleagues have to say about these concerns? A majority has nothing to offer, and Justice KAGAN dismisses them out of hand. In fact, she barely mentions the Constitution, other than to assure us that Auer does not allow agencies to "usur[p] the interpretive role of courts" because "courts retain a firm grip on the interpretive function" through their ability to decide whether Auer deference applies. Ante , at 2421. But that is no assurance at all. The judicial power has always been understood to provide the people with a neutral arbiter who bears the responsibility and duty to "expound and interpret" the governing law, not just the power to say whether someone else's interpretation, let alone the interpretation of a self-interested political actor, is "reasonable."
To be sure, it's conceivable that Congress might seek to limit the ability of judges to remedy an adverse agency action. It might, for example, provide that a court shall have power to set aside agency action pursuant to a regulation only if the action was based on an unreasonable interpretation of the regulation. But even assuming the constitutionality of a hypothetical statute like that, Auer is different. It does not limit the scope of the judicial power; instead, it seeks to coopt the judicial power by requiring an Article III judge to decide a case before him according to principles that he believes do not accurately reflect the law. Under Auer , a judge is required to lay aside his independent judgment and declare affirmatively that a regulation means what the agency says it means-and, thus, that the law is what the agency says it is. Then the judge is compelled to exercise his judicial authority to adjust private rights and obligations based on the agency's (mis)understanding of the law. If Auer were a statute, it would not be an exercise of Congress's "power (within limits) to tell the courts what classes of cases they may decide," or what relief they may supply, but a forbidden attempt "to prescribe or superintend how they decide those cases." And in the absence of any statute like that, this Court surely should not so freely give away to the executive branch its assigned responsibility to interpret the laws. "Abdication of responsibility is not part of the constitutional design."
In the end, Justice KAGAN's only real reply is this: However misguided it may be to hand over our interpretive powers to executive agencies, at least there isn't a mountain of empirical evidence showing that agencies have used this power to deliberately write "vague and open-ended" regulations to maximize their interpretive leeway. Ante , at 2421. But even this misses the point. Whether or not regulations are " 'designed' " to be vague, ibid. , many can be read in different ways, especially when new and unanticipated applications arise; cases like that come before the courts all the time. Without Auer 's shadow hanging over them, parties would receive a fair hearing before an impartial judge. The agency's interpretation would sometimes be rejected; and that, in turn, might lead it to solicit public comment on possible amendments to the regulation, which would provide an opportunity for public input that might produce better policy. But with Auer , there is no fair hearing and no need for the agency to amend the regulation through notice and comment. Whether purposeful or not, the agency's failure to write a clear regulation winds up increasing its power, allowing it to both write and interpret rules that bear the force of law-in the process uniting powers the Constitution deliberately separated and denying the people their right to an independent judicial determination of the law's meaning.
IV. Policy Arguments
Lacking support elsewhere, Justice KAGAN is forced to resort to policy arguments to defend Auer . But even the most sensible policy argument would not empower us to ignore the plain language of the APA or the demands of the Constitution. And as we've seen, those documents reflect a very different "policy" judgment by the people and their representatives. Besides, the policy arguments offered today are not just unpersuasive, they are troubling.
Take the first and boldest offering. Justice KAGAN suggests that determining the meaning of a regulation is largely a matter of figuring out what the "person who wrote it ... intended." Ante , at 2412. In this way, we're told, a legally binding regulation isn't all that different from "a memo or an e-mail"-if you "[w]ant to know what [it] means," you'd better "[a]sk its author." Ante , at 2412 - 2413. But the federal government's substantive rules are not like memos or e-mails; they are binding edicts that carry the force of law for all citizens. And if the rule of law means anything, it means that we are governed by the public meaning of the words found in statutes and regulations, not by their authors' private intentions. This is a vital part of what it means to have "a government of laws, and not of men." When judges interpret a regulation, what we are trying to get at, as Justice HOLMES explained long ago, is not the "particular intent" of those who wrote it, but "what [its] words would mean [to] a normal speaker of English ... in the circumstances in which they were used." If the best reading of the regulation turns out to be something other than what the agency claims to have intended, the agency is free to rewrite the regulation; but its secret intentions are not the law.
Nor does Justice KAGAN's account of the interpretive process even wind up supporting Auer . If a court's goal in interpreting a regulation really were to determine what its author "intended," Auer would be an almost complete mismatch with the goal. Agency personnel change over time, and an agency's policy priorities may shift dramatically from one presidential administration to another. Yet Auer tells courts that they must defer to the agency's current view of what the regulation ought to mean, which may or may not correspond to the views of those who actually wrote it. If interpreting a regulation really were just like reading an e-mail, Auer would be like seeking guidance about the e-mail's meaning, years or decades later, from the latest user of the computer from which the e-mail was sent. We've repeatedly rejected that approach in the context of statutory interpretation. While Members of this Court sometimes disagree about the usefulness of pre-enactment legislative history, we all agree that legislators' statements about the meaning of an already-enacted statute are not "a legitimate tool of statutory interpretation,' " much less a controlling one. So why on earth would we give "controlling weight" to an agency's statements about the meaning of an already-promulgated regulation?
Proceeding farther down this doubtful path, Justice KAGAN asserts that resolving ambiguities in a regulation "sounds more in policy than in law" and is thus a task more suited to executive officials than judges. Ante , at 2413. But this claim, too, contradicts a basic premise of our legal order: that we are governed not by the shifting whims of politicians and bureaucrats, but by written laws whose meaning is fixed and ascertainable-if not by all members of the public, then at least by lawyers who can advise them and judges who must apply the law to individual cases guided by the neutral principles found in our traditional tools of interpretation. The text of the regulation is treated as the law, and the agency's policy judgment has the force of law only insofar as it is embodied in the regulatory text. If "new issues demanding new policy calls" arise that aren't addressed in existing regulations, ante , at 2413, the solution is for the agency to promulgate new regulations using the notice-and-comment procedures set forth in the APA. But an agency has no warrant to compel judges to change the law to conform with the agency's current policy preferences.
To be sure, during the period of Auer 's ascendancy some suggested that the meaning of written law is always "radically indeterminate" and that judges expounding it are "for the most part, guided by policy-not text." And in an environment like that it was perhaps thought a small step to conclude that, if legal disputes are going to be resolved on political grounds, then they ought to be resolved by real politicians in the executive branch rather than ersatz politicians on the bench. But the proposed cure proved worse than the disease. Arguments like these surrendered the judgment embodied in our Constitution and the APA that courts owe the people they serve their independent legal judgment about the law's meaning. Besides, we've long since come to realize that the real cure doesn't lie in turning judges into rubber stamps for politicians, but in redirecting the judge's interpretive task back to its roots, away from open-ended policy appeals and speculation about legislative intentions and toward the traditional tools of interpretation judges have employed for centuries to elucidate the law's original public meaning. Today it is even said that we judges are, to one degree or another, "all textualists now."
Pursuing a more modest tack, Justice KAGAN next suggests that Auer is justified by the respect due agencies' "technical" expertise. Ante , at 2413 - 2414. But no one doubts that courts should pay close attention to an expert agency's views on technical questions in its field. Just as a court "would want to know what John Henry Wigmore said about an issue of evidence law [or] what Arthur Corbin thought about a matter of contract law," so too should courts carefully consider what the Food and Drug Administration thinks about how its prescription drug safety regulations operate. The fact remains, however, that even agency experts "can be wrong; even Homer nodded." Skidmore and the traditional approach it embodied recognized both of these facts of life long ago, explaining that, while courts should of course afford respectful consideration to the expert agency's views, they must remain open to competing expert and other evidence supplied in an adversarial setting. Respect for an agency's technical expertise demands no more.
Justice KAGAN's final policy argument is that Auer promotes "consistency" and "uniformity" in the interpretation of regulations. Ante , at 2413 - 2414. If we let courts decide what regulations mean, she warns, they might disagree, and it might take some time for higher courts to resolve those disagreements. But consistency and uniformity are hardly grounds on which Auer 's advocates should wish to fight. The judicial process is how we settle disputes about the meaning of written law, and our judicial system is more than capable of producing a single, uniform, and stable interpretation that will last until the regulation is amended or repealed. Meanwhile, under Auer courts often disagree about whether deference is warranted, see supra , at 2430 - 2431, and a regulation's "meaning" can be transformed with the stroke of a pen any time there is a new presidential administration. "Consistency," "uniformity," and stability in the law are hardly among Auer 's crowning achievements.
V. Stare Decisis
In the end, a majority declines to endorse Justice KAGAN's arguments and insists only that, even if Auer is not "right and well-reasoned," we're stuck with it because of the respect due precedent. Ante , at 2423.
But notice: While pretending to bow to stare decisis , the majority goes about reshaping our precedent in new and experimental ways. True, the majority admits, this Court has in the past accorded Auer deference " 'reflexive[ly],' " "without significant analysis of the underlying regulation" or "careful attention to [its] nature and context," and encouraged lower courts to do the same. Ante , at 2414. But no more. From now on, the majority says, not only must judges "exhaust all the 'traditional tools' of construction" to decide whether the agency's interpretation is "reasonable," they must also make "an independent inquiry into whether the character and context of the agency interpretation" justifies deference. Ante , at 2416. The majority candidly admits that it finds it impossible to "reduce" this new inquiry "to any exhaustive test," so it settles for laying out some "markers." Ante , at 2416 - 2417. What are the markers? We are told that courts should often-but not always-withhold deference from an interpretation offered by mid-level agency staff; often-but not always-withhold deference from a nontechnical, "prosaic-seeming" interpretation; often-but not always-withhold deference from an interpretation advanced for the first time in an amicus brief; and often-but not always-withhold deference from an interpretation that conflicts with an earlier one. See ante , at 2416 - 2418. The only certainty in all this is that the majority isn't really much moved by stare decisis ; everyone recognizes, to one degree or another, that Auer cannot stand. And between our remaining choices-continuing to make up new deference rules, or returning to the text of the APA and the approach to judicial review that prevailed for most of our history-the answer should have been easy.
A
There are serious questions about whether stare decisis should apply here at all. To be sure, Auer 's narrow holding about the meaning of the regulation at issue in that case may be entitled to stare decisis effect. The same may be true for the specific holdings in other cases where this Court has applied Auer deference. But does stare decisis extend beyond those discrete holdings and bind future Members of this Court to apply Auer 's broader deference framework?
It seems doubtful that stare decisis demands that much. We are not dealing with a precedent that purported to settle the meaning of a single statute or regulation or resolve a particular case. The Auer doctrine claims to do much more than that-to prescribe an interpretive methodology governing every future dispute over the meaning of every regulation. In other contexts, we do not regard statements in our opinions about such generally applicable interpretive methods, like the proper weight to afford historical practice in constitutional cases or legislative history in statutory cases, as binding future Justices with the full force of horizontal stare decisis . Why, then, should we regard as binding Auer 's statements about the weight to afford agencies' interpretations in regulatory cases? To the extent Auer purports to dictate "the interpretive inferences that future Justices must draw in construing statutes and regulations that the Court has never engaged," it may well "exceed the limits of stare decisis."
Even if our past expressions of support for Auer deference bear some precedential force, they certainly are not entitled (as the majority suggests, ante , at 2422 - 2423) to the special, heightened form of stare decisis we reserve for narrow statutory decisions. In contrast to precedents that fix the meaning of particular statutes and generate reliance interests in the process, the Auer doctrine is an abstract default rule of interpretive methodology that settles nothing of its own force. And this Court has recognized that it is "inconsistent with the Court's proper role" to insist that Congress exercise its legislative power to overturn such erroneous and judicially invented "default rule[s]." That should be especially so here because Auer 's default rule undermines judicial independence, which this Court has a special responsibility to defend.
Nor is it entirely clear that Congress could overturn the Auer doctrine legislatively. The majority describes Auer as a "presumption" about how courts should interpret statutes granting rulemaking power to agencies. Ante , at 2414 -1215. Congress can, of course, rebut the presumption on a statute-by-statute basis, or even for all past statutes. But can Congress eliminate the Auer presumption for future statutes? Perhaps-but legislation like that would raise questions, which the majority does not address, about the ability of one Congress to entrench its preferences by attempting to control the interpretation of legislation enacted by future Congresses.
We should not be in the business of tossing " 'balls ... into Congress's court,' " ante , at 2422, that would explode with constitutional questions if Congress tried to pick them up.
B
Even assuming for argument's sake that standard stare decisis considerations apply, they still do not require us to retain Auer . Even the majority implicitly recognizes this much, as it proceeds to vacate a lower court judgment that faithfully applied Auer and instruct that court to try again using the majority's new directions. If stare decisis allows us so freely to remodel Auer , it's hard to see on what account it might require us to retain it.
We do not lightly overturn precedents, and we seek always to honor the thoughtful guidance of those who have preceded us. At the same time, everyone agrees that stare decisis is not an " 'inexorable command,' " and this Court should not always remain bound to decisions whose "rationale no longer withstands 'careful analysis.' " Recognizing the need for balance in this area, the Court has, over time, fashioned principles to guide our treatment of precedent. Those principles call on us to consider factors such as "the quality of [the precedent's] reasoning, the workability of the rule it established, its consistency with other related decisions, developments since the decision was handed down, and reliance on the decision." As applied to Auer , all of these considerations weigh strongly in favor of bidding farewell to the doctrine rather than keeping it on life support.
First , we've already seen that no persuasive rationale supports Auer . From its humble origins as an unexplained bit of dictum in a wartime case about emergency price controls, the Auer doctrine evolved into a rigid rule of deference-all without any serious attempt by this Court to rationalize it or reconcile it with the APA, the Constitution, or traditional modes of judicial review. See Part I, supra . Even its fiercest defenders acknowledge that " Auer deference has not remained static over time" and urge the Court to continue to "shape" and "refin[e]" the doctrine. Today's decision attempts just such a "refinement" by hedging Auer with new qualifications and limitations. See ante , at 2414 - 2418. This shifting ground "undermin[es] the force of stare decisis ."
Second , today's ruling all but admits that Auer has not proved to be a workable standard. Even before this latest overhaul, uncertainty surrounding Auer 's scope and application had caused many to question whether there was any "practical benefit" in continuing to apply Auer "rather than a less deferential but more flexible and open-ended standard like Skidmore ." See supra , at 2430 - 2431. Nor does the majority's kinder, gentler version of Auer promise to solve the problem. On the contrary, its newly mandated inquiry into the "character and context of the agency interpretation," which it admits cannot be reduced "to any exhaustive test," ante , at 2416, seems destined only to compound the confusion. See supra , at 2444 - 2445. Many words come to mind to describe the tasks we assign lower court judges today, but "workable" is not among them.
Third , the Auer doctrine is, as we have also already seen, out of step with how courts normally interpret written laws. When we interpret a regulation, we typically (at least when there is no agency say-so) proceed in the same way we would when interpreting any other written law: We "begin our interpretation of the regulation with its text" and, if the text is unclear, we "turn to other canons of interpretation" and tie-breaking rules to resolve the ambiguity. And when we interpret an ambiguous statute , we never ask what current members of Congress think it means; in fact, we've held unanimously that legislators' post-enactment views about a statute's meaning are not even a " 'legitimate tool of statutory interpretation.' " Affording "controlling weight" to regulators' post-promulgation views about the meaning of an ambiguous regulation is hard to square with these usual judicial practices.
Fourth , the explosive growth of the administrative state over the last half-century has exacerbated Auer 's potential for mischief. When the Court first uttered its dictum in Seminole Rock , the administrative state was new and the APA was only a gleam in Congress's eye. Even 20 years later, when the Court began reviving the Seminole Rock dictum and turning it into a new deference doctrine, it was not yet apparent how pervasive the administrative state would become in the lives of ordinary Americans. Now, in the 21st century, "[t]he administrative state wields vast power and touches almost every aspect of daily life." Among other things, it produces " 'reams of regulations' " -so many that they dwarf the statutes enacted by Congress. As of 2018, the Code of Federal Regulations filled 242 volumes and was about 185,000 pages long, almost quadruple the length of the most recent edition of the U. S. Code. And agencies add thousands more pages of regulations every year. Whether you think this administrative fecundity is a good or a bad thing, it surely means that the cost of continuing to deny citizens an impartial judicial hearing on the meaning of disputed regulations has increased dramatically since this Court started down this road.
Fifth , Auer has generated no serious reliance interests. The only parties that might have relied on Auer 's promise of deference are agencies that use post hoc interpretations to bypass the APA's notice-and-comment procedures. But this Court has never suggested that the convenience of government officials should count in the balance of stare decisis , especially when weighed against the interests of citizens in a fair hearing before an independent judge and a stable and knowable set of laws. In short, " '[t]he fact that [agencies] may view [ Auer deference] as an entitlement does not establish the sort of reliance interest that could outweigh the countervailing interest' " of all citizens " 'in having their constitutional rights fully protected.' "
Coming closer to the mark, the majority worries that "abandoning Auer deference would cast doubt on many settled constructions" of regulations on which regulated parties might have relied. Ante , at 2406. But, again, decisions construing particular regulations might retain stare decisis effect even if the Court announced that it would no longer adhere to Auer 's interpretive methodology. After all, decisions construing particular statutes continue to command respect even when the interpretive methods that led to those constructions fall out of favor. Besides, if the majority is correct that abandoning Auer would require revisiting regulatory constructions that were upheld based on Auer deference, the majority's revision of Auer will yield exactly the same result. There are innumerable lower court decisions that have followed this Court's lead and afforded Auer deference mechanically, without conducting the inquiry the Court now holds is required. Today's ruling casts no less doubt on the continuing validity of those decisions than we would if we simply moved on from Auer .
*
Overruling Auer would have taken us directly back to Skidmore , liberating courts to decide cases based on their independent judgment and "follow [the] agency's [view] only to the extent it is persuasive." By contrast, the majority's attempt to remodel Auer 's rule into a multi-step, multi-factor inquiry guarantees more uncertainty and much litigation. Proceeding in this convoluted way burdens our colleagues on the lower courts, who will have to spend time debating deference that they could have spent interpreting disputed regulations. It also continues to deny the people who come before us the neutral forum for their disputes that they rightly expect and deserve.
But this cloud may have a silver lining: The majority leaves Auer so riddled with holes that, when all is said and done, courts may find that it does not constrain their independent judgment any more than Skidmore . As reengineered, Auer requires courts to "exhaust all the 'traditional tools' of construction" before they even consider deferring to an agency. Ante , at 2415 - 2416. And those tools include all sorts of tie-breaking rules for resolving ambiguity even in the closest cases. Courts manage to make do with these tools in many other areas of the law, so one might hope they will hardly ever find them inadequate here. And if they do, they will now have to conduct a further inquiry that includes so few firm guides and so many cryptic "markers" that they will rarely, if ever, have to defer to an agency regulatory interpretation that differs from what they believe is the best and fairest reading.
But whatever happens, this case hardly promises to be this Court's last word on Auer . If today's opinion ends up reducing Auer to the role of a tin god-officious, but ultimately powerless-then a future Court should candidly admit as much and stop requiring litigants and lower courts to pay token homage to it. Alternatively, if Auer proves more resilient, this Court should reassert its responsibility to say what the law is and afford the people the neutral forum for their disputes that they expect and deserve.
Justice KAVANAUGH, with whom Justice ALITO joins, concurring in the judgment.
I agree with Justice GORSUCH's conclusion that the Auer deference doctrine should be formally retired. I write separately to emphasize two points.
First , I agree with THE CHIEF JUSTICE that "the distance between the majority and Justice GORSUCH is not as great as it may initially appear." Ante, at 2424 (opinion concurring in part). The majority's approach in Part II-B of its opinion closely resembles the argument advanced by the Solicitor General to "clarif[y] and narro[w]" Auer . Brief for Respondent 15. Importantly, the majority borrows from footnote 9 of this Court's opinion in Chevron to say that a reviewing court must "exhaust all the 'traditional tools' of construction" before concluding that an agency rule is ambiguous and deferring to an agency's reasonable interpretation. Ante, at 2443 (quoting Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc. , 467 U.S. 837, 843, n. 9, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984) ). If a reviewing court employs all of the traditional tools of construction, the court will almost always reach a conclusion about the best interpretation of the regulation at issue. After doing so, the court then will have no need to adopt or defer to an agency's contrary interpretation. In other words, the footnote 9 principle, taken seriously, means that courts will have no reason or basis to put a thumb on the scale in favor of an agency when courts interpret agency regulations.
Formally rejecting Auer would have been a more direct approach, but rigorously applying footnote 9 should lead in most cases to the same general destination. Umpires in games at Wrigley Field do not defer to the Cubs manager's in-game interpretation of Wrigley's ground rules. So too here.
To be sure, some cases involve regulations that employ broad and open-ended terms like "reasonable," "appropriate," "feasible," or "practicable." Those kinds of terms afford agencies broad policy discretion, and courts allow an agency to reasonably exercise its discretion to choose among the options allowed by the text of the rule. But that is more State Farm than Auer . See Motor Vehicle Mfrs. Assn. of United States, Inc. v. State Farm Mut. Automobile Ins. Co. , 463 U.S. 29, 103 S.Ct. 2856, 77 L.Ed.2d 443 (1983).
In short, after today's decision, a judge should engage in appropriately rigorous scrutiny of an agency's interpretation of a regulation, and can simultaneously be appropriately deferential to an agency's reasonable policy choices within the discretion allowed by a regulation.
Second , I also agree with THE CHIEF JUSTICE that "[i]ssues surrounding judicial deference to agency interpretations of their own regulations are distinct from those raised in connection with judicial deference to agency interpretations of statutes enacted by Congress." Ante, at 2425. Like THE CHIEF JUSTICE, "I do not regard the Court's decision" not to formally overrule Auer " to touch upon the latter question." Ibid.
In case you're wondering, the regulatory definition of active moiety is "[t]he molecule or ion, excluding those appended portions of the molecule that cause the drug to be an ester, salt (including a salt with hydrogen or coordination bonds), or the noncovalent derivative (such as a complex, chelate, or clathrate) of the molecule, responsible for the physiological or pharmacological action of the drug substance." 21 C.F.R. § 314.3(b) (2018).
See, e.g. , PLIVA, Inc. v. Mensing , 564 U.S. 604, 613, 131 S.Ct. 2567, 180 L.Ed.2d 580 (2011) ; Chase Bank USA, N. A. v. McCoy , 562 U.S. 195, 208-210, 131 S.Ct. 871, 178 L.Ed.2d 716 (2011) ; Coeur Alaska, Inc. v. Southeast Alaska Conservation Council , 557 U.S. 261, 274-275, 129 S.Ct. 2458, 174 L.Ed.2d 193 (2009) ; Riegel v. Medtronic, Inc. , 552 U.S. 312, 328, 128 S.Ct. 999, 169 L.Ed.2d 892 (2008) ; Long Island Care at Home, Ltd. v. Coke , 551 U.S. 158, 171, 127 S.Ct. 2339, 168 L.Ed.2d 54 (2007) ; Washington State Dept. of Social and Health Servs. v. Guardianship Estate of Keffeler , 537 U.S. 371, 387-388, 123 S.Ct. 1017, 154 L.Ed.2d 972 (2003).
Our (pre-Auer ) decisions applying Seminole Rock deference are legion. See, e.g. , Shalala v. Guernsey Memorial Hospital , 514 U.S. 87, 94-95, 115 S.Ct. 1232, 131 L.Ed.2d 106 (1995) ; Thomas Jefferson Univ. v. Shalala , 512 U.S. 504, 512, 114 S.Ct. 2381, 129 L.Ed.2d 405 (1994) ; Stinson v. United States , 508 U.S. 36, 44-45, 113 S.Ct. 1913, 123 L.Ed.2d 598 (1993) ; INS v. National Center for Immigrants' Rights, Inc. , 502 U.S. 183, 189-190, 112 S.Ct. 551, 116 L.Ed.2d 546 (1991) ; Robertson v. Methow Valley Citizens Council , 490 U.S. 332, 358-359, 109 S.Ct. 1835, 104 L.Ed.2d 351 (1989) ; Mullins Coal Co. of Va. v. Director, Office of Workers' Compensation Programs , 484 U.S. 135, 159, 108 S.Ct. 427, 98 L.Ed.2d 450 (1987) ; Lyng v. Payne , 476 U.S. 926, 939, 106 S.Ct. 2333, 90 L.Ed.2d 921 (1986) ; Fidelity Fed. Sav. & Loan Assn. v. de la Cuesta , 458 U.S. 141, 158, n. 13, 102 S.Ct. 3014, 73 L.Ed.2d 664 (1982) ; Blanding v. DuBose , 454 U.S. 393, 401, 102 S.Ct. 715, 70 L.Ed.2d 576 (1982) (per curiam ); Ford Motor Credit Co. v. Milhollin , 444 U.S. 555, 566, 100 S.Ct. 790, 63 L.Ed.2d 22 (1980) ; United States v. Larionoff , 431 U.S. 864, 872, 97 S.Ct. 2150, 53 L.Ed.2d 48 (1977) ; Northern Indiana Public Service Co. v. Porter County Chapter of Izaak Walton League of America, Inc. , 423 U.S. 12, 15, 96 S.Ct. 172, 46 L.Ed.2d 156 (1975) (per curiam ); Ehlert v. United States , 402 U.S. 99, 105, 91 S.Ct. 1319, 28 L.Ed.2d 625 (1971) ; INS v. Stanisic , 395 U.S. 62, 72, 89 S.Ct. 1519, 23 L.Ed.2d 101 (1969) ; Thorpe v. Housing Authority of Durham , 393 U.S. 268, 276, 89 S.Ct. 518, 21 L.Ed.2d 474 (1969) ; Udall v. Tallman , 380 U.S. 1, 16-17, 85 S.Ct. 792, 13 L.Ed.2d 616 (1965).
The proper understanding of the scope and limits of the Auer doctrine is, of course, not set out in any of the opinions that concur only in the judgment.
For a similar reason, this Court has denied Auer deference when an agency interprets a rule that parrots the statutory text. See Gonzales v. Oregon , 546 U.S. 243, 257, 126 S.Ct. 904, 163 L.Ed.2d 748 (2006). An agency, we explained, gets no "special authority to interpret its own words when, instead of using its expertise and experience to formulate a regulation, it has elected merely to paraphrase the statutory language." Ibid.
The general rule, then, is not to give deference to agency interpretations advanced for the first time in legal briefs. See Bowen , 488 U.S. at 212-213, 109 S.Ct. 468. But we have not entirely foreclosed that practice. Auer itself deferred to a new regulatory interpretation presented in an amicus curiae brief in this Court. There, the agency was not a party to the litigation, and had expressed its views only in response to the Court's request. "[I]n the circumstances," the Court explained, "[t]here [was] simply no reason to suspect that the interpretation [did] not reflect the agency's fair and considered judgment on the matter in question." Auer , 519 U.S. at 462, 117 S.Ct. 905.
519 U.S. 452, 117 S.Ct. 905, 137 L.Ed.2d 79 (1997).
Larkin & Slattery, The World After Seminole Rock and Auer , 42 Harv. J. L. & Pub. Pol'y 625, 641 (2019) (internal quotation marks omitted).
See Knudsen & Wildermuth, Unearthing the Lost History of Seminole Rock , 65 Emory L. J. 47, 55, 65, 68 (2015) (Lost History).
St. Joseph Stock Yards Co. v. United States , 298 U.S. 38, 73, 56 S.Ct. 720, 80 L.Ed. 1033 (1936) (concurring opinion). See also FTC v. Gratz , 253 U.S. 421, 427, 40 S.Ct. 572, 64 L.Ed. 993 (1920) ; ICC v. Union Pacific R. Co. , 222 U.S. 541, 547, 32 S.Ct. 108, 56 L.Ed. 308 (1912) ; Belden v. Chase , 150 U.S. 674, 698, 14 S.Ct. 264, 37 L.Ed. 1218 (1893) ; Decatur v. Paulding , 14 Pet. 497, 515, 39 U.S. 497, 10 L.Ed. 559 (1840) ; accord, Woolhandler, Judicial Deference to Administrative Action-A Revisionist History, 43 Admin. L. Rev. 197, 206-207 (1991).
Bamzai, The Origins of Judicial Deference to Executive Interpretation, 126 Yale L. J. 908, 930-947 (2017) (Origins).
Id. , at 943, 962; cf. NLRB v. Noel Canning , 573 U.S. 513, 572-573, 134 S.Ct. 2550, 189 L.Ed.2d 538 (2014) (SCALIA, J., concurring in judgment) (an "open, widespread, and unchallenged" governmental practice can "guide [courts'] interpretation" of an ambiguous text, but it cannot "alter" the meaning of that text); Edward's Lessee v. Darby , 12 Wheat. 206, 210, 6 L.Ed. 603 (1827) ("In the construction of a doubtful and ambiguous law, the cotemporaneous construction of those who were called upon to act under the law, and were appointed to carry its provisions into effect, is entitled to very great respect").
169 U.S. 331, 18 S.Ct. 374, 42 L.Ed. 767.
Id. , at 342, 18 S.Ct. 374.
Id. , at 342-343, 18 S.Ct. 374.
Cf. Newman, How Courts Interpret Regulations, 35 Cal. L. Rev. 509, 521, and n. 78 (1947) (noting that Eaton suggested administrative interpretations could be " 'persuasive' but not binding").
323 U.S. 134, 65 S.Ct. 161, 89 L.Ed. 124.
Id. , at 136-137, 65 S.Ct. 161. Much of the legal analysis supporting this conclusion was contained in the companion case, Armour & Co. v. Wantock , 323 U.S. 126, 65 S.Ct. 165, 89 L.Ed. 118 (1944), which made no mention of any administrative interpretations. Id. , at 129-134, 65 S.Ct. 165 ; see Skidmore , 323 U.S. at 136, 65 S.Ct. 161 (citing the "reasons set forth in the Armour case decided herewith").
Id. , at 139, 65 S.Ct. 161.
Id. , at 140, 65 S.Ct. 161 ; see also id. , at 139, 65 S.Ct. 161 (the agency's views "are not, of course, conclusive, even in the cases with which they directly deal" and do not "bin[d] a district court's processes, as an authoritative pronouncement of a higher court might do").
Davis, Administrative Rules-Interpretative, Legislative, and Retroactive, 57 Yale L. J. 919, 936-939, and n. 86 (1948) ; see also K. Davis, Administrative Law § 249, p. 901 (1951) ("[S]ubstitution of judicial judgment on the content of interpretative rules is always permissible, even though the reviewing court may give 'weight' or 'great weight' to the rule. The best guide may be the Court's formula in Skidmore ...").
325 U.S. 410, 65 S.Ct. 1215, 89 L.Ed. 1700.
Id. , at 414, 65 S.Ct. 1215.
Id. , at 414-417, 65 S.Ct. 1215.
Id. , at 417, 65 S.Ct. 1215.
See Davis, Scope of Review of Federal Administrative Action, 50 Colum. L. Rev. 559, 597 (1950).
Lost History 60; see also Anthony, The Supreme Court and the APA: Sometimes They Just Don't Get It, 10 Admin. L. J. Am. U. 1, 12 (1996).
325 U.S. at 417-418, 65 S.Ct. 1215 ; see Pojanowski, Revisiting Seminole Rock , 16 Geo. J. L. & Pub. Pol'y 87, 88 (2018) ("A closer look at Seminole Rock suggests an unremarkable application of the less-deferential standard of review of Skidmore ").
Lost History 94-97; see Pojanowski, supra , at 92-96.
Lost History 65-68.
Southern Goods Corp. v. Bowles , 158 F.2d 587, 590 (1946).
Ibid.
380 U.S. 1, 4, 17-18, 85 S.Ct. 792, 13 L.Ed.2d 616 (accepting a regulatory interpretation by the Secretary of the Interior that was consistent, widely disseminated, and heavily relied upon, while not suggesting any disagreement with the Secretary's interpretation).
Lost History 80.
See generally id. , at 68-92, 98.
Id. , at 53, 85 S.Ct. 792.
Scalia, Judicial Deference to Administrative Interpretations of Law, 1989 Duke L. J. 511, 520.
Decker v. Northwest Environmental Defense Center , 568 U.S. 597, 613, 133 S.Ct. 1326, 185 L.Ed.2d 447 (2013) ; see Pauley v. BethEnergy Mines, Inc. , 501 U.S. 680, 702, 111 S.Ct. 2524, 115 L.Ed.2d 604 (1991) (the agency's interpretation "need not be the best or most natural one by grammatical or other standards").
Hickman & Thomson, The Chevron ization of Auer , 103 Minn. L. Rev. Headnotes 103, 105 (2019).
See Kavanaugh, Fixing Statutory Interpretation, 129 Harv. L. Rev. 2118, 2134-2144 (2016).
Christopher v. SmithKline Beecham Corp. , 567 U.S. 142, 155, 132 S.Ct. 2156, 183 L.Ed.2d 153 (2012) (alterations and internal quotation marks omitted).
Leske, Splits in the Rock : The Conflicting Interpretations of the Seminole Rock Deference Doctrine by the U. S. Courts of Appeals, 66 Admin. L. Rev. 787, 832 (2014) ; see Hickman & Thomson, supra , at 111 (noting a "glut of recent cases in which members of the same court are openly divided on the proper application of Auer ").
See Perez v. Mortgage Bankers Assn. , 575 U. S. 92, ---- - ----, 135 S.Ct. 1199, 1210-1211, 191 L.Ed.2d 186 (2015) (ALITO, J., concurring in part and concurring in judgment); id. , at ---- - ----, 135 S.Ct. at 1211-1213 (SCALIA, J., concurring in judgment); id. , at ---- - ----, 135 S.Ct. at 1216-1225 (THOMAS, J., concurring in judgment) ; Decker , 568 U.S. at 615-616, 133 S.Ct. 1326 (ROBERTS, C. J., joined by ALITO, J., concurring); id. , at 616-621, 133 S.Ct. 1326 (SCALIA, J., concurring in part and dissenting in part); Talk America, Inc. v. Michigan Bell Telephone Co. , 564 U.S. 50, 67-69, 131 S.Ct. 2254, 180 L.Ed.2d 96 (2011) (SCALIA, J., concurring); see also Kavanaugh, Keynote Address: Justice Scalia and Deference 19:06 (June 2, 2016), http://vimeo.com/169758593 (predicting ''that Auer will someday be overruled and that Justice SCALIA's dissent in Decker will be the law of the land").
See, e.g. , Forrest Gen. Hospital v. Azar , 926 F.3d 221, ----, 2019 WL 2417409, *7 (CA5 2019) ; San Diego Gas & Elec. Co. v. FERC , 913 F.3d 127, 145, n. 4 (CADC 2019) (RANDOLPH, J., dissenting); United States v. Havis , 907 F.3d 439, 450-452 (CA6 2018) (THAPAR, J., concurring), vacated, 921 F.3d 628, on reh'g en banc, 927 F.3d 382, 2019 WL 2376070 (CA6 2019) ; Marsh v. J. Alexander's LLC , 905 F.3d 610, 652-653 (CA9 2018) (IKUTA, J., dissenting); Egan v. Delaware River Port Auth. , 851 F.3d 263, 279 (CA3 2017) (JORDAN, J., concurring in judgment); Perez v. Loren Cook Co. , 803 F.3d 935, 938, n. 2 (CA8 2015) (en banc); Johnson v. McDonald , 762 F.3d 1362, 1366-1368 (CA Fed. 2014) (O'MALLEY, J., concurring); Exelon Generation Co. v. Local 15, Int'l Brotherhood of Elec. Workers, AFL-CIO , 676 F.3d 566, 576, n. 5 (CA7 2012).
See, e.g. , Hickman & Thomson, supra , at 111-113; Adler, Auer Evasions, 16 Geo. J. L. & Pub. Pol'y 1, 26 (2018) ; Pojanowski, 16 Geo. J. L. & Pub. Pol'y, at 99 ; Knudsen & Wildermuth, Lessons From the Lost History of Seminole Rock , 22 Geo. Mason L. Rev. 647, 667 (2015) ; Leske, supra , at 789-793; Molot, The Judicial Perspective in the Administrative State: Reconciling Modern Doctrines of Deference with the Judiciary's Structural Role, 53 Stan. L. Rev. 1, 108-110 (2000) ; Anthony, 10 Admin. L. J., at 4-12 ; Manning, Constitutional Structure and Judicial Deference to Agency Interpretations of Agency Rules, 96 Colum. L. Rev. 612, 696 (1996).
Kisor v. Shulkin , 869 F.3d 1360, 1367 (2017).
Id. , at 1368.
Kisor v. Shulkin , 880 F.3d 1378, 1379 (CA Fed. 2018) (opinion of O'MALLEY, J.).
586 U. S. ----, 139 S.Ct. 657, 202 L.Ed.2d 491 (2018).
Abbott Laboratories v. Gardner , 387 U.S. 136, 140, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967).
5 U.S.C. § 706.
Ibid. ; see § 551(13) (defining "agency action").
The case before us doesn't arise under the APA, but the statute that governs here is plainly modeled on the APA and contains essentially the same commands. It directs a reviewing court to "decide all relevant questions of law" and to "set aside any regulation or any interpretation thereof " that is "not in accordance with law." 38 U.S.C. § 7292(d)(1).
See, e.g. , § 706(2)(A) (arbitrary and capricious, abuse of discretion); § 706(2)(E) (substantial evidence); see also Universal Camera Corp. v. NLRB , 340 U.S. 474, 482, n. 14, 71 S.Ct. 456, 95 L.Ed. 456 (1951) (noting that as originally proposed, the APA's judicial review provision would have included an explicit requirement for courts to accord "due weight" to "the experience, technical competence, specialized knowledge, and legislative policy of the agency involved as well as the discretionary authority conferred upon it" (internal quotation marks omitted)).
Duffy, Administrative Common Law in Judicial Review, 77 Texas L. Rev. 113, 194-195 (1998) ; see Merrill, Capture Theory and the Courts: 1967-1983, 72 Chi.-Kent L. Rev. 1039, 1085-1086 (1997) (noting the "embarrassing" fact that "the APA appears to compel th[e] conclusion" that "courts should decide all questions of law de novo"). See also, e.g. , Origins 985; Mashaw, Rethinking Judicial Review of Administrative Action: A Nineteenth Century Perspective, 32 Cardozo L. Rev. 2241, 2243 (2011) ; Garrett, Legislating Chevron, 101 Mich. L. Rev. 2637, 2640 (2003) ; Molot, Reexamining Marbury in the Administrative State: A Structural and Institutional Defense of Judicial Power over Statutory Interpretation, 96 Nw. U. L. Rev. 1239, 1249 (2002) ; Anthony, 10 Admin. L. J. Am. U., at 9-10 ; Farina, Statutory Interpretation and the Balance of Power in the Administrative State, 89 Colum. L. Rev. 452, 473, and n. 85 (1989) ; Starr, Sunstein, Willard, & Morrison, Judicial Review of Administrative Action in a Conservative Era, 39 Admin. L. Rev. 353, 368 (1987) (remarks of Prof. Sunstein); Pierce & Shapiro, Political and Judicial Review of Agency Action, 59 Texas L. Rev. 1175, 1182 (1981) ; 4 K. Davis, Administrative Law § 30.01, pp. 190-191 (1958).
545 U.S. 967, 125 S.Ct. 2688, 162 L.Ed.2d 820 (2005).
See, e.g. , In re Lovin , 652 F.3d 1349, 1353-1354 (CA Fed. 2011) ; Levy v. Sterling Holding Co. , 544 F.3d 493, 502-503 (CA3 2008).
18 U.S.C. § 3553(a).
15 U.S.C. § 16(e)(1).
See Perez , 575 U. S., at ---- - ----, 135 S.Ct., at 1203-1204.
United States v. Nixon , 418 U.S. 683, 695-696, 94 S.Ct. 3090, 41 L.Ed.2d 1039 (1974).
Perez , 575 U. S., at ----, 135 S.Ct., at 1221 (THOMAS, J., concurring in judgment).
Ibid. ; see id. , at ----, 135 S.Ct., at 1211-1212 (SCALIA, J., concurring in judgment) (Auer lets agencies "use [interpretive] rules not just to advise the public, but also to bind them").
See INS v. Chadha , 462 U.S. 919, 951, 954, 103 S.Ct. 2764, 77 L.Ed.2d 317 (1983).
Brief for Administrative Law Scholars as Amici Curiae 9-10, n. 4.
See Perez , 575 U. S., at ----, 135 S.Ct., at 1206-1207 ; Marseilles Land & Water Co. v. FERC , 345 F.3d 916, 920 (CADC 2003).
Perez , 575 U. S., at ----, 135 S.Ct., at 1211-1212 (SCALIA, J., concurring in judgment).
Milner v. Department of Navy , 562 U.S. 562, 572, 131 S.Ct. 1259, 179 L.Ed.2d 268 (2011).
McCarran, Improving "Administrative Justice": Hearings and Evidence; Scope of Judicial Review, 32 A. B. A. J. 827, 893 (1946).
H. R. Rep. No. 1980, 79th Cong., 2d Sess., 44 (1946); accord, S. Rep. No. 752, 79th Cong., 1st Sess., 28 (1945); 92 Cong. Rec. 5654 (1946) (statement of Rep. Walter). See also Shepherd, Fierce Compromise: The Administrative Procedure Act Emerges from New Deal Politics, 90 Nw. U. L. Rev. 1557, 1662-1666 (1996).
Universal Camera , 340 U.S. at 490, 71 S.Ct. 456 (emphasis added).
Dickinson, Administrative Procedure Act: Scope and Grounds of Broadened Judicial Review, 33 A. B. A. J. 434, 516 (1947). See also Origins 990-991 (critiquing the Attorney General's characterization of the APA as "inherently question begging" and unsupported by any analysis).
Adler, 16 Geo. J. L. & Pub. Pol'y, at 7 ; see Lost History 63; Pojanowski, 16 Geo. J. L. & Pub. Pol'y, at 95-96.
Davis, 50 Colum. L. Rev., at 597-598; see also Davis, 57 Yale L. J., at 936, n. 72 ; Newman, 35 Cal. L. Rev., at 521-522.
Hearings on H. R. 184 et al. before the House Committee on the Judiciary, 79th Cong., 1st Sess., 38 (1945); see Origins 988-989.
Patchak v. Zinke , 583 U. S. ----, ----, 138 S.Ct. 897, 904, 200 L.Ed.2d 92 (2018) (plurality opinion) (quoting Massachusetts v. Mellon , 262 U.S. 447, 488, 43 S.Ct. 597, 67 L.Ed. 1078 (1923) ).
Marbury v. Madison , 1 Cranch 137, 177, 2 L.Ed. 60 (1803) ; see also Wayman v. Southard , 10 Wheat. 1, 46, 6 L.Ed. 253 (1825) ("[T]he legislature makes, the executive executes, and the judiciary construes the law"); The Federalist No. 78, p. 467 (C. Rossiter ed. 1961) (A. Hamilton).
Miller v. Johnson , 515 U.S. 900, 922, 115 S.Ct. 2475, 132 L.Ed.2d 762 (1995).
See Declaration of Independence ¶11.
Plaut v. Spendthrift Farm, Inc. , 514 U.S. 211, 220-221, 115 S.Ct. 1447, 131 L.Ed.2d 328 (1995).
The Federalist No. 78, at 466.
Palmore v. United States , 411 U.S. 389, 412, 93 S.Ct. 1670, 36 L.Ed.2d 342 (1973) (DOUGLAS, J., dissenting); see Oil States Energy Services , LLC v. Greene's Energy Group , LLC , 584 U. S. ----, ----, 138 S.Ct. 1365, 1381, 200 L.Ed.2d 671 (2018) (GORSUCH, J., dissenting) ("[W]hen an independent judiciary gives ground to bureaucrats in the adjudication of cases, the losers will often prove the unpopular and vulnerable"); United States v. Hatter , 532 U.S. 557, 568-569, 121 S.Ct. 1782, 149 L.Ed.2d 820 (2001) (quoting John Marshall's admonition that a judge who may be called on to decide a dispute " 'between the most powerful individual in the community, and the poorest and most unpopular' " must be " 'perfectly and completely independent, with nothing to influence or control him but God and his conscience' " (alterations omitted)); Jackson, The Meaning of Statutes: What Congress Says or What the Court Says, 34 A. B. A. J. 535, 536 (1948) ("[T]he interpretation of [the laws'] fair meaning ... should be made by judges as independent of politics as humanly possible and not serving the interests of the class for whom, or a majority by whom, legislation is enacted").
2 Records of the Federal Convention of 1787, p. 75 (M. Farrand ed. 1911); see also Manning, 96 Colum. L. Rev., at 640-648.
United States v. Will , 449 U.S. 200, 218, 101 S.Ct. 471, 66 L.Ed.2d 392 (1980).
See The Federalist No. 81, at 482 (A. Hamilton).
Id. , at 483.
Northern Pipeline Constr. Co. v. Marathon Pipe Line Co. , 458 U.S. 50, 60, 102 S.Ct. 2858, 73 L.Ed.2d 598 (1982) (plurality opinion).
Bank Markazi v. Peterson , 578 U. S. ----, ----, 136 S.Ct. 1310, 1323, 194 L.Ed.2d 463 (2016) (alterations omitted).
Stern v. Marshall , 564 U.S. 462, 483, 131 S.Ct. 2594, 180 L.Ed.2d 475 (2011) (internal quotation marks omitted).
Perez , 575 U. S., at ----, 135 S.Ct., at 1203-1204 ; see Chrysler Corp. v. Brown , 441 U.S. 281, 295-296, 99 S.Ct. 1705, 60 L.Ed.2d 208 (1979). To be sure, our precedent allowing executive agencies to issue legally binding regulations to govern private conduct may raise constitutional questions of its own. See, e.g. , Department of Transportation v. Association of American Railroads , 575 U. S. 43, ---- - ----, 135 S.Ct. 1225, 1240, 191 L.Ed.2d 153 (2015) (THOMAS, J., concurring in judgment).
Cox, Judge Learned Hand and the Interpretation of Statutes, 60 Harv. L. Rev. 370, 390 (1947).
Id. , at 390-391, and n. 58; see also Kavanaugh, 129 Harv. L. Rev., at 2151 (in pursuing their policy goals, "[e]xecutive branch agencies often think they can take a particular action unless it is clearly forbidden ").
Plaut , 514 U.S. at 225, 115 S.Ct. 1447 (quoting T. Cooley, Constitutional Limitations 95 (1868)).
Id. , at 95; see also Bank Markazi , 578 U. S., at ----, n. 17, 136 S.Ct., at 1323, n. 17.
Ogden v. Blackledge , 2 Cranch 272, 277, 2 L.Ed. 276.
Cooley, supra , at 95.
Cf. Cary v. Curtis , 3 How. 236, 253, 257, 11 L.Ed. 576 (1845) (STORY, J., dissenting) (if the "right to interpret the laws" is taken away from courts and "confided to an executive functionary," then "the judicial power, designed by the Constitution to be the final and appellate jurisdiction to interpret our laws, is superseded in its most vital and important functions").
Marbury , 1 Cranch at 177.
Arlington v. FCC , 569 U.S. 290, 297, 133 S.Ct. 1863, 185 L.Ed.2d 941 (2013) (emphasis added).
Clinton v. City of New York , 524 U.S. 417, 452, 118 S.Ct. 2091, 141 L.Ed.2d 393 (1998) (KENNEDY, J., concurring).
Marbury , 1 Cranch at 163.
Holmes, The Theory of Legal Interpretation, 12 Harv. L. Rev. 417, 417-418 (1899) ; see INS v. Cardoza-Fonseca , 480 U.S. 421, 452-453, 107 S.Ct. 1207, 94 L.Ed.2d 434 (1987) (SCALIA, J., concurring in judgment) ("Judges interpret laws rather than reconstruct legislators' intentions"); H. Hart & A. Sacks, The Legal Process 1375 (1994) ("Unenacted intentions or wishes cannot be given effect as law").
United States v. Woods , 571 U.S. 31, 48, 134 S.Ct. 557, 187 L.Ed.2d 472 (2013).
O'Scannlain, "We Are All Textualists Now": The Legacy of Justice Antonin Scalia, 91 St. John's L. Rev. 303, 304-305 (2017) (contesting the radical indeterminacy of legal texts).
Id. , at 313; see Siegel, Textualism and Contextualism in Administrative Law, 78 B. U. L. Rev. 1023, 1057 (1998).
Larkin & Slattery, 42 Harv. J. L. & Pub. Pol'y, at 647.
Ibid.
See Criddle & Staszewski, Against Methodological Stare Decisis, 102 Geo. L. J. 1573, 1577, and n. 12 (2014) ; C. Oldfather, Methodological Stare Decisis and Constitutional Interpretation, in Precedent in the United States Supreme Court 135, 135-136 (C. Peters ed. 2013).
Kozel, Statutory Interpretation, Administrative Deference, and the Law of Stare Decisis, 97 Texas L. Rev. 1125, 1159 (2019) ; see Raso & Eskridge, Chevron as a Canon, Not a Precedent: An Empirical Study of What Motivates Justices in Agency Deference Cases, 110 Colum. L. Rev. 1727, 1765-1766 (2010) (concluding that in practice, this Court has not treated administrative-deference regimes such as Chevron and Auer as binding precedents).
South Dakota v. Wayfair , Inc. , 585 U. S. ----, ----, 138 S.Ct. 2080, 2096, 201 L.Ed.2d 403 (2018).
See, e.g. , Alexander & Prakash, Mother May I? Imposing Mandatory Prospective Rules of Statutory Interpretation, 20 Const. Comment. 97 (2003) ; Elhauge, Preference-Estimating Statutory Default Rules, 102 Colum. L. Rev. 2027, 2109-2110, and nn. 231-233 (2002).
Pearson v. Callahan , 555 U.S. 223, 233, 129 S.Ct. 808, 172 L.Ed.2d 565 (2009).
Arizona v. Gant , 556 U.S. 332, 348, 129 S.Ct. 1710, 173 L.Ed.2d 485 (2009) (quoting Lawrence v. Texas , 539 U.S. 558, 577, 123 S.Ct. 2472, 156 L.Ed.2d 508 (2003) ).
Janus v. State , County , and Municipal Employees , 585 U. S. ----, ---- - ----, 138 S.Ct. 2448, 2478-2479, 201 L.Ed.2d 924 (2018).
Brief for Administrative Law Scholars as Amici Curiae 13.
Knick v . Township of Scott , --- U.S. ----, ----, 139 S.Ct. 2162, ----, --- L.Ed.2d ----, 2019 WL 2552486 (2019) ante , at 2178 - 2179 ; see Janus , 585 U. S., at ----, 138 S.Ct., at 2472-2473. See also Lost History 54-92; Knudsen & Wildermuth, 22 Geo. Mason L. Rev., at 658-664.
Hickman & Thomson, 103 Minn. L. Rev. Headnotes, at 110.
Green v. Brennan , 578 U. S. ----, ----, 136 S.Ct. 1769, 1776, 195 L.Ed.2d 44 (2016) ; see, e.g. , National Assn. of Home Builders v. Defenders of Wildlife , 551 U.S. 644, 668-669, 127 S.Ct. 2518, 168 L.Ed.2d 467 (2007) (construing regulation in light of text, history, and canon against surplusage).
Woods , 571 U.S. at 48, 134 S.Ct. 557 ; see also Bruesewitz v. Wyeth LLC , 562 U.S. 223, 242, 131 S.Ct. 1068, 179 L.Ed.2d 1 (2011) ; Jones v. United States , 526 U.S. 227, 238, 119 S.Ct. 1215, 143 L.Ed.2d 311 (1999) ; United States v. Mine Workers , 330 U.S. 258, 281-282, 67 S.Ct. 677, 91 L.Ed. 884 (1947).
To be sure, under Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc. , 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), we sometimes defer to an agency's construction of a statute . But there are serious questions, too, about whether that doctrine comports with the APA and the Constitution. See, e.g. , Pereira v. Sessions , 585 U. S. ----, ---- - ----, 138 S.Ct. 2105, 2120-2121, 201 L.Ed.2d 433 (2018) (KENNEDY, J., concurring); Michigan v. EPA , 576 U. S. ----, ---- - ----, 135 S.Ct. 2699, 2713-2714, 192 L.Ed.2d 674 (2015) (THOMAS, J., concurring); Perez , 575 U. S., at ---- - ----, 135 S.Ct., at 1211-1213 (SCALIA, J., concurring in judgment). Regardless, it would be a mistake to suppose that Auer is in any way a "logical corollary to Chevron ." Decker , 568 U.S. at 620, 133 S.Ct. 1326 (SCALIA, J., concurring in part and dissenting in part).
Arlington , 569 U.S. at 313, 133 S.Ct. 1863 (ROBERTS, C. J., dissenting) (internal quotation marks omitted).
Federal Maritime Comm'n v. South Carolina Ports Authority , 535 U.S. 743, 755, 122 S.Ct. 1864, 152 L.Ed.2d 962 (2002).
See Office of the Federal Register, Code of Federal Regulations: Total Pages 1938-1949, and Total Volumes and Pages 1950-2018, http://www.federalregister.gov/uploads/2019/04/C.F.R.TotalPages2018.pdf; United States v. Secretary, Fla. Dept. of Corrections , 778 F.3d 1223, 1225 (CA11 2015).
Janus , 585 U. S., at ----, 138 S.Ct. at 2484 (quoting Gant , 556 U.S. at 349, 129 S.Ct. 1710 ).
Gonzales v. Oregon , 546 U.S. 243, 269, 126 S.Ct. 904, 163 L.Ed.2d 748 (2006) ; see Christopher , 567 U.S. at 159, 132 S.Ct. 2156 (applying Skidmore after concluding that agency's interpretation did not merit Auer deference). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
113
] |
BOIRE, REGIONAL DIRECTOR, TWELFTH REGION, NATIONAL LABOR RELATIONS BOARD, v. GREYHOUND CORPORATION.
No. 77.
Argued February 17, 1964.
Decided March 23, 1964.
Norton J. Come argued the cause for petitioner. With him on the brief were Solicitor General Cox, Arnold Ordman, Dominick L. Manoli and Herman M. Levy.
Warren E. Hall, Jr. argued the cause and filed a brief for respondent.
I. J. Gromfine and Herman Sternstein filed a brief for the Amalgamated Association of Street, Electric Railway and Motor Coach Employees of America, AFL-CIO, as amicus curiae, urging reversal.
Alexander E. Wilson, Jr. filed a brief for Floors, Inc., as amicus curiae, urging affirmance.
Mr. Justice Stewart
delivered the opinion of the Court.
The Amalgamated Association of Street, Electric Railway and Motor Coach Employees of America, AFL-CIO (the Union) filed an amended petition with the National Labor Relations Board pursuant to § 9 (c) of the National Labor Relations Act, requesting a representation election among the porters, janitors and maids working at four Florida bus terminals operated by the respondent (Greyhound). The amended petition designated the “employer” of the employees sought to be represented as Greyhound and Floors, Inc. The latter, a corporation engaged in the business of providing cleaning, maintenance and similar services to various customers in Florida, had contracted with Greyhound to provide such services at the four terminals in question.
At the Board hearing on the petition, the Union contended alternatively that the unit requested was appropriate as a residual unit of all unrepresented Greyhound employees at the four terminals — on the ground that Greyhound was at least a joint employer with Floors of the employees — or that the unit was appropriate because the employees comprised a homogeneous, distinct group. Greyhound and Floors claimed that the latter was the sole employer of the employees, and that the appropriate bargaining unit should therefore encompass all Floors’ employees, either in all four cities in which the terminals are located, or in separate groups.
The Board found that while Floors hired, paid, disciplined, transferred, promoted and discharged the employees, Greyhound took part in setting up work schedules, in determining the number of employees required to meet those schedules, and in directing the work of the employees in question. The Board also found that Floors’ supervisors visited the terminals only irregularly — on occasion not appearing for as much as two days at a time — and that in at least one instance Greyhound had prompted the discharge of an employee whom it regarded as unsatisfactory. On this basis, the Board, with one member dissenting, concluded that Greyhound and Floors were joint employers, because they exercised common control over the employees, and that the unit consisting of all employees under the joint employer relationship was an appropriate unit in which to hold an election. The Board thereupon directed an election to determine whether the employees desired to be represented by the Union.
Shortly before the election was scheduled to take place, Greyhound filed this suit in the United States District Court for the Southern District of Florida, seeking to set aside the decision of the Board and to enjoin the pending election. After a hearing, the court entered an order permanently restraining the election. 205 F. Supp. 686. Concluding that it had jurisdiction on the basis of this Court’s decision in Leedom v. Kyne, 358 U. S. 184, the court held on the merits that the Board’s findings were insufficient as a matter of law to establish a joint employer relationship, that those findings established, as a matter of law, that Floors was the sole employer of the employees in question, and that the Board had therefore violated the National Labor Relations Act by attempting to conduct a representation election where no employment relationship existed between the employees and the purported employer. The Court of Appeals affirmed, 309 F. 2d 397, and we granted certiorari to consider a seemingly important question of federal labor law. 372 U. S. 964. We reverse the judgment of the Court of Appeals.
Both parties agree that in the normal course of events Board orders in certification proceedings under § 9 (c) are not directly reviewable in the courts. This Court held as long ago as American Federation of Labor v. Labor Board, 308 U. S. 401, that the “final order [s]” made reviewable by §§10 (e) and (f) in the Courts of Appeals do not include Board decisions in certification proceedings. Such decisions, rather, are normally reviewable only where the dispute concerning the correctness of the certification eventuates in a finding by the Board that an unfair labor practice has been committed as, for example, where an employer refuses to bargain with a certified representative on the ground that the election was held in an inappropriate bargaining unit. In such a case, § 9 (d) of the Act makes full provision for judicial review of the underlying certification order by providing that “such certification and the record of such investigation shall be included in the transcript of the entire record required to be filed” in the Court of Appeals.
That this indirect method of obtaining judicial review imposes significant delays upon attempts to challenge the validity of Board orders in certification proceedings is obvious. But it is equally obvious that Congress explicitly intended to impose precisely such delays. At the time of the original passage of the National Labor Relations Act in 1935, the House Report clearly delineated the congressional policy judgment which underlay the restriction of judicial review to that provided for in §9(d):
“When an employee organization has built up its membership to a point where it is entitled to be recognized as the representative of the employees for collective bargaining, and the employer refuses to accord such recognition, the union, unless an election can promptly be held to determine the choice of representation, runs the risk of impairment of strength by attrition and delay while the case is dragging on through the courts, or else is forced to call a strike to achieve recognition by its own economic power. Such strikes have been called when election orders of the National Labor Relations Board have been held up by court review.”
And both the House and the Senate Reports spelled out the thesis, repeated on the floor, that the purpose of § 9 (d) was to provide “for review in the courts only after the election has been held and the Board has ordered the employer to do something predicated upon the results of the election.” Congressional determination to restrict judicial review in such situations was reaffirmed in 1947, at the time that the Taft-Hartley amendments were under consideration, when a conference committee rejected a House amendment which would have permitted any interested person to obtain review immediately after a certification because, as Senator Taft noted, “such provision would permit dilatory tactics in representation proceedings.”
In light of the clear import of this history, this Court has consistently refused to allow direct review of such orders in the Courts of Appeals. American Federation of Labor v. Labor Board, supra. In two cases, however, each characterized by extraordinary circumstances, our decisions have permitted district court review of orders entered in certification proceedings. In Leedom v. Kyne, 358 U. S. 184, despite the injunction of § 9 (b)(1) of the Act that “the Board shall not (1) decide that any unit is appropriate ... if such unit includes both professional employees and employees who are not professional employees unless a majority of such professional employees vote for inclusion in such unit,” the Board- — • without polling the professional employees — -approved as appropriate a unit containing both types of employees. The Board conceded in the Court of Appeals that it “had acted in excess of its powers and had thereby worked injury to the statutory rights of the professional employees.” 358 U. S., at 187. We pointed out there that the District Court suit was “not one to 'review/ in the sense of that term as used in the Act, a decision of the Board made within its jurisdiction. Rather it is one to strike down an order of the Board made in excess of its delegated powers and contrary to a specific prohibition in the Act.” 358 U. S., at 188. Upon these grounds we affirmed the District Court’s judgment setting aside the Board’s “attempted exercise of [a] power that had been specifically withheld.” 358 U. S., at 189. And in McCul-loch v. Sociedad Nacional, 372 U. S. 10, in which District Court jurisdiction was upheld in a situation involving the question of application of the laws of the United States to foreign-flag ships and their crews, the Court was careful to note that “the presence of public questions particularly high in the scale of our national interest because of their international complexion is a uniquely compelling justification for prompt judicial resolution of the controversy over the Board’s power. No question of remotely comparable urgency was involved in Kyne, which was a purely domestic adversary situation. The exception recognized today is therefore not to be taken as an enlargement of the exception in Kyne.” 372 U. S., at 17.
The respondent makes no claim that this case is akin to Sociedad Nacional. The argument is, rather, that the present case is one which falls within the narrow limits of Kyne, as the District Court and the Court of Appeals held. The respondent points out that Congress has specifically excluded an independent contractor from the definition of “employee” in § 2 (3) of the Act. It is said that the Board’s finding that Greyhound is an employer of employees who are hired, paid, transferred and promoted by an independent contractor is, therefore, plainly in excess of the statutory powers delegated to it by Congress. This argument, we think, misconceives both the import of the substantive federal law and the painstakingly delineated procedural boundaries of Kyne.
Whether Greyhound, as the Board held, possessed sufficient control over the work of the employees to qualify as a joint employer with Floors is a question which is unaffected by any possible determination as to Floors’ status as an independent contractor, since Greyhound has never suggested that the employees themselves occupy an independent contractor status. And whether Greyhound possessed sufficient indicia of control to be an “employer” is essentially a factual issue, unlike the question in Kyne, which depended solely upon construction of the statute. The Kyne exception is a narrow one, not to be extended to permit plenary district court review of Board orders in certification proceedings whenever it can be said that an erroneous assessment of the particular facts before the Board has led it to a conclusion which does not comport with the law. Judicial review in such a situation has been limited by Congress to the courts of appeals, and then only under the conditions explicitly laid down in § 9 (d) of the Act.
Accordingly, the judgment of the Court of Appeals is reversed and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
Mr. Justice Douglas dissents.
Section 9 (c) of the National Labor Relations Act, as amended, 29 U. S. C. § 169 (c), provides in pertinent part:
“(1) Whenever a petition shall have been filed, in accordance with such regulations as may be prescribed by the Board—
“(A) by an employee or group of employees or any individual or labor organization acting in their behalf alleging that a substantial number of employees (i) wish to be represented for collective bargaining and that their employer declines to recognize their representative as the representative defined in subsection (a) of this section, or (ii) assert that the individual or labor organization, which has been certified or is being currently recognized by their employer as the bargaining representative, is no longer a representative as defined in subsection (a) of this section; or
“(B) by an employer, alleging that one or more individuals or labor organizations have presented to him a claim to be recognized as the representative defined in subsection (a) of this section; “the Board shall investigate such petition and if it has reasonable cause to believe that a question of representation affecting commerce exists shall provide for an appropriate hearing upon due notice. Such hearing may be conducted by an officer or employee of the regional office, who shall not make any recommendations with respect thereto. If the Board finds upon the record of such hearing that such a question of representation exists, it shall direct an election by secret ballot and shall certify the results thereof.”
Section 10 of the National Labor Relations Act, as amended, 29 U. S. C. § 160, provides in pertinent part:
“(e) The Board shall have power to petition any court of appeals of the United States, or if all the courts of appeals to which application may be made are in vacation, any district court of the United States, within any circuit or district, respectively, wherein the unfair labor practice in question occurred or wherein such person resides or transacts business, for the enforcement of such order and for appropriate temporary relief or restraining order, and shall file in the court the record in the proceedings, as provided in section 2112 of Title 28. . . . [Footnote 2 continued on p. 4-77]
“(f) Any person aggrieved by a final order of the Board granting or denying in whole or in part the relief sought may obtain a review of such order in any United States court of appeals in the circuit wherein the unfair labor practice in question was alleged to have been engaged in or wherein such person resides or transacts business, or in the United States Court of Appeals for the District of Columbia, by filing in such a court a written petition praying that the order of the. Board be modified or set aside.”
Section 9 (d) of the National Labor Relations Act, 29 U. S. C. § 159 (d), provides in pertinent part:
“Whenever an order of the Board made pursuant to section 160 (c) . . . is based in whole or in part upon facts certified following an investigation pursuant to subsection (c) of this section and there is a petition for the enforcement or review of such order, such certification and the record of such investigation shall be included in the transcript of the entire record required to be filed under subsection (e) or (f) . . . , and thereupon the decree of the court enforcing, modifying, or setting aside in whole or in part the order of the Board shall be made and entered upon the pleadings, testimony, and proceedings set forth in such transcript.”
H. R. Rep. No. 972, 74th Cong., 1st Sess., 5.
“. . . Section 9 (d) of the bill makes clear that there is to be no court review prior to the holding of the election, and provides an exclusive, complete, and adequate remedy whenever an order of the Board made pursuant to section 10 (c) is based in whole or in part upon facts certified following an election or other investigation pursuant to section 9 (c). The hearing required to be held in any such investigation provides an appropriate safeguard and opportunity to be heard. Since the certification and the record of the investigation are required to be included in the transcript of the entire record filed pursuant to section 10 (e) or (f), the Board’s actions and determinations of fact and law in regard thereto will be subject to the same court review as is provided for its other determinations under sections 10 (b) and 10 (c).” H. R. Rep. No. 972, 74th Cong., 1st Sess., 20-21. [Footnote 6 is on p. 479]
“Section 9 (d) makes it absolutely clear that there shall be no right to court review anterior to the holding of an election. An election is the mere determination of a preliminary fact, and in itself has no substantial effect upon the rights of either employers or employees. There is no more reason for court review prior to an election than for court review prior to a hearing. But if subsequently the Board makes an order predicated upon the election, such as an order to bargain collectively with elected representatives, then the entire election procedure becomes part of the record upon which the order of the Board is based, and is fully reviewable by any aggrieved party in the Federal courts in the manner provided in section 10. And this review Would include within its scope the action of the Board in determining the appropriate unit for purposes of the election. This provides a complete guarantee against arbitrary action by the Board.” S. Rep. No. 573, 74th Cong., 1st Sess., 14.
79 Cong. Rec. 7658.
See H. R. Rep. No. 245, 80th Cong., 1st Sess., 43; H. R. Rep. No. 510, 80th Cong., 1st Sess., 56-57.
93 Cong. Rec. 6444.
Section 2 (3) of the National Labor Relations Act, as amended, 29 U. S. C. § 152 (3). The effect of this provision was to overrule Labor Board v. Hearst Publications, 322 U. S. 111. See H. R. Rep. No. 245, 80th Cong., 1st Sess., 18. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
81
] |
ASTRUE, COMMISSIONER OF SOCIAL SECURITY v. RATLIFF
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE EIGHTH CIRCUIT
No. 08-1322.
Argued February 22, 2010 —
Decided June 14, 2010
Thomas, J., delivered the opinion for a unanimous Court. Sotomayor, J., filed a concurring opinion, in which Stevens and Ginsburg, JJ., joined, post, p. 598.
Anthony A. Yang argued the cause for petitioner. With him on the briefs were Solicitor General Kagan, Assistant Attorney General West,.Deputy Solicitor General Stewart, William Kanter, and Michael E. Robinson.
James D. Leach argued the cause for respondent. With him on the brief were Scott L. Nelson and Stephen B. Kinnaird.
Ckarles L. Martin, Barbara Jones, and Jon C. Dubin filed a brief for the National Organization of Social Security Claimants’ Representatives et al. as amid curiae urging affirmance.
Justice Thomas
delivered the opinion of the Court.
Section 204(d) of the Equal Access to Justice Act (EAJA), codified in 28 U. S. C. § 2412(d), provides in pertinent part that “a court shall award to a prevailing party . . . fees and other expenses ... in any civil action . . . brought by or against the United States . . . unless the court finds that the position of the United States was substantially justified.” We consider whether an award of “fees and other expenses” to a “prevailing party” under § 2412(d) is payable to the litigant or to his attorney. We hold that a § 2412(d) fees award is payable to the litigant and is therefore subject to a Government offset to satisfy a pre-existing debt that the litigant owes the United States.
I
This case arises out of proceedings in which a Social Security claimant, Ruby Willow Kills Ree, prevailed on a claim for benefits against the United States. Respondent Catherine Ratliff was Kills Ree’s attorney in those proceedings. The District Court granted Kills Ree’s unopposed motion for a § 2412(d) fees award in the amount of $2,112.60. Before the United States paid the fees award, however, it discovered that Kills Ree owed the Government a debt that predated the District Court’s approval of the award. Accordingly, the United States sought an administrative offset against the fees award to satisfy part of that debt.
The Government’s authority to use administrative offsets is statutory. See 31 U. S. C. §§ 3711(a), 3716(a) (authorizing an agency whose debt collection attempts are unsuccessful to “collect the claim by administrative offset”). Congress has subjected to offset all “funds payable by the United States,” § 3701(a)(1), to an individual who owes certain delinquent federal debts, see § 3701(b), unless, as relevant here, payment is exempted by statute, see § 3716(e)(2). No such exemption applies to attorney’s fees awards under 28 U. S. C. § 2412(d)(1)(A) (hereinafter subsection (d)(1)(A)), which are otherwise subject to offset, see 31 CFR § 285.5(e)(1) (2009), and which, as of January 2005, are covered by the Treasury Offset Program (TOP) operated by the Treasury Department’s Financial Management Service (FMS). See Brief for Petitioner 4 (explaining TOP’S extension to cover so-called “ ‘miscellaneous’ ” payments that include attorney’s fees payments the Treasury Department makes on behalf of federal agencies).
In this case, the Government, relying on the TOP, notified Kills Ree that the Government would apply her § 2412(d) fees award to offset a portion of her outstanding federal debt. Ratliff intervened to challenge the offset on the grounds that § 2412(d) fees belong to a litigant’s attorney and thus may not be used to offset or otherwise satisfy a litigant’s federal debts. The District Court held that because § 2412(d) directs that fees be awarded to the prevailing party, not to her attorney, Ratliff lacked standing to challenge the Government’s proposed offset. See No. CIV. 06-5070-RHB, 2007 WL 6894710, *1 (D SD, May 10, 2007).
The Court of Appeals for the Eighth Circuit reversed. 540 F. 3d 800 (2008). It held that under Circuit precedent, “EAJA attorneys’ fees are awarded to prevailing parties’ attorneys.” Id., at 802. The Court of Appeals recognized that its decision did not accord with a “literal interpretation of the EAJA,” ibid., and exacerbated a split among the Courts of Appeals, compare id., at 801-802, with, e. g., Reeves v. Astrue, 526 F. 3d 732, 733 (CA11 2008); Manning v. Astrue, 510 F. 3d 1246, 1249-1251 (CA10 2007); FDL Technologies, Inc. v. United States, 967 F. 2d 1578, 1580 (CA Fed. 1992); Panola Land Buying Assn. v. Clark, 844 F. 2d 1506, 1510-1511 (CA11 1988). We granted certiorari. 557 U. S. 965 (2009).
II
Subsection (d)(1)(A) directs that courts “shall award to a prevailing party . . . fees and other expenses . . . incurred by that party.” (Emphasis added.) We have long held that' the term “prevailing party” in fee statutes is a “term of art” that refers to the prevailing litigant. See, e. g., Buckhannon Board & Care Home, Inc. v. West Virginia Dept. of Health and Human Resources, 532 U. S. 598, 603 (2001). This treatment reflects the fact that statutes that award attorney’s fees to a prevailing party are exceptions to the “ ‘American Rule’” that each litigant “bear [his] own attorney’s fees.” Id., at 602 (citing Key Tronic Corp. v. United States, 511 U. S. 809, 819 (1994)). Nothing in EAJA supports a different reading. Cf. Arthur Andersen LLP v. Carlisle, 556 U. S. 624, 630, n. 4 (2009) (where Congress employs “identical words and phrases within the same statute,” they are presumed to carry “the same meaning” (internal quotation marks omitted)). Indeed, other subsections within § 2412(d) underscore that the term “prevailing party” in subsection (d)(1)(A) carries its usual and settled meaning — prevailing litigant. Those other subsections clearly distinguish the party who receives the fees award (the litigant) from the attorney who performed the work that generated the fees. See, e.g., § 2412(d)(1)(B) (hereinafter subsection (d)(1)(B)) (the “prevailing party” must apply for the fees award and “sho[w]” that he “is a prevailing party and is eligible to receive an award” by, among other things, submitting “an itemized statement from any attorney . . . representing or appearing in behalf of the party” that details the attorney’s hourly rate and time spent on the case (emphasis added)); see also Part III, infra.
Ratliff nonetheless asserts that subsection (d)(l)(A)’s use of the verb “award” renders § 2412(d) fees payable directly to a prevailing party’s attorney and thus protects the fees from a Government offset against the prevailing party’s federal debts. See Brief for Respondent 11-19 (arguing that subsection (d)(l)(A)’s use of the word “ ‘award’ ” “expressly incorporates a critical distinction” between the right to an “‘award’” of fees and the right to “‘receiv[e]’” the fees). We disagree.
The transitive verb “ ‘award’ ” has a settled meaning in the litigation context: It means “[t]o give or assign by sentence or judicial determination.” Black’s Law Dictionary 125 (5th ed. 1979) (emphasis added); see also Webster’s Third New International Dictionary 152 (1993) (“to give by judicial decree” (emphasis added)). The plain meaning of the word “award” in subsection (d)(1)(A) is thus that the court shall “give or assign by... judicial determination” to the “prevailing party” (here, Ratliff’s client Kills Ree) attorney’s fees in the amount sought and substantiated under, inter alia, subsection (d)(1)(B).
Ratliff’s contrary argument does not withstand scrutiny. According to Ratliff, subsection (d)(1)(B), which uses “the noun ‘award’ ” to mean a “ ‘decision,’ ” requires us to construe subsection (d)(1)(A) (which uses “award” as a verb) to mean that “[o]nly the prevailing party may receive the award (the decision granting fees), but only the attorney who earned the fee (the payment asked or given for professional services) is entitled to receive it.” Brief for Respondent 16,15 (emphasis in original; some internal quotation marks and footnote omitted). This argument ignores the settled definitions above, and even the definitions Ratliff proffers, because each makes clear that the verb “award” in subsection (d)(1)(A) means to “give by the decision of a law court” or to “grant . ..by judicial decree,” not simply to “give a decision” itself. Id., at 16, and n. 39 (emphasis added; internal quotation marks omitted). We thus agree with the Government that under the statutory language here, the “judicial decision is the means by which the court confers a right to payment upon the prevailing party; it is not itself the thing that the court gives (or orders the defendant to give) to the party.” Reply Brief for Petitioner 4 (emphasis in original; citing Hewitt v. Helms, 482 U. S. 755, 761 (1987) (explaining that “[i]n all civil litigation, the judicial decree is not the end but the means”)). This settled and natural construction of the operative statutory language is reflected in our cases. See, e. g., Scarborough v. Principi, 541 U. S. 401, 405 (2004) (“EAJA authorizes the payment of fees to a prevailing party” (emphasis added)).
Ratliff’s final textual argument — that subsection (d)(2)(A)’s reference to “attorney fees” itself establishes that the fees are payable to the prevailing party’s attorney, see Brief for Respondent 19-22 — proves far too much. The fact that the statute awards to the prevailing party fees in which her attorney may have a beneficial interest or a contractual right does not establish that the statute “awards” the fees directly to the attorney. For the reasons we have explained, the statute’s plain text does the opposite — it “awards” the fees to the litigant, and thus subjects them to a federal administrative offset if the litigant has outstanding federal debts.
Ill
In an effort to avoid EAJA’s plain meaning, Ratliff argues that other provisions of EAJA, combined with the SSA and the Government’s practice of paying some EAJA fees awards directly to attorneys in Social Security cases, render § 2412(d) at least ambiguous on the question presented here, and that these other provisions resolve the ambiguity in her favor. Again we disagree. Even accepting § 2412(d) as ambiguous on the question presented, the provisions and practices Ratliff identifies do not alter our conclusion that EAJA fees are payable to litigants and are thus subject to offset where a litigant has outstanding federal debts.
To begin with, §2412(d)(l)’s provisions differentiate between attorneys and prevailing parties, and treat attorneys on par with other service providers, in a manner that forecloses the conclusion that attorneys have a right to direct payment of subsection (d)(1)(A) awards. As noted above, subsection (d)(1)(B) requires the prevailing party to submit a fee application showing that she is otherwise “eligible to receive an award” and, as a complement to that requirement, compels the prevailing party to submit “an itemized statement from any attorney . . . representing or appearing in behalf of the party” that details the attorney’s hourly rate and time the attorney spent on the case. (Emphasis added.) This language would make little sense if, as Ratliff contends, §2412(d)’s “prevailing party” language effectively refers to the prevailing litigant’s attorney. Subsection (d)(1)(B) similarly makes clear that the “prevailing party” (not her attorney) is the recipient of the fees award by requiring the prevailing party to demonstrate that her net worth falls within the range the statute requires for fees awards. And E AJA’s cost provision further underscores the point. That provision uses language identical to that in the attorney’s fees provision to allow prevailing parties to recover “the reasonable expenses of expert witnesses” and “any study, analysis, engineering report, test, or project” necessary to prepare “the party’s case,” § 2412(d)(2)(A), yet Ratliff does not argue that it makes costs payable directly to the vendors who provide the relevant services.
Nor do the SSA provisions on which Ratliff relies establish that subsection (d)(1)(A) fees awards are payable to prevailing parties’ attorneys. It is true that the SSA makes fees awards under that statute payable directly to a prevailing claimant’s attorney. See 42 U. S. C. § 406(b)(1)(A) (providing that where a claimant “who was represented before the court by an attorney” obtains a favorable judgment, “the court may determine and allow as part of its judgment a reasonable fee for such representation, not in excess of 25 percent of” the benefits award and may certify the full amount of the statutory fees award “for payment to such attorney out of, and not in addition to, the amount of” the claimant’s benefits award (emphasis added)). But the SSA’s express authorization of such payments undermines Ratliff’s case insofar as it shows that Congress knows how to make fees awards payable directly to attorneys where it desires to do so. Given the stark contrast between the SSA’s express authorization of direct payments to attorneys and the absence of such language in subsection (d)(1)(A), we are reluctant to interpret the latter provision to contain a direct fee requirement absent clear textual evidence supporting such an interpretation.
Ratliff contends that Congress’ 1985 amendments to § 206(b) of EA JA supply just such evidence, at least in Social Security cases. See §3(2), 99 Stat. 186, note following 28 U. S. C. § 2412, p. 1309 (Saving Provision). The 1985 amendments address the fact that Social Security claimants may be eligible to receive fees awards under both the SSA and EAJA, and clarify the procedure that attorneys and their clients must follow to prevent the windfall of an unauthorized double recovery of fees for the same work. Section 206(b) provides that no violation of law occurs “if, where the claimant’s attorney receives fees for the same work under both [42 U. S. C. § 406(b) and 28 U. S. C. § 2412(d)], the claimant’s attorney refunds to the claimant the amount of the smaller fee.” According to Ratliff, the fact that § 206(b) recognizes, or at least assumes, that an attorney will sometimes “receiv[e]” fees under 28 U. S. C. § 2412(d) suggests that we should construe subsection (d)(1)(A) to incorporate the same direct payments to attorneys that the SSA expressly authorizes.
This argument gives more weight to § 206(b)’s reference to attorney “receipt]” of fees than the reference can bear. Section 206(b)’s ensuing reference to the attorney’s obligation to “refun[d]” the amount of the smaller fee to the claimant, which reference suggests that the award belongs to the claimant in the first place, alone undercuts Ratliff’s reading of “receives” as implying an initial statutory payment to the attorney. And Ratliff’s reading is in any event irreconcilable with the textual differences between EAJA and the SSA we discuss above. Thus, even accepting Ratliff’s argument that subsection (d)(1)(A) is ambiguous, the statutory provisions she cites resolve any ambiguity in favor of treating subsection (d)(1)(A) awards as payable to the prevailing litigant, and thus subject to offset where the litigant has relevant federal debts.
The Government’s history of paying EAJA awards directly to attorneys in certain cases does not compel a different conclusion. The Government concedes that until 2006, it “frequently paid EAJA fees in Social Security cases directly to attorneys.” Reply Brief for Petitioner 13. But this fact does not alter our interpretation of subsection (d)(l)(A)’s “prevailing party” language or the Government’s rights and obligations under the statute. As the Government explains, it most often paid EAJA fees directly to attorneys in cases in which the prevailing party had assigned its rights in the fees award to the attorney (which assignment would not be necessary if the statute rendered the fees award payable to the attorney in the first instance). The fact that some such cases involved a prevailing party with outstanding federal debts is unsurprising given that it was not until 2005 that the Treasury Department modified the TOP to require offsets against “miscellaneous” payments such as attorney’s fees awards. And as Ratliff admits, the Government has since continued the direct payment practice only in cases where “the plaintiff does not owe a debt to the government and assigns the right to receive the fees to the attorney.” Brief for Respondent 28 (boldface deleted). The Government’s decision to continue direct payments only in such cases is easily explained by the 2005 amendments to the TOP, and nothing about the Government’s past payment practices altered the statutory text that governs this casé or estopped the Government from conforming its payment practices to the Treasury Department’s revised regulations. For all of these reasons, neither EAJA nor the SSA supports Ratliff’s reading of subsection (d)(1)(A).
Our eases interpreting and applying 42 U. S. C. § 1988, which contains language virtually identical to the EAJA pro vision we address here, buttress this conclusion. Our most recent cases applying § 1988(b)’s “prevailing party” language recognize the practical reality that attorneys are the beneficiaries and, almost always, the ultimate recipients of the fees that the statute awards to “prevailing part[ies].” See, e. g., Venegas v. Mitchell, 495 U. S. 82, 86 (1990). But these cases emphasize the nonstatutory (contractual and other assignment-based) rights that typically confer upon the attorney the entitlement to payment of the fees award the statute confers on the prevailing litigant. As noted above, these kinds of arrangements would be unnecessary if, as Ratliff contends, statutory fees language like that in § 1988(b) and EAJA provides attorneys with a statutory right to direct payment of awards. Hence our conclusion that “the party, rather than the lawyer,” id., at 87, is “entitle[d] to receive the fees” under § 1988(b), id., at 88, and that the statute “controls what the losing defendant must pay, not what the prevailing plaintiff must, pay his lawyer,” id., at 90; see also Evans v. Jeff D., 475 U. S. 717, 730-732, and n. 19 (1986) (explaining that the “language of [§ 1988]... bestow[s] on the ‘prevailing party’ (generally plaintiffs) a statutory eligibility for a discretionary award of attorney’s fees” and does not “besto[w] fee awards upon attorneys” themselves (emphasis deleted; footnote omitted)). These conclusions apply with equal force to the functionally identical statutory language here.
* * *
We reverse the Court of Appeals' judgment and remand the case for further proceedings consistent with this opinion.
It is so ordered.
Section 3701 defines an administrative offset as “withholding funds payable by the United States” to the debtor. § 3701(a)(1). An agency may effect such an offset by cooperating with another agency to withhold such funds, or by notifying the Treasury Department of the debt so Treasury may include it in Treasury’s centralized offset program. See 31 CFR §§ 285.5(d)(2), 901.3(b)(1), (c) (2009). Alternatively, the Treasury Department may attempt an administrative offset after receiving notice from a creditor agency that a legally enforceable nontax debt has become more than 180 days delinquent. See 31 U. S. C. § 3716(c)(6); 31 CFR §§285.5(d)(1), 901.3(b)(1).
Respondent Ratliff argues for the first time in her merits brief before this Court that the 2005 amendments to the FMS regulations exempt the EAJA fees award in this case from administrative offset against Kills Ree’s outstanding federal debt. See Brief for Respondent 8,46 (citing 31 CFR § 285.5(e)(5)). We need not decide this question because Ratliff did not raise the regulations as a bar to offset in her brief in opposition to the Government’s petition for a writ of certiorari, see this Court’s Rule 15.2, or in the proceedings below.
The split exists in the Social Security context because the Social Security Act (SSA), 49 Stat. 620, as amended, 42 U. S. C. § 301 et seq., provides for payment of attorney’s fees awards directly to counsel, see § 406(b)(1)(A), and until 2006 the Government in many cases treated fees awards under EAJA the same way, see Reply Brief for Petitioner 13-14.
Ratliff argues that fees awarded under 42 U. S. C. § 406(b) can never be “‘refund[ed]’” in this sense because SSA fees are “never paid initially to the client.” Brief for Respondent 14 (emphasis in original). That is not accurate. As we have explained, Social Security claimants and attorneys normally enter into contingent-fee agreements that are subject to judicial “review for reasonableness.” Gisbrecht v. Barnhart, 535 U. S. 789, 809 (2002). Where the court allows a fee, § 406(b) permits the Commissioner to collect the approved fee out of the client’s benefit award and to certify the fee for “payment to such attorney out of” that award. § 406(b)(1)(A). In such cases, the attorney would “refun[d]” the fee to the client in the event that the attorney also receives a (larger) EAJA award, because the attorney “reeeive[d]” the SSA fee from the client’s funds. Similarly inaccurate is Ratliff’s suggestion that our construction of EAJA §206(b)’s reference to “refun[d]” would preclude attorneys from collecting any fees from a prevailing party until both SSA and EAJA payments are awarded. Our construction does not alter or preclude what we have recognized as courts’ common practice of awarding EAJA fees at the time a court remands a case to the Social Security Administration (Administration) for benefits proceedings. Such awards often allow attorneys to collect EAJA fees months before any fees are awarded under 42 U. S. C. § 406(b), because § 406(b) fees cannot be determined until the Administration enters a final benefits ruling. See Shalala v. Schaefer, 509 U. S. 292, 295-302 (1993).
Section 1988(b) provides that in actions covered by the statute and subject to exceptions not relevant here, “the court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney’s fee.” | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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105
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GUTIERREZ de MARTINEZ et al. v. LAMAGNO et al.
No. 94-167.
Argued March 22, 1995 —
Decided June 14, 1995
Ginsburg, J., delivered the opinion of the Court with respect to Parts I, II, and III, in which Stevens, O’Connor, Kennedy, and Breyer, JJ., joined, and an opinion with respect to Part IV, in which Stevens, Kennedy, and Breyer, JJ., joined. O’Connor, J., filed an opinion concurring in part and concurring in the judgment, post, p. 437. Souter, J., filed a dissenting opinion, in which Rehnquist, C. J., and Scaua and Thomas, JJ., joined, post, p. 438.
Isidoro Rodriguez argued the cause and filed a brief for petitioners. Malcolm L. Stewart argued the cause for the federal respondents in support of petitioners pursuant to this Court’s Rule 12.4. On the briefs were Solicitor General Days, Assistant Attorney General Hunger, Deputy Solicitor General Bender, Jeffrey R Minear, Barbara L. Herwig, and Peter R. Maier.
Andrew J. Maloney III argued the cause and filed a brief for respondent Lamagno.
Michael K. Kellogg, by invitation of the Court, 513 U. S. 1010, argued the cause and filed a brief as amicus curiae urging affirmance.
Justice Ginsburg
delivered the opinion of the Court, except as to Part IV.
When a federal employee is sued for a wrongful or negli-. gent act, the Federal Employees Liability Reform and Tort Compensation Act of 1988 (commonly known as the Westfall Act) empowers the Attorney General to certify that the employee “was acting within the scope of his office or employment at the time of the incident out of which the claim arose . . . 28 U. S. C. §2679(d)(1). Upon certification, the employee is dismissed from the action and the United States is substituted as defendant. The case then falls under the governance of the Federal Tort Claims Act (FTCA), ch. 753, 60 Stat. 812,842. Generally, such cases unfold much as cases do against other employers who concede respondeat superior liability. If, however, an exception to the FTCA shields the United States from suit, the plaintiff may be left without a tort action against any party.
This case is illustrative. The Attorney General certified that an allegedly negligent employee “was acting within the scope of his . . . employment” at the time of the episode in suit. Once brought into the case as a defendant, however, the United States asserted immunity, because the incident giving rise to the claim occurred abroad and the FTCA excepts “[a]ny claim arising in a foreign country.” 28 U. S. C. §2680(k). Endeavoring to redeem their lawsuit, plaintiffs (petitioners here) sought court review of the Attorney General’s scope-of-employment certification, for if the employee was acting outside the scope of his employment, the plaintiffs’ tort action could proceed against him. The lower courts held the certification unreviewable. We reverse that determination and hold that the scope-of-employment certification is reviewable in court.
J — I
Shortly before midnight on January 18, 1991, m Barranquilla, Colombia, a car driven by respondent Dirk A. La-magno, a special agent of the United States Drug Enforcement Administration (DEA), collided with petitioners’ car. Petitioners, who are citizens of Colombia, allege that La-magno was intoxicated and that his passenger, an unidentified woman, was not a federal employee.
Informed that diplomatic immunity shielded Lamagno from suit in Colombia, petitioners filed a diversity action against him in the United States District Court for the Eastern District of Virginia, the district where Lamagno resided. Alleging that Lamagno’s negligent driving caused the accident, petitioners sought compensation for physical injuries and property damage. In response, the local United States Attorney, acting pursuant to the Westfall Act, certified on behalf of the Attorney General that Lamagno was acting within the scope of his employment at the time of the accident. The certification, as is customary, stated no reasons for the U. S. Attorney’s scope-of-employment determination.
In the Westfall Act, Congress instructed:
“Upon certification by the Attorney General that the defendant employee was acting within the scope of his office or employment at the time of the incident out of which the claim arose, any civil action or proceeding commenced upon such claim in a United States district court shall be deemed an action against the United States under the provisions of this title and all references thereto, and the United States shall be substituted as the party defendant.” § 2679(d)(1).
Thus, absent judicial review and court rejection of the certification, Lamagno would be released from the litigation; furthermore, he could not again be pursued in any damages action arising from the “same subject matter.” § 2679(b)(1). Replacing Lamagno, the United States would become sole defendant.
Ordinarily, scope-of-employment certifications occasion no contest. While the certification relieves the employee of responsibility, plaintiffs will confront instead a financially reliable defendant. But in this case, substitution of the United States would cause the demise of the action: Petitioners’ claims “ar[ose] in a foreign country,” FTCA, 28 U. S. C. §2680(k), and thus fell within an exception to the FTCA’s waiver of the United States’ sovereign immunity. See § 2679(d)(4) (upon certification, the action “shall proceed in the same manner as any action against the United States ... and shall be subject to the limitations and exceptions applicable to those actions”). Nor would the immunity of the United States allow petitioners to bring Lamagno back into the action. See United States v. Smith, 499 U. S. 160 (1991).
To keep their action against Lamagno alive, and to avoid the fatal consequences of unrecallable substitution of the United States as the party defendant, petitioners asked the District Court to review the certification. Petitioners maintained that Lamagno was acting outside the scope of his employment at the time of the accident; certification to the contrary, they argued, was groundless and untrustworthy. Following Circuit precedent, Johnson v. Carter, 983 F. 2d 1316 (CA4) (en banc), cert. denied, 510 U. S. 812 (1993), the District Court held the certification unreviewable, substituted the United States for Lamagno, and dismissed petitioners’ suit. App. 7-9. In an unadorned order, the Fourth Circuit affirmed. 23 F. 3d 402 (1994).
The Circuits divide sharply on this issue. Parting from the Fourth Circuit, most of the Courts of Appeals have held certification by the Attorney General or her delegate amenable to court review. We granted certiorari to resolve the conflict, 513 U. S. 998 (1994), and we now reverse the Fourth Circuit’s judgment.
II
A
We encounter in this ease the familiar questions: where is the line to be drawn; and who decides. Congress has firmly answered the first question. “Scope of employment” sets the line. See § 2679(b)(1); United States v. Smith, 499 U. S. 160 (1991). If Lamagno is inside that line, he is not subject to petitioners’ suit; if he is outside the line, he is personally answerable. The sole question, then, is who decides on which side of the line the case falls: the local United States Attorney, unreviewably or, when that official’s decision is contested, the court. Congress did not address this precise issue unambiguously, if at all. As the division in the lower courts and in this Court shows, the Westfall Act is, on the “who decides” question we confront, open to divergent interpretation.
Two considerations weigh heavily in our analysis, and we state them at the outset. First, the Attorney General herself urges review, mindful that in cases of the kind petitioners present, the incentive of her delegate to certify is marked. Second, when a Government official’s determination of a fact or circumstance — for example, “scope of employment” — is dispositive of a court controversy, federal courts generally do not hold the determination unreviewable. Instead, federal judges traditionally proceed from the “strong presumption that Congress intends judicial review.” Bowen v. Michigan Academy of Family Physicians, 476 U. S. 667, 670 (1986); see id., at 670-673; Abbott Laboratories v. Gardner, 387 U. S. 136, 140 (1967). Chief Justice Marshall long ago captured the essential idea:
“It would excite some surprise if, in a government of laws and of principle, furnished with a department whose appropriate duty it is to decide questions of right, not only between individuals, but between the government and individuals; a ministerial officer might, at his discretion, issue this powerful process ... leaving to [the claimant] no remedy, no appeal to the laws of his country, if he should believe the claim to be unjust. But this anomaly does not exist; this imputation cannot be cast on the legislature of the United States.” United States v. Nourse, 9 Pet. 8, 28-29 (1835).
Accordingly, we have stated time and again that judicial review of executive action “will not be cut off unless there is persuasive reason to believe that such was the purpose of Congress.” Abbott Laboratories, 387 U. S., at 140 (citing cases). No persuasive reason for restricting access to judicial review is discernible from the statutory fog we confront here.
B
Congress, when it composed the Westfall Act, legislated against a backdrop of judicial review. Courts routinely reviewed the local United States Attorney’s scope-of-employment certification under the Westfall Act’s statutory predecessor, the Federal Drivers Act, Pub. L. 87-258, § 1, 75 Stat. 539 (previously codified as 28 U. S. C. § 2679(d) (1982 ed.)). Similar to the Westfall Act but narrower in scope, the Drivers Act made the FTCA the exclusive remedy for motor vehicle accidents involving federal employees acting within the scope of their employment. 75 Stat. 539 (previously codified at 28 U. S. C. § 2679(b) (1982 ed.)). The Drivers Act, like the Westfall Act, had a certification scheme, though it applied only to cases brought in state court. Once the Attorney General or his delegate certified that the defendant driver was acting within the scope of employment, the case was removed to federal court and the United States was substituted as defendant. But the removal and substitution were subject to the federal court’s control; a court determination that the driver was acting outside the scope of his employment would restore the case to its original status. See, e. g., McGowan v. Williams, 623 F. 2d 1239, 1242 (CA7 1980); Seiden v. United States, 537 F. 2d 867, 870 (CA6 1976); Levin v. Taylor, 464 F. 2d 770, 771 (CADC 1972).
When Congress wrote the Westfall Act, which covers federal employees generally and not just federal drivers, the legislators had one purpose firmly in mind. That purpose surely was not to make the Attorney General’s delegate the final arbiter of “scope-of-employment” contests. Instead, Congress sought to override Westfall v. Erwin, 484 U. S. 292 (1988). In Westfall, we held that, to gain immunity from suit for a common-law tort, a federal employee would have to show (1) that he was acting within the scope of his employment, and (2) that he was performing a discretionary function. Id., at 299. Congress reacted quickly to delete the “discretionary function” requirement, finding it an unwarranted judicial imposition, one that had “created an immediate crisis involving the prospect of personal liability and the threat of protracted personal tort litigation for the entire Federal workforce.” § 2(a)(5), 102 Stat. 4563.
The Westfall Act trained on this objective: to “return Federal employees to the status they held prior to the Westfall decision.” H. R. Rep. No. 100-700, p. 4 (1988). Congress was notably concerned with the significance of the scope-of-employment inquiry — that is, it wanted the employee’s personal immunity to turn on that question alone. See §2(b), 102 Stat. 4564 (purpose of Westfall Act is to “protect Federal employees from personal liability for common law torts committed within the scope of their employment”). But nothing tied to the purpose of the legislation shows that Congress meant the Westfall Act to commit the critical “scope-of-employment” inquiry to the unreviewable judgment of the Attorney General or her delegate, and thus to alter fundamentally the answer to the “who decides” question.
C
Construction of the Westfall Act as Lamagno urges — to deny to federal courts authority to review the Attorney General’s scope-of-employment certification — would oblige us to attribute to Congress two highly anomalous commands. Not only would we have to accept that Congress, by its silence, authorized the Attorney General’s delegate to make determinations of the kind at issue without any judicial check. At least equally perplexing, the proposed reading would cast Article III judges in the role of petty functionaries, persons required to enter as a court judgment an executive officer’s decision, but stripped of capacity to evaluate independently whether the executive’s decision is correct.
r — 1
In the typical case, by certifying that an employee was acting within the scope of his employment, the Attorney General enables the tort plaintiff to maintain a claim for relief under the FTCA, a claim against the financially reliable United States. In such a case, the United States, by certifying, is acting against its financial interest, exposing itself to liability as would any other employer at common law who admits that an employee acted within the scope of his employment. See Restatement (Second) of Agency §219 (1958).
.The situation alters radically, however, in the unusual case — like the one before us — that involves an exception to the FTCA. When the United States retains immunity from suit, certification disarms plaintiffs. They may not proceed against the United States, nor may they pursue the employee shielded by the certificátion. Smith, 499 U. S., at 166-167. In such a case, the certification surely does not qualify as a declaration against the Government’s interest: it does not expose the United States to liability, and it shields a federal employee from liability.
But that is not all. The impetus to certify becomes overwhelming in a case like this one, as the Attorney General, in siding with petitioners, no doubt comprehends. If the local United States Attorney, to whom the Attorney General has delegated responsibility, refuses certification, the employee can make a federal case of the matter by alleging a wrongful failure to certify. See § 2679(d)(3). The federal employee’s claim is one the United States Attorney has no incentive to oppose for the very reason the dissent suggests, see post, at 448-449: Win or lose, the United States retains its immunity; hence, were the United States to litigate “scope of employment” against its own employee — thereby consuming the local United States Attorney’s precious litigation resources— it would be litigating solely for the benefit of the plaintiff. Inevitably, the United States Attorney will feel a strong tug to certify, even when the merits are cloudy, and thereby “do a favor,” post, at 448, both for the employee and for the United States as well, at a cost borne solely, and perhaps quite unfairly, by the plaintiff.
The argument for unreviewability in such an instance runs up against a mainstay of our system of government. Madison spoke precisely to the point:
“No man is allowed to be a judge in his own cause, because his interest would certainly bias his judgment, and, not improbably, corrupt his integrity. With equal, nay with greater reason, a body of men are unfit to be both judges and parties at the same time . . . .” The Federalist No. 10, p. 79 (C. Rossiter ed. 1961).
See In re Murchison, 349 U. S. 133, 136 (1956) (“[0]ur system of law has always endeavored to prevent even the probability of unfairness. To this end no man can be a judge in his own case and no man is permitted to try cases where he has an interest in the outcome.”); Spencer v. Lapsley, 20 How. 264, 266 (1858) (recognizing statute accords with this maxim); see also Publius Syrus, Moral Sayings 51 (D. Lyman transí. 1856) (“No one should be judge in his own cause.”); B. Pascal, Thoughts, Letters and Opuscules 182 (0. Wight transí. 1859) (“It is not permitted to the most equitable of men to be a judge in his own cause.”); 1 W. Blackstone, Commentaries *91 (“[I]t is unreasonable that any man should determine his own quarrel.”).
In sum, under Lamagno’s reading of the congressional product at issue, whenever the case falls within an exception to the FTCA, the Attorney General sits as an unreviewable “judge in her own cause”; she can block petitioners’ way to a tort action in court, at no cost to the federal treasury, while avoiding litigation in which the United States has no incentive to engage, and incidentally enhancing the morale — or at least sparing the purse — of federal employees. The United States, as we have noted, disavows this extraordinary, conspicuously self-serving interpretation. See supra, at 424, and n. 4. Recognizing that a United States Attorney, in cases of this order, is hardly positioned to act impartially, the Attorney General reads the law to allow judicial review.
2
If Congress made the Attorney General’s delegate sole judge, despite the apparent conflict of interest, then Congress correspondingly assigned to the federal court only rubber-stamp work. Upon certification in a case such as this one, the United States would automatically become the defendant and, just as automatically, the case would be dismissed. The key question presented — scope of employment — however contestable in fact, would receive no judicial audience. The court could do no more, and no less, than convert the executive’s scarcely disinterested decision into a court judgment. This strange course becomes all the more surreal when one adds to the scene the absence of an obligation on the part of the Attorney General’s delegate to conduct a fair proceeding, indeed, any proceeding. She need not give the plaintiff an opportunity to speak to the “scope” question, or even notice that she is considering the question. Nor need she give any explanation for her action.
Congress may be free to establish a compensation scheme that operates without court participation. Cf. 21 U. S. C. §904 (authorizing executive settlement of tort claims that “arise in a foreign country in connection with the operations of the [DEA] abroad”). But that is a matter quite different from instructing a court automatically to enter a judgment pursuant to a decision the court has no authority to evaluate. Cf. United States v, Klein, 13 Wall. 128, 146 (1872) (Congress may not “prescribe rules of decision to the Judicial Department of the government in cases pending before it”). We resist ascribing to Congress an intention to place courts in this untenable position.
Ill
We return now, in more detail, to the statutory language to determine whether it overcomes the presumption favoring judicial review, the tradition of court review of scope certifications, and the anomalies attending foreclosure of review.
The certification, removal, and substitution provisions of the Westfall Act, 28 U. S. C. §§2679(d)(l)-(3), work together to assure that, when scope of employment is in controversy, that matter, key to the application of the FTCA, may be resolved in federal court. To that end, the Act specifically allows employees whose certification requests have been denied by the Attorney General, to contest the denial in court. § 2679(d)(3). If the action was initiated by the tort plaintiff in state court, the Attorney General, on the defendant-employee’s petition, is to enter the case and may remove it to the federal court so that the scope determination can be made in the federal forum. Ibid.
When the Attorney General has granted certification, if the case is already in federal court (as is this case, because of the parties’ diverse citizenship), the United States will be substituted as the party defendant. § 2679(d)(1). If the case was initiated by the tort plaintiff in state court, the Attorney General is to remove it to the federal court, where, as in a case that originated in the federal forum, the United States will be substituted as the party defendant. § 2679(d)(2).
The statute next instructs that the “certification of the Attorney General shall conclusively establish scope of office or employment for purposes of removal.” Ibid, (emphasis added). The meaning of that instruction, in the view of petitioners and the Attorney General, is just what the emphasized words import. Congress spoke in discrete sentences in § 2679(d)(2) first of removal, then of substitution. Next, Congress made the Attorney General’s certificate conclusive solely for purposes of removal, and notably not for purposes of substitution. It follows, petitioners and the Attorney General conclude, that the scope-of-employment judgment determinative of substitution can and properly should be checked by the court, i. e., the Attorney General’s scarcely disinterested certification on that matter is by statute made the first, but not the final word.
Lamagno’s construction does not draw on the “certification . . . shall [be conclusive] ... for purposes of removal” language of § 2679(d)(2). Instead, Lamagno emphasizes the word “shall” in the statement: “Upon certification by the Attorney General . . . any civil action or proceeding . . . shall be deemed an action against the United States ..., and the United States shall be substituted as the party defendant.” § 2679(d)(1) (emphasis added). Any doubt as to the commanding force of the word “shall,” Lamagno urges, is dispelled by this further feature: the Westfall Act’s predecessor, the Federal Drivers Act, provided for court review of “scope-of-employment” certifications at the tort plaintiff’s behest. Not only does the Westfall Act fail to provide for certification challenges by tort plaintiffs, Lamagno underscores, but the Act prominently provides for court review of refusals to certify at the behest of defending employees. See § 2679(d)(3). Congress, in Lamagno’s view, thus plainly intended the one-sided review, i. e., a court check at the call of the defending employee, but no check at the tort plaintiff’s call.
We recognize that both sides have tendered plausible constructions of a text most interpreters have found far from clear. See, e. g., McHugh v. University of Vermont, 966 F. 2d 67, 72 (CA2 1992) (“[T]he text of the Westfall Act, viewed as a whole, is ambiguous.”); Arbour v. Jenkins, 903 F. 2d 416, 421 (CA6 1990) (“[T]he scope certification provisions of the Westfall Act as a whole . . . [are] ambiguous regarding the reviewability of the Attorney General’s scope certification.”). Indeed, the United States initially took the position that the local United States Attorney’s scope-of-employment certifications are conclusive and unreviewable but, on further consideration, changed its position. See Brief for United States 14, n. 4. Because the statute is reasonably susceptible to divergent interpretation, we adopt the reading that accords with traditional understandings and basic principles: that executive determinations generally are subject to judicial review and that mechanical judgments are not the kind federal courts are set up to render. Under our reading, the Attorney General’s certification that a federal employee was acting within the scope of his employment — a certification the executive official, in cases of the kind at issue, has a compelling interest to grant — does not conclusively establish as correct the substitution of the United States as defendant in place of the employee.
> HH
Treating the Attorney General’s certification as conclusive for purposes of removal but not for purposes of substitution, amicus ultimately argues, “raise[s] a potentially serious Article III problem.” Brief for Michael K. Kellogg as Amicus Curiae 29. If the certification is rejected, because the federal court concludes that the employee acted outside the scope of his employment, and if the tort plaintiff and the employee resubstituted as defendant are not of diverse citizenship, amicus urges, then the federal court will be left with a case without a federal question to support the court’s subject-matter jurisdiction. This last-pressed argument by amicus largely drives the dissent. See post, at 440-443.
This case itself, we note, presents not even the specter of an Article III problem. The case was initially instituted in federal court; it was not removed from a state court. The parties’ diverse citizenship gave petitioners an entirely secure basis for filing in federal court.
In any event, we do not think the Article III problem ami-cus describes is a grave one. There may no longer be a federal question once the federal employee is resubstituted as defendant, but in the category of cases amicus hypothesizes, there was a nonfrivolous federal question, certified by the local United States Attorney, when the case was removed to federal court. At that time, the United States was the defendant, and the action was thus under the FTCA. Whether the employee was acting within the scope of his federal employment is a significant federal question — and the Westfall Act was designed to assure that this question could be aired in a federal forum. See supra, at 430-432. Because a case under the Westfall Act thus “raises [a] questio[n] of substantive federal law at the very outset,” it “clearly ‘arises under’ federal law, as that term is used in Art. III.” Verlinden B. V. v. Central Bank of Nigeria, 461 U. S. 480, 493 (1983).
In adjudicating the scope-of-federal-employment question “at the very outset,” the court inevitably will confront facts relevant to the alleged misconduct, matters that bear on the state tort claims against the employee. Cf. Mine Workers v. Gibbs, 383 U. S. 715, 725 (1966) (approving exercise of pendent jurisdiction when federal and state claims have “a common nucleus of operative fact” and would “ordinarily be expected to [be tried] all in one judicial proceeding”). “[C]on-siderations of judicial economy, convenience and fairness to litigants,” id., at 726, make it reasonable and proper for the federal forum to proceed beyond the federal question to final judgment once it has invested time and resources on the initial scope-of-employment contest.
If, in preserving judicial review of scope-of-employment certifications, Congress “approach[ed] the limit” of federal-court jurisdiction, see post, at 441 — and we do not believe it did — we find the exercise of federal-court authority involved here less ominous than the consequences of declaring certifications of the kind at issue uncontestable: The local United States Attorney, whose conflict of interest is apparent, would be authorized to make final and binding decisions insulating both the United States and federal employees like Lamagno from liability while depriving plaintiffs of potentially meritorious tort claims. The Attorney General, having weighed the competing considerations, does not read the statute to confer on her such extraordinary authority. Nor should we assume that Congress meant federal courts to accept cases only to stamp them “Dismissed” on an interested executive official’s unchallengeable representation. The statute is fairly construed to allow petitioners to present to the District Court their objections to the Attorney General’s scope-of-employment certification, and we hold that construction the more persuasive one.
* * *
For the reasons stated, the judgment of the United States Court of Appeals for the Fourth Circuit is reversed, and the case is remanded for proceedings consistent with this opinion.
It is so ordered.
Petitioners also filed an administrative claim with the DEA pursuant to 84 Stat. 1284, as amended, 21 U. S. C. § 904, which authorizes settlement of tort claims that “arise in a foreign country in connection with the operations of the [DEA] abroad.” The DEA referred the claim to the Department of Justice, which has not yet made a final administrative decision on that claim. As read by the Fourth Circuit, § 904 contains no express or implied provision for judicial review. App. 15.
The certification read:
“I, Richard Cullen, United States Attorney for the Eastern District of Virginia, acting pursuant to the provisions of 28 U. S. C. § 2679, and by virtue of the authority vested in me by the Appendix to 28 C.F.R. § 15.3 (1991), hereby certify that I have investigated the circumstances of the incident upon which the plaintiffs’] claim is based. On the basis of the information now available with respect to the allegations of the complaint, I hereby certify that defendant Dirk A. Lamagno was acting within the scope of his employment as an employee of the United States of America at the time of the incident giving rise to the above entitled action.” App. 1-2.
Compare Johnson v. Carter, 983 F. 2d 1316 (CA4) (en banc), cert. denied, 510 U. S. 812 (1993); Garcia v. United States, 22 F. 3d 609, suggestion for rehearing en banc granted, 22 F. 3d 612 (CA5 1994); Aviles v. Lutz, 887 F. 2d 1046, 1048-1049 (CA10 1989) (certification not reviewable), with Nasuti v. Scannell, 906 F. 2d 802, 812-814 (CA1 1990); McHugh v. University of Vermont, 966 F. 2d 67, 71-75 (CA2 1992); Melo v. Hafer, 912 F. 2d 628, 639-642 (CA3 1990), aff’d on other grounds, 502 U. S. 21 (1991); Arbour v. Jenkins, 903 F. 2d 416, 421 (CA6 1990); Hamrick v. Franklin, 931 F. 2d 1209 (CA7), cert. denied, 602 U. S. 869 (1991); Brown v. Armstrong, 949 F. 2d 1007, 1010-1011 (CA8 1991); Meridian Int’l Logistics, Inc. v. United States, 939 F. 2d 740, 744-745 (CA9 1991); S. J .& W. Ranch, Inc. v. Lehtinen, 913 F. 2d 1538, 1543 (1990), modified, 924 F. 2d 1655 (CA11), cert. denied, 602 U. S. 813 (1991); Kimbro v. Velten, 30 F. 3d 1501 (CADC 1994), cert. pending, No. 94-6703 (certification reviewable).
The United States, in accord with petitioners, reads the Westfall Act to allow a plaintiff to challenge the Attorney General’s scope-of-employment certification. We therefore invited Michael K. Kellogg to brief and argue this case, as amicus curiae, in support of the judgment below. 513 U. S. 1010 (1994). Mr. Kellogg accepted the appointment and has well fulfilled his assigned responsibility.
Several of the FTCA’s 13 exceptions are for cases in which other compensatory regimes afford relief. Kosak v. United States, 465 U. S. 848, 858 (1984) (one rationale for exceptions is “not extending the coverage of the [FTCA] to suits for which adequate remedies were already available”). See, e. g., § 2680(c) (excluding “[a]ny claim arising in respect of the assessment or collection of any tax or customs duty”); § 2680(d) (excluding “[a]ny claim for which a remedy is provided by” the Public Vessels Act, “relating to claims or suits in admiralty against the United States”); § 2680(e) (excluding “[a]ny claim arising out of an act or omission of any employee of the Government in administering the provisions of” the Trading with the Enemy Act); 2 L. Jayson, Handling Federal Tort Claims: Administrative and Judicial Remedies 13-8,13-25,13-43 to 13-44 (1995) (explaining these exclusions as cases in which other remedies are available).
To the reality of an executive decisionmaker with scant incentive to act impartially, and a court used to rubber-stamp that decisionmaker’s judgment, the dissent can only reply that these are “rare cases.” Post, at 447. But this dispute centers solely on cases fitting the description “rare.” See supra, at 422. It is hardly an answer to say that, in other cases, indeed in the great bulk of cases, court offices are not misused.
Section 2679(d) provides in pertinent part:
“(1) Upon certification by the Attorney General that the defendant employee was acting within the scope of his office or employment at the time of the incident out of which the claim arose, any civil action or proceeding commenced upon such claim in a United States district court shall be deemed an action against the United States under the provisions of this title and all references thereto, and the United States shall be substituted as the party defendant.
“(2) Upon certification by the Attorney General that the defendant employee was acting within the scope of his office or employment at the time of the incident out of which the claim arose, any civil action or proceeding commenced upon such claim in a State court shall be removed without bond at any time before trial by the Attorney General to the district court of the United States for the district and division embracing the place in which the action or proceeding is pending. Such action or proceeding shall be deemed to be an action or proceeding brought against the United States under the provisions of this title and all references thereto, and the United States shall be substituted as the party defendant. This certification of the Attorney General shall conclusively establish scope of office or employment for purposes of removal.
“(3) In the event that the Attorney General has refused to certify scope of office or employment under this section, the employee may at any time before trial petition the court to find and certify that the employee was acting within the scope of his office or employment. Upon such certification by the court, such action or proceeding shall be deemed to be an action or proceeding brought against the United States under the provisions of this title and all references thereto, and the United States shall be substituted as the party defendant. A copy of the petition shall be served upon the United States in accordance with the provisions of Rule 4(d)(4) of the Federal Rules of Civil Procedure. In the event the petition is filed in a civil action or proceeding pending in a State court, the action or proceeding may be removed without bond by the Attorney General to the district court of the United States for the district and division embracing the place in which it is pending. If, in considering the petition, the district court determines that the employee was not acting within the scope of his office or employment, the action or proceeding shall be remanded to the State court.”
In fact, under Lamagno’s construction, this provision has no work to do, because Congress would have had no cause to insulate removal from challenge. If certification cannot be overturned, as Lamagno urges, then a firm basis for federal jurisdiction is ever present — the United States is a party, and the FTCA governs the case.
Though “shall” generally means “must,” legal writers sometimes use, or misuse, “shall” to mean “should,” “will,” or even “may.” See D. Mellin-koff, Mellinkoff’s Dictionary of American Legal Usage 402-403 (1992) (“shall” and “may” are “frequently treated as synonyms” and their meaning depends on context); B. Garner, Dictionary of Modern Legal Usage 939 (2d ed. 1995) (“[C]ourts in virtually every English-speaking jurisdiction have held — by necessity — that shall means may in some contexts, and vice versa.”). For example, certain of the Federal Rules use the word “shall” to authorize, but not to require, judicial action. See, e. g., Fed. Rule Civ. Proc. 16(e) (“The order following a final pretrial conference shall be modified only to prevent manifest injustice.”) (emphasis added); Fed. Rule Crim. Proc. 11(b) (A nolo contendere plea “shall be accepted by the court only after due consideration of the views of the parties and the interest of the public in the effective administration of justice.”) (emphasis added).
The dissent argues that Congress must have meant to foreclose judicial review of substitution when it omitted from the Westfall Act the Drivers Act language authorizing such review. See post, at 439-440, 443. But this language likely was omitted for another reason. It appeared in the Drivers Act provision authorizing the return of removed cases to state court: “Should a United States district court determine on a hearing on a motion to remand held before a trial on the merits that the case so removed is one in which a remedy by suit ... is not available against the United States, the case shall be remanded to-the State court.” 75 Stat. 539 (previously codified at 28 U. S. C. § 2679(d) (1982 ed.)). Congress likely omitted this provision, the thrust of which was to authorize remands, because it had decided to foreclose needless shuttling of a case from one court to another — a decision evident also in the Westfall Act language making certification “conclusiv[e] ... for pin-poses of removal.” See § 2679(d)(2). The omission thus tells us little about Congress’ will concerning review of substitution.
The dissent, moreover, draws inconsistent inferences from congressional silence. Omission of language authorizing review of substitution, the dissent argues, forecloses review. See post, at 439-440, 443. But omission of language authorizing review of removal is not sufficient to foreclose review; rather, to achieve this purpose, the dissent says, Congress took the further step of adding language in § 2679(d)(2) making review “conclusive] ... for purposes of removal.” See post, at 444-445.
The dissent charges that for Congress to allow cases like this one to open and finish in federal court, when brought there by the local United States Attorney, “implies a jurisdictional tenacity,” post, at 443, and allows losers always to win, post, at 442. Under the dissent’s abstract and unrelenting logic, it is a jurisdictional flight for Congress to assign to federal courts tort actions in which there is a genuine issue of fact whether a federal employee acted within the scope of his federal employment. The dissent’s solution for this discrete class of cases: plaintiffs always lose. For the above-stated reasons, we disagree. See also Goldberg-Ambrose, Protective Jurisdiction of the Federal Courts, 30 UCLA L. Rev. 642, 649 (1983) (“If [the legal relationships on which the plaintiff necessarily relies] are federally created, even in small part, the claim should be treated as one that arises under federal law within the meaning of article III, independent of any protective jurisdiction theory.”). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
27
] |
GARDEBRING, COMMISSIONER OF THE MINNESOTA DEPARTMENT OF HUMAN SERVICES v. JENKINS
No. 86-978.
Argued January 13, 1988
Decided April 19, 1988
Stevens, J., delivered the opinion of the Court, in which Rehnquist, C. J., and White, Blackmun, and Scalia, JJ., joined. O’Connor, J., filed an opinion concurring in the judgment in part and dissenting in part, in which Brennan, J., joined, and in which Marshall, J., joined as to the last paragraph, post, p. 432. Kennedy, J., took no part in the consideration or decision of the case.
John L. Kirwin, Assistant Attorney General of Minnesota, argued the cause for petitioner. With him on the briefs were Hubert H. Humphrey III, Attorney General, and Beverly Jones Heydinger, Assistant Attorney General.
Paul J. Larkin, Jr., argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General Fried, Assistant Attorney General Willard, Deputy Solicitor General Wallace, and John F. Cordes.
Laurie N. Davison argued the cause for respondent. With her on the brief was Alan B. Morrison.
A brief of amici curiae urging reversal was filed for the State of Alabama et al. by Warren Price III, Attorney General of Hawaii, Thomas D. Farrell, Deputy Attorney General, Don Siegelman, Attorney General of Alabama, Steve Clark, Attorney General of Arkansas, Duane Woodard, Attorney General of Colorado, Joseph I. Lieberman, Attorney General of Connecticut, John S. Miller, Michael J. Bowers, Attorney General of Georgia, James T. Jones, Attorney General of Idaho, Neil F. Hartigan, Attorney General of Illinois, Thomas J. Miller, Attorney General of Iowa, Robert T. Stephan, Attorney General of Kansas, David L. Armstrong, Attorney General of Kentucky, William J. Guste, Jr., Attorney General of Louisiana, James E. Tierney, Attorney General of Maine, J. Joseph Cur- ran, Jr., Attorney General of Maryland, Frank J. Kelley, Attorney General of Michigan, Brian McKay, Attorney General of Nevada, Lacy H. Thornburg, Attorney General of North Carolina, Nicholas Spaeth, Attorney General of North Dakota, Anthony J. Celebrezze, Jr., Attorney General of Ohio, Dave Frohnmayer, Attorney General of Oregon, T. Travis Medlock, Attorney General of South Carolina, Roger A. Tellinghuisen, Attorney General of South Dakota, David L. Wilkinson, Attorney General of Utah, Jeffrey Amestoy, Attorney General of Vermont, Mary Sue Terry, Attorney General of Virginia, Donald J. Hanaway, Attorney General of Wisconsin, and Joseph B. Meyer, Attorney General of Wyoming.
Evelyn R. Frank filed a brief for the Economic Rights Task Force, National Lawyers Guild, as amicus curiae urging affirmance.
Justice Stevens
delivered the opinion of the Court.
In 1981 Congress amended the statute authorizing the Aid to Families with Dependent Children (AFDC) program to provide that a family receiving nonrecurring lump-sum income is ineligible for benefits for the number of months that the income would satisfy the family’s standard of need. §2304 of the Omnibus Budget Reconciliation Act of 1981, 95 Stat. 845, as amended, 42 U. S. C. § 602(a)(17) (1982 ed. and Supp. III); see generally Lukhard v. Reed, 481 U. S. 368, 371-373 (1987) (plurality opinion); see also id., at 384-386 (Powell, J., dissenting). In this case the United States Court of Appeals for the Eighth Circuit held that the Minnesota Department of Human Services (the Department) could not enforce that amendment against respondent, and the class she represents, because it had not given them the notice required by a regulation promulgated by the Secretary of Health and Human Services (the Secretary), 45 CFR §206.10(a)(2)(i) (1987). We granted certiorari to review the Court of Appeals’ interpretation of the Secretary’s regulation as well as its remedial decision in favor of an injunction barring the Department from recouping payments made to respondent during her period of ineligibility. Because we conclude that the regulation was not violated, we do not reach the remedy question.
I
On October 31, 1983, respondent’s husband received a retroactive Social Security disability payment of $5,752. Respondent used the entire lump sum to pay a $3,863.75 arrearage on the family’s home mortgage, an overdue car repair bill of $1,366, and a legal fee of $150, and the remainder to purchase clothing for her children and to pay other bills. Within two days, the entire sum had been expended.
On November 2, 1983, respondent reported the receipt (and the expenditure) of the Social Security payment to her caseworker and was advised that under the 1981 amendment her family would be ineligible for benefits for the next several months. She immediately filed an administrative appeal and her family continued to receive benefits while the appeal waspending. See 45 CFR §205.10(a)(6)(i) (1987). The Appeals Referee decided that the benefits should not be terminated because the Jenkinses had not received any advance notice of the new lump-sum rule, App. 69-73, but the Department’s Deputy Commissioner reversed. Id., at 73-76. While expressing disagreement with the policy implemented by the 1981 amendment, he concluded that the federal statute must be enforced even though the lack of advance notice had produced a “harsh result.”
When the administrative review proceedings terminated in August, the Jenkins family was again eligible for benefits. The Department’s decision, however, meant that benefits had been improperly paid for the period between October 1983 and May 1984. Accordingly, as required by the federal statute, see 42 U. S. C. § 602(a)(22) (1982 ed. and Supp. III); see also 45 CFR § 233.20(a)(13) (1987), in due course the Department ordered recoupment of the wrongfully paid benefits by deducting 1% from each future AFDC monthly payment, in accordance with state law, see Minn. Stat. § 256.73, subd. 6 (1986).
Shortly after the conclusion of the state administrative proceedings, respondent intervened in an action already pending in Federal District Court challenging the Department’s lump-sum policy on various grounds. In her complaint in intervention, App. 14, 20, respondent added an allegation that the Department’s implementation of the new lump-sum rule without adequate notice to AFDC applicants and recipients violated the Secretary’s regulation. The District Court certified a class and entered summary judgment in its favor on the notice issue. Slaughter v. Levine, 598 F. Supp. 1035, 1049-1052 (Minn. 1984).
The District Court awarded two forms of relief. First, it required the Department to prepare a written notice that adequately explained the lump-sum policy and to distribute it to all current AFDC recipients and all future applicants. Id., at 1055. Second, it ordered the Department to notify all class members who had been injured by the Department’s violation that they might apply for corrective payments from their local welfare agencies. Ibid. The court concluded that the Eleventh Amendment prevented it from ordering any repayment of benefits that had been improperly denied, ibid., or from enjoining the Department from recouping overpayments to families like the Jenkinses. Slaughter v. Levine, 621 F. Supp. 509, 513-514 (Minn. 1985). For the-purposes of relief, the District Court determined that members of the class who did not expend any portion of their lump-sum payments before they received notice of the current lump-sum policy had not been injured by the Department’s violation of the federal notice regulation. 598 F. Supp., at 1055.
A divided panel of the Court of Appeals affirmed the District Court’s judgment insofar as it found a violation of the notice regulation and denied monetary relief to members of the class. Slaughter v. Levine, 801 F. 2d 288 (CA8 1986) (case below). It concluded, however, that the District Court should have enjoined the Department from recouping any amounts that were treated as “overpayments” under the post-1981 policy if they would háve been proper under the pre-1981 lump-sum rule. In explaining its basic holding, the Court of Appeals pointed out that advance notice to lump-sum recipients was necessary to achieve the purposes of the 1981 amendment, and that to impose the new rule on a family that assumed that the old rule was still in effect “would be truly Kafkaesque.” The dissenting judge did not believe that either the statute or the notice regulation conditioned the implementation of the new rule on advance notice to the small percentage of AFDC beneficiaries affected by it. He construed the regulation as simply requiring “the state to publicize generally in written form, and orally as appropriate, the AFDC program and its availability.” Id., at 303 (Fagg, J., dissenting). Because of the significance of the Court of Appeals’ holding for States’ administration of welfare laws, we granted certiorari, 482 U. S. 926 (1987).
II
The Secretary’s notice regulation, which was first adopted in 1971 and later amended in 1978 and 1979, now provides:
“Applicants shall be informed about the eligibility requirements and their rights and obligations under the program. Under this requirement individuals are given information in written form, and orally as appropriate, about coverage, conditions of eligibility, scope of the program, and related services available, and the rights and responsibilities of applicants for and recipients of assistance. Specifically developed bulletins or pamphlets explaining the rules regarding eligibility and appeals in simple, understandable terms are publicized and available in quantity.” 45 CFR § 206.10(a)(2)(i) (1987).
Pursuant to this regulation, the Department has prepared and distributed two brief printed brochures. The first contains four pages and generally describes the AFDC program, the application process, the benefit levels, and the applicant’s basic procedural rights. The pamphlet states that the “information in this brochure will help you decide if you wish to apply for AFDC, but it is not intended to cover all program rules. ... You are urged to contact your welfare office for specific information as to the eligibility rules and limitations for AFDC. Since these can and do change from time to time, you should inquire with your welfare office for up-to-date information.” App. 29.
The second brochure is a six-page booklet entitled “Monthly Reporting: What AFDC Households Must Know”; it explains the recipient’s duty to report all of the household income each month. Although some of the intricacies of the AFDC program are explained, it does not comment specifically on the lump-sum rule. In addition to using pamphlets such as these, the Department relies on its caseworkers to provide applicants and recipients with oral advice about the aspects of the program that are relevant to specific situations.
When the 1981 amendment was enacted, the Department did not prepare a new pamphlet. It did, however, on September 18, 1981, send a letter to all AFDC recipients advising them that there had been 19 major changes in the AFDC program. The paragraph commenting on the new lump-sum rule was not a model of clarity, but presumably it at least alerted the reader to the existence of the new rule. Since the letter was just mailed to those already receiving AFDC benefits, however, it did not provide any notice to a family that did not apply for benefits until a later date. Such a family might not learn about the operation of the lump-sum rule until it reported the receipt of a payment to a caseworker; if, as was true in the Jenkins’ case, the money had already been spent, it would obviously be too late for the family to budget the use of that money to replace its normal AFDC checks.
The question for us to decide is not whether advance written notice is desirable, or, indeed, whether such notice is necessary to accomplish the purposes of the 1981 statute. The question is whether the pre-existing regulation was intended to forestall the implementation of a congressionally mandated program change until the state agencies provided all AFDC recipients with notice of the change. Although such a rule might well represent sound policy, we do not believe that a fair reading of the text of §206.10(a)(2)(i) conveys that message.
It is true that the regulation requires that individuals be given “information in written form, and orally as appropriate, about. . . conditions of eligibility,” but that is hardly how one would write a command stating that every such condition must be identified and explained before it may be enforced. The reference to “information” in both written and oral form “about” various aspects of the program seems to require instead merely a general descriptive statement regarding AFDC benefits. Thus, the plain language of the regulation does not require that information be disseminated regarding every specific change in eligibility requirements.
Indeed, it is doubtful whether the notice requirement even applies to AFDC recipients, The notice provision appears in a section that contains various rules regarding “[application, determination of eligibility and furnishing of assistance,” 45 CFR § 206.10 (1987). The section speaks to how one may apply for benefits, general conditions of eligibility, the time frame within which States must determine eligibility, basic rules about the furnishing of assistance to recipients, and general procedures for redetermining eligibility due to changed circumstances. The regulation in question in this case, § 206.10(a)(2)(i), both on its face and in context of the section as a whole, quite plainly speaks to how general information about the program must be provided to individuals seeking assistance, that is, to program applicants. See § 206.10(b)(1) (defining “applicant”). The very next provision in the section, in fact, states that “[procedures shall be adopted which are designed to assure that recipients make timely and accurate reports of any change in circumstances which may affect their eligibility or the amount of assistance.” § 206.10(a)(2)(ii) (emphasis added). In other words, the drafters of this regulation wrote separately about two types of information that must be communicated: in § 206.10 (a)(2)(i) about providing applicants with program information, and in § 206.10(a)(2)(ii) about developing procedures for recipients themselves to provide information about changed circumstances that might affect their benefits. The requirement of § 206.10(a)(2)(i) that information be given to applicants in “written form, and orally as appropriate,” seems in fact to require no mailing of information at all, but rather simply explains that printed information about access to AFDC benefits, such as pamphlets, booklets, and flyers, be available, and that such information may be transmitted orally as well.
Respondent contends that the notice provision applies to recipients of AFDC benefits as well as applicants. She points to §206.10(a)(1)(iii), which provides that “[a]n applicant may be assisted, if he so desires, by an individual(s) of his choice (who need not be a lawyer) in the various aspects of the application process and the redetermination of eligibility and may be accompanied by such individual(s) in contacts with the agency and when so accompanied may also be represented by them.” Since “redetermination of eligibility” involves “a review of factors affecting AFDC eligibility and payment amount,” § 206.10(b)(4), and thus clearly applies to recipients, respondent contends that “applicant” is used in § 206.10(a)(1)(iii) to include recipients as well, and therefore must have the same inclusive meaning throughout §206.10, including the notice provision.
We are unpersuaded. The term “recipients” is used in various other provisions in the section, and appears simply to have been inadvertently omitted at this juncture. The definition of the term “applicant,” understood in the context of eligibility “redetermination,” makes this omission apparent. An “applicant” is “a person who has, directly, or through his authorized representative, or where incompetent or incapacitated, through someone acting responsibly for him, made application for public assistance from the agency administering the program, and whose application has not been terminated.” § 206.10(b)(1). Since redetermination of benefits affects only those who have already been “determined to be eligible,” § 206.10(a)(9), and an “applicant,” by definition, has not yet been determined to be eligible, it would therefore be impossible for an applicant’s case to be redetermined. Thus, it is plain that § 206.10(a)(1)(iii) omitted the word “recipient” when referring to redetermination.
Thus, a reading of the plain language of the notice provision and other provisions in the same section reveals that only applicants, and not recipients, are addressed by the requirement that individuals be given information about the program. Further, even as to applicants, the notice provision requires only that general program information be available, in “written form” and “orally as appropriate.”
The Secretary, who is responsible for enforcing the regulation, does not agree with the strict interpretation adopted by the District Court. Rather, he believes that it is generally appropriate to rely on an oral explanation of the consequences of receiving a lump-sum payment when the recipient reports it to the family’s caseworker. We recognize that the Secretary had not taken a position on this question until this litigation. However, when it is the Secretary’s regulation that we are construing, and when there is no claim in this Court that the regulation violates any constitutional or statutory mandate, we are properly hesitant to substitute an alternative reading for the Secretary’s unless that alternative reading is compelled by the regulation’s plain language or by other indications of the Secretary’s intent at the time of the regulation’s promulgation.
Finally, respondent’s emphasis on the harsh result in this particular case is actually, in large part, a criticism of the lump-sum rule itself. The record indicates that even if respondent had known about the rule, she would have been hard pressed not to use most of the $5,752 payment to avoid a foreclosure of the mortgage on the family home and to make promised payments to other creditors. Further, even though the rule, combined with the absence of advance notice, may have produced a “Kafkaesque” result for the Jenkins family, it is not irrational to assume that most needy families will realize that the receipt of a large lump sum may affect their future eligibility for benefits, and that it would be prudent to inform their caseworkers of the development before spending the money. Moreover, the harshness of the result is somewhat mitigated by the fact that the family’s benefits continued during the administrative appeal and that the recoupment process only subtracts 1% of each monthly AFDC check, and the further fact that if AFDC benefits are actually terminated, a family may be immediately eligible for another form of public assistance, albeit a less generous one. In all events, since the regulation was written long before the lump-sum rule was enacted, it clearly was not designed to forestall the harsh consequences suffered by the Jenkinses.
In the final analysis, our decision rests on our agreement with the Secretary and the dissenting judge in the Court of Appeals that the regulation simply requires the State to publish a general description of the basic structure of the AFDC program and its availability. We would require a much more precise mandate to the States to permit courts to interfere with the workings of governmental benefits programs by ordering the taking of certain affirmative steps.
The judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
Justice Kennedy took no part in the consideration or decision of this case.
The statute was amended again in § 2632 of the Deficit Reduction Act of 1984, 98 Stat. 1141, to give States the option of recalculating the period of ineligibility caused by receipt of a lump sum in three situations not relevant here.
Examples of “lump-sum income” are provided in the federal regulation that implements Congress’ directive:
“When the AFDC assistance unit’s income, after applying applicable disregards, exceeds the State need standard for the family because of receipt of nonrecurring earned or unearned lump sum income (including for AFDC, title II and other retroactive monthly benefits, and payments in the nature of a windfall, e. g., inheritances or lottery winnings, personal injury and worker compensation awards, to the extent it is not earmarked and used for the purpose for which it is paid, i. e., monies for back medical bills resulting from accidents or injury, funeral and burial costs, replacement or repair of resources, etc.), the family will be ineligible for aid for the full number of months derived by dividing the sum of the lump sum income and other income by the monthly need standard for a family of that size. ...” 45 CFR § 233.20(a)(3)(ii)(F) (1987).
Under the lump-sum rule that had been in effect prior to 1981, the family had an incentive to spend the entire amount in October to avoid having any unspent amount treated as a “resource” in future months because excessive resources, like excessive income, would make the family ineligible for AFDC benefits. See Lukhard v. Reed, 481 U. S. 368, 371-373 (1987) (plurality opinion).
As the Appeals Referee later stated in his findings of fact (which were adopted on appeal by the Deputy Commissioner, see App. 73):
“The need standard for the [Jenkins] family unit is $724 per month. Because of recoupment of a past overpayment, it did not actually receive that amount each month. It received $688 each month. The County Agency considered that through its error, overpayments were made in the amount of $724 monthly for the months of October and November, 1983. It determined that eligibility would not exist through the month of March, 1984, and that if eligibility existed for April, 1984, it would not be for a full grant.” Id., at 71.
He stated, in part:
“While the County Agency should have advised the Petitioner of the lump sum rule and how any Worker’s Compensation or Disability payments would be treated, the question does arise regarding whether the recipients could have acted any differently if they had known.
“The Federal policy regarding the treatment of lump sum payments is punitive and ignores the basic purposes of the AFDC Program. We do not like the Order in this case and would do anything to avoid the harsh result. The State Agency must comply with Federal Regulations as those regulations have been interpreted by legal counsel. Neither our legal counsel nor State Agency staff believes this is a good policy, but we have verified our interpretation with the Federal Agency on numerous occasions. The effect of the Federal policy is to deprive children of the minimum support available in an already insufficient AFDC grant. It does not please us to affirm the termination of the Petitioner’s grant, but we see no alternative within current Federal policy.” Id., at 75 (emphasis in original).
The original plaintiffs contended that the policy (1) violates the Social Security Act because it fails to take into account the actual availability of lump-sum funds in determining AFDC eligibility, (2) violates the Act because it is improperly applied to those members of the class who cannot, despite good-faith efforts, make their lump sums last for the entire period of-ineligibility, (3) creates an irrational, irrebuttable presumption that the lump-sum payment would be available for use by the family during the entire period of ineligibility, (4) violates due process because it applies without advance notice, (5) results in the “punishment” of needy children for their parents’ improvidence, and (6) violates equal protection principles by treating an AFDC recipient more harshly than a family that received, and spent, a lump sum immediately before applying for an AFDC grant. See Complaint, 1 Record A-12 — A-15. The District Court rejected each of these arguments, except (4), which it did not reach due to its holding that advance notice was required by the Secretary’s regulation. Slaughter v. Levine, 598 F. Supp. 1035, 1045-1049, 1052-1055 (Minn. 1984). The Department had also filed a third-party complaint against the Secretary, claiming that 42 U. S. C. § 602(a)(17) (1982 ed. and Supp. III) does not apply to unavailable lump sums, and that HHS’ lump-sum regulations are invalid to the extent that they require States to consider unavailable lump sums; these claims were rejected. 598 F. Supp., at 1045-1049. The Department also asked for, and was granted, a District Court order that the Secretary pay the federal share of any benefits paid to class members as a result of the court’s decision. Slaughter v. Levine, 605 F. Supp. 1242, 1249-1250 (Minn. 1985). The Secretary filed an appeal from this order, but subsequently withdrew it. See Slaughter v. Levine, 801 F. 2d 288, 294, n. 8 (CA8 1986) (ease below).
It defined the class as follows:
“[T]hose individuals in the State of Minnesota who are otherwise eligible for AFDC benefits and who have been, or will be, found ineligible for AFDC benefits for a predetermined number of months as a consequence of receipt of lump sum income by one of the members of an AFDC assistance unit of which they have been a member, and whose lump sum has or will become unavailable to them in whole or in part prior to their re-eligibility for benefits.” 598 F. Supp., at 1041.
Because the remaining named plaintiff from the initial complaint had not spent any of her lump-sum funds prior to receipt of notice of the Department’s policy, plaintiffs’ counsel conceded that she was not an adequate representative of the class. For that reason, although respondent was an intervenor, she became the class representative. See 605 F. Supp., at 1245-1247, and n. 3.
“[A] lump-sum recipient without notice of the new rule is very likely to spend most or all of a lump sum before learning of the rule’s strict budgeting requirements, particularly when the recipient is familiar with the prior policy. Consequently, the net result of failing to give adequate advance notice of the new lump-sum rule is to frustrate the very goal Congress sought to further in enacting the rule: encouraging recipients to budget lump sums so that they serve to replace the family’s monthly AFDC check.” 801 F. 2d, at 295-296 (footnote omitted).
importance of advance notice is heightened by the fact that the effects of the lump-sum rule on an AFDC recipient can be peculiarly drastic. In general, the AFDC program’s income-and-asset-related eligibility requirements reduce or cut off eligibility only if the resource is actually available to the recipient. However, the new lump-sum rule diverges from the norm, cutting off eligibility without regard, except in very limited circumstances, to whether the lump sum is actually available. Thus, under the operation of most eligibility requirements, there is no point at which a family will not have either the basic support provided by the AFDC program or other financial resources that equal or surpass the AFDC standard of need. In contrast, under the lump-sum rule, where a family exhausts its lump sum before its ineligibility period expires, the family may well be left for months with insufficient resources to provide for basic necessities. To impose this situation on a family that had no advance notice of the new lump-sum rule and operated on the altogether reasonable assumption that the old policy still governed would be truly Kafkaesque.” Id., at 296 (footnotes omitted).
The first change described in the letter was the new lump-sum rule. The letter stated:
“Lump Sum Money: When a family receives lump-sum money such as an inheritance, a Social Security back payment, insurance settlement, gift, etc., the money will be deducted from the AFDC grant, whether or not it hás already been spent. If the lump sum added to other family income totals more than the AFDC maximum for that size family, the family will be ineligible for the month in which the lump sum was received (and possibly for a number of following months), whether or not the money is spent before the period of ineligibility has gone by. If the family already received an AFDC grant that month, the grant would be ‘recouped’ by the welfare agency.” App. to Pet. for Cert. 97-98.
Respondent objects that the Department did not raise this contention below. Although it did not elaborate on the point, the Department did, though, comment that “[b]asically, [the regulation] is directed toward new applicants, requiring that the state publicize the availability of the AFDC program through the use of pamphlets.” Brief for Appellant in No. 85-5143-MN (CA8), p. 24 (emphasis added). Moreover, the Department raised the argument in the petition for a writ of certiorari, see Pet. for Cert. 11, and respondent did not object, in her brief in opposition, that the Department had not raised the claim below. Thus, in accordance with our rule that “[n]onjurisdictional defects of this sort should be brought to our attention no later than in respondent’s brief in opposition to the petition for certiorari,” Oklahoma City v. Tuttle, 471 U. S. 808, 816 (1985) (emphasis in original), “we consider it within our discretion to deem the defect waived.” Ibid. Finally, the issue in this case, as raised by respondent’s complaint, is the meaning of the notice provision of the federal regulations. Whether or not the provision covers recipients as well as applicants is germane to that interpretive quest, regardless of whether one of the parties points us in that direction.
Petitioner also points out that although the notice provision originally referred simply to “applicants,” see 36 Fed. Reg. 3860, 3864 (1971), in 1978 it underwent a temporary metamorphosis. The Secretary published a notice of proposed rulemaking, 41 Fed. Reg. 56832 (1976), to respond to “reports from recipient group representatives that some State and local agencies have not made printed or oral information about the public assistance programs available to persons seeking information unless they are applicants.” 43 Fed. Reg. 6949 (1978). Accordingly, the notice provision was “revised to specify that information concerning the program shall be provided to any person who requests it, and applicants and all persons who inquire about the programs shall be informed of the eligibility requirements and the rights and obligations of individuals under the programs.” Id., at 6950. The next year, without explanation, the notice provision was shifted back to its original, and current, form. See 44 Fed. Reg. 17940, 17943 (1979). We agree with petitioner that this history provides strong support for the conclusion that the current provision does not extend beyond applicants. It also tends to buttress our reasoning in the text that the notice provision was intended simply as a requirement that general program information be made available to applicants upon request, and not as a mandate to States to provide specific, unrequested information about particular changes in eligibility requirements to current benefits recipients, or, as we also discuss in the text, to applicants.
The Secretary’s comments accompanying the regulations as originally promulgated strongly support this conclusion. As originally proposed in 1970, the redetermination provision read “[a]n applicant or recipient may be assisted if he so desires by other individuals of his choice in the various aspects of the application process and the redetermination of eligibility . . . .” 35 Fed. Reg. 18402 (1970) (emphasis added). When the provision was adopted several months later, the reference to “recipients” was eliminated, even though the reference to “redetermination of eligibility” was retained. 36 Fed. Reg. 3860, 3864 (1971). The Secretary’s explanatory comments continued to acknowledge the distinction between applicants and recipients, but did not explain the deletion of the term “recipients” from the text of the rule itself: “[Njotice of proposed rule making was published ... to provide that applicants for and recipients of public assistance may be accompanied by other individuals in their contacts with the agency, if they so wish.” Id., at 3860. Thus, the history of these regulations supports the conclusion in the text that the word “recipient” was inadvertently omitted when referring to redetermination, and, accordingly, that “applicant,” as used in the notice provision, means simply “applicant,” and nothing more.
The lump-sum rule is only one of many conditions of eligibility for AFDC benefits that are meticulously described in 40 pages of the Code of Federal Regulations and in 66 pages of Minnesota’s recently revised AFDC rules and regulations. See 45 CFR pt. 233 (1987); Minn. Rules, ch. 9500.2000 et seq. (1987). The conditions are subject to frequent alteration, with many changes such as the new lump-sum rule affecting only a small minority of AFDC recipients. Unquestionably it would be wise (assuming that it were feasible and not too expensive) to precede every such change with adequate advance notice, but the regulation itself does not unambiguously impose any such requirement on state welfare agencies.
In rebutting the argument that the Secretary’s views are due deference from us, respondent points to the Secretary’s response to an interrogatory put to him by petitioner’s predecessor as third-party plaintiff, a response upon which the Court of Appeals relied:
“Federal regulations at 45 CFR §206.10(a)(2)(i) and (ii) require a State agency to inform AFDC applicants and recipients about eligibility requirements and their rights and obligations under the AFDC Program. Under these requirements, States are fully expected to establish policies to ensure that individuals are provided information in written form, and orally as appropriate, about coverage, conditions of eligibility, scope of the program and related services available. This would include generally advising applicants and recipients of their obligation to report receipt of lump sum income, the operation of the lump sum rule, and the effect on eligibility for assistance.” App. 89 (emphasis added).
While the highlighted sentence indeed indicates that individuals must be advised to report receipt of lump-sum income, it does not specify whether such advisement must be made in specific mailings— i. e., a letter to recipients telling them to report receipt of lump-sum income as soon as it is received and before the normal monthly reporting, if necessary — or whether such advisement could be satisfied through the general notice telling individuals to report all of their income, including lump-sum income, on a usual, monthly basis. In fact, in response to a separate interrogatory, the Secretary explained:
“A State has considerable latitude in the development of procedures it shall adopt to ensure effective administration of the AFDC program. Provisions at Jp5 CFR §206.10(a)(2)(i) do not require a State to publicize the lump sum rule or any other eligibility requirements in specifically developed pamphlets or bulletins.” Id., at 90-91 (emphasis added).
'This second answer tends to support our reading of the first answer, namely, that it is inconclusive on the question whether States must notify individuals in advance to report lump-sum income immediately upon its receipt, or, for that matter, whether States must notify individuals in advance about the effect of the new lump-sum rule.
Respondent deems this case particularly harsh because of an earlier incident involving her family. When the Department sent its September 1981 letter explaining the new lump-sum rule, the Jenkinses were receiving AFDC benefits, and received a lump-sum payment later that year. However, because of obligations incurred in other litigation, the Department had not yet implemented the new lump-sum rule, and respondent’s lump-sum payment was treated under the old rule. Accordingly, respondent contends, she had every reason to believe that the old lump-sum rule was still in effect when her husband received the October 1983 Social Security payment. However, respondent fails to note during this argument that she swore to an affidavit that stated: “The welfare department apparently says that I got a letter in September of 1981 explaining the new lump sum rule. I have been shown a copy, of the letter, and don’t remember receiving it.” Id., at 111. Respondent cannot have it both ways: Either she received the letter and can argue that, because the new lump-sum rule was not applied to her late 1981 lump-sum payment, she had good cause to believe the new rule was not going to go into effect; or, she did not receive the letter and cannot invoke this equitable argument. Respondent’s affidavit admission forecloses the former argument.
The latter argument — that respondent did not receive the 1981 letter (or that she received it but did not understand it) and that therefore she acted in 1983 under the general assumption that, absent notice of the new lump-sum rule, the old lump-sum rule was still in effect — carried some weight with both the District Court and the Court of Appeals. See Slaughter v. Levine, 598 F. Supp., at 1050-1051; Slaughter v. Levine, 801 F. 2d, at 295-296. We are sympathetic with the plight of those AFDC recipients in this situation, and can only reiterate that our decision today is an endorsement of neither the new lump-sum rule nor the absence of notice thereof. Instead, our authority is merely to determine whether the pertinent provision of the regulations requires advance written notice to individuals explaining the workings of the new lump-sum rule. As we have explained, 45 CFR § 206.10(a)(2)(i) (1987) simply does not provide the specific mandate that respondent seeks.
Our decision, of course, means that the Department may recoup the overpayment made to respondent. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
62
] |
NATIONAL LABOR RELATIONS BOARD v. DENVER BUILDING & CONSTRUCTION TRADES COUNCIL et al.
No. 393.
Argued February 27, 1951.
Decided June 4, 1951.
David P. Findling argued the cause for petitioner. With him on the brief were Solicitor General Perlman, Mozart G. Ratner and Dominick L. Manoli.
Wm. E. Leahy argued the cause for respondents. With him on the brief were Wm. J. Hughes, Jr., Louis Sherman, Martin F. O’Donoghue, Thomas X. Dunn and Philip Hornbein, Jr.
Clif Langsdale filed a brief for the United Brotherhood of Carpenters & Joiners of America, A. F. of L., et al., as amici curiae, supporting respondents.
Mr. Justice Burton
delivered the opinion of the Court.
The principal question here is whether a labor organization committed an unfair labor practice, within the meaning of § 8 (b) (4) (A) of the National Labor Relations Act, 49 Stat. 449, 29 U. S. C. § 151, as amended by the Labor Management Relations Act, 1947, by engaging in a strike, an object of which was to force the general contractor on a construction project to terminate its contract with a certain subcontractor on that project. For the reasons hereafter stated, we hold that such an unfair labor practice was committed.
In September, 1947, Doose & Lintner was the general contractor for the construction of a commercial building in Denver, Colorado. It awarded a subcontract for electrical work on the building, in an estimated amount of $2,300, to Gould & Preisner, a firm which for 20 years had employed nonunion workmen on construction work in that city. The latter’s employees proved to be the only nonunion workmen on the project. Those of the general contractor and of the other subcontractors were members of unions affiliated with the respondent Denver Building and Construction Trades Council (here called the Council). In November a representative of one of those unions told Gould that he did not see how the job could progress with Gould’s nonunion men on it. Gould insisted that they would complete the electrical work unless bodily put off. The representative replied that the situation would be difficult for both Gould & Preisner and Doose & Lintner.
January 8,1948, the Council’s Board of Business Agents instructed the Council’s representative “to place a picket on the job stating that the job was unfair” to it. In keeping with the Council’s practice, each affiliate was notified of that decision. That notice was a signal in the nature of an order to the members of the affiliated unions to leave the job and remain away until otherwise ordered. Representatives of the Council and each of the respondent unions visited the project and reminded the contractor that Gould & Preisner employed nonunion workmen and said that union men could not work on the job with nonunion men. They further advised that if Gould & Preisner’s men did work on the job, the Council and its affiliates would put a picket on it to notify their members that nonunion men were working on it and that the job was unfair. All parties stood their ground.
January 9, the Council posted a picket at the project carrying a placard stating “This Job Unfair to Denver Building and Construction Trades Council.” He was paid by the Council and his picketing continued from January 9 through January 22. During that time the only persons who reported for work were the nonunion electricians of Gould & Preisner. January 22, before Gould & Preisner had completed its subcontract, the general contractor notified it to get off the job so that Doose & Lintner could continue with the project. January 23, the Council removed its picket and shortly thereafter the union employees resumed work on the project. Gould & Preisner protested this treatment but its workmen were denied entrance to the job.
On charges filed by Gould & Preisner, the Regional Director of the National Labor Relations Board issued the complaint in this case against the Council and the respondent unions. It alleged that they had engaged in a strike or had caused strike action to be taken on the project by employees of the general contractor and of other subcontractors, an object of which was to force the general contractor to cease doing business with Gould & Preisner on that project.
Between the Board’s receipt of the charges and the filing of the complaint based upon them, the Regional Director of the Board petitioned the United States District Court for the District of Colorado for injunctive relief. That petition was dismissed on the jurisdictional ground that the activities complained of did not affect interstate commerce. Sperry v. Denver Building Trades Council, 77 F. Supp. 321. Such action will be discussed later under the heading of res judicata. Hearings were held by the Board’s trial examiner on the merits of the complaint. The Board adopted its examiner’s findings, conclusions and recommendations, with minor additions and modifications not here material. It attached the examiner’s intermediate report to its decision and ordered respondents to cease and desist from engaging in the activities charged. 82 N. L. R. B. 1195. Respondents petitioned the United States Court of Appeals for the District of Columbia Circuit for a review under § 10 (f). The Board answered and asked for enforcement of its order. That court held, with one judge dissenting, that the conduct complained of affected interstate commerce sufficiently to give the Board jurisdiction over it, but the court unanimously set aside the order of the Board and said: “Convinced that the action in the circumstances of this case is primary and not secondary we are obliged to refuse to enforce the order based on § 8 (b) (4) (A).” 87 U. S. App. D. C. 293, 304, 186 F. 2d 326, 337. The Board claimed a conflict between that conclusion and the reasoning of the Court of Appeals for the Second Circuit in No. 108, International Brotherhood of Electrical Workers v. Labor Board, 181 F. 2d 34, and of that for the Sixth Circuit in No. 85, Labor Board v. Local 74, United Brotherhood of Carpenters, 181 F. 2d 126. We granted certiorari in each case, 340 U. S. 902-903, and all were argued with No. 313, Labor Board v. International Rice Milling Co., ante, p. 665. In another companion case, No. 387, United Brotherhood of Carpenters v. Labor Board, decided by the Court of Appeals for the Tenth Circuit, 184 F. 2d 60, certiorari has been denied this day, post, p. 947.
I. Res Judicata. — Respondents not only attack the jurisdiction of the Board on the ground that the actions complained of did not affect interstate commerce, but they contend that the decision rendered on that point by the District Court for the District of Colorado in Sperry v. Denver Building Trades Council, supra, has made the issue res judicata. We do not agree. The District Court did not have before it the record on the merits. It proceeded under § 10 (1) which is designed to assist a preliminary investigation of the charges before the filing of a complaint. If the officer or regional attorney to whom the matter is referred has reasonable cause to believe that a charge is true and that a complaint should issue, the statute says that he shall petition an appropriate District Court for injunctive relief, pending the final adjudication of the Board. Such proceeding is independent of that on the merits under § 10 (a)-(d). There is a separate provision for securing injunctive relief after the filing of the complaint. § 10 (j). Court review is authorized in § 10 (e) and (f). As held by the Board, 82 N. L. R. B. at 1203-1204, and the court below, 87 U. S. App. D. C. at 297, 299, 186 F. 2d at 330, 332, the very scheme of the statute accordingly contemplates that a decision on jurisdiction made in the independent preliminary proceeding for interlocutory relief, under § 10 (1), shall not foreclose a proceeding on the merits such as is now before us.
II. Effect on Interstate Commerce. — The activities complained of must affect interstate commerce in order to bring them within the jurisdiction of the Board. The Board here found that their effect was sufficient to sustain its jurisdiction and the Court of Appeals was satisfied. We see no justification for reversing that conclusion.
The Board found that, in 1947, Gould & Preisner purchased $86,560.30 of raw materials, of which $55,745.25, or about 65%, were purchased outside of Colorado. Also, most of the merchandise it purchased in Colorado had been produced outside of that State. While Gould & Preisner performed no services outside of Colorado, it shipped $5,000 of its products outside of that State. Up to the time when its services were discontinued on the instant project, it had expended on it about $315 for labor and about $350 for materials. On a 65% basis, $225 of those materials would be from out of the State. The Board adopted its examiner’s finding that any widespread application of the practices here charged might well result in substantially decreasing the influx of materials into Colorado from outside the State and it recognized that Gould & Preisner’s annual purchase of over $55,000 of such materials was not negligible.
The Board also adopted the finding that the activities complained of had a close, intimate and substantial relation to trade, traffic and commerce among the states and that they tended to lead, and had led, to labor disputes burdening and obstructing commerce and the free flow of commerce. The fact that the instant building, after its completion, might be used only for local purposes does not alter the fact that its construction, as distinguished from its later use, affected interstate commerce.
Even when the effect of activities on interstate commerce is sufficient to enable the Board to take jurisdiction of a complaint, the Board sometimes properly declines to do so, stating that the policies of the Act would not be effectuated by its assertion of jurisdiction in that case. Here, however, the Board not only upheld the filing of the complaint but it sustained the charges made in it.
The same jurisdictional language as that now in effect appeared in the National Labor Relations Act of 1935 and this Court said of it in that connection:
“Examining the Act in the light of its purpose and of the circumstances in which it must be applied we can perceive no basis for inferring any intention of Congress to make the operation of the Act depend on any particular volume of commerce affected more than that to which courts would apply the maxim de minimis.” Labor Board v. Fainblatt, 306 U. S. 601, 607; see also, Labor Board v. Jones & Laughlin Steel Corp., 301 U. S. 1.
The maxim de minimis non curat lex does not require the Board to refuse to take jurisdiction of the instant case.
III. The Secondary Boycott. — We now reach the merits. They require a study of the objectives of the strike and a determination whether the strike came within the definition of an unfair labor practice stated in § 8 (b) (4) (A).
The language of that section which is here essential is as follows:
“(b) It shall be an unfair labor practice for a labor organization . . .
“(4) to engage in ... a strike . . . where an object thereof is: (A) forcing or requiring . . . any employer or other person ... to cease doing business with any other person; . . . .” 61 Stat. 141, 29 U. S. C. (Supp. Ill) § 158 (b) (4) (A).
While § 8 (b) (4) does not expressly mention “primary” or “secondary” disputes, strikes or boycotts, that section often is referred to in the Act’s legislative history as one of the Act’s “secondary boycott sections.” The other is § 303, 61 Stat. 158, 29 U. S. C. (Supp. Ill) § 187, which uses the same language in defining the basis for private actions for damages caused by these proscribed activities.
Senator Taft, who was the sponsor of the bill in the Senate and was the Chairman of the Senate Committee on Labor and Public Welfare in charge of the bill, said, in discussing this section:
“. . . under the provisions of the Norris-LaGuardia Act, it became impossible to stop a secondary boycott or any other kind of a strike, no matter how unlawful it may have been at common law. All this provision of the bill does is to reverse the effect of the law as to secondary boycotts. It has been set forth that there are good secondary boycotts and bad secondary boycotts. Our committee heard evidence for weeks and never succeeded in having anyone tell us any difference between different kinds of secondary boycotts. So we have so broadened the provision dealing with secondary boycotts as to make them an unfair labor practice.” 93 Cong. Rec. 4198.
The Conference Report to the House of Representatives said:
“Under clause (A) [of § 8 (b) (4)] strikes or boycotts, or attempts to induce or encourage such action, were made unfair labor practices if the purpose was to force an employer or other person to cease using, selling, handling, transporting, or otherwise dealing in the products of another, or to cease doing business with any other person. Thus it was made an unfair labor practice for a union to engage in a strike against employer A for the purpose of forcing that employer to cease doing business with employer B. Similarly it would not be lawful for a union to boycott employer' A because employer A uses or otherwise deals in the goods, of, or does business with, employer B.” H. R. Rep. No. 510, 80th Cong., 1st Sess. 43.
At the same time that §§ 7 and 13 safeguard collective bargaining, concerted activities and strikes between the primary parties to a labor dispute, § 8 (b) (4) restricts a labor organization and its agents in the use of economic pressure where an object of it is to force an employer or other person to boycott someone else.
A. We must first determine whether the strike in this case had a proscribed object. The conduct which the Board here condemned is readily distinguishable from that which it declined to condemn in the Rice Milling case, ante, p. 665. There the accused union sought merely to obtain its own recognition by the operator of a mill, and the union’s pickets near the mill sought to influence two employees of a customer of the mill not to cross the picket line. In that case we supported the Board in its conclusion that such conduct was no more than was traditional and permissible in a primary strike. The union did not engage in a strike against the customer. It did not encourage concerted action by the customer’s employees to force the customer to boycott the mill. It did not commit any unfair labor practice proscribed by §8(b) (4).
In. the background of the instant case there was a longstanding labor dispute between the Council and Gould & Preisner due to the latter’s practice of employing nonunion workmen on construction jobs in Denver. The respondent labor organizations contend that they engaged in a primary dispute with Doose & Lintner alone, and that they sought simply to force Doose & Lintner to make the project an all-union job. If there had been no contract between Doose & Lintner and Gould & Preisner there might be substance in their contention that the dispute involved no boycott. If, for example, Doose & Lintner had been doing all the electrical work on this project through its own nonunion employees, it could have replaced them with union men and thus disposed of the dispute. However, the existence of the Gould & Preisner subcontract presented a materially different situation. The nonunion employees were employees of Gould & Preisner. The only way that respondents could attain their purpose was to force Gould & Preisner itself off the job. This, in turn, could be done only through Doose & Lintner’s termination of Gould & Preisner’s subcontract. The result is that the Council’s strike, in order to attain its ultimate purpose, must have included among its objects that of forcing Doose & Lintner to terminate that subcontract. On that point, the Board adopted the following finding:
“That an object, if not the only object, of what transpired with respect to . . . Doose & Lintner was to force or require them to cease doing business with Gould & Preisner seems scarcely open to question, in view of all of the facts. And it is clear at least as to Doose & Lintner, that that purpose was achieved.” (Emphasis supplied.) 82 N. L. R. B. at 1212.
We accept this crucial finding. It was an object of the strike to force the contractor to terminate Gould & Preisner’s subcontract.
B. We hold also that a strike with such an object was an unfair labor practice within the meaning of § 8 (b) (4) (A).
It is not necessary to find that the sole object of the strike was that of forcing the contractor to terminate the subcontractor’s contract. This is emphasized in the legislative history of the section. See also, Labor Board v. Wine, Liquor & Distillery Workers Union, 178 F. 2d 584, 586.
We agree with the Board also in its conclusion that the fact that the contractor and subcontractor were engaged on the same construction project, and that the contractor had some supervision over the subcontractor’s work, did not eliminate the status of each as an independent contractor or make the employees of one the employees of the other. The business relationship between independent contractors is too well established in the law to be overridden without clear language doing so. The Board found that the relationship between Doose & Lintner and Gould & Preisner was one of “doing business” and we find no adequate reason for upsetting that conclusion.
Finally, § 8 (c) safeguarding freedom of speech has no significant application to the picket’s placard in this case. Section 8 (c) does not apply to a mere signal by a labor organization to its members, or to the members of its affiliates, to engage in an unfair labor practice such as a strike proscribed by § 8 (b) (4) (A). That the placard was merely such a signal, tantamount to a direction to strike, was found by the Board.
“. . . the issues in this case turn upon acts by labor organizations which are tantamount to directions and instructions to their members to engage in strike action. The protection afforded by Section 8 (c) of the Act to the expression of ‘any views, argument or opinion’ does not pertain where, as here, the issues raised under Section 8 (b) (4) (A) turn on official directions or instructions to a union’s own members.” 82 N. L. R. B. at 1213.
The further conclusion that § 8 (c) does not immunize action against the specific provisions of § 8 (b) (4) (A) has been announced in other cases. See No. 108, International Brotherhood of Electrical Workers v. Labor Board, post, p. 694.
Not only are the findings of the Board conclusive with respect to questions of fact in this field when supported by substantial evidence on the record as a whole, but the Board’s interpretation of the Act and the Board’s application of it in doubtful situations are entitled to weight. In the views of the Board as applied to this case we find conformity with the dual congressional objectives of preserving the right of labor organizations to bring pressure to bear on offending employers in primary labor disputes and of shielding unoffending • employers and others from pressures in controversies not their own.
For these reasons we conclude that the conduct of respondents constituted an unfair labor practice within the meaning of § 8 (b) (4) (A). The judgment of the Court of Appeals accordingly is reversed and the case is remanded to it for procedure not inconsistent with this opinion.
It is so ordered.
Mr. Justice Jackson would affirm the judgment of the Court of Appeals.
“Sec. 8. . . .
“(b) It shall be an unfair.labor practice for a labor organization or its agents—
“(4) to engage in, or to induce or encourage the employees of any employer to engage in, a strike or a concerted refusal in the course of their employment to use, manufacture, process, transport, or otherwise handle or work on any goods, articles, materials, or commodities or to perform any services, where an object thereof is: (A) forcing or requiring any employer or self-employed person to join any labor or employer organization or any employer or other person to cease using, selling, handling, transporting, or otherwise dealing in the products of any other producer, processor, or manufacturer, or to cease doing business with any other person; . . . .” 61 Stat. 140-141, 29 U. S. C. (Supp. Ill) § 158 (b) (4) (A).
Denver Building Trades Council, 82 N. L. R. B. 1195, 1210.
The Council’s by-laws provided in part:
“Article I-B
“Section 1. It shall be the duty of this Council to stand for absolute closed shop conditions on all jobs in the City of Denver and jurisdictional surroundings. . . . [Emphasis in original]
“Section 2. The Board of Business Agents . . . shall have the power to declare a job unfair and remove all men from the job. They shall also have the power to place the men back on the job when satisfactory arrangements have been made.
“Section 3. Any craft refusing to leave a job which has been declared unfair or returning to the job before being ordered back by the Council or its Board of Agents shall be tried, and if found guilty, shall be fined the sum of $25.00.
“Section 4. Refusal of any organization to pay said fine shall be followed by expulsion from this Council. An organization so expelled shall pay said fine and one complete back quarter dues and per capita before being reinstated.
“Article XI-B
“Section 1. Strikes must be called by the Council or the Board of Agents in conformity with Article I-B, Sections 1-2. When strikes are called the Council shall have full jurisdiction over the same, and any contractor, who works on a struck job, or employs non-union men to work on a struck job, shall be declared unfair and all union men shall be called off from his work or shop.
“Section 2. The representative of the Council shall have the power to order all strikes when instructed to do so by the Council or Board of Agents. ... All employees on a struck job shall leave the same when ordered to do so by the Council Agent and remain away from the same until such time as a settlement is made, or otherwise ordered.” 82 N. L. R. B. at 1214^1215.
82 N. L. R. B. at 1211.
Originally the complaint was directed also against another union and included incidents at two other construction projects in Denver on which Gould & Preisner had subcontracted to do electrical work. The trial examiner recommended that the Board issue a cease and desist order based upon one of those incidents, but the Board dismissed the complaint as to all conduct except that on the project before us.
Under § 10 (1), 61 Stat. 149-150,29 U. S. C. (Supp. Ill) § 160 (l).
61 Stat. 148-149,29 U. S. C. (Supp. Ill) § 160 (f).
For a collection and review of the Board and lower court cases dealing with these and related issues under § 8 (b) (4), see Dennis, The Boycott Under the Taft-Hartley Act, N. Y. U. Third Annual Conference on Labor (1950) 367-460.
An appeal to the Court of Appeals in that proceeding was dismissed by the Board with that court’s consent.
“ (1) Whenever it is charged that any person has engaged in an unfair labor practice within the meaning of paragraph (4) (A), (B), or (C) of section 8 (b), the preliminary investigation of such charge shall be made forthwith and given priority over all other cases except cases of like character in the office where it is filed or to which it is referred. If, after such investigation, the officer or regional attorney to whom the matter may be referred has reasonable cause to believe such charge is true and that a complaint should issue, he shall, on behalf of the Board, petition any district court of the United States (including the District Court of the United States for the District of Columbia) within any district where the unfair labor practice in question has occurred, is alleged to have occurred, or wherein such person resides or transacts business, for appropriate injunctive relief pending the final adjudication of the Board with respect to such matter. Upon the filing of any such petition the district court shall have jurisdiction to grant such injunctive relief or temporary restraining order as it deems just and proper, notwithstanding any other provision of law: . . . .” '61 Stat. 149, 29 U. S.C. (Supp. Ill) § 160 (l).
See also, Labor Board v. Local 74, United Brotherhood of Carpenters, 181 F. 2d 126, aff’d in No. 85, post, p. 707; Denver Building Trades Council, 82 N. L. R. B. 93.
“Sec. 10. (a) The Board is empowered ... to prevent any person from engaging in any unfair labor practice (listed in section 8) affecting commerce. . . .” 61 Stat. 146, 29 U. S. C. (Supp. III) §160 (a).
“Sec. 2. When used in this Act—
“(6) The term 'commerce’ means trade, traffic, commerce, transportation, or communication among the several States ....
“(7) The term ‘affecting commerce’ means in commerce, or burdening or obstructing commerce or the free flow of commerce, or having led or tending to lead to a labor dispute burdening or obstructing commerce or the free flow of commerce. . . .” 61 Stat. 137-138, 29 U. S. C. (Supp. Ill) § 152 (6) (7).
49 Stat. 450, 29 U. S. C. § 152 (6) and (7).
“. . . Congress gave the Board authority to prevent practices ‘tending to lead to a labor dispute burdening or obstructing commerce or the free flow of commerce.’ . . . Congress therefore left it to the Board to ascertain whether proscribed practices would in particular situations adversely affect commerce when judged by the full reach of the constitutional power of Congress. Whether or no practices may be deemed by Congress to affect interstate commerce is not to be determined by confining judgment to the quantitative effect of the activities immediately before the Board. Appropriate for judgment is the fact that the immediate situation is representative of many others throughout the country, the total incidence of which if left unchecked may well become far-reaching in its harm to commerce.” Polish Alliance v. Labor Board, 322 U. S. 643, 648. See also, United Brotherhood of Carpenters v. Sperry, 170 F. 2d 863, 867-868.
For the current practice see Mimeograph Release of National Labor Relations Board, dated October 6, 1950, entitled “N. L. R. B. Clarifies and Defines Areas In Which It Will and Will Not Exercise Jurisdiction.” See also, Hotel Assn. of St. Louis, 92 N. L. R. B. 1388, 27 LRR Man. 1243.
See also, Hearings before the Senate Committee on Labor and Public Welfare on S. 55 and S. J. Res. 22, 80th Cong., 1st Sess. 14, 568, 688, 983, 1614, 1814, 1838; S. Rep. No. 105, 80th Cong., 1st Sess. (Pt. 1) 3, 22, 54, (Pt. 2) 19; 93 Cong. Ree. 4844, 4845, 4858.
61 Stat. 140, 151, 29 U. S. C. (Supp. Ill) §§ 157,163.
The Board further stated:
“2. The Trial Examiner found that the Council and the other three Respondents, by picketing Doose & Lintner’s . . . project as alleged in the complaint and thereby causing members of local unions affiliated with the Council to quit work on that project, with an object of forcing Doose & Lintner to cease doing business with Gould & Preisner, engaged in strike action in violation of Section 8 (b) (4) (A). We find merit in the Respondents’ exceptions only with respect to Carpenters [not involved here], and otherwise agree in substance with the Trial’s Examiner’s finding.” 82 N. L. R. B. at 1196.
Senator Taft, sponsor of the bill, stated in his supplementary analysis of it as passed: “Section 8 (b) (4), relating to illegal strikes and boycotts, was amended in conference by striking out the words ‘for the purpose of’ and inserting the clause ‘where an object thereof is.’ ” 93 Cong. Rec. 6859.
See note 17, supra, and see also:
“What the issue really boils down to is this: Does Section 8 (b) (4) (A) apply to normal business dealings between a contractor and subcontractor, both engaged in the same general business, where boycott pressure is applied against the subcontractor in aid of a dispute with the principal contractor? Clearly it does under the wording of the statute.” Metal Polishers Union, 86 N. L. R. B. 1243, 1252.
And see Labor Board v. Wine, Liquor & Distillery Workers Union, 178 F. 2d 584.
“The expressing of any views, argument, or opinion, or the dissemination thereof, whether in written, printed, graphic, or visual form, shall not constitute or be evidence of an unfair labor practice under any of the provisions of this Act, if such expression contains no threat of reprisal or force or promise of benefit.” 61 Stat. 142, 29 U. S. C. (Supp. III) § 158 (c).
“This strike action, of which the picketing was an integral and inseparable part, had the planned and expected effect of denying the services of all union workmen to Doose & Lintner while they continued to utilize the services of Gould & Preisner. Yet as soon as the illegal objective of the Respondents’ strike action had been achieved, the picket, the signal to union workmen that a strike was in progress, was removed. Thereupon union workmen were again available to Doose & Lintner. Thus the joint enterprise of the Respondents was accomplished within the framework and intent of the Council’s bylaws but in violation of Section 8 (b) (4) (A) of the Act.” 82 N. L. R. B. at 1216. And see reference to this finding by the same trial examiner in International Brotherhood of Electrical Workers, 82 N. L. R. B. 1028, 1046, n. 55.
“We therefore conclude that Section 8 (b) (4) (A) prohibits peaceful picketing, as well as other peaceful means of inducement and encouragement, in furtherance of an objective proscribed therein and that Section 8 (c) does not immunize such conduct.” United Brotherhood of Carpenters, 81 N. L. R. B. 802, 815; see also, pp. 807-816; enforcement order issued in Labor Board v. United Brotherhood of Carpenters, 184 F. 2d 60, certiorari denied this day as No. 387, post, p. 947. See United Brotherhood of Carpenters v. Sperry, 170 F. 2d 863, 868-869; Printing Specialties Union, 82 N. L. R. B. 271, 290; Bricklayers Union, 82 N. L. R. B. 228; Local 1796, United Brotherhood of Carpenters, 82 N. L. R. B. 211.
Universal Camera Corp. v. Labor Board, 340 U. S. 474; Labor Board v. Pittsburgh Steamship Co., 340 U. S. 498. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
81
] |
CENTRAL HUDSON GAS & ELECTRIC CORP. v. PUBLIC SERVICE COMMISSION OF NEW YORK
No. 79-565.
Argued March 17, 1980
Decided June 20, 1980
Powell, J., delivered the opinion of the Court, in which BurgeR, C. J., and Stewart, White, and Marshall, JJ., joined. BreNNAN, J., filed an opinion concurring in the judgment, post, p. 572. Blackmutst, J., post, p. 573, and SteveNS, J., post, p. 579, filed opinions concurring in the judgment, in which BreNNAN, J., joined. Rehnquist, J., filed a dissenting opinion, post, p. 583.
Telford Taylor argued the cause for appellant. With him on the briefs were Walter A. Bossert, Jr., and Davison W. Grant.
Peter H. Schiff argued the cause for appellee. With him on the brief was Howard J. Read.
Briefs of amici curiae urging reversal were filed by Cameron F. Mac-Bae and Robert L. Baum for the Edison Electric Institute; by Burt Nen-horne for Long Island Lighting Co.; by Edward H. Dowd and Myrna P. Field for the Mid-Atlantic Legal Foundation et ah; and by Edwin P. Rome and William H. Roberts for Mobil Corp.
Me. Justice Powell
delivered the opinion of the Court.
This case presents the question whether a regulation of the Public Service Commission of the State of New York violates the First and Fourteenth Amendments because it completely bans promotional advertising by an electrical utility.
I
In December 1973, the Commission, appellee here, ordered electric utilities in New York State to cease all advertising that “promot[es] the use of electricity.” App. to Juris. Statement 31a. The order was based on the Commission’s finding that “the interconnected utility system in New York State does not have sufficient fuel stocks or sources of supply to continue furnishing all customer demands for the 1973-1974 winter.” Id., at 26a.
Three years later, when the fuel shortage had eased, the Commission requested comments from the public on its proposal to continue the ban on promotional advertising. Central Hudson Gas & Electric Corp., the appellant in this case, opposed the ban on First Amendment grounds. App. A10. After reviewing the public comments, the Commission extended the prohibition in a Policy Statement issued on February 25, 1977.
The Policy Statement divided advertising expenses “into two broad categories: promotional — advertising intended to stimulate the purchase of utility services — and institutional and informational, a broad category inclusive of all advertising not clearly intended to promote sales.” App. to Juris. Statement 35a. The Commission declared all promotional advertising contrary to the national policy of conserving energy. It acknowledged that the ban is not a perfect vehicle for conserving energy. For example, the Commission’s order prohibits promotional advertising to develop consumption during periods when demand for electricity is low. By limiting growth in “off-peak” consumption, the ban limits the “beneficial side effects” of such growth in terms of more efficient use of existing powerplants. Id., at 37a. And since oil dealers are not under the Commission’s jurisdiction and thus remain free to advertise, it was recognized that the ban can achieve only “piecemeal conservationism” Still, the Commission adopted the restriction because it was deemed likely to “result in some dampening of unnecessary growth” in energy consumption. Ibid.
The Commission’s order explicitly permitted “informational” advertising designed to encourage “shifts of consumption” from peak demand times to periods of low electricity demand. Ibid, (emphasis in orginal). Informational advertising would not seek to increase aggregate consumption, but would invite a leveling of demand throughout any given 24-hour period. The agency offered to review “specific proposals by the companies for specifically described [advertising] programs that meet these criteria.” Id., at 38a.
When it rejected requests for rehearing on the Policy Statement, the Commission supplemented its rationale for the advertising ban. The agency observed that additional electricity probably would be more expensive to produce than existing output. Because electricity rates in New York were not then based on marginal cost, the Commission feared that additional power would be priced below the actual cost of generation. The additional electricity would be subsidized by all consumers through generally higher rates. Id., at 57a-58a. The state agency also thought that promotional advertising would give “misleading signals” to the public by appearing to encourage energy consumption at a time when conservation is needed. Id., at 59a.
Appellant challenged the order in state court, arguing that the Commission had restrained commercial speech in violation of the First and Fourteenth Amendments. The Commission’s order was upheld by the trial court and at the intermediate appellate level. The New York Court of Appeals affirmed. It found little value to advertising in “the noncompetitive market in which electric corporations operate.” Consolidated Edison Co. v. Public Service Comm’n, 47 N. Y. 2d 94, 110, 390 N. E. 2d 749, 757 (1979). Since consumers “have no choice regarding the source of their electric power,” the court denied that “promotional advertising of electricity might contribute to society’s interest in ‘informed and reliable’ economic decisionmaking.” Ibid. The court also observed that by encouraging consumption, promotional advertising would only exacerbate the current energy situation. Id., at 110, 390 N. E. 2d, at 758. The court concluded that the governmental interest in the prohibition outweighed the limited constitutional value of the commercial speech at issue. We noted probable jurisdiction, 444 U. S. 962 (1979), and now reverse.
The Commission’s order restricts only commercial speech, that is, expression related solely to the economic interests of the speaker and its audience. Virginia Pharmacy Board v. Virginia Citizens Consumer Council, 425 U. S. 748, 762 (1976); Bates v. State Bar of Arizona, 433 U. S. 350, 363-364 (1977); Friedman v. Rogers, 440 U. S. 1, 11 (1979). The First Amendment, as applied to the States through the Fourteenth Amendment, protects commercial speech from unwarranted governmental regulation. Virginia Pharmacy Board, 425 U. S., at 761-762. Commercial expression not only serves the economic interest of the speaker, but also assists consumers and furthers the societal interest in the fullest possible dissemination of information. In applying the First Amendment to this area, we have rejected the “highly paternalistic” view that government has complete power to suppress or regulate commercial speech. “[P]eople will perceive their own best interests if only they are well enough informed, and . . . the best means to that end is to open the channels of communication, rather than to close them. . . .” Id., at 770; see Linmark Associates, Inc. v. Willingboro, 431 U. S. 85, 92 (1977). Even when advertising communicates only an incomplete version of the relevant facts, the First Amendment presumes that some accurate information is better than no information at all. Bates v. State Bar of Arizona, supra, at 374.
Nevertheless, our decisions have recognized "the ‘commonsense’ distinction between speech proposing a commercial transaction, which occurs in an area traditionally subject to government regulation, and other varieties of speech.” Ohralik v. Ohio State Bar Assn., 436 U. S. 447, 455-456 (1978); see Bates v. State Bar of Arizona, supra, at 381; see also Jackson & Jeffries, Commercial Speech: Economic Due Process and the First Amendment, 65 Ya. L. Rev. 1, 38-39 (1979). The Constitution therefore accords a lesser protection to commercial speech than to other constitutionally guaranteed expression. 436 U. S., at 456, 457. The protection available for particular commercial expression turns on the nature both of the expression and of the governmental interests served by its regulation.
The First Amendment’s concern for commercial speech is based on the informational function of advertising. See First National Bank of Boston v. Bellotti, 435 U. S. 765, 783 (1978). Consequently, there can be no constitutional objection to the suppression of commercial messages that do not accurately inform the public about lawful activity. The government may ban forms of communication more likely to deceive the public than to inform it, Friedman v. Rogers, supra, at 13, 15-16; Ohralik v. Ohio State Bar Assn., supra, at 46A-465, or commercial speech related to illegal activity, Pittsburgh Press Co. v. Human Relations Comm’n, 413 U. S. 376, 388 (1973).
If the communication is neither misleading nor related to unlawful activity, the government’s power is more circumscribed. The State must assert a substantial interest to be achieved by restrictions on commercial speech. Moreover, the regulatory technique must be in proportion to that interest. The limitation on expression must be designed carefully to achieve the State’s goal. Compliance with this requirement may be measured by two criteria. First, the restriction must directly advance the state interest involved; the regulation may not be sustained if it provides only ineffective or remote support for the government’s purpose. Second, if the governmental interest could be served as well by a more limited restriction on commercial speech, the excessive restrictions cannot survive.
Under the first criterion, the Court has declined to uphold regulations that only indirectly advance the state interest involved. In both Bates and Virginia Pharmacy Board, the Court concluded that an advertising ban could not be imposed to protect the ethical or performance standards of a profession. The Court noted in Virginia Pharmacy Board that “[t]he advertising ban does not directly affect professional standards one way or the other.” 425 U. S., at 769. In Bates, the Court overturned an advertising prohibition that was designed to protect the “quality” of a lawyer’s work. “Restraints on advertising . . . are an ineffective way of deterring shoddy work.” 433 U. S., at 378.
The second criterion recognizes that the First Amendment mandates that speech restrictions be “narrowly drawn.” In re Primus, 436 U. S. 412, 438 (1978). The regulatory technique may extend only as far as the interest it serves. The State cannot regulate speech that poses no danger to the asserted state interest, see First National Bank of Boston v. Bellotti, supra, at 794-795, nor can it completely suppress information when narrower restrictions on expression would serve its interest as well. For example, in Bates the Court explicitly did not “foreclose the possibility that some limited supplementation, by way of warning or disclaimer or the like, might be required” in promotional materials. 433 U. S., at 384. See Virginia Pharmacy Board, supra, at 773. And in Carey v. Population Services International, 431 U. S. 678, 701-702 (1977), we held that the State’s “arguments ... do not justify the total suppression of advertising concerning contraceptives.” This holding left open the possibility that the State could implement more carefully drawn restrictions. See id., at 712 (Powell, J., concurring in part and in judgment) ; id., at 716-717 (Stevens, J., concurring in part and in judgment).
In commercial speech cases, then, a four-part analysis has developed. At the outset, we must determine whether the expression is protected by the First Amendment. For commercial speech to come within that provision, it at least must concern lawful activity and not be misleading. Next, we ask whether the asserted governmental interest is substantial. If both inquiries yield positive answers, we must determine whether the regulation directly advances the governmental interest asserted, and whether it is not more extensive than is necessary to serve that interest.
Ill
We now apply this four-step analysis for commercial speech to the Commission’s arguments in support of its ban on promotional advertising.
A
The Commission does not claim that the expression at issue either is inaccurate or relates to unlawful activity. Yet the New York Court of Appeals questioned whether Central Hudson’s advertising is protected commercial speech. Because appellant holds a monopoly over the sale of electricity in its service area, the state court suggested that the Commission’s order restricts no commercial speech of any worth. The court stated that advertising in a "noncompetitive market” could not improve the decisionmaking of consumers. 47 N. Y. 2d, at 110, 390 N. E. 2d, at 757. The court saw no constitutional problem with barring commercial speech that it viewed as conveying little useful information.
This reasoning falls short of establishing that appellant’s advertising is not commercial speech protected by the First Amendment. Monopoly over the supply of a product provides no protection from competition with substitutes for that product. Electric utilities compete with suppliers of fuel oil and natural gas in several markets, such as those for home heating and industrial power. This Court noted the existence of interfuel competition 45 years ago, see West Ohio Gas Co. v. Public Utilities Comm’n, 294 U. S. 63, 72 (1935). Each energy source continues to offer peculiar advantages and disadvantages that may influence consumer choice. For consumers in those competitive markets, advertising by utilities is just as valuable as advertising by unregulated firms.
Even in monopoly markets, the suppression of advertising reduces the information available for consumer decisions and thereby defeats the purpose of the First Amendment. The New York court’s argument appears to assume that the providers of a monopoly service or product are willing to pay for wholly ineffective advertising. Most businesses— even regulated monopolies — are unlikely to underwrite promotional advertising that is of no interest or use to consumers. Indeed, a monopoly enterprise legitimately may wish to inform the public that it has developed new services or terms of doing business. A consumer may need information to aid his decision whether or not to use the monopoly service at all, or how much of the service he should purchase. In the absence of factors that would distort the decision to advertise, we may assume that the willingness of a business to promote its products reflects a belief that consumers are interested in the advertising. Since no such extraordinary conditions have been identified in this case, appellant’s monopoly position does not alter the First Amendment’s protection for its commercial speech.
B
The Commission offers two state interests as justifications for the ban on promotional advertising. The first concerns energy conservation. Any increase in demand for electricity— during peak or off-peak periods — means greater consumption of energy. The Commission argues, and the New York, court agreed, that the State’s interest in conserving energy is sufficient to support suppression of advertising designed to increase consumption of electricity. In view of our country’s dependence on energy resources beyond our control, no one can doubt the importance of energy conservation. Plainly, therefore, the state interest asserted is substantial.
The Commission also argues that promotional advertising will aggravate inequities caused by the failure to base the utilities’ rates on marginal cost. The utilities argued to the Commission that if they could promote the use of electricity in periods of low demand, they would improve their utilization of generating capacity. The Commission responded that promotion of off-peak consumption also would increase consumption during peak periods. If peak demand were to rise, the absence of marginal cost rates would mean that the rates charged for the additional power would not reflect the true costs of expanding production. Instead, the extra costs would be borne by all consumers through higher overall rates. Withqut promotional advertising, the Commission stated, this inequitable turn of events would be less likely to occur. The choice among rate structures involves difficult and important questions of economic supply and distributional fairness. The State’s concern that rates be fair and efficient represents a clear and substantial governmental interest.
C
Next, we focus on the relationship between the State’s interests and the advertising ban. Under this criterion, the Commission’s laudable concern over the equity and efficiency of appellant’s rates does not provide a constitutionally adequate reason for restricting protected speech. The link between the advertising prohibition and appellant’s rate structure is, at most, tenuous. The impact of promotional advertising on the equity of appellant’s rates is highly speculative. Advertising to increase off-peak usage would have to increase peak usage, while other factors that directly affect the fairness and efficiency of appellant’s rates remained constant. Such conditional and remote eventualities simply cannot justify silencing appellant’s promotional advertising.
In contrast, the State’s interest in energy conservation is directly advanced by the Commission order at issue here. There is an immediate connection between advertising and demand for electricity. Central Hudson would not contest the advertising ban unless it believed that promotion would increase its sales. Thus, we find a direct link between the state interest in conservation and the Commission’s order.
D
We come finally to the critical inquiry in this case: whether the Commission’s complete suppression of speech ordinarily protected by the First Amendment is no more extensive than necessary to further the State’s interest in energy conservation. The Commission’s order reaches all promotional advertising, regardless of the impact of the touted service on overall energy use. But the energy conservation rationale, as important as it is, cannot justify suppressing information about electric devices or services that would cause no net increase in total energy use. In addition, no showing has been made that a more limited restriction on the content of promotional advertising would not serve adequately the State’s interests.
Appellant insists that but for the ban, it would advertise products and services that use energy efficiently. These include the “heat pump,” which both parties acknowledge to be a major improvement in electric heating, and the use of electric heat as a “backup” to solar and other heat sources. Although the Commission has questioned the efficiency of electric heating before this Court, neither the Commission’s Policy Statement nor its order denying rehearing made findings on this issue. In the absence of authoritative findings to the contrary, we must credit as within the realm of possibility the claim that electric heat can be an efficient alternative in some circumstances.
The Commission’s order prevents appellant from promoting electric services that would reduce energy use by diverting demand from less efficient sources, or that would consume roughly the same amount of energy as do alternative sources. In neither situation would the utility’s advertising endanger conservation or mislead the public. To. the extent that the Commission’s order suppresses speech that in no way impairs the State’s interest in energy conservation, the Commission’s order violates the First and Fourteenth Amendments and must be invalidated. See First National Bank of Boston v. Bellotti, 435 U. S. 765 (1978).
The Commission also has not demonstrated that its interest in conservation cannot be protected adequately by more limited regulation of appellant’s commercial expression. To further its policy of conservation, the Commission could attempt to restrict the format and content of Central Hudson’s advertising. It might, for example, require that the advertisements include information about the relative efficiency and expense of the offered service, both under current conditions and for the foreseeable future. Cf. Banzhaf v. FCC, 132 U. S. App. D. C. 14, 405 F. 2d 1082 (1968), cert. denied sub nom. Tobacco Institute, Inc. v. FCC, 396 U. S. 842 (1969). In the absence of a showing that more limited speech regulation would be ineffective, we cannot approve the complete suppression of Central Hudson’s advertising.
IV
Our decision today in no way disparages the national interest in energy conservation. We accept without reservation the argument that conservation, as well as the development of alternative energy sources, is an imperative national goal. Administrative bodies empowered to regulate electric utilities have the authority — and indeed the duty — -to take appropriate action to further this goal. When, however, such action involves the suppression of speech, the First and Fourteenth Amendments require that the restriction be no more extensive than is necessary to serve the state interest. In this case, the record before us fails to show that the total ban on promotional advertising meets this requirement.
Accordingly, the judgment of the New York Court of Appeals is
Reversed.
The dissenting opinion attempts to construe the Policy Statement to authorize advertising that would result “in a net energy savings” even if the advertising encouraged consumption of additional electricity. Post, at 604-605. The attempted construction fails, however, since the Policy Statement is phrased only in terms of advertising that promotes “the purchase of utility services” and “sales” of electricity. Plainly, the Commission did not intend to permit advertising that would enhance net energy efficiency by increasing consumption of electrical services.
“Marginal cost” has been defined as the “extra or incremental cost of producing an extra unit of output.” P. Samuelson, Economics 463 (19th ed. 1976) (emphasis in original).
Central Hudson also alleged that the Commission’s order reaches beyond the agency’s statutory powers. This argument was rejected by the New York Court of Appeals, Consolidated Edison Co. v. Public Service Comm’n, 47 N. Y. 2d 94, 102-104, 390 N. E. 2d 749, 752-754 (1979), and was not argued to this Court.
Consolidated Edison Co. v. Public Service Comm’n, 63 App. Div. 2d 364, 407 N. Y. S. 2d 735 (1978); App. to Juris. Statement 22a (N. Y. Sup. Ct., Feb. 17, 1978).
In an opinion concurring in the judgment, Mr. Justice SteveNS suggests that the Commission's order reaches beyond commercial speech to suppress expression that is entitled to the full protection of the First Amendment. See post, at 580-581. We find no support for this claim in the record of this case. The Commission’s Policy Statement excluded “institutional and informational” messages from the advertising ban, which was restricted to all advertising “clearly intended to promote sales.” App. to Juris. Statement 35a. The complaint alleged only that the “prohibition of promotional advertising by Petitioner is not reasonable regulation of Petitioner’s commercial speech. . . .” Id., at 70a. Moreover, the state-court opinions and the arguments of the parties before this Court also viewed this litigation as involving only commercial speech. Nevertheless, the concurring opinion of Me. Justice SteveNS views the Commission’s order as suppressing more than commercial speech because it would outlaw, for example, advertising that promoted electricity consumption by touting the environmental benefits of such uses. See post, at 581. Apparently the opinion would accord full First Amendment protection to all promotional advertising that includes claims “relating to . . . questions frequently discussed and debated by our political leaders.” Ibid.
Although this approach responds to the serious issues surrounding our national energy policy as raised in this case, we think it would blur further the line the Court has sought to draw in commercial speech cases. It would grant broad constitutional protection to any advertising that links a product to a current public debate. But many, if not most, products may be tied to public concerns with the environment, energy, economic policy, or individual health and safety. We rule today in Consolidated Edison Co. v. Public Service Comm’n, ante, p. 530, that utilities enjoy the full panoply of First Amendment protections for their direct comments on public issues. There is no reason for providing similar constitutional protection when such statements are made only in the context of commercial transactions. In that context, for example, the State retains the power to “insur[e] that the stream of commercial information flow[s] cleanly as well as freely.” Virginia Pharmacy Board v. Virginia Citizens Consumer Council, 425 U. S. 748, 772 (1975). This Court’s decisions on commercial expression have rested on the premise that such speech, although meriting some protection, is of less constitutional moment than other forms of speech. As we stated in Ohralik, the failure to distinguish between commercial and noncommercial speech “could invite dilution, simply by a leveling process, of the force of the [First] Amendment’s guarantee with respect to the latter kind of speech.” 436 U. S., at 456.
In most other contexts, the First Amendment prohibits regulation based on the content of the message. Consolidated Edison Co. v. Public Service Comm’n, ante, at 537-540. Two features of commercial speech permit regulation of its content. First, commercial speakers have extensive knowledge of both the market and their products. Thus, they are well situated to evaluate the accuracy of their messages and the lawfulness of the underlying activity. Bates v. State Bar of Arizona, 433 U. S. 350, 381 (1977). In addition, commercial speech, the offspring of economic self-interest, is a hardy breed of expression that is not “particularly susceptible to being crushed by overbroad regulation.” Ibid.
In Linmark Associates, Inc. v. Willingboro, 431 U. S. 85, 95-96 (1977), we observed that there was no definite connection between the township’s goal of integrated housing and its ban on the use of “For Sale” signs in front of houses.
This analysis is not an application of the “overbreadth” doctrine. The latter theory permits the invalidation of regulations on First Amendment grounds even when the litigant challenging the regulation has engaged in no constitutionally protected activity. E. g., Kunz v. New York, 340 U. S. 290 (1951). The overbreadth doctrine derives from the recognition that unconstitutional restriction of expression may deter protected speech by parties not before the court and thereby escape judicial review. Broadrick v. Oklahoma, 413 U. S. 601, 612-613 (1973); see Note, The First Amendment Overbreadth Doctrine, 83 Harv. L. Rev. 844, 853-858 (1970). This restraint is less likely where the expression is linked to “commercial well-being” and therefore is not easily deterred by “over-broad regulation.” Bates v. State Bar of Arizona, supra, at 381.
In this case, the Commission’s prohibition acts directly against the promotional activities of Central Hudson, and to the extent the limitations are unnecessary to serve the State’s interest, they are invalid.
We review with special care regulations that entirely suppress commercial speech in order to pursue a nonspeech-related policy. In those circumstances, a ban on speech could screen from public view the underlying governmental policy. See Virginia Pharmacy Board, 425 U. S., at 780, n. 8 (Stewart, J., concurring). Indeed, in recent years this Court has not approved a blanket ban on commercial speech unless the expression itself was flawed in some way, either because it was deceptive or related to unlawful activity.
Several commercial speech decisions have involved enterprises subject to extensive state regulation. E. g., Friedman v. Rogers, 440 U. S. 1, 4-5 (1979) (optometrists); Bates v. State Bar of Arizona, 433 U. S. 350 (1977) (lawyers); Virginia Pharmacy Board v. Virginia Citizens Consumer Council, supra, at 750-752 (pharmacists).
There may be a greater incentive for a utility to advertise if it can use promotional expenses in determining its rate of return, rather than pass those costs on solely to shareholders. That practice, however, hardly distorts the economic decision whether to advertise. Unregulated businesses pass on promotional costs to consumers, and this Court expressly approved the practice for utilities in West Ohio Gas Co. v. Public Utilities Comrn’n, 294 U. S. 63, 72 (1935).
See W. Jones, Regulated Industries 191-287 (2d ed. 1976).
The Commission also might consider a system of previewing advertising campaigns to insure that they will not defeat conservation policy. It has instituted such a program for approving “informational” advertising under the Policy Statement challenged in this case. See supra, at 560. We have observed that commercial speech is such a sturdy brand of expression that traditional prior restraint doctrine may not apply to it. Virginia Pharmacy Board v. Virginia Citizens Consumer Council, 425 U. S., at 771-772, n. 24. And in other areas of speech regulation, such as obscenity, we have recognized that a prescreening arrangement can pass constitutional muster if it includes adequate procedural safeguards. Freedman v. Maryland, 380 U. S. 51 (1965).
In view of our conclusion that the Commission’s advertising policy violates the First and Fourteenth Amendments, we do not reach appellant’s claims that the agency’s order also violated the Equal Protection Clause of the Fourteenth Amendment, and that it is both overbroad and vague.
The Commission order at issue here was not promulgated in response to an emergency situation. Although the advertising ban initially was prompted by critical fuel shortage in 1973, the Commission makes no claim that an emergency now exists. We do not consider the powers that the State might have over utility advertising in emergency circumstances. See State v. Oklahoma Oas & Electric Co., 536 P. 2d 887, 895-896 (Okla. 1975). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
116
] |
Jackie Hosang LAWSON and Jonathan M. Zang, Petitioners
v.
FMR LLC et al.
No. 12-3.
Supreme Court of the United States
Argued Nov. 12, 2013.
Decided March 4, 2014.
Syllabus*
To safeguard investors in public companies and restore trust in the financial markets following the collapse of Enron Corporation, Congress passed the Sarbanes-Oxley Act of 2002. One of the Act's provisions protects whistleblowers; at the time relevant here, that provision instructed: "No [public] company ..., or any ... contractor [or] subcontractor ... of such company, may discharge, demote, suspend, threaten, harass, or ... discriminate against an employee in the terms and conditions of employment because of [whistleblowing activity]." 18 U.S.C. § 1514A(a).
Plaintiffs below, petitioners here, are former employees of respondents (collectively FMR), private companies that contract to advise or manage mutual funds. As is common in the industry, the mutual funds served by FMR are public companies with no employees. Both plaintiffs allege that they blew the whistle on putative fraud relating to the mutual funds and, as a consequence, suffered retaliation by FMR. Each commenced suit in federal court. Moving to dismiss the suits, FMR argued that the plaintiffs could state no claim under § 1514A, for that provision protects only employees of public companies, and not employees of private companies that contract with public companies. On interlocutory appeal from the District Court's denial of FMR's motion to dismiss, the First Circuit reversed, concluding that the term "an employee" in § 1514A(a) refers only to employees of public companies.
Held : The judgment is reversed and the case is remanded.
670 F.3d 61, reversed and remanded.
Justice GINSBURG delivered the opinion of the Court, concluding that § 1514A's whistleblower protection includes employees of a public company's private contractors and subcontractors. Pp. 1165 - 1176.
(a) This reading of § 1514A is supported by the provision's text. Pp. 1165 - 1169.
(1) The Court looks first to the ordinary meaning of the provision's language. See Moskal v. United States, 498 U.S. 103, 108, 111 S.Ct. 461, 112 L.Ed.2d 449. As relevant here, § 1514A(a) provides that "no ... contractor ... may discharge ... an employee." The ordinary meaning of "an employee" in this proscription is the contractor's own employee. FMR's "narrower construction" requires inserting "of a public company" after "an employee," but where Congress meant "an employee of a public company," it said so.
The provision as a whole supports this reading. The prohibited retaliatory measures enumerated in § 1514A(a)-discharge, demotion, suspension, threats, harassment, or discrimination in employment terms and conditions-are actions an employer takes against its own employees. Contractors are not ordinarily positioned to take adverse actions against employees of the public company with whom they contract. FMR's interpretation of § 1514A, therefore, would shrink to insignificance the provision's ban on retaliation by contractors. The protected activity covered by § 1514A, and the provision's enforcement procedures and remedies, also indicate that Congress presumed an employer-employee relationship between the retaliator and the whistleblowing employee. Pp. 1165 - 1168.
(2) FMR's textual arguments are unpersuasive. It urges that "an employee" must be read to refer exclusively to public company employees to avoid the absurd result of extending protection to the personal employees of company officers and employees, e.g., their housekeepers or gardeners. This concern appears more theoretical than real and, in any event, is outweighed by the compelling arguments opposing FMR's reading of § 1514A. FMR also urges that its reading is supported by the provision's statutory headings, but those headings are "not meant to take the place of the detailed provisions of the text."
Trainmen v. Baltimore & Ohio R. Co., 331 U.S. 519, 528, 67 S.Ct. 1387, 91 L.Ed. 1646. Pp. 1168 - 1169.
(b) Other considerations support the Court's textual analysis. Pp. 1169 - 1175.
(1) The Court's reading fits § 1514A's aim to ward off another Enron debacle. The legislative record shows Congress' understanding that outside professionals bear significant responsibility for reporting fraud by the public companies with whom they contract, and that fear of retaliation was the primary deterrent to such reporting by the employees of Enron's contractors. Sarbanes-Oxley contains numerous provisions designed to control the conduct of accountants, auditors, and lawyers who work with public companies, but only § 1514A affords such employees protection from retaliation by their employers for complying with the Act's reporting requirements. Pp. 1169 - 1171.
(2) This Court's reading of § 1514A avoids insulating the entire mutual fund industry from § 1514A. Virtually all mutual funds are structured so that they have no employees of their own; they are managed, instead, by independent investment advisors. Accordingly, the "narrower construction" endorsed by FMR would leave § 1514A with no application to mutual funds. The Court's reading of § 1514A, in contrast, protects the employees of investment advisors, who are often the only firsthand witnesses to shareholder fraud involving mutual funds. Pp. 1171 - 1172.
(3) There is scant evidence that today's decision will open any floodgates for whistleblowing suits outside § 1514A's purposes. The Department of Labor's regulations have interpreted § 1514A as protecting contractor employees for almost a decade, yet FMR is unable to identify a single case in which the employee of a private contractor has asserted a § 1514A claim based on allegations unrelated to shareholder fraud. Plaintiffs and the Solicitor General suggest various limiting principles to dispel any overbreadth problems. This Court need not determine § 1514A's bounds here, however, because, if plaintiffs' allegations prove true, plaintiffs are precisely the "firsthand witnesses to [the shareholder] fraud" Congress anticipated § 1514A would protect. S.Rep. No. 107-146, p. 10. Pp. 1172 - 1174.
(4) The 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act does not affect this Court's task of determining whether Congress in 2002 afforded protection to whistleblowing contractor employees. Pp. 1173 - 1175.
(c) AIR 21's whistleblower protection provision has been read to cover, in addition to employees of air carriers, employees of contractors and subcontractors of the carriers. Given the parallel statutory texts and whistleblower protective aims, the Court reads the words "an employee" in AIR 21 and in § 1514A to have similar import. Pp. 1175 - 1176.
Justice SCALIA, joined by Justice THOMAS, relying only on 18 U.S.C. § 1514A's text and broader context, agreed that § 1514A protects employees of private contractors from retaliation when they report covered forms of fraud. Pp. 1176 - 1177.
GINSBURG, J., delivered the opinion of the Court, in which ROBERTS, C.J., and BREYER and KAGAN, JJ., joined, and in which SCALIA and THOMAS, JJ., joined in principal part. SCALIA, J., filed an opinion concurring in principal part and concurring in the judgment, in which THOMAS, J., joined. SOTOMAYOR, J., filed a dissenting opinion, in which KENNEDY and ALITO, JJ., joined.
Eric Schnapper, Seattle, WA, for the petitioners.
Nicole A. Saharsky, for the United States as amicus curiae, by special leave of the Court, supporting the petitioners.
Mark A. Perry, Washington, DC, for the respondents.
Eric Schnapper, Counsel of Record, Seattle, WA, Indira Talwani, Segal Roitman, LLP, Boston, MA, Kevin G. Powers, Rodgers, Powers & Schwartz, LLP, Boston, MA, Counsel for Petitioners.
Stephen M. Shapiro, Timothy S. Bishop, Mayer Brown LLP, Chicago, IL, Mark A. Perry, Counsel of Record, Porter N. Wilkinson, Geoffrey C. Weien, Gibson, Dunn & Crutcher LLP, Washington, DC, Rachel S. Brass, Gibson, Dunn & Crutcher LLP, San Francisco, CA, Counsel for Respondents.
Justice GINSBURG delivered the opinion of the Court.
To safeguard investors in public companies and restore trust in the financial markets following the collapse of Enron Corporation, Congress enacted the Sarbanes-Oxley Act of 2002, 116 Stat. 745. See S.Rep. No. 107-146, pp. 2-11 (2002). A provision of the Act, 18 U.S.C. § 1514A, protects whistleblowers. Section 1514A, at the time here relevant, instructed:
"No [public] company ..., or any officer, employee, contractor, subcontractor, or agent of such company, may discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment because of [whistleblowing or other protected activity]." § 1514A(a) (2006 ed.).
This case concerns the definition of the protected class: Does § 1514A shield only those employed by the public company itself, or does it shield as well employees of privately held contractors and subcontractors-for example, investment advisers, law firms, accounting enterprises-who perform work for the public company?
We hold, based on the text of § 1514A, the mischief to which Congress was responding, and earlier legislation Congress drew upon, that the provision shelters employees of private contractors and subcontractors, just as it shelters employees of the public company served by the contractors and subcontractors. We first summarize our principal reasons, then describe this controversy and explain our decision more comprehensively.
Plaintiffs below, petitioners here, are former employees of private companies that contract to advise or manage mutual funds. The mutual funds themselves are public companies that have no employees. Hence, if the whistle is to be blown on fraud detrimental to mutual fund investors, the whistleblowing employee must be on another company's payroll, most likely, the payroll of the mutual fund's investment adviser or manager.
Taking the allegations of the complaint as true, both plaintiffs blew the whistle on putative fraud relating to the mutual funds and, as a consequence, suffered adverse action by their employers. Plaintiffs read § 1514A to convey that "[n]o ... contractor ... may ... discriminate against [its own] employee [for whistleblowing]." We find that reading consistent with the text of the statute and with common sense. Contractors are in control of their own employees, but are not ordinarily positioned to control someone else's workers. Moreover, we resist attributing to Congress a purpose to stop a contractor from retaliating against whistleblowers employed by the public company the contractor serves, while leaving the contractor free to retaliate against its own employees when they reveal corporate fraud.
In the Enron scandal that prompted the Sarbanes-Oxley Act, contractors and subcontractors, including the accounting firm Arthur Andersen, participated in Enron's fraud and its coverup. When employees of those contractors attempted to bring misconduct to light, they encountered retaliation by their employers. The Sarbanes-Oxley Act contains numerous provisions aimed at controlling the conduct of accountants, auditors, and lawyers who work with public companies. See, e.g., 116 Stat. 750-765, 773-774, 784, §§ 101-107, 203-206, 307. Given Congress' concern about contractor conduct of the kind that contributed to Enron's collapse, we regard with suspicion construction of § 1514A to protect whistleblowers only when they are employed by a public company, and not when they work for the public company's contractor.
Congress borrowed § 1514A's prohibition against retaliation from the wording of the 2000 Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR 21), 49 U.S.C. § 42121. That Act provides: "No air carrier or contractor or subcontractor of an air carrier may discharge an employee or otherwise discriminate against an employee with respect to compensation, terms, conditions, or privileges of employment" when the employee provides information regarding violations "relating to air carrier safety" to his or her employer or federal authorities. § 42121(a)(1). AIR 21 has been read to cover, in addition to employees of air carriers, employees of contractors and subcontractors of the carriers. Given the parallel statutory texts and whistleblower protective aims, we read the words "an employee" in AIR 21 and in § 1514A to have similar import.
I
A
The Sarbanes-Oxley Act of 2002 (Sarbanes-Oxley or Act) aims to "prevent and punish corporate and criminal fraud, protect the victims of such fraud, preserve evidence of such fraud, and hold wrongdoers accountable for their actions." S.Rep. No. 107-146, p. 2 (2002) (hereinafter S. Rep.).1 Of particular concern to Congress was abundant evidence that Enron had succeeded in perpetuating its massive shareholder fraud in large part due to a "corporate code of silence"; that code, Congress found, "discourage[d] employees from reporting fraudulent behavior not only to the proper authorities, such as the FBI and the SEC, but even internally." Id., at 4-5 (internal quotation marks omitted). When employees of Enron and its accounting firm, Arthur Andersen, attempted to report corporate misconduct, Congress learned, they faced retaliation, including discharge. As outside counsel advised company officials at the time, Enron's efforts to "quiet" whistleblowers generally were not proscribed under then-existing law. Id., at 5, 10. Congress identified the lack of whistleblower protection as "a significant deficiency" in the law, for in complex securities fraud investigations, employees "are [often] the only firsthand witnesses to the fraud." Id., at 10.
Section 806 of Sarbanes-Oxley addresses this concern. Titled "Protection for Employees of Publicly Traded Companies Who Provide Evidence of Fraud," § 806 added a new provision to Title 18 of the United States Code, 18 U.S.C. § 1514A, which reads in relevant part:
"Civil action to protect against retaliation in fraud cases
"(a) Whistleblower Protection for Employees of Publicly Traded Companies.-No company with a class of securities registered under section 12 of the Securities Exchange Act of 1934 (15 U.S.C. § 78 l ), or that is required to file reports under section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. § 78 o (d)), or any officer, employee, contractor, subcontractor, or agent of such company, may discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment because of any lawful act done by the employee-
"(1) to provide information, cause information to be provided, or otherwise assist in an investigation regarding any conduct which the employee reasonably believes constitutes a violation of section 1341 [mail fraud], 1343 [wire fraud], 1344 [bank fraud], or 1348 [securities or commodities fraud], any rule or regulation of the Securities and Exchange Commission, or any provision of Federal law relating to fraud against shareholders, when the information or assistance is provided to or the investigation is conducted by [a federal agency, Congress, or supervisor]...." § 806, 116 Stat. 802.2
Congress has assigned whistleblower protection largely to the Department of Labor (DOL), which administers some 20 United States Code incorporated whistleblower protection provisions. See 78 Fed.Reg. 3918 (2013). The Secretary has delegated investigatory and initial adjudicatory responsibility over claims under a number of these provisions, including § 1514A, to DOL's Occupational Safety and Health Administration (OSHA). Ibid. OSHA's order may be appealed to an administrative law judge, and then to DOL's Administrative Review Board (ARB). 29 CFR §§ 1980.104 to 1980.110 (2011).
In common with other whistleblower protection provisions enforced by DOL, see 77 Fed.Reg. 3912 (2012), the ARB's determination on a § 1514A claim constitutes the agency's final decision and is reviewable in federal court under the standards stated in the Administrative Procedure Act, 5 U.S.C. § 706. If, however, the ARB does not issue a final decision within 180 days of the filing of the complaint, and the delay is not due to bad faith on the claimant's part, the claimant may proceed to federal district court for de novo review. 18 U.S.C. § 1514A(b). An employee prevailing in a proceeding under § 1514A is entitled to "all relief necessary to make the employee whole," including "reinstatement with the same seniority status that the employee would have had, but for the discrimination," backpay with interest, and compensation for litigation costs. § 1514A(c).
Congress modeled § 1514A on the anti-retaliation provision of the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century (AIR 21), 49 U.S.C. § 42121, a measure enacted two years earlier. See S. Rep., at 30 (corporate whistleblower protections "track [AIR 21's] protections as closely as possible"). Section 1514A incorporates by cross-reference AIR 21's administrative enforcement procedures. 18 U.S.C. § 1514A(b)(2).
B
Petitioners Jackie Hosang Lawson and Jonathan M. Zang (plaintiffs) separately initiated proceedings under § 1514A against their former employers, privately held companies that provide advisory and management services to the Fidelity family of mutual funds. The Fidelity funds are not parties to either case; as is common in the mutual fund industry, the Fidelity funds themselves have no employees. Instead, they contract with investment advisers like respondents to handle their day-to-day operations, which include making investment decisions, preparing reports for shareholders, and filing reports with the Securities and Exchange Commission (SEC). Lawson was employed by Fidelity Brokerage Services, LLC, a subsidiary of FMR Corp., which was succeeded by FMR LLC. Zang was employed by a different FMR LLC subsidiary, Fidelity Management & Research Co., and later by one of that company's subsidiaries, FMR Co., Inc. For convenience, we refer to respondents collectively as FMR.
Lawson worked for FMR for 14 years, eventually serving as a Senior Director of Finance. She alleges that, after she raised concerns about certain cost accounting methodologies, believing that they overstated expenses associated with operating the mutual funds, she suffered a series of adverse actions, ultimately amounting to constructive discharge. Zang was employed by FMR for eight years, most recently as a portfolio manager for several of the funds. He alleges that he was fired in retaliation for raising concerns about inaccuracies in a draft SEC registration statement concerning certain Fidelity funds. Lawson and Zang separately filed administrative complaints alleging retaliation proscribed by § 1514A. After expiration of the 180-day period specified in § 1514A(b)(1), Lawson and Zang each filed suit in the U.S. District Court for the District of Massachusetts.
FMR moved to dismiss the suits, arguing, as relevant, that neither plaintiff has a claim for relief under § 1514A. FMR is privately held, and maintained that § 1514A protects only employees of public companies- i.e., companies that either have "a class of securities registered under section 12 of the Securities Exchange Act of 1934," or that are "required to file reports under section 15(d)" of that Act. § 1514A(a).3 In a joint order, the District Court rejected FMR's interpretation of § 1514A and denied the dismissal motions in both suits. 724 F.Supp.2d 141 (Mass.2010).
On interlocutory appeal, a divided panel of the First Circuit reversed. 670 F.3d 61 (2012). The Court of Appeals majority acknowledged that FMR is a "contractor" 4 within the meaning of § 1514A(a), and thus among the actors prohibited from retaliating against "an employee" who engages in protected activity. The majority agreed with FMR, however, that "an employee" refers only to employees of public companies and does not cover a contractor's own employees. Id., at 68-80. Judge Thompson dissented. In her view, the majority had "impose[d] an unwarranted restriction on the intentionally broad language of the Sarbanes-Oxley Act" and "bar[red] a significant class of potential securities-fraud whistleblowers from any legal protection." Id., at 83.
Several months later, the ARB issued a decision in an unrelated case, Spinner v. David Landau & Assoc., LLC, No. 10-111 etc., ALJ No. 2010-SOX-029 (May 31, 2012),5 disagreeing with the Court of Appeals' interpretation of § 1514A. In a comprehensive opinion, the ARB explained its position that § 1514A affords whistleblower protection to employees of privately held contractors that render services to public companies. Ibid.6
We granted certiorari, 569 U.S. ----, 133 S.Ct. 2387, 185 L.Ed.2d 1103 (2013), to resolve the division of opinion on whether § 1514A extends whistleblower protection to employees of privately held contractors who perform work for public companies.
II
A
In determining the meaning of a statutory provision, "we look first to its language, giving the words used their ordinary meaning." Moskal v. United States, 498 U.S. 103, 108, 111 S.Ct. 461, 112 L.Ed.2d 449 (1990) (citation and internal quotation marks omitted). As Judge Thompson observed in her dissent from the Court of Appeals' judgment, "boiling [§ 1514A(a) ] down to its relevant syntactic elements, it provides that 'no ... contractor ... may discharge ... an employee.' " 670 F.3d, at 84 (quoting § 1514A(a)). The ordinary meaning of "an employee" in this proscription is the contractor's own employee.
FMR's interpretation of the text requires insertion of "of a public company" after "an employee." But where Congress meant "an employee of a public company," it said so: With respect to the actors governed by § 1514A, the provision's interdictions run to the officers, employees, contractors, subcontractors, and agents "of such company," i.e., a public company. § 1514A(a). Another anti-retaliation provision in Sarbanes-Oxley provides: "[A] broker or dealer and persons employed by a broker or dealer who are involved with investment banking activities may not, directly or indirectly, retaliate against or threaten to retaliate against any securities analyst employed by that broker or dealer or its affiliates...." 15 U.S.C. § 78 o-6(a)(1)(C) (emphasis added). In contrast, nothing in § 1514A's language confines the class of employees protected to those of a designated employer. Absent any textual qualification, we presume the operative language means what it appears to mean: A contractor may not retaliate against its own employee for engaging in protected whistleblowing activity.7
Section 1514A's application to contractor employees is confirmed when we enlarge our view from the term "an employee" to the provision as a whole. The prohibited retaliatory measures enumerated in § 1514A(a)-discharge, demotion, suspension, threats, harassment, or discrimination in the terms and conditions of employment-are commonly actions an employer takes against its own employees. Contractors are not ordinarily positioned to take adverse actions against employees of the public company with whom they contract. FMR's interpretation of § 1514A, therefore, would shrink to insignificance the provision's ban on retaliation by contractors. The dissent embraces FMR's "narrower" construction. See post, at 1178, 1178 - 1179, 1179, 1180 - 1181.
FMR urges that Congress included contractors in § 1514A's list of governed actors simply to prevent public companies from avoiding liability by employing contractors to effectuate retaliatory discharges. FMR describes such a contractor as an "ax-wielding specialist," illustrated by George Clooney's character in the movie Up in the Air.8 Brief for Respondents 24-25 (internal quotation marks omitted). As portrayed by Clooney, an ax-wielding specialist is a contractor engaged only as the bearer of the bad news that the employee has been fired; he plays no role in deciding who to terminate. If the company employing the ax-wielder chose the recipients of the bad tidings for retaliatory reasons, the § 1514A claim would properly be directed at the company. Hiring the ax-wielder would not insulate the company from liability. Moreover, we see no indication that retaliatory ax-wielding specialists are the real-world problem that prompted Congress to add contractors to § 1514A. 9
Moving further through § 1514A to the protected activity described in subsection (a)(1), we find further reason to believe that Congress presumed an employer-employee relationship between the retaliator and the whistleblower. Employees gain protection for furnishing information to a federal agency, Congress, or "a person with supervisory authority over the employee (or such other person working for the employer who has the authority to investigate, discover, or terminate misconduct)." § 1514A(a)(1) (emphasis added). And under § 1514A(a)(2), employees are protected from retaliation for assisting "in a proceeding filed or about to be filed ( with any knowledge of the employer ) relating to an alleged violation" of any of the enumerated fraud provisions, securities regulations, or other federal law relating to shareholder fraud. § 1514A(a)(2) (emphasis added). The reference to employer knowledge is an additional indicator of Congress' expectation that the retaliator typically will be the employee's employer, not another entity less likely to know of whistleblower complaints filed or about to be filed.
Section 1514A's enforcement procedures and remedies similarly contemplate that the whistleblower is an employee of the retaliator. As earlier noted, see supra, at 1163 - 1164, § 1514A(b)(2)(A) provides that a claim under § 1514A "shall be governed under the rules and procedures set forth in section 42121(b) of title 49," i.e., AIR 21's anti-retaliation provision. Throughout § 42121(b), the respondent is referred to as "the employer." See 49 U.S.C. § 42121(b)(2)(B)(ii) (The Secretary shall not conduct an investigation into a retaliation claim "if the employer demonstrates, by clear and convincing evidence, that the employer would have taken the same unfavorable personnel action in the absence of that behavior."); § 42121(b)(2)(B)(iv) ("Relief may not be ordered ... if the employer demonstrates by clear and convincing evidence that the employer would have taken the same unfavorable personnel action in the absence of that behavior.").
Regarding remedies, § 1514A(c)(2) states that a successful claimant shall be entitled to "reinstatement with the same seniority status that the employee would have had, but for the discrimination," as well as "the amount of back pay, with interest." As the Solicitor General, for the United States as amicus curiae, observed, "It is difficult, if not impossible, to see how a contractor or subcontractor could provide those remedies to an employee of a public company." Brief for United States as Amicus Curiae 15. The most sensible reading of § 1514A's numerous references to an employer-employee relationship between the respondent and the claimant is that the provision's protections run between contractors and their own employees.
Remarkably, the dissent attributes to Congress a strange design. Under the dissent's "narrower" construction, post, at 1178, 1178 - 1179, 1179, 1180 - 1181, a public company's contractor may not retaliate against a public company's employees, academic here because the public company has no employees. According to the dissent, this coverage is necessary to prevent "a gaping hole" that would allow public companies to "evade § 1514A simply by hiring a contractor to engage in the very retaliatory acts that an officer or employee could not." Post, at 1182. This cannot be right-even if Congress had omitted any reference to contractors, subcontractors, or agents in § 1514A, the remaining language surely would prohibit a public company from directing someone else to engage in retaliatory conduct against the public company's employees; hiring an ax-wielder to announce an employee's demotion does not change the fact that the public company is the entity commanding the demotion. Under the dissent's reading of § 1514A, the inclusion of contractors as covered employers does no more than make the contractor secondarily liable for complying with such marching orders-hardly a hole at all.10
There would be a huge hole, on the other hand, were the dissent's view of § 1514A's reach to prevail: Contractors' employees would be disarmed; they would be vulnerable to retaliation by their employers for blowing the whistle on a scheme to defraud the public company's investors, even a scheme engineered entirely by the contractor. Not only would mutual fund advisers and managers escape § 1514A's control. Legions of accountants and lawyers would be denied § 1514A's protections. See infra, at 1170 - 1172. Instead of indulging in fanciful visions of whistleblowing babysitters and the like, post, at 1177 - 1178, 1180, 1183 - 1184, 1187 - 1188, the dissent might pause to consider whether a Congress, prompted by the Enron debacle, would exclude from whistleblower protection countless professionals equipped to bring fraud on investors to a halt.
B
We turn next to two textual arguments made by FMR. First, FMR urges that "an employee" must be read to refer exclusively to public company employees to avoid the absurd result of extending protection to the personal employees of company officers and employees, e.g., their housekeepers or gardeners. See Brief for Respondents 19-20; post, at 1177 - 1178, 1180, 1183 - 1184, 1187 - 1188. Plaintiffs and the Solicitor General do not defend § 1514A's application to personal employees. They argue, instead, that the prohibition against an "officer" or "employee" retaliating against "an employee" may be read as imposing personal liability only on officers and employees who retaliate against other public company employees. Brief for Petitioners 12; Brief for United States as Amicus Curiae 16.11 FMR calls this reading "bizarre," for it would ascribe to the words "an employee" in § 1514A(a) "one meaning if the respondent is an 'officer' and a different meaning if the respondent is a 'contractor.' " Brief for Respondents 20-21.
We agree with FMR that plaintiffs and the Solicitor General offer an interpretation at odds with the text Congress enacted. If, as we hold, "an employee" includes employees of contractors, then grammatically, the term also includes employees of public company officers and employees. Nothing suggests Congress' attention was drawn to the curiosity its drafting produced. The issue, however, is likely more theoretical than real. Few housekeepers or gardeners, we suspect, are likely to come upon and comprehend evidence of their employer's complicity in fraud. In any event, FMR's point is outweighed by the compelling arguments opposing FMR's contention that "an employee" refers simply and only to public company employees. See supra, at 1165 - 1168. See also infra, at 1172 - 1174 (limiting principles may serve as check against overbroad applications).
Second, FMR argues that the statutory headings support the exclusion of contractor employees from § 1514A's protections. Although § 1514A's own heading is broad ("Civil action to protect against retaliation in fraud cases"), subsection (a) is captioned "Whistleblower Protection for Employees of Publicly Traded Companies." Similarly, the relevant public law section, § 806 of Sarbanes-Oxley, is captioned "Protection for Employees of Publicly Traded Companies Who Provide Evidence of Fraud." 116 Stat. 802. The Court of Appeals described the latter two headings as "explicit guides" limiting protection under § 1514A to employees of public companies. 670 F.3d, at 69.
This Court has placed less weight on captions. In Trainmen v. Baltimore & Ohio R. Co., 331 U.S. 519, 67 S.Ct. 1387, 91 L.Ed. 1646 (1947), we explained that where, as here, "the [statutory] text is complicated and prolific, headings and titles can do no more than indicate the provisions in a most general manner." Id., at 528, 67 S.Ct. 1387. The under-inclusiveness of the two headings relied on by the Court of Appeals is apparent. The provision indisputably extends protection to employees of companies that file reports with the SEC pursuant to § 15(d) of the 1934 Act, even when such companies are not "publicly traded." And the activity protected under § 1514A is not limited to "provid[ing] evidence of fraud"; it also includes reporting violations of SEC rules or regulations. § 1514A(a)(1). As in Trainmen, the headings here are "but a short-hand reference to the general subject matter" of the provision, "not meant to take the place of the detailed provisions of the text." 331 U.S., at 528, 67 S.Ct. 1387.Section 1514A is attended by numerous indicators that the statute's prohibitions govern the relationship between a contractor and its own employees; we do not read the headings to "undo or limit" those signals. Id., at 529, 67 S.Ct. 1387.12
III
A
Our textual analysis of § 1514A fits the provision's purpose. It is common ground that Congress installed whistleblower protection in the Sarbanes-Oxley Act as one means to ward off another Enron debacle. S. Rep., at 2-11. And, as the ARB observed in Spinner, "Congress plainly recognized that outside professionals-accountants, law firms, contractors, agents, and the like-were complicit in, if not integral to, the shareholder fraud and subsequent cover-up [Enron] officers ... perpetrated." ALJ No. 2010-SOX-029, pp. 12-13. Indeed, the Senate Report demonstrates that Congress was as focused on the role of Enron's outside contractors in facilitating the fraud as it was on the actions of Enron's own officers. See, e.g., S. Rep., at 3 (fraud "occurred with extensive participation and structuring advice from Arthur Andersen ... which was simultaneously serving as both consultant and independent auditor for Enron" (internal quotation marks and brackets omitted)); id., at 4 ("professionals from accounting firms, law firms and business consulting firms, who were paid millions to advise Enron on these practices, assured others that Enron was a solid investment"); id., at 4-5 (team of Andersen employees were tasked with destroying "physical evidence and documents" relating to Enron's fraud); id., at 5 ("Enron and Andersen were taking advantage of a system that allowed them to behave in an apparently fraudulent manner"); id., at 11 (Enron's fraud partly attributable to "the well-paid professionals who helped create, carry out, and cover up the complicated corporate ruse when they should have been raising concerns"); id., at 20-21 ("Enron's accountants and lawyers brought all their skills and knowledge to bear in assisting the fraud to succeed and then in covering it up.").
Also clear from the legislative record is Congress' understanding that outside professionals bear significant responsibility for reporting fraud by the public companies with whom they contract, and that fear of retaliation was the primary deterrent to such reporting by the employees of Enron's contractors. Congressional investigators discovered ample evidence of contractors demoting or discharging employees they have engaged who jeopardized the contractor's business relationship with Enron by objecting to Enron's financial practices. See, e.g., Oppel, Merrill Replaced Research Analyst Who Upset Enron, N.Y. Times, July 30, 2002, p. A1 ("In the summer of 1998, when it was eager to win more investment banking business from Enron, Merrill Lynch replaced a research analyst who had angered Enron executives by rating the company's stock 'neutral' with an analyst who soon upgraded the rating, according to Congressional investigators."); Yost, Andersen Whistleblower Was Removed, Associated Press (Apr. 3, 2002) (Congressional investigation reveals that Andersen removed one of its partners from its Enron team after Enron officials expressed unhappiness with the partner's questioning of certain accounting practices); Oppel, The Man Who Paid the Price for Sizing up Enron, N.Y. Times, Mar. 27, 2002, p. C1 ("Enron executives pressed UBS Paine-Webber to take action against a broker who advised some Enron employees to sell their shares in August and was fired by the brokerage firm within hours of the complaint, according to e-mail messages released today by Congressional investigators.").
In the same vein, two of the four examples of whistleblower retaliation recounted in the Senate Report involved outside professionals retaliated against by their own employers. S. Rep., at 5 (on Andersen and UBS Paine-Webber employees); see also id., at 4-5 (Andersen employees who "attempted to report or 'blow the whistle' on [Enron's] fraud ... were discouraged at nearly every turn"). Emphasizing the importance of outside professionals as "gatekeepers who detect and deter fraud," the Senate Report concludes: "Congress must reconsider the incentive system that has been set up that encourages accountants and lawyers who come across fraud in their work to remain silent." Id., at 20-21. From this legislative history, one can safely conclude that Congress enacted § 1514A aiming to encourage whistleblowing by contractor employees who suspect fraud involving the public companies with whom they work.13
FMR argues that Congress addressed its concerns about the role of outside accountants and lawyers in facilitating Enron's wrongdoing, not in § 1514A, but exclusively in other provisions of Sarbanes-Oxley " directly regulat[ing] accountants and lawyers." Brief for Respondents 40. In particular, FMR points to sections of the Act requiring accountants and lawyers for public companies to investigate and report misconduct, or risk being banned from further practice before the SEC. Id., at 41 (citing 15 U.S.C. §§ 7215(c)(4), 7245). These requirements, however, indicate why Congress would have wanted to extend § 1514A's coverage to the many lawyers and accountants who perform outside work for public companies. Although lawyers and accountants are subject to extensive regulations and sanctions throughout Sarbanes-Oxley, no provision of the Act other than § 1514A affords them protection from retaliation by their employers for complying with the Act's reporting requirements.14 In short, we cannot countenance the position advanced by FMR and the dissent, see post, at 1184 - 1186, that Congress intended to leave these professionals vulnerable to discharge or other retaliatory action for complying with the law.
B
Our reading of § 1514A avoids insulating the entire mutual fund industry from § 1514A, as FMR's and the dissent's "narrower construction" would do. As companies "required to file reports under section 15(d) of the Securities Exchange Act of 1934," 18 U.S.C. § 1514A(a), mutual funds unquestionably are governed by § 1514A. Because mutual funds figure prominently among such report-filing companies, Congress presumably had them in mind when it added to "publicly traded companies" the discrete category of companies "required to file reports under section 15(d)."
Virtually all mutual funds are structured so that they have no employees of their own; they are managed, instead, by independent investment advisers. See S.Rep. No. 91-184, p. 5 (1969) (accompanying the 1970 amendments to the Investment Company Act of 1940). The United States investment advising industry manages $14.7 trillion on behalf of nearly 94 million investors. See 2013 Investment Company Fact Book 7 (53d ed.), available at http:// www. icifactbook. org/ pdf/ 2013_ factbook. pdf (as visited Feb. 20, 2014, and available in Clerk of Court's case file). These investment advisers, under our reading of § 1514A, are contractors prohibited from retaliating against their own employees for engaging in whistleblowing activity. This construction protects the "insiders [who] are the only firsthand witnesses to the [shareholder] fraud." S. Rep., at 10. Under FMR's and the dissent's reading, in contrast, § 1514A has no application to mutual funds, for all of the potential whistleblowers are employed by the privately held investment management companies, not by the mutual funds themselves. See Brief for Respondents 45 (describing this glaring gap as "merely a consequence of the corporate structure" of mutual funds).
The Court of Appeals found exclusion of the mutual fund industry from § 1514A tenable because mutual funds and their investment advisers are separately regulated under the Investment Company Act of 1940, 15 U.S.C. § 80a-1 et seq., the Investment Advisers Act of 1940, 15 U.S.C. § 80b-1 et seq.,and elsewhere in Sarbanes-Oxley. 670 F.3d, at 72-73. See also post, at 1186, n. 10. But this separate regulation does not remove the problem, for nowhere else in these legislative measures are investment management employees afforded whistleblower protection. Section 1514A alone shields them from retaliation for bringing fraud to light.
Indeed, affording whistleblower protection to mutual fund investment advisers is crucial to Sarbanes-Oxley's endeavor to "protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws." 116 Stat. 745. As plaintiffs observe, these disclosures are written, not by anyone at the mutual funds themselves, but by employees of the investment advisers. "Under FMR's [and the dissent's] proposed interpretation of section 1514A, FMR could dismiss any FMR employee who disclosed to the directors of or lawyers for the Fidelity funds that there were material falsehoods in the documents being filed by FMR with the SEC in the name of those funds." Reply Brief 13. It is implausible that Congress intended to leave such an employee remediless. See id., at 14.
C
Unable credibly to contest the glaring under-inclusiveness of the "narrower reading" FMR urges, the dissent emphasizes instead FMR's claim that the reading of § 1514A we adopt is all too inclusive. See post, at 1177 - 1178, 1180, 1183 - 1184, 1187 - 1188. FMR's amici also press this point, observing that the activity protected under § 1514A(a)(1) encompasses reporting not only securities fraud (18 U.S.C. § 1348), but also mail, wire, and bank fraud (§§ 1341, 1343, 1344). Including contractor employees in the protected class, they therefore assert, could "cas[t] a wide net over employees who have no exposure to investor-related activities and thus could not possibly assist in detecting investor fraud." Brief for Chamber of Commerce of the United States of America as Amicus Curiae 3. See also Brief for Securities Industry and Financial Markets Association as Amicus Curiae 7-16.
There is scant evidence, however, that these floodgate-opening concerns are more than hypothetical. DOL's regulations have interpreted § 1514A as protecting contractor employees for almost a decade.15 See 69 Fed.Reg. 52105-52106 (2004). Yet no "narrower construction" advocate has identified even a single case in which the employee of a private contractor has asserted a § 1514A claim based on allegations unrelated to shareholder fraud. FMR's parade of horribles rests solely on Lockheed Martin Corp. v. ARB, 717 F.3d 1121 (C.A.10 2013), a case involving mail and wire fraud claims asserted by an employee of a public company- i.e., claims in no way affected by today's decision. The dissent's fears that household employees and others, on learning of today's decision, will be prompted to pursue retaliation claims, post, at 1184, and that OSHA will find them meritorious under § 1514A, seem to us unwarranted. If we are wrong, however, Congress can easily fix the problem by amending § 1514A explicitly to remove personal employees of public company officers and employees from the provision's reach. But it would thwart Congress' dominant aim if contractors were taken off the hook for retaliating against their whistleblowing employees, just to avoid the unlikely prospect that babysitters, nannies, gardeners, and the like will flood OSHA with § 1514A complaints.
Plaintiffs and the Solicitor General observe that overbreadth problems may be resolved by various limiting principles. They point specifically to the word "contractor." Plaintiffs note that in "common parlance," "contractor" does not extend to every fleeting business relationship. Instead, the word "refers to a party whose performance of a contract will take place over a significant period of time." Reply Brief 16. See also Fleszar v. United States Dept. of Labor, 598 F.3d 912, 915 (C.A.7 2010) ("Nothing in § 1514A implies that, if [a privately held business] buys a box of rubber bands from Wal-Mart, a company with traded securities, the [business] becomes covered by § 1514A.").
The Solicitor General further maintains that § 1514A protects contractor employees only to the extent that their whistleblowing relates to "the contractor ... fulfilling its role as a contractor for the public company, not the contractor in some other capacity." Tr. of Oral Arg. 18-19 (Government counsel). See also id., at 23 ("[I]t has to be a person who is in a position to detect and report the types of fraud and securities violations that are included in the statute.... [W]e think that 'the contractor of such company' refers to the contractor in that role, working for the public company.' ").
Finally, the Solicitor General suggests that we need not determine the bounds of § 1514A today, because plaintiffs seek only a "mainstream application" of the provision's protections. Id., at 20 (Government counsel). We agree. Plaintiffs' allegations fall squarely within Congress' aim in enacting § 1514A. Lawson alleges that she was constructively discharged for reporting accounting practices that overstated expenses associated with managing certain Fidelity mutual funds. This alleged fraud directly implicates the funds' shareholders: "By inflating its expenses, and thus understating its profits, [FMR] could potentially increase the fees it would earn from the mutual funds, fees ultimately paid by the shareholders of those funds." Brief for Petitioners 3. Zang alleges that he was fired for expressing concerns about inaccuracies in a draft registration statement FMR prepared for the SEC on behalf of certain Fidelity funds. The potential impact on shareholders of false or misleading registration statements needs no elaboration. If Lawson and Zang's allegations prove true, these plaintiffs would indeed be "firsthand witnesses to [the shareholder] fraud" Congress anticipated § 1514A would protect. S. Rep., at 10.
D
FMR urges that legislative events subsequent to Sarbanes-Oxley's enactment show that Congress did not intend to extend § 1514A's protections to contractor employees.16 In particular, FMR calls our attention to the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act, 124 Stat. 1376 (Dodd-Frank). Dodd-Frank amended § 1514A(a) to read:
"No company with a class of securities registered under section 12 of the Securities Exchange Act of 1934 (15 U.S.C. 78 l ), or that is required to file reports under [section 12] of the [1934 Act] (15 U.S.C. 78 o (d)) including any subsidiary or affiliate whose financial information is included in the consolidated financial statements of such company, or nationally recognized statistical rating organization (as defined in section 3(a) of the [1934 Act] (15 U.S.C. 78c), or any officer, employee, contractor, subcontractor, or agent of such company or nationally recognized statistical rating organization, may discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment because of any [protected activity]." 18 U.S.C. § 1514A(a) (2012 ed.) (emphasis added; footnote omitted.)
The amended provision extends § 1514A's protection to employees of public company subsidiaries and nationally recognized statistical rating organizations (NRSROs). FMR asserts that Congress' decision to add NRSROs to § 1514A shows that the provision did not previously cover contractor employees: "If [§ 1514A] already covered every private company contracting with a public company, there would have been no need for Congress to extend [§ 1514A] to certain private companies." Brief for Respondents 35-36. This argument fails at the starting gate, for FMR concedes that not all NRSROs are privately held, and not all NRSROs contract with public companies. Id., at 36.
We see nothing useful to our inquiry in Congress' decision to amend § 1514A to include public company subsidiaries and NRSROs. More telling, at the time of the Dodd-Frank amendments, DOL regulations provided that § 1514A protects contractor employees. See 29 CFR § 1980.101 (2009). Congress included in its alterations no language gainsaying that protection. As Judge Thompson's dissent from the First Circuit's judgment observes, "Congress had a miles-wide opening to nip [DOL's] regulation in the bud if it had wished to do so. It did not." 670 F.3d, at 88.
Dodd-Frank also establishes a corporate whistleblowing reward program, accompanied by a new provision prohibiting any employer from retaliating against "a whistleblower" for providing information to the SEC, participating in an SEC proceeding, or making disclosures required or protected under Sarbanes-Oxley and certain other securities laws. 15 U.S.C. § 78u-6(a)(6), (b)(1), (h). FMR urges that, as this provision covers employees of all companies, public or private, "[t]here is no justification" for reading § 1514A to cover employees of contractors: "Any 'gap' that might, arguendo, have existed for employees of private entities between 2002 and 2010 has now been closed." Brief for Respondents 44.17
FMR, we note, somewhat overstates Dodd-Frank's coverage. Section 1514A's protections include employees who provide information to any "person with supervisory authority over the employee." § 1514A(a)(1)(C). Dodd-Frank's whistleblower provision, however, focuses primarily on reporting to federal authorities. See Brief for United States as Amicus Curiae 30 ("[I]f employees of contractors of public companies are not protected under Section 1514A, they are not protected for making internal complaints under ... the Dodd-Frank Act.").
In any event, our task is not to determine whether including contractor employees in the class protected by § 1514A remains necessary in 2014. It is, instead, to determine whether Congress afforded protection to contractor employees when it enacted § 1514A in 2002. If anything relevant to our inquiry can be gleaned from Dodd-Frank, it is that Congress apparently does not share FMR's concerns about extending protection comprehensively to corporate whistleblowers.18
IV
We end by returning to AIR 21's whistleblower protection provision, 49 U.S.C. § 42121, enacted two years before Sarbanes-Oxley. Congress designed § 1514A to "track ... as closely as possible" the protections afforded by § 42121. S. Rep., at 30. To this end, § 1514A incorporates by cross-reference § 42121's administrative enforcement regime, see 18 U.S.C. § 1514A(b)(2), and contains parallel statutory text. Compare § 1514A(a) ("No [public] company ... or any officer, employee, contractor, subcontractor, or agent of such company, may discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment" for engaging in protected activity) with 49 U.S.C. § 42121(a) ("No air carrier or contractor or subcontractor of an air carrier may discharge an employee or otherwise discriminate against an employee with respect to compensation, terms, conditions, or privileges of employment" for engaging in protected activity).19
Section 42121 has been read to protect employees of contractors covered by the provision. The ARB has consistently construed AIR 21 to cover contractor employees. E.g., Evans v. Miami Valley Hospital, ARB No. 07-118 etc., ALJ No. 2006-AIR-022, pp. 9-11 (June 30, 2009); Peck v. Safe Air Int'l, Inc., ARB No. 02-028, ALJ No. 2001-AIR-3, p. 13 (Jan. 30, 2004). 20 And DOL's regulations adopting this interpretation of § 42121 date back to April 1, 2002, before § 1514A was enacted. 67 Fed.Reg. 15454, 15457-15458 (2002). The Senate Report for AIR
21 supports this reading, explaining that the Act "provide[s] employees of airlines, and employees of airline contractors and subcontractors, with statutory whistleblower protection." S.Rep. No. 105-278, p. 22 (1998).21
The Court of Appeals recognized that Congress modeled § 1514A on § 42121, and that § 42121 has been understood to protect contractor employees. 670 F.3d, at 73-74. It nonetheless declined to interpret § 1514A the same way, because, in its view, "important differences" separate the two provisions. First, unlike § 1514A, § 42121 contains a definition of "contractor": "a company that performs safety-sensitive functions by contract for an air carrier." 49 U.S.C. § 42121(e). Second, unlike § 1514A, § 42121 does not include "officers" or "employees" among governed actors. 670 F.3d, at 74. These distinctions, the Court of Appeals reasoned, render § 1514A less amenable to an inclusive construction of the protected class. Ibid.22
We do not find these textual differences overwhelming. True, Congress strayed from § 42121's pattern in failing to define "contractor" for purposes of § 1514A, and in adding "officers" and "employees" to § 1514A's list of governed actors. And we agree that § 1514A covers a far wider range than § 42121 does. But in our view, neither difference warrants the determination that § 1514A omits employees of contractors while § 42121 includes them. The provisions' parallel text and purposes counsel in favor of interpreting the two provisions consistently. And we have already canvassed the many reasons why § 1514A is most sensibly read to protect employees of contractors. See supra, at 1165 - 1172.
* * *
For the reasons stated, we hold that 18 U.S.C. § 1514A whistleblower protection extends to employees of contractors and subcontractors. The judgment of the U.S. Court of Appeals for the First Circuit is therefore reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
Justice SCALIA, with whom Justice THOMAS joins, concurring in principal part and concurring in the judgment.
I agree with the Court's conclusion that 18 U.S.C. § 1514A protects employees of private contractors from retaliation when they report covered forms of fraud. As the Court carefully demonstrates, that conclusion logically flows from § 1514A's text and broader context. I therefore join the Court's opinion in principal part.
I do not endorse, however, the Court's occasional excursions beyond the interpretative terra firma of text and context, into the swamps of legislative history. Reliance on legislative history rests upon several frail premises. First, and most important: That the statute means what Congress intended. It does not. Because we are a government of laws, not of men, and are governed by what Congress enacted rather than by what it intended, the sole object of the interpretative enterprise is to determine what a law says. Second: That there was a congressional "intent" apart from that reflected in the enacted text. On most issues of detail that come before this Court, I am confident that the majority of Senators and Representatives had no views whatever on how the issues should be resolved-indeed, were unaware of the issues entirely. Third: That the views expressed in a committee report or a floor statement represent those of all the Members of that House. Many of them almost certainly did not read the report or hear the statement, much less agree with it-not to mention the Members of the other House and the President who signed the bill.
Since congressional "intent" apart from enacted text is fiction to begin with, courts understandably allow themselves a good deal of poetic license in defining it. Today's opinion is no exception. It cites parts of the legislative record that are consistent with its holding that § 1514A covers employees of private contractors and subcontractors, but it ignores other parts that unequivocally cut in the opposite direction. For example, the following remark by the Sarbanes-Oxley Act's lead sponsor in the Senate: "[L]et me make very clear that [the Act] applies exclusively to public companies-that is, to companies registered with the Securities and Exchange Commission. It is not applicable to pr[i]v[at]e companies,[ *] who make up the vast majority of companies across the country." 148 Cong. Rec. 14440 (2002) (remarks of Sen. Sarbanes).
Two other minor points in the Court's opinion I do not agree with. First, I do not rely on the fact that a separate anti-retaliation provision, 49 U.S.C. § 42121(a), "has been read" by an administrative tribunal to cover contractor employees. Ante, at 1176. Section 1514A(b)(2), entitled "Procedure," contains cross-references to the procedural rules set forth in § 42121(b), but the substantive provisions of § 1514A(a) are worded quite differently from the substantive prohibition of § 42121, which is contained in subsection (a)-thus making interpretation of the latter an unreliable guide to § 1514A's meaning. Second, I do not agree with the Court's acceptance of the possible validity of the Government's suggestion that "§ 1514A protects contractor employees only to the extent that their whistleblowing relates to 'the contractor ... fulfilling its role as a contractor for the public company.' " Ante, at 1173 (quoting Tr. of Oral Arg. 18-19). Although that "limiting principl[e]," ibid., may be appealing from a policy standpoint, it has no basis whatsoever in the statute's text. So long as an employee works for one of the actors enumerated in § 1514A(a) and reports a covered form of fraud in a manner identified in § 1514(a)(1)-(2), the employee is protected from retaliation.
For all the other reasons given by the Court, the statute's text is clear, and I would reverse the judgment of the Court of Appeals and remand the case.
Justice SOTOMAYOR, with whom Justice KENNEDY and Justice ALITO join, dissenting.
Section 806 of the Sarbanes-Oxley Act of 2002, 116 Stat. 802, forbids any public company,1 or any "officer, employee, contractor, subcontractor, or agent of such company," to retaliate against "an employee" who reports a potential fraud. 18 U.S.C. § 1514A(a). The Court recognizes that the core purpose of the Act is to "safeguard investors in public companies." Ante, at 1161. And the Court points out that Congress entitled the whistleblower provision, "Protection for Employees of Publicly Traded Companies Who Provide Evidence of Fraud." § 806, 116 Stat. 802. Despite these clear markers of intent, the Court does not construe § 1514A to apply only to public company employees who blow the whistle on fraud relating to their public company employers. The Court instead holds that the law encompasses any household employee of the millions of people who work for a public company and any employee of the hundreds of thousands of private businesses that contract to perform work for a public company.
The Court's interpretation gives § 1514A a stunning reach. As interpreted today, the Sarbanes-Oxley Act authorizes a babysitter to bring a federal case against his employer-a parent who happens to work at the local Walmart (a public company)-if the parent stops employing the babysitter after he expresses concern that the parent's teenage son may have participated in an Internet purchase fraud. And it opens the door to a cause of action against a small business that contracts to clean the local Starbucks (a public company) if an employee is demoted after reporting that another nonpublic company client has mailed the cleaning company a fraudulent invoice.
Congress was of course free to create this kind of sweeping regime that subjects a multitude of individuals and private businesses to litigation over fraud reports that have no connection to, or impact on, the interests of public company shareholders. But because nothing in the text, context, or purpose of the Sarbanes-Oxley Act suggests that Congress actually wanted to do so, I respectfully dissent.
I
Although the majority correctly starts its analysis with the statutory text, it fails to recognize that § 1514A is deeply ambiguous. Three indicators of Congress' intent clearly resolve this ambiguity in favor of a narrower interpretation of § 1514A: the statute's headings, the statutory context, and the absurd results that follow from the majority's interpretation.
A
The majority begins its textual analysis by declaring that the " 'relevant syntactic elements' " of § 1514A are that " ' "no ... contractor ... may discharge ... an employee." ' " Ante, at 1165. After " 'boiling ... down' " the text to this formulation, the majority concludes that the "ordinary meaning of 'an employee' " is obviously "the contractor's own employee." Ibid.
If that were what the statute said, the majority's decision would undoubtedly be correct. But § 1514A(a) actually provides that "[n]o [public] company ... or any officer, employee, contractor, subcontractor, or agent of such company ... may discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee." The provision thus does not speak only (or even primarily) to "contractors." It speaks to public companies, and then includes a list of five types of representatives that companies hire to carry out their business: "officer[s], employee[s], contractor[s], subcontractor[s], [and] agent[s]."
Read in full, then, the statute is ambiguous. The majority is correct that it may be read broadly, to create a cause of action both for employees of public companies and for employees of the enumerated public company representatives. But the statute can also be read more narrowly, to prohibit the public company and the listed representatives-all of whom act on the company's behalf-from retaliating against just the public company's employees.
The narrower reading of the text makes particular sense when one considers the other terms in the list of company representatives. The majority acknowledges that, as a matter of "gramma[r]," the scope of protected employees must be consistent with respect to all five types of company representatives listed in § 1514A(a). Ante, at 1168 - 1169. Yet the Government and petitioners readily concede that § 1514A is meant to bar two of the enumerated representatives-"officer[s]" and "employee[s]"-from retaliating against other employees of the public company, as opposed to their own babysitters and housekeepers. See Brief for United States as Amicus Curiae 16 (§ 1514A "impose[s] personal liability on corporate officers and employees who are involved in retaliation against other employees of their employer"); Brief for Petitioners 12 (similar). The Department of Labor's Administrative Review Board (ARB) agrees. Spinner v. David Landau & Assoc., LLC, No. 10-111 etc., ALJ No. 2010-SOX-029, p. 8 (May 31, 2012). And if § 1514A prohibits an "officer" or "employee" of a public company from retaliating against only the public company's own employees, then as the majority points out, the same should be true "grammatically" of contractors, subcontractors, and agents as well, ante, at 1168 - 1169.2
The majority responds by suggesting that the narrower interpretation could have been clearer if Congress had added the phrase " 'of a public company' after 'an employee.' " Ante, at 1165 - 1166. Fair enough. But Congress could more clearly have dictated the majority's construction of the statute, too: It could have specified that public companies and their officers, employees, contractors, subcontractors, and agents may not retaliate against "their own employees." In any case, that Congress could have spoken with greater specificity in both directions only underscores that the words Congress actually chose are ambiguous. To resolve this ambiguity, we must rely on other markers of intent.
B
We have long held that where the text is ambiguous, a statute's titles can offer "a useful aid in resolving [the] ambiguity." FTC v. Mandel Brothers, Inc., 359 U.S. 385, 388-389, 79 S.Ct. 818, 3 L.Ed.2d 893 (1959). Here, two headings strongly suggest that Congress intended § 1514A to apply only to employees of public companies. First, the title of § 806-the section of the Sarbanes-Oxley Act that enacted § 1514A-speaks clearly to the scope of employees protected by the provision: "Protection for Employees of Publicly Traded Companies Who Provide Evidence of Fraud." 116 Stat. 802. Second, the heading of § 1514A(a) reinforces that the provision provides "[w]histleblower protection for employees of publicly traded companies."
The majority suggests that in covering "employees of publicly traded companies," the headings may be imprecise. Ante, at 1169. Section 1514A(a) technically applies to the employees of two types of companies: those "with a class of securities registered under section 12 of the Securities Exchange Act of 1934," and those that are "required to file reports under section 15(d) of the" same Act. Both types of companies are "public" in that they are publicly owned. See ante, at 1164 - 1165. The difference is that shares of the § 12 companies are listed and traded on a national securities exchange; § 15(d) companies, by contrast, exchange their securities directly with the public. The headings may therefore be inexact in the sense that the phrase "publicly traded" is commonly associated with companies whose securities are traded on national exchanges. Congress, however, had good reason to use the phrase to refer to § 15(d) companies as well: Section 15(d) companies are traded publicly, too. For instance, as the majority recognizes, ante, at 1171, a mutual fund is one paradigmatic example of a § 15(d) company. And mutual funds, like other § 15(d) companies, are both publicly owned and widely traded; the trades just take place typically between the fund and its investors directly.
In any case, even if referring to employees of § 12 and § 15(d) companies together as "employees of publicly traded companies" may be slightly imprecise, the majority's competing interpretation of § 1514A would stretch the statute's headings far past the point of recognition. As the majority understands the law, Congress used the term "employees of publicly traded companies" as shorthand not just for (1) employees of § 12 and § 15(d) companies, but also for (2) household employees of any individual who works for a § 12 or § 15(d) company; (3) employees of any private company that contracts with a § 12 or § 15(d) company; (4) employees of any private company that, even if it does not contract with a public company, subcontracts with a private company that does; and (5) employees of any agent of a § 12 or § 15(d) company. If Congress had wanted to enact such a far-reaching provision, it would have called it something other than "[w]histleblower protection for employees of publicly traded companies."
Recognizing that Congress chose headings that are inconsistent with its interpretation, the majority notes that the Court has "placed less weight on captions." Ante, at 1169. But where the captions favor one interpretation so decisively, their significance should not be dismissed so quickly. As we have explained, headings are important " 'tools available for the resolution of a doubt' about the meaning of a statute." Almendarez-Torres v. United States, 523 U.S. 224, 234, 118 S.Ct. 1219, 140 L.Ed.2d 350 (1998).
C
1
Statutory context confirms that Congress intended § 1514A to apply only to employees of public companies. To start, the Sarbanes-Oxley Act as a whole evinces a clear focus on public companies. Congress stated in the Act's preamble that its objective was to "protect investors by improving the accuracy and reliability of corporate disclosures made pursuant to the securities laws," 116 Stat. 745, disclosures that public companies alone must file. The Act thus created enhanced disclosure obligations for public companies, § 401; added new conflict of interest rules for their executives, § 402; increased the responsibilities of their audit committees, § 301; and created new rules governing insider trading by their executives and directors, § 306. The common denominator among all of these provisions is their singular focus on the activities of public companies.
When Congress wanted to depart from the Act's public company focus to regulate private firms and their employees, it spoke clearly. For example, § 307 of the Act ordered the Securities and Exchange Commission (SEC) to issue rules "setting forth minimum standards of professional conduct for attorneys appearing and practicing before the [SEC]," including a rule requiring outside counsel to report violations of the securities laws to public company officers and directors. 15 U.S.C. § 7245. Similarly, Title I of the Act created the Public Company Accounting Oversight Board (PCAOB) and vested it with the authority to register, regulate, investigate, and discipline privately held outside accounting firms and their employees. §§ 7211-7215. And Title V required the SEC to adopt rules governing outside securities analysts when they make public recommendations regarding securities. § 78o-6.
Section 1514A, by contrast, does not unambiguously cover the employees of private businesses that contract with public companies or the employees of individuals who work for public companies. Far from it, for the reasons noted above. Yet as the rest of the Sarbanes-Oxley Act demonstrates, if Congress had really wanted § 1514A to impose liability upon broad swaths of the private sector, it would have said so more clearly.
Congress' intent to adopt the narrower understanding of § 1514A is also clear when the statute is compared to the whistleblower provision that served as its model. That provision, enacted as part of the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century, 49 U.S.C. § 42121, provides that "[n]o air carrier or contractor or subcontractor of an air carrier" may retaliate against an employee who reports a potential airline safety violation.
Section 42121 protects employees of contractors. But as the majority acknowledges, "Congress strayed" from § 42121 in significant ways when it wrote § 1514A. Ante, at 1176. First, § 42121 specifically defines the term "contractor," limiting the term to "a company that performs safety-sensitive functions by contract for an air carrier." § 42121(e). That is in notable distinction to § 1514A, which does not define the word "contractor" as a particular type of company, instead placing the term in a list alongside individual "officer[s]" and "employee[s]" who act on a company's behalf. Second, unlike § 42121, § 1514A sets off the term "contractor" in a separate clause that is subsidiary to the primary subject of the provision-the public company itself. Third, the title of § 42121 is "[p]rotection of employees providing air safety information," a title that comfortably encompasses the employees of contractors. Not so of § 1514A's headings, as explained above. In short, § 42121 shows that Congress had an easy-to-follow model if it wanted to protect the employees of contractors, yet chose to depart from that model in several important ways. We should not presume that choice to be accidental. See Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 734, 95 S.Ct. 1917, 44 L.Ed.2d 539 (1975).
2
The majority relies on statutory context as well, but its examples are unconvincing. It first argues that the types of conduct prohibited by the statute-"discharge, demotion, suspension, threats, harassment, [and] discrimination in the terms and conditions of employment"-are "commonly actions an employer takes against its own employees." Ante, at 1166. The problem is that § 1514A does not forbid retaliation by an "employer"; it forbids retaliation by a "[public] company ... or any officer, employee, contractor, subcontractor, or agent of such company." For the reasons already discussed, Congress could have reasonably included the five types of representatives not in their capacity as employers, but rather as representatives of the company who are barred from retaliating against a public company's employees on the company's behalf.
The majority next suggests that contractors are rarely "positioned to take adverse actions against employees of the public company with whom they contract." Ante, at 1166. That misconceives the nature of modern work forces, which increasingly comprise a mix of contractors and persons laboring under more typical employment relationships. For example, public companies often hire "independent contractors," of whom there are more than 10 million, 3 and contract workers,4 of whom there are more than 11 million.5 And they employ outside lawyers, accountants, and auditors as well. While not every person who works for a public company in these nonemployee capacities may be positioned to threaten or harass employees of the public company, many are. See, e.g.,Tides v. The Boeing Co., 644 F.3d 809, 811 (C.A.9 2011) (noting that "approximately seventy contract auditors from [an] accounting firm" possessed "managerial authority" over the 10 Boeing employees in the company's audit division). Congress therefore had as much reason to shield a public company's employees from retaliation by the company's contractors as it had to bar retaliation by officers and employees. Otherwise, the statute would have had a gaping hole-a public company could evade § 1514A simply by hiring a contractor to engage in the very retaliatory acts that an officer or employee could not.6
The majority also too quickly dismisses the prominence of "outplacement" firms, or consultants that help companies determine whom to fire. See ante, at 1166 - 1167. Companies spent $3.6 billion on these services in 2009 alone.7 Congress surely could have meant to protect public company employees against retaliation at the hands of such firms, especially in the event that the public company itself goes bankrupt (as companies engaged in fraud often do). See, e.g.,Kalkunte v. DVI Financial Servs., Inc., No. 05-139 etc., ALJ No. 2004-SOX-056, 2009 WL 901018 (Feb. 27, 2009) (former employee of bankrupt public company permitted to bring § 1514A action against corporate restructuring firm that terminated her employment). 8
The majority points next to the remedies afforded by § 1514A(c), which authorizes "all relief necessary to make the employee whole," in addition to "reinstatement," "back pay," and "special damages ... including litigation costs, expert witness fees, and reasonable attorney fees." The majority posits that Congress could not have intended to bar contractors from retaliating against public company employees because one of the remedies (reinstatement) would likely be outside of the contractor's power. Ante, at 1167 - 1168. But there is no requirement that a statute must make every type of remedy available against every type of defendant. A contractor can compensate a whistleblower with backpay, costs, and fees, and that is more than enough for the statute's remedial scheme to make sense. The majority's reference to the affirmative defense for public company "employers" who lack "knowledge" that an employee has participated in a proceeding relating to the fraud report, ante, at 1167 (citing § 1514(A)(a)(2)), fails for a similar reason. There is no rule that Congress may only provide an affirmative defense if it is available to every conceivable defendant.
D
1
Finally, the majority's reading runs afoul of the precept that "interpretations of a statute which would produce absurd results are to be avoided if alternative interpretations consistent with the legislative purpose are available." Griffin v. Oceanic Contractors, Inc., 458 U.S. 564, 575, 102 S.Ct. 3245, 73 L.Ed.2d 973 (1982). The majority's interpretation transforms § 1514A into a sweeping source of litigation that Congress could not have intended. As construed by the majority, the Sarbanes-Oxley Act regulates employment relationships between individuals and their nannies, housekeepers, and caretakers, subjecting individual employers to litigation if their employees claim to have been harassed for providing information regarding any of a host of offenses. If, for example, a nanny is discharged after expressing a concern to his employer that the employer's teenage son may be participating in some Internet fraud, the nanny can bring a § 1514A suit. The employer may prevail, of course, if the nanny cannot prove he was fired "because of" the fraud report. § 1514A. But there is little reason to think Congress intended to sweep such disputes into federal court.
Nor is it plausible that Congress intended the Act to impose costly litigation burdens on any private business that happens to have an ongoing contract with a public company. As the majority acknowledges, the purpose of the Act was to protect public company investors and the financial markets. Yet the majority might well embroil federal agencies and courts in the resolution of mundane labor disputes that have nothing to do with such concerns. For instance, a construction worker could file a § 1514A suit against her employer (that has a long-term contract with a public company) if the worker is demoted after reporting that another client has mailed the company a false invoice.9
The majority's interpretation also produces truly odd distinctions. Under the rule it announces, a babysitter can bring a § 1514A retaliation suit against his employer if his employer is a checkout clerk for the local PetSmart (a public company), but not if she is a checkout clerk for the local Petco (a private company). Likewise, the day laborer who works for a construction business can avail himself of § 1514A if her company has been hired to help remodel the local Dick's Sporting Goods store (a public company), but not if it is remodeling a nearby Sports Authority (a private company).
In light of the reasonable alternative reading of § 1514A, there is no reason to accept these absurd results. The majority begs to differ, arguing that "[t]here is scant evidence" that lawsuits have been brought by the multitude of newly covered employees " 'who have no exposure to investor-related activities and thus could not possibly assist in detecting investor fraud.' " Ante, at 1172. Until today, however, no court has deemed § 1514A applicable to household employees of individuals who work for public companies; even the Department of Labor's ARB rejected that view. Spinner, ALJ No. 2010-SOX-029, at 8. And as the District Court noted, prior to the ARB's 2012 decision in Spinner, the ARB "ha[d] yet to provide ... definitive clarification" on the question whether § 1514A extends to the employees of a public company's private contractors. 724 F.Supp.2d 141, 155 (Mass.2010). So the fact that individuals and private businesses have yet to suffer burdensome litigation offers little assurance that the majority's capacious reading of § 1514A will produce no untoward effects.
Finally, it must be noted that § 1514A protects the reporting of a variety of frauds-not only securities fraud, but also mail, wire, and bank fraud. By interpreting a statute that already protects an expansive class of conduct also to cover a large class of employees, today's opinion threatens to subject private companies to a costly new front of employment litigation. Congress almost certainly did not intend the statute to have that reach.
2
The majority argues that the broader reading of § 1514A is necessary because a small number of the millions of individuals and private companies affected by its ruling have a special role to play in preventing public company fraud. If § 1514A does not bar retaliation against employees of contractors, the majority cautions, then law firms and accounting firms will be free to retaliate against their employees when those employees report fraud on the part of their public company clients.
It is undisputed that Congress was aware of the role that outside accountants and lawyers played in the Enron debacle and the importance of encouraging them to play an active part in preventing future scandals. But it hardly follows that Congress must have meant to apply § 1514A to every employee of every public company contractor, subcontractor, officer, and employee as a result. It is far more likely that Congress saw the unique ethical duties and professional concerns implicated by outside lawyers and accountants as reason to vest regulatory authority in the hands of experts with the power to sanction wrongdoers.
Specifically, rather than imposing § 1514A's generic approach on outside accounting firms, Congress established the PCAOB, which regulates "every detail" of an accounting firm's practice, including "supervision of audit work," "internal inspection procedures," "professional ethics rules," and " 'such other requirements as the Board may prescribe.' " Free Enterprise Fund v. Public Company Accounting Oversight Bd., 561 U.S. 477, ----, 130 S.Ct. 3138, 3148, 177 L.Ed.2d 706 (2010). Importantly, the PCAOB is empowered to levy "severe sanctions in its disciplinary proceedings, up to and including the permanent revocation of a firm's registration ... and money penalties of $15 million." Id., at ----, 130 S.Ct., at 3148 (citing 15 U.S.C. § 7215(c)(4)). Such sanctions could well provide a more powerful incentive to prevent an accounting firm from retaliating against its employees than § 1514A.
The Sarbanes-Oxley Act confers similar regulatory authority upon the SEC with respect to attorneys. The Act requires the SEC to establish rules of professional conduct for attorneys, § 307 (codified at 15 U.S.C. § 7245), and confers broad power on the SEC to punish attorneys for "improper professional conduct," which would include, for example, a law firm partner's decision to retaliate against an associate who reports fraud. § 602 (codified at 15 U.S.C. § 78d-3). Indeed, the Act grants the SEC the power to censure culpable attorneys and to deny "permanently" to any such attorney the "privilege of appearing of practicing before" the SEC "in any way." § 602.
Congress thus evidently made the judgment that decisions concerning how best to punish law firms and accounting firms ought to be handled not by the Department of Labor, but by the SEC and the PCAOB. Such judgment should not be disturbed under usual circumstances, much less at the cost to congressional intent produced by today's ruling. The majority does offer cogent policy arguments for why Congress might have been wiser to include certain types of contractors within § 1514A, noting for example that a law firm or accounting firm might be able to retaliate against its employees for making reports required under the Sarbanes-Oxley Act. Ante, at 1170 - 1171. But as the majority recognizes, Congress has since remedied that precise concern, enacting a comprehensive whistleblower incentive and protection program that unequivocally "prohibit[s] any employer"-public or private-"from retaliating against 'a whistleblower' for providing information to the SEC, participating in an SEC proceeding, or making disclosures required or protected under Sarbanes-Oxley and certain other securities laws." Ante, at 1174 (citing 15 U.S.C. §§ 78u-6(a)(6), (b)(1), (h)). The majority thus acknowledges that, moving forward, retaliation claims like the petitioners' may "procee[d] under [§ 78u-6]," ante, at 1174, n. 17. In other words, to the extent the majority worries about a "hole" in FMR's interpretation, ante, at 1168, Congress has already addressed it.10
II
Because the statute is ambiguous, and because the majority's broad interpretation has also been adopted by the ARB, there remains the question whether the ARB's decision in Spinner, ALJ No. 2010-SOX-029, is entitled to deference under Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984).11 Under United States v. Mead Corp., 533 U.S. 218, 226-227, 121 S.Ct. 2164, 150 L.Ed.2d 292 (2001), an agency may claim Chevron deference "when it appears [1] that Congress delegated authority to the agency generally to make rules carrying the force of law, and [2] that the agency interpretation claiming deference was promulgated in the exercise of that authority." Neither requirement is met here.
First, the agency interpretation for which petitioners claim deference is the position announced by the ARB, the board to which the Secretary of Labor has delegated authority "in review or on appeal" in connection with § 1514A proceedings. 75 Fed.Reg. 3924 (2010). According to petitioners, the ARB's rulings are entitled to deference because the "Secretary is responsible for enforcing Section 1514A both through investigation and through formal adjudication." Brief for Petitioners 61. That is right as far as it goes, but even if the Secretary has the power to investigate and adjudicate § 1514A claims, Congress did not delegate authority to the Secretary to "make rules carrying the force of law," Mead, 533 U.S., at 226-227, 121 S.Ct. 2164. Congress instead delegated that power to the SEC: Section 3(a) of the Sarbanes-Oxley Act, codified at 15 U.S.C. § 7202(a), provides that the SEC "shall promulgate such rules and regulations, as may be necessary or appropriate in the public interest or for the protection of investors, and in furtherance of this Act." So if any agency has the authority to resolve ambiguities in § 1514A with the force of law, it is the SEC, not the Department of Labor. See Martin v. Occupational Safety and Health Review Comm'n, 499 U.S. 144, 154, 111 S.Ct. 1171, 113 L.Ed.2d 117 (1991). The SEC, however, has not issued a regulation applying § 1514A whistleblower protection to employees of public company contractors. And while the majority notes that the SEC may share the (incorrect) view that the Department of Labor has interpretive authority regarding § 1514A, ante, at 1165, n. 6, the majority cites nothing to suggest that one agency may transfer authority unambiguously delegated to it by Congress to a different agency simply by signing onto an amicus brief.
That Congress did not intend for the Secretary to resolve ambiguities in the law is confirmed by § 1514A's mechanism for judicial review. The statute does not merely permit courts to review the Secretary's final adjudicatory rulings under the Administrative Procedure Act's deferential standard. It instead allows a claimant to bring an action in a federal district court, and allows district courts to adjudicate such actions de novo, in any case where the Secretary has not issued a final decision within 180 days. That is a conspicuously short amount of time in light of the three-tiered process of agency review of § 1514A claims. See ante, at 1163 - 1164. As a result, even if Congress had not delegated to the SEC the authority to resolve ambiguities in § 1514A, the muscular scheme of judicial review suggests that Congress would have wanted federal courts, and not the Secretary of Labor, to have that power. See Mead, 533 U.S., at 232, 121 S.Ct. 2164 (declining to defer to Customs Service classifications where, among other things, the statute authorized "independent review of Customs classifications by the [Court of International Trade]").
As to the second Mead requirement, even if Congress had delegated authority to the Secretary to make "rules carrying the force of law," the "agency interpretation claiming deference" in this case was not "promulgated in the exercise of that authority." Id., at 226-227, 121 S.Ct. 2164. That is because the Secretary has explicitly vested any policymaking authority he may have with respect to § 1514A in the Occupational Safety and Health Administration (OSHA) instead of the ARB. See 67 Fed.Reg. 65008 (2002). In fact, the Secretary has expressly withdrawn from the ARB any power to deviate from the rules OSHA issues on the Department of Labor's behalf. 75 Fed.Reg. 3925 ("The [ARB] shall not have jurisdiction to pass on the validity of any portion of the Code of Federal Regulations that has been duly promulgated by the Department of Labor and shall observe the provisions thereof, where pertinent, in its decisions").
OSHA has promulgated regulations supporting the majority's reading of § 1514A. See 29 CFR § 1980.101(f)-(g) (2013). The Secretary, however, has expressly disclaimed any claim of deference to them. See Brief for United States as Amicus Curiae 33, n. 8. As a result, the ARB's understanding of § 1514A's coverage in Spinner was not an "exercise of [the Secretary's] authority" to make rules carrying the force of law, Mead, 533 U.S., at 226-227, 121 S.Ct. 2164, but rather the ARB's necessary compliance with a regulation that no one claims is deserving of deference in the first place. See Spinner, ALJ No. 2010-SOX-029, at 10 (recognizing that "the ARB is bound by the [Department of Labor] regulations").
In the absence of Chevron deference, the ARB's decision in Spinner may claim only "respect according to its persuasiveness"
under Skidmore v. Swift & Co., 323 U.S. 134, 65 S.Ct. 161, 89 L.Ed. 124 (1944). See Mead, 533 U.S., at 221, 121 S.Ct. 2164. But the ARB's decision is unpersuasive, for the many reasons already discussed.
* * *
The Court's interpretation of § 1514A undeniably serves a laudatory purpose. By covering employees of every officer, employee, and contractor of every public company, the majority's interpretation extends § 1514A's protections to the outside lawyers and accountants who could have helped prevent the Enron fraud.
But that is not the statute Congress wrote. Congress envisioned a system in which public company employees would be covered by § 1514A, and in which outside lawyers, investment advisers, and accountants would be regulated by the SEC and PCAOB. Congress did not envision a system in which employees of other private businesses-such as cleaning and construction company workers who have little interaction with investor-related activities and who are thus ill suited to assist in detecting fraud against shareholders-would fall within § 1514A. Nor, needless to say, did it envision § 1514A applying to the household employees of millions of individuals who happen to work for public companies-housekeepers, gardeners, and babysitters who are also poorly positioned to prevent fraud against public company investors. And to the extent § 1514A may have been underinclusive as first drafted, Congress has shown itself capable of filling in any gaps. See, e.g., Dodd-Frank Wall Street Reform and Consumer Protection Act, §§ 922, 929A, 124 Stat. 1848, 1852 (extending § 1514A to credit rating agencies and public company subsidiaries); § 922, id., at 1841-1848 (codifying additional whistleblower incentive and protection program at 15 U.S.C. § 78u-6).
The Court's decision upsets the balance struck by Congress. Fortunately, just as Congress has added further protections to the system it originally designed when necessary, so too may Congress now respond to limit the far-reaching implications of the Court's interpretation.12 But because that interpretation relies on a debatable view of § 1514A's text, is inconsistent with the statute's titles and its context, and leads to absurd results that Congress did not intend, I respectfully dissent.
The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U.S. 321, 337, 26 S.Ct. 282, 50 L.Ed. 499.
Title VIII of the Act, which contains the whistleblower protection provision at issue in this case, was authored by Senators Leahy and Grassley and originally constituted a discrete bill, S. 2010. We thus look to the Senate Report for S.2010, S.Rep. No. 107-146, as the Senate Report relevant here. See 148 Cong. Rec. S7418 (daily ed. July 26, 2002) (statement of Sen. Leahy) ("unanimous consent" to "includ[e] in the Congressional Record as part of the official legislative history" of Sarbanes-Oxley that Title VIII's "terms track almost exactly the provisions of S. 2010, introduced by Senator Leahy and reported unanimously from the Committee on the Judiciary").
As discussed infra, at 1173 - 1175, Congress amended § 1514A in 2010 to extend whistleblower coverage to employees of public companies' subsidiaries and nationally recognized statistical ratings organizations. 124 Stat. 1848. Plaintiffs do not fall in either category and, in any event, their claims are governed by the prior version of § 1514A. Unless otherwise noted, all citations to § 1514A are to the original text in the 2006 edition of the United States Code.
Here, as just noted, the public company has no employees. See supra, at 1161 - 1162.
As § 1514A treats contractors and subcontractors identically, we generally refer simply to "contractors" without distinguishing between the two.
The whistleblower in Spinner was an employee of an accounting firm that provided auditing, consulting, and Sarbanes-Oxley compliance services to a public company.
The dissent maintains that the ARB's interpretation of § 1514A is not entitled to deference because, "if any agency has the authority to resolve ambiguities in § 1514A with the force of law, it is the SEC, not the Department of Labor." Post, at 1187. Because we agree with the ARB's conclusion that § 1514A affords protection to a contractor's employees, we need not decide what weight that conclusion should carry. We note, however, that the SEC apparently does not share the dissent's view that it, rather than DOL, has interpretive authority over § 1514A. To the contrary, the SEC is a signatory to the Government's brief in this case, which takes the position that Congress has charged the Secretary of Labor with interpreting § 1514A. Brief for United States as Amicus Curiae 9-11, 31-34. That view is hardly surprising given the lead role played by DOL in administering whistleblower statutes. See supra, at 1163. The dissent observes that the SEC "has not issued a regulation applying § 1514A whistleblower protection to employees of public company contractors," post, at 1187, but omits to inform that the SEC has not promulgated any regulations interpreting § 1514A, consistent with its view that Congress delegated that responsibility to DOL.
We need not decide in this case whether § 1514A also prohibits a contractor from retaliating against an employee of one of the other actors governed by the provision.
This hypothetical originates in a Seventh Circuit opinion, Fleszar v. United States Dept. of Labor, 598 F.3d 912, 915 (2010), and is mentioned in a footnote in the First Circuit's opinion in this case, 670 F.3d 61, 69, n. 11 (2012).
When asked during oral argument for an example of actual circumstances in which a contractor would have employment decisionmaking authority over public company employees, FMR's counsel cited Kalkunte v. DVI Financial Servs., Inc., No. 05-139 etc., ALJ No. 2004-SOX-056, 2009 WL 901018 (Feb. 27, 2009). Tr. of Oral Arg. 33. That case involved a bankrupt public company that hired a private company to handle its dissolution. The ARB found the private company liable under § 1514A because it acted as a "contractor, subcontractor, or agent " of the public company in discharging the claimant. ALJ No. 2004-SOX-056, at 10 (emphasis added). Neither FMR nor its amici have pointed us to any actual situation in which a public company employee would be vulnerable to retaliatory conduct by a contractor not already covered as an "agent" under § 1514A. Notably, even in Tides v. The Boeing Co., 644 F.3d 809 (C.A.9 2011), the case cited by the dissent for the proposition that contractors may possess "managerial authority" over public company employees, post, at 1182, the alleged retaliation was by the public company itself.
The dissent suggests that we "fai[l] to recognize" that its construction also makes contractors primarily liable for retaliating of their own volition against employees of public companies. Post, at 1182 - 1183, n. 6. As explained supra, at 1166, n. 9, however, FMR and its supporters have identified not even one real-world instance of a public company employee asserting a § 1514A claim alleging retaliatory conduct by a contractor. Again, no "gaping hole," practically no hole at all.
The ARB endorsed this view in Spinner v. David Landau & Assoc., LLC, No. 10-111 etc., ALJ No. 2010-SOX-029, p. 8 (May 31, 2012). We have no occasion to determine whether the ARB would be entitled to deference in this regard, for, as explained in text, we find that the statutory text unambiguously affords protection to personal employees of public company officers and employees. § 1514A(a).
AIR 21's anti-retaliation provision, on which § 1514A is based, includes a similarly composed heading, "Discrimination against airline employees." 49 U.S.C. § 42121(a). Nevertheless, that provision has been read to cover employees of companies rendering contract services to airlines. See infra, at 1175 - 1176.
FMR urges that the Senate Report's references to "employees of publicly traded companies" demonstrate that Congress wanted to limit whistleblower protection to such employees. Brief for Respondents 30-31. This argument fails for the same reason that FMR's reliance on the statutory section headings fails: "employees of publicly traded companies" must be understood as shorthand not designed to capture every employee covered by § 1514A. See supra, at 1167 - 1169. Senator Sarbanes' statement, cited in the concurring opinion, post, at 1178, is similarly imprecise. The Act indisputably covers private accounting firms and law firms that provide services to public companies. See, e.g., 15 U.S.C. §§ 7215, 7245. Indeed, Senator Sarbanes acknowledged this point in his very next sentence. See 148 Cong. Rec. 14440 (2002) (remarks of Sen. Sarbanes) ("This legislation prohibits accounting firms from providing certain specified consulting services if they are also the auditors of the company.").
The dissent suggests that the Public Company Accounting Oversight Board's and the SEC's authority to sanction unprofessional conduct by accountants and lawyers, respectively, "could well provide" a disincentive to retaliate against other accountants and lawyers. See post, at 1185. The possibility of such sanctions, however, is cold comfort to the accountant or lawyer who loses her job in retaliation for her efforts to comply with the Act's requirements if, as the dissent would have it, § 1514A does not enable her to seek reinstatement or backpay.
Although the dissent suggests that the ARB had not provided "definitive clarification" on the issue prior to Spinner,post at 1184 - 1185, the ARB "repeatedly interpreted [§ 1514A] as affording whistleblower protection to employees of [private] contractors" before Spinner. See Spinner, No. 10-111 etc., ALJ No. 2010-SOX-029, p. 5 (citing prior decisions).
We can easily dismiss FMR's invocation of a failed bill from 2004, the Mutual Fund Reform Act, S. 2059, 108th Cong., 2d Sess., § 116(b), which would have amended § 1514A explicitly to cover employees of investment advisers and affiliates. Brief for Respondents 34-35. "[F]ailed legislative proposals are a particularly dangerous ground on which to rest an interpretation of a prior statute." United States v. Craft, 535 U.S. 274, 287, 122 S.Ct. 1414, 152 L.Ed.2d 437 (2002) (internal quotation marks omitted). Where, as here, the proposed amendment amounted to six lines in a 51-page bill that died without any committee action, its failure is scarcely relevant to Congress' intentions regarding a different bill enacted two years earlier.
FMR acknowledges that plaintiffs' claims could have proceeded under Dodd-Frank, but for the date of enactment. Brief for Respondents 43.
Section 1107 of the Act is of similar breadth, declaring it a criminal offense to "tak[e] any action harmful to any person, including interference with the lawful employment or livelihood of any person, for providing to a law enforcement officer any truthful information relating to the commission or possible commission of any Federal offense." 18 U.S.C. § 1513(e).
For other provisions borrowing from AIR 21, see 49 U.S.C. § 20109, governing rail carriers, which incorporates AIR 21's enforcement procedures, and § 31105, governing motor carriers, which incorporates AIR 21's proof burdens.
The ARB has also interpreted similarly worded whistleblower protection provisions in the Pipeline Safety Improvement Act of 2002, 49 U.S.C. § 60129(a), and the Energy Reorganization Act of 1974, 42 U.S.C. § 5851(a), as protecting employees of contractors. See Rocha v. AHR Utility Corp., ARB No. 07-112, ALJ No. 2006-PSI-001 etc., p. 2, 2009 WL 2407945 (June 25, 2009); Robinson v. Triconex Corp., ARB No. 10-013, ALJ No. 2006-ERA-031, pp. 8-9 (Mar. 28, 2012).
FMR protests that there is no court of appeals precedent on point, Brief for Respondents 24, n. 6, but the courts of appeals are not, of course, the only lodestar for determining whether a proposition of law is plainly established.
The dissent suggests the provisions' headings are also distinguishable because § 42121's title-"Protection of employees providing air safety information"-"comfortably encompasses the employees of contractors." Post, at 1181. The dissent omits, however, the subsection heading directly following the title: "Discrimination against airline employees." § 42121(a).
The Congressional Record reads "provide companies," but context as well as grammar makes clear that this is a scrivener's error for "private companies."
The majority uses the term "public company" as shorthand for 18 U.S.C. § 1514A's reference to companies that either have " 'a class of securities registered under section 12 of the Securities Exchange Act of 1934,' " or that are " 'required to file reports under section 15(d).' " Ante, at 1164 - 1165. I do the same.
In reaching the opposite conclusion, the majority rejects the concessions by the Government and petitioners and gives no weight to the ARB's interpretation. If § 1514A creates a cause of action for contractor employees, the majority concludes, so too must it create a cause of action for "housekeepers" and "gardeners" against their individual employers if they happen to work for a public company. Ante, at 1168 - 1169. In reaching this result, however, the majority only adds to the absurdities produced by its holding. See infra, at 1167 - 1168.
Dept. of Labor, Bureau of Labor Statistics, News, Contingent and Alternative Employment Arrangements, Feb. 2005, (July 27, 2005), online at http:// www. bls. gov/ news. release/ conemp. nr 0. htm (all Internet materials as visited on Feb. 28, 2014, and available in Clerk of Court's case file).
The Bureau of Labor Statistics distinguishes contract workers from independent contractors, defining the former as "[w]orkers who are employed by a company that provides them or their services to others under contract and who ... usually work at the customer's worksite." Id., at 2 (Table A).
Penn, Staffing Firms Added Nearly 1 Million Jobs Over Four Years Since Recession, ASA Says, Bloomberg Law (Oct. 8, 2012), online at http:// about. bloomberglaw. com/ law- reports/ staffing- firms- added- nearly- 1- million- jobs- over- four- years- since- recession- asa- says/.
The majority submits that the hole might not be so problematic because § 1514A "surely" prohibits a "public company from directing someone else to engage in retaliatory conduct against the public company's employees." Ante, at 1167. It surely does, but that is the point-the whole reason § 1514A(a) clearly does so is because it expressly forbids a public company to retaliate against its employees through "any officer, employee, contractor, subcontractor, or agent." The prohibition on retaliation through a contractor would be far less certain (hence the hole) if Congress had merely forbidden a public company to retaliate through its "officers and employees." Moreover, while the majority concedes that, under the narrower reading of § 1514A, Congress' inclusion of the term "contractor" imposes secondary liability in the event a public company is judgment proof, ante, at 1167 - 1168, the majority fails to recognize that Congress' use of the term also imposes primary liability against contractors who threaten public company employees without direction from the company. Thus, for example, FMR's interpretation of § 1514A would prevent an outside accountant from threatening or harassing a public company employee who discovers that the accountant is defrauding the public company and who seeks to blow the whistle on that fraud.
Rogers, Do Firing Consultants Really Exist, Slate, Jan. 7, 2010, www. slate. com/ articles/ news_ and_ politics/ explainer/ 2010/ 01/ getting_ the_ ax_ from_ george_ clooney. html.
The majority suggests that an outplacement firm would likely be acting as an "agent" for the public company, such that Congress' additional inclusion of the word "contractor" would be superfluous under the narrower reading of § 1514A. Ante, at 1166, n. 9. The two words are not legally synonymous, however. An outplacement firm and public company might, for example, enter into a contract with a provision expressly disclaiming an agency relationship. Moreover, Congress' use of the term "contractor" would in all events have an independent and important effect: If Congress had not included the term, no one could be held liable if a contractor were to threaten or harass a public company employee without the company's direction. While the majority may speculate that such occurrences are rare, ibid., it is hardly unthinkable. See n. 6, supra.
Recognizing that the majority's reading would lead to a "notably expansive scope untethered to the purpose of the statute," the District Court in this case sought to impose an extratextual limiting principle under which an employee who reports fraud is entitled to protection only if her report "relat[es] to fraud against shareholders." 724 F.Supp.2d 141, 160 (Mass.2010). The District Court acknowledged, however, that "the language of the statute itself does not plainly provide such a limiting principle," id., at 158, and the majority does not attempt to revive that limitation here.
The majority also contends that its reading is necessary to avoid "insulating the entire mutual fund industry from § 1514A." Ante, at 1171. But that argument is misguided for a reason similar to the majority's concern about lawyers and accountants. As this Court has observed, Congress responded to the " 'potential for abuse inherent in the structure of investment companies,' " Daily Income Fund, Inc. v. Fox, 464 U.S. 523, 536, 104 S.Ct. 831, 78 L.Ed.2d 645 (1984), by enacting the Investment Company Act of 1940 and the Investment Advisers Act of 1940. 15 U.S.C. § 80a-1 et seq.; § 80b-1 et seq. The Advisers Act in particular grants the SEC broad regulatory authority to regulate mutual fund investment advisers. § 80b-11. The Act also authorizes fines and imprisonment of up to five years for violations of SEC rules. The SEC thus has broad discretion to punish retaliatory actions taken by mutual fund advisers against their employees. And to the extent these provisions may have been insufficient to protect mutual fund adviser employees, § 78u-6's extensive whistleblower incentive and protection program now unambiguously covers such employees.
Although it claims not to reach the issue, ante, at 1165, n. 6, the majority implicitly declines to defer to a portion of the ARB's ruling as well, rejecting the ARB's ruling that § 1514A does not apply to the household employees of public company officers and employees, ante, at 1168 - 1169, and n. 11.
Congress could, for example, limit § 1514A to contractor employees in only those professions that can assist in detecting fraud on public company shareholders, or it could restrict the fraud reports that trigger whistleblower protection to those that implicate the interests of public company investors, see n. 9, supra. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
70
] |
WEINBERGER, SECRETARY OF HEALTH, EDUCATION, AND WELFARE, et al. v. HYNSON, WESTCOTT & DUNNING, INC.
No. 72-394.
Argued April 17, 1973
Decided June 18, 1973
Douglas, J., delivered the opinion of the Court, in which Burger, C. J., and White, Marshall, BlackmuN, and Rehnquist, JJ., joined. Powell, J., filed an opinion concurring in the result as to Part I and joining in Part II of the Court’s opinion, post, p. 637. BreNNAN, J., took no part in the consideration or decision of the cases. Stewart, J., took no part in the decision of the cases.
Deputy Solicitor General Friedman and Andrew L. Frey argued the cause for petitioners in No. 72-394 and respondents in No. 72-414. With Mr. Frey on the briefs were Solicitor General Griswold, Assistant Attorney Gen eral Kauper, Deputy Solicitor General Wallace, Robert B. Nicholson, Howard E. Shapiro, and Peter Barton Hutt.
Edward Brown Williams argued the cause for petitioner in No. 72-414 and respondent in No. 72-394. With him on the briefs was Jan Edward Williams.
Together with No. 72-414, Hynson, Westcott & Dunning, Inc. v. Weinberger, Secretary of Health, Education, and Welfare, et al., also on certiorari to the same court.
Briefs of amici curiae in both eases were filed by Lloyd N. Cutler, Daniel Marcus, and William T. Lake for Pharmaceutical Manufacturers Assn.; by Bruce J. Terris, Joseph Onek, and Peter H. Schuck for American Public Health Assn, et al.; and by Thomas D. Finney, Jr., Thomas Richard Spradlin, and Daniel F. O’Keefe, Jr., for the Proprietary Assn. Briefs of amici curiae in No. 72-394 were filed by Alan H. Kaplan for E. R. Squibb & Sons, Inc., and by Robert L. Wald, Selma M. Levine, Joel E. Hoffman, Philip Elman, and Philip J. Franks for USV Pharmaceutical Corp.
Mr. Justice Douglas
delivered the opinion of the Court.
These cases, together with Weinberger v. Bentex Pharmaceuticals, Inc., post, p. 645, CIBA Corp. v. Weinberger, post, p. 640, and USV Pharmaceutical Corp. v. Weinberger, post, p. 655, all here on certiorari, raise a series of questions under the 1962 amendments to the Federal Food, Drug, and Cosmetic Act of 1938. 52 Stat. 1040. The 1938 Act, which established a system of premarketing clearance for drugs, prohibited the introduction into commerce of any “new drug” unless a new drug application (NDA) filed with the Food and Drug Administration (FDA) was effective with respect to that drug. § 505 (a), 52 Stat. 1052. Under the 1938 Act a “new drug” was one not generally recognized by qualified experts as safe for its intended use. §201 (p)(1). The Government could sue to enjoin violations, prosecute criminally, and seize and condemn the articles. §§ 301 (d), 302 (a), 303, 304. The Act established procedures for filing NDA’s, § 505 (b), and provided standards under which, after notice and hearing, FDA could refuse to allow an NDA to become effective, §§505 (c) and (d), or could suspend an NDA in effect on the basis of new evidence that the drug was unsafe. § 505 (e). Orders denying or suspending an NDA could be reviewed in a district court on the administrative record. § 505 (h).
The 1962 Act amended §201 (p)(l) of the 1938 Act to define a “new drug” as a drug not generally recognized among experts as effective as well as safe for its intended use. 21 U. S. C. § 321 (p)(1). A new drug, as now defined, still may not be marketed unless an NDA is in effect. FDA is now directed to refuse approval of an NDA and to withdraw any prior approval if “substantial evidence” that the drug is effective for its intended use is lacking. 21 U. S. C. §§ 355 (d) and (e). Thus, the basic clearance system, requiring FDA approval of an NDA before a “new drug” may be lawfully marketed, was continued, except that FDA now either must approve or disapprove an application within 180 days. 21 U. S. C. § 355 (c). (Under the 1938 Act an application automatically became effective if it was not disapproved.) Judicial review was transferred to the courts of appeals. 21 U. S. C. § 355 (h).
Since the Act as amended requires affirmative agency approval, all NDA’s “effective” prior to 1962 were deemed “approved” under the new definition, and manufacturers were given two years to develop substantial evidence of effectiveness, during which previously approved NDA’s could not be withdrawn by FDA for a drug’s lack of effectiveness. The 1962 amendments also contain a “grandfather” clause exempting from the effectiveness requirements any drug which on the day preceding enactment (1) was commercially used or sold in the United States, (2) was not a “new drug” as defined in the 1938 Act (it being generally recognized as safe), and (3) “was not covered by an effective application” for a new drug under the 1938 Act.
Between 1938 and 1962 FDA had permitted 9,457 NDA’s to become effective. Of these, some 4,000 were still on the market. In addition, there were thousands of drugs which manufacturers had marketed without applying to FDA for clearance. These drugs, known as “me-toos,” are similar to or identical with drugs with effective NDA’s and are marketed in reliance on the “pioneer” drug application approved by FDA. In some cases, a manufacturer obtained an advisory opinion letter from FDA that its product was generally recognized among experts as safe.
To aid in its task of fulfilling the statutory mandate to review all marketed drugs for their therapeutic efficacy, whether or not previously approved, FDA retained the National Academy of Sciences-National Research Council (NAS-NRC) to create expert panels to review by class the efficacy of each approved drug. Holders of NDA’s were invited to furnish the panels with the best available data to establish the effectiveness of their drugs. The panels reported to FDA; and on January 23, 1968, FDA announced its policy of applying the NAS-NRC efficacy findings to all drugs, including the related “me-too” drugs.
I
Respondent in No. 72-394, Hynson, Westcott & Dunning, Inc., had filed an application under the 1938 Act for a drug called Lutrexin, recommended by Hynson for use in the treatment of premature labor, threatened and habitual abortion, and dysmenorrhea. FDA informed Hynson that Hynson’s studies submitted with the application were not sufficiently well controlled to justify the claims of effectiveness and urged Hynson not to represent the drug as useful for threatened and habitual abortion. But FDA allowed the application to become effective, since the 1938 Act permitted evaluation of a new drug solely on the grounds of its safety. Before the 1962 amendments Hynson filed an application for a related drug which FDA, again on the basis of the test of safety, allowed to become effective. When the 1962 amendments became effective and NAS-NRC undertook to appraise the efficacy of drugs theretofore approved as safe, Hynson submitted a list of literature references, a copy of an unpublished study, and a representative sample testimonial letter on behalf of Lutrexin. The panel of NAS-NRC working in the relevant field reported to FDA that Hyn-son’s claims for effectiveness of the drug were either inappropriate or unwarranted in the absence of submission of further appropriate documentation. At the invitation of the Commissioner of Food and Drugs, Hynson submitted additional data. But the Commissioner concluded that this additional information was inadequate and published notice of his intention to withdraw approval of the NDA’s covering the drug, offering Hynson the opportunity for a prewithdrawal hearing. Before the hearing could take place, Hynson brought suit in the District Court for a declaratory judgment that the drugs in question were exempt from the efficacy review provisions of the 1962 amendments or, alternatively, that there was no lack of substantial evidence of the drug’s efficacy. The Government’s motion to dismiss was granted, the District Court ruling that FDA had primary jurisdiction and that Hynson had failed to exhaust its administrative remedies.
While the District Court litigation was pending, FDA promulgated new regulations establishing minimal standards for “adequate and well-controlled investigations” and limiting the right to a hearing to those applicants who could proffer at least some evidence meeting those standards. Although Hynson maintained that it was not subject to the new regulations because its initial request for a hearing predated their issuance, it renewed its request and submitted the material which it claimed constituted “substantial evidence” of Lutrexin’s effectiveness. The Commissioner denied the request for a hearing and withdrew the NDA for Lutrexin. He ruled that Lutrexin is not exempt from the 1962 amendments and that Hynson had not submitted adequate evidence that Lutrexin is not a new drug or is effective. The Court of Appeals reversed, 461 F. 2d 215, holding that while the drug in question was not exempt, Hynson was entitled to a hearing on the substantial-evidence question.
Section 505 (e) directs FDA to withdraw approval of an NDA if the manufacturer fails to carry the burden of showing there is “substantial evidence” respecting the efficacy of the drug. As the Court of Appeals says, “substantial evidence” was substituted for “preponderance” of the evidence. 461 F. 2d, at 220. The Act and the Regulations, in their reduction of that standard to detailed guidelines, make FDA’s so-called administrative summary judgment procedure appropriate.
The general contours of “substantial evidence” are defined by § 505 (d) of the Act to include “evidence consisting of adequate and well-controlled investigations, including clinical investigations, by experts qualified by scientific training and experience to evaluate the effectiveness of the drug involved, on the basis of which it could fairly and responsibly be concluded by such experts that the drug will have the effect it purports or is represented to have under the conditions of use prescribed, recommended, or suggested in the labeling or proposed labeling thereof.” 21 U. S. C. § 355 (d). Acting pursuant to his “authority to promulgate regulations for the efficient enforcement” of the Act, § 701 (a), 21 U. S. C. §371 (a), the Commissioner has detailed the “principles . . . recognized by the scientific community as the essentials of adequate and well-controlled clinical investigations. They provide the basis for the determination whether there is ‘substantial evidence’ to support the claims of effectiveness for ‘new drugs’ . . . 21 CFB, § 130.12 (a)(5)(h). They include a “plan or protocol” setting forth the objective of the study and an adequate method for selecting appropriate subjects, explaining the methods of observation and steps taken to minimize bias, providing a comparison by one of four “recognized” methods of the results of treatment or diagnosis with a control, and summarizing the methods of analysis, including any appropriate statistical methods. Id., § 130.12 (a)(5)(ii)(a). No investigation will be considered “adequate for approval of a new drug” unless the test drug is “standardized as to identity, strength, quality, purity, and dosage form to give significance to the results of the investigation.” Id., § 130.12 (a) (5) (ii) (b). Finally, the regulation provides that “ [uncontrolled studies or partially controlled studies are not acceptable as the sole basis for the approval of claims of effectiveness. Such studies, carefully conducted and documented, may provide corroborative support . . . . Isolated case reports, random experience, and reports lacking the details which permit scientific evaluation will not be considered.” Id., § 130.12 (a) (5) (ii) (c).
Lower courts have upheld the validity of these regulations, and it is not disputed here that they express well-established principles of scientific investigation. Moreover, their strict and demanding standards, barring anecdotal evidence indicating that doctors “believe” in the efficacy of a drug, are amply justified by the legislative history. The hearings underlying the 1962 Act show a marked concern that impressions or beliefs of physicians, no matter how fervently held, are treacherous. Congress in its definition of “substantial evidence” in § 505 (d) wrote the requirement of “evidence consisting of adequate and well-controlled investigations.” The Senate Report makes clear that an abrupt departure was being taken from old norms for marketing drugs. There had been mounting concern over efficacy of drugs as well as their safety. The Report stated:
“[A] claim could be rejected if it were found (a) that the investigations were not 'adequate; (b) that they were not 'well controlled’; (c) that they had been conducted by experts not qualified to evaluate the effectiveness of the drug for which the application is made; or (d) that the conclusions drawn by such experts could not fairly and responsibly be derived from their investigations.”
To be sure, the Act requires FDA to give “due notice and opportunity for hearing to the applicant” before it can withdraw its approval of an NDA. § 505 (e), 21 U. S. C. §355 (e). FDA, however, by regulation, requires any applicant who desires a hearing to submit reasons “why the application . . . should not be withdrawn, together with a well-organized and full-factual analysis of the clinical and other investigational data he is prepared to prove in support of his opposition to the notice of opportunity for a hearing. . . . When it clearly appears from the data in the application and from the reasons and factual analysis in the request for the hearing that there is no genuine and substantial issue of fact . . . , e. g., no adequate and well-controlled clinical investigations to support the claims of effectiveness,” the Commissioner may deny a hearing and enter an order withdrawing the application based solely on these data. 21 CFR § 130.14 (b). What the agency has said, then, is that it will not provide a formal hearing where it is apparent at the threshold that the applicant has not tendered any evidence which on its face meets the statutory standards as particularized by the regulations.
The propriety of such a procedure was decided in United States v. Storer Broadcasting Co., 351 U. S. 192, 205, and FPC v. Texaco, 377 U. S. 33, 39. We said in Texaco:
“[T]he statutory requirement for a hearing under § 7 [of the Natural Gas Act] does not preclude the Commission from particularizing statutory standards through the rulemaking process and barring at the threshold those who neither measure up to them nor show reasons why in the public interest the rule should be waived.” Ibid.
There can be no question that to prevail at a hearing an applicant must furnish evidence stemming from “adequate and well-controlled investigations.” We cannot impute to Congress the design of requiring, nor does due process demand, a hearing when it appears conclusively from the applicant's “pleadings” that the application cannot succeed.
The NAS-NRC panels evaluated approximately 16,500 claims made on behalf of the 4,000 drugs marketed pursuant to effective NDA's in 1962. Seventy percent of these claims were found not to be supported by substantial evidence of effectiveness, and only 434 drugs were found effective for all their claimed uses. If FDA were required automatically to hold a hearing for each product whose efficacy was questioned by the NAS-NRC study, even though many hearings would be an exericse in futility, we have no doubt that it could not fulfill its statutory mandate to remove from the market all those drugs which do not meet the effectiveness requirements of the Act.
If this were a case involving trial by jury as provided in the Seventh Amendment, there would be sharper limitations on the use of summary judgment, as our decisions reveal. See, e. g., Adickes v. Kress & Co., 398 U. S. 144, 153-161; White Motor Co. v. United States, 372 U. S. 253. But Congress surely has great leeway in setting standards for releasing on the public, drugs which may well be miracles or, on the other hand, merely easy money-making schemes through use of fraudulent articles labeled in mysterious scientific dress. The standard of “well-controlled investigations” particularized by the regulations is a protective measure designed to ferret out those drugs for which there is no affirmative, reliable evidence of effectiveness. The drug manufacturers have full and precise notice of the evidence they must present to sustain their NDA’s, and under these circumstances we find PDA hearing regulations unexceptionable on any statutory or constitutional ground.
Our conclusion that the summary judgment procedure of FDA is valid does not end the matter, for Hynson argues that its submission to FDA satisfied its threshold burden. In reviewing an order of the Commissioner denying a hearing, a court of appeals must determine whether the Commissioner’s findings accurately reflect the study in question and if they do, whether the deficiencies he finds conclusively render the study inadequate or uncontrolled in light of the pertinent regulations. There is a contrariety of opinion within the Court concerning the adequacy of Hynson’s submission. Since a majority are of the view that the submission was sufficient to warrant a hearing, we affirm the Court of Appeals on that phase of the case.
II
No. 72-414 is a cross-petition by Hynson from the judgment of the Court of Appeals. This cross-petition raises questions concerning the “new drug” provisions of the 1962 amendments. The Court of Appeals suggested that only a district court has authority to determine whether Lutrexin is a “new drug.” The Government contends that the Commissioner has authority to determine new drug status in proceedings to withdraw approval of the product’s NDA under § 505 (e). Although Hynson agrees, some of the manufacturers, parties to other suits in this group of cases, advance the contrary view.
Prior to 1938 there was no machinery for the pre-marketing approval of drugs sold in commerce. Under the 1906 Act, 34 Stat. 768, adulterated and misbranded drugs were narrowly defined, and the Act provided only criminal sanctions and seizure by libel for condemnation. As previously noted, the 1938 Act provided for regulatory clearance of drugs prior to marketing and for administrative suspension of any clearance if required in the interests of public safety. To introduce a new drug an application had to be effective with respect to that drug. The application was to become effective within a fixed period unless the agency after notice and opportunity for hearing refused to permit it to become effective, finding that it could not determine from existing evidence or had not been shown that it was safe. 52 Stat. 1041-1042, 1052. Any NDA could be suspended if clinical experience or new testing showed that the drug was not safe. Id., at 1053. Orders denying or suspending an NDA were reviewable on the administrative record in a district court. Ibid. Marketing a new drug without an effective NDA could be enjoined or made the basis of a criminal prosecution, or the drug could be seized in libel and condemnation proceedings.
There was a steady stream of NDA’s under that Act supported by voluminous data. Many new drugs claiming “me-too” status were marketed illegally or were launched with an advisory opinion of FDA that they were recognized as safe. It is estimated that by 1969 there were five identical or similar drugs for every drug with an effective NDA. Enormous administrative problems were created. Each NDA contained about 30 volumes, a stack 10 to 12 feet high; and some contained as many as 400 volumes of data.
It is clear to us that FDA has power to determine whether particular drugs require an approved NDA in order to be sold to the public. FDA is indeed the administrative agency selected by Congress to administer the Act, and it cannot administer the Act intelligently and rationally unless it has authority to determine what drugs are “new drugs” under § 201 (p) and whether they are exempt from the efficacy requirements of the 1962 amendments by the grandfather clause of § 107 (c)(4).
Regulatory agencies have by the requirements of particular statutes usually proceeded on a case-by-case basis, giving each person subject to regulation separate hearings. But there is not always a constitutional reason why that must be done. United States v. Storer Broadcasting Co., 351 U. S. 192, is one example. We there upheld rules of the Federal Communications Commission limiting the number of broadcasting stations a single individual might own, saying that that was a proper exercise of the agency's “rule-making authority necessary for the orderly conduct of its business.” Id., at 202. The comprehensive, rather than the individual, treatment may indeed be necessary for quick effective relief. See Permian Basin Area Rate Cases, 390 U. S. 747. A generic drug — which is found to be unsafe and/or lacking in efficacy — may be manufactured by several persons or manufacturers. To require separate judicial proceedings to be brought against each, as if each were the owner of a Black Acre being condemned, would be to create delay where in the interests of public health there should be prompt action. A single administrative proceeding in which each manufacturer may be heard is constitutionally permissible measured by the requirements of procedural due process.
FDA maintains that a withdrawal of any NDA approval covers all “me-too” drugs. For the reasons stated, that procedure is a permissible one where every manufacturer of a challenged drug has an opportunity to be heard. FDA under § 554 of the Administrative Procedure Act may issue a declaratory order governing all drugs covered by a particular NDA. 5 U. S. C. § 554 (e). That section prescribes the procedures an agency must follow “in every case of adjudication required by statute to be determined on the record after opportunity for an agency hearing.” §554 (a). The industry maintains that § 554 (e) is of no avail to FDA because in a withdrawal proceeding a common issue is whether a drug is a “new drug.” That issue, it is argued, can be resolved only in a court proceeding where there is an adjudication “on the record of [a] hearing.” But that assumes an individualized hearing and adjudication as is common in regulatory proceedings. Section 554 (e), however, does not place administrative proceedings in that straitjacket. It provides that an agency “in its sound discretion, may issue a declaratory order to terminate a controversy or remove uncertainty.” The termination of a controversy over a “new drug” may often be of prime importance. This is an age of ever-expanding dockets at the administrative as well as at the judicial level. If the administrative controls over drugs are to be efficient, they must be exercised with dispatch. Only paralysis would result if case-by-case battles in the courts were the only way to protect the public against unsafe or ineffective drugs. Moreover, if every “me-too” drug in a particular generic category had to be put to the test in court actions, great inequities might well result. It might take months to eliminate one “me-too” drug manufactured by one com.pany from the market. Meanwhile, competitors selling drugs in the same category would go scot-free until the tedious and laborious procedures of litigation reached them. We cannot believe that Congress engaged in such an exercise in futility when it enacted the 1962 amendments. That would in effect restore the enforcement provisions to the status they enjoyed under the rather primitive 1906 Act. We hold that FDA by reasons of § 554 (e) of the Administrative Procedure Act may issue a declaratory order to terminate a controversy over a “new drug” or to remove any uncertainty whether a particular drug is a “new drug” within the meaning of § 201 (p)(1) of the 1938 Act. See Abbott Laboratories v. Gardner, 387 U. S. 136.
It is argued, however, that the only lawful purpose of an FDA hearing is to allow it a method for determining which lawsuits it will file in the future. Yet that is only another version of the tactics of delay and procrastination which the industry offers as the way best to serve industry's needs. The public needs are, however, opposed and paramount. We do not accept the invitation to hold that FDA has no jurisdiction to determine whether a particular drug is a “new drug” and to decide whether an NDA should be withdrawn.
Its determination that a product is a “new drug” or a “me-too” drug is, of course, reviewable. But its jurisdiction to determine whether it has jurisdiction is as essential to its effective operation as is a court’s like power. Cf. United States v. Shipp, 203 U. S. 563, 573. The heart of the new procedures designed by Congress is the grant of primary jurisdiction to FDA, the expert agency it created. FDA does not have the final say, for review may be had, not in a district court (except in a limited group of cases we will discuss), but in a court of appeals. FDA does not have unbridled discretion to do what it pleases. Its procedures must satisfy the rudiments of fair play. Judicial relief is available only after administrative remedies have been exhausted.
It is argued that though FDA is empowered to decide the threshold-question whether the drug is a “new drug,” that power is only an incident to its power to approve or withdraw approval of NDA’s. Some manufacturers, however, have no NDA’s in effect and are not seeking approval of any drugs. Nevertheless, FDA may make a declaratory order that a drug is a “new drug.” While that order is not reviewable in the court of appeals under § 505 (h), it is reviewable by the district court under the Administrative Procedure Act. 5 U. S. C. §§ 701-704; Citizens to Preserve Overton Park v. Volpe, 401 U. S. 402, 410; Abbott Laboratories v. Gardner, supra, at 139-148. By analogy an agency order declaring a commodity not exempt from regulation is normally a declaratory order that is reviewable, as we held in Frozen Food Express v. United States, 351 U. S. 40.
The question then presented is whether FDA properly exercised its jurisdiction in this instance. As indicated above, Hynson in requesting an administrative hearing also asked FDA to decide that Lutrexin is not a “new drug” within the meaning of § 201 (p) as amended, 21 U. S. C. § 321 (p). In addition, it asked that Lutrexin be “grandfathered” under § 107 (c) (4) of the 1962 amendments. The Commissioner rejected both claims. Finding that Hynson had failed to present any evidence of adequate and well-controlled investigations in support of Lutrexin’s effectiveness, he concluded that "there is no data base upon which experts can fairly and responsibly conclude that the safety and effectiveness of the drugs has been proven and is so well established that the drugs can be generally recognized among such experts as safe and effective for their intended uses.” The Commissioner also held that Lutrexin is not exempt under § 107 (c) (4) because its NDA, which had become effective in 1953, had not been withdrawn prior to the enactment of the 1962 amendments and thus was “covered by an effective application” within the meaning of § 107 (c)(4)(C). The Court of Appeals affirmed the Commissioner’s ruling that Lutrexin is not exempt under § 107 (c) (4). It did not discuss his holding that Lutrexin currently is a “new drug.” Although we agree that the Commissioner properly ruled that Lutrexin does not come within § 107 (c)(4), we conclude that the Commissioner’s order with respect to Lutrexin’s “new drug” status must be vacated.
The thrust of § 201 (p) is both qualitative and quantitative. The Act, however, nowhere defines what constitutes “general recognition” among experts. Hynson contends that the “lack of substantial evidence” is applicable only to proof of the actual effectiveness of drugs that fall within the definition of a new drug and not to the initial determination under § 201 (p) whether a drug is “generally recognized” as effective. It would rely solely on the testimony of physicians and the extant literature, evidence that has been characterized as “anecdotal.” We agree with FDA, however, that the statutory scheme and overriding purpose of the 1962 amendments compel the conclusion that the hurdle of “general recognition” of effectiveness requires at least “substantial evidence” of effectiveness for approval of an NDA. In the absence of any evidence of adequate and well-controlled investigation supporting the efficacy of Lutrexin, a fortiori Lutrexin would be a “new drug” subject to the provisions of the Act.
As noted, the 1962 amendments for the first time gave FDA power to scrutinize and evaluate drugs for effectiveness as well as safety. The Act requires the Commissioner to disapprove any application when there is a lack of “substantial evidence” that the applicant’s drug is effective. § 505 (d), 21 U. S. C. § 355 (d). Similarly, he may withdraw approval for any drug if he subsequently determines that there is a lack of such evidence. § 505 (e), 21 U. S. C. § 355 (e). Evidence may be accepted only if it consists of “adequate and well-controlled investigations, including clinical investigations, by experts qualified by scientific training and experience to evaluate the effectiveness of the drug involved . . . .” § 505 (d), 21 TJ. S. C. §355 (d). The legislative history of the Act indicates that the test was to be a rigorous one. The “substantial evidence” requirement reflects the conclusion of Congress, based upon hearings, that clinical impressions of practicing physicians and poorly controlled experiments do not constitute an adequate basis for establishing efficacy. This policy underlies the regulations defining the contours of “substantial evidence”: “Uncontrolled studies or partially controlled studies are not acceptable as the sole basis for the approval of claims of effectiveness. Such studies, carefully conducted and documented, may provide corroborative support of well-controlled studies ... . Isolated case reports, random experience, and reports lacking the details which permit scientific evaluation will not be considered.” 21 CFR § 130.12 (a) (5) (ii) (c).
These efficacy requirements were not designed to be prospective only. Clearly, after the initial two-year moratorium on existing drugs, FDA has the power to withdraw an application which became effective prior to the adoption of the 1962 amendments, if the applicant has not provided "substantial evidence” of the drug’s efficacy. The Act plainly contemplates that such drugs will be evaluated on the basis of adequate and well-controlled investigations. Hynson would have us hold that withdrawal proceedings can be thwarted by a showing of general recognition of effectiveness based merely on expert testimony and reports with respect to investigations and clinical observation regardless of the controls used. But, we cannot construe § 201 (p) to deprive FDA of jurisdiction over a drug which, if subject to FDA regulation, could not be marketed because it had not passed the “substantial evidence” test. To do so “would be to impute to Congress a purpose to paralyze with one hand what it sought to promote with the other.” Clark v. Uebersee Finanz-Korp., 332 U. S. 480, 489.
Moreover, the interpretation of § 201 (p) urged by Hynson is not consistent with the statutory scheme as it operates on a purely prospective basis. Under subsection (2), a drug cannot transcend “new drug” status until it has been used “to a material extent or for a material time.” Yet, a drug cannot be marketed lawfully before an NDA has been approved by the Commissioner on the basis of “substantial evidence.” As the Solicitor General argues, “the Act is designed so that drugs on the market, unless exempt, will have mustered the requisite scientifically reliable evidence of effectiveness long before they are in a position to drop out of active regulation by ceasing to be a ‘new drug.’ ”
It is well established that our task in interpreting separate provisions of a single Act is to give the Act “the most harmonious, comprehensive meaning possible” in light of the legislative policy and purpose. Clark v. Uebersee Finanz-Korp., supra, at 488; see United States v. Bacto-Unidisk, 394 U. S. 784, 798. We accordingly have concluded that a drug can be “generally recognized” by experts as effective for intended use within the meaning of the Act only when that expert consensus is founded upon “substantial evidence” as defined in § 505 (d). We have held in No. 72-394, however, that the Commissioner was not justified in withdrawing Hynson’s NDA without a prior hearing on whether Hynson had submitted “substantial evidence” of Lutrexin’s effectiveness. Consequently, any ruling as to Lutrexin’s “new drug” status is premature and must await the outcome of this hearing.
Finally, we cannot agree with Hynson that Lutrexin is exempt from the provisions of the Act by virtue of § 107 (c) (4) of the 1962 amendments. That section provides that no drug will be treated as a “new drug” if, on the day preceding the adoption of the amendments, the drug “(A) was commercially used or sold in the United States, (B) was not a new drug as defined by section 201 (p) of the basic Act as then in force, and (C) was not covered by an effective application under section 505 of that Act . . . .” The applicability of this section turns solely on whether Lutrexin was “covered” by an effective NDA immediately prior to the adoption of the 1962 amendments. Hynson argues that when Lutrexin became generally recognized as safe and was no longer a “new drug,” its NDA ceased to be effective.
That argument draws no statutory support. The 1938 Act did not provide any mechanism other than the Commissioner’s suspension authority under § 505 (e), whereby an NDA once effective could cease to be effective. Indeed, § 505 (e) leads to the conclusion that an NDA remains effective unless it is suspended. That section empowers FDA to withdraw approval of an NDA whenever new evidence comes to light suggesting that the drug has become unsafe, whether or not the drug was generally recognized as safe in the interim.
Moreover, Hynson’s argument, as the Court of Appeals recognized, would render clause (C) superfluous. Under Hynson’s reasoning, any drug that could satisfy clause (B) — i. e., any drug that had become generally recognized as safe — automatically would satisfy clause (C). This construction, therefore, offends the well-settled rule of statutory construction that all parts of a statute, if at all possible, are to be given effect. See, e. g., Jarecki v. G. D. Searle & Co., 367 U. S. 303, 307; Ginsberg & Sons v. Popkin, 285 U. S. 204, 208. The interpretation accorded by the Commissioner and the Court of Appeals, on the other hand, does give clause (C) operative effect. It would limit the exemption to drugs, generally recognized as safe, which had not come under the blanket of an effective NDA. This interpretation accords with the legislative history which suggests that the exemption is afforded only for drugs that never had been subject to new drug regulation.
Except for the modification with respect to Lutrexin’s “new drug” status, the judgment of the Court of Appeals is
Affirmed.
Mr. Justice Brennan took no part in the consideration or decision of these cases. Mr. Justice Stewart took no part in the decision of these cases.
APPENDIX TO OPINION OF THE COURT
Title 21 CFR § 130.12 (a)(5) provides:
(ii) The following principles have been developed over a period of years and are recognized by the scientific community as the essentials of adequate and well-controlled clinical investigations. They provide the basis for the determination whether there is “substantial evidence” to support the claims of effectiveness for “new drugs” and antibiotic drugs.
(a) The plan or protocol for the study and the report of the results of the effectiveness study must include the following:
(1) A clear statement of the objectives of the study,
(2) A method of selection of the subjects that—
(i) Provides adequate assurance that they are suitable for the purposes of the study, diagnostic criteria of the condition to be treated or diagnosed, confirmatory laboratory tests where appropriate, and, in the case of prophylactic agents, evidence of susceptibility and exposure to the condition against which prophylaxis is desired.
(ii) Assigns the subjects to test groups in such a way as to minimize bias.
(Hi) Assures comparability in test and control groups of pertinent variables, such as age, sex, severity, or duration of disease, and use of drugs other than the test drug.
(3) Explains the methods of observation and recording of results, including the variables measured, quantitation, assessment of any subject’s response, and steps taken to minimize bias on the part of the subject and observer.
(4) Provides a comparison of the results of treatment or diagnosis with a control in such a fashion as to permit quantitative evaluation. The precise nature of the control must be stated and an explanation given of the methods used to minimize bias on the part of the observers and the analysts of the data. Level and methods of “blinding,” if used, are to be documented. Generally, four types of comparison are recognized:
(i) No treatment: Where objective measurements of effectiveness are available and placebo effect is negligible, comparison of the objective results in comparable groups of treated and untreated patients.
(ii) Placebo control: Comparison of the results of use of the new drug entity with an inactive preparation designed to resemble the test drug as far as possible.
(iii) Active treatment control: An effective regimen of therapy may be used for comparison, e. g., where the condition treated is such that no treatment or administration of a placebo would be contrary to the interest of the patient.
(iv) Historical control: In certain circumstances, such as those involving diseases with high and predictable mortality (acute leukemia of childhood), with signs and symptoms of predictable duration or severity (fever in certain infections), or in case of prophylaxis, where morbidity is predictable, the results of use of a new drug entity may be compared quantitatively with prior experience historically derived from the adequately documented natural history of the disease or condition in comparable patients or populations with no treatment or with a regimen (therapeutic, diagnostic, prophylactic) the effectiveness of which is established.
(5) A summary of the methods of analysis and an evaluation of data derived from the study, including any appropriate statistical methods.
Provided, however, That any of the above criteria may be waived in whole or in part, either prior to the investigation or in the evaluation of a completed study, by the Director of the Bureau of Drugs with respect to a specific clinical investigation; a petition for such a waiver may be filed by any person who would be adversely affected by the application of the criteria to a particular clinical investigation; the petition should show that some or all of the criteria are not reasonably applicable to the investigation and that alternative procedures can be, or have been, followed, the results of which will or have yielded data that can and should be accepted as substantial evidence of the drug's effectiveness. A petition for a waiver shall set forth clearly and concisely the specific provision or provisions in the criteria from which waiver is sought, why the criteria are not reasonably applicable to the particular clinical investigation, what alternative procedures, if any, are to be, or have been, employed, what results have been obtained, and the basis on which it can be, or has been, concluded that the clinical investigation will or has yielded substantial evidence of effectiveness, notwithstanding nonconformance with the criteria for which waiver is requested.
(6) For such an investigation to be considered adequate for approval of a new drug, it is required that the test drug be standardized as to identity, strength, quality, purity, and dosage form to give significance to the results of the investigation.
(c) Uncontrolled studies or partially controlled studies are not acceptable as the sole basis for the approval of claims of effectiveness. Such studies, carefully conducted and documented, may provide corroborative support of well-controlled studies regarding efficacy and may yield valuable data regarding safety of the test drug. Such studies will be considered on their merits in the light of the principles listed here, with the exception of the requirement for the comparison of the treated subjects with controls. Isolated case reports, random experience, and reports lacking the details which permit scientific evaluation will not be considered.
Drug Amendments of 1962 (Harris-Kefauver Act), 76 Stat. 780, amending 21 ü. S. C. § 301 et seq.
The Act originally provided for filing applications with the Sec-retar}' of Agriculture, but his functions were assigned to FDA. FDA is now part of the Department of Health, Education, and Welfare (HEW), and the Secretary of HEW has delegated his responsibilities under the Federal Food, Drug, and Cosmetic Act to the Commissioner of Food and Drugs. 21 CFR §2.120.
“Substantial evidence” was defined to mean “evidence consisting of adequate and well-controlled investigations, including clinical investigations, by experts qualified by scientific training and experience to evaluate the effectiveness of the drug involved, on the basis of which it could fairly and responsibly be concluded by such experts that the drug will have the effect it purports or is represented to have . . . .” 21 U. S. C. §355 (d).
Drug Amendments of 1962, §§107 (e)(2) and (c)(3)(B), 76 Stat. 788, note following 21 U. S. C. § 321.
Id., §107 (c)(4).
31 Fed. Reg. 9426.
FDA has recently adopted a regulation declaring the manner in which Drug Efficacy Study Implementation Notices and Notices of Opportunity for Hearing apply to identical, related, and similar drugs. Any person with an interest in such drugs is provided an opportunity for hearing on any proposed withdrawal of NDA approval for the basic or pioneer drug. 37 Fed. Reg. 23185, adding § 130.40 to 21 CFR.
35 Fed. Reg. 7251, amending 21 CFR §§ 130.12 (a) (5) and 130.14.
Section 505 (e) as amended, 21 U. S. C. §355 (e), provides in relevant part:
“The Secretary shall, after due notice and opportunity for hearing to the applicant, withdraw approval of an application with respect to any drug under this section if the Secretary finds ... (3) on the basis of new information before him with respect to such drug, evaluated together with the evidence available to him when the application was approved, that there is a lack of substantial evidence that the drug will have the effect it purports or is represented to have under the conditions of use prescribed, recommended, or suggested in the labeling thereof
See n. 3, supra.
Title 21 CFR § 130.12 (a)(5) as amended, 35 Fed. Reg. 7251, is set forth in relevant part in an Appendix to this opinion.
Subjects must be chosen so that they are “suitable for the purposes of the study,” assigned to test groups in such a way as to minimize bias, and comparable in terms of “pertinent variables, such as age, sex, severity, or duration of disease, and use of drugs other than the test drug.” 21 CFR § 130.12 (a) (5) (ii) (a) (2).
Upjohn Co. v. Finch, 422 F. 2d 944 (CA6); Pharmaceutical Manufacturers Assn. v. Richardson, 318 F. Supp. 301 (Del). FDA was enjoined from enforcing the regulations as originally issued on September 19, 1969, 34 Fed. Reg. 14596, on the ground that FDA had not complied with the notice requirements of the Administrative Procedure Act. Pharmaceutical Manufacturers Assn. v. Finch, 307 F. Supp. 858 (Del.). The regulations were reissued in their current form on May 8, 1970. 35 Fed. Reg. 7251.
See Hearings on S. 1552 before the Subcommittee on Antitrust and Monopoly of the Senate Committee on the Judiciary, 87th Cong., 1st Sess., pt. 1, pp. 195, 282, 411-412. Much of this aspect of the legislative background of the 1962 Act is reviewed in enlightening detail by Judge Latehum in Pharmaceutical Manufacturers Assn. v. Richardson, supra, at 306 et seq.
S. Rep. No. 1744, 87th Cong., 2d Sess., pt. 2, p. 1.
Id., at 6.
This applies, of course, onl}- to those regulations that are precise. For example, the plan or protocol for a study must include “[a] summary of the methods of analysis and an evaluation of data derived from the study, including any appropriate statistical methods.” 21 CFR § 130.12(a) (5) (ii) (a) (5). A mere reading of the study submitted will indicate whether the study is totally deficient in this regard. Some of the regulations, however, are not precise, as they call for the exercise of discretion or subjective judgment in determining whether a study is adequate and well controlled. For example, § 130.12 (a) (5) (ii) (a) (2) (i) requires that the plan or protocol for the study include a method of selection of the subjects that provide “adequate assurance that they are suitable for the purposes of the study.” (Emphasis added.) The qualitative standards “adequate” and "suitable” do not lend themselves to clear-cut definition, and it may not be possible to tell from the face of a study whether the standards have been met. Thus, it might not be proper to deny a hearing on the ground that the study did not comply with this regulation.
Under the Rules of Civil Procedure the party moving for summary judgment has the burden of showing the absence of a genuine issue as to any material fact. Adickes v. Kress & Co., 398 U. S. 144, 157.
Under the Administrative Procedure Act, a court reviews agency findings to determine whether they are supported by substantial evidence only in a case subject to the hearing provisions of 5 U. S. C. §§ 556 and 557 or “otherwise reviewed on the record of an agency hearing provided by statute . . . .” 5 U. S. C. § 706 (2) (E) This is not such a case. The question with which we are concerned involves the initial agency determination whether a hearing is required by statute. See Pfizer, Inc. v. Richardson, 434 F. 2d 536, 546-547 (CA2).
1939 Annual Report FDA; 1941 Annual Report FDA; Annual Reports Federal Security Agency (1938-1952); Annual Reports HEW (1953-1962).
That section provides:
“The term 'new drug' means—
“(1) Any drug (except a new animal drug or an animal feed bearing or containing a new animal drug) the composition of which is such that such drug is not generally recognized, among experts qualified by scientific training and experience to evaluate the safety and effectiveness of drugs, as safe and effective for use under the conditions prescribed, recommended, or suggested in the labeling thereof, except that such a drug not so recognized shall not be deemed to be a ‘new drug’ if at any time prior to the enactment of this chapter it was subject to the Food and Drugs Act of June 30, 1906, as amended, and if at such time its labeling contained the same representations concerning the conditions of its use; or
“(2) Any drug (except a new animal drug or an animal feed bearing or containing a new animal drug) the composition of which is such that such drug, as a result of investigations to determine its safety and effectiveness for use under such conditions, has become so recognized, but which has not, otherwise than in such investigations, been used to a material extent or for a material time under such conditions."
That section provides:
“In the case of any drug which, on the day immediately preceding the enactment date, (A) was commercially used or sold in the United States, (B) was not a new drug as defined by section 201 (p) of the basic Act as then in force, and (C) was not covered by an effective application under section 505 of that Act, the amendments to section 201 (p) made by this Act shall not apply to such drug when intended solely for use under conditions prescribed, recommended, or suggested in labeling with respect to such drug on that day.”
It also follows that if Hynson were not entitled to a hearing under § 505 (e), it would not be entitled to a hearing on its claim that Lutrexin is not a “new drug.”
See Hearings, supra, n. 14.
Hynson also argues that Lutrexin is exempt by operation of §107 (c)(2), which provides:
“An application filed pursuant to section 505 (b) of the basic Act which was ‘effective’ within the meaning of that Act on the day immediately preceding the enactment date shall be deemed, as of the enactment date, to be an application ‘approved’ by the Secretary within the meaning of the basic Act as amended by this Act.”
Hynson contends that Lutrexin, generally recognized as safe prior to 1962, was not a “new drug” under applicable standards before the 1962 amendments. Thus, the argument goes, its NDA had ceased to be effective and could not be deemed “approved” under § 107 (c)(2). Consequently, there was no approval that could be withdrawn in administrative proceedings pursuant to § 505 (e).
This argument shares a common thread with the argument under § 107 (c) (4) — that the NDA for Lutrexin had ceased to be effective. The argument is no more persuasive under § 107 (c) (2) than § 107 (c)(4). In addition, the construction offered by Hynson would upset the carefully drawn transitionary provisions of §§ 107 (c) (2) and (c)(3). Since the Commissioner now must affirmatively approve or disapprove all NDA’s, § 107 (c) (2) was enacted to remove the administrative burden of approving each and even- NDA then effective. It also protected the marketing authority of all manufacturers that had effective NDA’s. Without this provision, no manufacturer whose drug had become generally recognized as safe could have continued to market the drug if it was not also generally recognized as effective.
See S. Rep. No. 1744, 87th Cong., 2d Sess., pt. 2, p. 8; H. R. Rep. No. 2464, 87th Cong., 2d Sess., 12; H. R. Rep. No. 2526, 87th Cong., 2d Sess., 22-23. Hynson contends that the construction afforded by FDA renders the exemption nugatory and defeats the legislative purpose. The provision, however, does exempt drugs that, as a generic class, were never subject to new drug regulation. These consist primarily of over-the-counter drugs which, although they were not “grandfathered” under the 1938 Act, were not subject to new drug regulation because of universal recognition of the safety of their old, established ingredients at the time they came on the market.
Cf. Fuentes v. Shevin, 407 U. S. 67, 80 (1972), and oases cited therein. I do not question, of course, the authority of the Commissioner to adopt reasonable regulations consistent with the statute and which do not, as applied, deprive persons of their property without the elementary due process of a fair opportunity for a hearing. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
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"National Security Agency",
"Office of Economic Opportunity",
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"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
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"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
39
] |
NATIONAL LABOR RELATIONS BOARD v. BABCOCK & WILCOX CO.
No. 250.
Argued January 25, 1956.
Decided April 30, 1956.
Dominick L. Manoli argued the causes for the National Labor Relations Board. With him on the briefs were Solicitor General Sobeloff, Theophil C. Kammholz and David P. Findling.
O. B. Fisher argued the cause and filed a brief for respondent in No. 250.
Karl H. Mueller argued the cause for respondent in No. 251. With him on the brief was Howard Lichtenstein.
Eugene B. Schwartz argued the cause for petitioner in No. 422. With him on the brief were Harry E. Smoyer and V. Jay Einhart.
Mr. Justice Reed
delivered the opinion of the Court.
In each of these cases the employer refused to permit distribution of union literature by nonemployee union organizers on company-owned parking lots. The National Labor Relations Board, in separate and unrelated proceedings, found in each case that it was unreasonably difficult for the union organizer to reach the employees off company property and held that, in refusing the unions access to parking lots, the employers had unreasonably impeded their employees’ right to self-organization in violation of §8 (a)(1) of the National Labor Relations Act. Babcock & Wilcox Co., 109 N. L. R. B. 485, 494; Ranco, Inc., id., 998, 1007, and Seamprufe, Inc., id., 24, 32.
The plant involved in No. 250, Labor Board v. Babcock & Wilcox Co., is a company engaged in the manufacture of tubular products such as boilers and accessories, located on a 100-acre tract about one mile from a community of 21,000 people. Approximately 40% of the 500 employees live in that town and the remainder live within a 30-mile radius. More than 90% of them drive to work in private automobiles and park on a company lot that adjoins the fenced in plant area. The parking lot is reached only by a driveway 100 yards long which is entirely on company property excepting for a public right-of-way that extends 31 feet from the metal of the highway to the plant’s property. Thus, the only public place in the immediate vicinity of the plant area at which leaflets can be effectively distributed to employees is that place where this driveway crosses the public right-of-way. Because of the traffic conditions at that place the Board found it practically impossible for union organizers to distribute leaflets safely to employees in motors as they enter or leave the lot. The Board noted that the company’s policy on such distribution had not discriminated against labor organizations and that other means of communication, such as the mail and telephones, as well as the homes of the workers, were open to the union. The employer justified its refusal to allow distribution of literature on company property on the ground that it had maintained a consistent policy of refusing access to all kinds of pamphleteering and that such distribution of leaflets would litter its property.
The Board found that the parking lot and the walkway from it to the gatehouse, where employees punched in for work, were the only “safe and practicable” places for distribution of union literature. The Board viewed the place of work as so much more effective a place for communication of information that it held the employer guilty of an unfair labor practice for refusing limited access to company property to union organizers. It therefore ordered the employer to rescind its no-distribution order for the parking lot and walkway, subject to reasonable and nondiscriminating regulations “in the interest of plant efficiency and discipline, but not as to deny access to union representatives for the purpose of effecting such distribution.” 109 N. L. R. B., at 486.
The Board petitioned the Court of Appeals for the Fifth Circuit for enforcement. That court refused enforcement on the ground the statute did not authorize the Board to impose a servitude on the employer’s property where no employee was involved. Labor Board v. Babcock & Wilcox Co., 222 F. 2d 316.
The conditions and circumstances involved in No. 251, Labor Board v. Seamprufe, Inc., and No. 422, Ranco, Inc. v. Labor Board, are not materially different, except that Seamprufe involves a plant employing approximately 200 persons and in the Raneo case it appears that union organizers had a better opportunity to pass out literature off company property. The Board likewise ordered these employers to allow union organizers limited access to company lots. The orders were in substantially similar form as that in the Babcock & Wilcox case. Enforcement of the orders was sought in the Courts of Appeals. The Court of Appeals for the Tenth Circuit in No. 251, Labor Board v. Seamprufe, Inc., 222 F. 2d 858, refused enforcement on the ground that a nonemployee can justify his presence on company property only “as it bears a cogent relationship to the exercise of the employees’ guaranteed right of self-organization.” These “solicitors were therefore strangers to the right of self-organization, absent a showing of nonaccessibility amounting to a handicap to self-organization.” Id., at 861. The Court of Appeals for the Sixth Circuit in No. 422 granted enforcement. Labor Board v. Ranco, Inc., 222 F. 2d 543. The per curiam opinion depended upon its decision in Labor Board v. Monarch Tool Co., 210 F. 2d 183, a case in which only employees were involved; Labor Board v. Lake Superior Lumber Corporation, 167 F. 2d 147, an isolated lumber camp case; and our Republic Aviation Corp. v. Labor Board, 324 U. S. 793. It apparently considered, as held in the Monarch Tool case, supra, at 186, that the attitude of the employer in the Raneo case was an “unreasonable impediment to the freedom of communication essential to the exercise of its employees’ rights to self organization.” Because of the conflicting decisions on a recurring phase of enforcement of the National Labor Relations Act, we granted certiorari. 350 U. S. 818, 894.
In each of these cases the Board found that the employer violated §8 (a)(1) of the National Labor Relations Act, 61 Stat. 140, making it an unfair labor practice for an employer to interfere with employees in the exercise of rights guaranteed in § 7 of that Act. The pertinent language of the two sections appears below. These holdings were placed on the Labor Board’s determination in LeTourneau Company of Georgia, 54 N. L. R. B. 1253. In the LeTourneau case the Board balanced the conflicting interests of employees to receive information on self-organization on the company’s property from fellow employees during nonworking time, with the employer’s right to control the use of his property and found the former more essential in the circumstances of that case. Recognizing that the employer could restrict employees’ union activities when necessary to maintain plant discipline or production, the Board said: “Upon all the above considerations, we are convinced, and find, that the respondent, in applying its ‘no-distributing’ rule to the distribution of union literature by its employees on its parking lots has placed an unreasonable impediment on the freedom of communication essential to the exercise of its employees’ right to self-organization,” LeTourneau Company of Georgia, 54 N. L. R. B., at 1262. This Court affirmed the Board. Republic Aviation Corp. v. Labor Board, 324 U. S. 793, 801 et seq. The same rule had been earlier and more fully stated in Peyton Packing Co., 49 N. L. R. B. 828, 843-844.
The Board has applied its reasoning in the LeTourneau case without distinction to situations where the distribution was made, as here, by nonemployees. Carolina Mills, 92 N. L. R. B. 1141, 1149, 1168-1169. The fact that our LeTourneau case ruled only as to employees has been noted by the Courts of Appeal in Labor Board v. Lake Superior Lumber Corp., 167 F. 2d 147, 150, and Labor Board v. Seamprufe, Inc., 222 F. 2d, at 860. Cf. Labor Board v. American Furnace Co., 158 F. 2d 376, 380.
In these present cases the Board has set out the facts that support its conclusions as to the necessity for allowing nonemployee union organizers to distribute union literature on the company’s property. In essence they are that nonemployee union representatives, if barred, would have to use personal contacts on streets or at home, telephones, letters or advertised meetings to get in touch with the employees. The force of this position in respect to employees isolated from normal contacts has been recognized by this Court and by others. See Republic Aviation Corporation v. Labor Board, supra, at 799, note 3; Labor Board v. Lake Superior Lumber Corp., supra, at 150. We recognize, too, that the Board has the responsibility of “applying the Act’s general prohibitory language in the light of the infinite combinations of events which might be charged as violative of its terms.” Labor Board v. Stowe Spinning Co., 336 U. S. 226, 231. We are slow to overturn an administrative decision.
It is our judgment, however, that an employer may validly post his property against nonemployee distribution of union literature if reasonable efforts by the union through other available channels of communication will enable it to reach the employees with its message and if the employer’s notice or order does not discriminate against the union by allowing other distribution. In these circumstances the employer may not be compelled to allow distribution even under such reasonable regulations as the orders in these cases permit.
This is not a problem of always open or always closed doors for union organization on company property. Organization rights are granted to workers by the same authority, the National Government, that preserves property rights. Accommodation between the two must be obtained with as little destruction of one as is consistent with the maintenance of the other. The employer may not affirmatively interfere with organization; the union may not always insist that the employer aid organization. But when the inaccessibility of employees makes ineffective the reasonable attempts by nonemployees to communicate with them through the usual channels, the right to exclude from property has been required to yield to the extent needed to permit communication of information on the right to organize.
The determination of the proper adjustments rests with the Board. Its rulings, when reached on findings of fact supported by substantial evidence on the record as a whole, should be sustained by the courts unless its conclusions rest on erroneous legal foundations. Here the Board failed to make a distinction between rules of law applicable to employees and those applicable to non-employees.
The distinction is one of substance. No restriction may be placed on the employees’ right to discuss self-organization among themselves, unless the employer can demonstrate that a restriction is necessary to maintain production or discipline. Republic Aviation Corp. v. Labor Board, 324 U. S. 793, 803. But no such obligation is owed nonemployee organizers. Their access to company property is governed by a different consideration. The right of self-organization depends in some measure on the ability of employees to learn the advantages of self-organization from others. Consequently, if the location of a plant and the living quarters of the employees place the employees beyond the reach of reasonable union efforts to communicate with them, the employer must allow the union to approach his employees on his property. No such conditions are shown in these records.
The plants are close to small well-settled communities where a large percentage of the employees live. The usual methods of imparting information are available. See, e. g., note 1, supra. The various instruments of publicity are at hand. Though the quarters of the employees are scattered they are in reasonable reach. The Act requires only that the employer refrain from interference, discrimination, restraint or coercion in the employees' exercise of their own rights. It does not require that the employer permit the use of its facilities for organization when other means are readily available.
Labor Board v. Babcock & Wilcox Co., No. 250, is
Affirmed.
Labor Board v. Seamprufe, Inc., No. 251, is
Affirmed.
Ranco, Inc. v. Labor Board, No. 422, is
Reversed.
Mr. Justice Harlan took no part in the consideration or decision of these cases.
“Other union contacts with employees: In addition to distributing literature to some of the employees, as shown above, during the period of concern herein the Union has had other contacts with some of the employees. It has communicated with over 100 employees of Respondent on 3 different occasions by sending literature to them through the mails. Union representatives have communicated with many of Respondent’s employees by talking with them on the streets of Paris, by driving to their homes and talking with them there, and by talking with them over the telephone. All of these contacts have been for the purpose of soliciting the adherence and membership of the employees in the Union.” 109 N. L. R. B., at 492-493.
“Sec. 7. Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection ....
“Sec. 8 (a). It shall be an unfair labor practice for an employer—
“(1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7 ... .” 61 Stat. 140, 29 U. S. C. §§ 157,158 (a)(1).
“As previously indicated, the respondent’s plant is located in the country in the heart of 6,000 acres of land owned by it or its subsidiary. Apart from IT. S. Highway No. 13 (and perhaps the intersecting road), the respondent and its subsidiary own all the land adjacent to the plant. This, in itself, seriously limits the possibilities of effectively communicating with the bulk of the respondent’s employees. This limitation would not, however, be too restrictive if the respondent’s gate opened directly onto the highway, for then persons could stand outside the respondent’s premises and distribute literature as each employee entered or left the plant. But at the respondent’s plant the gate is 100 feet back from the highway, on company property. Over 60 percent of the respondent’s employees, after passing the gate, enter automobiles or busses parked in the space between the gate and the highway, and presumably speed homeward, without ever setting foot on the highway. Distribution of literature to employees is rendered virtually impossible under these circumstances, and it is an inescapable conclusion that self-organization is consequently seriously impeded. It is no answer to suggest that other means of disseminating union literature are not foreclosed. Moreover, the employees’ homes are scattered over a wide area. In the absence of a list of names and addresses, it appears that direct contact with the majority of the respondent’s employees away from the plant would be extremely difficult.” LeTourneau Company of Georgia, 54 N. L. R. B., at 1260-1261.
An element of discrimination existed in the Carolina Mills case, 92 N. L. R. B., at 1142, such as existed in Labor Board v. Stowe Spinning Co., 336 U. S. 226, 230, 233, but this was not relied upon in the opinion. See also Caldwell Furniture Co., 97 N. L. R. B. 1501, 1502, 1509; Monarch Machine Tool Co., 102 N. L. R. B. 1242, 1248, enforced, Labor Board v. Monarch Tool Co., 210 F. 2d 183. For a collection of Board cases, see Ranco, Inc., 109 N. L. R. B. 998, 1006, and Note, 65 Yale L. J. 423.
Universal Camera Corp. v. Labor Board, 340 U. S. 474, 491.
In the Seamprufe case the examiner’s report, approved by the Board, said: “To differentiate between employees soliciting on behalf of the Union and nonemployee union solicitors would be a differentiation not only without substance but in clear defiance of the rationale given by the Board and the courts for permitting solicitation. This conclusion is based on the belief that the rationale enunciated by the Supreme Court in the LeTourneau case, supra, is equally applicable in the case of solicitation by union representatives as well as where the solicitation is done by employees.” 109 N. L. R. B., at 32. See also Babcock & Wilcox Co., id., at 493, and Ranco, Inc., id., at 1006. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
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"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
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"Civil Rights Commission",
"Civil Service Commission, U.S.",
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"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
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"Federal Home Loan Bank Board",
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"Farmers Home Administration",
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"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
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"Legal Services Corporation",
"Merit Systems Protection Board",
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"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
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"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
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"General Land Office or Commissioners",
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"Processing Tax Board of Review"
] | [
81
] |
BE&K CONSTRUCTION CO. v. NATIONAL LABOR RELATIONS BOARD et al.
No. 01-518.
Argued April 16, 2002
Decided June 24, 2002
O’CONNOR, J., delivered the opinion of the Court, in which Rehnquist, C. J., and Scalia, Kennedy, and Thomas, JJ., joined. Scalia, J., filed a concurring opinion, in which Thomas, J., joined, post, p. 537. Breyer, J., filed an opinion concurring in part and concurring in the judgment, in which Stevens, Souter, and Ginsburg, JJ., joined, post, p. 538.
Maurice Baskin argued the cause and filed briefs for petitioner.
Deputy Solicitor General Wallace argued the cause for respondents. With him on the brief for the National Labor Relations Board were Solicitor General Olson, Austin C. Schlick, Arthur F. Rosenfeld, John H. Ferguson, Norton J. Come, and John Emad Arbab. Sandra Rae Benson, Theodore Franklin, Jonathan P. Hiatt, James B. Coppess, Peter
D. Nussbaum, Meera Trehan, and Laurence Gold filed a brief for respondent Unions.
Briefs of amici curiae urging reversal were filed for the Chamber of Commerce of the United States et al. by Stanley R. Strauss, Stephen A. Bokat, Robin S. Conrad, and Joshua A. Ulman; and for the Society for Human Resource Management et al. by Mark A Carter and Daniel V. Yager.
Justice O’Connor
delivered the opinion of the Court.
Petitioner sued respondent unions, claiming that their lobbying, litigation, and other concerted activities violated federal labor law and antitrust law. After petitioner lost on or withdrew each of its elaims, the National Labor Relations Board decided petitioner had violated federal labor law by prosecuting an unsuccessful suit with a retaliatory motive. The Court of Appeals affirmed. Because we find the Board lacked authority to assess liability using this standard, we reverse and remand.
I
Petitioner, an industrial general contractor, received a contract to modernize a California steel mill near the beginning of 1987. 246 F. 3d 619, 621 (CA6 2001). According to petitioner, various unions attempted to delay the project because petitioner’s employees were nonunion. Ibid. That September, petitioner and the mill operator filed suit against those unions in the District Court for the Northern District of California. App. to Pet. for Cert. 33a. The suit was based on the following basic allegations: First, the unions had lobbied for adoption and enforcement of an emissions standard, despite having no real concern the project would harm the environment. 246 F. 3d, at 621. Second, the unions had handbilled and picketed at petitioner’s site — and also encouraged strikes among the employees of petitioner’s subcontractors — without revealing reasons for their disagreement. Ibid. Third, to delay the construction project and raise costs, the unions had filed an action in state court alleging violations of California’s Health and Safety Code. Id., at 621-622. Finally, the unions had launched grievance proceedings against petitioner’s joint venture partner based on inapplicable collective bargaining agreements. Id., at 622.
Initially, petitioner and the mill operator sought damages under §303 of the Labor-Management Relations Act, 1947 (LMRA), 61 Stat. 158, as amended, 29 U. S. C. § 187, which provides a cause of action against labor organizations for injuries caused by secondary boycotts prohibited under § 158(b)(4). 246 F. 3d, at 622. But after the District Court granted the unions’ motion for summary judgment on the plaintiffs’ lobbying- and grievance-related claims, the plaintiffs amended their complaint to allege that the unions’ activities violated §§ 1 and 2 of the Sherman Act, 26 Stat. 209, as amended, 15 U. S. C. §§ 1-2, which prohibit certain agreements in restraint of trade, monopolization, and attempts to monopolize. 246 F. 3d, at 622. The District Court dismissed the amended complaint, however, because it realleged claims that had already been decided. Id., at 622-623. The District Court also dismissed the plaintiffs’ claim regarding the unions’ state court lawsuit since the plaintiffs had no evidence that the suit was not reasonably based and because two unions that the plaintiffs sued were never parties to that state court action. Id., at 623.
The plaintiffs filed a second amended complaint. It included their remaining claims but again realleged claims that had already been decided. Ibid.; App. 32-33. The District Court dismissed the decided claims and imposed sanctions on the plaintiffs under Federal Rule of Civil Procedure 11. 246 F. 3d, at 623. At that point, the mill operator dismissed its remaining claims with prejudice. Ibid. The District Court then granted summary judgment to the unions on petitioner’s antitrust claim once petitioner was unable to show the unions had formed a combination with nonlabor entities for an illegitimate purpose. Ibid. Petitioner dismissed its remaining claims and appealed. Id., at 623-624.
The United States Court of Appeals for the Ninth Circuit affirmed the dismissal of petitioner’s antitrust claim. It held that the District Court erred in requiring petitioner to prove that the unions combined with nonlabor entities for an illegitimate purpose, but found the error harmless since the unions had antitrust immunity when lobbying officials or petitioning courts and agencies, unless the activity was a sham. USS-POSCO Industries v. Contra Costa County Bldg. & Const. Trades Council, AFL-CIO, 31 F. 3d 800, 810 (CA9 1994). Petitioner did' not argue that the unions’ litigation activity had been objectively baseless, but maintained that “the unions [had] engaged in a pattern of automatic petitioning of governmental bodies . . . without regard to . . . the merits of said petitions.” Ibid, (internal quotation marks omitted; emphasis added). The Ninth Circuit allowed that petitioner’s claim, if proved, could overcome the unions’ antitrust immunity, but rejected it nonetheless because “fifteen of the twenty-nine [actions filed by the unions] . . . have proven successful. The fact that more than half of all the actions ... turn out to have merit cannot be reconciled with the charge that the unions were filing [them] willy-nilly without regard to success.” Id., at 811 (footnote omitted).
The Ninth Circuit reversed the District Court’s award of Rule 11 sanctions, however, after petitioner explained that it had realleged decided claims based on Circuit precedent suggesting that doing so was necessary to preserve them on appeal. Ibid. Although the Ninth Circuit decided that rule did not apply to amended complaints following summary judgment, it held that petitioner’s view was not frivolous and that its counsel could not be blamed for “err[ing] on the side of caution.” Id., at 812.
In the meantime, two unions had lodged complaints against petitioner with the National Labor Relations Board (Board), 246 F. 3d, at 624, and after the federal proceedings ended, the Board’s general counsel issued an administrative complaint against petitioner, alleging that it had violated § 8(a)(1) of the National Labor Relations Act (NLRA), 49 Stat. 452, as amended, 29 U. S. C. § 158(a)(1), by filing and maintaining the federal lawsuit. App. to Pet. for Cert. 29a. Section 8(a)(1) prohibits employers from restraining, coercing, of interfering with employees’ exercise of rights related to self-organization, collective bargaining, and other concerted activities. 29 U. S. C. §§ 157, 158(a)(1).
A three-member panel of the Board addressed cross-motions for summary judgment and ruled in favor of the general counsel. The panel determined that petitioner’s federal lawsuit had been unmeritorious because all of petitioner’s claims were dismissed or voluntarily withdrawn with prejudice. App. to Pet. for Cert. 30a, 47a, 49a. The panel then examined whether petitioner’s suit had been filed to retaliate against the unions for engaging in activities protected under the NLRA. The panel first concluded that the unions’ conduct was protected activity, id,., at 50a-59a, and then decided that petitioner’s lawsuit had been unlawfully motivated because it was “directed at protected conduct” and “necessarily tended to discourage similar protected activity,” and because petitioner admitted it had filed suit “‘to stop certain [ujnion conduct which it believed to be unprotected,’” id., at 59 a-60a. The panel found additional evidence of retaliatory motive because petitioner had sued some unions that were not parties to the state court lawsuit. Id., at 60a. The panel also found evidence of retaliatory motive because petitioner’s LMRA claims had an “utter absence of merit” and had been dismissed on summary judgment. Id., at 61a. After determining that petitioner’s suit had violated the NLRA because it was unsuccessful and retaliatory, the panel ordered petitioner to cease and desist from prosecuting such suits and to post notice to its employees admitting it had been found to have violated the NLRA and promising not to pursue such litigation in the future. Id., at 65a-67a. The panel also ordered petitioner to pay the unions’ legal fees and expenses incurred in defense of the federal suit. Id., at 65a.
Petitioner sought review of the Board’s decision in the United States Court of Appeals for the Sixth Circuit, and the Board cross-petitioned for enforcement of its order. The Sixth Circuit granted the Board’s petition. Relying on Bill Johnson’s Restaurants, Inc. v. NLRB, 461 U. S. 731, 747 (1983), the Sixth Circuit held that “because the judicial branch of government had already determined that [petitioner’s] claims against the unions were unmeritorious or dismissed, evidence of a simple retaliatory motive .. . suffice[d] to adjudge [petitioner] of committing an unfair labor practice.” 246 F. 3d, at 628. The court rejected petitioner’s argument that under Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc., 508 U. S. 49 (1993), “only baseless or ‘sham’ suits serve to restrict the otherwise unfettered right to seek court resolution of differences.” 246 F. 3d, at 629. Instead, the court decided Professional Real Estate Investors was inapplicable because its immunity standard had been established in the antitrust context without reference to any standard for determining if completed litigation violates the NLRA. 246 F. 3d, at 629. The Sixth Circuit found that substantial evidence supported the Board’s inference of retaliatory motive because petitioner had filed an unmeritorious suit, realleged previously decided claims, sought treble damages on its antitrust claim, and sought damages from unions not parties to the state court suit. Id,., at 629-631. The court also upheld the Board’s award of attorney’s fees. Id., at 632.
Petitioner sought review of the Sixth Circuit’s judgment by a petition for certiorari that raised four separate qués-tions. We granted certiorari on the following rephrased question:
“Did the Court of Appeals err in holding that under Bill Johnson’s Restaurants, Inc. v. NLRB, 461 U. S. 731 (1983), the NLRB may impose liability on an employer for filing a losing retaliatory lawsuit, even if the employer could show the suit was not objectively baseless under Professional Real Estate Investors, Inc. v. Columbia Pictures Industries, Inc., 508 U. S. 49 (1993)?” 534 U. S. 1074 (2002).
We now reverse the judgment of the Sixth Circuit and remand.
II
The First Amendment provides, in relevant part, that “Congress shall make no law . . . abridging . . . the right of the people ... to petition the Government for a redress of grievances.” We have recognized this right to petition as one of “the most precious of the liberties safeguarded by the Bill of Rights,” Mine Workers v. Illinois Bar Assn., 389 U. S. 217, 222 (1967), and have explained that the right is implied by “[t]he very idea of a government, republican in form,” United States v. Cruikshank, 92 U. S. 542, 552 (1876).
We have also considered the right to petition when interpreting federal law. In the antitrust context, for example, we held that “the Sherman Act does not prohibit... persons from associating... in an attempt to persuade the legislature or the executive to take particular action with respect to a law that would produce a restraint or a monopoly.” Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U. S. 127, 136 (1961). We based our interpretation in part on the principle that we would not “lightly impute to Congress an intent to invade ... freedoms” protected by the Bill of Rights, such as the right to petition. Id., at 138. We later made clear that this antitrust immunity “shields from the Sherman Act a concerted effort to influence public officials regardless of intent or purpose.” Mine Workers v. Pennington, 381 U. S. 657, 670 (1965).
These antitrust immunity principles were then extended to situations where groups “use . .. courts to advocate their causes and points of view respecting resolution of their business and economic interests vis-á-vis their competitors.” California Motor Transport Co. v. Trucking Unlimited, 404 U. S. 508, 511 (1972) (emphasis added). We thus made explicit that “the right to petition extends to all departments of the Government,” and that “[t]he right of access to the courts is . . . but one aspect of the right of petition.” Id., at 510.
Even then, however, we emphasized that such immunity did not extend to “illegal and reprehensible practiced] which may corrupt the... judicial proces[s],” id., at 513, hearkening back to an earlier statement that antitrust immunity would not extend to lobbying “ostensibly directed toward influencing governmental action [that] is a mere sham to cover what is actually nothing more than an attempt to interfere directly with the business relationships of a competitor.” Noerr, supra, at 144. This line of cases thus establishes that while genuine petitioning is immune from antitrust liability, sham petitioning is not.
In Professional Real Estate Investors, we adopted a two-part definition of sham antitrust litigation: first, it “must be objectively baseless in the sense that no reasonable litigant could realistically expect success on the merits”; second, the litigant’s subjective motivation must “concea[l] an attempt to interfere directly with the business relationships of a competitor . . . through the use [of] the governmental process — as opposed to the outcome of that process — as an anti-competitive weapon.” 508 U. S., at 60-61 (internal quotation marks omitted; emphasis in original). For a suit to violate the antitrust laws, then, it must be a sham both objectively and subjectively.
This case raises the same underlying issue of when litigation may be found to violate federal law, but this time with respect to the NLRA rather than the Sherman Act. Recognizing this underlying connection, we previously decided whether the Board could enjoin state court lawsuits by analogizing to the antitrust context. In Bill Johnson’s, a restaurant owner had filed a state court lawsuit against individuals who picketed its restaurant after a waitress was fired. 461 U. S., at 738-734. The owner alleged that the picketing was harassing and dangerous and that a leaflet distributed by the picketers was libelous. ' Id., at 734. The waitress filed a charge with the Board claiming the suit had been filed in retaliation for participation in protected activities. Id., at 735. The Administrative Law Judge (AU) decided that the owner’s suit lacked a reasonable basis and was intended to penalize protected activity based on his assessment of the evidence and its credibility. Id., at 736, 744. The Board upheld this determination and ordered the owner to withdraw its suit and pay the defendants’ legal expenses. Id., at 737. The Court of Appeals enforced the order. Ibid.
We vacated the judgment, however, holding that First Amendment and federalism concerns prevented “[t]he filing and prosecution of a well-founded lawsuit” from being “enjoined as an unfair labor practice, even if it would not have been commenced but for the plaintiff’s desire to retaliate against the defendant for exercising rights protected by the [NLRA].” Id., at 737, 743. We also held that the Board may not decide that a suit is baseless by making credibility determinations, as the ALJ had done, when genuine issues of material fact or state law exist. Id., at 745, 746-747. In recognition of our sham exception to antitrust immunity, however, we reasoned that “[w]e should follow a similar course under the NLRA” and held that the Board could enjoin baseless suits brought with a retaliatory motive, id., at 744 (citing California Motor Transport, supra), and then remanded for further proceedings, 461 U. S., at 749.
At issue today is not the standard for enjoining ongoing suits but the standard for declaring completed suits unlawful. In Bill Johnson’s, we remarked in dicta about that situation:
“If judgment goes against the employer in the state court, ... or if his suit is withdrawn or is otherwise shown to be without merit, the employer has had its day in court, the interest of the State in providing a forum for its citizens has been vindicated, and the Board may then proceed to adjudicate the . . . unfair labor practice case. The employer’s suit having proved unmeritorious, the Board would be warranted in taking that fact into account in determining whether the suit had been filed in retaliation for the exercise of the employees’ [NLRA] §7 rights. If a violation is found, the Board may order the employer to reimburse the employees whom he had wrongfully sued for their attorney’s fees and other expenses. It may also order any other proper relief that would effectuate the policies of the [NLRA].” Id., at 747.
Under this standard, the Board could declare that a lost or withdrawn suit violated the NLRA if it was retaliatory. In Bill Johnson’s, however, the issue before the Court was whether the Board could enjoin an ongoing state lawsuit without finding that the suit lacked a reasonable basis in law or fact. Id., at 733. To resolve that issue, we had no actual need to decide whether the Board could declare unlawful reasonably based suits that were ultimately unsuccessful. Indeed, the Board had yet to declare such a suit unlawful: It had attempted to enjoin an uncompleted suit that it had declared baseless. Id., at 736-737. Nor did we have occasion to consider the precise scope of the term “retaliation.” See infra, at 633, 637.
Moreover, although our statements regarding completed litigation were intended to guide further proceedings, we did not expressly order the Board to adhere to its prior finding of unlawfulness under the standard we stated. See 461 U. S., at 749-750, n. 15 (“[0]n remand the Board may reinstate its finding that petitioner acted unlawfully ... if the Board adheres to its previous finding that the suit was filed for a retaliatory purpose” (emphasis added)). Thus, exercising our “customary refusal to be bound by dicta,” U. S. Bancorp Mortgage Co. v. Bonner Mall Partnership, 513 U. S. 18, 24 (1994), we turn to the question presented.
III
Because of its objective component, the sham litigation standard in Professional Real Estate Investors protects reasonably based petitioning from antitrust liability. Because of its subjective component, it also protects petitioning that is unmotivated by anticompetitive intent, whether it is reasonably based or not. The Board admits such broad immunity is justified in the antitrust context because it properly “balances the risk of anticompetitive lawsuits against the chilling effect” on First Amendment petitioning that might be caused by “the treble-damages remedy and other distinct features of antitrust litigation,” such as the fact that antitrust claims may be privately initiated and may impose high discovery costs. Brief for Respondent NLRB 40-41. According to the Board, however, such broad protection is unnecessary in the labor law context because, outside of the LMRA, enforcement of the NLRA requires the Board’s general counsel to first authorize the issuance of an administrative complaint; thus, an adjudication cannot be launched solely by private action. See 29 U. S. C. § 153(d); NLRB v. Food & Commercial Workers, 484 U. S. 112, 118-119 (1987). Nor can the Board issue punitive remedies, see Republic Steel Corp. v. NLRB, 311 U. S. 7, 10-12 (1940), and instead is limited to restoring the previolation status quo, see id., at 12-13; NLRB v. J H. Rutter-Rex Mfg. Co., 396 U. S. 258, 265 (1969). The Board also allows “little prehearing discovery.” NLRB v. Robbins Tire & Rubber Co., 437 U. S. 214, 236 (1978).
At most, however, these arguments demonstrate that the threat of an antitrust suit may pose a greater burden on petitioning than the threat of an NLRA adjudication. This does not mean the burdens posed by the NLRA raise no First Amendment concerns. To determine if they do, we must first isolate those burdens.
Here, the Board’s determination that petitioner’s lawsuit violated the NLRA .resulted in an order requiring petitioner to post certain notices, refrain from filing similar suits, and pay the unions’ attorney’s fees. Petitioner did not challenge below the Board’s authority to impose the notice and injunction penalties upon a finding of illegality, but did challenge the Board’s authority to award attorney’s fees, albeit unsuccessfully. 246 F. 3d, at 631-632. Although petitioner sought review of the fee issue, Pet. for Cert, i, we did not grant certiorari on that specific question, instead asking the parties to address whether the Board may impose liability for a retaliatory lawsuit that was unsuccessful even if it was not objectively baseless. 534 U. S. 1074 (2002).
As we see it, a threshold question here is whether the Board may declare that an unsuccessful retaliatory lawsuit violates the NLRA even if reasonably based. If it may, the resulting finding of illegality is a burden by itself. In addition to a declaration of illegality and whatever legal consequences flow from that, the finding also poses the threat of reputational harm that is different and additional to any burden posed by other penalties, such as a fee award. Because we can resolve this case by looking only at the finding of illegality, we need not decide whether the Board otherwise has authority to award attorney’s fees when a suit is found to violate the NLRA.
Having identified this burden, we must examine the petitioning activity it affects. In Bill Johnson’s, we held that the Board may not enjoin reasonably based state court lawsuits in part because of First Amendment concerns. 461 U. S., at 742-743. We implied those concerns are no longer present when a suit ends because “the employer has had its day in court.” Id., at 747. By analogy to other areas of First Amendment law, one might assume that any concerns related to the right to petition must be greater when enjoining ongoing litigation than when penalizing completed litigation. After all, the First Amendment historically provides greater protection from prior restraints than after-the-fact penalties, see Alexander v. United States, 509 U. S. 544, 553-554 (1993), and enjoining a lawsuit could be characterized as a prior restraint, whereas declaring a completed lawsuit unlawful could be characterized as an after-the-fact penalty on petitioning. But this analogy at most suggests that injunctions may raise greater First Amendment concerns, not that after-the-fact penalties raise no concerns. Likewise, the fact that Bill Johnson’s allowed certain baseless suits to . be enjoined tells little about the propriety of imposing penalties on various classes of nonbaseless suits.
We said in Bill Johnson’s that the Board could enjoin baseless retaliatory suits because they fell outside of the First Amendment and thus were analogous to “false statements.” 461 U. S., at 743. We concluded that “[j]ust as false statements are not immunized by the First Amendment right to freedom of speech, baseless litigation is not immunized by the First Amendment right to petition.” Ibid, (citations omitted). While this analogy is helpful, it does not suggest that the class of baseless litigation is completely unprotected: At most, it indicates such litigation should be unprotected “just as” false statements are. And while false statements may be unprotected for their own sake, “[t]he First Amendment requires that we protect some falsehood in order to protect speech that matters.” Gertz v. Robert Welch, Inc., 418 U. S. 323, 341 (1974) (emphasis added); id., at 342 (noting the need to protect some falsehoods to ensure that “the freedoms of speech and press [receive] that ‘breathing space’ essential to their fruitful exercise” (quoting NAACP v. Button, 371 U. S. 415, 433 (1963))). An example of such “breathing space” protection is the requirement that a public official seeking compensatory damages for defamation prove by clear and convincing evidence that false statements were made with knowledge or reckless disregard of their falsity. See New York Times Co. v. Sullivan, 376 U. S. 254, 279-280, 285 (1964).
It is at least consistent with these “breathing space” principles that we have never held that the entire class of objectively baseless litigation may be enjoined or declared unlawful even though such suits may advance no First Amendment interests of their own. Instead, in cases like Bill Johnson's and Professional Real Estate Investors, our holdings limited regulation to suits that were both objectively baseless and subjectively motivated by an unlawful purpose. But we need not resolve whether objectively baseless litigation requires any “breathing room” protection, for what is at issue here are suits that are not baseless in the first place. Instead, as an initial matter, we are dealing with the class of reasonably based but unsuccessful lawsuits. But whether this class of suits falls outside the scope of the First Amend-merit’s Petition Clause at the least presents a difficult constitutional question, given the following considerations.
First, even though all the lawsuits in this class are unsuccessful, the class nevertheless includes a substantial proportion of all suits involving genuine grievances because the genuineness of a grievance does not turn on whether it succeeds. Indeed, this is reflected by our prior cases which have protected petitioning whenever it is genuine, not simply when it triumphs. See, e. g., Professional Real Estate Investors, 508 U. S., at 58-61 (protecting suits from antitrust liability whenever they are objectively or subjectively genuine); Pennington, 381 U. S., at 670 (shielding from antitrust immunity any “concerted effort to influence public officials”). Nor does the text of the First Amendment speak in terms of successful petitioning — it speaks simply of “the right of the people ... to petition the Government for a redress of grievances.”
Second, even unsuccessful but reasonably based suits advance some First Amendment interests. Like successful suits, unsuccessful suits allow the “ ‘public airing of disputed facts,’” Bill Johnson’s, supra, at 743 (quoting Balmer, Sham Litigation and the Antitrust Law, 29 Buffalo L. Rev. 39, 60 (1980)), and raise matters of public concern. They also promote the evolution of the law by supporting the development of legal theories that may not gain acceptance the first time around. Moreover, the ability to lawfully prosecute even unsuccessful suits adds legitimacy to the court system as a designated alternative to force. See Andrews, A Right of Access to Court Under the Petition Clause of the First Amendment: Defining the Right, 60 Ohio St. L. J. 557, 656 (1999) (noting the potential for avoiding violence by the filing of unsuccessful claims).
Finally, while baseless suits can be seen as analogous to false statements, that analogy does not directly extend to suits that are unsuccessful but reasonably based. For even if a suit could be seen as a kind of provable statement, the fact that it loses does not mean it is false. At most it means the plaintiff did not meet its burden of proving its truth. That does not mean the defendant has proved — or could prove — the contrary.
Because the Board confines its penalties to unsuccessful suits brought with a retaliatory motive, however, we must also consider the significance of that particular limitation, which is fairly included within the question presented. See 534 U. S. 1074 (2002) (granting certiorari on whether the Board “may impose liability on an employer for filing a losing retaliatory lawsuit, even if the employer could show the suit was not objectively baseless” (emphasis added)).
>
In the context of employer-filed lawsuits, we previously indicated that retaliatory suits are those “filed in retaliation for the exercise of the employees’ [NLRA] §7 rights.” Bill Johnson’s, 461 U. S., at 747. Because we did not specifically address what constitutes “retaliation,” however, the precise scope of that term was not defined. The Board’s view is that a retaliatory suit is one “brought with a motive to interfere with the exercise of protected [NLRA §]7 rights.” Brief for Respondent NLRB 46 (emphasis added). As we read it, however, the Board’s definition broadly covers a substantial amount of genuine petitioning.
For example, an employer may file suit to stop conduct by a union that he reasonably believes is illegal under federal law, even though the conduct would otherwise be protected under the NLRA. As a practical matter, the filing of the suit may interfere with or deter some employees’ exercise of NLRA rights. Yet the employer’s motive may still reflect only a subjectively genuine desire to test the legality of the conduct. Indeed, in this very case, the Board’s first basis for finding retaliatory motive was the fact that petitioner’s suit related to protected conduct that petitioner believed was unprotected. App. to Pet. for Cert. 59a-60a. If such a belief is both subjectively genuine and objectively reasonable, then declaring the resulting suit illegal affects genuine petitioning.
The Board also claims to rely on evidence of antiunion animus to infer retaliatory motive. Brief for Respondent NLRB 47. Yet ill will is not uncommon in litigation. Cf. Professional Real Estate Investors, 508 U. S., at 69 (Stevens, J., concurring in judgment) (“We may presume that every litigant intends harm to his adversary”). Disputes between adverse parties may generate such ill will that recourse to the courts becomes the only legal and practical means to resolve the situation. But that does not mean such disputes are not genuine. As long as a plaintiff’s purpose is to stop conduct he reasonably believes is illegal, petitioning is genuine both objectively and subjectively. See id., at 60-61.
Even in other First Amendment contexts, we have found it problematic to regulate some demonstrably false expression based on the presence of ill will. For example, we invalidated a criminal statute prohibiting false statements about public officials made with ill will. See Garrison v. Louisiana, 379 U. S. 64, 73-74 (1964) (“Debate on public issues will not be uninhibited if the speaker must run the risk that it will be proved in court that he spoke out of hatred”). Indeed, the requirement that private defamation plaintiffs prove the falsity of speech on matters of public concern may indirectly shield much speech concealing ill motives. See Philadelphia Newspapers, Inc. v. Hepps, 475 U. S. 767, 776-777 (1986); see also Hustler Magazine, Inc. v. Falwell, 485 U. S. 46, 53 (1988) (prohibiting use of ill motive to create liability for speech in the realm of public debate about public figures).
For these reasons, the difficult constitutional question we noted earlier, supra, at 531-533, is not made significantly easier by the Board’s retaliatory motive limitation since that limitation fails to exclude a substantial amount of petitioning that is objectively and subjectively genuine.
The final question is whether, in light of the important goals of the NLRA, the Board may nevertheless burden an unsuccessful but reasonably based suit when it concludes the suit was brought with a retaliatory purpose. As explained above, supra, at 525-526, we answered a similar question in the negative in the antitrust context. And while the burdens on speech at issue in this case are different from those at issue in Professional Real Estate Investors, we are still faced with a difficult constitutional question: namely, whether a class of petitioning may be declared unlawful when a substantial portion of it is subjectively and objectively genuine.
In a prior labor law case, we avoided a similarly difficult First Amendment issue by adopting a limiting construction of the relevant NLRA provision. See Edward J. DeBartolo Corp. v. Florida Gulf Coast Building & Constr. Trades Council, 485 U. S. 568, 575 (1988). At issue there was the scope of § 8(b)(4) of the NLRA, 29 U. S. C. § 158(b)(4), which limits unions from “threatening], coerc[ing], or restraining] any person engaged in commerce or in an industry affecting commerce” with respect to certain prohibited purposes. § 158(b)(4)(ii). The Board read this provision to cover hand-billing that urged customers not to shop at a mall where the purpose of the handbilling was to convince the mall’s proprietor to influence a tenant to quit dealing with a nonunion contractor. 485 U. S., at 574. A prior case had held that the same statutory prohibition on threats, coercion, and restraints was “'nonspecific, indeed vague,’ and [thus] should be interpreted with ‘caution’ and not given a ‘broad sweep.’ ” Id., at 578 (quoting NLRB v. Drivers, 362 U. S. 274, 290 (I960)). Likewise, in DeBartolo, we found that the statutory provisions and their legislative history indicated no clear intent to reach the handbilling in question, 485 U. S., at 578-588, and so we simply read the statute not to cover it, thereby avoiding the First Amendment question altogether, id., at 588.
Here, the relevant NLRA provision is § 8(a)(1), 29 U. S. C. § 158(a)(1), which prohibits employers from “interferfing] with, restraining], or coercing] employees in the exercise of the rights guaranteed in [29 U. S. C. §]157.” Section 157 provides, in relevant part:
“Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection . . . .”
Section 158(a)(l)’s prohibition on interfering, restraining, or coercing in connection with the above rights is facially as broad as the prohibition at issue in DeBartolo. And while it might be read to reach the entire class of suits the Board has deemed retaliatory, it need not be read so broadly. Indeed, even considered in context, there is no suggestion that these provisions were part of any effort to cover that class of suits. See §§ 158(a)(2)-(5) (generally prohibiting employers from interfering with the formation and administration of a union, from discriminating in employment practices based on union membership, from discharging employees who provide testimony or file charges under the NLRA, and from refusing to bargain collectively with employee representatives).
Because there is nothing in the statutory text indicating that § 158(a)(1) must be read to reach all reasonably based but unsuccessful suits filed with a retaliatory purpose, we decline to do so. Because the Board’s standard for imposing liability under the NLRA allows it to penalize such suits, its standard is thus invalid. We do not decide whether the Board may declare unlawful any unsuccessful but reasonably based suits that would not have been filed but for a motive to impose the costs of the litigation process, regardless of the outcome, in retaliation for NLRA protected activity, since the Board’s standard does not confine itself to such suits. Likewise, we need not decide what our dicta in Bill Johnson’s may have meant by “retaliation.” 461 U. S., at 747; see supra, at 527-528. Finally, nothing in our holding today should be read to question the validity of common litigation sanctions imposed by courts themselves — such as those authorized under Rule 11 of the Federal Rules of Civil Procedure — or the validity of statutory provisions that merely authorize the imposition of attorney’s fees on a losing plaintiff.
The judgment of the Court of Appeals for the Sixth Circuit is therefore reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
81
] |
NATIONAL LABOR RELATIONS BOARD v. NASH-FINCH CO., dba JACK & JILL STORES
No. 70-93.
Argued October 19, 1971
Decided December 8, 1971
Lawrence G. Wallace argued the cause for petitioner. On the briefs were Solicitor General Griswold, Peter L. Strauss, Dominick L. Manoli, Norton J. Come, and Peter G. Nash.
William A. Harding argued the cause for respondent pro hac vice. With him on the brief was Richard P. Nelson.
Solomon I. Hirsh filed a brief for the Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO, as amicus curiae urging reversal.
Milton A. Smith, Jerry Kronenberg, and Gerard C. Smetana filed a brief for the Chamber of Commerce of the United States as amicus curiae urging affirmance.
MR. Justice Douglas
delivered the opinion of the Court.
Title 28 U. S. C. § 2283 provides;
“A court of the United States may not grant an injunction to stay proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments.”
The question is whether the National Labor Relations Board may, through proceedings in a federal court, enjoin a state court order which regulates peaceful picketing governed by the federal agency. The District Court rejected the Board's contention that it is within the exception to § 2283, recognized in Leiter Minerals, Inc. v. United States, 352 U. S. 220, as respects suits brought by the United States. The Court of Appeals affirmed. 434 F. 2d 971. The ease is here on a petition for a writ of certiorari which we granted, 402 U. S. 928.
When a union began organizing employees of certain stores in Grand Island, Nebraska, the union filed unfair labor practice charges against the company. The General Counsel issued a complaint. A hearing was held and a Trial Examiner sustained the complaint and recommended that the company cease and desist. Shortly thereafter and before the Board had acted, the union picketed the stores. The company thereupon petitioned the Nebraska state court for an injunction. The state court issued a restraining order, limiting the pickets to two at each store, enjoining them from blocking or picketing entrances or exits and from distributing literature pertaining to the dispute which would halt or slow trafile, from instigating conversations with customers in any manner relating to the dispute, from mass picketing, from acts of physical coercion against persons driving to work, and from doing any act in violation of Neb. Rev. Stat. § 28-812, which makes unlawful “loitering about, picketing or patrolling the place of work . . . against the will of such person.” The injunction also bans anyone other than a bona fide union . member from picketing unless he becomes a defendant in the state proceedings. Finally, the injunction bars anyone, other than pickets and named defendants, from picketing, distributing handbills, or otherwise “caus[ing] to be published or broadcast any information pertaining to the dispute . . . between the parties.”
Later the Board entered its decision and order accepting in part the Trial Examiner’s recommendations and rejecting parts not material to the present controversy.
The Board then filed this suit in the Federal District Court seeking to restrain the enforcement of the state court injunction on the ground that it regulated conduct which was governed exclusively by the National Labor Relations Act. As noted, both the District Court and the Court of Appeals denied the Board relief. The Court of Appeals held that for the purposes of § 2283 the Board is “an administrative agency of the United States, and is not the United States.” 434 F. 2d, at 975. Congress from the beginning has restricted the authority of the federal judiciary to interfere with state court actions. See Younger v. Harris, 401 U. S. 37, 43-44. The present § 2283 is a revision of earlier provisions of federal statutes which were construed to allow within limits such federal injunctions in favor of federal agencies. Bowles v. Willingham, 321 U. S. 503, 510. Any exception in favor of federal agencies must, however, be “implied,” ibid., unless it comes within the exceptions stated in §2283.
It is suggested that this federal injunction was “in aid” of the jurisdiction of the federal court since the suit is in the District Court by reason of 28 U. S. C. § 1337 which grants jurisdiction over “any civil action or proceeding arising under any Act of Congress regulating commerce.” In Capital Service, Inc. v. NLRB, 347 U. S. 501, an employer invoked the aid both of a state court and of the federal Board against picketing. The Board sought a federal court injunction under § 10 (1) of the Act, 29 U. S. C. § 160 (l), which specifically allows it wherever an unfair labor practice respecting a secondary boycott or picketing violative of § 8 (b) (4) or § 8 (b) (7) of the Act is involved. We ruled that the state injunction “restrains conduct which the District Court was asked to enjoin in the § 10 (1) proceeding.” Id., at 505. We held that under those circumstances an injunction by the federal court was “necessary in aid of its jurisdiction” over commerce, because the federal court to exercise its jurisdiction “freely and fully” must “first remove the state decree.” Id., at 506.
In the instant case the company did not file any charges with the Board which claimed that the union’s picketing violated §8 (b)(4) or §8 (b)(7) of the Act, 73 Stat. 542 and 544, 29 U. S. C. § 158 (b) (4) and § 158 (b)(7).
Section 10 (j) gives the District Court similar authority in respect of an unfair labor practice of the employer under § 8 (a)(1) of the Act which protects the right of employees to organize. But a resort to court action, the Board has held, does not violate § 8 (a)(1). See Clyde Taylor Co., 127 N. L. R. B. 103, 109.
The action in the instant case does not seek an injunction to restrain specific activities upon which the Board has issued a complaint but is based upon the general doctrine of pre-emption. We therefore do not believe this case falls within the narrow exception contained in § 2283 for matters “necessary in aid of its jurisdiction.” There is in the Act no express authority for the Board to seek injunctive relief against pre-empted state action. The question remains whether there is implied authority to do so.
It has long been held that the Board, though not granted express statutory remedies, may obtain appropriate and traditional ones to prevent frustration of the purposes of the Act. We held in In re National Labor Relations Board, 304 U. S. 486, 496, that even in the absence of an express statutory remedy, the Board might petition for writ of prohibition against premature invocation of the review jurisdiction of the Court of Appeals. In Amalgamated Workers v. Edison Co., 309 U. S. 261, we held that the Board had implied authority to institute contempt proceedings for violation of court decrees enforcing orders of the Board. In Nathanson v. NLRB, 344 U. S. 25, we found an implied authority of the Board to file claims in bankruptcy covering the sums included in its back-pay awards. The claims were not given priority under § 64 (a) (5) of the Bankruptcy Act, but this was because “the United States [was] collecting for the benefit of a private party,” id., at 28, not as suggested, post, at 149, because the Board’s juridical status was something less than that of the United States.
We conclude that there is also an implied authority of the Board, in spite of the command of § 2283, to enjoin state action where its federal power pre-empts the field. Our starting point is contained in the observation of Mr. Chief Justice Hughes in Amalgamated Workers v. Edison Co., supra, at 265.
“The Board as a public agency acting in the public interest, not any private person or group, not any employee or group of employees, is chosen as the instrument to assure protection from the described unfair conduct in order to remove obstructions to interstate commerce.”
The purpose of the Act was to obtain “uniform application” of its substantive rules and to avoid the “diversities and conflicts likely to result from a variety of local procedures and attitudes toward labor controversies.” Garner v. Teamsters Union, 346 U. S. 485, 490. The federal regulatory scheme (1) protects some activities, though not violence (see United Mine Workers v. Gibbs, 383 U. S. 715, 729-731), (2) prohibits some practices, and (3) leaves others to be controlled by the free play of economic forces. We said in Garner v. Teamsters Union, supra, at 500:
“For a state to impinge on the area of labor combat designed to be free is quite as much an obstruction of federal policy as if the state were to declare picketing free for purposes or by methods which the federal Act prohibits.”
In Leiter Minerals, Inc. v. United States, 352 U. S. 220, a state suit over mineral rights in public lands was pending, the parties being private persons. The United States brought suit in the federal court to quiet title to the mineral rights and sought and obtained a federal injunction against prosecution of the state proceedings. In holding that § 2283 impliedly allowed such an exception we said:
“The statute is designed to prevent conflict between federal and state courts. This policy is much more compelling when it is the litigation of private parties which threatens to draw the two judicial systems into conflict than when it is the United States which seeks a stay to prevent threatened irreparable injury to a national interest. The frustration of superior federal interests that would ensue from precluding the Federal Government from obtaining a stay of state court proceedings except under the severe restrictions of 28 U. S. C. § 2283 would be so great that we cannot reasonably impute such a purpose to Congress from the general language of 28 U. S. C. § 2283 alone.” Id., at 225-226.
In Leiter, the United States brought suit under the authority of the Attorney General. Here it is the Board that moved to prevent “irreparable injury to a national interest.” The Board is the sole protector of the “national interest” defined with particularity in the Act. Leiter, of course, was initiated by the Attorney General; but underlying the controversy were federal agencies in the Department of the Interior responsible for administration of the public lands. The fact that the moving party was a federal agency, not the Attorney General, was considered irrelevant in Bowles v. Willingham, supra, where the Administrator of the Emergency Price Control Act sued to enjoin a state court from interfering with orders of the federal agency. An exception from the general ban on federal injunctions against state court action was implied by reason of the fact that the method of review of the orders of the federal agency was in the Emergency Court of Appeals. But there was no suggestion that suit by or against the Administrator was not a suit of the United States. The purpose of § 2283 was to avoid unseemly conflict between the state and the federal courts where the litigants were private persons, not to hamstring the Federal Government and its agencies in the use of federal courts to protect federal rights. We can no more conclude here than in Leiter that a general statute, limiting the power of federal courts to issue injunctions, had as its purpose the frustration of federal systems of regulation. See Brown v. Wright, 137 F. 2d 484, 488. The frustration of superior federal interests by the general language of § 2283 cannot reasonably be imputed. See NLRB v. Sunshine Mining Co., 125 F. 2d 757, 762; NLRB v. New York State Board, 106 F. Supp. 749, 752; NLRB v. Industrial Commission, 84 F. Supp. 593, aff’d, 172 F. 2d 389.
The fact that the Board is given express authority to seek enforcement of its orders in some sections of the Act is not persuasive that the Act expresses a policy to bar the Board from enforcing the national interests on other matters. The instances where the Board is given explicit authority to seek the aid of federal courts are not exclusive examples, as we have already shown. They are only particularized instances of specific enforcement devices relating to specified orders, not a denial by implication that the Act and the Board would not be entitled to federal aid or protection in other instances, as illustrated by In re National Labor Relations Board, supra; Amalgamated Workers v. Edison Co., supra; and Nathanson v. NLRB, supra. The exclusiveness of the federal domain is clear; and where it is a public authority that seeks protection of that domain, the way seems clear. For the Federal Government and its agencies, the federal courts are the forum of choice. For them, as Leiter indicates, access to the federal courts is “preferable in the context of healthy federal-state relations.” 352 U. S., at 226.
Whether there are parts of the state court injunction that should survive our reversal of the judgment below is a question we do not reach. It will be open on the remand of the cause.
Reversed and remanded.
For the history of present § 2283 see H. R. Rep. No. 308, 80th Cong., 1st Sess., A181.
The basis of our decision in Nathanson was that “[t]he priority granted by [§ 64 (a) (5), 11 U. S. C. § 104 (a) (5)] ... was designed ‘to secure an adequate revenue to sustain the public burthens and discharge the public debts.’ ” 344 U. S., at 27-28. Because there was “no function ... of assuring the public revenue” and “[t]he beneficiaries of the claims [were] private persons,” id., at 28, we found it inappropriate to apply the priority for claims owing the United States and, instead, gave the claims the same “treatment tha[t] other wage claims enjoy[ed].” Id., at 29. The suggestion that Nathanson is a stronger case for equating the status of the Board to that of the United States disregards both the policies of the Bankruptcy Act upon which we relied in that decision and the federal pre-emption which inheres in the present case.
Cases such as Reconstruction Finance Corp. v. J. G. Menihan Corp., 312 U. S. 81, do not support a miserly interpretation of the Board’s powers. There, we held that costs of litigation could be assessed against a corporation which Congress had launched into the commercial world with the power to “sue and be sued.” Contrary to the dissent’s assertion that the case turned on the failure of Congress to manifest an intent “to bestow the privileges and immunities of the United States on a federal agency,” post, at 150, our decision there was based upon the grant of “the unqualified authority to sue and be sued [which] placed petitioner upon an equal footing with private parties as to the usual incidents of suits in relation to the payment of costs and allowances.” 312 U. S., at 85-86.
Amalgamated Clothing Workers v. Richman Bros. Co., 348 U. S. 511, held that a private party under the protection of the Board’s order could not obtain injunctive relief in a federal court against an anti-picketing order issued by a state court. And see Atlantic Coast Line R. Co. v. Brotherhood of Locomotive Engineers, 398 U. S. 281.
Actions against the National Labor Relations Board are dismissed on the ground that they are against a federal agency exercising a governmental regulatory function and so are suits against the United States, which cannot be sued without the consent of Congress. Clover Fork Coal Co. v. NLRB, 107 F. 2d 1009. The same holds for the Atomic Energy Commission, Cotter Corp. v. Seaborg, 370 F. 2d 686; the Civil Service Commission, Soderman v. U. S. Civil Service Commission, 313 F. 2d 694; the Veterans Administration, Evans v. U. S. Veterans Admin. Hospital, 391 F. 2d 261; and the Securities and Exchange Commission, Holmes v. Eddy, 341 F. 2d 477. Similarly, an action by the Director General of Railroads was held to be on behalf of the United States and thus was not barred by the relevant statute of limitations. Davis v. Corona Coal Co., 265 U. S. 219.
Congress has vested the Board with broad powers to seek in-junctive relief in the district courts. Section 10 (1), 29 U. S. C. § 160 (Z), for example, gives the Board power to obtain an injunction where an investigation produces reasonable cause to believe that a charge of secondary boycott or illegal picketing activity is true. Section 10 (j), 29 U. S. C. § 160 (j), provides a similar basis of power for other unfair labor practices. “In case of contumacy or refusal to obey a subpena issued to any person” during “hearings and investigations, which, in the opinion of the Board, are necessary and proper for the exercise of [its] powers” under §§ 9 and 10, 29 U. S. C. §§ 159 and 160, the Board may seek injunctive relief from a district court requiring compliance. 29 U. S. C. §161 (2). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
81
] |
FLORIDA POWER & LIGHT CO. v. LORION, dba CENTER FOR NUCLEAR RESPONSIBILITY, et al.
No. 83-703.
Argued October 29, 1984
Decided March 20, 1985
Brennan, J., delivered the opinion of the Court, in which Burger, C. J., and White, Marshall, Blackmun, Powell, Rehnquist, and O’Connor, JJ., joined. Stevens, J., filed a dissenting opinion, post, p. 746.
Charles A. Rothfeld argued the cause pro hac vice for petitioners in No. 83-1031. On the briefs were Solicitor General Lee, Deputy Solicitor General Claiborne, John H. Garvey, Dirk D. Snel, John A: Bryson, Herzel H. E. Plaine, and E. Leo Slaggie. Harold F. Reis argued the cause for petitioner in No. 83-703. With him on the briefs was Norman A. Coll.
Martin H. Hodder argued the cause for respondent Lorion. With him on the brief was Terence J. Anderson.
Together with No. 83-1031, United States Nuclear Regulatory Commission et al. v. Lorion, dba Center for Nuclear Responsibility, et al., also on certiorari to the same court.
Joseph B. Knotts, Jr., and Linda L. Hodge filed a brief for the Atomic Industrial Forum, Inc., as amicus curiae urging reversal.
Justice Brennan
delivered the opinion of the Court.
These cases require us to decide whether 28 U. S. C. §2342(4) and 42 U. S. C. §2239 grant the federal courts of appeals exclusive subject-matter jurisdiction initially to review decisions of the Nuclear Regulatory Commission to deny citizen petitions requesting that the Commission “institute a proceeding ... to modify, suspend or revoke a license_” 10 CFR § 2.206(a) (1984).
Respondent Joette Lorion, on behalf of the Center for Nuclear Responsibility, wrote the Nuclear Regulatory Commission on September 11, 1981, to express fears about potential safety threats at petitioner Florida Power and Light Company’s Turkey Point nuclear reactor near her home outside Miami, Florida. Her detailed letter urged the Commission to suspend Turkey Point’s operating license and specified several reasons for such action. The Commission treated Lorion’s letter as a citizen petition for enforcement action pursuant to the authority of § 2.206 of the Commission’s rules of practice. This rule provides:
“Any person may file a request for the Director of Nuclear Reactor Regulation ... to institute a proceeding pursuant to [10 CFR] §2.202 to modify, suspend or revoke a license, or for such other action as may be proper. . . . The requests shall specify the action requested and set forth the facts that constitute the basis for the request.” 10 CFR § 2.206(a) (1984).
This rule also requires the Director of Nuclear Reactor Regulation, within a reasonable time after receiving such a request, either to institute the requested proceeding, or to provide a written explanation of the decision to deny the request. § 2.206(b). The Commission interprets §2.206 as requiring issuance of an order to show cause when a citizen petition raises “substantial health or safety issues.” Consolidated Edison Co. of New York, 2 N. R. C. 173, 174 (1975).
In these cases, the Director decided not to take the action Lorion had requested. His written explanation — based on a 547-page record compiled primarily from existing Commission materials — responded to each of Lorion’s points. See In re Florida Power & Light Co. (Turkey Point Plant, Unit 4), 14 N. R. C. 1078 (1981). Lorion unsuccessfully sought review by the Commission of the Director’s denial of the §2.206 request and then petitioned the Court of Appeals for the District of Columbia Circuit for review. Before that court, Lorion argued that the Director’s denial of the §2.206 request was arbitrary and capricious pursuant to the Administrative Procedure Act (APA), 5 U. S. C. §706(2)(A). Lorion also claimed that the Commission improperly denied her the statutory right to a full public hearing on the § 2.206 request. The Commission defended the substantive integrity of its decision and argued that Lorion had no right to a hearing.
Declining to reach the merits of this dispute, the Court of Appeals decided sua sponte that it lacked initial subject-matter jurisdiction over Lorion’s challenge to the denial of the §2.206 petition. This result was based on the court’s reading of the three statutory provisions that define the initial jurisdiction of the federal courts of appeals over Commission decisions. Under 28 U. S. C. §2342(4), a provision of the Administrative Orders Review Act (commonly known and referred to herein as the Hobbs Act) the courts of appeals have exclusive jurisdiction over petitions seeking review of “all final orders of the Atomic Energy Commission [now the Nuclear Regulatory Commission] made reviewable by section 2239 of title 42.” Title 42 U. S. C. § 2239(b) provides that the Hobbs Act governs review of “[a]ny final order entered in any proceeding of the kind specified in subsection (a) [of section 2239].” Subsection (a) proceedings are those “for the granting, suspending, revoking, or amending of any license.” 42 U. S. C. §2239(a)(1). The Court of Appeals concluded that the Commission’s denial of Lorion’s §2.206 petition was not an order entered in a “proceeding for the granting, suspending, revoking, or amending of any license” within the meaning of 42 U. S. C. § 2239(a) and therefore dismissed Lorion’s petition for review for lack of subject-matter jurisdiction. 229 U. S. App. D. C. 440, 712 F. 2d 1472 (1983).
The court’s decision turned on its interpretation of the interrelation between the review and hearing provisions of § 2239. Section 2239(a)(1) provides that “[i]n any proceeding under this chapter, for the granting, suspending, revoking, or amending of any license . . . the Commission shall grant a hearing upon the request of any person whose interest may be affected by the proceeding.” On the basis of this statu-
tory hearing requirement, the court reasoned that Commission action was a § 2239(a)(1) “proceeding” only if an interested person could obtain a hearing. Because the Court of Appeals for the District of Columbia Circuit had earlier held that a § 2.206 petitioner had no right to a hearing, see Porter County Chapter of the Izaak Walton League of America, Inc. v. NRC, 196 U. S. App. D. C. 456, 462, and n. 16, 606 F. 2d 1363, 1369, and n. 16 (1979), and because the Commission urged in its brief that “ ‘[u]nless and until granted [Lorion’s §2.206 request] is not a “proceeding” where the requester has any right to present evidence,’” 229 U. S. App. D. C., at 446, 712 F. 2d, at 1478 (citation omitted), the Court of Appeals held that the denial of Lorion’s § 2.206 request was not an order entered in a “proceeding” within the meaning of § 2239(a). Section 2239(b) was therefore found not to authorize initial court of appeals review of the order, and the court declined to hear the case. This holding arguably departed from precedent within the Circuit, and in any event created a direct conflict with the holdings of two other Circuits. We granted certiorari to resolve the conflict. 466 U. S. 903 (1984). We reverse.
II
The issue before us is whether the Commission’s denial of a §2.206 request should be considered a final order initially reviewable exclusively in the court of appeals pursuant to 42 U. S. C. § 2239(b) and 28 U. S. C. §2342(4). This issue requires us to decide whether such an order is issued in a “proceeding ... for the granting, suspending, revoking, or amending of any license.” 42 U. S. C. § 2239(a)(1). Enacting § 2239 in 1954, Congress did not focus specifically on this question; the Commission did not establish the §2.206 citizen petition procedure until 20 years later. See 39 Fed. Reg. 12353 (1974). Our task therefore is to decide whether Commission denials of §2.206 petitions are final orders of the kind Congress intended to be reviewed initially in the court of appeals pursuant to § 2239(b).
A
We begin, as did the Court of Appeals, with the language of the statute. See Reiter v. Sonotone Corp., 442 U. S. 330, 337 (1979). The crucial statutory language in subsection (b) of § 2239 is: “Any final order entered in any proceeding of the kind specified in subsection (a) of this section shall be subject to judicial review in the manner prescribed in [the Hobbs Act, 28 U. S. C. §2341 et seq.].” Though subsection (b) would seem generally to locate review of licensing proceedings in the courts of appeals pursuant to 28 U. S. C. §2342(4), the cross-reference to “proceeding^] of the kind specified in subsection (a)” is problematic. In a vexing semantic conjunction, the sentence in subsection (a) to which subsection (b) refers sets forth both the scope of Commission licensing proceedings and the hearing requirement for such proceedings. See 42 U. S. C. § 2239(a)(1) (“In any proceeding under this chapter, for the granting, suspending, revoking, or amending of any license . . . the Commission shall grant a hearing to any person whose interest may be affected by the proceeding”).
The Court of Appeals found this statutory language “clear-cut.” 229 U. S. App. D. C., at 445, 712 F. 2d, at 1477. We do not find it so. Though the linkage in § 2239 of the definition of proceeding and hearing could be read as the Court of Appeals read it, see supra, at 733-734, § 2239 could as easily be read as reflecting two independent congressional purposes: (1) to provide for hearings in licensing proceedings if requested by certain individuals (those “whose interest may be affected”); and (2) to place judicial review of final orders in all licensing proceedings in the courts of appeals pursuant to the Hobbs Act irrespective of whether a hearing before the agency occurred or was requested. On this alternative reading, the cross-reference in subsection (b) to “proceeding^] of the kind specified in subsection (a),” 42 U. S. C. § 2239(b), was meant only to refer to the language “any proceeding under this chapter, for the granting, suspending, revoking, or amending of any license,” § 2239(a)(1). If read this way, subsection (b) reflects no congressional intent to limit initial court of appeals review to Commission actions in which a hearing took place.
To discern the correct interpretation of this statute we must therefore decide whether Congress intended to authorize initial court of appeals review by reference to the procedures accompanying agency action (%. e., by reference to whether a hearing was held) or by reference to the subject matter of the agency action (i. e., by reference to whether the order was issued in a licensing proceeding). Adopting the former interpretation, the Court of Appeals relied solely on what it took to be the plain meaning of § 2239. Yet plain meaning, like beauty, is sometimes in the eye of the beholder. The court below inferred “plain meaning” from the conjunction of the hearing requirement and the description of the scope of licensing proceeedings in subsection (a) without consulting indicia of congressional intent in the legislative history or general principles respecting the proper forum for judicial review of agency action. Because we find the statute ambiguous on its face, we seek guidance in the statutory structure, relevant legislative history, congressional purposes expressed in the choice of Hobbs Act review, and general principles respecting the proper allocation of judicial authority to review agency orders. We conclude that these sources indicate that Congress intended to provide for initial court of appeals review of all final orders in licensing proceedings whether or not a hearing before the Commission occurred or could have occurred.
B
Relevant evidence of congressional intent in the legislative history, though fragmentary, supports this interpretation. The legislative metamorphoses of the various bills that eventually became the Atomic Energy Act of 1954 strongly suggest that Congress intended to define the scope of initial court of appeals review according to the subject matter of the Commission action and not according to whether the Commission held a hearing. As originally introduced in both the House and the Senate, the provision governing judicial review (§ 189 of the proposed Act) provided that “[a]ny proceeding to enjoin, set aside, annul or suspend any order of the Commission shall be brought as provided by [the Hobbs Act, 28 U. S. C. §2341 et seq.V H. R. 8862, 83d Cong., 2d Sess., § 189 (1954); S. 3323, 83d Cong., 2d Sess., § 189 (1954). After hearings by the Joint Committee on Atomic Energy, the judicial review provision was amended to provide for initial court of appeals review of “[a]ny final order granting, denying, suspending, revoking, modifying, or rescinding any license_” Joint Committee on Atomic Energy, 83d Cong., 2d Sess., § 189 (Comm. Print of May 21, 1954). Though this change was unexplained, it appears to have been intended to limit the scope of judicial review to final orders entered in licensing proceedings; the earlier version had more broadly authorized review of “any order of the Commission.” Soon after the bill incorporating this provision was submitted to the full Congress, a shortcoming in the proposed scope of review became apparent. Judicial review would not extend to final orders in proceedings that terminated short of a suspension, revocation, or amendment of a license; those seeking to challenge Commission decisions not to suspend, revoke, or amend could not obtain initial court of appeals review. Remedying this deficiency, Senator Hickenlooper proposed an amendment to expand the authorization for review to final orders issued in “any 'proceeding under this act, for the granting, suspending, revoking, or amending of any license . . . .” Amendment to S. 3690, 83d Cong., 2d Sess., § 189 (July 16, 1954) (emphasis added).
The hearing requirement under the Act developed independently of the review provisions until the last step of the legislative process. As introduced in the House and the Senate, the original bills did not provide for a hearing in licensing determinations. See H. R. 8862, supra; S. 3323, supra. The lack of a hearing requirement prompted expressions of concern at Committee hearings, S. 3323 and H. R. 8862, To Amend the Atomic Energy Act of 1946: Hearings on S. 3323 and H. R. 8862 before the Joint Committee on Atomic Energy, 83d Cong., 2d Sess., 65, 113-114, 152-153, 226-227, 328-329, 352-353, 400-401, 416-417 (1954), and led to an amendment to § 181 of the proposed Act providing for a hearing in “any agency action.” H. R. 9757, 83d Cong., 2d Sess., §181 (1954). This provision was soon recognized as too broad a response to the perceived need, see 100 Cong. Rec. 10686 (1954) (remarks of Sen. Pastore) (“That wording was thought to be too broad, broader than it was intended to make it”), and the hearing requirement was tailored to the scope of proceedings authorized under the licensing Sub-chapter. Senator Hickenlooper accomplished this narrowing with the same amendment he used to broaden the scope of reviewable licensing determinations. He simply proposed to add the hearing requirement to §189, which until then had governed only judicial review; in this way the hearing authorization was limited to licensing proceedings. Amendment to S. 3690, supra, § 189. The proposed amendment was accepted and the current §2239 reflects its precise wording.
The evolution of the judicial review provision reveals a congressional intent to provide for initial court of appeals review of all final orders in licensing proceedings. When Congress decided on the scope of judicial review, it did so solely by reference to the subject matter of the Commission action and not by reference to the procedural particulars of the Commission action. That the hearing provision evolved independently reinforces the conclusion that Congress had no intention to limit initial court of appeals review to cases in which a hearing occurred or could have occurred. The only possible evidence of congressional intent to limit court of appeals review by reference to the procedures used is the last-minute marriage of the hearing and review provisions in the Hickenlooper Amendment. Nothing in the legislative history affirmatively suggests that Congress intended this conjunction of the hearing and review provisions to limit initial court of appeals review to final orders resulting from proceedings in which a hearing occurred. To the contrary, this semantic conjunction indicates no more than a congressional intent to provide for a hearing in the types of proceedings in which initial court of appeals review would take place — that is, licensing proceedings. See 100 Cong. Rec. 10686 (1954) (remarks of Sen. Pastore) (“The amendment limits the provision to hearings on licenses in which a review shall take place”).
C
Whether subject-matter jurisdiction over denials of §2.206 petitions properly lies in the district courts or the courts of appeals must also be considered in light of the basic congressional choice of Hobbs Act review in 42 U. S. C. § 2239(b). The Hobbs Act specifically contemplated initial court of appeals review of agency orders resulting from proceedings in which no hearing took place. See 28 U. S. C. § 2347(b) (“When the agency has not held a hearing . . . the court of appeals shall. . . pass on the issues presented, when a hearing is not required by law and ... no genuine issue of material fact is presented”). One purpose of the Hobbs Act was to avoid the duplication of effort involved in creation of a separate record before the agency and before the district court. See H. R. Rep. No. 2122, 81st Cong., 2d Sess., 4 (1950) (“[T]he submission of the cases upon the records made before the administrative agencies will avoid the making of two records, one before the agency and one before the court, and thus going over the same ground twice”). Cf. Harrison v. PPG Industries, Inc., 446 U. S. 578, 593 (1980) (“The most obvious advantage of direct review by a court of appeals is the time saved compared to review by a district court, followed by a second review on appeal”).
Given the choice of the Hobbs Act as the primary method of review of licensing orders, we have no reason to think Congress in the Atomic Energy Act would have intended to preclude initial court of appeals review of licensing proceedings in which a Commission hearing did not occur when the Hobbs Act specifically provides for such review and the consequence of precluding it would be unnecessary duplication of effort.
D
The legislative history and the basic congressional choice of Hobbs Act review lead us to conclude that Congress intended to vest in the courts of appeals initial subject-matter jurisdiction over challenges to Commission denials of § 2.206 petitions. An examination of the consequences that would follow upon adoption of the contrary rule proposed by the Court of Appeals in these cases confirms the soundness of this conclusion. The Court of Appeals did not specify whether it thought § 2239 vested the courts of appeals with initial jurisdiction over only proceedings in which a hearing actually occurred or over proceedings in which a hearing could have occurred had one been requested. Either approach results in consequences that cannot be squared with general principles respecting judicial review of agency action.
If initial review in the court of appeals hinged on whether a hearing before the agency actually occurred, then some licensing proceedings will be reviewed in the courts of appeals while others will not depending on whether a hearing is requested. It is clear that § 2239 contemplates the possibility of proceedings without hearings. Absent a request from a person whose interest may be affected by the proceeding no hearing is required. 42 U. S. C. § 2239(a)(1) (“In any proceeding under this chapter . . . the Commission shall grant a hearing upon the request of any person whose interest may be affected by the proceeding”). Thus if no one requests a hearing or if the only request comes from a person whose interest cannot be affected by the issues before the Commission in the proceeding, no hearing will be held. See, e. g., Bellotti v. NRC, 233 U. S. App. D. C. 274, 725 F. 2d 1380 (1983). The locus of judicial review would thus depend on the “fortuitous circumstance” of whether an interested person requested a hearing, see Crown Simpson Pulp Co. v. Costle, 445 U. S. 193, 196-197 (1980). This sorting process would result in some final orders in licensing proceedings receiving two layers of judicial review and some receiving only one. “Absent a far clearer expression of congressional intent, we are unwilling to read the Act as creating such a seemingly irrational bifurcated system.” Id., at 197.
If initial review in the court of appeals hinged on whether a hearing could have taken place had an interested person requested one, different but equally irrational consequences follow. All final orders in full-blown Commission licensing proceedings in which the issue is the granting, suspending, revoking, or amending of a license would be reviewed initially in the court of appeals irrespective of whether a hearing occurred before the agency. But final orders in summary proceedings and informal Commission rulemaking authorized in § 2239(a) would be reviewed initially in the district court because the Commission does not currently provide for a hearing in such situations.
At least two implausible results would flow from excluding orders in such situations from initial review in the court of appeals. First, the resulting duplication of judicial review in the district court and court of appeals, with its attendant delays, would defeat the very purpose of summary or informal procedures before the agency — saving time and effort in cases not worth detailed formal consideration or not requiring a hearing on the record. See Investment Company Institute v. Board of Governors of Federal Reserve System, 179 U. S. App. D. C. 311, 317-318, 551F. 2d 1270, 1276-1277 (1977); Verkuil, Judicial Review of Informal Rulemaking, 60 Va. L. Rev. 185, 204 (1974). Second, such an approach would cause bifurcation of review of orders issued in the same proceeding. While the final order in the licensing proceeding would be reviewed initially in the court of appeals, numerous ancillary or preliminary orders denying requests for intervention or a hearing by persons who purport to be affected by the issues in the proceeding would be reviewed initially in the district court. In the absence of specific evidence of contrary congressional intent, however, we have held that review of orders resolving issues preliminary or ancillary to the core issue in a proceeding should be reviewed in the same forum as the final order resolving the core issue. Foti v. INS, 375 U. S. 217, 227, 232 (1963); see L. Jaffe, Judicial Control of Administrative Action 422 (1965); Currie & Goodman, Judicial Review of Federal Administrative Action: Quest for the Optimum Forum, 75 Colum. L. Rev. 1, 60 (1975).
Perhaps the only plausible justification for linking initial review in the court of appeals to the occurrence of a hearing before the agency would be that, absent a hearing, the reviewing court would lack an adequate agency-compiled factual basis to evaluate the agency action and a district court with factfinding powers could make up that deficiency. Such a justification cannot, however, be squared with fundamental principles of judicial review of agency action. “[T]he focal point for judicial review should be the administrative record already in existence, not some new record made initially in the reviewing court.” Camp v. Pitts, 411 U. S. 138, 142 (1973). The task of the reviewing court is to apply the appropriate APA standard of review, 5 U. S. C. § 706, to the agency decision based on the record the agency presents to the reviewing court. Citizens to Preserve Overton Park v. Volpe, 401 U. S. 402 (1971).
If the record before the agency does not support the agency action, if the agency has not considered all relevant factors, or if the reviewing court simply cannot evaluate the challenged agency action on the basis of the record before it, the proper course, except in rare circumstances, is to remand to the agency for additional investigation or explanation. The reviewing court is not generally empowered to conduct a de novo inquiry into the matter being reviewed and to reach its own conclusions based on such an inquiry. We made precisely this point last Term in a case involving review under the Hobbs Act. FCC v. ITT World Communications, Inc., 466 U. S. 463, 468-469 (1984); see also Camp v. Pitts, supra. Moreover, a formal hearing before the agency is in no way necessary to the compilation of an agency record. As the actions of the Commission in compiling a 547-page record in this case demonstrate, agencies typically compile records in the course of informal agency action. The APA specifically contemplates judicial review on the basis of the agency record compiled in the course of informal agency action in which a hearing has not occurred. See 5 U. S. C. §§ 551(13), 704, 706.
The factfinding capacity of the district court is thus typically unnecessary to judicial review of agency decisionmak-ing. Placing initial review in the district court does have the negative effect, however, of requiring duplication of the identical task in the district court and in the court of appeals; both courts are to decide, on the basis of the record the agency provides, whether the action passes muster under the appropriate APA standard of review. One crucial purpose of the Hobbs Act and other jurisdictional provisions that place initial review in the courts of appeals is to avoid the waste attendant upon this duplication of effort. Harrison v. PPG Industries, Inc., 446 U. S., at 593; Investment Company Institute, supra, at 317, 551 F. 2d, at 1276. Absent a firm indication that Congress intended to locate initial APA review of agency action in the district courts, we will not presume that Congress intended to depart from the sound policy of placing initial APA review in the courts of appeals.
These considerations apply with full force in the present cases. Locating initial review in the district court would certainly result in duplication of effort and probably result in bifurcation of review in that persons seeking to use § 2.206 petitions to broaden the scope of ongoing Commission proceedings would, if unsuccessful, obtain review in the district court while review of the final order in the proceeding would occur in the court of appeals.
l — l I — t 1 — 1
Whether initial subject-matter jurisdiction lies initially in the courts of appeals must of course be governed by the intent of Congress and not by any views we may have about sound policy. Harrison v. PPG Industries, Inc., supra, at 593. In these cases, the indications of legislative intent we have been able to discern suggest that Congress intended to locate initial subject-matter jurisdiction in the courts of appeals. This result is in harmony with Congress’ choice of Hobbs Act review for Commission licensing proceedings in § 2239(b) and is consistent with basic principles respecting the allocation of judicial review of agency action. We therefore hold that 42 U. S. C. § 2239 vests in the courts of appeals initial subject-matter jurisdiction over Commission orders denying § 2.206 citizen petitions. Accordingly, the judgment below is reversed, and the cases are remanded to the Court of Appeals for further proceedings consistent with this opinion.
It is so ordered.
Sections 181-189 of the Atomic Energy Act of 1954, 42 U. S. C. §§ 2231-2239, set forth a detailed and comprehensive licensing scheme to govern private construction and operation of nuclear power facilities.
Lorion claimed that (1) the reactor’s steam generator tubes had not been inspected; (2) the plugging and consequent deactivation of as many as 25% of the steam generator tubes overburdened the remaining functional tubes and therefore posed a risk of leakage in those tubes; and (3) the steel reactor pressure vessel had become dangerously brittle and therefore might not withstand the thermal shock that would accompany any emergency cooldown of the reactor core. App. 6-8.
The Director of Nuclear Reactor Regulation institutes the requested proceeding by serving an order to show cause upon the licensee. According to Commission regulations this order must inform the licensee of, inter alia, the allegations against it, its right to respond, and its right to a hearing. 10 CFR § 2.202 (1984).
The claimed lack of inspection was found to have been mooted by a Commission staff inspection of the steam generator tubes on October 19, 1981, approximately one month after Lorion’s letter. The risk of leaking steam generator tubes was found not to pose a serious safety hazard. In any event, the chances of such leakage were found to be remote and the tubes were then being subjected to close monitoring by Commission staff. The risk of vessel cracking as a result of thermal shock was similarly found to be negligible. See In re Florida Power & Light Co. (Turkey Point Plant, Unit 4), 14 N. R. C. 1078 (1981).
The Court of Appeals transferred the case to the District Court pursuant to 28 U. S. C. § 1631. See App. to Pet. for Cert, in No. 83-703, p. 15. In its opinion, the Court of Appeals had suggested that the District Court likely had subject-matter jurisdiction under either 28 U. S. C. § 1331 or 28 U. S. C. § 1337. See 229 U. S. App. D. C., at 447, 712 F. 2d, at 1479.
See Seacoast Anti-pollution League of New Hampshire v. NRC, 223 U. S. App. D. C. 288, 291, 690 F. 2d 1025, 1028 (1982).
See County of Rockland v. NRC, 709 F. 2d 766, 774 (CA2), cert. denied, 464 U. S. 993 (1983); Rockford County League of Women Voters v. NRC, 679 F. 2d 1218, 1219-1221 (CA7 1982).
In these cases we address only the question whether initial subject-matter jurisdiction is properly located in the court of appeals or the district court. That is the only question on which we granted certiorari, and it is the only question that the parties have briefed and argued before this Court. We express no views on the merits of respondent Lorion’s challenge to the Commission’s denial of her citizen petition made under the authority of 10 CFR § 2.206 (1984).
In addition, no party has argued that under the APA, 5 U. S. C. § 701(a)(2), Commission denials of §2.206 petitions are instances of presumptively unreviewable “agency action . . . committed to agency discretion by law” because they involve the exercise of enforcement discretion. See Heckler v. Chaney, post, at 828-835. Because the question has been neither briefed nor argued and is unnecessary to the decision of the issue presented in this case, we express no opinion as to its proper resolution. The issue is open to the Court of Appeals on remand should the Commission choose to press it.
This fact does not preclude a finding that denials of § 2.206 petitions should be viewed as orders in § 2239(a) “proceedings” for purposes of the judicial review provisions of § 2239(b); “[cjlearly, changes in administrative procedures may affect the scope and content of various types of agency orders and thus the subject matter embraced in a judicial proceeding to review such orders.” Foti v. INS, 375 U. S. 217, 230, n. 16 (1963).
For example, the Commission requires a person seeking a hearing in a licensing proceeding to establish at least one contention with basis and specificity, see BP I v. AEC, 163 U. S. App. D. C. 422, 502 F. 2d 424 (1974), and to make an initial showing that a genuine issue of material fact exists, 10 CFR §2.749 (1984). Similarly, rulemaking under § 2239(a) is typically accompanied only by notice and comment procedures. See Connecticut Light & Power Co. v. NRC, 218 U. S. App. D. C. 134, 673 F. 2d 525, cert, denied, 459 U. S. 835 (1982).
The cases before us present no question, and thus we express no opinion, as to the Commission’s authority to condition or restrict the statutory hearing requirement of 42 U. S. C. § 2239(a)(1) in these or any other ways. In particular, we express no opinion as to whether the Commission properly denied respondent Lorion’s request for a hearing on her §2.206 petition.
Respondent Lorion also argues that the Commission itself does not consider its denial of a § 2.206 petition an order issued in a “proceeding” as that term is understood in 42 U. S. C. § 2239(a)(1). This argument is based in large part on the language of 10 CFR § 2.206 (1984). That language authorizes the Director of Nuclear Reactor Regulation to “institute a proceeding” in response to a §2.206 petition raising substantial safety questions. An order denying a § 2.206 petition is an order refusing to institute a proceeding, respondent Lorion argues, and therefore cannot be an order issued in a proceeding because none has been instituted. Also, in some unfortunate language in its brief before the Court of Appeals below, the Commission argued that respondent Lorion had no right to a hearing because no “proceeding” commences until an order to show cause pursuant to 10 CFR § 2.202 (1984) is issued. See 229 U. S. App. D. C., at 446, 712 F. 2d, at 1478 (quoting Government brief below at 24-25). We do not think the issue of congressional intent as to subject-matter jurisdiction should turn on such semantic quibbles. In neither its regulations nor its initial brief below did the Commission intend to suggest an opinion as to the proper forum for judicial review of denials of § 2.206 petitions. The § 2.206 petition is but the first step in a process that will, if not terminated for any reason, culminate in a full formal proceeding under 42 U. S. C. § 2239(a)(1). We have already made clear that subject-matter jurisdiction to review summary orders terminating licensing proceedings prior to a full hearing should lie in the courts of appeals. See supra, at 742-743. The denial of a § 2.206 petition is simply a summary procedure that terminates a proceeding at the first step of the process. Thus initial court of appeals subject-matter jurisdiction over Commission denials of §2.206 petitions should not be rejected for the reason that these orders are not products of “proceedings.”
This argument in reality is a claim that denials of § 2.206 petitions occur too early in the process to be considered final orders in licensing proceedings. That argument, properly understood, is a claim that such Commission decisions are exercises of enforcement discretion. As such, the argument goes to whether such decisions are reviewable under the APA, see n. 8, supra, and not to whether the courts of appeals have initial subject-matter jurisdiction. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
84
] |
ST. JOE PAPER CO. et al. v. ATLANTIC COAST LINE RAILROAD CO.
NO. 24.
Argued October 15, 1953.
Decided April 5, 1954.
William D. Mitchell argued the cause for petitioners. With him on a brief for petitioners in No. 24 were John B. Marsh and Edward E. Watts, Jr. Also on the brief were Howard P. Macfarlane and George W. Ericksen for Conn et al., Henry P. Adair and Donald Russell for the Trustees under the duPont Will, and Giles J. Patterson and John R. Turney for the St. Joe Paper Company, petitioners.
Henry L. Walker and Sidney S. Alderman filed a brief for the Southern Railway Company et al., and with them on the brief were Harold J. Gallagher, Walter H. Brown, Jr. and James B. McDonough, Jr. for the Seaboard Air Line Railroad Company, petitioners in No. 24.
Clarence M. Mulholland and Edward J. Hickey, Jr. filed a brief for the Railway Labor Executives’ Association, petitioner in No. 24.
Fred N. Oliver, Willard P. Scott and J. Turner Butler filed a brief for petitioners in No. 33.
Clifton S. Thomson and Chester Bedell filed a brief for petitioners in No. 36.
Miller Walton filed a brief for petitioners in No. 37.
Edward W. Bourne argued the cause for respondent. With him on the brief were Charles Cook Howell, Richard B. Gwathmey and Charles Cook Howell, Jr.
Mr. Justice Frankfurter
delivered the opinion of the Court.
The sole question for decision in this case is whether the Interstate Commerce Commission has the power under § 77 of the Bankruptcy Act to submit a plan of reorganization to a district court whereby a debtor railroad would be compelled to merge with another railroad having no prior connection with the debtor. Answer to this problem depends on understanding of a long legislative history. First, however, it is necessary to put the problem into its relevant context.
In August of 1931, the Florida East Coast Railway was thrown into equity receivership. It operated in this manner until January of 1941, when a committee representing the owners of a substantial portion of the debtor’s principal bond issue filed a petition for reorganization under § 77 of the Bankruptcy Act in the United States District Court for the Southern District of Florida. The petition was approved by the court, and, as provided in the statute, proceedings were initiated before the Interstate Commerce Commission for hearings on a plan of reorganization formulated by the bondholders’ committee.
In the course of the next ten years, many proposals have been considered by the Commission. Most of them were rejected for one reason or another, but three have in turn been certified by it to the District Court. None has as yet been confirmed by that court. The initial plan provided for a simple internal reorganization. It was rejected by the court, and the case was remanded to the Commission with directions to take account of an intervening improvement in the debtor’s cash position. 52 F. Supp. 420. Atlantic Coast Line Railroad, the present respondent, first appeared on the scene in November 1944 when, after the Commission’s hearings for the purpose of devising a second plan had been closed, one Lynch, joined by other bondholders of the debtor, sought to reopen the proceedings for the purpose of proposing a new plan whereby each recipient of stock in the reorganized debtor would be required to sell 60% of his interest at par to Atlantic, a connecting carrier, thereby giving that railroad operating control of the debtor. On November 30, 1944, Atlantic was allowed to intervene before the Commission in support of the Lynch proposal. The St. Joe Paper Co., on the other hand, which had by that time acquired a majority interest in the debtor’s principal bond issue, opposed the Lynch plan. The Commission rejected the Lynch proposal, indicating that, in view of Atlantic’s operating deficits over the past years, combining the two railroads would not be in the public interest at that time. 261 I. C. C. 151, 187.
The subsequent struggle for control of the debtor has been largely between these two interests — the St. Joe Paper Co., owner of the major interest in the debtor, and Atlantic, a connecting carrier anxious to acquire the debtor’s coveted Florida east coast traffic from Jacksonville to Miami. Shortly after the Commission’s rejection of the Lynch plan, Atlantic proposed its own plan providing for the merger of the debtor into Atlantic in return for the distribution of cash and various types of Atlantic’s securities to the debtor’s bondholders. St. Joe again opposed, as did various other bondholders, two competitors of Atlantic, an association representing the debtor’s employees, and other interested parties. The matter was referred to an Examiner who, after a lengthy investigation, found that such a merger would not be in the public interest, and that the Atlantic plan would not constitute “fair and equitable” treatment for all the unwilling bondholders who were in substance the owners of the debtor railroad. The Commission, however, by a sharply divided decision overruled the Examiner and sanctioned a “forced merger.” 267 I. C. C. 295. Circuit Judge Sibley, sitting in the District Court, set the plan aside on the ground that the Commission had no power under the statute to force a merger; in addition, he held the plan not “fair and equitable.” 81 F. Supp. 926. On appeal to the Court of Appeals for the Fifth Circuit, two judges sustained the Commission’s authority to propose such a plan while the third agreed with Judge Sibley; but a majority agreed with the District Court that the plan was not “fair and equitable.” 179 F. 2d 538.
The Commission then formulated another plan, which likewise provided for a forced merger of the debtor and Atlantic, 282 I. C. C. 81, and Circuit Judge Strum, sitting in the District Court, while bound on the question of the Commission’s power by the prior Court of Appeals decision, again set the plan aside as unfair and inequitable. 103 F. Supp. 825. The Court of Appeals was now convened en banc. Three of its judges, without further consideration of the Commission’s power, reversed the District Court and found the plan fair and equitable. The other two judges dissented and adopted the reasoning of Judge Sibley in the earlier case, i. e., that the Commission had no power under the statute to propose such a compelled merger plan. 201 F. 2d 325. Because of the importance of this question in the administration of § 77 of the Bankruptcy Act, we granted certiorari. 345 U. S. 948.
The procedure by which the Commission is authorized to consider and approve a plan of reorganization and then submit it to the interested parties for acceptance, as well as the courts for judicial confirmation, is governed by an elaborate statutory scheme. See § 77 of the Bankruptcy Act, 47 Stat. 1474, as amended, 11 U. S. C. § 205. Any question such as the one now here must be resolved by reference to this governing law and its underlying purpose, imbedded as that is not merely in the formal words of the statute but in the history which gives them meaning. If ever a long course of legislation is to be treated as an organic whole, whose parts are not disjecta membra, this is true of § 77.
The respondent relies on subsection (b)(5) to sustain the Commission’s power to submit a forced merger plan of the type here involved. This was subsection (b) (3) of the original § 77 of the Bankruptcy Act as enacted in 1933, 47 Stat. 1474, 1475. It then read, insofar as here material,
“(b) A plan of reorganization within the meaning of this section . . . (3) shall provide adequate means for the execution of the plan, which may, so far as may be consistent with the provisions of sections 1 and 5 of the Interstate Commerce Act as amended, include . . . the merger of the debtor with any other railroad corporation . . . .”
The permissive merger provision in plans of reorganization was thus made expressly conditional on compliance with the requirements of §§ 1 and 5 of the Interstate Commerce Act. The reason for this proviso, commonly-referred to as the “consistency clause,” was stated as follows by Commissioner Joseph Eastman, Chairman of the Legislative Committee of the Interstate Commerce Commission and one of the weightiest voices before Congress on railroad matters:
“Explanation. — This act ought not to authorize railroad mergers . . . which are inconsistent with the applicable provisions of the Interstate Commerce Act, particularly the consolidation-plan provisions. These amendments are intended to avoid that possibility.”
In the ensuing floor debates it was further made clear that the purpose of the consistency clause was to subject mergers under § 77 to whatever restrictions obtained for mergers under the Interstate Commerce Act. Representative Hatton Sumners, Chairman of the Judiciary Committee which had reported out the bill and floor manager of the bill, gave this assurance:
“Mr. HORR. May I inquire whether or not, where the word 'reorganization' is used, the gentleman is of the opinion that this would encourage consolidations of railroads?
“Mr. SUMNERS of Texas. They could not be consolidated in violation of the interstate commerce act.
“Mr. HORR. They would first have to go through that?
“Mr. SUMNERS of Texas. They would first have to go through that.” 76 Cong. Rec. 2909.
And Congressman Rayburn, Chairman of the Committee on Interstate and Foreign Commerce, put it thus:
“Fear has been expressed that with the enactment of this bill the powers of the Interstate Commerce Commission and the courts over consolidations and mergers would be expanded. It is my firm conviction that this proposal in specific provisions safeguards the present consolidation and merger provisions of the interstate commerce act and gives no additional authority to the commission or the courts in these matters.” 76 Cong. Rec. 2917-2918.
In view of this deliberate and explicit incorporation of the restrictions attending mergers under the Interstate Commerce Act into § 77 of the Bankruptcy Act, it is necessary to grite some consideration to the merger and consolidation provisions of the former, 49 U. S. C. § 5. The history of these provisions is long and tortuous; its detailed summary is relegated to an appendix, post, p. 315. Suffice it to say here that one clear thread which runs through a course of legislation extending over a period of twenty years, as well as through the various commentaries upon it, is that only mergers voluntarily initiated by the participating carriers are encompassed by that statute and sanctioned by it. From the initial enactment in the Transportation Act of 1920, 41 Stat. 456, 480, to the most recent comprehensive re-examination of these provisions in the Transportation Act of 1940, 54 Stat. 898, 905, Congress has consistently and insistently denied the Interstate Commerce Commission the power to take the initiative in getting one railroad to turn over its properties to another railroad in return for assorted securities of the latter. The role of the Commission in this regard has traditionally been confined to approving or disapproving mergers proposed by the railroads to be merged. And this adamant position taken by Congress has not been for want of attempts to secure relaxation. Advocacy of giving the Commission power to propose and enforce mergers has been steady and, at times, strong, but it has consistently failed in Congress.
The reasons for this hostility to mergers imposed by the Commission derive largely from the disadvantages attributed by Congress to such far-reaching corporate revampings. Employees of the constituent railroads would, it has been feared, almost certainly be adversely affected. Shippers and communities adequately served by railroad A may suddenly find themselves unfavorably dependent upon railroad B. Investors in one railroad would, contrary to their expectations, find their holdings transmuted into securities of a different railroad. As the Commission in its 1938 Annual Report said of consolidations:
“Projects of this character cannot be crammed down the throats of those who must carry them out or conform to them. Legal compulsion can be used with advantage to bring recalcitrants and stragglers into line, but not to drive hostile majorities into action.” (P. 23.)
We therefore conclude that the Commission does not have under § 77 of the Bankruptcy Act a power which Congress has repeatedly denied it under the Interstate Commerce Act, namely to initiate the merger or consolidation of two railroads. In light of the continuously and vehemently reiterated policy against endowing the ICC with such a power under § 5 of the Interstate Commerce Act, it is inconceivable, wholly apart from the consistency clause, that such was the sub silentio effect of § 77, an emergency statute hurriedly enacted with scarcely any debate. The consistency clause serves but to strengthen this natural presumption against such a tacit grant. It would require unambiguous language indeed to accomplish a contrary result; yet nowhere in the committee reports and the debates on the original § 77, nor in any of the. legislative materials relating to the thorough re-examination of that statute in 1935, can we find so much as one word which conveys the impression that as to mergers under the Bankruptcy Act, Congress stealthily designed to jettison its long-standing and oft-reiterated policy against compulsory mergers. On the contrary, after the enactment of § 77 in 1933, the Commission in its annual reports, and the Federal Coordinator of Transportation in his several reports, had frequent occasion to discuss § 77 of the Bankruptcy Act and § 5 of the Interstate Commerce Act. It would indeed be strange for these railroad authorities to bemoan the Commission’s inability to initiate mergers and consolidations if it had been a fact that as to the substantial portion of the Nation’s railroad mileage then in receivership or § 77 proceedings the Commission clearly had this very power. Had it been the declared intention of the drafters of § 77 to confer such a power, it is fair to assume that, in view of the persistent opposition of organized labor and other groups to such attempts under the Commerce Act, the statute would not have passed.
All this of course is not to say that mergers cannot be carried out in the course of a § 77 reorganization. It merely means that if they are, they must be consummated in accordance with all the requirements and restrictions applicable to mergers under the Act primarily concerned with railroad amalgamations, the Interstate Commerce Act. So far as here relevant, that means that the merger must be worked out and put before the Commission by the merging carriers. It also means that one carrier cannot be railroaded by the Commission into an undesired merger with another carrier.
In short, the consistency clause of § 77 incorporates by reference § 5 of the Interstate Commerce Act, as amended. And the very heart of § 5 is that a merger of two carriers may be approved by the Interstate Commerce Commission only if it originates as a voluntary proposal by the merging carriers. This essential prerequisite for a merger between Florida East Coast and Atlantic Coast Line — two existing corporate entities— must be complied with, for by virtue of the consistency clause the command of Congress applies even if one of these carriers is in § 77 proceedings just as much as it would if neither of the carriers were in receivership or trusteeship. The legislative incorporation of § 5 into § 77 should not result in its judicial mutilation.
The most recent occasion on which the Senate Committee on Interstate Commerce comprehensively re-examined the subject of railroad reorganization was the report submitted in 1946 by Chairman Wheeler, the guiding spirit of most of the legislation here under consideration. Much of what the Committee says there under the heading of “Avoidance of consolidation statute” is highly relevant here:
“In view of [the] many interests, immediately and directly affected by any proposed consolidation, Congress has provided a series of safeguards and procedural steps, in section 5 of the Interstate Commerce Act. . . .
“This statute and its statutory procedure, statutory safeguards, and statutory rights have been set to one side in the proceedings under section 77 of the Bankruptcy Act. The institutional and other groups, and the Commission, have assumed that they could effect consolidations, not under the Interstate Commerce Act, but under the Bankruptcy Act; not under a statute dealing with transportation, but under a statute dealing with financial reorganization; not under a section which considers and specifies one single financial question, the effect of consolidation on fixed charges, but under a section which deals with all sorts of financial problems, most of them not related to consolidation. They have assumed to effect consolidations, not under legislation which deals primarily with the rights and interests of States, local communities, and employees, but under a bankruptcy law which deals primarily with the interests of securityholders.
“Those who are trying to bypass this statute and to consolidate railroads as part of a financial reorganization proceeding bring consolidation into the proceeding as something subsidiary, a mere tail to the main kite. When governors of States and representatives of communities and employees organizations are invited to the proceedings by the Commission, they find the issue which primarily concerns them enveloped in all sorts of other questions of a financial and technical nature. If they should want to appeal to a court from a consolidation decision in this grab bag of proceedings, their task would be far more complicated and far more difficult than Congress intended when it passed section 5 of the Interstate Commerce Act. There is always the available cry — the courts should not disapprove any part of the reorganization plan, even though it be a consolidation matter, lest all the time and labor and expense which has gone into the reorganization proceeding be lost.
“The Commission justifies its course of action by citing two subsections of section 77 of the Bankruptcy Act. Subsection (b) lists a number of the substantive changes which can be made through a plan of reorganization under section 77. Then it lists a number of ‘means for the execution of the plan/ .... Among these ‘means for the execution of the plan’ is included ‘the merger or consolidation of the debtor with another corporation or corporations.’ Subsection (f) authorizes the Commission, after the court confirms the plan, ‘without further proceedings’ to authorize the issuance of securities, transfer of property, sale, ‘consolidation or merger of the debtor’s property, or pooling of traffic, to the extent contemplated by the plan and not inconsistent with the provisions and purposes of the Interstate Commerce Act as now or hereafter amended.’
“Note should be taken of the Commission’s position. It could, under its construction of the statute, authorize not only mergers, but also pooling of traffic, without complying with the requirements laid down by Congress in section 5 of the Interstate Commerce Act. Consolidations, mergers, and pooling of traffic have long been regarded as dangerous, if not carefully regulated and supervised; Congress has long had those evils in mind and sought to prevent excesses, while saving what is good in such transactions; to this end Congress carefully elaborated a considerable number of safeguards in section 5 of that act. None of those safeguards is elaborated in section 77 of the Bankruptcy Act.
“It may not be assumed that Congress intended, in section 77, to permit it to bypass the section 5 procedure and proceedings. Section 77 was hurriedly passed by Congress. It was not considered by either a subcommittee or full committee of the Senate, before being taken up on the floor. It was pushed through in the final days of the Seventy-second Congress on the plea that it would prevent receiverships. Congress would not, in such a manner, legislate out of existence, for companies requiring reorganizations, its carefully elaborated safeguards with respect to consolidations or traffic pools. If the Commission’s construction of section 77 is sound, that it can avoid the necessity of considering consolidations under section 5 of the Interstate Commerce Act, it is obvious that the legislation enacted as section 77 of the Bankruptcy Act contained a ‘joker’ of serious and dangerous proportions.
“The most that the Commission may claim under section 77 is that, if it has approved a consolidation by an order under section 5 of the Transportation Act, it may perhaps be able to give effect to that action in the course of reorganization proceedings.
“This is of importance in administering both statutes. The procedure and safeguards of the Transportation Act must be preserved as a matter of law and of right; . . . (Emphasis added.)
The crucial question, therefore, is whether this merger plan meets the statutory requirements. Since it does not, as we have found, because it is sought to be imposed by Commission fiat rather than proposed by the merging carriers, it matters not that the security holders might ultimately accept it if it were put to them for a formal vote. The kind of Hobson’s choice, more or less, to which security holders are put when voting on a merger plan is not to be put to them on a plan initiated by the Commission rather than by their own corporation. And so, if a plan does not satisfy the basic conditions which circumscribe the Commission’s power, it has a congenital defect, and any interested party can object to its attempted effectuation.
Likewise, the so-called “cramdown” clause, much relied on by respondent, has no bearing on this case. That provision was added to § 77 of the Bankruptcy Act in 1935, 49 Stat. 911, 919, 11 U. S. C. § 205 (e), because under the prior law a plan had to be accepted by at least two-thirds (in amount) of each class of creditors and stockholders affected by the plan. This enabled a small dis-sentient minority to block any plan of reorganization, no matter how “fair and equitable,” in order to exact inequitable adjustments as the price of its acquiescence. Under the “cramdown” provision the district court may, under the appropriate circumstances and after making certain required findings, confirm a plan despite the disapproval of more than one-third of each class affected. From the existence of this general power in the district court to confirm a plan despite the opposition of dis-sentient elements, the conclusion is sought to be drawn that the Commission must therefore have initial power to submit a compulsory merger plan to the court. Obviously this does not follow. Since the vast majority of § 77 proceedings involve internal reorganizations, the “cramdown” provision has a purpose and scope of application wholly independent of mergers, and it therefore has no bearing one way or the other on the question at issue in this case. It is true that in view of our holding here that merger plans cannot be proposed by the Commission under the Bankruptcy Act, the “cramdown” provision can never be applied to such involuntary plans. But there is nothing particularly startling about this. Once its terms are found to be valid, a plan may be imposed on recalcitrant dissenters. But the validity of a plan cannot be derived from the existence of such “cramdown” power. It is still true that a horse-chestnut is not a chestnut horse.
The judgment is reversed and the case is remanded to the District Court for further proceedings in accordance with this opinion.
Reversed and remanded.
Mr. Justice Black and Mr. Justice Clark took no part in the consideration or decision of these cases.
[For dissenting opinion, see post, p. 321.]
APPENDIX TO OPINION OF THE COURT.
A brief outline of the history of the consolidation provisions of the Interstate Commerce Act.
Prior to 1920, competition was the desideratum of our railroad economy. Section 5 of the original Interstate Commerce Act of 1887 forbade any agreements for the pooling of freights or revenues, and the policy of the antitrust legislation was also applied to the railroads.
In 1919, when the Government was planning to return the railroads to private ownership, many of the smaller railroads were in very weak condition and their continued survival was in jeopardy. Hence, for the first time, governmental encouragement of railroad consolidation was discussed. It was agreed that the Interstate Commerce Commission should be directed to prepare a plan for the consolidation of the railroads of the country into a limited number of systems. But there was sharp disagreement over ways and means for carrying out this program. The House Committee opposed grant of power to the Commission to compel consolidations. The Senate Committee, however, under the leadership of Senator Cum-mins, an ardent advocate of compulsory consolidation, recommended a bill providing for voluntary consolidation in accordance with a master plan for a period of seven years, but authorizing compulsory consolidations thereafter. Although many groups, including virtually all the railroads, opposed the compulsory provisions, the Senate passed the bill, 59 Cong. Rec. 952. But in conference, “[t]he Senate receded from the provisions for compulsory consolidation” and the House version was adopted.
In 1921, the Commission promulgated a tentative consolidation plan. Strong opposition immediately developed and long hearings before the Commission ensued. The upshot was that in 1925, the Commission, recognizing the unfeasibility of working out a national plan of consolidation, asked Congress to be relieved of this burden. This request was left unheeded until 1940, and in 1929 the Commission adopted its final plan of consolidation.
Meanwhile Senator Cummins renewed his efforts to give the Interstate Commerce Commission power to compel consolidations if after a certain number of years the voluntary program had made no progress. This bill again met with strong opposition, but prior to his defeat in 1926, Senator Cummins made two further attempts to endow the Commission with power to force consolidations. All these legislative efforts failed.
In February of 1933, the drive for compulsory consolidation gained new impetus when the National Transportation Committee, headed by ex-President Coolidge, issued a report recommending legislation along these lines. Again the opposition was so vigorous that the Emergency Railroad Transportation Act of 1933, passed some months later, contained no such provision; on the contrary it had a special section designed to protect labor against further cutbacks in employment.
The 1933 Act also established the office of a Federal Coordinator of Transportation to investigate the entire transportation problem and make appropriate recommendations. In his first Report, the Coordinator, Commissioner Joseph Eastman, reviewed the subject of railroad consolidations and concluded that the sweeping proposal of his legal adviser, Mr. Leslie Craven, for compulsory-consolidation should not be followed, but that the remedy lay along lines of greater coordination and pooling, with some forced mergers on a “trial” basis. The third and fourth Reports reiterated the Commission’s inability to compel mergers. Again no legislative action resulted.
In 1938, President Roosevelt appointed Commissioners Eastman, Splawn, and Mahaffie of the Interstate Commerce Commission to make another comprehensive study of the railroad problem. This “Committee of Three,” after pointing out that “voluntary consolidation of railroad companies may now be accomplished, subject to certain limitations, with the approval of the Commission,” recommended new legislation, giving the Commission “authority ... to require a unification, where it is sought by at least one carrier.” Subsequently the President also appointed another Committee consisting of three railroad executives and three representatives of railway labor, known as the “Committee of Six.” This Committee’s recommendations were vastly different:
“We do not think the country is ready for any compulsory system of consolidations. Whether ultimate resort must be had to the principle of compulsion is a question which we think it better to defer until after there has been an opportunity to see what can be accomplished if the railroads are relieved from these limitations and restrictions [of the consolidation plan]. In our opinion the best results will be achieved by leaving all initiative in the matter to the railroads themselves, . . . .”
The Transportation Act of 1940 — Congress’ last word on the subject of consolidation — essentially rejected the recommendations of the Committee of Three and adopted those of the Committee of Six. The Commission was finally relieved of its duty to promulgate a national consolidation plan, and the power to initiate mergers and consolidations was left completely in the hands of the carriers.
Perhaps the best insight into the prevailing attitude towards compulsory mergers can be obtained from the following statements of Chairman Wheeler of the Senate Committee on Interstate Commerce during the hearings on S. 2009, which ultimately became the Transportation Act of 1940. In response to some fear expressed by the General Counsel of the Brotherhood of Railroad Trainmen that the pending bill would encourage consolidations, Senator Wheeler said:
“Of course, as you well know, some people maintain that we ought to give the Interstate Commerce Commission the power to force consolidations.
“There is a very strong sentiment on the part of a great many people that consolidation should be compelled. They say that nothing will be done until such time as that happens.
“The railroad executives do not want forced consolidation; they are opposed to it. The railroad men are opposed to it, generally speaking.
“After all, when you speak of that [encouraging consolidations], the Interstate Commerce Commission has studied it for years, and no consolidation can take place under this bill until such time as it is a voluntary consolidation. . . .
“I cannot understand why you are talking about consolidations before this committee, because there is nothing in this bill to indicate that we have taken the position that we are in favor of forced consolidations. There is nothing in the bill that will change the situation at all.
“As a matter of fact, much of the objection to this bill on the part of a number of people has been that it has not got some provision in it making it easier for consolidations; as a matter of fact, forcing consolidations and coordinations, or at least setting up in the Interstate Commerce Commission a committee that will go ahead and suggest how consolidations ought to be made.
“We have taken that out, and I have refused to adhere to that or to listen to agruments [sic] about it, but you are coming in here and telling us that there is something in here about consolidations that you do not want.
“I have repeatedly said that you could not get a bill to force consolidations, or to have in here a provision that the Commission should have an opportunity of carrying on investigations of the subject to try to force consolidations, and so forth. So, as far as this committee is concerned, with reference to this bill, you are just wasting our time in talking about consolidations, because that subject is out the window.”
Thus, hostility to the consolidation of railroads except by the voluntary action of the merging roads has been the undeviating policy of Congress since 1920. In assessing the failure of the consolidation program initiated by the Transportation Act of 1920, most students of transportation problems agree that one difficulty was this persistent refusal on the part of Congress to give the Commission power to take the initiative in proposing and enforcing particular mergers. Yet that is the policy deliberately and explicitly followed by Congress each time it considered this problem.
Examiner Jewell stated that under the plan previously approved by the Commission “control would vest in the St. Joe Company by reason of its ownership of a majority in amount of the debtor’s outstanding first and refunding mortgage bonds, these bonds being the only securities of the debtor exchangeable under the plan for the new securities of the reorganized debtor.” B,., VI, p. 736. The only other outstanding bond issue of the debtor was, under that plan, to be paid off out of available cash. Previously the Commission had decided that the claims of unsecured creditors and the equity of the stockholders could not be recognized, and that these parties would therefore be denied participation in the reorganization. 252 I. C. C. 423, 465.
By “forced merger” plan, or “compulsory merger” plan, is meant a merger plan foisted upon one of the parties by the Commission, as distinguished from a merger voluntarily initiated by the participating carriers.
Under the Commission’s statutory power to revise an approved plan upon objections received within sixty days of its promulgation, 11 U. S. C. §205 (d), this decision was shortly thereafter reaffirmed by another close vote of the full Commission membership. 267 I. C. C. 729.
The Circuit Judges of the Fifth Circuit who have at some stage in these proceedings passed on this question of the Commission’s power have thus divided evenly on the issue. Judges Hutcheson, Holmes and Rives concluded that the Commission had such power; Judges Sibley, Borah, and Russell concluded that it did not.
“A plan of reorganization ... (5) shall provide adequate means for the execution of the plan, which may include . . . the merger or consolidation of the debtor with another corporation or corporations
Letter from Chairman Eastman to Senator Hastings, the sponsor of § 77, dated Jan. 31, 1933, reproduced in Hearings before the Senate Committee on Interstate Commerce on S. 1869, 76th Cong., 1st Sess. 288, 300. As to Eastman’s authority in the field of railroad regulation, see Fuess, Joseph B. Eastman — Servant of the People.
See also the remarks of Senator Couzens, Chairman of the Committee on Interstate Commerce, at 74 Cong. Rec. 6041 et seq.
In the course of the 1935 revision of § 77, the consistency clause was taken out of subsection (b)(3), combined with a similar clause in subsection (e), and, as thus combined, placed in subsection (f) of the statute, 49 Stat. 911, 920. Judge Sibley indicated that he thought the consistency clause “became accidentally misplaced in redrafting the Act.” 81 F. Supp., at 932. However that may be, it seems quite clear that Congress did not intend to alter the deliberately established relationship between § 5 of the Commerce Act and § 77 (b) (3) of the Bankruptcy Act merely by a change in the position of the consistency clause, unaccompanied by any explanatory comment. It would be a gross disregard of the meaning of legislation to be controlled by the bare words of the present merger provision detached from, and in defiance of, the whole history of the section.
In this connection it is interesting to note that in the course of a proposed comprehensive revision of § 77 in 1939, the question here in issue would have been made absolutely clear by the addition of the following proviso to the merger subsection:
“Provided, That nothing in this section shall authorize compulsory merger or consolidation . . . .” S. 1869, 76th Cong., 1st Sess., March 20, 1939, p. 19.
After extensive hearings before the Senate Committee on Interstate Commerce, the bill was reported out and subsequently passed by the Senate, 84 Cong. Rec. 6257. Even more extensive hearings were then held by the House Committee, but the bill was never reported out, probably because of the controversial provision in the bill establishing a special reorganization court for § 77 cases.
In the course of the House hearings, the Commission was requested to submit its views on the bill. After commenting in detail on various sections of the bill, not including the proviso above referred to, the Commission simply added that it deemed it “unnecessary” to comment on the other “minor amendments” included in the bill. Hearings before Special Subcommittee on Bankruptcy and Reorganization of the House Committee on the Judiciary on S. 1869, 76th Cong., 1st Sess., Serial No. 11, pt. 1, p. 571.
Cassius M. Clay, Assistant General Counsel of the RFC and intimately acquainted with problems of railroad reorganization, questioned the need for the proviso on the ground that the consistency clause in subsection (f) already covered the matter and that the proviso might be construed to prevent the merger of a parent and its subsidiaries. Hearings before Senate Committee on Interstate Commerce on S. 1869, 76th Cong., 1st Sess. 329.
See, e. g., Report of the Federal Coordinator of Transportation, H. R. Doc. No. 89, 74th Cong., 1st Sess. 41 (1935); 52 I. C. C. Ann. Rep. 22 (1938).
During the years 1933-1940 the percentage of railroad mileage representing roads in § 77 proceedings or receivership was as follows:
Year Percent Year Percent
1933 . 16 1937 . 28
1934 . 16 1938 . 31
1935 . 27 1939 . 31
1936 . 28 1940 . 31
(Figures computed from Table 1 of the ICC’s Annual Reports on the Statistics of Railways in the United States for 1933-1940, and the cumulative Table 151 in the 1940 volume.)
See Appendix, post, p. 315.
We are not aware of any case other than the present where this requirement was not observed. In all the reported cases of reorganizations involving mergers, the merger was either proposed by the debtor in conjunction with the other party, or the merger involved a parent and its subsidiaries, and was treated essentially as an internal reorganization. In any event, we are not now called upon to pass on the validity of the latter type of merger.
In this connection it is important to remember that a railroad in § 77 proceedings is not a defunct organism but remains a live and going concern. See the references throughout § 77 to “the debtor” as an active entity; also Van Schaick v. McCarthy, 116 F. 2d 987, 992-993. During the entire period that the Florida East Coast has been in receivership or trusteeship there have been annual stockholders’ meetings at which a Board of Directors was elected. See the Florida East Coast’s Annual Reports on file with the Interstate Commerce Commission. Indeed the desire to provide a ready remedy for the overhauling of a railroad’s financial structure without impairing its primary responsibilities as a regularly functioning carrier was one of the principal reasons for the enactment of § 77. See 5 Collier, Bankruptcy, § 77.02. Thus it follows from the consistency clause, when viewed in the light of this corporate continuity of a railroad in reorganization, that those who in the absence of § 77 would wield the corporate merger powers must initiate and work out the merger now. Cf. §77 (d), which not only permits but requires the debtor railroad itself to file a plan of reorganization (“the debtor . . . shall file a plan”; certain other interested parties “may” also file a plan).
S. Rep. No. 1170, 79th Cong., 2d Sess. 80-85.
There is nothing in the legislative history of this provision to indicate that it was intended to have any effect on the law governing mergers in reorganization plans.
24 Stat. 379, 380.
26 Stat. 209, United States v. Trans-Missouri Freight Assn., 166 U. S. 290; United States v. Joint Traffic Assn., 171 U. S. 505; 38 Stat. 730.
See S. Rep. No. 1182, pt. 2, 76th Cong., 3d Sess. 518-520; also Van Metre, Transportation in the United States, 80.
H. R. Rep. No. 456, 66th Cong., 1st Sess. 6: “In our opinion, the interests of the public will be better served where the consolidations are voluntarily entered into, upon approval by the Interstate Commerce Commission, and where such consolidation or merger is in the interest of better service to the public, or economy in operation, or otherwise of advantage to the convenience or commerce of the people.”
S. Rep. No. 304, 66th Cong., 1st Sess. 15.
See statement of Senator Cummins at 59 Cong. Rec. 226; see also Leonard, Railroad Consolidation Under the Transportation Act of 1920, 50, 61.
H. R. Rep. No. 650, 66th Cong., 2d Sess. 64; see also S. Rep. No. 1182, pt. 2, 76th Cong., 3d Sess. 524: “It will be noted that the whole program of consolidation . . . was voluntary. Although the Commission could promulgate a plan, it was given no affirmative power to put the plan into effect. It was entitled merely to insist that any consolidations submitted to it for approval should conform to the plan. Thus the whole problem of initiating and developing actual consolidations was left in the hands of the carriers themselves. . . .”
631. C. C. 455.
For the Commission’s letter to the Chairman of the Committee on Interstate Commerce, see Exhibit C-1814, S. Rep. No. 1182, pt. 3, 76th Cong., 3d Sess. 1578; see also 39 I. C. C. Ann. Rep. 13 (1925).
1591. C. C. 522.
S. 2224, 68th Cong., 1st Sess.
See Leonard, supra, note 6, at 135, 175-179.
S. 1870, 69th Cong., 1st Sess.; S. 3840, 69th Cong., 1st Sess.
Report of the National Transportation Committee, February 13, 1933, p. 11.
See, e. g., 77 Cong. Rec. 4873 et seq.; Leonard, Railroad Consolidation under the Transportation Act of 1920, 221-222.
48 Stat. 211, 214.
S. Doc. No. 119, 73d Cong., 2d Sess. 30-33, 36-37, 86-88.
H. R. Doc. No. 89, 74th Cong., 1st Sess. 41; H. R. Doc. No. 394, 74th Cong., 2d Sess. 45-47.
Shortly before the termination of his office in 1936, the Federal Coordinator, disturbed by the lack of initiative among the carriers, attempted to order the unification of 11 terminal properties. The orders met with considerable objection from railway labor and were ignored by the carriers. See Leonard, supra, note 15, at 233.
H. R. Doc. No. 583, 75th Cong., 3d Sess. 36, 39. For the adverse reaction of the Railroad Brotherhoods to these proposals, see id,., at 67, 70.
Report of Committee appointed Sept. 20, 1938, by the President of the United States to Submit Recommendations upon the General Transportation Situation, Dec. 23, 1938, p. 31.
54 Stat. 898,905.
Hearings before the Senate Committee on Interstate Commerce on S. 1310, S. 2016, S. 1869 and S. 2009, 76th Cong., 1st Sess. 391-395.
Leonard, Railroad Consolidation Under the Transportation Act of 1920, 267-269; Van Metre, Transportation in the United States, 86; Moulton, The American Transportation Problem, 857-858; Dearing and Owen, National Transportation Policy, 322, 342-343, 376. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
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] | [
65
] |
UNITED STATES et al. v. TEXAS & PACIFIC MOTOR TRANSPORT CO.
NO. 38.
Argued November 7-8, 1950.
Decided February 26, 1951.
Daniel W. Knowlton argued the cause for the United States and the Interstate Commerce Commission, appellants in No. 38. With him on the brief were Solicitor General Perlman, Acting Assistant Attorney General Un-derhill and H. L. Underwood.
Frank C. Brooks argued the cause and filed a brief for appellant in No. 39.
J. T. Suggs argued the cause for appellee. With him on the brief were R. Granville Curry, W. O. Reed, Claude Williams, Robert Thompson and D. L. Case.
Mr. Justice Reed
delivered the opinion of the Court.
These appeals, by the Interstate Commerce Commission, and by the intervenor, Regular Common Carrier Conference of American Trucking Associations, Inc., from the judgment of a three-judge federal district court setting aside two orders of the Interstate Commerce Commission, and entering a permanent injunction, raise questions similar to those discussed in No. 25, United States v. Rock Island Motor Transit Co., ante, p. 419, decided today. The questions relate to the power of the Commission to ban service practices theretofore permitted under certificates of public convenience and necessity previously issued to a common carrier by motor vehicle. The Commission acted under authority reserved in the certificate to impose additional restrictions to insure that the motor carrier’s operations will be auxiliary to or supplemental of the operations of its parent common carrier by rail.
The Texas and Pacific Motor Transport Company is a wholly owned subsidiary of the Texas and Pacific Railway, operating a system of regular routes for the carriage of freight, from New Orleans to El Paso, Texas, and Lovington, New Mexico, roughly paralleling the lines of the railway and its subsidiaries. Transport was organized in 1929 to provide a local pick-up and delivery service in connection with rail transportation between points on the lines of the railway. Its first over-the-road common-carrier operation, between Monahans, Texas, and Loving-ton, New Mexico, was inaugurated just before the effective date of the Motor Carrier Act of 1935. It extended its operations by obtaining certificates of convenience and necessity from the Commission, both under § 213 of the 1935 Act, now § 5 of the Interstate Commerce Act, providing for acquisition of established rights by purchase from other carriers (“grandfather” rights); and under § 207 of the Interstate Commerce Act, providing for new operations.
Between July 1939 and November 1942, the Commission issued sixteen certificates to Transport, covering various segments of its presently operating routes. In all the certificates the Commission reserved the right to impose further restrictions in order to confine Transport’s operation to service “auxiliary to, or supplemental of, rail service.” This condition was expressed in either one of the two forms set out in the margin. In addition, each certificate contained one or more, usually more, further conditions: (1) That the service to be performed was to be “auxiliary to, or supplemental of” the rail service. (2) That only railway station points were to be served. (3) Either that (a) all shipments should be made on a through rail bill of lading, including a prior or subsequent rail movement; or (b) that no shipments should be made between certain “key points” on the rail line, or through more than one of them. And (4) that the contractual arrangements between Transport and Railway be subject to modification by the Commission.
The irregular incidence of these conditions in the certificates may be accounted for by the segmentary fashion in which Transport built up its system of routes, over a period of several years. They were not reconsidered as a group by the Commission until 1943, when, in response to a petition by Transport, to determine what modification should be made in its certificate No. MC-50544 (Sub-No. 11), particularly in regard to service for freight between El Paso and Sierra Blanca, Texas, for the Texas and New Orleans Railroad Company, it reopened nine of the certificate proceedings to consider whether Transport could join with other motor carriers in rates, some of which provided for substituting rail service for motor service. The Commission held that
“Since petitioner’s certificates limit the service to be performed to that which is auxiliary to or supplemental of the rail service of the railway [in some the limitation was by reservation], it is without authority to engage in operations unconnected with the rail service and, accordingly, may not properly be a party to tariffs containing all-motor or joint rates, nor participate in a directory providing for the substitution of train service for motor-vehicle service at its option. To the extent petitioner is performing or participating in all-motor movements on the bills of lading of a motor carrier and at all-motor rates, it is performing a motor service in competition with the rail service and the service of existing motor carriers; and, to the extent it is substituting rail service for motor-vehicle service, the rail service is auxiliary to or supplemental of the motor-vehicle service rather than the motor-vehicle service being auxiliary to or supplemental of rail service.”
The Commission did not issue any affirmative order, but directed Transport to modify its service in accordance with the findings, within a reasonable time.
Transport and Railway then petitioned jointly for reconsideration, or for further hearings, including hearings on certain other certificates; and, although the two petitioners later attempted to withdraw their petition on the ground that permission to file a joint tariff had been granted, the Commission nevertheless ordered that the proceedings be reopened in all sixteen certificates, and three Temporary Authorities, “solely to determine what, if any, changes or modifications should be made in the conditions contained in the outstanding certificates of public convenience and necessity . . . .”
After a hearing at which Transport and Railway appeared, but refused to introduce any evidence, and after oral argument on the examiner’s report, the Commission on January 22, 1948, ordered that all sixteen certificates be modified to include uniformly the substance of the five conditions set out above, specifically as follows:
“1. The service to be performed by applicant shall be limited to service which is auxiliary to, or supplemental of, the train service of The Texas and Pacific Railway Company, The Weatherford, Mineral Wells and Northwestern Railway Company, or Texas-New Mexico Railway Company, and, between El Paso and Sierra Blanca, Tex., the train service of Texas and New Orleans Railroad Company, hereinafter called the railways.
“2. Applicant shall not render any service to or from any point not a station on a rail line of the railways.
“3. No shipments shall be transported by applicant between any of the following points, or through, or to, or from, more than one of said points: New Orleans, Alexandria, and Shreveport, La., Tex-arkana, Tex.-Ark., Fort Worth-Dallas, (considered as one), Abilene, Monahans, and El Paso, Tex.
“4. All contractual arrangements between applicant and the railways shall be reported to us and shall be subject to revision if and as we find it to be necessary, in order that such arrangements shall be fair and equitable to the parties.
“5. Such further specific conditions as in the future we may find necessary to impose in order to insure that the service shall be auxiliary to, or supplemental of, the train service of the railways.”
The effect on appellee was to bar it from issuing its own bills of lading or performing all-motor service under all-motor local rates or all-motor joint rates with connecting motor carriers, or substituting rail service for motor service, and it could not be a party to such tariffs. Prior to these proceedings the appellee had issued its own bills of lading and participated in motor-carrier tariffs. The District Court found the value of the certificates, $65,000, would be destroyed and $240,000 annual revenue lost.
A petition for reconsideration of this order, and for oral argument before the entire Commission, was denied on May 9, 1949. Transport thereupon brought this suit in the Federal District Court, seeking to set aside the Commission’s orders of January 22, 1948, and May 9, 1949, and to enjoin their enforcement. In the District Court proceedings the Regular Common Carrier Conference of American Trucking Associations intervened on behalf of the Commission. After hearing, the District Court made findings of fact and conclusions of law, and entered a judgment setting aside the Commission’s orders, and permanently enjoining it from imposing any condition on Transport’s certificates “in such manner as will prohibit petitioner from:
“a. Filing, publishing and maintaining common carrier motor rates as provided by statute in the case of common carrier motor carriers generally;
“b. Interchanging traffic with other .common carrier motor carriers on joint motor rates;
“c. Issuing its own bills of lading and tendering its service to the public generally on its own contracts of shipment;
“d. Transporting traffic to, through, from or between any so-called ‘key points’ on that part of its route covered by interstate certificates of public convenience and necessity, to which no ‘key point’ restriction attached on issuance of such certificates,
or in such manner as will restrict petitioner to ship on rail rates or on railroad bills of lading.”
From this judgment the Commission and the intervenor, Common Carrier Conference, appeal here.
The District Court, 87 F. Supp. 107, 112, reasoned that the operations of Transport were at all times and in all ways auxiliary to and supplemental of the rail operations and therefore could not be restricted as attempted. The connotation of auxiliary and supplementary to the trial court was only a restriction limiting service to rail points. Without dealing specifically with the reservation to impose further conditions restricting the motor carrier’s service to coordinated rail service, the District Court decided that the Commission’s order restricting the service could not be valid in view of § 216, Transportation Act of 1940, 49 Stat. 558, 54 Stat. 924. That section allows motor common carriers to establish through routes, joint rates, practices and division of charges with other carriers by motor, rail or water. It held, too, that the Commission’s action was in essence a revocation in part of a certificate and unlawful except under conditions prescribed by § 212, 49 Stat. 555, 54 Stat. 924, and unconstitutional because confiscatory.
Transport here supports the soundness of the reasons given by the three-judge District Court for its injunction and supplements them by contentions that the Commission’s order was without support in the evidence and that Transport was not accorded due process of law at the hearing of October 17, 1944, 47 M. C. C. 753, 755. In view of our decision of today upholding the Commission in No. 25, United States v. Rock Island Motor Transit Co., ante, p. 419, all reasons for affirming the judgment below may be promptly rejected.
So far as the above issues relied upon by the District Court for its injunction are concerned, they seem to have been resolved in favor of the Government by our opinion in the Rock Island case. This proceeding involves certificates for new routes under § 207. No such certificates or applications were in that case. The opinion, however, considered the Commission’s practice in § 207 proceedings and stated that it was the same as in §§ 5 and 213 acquisition proceedings. We now hold that the .same considerations justify the reservation in issue here. See n. 2, supra.
Transport’s position that the order in question was without support in the evidence is based on the theory that as evidence was taken in the original applications that resulted in the necessary findings under §§ 213 of the Motor Carrier Act and 5 of the Transportation Act of 1940 for certificates to railroad motor carrier affiliates, changes in practices cannot now be made without evidence that the formerly permitted practices had been inconsistent with the public interest and did unduly restrain competition. American Trucking Associations, Inc. v. United States, 326 U. S. 77, 86, and Interstate Commerce Commission v. Louisville & Nashville R. Co., 227 U. S. 88, 91.
The Louisville & Nashville case required a full hearing and the privilege of introducing testimony before the road’s rates were set aside as unreasonable. The Commission was taking the position that the Hepburn Act allowed it to set aside rates after a “hearing” without evidence. The American Trucking case dealt with the issuance of a series of certificates by the Commission to a railroad-affiliated motor carrier after refusal to admit evidence of the flow of truck traffic between various localities along the parent railroad, and of the effect of the existing and prospective railroad-affiliated motor carriers on the over-the-road carriers. On appeal from an affirmance by a district court, we reversed the Commission.
This situation, however, differs from those referred to by Transport in that the Commission has reopened the proceedings, after they were started by Transport for an interpretation of its right to file and maintain a motor common-carrier tariff. Hearings were had in 1942 at Dallas, at which appellee’s witnesses gave testimony as to the freight interchange between appellee and other motor carriers and the existence of tariffs, etc. After the report of the Commission referred to on pp. 454-455, Transport and the Texas and Pacific Railway petitioned for reconsideration by the Commission, setting out the facts of their current operations, and addressing themselves particularly to the elimination of the prior or subsequent rail-haul condition. Thereafter the proceedings were reopened to determine what changes or modifications should be made. Another hearing was held, October 17, 1944, and report made. At that hearing Transport appeared but refused to introduce evidence. The examiner examined an official of Transport as to the nature and extent of Transport’s operations. This evidence developed the fact that Transport operated both on motor-carrier and rail rates under its own bills of lading in full competition with other motor carriers. Thus there appears in the record adequate evidence of the circumstances of Transport’s operations.
Upon the due-process point we approve the ruling of the Commission. It follows:
“Applicant argues that the notice setting the proceedings for further hearing did not inform it or the other parties of the nature of the issues to be met, or give them sufficient time to prepare to meet the issues; and that the hearing, in view of the request for its cancellation, was in the nature of an ex parte proceeding. We are not impressed with applicant’s argument that it was unable to foresee the issues. The notice in question stated that the further hearing was for the purpose of determining what changes, if any, should be made in the conditions, and thus placed the conditions themselves in issue. One of these is condition 5 or 5A, which in itself was adequate notice to applicant and the other parties that the primary purpose of the further hearing would be to determine, as provided for in that condition, whether it is necessary to change or modify the existing conditions or to add others so as effectively to restrict applicant’s operations to service which is auxiliary to or supplemental of rail service. Applicant was given the opportunity of presenting evidence to show that no need exists for a change in its present conditions; however, not only did it choose not to offer such evidence, but it objected to the receipt of any evidence with respect thereto. In the circumstances, the examiner properly denied its motion to discontinue the further hearing and to withdraw its witness, and properly overruled its objection to the adduction of testimony through such witness.”
The judgment of the three-judge District Court is reversed and the proceedings remanded with directions to dismiss the complaint.
Reversed.
Mr. Justice Black, Mr. Justice Douglas, Mr. Justice Jackson and Mr. Justice Burton dissent.
Sixteen proceedings are covered by I. C. C. docket number MC-50544, and various subnumbers, set out in Appendix A to Texas & Pacific Motor Transport Co. Common Carrier Application, 47 M. C. C. 753, 764. Transport was also operating under certain temporary authorities, Nos. MC-50544 (Sub-Nos. 21-TA, 24 — TA, and 30-TA), which expired before the issuance of the Commission’s orders under consideration here.
“5. Such further specific conditions as we, in the future, may find it necessary to impose in order to restrict applicant’s operation to service which is auxiliary to, or supplemental of, rail service.
“5A. The authority herein granted shall be subject to such further limitations or restrictions as the Commission may hereafter find it necessary to impose in order to restrict applicant’s operation to service which is auxiliary to, or supplemental of, train service of the railway, and in order to insure that the service rendered shall not unduly restrain competition.” 47 M. C. C. 753,766.
“1. The service to be performed by applicant shall be limited to service which is auxiliary to, or supplemental .of, rail service of the Texas and Pacific Railway, or in certain cases of its subsidiary rail lines, (or of Texas-New Mexico Railway Company) herein called the railway.” Ibid.
“2. Applicant shall not serve, or interchange traffic at any point not a station on a rail line of the railway.” Ibid.
“3. Shipments transported by applicant shall be limited to those which it receives from or delivers to the railway under a through bill of lading covering, in addition to movement by applicant, a prior or subsequent movement by rail.
“3A. Shipments transported by applicant shall be limited to those which it receives from or delivers to the railway under a through bill of lading covering in addition to movement by applicant, a prior or subsequent movement by rail, and those which it transports as parts of through shipments prior or subsequent to movement by rail under appropriate transit rules.” Ibid.
“3B. No shipments shall be transported by applicant as a common carrier by motor vehicle between any of the following points or through, or to, or from more than one of said points: Fort Worth, Tex., and Texarkana, Tex.-Ark.
“3C. No shipments shall be transported by applicant between any of the following points or through, or to, or from more than one of said points: El Paso and Pecos, Tex.” Ibid.
“4. All contractual arrangements between applicant and the railway shall be reported to us and shall be subject to revision, if and as we find it to be necessary in order that such arrangements shall be fair and suitable to the parties.” Ibid.
41 M. C. C. 721,726.
47 M. C. C. 753, 763-764.
47 M. C. C. 753, 754, and Rules 30, 107 (a) and 107 (b) of Supp. No. 5 to I. C. C. Tariff Circular No. 20. See 41 M. C. C. 721, 726, excerpted at note 19, No. 25, United States v. Rock Island Motor Transit Co., decided today, ante, p. 419.
“Thus, while the Commission might prescribe the points to be served, it could not forbid the participation in joint rates and through routes for the simple reason that such a provision would be inconsistent with the wording of Sec. 216 of the Act.” 87 F. Supp. 107, 112.
Several Commission decisions on the general necessity of evidence to support rulings are added. Greyhound Corporation—Control, 50 M. C. C. 237, 242; Scannell—Control, 50 M. C. C. 535, 541; C. & D. Motor Delivery Company — Purchase—Hubert C. Elliott, 38 M. C. C. 547, 553; Joint N. E. Motor Carrier Assn., Inc. v. Rose and Welloff, 43 M. C. C. 487, 488. None bear on such a situation as this. They relate to restrictions on the issue or transfer of certificates and revocation.
47 M. C. C. 753,756. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
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] | [
65
] |
SULLIVAN, SECRETARY OF HEALTH AND HUMAN SERVICES v. HUDSON
No. 88-616.
Argued April 17, 1989
Decided June 12, 1989
O’Connor, J., delivered the opinion of the Court, in which Brennan, Marshall, Blackmun, and Stevens, JJ., joined. White, J., filed a dissenting opinion, in which Rehnquist, C. J., and Scalia and Kennedy, JJ., joined, post, p. 893.
Edwin S. Kneedler argued the cause for petitioner. On the briefs were former Solicitor General Fried, Acting Solicitor General Bryson, Assistant Attorney General Bolton, Deputy Solicitor General Merrill, Harriet S. Shapiro, and William Ranter.
James E. Coleman, Jr., argued the cause for respondent. With him on the brief were Joseph E. Killory, Jr., and Richard J. Ebbinghouse.
Justice O’Connor
delivered the opinion of the Court.
The issue before us in this case is whether a Social Security claimant is entitled to an award of attorney’s fees under the Equal Access to Justice Act for representation provided during administrative proceedings held pursuant to a district court order remanding the action to the Secretary of Health and Human Services.
I
Respondent Elmer Hudson filed an application for the establishment of a period of disability and for disability benefits under the Social Security Act, 49 Stat. 620, as amended, 42 U. S. C. § 401 et seq. (1982 ed. and Supp. V) on September 9,1981. On the same day, she filed an application for supplemental security income under Title XVI of the Act. Respondent, now 50, submitted medical evidence indicating obesity, limitations in movement, and lower back pain. Her application for benefits was administratively denied, and that position was upheld on reconsideration by the Social Security Administration. Respondent requested and received a hearing before an Administrative Law Judge (ALJ), where she was represented by a Legal Services Corporation paralegal. At the hearing, respondent testified that she suffered from back pain, depression, and nervousness. Respondent was in a state of anxiety and cried throughout the hearing. The ALJ ordered a posthearing psychiatric examination by Dr. Anderson, a psychiatrist, and respondent’s representative chose to have her undergo an additional evaluation by Dr. Myers, a clinical psychologist. Dr. Anderson’s report indicated that respondent suffered from mild to moderate dysthymic disorder and a histrionic personality disorder. He concluded that respondent’s psychological condition would not interfere with her ability to work in the domestic services area, where most of her past work experience lay. Dr. Myers found that respondent was moderately to severely depressed, suffered from insomnia, fatigue, psychomotor retardation, tearfulness, and anxiety. He concluded that her psychological problems, coupled with her mild physical disabilities and back pain, rendered her unemployable absent exhaustive rehabilitative efforts.
Based on these two reports, the ALJ rendered her decision finding that respondent was not disabled because she was capable of performing work similar to that she had done in the past. The ALJ’s decision was approved by the Social Security Appeals Council, thus becoming the final decision of the Secretary concerning respondent’s applications. Respondent then brought an action in the District Court for the Northern District of Alabama under 42 U. S. C. § 405(g) seeking judicial review of the Secretary’s decision denying benefits. The District Court found that the Secretary’s decision was supported by substantial evidence and affirmed the denial of benefits. App. to Pet. for Cert. 43a-44a. The Court of Appeals for the Eleventh Circuit reversed. It vacated the Secretary’s decision and instructed the District Court to remand the case to the Secretary for reconsideration. Hudson v. Heckler, 755 F. 2d 781 (1985). The Court of Appeals agreed with respondent that “the Secretary did not follow her own regulations” in making the disability determination in respondent’s case. Id., at 785. The court found that those regulations required the Secretary to consider the cumulative effect of impairments even where no individual ailment considered in isolation would be disabling. Ibid. In respondent’s case the ALJ had never considered the combined effect of respondent’s physical and psychological afflictions. Nor had the ALJ given any reasons for her rejection of Dr. 'Myers’ evaluation of the combined effects of respondent’s physical and psychological conditions. Id., at 785-786.
Following the District Court’s remand order, the Social Security Appeals Council vacated its earlier denial of respondent’s request for review and returned the case to an ALJ for further proceedings. App. to Pet. for Cert. 30a. The Appeals Council instructed the ALJ to provide respondent with an opportunity to testify at a supplemental hearing and to adduce additional evidence. Id., at 31a. The Appeals Council also indicated that the ALJ might wish to obtain the services of a medical adviser to evaluate respondent’s psychiatric impairment during the period at issue. Ibid. Finally, the Appeals Council instructed the ALJ to apply the revised regulations for determining disability due to mental disorders, which had been published by the Secretary in 1985 pursuant to statutory directive. Ibid. On remand, the ALJ found that respondent had been disabled as of May 15, 1981, as she had originally maintained in her initial applications for benefits. Respondent was represented before the ALJ in the remand proceedings by the same counsel who had represented her before the District Court and the Court of Appeals.
On October 22, 1986, the Appeals Council adopted the ALJ’s recommended decision and instructed the Social Security Administration to pay respondent disability and supplemental income benefits. Id., at 21a-23a. On December 11, 1986, the District Court, pursuant to the Secretary’s motion, dismissed respondent’s action for judicial review, finding that after the remand order respondent had obtained all the relief prayed for in her complaint. The District Court retained jurisdiction over the action for the limited purpose of considering any petition for the award of attorney’s fees. Respondent then filed the instant petition for an award of attorney’s fees under the Equal Access to Justice Act (EAJA), Pub. L. 96-481, 94 Stat. 2328, as amended, 28 U. S. C. § 2412(d) (1982 ed., Supp. V). The District Court denied respondent’s fee application in toto, finding that the position taken by the Secretary in the initial denial of benefits to respondent was “substantially justified.” App. to Pet. for Cert. 17a-20a. The Court of Appeals again reversed. Hudson v. Secretary of Health and Human Services, 839 F. 2d 1453 (CA11 1988). The Court of Appeals noted that in its earlier opinion it had found that the Secretary had violated her own regulations by failing to consider the cumulative effect of respondent’s ailments, and that the ALJ had failed to give her reasons for rejection of Dr. Myers’ testimony concerning the cumulative effects of respondent’s ailments. Id., at 1457-1458. The Secretary’s defense of the denial of benefits to respondent “on those two grounds was not substantially justified.” Id., at 1458. Having concluded that an award of attorney’s fees was proper under the EAJA, the court went on to consider whether the award could include attorney’s fees for work done at the administrative level after the cause was remanded to the Secretary by the District Court. The Court of Appeals rejected the Secretary’s argument that 5 U. S. C. §§504(a)(1) and 504(b)(1)(C) (1982 ed., Supp. V) limited a court’s power to award attorney’s fees for administrative proceedings to those situations “in which the position of the United States is represented by counsel or otherwise. ...” While recognizing that the Secretary was not represented by counsel in the remand proceedings at issue here, the Court of Appeals found that “the critical determination is whether the Secretary has staked out a position.” 839 F. 2d, at 1460. Since the Secretary had taken an adversarial position in the proceedings for judicial review prior to the remand, the Court of Appeals found that the proceedings were no less “adversarial” on remand before the agency, and therefore a fee award encompassing work performed before the agency on remand was proper. Ibid.
Because the Court of Appeals’ decision granting attorney’s fees for representation in administrative proceedings on remand from judicial review of a Social Security benefits determination conflicts with the decisions of other Courts of Appeals, see, e. g., Cornella v. Schweiker, 728 F. 2d 978, 988-989 (CA8 1984), we granted the Secretary’s petition for certiorari. Sub nom. Bowen v. Hudson, 488 U. S. 980 (1988).
In 1980, Congress passed the EAJA in response to its concern that persons “may be deterred from seeking review of, or defending against, unreasonable governmental action because of the expense involved in securing the vindication of their rights.” 94 Stat. 2325. As the Senate Report put it:
“For many citizens, the costs of securing vindication of their rights and the inability to recover attorney fees preclude resort to the adjudicatory process. . . . When the cost of contesting a Government order, for example, exceeds the amount at stake, a party has no realistic choice and no effective remedy. In these cases, it is more practical to endure an injustice than to contest it.” S. Rep. No. 96-253, p. 5 (1979).
The EAJA was designed to rectify this situation by providing for an award of a reasonable attorney’s fee to a “prevailing party” in a “civil action” or “adversary adjudication” unless the position taken by the United States in the proceeding at issue “was substantially justified” or “special circumstances make an award unjust.” That portion of the Act applicable to “civil actions” provides, as amended, in relevant part that
“[ejxcept as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and other expenses . . . incurred by that party in any civil action . . . including proceedings for judicial review of agency action, brought by or against the United States in any court having jurisdiction of that action, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.” 28 U. S. C. § 2412(d)(1)(A) (1982 ed., Supp. V).
Application of this provision to respondent’s situation here requires brief consideration of the structure of administrative proceedings and judicial review under the Social Security Act. Once a claim has been processed administratively, judicial review of the Secretary’s decision is available pursuant to § 205(g) of the Social Security Act, 42 U. S. C. § 405(g), which provides in pertinent part:
“Any individual, after any final decision of the Secretary made after a hearing to which he was a party, . . . may obtain a review of such decision by a civil action .... The court shall have the power to enter, upon the pleadings and transcript of the record, a judgment affirming, modifying, or reversing the decision of the Secretary, with or without remanding the cause for a rehearing. . . . The court may, on motion of the Secretary for good cause shown before he files his answer, remand the case to the Secretary for further action by the Secretary, and it may at any time order additional evidence to be taken before the Secretary, but only upon a showing that there is new evidence which is material and that there is good cause for the failure to incorporate such evidence into the record in a prior proceeding; and the Secretary shall, after the case is remanded, and after hearing such additional evidence if so ordered, modify or affirm his findings of fact or his decision, or both, and shall file with the court any such additional and modified findings of fact and decision, and a transcript of the additional record and testimony upon which his action in modifying or affirming was based.”
As provisions for judicial review of agency action go, § 405(g) is somewhat unusual. The detailed provisions for the transfer of proceedings from the courts to the Secretary and for the filing of the Secretary’s subsequent findings with the court suggest a degree of direct interaction between a federal court and an administrative agency alien to traditional review of agency action under the Administrative Procedure Act. As one source puts it:
“The remand power places the courts, not in their accustomed role as external overseers of the administrative process, making sure that it stays within legal bounds, but virtually as coparticipants in the process, exercising ground-level discretion of the same order as that exercised by ALJs and the Appeals Council when they act upon a request to reopen a decision on the basis of new and material evidence.” J. Mashaw, C. Goetz, F. Goodman, W. Schwartz, P. Verkuil, & M. Carrow, Social Security Hearings and Appeals 133 (1978).
Where a court finds that the Secretary has committed a legal or factual error in evaluating a particular claim, the district court’s remand order will often include detailed instructions concerning the scope of the remand, the evidence to be adduced, and the legal or factual issues to be addressed. See, e. g., Cooper v. Bowen, 815 F. 2d 557, 561 (CA9 1987). Often, complex legal issues are involved, including classification of the claimant’s alleged disability or his or her prior work experience within the Secretary’s guidelines or “grids” used for determining claimant disability. See, e. g., Cole v. Secretary of Health and Human Services, 820 F. 2d 768, 772-773 (CA6 1987). Deviation from the court’s remand order in the subsequent administrative proceedings is itself legal error, subject to reversal on further judicial review. See, e. g., Hooper v. Heckler, 752 F. 2d 83, 88 (CA4 1985); Mefford v. Gardner, 383 F. 2d-748, 758-759 (CA6 1967). In many remand situations, the court will retain jurisdiction over the action pending the Secretary’s decision and its filing with the court. See Ahghazali v. Secretary of Health and Human Services, 867 F. 2d 921, 927 (CA6 1989) (remanding action to District Court with instructions to retain jurisdiction during proceedings on remand before the agency); Taylor v. Heckler, 778 F. 2d 674, 677, n. 2 (CA11 1985) (“[T]he district court retains jurisdiction of the case until the proceedings on remand have been concluded”); accord, Brown v. Secretary of Health and Human Services, 747 F. 2d 878, 883-885 (CA3 1984). The court retains the power in such situations to assure that its prior mandate is effectuated. See Ford Motor Co. v. NLRB, 305 U. S. 364, 373 (1939).
Two points important to the application of the EAJA emerge from the interaction of the mechanisms for judicial review of Social Security benefits determinations and the EAJA. First, in a case such as this one, where a court’s remand to the agency for further administrative proceedings does not necessarily dictate the receipt of benefits, the claimant will not normally attain “prevailing party” status within the meaning of § 2412(d)(1)(A) until after the result of the administrative proceedings is known. The situation is for all intents and purposes identical to that we addressed in Hanrahan v. Hampton, 446 U. S. 754 (1980). There we held that the reversal of a directed verdict for defendants on appeal did not render the plaintiffs in that action “prevailing parties” such that an interim award of attorney’s fees would be justified under 42 U. S. C. § 1988. We found that such “procedural or evidentiary rulings” were not themselves “matters on which a party could ‘prevail’ for purposes of shifting his counsel fees to the opposing party under § 1988.” Id., at 759. More recently in Texas State Teachers Assn. v. Garland Independent School Dist., 489 U. S. 782 (1989), we indicated that in order to be considered a prevailing party, a plaintiff must achieve some of the benefit sought in bringing the action. Id., at 791-793. We think it clear that under these principles a Social Security claimant would not, as a general matter, be a prevailing party within the meaning of the EAJA merely because a court had remanded the action to the agency for further proceedings. See Hewitt v. Helms, 482 U. S. 755, 760 (1987). Indeed, the vast majority of the Courts of Appeals have come to this conclusion. See, e. g., Paulson v. Bowen, 836 F. 2d 1249, 1252 (CA9 1988); Swedberg v. Bowen, 804 F. 2d 432, 434 (CA8 1986); Brown v. Secretary of Health and Human Services, supra, at 880-881.
Second, the EAJA provides that an application for fees must be filed with the court “within thirty days of final judgment in the action.” 28 U. S. C. §2412(d)(1)(B) (1982 ed., Supp. V). As in this case, there will often be no final judgment in a claimant’s civil action for judicial review until the administrative proceedings on remand are complete. See Guthrie v. Schweiker, 718 F. 2d 104, 106 (CA4 1983) (“[T]he procedure set forth in 42 U. S. C. § 405(g) contemplates additional action both by the Secretary and a district court before a civil action is concluded following a remand”). The Secretary concedes that a remand order from a district court to the agency is not a final determination of the civil action and that the district court “retains jurisdiction to review any determination rendered on remand.” Brief for Petitioner 16, 16-17.
Thus, for purposes of the EAJA, the Social Security claimant’s status as a prevailing party and the final judgment in her “civil action . . . for review of agency action” are often completely dependent on the successful completion of the remand proceedings before the Secretary. Moreover, the remanding court continues to retain jurisdiction over the action within the meaning of the EAJA and may exercise that jurisdiction to determine if its legal instructions on remand have been followed by the Secretary. Our past decisions interpreting other fee-shifting provisions make clear that where administrative proceedings are intimately tied to the resolution of the judicial action and necessary to the attainment of the results Congress sought to promote by providing for fees, they should be considered part and parcel of the action for which fees may be awarded.
In Pennsylvania v. Delaware Valley Citizens’ Council, 478 U. S. 546 (1986), we considered whether the costs of representation before federal and state administrative agencies in defense of the provisions of a consent decree entered under the Clean Air Act were compensable under the fee-shifting provision of that statute. Section 304(d) of the Clean Air Act provides for the award of a reasonable attorney fee in conjunction with “any final order in any action brought pursuant to” certain provisions of the Act. 42 U. S. C. § 7604(d). In Delaware Valley, we rejected the contention that the word “action” in the fee-shifting provision should be read narrowly to exclude all proceedings which could be plausibly characterized as “nonjudicial.” We indicated that
“[although it is true that the proceedings [at issue] were not ‘judicial’ in the sense that they did not occur in a courtroom or involve ‘traditional’ legal work such as examination of witnesses or selection of jurors for trial, the work done by counsel in these two phases was as necessary to the attainment of adequate relief for their client as was all of their earlier work in the courtroom which secured Delaware Valley’s initial success in obtaining the consent decree.” 478 U. S., at 558.
Similarly, in New York Gas Light Club, Inc. v. Carey, 447 U. S. 54 (1980), we held that under the fee-shifting provision of Title VII of the Civil Rights Act of 1964, 42 U. S. C. §2000e-5(k), a federal court could award attorney’s fees for services performed in state administrative and judicial enforcement proceedings. We noted that the words of the statute, authorizing “the court” to award attorney’s fees “[i]n any action or proceeding under this title,” could be read to include only federal administrative or judicial proceedings. 447 U. S., at 60-61. Looking to the entire structure of Title VII, we observed that Congress had mandated initial resort to state and local remedies, and that “Congress viewed proceedings before the Equal Employment Opportunity Commission and in federal court as supplements to available state remedies for employment discrimination.” Id., at 65. Given this interlocking system of judicial and administrative avenues to relief, we concluded that the exclusion of state and local administrative proceedings from the fee provisions would clearly clash with the congressional design behind the statutory scheme whose enforcement the fee-shifting provisions was designed to promote. Ibid. See also Webb v. Dyer County Board of Education, 471 U. S. 234, 243 (1985) (work performed in administrative proceedings that is “both useful and of a type ordinarily necessary to advance civil rights litigation” may be compensable under 42 U. S. C. § 1988); North Carolina Dept. of Transportation v. Crest Street Community Council, Inc., 479 U. S. 6, 15 (1986).
We think the principles we found persuasive in Delaware Valley and Carey are controlling here. As in Delaware Valley, the administrative proceedings on remand in this case were “crucial to the vindication of [respondent’s] rights.” Delaware Valley, supra, at 561. No fee award at all would have been available to respondent absent successful conclusion of the remand proceedings, and the services of an attorney may be necessary both to ensure compliance with the District Court’s order in the administrative proceedings themselves, and to prepare for any further proceedings before the District Court to verify such compliance. In addition, as we did in Carey, we must endeavor to interpret the fee statute in light of the statutory provisions it was designed to effectuate. Given the “mandatory” nature of the administrative proceedings at issue here, and their close relation in law and fact to the issues before the District Court on judicial review, we find it difficult to ascribe to Congress an intent to throw the Social Security claimant a lifeline that it knew was a foot short. Indeed, the incentive which such a system would create for attorneys to abandon claimants after judicial remand runs directly counter to long established ethical canons of the legal profession. See American Bar Association, Model Rules of Professional Conduct, Rule 1.16, pp. 53-55 (1984). Given the anomalous nature of this result, and its frustration of the very purposes behind the EAJA itself, Congress cannot lightly be assumed to have intended it. See Christiansburg Garment Co. v. EEOC, 434 U. S. 412, 418-419 (1978). Since the judicial review provisions of the Social Security Act contemplate an ongoing civil action of which the remand proceedings are but a part, and the EAJA allows “any court having jurisdiction of that action” to award fees, 28 U. S. C. § 2412(d)(1)(A), we think the statute, read in light of its purpose “to diminish the deterrent effect of seeking review of, or defending against, governmental action,” 94 Stat. 2325, permits a court to award fees for services performed on remand before the Social Security Administration. Where a court finds that the Secretary’s position on judicial review was not substantially justified within the meaning of the EAJA, see Pierce v. Underwood, 487 U. S. 552, 563-568 (1988), it is within the court’s discretion to conclude that representation on remand was necessary to the effectuation of its mandate and to the ultimate vindication of the claimant’s rights, and that an award of fees for work performed in the administrative proceedings is therefore proper. See Delaware Valley, supra, at 561; Webb, supra, at 243.
The Secretary mounts two interrelated challenges to this interpretation of § 2412(d)(1)(A). While the Secretary’s contentions are not without some force, neither rises to the level necessary to oust what we think is the most reasonable interpretation of the statute in light of its manifest purpose. First, the Secretary argues that plain meaning of the term “civil action” in § 2412(d)(1)(A) excludes any proceedings outside of a court of law. Brief for Petitioner 12-13; Reply Brief for Petitioner 8-9. Of course, if the plain language of the EAJA evinced a congressional intent to preclude the interpretation we reach here, that would be the end of the matter. In support of this proposition, the Secretary points out that the “‘[t]erm [action] in its usual legal sense means a suit brought in a court; a formal complaint within the jurisdiction of a court of law.’” Brief for Petitioner 13, n. 7, quoting Black’s Law Dictionary 26 (5th ed. 1979). Second, the Secretary notes that Congress did authorize EAJA fee awards under 5 U. S. C. §504(a)(1) (1982 ed., Supp. V) where an agency “conducts an adversary adjudication,” and that an adversary adjudication is defined in § 504(b)(1)(C) as “an adjudication ... in which the position of the United States is represented by counsel or otherwise.” Under 28 U. S. C. §2412(d)(3) (1982 ed., Supp. V) a court is empowered to award fees for representation before an agency to a party who prevails in an action for judicial review to “the same extent authorized in [5 U. S. C. § 504(a)].” Thus, the Secretary concludes that since benefits proceedings before the Secretary and his designates are nonadversarial, and a court is explicitly empowered to award fees for agency proceedings where such proceedings satisfy the requirements of § 504(a)(1), the principle of expressio unius est exclusio alterius applies, and a court may never award fees for time spent in nonadversarial administrative proceedings. See Brief for Petitioner 12-18; Reply Brief for Petitioner 7-12.
We agree with the Secretary that for purposes of the EAJA Social Security benefit proceedings are not “adversarial” within the meaning of § 504(b)(1)(C) either initially or on remand from a court. See Richardso?i v. Perales, 402 U. S. 389, 403 (1971). The plain language of the statute requires that the United States be represented by “counsel or otherwise,” and neither is true in this context. Nonetheless, we disagree with the conclusion the Secretary would draw from this fact. First, as Delaware Valley, Webb, and Carey indicate, administrative proceedings may be so intimately connected with judicial proceedings as to be considered part of the “civil action” for purposes of a fee award. This is particularly so in the Social Security context where “a suit [has been] brought in a court,” and where “a formal complaint within the jurisdiction of a court of law” remains pending and depends for its resolution upon the outcome of the administrative proceedings. Second, we disagree with the Secretary’s submission that a negative implication can be drawn from the power granted a court to award fees based on representation in a prior adversary adjudication before an agency. Section 2412(d)(8) provides that “[i]n awarding fees and other expenses under this subsection to a prevailing party in any action for judicial review of an adversary adjudication,” the court may award fees to the same extent that they would have been available before the agency itself under § 504(a)(1). On its face, the provision says nothing about the power of a court to award reasonable fees for representation in a non-adversarial adjudication which is wholly ancillary to a civil action for judicial review. That Congress carved the world of EAJA proceedings into “adversary adjudications” and “civil actions” does not necessarily speak to, let alone preclude, a reading of the term “civil action” which includes administrative proceedings necessary to the completion of a civil action.
We conclude that where a court orders a remand to the Secretary in a benefits litigation and retains continuing jurisdiction over the case pending a decision from the Secretary which will determine the claimant’s entitlement to benefits, the proceedings on remand are an integral part of the “civil action” for judicial review, and thus attorney’s fees for representation on remand are available subject to the other limitations in the EAJA. We thus affirm the judgment of the Court of Appeals on this issue and remand the case to that court for further proceedings consistent with this opinion.
It is so ordered. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
62
] |
DOUGHERTY COUNTY, GEORGIA, BOARD OF EDUCATION et al. v. WHITE
No. 77-120.
Argued October 2-3, 1978
Decided November 28, 1978
MARSHALL, J., delivered the opinion of the Court, in which BreNNAN, White, BlacicmuN, and SteveNS, JJ., joined. SteveNS, J., filed a concurring statement, post, p. 47. Stewart, J., filed a dissenting statement, post, p. 47. Powell, J., filed a dissenting opinion, in which Burger, C. J., and RehNquist, J., joined, post, p. 47.
Jesse W. Walters argued the cause and filed a brief for appellants.
John R. Myer argued the cause for appellee. With him on the brief were Robert A. Murphy, William E. Caldwell, and Norman J. Chachkin.
Deputy Solicitor General Wallace argued the cause for the United States as amicus curiae urging affirmance. On the brief were Solicitor General McCree, Assistant Attorney General Days, and Brian K. Landsberg.
Mr. Justice Marshall
delivered the opinion of the Court.
Under § 5 of the Voting Rights Act of 1965, all States and political subdivisions covered by § 4 of the Act must submit any proposed change affecting voting, for preclearance by the Attorney General or the District Court for the District of Columbia. At issue in this appeal is whether a county board of education in a covered State must seek approval of a rule requiring its employees to take unpaid leaves of absence while they campaign for elective office. Resolution of this question necessitates two related inquiries: first, whether a rule governing leave for employee candidates is a “standard, practice, or procedure with respect to voting” within the meaning of § 5 of the Voting Rights Act; and second, whether a county school board is a “political subdivision” within the purview of the Act.
I
The facts in this case are not in dispute. Appellee, a Negro, is employed as Assistant Coordinator of Student Personnel Services by appellant Dougherty County Board of Education (Board). In May 1972, he announced his candidacy for the Georgia House of Representatives. Less than a month later, on June 12, 1972, the Board adopted Rule 58 without seeking prior federal approval. Rule 58 provides:
“POLITICAL OFFICE. Any employee of the school system who becomes a candidate for any elective political office, will be required to take a leave of absence, without pay, such leave becoming effective upon the qualifying for such elective office and continuing for the duration of such political activity, and during the period of service in such office, if elected thereto.”
Appellee qualified as a candidate for the Democratic primary in June 1972, and was compelled by Rule 58 to take a leave of absence without pay. After his defeat in the August primary, appellee was reinstated. Again in June 1974, he qualified as a candidate for the Georgia House and was forced to take leave. He was successful in both the August primary and the November general election. Accordingly, his leave continued through mid-November 1974. Appellee took a third leave of absence in June 1976, when he qualified to run for re-election. When it became clear in September that he would be unopposed in the November 1976 election, appellee was reinstated. As a consequence of those mandatory leaves, appellee lost pay in the amount of $2,810 in 1972, $4,780 in 1974, and $3,750 in 1976.
In June 1976, appellee filed this action in the Middle District of Georgia alleging that Rule 58 was a “standard, practice, or procedure with respect to voting” adopted by a covered entity and therefore subject to the preclearance requirements of § 5 of the Act. Appellee averred that he was the first Negro in recent memory, perhaps since Reconstruction, to run for the Georgia General Assembly from Dougherty County. The Board did not contest this fact, and further acknowledged that it was aware of no individual other than appellee who had run for public office while an employee of the Dougherty County Board of Education.
On cross motions for summary judgment, the three-judge District Court held that Rule 58 should have been submitted for federal approval before implementation. 431 F. Supp. 919 (1977). In so ruling, the court correctly declined to decide the ultimate question that the Attorney General or the District of Columbia court would face on submission of the Rule for preclearance under § 5 — whether the change in fact had a discriminatory purpose or effect. See Perkins v. Matthews, 400 U. S. 379, 383-385 (1971). Rather, the District Court confined its review to the preliminary issue whether Rule 58 had the “potential” for discrimination and hence was subject to § 5. Georgia v. United States, 411 U. S. 526, 534 (1973). In concluding that the Rule did have such potential, the District Court interpreted Allen v. State Board of Elections, 393 U. S. 544 (1969), and Georgia v. United States, supra, to mandate preclearance of any modification by a covered State or political subdivision “which restricts the ability of citizens to run for office.” 431 F. Supp., at 922. The court reasoned that Rule 58 was such a modification because:
“By imposing a financial loss on [Board] employees who choose to become candidates, [the Rule] makes it more difficult for them to participate in the democratic process and, consequently, restricts the field from which the voters may select their representatives.” Ibid.
The District Court therefore enjoined enforcement of Rule 58 pending compliance with the preclearance requirements of § 5. We noted probable jurisdiction. 435 U. S. 921 (1978). Since we find Allen v. State Board of Elections, supra, and United States v. Board of Comm’rs of Sheffield, 435 U. S. 110 (1978), dispositive of the issues presented in this appeal, we affirm.
II
Section 5 provides that whenever a covered State or political subdivision “shall enact or seek to administer any voting qualification or prerequisite to voting, or standard, practice, or procedure with respect to voting different from that in force or effect on November 1, 1964,” it may not implement that change until it either secures a determination from the District Court for the District of Columbia that the change “does not have the purpose and will not have the effect of denying or abridging the right to vote on account of race or color” or submits the change to the Attorney General and he interposes no objection within 60 days. 42 U. S. C. § 1973c (emphasis added). Although §14 (c)(1) expansively defines the term “voting” to “include all action necessary to make a vote effective,” 79 Stat. 445, 42 U. S. C. § 1973Í (c)(1), the Act itself nowhere amplifies the meaning of the phrase “standard, practice, or procedure with respect to voting.” Accordingly, in our previous constructions of § 5, we have sought guidance from the history and purpose of the Act.
A
This Court first considered the scope of the critical language of § 5 in Allen v. State Board of Elections, 393 U. S. 544 (1969), involving consolidated appeals in three cases from Mississippi and one from Virginia. After canvassing the legislative history of the Act, we concluded that Congress meant “to reach any state enactment which altered the election law of a covered State in even a minor way.” 393 U. S.,. at 566. Conceived after “nearly a century of systematic resistance to the Fifteenth Amendment,” South Carolina v. Katzenbach, 383 U. S. 301, 328 (1966), the Voting Rights Act was, as Allen emphasized, “aimed at the subtle, as well as the obvious, state regulations which have the effect of denying citizens their right to vote because of their race.” 393 U. S., at 565 (footnote omitted). To effectuate the “articulated purposes of the legislation,” id., at 570, the Allen Court held that the phrase “standard, practice, or procedure” must be given the “broadest possible scope,” id., at 567, and construed it to encompass candidate qualification requirements. Id., at 570 (Whitley v. Williams, companion case decided with Allen, supra). The Court concluded that any enactment which burdens an independent candidate by “increasing the difficulty for [him] to gain a position on the general election ballot” is subject to § 5 since such a measure could “undermine the effectiveness” of voters who wish to elect nonaffiliated representatives. 393 U. S., at 565.
In subsequent cases interpreting § 5, we have consistently adhered to the principles of broad construction set forth in Allen. In Hadnott v. Amos, 394 U. S. 358 (1969), this Court held that an Alabama statute requiring independent candidates to declare their intention to seek office two months earlier than under prior procedures imposed “increased barriers” on candidacy and therefore warranted § 5 scrutiny. Id., at 366. Similarly, in contexts other than candidate qualification, we have interpreted § 5 expansively to mandate preclearance for changes in the location of polling places, Perkins v. Matthews, supra; alterations of municipal boundaries, Richmond v. United States, 422 U. S. 358 (1975); Petersburg v. United States, 410 U. S. 962 (1973), summarily aff’g 354 F. Supp. 1021 (DC 1972); Perkins v. Matthews, supra; and reapportionment and redistricting plans, Georgia v. United States, supra.
Had Congress disagreed with this broad construction of § 5, it presumably would have clarified its intent when re-enacting the statute in 1970 and 1975. Yet, as this Court observed in Georgia v. United States, “[a]fter extensive deliberations in 1970 on bills to extend the Voting Rights Act, during which the Allen case was repeatedly discussed, the Act was extended for five years, without any substantive modification of § 5.” 411 U. S., at 533 (footnote omitted). Again in 1975, both the House and Senate Judiciary Committees, in recommending extension of the Act, noted with approval the “broad interpretations to the scope of Section 5” in Allen and Perkins v. Matthews. S. Rep. No. 94-295, p. 16 (1975) (hereinafter S. Rep.); H. R. Rep. No. 94-196, p. 9 (1975) (hereinafter H. R. Rep.). Confirming the view of this Court, the Committee Reports stated, without qualification, that “[s]ection 5 of the Act requires review of all voting changes prior to implementation by the covered jurisdictions.” S. Rep. 15; H. R. Rep. 8 (emphasis added).
The Attorney General’s regulations, in force since 1971, reflect an equally inclusive understanding of the reach of § 5. They provide that “[a] 11 changes affecting voting, even though the change appears to be minor or indirect,” must be submitted for prior approval. 28 CFR § 51.4 (a) (1977). More particularly, the regulations require preclearance of “[a]ny alteration affecting the eligibility of persons to become or remain candidates or obtain a position on the ballot in primary or general elections or to become or remain officeholders.” §51.4 (c)(4). Pursuant to these regulations, the Attorney General, after being apprised of Rule 58, requested its submission for § 5 clearance. Given the central role of the Attorney General in formulating and implementing § 5, this interpretation of its scope is entitled to particular deference. United States v. Board of Comm’rs of Sheffield, 435 U. S., at 131; Perkins v. Matthews, 400 U. S., at 391. See Georgia v. United States, 411 U. S., at 536-539.
B
Despite these consistently expansive constructions of § 5, appellants contend that the Attorney General and District Court erred in treating Rule 58 as a “standard, practice, or procedure with respect to voting” rather than as simply “a means of getting a full days work for a full days pay — nothing more and nothing less.” Brief for Appellants 20. In appellants’ view, Congress did not intend to subject all internal personnel measures affecting political activity to federal superintendence.
The Board mischaracterizes its policy. Rule 58 is not a neutral personnel practice governing all forms of absenteeism. Rather, it specifically addresses the electoral process, singling out candidacy for elective office as a disabling activity. Although not in form a filing fee, the Rule operates in precisely the same fashion. By imposing substantial economic disincentives on employees who wish to seek elective office, the Rule burdens entry into elective campaigns and, concomitantly, limits the choices available to Dougherty County voters. Given the potential loss of thousands of dollars by employees subject to Rule 58, the Board’s policy could operate as a more substantial inhibition on entry into the elective process than many of the filing-fee changes involving only hundreds of dollars to which the Attorney General has successfully interposed objections. That Congress was well aware of these objections is apparent from the Committee Reports supporting extension of the Act in 1975. S. Rep. 16-17; H. R. Rep. 10.
In Georgia v. United States, we observed that “[s]ection 5 is not concerned with a simple inventory of voting procedures, but rather with the reality of changed practices as they affect Negro voters.” 411 U. S., at 531. The reality here is that Rule 58’s impact on elections is no different from that of many of the candidate qualification changes for which we have previously required preclearance. See Hadnott v. Amos, 394 U. S. 358 (1969); Allen, 393 U. S., at 551. Moreover, as a practical matter, Rule 58 implicates the political process to the same extent as do other modifications that this Court and Congress have recognized § 5 to encompass, such as changes in the location of polling places, Perkins v. Matthews, and alterations in the procedures for casting a write-in vote, Allen v. State Board of Elections, supra.
We do not, of course, suggest that all constraints on employee political activity affecting voter choice violate § 5. Presumably, most regulation of political involvement by public employees would not be found to have an invidious purpose or effect. Yet the same could be said of almost all changes subject to § 5. According to the most recent figures available, the Voting Rights Section of the Civil Rights Division processes annually some 1,800 submissions involving over 3,100 changes and interposes objections to less than 2%. Attorney General Ann. Rep. 159-160 (1977). Approximately 91% of these submissions receive clearance without further exchange of correspondence. Tr. of Oral Arg. 53. Thus, in determining if an enactment triggers § 5 scrutiny, the question is not whether the provision is in fact innocuous and likely to be approved, but whether it has a potential for discrimination. See Georgia v. United States, supra, at 534; Perkins v. Matthews, supra, at 383-385; Allen v. State Board of Elections, supra, at 555-556, n. 19, 558-559, 570-571.
Without intimating any views on the substantive question of Rule 58’s legitimacy as a nonracial personnel measure, we believe that the circumstances surrounding its adoption and its effect on the political process are sufficiently suggestive of the potential for discrimination to demonstrate the need for preclearance. Appellee was the first Negro in recent years to seek election to the General Assembly from Dougherty County, an area with a long history of racial discrimination in voting. Less than a month after appellee announced his candidacy, the Board adopted Rule 58, concededly without any prior experience of absenteeism among employees seeking office. That the Board made its mandatory leave-of-absence requirement contingent on candidacy rather than on absence during working hours underscores the Rule’s potential for inhibiting participation in the electoral process.
Plainly, Rule 58 erects “increased, barriers” to candidacy as formidable as the filing date changes at issue in Hadnott v. Amos, supra, at 366 (2 months), and Allen v. State Board of Elections, supra, at 551 (20 days). To require preclearance of Rule 58 follows directly from our previous recognition that § 5 must be given “the broadest possible scope,” Allen v. State Board of Elections, supra, at 567, encompassing the “subtle, as well as the obvious,” forms of discrimination. 393 U. S., at 565. Informed by similarly expansive legislative and administrative understandings of the perimeters of § 5, we hold that obstacles to candidate qualification such as the Rule involved here are “standard [s], practice [s], or procedure's] with respect to voting.”
Ill
Section 5 applies to all changes affecting voting made by “political subdivision [s]” of States designated for coverage pursuant to § 4 of the Act. Although acknowledging that the Board is a political subdivision under state law, appellants contend that it does not meet the definition of that term as employed in the Voting Rights Act. They rely on § 14 (c) (2) of the Act, 79 Stat. 445, 42 U. S. C. § 19731 (c)(2), which defines “political subdivision” as
“any county or parish, except that where registration for voting is not conducted under the supervision of a county or parish, the term shall include any other subdivision of a State which conducts registration for voting.”
Because the Board is neither a county, parish, nor entity which conducts voter registration, appellants maintain that it does not come within the purview of § 5.
This contention is squarely foreclosed by our decision last Term in United States v. Board of Comm’rs of Sheffield, 435 U. S. 110 (1978). There, we expressly rejected the suggestion that the city of Sheffield was beyond the ambit of § 5 because it did not itself register voters and hence was not a political subdivision as the term is defined in § 14 (c) (2) of the Act. Rather, the “language, structure, history, and purposes of the Act persuade [d] us that § 5, like the constitutional provisions it is designed to implement, applies to all entities having power over any aspect of the electoral process within designated jurisdictions . . . 435 U. S., at 118. Accordingly, we held that once a State has been designated for coverage, § 14 (c)(2)'s definition of political subdivision has no “operative significance in determining the reach of § 5.” 435 U. S., at 126.
Appellants attempt to distinguish Sheffield on the ground that the Board, unlike the city of Sheffield, does not itself conduct elections. Since the Board has no direct responsibilities in conjunction with the election of public officials, appellants argue that it does not “exercise control” over the voting process, id., at 127, and is not therefore subject to §5.
Sheffield provides no support for such a cramped reading of the term “control.” Our concern there was that covered jurisdictions could obviate the necessity for preclearance of voting changes by the simple expedient of “allowing local entities that do not conduct voter registration to control critical aspects of the electoral process.” 435 U. S., at 125. We thus held that the impact of a change on the elective process, rather than the adopting entity’s registration responsibilities, was dispositive of the question of § 5. coverage. Here, as the discussion in Part II, supra, indicates, a political unit with no nominal electoral functions can nonetheless exercise power over the process by attaching a price tag to candidate participation. Appellants’ analysis would hence achieve what Sheffield sought to avert; it would enable covered jurisdictions to circumvent the Act by delegating power over candidate qualification to local entities that do not conduct elections or voter registration. A State or political subdivision, by de jacto delegation, “thereby could achieve through its instru-mentalities what it could not do itself without preclearance.” 435 U. S., at 139 (Powell, J., concurring in judgment). If only those governmental units with official electoral obligations actuate the preclearance requirements of § 5, the Act would be “nullified] ... in a large number of its potential applications.” 435 U. S., at 125 (footnote omitted).
Nothing in the language or purpose of the Act compels such an anomalous result. By its terms, § 5 requires preclearance whenever a political subdivision within a covered State adopts a change in a standard, practice, or procedure with respect to voting. No requirement that the subdivision itself conduct elections is stated in § 5 and none is fairly implied. As this Court has observed, § 5 of the Voting Rights Act reflects Congress’ firm resolve to end “the blight of racial discrimination in voting, which has infected the electoral process in parts of our country for nearly a century.” South Carolina v. Katzenbach, 383 U. S., at 308. Whether a subdivision adopting a potentially discriminatory change has some nominal electoral functions bears no relation to the purpose of § 5. That provision directs attention to the impact of a change on the electoral process, not to the duties of the political subdivision that adopted it. To make coverage under § 5 turn on whether the State has confided in the Dougherty County Board of Education some formal responsibility for the conduct of elections, when the Board clearly has the power to affect candidate participation in those elections, would serve no purpose consonant with the objectives of the federal statutory scheme.
Nor would appellants’ interpretation of § 5 comport with any ascertainable congressional intent. The legislative history of the 1975 extension, the statute which is controlling here, leaves no doubt but that Congress intended all electoral changes by political entities in covered jurisdictions to trigger federal scrutiny. Both the supporters and opponents of the proposed extension appear to have shared the common understanding that under § 5 no covered jurisdiction may enforce a change affecting voting without obtaining prior approval. See Hearings on S. 407 et al. before the Subcommittee on Constitutional Rights of the Senate Committee on the Judiciary, 94th Cong., 1st Sess., 75-76 (1975) (testimony of Arthur Flemming, Chairman of the U. S. Commission on Civil Rights) (e. g., § 5 applies “to changes in voting laws, practices, and procedures that affect every stage of the political process”) ; Hearings on H. R. 939 et al. before the Subcommittee on Civil and Constitutional Rights of the House Committee on the Judiciary, 94th Cong., 1st Sess., 19 (1975) (testimony of Arthur Flemming); 121 Cong. Rec. 23744 (1975) (remarks of Sen. Stennis) (“Any changes, so far as election officials [are] concerned, which [are] made in precincts, county districts, school districts, municipalities, or State legislatures . . . [have] to be submitted”); id., at 24114 (remarks of Sen. Allen). Moreover, both the House and Senate Committees and witnesses at the House and Senate hearings referred to § 5’s past and prospective application to school districts. See, e. g., 121 Cong. Rec. 23744 (1975) (remarks of Sen. Stennis); Hearings on S. 407, supra, at 467-470 (testimony of George Korbel, EEOC Regional Attorney); Hearings on H. R. 939, supra, at 387-390 (testimony of George Korbel); S. Rep. 27-28; H. R. Rep. 19-20. Yet none of these discussions suggests that direct supervision of elections by a school board is a prerequisite to its coverage under the Act. To the contrary, a fair reading of the legislative history compels the conclusion that Congress was determined in the 1975 extension of the Act to provide some mechanism for coping with all potentially discriminatory enactments whose source and forms it could not anticipate but whose impact on the electoral process could be significant. Rule 58 is such a change.
Because we conclude that Rule 58 is a standard, practice, or procedure with respect to voting enacted by an entity subject to § 5, the judgment of the District Court is
Affirmed.
Mr. Justice Stewart dissents for the reasons expressed in Part I of the dissenting opinion of Mr. Justice Powell.
79 Stat. 439, as amended, 42 U. S. C. § 1973c. Section 5 provides in part:
“Whenever a State or political subdivision with respect to which the prohibitions set forth in [§ 4 (a) of the Act] based upon determinations made under the first sentence of [§ 4 (b) of the Act] are in effect shall enact or seek to administer any voting qualification or prerequisite to voting, or standard, practice, or procedure with respect to voting different from that in force or effect on November 1, 1964, . . . such State or subdivision may institute an action in the United States District Court for the District of Columbia for a declaratory judgment that such qualification, prerequisite, standard, practice, or procedure does not have the purpose and will not have the effect of denying or abridging the right to vote on account of race or color, . . . and unless and until the court enters such judgment no person shall be denied the right to vote for failure to comply with such qualification, prerequisite, standard, practice, or procedure: Provided, That such qualification, prerequisite, standard, practice, or procedure may be enforced without such proceeding if the qualification, prerequisite, standard, practice, or procedure has been submitted by the chief legal officer or other appropriate official of such State or subdivision to the Attorney General and the Attorney General has not interposed an objection within sixty days after such submission, or upon good cause shown, to facilitate an expedited approval within sixty days after such submission, the Attorney General has affirmatively indicated that such objection will not be made. . . .”
79 Stat. 438, as amended, 42 U. S. C. § 1973b. Georgia has been designated a covered jurisdiction pursuant to §4. 30 Fed. Reg. 9897 (1965).
The Solicitor General and counsel for appellants advise us that appellee was also on unpaid leave during his participation in the annual 214-month sittings of the Georgia General Assembly in 1975, 1976, 1977, and 1978. Brief for United States as Amicus Curiae 4 n. Ip Tr. of Oral Arg. 6. Appellee did not challenge this application of Rule 58 below. We therefore do not consider whether preclearance is required for a policy governing mandatory leaves during the interval in which an employee is actually absent due to legislative responsibilities.
Jurisdiction was predicated on 42 U. S. C. § 1973c, 28 U. S. C. § 2284, and 28 U. S. C. § 1343. See Allen v. State Board of Elections, 393 U. S. 544, 554-563 (1969).
For example, we noted that Attorney General Katzenbach, who played a substantial role in drafting the Act, testified that the term “practice” in § 5 “was intended to be all-inclusive . . . .” Hearings on S. 1564 before the Senate Committee on the Judiciary, 89th Cong., 1st Sess., 192 (1965), quoted in Allen v. State Board of Elections, supra, at 566-567, and n. 31.
The protean strategies of racial discrimination that led Congress to adopt the Voting Rights Act have been often discussed by this Court, see United States v. Board of Comm’rs of Sheffield, 435 U. S. 110, 118-121 (1978); South Carolina v. Katzenbach, 383 U. S., at 308-315, and need not be reviewed here.
Shortly before the commencement of this litigation, counsel for appellee brought Rule 58 to the attention of the Civil Rights Division of the Department of Justice. Two and one-half months after appellee filed his complaint, Assistant Attorney General Pottinger informed the Superintendent of the Dougherty County School System that Rule 58 should be submitted for preclearance. Appellants made no response.
See U. S. Commission on Civil Rights, The Voting Rights Act: Ten Years After 134-137 (1975) {e. g., $360 fee for Commissioner in Mobile, Alabama, in 1973; $818 fee for Mayor in Rock Hill, South Carolina, in 1973).
In addition, the Committees relied heavily on findings by the United States Commission on Civil Rights in The Voting Rights Act: Ten Years After, supra, at 131-142, a document which reviewed at some length the barriers to qualification, including fifing fees, faced by minority candidates. See S. Rep. 21, 24; H. R. Rep. 12, 16.
As this Court has recognized in its decisions invalidating certain filing-fee schemes under the Fourteenth Amendment, “we would ignore reality” were we not to acknowledge that a financial barrier to candidacy “falls with unequal weight on voters, as well as candidates,” since it “tends to deny some voters the opportunity to vote for a candidate of their choosing.” Bullock v. Carter, 405 U. S. 134, 144 (1972) (filing fees of $1,424.60 for County Commissioner, $1,000 for Commissioner of General Land Office, and $6,300 for County Judge). See also Lubin v. Panish, 415 U. S. 709 (1974) (filing fee of $701.60 for County Supervisor).
For a review of voting rights litigation in the city of Albany, the county seat of Dougherty County containing 80% of its population, see Paige v. Gray, 399 F. Supp. 459, 461-463 (MD Ga. 1975), vacated in part, 538 F. 2d 1108 (CA5 1976), on remand, 437 F. Supp. 137, 149-158 (MD Ga. 1977).
The dissent suggests, post, at 53, that Rule 58 is directed only toward barring “the expenditure of public funds to support the candidacy of an employee whose time and energies may be devoted to campaigning, rather than counseling schoolchildren.” Insofar as the Board is concerned about its employees’ failure to discharge their contractual obligations while standing for office, it has a variety of means to vindicate its interest. The Board may, for example, prescribe regulations governing absenteeism, or may terminate or suspend the contracts of employees who willfully neglect their professional responsibilities. See Ga. Code § 32-2101c (1975); Ransum v. Chattooga County Board of Education, 144 Ga. App. 783, 242 S. E. 2d 374 (1978). What it may not do is adopt a rule that explicitly and directly burdens the electoral process without preclearance.
See Ga. Code §§32-901, 23-1716 (1975); Campbell v. Red Bud Consolidated School Dist., 186 Ga. 541, 548, 198 S. E. 225, 229 (1938); Ty Ty Consolidated School Dist. v. Colquitt Lumber Co., 153 Ga. 426, 427, 112 S. E. 561 (1922).
Section 4 (a) makes continued coverage under the Act turn on whether discriminatory tests or devices have been used “anywhere in the territory” of a State or political subdivision for a prescribed number of years. 79 Stat. 438, as amended, 42 U. S. C. § 1973b (a). In Sheffield, we concluded that the territorial reach of the substantive requirements of § 5 was meant to be coterminous with the jurisdictional provisions of §4 (a). 435 U. S., at 120-129. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
116
] |
BUSH v. LUCAS
No. 81-469.
Argued January 19, 1983
Decided June 13, 1983
Stevens, J., delivered the opinion for a unanimous Court. MARSHALL, J., filed a concurring opinion, in which Blackmun, J., joined, post, p. 390.
William Harvey Elrod, Jr., argued the cause and filed briefs for petitioner.
Deputy Solicitor General Getter argued the cause for respondent. With him on the brief were Solicitor General Lee, Assistant Attorney General McGrath, David A. Strauss, Barbara L. Herwig, and Wendy M. Keats.
Briefs of amici curiae urging reversal were filed by Charles B. Wayne and Mark H. Lynch for the American Civil Liberties Union; by J. Albert Woll, Marsha Berzon, Laurence Gold, Edward J. Hickey, Erick Genser, James Rosa, and David Barr for the American Federation of Labor and Congress of Industrial Organizations et al.; by John F. Bufe, Lois G. Williams, and Michael David Fox for the National Treasury Employees Union; and by John C. Keeney, Jr., Joseph M. Hassett, and Peter Raven-Hansen for Representative Schroeder et al.
Justice Stevens
delivered the opinion of the Court.
Petitioner asks us to authorize a new nonstatutory damages remedy for federal employees whose First Amendment rights are violated by their superiors. Because such claims arise out of an employment relationship that is governed by comprehensive procedural and substantive provisions giving meaningful remedies against the United States, we conclude that it would be inappropriate for us to supplement that regulatory scheme with a new judicial remedy.
Petitioner Bush is an aerospace engineer employed at the George C. Marshall Space Flight Center, a major facility operated by the National Aeronautics and Space Administration in Alabama. Respondent Lucas is the Director of the Center. In 1974 the facility was reorganized and petitioner was twice reassigned to new positions. He objected to both reassignments and sought formal review by the Civil Service Commission. In May and June 1975, while some of his administrative appeals were pending, he made a number of public statements, including two televised interviews, that were highly critical of the agency. The news media quoted him as saying that he did not have enough meaningful work to keep him busy, that his job was “a travesty and worthless,” and that the taxpayers’ money was being spent fraudulently and wastefully at the Center. His statements were reported on local television, in the local newspaper, and in a national press release that appeared in newspapers in at least three other States.
In June 1975 respondent, in response to a reporter’s inquiry, stated that he had conducted an investigation and that petitioner’s statements regarding his job had “no basis in fact.” App. 15. In August 1975 an adverse personnel action was initiated to remove petitioner from his position. Petitioner was charged with “publicly makfing] intemperate remarks which were misleading and often false, evidencing a malicious attitude towards Management and generating an environment of sensationalism demeaning to the Government, the National Aeronautics and Space Administration and the personnel of the George C. Marshall Space Flight Center, thereby impeding Government efficiency and eeon-omy and adversely affecting public confidence in the Government service.” He was also informed that his conduct had undermined morale at the Center and caused disharmony and disaffection among his fellow employees. Petitioner had the opportunity to file a written response and to make an oral presentation to agency officials. Respondent then determined that petitioner’s statements were false and misleading and that his conduct would justify removal, but that the lesser penalty of demotion was appropriate for a “first offense.” Ibid. He approved a reduction in grade from GS-14 to GS-12, which decreased petitioner’s annual salary by approximately $9,716.
Petitioner exercised his right to appeal to the Federal Employee Appeals Authority. After a 3-day public hearing, the Authority upheld some of the charges and concluded that the demotion was justified. It specifically determined that a number of petitioner’s public statements were misleading and that, for three reasons, they “exceeded the bounds of expression protected by the First Amendment.” First, petitioner’s statements did not stem from public interest, but from his desire to have his position abolished so that he could take early retirement and go to law school. Second, the statements conveyed the erroneous impression that the agency was deliberately wasting public funds, thus discrediting the agency and its employees. Third, there was no legitimate public interest to be served by abolishing petitioner’s position.
Two years after the Appeals Authority’s decision, petitioner requested the Civil Service Commission’s Appeals Review Board to reopen the proceeding. The Board reexamined petitioner’s First Amendment claim and, after making a detailed review of the record and the applicable authorities, applied the balancing test articulated in Pickering v. Board of Education, 391 U. S. 563 (1968). On the one hand, it acknowledged the evidence tending to show that petitioner’s motive might have been personal gain, and the evidence that his statements caused some disruption of the agency’s day-today routine. On the other hand, it noted that society as well as the individual had an interest in free speech, including “a right to disclosure of information about how tax dollars are spent and about the functioning of government apparatus, an interest in the promotion of the efficiency of the government, and in the maintenance of an atmosphere of freedom of expression by the scientists and engineers who are responsible for the planning and implementation of the nation’s space program.” Because petitioner’s statements, though somewhat exaggerated, “were not wholly without truth, they properly stimulated public debate.” Thus the nature and extent of proven disruption to the agency’s operations did not “justify abrogation of the exercise of free speech.” The Board recommended that petitioner be restored to his former position, retroactively to November 30,1975, and that he receive backpay. That recommendation was accepted. Petitioner received approximately $30,000 in backpay.
While his administrative appeal was pending, petitioner filed an action against respondent in state court in Alabama seeking to recover damages for defamation and violation of his constitutional rights. Respondent removed the lawsuit to the United States District Court for the Northern District of Alabama, which granted respondent’s motion for summary judgment. It held, first, that the defamation claim could not be maintained because, under Barr v. Matteo, 360 U. S. 564 (1959), respondent was absolutely immune from liability for damages for defamation; and second, that petitioner’s demotion was not a constitutional deprivation for which a damages action could be maintained. The United States Court of Appeals for the Fifth Circuit affirmed. 598 F. 2d 958 (1979). We vacated that court’s judgment, 446 U. S. 914 (1980), and directed that it reconsider the case in the light of our intervening decision in Carlson v. Green, 446 U. S. 14 (1980). The Court of Appeals again affirmed the judgment against petitioner. It adhered to its previous conclusion that “plaintiff had no cause of action for damages under the First Amendment for retaliatory demotion in view of the available remedies under the Civil Service Commission regulations.” 647 F. 2d 573, 574 (1981). It explained that the relationship between the Federal Government and its civil service employees was a special factor counselling against the judicial recognition of a damages remedy under the Constitution in this context.
We assume for purposes of decision that petitioner’s First Amendment rights were violated by the adverse personnel action. We also assume that, as petitioner asserts, civil service remedies were not as effective as an individual damages remedy and did not fully compensate him for the harm he suffered. Two further propositions are undisputed. Congress has not expressly authorized the damages remedy that petitioner asks us to provide. On the other hand, Congress has not expressly precluded the creation of such a remedy by declaring that existing statutes provide the exclusive mode of redress.
Thus, we assume, a federal right has been violated and Congress has provided a less than complete remedy for the wrong. If we were writing on a clean slate, we might answer the question whether to supplement the statutory scheme in either of two quite simple ways. We might adopt the common-law approach to the judicial recognition of new causes of action and hold that it is the province of the judiciary to fashion an adequate remedy for every wrong that can be proved in a case over which a court has jurisdiction. Or we might start from the premise that federal courts are courts of limited jurisdiction whose remedial powers do not extend beyond the granting of relief expressly authorized by Congress. Under the former approach, petitioner would obviously prevail; under the latter, it would be equally clear that he would lose.
Our prior cases, although sometimes emphasizing one approach and sometimes the other, have unequivocally rejected both extremes. They establish our power to grant relief that is not expressly authorized by statute, but they also remind us that such power is to be exercised in the light of relevant policy determinations made by the Congress. We therefore first review some of the cases establishing our power to remedy violations of the Constitution and then consider the bearing of the existing statutory scheme on the precise issue presented by this case.
I
The federal courts’ power to grant relief not expressly authorized by Congress is firmly established. Under 28 U. S. C. § 1331, the federal courts have jurisdiction to decide all cases “arising] under the Constitution, laws, or treaties of the United States.” This jurisdictional grant provides not only the authority to decide whether a cause of action is stated by a plaintiff’s claim that he has been injured by a violation of the Constitution, Bell v. Hood, 327 U. S. 678, 684 (1946), but also the authority to choose among available judicial remedies in order to vindicate constitutional rights. This Court has fashioned a wide variety of nonstatutory remedies for violations of the Constitution by federal and state officials. The cases most relevant to the problem before us are those in which the Court has held that the Constitution itself supports a private cause of action for damages against a federal official. Bivens v. Six Unknown Fed. Narcotics Agents, 403 U. S. 388 (1971); Davis v. Passman, 442 U. S. 228 (1979); Carlson v. Green, supra.
In Bivens the plaintiff alleged that federal agents, without a warrant or probable cause, had arrested him and searched his home in a manner causing him great humiliation, embarrassment, and mental suffering. He claimed damages on the theory that the alleged violation of the Fourth Amendment provided an independent basis for relief. The Court upheld the sufficiency of his complaint, rejecting the argument that a state tort action in trespass provided the only appropriate judicial remedy. The Court explained why the absence of a federal statutory basis for the cause of action was not an obstacle to the award of damages:
“That damages may be obtained for injuries consequent upon a violation of the Fourth Amendment by federal officials should hardly seem a surprising proposition. Historically, damages have been regarded as the ordinary remedy for an invasion of personal interests in liberty. See Nixon v. Condon, 286 U. S. 73 (1932); Nixon v. Herndon, 273 U. S. 536, 540 (1927); Swafford v. Templeton, 185 U. S. 487 (1902); Wiley v. Sinkler, 179 U. S. 58 (1900); J. Landynski, Search and Seizure and the Supreme Court 28 et seq. (1966); N. Lasson, History and Development of the Fourth Amendment to the United States Constitution 43 et seq. (1937); Katz, The Jurisprudence of Remedies: Constitutional Legality and the Law of Torts in Bell v. Hood, 117 U. Pa. L. Rev. 1, 8-33 (1968); cf. West v. Cabell, 153 U. S. 78 (1894); Lammon v. Feusier, 111 U. S. 17 (1884). Of course, the Fourth Amendment does not in so many words provide for its enforcement by an award of money damages for the consequences of its violation. But ‘it is... well settled that where legal rights have been invaded, and a federal statute provides for a general right to sue for such invasion, federal courts may use any available remedy to make good the wrong done.’ Bell v. Hood, 327 U. S., at 684 (footnote omitted). The present case involves no special factors counselling hesitation in the absence of affirmative action by Congress. We are not dealing with a question of ‘federal fiscal policy/ as in United States v. Standard Oil Co., 332 U. S. 301, 311 (1947).” 403 U. S., at 395-396.
The Court further noted that there was “no explicit congressional declaration that persons injured by a federal officer’s violation of the Fourth Amendment may not recover money damages from the agents, but must instead be remitted to another remedy, equally effective in the view of Congress.” Id., at 397.
In his separate opinion concurring in the judgment, Justice Harlan also thought it clear that the power to authorize damages as a remedy for the vindication of a federal constitutional right had not been placed by the Constitution itself exclusively in Congress’ hands. Id., at 401-402. Instead, he reasoned, the real question did not relate to “whether the federal courts have the power to afford one type of remedy as opposed to the other, but rather to the criteria which should govern the exercise of our power.” Id., at 406. In resolving that question he suggested that “the range of policy considerations we may take into account is at least as broad as the range of those a legislature would consider with respect to an expressed] statutory authorization of a traditional remedy.” id., at 407. After weighing the relevant policies he agreed with the Court’s conclusion that the Government had not advanced any substantial policy consideration against recognizing a federal cause of action for violation of Fourth Amendment rights by federal officials.
In Davis v. Passman, supra, the petitioner, former deputy administrative assistant to a Member of Congress, alleged that she had been discharged because of her sex, in violation of her constitutional right to the equal protection of the laws. We held that the Due Process Clause of the Fifth Amendment gave her a federal constitutional right to be free from official discrimination and that she had alleged a federal cause of action. In reaching the conclusion that an award of damages would be an appropriate remedy, we emphasized the fact that no other alternative form of judicial relief was available. The Court also was persuaded that the special concerns which would ordinarily militate against allowing recovery from a legislator were fully reflected in respondent’s affirmative defense based on the Speech or Debate Clause of the Constitution. Id., at 246. We noted the absence of any explicit congressional declaration that persons in petitioner’s position may not recover damages from those responsible for their injury. Id., at 246-247.
Carlson v. Green, 446 U. S. 14 (1980), involved a claim that a federal prisoner’s Eighth Amendment rights had been violated. The prisoner’s mother brought suit on behalf of her son’s estate, alleging that federal prison officials were responsible for his death because they had violated their constitutional duty to provide him with proper medical care after he suffered a severe asthmatic attack. Unlike Bivens and Davis, the Green case was one in which Congress had provided a remedy, under the Federal Tort Claims Act, against the United States for the alleged wrong. 28 U. S. C. § 2671 et seq. As is true in this case, that remedy was not as completely effective as a Bivens-type action based directly on the Constitution.
The Court acknowledged that a Bivens action could be defeated in two situations, but found that neither was present. First, the Court could discern “ ‘no special factors counselling hesitation in the absence of affirmative action by Congress.’ ” 446 U. S., at 18-19, citing Bivens, 403 U. S., at 396, and Davis, supra, at 245. Second, there was no congressional determination foreclosing the damages claim and making the Federal Tort Claims Act exclusive. 446 U. S., at 19, and n. 5. No statute expressly declared the FTCA remedy to be a substitute for a Bivens action; indeed, the legislative history of the 1974 amendments to the FTCA “made it crystal clear that Congress views FTCA and Bivens as parallel, complementary causes of action.” 446 U. S., at 19-20.
This much is established by our prior cases. The federal courts’ statutory jurisdiction to decide federal questions confers adequate power to award damages to the victim of a constitutional violation. When Congress provides an alternative remedy, it may, of course, indicate its intent, by statutory language, by clear legislative history, or perhaps even by the statutory remedy itself, that the courts’ power should not be exercised. In the absence of such a congressional directive, the federal courts must make the kind of remedial determination that is appropriate for a common-law tribunal, paying particular heed, however, to any special factors coun-selling hesitation before authorizing a new kind of federal litigation.
Congress has not resolved the question presented by this case by expressly denying petitioner the judicial remedy he seeks or by providing him with an equally effective substitute. There is, however, a good deal of history that is relevant to the question whether a federal employee’s attempt to recover damages from his superior for violation of his First Amendment rights involves any “special factors counselling hesitation.” When those words were first used in Bivens, supra, at 396, we illustrated our meaning by referring to United States v. Standard Oil Co., 332 U. S. 301, 311, 316 (1947), and United States v. Gilman, 347 U. S. 507 (1954).
In the Standard Oil case the Court had been asked to authorize a new damages remedy for the Government against a tortfeasor who had injured a soldier, imposing hospital expenses on the Government and depriving it of his services. Although, as Justice Jackson properly noted in dissent, the allowance of recovery would not have involved any usurpation of legislative power, 332 U. S., at 318, the Court nevertheless concluded that Congress as “the custodian of the national purse” should make the necessary determination of federal fiscal policy. The Court refused to create a damages remedy, which would be “the instrument for determining and establishing the federal fiscal and regulatory policies which the Government’s executive arm thinks should prevail in a situation not covered by traditionally established liabilities.” Id., at 314.
Similarly, in Gilman, the Court applied the Standard Oil rationale to reject the Government’s attempt to recover indemnity from one of its employees after having been held liable under the FTCA for the employee’s negligence. As the Court noted: “The relations between the United States and its employees have presented a myriad of problems with which the Congress over the years has dealt. . . . Government employment gives rise to policy questions of great import, both to the employees and to the Executive and Legislative Branches.” 347 U. S., at 509. The decision regarding indemnity involved questions of employee discipline and morale, fiscal policy, and the efficiency of the federal service. Hence, the Court wrote, the reasons for deferring to congressional policy determinations were even more compelling than in Standard Oil.
“Here a complex of relations between federal agencies and their staffs is involved. Moreover, the claim now asserted, though the product of a law Congress passed, is a matter on which Congress has not taken a position. It presents questions of policy on which Congress has not spoken. The selection of that policy which is most advantageous to the whole involves a host of considerations that must be weighed and appraised. That function is more appropriately for those who write the laws, rather than for those who interpret them.” 347 U. S., at 511-513.
The special factors counselling hesitation in the creation of a new remedy in Standard Oil and Gilman did not concern the merits of the particular remedy that was sought. Rather, they related to the question of who should decide whether such a remedy should be provided. We should therefore begin by considering whether there are reasons for allowing Congress to prescribe the scope of relief that is made available to federal employees whose First Amendment rights have been violated by their supervisors.
t — H HH
Unlike Standard Oil and Gilman, this case concerns a claim that a constitutional right has been violated. Nevertheless, just as those cases involved “federal fiscal policy” and the relations between the Government and its employees, the ultimate question on the merits in this case may appropriately be characterized as one of “federal personnel policy.” When a federal civil servant is the victim of a retaliatory demotion or discharge because he has exercised his First Amendment rights, what legal remedies are available to him?
The answer to that question has changed dramatically over the years. Originally the answer was entirely a matter of Executive discretion. During the era of the patronage system that prevailed in the Federal Government prior to the enactment of the Pendleton Act in 1883, 22 Stat. 403, the federal employee had no legal protection against political retaliation. Indeed, the exercise of the First Amendment right to support a political candidate opposing the party in office would routinely have provided an accepted basis for discharge. During the past century, however, the job security of federal employees has steadily increased.
In the Pendleton Act Congress created the Civil Service Commission and provided for the selection of federal civil servants on a merit basis by competitive examination. Although the statute did not address the question of removals in general, it provided that no employee in the public service could be required to contribute to any political fund or fired for refusing to do so, and it prohibited officers from attempting to influence or coerce the political actions of others.
Congressional attention to the problem of politically motivated removals was again prompted by the issuance of Executive Orders by Presidents Roosevelt and Taft that forbade federal employees to communicate directly with Congress without the permission of their supervisors. These “gag orders,” enforced by dismissal, were cited by several legislators as the reason for enacting the Lloyd-La Follette Act in 1912, 37 Stat. 539, 555, § 6. That statute provided that “no person in the classified civil service of the United States shall be removed therefrom except for such cause as will promote the efficiency of said service and for reasons given in writing . . . .” Moreover, it explicitly guaranteed that the right of civil servants “to furnish information to either House of Congress, or to any committee or member thereof, shall not be denied or interfered with.” As the House Report explained, this legislation was intended “to protect employees against oppression and in the right of free speech and the right to consult their representatives.” In enacting the Lloyd-La Follette Act, Congress weighed the competing policy considerations and concluded that efficient management of Government operations did not preclude the extension of free speech rights to Government employees.
In the ensuing years, repeated consideration of the conflicting interests involved in providing job security, protecting the right to speak freely, and maintaining discipline and efficiency in the federal work force gave rise to additional legislation, various Executive Orders, and the promulgation of detailed regulations by the Civil Service Commission. Federal civil servants are now protected by an elaborate, comprehensive scheme that encompasses substantive provisions forbidding arbitrary action by supervisors and procedures — administrative and judicial — by which improper action may be redressed. They apply to a multitude of personnel decisions that are made daily by federal agencies. Constitutional challenges to agency action, such as the First Amendment claims raised by petitioner, are fully cognizable within this system. As the record in this case demonstrates, the Government’s comprehensive scheme is costly to administer, but it provides meaningful remedies for employees who may have been unfairly disciplined for making critical comments about their agencies.
A federal employee in the competitive service may be removed or demoted “only for such cause as will promote the efficiency of the service.” The regulations applicable at the time of petitioner’s demotion in 1975, which are substantially similar to those now in effect, required that an employee be given 30 days’ written notice of a proposed discharge, suspension, or demotion, accompanied by the agency’s reasons and a copy of the charges. The employee then had the right to examine all disclosable materials that formed the basis of the proposed action, 5 CFR § 752.202(a) (1975), the right to answer the charges with a statement and supporting affidavits, and the right to make an oral noneviden-tiary presentation to an agency official. § 752.202(b). The regulations required that the final agency decision be made by an official higher in rank than the official who proposed the adverse action, § 752.202(f). The employee was entitled to notification in writing stating which of the initial reasons had been sustained. Ibid.; 5 U. S. C. § 7501(b)(4).
The next step was a right to appeal to the Civil Service Commission’s Federal Employee Appeals Authority. 5 CFR §§752.203, 772.101 (1975). The Appeals Authority was required to hold a trial-type hearing at which the employee could present witnesses, cross-examine the agency’s witnesses, and secure the attendance of agency officials, § 772.307(c), and then to render a written decision, §772.-309(a). An adverse decision by the FEAA was judicially reviewable in either federal district court or the Court of Claims. In addition, the employee had the right to ask the Commission’s Appeals Review Board to reopen an adverse decision by the FEAA. §772.310.
If the employee prevailed in the administrative process or upon judicial review, he was entitled to reinstatement with retroactive seniority. § 752.402. He also had a right to full backpay, including credit for periodic within-grade or step increases and general pay raises during the relevant period, allowances, differentials, and accumulated leave. §550.803. Congress intended that these remedies would put the employee “in the same position he would have been in had the unjustified or erroneous personnel action not taken place.”
Given the history of the development of civil service remedies and the comprehensive nature of the remedies currently available, it is clear that the question we confront today is quite different from the typical remedial issue confronted by a common-law court. The question is not what remedy the court should provide for a wrong that would otherwise go un-redressed. It is whether an elaborate remedial system that has been constructed step by step, with careful attention to conflicting policy considerations, should be augmented by the creation of a new judicial remedy for the constitutional violation at issue. That question obviously cannot be answered simply by noting that existing remedies do not provide complete relief for the plaintiff. The policy judgment should be informed by a thorough understanding of the existing regulatory structure and the respective costs and benefits that would result from the addition of another remedy for violations of employees’ First Amendment rights.
The costs associated with the review of disciplinary decisions are already significant — not only in monetary terms, but also in the time and energy of managerial personnel who must defend their decisions. Respondent argues that supervisory personnel are already more hesitant than they should be in administering discipline, because the review that ensues inevitably makes the performance of their regular duties more difficult. Brief for Respondent 37-41. Whether or not this assessment is accurate, it is quite probable that if management personnel face the added risk of personal liability for decisions that they believe to be a correct response to improper criticism of the agency, they would be deterred from imposing discipline in future cases. In all events, Congress is in a far better position than a court to evaluate the impact of a new species of litigation between federal employees on the efficiency of the civil service. Not only has Congress developed considerable familiarity with balancing governmental efficiency and the rights of employees, but it also may inform itself through factfinding procedures such as hearings that are not available to the courts.
Nor is there any reason to discount Congress’ ability to make an evenhanded assessment of the desirability of creating a new remedy for federal employees who have been demoted or discharged for expressing controversial views. Congress has a special interest in informing itself about the efficiency and morale of the Executive Branch. In the past it has demonstrated its awareness that lower-level Government employees are a valuable source of information, and that supervisors might improperly attempt to curtail their subordinates’ freedom of expression.
Thus, we do not decide whether or not it would be good policy to permit a federal employee to recover damages from a supervisor who has improperly disciplined him for exercising his First Amendment rights. As we did in Standard Oil, we decline “to create a new substantive legal liability without legislative aid and as at the common law,” 332 U. S., at 302, because we are convinced that Congress is in a better position to decide whether or not the public interest would be served by creating it.
The judgment of the Court of Appeals is
Affirmed.
The record indicates that petitioner filed two appeals from the first reassignment and three appeals from the second. App. to Pet. for Cert, e-3 to e-4. He asserts that he had previously made unsuccessful attempts within the Center to obtain redress. App. 30.
App. to Pet. for Cert, d-2 to d-3 (memorandum opinion of District Court); id., at e-19 (opinion of Federal Employee Appeals Authority).
Id., at f-2 to f-3, e-19, e-7.
Id., at e-38 to e-39. Petitioner could have obtained judicial review of the Authority’s determination by filing suit in a federal district court or in the United States Court of Claims, but did not do so.
Id., at f-23 to f-25.
Id., at d-2 to d-17.
Competent decisionmakers may reasonably disagree about the merits of petitioner’s First Amendment claim. Compare the opinion of the District Court, App. D to Pet. for Cert., and the opinion of the Atlanta Field Office of the Federal Employees Appeal Authority issued on August 12, 1976, App. E, both rejecting petitioner’s claims, with the opinion of the Appeals Review Board issued on July 14, 1978, App. F, finding that the First Amendment had been violated. This question is not before us.
See Carlson v. Green, 446 U. S. 14, 20-23 (1980) (factors making Federal Tort Claims Act recovery less “effective” than an action under the Constitution to recover damages against the individual official). Petitioner contends that, unlike a damages remedy against respondent individually, civil service remedies against the Government do not provide for punitive damages or a jury trial and do not adequately deter the unconstitutional exercise of authority by supervisors. Brief for Petitioner 27-29.
His attorney’s fees were not paid by the Government, and he claims to have suffered uncompensated emotional and dignitary harms. Id., at 24-26. In light of our disposition of this case, we do not need to decide whether such costs could be recovered as compensation in an action brought directly under the Constitution.
In Marbury v. Madison, 1 Cranch 137, 163 (1803), Chief Justice Marshall invoked the authority of Blackstone’s Commentaries in support of this proposition. Blackstone had written: “[I]t is a general and indisputable rule, that where there is a legal right, there is also a legal remedy by suit, or action at law, whenever that right is invaded. . . . [I]t is a settled and invariable principle in the laws of England, that every right, when withheld, must have a remedy, and every injury its proper redress.” 3 Commentaries *23, *109.
See Bivens v. Six Unknown Fed. Narcotics Agents, 403 U. S. 388, 428 (1971) (Black, J., dissenting).
See, e. g., United States v. Lee, 106 U. S. 196 (1882) (ejectment action against federal officers to enforce Takings Clause of Fifth Amendment); Wiley v. Sinkler, 179 U. S. 58, 64-65 (1900) (damages against state officer for denying plaintiff’s right to vote in federal election); Ex parte Young, 209 U. S. 123 (1908) (injunctive relief against state official for violation of Fourteenth Amendment); Weeks v. United States, 232 U. S. 383, 398 (1914) (exclusion in federal criminal case of evidence seized in violation of Fourth Amendment); Jacobs v. United States, 290 U. S. 13, 16 (1933) (award of interest as well as principal in just compensation claim founded on the Fifth Amendment); Swann v. Charlotte-Mecklenburg Bd. of Education, 402 U. S. 1, 15-16 (1971) (school busing to remedy unconstitutional racial segregation). See generally Hill, Constitutional Remedies, 69 Colum. L. Rev. 1109, 1124-1127 (1969).
“Moreover, since respondent is no longer a Congressman, see n. 1, supra, equitable relief in the form of reinstatement would be unavailing. And there are available no other alternative forms of judicial relief. For Davis, as for Bivens, ‘it is damages or nothing.’ Bivens, supra, at 410 (Harlan, J., concurring in judgment).” 442 U. S., at 245.
We need not reach the question whether the Constitution itself requires a judicially fashioned damages remedy in the absence of any other remedy to vindicate the underlying right, unless there is an express textual command to the contrary. Cf. Davis v. Passman, 442 U. S. 228, 246 (1979). The existing civil service remedies for a demotion in retaliation for protected speech are clearly constitutionally adequate. See infra, at 386-388.
“Whatever the merits of the policy, its conversion into law is a proper subject for congressional action, not for any creative power of ours. Congress, not this Court or the other federal courts, is the custodian of the national purse. By the same token it is the primary and most often the exclusive arbiter of federal fiscal affairs. And these comprehend, as we have said, securing the treasury or the government against financial losses however inflicted, including requiring reimbursement for injuries creating them, as well as filling the treasury itself.” 332 U. S., at 314-316.
The Court further noted that the type of harm for which the Executive sought judicial redress was not new, and that Congress presumably knew of it but had not exercised its undoubted power to authorize a damages action. Id., at 315-316.
The Report of the Committee on Civil Service and Retrenchment submitted by Senator Pendleton on May 15,1882, contained a vivid description of the patronage system, reading in part as follows:
“The fact is confessed by all observers and commended by some that ‘to the victors belong the spoils;’ that with each new administration comes the business of distributing patronage among its friends. . . . [The President] is to do what some predecessor of his has left undone, or to undo what others before him have done; to put this man up and that man down, as the system of political rewards and punishments shall seem to him to demand.” S. Rep. No. 576, 47th Cong., 1st Sess., 2 (1882).
See generally House Committee on Post Office and Civil Service, History of Civil Service Merit Systems of the United States and Selected Foreign Countries, 94th Cong., 2d Sess., 26-173 (1976).
See S. Rep. No. 576, supra, n. 16, at 9; cf. H. R. Rep. No. 1826, 47th Cong., 2d Sess., 1-2 (1882) (rejected provisions of House bill permitting removals only for cause).
Section 13 provided:
“No officer or employee of the United States mentioned in this act shall discharge, or promote, or degrade, or in manner change the official rank or compensation of any other officer or employee, or promise or threaten so to do, for giving or withholding or neglecting to make any contribution of money or other valuable thing for any political purpose.” 22 Stat. 407.
Other sections made it unlawful for Government employees to solicit political contributions from, and to give such contributions to, other Government employees, §§ 11, 14, and to receive any political contributions on Government premises, § 12. Section 2 required the Civil Service Commission to promulgate rules providing, inter alia, “that no person in the public service is for that reason under any obligations to contribute to any political fund, or to render any political service, and that he will not be removed or otherwise prejudiced for refusing to do so,” and also “that no person in said service has any right to use his official authority or influence to coerce the political action of any person or body.” 22 Stat. 404. See 5 U. S. C. § 2302(b)(3) (1982 ed.); 5 U. S. C. §§7321-7323.
In 1906 President Roosevelt issued Executive Order No. 1142, which provided:
“All officers and employees of the United States of every description, serving in or under any of the Executive Departments or independent Government establishments, and whether so serving in or out of Washington, are hereby forbidden, either directly or indirectly, individually or through associations, to solicit an increase of pay or to influence or attempt to influence in their own interest any other legislation whatever, either before Congress or its committees, or in any way save through the heads of the Departments or independent Government establishments in or under which they serve, on penalty of dismissal from the Government service. Theodore Roosevelt.”
President Taft issued another Order, Executive Order No. 1514, in 1909:
“It is hereby ordered that no bureau, office, or division chief, or subordinate in any department of the Government, and no officer of the Army or Navy or Marine Corps stationed in Washington, shall apply to either House of Congress, or to any committee of either House of Congress, or to any Member of Congress, for legislation or for appropriations, or for congressional action of any kind, except with the consent and knowledge of the head of the department; nor shall any such person respond to any request for information from either House of Congress, or any committee of either House of Congress, or any member of Congress, except through, or as authorized by, the head of his department. William H. Taft.”
See 48 Cong. Rec. 4513, 5223, 5634, 5635, 10673, 10729-10730 (1912).
See id., at 4513 (remarks of Rep. Gregg) (“[I]t is for the purpose of wiping out the existence of this despicable ‘gag rule’ that this provision is inserted. The rule is unjust, unfair, and against the provisions of the Constitution of the United States, which provides for the right of appeal and the right of free speech to all its citizens”). A number of the bill’s proponents asserted that the gag rule violated the First Amendment rights of civil servants. See, e. g., id., at 4653 (remarks of Rep. Calder); id., at 4738 (remarks of Rep. Blackmon); id., at 5201 (remarks of Rep. Prouty); id., at 5223 (remarks of Rep. O’Shaunessy); id., at 5634 (remarks of Rep. Lloyd); id., at 5637-5638 (remarks of Rep. Wilson); id., at 10671 (remarks of Sen. Ashurst); id., at 10673 (remarks of Sen. Reed); id., at 10793 (remarks of Sen. Smith); id., at 10799 (remarks of Sen. La Follette).
The statute also required notice and reasons and an opportunity for the employee to answer the charges in writing with supporting affidavits. These requirements had previously been adopted by President McKinley in an Executive Order issued in 1897, but they were not judicially enforceable. History of Civil Service Merit Systems, supra n. 16, at 202-203.
This provision was accompanied by a more specific guarantee that membership in any independent association of postal employees seeking improvements in wages, hours, and working conditions, or the presentation to Congress of any grievance, “shall not constitute or be cause for reduction in rank or compensation or removal of such person or groups of persons from said service.”
H. R. Rep. No. 388, 62d Cong., 2d Sess., 7 (1912).
Members of the House, which originated § 6, suggested that it would improve the efficiency and morale of the civil service. “It will do away with the discontent and suspicion which now exists among the employees and will restore that confidence which is necessary to get the best results from the employees.” 48 Cong. Ree. 4654 (1912) (remarks of Rep. Calder); see id., at 5635 (remarks of Rep. Lloyd).
The Senate Committee initially took a different position, urging in its Report that the relevant language, see id., at 10732 (House version) be omitted entirely:
“As to the last clause in section 6, it is the view of the committee that all citizens have a constitutional right as such to present their grievances to Congress or Members thereof. But governmental employees occupy a position relative to the Government different from that of ordinary citizens. Upon questions of interest to them as citizens, governmental employees have a right to petition Congress direct. A different rule should prevail with regard to their presentation of grievances connected with their relation to the Government as employees. In that respect good discipline and the efficiency of the service requires that they present their grievances through the proper administrative channels.” S. Rep. No. 955, 62d Cong., 2d Sess., 21 (1912).
As Senator Bourne explained, “it was believed by the committee that to recognize the right of the individual employee to go over the head of his superior and go to Members of Congress on matters appertaining to his own particular grievances, or for his own selfish interest, would be detrimental to the service itself; that it would absolutely destroy the discipline necessary for good service.” 48 Cong. Rec. 10676 (1912).
This view did not prevail. After extended discussion in floor debate concerning the right to organize and the right to present grievances to Congress, id., at 10671-10677, 10728-10733, 10792-10804, the Committee offered and the Senate approved a compromise amendment to the House version — guaranteeing both rights at least in part — which was subsequently enacted into law. Id., at 10804; 37 Stat. 555.
Among the most significant are the Veterans Preference Act of 1944, 58 Stat. 390 (protecting veterans in federal employment by extending the 1912 Act’s procedural and substantive protections to adverse actions other than removals, and adding the right to respond orally and to appeal to the Civil Service Commission); the Back Pay Act of 1948, 62 Stat. 354 (extending the protections against removal contained in the 1912 Act to all employees who were suspended without pay; permitting backpay awards to certain categories of employees who were improperly removed or suspended and to victims of improper reductions in force); the Back Pay Act of 1966, 81 Stat. 203 (extending the right to backpay and lost benefits to every employee affected by a personnel action subsequently found to be unjustified); and the Civil Service Reform Act of 1978, 92 Stat. 1134 (shifting adjudicative functions of the Civil Service Commission to the Merit Systems Protection Board, modifying administrative appeals procedures, and providing new protections for so-called “whistleblowers”).
Exec. Order No. 10988, § 14, 3 CFR 521 (1959-1963 Comp.), and Exec. Order No. 11491, § 22, 3 CFR 861 (1966-1970 Comp.), printed in note following 5 U. S. C. § 7301, gave all employees in the competitive service the right to appeal adverse actions to the Civil Service Commission, and made the administrative remedy applicable to adverse personnel actions other than removal and suspension without pay.
See 5 CFR §§752, 772 (1975).
Not all personnel actions are covered by this system. For example, there are no provisions for appeal of either suspensions for 14 days or less, 5 U. S. C. § 7503 (1982 ed.), or adverse actions against probationary employees, § 7511. In addition, certain actions by supervisors against federal employees, such as wiretapping, warrantless searches, or uncompensated takings, would not be defined as “personnel actions” within the statutory scheme.
Petitioner received retroactive reinstatement and $30,000 in backpay. An empirical study found that approximately one quarter of the adverse actions in the federal civil service were contested. Merrill, Procedures for Adverse Actions Against Federal Employees, 69 Va. L. Rev. 196,198-199 (1973). In 1970, agency appeals succeeded in 20% of removal cases and 24% of demotion cases. Before the Civil Service Commission, 47% of those employees who appealed demotions and 24% of those who contested removal were successful. Id., at 204, n. 35.
prjor enactment of the Civil Service Reform Act of 1978, this protection was accorded in part by statute, 5 U. S. C. § 7501(a) (removals and suspensions without pay of non-preference-eligible employees); § 7512(a) (removals, suspensions without pay, reductions in grade or pay, and other adverse actions against preference-eligible employees), and in part by Executive Orders, see n. 26, supra, implemented in Civil Service Commission regulations, 5 CFR §§ 752.104(a), 752.201 (1975) (adverse actions, including reductions in grade or pay, against covered employees, including non-preference-eligibles). The 1978 amendments retained the general rule, 5 U. S. C. § 7513(a) (1982 ed.), and supplemented it by specifying certain “prohibited personnel practices.” § 2302.
Various aspects of the regulations discussed in text were added at different times. See generally Merrill, supra n. 29, at 214-218.
Under the statute, before and after the 1978 amendments, the agency has the discretionary authority to provide an evidentiary hearing. 5 U. S. C. § 7501(b); 5 U. S. C. § 7513(c) (1982 ed.); see 5 CFR § 752.404(g) (1983). As amended in 1978, the statute gives the employee the right to representation by an attorney or other person. 5 U. S. C. § 7513(b)(3) (1982 ed.); see 5 CFR § 752.404(e) (1983).
The 1978 Civil Service Reform Act gave the Commission's adjudicative functions to the Merit Systems Protection Board (MSPB). 5 U. S. C. §§ 1205, 7543(d), 7701 (1982 ed.).
The Commission’s regulations did not specify which party carried the burdens of production and persuasion. Nevertheless, participants in the process and reviewing courts assumed that the burden was on the agency to prove that the adverse action was justified. Merrill, supra n. 29, at 251; Johnson & Stoll; Judicial Review of Federal Employee Dismissals and Other Adverse Actions, 57 Cornell L. Rev. 178, 192-193 (1972).
Under the law now in effect, the United States Court of Appeals for the Federal Circuit has exclusive jurisdiction over appeals from the MSPB. 5 U. S. C. § 7703 (1982 ed.); Federal Courts Improvement Act of 1982, § 127(a), Pub. L. 97-164, 96 Stat. 37, 28 U. S. C. § 1295 (1982 ed.).
S. Rep. No. 1062, 89th Cong., 2d Sess., 1 (1966).
There is a remarkable similarity between comments made in Congress in 1912, when the Lloyd-La Follette Act was passed, and in 1978, when the Civil Service Reform Act was enacted. In 1912, Representative Calder stated: “There are always two sides to every question, and surely if any man is competent to express an opinion regarding the needs of the postal service it is the men who perform the actual work. If anyone is competent to make known unsatisfactory working conditions, who, might I ask, is better qualified to lay his proper grievances before Congress than the men who have complaints to make and who suffer from these grievances?” 48 Cong. Rec. 4653 (1912). In 1978, a Senate Committee Print stated: “Federal employees are often the source of information about agency operations suppressed by their superiors. Since they are much closer to the actual working situation than top agency officials, they have testified before Congress, spoken to reporters, and informed the public. Mid-level employees provide much of the information Congress needs to evaluate programs, budgets, and overall agency performance.” Senate Committee on Governmental Affairs, The Whistleblowers, 95th Cong., 2d Sess., 40 (Comm. Print 1978). See also H. R. Rep. No. 95-1403, pp. 386-387 (1978); S. Rep. No. 95-969, p. 8 (1978). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
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"National Credit Union Administration",
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"National Enforcement Commission",
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] | [
19
] |
NEW ORLEANS PUBLIC SERVICE, INC. v. COUNCIL OF THE CITY OF NEW ORLEANS et al.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT
No. 88-348.
Argued April 25, 1989
Decided June 19, 1989
Rex E. Lee argued the cause for petitioner. With him on the briefs were David W. Carpenter, Thomas O. Lind, Her schel L. Abbott, Jr., David G. Radlauer, and Edward H. Bergin.
Richard J. Lazarus argued the cause for the United States et al. as amici curiae urging reversal. With him on the brief were Acting Solicitor General Bryson, Deputy Solicitor General Shapiro, Catherine C. Cook, Jerome M. Feit, and Robert H. Solomon.
Clinton A. Vince argued the cause for respondents. With him on the brief were Bernhardt K. Wruble, Nancy A. Wodka, and Okla Jones II.
Briefs of amici curiae urging affirmance were filed for the National Association of Regulatory Utility Commissioners by William Paul Rodgers, Jr.; for the National League of Cities et al. by Bernia Ruth Solomon and Charles Rothfeld; and for the Pennsylvania Public Utility Commission by Laurence F. Barth and John F. Povilaitis.
Justice Scalia
delivered the opinion of the Court.
In Nantahala Power & Light Co. v. Thornburg, 476 U. S. 953 (1986), we held that for purposes of setting intrastate retail rates a State may not differ from the Federal Energy Regulatory Commission’s allocations of wholesale power by imposing its own judgment of what would be just and reasonable. Last Term, in Mississippi Power & Light Co. v. Mississippi ex rel. Moore, 487 U. S. 354 (1988), we held that FERC’s allocation of the $3 billion-plus cost of the Grand Gulf 1 nuclear reactor among the operating companies that jointly agreed to finance its construction and operation pre-empted Mississippi’s inquiry into the prudence of a utility retailer’s decision to participate in the joint venture. Today we confront once again a legal issue arising from the question of who must pay for Grand Gulf 1. Here the state ratemaking authority deferred to FERC’s implicit finding that New Orleans Public Service, Inc.’s decision to participate in the Grand Gulf venture was reasonable, but determined that the costs incurred thereby should not be completely reimbursed because, it asserted, the utility’s management was negligent in failing later to diversify its supply portfolio by selling a portion of its Grand Gulf power. Whether the State’s decision to provide less than full reimbursement for the FE Reallocated wholesale costs conflicts with our holdings in Nantahala and Mississippi Poiver & Light is not at issue in this case. Rather, we address the threshold question whether the District Court, which the utility petitioned for declaratory and injunctive relief from the state ratemaking authority’s order, properly abstained from exercising jurisdiction in deference to the state review process.
hH
Because the abstention questions at stake here have little to do with the intricacies of the factual and procedural history underlying the controversy, we may sketch the background of this case in brief. Petitioner New Orleans Public Service, Inc. (NOPSI), a producer, wholesaler, and retailer of electricity that provides retail electrical service to the city of New Orleans, is one of four wholly owned operating subsidiaries of Middle South Utilities, Inc. Middle South operates an integrated “power pool” in which each of the four operating companies transmits produced electricity to a central dispatch center and draws back from the dispatch center the power it needs to meet customer demand. In 1974, NOPSI and its fellow operating companies entered a contract with Middle South Energy, Inc. (MSE), another wholly owned Middle South subsidiary, whereby the operating companies agreed to finance MSE’s construction and operation of two 1250 megawatt nuclear reactors, Grand Gulf 1 and 2, in return for the right to the reactors’ electrical output. The estimated cost of completing the two reactors was $1.2 billion.
During the late 1970’s, consumer demand turned out to be far lower than expected, and regulatory delays, enhanced construction requirements, and high inflation led to spiraling costs. As a result, construction of Grand Gulf 2 was suspended, and the cost of completing Grand Gulf 1 alone eventually exceeded $3 billion. Not surprisingly, the cost of the electricity produced by the reactor greatly exceeded that of power generated by Middle South’s conventional facilities.
Acting pursuant to its exclusive regulatory authority over interstate wholesale power transactions, 49 Stat. 847, as amended, 16 U. S. C. §824 et seq., FERC conducted extensive proceedings to determine “just and reasonable” rates for Grand Gulf 1 power and to prescribe a “just, reasonable, and nondiscriminatory” allocation of Grand Gulf’s costs and output. In June 1985, the Commission issued a final order, Middle South Energy, Inc., 31 FERC ¶61,305, rehearing denied, 32 FERC ¶ 61,425 (1985), aff’d sub nom. Mississippi Industries v. FERC, 257 U. S. App. D. C. 244, 808 F. 2d 1525, rehearing granted and vacated in part, 262 U. S. App. D. C. 42, 822 F. 2d 1104, cert. denied, 484 U. S. 985 (1987), in which it concluded that, because the planned nuclear reactors had been designed “to meet overall System needs and objectives,” 31 FERC, p. 61,655, the Middle South subsidiaries should pay for the Grand Gulf project “roughly in proportion to each company’s share of System demand,” id., at 61,655-61,656. The Commission allocated 17 percent of Grand Gulf costs (approximately $13 million per month) to NOPSI, rejecting Middle South’s proposal of 29.8 percent as well as the 9 percent figure favored by the respondent here, the New Orleans City Council.
“Although it did not expressly discuss the ‘prudence’ of constructing Grand Gulf and bringing it on line, FERC implicitly accepted the uncontroverted testimony of [Middle South] executives who explained why they believed the decisions to construct and to complete Grand Gulf 1 were sound, and approved the finding that ‘continuing construction of Grand Gulf Unit No. 1 was prudent because Middle South’s executives believed Grand Gulf would enable the Middle South system to diversify its base load fuel mix and, it was projected, at the same time, produce power for a total cost (capacity and energy) which would be less than existing alternatives on the system.’” Mississippi Power & Light Co. v. Mississippi ex rel. Moore, 487 U. S., at 363, quoting Middle South Energy, Inc., 26 FERC ¶63,044, pp. 65, 112-65, 113 (1984).
When NOPSI sought from the New Orleans City Council (Council) — the local ratemaking body with final authority over the utility’s retail rates, see 16 U. S. C. § 824(b); La. Rev. Stat. Ann. §§33:4405, 33:4495 (West 1988); Home Rule Charter of the City of New Orleans §4-1604 (1986), as amended by Ordinance No. 8264 M. C. S., as amended by Ordinance No. 10340 M. C. S.— a rate increase to cover the increase in wholesale rates resulting from FERC’s allocation of Grand Gulf costs, the Council denied an immediate rate adjustment, explaining that a public hearing was necessary to explore “‘the legality and prudency [sic] of the [contracts relating to Grand Gulf 1, and] the prudency [sic] and reasonableness of the said expenses.’” Brief for United States et al. as Amici Curiae 5, quoting Council Resolution R-85-423. NOPSI responded by filing an action for injunctive and declaratory relief in the United States District Court for the Eastern District of Louisiana, asserting that federal law required the Council to allow it to recover, through an increase in retail rates, its FERC-allocated share of the Grand Gulf expenses.
The District Court granted the Council’s motion to dismiss, holding that pursuant to the Johnson Act, 28 U. S. C. § 1342, it had no jurisdiction to entertain the action, and that even if it had jurisdiction it would be compelled by Burford v. Sun Oil Co., 319 U. S. 315 (1943), to abstain. On appeal, the Fifth Circuit initially reversed on both grounds, but later, on its own motion, vacated its earlier opinion in part and held that abstention was proper both under Burford and under Younger v. Harris, 401 U. S. 37 (1971). New Orleans Pub. Serv., Inc. v. New Orleans, 782 F. 2d 1236, modified, 798 F. 2d 858 (1986), cert. denied, 481 U. S. 1023 (1987) (NOPSI I).
By resolution of October 10, 1985, while NOPSI I was still pending before the Fifth Circuit, the Council initiated an investigation into the prudence of NOPSI’s involvement in Grand Gulf 1. Resolution R-85-636 stated the Council’s intention to examine all aspects of NOPSI’s relationship with Grand Gulf, including NOPSPs “‘efforts to minimize its total cost exposure for the purchase,’” and Grand Gulf’s “‘impact on its other power supply opportunities,”’ “‘for the purpose of determining what portion, if any, of NOPSI’s Grand Gulf 1 expense shall be assumed by [NOPSPs] shareholders.’” App. 113-114. The resolution specifically provided, however, that in setting the appropriate retail rate, the Council would “‘not seek to invalidate any of the agreements surrounding Grand Gulf 1 or to order NOPSI to pay MSE a rate other than that approved by the FERC.’” Id., at 114.
In November 1985, NOPSI filed a second suit in the United States District Court for the Eastern District of Louisiana, seeking to preclude the Council from requiring NOPSI or its shareholders to absorb any of NOPSPs FERC-allocated share of the Grand Gulf costs. The District Court dismissed the suit as unripe, but held in the alternative that abstention was appropriate. On appeal, the Fifth Circuit affirmed the judgment on ripeness grounds. New Orleans Pub. Serv., Inc. v. Council of New Orleans, 833 F. 2d 583 (1987).
The Council completed its prudence review on February 4, 1988, and immediately entered a final order disallowing $135 million of the Grand Gulf costs. The order was based on the Council’s determinations that “NOPSPs . . . oversight and review of its Grand Gulf obligation . . . was uncritical and severely deficient,” App. 24, and that NOPSI acted imprudently in failing to reduce the risk of its Grand Gulf commitment, in the wake of the Three Mile Island nuclear incident in March 1979, “by selling all or part of its share off-system,” id., at 24-25.
Upon receipt of the Council’s decree, NOPSI turned once again to the District Court for the Eastern District of Louisiana, seeking declaratory and injunctive relief on the ground that, in light of this Court’s recent decision in Nantahala Power & Light Co. v. Thornburg, 476 U. S. 953 (1986), the Council’s rate order was pre-empted by federal law. Although the District Court expressed considerable doubt as to the merits of the Council’s position on the pre-emption question, it concluded that, notwithstanding Nantahala, it should still abstain from deciding the suit.
Anticipating that the District Court might again abstain, NOPSI had filed a petition for review of the Council’s order in the Civil District Court for the Parish of Orleans, Louisiana. As filed, NOPSI’s petition raised only state-law claims and federal due process and takings claims, but NOPSI informed the state court by letter that it would amend to raise its federal pre-emption claim if the federal court once again dismissed its complaint. When that happened, it did so.
In the parallel federal proceedings, the Fifth Circuit affirmed the District Court’s dismissal, agreeing that the case was effectively controlled by NOPSI I, i. e., that Burford and Younger abstention applied. 850 F. 2d 1069 (1988). We granted certiorari. 488 U. S. 1003 (1989).
* — 1 | — i
Before proceeding to the merits of the abstention issues, it bears emphasis that the Council does not dispute the District Court’s jurisdiction to decide NOPSI’s pre-emption claim. Our cases have long supported the proposition that federal courts lack the authority to abstain from the exercise of jurisdiction that has been conferred. For example: “We have no more right to decline the exercise of jurisdiction which is given, than to usurp that which is not given. The one or the other would be treason to the Constitution.” Cohens v. Virginia, 6 Wheat. 264, 404 (1821). “ *[T]he courts of the United States are bound to proceed to judgment and to afford redress to suitors before them in every case to which their jurisdiction extends. They cannot abdicate their authority or duty in any case in favor of another jurisdiction.’” Chicot County v. Sherwood, 148 U. S. 529, 534 (1893) (citations omitted). “When a Federal court is properly appealed to in a case over which it has by law jurisdiction, it is its duty to take such jurisdiction .... The right of a party plaintiff to choose a Federal court where there is a choice cannot be properly denied.” Willcox v. Consolidated Gas Co., 212 U. S. 19, 40 (1909) (citations omitted). Underlying these assertions is the undisputed constitutional principle that Congress, and not the Judiciary, defines the scope of federal jurisdiction within the constitutionally permissible bounds. Kline v. Burke Construction Co., 260 U. S. 226, 234 (1922).
That principle does not eliminate, however, and the categorical assertions based upon it do not call into question, the federal courts’ discretion in determining whether to grant certain types of relief — a discretion that was part of the common-law background against which the statutes conferring jurisdiction were enacted. See Shapiro, Jurisdiction and Discretion, 60 N. Y. U. L. Rev. 543, 570-577 (1985). Thus, there are some classes of cases in which the withholding of authorized equitable relief because of undue interference with state proceedings is “the normal thing to do,” Younger v. Harris, 401 U. S., at 45. We have carefully defined, however, the areas in which such “abstention” is permissible, and it remains “‘the exception, not the rule.’” Hawaii Housing Authority v. Midkiff, 467 U. S. 229, 236 (1984), quoting Colorado River Water Conservation Dist. v. United States, 424 U. S. 800, 813 (1976). As recently as last Term we described the federal courts’ obligation to adjudicate claims within their jurisdiction as “‘virtually unflagging.’” Deakins v. Monaghan, 484 U. S. 193, 203 (1988) (citation omitted).
With these principles in mind, we address the question whether the District Court, relying on Burford v. Sun Oil Co., 319 U. S. 315 (1943), and Younger v. Hams, supra, properly declined to exercise its jurisdiction in the present case. While we acknowledge that “[t]he various types of abstention are not rigid pigeonholes into which federal courts must try to fit cases,” Pennzoil Co. v. Texaco Inc., 481 U. S. 1, 11, n. 9 (1987), the policy considerations supporting Bur- ford and Younger are sufficiently distinct to justify independent analyses.
A
In Burford v. Sun Oil Co., supra, a Federal District Court sitting in equity was confronted with a Fourteenth Amendment challenge to the reasonableness of the Texas Railroad Commission’s grant of an oil drilling permit. The constitutional challenge was of minimal federal importance, involving solely the question whether the commission had properly applied Texas’ complex oil and gas conservation regulations. Id., at 331, and n. 28. Because of the intricacy and importance of the regulatory scheme, Texas had created a centralized system of judicial review of commission orders, which “permit[ted] the state courts, like the Railroad Commission itself, to acquire a specialized knowledge” of the regulations and industry, id., at 327. We found the state courts’ review of commission decisions “expeditious and adequate,” id., at 334, and, because the exercise of equitable jurisdiction by comparatively unsophisticated Federal District Courts alongside state-court review had repeatedly led to “[djelay, misunderstanding of local law, and needless federal conflict with the state policy,” id., at 327, we concluded that “a sound respect for the independence of state action requir[ed] the federal equity court to stay its hand,” id., at 334.
We applied these same principles in Alabama Pub. Serv. Comm’n v. Southern R. Co., 341 U. S. 341 (1951), where a railroad sought to enjoin enforcement of an order of the Alabama Public Service Commission refusing permission to discontinue unprofitable rail lines. According to the railroad, requiring continued operation of the lines amounted to confiscation of property in violation of federal due process rights. Under Alabama law, a party dissatisfied with a final order of the Public Service Commission had an absolute right of appeal to the Circuit Court of Montgomery County, which was “empowered to set aside any Commission order found to be contrary to the substantial weight of the evidence or erroneous as a matter of law.” Id., at 348. This right of statutory-appeal “concentrated in one circuit court” which exercised “supervisory” powers was, we found, “an integral part of the regulatory process under the Alabama Code.” Ibid. Taking account of the unified nature of the state regulatory process, and emphasizing that “adequate state court review of [the] administrative order [was] available,” id., at 349, and that the success of the railroad’s constitutional challenge depended upon the “predominantly local factor of public need for the service rendered,” id., at 347, we held that the District Court ought to have abstained from exercising its jurisdiction, id., at 350.
From these cases, and others on which they relied, we have distilled the principle now commonly referred to as the “Burford doctrine.” Where timely and adequate state-court review is available, a federal court sitting in equity must decline to interfere with the proceedings or orders of state administrative agencies: (1) when there are “difficult questions of state law bearing on policy problems of substantial public import whose importance transcends the result in the case then at bar”; or (2) where the “exercise of federal review of the question in a case and in similar cases would be disruptive of state efforts to establish a coherent policy with respect to a matter of substantial public concern.” Colorado River Water Conservation Dist. v. United States, supra, at 814.
The present case does not involve a state-law claim, nor even an assertion that the federal claims are “in any way entangled in a skein of state law that must be untangled before the federal case can proceed,” McNeese v. Board Of Education for Community Unit School Dist. 187, Cahokia, 373 U. S. 668, 674 (1963). The Fifth Circuit acknowledged as much in NOPSI I, but found “the absence of a state law claim . . . not fatal” because, it thought, “[t]he motivating force behind Burford abstention is ... a reluctance to intrude into state proceedings where there exists a complex state regulatory system.” 798 F. 2d, at 861-862. Finding that this case involved a complex regulatory scheme of “paramount local concern and a matter which demands local administrative expertise,” id., at 862, it held that the District Court appropriately applied Burford.
While Burford is concerned with protecting complex state administrative processes from undue federal interference, it does not require abstention whenever there exists such a process, or even in all cases where there is a “potential for conflict” with state regulatory law or policy. Colorado River Water Conservation Dist., 424 U. S., at 815-816. Here, NOPSI’s primary claim is that the Council is prohibited by federal law from refusing to provide reimbursement for FERC-allocated wholesale costs. Unlike a claim that a state agency has misapplied its lawful authority or has failed to take into consideration or properly weigh relevant state-law factors, federal adjudication of this sort of pre-emption claim would not disrupt the State’s attempt to ensure uniformity in the treatment of an “essentially local problem,” Alabama Pub. Serv. Comm’n, supra, at 347.
That Burford abstention is not justified in these circumstances is strongly suggested by our decision in Public Util. Comm’n of Ohio v. United Fuel Gas Co., 317 U. S. 456 (1943), decided just four months prior to Burford, in which a District Court had enjoined on federal pre-emption grounds a State’s attempt to fix interstate gas rates. After determining that the State’s order impinged on the authority Congress had vested solely in the Federal Power Commission, we addressed the State’s contention that the District Court had nonetheless abused its discretion by granting injunctive relief:
“It is perhaps unnecessary at this late date to repeat the admonition that the federal courts should be wary of interrupting the proceedings of state administrative tribunals by use of the extraordinary writ of injunction. But this, too, is a rule of equity and not to be applied in blind disregard of fact. And what are the commanding circumstances of the present case? First, and most important, the orders of the state Commission are on their face plainly invalid. No inquiry beyond the orders themselves and the undisputed facts which underlie them is necessary in order to discover that they are in conflict with the federal Act” 317 U. S., at 468-469 (emphasis added).
Similarly in the case at bar, no inquiry beyond the four corners of the Council’s retail rate order is needed to determine whether it is facially pre-empted by FERC’s allocative decree and relevant provisions of the Federal Power Act. Such an inquiry would not unduly intrude into the processes of state government or undermine the State’s ability to maintain desired uniformity. It may, of course, result in an injunction against enforcement of the rate order, but “there is ... no doctrine requiring abstention merely because resolution of a federal question may result in the overturning of a state policy.” Zablocki v. Redhail, 434 U. S. 374, 380, n. 6 (1978).
It is true that in its initial complaint, NOPSI asserted, as an alternative to its facial pre-emption challenge, that the rate order’s nominal emphasis on NOPSI’s failure in 1979-1980 to diversify its power supply by selling off a portion of its Grand Gulf allocation was merely a cover for the determination that the original Grand Gulf investment was itself unwise. Unlike the facial challenge, this claim cannot be resolved on the face of the rate order, because it hinges largely on the plausibility of the Council’s finding that NOPSI should have, and could have, diversified its supply portfolio and thereby lowered its average wholesale costs. See n. 2, supra. Analysis of this pretext claim requires an inquiry into industry practice, wholesale rates, and power availability during the relevant time period, an endeavor that demands some level of industry-specific expertise. But since, as the facts of this case amply demonstrate, wholesale electricity is not bought and sold within a predominantly local market, it does not demand significant familiarity with, and will not disrupt state resolution of, distinctively local regulatory facts or policies. The principles underlying Burford are therefore not implicated.
B
In Younger v. Harris, 401 U. S. 37 (1971), which involved a facial First Amendment-based challenge to the California Criminal Syndicalism Act, we held that absent extraordinary circumstances federal courts should not enjoin pending state criminal prosecutions. That far-from-novel holding was based partly on traditional principles of equity, id., at 43-44, but rested primarily on the “even more vital consideration” of comity, id., at 44. As we explained, this includes “a proper respect for state functions, a recognition of the fact that the entire country is made up of a Union of separate state governments, and a continuance of the belief that the National Government will fare best if the States and their institutions are left free to perform their separate functions in their separate ways.” Ibid.
The state-court proceeding at issue here is not a criminal prosecution, and one of the issues in the present case is whether the principle of Younger can properly be extended to this type of suit. NOPSI argues that that issue does not have to be reached, however, for several reasons. First, NOPSI argues that Younger does not require abstention in the face of a substantial claim that the challenged state action is completely pre-empted by federal law. Such a claim, NOPSI contends, calls into question the prerequisite of Younger abstention that the State have a legitimate, substantial interest in its pending proceedings, Middlesex County Ethics Comm. v. Garden State Bar Assn., 457 U. S. 423, 432 (1982). Thus, it contends, a district court presented with a pre-emption-based request for equitable relief should take a quick look at the merits; and if upon that look the claim appears substantial, the court should endeavor to resolve it.
We disagree. There is no greater federal interest in enforcing the supremacy of federal statutes than in enforcing the supremacy of explicit constitutional guarantees, and constitutional challenges to state action, no less than preemption-based challenges, call into question the legitimacy of the State’s interest in its proceedings reviewing or enforcing that action. Yet it is clear that the mere assertion of a substantial constitutional challenge to state action will not alone compel the exercise of federal jurisdiction. See Younger, 401 U. S., at 53. That is so because when we inquire into the substantiality of the State’s interest in its proceedings we do not look narrowly to its interest in the outcome of the particular case — which could arguably be offset by a substantial federal interest in the opposite outcome. Rather, what we look to is the importance of the generic proceedings to the State. In Younger, for example, we did not consult California’s interest in prohibiting John Harris from distributing handbills, but rather its interest in “carrying out the important and necessary task” of enforcing its criminal laws. Id., at 51-52. Similarly, in Ohio Civil Rights Comm’n v. Dayton Christian Schools, Inc., 477 U. S. 619 (1986), we looked not to Ohio’s specific concern with Dayton Christian Schools’ firing of Linda Hoskinson, but to its more general interest in preventing employers from engaging in sex discrimination. Id., at 628. Because pre-emption-based challenges merit a similar focus, the appropriate question here is not whether Louisiana has a substantial, legitimate interest in reducing NOPSI’s retail rate below that necessary to recover its wholesale costs, but whether it has a substantial, legitimate interest in regulating intrastate retail rates. It clearly does. “[T]he regulation of utilities is one of the most important of the functions traditionally associated with the police power of the States.” Arkansas Electric Cooperative Corp. v. Arkansas Pub. Serv. Comm’n, 461 U. S. 375, 377 (1983). Accord, Pacific Gas & Electric Co. v. State Energy Resources Conservation and Development Comm’n, 461 U. S. 190, 205-206 (1983); Central Hudson Gas & Electric Corp. v. Public Sen. Comm’n of New York, 447 U. S. 567, 569 (1980).
NOPSI attempts to avoid this conclusion by stressing that it challenges not only the result of the Council’s deliberations, but the very right of the Council to conduct those deliberations. (This argument assumes, of course, that enjoining the Louisiana state courts can be equated with enjoining the Council proceedings, a point we shall address in due course.) But that is simply not true, if the reference to “the Council’s deliberations” is as generic as it should be. NOPSI does not deny that the State has an interest affirmatively protected by federal law in conducting proceedings to set intrastate retail electricity rates; rather, it contends that under the particular facts of the present case its FERC-allocated wholesale costs are not a proper subject for such proceedings. That is no different from the contention in Younger that the defendant’s violation of the particular (allegedly unconstitutional) state statute was not a proper subject of prosecution. In other words, this argument of NOPSI ultimately reduces once again to insistence upon too narrow an analytical focus.
NOPSI’s second argument to the effect that abstention is improper even assuming the state proceedings here are the sort to which Younger applies rests upon the principle that abstention is not appropriate if the federal plaintiff will “suffer irreparable injury” absent equitable relief. Younger, 401 U. S., at 43-44; see also id., at 48. Irreparable injury may possibly be established, Younger suggested, by a showing that the challenged state statute is “ ‘flagrantly and patently violative of express constitutional prohibitions . . . ,’” id., at 53-54, quoting Watson v. Buck, 313 U. S. 387, 402 (1941). Relying on Public Util. Comm’n of Ohio v. United Fuel Gas Co., 317 U. S. 456 (1943), where we upheld the order of a District Court enjoining the State Public Utilities Commission from attempting directly to regulate interstate gas prices because such actions were “on their face plainly invalid,” id., at 469 (emphasis added), NOPSI asserts that Younger’s posited exception for state statutes “flagrantly and patently vio-lative of express constitutional prohibitions” ought to apply equally to state proceedings and orders flagrantly and patently violative of federal pre-emption (which is unlawful only because it violates the express constitutional prescription of the Supremacy Clause). Thus, NOPSI argues, even if a substantial claim of federal pre-emption is not sufficient to render abstention inappropriate, at least a facially conclusive claim is. Perhaps so. But we do not have to decide the matter here, since the proceeding and order at issue do not meet that description. The Council has not sought directly to regulate interstate wholesale rates; nor has it questioned the validity of the FERC-prescribed allocation of power within the Grand Gulf system, or the FERC-prescribed wholesale rates; nor has it reexamined the prudence of NOPSI’s agreement to participate in Grand Gulf 1 in the first place. Rather, the Council maintains that it has examined the prudence of NOPSPs failure, after the risks of nuclear power became apparent, to diversify its supply portfolio, and that finding that failure negligent, it has taken the normal ratemaking step of making NOPSPs shareholders rather than the ratepayers bear the consequences. Nothing in this is directly or even indirectly foreclosed by the federal statute, the regulations implementing it, or the case law applying it. There may well be reason to doubt the Council’s necessary factual finding that NOPSI would have saved money had it diversified. See n. 2, supra. But we cannot conclusively say it is wrong without further factual inquiry — and what requires further factual inquiry can hardly be deemed “flagrantly” unlawful for purposes of a threshold abstention determination.
We conclude, therefore, that NOPSPs challenge must stand or fall upon the answer to the question whether the Louisiana court action is the type of proceeding to which Younger applies. Viewed in isolation, it plainly is not. Although our concern for comity and federalism has led us to expand the protection of Younger beyond state criminal prosecutions, to civil enforcement proceedings, Huffman v. Pursue, Ltd., 420 U. S. 592, 604 (1975); Trainor v. Hernandez, 431 U. S. 434, 444 (1977); Moore v. Sims, 442 U. S. 415, 423 (1979), and even to civil proceedings involving certain orders that are uniquely in furtherance of the state courts’ ability to perform their judicial functions, see Juidice v. Vail, 430 U. S. 327, 336, n. 12 (1977) (civil contempt order); Pennzoil Co. v. Texaco Inc., 481 U. S. 1, 13 (1987) (requirement for the posting of bond pending appeal), it has never been suggested that Younger requires abstention in deference to a state judicial proceeding reviewing legislative or executive action. Such a broad abstention requirement would make a mockery of the rule that only exceptional circumstances justify a federal court’s refusal to decide a case in deference to the States. Colorado River Water Conservation Dist. v. United States, 424 U. S., at 817; Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U. S. 1, 25 (1983); cf. Moore v. Sims, supra, at 423, n. 8 (“[W]e do not remotely suggest ‘that every pending proceeding between a State and a federal plaintiff justifies abstention unless one of the exceptions to Younger applies’ ” (citation omitted)).
In asserting that Younger is applicable, however, respondents focus not upon the Louisiana court action in isolation, but upon that action as a mere continuation of the Council proceeding. Their contention is that “[t]he Council’s own ratemaking and prudence inquiry, even though complete, constitutes an ‘ongoing proceeding’ because it is subject to state judicial review.” Brief for Respondents 31. The proper question, they contend, is whether the Council proceeding qualified for Younger treatment — because if it did, the proceeding is not complete until judicial review is concluded. Respondents argue by analogy to the treatment of court proceedings, for Younger purposes, as an uninter-ruptible whole. When, in a proceeding to which Younger applies, a state trial court has entered judgment, the losing party cannot, of course, pursue equitable remedies in federal district court while concurrently challenging the trial court’s judgment on appeal. For Younger purposes, the State’s trial-and-appeals process is treated as a unitary system, and for a federal court to disrupt its integrity by intervening in midprocess would demonstrate a lack of respect for the State as sovereign. For the same reason, a party may not procure federal intervention by terminating the state judicial process prematurely — forgoing the state appeal to attack the trial court’s judgment in federal court. “[A] necessary concomitant of Younger is that a party [wishing to contest in federal court the judgment of a state judicial tribunal] must exhaust his state appellate remedies before seeking relief in the District Court.” Huffman v. Pursue, Ltd., supra, at 608. Respondents urge that these principles apply equally where the initial adjudicatory tribunal is an agency — i. e., that the litigation, from agency through courts, is to be viewed as a unitary process that should not be disrupted, so that federal intervention is no more permitted at the conclusion of the administrative stage than during it.
We will assume, without deciding, that this is correct. Respondents’ case for abstention still requires, however, that the Council proceeding be the sort of proceeding entitled to Younger treatment. We think it is not. While we have expanded Younger beyond criminal proceedings, and even beyond proceedings in courts, we have never extended it to proceedings that are not “judicial in nature.” See Middlesex County Ethics Comm. v. Garden State Bar Assn., 457 U. S., at 433-434 (“It is clear beyond doubt that the New Jersey Supreme Court considers its bar disciplinary proceedings as ‘judicial in nature.’ As such, the proceedings are of a character to warrant federal-court deference”). See also Ohio Civil Rights Comm’n v. Dayton Christian Schools, Inc., 477 U. S., at 627 (“Because we found that the administrative proceedings in Middlesex were ‘judicial in nature’ from the outset, ... it was not essential to the decision that they had progressed to state-court review by the time we heard the federal injunction case”). The Council’s proceedings in the present case were not judicial in nature.
In Prentis v. Atlantic Coast Line Co., 211 U. S. 210 (1908), several railroads requested a Federal Circuit Court “to enjoin . . . the Virginia State Corporation Commission from publishing or taking any steps to enforce a certain order fixing passenger rates,” on the ground that the proposed rates were confiscatory. Id., at 223. To decide whether the federal court was at liberty to issue the requested injunction, we examined first the nature of the challenged agency action. Under Virginia law the commission was invested with both legislative and judicial powers, and we assumed, without deciding, that “if it were proceeding against [a railroad] to enforce [the rate] order or to punish [the railroad] for a breach, “it then would be sitting as a court and would be protected from interference on the part of courts of the United States,” id., at 226. But, upon analysis, we found the proceedings in the case at hand to be legislative. Justice Holmes, writing for the Court, explained as follows:
“A judicial inquiry investigates, declares and enforces liabilities as they stand on present or past facts and under laws supposed already to exist. That is its purpose and end. Legislation on the other hand looks to the future and changes existing conditions by making a new rule to be applied thereafter to all or some part of those subject to its power. The establishment of a rate is the making of a rule for the future, and therefore is an act legislative and not judicial in kind . . . .” Ibid.
He then considered and rejected the notion that the nature of the agency’s proceedings might depend on their form:
“[The proper characterization of an agency’s actions] depends not upon the character of the body but upon the character of the proceedings. . . . And it does not matter what inquiries may have been made as a preliminary to the legislative act. Most legislation is preceded by hearings and investigations. But the effect of the inquiry, and of the decision upon it, is determined by the nature of the act to which the inquiry and decision lead up. . . . The nature of the final act determines the nature of the previous inquiry. As the judge is bound to declare the law he must know or discover the facts that establish the law. So when the final act is legislative the decision which induces it cannot be judicial in the practical sense, although the questions considered might be the same that would arise in the trial of a case.” Id., at 226-227 (citations omitted).
We have since reaffirmed both the general mode of analysis of Prentis, see District of Columbia Court of Appeals v. Feldman, 460 U. S. 462, 476-479 (1983), and its specific holding that ratemaking is an essentially legislative act, Colorado Interstate Gas Co. v. FPC, 324 U. S. 581, 589 (1945). Thus, the Council’s proceedings here were plainly legislative.
That characterization does not, however, end the inquiry. In Prentis, while we found the challenged agency proceeding legislative in character, we nonetheless held equitable intervention inappropriate because, we determined, the attack on the rate order was premature. Although we made clear that those challenging the rates “were not bound to wait for proceedings brought to enforce the rate and to punish them for departing from it,” 211 U. S., at 228, because Virginia provided for legislative review of commission rates by appeal to the state courts, we concluded that the challengers “should make sure that the State in its final legislative action would not respect what they think their rights to be, before resorting to the courts of the United States.” Id., at 230. We were as concerned, in other words, to preserve the integrity of a unitary and still-to-be-completed legislative process as we were, under Huffman v. Pursue, Ltd., 420 U. S. 592 (1975), to preserve the integrity of judicial proceedings. Similarly in the present case, if the Louisiana courts’ review of Council ratemaking was legislative in nature, NOPSI’s challenge to the Council’s order should have been dismissed as unripe.
There is no contention here that the Louisiana courts’ review involves anything other than a judicial act — that is, not “the making of a rule for the future,” but the declaration of NOPSI’s rights vis-a-vis the Council “on present or past facts and under laws supposed already to exist,” Prentis, supra, at 226. Nor does there seem to be room for such a contention. See State ex rel. Guste v. Council of New Orleans, 309 So. 2d 290, 294-296 (La. 1975). Since the state-court review is not an extension of the legislative process, NOPSPs pre-emption claim was ripe for federal review when the Council’s order was entered. See Lane v. Wilson, 307 U. S. 268, 274-275 (1939); Bacon v. Rutland R. Co., 232 U. S. 134, 138 (1914).
As a challenge to completed legislative action, NOPSI’s suit represents neither the interference with ongoing judicial proceedings against which Younger was directed, nor the interference with an ongoing legislative process against which our ripeness holding in Prentis was directed. It is, insofar as our policies of federal comity are concerned, no different in substance from a facial challenge to an allegedly unconstitutional statute or zoning ordinance — which we would assuredly not require to be brought in state courts. See Wooley v. Maynard, 430 U. S. 705, 711 (1977). It is true, of course, that the federal court’s disposition of such a case may well affect, or for practical purposes pre-empt, a future — or, as in the present circumstances, even a pending — state-court action. But there is no doctrine that the availability or even the pendency of state judicial proceedings excludes the federal courts. Viewed, as it should be, as no more than a state-court challenge to completed legislative action, the Louisiana suit comes within none of the exceptions that Younger and later cases have established.
For the reasons stated, the judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion.
So ordered.
For a more in-depth account of the factual and regulatory history of the Grand Gulf nuclear power project, see Mississippi Power & Light Co. v. Mississippi ex rel. Moore, 487 U. S. 354 (1988).
Adverting to the merits, the District Court commented: “[T]he Council faults NOPSI not for buying a ‘pig in a poke’ but for failing to find a sucker to buy it when the faux-pas became apparent.11
“nP. T. Barnum once said of suckers: ‘There’s one born every minute.’ This court, however, is not ready to assume there are many, if any, such suckers purchasing electricity in the wholesale market today. Indeed, this court is somewhat mystified by the Council’s logic in arriving at the $135 million disallowance in the Rate Order. In the Rate Order, the Council simply concluded that since [NOPSI’s President] said so, savings were actually possible. Then, the Council seemingly pulled from thin air a figure of 8% for the prudence disallowance. However, the Council, and in this case, everyone else knows that the 8% figure was not pulled from thin air but represents the difference between FERC’s 17% allocation and what NOPSI consistently claims as its relative share of the [Middle South] system [and what the Council advocated unsuccessfully in the FERC proceeding], i. e., 9%. Thus, the disallowed costs bear no apparent relationship to the savings NOPSI is said to have foregone [sic]. Must not the ‘savings’ posited as the reason for the disallowance be at least possible in an actual economic market? Furthermore, must not the ultimate disallowance bear some rational relationship to the possible savings which support that dis-allowance? These questions must be resolved on another day in another court.” App. to Pet. for Cert. 30A-31A, and n. 11.
NOPSI’s state suit has since been consolidated with a declaratory judgment action filed earlier by the Council, seeking a declaration that the rate order represented a just and reasonable exercise of regulatory power and that NOPSI’s failure to comply with the order would be unlawful, and with a suit filed by a local consumers’ rights organization, the Alliance for Affordable Energy, seeking to force the Council to disallow all or at least a larger proportion of the Grand Gulf costs. That case is still pending. NOPSI v. Council of New Orleans, No. 88-4511; Boissiere v. Cain, No. 88-2503; and Alliance for Affordable Energy, Inc. v. Council of New Orleans, No. 88-2502 (Civ. Dist. Ct., Parish of Orleans, La.).
In Ohio Civil Rights Comm’n v. Dayton Christian Schools, Inc., All U. S. 619 (1986), we held that the Younger doctrine prevented an injunction against an ongoing sex discrimination proceeding before the Ohio Civil Rights Commission. The only other decision of ours arguably applying Younger to an administrative proceeding, Middlesex County Ethics Comm. v. Garden State Bar Assn., 457 U. S. 423 (1982), similarly involved a situation in which the proceeding was not yet at an end. The fact that Dayton Christian Schools relied, as an alternative argument, upon the fact that the federal challenge could be made upon appeal to the state courts, see 477 U. S., at 629, suggests, perhaps, that an administrative proceeding to which Younger applies cannot be challenged in federal court even after the administrative action has become final. But we have never squarely faced the question. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
43
] |
RADIO CORPORATION OF AMERICA et al. v. UNITED STATES et al.
No. 565.
Argued March 26-27, 1951.
Decided May 28, 1951.
John T. Cahill argued the cause for the Radio Corporation of America et al., appellants. With him on the brief were Weymouth Kirkland, Howard Ellis, Joseph V. Heffernan, John W. Nields, Ray B. Houston and Robert G. Zeller.
Simon H. Rifkind argued the cause and filed a brief for the Emerson Radio & Phonograph Corporation, appellant. Also of counsel was Thomas D. Nash.
Alfred Kamin argued the cause and filed a brief for Local 1031, International Brotherhood of Electrical Workers, A. F. of L., appellant.
A. L. Schapiro and B. C. Schijf submitted on brief for the Pilot Radio Corporation, appellant.
John J. Kelly, Jr. for the Radio Craftsmen, Inc.; Frank S. Righeimer, Jr. for Wells-Gardner & Co.; and Gerald Ratner for the Television Installation Service Association, appellants.
Solicitor General Perlman argued the cause for the United States and the Federal Communications Commission, appellees. Samuel I. Rosenman argued the cause for the Columbia Broadcasting System, Inc., appellee. With them on a joint brief were Stanley M. Silverberg, Benedict P. Cottone, Max Goldman and Richard A. Solomon for the United States and the Federal Communications Commission, and Ralph F. Colin and Richard S. Salant for the Columbia Broadcasting System, Inc.
Mr. Justice Black
delivered the opinion of the Court.
Radio Corporation of America (RCA) and two of its subsidiaries brought this action in a three-judge District Court to enjoin and set aside an order of the Federal Communications Commission prescribing standards for transmission of color television. The effect of the challenged order was to reject a color system proposed by RCA and to accept one proposed by the Columbia Broadcasting System (CBS). The basis of RCA’s complaint was that the order had been entered arbitrarily and capriciously, without the support of substantial evidence, against the public interest, and contrary to law. After hearing and oral argument, the District Court entered summary judgment sustaining the Commission, one judge dissenting. RCA and the other plaintiffs took this direct appeal under 28 U. S. C. § 1253 and § 2101 (b).
At the outset we are faced with RCA’s contention that the District Court failed to review the record as a whole in determining whether the Commission’s order was supported by substantial evidence; it is urged that for this reason we should summarily reverse and remand the case for further consideration by that court. If RCA’s premise were correct, the course which it suggests might be wholly appropriate. For as pointed out recently, in considering the question of sufficiency of evidence to support an administrative order this Court must and does rely largely on a first reviewing court’s conclusion. Universal Camera Corp. v. Labor Board, 340 U. S. 474. The present case, however, need not be returned for further scrutiny below because we are convinced that the review already afforded did not fall short of that which is required. The District Court heard oral argument for three days and deliberated for about five weeks before handing down its decision. Both the majority and dissenting opinions show a familiarity with RCA’s basic contention (and the minor ones as well) that could have come only from careful study of the record as a whole. To be sure, there was a casual statement in the majority opinion susceptible of the interpretation that the court in reaching the decision made an examination of the record less complete than it should have been. Fairly construed, however, the remark, while perhaps unfortunate, is entirely consistent with that conscientious review which we are satisfied was given this record by the District Court. We therefore pass to the question of validity of the Commission’s order.
All parties agree, as they must, that given a justifiable fact situation, the Commission has power under 47 U. S. C. § 303 (c), (e), (f), (g) to do precisely what it did in this case, namely, to promulgate standards for transmission of color television that result in rejecting all but one of the several proposed systems. Moreover, it cannot be contended seriously that the Commission in taking such a course was without evidential support for its refusal to adopt the RCA system at this time. The real argument, advanced at great length and in many different forms, boils down to this: Viewing the record as a whole, the Commission as a matter of law erred in concluding that the CBS color system had reached a state of development which justified its acceptance to the exclusion of RCA’s and that of others. Consequently, before the Commission, the District Court and here, RCA’s main attempt has been to persuade that no system has yet been proven worthy of acceptance for public use, that commercial color broadcasting must be postponed awaiting inventions that will achieve more nearly perfect results.
We sustain the Commission’s power to reject this position and hold valid the challenged order, buttressed as it is by the District Court’s approval. To explain our conclusion it is unnecessary to repeat the detailed statement of facts made in the majority and minority opinions of the Commission and District Court. Nor, for present purposes, is it necessary to attempt a translation of the technical terms invented to carry meanings in the rapidly growing television industry. It will suffice to give the following brief summary of the background of the Commission’s findings and what was found:
Standards for black and white television transmission were first promulgated by the Commission in 1941. RCA’s complaint alleges, and all apparently agree, that “The quality of the present [black and white] service, the improvements and reductions in price to the public that have been made, the incredible expansion of the industry as a whole, are all due to the fact that manufacturers could build upon a single set of long-range high-quality standards.” From 1941 until now the Commission has been engaged in consideration of plans and proposals looking toward promulgation of a single set of color standards. CBS apparently made quicker progress in developing an acceptable system than did others. It was soon attacked, however, on the ground that it was utilizing old knowledge highly useful in the realm of the physical sciences and mechanical practices but incongruous in the new fields of electronics occupied by television. This is still the core of the objection to the CBS system, together with the objection that existing receiving sets are not constructed in such a way that they can, without considerable adjustments, receive CBS color broadcasts either in color or black and white. The fact that adjustments are required before a CBS color broadcast can be received in black and white on existing sets makes this system “incompatible” with the millions of television receivers now in the hands of the public.
There is no doubt that a “compatible” color television system would be desirable. Recognition of this fact seems to be the controlling reason why the Commission did not long ago approve the “incompatible” CBS system. In the past, it has postponed adoption of standards with the hope that a satisfactory “compatible” color television system would be developed. But this time, in light of previous experience, the Commission thought that further delay in making color available was too high a price to pay for possible “compatibility” in the future, despite RCA’s claim that it was on the verge of discovering an acceptable “compatible” system.
The Commission’s special familiarity with the problems involved in adopting standards for color television is amply attested by the record. It has determined after hearing evidence on all sides that the CBS system will provide the public with color of good quality and that television viewers should be given an opportunity to receive it if they so desire. This determination certainly cannot be held capricious. It is true that the choice between adopting standards now or at a later date was not free from difficulties. Moreover, the wisdom of the decision made can be contested as is shown in the dissenting opinions of two Commissioners. But courts should not overrule an administrative decision merely because they disagree with its wisdom. We cannot say the District Court misapprehended or misapplied the proper judicial standard in holding that the Commission’s order was not arbitrary or against the public interest as a matter of law.
Whether the Commission should have reopened its proceedings to permit RCA to offer proof of new discoveries for its system was a question within the discretion of the Commission which we find was not abused. We have considered other minor contentions made by RCA but are satisfied with the way the District Court disposed of them.
The District Court’s judgment sustaining the order of the Commission is
Affirmed.
Mr. Justice Frankfurter,
dubitante.
Since I am not alone in entertaining doubts about this case they had better be stated. The ultimate issue is the function of this Court in reviewing an order of the Federal Communications Commission, adopted October 10, 1950, whereby it promulgated standards for the transmission of color television. The significance of these standards lies in the sanction of a system of “incompatible” color television, that is, a system requiring a change in existing receivers for the reception of black and white as well as colored pictures. The system sanctioned by the Commission’s order will require the addition of an appropriate gadget to the millions of outstanding receiving sets at a variously estimated, but in any event substantial, cost. From the point of view of the public interest, it is highly desirable to have a color television system that is compatible. The Commission’s order sanctioning an incompatible system is based not on the scientific unattainability of a compatible system, nor even on a forecast that its feasibility is remote. It rests on the determination that inasmuch as compatibility has not yet been achieved, while a workable incompatible system has proven itself, such a system, however intrinsically unsatisfactory, ought no longer to be withheld from the public.
After hearings on the Commission’s proposals were closed, the Radio Corporation of America, persistent promoter of a compatible system, suggested to the Commission further consideration of the progress made after the Commission had taken the matter under advisement in May, 1950. To be sure, this proffer of relevant information concerning progress toward the desired goal was made by an interested party. But within the Commission itself the need for further light was urged in view of the rapid development that had been made since the Commission’s hearings got under way. The heart of the controversy was thus put by Commissioner Hennock: “It is of vital importance to the future of television that we make every effort to gain the time necessary for further experimentation leading to the perfection of a compatible color television system.” The Commission did not rule out reasonable hope for the early attainment of compatibility. Indeed, it gave ground for believing that success of experimentation to that end is imminent. But it shut off further inquiry into developments it recognized had grown apace because in its “sound discretion” it concluded that “a delay in reaching a determination with respect to the adoption of standards for color television service . . . would not be conducive to the orderly and expeditious dispatch of the Commission’s business and would not best serve the ends of justice . . . .”
The real question, as I have indicated, is whether this determination of the Commission, considering its nature and its consequences, is beyond judicial scrutiny.
I am no friend of judicial intrusion into the administrative process. I do not believe in a construction of the Communications Act that would cramp the broad powers of the Communications Commission. See National Broadcasting Co. v. United States, 319 U. S. 190. I have no doubt that if Congress chose to withdraw all court review from the Commission’s orders it would be constitutionally free to do so. See Stark v. Wickard, 321 U. S. 288, 312. And I deem it essential to the vitality of the administrative process that, even when subject to judicial review, the Commission be allowed to exercise its powers unhampered by the restrictive procedures appropriate for litigation in the courts. See Federal Communications Comm’n v. National Broadcasting Co., 319 U. S. 239, 248. But so long as the Congress has deemed it right to subject the orders of the Commission to review by this Court, the duty of analyzing the essential issues of an order cannot be escaped by too easy reliance on the conclusions of a district court or on the indisputable formula that an exercise of discretion by the Commission is not to be displaced by a contrary exercise of judicial discretion.
What may be an obvious matter of judgment for the Commission in one situation may so profoundly affect the public interest in another as not to be a mere exercise of conventional discretion. Determinations by the Commission are not abstract determinations. We are not here called upon to pass on the abstract question whether the Commission may refuse to reconsider a problem before it although enlightening new evidence is promised. We are faced with a particular order of great significance. It is not the effect of this order upon commercial rivalries that gives it moment. The Communications Act was not designed as a code for the adjustment of conflicting private interests. It is the fact that the order originates color television, with far-reaching implications to the public interest.
The assumption underlying our system of regulation is that the national interest will be furthered by the fullest possible use of competition. At some point, of course, the Commission must fix standards limiting competition. But once those standards are fixed, the incentive for improvement is relaxed. It is obvious that the money spent by the public to adapt and convert the millions of sets now in use may well make the Commission reluctant to sanction new and better standards for color pictures if those standards would outmode receiving sets adapted to the system already in use. And even if the Commission is willing to adopt a second, inconsistent set of color television standards sometime in the future, the result will be economic waste on a vast scale.
And all to what end? And for what overriding gain? Of course the Commission does not have to wait for the millennium. Of course it does not have to withhold color pictures from the American public indefinitely because improvements in color transmission will steadily be perfected. That is not what is involved here. What the Commission here decided is that it could not wait, or the American public could not wait, a little while longer, with every prospect of a development which, when it does come, concededly will promote the public interest more than the incompatible system now authorized. Surely what constitutes the public interest on an issue like this is not one of those expert matters as to which courts should properly bow to the Commission’s expertness. In any event, nothing was submitted to us on argument, nor do I find anything in the Commission’s brief of 150 pages, which gives any hint as to the public interest that brooks no delay in getting color television even though the method by which it will get it is intrinsically undesirable, inevitably limits the possibilities of an improved system or, in any event, leads to potential great economic waste. The only basis for this haste is that the desired better method has not yet proved itself and in view of past failures there is no great assurance of early success. And so, since a system of color television, though with obvious disadvantages, is available, the requisite public interest which must control the Commission’s authorization is established. I do not agree.
One of the more important sources of the retardation or regression of civilization is man’s tendency to use new inventions indiscriminately or too hurriedly without adequate reflection of long-range consequences. No doubt the radio enlarges man’s horizon. But by making him a captive listener it may make for spiritual impoverishment. Indiscriminate use of the radio denies him the opportunities for reflection and for satisfying those needs of withdrawal of which silent prayer is only one manifestation. It is an uncritical assumption that every form of reporting or communication is equally adaptable to every situation. Thus, there may be a mode of what is called reporting which may defeat the pursuit of justice.
Doubtless, television may find a place among the devices of education; but much long-headed thought and patient experimentation are demanded lest uncritical use may lead to hasty jettisoning of hard-won gains of civilization. The rational process of trial and error implies a wary use of novelty and a critical adoption of change. When a college head can seriously suggest, not by way of irony, that soon there will be no need of people being able to read — that illiteracy will be the saving of wasteful labor — one gets an idea of the possibilities of the new barbarism parading as scientific progress.
Man forgets at terrible cost that the environment in which an event is placed may powerfully determine its effect. Disclosure conveyed by the limitations and power of the camera does not convey the same things to the mind as disclosure made by the limitations and power of pen or voice. The range of presentation, the opportunities for distortion, the impact on reason, the effect on the looker-on as against the reader-hearer, vary; and the differences may be vital. Judgment may be confused instead of enlightened. Feeling may be agitated, not guided; reason deflected, not enlisted. Reason — the deliberative process — has its own requirements, met by one method and frustrated by another.
What evil would be encouraged, what good retarded by delay? By haste, would morality be enhanced, insight deepened, and judgment enlightened? Is it even economically advantageous to give governmental sanction to color television at the first practicable moment, or will it not in fact serve as an added drain on raw materials for which the national security has more exigent needs?
Finally, we are told that the Commission’s determination as to the likely prospect of early attainment of compatibility is a matter within its competence and not subject to court review. But prophecy of technological feasibility is hardly in the domain of expertness so long as scientific and technological barriers do not make the prospect fanciful. In any event, this Court is not without experience in understanding the nature of such complicated issues. We have had occasion before to consider complex scientific matters. Telephone Cases, 126 U. S. 1; McCormick v. Graham’s Adm’r, 129 U. S. 1 (harvester) ; Corona Co. v. Dovan Corp., 276 U. S. 358 (improvement in vulcanization of rubber); DeForest Radio Co. v. General Electric Co., 283 U. S. 664 (high-vacuum discharge tube); Radio Corporation v. Radio Engineering Laboratories, 293 U. S. 1 (audion oscillator); Marconi Wireless Co. v. United States, 320 U. S. 1 (wireless telegraphy improvement) ; and Universal Oil Products Co. v. Globe Oil & Rfg. Co., 322 U. S. 471 (oil cracking process).
Experience has made it axiomatic to eschew dogmatism in predicting the impossibility of important developments in the realms of science and technology. Especially when the incentive is great, invention can rapidly upset prevailing opinions of feasibility. One may even generalize that once the deadlock in a particular field of inquiry is broken progress becomes rapid. Thus, the plastics industry developed apace after a bottleneck had been broken in the chemistry of rubbers. Once the efficacy of sulfanila-mide was clearly established, competent investigators were at work experimenting with thousands of compounds, and new and better antibiotics became available in a continuous stream. A good example of the rapid change of opinion that often occurs in judgment of feasibility is furnished by the cyclotron. Only a few years ago distinguished nuclear physicists proclaimed the limits on the energy to which particles could be accelerated by the use of a cyclotron. It was suggested that 12,000,000-volt protons were the maximum obtainable. Within a year the limitations previously accepted were challenged. At the present time there are, I believe, in operation in the United States at least four cyclotrons which accelerate protons to energies of about 400,000,000 volts. One need not have the insight of a great scientific investigator, nor the rashness of the untutored, to be confident that the prognostications now made in regard to the feasibility of a “compatible” color television system will be falsified in the very near future.
The subsidiaries are the National Broadcasting Co. and RCA Victor Distributing Corp. Later, other parties were permitted over the Commission’s objection to intervene in support of RCA’s position. The Columbia Broadcasting System (CBS) intervened as a party defendant.
The order also rejected a system proposed by Color Television, Inc., which is not a party to this litigation.
95 F.Supp. 660 (N.D.Ill.).
“After listening to many hours of oral argument by able counsel representing the respective parties, we formed some rather definite impressions relative to the merits of the order, as well as the proceedings before the Commission upon which it rests. And our reading and study of the numerous and voluminous briefs with which we have been favored have not altered or removed those impressions. Also, in studying the case, we have been unable to free our minds of the question as to why we should devote the time and energy which the importance of the case merits, realizing as we must that the controversy can only be finally terminated by a decision of the Supreme Court. This is so because any decision we make is appealable to that court as a matter of right and we were informed during oral argument, in no uncertain terms, that which otherwise might be expected, that is, that the aggrieved party or parties will immediately appeal. In other words, this is little more than a practice session where the parties prepare and test their ammunition for the big battle ahead.” (Emphasis added.) 95 F. Supp. at 664.
47 U. S. C. §303: “. . . [T]he Commission ... as public convenience, interest, or necessity requires, shall—
“(c) Assign bands of frequencies to the various classes of stations, and assign frequencies for each individual station and determine the power which each station shall use and the time during which it may operate;
“(e) Regulate the kind of apparatus to be used with respect to its external effects and the purity and sharpness of the emissions from each station and from the apparatus therein;
“(f) Make such regulations not inconsistent with law as it may deem necessary to prevent interference between stations and to carry out the provisions of this chapter ....
“(g) Study new uses for radio, provide for experimental uses of frequencies, and generally encourage the larger and more effective use of radio in the public interest.”
The Commission unanimously believed that CBS had the best system presently available, although two Commissioners dissented on other grounds. The relative merits and demerits of the RCA and CBS systems were summarized as follows:
“[T]he RCA system [is] deficient in the following respects:
“(a) The color fidelity of the RCA picture is not satisfactory.
“ (b) The texture of the color picture is not satisfactory.
“(c) The receiving equipment utilized by the RCA system is exceedingly complex.
“(d) The equipment utilized at the station is exceedingly complex.
“(e) The RCA color system is much more susceptible to certain kinds of interference than the present monochrome system or the CBS system.
“(f) There is not adequate assurance in the record that RCA color pictures can be transmitted over the 2.7 megacycle coaxial cable facilities.
“(g) The RCA system has not met the requirements of successful field testing.
“[T]he CBS system produces a color picture that is most satisfactory from the point of view of texture, color fidelity and contrast. . . . [Receivers and station equipment are simple to operate and . . . receivers when produced on a mass marketing basis should be within the economic reach of the great mass of purchasing public. .. . [E]ven with present equipment the CBS system can produce color pictures of sufficient brightness without objectionable flicker to be adequate for home use and . . . the evidence concerning long persistence phosphors shows that there is a specific method available for still further increasing brightness with no objectionable flicker. Finally, . . . while the CBS system has less geometric resolution than the present monochrome system the addition of color to the picture more than outweighs the loss in geometric resolution so far as apparent definition is concerned.” Second Report of the Commission, October 10,1950, 1 Pike & Fischer Radio Reg. (P. & F.), ¶ 91:26, pp. 91:441-442.
The facts found by the Commission appear in two reports on Color Television Issues. First Report of the Commission, September 1, 1950, 1 P. & F. ¶ 91:24, p. 91:261-; Second Report of the Commission, October 10, 1950, 1 P. & F. ¶ 91:26, p. 91:441. The District Court described the proceedings before the Commission as follows: “The hearing, participated in by all members of the Commission, commenced September 26, 1949 and ended May 26, 1950. In all, fifty-three different witnesses were heard and 265 exhibits received. The transcript of the hearing covers 9717 pages. During the period from November 22, 1949 to February 6, 1950, extensive field tests were made of the three systems [RCA, CBS, Color Television, Inc.] proposed. Progress reports concerning these tests were filed with the Commission by the three proponents during December 1949 and January 1950. Comparative demonstrations of the three proposed systems were made on different dates until May 17, 1950.” 95 F. Supp. at 665.
Emphasis added.
See the particularly interesting historical summary of these efforts in Commissioner Jones’ dissent to the First Report of the Commission, September 1, 1950, 1 P. & F. ¶ 91:24, pp. 91:346-447. His view was that color television standards should have been promulgated long before they were.
See note 6, supra.
See note 6, supra.
National Broadcasting Co. v. United States, 319 U. S. 190, 224.
Universal Camera Corp. v. Labor Board, 340 U. S. 474, 490-491.
See United States v. Pierce Auto Lines, 327 U. S. 515, 534-535. With respect to reopening the record, the Commission said in part: "... [A] new television system is not entitled to a hearing or a reopening of a hearing simply on the basis of a paper presentation. In the radio field many theoretical systems exist and can be described on paper but it is a long step from this process to successful operation. There can be no assurance that a system is going to work until the apparatus has been built and has been tested. None of the new systems or improvements in systems meet these tests so as to warrant reopening of the hearing. . . .
“The Commission does not imply that there is no further room for experimentation. . . . Many of the results of such experimentation can undoubtedly be added without affecting existing receivers. As to others some obsolescence of existing receivers may be involved if the changes are adopted. In the interest of stability this latter type of change will not be adopted unless the improvement is substantial in nature, when compared to the amount of dislocation involved. But when such an improvement does come along, the Commission cannot refuse to consider it merely because the owners of existing receivers might be compelled to spend additional money to continue receiving programs.
“. . . [A]ny improvement that results from the experimentation might face the problem of being incompatible with the present monochrome system or the color system we are adopting today. In that event, the new color system or other improvement will have to sustain the burden of showing that the improvement which results is substantial enough to be worth while when compared to the amount of dislocation involved to receivers then in the hands of the public.” Second Report of the Commission, October 10, 1950, 1 P. & F. ¶ 91:26, pp. 91:445-446.
“Broadcasting as an influence on men’s minds has great possibilities, either of good or evil. The good is that if broadcasting can find a serious audience it is an unrivalled means of bringing vital issues to wider understanding. The evil is that broadcasting is capable of increasing perhaps the most serious of all dangers which threaten democracy and free institutions today — the danger of passivity — of acceptance by masses of orders given to them and of things said to them. Broadcasting has in itself a tendency to encourage passivity, for listening as such, if one does no more, is a passive occupation. Television may be found to have this danger of passivity in even stronger form.” Report of the Broadcasting Committee, 1949 (Cmd. 8116,1951) 75. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
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"Board of Immigration Appeals",
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"Central Intelligence Agency",
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"Civil Service Commission, U.S.",
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"Federal Deposit Insurance Corporation",
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"Federal Energy Regulatory Commission",
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"Federal Maritime Commission",
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"Federal Parole Board",
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"Federal Reserve Board of Governors",
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"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
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"Department or Secretary of Health and Human Services",
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"National Enforcement Commission",
"National Highway Traffic Safety Administration",
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"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
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"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
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"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
37
] |
RAYMOND MOTOR TRANSPORTATION, INC., et al. v. RICE, SECRETARY, DEPARTMENT OF TRANSPORTATION OF WISCONSIN, et al.
No. 76-558.
Argued November 8-9, 1977
Decided February 21, 1978
J ohn H. Lederer argued the cause for appellants. With him on the briefs were Jack R. DeWitt and Jon P. Axelrod.
Albert H arriman, Assistant Attorney General of Wisconsin, argued the cause for appellees. With him on the brief were Bronson C. La Follette, Attorney General, pro se, and Charles A. Block, Assistant Attorney General.
Briefs of amici curiae urging affirmance were filed by Theodore L. Sendak, Attorney General, and Donald P. Bogará for the State of Indiana; by Anthony F. Troy, Attorney General, Walter A. McFarlane, Deputy Attorney General, and Valentine W. Southall, Jr., Assistant Attorney General, for the Commonwealth of Virginia; and by Richard T. Conway, Harry J. Breithaupt, Jr., and E. Parker Brown for the Association of American Railroads.
Mr. Justice Powell
delivered the opinion of the Court.
We consider on this appeal whether administrative regulations of the State of Wisconsin governing the length and configuration of trucks that may be operated within the State violate the Commerce Clause because they unconstitutionally burden or discriminate against interstate commerce. The three-judge District Court held that the regulations are not unconstitutional on either ground. Because we conclude that they unconstitutionally burden interstate commerce, we reverse;
I
Appellant Raymond Motor Transportation, Inc. (Raymond), a Minnesota corporation with its principal place of business in Minneapolis, is a common carrier of general commodities by-motor vehicle. Operating pursuant to a certificate of public convenience and necessity granted by the Interstate Commerce Commission, see 49 U. S. C. §§ 306-308, Raymond provides service in eastern North Dakota, Minnesota, northern Illinois, and northwestern Indiana. Its primary interstate route is between Chicago and Minneapolis. It does not serve any points in Wisconsin.
Appellant Consolidated Freightways Corporation of Delaware (Consolidated), a Delaware corporation with its principal place of business in Menlo Park, Cal., also is a common carrier of general commodities by motor vehicle. Consolidated operates nationwide, providing service under a certificate of public convenience and necessity in 42 States and Canada. Among other routes, Consolidated carries commodities between Chicago, Detroit, and points east, and Minneapolis and points west to Seattle. Unlike Raymond, Consolidated does carry commodities between Wisconsin and other States, and it maintains terminals in Milwaukee and Madison where truckloads of goods are dispatched and received.
Both Raymond and Consolidated use two different kinds of trucks. One consists of a three-axle power unit (tractor) which pulls a single two-axle trailer that is 40 feet long. The overall length of such a single-trailer unit (single) is 55 feet. This unit has been used on the Nation’s highways for many years and is an industry standard. The other type truck consists of a two-axle tractor which pulls a single-axle trailer to which a single-axle dolly and a second single-axle trailer are attached. Each trailer is 27 feet long, and the overall length of such a double-trailer unit (double) is 65 feet.
The double, which has come into increasing use in recent years, is thought to have certain advantages over the single for general commodities shipping. Because of these advantages, Raymond would prefer to use doubles on its route between Chicago and Minneapolis. Consolidated would prefer to use doubles on its routes between Chicago, Detroit, and points east, and Minneapolis and points west, as well as on its routes commencing and ending in Milwaukee and Madison. The most direct route for all of this traffic is over Interstate Highways 90 and 94, both of which cross Wisconsin between Illinois and Minnesota. State law allows 65-foot doubles to be operated on interstate highways and access roads in Michigan, Illinois, Minnesota, and all of the States west from Minnesota to Washington through which Interstate Highways 90 and 94 run.
Wisconsin law, however, generally does not allow trucks longer than 55 feet to be operated on highways within that State. The key statutory provision is Wis. Stat. § 348.07 (1) (1975), which sets a limit of 55 feet on the overall length of a vehicle pulling one trailer. Any person operating a single-trailer unit of greater length must obtain a permit issued by the State Highway Commission. In addition, § 348.08 (1) provides that no vehicle pulling more than one other vehicle shall be operated on a highway without a permit.
The Commission is authorized to issue various classes of annual permits for the operation of vehicles that do not conform to the above requirements. In particular, it may issue “trailer train” permits for the operation of combinations of more than two vehicles “consisting of truck tractors, trailers, semitrailers or wagons which do not exceed a total length of 100 feet,” § 348.27 (6). The Commission may also “impose such reasonable conditions” and “adopt such reasonable rules” of operation with respect to vehicles operated under permit “as it deems necessary for the safety of travel and protection of the highways,” § 348.25 (3), including specification of the routes to be used by permittees.
The Commission has issued administrative regulations setting forth the conditions under which “trailer train” and other classes of permits will be issued. Although the Commission is empowered by § 348.27 (6) to issue “trailer train” permits to operate double-trailer trucks up to 100 feet long, its regulations restrict such permits to “the operation of vehicles used for the transporting of municipal refuse or waste, or for the interstate or intra-state operation without load of vehicles in transit from manufacturer or dealer to purchaser or dealer, or for the purpose of repair.” Wis. Admin. Code § Hy 30.14 (3) (a) (July 1975). “Trailer train” permits also are issued “for the operation of a combination of three vehicles used for the transporting of milk from the point of production to the point of first processing,” § Hy 30.18 (3) (a) (June 1976).
II
The overture to this lawsuit began when Raymond and Consolidated each applied to the appropriate Wisconsin officials under § 348.27 (6) for annual permits to operate 65-foot doubles on Interstate Highways 90 and 94 between Illinois and Minnesota and, in Consolidated’s case, on short stretches of four-lane divided highways between the interstate highways and freight terminals in Milwaukee and Madison. The permits were denied because appellants’ proposed operations were not within the narrow scope of the administrative regulations that specify when “trailer train” permits will be issued. Appellants then filed suit in Federal District Court seeking declaratory and injunctive relief on the ground that the regulations barring the proposed operation of 65-foot doubles burden and discriminate against interstate commerce in violation of the Commerce Clause, Art. I, § 8, cl. 3. The complaint alleged that the State’s refusal to issue the requested permits disrupts and delays appellants’ transportation of commodities in interstate commerce; that 65-foot doubles are as safe as, if not safer than, the 55-foot singles that are allowed to operate on Wisconsin highways without permits; and that the maze of statutory and administrative exceptions to the general prohibition against operating vehicles longer than 55 feet results in “ ‘over-length’ permits [being] routinely granted to classes of vehicles indistinguishable from those of the Plaintiffs in terms of size, safety, and divisibility of loads . . . .” App. 18.
A three-judge District Court was convened pursuant to 28 U. S. C. § 2281. After a pretrial conference, the court directed the State to file an amended answer setting forth every justification for its refusal to issue the permits sought, “such as safety, for example.” App. 25. The State's amended answer advanced highway safety as its sole justification. Id., at 27-29. By agreement of the parties, the case was tried on affidavits, depositions, and exhibits.
Appellants presented a great deal of evidence supporting their allegation that 65-foot doubles are as safe as, if not safer than, 55-foot singles when operated on limited-access, four-lane divided highways. For example, the Deputy Director of the Bureau of Motor Carrier Safety, Federal Highway Administration, United States Department of Transportation, testified on deposition that the Bureau's five-year study of the accident experience of selected motor carriers that use both types of trucks showed that doubles are safer than singles in terms of the number of accidents, injuries, and fatalities per 100,000 miles, and in terms of the amount of property damage and number of injuries and fatalities per accident. The deponent's own expert opinion was that doubles are safer because of the articulation between the first and second trailers, which allows greater maneuverability and prevents the back wheels of the second trailer from deviating from the path of the front wheels of the tractor (offtracking) as much as the back wheels of a 55-foot single; because loads typically are distributed more evenly in doubles than in singles; and because doubles typically have better braking capability than singles.
Other experts testified that 65-foot doubles brake as well as 55-foot singles, maneuver and track better, are less prone to jackknife, and produce less splash and spray to obscure the vision of drivers in following and passing vehicles. These experts agreed that the difference in the amount of time needed to pass a 55-foot single and a 65-foot double has no appreciable effect on motorist safety on limited-access, four-lane divided highways. Appellants also produced depositions and affidavits of state highway safety officials from 12 of the States where 65-foot doubles are allowed on some or ail highways; all shared the opinion that 65-foot doubles are as safe as 55-foot singles.
The State, for reasons unexplained, made no effort to contradict this evidence of comparative safety with evidence of its own. The Chairman of the State Highway Commission, while acknowledging the Commission’s statutory authority to issue the permits sought by appellants, testified that the regulations preventing their issuance are not based on an administrative assessment of the safety of 65-foot doubles, and he himself was “not prepared to make a statement relative to the safety of these vehicles.” App. 250. The reason for the Commission’s adoption of these regulations, according to the Chairman, was its belief that the people of the State did not want more vehicles over 55 feet long on the State’s highways. The State produced no evidence, nor has it made any suggestion in this Court, that 65-foot doubles are less safe than 55-foot singles because of their extra trailer, as distinguished from their extra length.
Appellants also produced uncontradicted evidence showing that their operations are disrupted, their costs are raised, and their service is slowed by the challenged regulations. For example, Consolidated ordinarily finds it faster and less expensive to use 65-foot doubles to carry interstate freight originating from or destined for Milwaukee and Madison. To comply with Wisconsin law, however, an interstate double bound for Wisconsin must stop before entering the State and detach one of its two trailers. Consolidated then pulls each trailer separately to the freight terminal in Milwaukee or Madison. Likewise, each trailer of a double outbound from one of those cities must be pulled across the Wisconsin state line separately, at which point they are united into a double-trailer combination. Consolidated maintains a crew of drivers in Wisconsin whose sole responsibility is to shuttle second trailers to and from the state line.
On routes through Wisconsin between Chicago and Minneapolis, both Consolidated and Raymond are compelled to use 55-foot singles instead of 65-foot doubles because each trailer of a double would have to be pulled by a separate tractor on the portion of the route that is in Wisconsin. On its long east-west routes from Detroit and Chicago to Seattle, Consolidated must divert doubles south of Wisconsin through Missouri and Nebraska in order to avoid Wisconsin’s ban. These routes would involve a considerably shorter distance if Consolidated’s trucks could go through Wisconsin.
Finally, appellants’ evidence demonstrated that Wisconsin routinely allows a great number and variety-of vehicles over 55 feet long to be operated on the State’s highways. App. 178-181.
The three-judge court ruled against appellants. 417 F. Supp. 1352 (WD Wis. 1976) (per curiam). The court found that the Wisconsin regulatory scheme does not discriminate against interstate commerce. Id., at 1356-1358. The court also considered “whether the burden imposed upon interstate commerce outweighs the benefits to the local popul[ace],” id., at 1358, and concluded that it did not. It thought that appellants had not shown that the State’s refusal to issue permits for appellants’ 65-foot doubles had no relation to highway safety, pointing to the fact that, other things being equal, it takes longer for a motorist to pass a 65-foot truck than a 55-foot truck. Id., at 1359. The court considered the expense imposed on appellants to be “of no material consequence.” Id., at 1361. We noted probable jurisdiction. 430 U.S. 914 (1977).
Ill
Appellants challenge both branches of the District Court’s holding. First, they contend that the State’s refusal to issue the requested “trailer train” permits under § 348.27 (6) burdens interstate commerce in violation of the Commerce Clause because it substantially interferes with the movement of goods in interstate commerce and makes no contribution to highway safety. Second, they argue that § 348.27 (4), authorizing issuance of “interplant” permits, see n. 5, supra, discriminates against interstate commerce in violation of the Commerce Clause because it allows permits to be issued to carry the products of Wisconsin industries, but not of other States’ industries, over Wisconsin highways in trucks longer than 55 feet. We find it necessary to address the second contention only as it bears on the first.
By its terms, the Commerce Clause grants Congress the power “[t]o regulate Commerce . . . among the several States . . . .” Long ago it was settled that even in the absence of a congressional exercise of this power, the Commerce Clause prevents the States from erecting barriers to the free flow of interstate commerce. Cooley v. Board of Wardens, 12 How. 299 (1852); see Great A&P Tea Co. v. Cottrell, 424 U. S. 366, 370-371 (1976). At the same time, however, it never has been doubted that much state legislation, designed to serve legitimate state interests and applied without discrimination against interstate commerce, does not violate the Commerce Clause even though it affects commerce. H. P. Hood & Sons, Inc. v. Du Mond, 336 U. S, 525, 531-532 (1949); see Gibbons v. Ogden, 9 Wheat. 1, 203-206 (1824); id., at 235 (Johnson, J., concurring). “[I]n areas where activities of legitimate local concern overlap with the national interests expressed by the Commerce Clause — where local and national powers are concurrent — -the Court in the absence of congressional guidance is called upon to make ‘delicate adjustment of the conflicting state and federal claims,’ H. P. Hood & Sons, Inc. v. Du Mond, supra, at 553 (Black, J., dissenting) . . . .” Great A&P Tea Co. v. Cottrell, supra, at 371; see Hunt v. Washington Apple Advertising Comm’n, 432 U. S. 333, 350 (1977).
In this process of “delicate adjustment,” the Court has employed various tests to express the distinction between permissible and impermissible impact upon interstate commerce, but experience teaches that no single conceptual approach identifies all of the factors that may bear on a particular case. Our recent decisions make clear that the inquiry necessarily involves a sensitive consideration of the weight and nature of the state regulatory concern in light of the extent of the burden imposed on the course of interstate commerce. As the Court stated in Pike v. Bruce Church, Inc., 397 U.S. 137, 142 (1970):
“Although the criteria for determining the validity of state statutes affecting interstate commerce have been variously stated, the general rule that emerges can be phrased as follows: Where the statute regulates evenhandedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits. Huron Cement Co. v. Detroit, 362 U. S. 440, 443. If a legitimate local purpose is found, then the question becomes one of degree. And the extent of the burden that will be tolerated will of course depend on the nature of the local interest involved, and on whether it could be promoted as well with a lesser impact on interstate activities.”
Accord, Great A&P Tea Co. v. Cottrell, supra, at 371-372; Hughes v. Alexandria Scrap Corp., 426 U. S. 794, 804 (1976); see also Hunt v. Washington Apple Advertising Comm’n, supra, at 350.
In the instant case, appellants do not dispute that a State has a legitimate interest in regulating motor vehicles using its roads in order to promote highway safety. Nor do they contend that federal regulation has pre-empted state regulation of truck length or configuration. They argue, however, that the burden imposed upon interstate commerce by the Wisconsin regulations challenged here is, in the language of Pike v. Bruce Church, Inc., “clearly excessive in relation to the putative local benefits.” Appellants contend that the regulations were shown by uncontradicted evidence to make no contribution to highway safety, while imposing a burden on interstate commerce that is substantial in terms of expense and delay. They analogize this case to Bibb v. Navajo Freight Lines, 359 U. S. 520 (1959), where the Court invalidated an Illinois law, defended on the ground that it promoted highway safety, that required trailers of trucks driven within Illinois to be equipped with contour mudguards.
The State replies that the general rule of Pike is not applicable to a State’s regulation of motor vehicles in the promotion of safety. It contends that we should be guided, instead, by South Carolina Highway Dept. v. Barnwell Bros., Inc., 303 U. S. 177 (1938), which upheld over Commerce Clause objections a state law that set stricter limitations on truck width and weight than did surrounding States’ laws. The State emphasizes that Barnwell Bros, applied a “rational relation” test rather than a “balancing” test, and argues that its regulations bear a rational relation to highway safety: Longer trucks take longer to pass or be passed than shorter trucks.
We acknowledge, as did the Court in Bibb, that there is language in Barnwell Bros, “which, read in isolation from . . . later decisions . . . , would suggest that no showing of burden on interstate commerce is sufficient to invalidate local safety regulations in absence of some element of discrimination against interstate commerce.” 359 U. S., at 528-529. But Bibb rejected such a suggestion by stating the test to be applied to state highway regulation in terms similar in principle to the subsequent formulation in Pike v. Bruce Church, Inc.:
“Unless we can conclude on the whole record that ‘the total effect of the law as a safety measure in reducing accidents and casualties is so slight or problematical as not to outweigh the national interest in keeping interstate commerce free from interferences which seriously impede it’. . . we must uphold the statute.” 359 U. S., at 524, quoting Southern Pacific Co. v. Arizona ex rel. Sullivan, 325 U. S. 761, 775-776 (1945).
Thus, we cannot accept the State’s contention that the inquiry under the Commerce Clause is ended without a weighing of the asserted safety purpose against the degree of interference with interstate commerce.
Nevertheless, it also is true that the Court has been most reluctant to invalidate under the Commerce Clause “ ‘state legislation in the field of safety where the propriety of local regulation has long been recognized.’ ” Pike v. Bruce Church, Inc., supra, at 143, quoting Southern Pacific Co. v. Arizona ex rel. Sullivan, supra, at 796 (Douglas, J., dissenting). In no field has this deference to state regulation been greater than that of highway safety regulation., See, e. g., Hendrick v. Maryland, 235 U. S. 610 (1915); Sproles v. Binjord, 286 U. S. 374 (1932); Maurer v. Hamilton, 309 U. S. 598 (1940); Railway Express Agency, Inc. v. New York, 336 U. S. 106 (1949). Thus, those who would challenge state regulations said to promote highway safety must overcome a “strong presumption of [their] validity.” Bibb, supra, at 524.
Despite the strength of this presumption, we are persuaded by the record in this case that the challenged regulations unconstitutionally burden interstate commerce. As we have shown, appellants produced a massive array of evidence to disprove the State’s assertion that the regulations make some contribution to highway safety. The State, for its part, virtually defaulted in its defense of the regulations as a safety measure. Both it and the District Court were content to assume that the regulations contribute to highway safety because appellants’ 65-foot doubles take longer to pass or be passed than the 55-foot singles. Yet appellants produced uncontradicted evidence that the difference in passing time does not pose an appreciable threat to motorists traveling on limited access, four-lane divided highways. They also showed that the Highway Commission routinely allows many other vehicles 55 feet or longer to use the State’s highways. In short, the State’s assertion that the challenged regulations contribute to highway safety is rebutted by appellants’ evidence and undercut by the maze of exemptions from the general truck-length limit that the State itself allows.
Moreover, appellants demonstrated, again without contradiction, that the regulations impose a substantial burden on the interstate movement of goods. The regulations substantially increase the cost of such movement, a fact which is not, as the District Court thought, entirely irrelevant. In addition, the regulations slow the movement of goods in interstate commerce by forcing appellants to haul doubles across the State separately, to haul doubles around the State altogether, or to incur the delays caused by using singles instead of doubles to pick up and deliver goods. See Bibb, 359 U. S., at 527. Finally, the regulations prevent appellants from accepting interline transfers of 65-foot doubles for movement through Wisconsin from carriers that operate only in the 33 States where the doubles are legal. See id., at 527-528. In our view, the burden imposed on interstate commerce by Wisconsin’s regulations is no less than that imposed by the statute invalidated in Bibb.
One other consideration, although not decisive, lends force to our conclusion that the challenged regulations cannot stand. As we have noted, Wisconsin’s regulatory scheme contains a great number of exceptions to the general rule that vehicles over 55 feet long cannot be operated on highways within the State. At least one of these exceptions discriminates on its face in favor of Wisconsin industries and against the industries of other States, and there are indications in the record that a number of the other exceptions, although neutral on their face, were enacted at the instance of, and primarily benefit, important Wisconsin industries. Viewed realistically, these exceptions may be the product of compromise between forces within the State that seek to retain the State’s general truck-length limit, and industries within the State that complain that the general limit is unduly burdensome. Exemptions of this kind, however, weaken the presumption in favor of the validity of the general limit, because they undermine the assumption that the State’s own political processes will act as a check on local regulations that unduly burden interstate commerce. See n. 18, supra.
IV
On this record, we are persuaded that the challenged regulations violate the Commerce Clause because they place a substantial burden on interstate commerce and they cannot be said to make more than the most speculative contribution' to highway safety. Our holding is a narrow one, for we do not decide whether laws of other States restricting the operation of trucks over 55 feet long, or of double-trailer trucks, would be upheld if the evidence produced on the safety issue were not so overwhelmingly one-sided as in this case. The State of Wisconsin has failed to make even a colorable showing that its regulations contribute to highway safety. The judgment of the District Court is reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
Mr. Justice Stevens took no part in the consideration or decision of this case.
Appendix A of the District Court opinion contains illustrations of both kinds of trucks. 417 F. Supp. 1352, 1363 (WD Wis. 1976) (per curiam).
A double can carry a greater volume of general commodities than a single, often without exceeding legal limits on gross vehicle weights. Thus, fewer doubles than singles are needed to carry a given amount of cargo, with consequent savings in fuel and drivers’ time. In addition, because the trailers of a double can be routed separately, cargo can be picked up from various shippers, dispatched, and delivered to various destinations more quickly by use of doubles than singles.
Subsequent to the District Court’s decision, this section was amended to allow single-trailer units up to 59 feet long to be operated without a permit “providing the cargo or cargo space of the semitrailer is 45 feet or less in length and the truck tractor is within the statutory limit in sub. (1).” 1977 Wis. Laws, ch. 29, § 1487h, adding § 348.07 (2) (g).
Exempted from the length limit of § 348.07 (1) are combinations of mobile homes and their towing vehicles, if their overall length does not exceed 60 feet, §348.07 (2)(d), and implements of husbandry operated temporarily upon the highway, § 348.07 (2) (e).
The District Court assumed that § 348.08 (1) generally allows double-trailer trucks up to 55 feet long to be operated without permits. See 417 F. Supp., at 1354-1355. The State concedes that this assumption was erroneous. Tr. of Oral Arg. 34-37. The section, however, does exempt from its permit requirement combinations of two vehicles pulled by a third and “being transported by the drive-away method in saddle-mount combination,” where overall length does not exceed 55 feet, § 348.08 (1) (a); combinations of farm tractors pulling two trailers or one trailer and one implement of husbandry, if the combination is used exclusively for farming and its overall length does not exceed 55 feet, § 348.08 (1) (b); and “tour trains” operated primarily on county and municipal roads for recreational or educational purposes, § 348.08 (1) (c). The terms “drive-away method” and “saddle-mount combination” in § 348.08 (1) (a) are not defined by the statute or regulations, but they apparently refer to a method of towing one four-wheel motor vehicle by resting its front wheels on the back of a second four-wheel motor vehicle. See 49 CFR §§ 390.9, 393.71, and 393.17 (1976).
The Commission also is authorized to issue annual permits to operate overlength vehicles “to industries and to their agent motor carriers owning and operating oversize vehicles in connection with interplant, and from plant to state line, operations in this state,” § 348.27 (4); “to pipeline companies or operators or public service corporations for transportation of poles, pipe, girders and similar materials . . . used in its [sic] business,” § 348.27 (5); “to companies and individuals hauling peeled or unpeeled pole-length forest products used in its [sic] business,” provided that overall length does not exceed 65 feet, § 348.27 (5); “to auto carriers operating ‘haulaways’ specially constructed to transport motor vehicles,” provided that overall length does not exceed 65 feet, § 348.27 (5); “to licensed mobile home transport companies and to licensed mobile home manufacturers and dealers authorizing them to transport oversize mobile homes,” § 348.27 (7); to persons transporting “loads of pole length and pulpwood exceeding statutory length . . . limitations ... for a distance not to exceed 3 miles from the Michigan-Wisconsin state line,” § 348.27 (9); and to other persons “[f]or good cause in specified instances . . . for a specified period . . . [to] allow loads exceeding the size . . . limitations imposed by this chapter,” §348.27 (3).
Section 348.25 (4) provides that permits “shall be issued only for the transporting of a single article or vehicle which exceeds statutory size . . . limitations and which cannot reasonably be divided or reduced to comply with statutory size . . . limitations . . . .'” The Commission by regulation, however, exempts general, industrial interplant, and double-trailer milk truck permits from this requirement. Wis. Admin. Code § Hy 30.01 (3) (c) (June 1976). It appears that the Commission interprets § 348.25 (4) to require only that it would be less economical, rather than physically impossible, to divide a load. See App. 200, 210, 211-212.
Consolidated also sought authority to operate over Interstate Highway 894, an alternative route which bypasses the Milwaukee metropolitan area.
The complaint named as defendants, individually and in their official capacities, Rice, the Secretary of the Wisconsin Department of Transportation; Huber, the Chairman of the Wisconsin Highway Commission; Sweda and Young, members of the Commission; Volk, the Chief Traffic Engineer of Wisconsin; Versnik, the commanding officer of the Wisconsin State Patrol; and LaFollette, the Attorney General of Wisconsin. We shall refer to the defendants collectively as “the State.”
The complaint also stated a claim under the Equal Protection Clause of the Fourteenth Amendment which the District Court rejected and which we do not reach.
Section 2281 was repealed by Pub. L. 94 — 381, 90 Stat. 1119, the day before the three-judge court’s decision in this case. The repeal, however, did not affect actions commenced on or before its date of enactment. See § 7 of Pub. L. 94-381, 90 Stat. 1120.
According to a stipulated exhibit, at the time of trial only 17 States and the District of Columbia did not allow 65-foot doubles on their highways. A few more permitted their operation on designated highways, and the rest allowed them on all highways. App. 278. For a more detailed summary of current state laws regulating truck length and configuration, see American Association of State Highway and Transportation Officials, Legal Maximum Dimensions and Weights of Motor Vehicles Compared with AASHTO Standards (1976).
The State did introduce expert testimony that occupants of smaller vehicles are more likely to be killed in collisions with large trucks than occupants of larger vehicles. The study upon which this testimony was based did not distinguish between 55-foot singles and 65-foot doubles, and the State’s expert witness had no opinion as to their relative safety. App. 154.
He also said that the state legislature, in response to this feeling, had declined to enact legislation that would have allowed 65-foot doubles to be operated without permits. He interpreted this legislative inaction as evidence of a legislative intent that the Commission should not issue permits for such trucks, despite its statutory power to do so.
Indeed, the State agrees that “[a]ppellants have shown that 65 foot twin trailers have as good a safety record as other large vehicles.” Brief for Appellees 13.
It appears that 65-foot doubles must be routed as far south as Missouri because Iowa, which Interstate Highway 80 crosses on an east-west route, also bans 65-foot doubles.
An officer of Consolidated estimated that it costs the company in excess of $2 million annually to make the various adjustments in operations that are required by Wisconsin law. An officer of Raymond estimated that the company could save up to $63,000 annually on fuel and up to $102,000 annually on drivers’ wages if it could use 65-foot doubles on its route between Chicago and Minneapolis.
Cooley v. Board of Wardens, 12 How. 299, 319 (1852), distinguished between subjects “imperatively demanding a single uniform rule” and subjects “imperatively demanding that diversity, which alone can meet the local necessities.” Other cases have distinguished between stats regulations that affect interstate commerce “directly,” and those that affect it “indirectly.” E. g., Hall v. DeCuir, 95 U. S. 485, 488 (1878); Smith v. Alabama, 124 U. S. 465, 482 (1888). And many cases have distinguished between regulations that are an exercise of the State’s “police powers,” and those that are “regulations of commerce.” E. g., Railroad Co. v. Fuller, 17 Wall. 560, 570 (1873); Smith v. Alabama, supra, at 482.
See, e. g., Di Santo v. Pennsylvania, 273 U. S. 34, 44 (1927) (Stone, J., dissenting); Parker v. Brown, 317 U. S. 341, 362-363 (1943); Southern Pacific Co. v. Arizona ex rel. Sullivan, 325 U. S. 761, 768-769 (1945); H. P. Hood & Sons, Inc. v. Du Mond, 336 U. S. 525, 552-553 (1949) (Black, J., dissenting).
Congress has considered pre-empting this field, but it has not acted. See, e. g., S. Rep. No. 93-1111, p. 10 (1974); Hearings on Transportation and the New Energy Policies (Truck Sizes and Weights) before the Subcommittee on Transportation of the Senate Committee on Public Works, 93d Cong., 2d Sess. (1974).
The Court’s special deference to state highway regulations derives in part from the assumption that where such regulations do not discriminate on their face against interstate commerce, their burden usually falls on local economic interests as well as other States’ economic interests, thus insuring that a State’s own political processes will serve as a check against unduly burdensome regulations. Compare South Carolina Highway Dept. v. Barnwell Bros., 303 U. S. 177, 187 (1938), with Southern Pacific Co. v. Arizona ex rel. Sullivan, 325 U. S., at 783. It also derives from a recognition that the States shoulder primary responsibility for the construction, maintenance, and policing of their highways, and that highway conditions may vary widely from State to State. See Bibb v. Navajo Freight Lines, 359 U. S. 520, 523-524 (1959); Barnwell Bros., supra, at 187.
The District Court, without mentioning this evidence, suggested that language in Morris v. Duby, 274 U. S. 135, 144 (1927), and Buck v. Kuykendall, 267 U. S. 307, 315 (1925), established a principle “that for purposes of judicial review of state highway legislation, size restrictions might be deemed inherently tied to public safety . . . .” 417 F. Supp., at 1360. The language relied upon does not go so far, and it antedates the era of the limited-access, four-lane divided highways involved in this case. Size restrictions, like other highway safety regulations, are entitled to a strong presumption of validity, but this presumption cannot justify a court in closing its eyes to uncontroverted evidence of record.
The State’s failure to present any evidence to rebut appellants’ showing in itself sets this case apart from Barnwell Bros., see 303 U. S., at 196, and even from Bibb, see 359 U. S., at 525.
The District Court said: “That compliance with Wisconsin regulations imposes added costs upon the plaintiffs is a fact of no material consequence.” 417 F. Supp., at 1361, citing Bibb, supra, at 526. In Bibb, the Court thought that the cost to carriers of installing the mudguards required by Illinois would not, in itself, require invalidation of the Illinois law. See 359 U. S., at 526. But the Court also made it clear that “[c]ost taken into consideration with other factors might be relevant in some cases to the issue of burden on commerce.” Ibid.
The State contends that its regulations do not interfere with interlining as seriously as the Illinois law at issue in Bibb because 65-foot doubles “may freely be hauled through Wisconsin, but, of course, they must be hauled one at a time. . . . This does not prevent interlining, it just makes it more expensive.” Brief for Appellees 11. This contention overlooks the fact that in Bibb interlining could have continued if either the originating or the connecting carriers had been willing to bear the expense of installing the contour mudguards required by Illinois law.
The State argues that this case is distinguishable from Bibb because the contour mudguards required by Illinois were illegal in Arkansas, and the straight mudguards required by Arkansas were illegal in Illinois. Here, by contrast, the 55-foot singles that are legal in Wisconsin are not illegal in any other State. But the State fails to appreciate that the conflict between the Illinois and Arkansas requirements in Bibb was important because of the added burden of delay and expense that it imposed on carriers operating between the two States. The conflict would have required such carriers to stop somewhere between Illinois and Arkansas, either to shift cargo from one trailer to another, 359 U. S., at 526, or to change mudguards on the original trailer, id., at 527.
We also note that the interference with interlining that weighed in the Bibb decision did not result from the conflict between the Illinois and Arkansas requirements, but rather from the fact that many originating carriers did not operate in Illinois and hence “would not be expected to equip [their] trailers with contour mudguards.” Id., at 528.
Under Wis. Stat. §348.27 (4) (1975), the Commission issues permits to Wisconsin industries and their agent motor carriers to transport goods in trucks over 55 feet long from plants in Wisconsin to the state line, and thence to markets in other States, but it does not issue permits to* industries with plants in other States to transport goods in trucks over 55 feet long through Wisconsin to markets in other States. The District Court’s sua sponte speculation that industries in States other than Wisconsin also might be eligible for permits under §348.27 (4), see 417 F. Supp., at 1357 n. 9, is refuted by the record, see App. 257-258, and was disavowed by the State, Tr. of Oral Arg. 30; see Brief for Appellees 4.
Given our conclusion that the regulations preventing issuance of the requested permits unconstitutionally burden interstate commerce, we find it unnecessary to decide whether appellants would be entitled to relief solely on the basis of the discrimination against interstate commerce embodied in § 348.27 (4). Compare Brief for Appellees 4, and Brief for Association of American Railroads as Amicus Curiae 20, with Reply Brief for Appellants 39. Neither do we intimate that nondiscriminatory exceptions to general length, width, or weight limits are inherently suspect. Cf. Sproles v. Binford, 286 U. S. 374, 391-396 (1932).
As one commentator has written, Commerce Clause adjudication must depend in large part “upon the thoroughness with which the lawyers perform their task in the conduct of constitutional litigation. Here, as in many other fields, constitutionality is conditioned upon the facts, and to the lawyers the courts are entitled to look for gamering and presenting the facts.” Dowling, Interstate Commerce and State Power, 27 Va. L. Rev. 1, 27-28 (1940). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
116
] |
CALLANAN ROAD IMPROVEMENT CO. v. UNITED STATES et al.
No. 488.
Argued April 8, 1953.
Decided May 4, 1953.
William A. Roberts argued the cause for appellant. With him on the brief was James E. Wilson.
William J. Hickey argued the cause for the United States and the Interstate Commerce Commission, appel-lees. With him on the brief were Acting Solicitor General Stern, Acting Assistant Attorney General Hodges, Ralph S. Spritzer, Daniel M. Friedman and Edward M. Reidy.
R. Granville Curry argued the cause for the Cornell Steamboat Company, appellee. With him on the brief was Frederick M. Dolan.
Mr. Justice Minton
delivered the opinion of the Court.
In 1941, one Joseph R. Hutton applied to the Interstate Commerce Commission for a permit to operate as a contract carrier by water between points on Long Island Sound, New York Harbor, the Hudson River, the New York State Barge Canal System, the Niagara River, and contiguous ports. In the alternative, he prayed a certificate of convenience and necessity if he be found to be a common carrier. The application was a “grandfather” clause proceeding under § 309 of Part III, Water Carriers, of the Interstate Commerce Act, 54 Stat. 941, 49 U. S. C. (1946 ed.) § 909.
The Commission, after hearing and investigation, made findings of fact and conclusions of law thereon to the effect that for 37 years Hutton had been in operation; that “ [h] e owns and manages 1 steam power boat of about 240 horsepower, and 4 barges, all of which are operated as a unit. The power boat is used to tow the barges but also carries about 150 gross tons of freight. On occasion other barges are rented or chartered for operation in applicant’s fleet.” It was further found that during and since 1939 and 1940, “applicant’s operation has been that of a common carrier of commodities generally between points on New York Harbor, the Hudson River below its junction with the New York State Barge Canal, the New York State Barge Canal between the Hudson River and the Niagara River including the Oswego branch, and the Niagara River.” The Commission further found that the applicant was in operation January 1, 1940, the critical date provided in § 309 for “grandfather” proceedings, and by reason of his long, continuous operation, public convenience and necessity would be served by continuance of such operation, and specifically found:
“We find that applicant is a common carrier by water; that public convenience and necessity require operation by applicant as a common carrier in interstate or foreign commerce, of commodities generally, between points on New York Harbor as determined in Ex Parte No. 140, points on the Hudson River below its junction with the New York State Barge Canal, the New York State Barge Canal between the Hudson River and the Niagara River including the Oswego branch, and the Niagara River; that applicant is fit, willing and able properly to perform said transportation; and that applicant is entitled to a certificate authorizing such operation, subject, however, to general conditions which are necessary to carry out, with respect to such operation, the requirements of Part III of the act and the orders, rules, and regulations of the Commission thereunder.”
The Commission entered an order on July 17, 1942, effective October 5, 1942, granting the certificate of convenience and necessity to Hutton. This order recited the fact of the above findings and incorporated them by reference. 250 I. C. C. 804.
Thus it will be seen that the Commission found the operations of Hutton to be those of a common carrier by water of commodities generally in self-propelled vessels which he owned and which he also used to tow barges he owned, rented, or chartered. There is no finding that his operations included the towing of barges which he did not own, rent, or charter. The certificate was accepted by Hutton, and, as far as appears on this record, he operated under it until March 7, 1944, in the same manner as he had before.
On March 7, 1944, the Commission of its own motion opened the record in Hutton’s original application and, after reconsidering its former findings, specified the type of vessels to be used in the exercise of its authority theretofore granted. 260 I. C. C. 804. The Commission’s order of March 7,1944, in pertinent part reads as follows:
“That public convenience and necessity require the continuance of operation by applicant as a common carrier by water, by self-propelled vessels and by non-self-propelled vessels with the use of separate towing vessels in interstate or foreign commerce, in the transportation of commodities generally between points in the area defined by the order of the Commission . . . .”
This amended certificate, which limited Hutton to the identical operations he had long carried on and upon which his § 309 rights were authorized, was accepted by him without question, and he continued to operate under it until his death several months later.
The Callanan Road Improvement Company, the appellant here, sought to purchase the amended certificate from Hutton’s administratrix for operations limited to the Hudson River and New York Harbor. By § 312 of the Interstate Commerce Act, 54 Stat. 944, 49 U. S. C. (1946 ed.) § 912, the Interstate Commerce Commission’s authorization is required for such a transfer. An application for approval was filed before the Commission by the appellant and the administratrix. After hearing, the Commission by order dated August 18, 1947 (265 I. C. C. 813), authorized the transfer of the amended certificate to the appellant in the following words:
“It is further ordered, That, following consummation of the sale to the transferee of the operating rights covered by said amended certificate, said transferee may perform to the extent above described, the water-carrier service heretofore authorized under said amended certificate dated March 7, 1944, in No. W-103.”
On February 5, 1948, the Commission issued an amended certificate to the appellant, pursuant to its order of August 18, 1947. Thus, the appellant sought and received a transfer of the amended certificate of March 7, 1944, limited by consent as to waters to be operated upon.
On January 5, 1951, the appellant filed a petition with the Commission for interpretation of the amended certificate it had purchased from Hutton’s administratrix. Cornell Steamboat Company, engaged only in towing on the waters in question, appeared and offered evidence against the appellant. In this proceeding, the appellant claimed the right under its certificate to engage in towing service as distinguished from freighting service. It is and was the contention of the appellant that under the original certificate issued to Hutton in 1942, the latter was a common carrier of goods generally, and that the limitations or modification of this certificate by the order of the Commission of March 7, 1944, which denied Hutton the right to engage in towing services was unauthorized, and, as transferee, the appellant was entitled to engage in towing service and to promulgate and file tariffs therefor. The Commission after hearing held the appellant was not entitled to engage in the service of towing and cancelled the tariffs filed by the appellant covering towing services. 285 I. C. C. 75.
The appellant filed a complaint in the District Court of the United States for the Northern District of New York to set aside that order. A statutory three-judge court refused to set it aside, 107 F. Supp. 184, and this appeal followed.
We need not go into the differences between towage and freightage. It is admitted for the purposes of this case that the limitations placed by the order of March 7, 1944, upon the original certificate issued Hutton in 1942, had the effect of restricting his operations to freightage and denied him the right to engage in towage. The appellant cannot now raise the question of the power of the Commission to modify the original certificate of July 17, 1942, by the limitations contained in the order of March 7, 1944. Whether the Commission’s action in reopening the 1942 proceedings and placing the limitations on the certificate theretofore issued was right or wrong, the jurisdiction of the Commission was not destroyed thereby. A direct attack in such circumstances was the remedy.
Hutton not only did not object. He accepted the modified certificate and operated under it, just as he had always operated. His operation was not cut down by the limitations placed upon the certificate. The appellant, as transferee of that modified certificate, stands in no better position than Hutton stood. Cf. Gregg Cartage & Storage Co. v. United States, 316 U. S. 74, 82-83. Indeed, in the 1947 transfer proceedings before the Commission when the appellant sought to acquire Hutton’s amended certificate of March 7, 1944, the appellant objected that the protestant there could not raise the question of the Commission’s power to modify the certificate, as this would be a collateral attack on the Commission’s order. That is exactly what the appellant seeks to do here. It cannot in this collateral proceeding attack the validity of the Commission’s order of March 7, 1944. Securities & Exchange Comm’n v. Central-Illinois Sec. Corp., 338 U. S. 96, 143; Stanley v. Supervisors, 121 U. S. 535, 550; Reconstruction Finance Corp. v. Lightsey, 185 F. 2d 167; City of Tulsa v. Midland Valley R. Co., 168 F. 2d 252, 254; Brown Co. v. Atlantic Pipe Line, 91 F. 2d 394, 398. The appellant must take the certificate as it stood at the time it sought and received the Commission’s approval for its transfer.
Furthermore, the appellant, having invoked the power of the Commission to approve the transfer of the amended certificate to it, is now estopped to deny the Commission’s power to issue the certificate in its present form and as it existed prior to the time the appellant sought its transfer. United Fuel Gas Co. v. Railroad Comm’n, 278 U. S. 300, 307-308; St. Louis Malleable Casting Co. v. Prendergast Construction Co., 260 U. S. 469. This is especially true in view of the appellant’s contention at the 1947 transfer hearing that the protestant in that hearing could not raise the question there which the appellant seeks to raise here, as it would constitute a collateral attack on the order of the Commission. The appellant cannot blow hot and cold and take now a position contrary to that taken in the proceedings it invoked to obtain the Commission’s approval. If the appellant then had taken the position it seeks now, the Commission might conceivably have refused its approval of the transfer. The appellant accepted the transfer with the limitations contained in the certificate. The appellant now will not be heard to say it is entitled to receive more than its transferor had or the certificate transferred gave.
The judgment of the District Court is
Affirmed.
Mr. Justice Black concurs in the result.
Mr. Justice Douglas dissents. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
65
] |
LIMBACH, TAX COMMISSIONER OF OHIO v. HOOVEN & ALLISON CO.
No. 83-96.
Argued February 22, 1984
Decided April 18, 1984
Blackmun, J., delivered the opinion for a unanimous Court.
Richard C. Farrin, Assistant Attorney General of Ohio, argued the cause for petitioner. With him on the briefs was Anthony J. Celebrezze, Jr., Attorney General.
Michael A. Nims argued the cause for respondent. With him on the brief was Charles H. Moellenberg, Jr
James F. Gossett filed a brief for the International Association of Assessing Officers as amicus curiae urging reversal.
Justice Blackmun
delivered the opinion of the Court.
In Hooven & Allison Co. v. Evatt, 324 U. S. 652 (1945) (Hooven I), this Court passed upon the constitutionality of Ohio’s application of a nondiscriminatory ad valorem personal property tax to imported fibers still in their original packages. The result there was unfavorable to the State. In this case, the Tax Commissioner of Ohio asks us to sustain the application of the same nondiscriminatory ad valorem personal property tax to like fibers, still in their original packages, imported by the same manufacturer. The case thus presents, primarily, an issue of preclusion framed in terms of collateral estoppel.
I
The Hooven & Allison Company (Hooven) is a domestic manufacturer of cordage products made from natural fibers. These fibers — hemp, sisal, jute, manila, and the like — are not grown in the United States and must be imported. Upon their arrival in this country, the imported fibers are transported by rail to Hooven’s plant in Xenia, Ohio, where they are stored in their original packages for future use in Hooven’s manufacturing process.
In accord with Ohio Rev. Code Ann. §5711.16 (1980), Hooven timely filed personal property tax returns for 1976 and 1977. In those returns, Hooven listed these original-package imported fibers as “imports,” but deducted their value from the total value of its manufacturing inventory. The following written explanation was given:
“The inventories represent fibers imported by the taxpayer from foreign countries, held in the original packages in its warehouses in Xenia prior to being used in manufacturing cordage, and when they are removed therefrom or placed in the production line in the factory, such imported fibers so used, or removed from the original package, are thereupon transferred to the Goods in Process and are included in the taxable inventories in Xenia City.” Joint Record in the Supreme Court of Ohio 11.
In taking this deduction, Hooven relied expressly on this Court’s 1945 decision in Hooven 1. In that decision, the Court, by a closely divided vote, ruled that subjecting Hooven’s imported original-package raw materials to Ohio personal property taxation would be in violation of the Import-Export Clause of the United States Constitution, Art. I, § 10, cl. 2.
The Tax Commissioner of Ohio, however, for each of the two years in question, disallowed the deduction and added back into Hooven’s taxable manufacturing inventory the imported raw materials held for future use in manufacturing. Hooven’s asserted property tax liability for each of those years, accordingly, was increased.
Upon application for review, the Tax Commissioner sustained the increased assessments. She rejected federal constitutional arguments advanced by Hooven, as well as an additional argument that, by the decision in Hooven I, she was collaterally estopped from levying the increased assessments. The Tax Commissioner in so ruling relied on Michelin Tire Corp. v. Wages, 423 U. S. 276 (1976).
Hooven then appealed to the Ohio Board of Tax Appeals, advancing the same collateral-estoppel and federal constitutional issues. That Board reversed the Tax Commissioner. App. to Pet. for Cert. A-10. It ruled that the Commissioner was collaterally estopped by the decision in Hooven I. It noted that the parties were the same as those in Hooven I; that the issue as to the taxability of original-package raw materials was also the issue in Hooven I; that the raw materials and the type of taxation were identical to those involved in Hooven I; that Hooven I has not been “reversed” by this Court “and thus, has the force and effect of law”; and that, under the doctrine of collateral estoppel, litigation of the issue was barred “and the exemption from taxation was improperly held to be unavailable.” App. to Pet. for Cert. A-23. The Board rejected the Tax Commissioner’s argument that the decision in Michelin implicitly had overruled Hooven I. The Board did not reach or consider the constitutional issues, observing that it lacked jurisdiction to do so. App. to Pet. for Cert. A-20; see S. S. Kresge Co. v. Bowers, 170 Ohio St. 405, 166 N. E. 2d 139 (1960), appeal dism’d, 365 U. S. 466 (1961).
Hooven and the Tax Commissioner each filed a notice of appeal to the Supreme Court of Ohio, the taxpayer doing so in order to preserve the constitutional issues, and the Tax Commissioner pressing the collateral-estoppel issue. The Supreme Court of Ohio affirmed the ruling of the Ohio Board of Tax Appeals. Hooven & Allison Co. v. Lindley, 4 Ohio St. 3d 169, 447 N. E. 2d 1295 (1983). That court, in a unanimous per curiam opinion, ruled that principles of collateral estoppel prohibited the Tax Commissioner from assessing personal property taxes upon Hooven’s imported raw materials held in the original containers for future use in manufacturing. It acknowledged the presence of Michelin but noted that this Court had not overruled Hooven I in Michelin, although it had not hesitated expressly to overrule Low v. Austin, 13 Wall. 29 (1872). Thus, the Ohio court observed, this Court’s “action — or inaction — must be accorded conclusive effect, at least in regard to its intent in reappraising its earlier ruling in Hooven 4 Ohio St. 3d, at 172, 447 N. E. 2d, at 1298. The court then “decline[d] to address the [federal] constitutional issues raised by Hooven in its appeal.” Id., at 173, 447 N. E. 2d, at 1299.
We granted certiorari. 464 U. S. 813 (1983).
HH HH
In Low v. Austin, supra, this Court, in an opinion by Justice Field, unanimously enunciated the “original-package” doctrine, although perhaps not for the first time, see Brown v. Maryland, 12 Wheat. 419, 442 (1827). It held that, under the Import-Export Clause, goods imported from a foreign country are not subject to state ad valorem property taxation while remaining in their original packages, unbroken and unsold, in the hands of the importer.
In Michelin Tire Corp. v. Wages, supra, an importer challenged the assessment of Georgia’s nondiscriminatory ad valorem property tax upon an inventory of imported tires and tubes maintained at a wholesale distribution warehouse. This Court rejected the challenge to the state tax on the imported tires. It found that in the history of the Import-Export Clause, there was nothing to suggest that a tax of the kind imposed on goods that were no longer in import transit was the type of exaction that was regarded as objectionable by the Framers. The tax could not affect the Federal Government’s exclusive regulation of foreign commerce since it did not fall on imports as such. Neither did the tax interfere with the free flow of imported goods among the States. The Clause, while not specifically excepting nondiscriminatory taxes that had some impact on imports, was not couched in terms of a broad prohibition of every tax, but prohibited States only from laying “Imposts or Duties,” which historically connoted exactions directed only at imports or commercial activities as such. The Court concluded that its reliance a century earlier in Low v. Austin “upon the Brown dictum . . . was misplaced.” 423 U. S., at 283. Chief Justice Taney’s opinion in the License Cases, 5 How. 504 (1847), was carefully analyzed, with the Court concluding that that opinion had been misread in Low. “[Precisely contrary” to the reading it was given in Low, Chief Justice Taney’s License Cases opinion was authority “that nondiscriminatory ad valorem property taxes are not prohibited by the Import-Export Clause.” 423 U. S., at 301. It followed, this Court concluded, that “Low v. Austin was wrongly decided” and “therefore must be, and is, overruled.” Ibid. Hooven I was directly cited only once in Michelin, and then only in a footnote in which the Court stated that it found it unnecessary to address the assertion in Hooven I that Congress could consent to state nondiscriminatory taxation of imports even were such taxes within the prohibition of the Import-Export Clause. See 423 U. S., at 301, n. 13. While we acknowledge that Hooven I was not expressly overruled in Michelin, the latter case strongly implies that the foundation of the former had been seriously undermined.
It is apparent, and indeed clear, that Michelin, with its overruling of Low v. Austin, adopted a fundamentally different approach to cases claiming the protection of the Import-Export Clause. We said precisely as much in Washington Revenue Dept. v. Association of Wash. Stevedoring Cos., 435 U. S. 734 (1978):
“Previous cases had assumed that all taxes on imports and exports and on the importing and exporting processes were banned by the Clause. ... So long as the goods retained their status as imports by remaining in their import packages, they enjoyed immunity from state taxation. . . .
“Michelin initiated a different approach to Import-Export Clause cases. It ignored the simple question whether the tires and tubes were imports. Instead, it analyzed the nature of the tax to determine whether it was an ‘Impost or Duty.’ 423 U. S., at 279, 290-294. Specifically, the analysis examined whether the exaction offended any of the three policy considerations leading to the presence of the Clause:
‘The Framers of the Constitution thus sought to alleviate three main concerns . . . : the Federal Government must speak with one voice when regulating commercial relations with foreign governments, and tariffs, which might affect foreign relations, could not be implemented by the States consistently with that exclusive power; import revenues were to be the major source of revenue of the Federal Government and should not be diverted to the States; and harmony among the States might be disturbed unless seaboard States, with their crucial ports of entry, were prohibited from levying taxes on citizens of other States by taxing goods merely flowing through their ports to the other States not situated as favorably geographically.’ Id., at 285-286 (footnotes omitted).
“The ad valorem property tax there at issue offended none of these policies.... The Court therefore concluded that the Georgia ad valorem property tax was not an ‘Impost or Duty,’ within the meaning of the Import-Export Clause . . . .” Id., at 752-754.
See also id., at 762 (opinion concurring in part and concurring in result).
To repeat: we think it clear that this Court in Michelin specifically abandoned the concept that the Import-Export Clause constituted a broad prohibition against all forms of state taxation that fell on imports. Michelin changed the focus of Import-Export Clause cases from the nature of the goods as imports to the nature of the tax at issue. The new focus is not on whether the goods have lost their status as imports but is, instead, on whether the tax sought to be imposed is an “Impost or Duty.” See P. Hartman, Federal Limitations on State and Local Taxation, § 5:4 (1981); Hellerstein, State Taxation and the Supreme Court: Toward a More Unified Approach to Constitutional Adjudication?, 75 Mich. L. Rev. 1426, 1427-1434 (1977). Cf. Montana v. United States, 440 U. S. 147 (1979).
Hooven I held that, under the Clause, a nondiscriminatory state ad valorem personal property tax could not be imposed until the imported goods had lost their status as imports by being removed from their original packages. This decision was among the progeny of Low v. Austin for it, too, was decided on the original-package doctrine. Thus, Hooven I is inconsistent with the later ruling in Michelin that such a tax is not an “Impost or Duty” and therefore is not prohibited by the Clause. Although Hooven I was not expressly overruled in Michelin, it must be regarded as retaining no vitality since the Michelin decision. The conclusion of the Supreme Court of Ohio that Hooven I retains current validity in this respect is therefore in error. A contrary ruling would return us to the original-package doctrine. So that there may be no misunderstanding, Hooven I, to the extent it espouses that doctrine, is not to be regarded as authority and is overruled.
J — I
A
Respondent Hooven, however, argues that because the Court in Michelin did not expressly overrule Hooven I, it must follow that state-law principles of collateral estoppel bar the imposition of an ad valorem tax upon Hooven’s raw materials inventory.
We reject the suggestion that we are confronted, in the present posture of the case, with a claim of collateral estoppel under state, as distinguished from federal, law. Hooven I was a decision concerned with the application and impact of the Import-Export Clause upon the Ohio tax. The issue, thus, was one of a federal constitutional barrier. The Supreme Court of Ohio certainly so viewed it. It referred to both Hooven I and Michelin in federal constitutional terms and it described the issue before it as whether the contested tax “may constitutionally be assessed” in light of the Import-Export Clause. 4 Ohio St. 3d, at 171, 447 N. E. 2d, at 1297. And it viewed collateral estoppel in the light of precepts set forth in Commissioner v. Sunnen, 333 U. S. 591 (1948), a federal income tax case. From this premise, the Ohio court moved to its judgment that the levy of the tax was “barred by the doctrine of collateral estoppel.” 4 Ohio St. 3d, at 173, 447 N. E. 2d, at 1299.
Collateral estoppel, therefore, was applied as a matter of federal, not state, law. We perceive in this case no state-law overtones that, by any stretch of the imagination, could serve to insulate the case from review here. We are concerned with federal issues and a contention that a state court disregarded a federal constitutional ruling of this Court. The issue, then, is reviewable here. See Deposit Bank v. Frankfort,, 191 U. S. 499 (1903); Stoll v. Gottlieb, 305 U. S. 165 (1938); Toucey v. New York Life Ins. Co., 314 U. S. 118, 129, n. 1 (1941).
B
We move on to respondent’s collateral-estoppel argument. It is true, of course, that the parties in Hooven I were the same parties as those before us in the present case. It is true that the property sought to be taxed for 1976 and 1977 identifies with the property sought to be taxed for 1938, 1939, and 1940 in Hooven I. And it is true that the tax involved is the same Ohio nondiscriminatory ad valorem personal property tax. The parties, the tax, and the goods imported and their containers are the same. The Tax Commissioner does not dispute this. Tr. of Oral Arg. 12. Collateral-estoppel concepts, therefore, might have an initial appeal.
The years involved in this tax case, however, are not the same tax years at issue in Hooven I. Because of this, Commissioner v. Sunnen, supra, is pertinent and, indeed, is controlling. That case concerned licenses granted by a patent owner and his assignment of interests in the royalty agreements to his wife. An earlier decision of the Board of Tax Appeals, involving the same facts, questions, and parties but different tax years, was held not to be conclusive under the doctrine of collateral estoppel because certain intervening decisions of this Court made manifest the error of the result that had been reached by the Board. 333 U. S., at 602-607. The reason for not applying the collateral-estoppel doctrine in the present case is even stronger than that in Sunnen, for here the constitutional analysis of the earlier case is repudiated by this Court’s intervening pronouncement.
Because the Supreme Court of Ohio did not apply the principles of Sunnen, its judgment must be vacated and the case remanded. Failure to follow Sunnen’s dictates would lead to the very tax inequality that the admonition of that case was designed to avoid. Hooven then would be immune forever from tax on its imported goods because of an early decision based upon a now repudiated legal doctrine, while all other taxpayers would have their tax liabilities determined upon the basis of the fundamentally different approach adopted in Michelin. See Sunnen, 333 U. S., at 599.
Petitioner, therefore, is not barred by collateral estoppel in asserting the increases in tax for 1976 and 1977.
IV
The case is before us without a developed factual record. Hooven takes the position that it is entitled to an opportunity to demonstrate that the facts of this case are significantly different from those of Michelin, so that the result in that case is not controlling here. Hooven suggests that in Michelin, the tires had been mingled with domestically manufactured tires and had been arranged and stored for sale and delivery; moreover, the tires were finished goods. Here, according to Hooven, its imported fibers are not for sale, are not finished goods, and are destined for incorporation into a manufacturing process. Hooven further asserts that, once a factual record has been developed, a court will be in a position to examine the case in the light of any other constitutional provision respondent is then in a position to invoke, including the Foreign Commerce Clause.
Any development of the record, of course, should take place in the state courts and first be evaluated there. Accordingly, we make no judgment on the merits of Hooven’s constitutional claims. The judgment of the Supreme Court of Ohio is therefore vacated, and the case is remanded for further proceedings not inconsistent with this opinion.
It is so ordered.
Because the respondents there, the county Tax Commissioner and Tax Assessors, did not cross-petition for certiorari, the Georgia courts’ ruling that tubes still in corrugated shipping cartons were immune from the tax was not before this Court for review. Michelin Tire Corp. v. Wages, 423 U. S., at 279. n. 2.
Since Michelin, Hooven I has been cited by this Court only twice. See California Retail Liquor Dealers Assn. v. Midcal Aluminum, Inc., 445 U. S. 97, 111 (1980), and Kleppe v. New Mexico, 426 U. S. 529, 540 (1976). Neither citation bears upon the issue before us in the present case. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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116
] |
EDELMAN v. LYNCHBURG COLLEGE
No. 00-1072.
Argued January 8, 2002 —
Decided March 19,2002
Eric Schnapper argued the cause for petitioner. With him on the briefs was Elaine Charlson Bredehoft.
Lisa S. Blatt argued the cause for the United States et al. as amici curiae urging reversal. With her on the brief were Solicitor General Olson, Assistant Attorney General Boyd, Deputy Solicitor General Clement, Paul R. Q. Wolf son, Philip B. Sklover, and Barbara L. Sloan.
Alexander W. Bell argued the cause for respondent. With him on the brief was Mary V. Barney.
Ann Elizabeth Reesman and Rae T. Vann filed a brief for the Equal Employment Advisory Council as amicus curiae urging affirmance.
Paula A Brantner filed a brief for the National Employment Lawyers Association as amicus curiae.
Justice Souter
delivered the opinion of the Court.
The scheme of redress for employment discrimination under Title VII of the Civil Rights Act of 1964, as amended, requires a complainant to file a “charge” with the Equal Employment Opportunity Commission within a certain time after the conduct alleged, 78 Stat. 259, 42 U. S. C. § 2000e-5(e)(1) (1994 ed.), and to affirm or swear that the allegations are true, §2000e-5(b). The issue here is the validity of an EEOC regulation permitting an otherwise timely filer to verify a charge after the time for filing has expired. We sustain the regulation.
I
On June 6,1997, respondent Lynchburg College denied academic tenure to petitioner Leonard Edelman, who faxed a letter to an EEOC field office on November 14, 1997, claiming “gender-based employment discrimination, exacerbated by discrimination on the basis of... national origin and religion.” App. 52. Edelman made no oath or affirmation.
On November 26,1997, Edelman’s lawyer wrote to the field office requesting an interview with an EEOC investigator and stating his “understanding that delay occasioned by the interview will not compromise the filing date, which will remain as November 14, 1997.” Id., at 54. An EEOC employee replied to Edelman and advised him to arrange an interview with a member of the field office. Without referring to the lawyer’s letter, the employee reminded Edelman that “a charge of discrimination must be filed within the time limits imposed by law.” Id., at 57. In Edelman’s case, the filing period was 300 days after the alleged discriminatory practice.
After the interview, the EEOC sent Edelman a Form 5 Charge of Discrimination for him to review and verify by oath or affirmation. On April 15, 1998, 313 days after the June 6, 1997, denial of tenure, the EEOC received the verified Form 5, which it forwarded to the College for response. After completing an investigation, the EEOC issued Edel-man a notice of right to sue.
Edelman first sued in a Virginia state court on various state-law claims, but later added a cause of action under Title VII, 42 U. S. C. §2000e~2(a)(l). The College then removed the case to Federal District Court and moved to dismiss, claiming that Edelman’s failure to file the verified Form 5 with the EEOC within the applicable filing period was a bar to subject-matter jurisdiction. Edelman replied that his November 1997 letter was a timely filed charge and that under an EEOC regulation, 29 CFR § 1601.12(b) (1997), the verification on the Form 5 related back to the letter.
The District Court found, however, that the November letter was not a “charge” within the meaning of Title VII because neither Edelman nor the EEOC treated it as one, App. to Pet. for Cert. 22-24, with the consequence that there was no timely filing to which the verification on Form 5 could relate back. After finding no ground for equitable tolling of the filing requirements, the District Court dismissed the Title VII complaint and remanded the state-law claims. Id., at 24-25.
A divided panel of the Court of Appeals affirmed. 228 F. 3d 503, 512 (CA4 2000). The majority held that the plain language of the statute foreclosed the EEOC regulation allowing a later oath to relate back to an earlier charge. The majority reasoned that the verification and filing provisions in §706 of Title VII were interdependent in defining “charge”: “Because a charge requires verification . . . , and because a charge must be filed within the limitations period, ... it follows that a charge must be verified within the limitations period.” Id., at 508..
Judge Luttig concurred only in the judgment. Id., at 512-513. He said that although the majority probably had “the better interpretation” of the statute, id., at 513, its reading of the filing and verification requirements as one was not compelled by the language, and the court was “bound to give deference” to the EEOC’s construction, ibid. He nonetheless joined in the judgment for the District Court’s reasons.
Because of a conflict among the Courts of Appeals, we granted certiorari, 533 U. S. 928 (2001), and now reverse.
II
A
Section 706 of the Civil Rights Act of 1964, as amended, 42 U. S. C. § 2000e-5, governs the filing of charges of discrimination with the EEOC. Section 706(b) requires “[c]harges” to “be in writing under oath or affirmation . . . containing] such information and ... in such form as the Commission requires.” § 2000e-5(b). Section 706(e)(1) provides that “[a] charge .. . shall be filed within one hundred and eighty [or in some cases, three hundred] days after the alleged unlawful employment practice occurred.” §2000e-5(e)(l).
Neither provision defines “charge,” which is likewise undefined elsewhere in the statute. Section 706(b) merely requires the verification of a charge, without saying when it must be verified; § 706(e)(1) provides that a charge must be filed within a given period, without indicating whether the charge must be verified when filed. Neither provision incorporates the other so as to give a definition by necessary implication.
The assumption of the Court of Appeals that the two provisions must be read as one, with “charge” defined as “under oath or affirmation,” was thus a structural and logical leap. Nor is the gap bridged by the rule of common sense that statutes are to be read as a whole, see United States v. Morton, 467 U. S. 822, 828 (1984). Although reading the two provisions together would not be facially inconsistent, doing that would ignore the two quite different objectives of the timing and verification requirements, which stand in the way of reading “charge” to subsume them both by definition. The point of the time limitation is to encourage a potential charging party to raise a discrimination claim before it gets stale, for the sake of a reliable result and a speedy end to any illegal practice that proves out. The verification requirement has the different object of protecting employers from the disruption and expense of responding to a claim unless a complainant is serious enough and sure enough to support it by oath subject to liability for perjury. This object, however, demands an oath only by the time the employer is obliged to respond to the charge, not at the time an employee files it with the EEOC. There is accordingly nothing plain in reading “charge” to require an oath by definition. Questionable would be the better word.
B
The statute is thus open to interpretation and the regulation addresses a legitimate question. Before we touch on the merits of the EEOC’s position, however, two threshold matters about the status of the regulation can be given short shrift. The first is whether the agency’s rulemaking exceeded its authority to adopt “suitable procedural regulations,” 42 U. S. C. § 2000e-12(a), and instead addressed a substantive issue over which the EEOC has no rulemaking power, see EEOC v. Arabian American Oil Co., 499 U. S. 244, 257 (1991); General Elec. Co. v. Gilbert, 429 U. S. 125, 141 (1976). Although the College argues that the EEOC’s regulation “alterfs] a substantive requirement included by Congress in the statute,” Brief for Respondent 32-33, this is really nothing more than a recast of the plain language argument; the College is merely restating the position we just rejected, that Congress defined “charge” as a verified accusation.
The other issue insignificant in this case, however prominent it is in much of the litigation that goes on over agency rulemaking, is the degree of deference owed to the regulation by reviewing courts. We agree with the Government as amicus that deference under Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, 843-844 (1984), does not necessarily require an agency’s exercise of express notice-and-comment rulemaking power, see Brief for United States et al. as Amici Curiae 19, n. 11; we so observed in United States v. Mead Corp., 533 U. S. 218, 230-231 (2001) (“[W]e have sometimes found reasons for Chevron deference even when no such administrative formality was required and none was afforded”). But there is no need to resolve any question of deference here. We find the EEOC rule not only a reasonable one, but the position we would adopt even if there were no formal rule and we were interpreting the statute from scratch. Because we so clearly agree with the EEOC, there is no occasion to defer and no point in asking what kind of deference, or how much.
c
A complaint to the EEOC starts the agency down the road to investigation, conciliation, and enforcement, and it is no small thing to be called upon to respond. As we said before, the verification provision is meant to provide some degree of insurance against catchpenny claims of disgruntled, but not necessarily aggrieved, employees. In requiring the oath or affirmation, however, Congress presumably did not mean to affect the nature of Title VII as “a remedial scheme in which laypersons, rather than lawyers, are expected to initiate the process.” EEOC v. Commercial Office Products Co., 486 U. S. 107,124 (1988); Love v. Pullman Co., 404 U. S. 522, 527 (1972). Construing § 706 to permit the relation back of an oath omitted from an original filing ensures that the lay complainant, who may not know enough to verify on filing, will not risk forfeiting his rights inadvertently. At the same time, the EEOC looks out for the employer’s interest by refusing to call for any response to an otherwise sufficient complaint until the verification has been supplied.
We would be hard pressed to take issue with the EEOC’s position after deciding Becker v. Montgomery, 532 U. S. 757 (2001), last Term. In that case, we considered whether the Federal Rule of Civil Procedure 11 signature requirement entailed the dismissal of a notice of appeal that was timely filed in the district court but was not signed within the filing period. We held that while the timing and content requirements for the notice of appeal were “jurisdictional in nature,” nothing prevented later cure of the signature defect, 532 U. S., at 765. There is no reason to think that relation back of the oath here is any less reasonable than relation back of the signature in Becker. Both are aimed at stemming the urge to litigate irresponsibly, and if relation back is a good rule for courts of law, it would be passing strange to call it bad for an administrative agency. In fact, it would be passing strange to disagree with the EEOC even without Becker, for a long history of practice with oath requirements supports the relation-back cure.
Where a statute or supplemental rule requires an oath, courts have shown a high degree of consistency in accepting later verification as reaching back to an earlier, unverified filing. This background law not only persuades by its regularity over time but points to tacit congressional approval of the EEOC’s position, Congress being presumed to have known of this settled judicial treatment of oath requirements when it enacted and later amended Title VIL
This presumption is complemented by the fact that Congress amended Title VII several times without once casting doubt on the EEOC’s construction. During the debates over the Equal Employment Opportunity Act of 1972, amending the Civil Rights Act of 1964, the text of the EEOC procedural regulations, including the predecessor of § 1601.12(b), was placed in the Congressional Record. 118 Cong. Rec. 718 (1972). By then the regulation was six years old, and had been upheld and applied by the federal courts. By amending the law without repudiating the regulation, Congress “suggests its consent to the Commission’s practice.” EEOC v. Associated Dry Goods Corp., 449 U. S. 590, 600, n. 17 (1981); see also EEOC v. Shell Oil Co., 466 U. S. 54, 69 (1984).
Ill
We accordingly hold the EEOC’s relation-back regulation to be an unassailable interpretation of §706 and therefore reverse. Our judgment does not, however, reach the conclusion drawn by the District Court, and the single judge ■ on the Court of Appeals, that Edelman’s letter was not a charge under the statute because neither he nor the EEOC treated it as one. It is enough to say here that at the factual level their view has some support. Although § 706(e)(1) of Title VII provides that the “notice of the charge . . . shall be served upon the person against whom such charge is made within ten days” of filing with the EEOC, 42 U. S. C. §§2000e-5(b) and (e)(1), the Government’s lawyer acknowledged at oral argument that the EEOC failed to “comply with its obligation to provide the employer with notice” within 10 days after receiving Edelman’s letter of November 14, 1997. Tr. of Oral Arg. 16. Edelman’s counsel agreed with the Government that the significance of the delayed notice to the College would be open on remand. Id., at 9-10, 17.
Accordingly, we reverse the judgment of the Court of Appeals and remand the case for further proceedings consistent with this opinion.
It is so ordered.
A Title VII complainant generally has 180 days from the time of the alleged unlawful employment practice to file with the EEOC, 42 U. S. C. § 2000e-5(e)(l) (1994 ed.), but a 300-day filing period applies if the charging party “institute^] proceedings with a State or local agency with authority to grant or seek relief” from unlawful employment practices. Ibid.; see also EEOC v. Commercial Office Products Co., 486 U. S. 107, 110 (1988). Virginia has such an agency, operating under a work-sharing agreement with the EEOC. See Tinsley v. First Union Nat. Bank, 155 F. 3d 435, 439-442 (CA4 1998).
The regulation provides in relevant part that “a charge is sufficient when the Commission receives from the person making the charge a written statement sufficiently precise to identify the parties, and to describe generally the action or practices complained of. A charge may be amended to cure technical defects or omissions, including failure to verify the charge, or to clarify and amplify allegations made therein. Such amendments and amendments alleging additional acts which constitute unlawful employment practices related to or growing out of the subject matter of the original charge will relate back to the date the charge was first received.”
Section 706(b) reads in relevant part that “[wjhenever a charge is filed by or on behalf of a person claiming to be aggrieved, or by a member of the Commission, alleging that an employer . . . has engaged in an unlawful employment practice, the Commission shall serve a notice of the charge ... on such employer . . . within ten days, and shall make an investigation thereof. Charges shall be in writing under oath or affirmation and shall contain such information and be in such form as the Commission requires.” 42 U. S. C. § 2000e-5(b). As to filing, § 706(e)(1) provides that “[a] charge under this section shall be filed within one hundred and eighty days after the alleged unlawful employment practice occurred and notice of the charge . . . shall be served upon the person against whom such charge is made within ten days thereafter, except that in a case of an unlawful employment practice with respect to which the person aggrieved has initially instituted proceedings with a State or local agency with authority to grant or seek relief from such practice ..., such charge shall be filed . . . within three hundred days after the alleged unlawful employment practice occurred.” § 2000e-5(e)(l).
Compare, e. g., 228 F. 3d 503, 509 (CA4 2000) (case below); Shempert v. Harwick Chemical Corp., 151 F. 3d 793, 796-797 (CA8 1998), with Philbin v. General Electric Capital Auto Lease, Inc., 929 F. 2d 321, 323-324 (CA7 1991) (per curiam); Peterson v. Wichita, 888 F. 2d 1307, 1308 (CA10 1989), cert. denied, 495 U. S. 932 (1990); Casavantes v. California State Univ., 732 F. 2d 1441,1443 (CA9 1984); Price v. Southwestern Bell Tel. Co., 687 F. 2d 74, 77, and n. 3 (CA5 1982).
See Delaware State College v. Ricks, 449 U. S. 250, 256-257 (1980) (“Limitations periods, while guaranteeing the protection of the civil rights laws to those who promptly assert their rights, also protect employers from the burden of defending claims arising from employment decisions that are long past”).
See EEOC v. Shell Oil Co., 466 U. S. 54, 76, n. 32 (1984) (“The function of an oath is to impress upon its taker an awareness of his duty to tell the truth”).
Title VII does not require the EEOC to utilize notice-and-comment procedures. Section 713(a) of Title VII requires the procedural regulations to “be in conformity with the standards and limitations” of the Administrative Procedure Act, 5 U. S. C. §§551-559. 42 U. S. C. §2000e-12(a) (1994 ed.). And the Administrative Procedure Act, 5 U. S. C. § 553(b), excepts “rules of agency organization, procedure, or practice” from notice-and-comment procedures unless required by statute.
We, of course, do not mean to say that the EEOC’s position is the “only one permissible.” See Commercial Office Products, 486 U. S., at 125 (O’Connor, J., concurring in part and concurring in judgment). The agency might, for example, have decided that the time to test the complainant’s seriousness is before the agency expends any effort on the case, and so have required a verified complaint prior to interview. JUSTICE O’Connor suggests, see post, at 122 (opinion concurring in judgment), that recognizing this implies that a sphere of deference is appropriate, and so resolves the Chevron question. But not all deference is deference under Chevron, see United States v. Mead Corp., 533 U. S. 218, 234 (2001), and there is no need to resolve deference issues when there is no need for deference.
The general practice of EEOC staff members is to prepare a formal charge of discrimination for the complainant to review and to verify, once the allegations have been clarified. See Brief for United States et al. as Amici Curiae 24. The complainant must submit a verified charge before the agency will require a response from the employer. See Brief for United States et al. as Amici Curiae on Pet. for Cert. 16.
Respondent argues that the employer will be prejudiced by these procedures because “there would be no deadline for verifying a charge.” Brief for Respondent 34, n. 26. But this is not our case, which simply challenges relation back per se, and our understanding is that the EEOC’s standard practice is to caution complainants that if they fail to follow up on their initial unverified charge, the EEOC will not proceed further with the complaint. See App. 57; Brief for United States et al. as Amici Curiae on Pet. for Cert. 17.
We also note that Rule 15(c) of the Federal Rules of Civil Procedure permits the relation back of amendments to pleadings under specified circumstances.
See, e. g., Rule C(6) of the Supplemental Rules for Certain Admiralty and Maritime Claims (“[A] person who asserts an interest in or right against the property that is the subject of the [civil forfeiture] action must file a verified statement identifying the interest or right”).
See, e.g., United States v. United States Currency in Amount of $103,387.27, 863 F. 2d 555,561-563 (CA7 1988); Johnston Broadcasting Co. v. FCC, 175 F. 2d 351, 355-356 (CADC 1949); see also 5A C. Wright & A. Miller, Federal Practice and Procedure §1339, p. 150 (2d ed. 1990) (“Even if a federal rule or statute requires verification, a failure to comply does not render the document fatally defective”). In Armstrong v. Fernandez, 208 U. S. 324, 330 (1908), we approved a bankruptcy court’s allowance of nunc pro tunc verification of a petition filed under the Bankruptcy Act of 1898.
State-court practice before and after Congress enacted the Civil Rights Act of 1964 has been, for the greater part, the same as federal. See, e. g., United Farm Workers of Am. v. Agricultural Labor Relations Bd., 37 Cal. 3d 912, 915, 694 P. 2d 138, 140 (1985) (en banc); Easter Seal Soc. for Disabled Children v. Berry, 627 A. 2d 482, 489 (D. C. 1993); Maliszewski v. Human Rights Comm’n, 269 Ill. App. 3d 472,474-477, 646 N. E. 2d 625, 626-628 (1995); Workman v. Workman, 46 N. E. 2d 718, 724 (Ind. App. 1943) (en banc); Pulliam v. Pulliam, 163 Kan. 497, 499-500, 183 P. 2d 220, 222-223 (1947); Southside Civic Assn. v. Warrington, 93-0890, pp. 3-4 (La. App. 4/1/94), 635 So. 2d 721, 723-724, pet. for writ denied, 94-1219 (La. 7/1/94), 639 So. 2d 1168; Drury Displays, Inc. v. Board of Adjustment, 760 S. W. 2d 112, 114 (Mo. 1998); Chisholm v. Vocational School for Girls, 103 Mont. 503, 506-509, 64 P. 2d 838, 841-842 (1936); In re Estate of Sessions, 217 Ore. 340, 347-349, 341 P. 2d 512, 516-517 (1959); State ex rel. Williams v. Jones, 164 S. W. 2d 823, 826 (Tenn. 1942); Greene v. Union Pac. Stages, Inc., 182 Wash. 143, 145, 45 P. 2d 611, 612 (1935). But see, e. g., Dinwiddie v. Board of County Comm’rs, 103 N. M. 442, 445, 708 P. 2d 1043, 1046 (1985), cert. denied, 476 U. S. 1117 (1986) (denying leave to amend and dismissing unverified complaint contesting election).
See North Star Steel Co. v. Thomas, 515 U.S. 29, 34 (1995) (‘“[I]t is not only appropriate but also realistic to presume that Congress was thoroughly familiar with [our] precedents ... and that it expect[s] its enactment[s] to be interpreted in conformity with them’” (citation omitted)).
See, e. g., Pub. L. 102-166,105 Stat. 1075; Pub. L. 92-261,86 Stat. 104.
Respondent argues that the regulation became inconsistent with Title VII when Congress passed the 1972 amendments to the legislation. Brief for Respondent 20-25, 37. In 1972, during the floor debate over the Senate version (S. 2515) of the Equal Employment Opportunity Act of 1972, Senator Allen noted that the committee amendments omitted the requirement that a charge be made under oath, and proposed an amendment to define a charge to “‘mean an accusation of discrimination supported by oath or affirmation.’ ” 118 Cong. Rec. 4815 (1972). The Senator expressed his view that the amendment preserved what he believed to be an existing requirement under the 1964 Act that “charges are to be filed and made under oath in writing.” Ibid. This understanding was neither confirmed nor denied, but Senator Williams, the bill’s floor manager, suggested that rather than the “one coverall, blanket” definition proposed by Senator Allen, the oath requirement could be included at the beginning of § 706(b). Ibid. So modified, the amendment was adopted by voice vote and enacted into law.
Besides refining the language of §706 of Title VII, the 1972 amendments extended the basic time period for filing a charge with the EEOC from 90 to 180 days, and from 210 to 300 days in deferral States. Pub. L. 92-261, 86 Stat. 104. Congress also added a requirement that the EEOC notify employers within 10 days of receiving a filed charge. Ibid. In view of the above-described exchange over the phrasing of the verification requirement, and because Congress enacted this requirement while at the same time amending the charge-filing deadline in § 706(e), respondent advocates our reading the 1972 amendments as a “congressional compromise.” Brief for Respondent 24. We are asked, in other words, to conclude that Congress lengthened the time for filing charges only because Congress, at the same time, required that a charge necessarily be verified when first filed. The evidence for such a quid pro quo is, however, equivocal.
See, e. g., Blue Bell Boots, Inc. v. EEOC, 418 F. 2d 355, 357 (CA6 1969); Georgia Power Co. v. EEOC, 412 F. 2d 462, 466-467 (CA5 1969); Weeks v. Southern Bell Tel. & Tel. Co., 408 F. 2d 228, 230-231 (CA5 1969); Choate v. Caterpillar Tractor Co., 402 F. 2d 357, 359-360 (CA7 1968). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
31
] |
UNITED STATES v. CUMBERLAND PUBLIC SERVICE CO.
No. 214.
Argued December 12, 1949.
Decided January 9, 1950.
Hilbert P. Zarky argued the cause for the United States. With him on the brief were Solicitor General Perlman, Assistant Attorney General Caudle and Ellis N. Slack.
Cornelius W. Grafton argued the cause for respondent. With him on the brief was Wilson W. Wyatt.
Hugh Satterlee, Thorpe Nesbit and Rollin Browne filed a brief, as amici curiae, urging affirmance.
Mr. Justice Black
delivered the opinion of the Court.
A corporation selling its physical properties is taxed on capital gains resulting from the sale. There is no corporate tax, however, on distribution of assets in kind to shareholders as part of a genuine liquidation. The respondent corporation transferred property to its shareholders as a liquidating dividend in kind. The shareholders transferred it to a purchaser. The question is whether, despite contrary findings by the Court of Claims, this record requires a holding that the transaction was in fact a sale by the corporation subjecting the corporation to a capital gains tax.
Details of the transaction are as follows. The respondent, a closely held corporation, was long engaged in the business of generating and distributing electric power in three Kentucky counties. In 1936 a local cooperative began to distribute Tennessee Valley Authority power in the area served by respondent. It soon became obvious that respondent’s Diesel-generated power could not compete with TVA power, which respondent had been unable to obtain. Respondent’s shareholders, realizing that the corporation must get out of the power business unless it obtained TVA power, accordingly offered to sell all the corporate stock to the cooperative, which was receiving such power. The cooperative refused to buy the stock, but countered with an offer to buy from the corporation its transmission and distribution equipment. The corporation rejected the offer because it would have been compelled to pay a heavy capital gains tax. At the same time the shareholders, desiring to save payment of the corporate capital gains tax, offered to acquire the transmission and distribution equipment and then sell to the cooperative. The cooperative accepted. The corporation transferred the transmission and distribution systems to its shareholders in partial liquidation. The remaining assets were sold and the corporation dissolved. The shareholders then executed the previously contemplated sale to the cooperative.
Upon this sale by the shareholders, the Commissioner assessed and collected a $17,000 tax from the corporation on the theory that the shareholders had been used as a mere conduit for effectuating what was really a corporate sale. Respondent corporation brought this action to recover the amount of the tax. The Court of Claims found that the method by which the stockholders disposed of the properties was avowedly chosen in order to reduce taxes, but that the liquidation and dissolution genuinely ended the corporation’s activities and existence. The court also found that at no time did the corporation plan to make the sale itself. Accordingly it found as a fact that the sale was made by the shareholders rather than the corporation, and entered judgment for respondent. One judge dissented, believing that our opinion in Commissioner v. Court Holding Co., 324 U. S. 331, required a finding that the sale had been made by the corporation. Certiorari was granted, 338 U. S. 846, to clear up doubts arising out of the Court Holding Co. case.
Our Court Holding Co. decision rested on findings of fact by the Tax Court that a sale had been made and gains realized by the taxpayer corporation. There the corporation had negotiated for sale of its assets and had reached an oral agreement of sale. When the tax consequences of the corporate sale were belatedly recognized, the corporation purported to “call off” the sale at the last minute and distributed the physical properties in kind to the stockholders. They promptly conveyed these properties to the same persons who had negotiated with the corporation. The terms of purchase were substantially those of the previous oral agreement. One thousand dollars already paid to the corporation was applied as part payment of the purchase price. The Tax Court found that the corporation never really abandoned its sales negotiations, that it never did dissolve, and that the sole purpose of the so-called liquidation was to disguise a corporate sale through use of mere formalisms in order to avoid tax liability. The Circuit Court of Appeals took a different view of the evidence. In this Court the Government contended that whether a liquidation distribution was genuine or merely a sham was traditionally a question of fact. We agreed with this contention, and reinstated the Tax Court’s findings and judgment. Discussing the evidence which supported the findings of fact, we went on to say that “the incidence of taxation depends upon the substance of a transaction” regardless of “mere formalisms,” and that taxes on a corporate sale cannot be avoided by using the shareholders as a “conduit through which to pass title.”
This language does not mean that a corporation can be taxed even when the sale has been made by its stockholders following a genuine liquidation and dissolution. While the distinction between sales by a corporation as compared with distribution in kind followed by shareholder sales may be particularly shadowy and artificial when the corporation is closely held, Congress has chosen to recognize such a distinction for tax purposes. The corporate tax is thus aimed primarily at the profits of a going concern. This is true despite the fact that gains realized from corporate sales are taxed, perhaps to prevent tax evasions, even where the cash proceeds are at once distributed in liquidation. But Congress has imposed no tax on liquidating distributions in kind or on dissolution, whatever may be the motive for such liquidation. Consequently, a corporation may liquidate or dissolve without subjecting itself to the corporate gains tax, even though a primary motive is to avoid the burden of corporate taxation.
Here, on the basis of adequate subsidiary findings, the Court of Claims has found that the sale in question was made by the stockholders rather than the corporation. The Government’s argument that the shareholders acted as a mere “conduit” for a sale by respondent corporation must fall before this finding. The subsidiary finding that a major motive of the shareholders was to reduce taxes does not bar this conclusion. Whatever the motive and however relevant it may be in determining whether the transaction was real or a sham, sales of physical properties by shareholders following a genuine liquidation distribution cannot be attributed to the corporation for tax purposes.
The oddities in tax consequences that emerge from the tax provisions here controlling appear to be inherent in the present tax pattern. For a corporation is taxed if it sells all its physical properties and distributes the cash proceeds as liquidating dividends, yet is not taxed if that property is distributed in kind and is then sold by the shareholders. In both instances the interest of the shareholders in the business has been transferred to the purchaser. Again, if these stockholders had succeeded in their original effort to sell all their stock, their interest would have been transferred to the purchasers just as effectively. Yet on such a transaction the corporation would have realized no taxable gain.
Congress having determined that different tax consequences shall flow from different methods by which the shareholders of a closely held corporation may dispose of corporate property, we accept its mandate. It is for the trial court, upon consideration of an entire transaction, to determine the factual category in which a particular transaction belongs. Here as in the Court Holding Co. case we accept the ultimate findings of fact of the trial tribunal. Accordingly the judgment of the Court of Claims is
Affirmed.
Mr. Justice Douglas took no part in the consideration or decision of this case.
26 U. S. C. § 22 (a); Treas. Reg. 103, § 19.22 (a)-19.
“. . . No gain or loss is realized by a corporation from the mere distribution of its assets in kind in partial or complete liquidation, however they may have appreciated or depreciated in value since their acquisition. . . .” Treas. Reg. 103, § 19.22 (a)—21.
What we said in the Court Holding Co. case was an approval of the action of the Tax Court in looking beyond the papers executed by the corporation and shareholders in order to determine whether the sale there had actually been made by the corporation. We were but emphasizing the established principle that in resolving such questions as who made a sale, fact-finding tribunals in tax cases can consider motives, intent, and conduct in addition to what appears in written instruments used by parties to control rights as among themselves. See, e. g., Helvering v. Clifford, 309 U. S. 331, 335-337; Commissioner v. Tower, 327 U. S. 280.
It has also been held that where corporate liquidations are effected through trustees or agents, gains from sales are taxable to the corporation as though it were a going concern. See, e. g., First National Bank v. United States, 86 F. 2d 938, 941; Treas. Reg. 103, § 19.22 (a)-21. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
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"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
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"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
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"United States Parole Commission",
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"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
68
] |
ALBEMARLE PAPER CO. et al. v. MOODY et al.
No. 74-389.
Argued April 14, 1975 —
Decided June 25, 1975
Francis V. Lowden, Jr., argued the cause for petitioners in No. 74-389. With him on the briefs were Gordon G. Busdicker, Charles O’Connell, Charles F. Blanchard, and Julian R. Allsbrook, Jr. Warren Woods argued the cause for petitioner in No. 74r-428. With him on the brief was Leonard Appel.
J. LeVonne Chambers argued the cause for respondents in both cases. With him on the brief were Jack Green-berg, James M. Nabrit III, Charles Stephen Ralston, Eric Schnapper, Morris J. Bailer, Barry L. Goldstein, Robert Belton, Conrad O. Pearson, T. T. Clayton, Albert J. Rosenthal, and Louis H. Poliak.
James P. Turner argued the cause for the United States et al. as amici curiae urging affirmance in both cases. On the brief were Solicitor General Bork, Assistant Attorney General Pottinger, Mark L. Evans, Brian K. Landsberg, David L. Rose, John C. Hoyle, Julia C. Cooper, Joseph T. Eddins, and Beatrice Rosenberg
Together with No. 74-428, Halifax Local No. 425, United Paper-makers & Paperworkers, AFL-CIO v. Moody et al., also on certiorari to the same court.
Briefs of amici curiae in both cases were filed by Gerard C. Smetana, Jerry Kronenberg, Milton A. Smith, and Richard B. Berman for the Chamber of Commerce of the United States; by J. Harold Flannery, Paul R. Dimond, William E. Caldwell, Robert B. Wallace, William H. Brown III, Lloyd N. Cutler, and Erwin N. Griswold for the Lawyers’ Committee for Civil Rights Under Law; and by the American Society for Personnel Administration. John Vanderstar filed a brief for Scott Paper Co, as amicus curiae in No. 74-389.
Mr. Justice Stewart
delivered the opinion of the Court.
These consolidated cases raise two important questions under Title VII of the Civil Rights Act of 1964, 78 Stat. 253, as amended by the Equal Employment Opportunity Act of 1972, 86 Stat. 103, 42 U. S. C. § 2000e et seq. (1970 ed. and Supp. Ill): First: When employees or applicants for employment have lost the opportunity to earn wages because an employer has engaged in an unlawful discriminatory employment practice, what standards should a federal district court follow in deciding whether to award or deny backpay? Second: What must an employer show to establish that pre-employment tests racially discriminatory in effect, though not in intent, are sufficiently “job related” to survive challenge under Title VII?
The respondents — plaintiffs in the District Court— are a certified class of present and former Negro employees at a paper mill in Roanoke Rapids, N. C.; the petitioners — defendants in the District Court— are the plant’s owner, the Albemarle Paper Co., and the plant employees’ labor union, Halifax Local No. 425. In August 1966, after filing a complaint with the Equal Employment Opportunity Commission (EEOC), and receiving notice of their right to sue, the respondents brought a class action in the United States District Court for the Eastern District of North Carolina, asking permanent injunctive relief against “any policy, practice, custom or usage” at the plant that violated Title VII. The respondents assured the court that the suit involved no claim for any monetary awards on a class basis, but in June 1970, after several years of discovery, the respondents moved to add a class demand for backpay. The court ruled that this issue would be considered at trial.
At the trial, in July and August 1971, the major issues were the plant’s seniority system, its program of employment testing, and the question of backpay. In its opinion of November 9, 1971, the court found that the petitioners had “strictly segregated” the plant’s departmental “lines of progression” prior to January 1, 1964, reserving the higher paying and more skilled lines for whites. The “racial identifiability” of whole lines of progression persisted until 1968, when the lines were reorganized under a new collective-bargaining agreement. The court found, however, that this reorganization left Negro employees “ ‘locked’ in the lower paying job classifications.” The formerly “Negro” lines of progression had been merely tacked on to the bottom of the formerly “white” lines, and promotions, demotions, and layoffs continued to be governed — where skills were “relatively equal” — by a system of “job seniority.” Because of the plant’s previous history of overt segregation, only whites had seniority in the higher job categories. Accordingly, the court ordered the petitioners to implement a system of “plantwide” seniority.
The court refused, however, to award backpay to the plaintiff class for losses suffered under the “job seniority” program. The court explained:
“In the instant case there was no evidence of bad faith non-compliance with the Act. It appears that the company as early as 1964 began active recruitment of blacks for its Maintenance Apprentice Program. Certain lines of progression were merged on its own initiative, and as judicial decisions expanded the then existing interpretations of the Act, the defendants took steps to correct the abuses without delay. . . .
“In addition, an award of back pay is an equitable remedy. . . . The plaintiffs’ claim for back pay was filed nearly five years after the institution of this action. It was not prayed for in the pleadings. Although neither party can be charged with deliberate dilatory tactics in bringing this cause to trial, it is apparent that the defendants would be substantially prejudiced by the granting of such affirmative relief. The defendants might have chosen to exercise unusual zeal in having this court determine their rights at an earlier date had they known that back pay would be at issue.”
The court also refused to enjoin or limit Albemarle’s testing program. Albemarle had required applicants for employment in the skilled lines of progression to have a high school diploma and to pass two tests, the Revised Beta Examination, allegedly a measure of nonverbal intelligence, and the Wonderlic Personnel Test (available in alternative Forms A and B), allegedly a measure of verbal facility. After this Court’s decision in Griggs v. Duke Power Co., 401 U. S. 424 (1971), and on the eve of trial, Albemarle engaged an industrial psychologist to study the “job relatedness” of its testing program. His study compared the test scores of current employees with supervisorial judgments of their competence in ten job groupings selected from the middle or top of the plant’s skilled lines of progression. The study showed a .statistically significant correlation with supervisorial ratings in three job groupings for the Beta Test, in seven job groupings for either Form A or Form B of the Wonderlic Test, and in two job groupings for the required battery of both the Beta and the Wonderlic Tests. The respondents’ experts challenged the reliability of these studies, but the court concluded:
“The personnel tests administered at the plant have undergone validation studies and have been proven to be job related. The defendants have carried the burden of proof in proving that these tests are ‘necessary for the safe and efficient operation of the business’ and are, therefore, permitted by the Act. However, the high school education requirement used in conjunction with the testing requirements is unlawful in that the personnel tests alone are adequate to measure the mental ability and reading skills required for the job classifications.”
The petitioners did not seek review of the court’s judgment, but the respondents appealed the denial of a back-pay award and the refusal to enjoin or limit Albemarle’s use of pre-employment tests. A divided Court of Appeals for the Fourth Circuit reversed the judgment of the District Court, ruling that backpay should have been awarded and that use of the tests should have been enjoined, 474 F. 2d 134 (1973). As for backpay, the Court of Appeals held that an award could properly be requested after the complaint was filed and that an award could not be denied merely because the employer had not acted in “bad faith,” id., at 142:
“Because of the compensatory nature of a back pay award and the strong congressional policy embodied in Title VII, a district court must exercise its discretion as to back pay in the same manner it must exercise discretion as to attorney fees under Title II of the Civil Rights Act. . . . Thus, a plaintiff or a complaining class who is successful in obtaining an injunction under Title VII of the Act should ordinarily be awarded back pay unless special circumstances would render such an award unjust. Newman v. Piggie Park Enterprises, 390 U. S. 400 ... (1968).” (Footnote omitted.)
As for the pre-employment tests, the Court of Appeals held, id., at 138, that it was error
“to approve a validation study done without job analysis, to allow Albemarle to require tests for 6 lines of progression where there has been no validation study at all, and to allow Albemarle to require a person to pass two tests for entrance into 7 lines of progression when only one of those tests was validated for that line of progression.”
In so holding the Court of Appeals “gave great deference” to the “Guidelines on Employee Selection Procedures,” 29 CFR pt. 1607, which the EEOC has issued “as a workable set of standards for employers, unions and employment agencies in determining whether their selection procedures conform with the obligations contained in title VII...29 CFR § 1607.1 (c).
We granted certiorari because of an evident Circuit conflict as to the standards governing awards of back-pay and as to the showing required to establish the “job relatedness” of pre-employment tests.
II
Whether a particular member of the plaintiff class should have been awarded any backpay and, if so, how much, are questions not involved in this review. The equities of individual cases were never reached. Though at least some of the members of the plaintiff class obviously suffered a loss of wage opportunities on account of Albemarle’s unlawfully discriminatory system of job seniority, the District Court decided that no backpay should be awarded to anyone in the class. The court declined to make such an award on two stated grounds: the lack of “evidence of bad faith non-compliance with the Act,” and the fact that “the defendants would be substantially prejudiced” by an award of backpay that was demanded contrary to an earlier representation and late in the progress of the litigation. Relying directly on Newman v. Piggie Park Enterprises, 390 U. S. 400 (1968), the Court of Appeals reversed, holding that back-pay could be denied only in “special circumstances.” The petitioners argue that the Court of Appeals was in error — that a district court has virtually unfettered discretion to award or deny backpay, and that there was no abuse of that discretion here.
Piggie Park Enterprises, supra, is not directly in point. The Court held there that attorneys’ fees should “ordinarily” be awarded — i. in all but “special circumstances” — to plaintiffs successful in obtaining injunctions against discrimination in public accommodations, under Title II of the Civil Rights Act of 1964. While the Act appears to leave Title II fee awards to the district court’s discretion, 42 U. S. C. § 2000a-3 (b), the court determined that the great public interest in having injunctive actions brought could be vindicated only if successful plaintiffs, acting as “private attorneys general,” were awarded attorneys’ fees in all but very unusual circumstances. There is, of course, an equally strong public interest in having injunctive actions brought under Title VII, to eradicate discriminatory employment practices. But this interest can be vindicated by applying the Piggie Park standard to the attorneys’ fees provision of Title VII, 42 U. S. C. § 2000e-5 (k), see Northcross v. Memphis Board of Education, 412 U. S. 427, 428 (1973). For guidance as to the granting and denial of backpay, one must, therefore, look elsewhere.
The petitioners contend that the statutory scheme provides no guidance, beyond indicating that backpay awards are within the District Court’s discretion. We disagree. It is true that backpay is not an automatic or mandatory remedy; like all other remedies under the Act, it is one which the courts “may” invoke. The scheme implicitly recognizes that there may be cases calling for one remedy but not another, and — owing to the structure of the federal judiciary — these choices are, of course, left in the first instance to the district courts. However, such discretionary choices are not left to a court’s “inclination, but to its judgment; and its judgment is to be guided by sound legal principles.” United States v. Burr, 25 F. Cas. 30, 35 (No. 14,692d) (CC Va. 1807) (Marshall, C. J.). The power to award backpay was bestowed by Congress, as part of a complex legislative design directed at a historic evil of national proportions. A court must exercise this power “in light of the large objectives of the Act,” Hecht Co. v. Bowles, 321 U. S. 321, 331 (1944). That the court’s discretion is equitable in nature, see Curtis v. Loether, 415 U. S. 189, 197 (1974), hardly means that it is unfettered by meaningful standards or shielded from thorough appellate review. In Mitchell v. DeMario Jewelry, 361 U. S. 288, 292 (1960), this Court held, in the face of a silent statute, that district courts enjoyed the “historic power of equity” to award lost wages to workmen unlawfully discriminated against under § 17 of the Fair Labor Standards Act of 1938, 52 Stat. 1069, as amended, 29 U. S. C. § 217 (1958 ed.) The Court simultaneously noted that “the statutory purposes [leave] little room for the exercise of discretion not to order reimbursement.” 361 U. S., at 296.
It is true that “[e]quity eschews mechanical rules . . . [and] depends on flexibility.” Holmberg v. Armbrecht, 327 U. S. 392, 396 (1946). But when Congress invokes the Chancellor’s conscience to further transcendent legislative purposes, what is required is the principled application of standards consistent with those purposes and not “equity [which] varies like the Chancellor’s foot.” Important national goals would be frustrated by a regime of discretion that “produce [d] different results for breaches of duty in situations that cannot be differentiated in policy.” Moragne v. States Marine Lines, 398 U. S. 375, 405 (1970).
The District Court’s decision must therefore be measured against the purposes which inform Title VII. As the Court observed in Griggs v. Duke Power Co., 401 U. S., at 429-430, the primary objective was a prophylactic one:
“It was to achieve equality of employment opportunities and remove barriers that have operated in the past to favor an identifiable group of white employees over other employees.”
Backpay has an obvious connection with this purpose. If employers faced only the prospect of an injunctive order, they would have little incentive to shun practices of dubious legality. It is the reasonably certain prospect of a backpay award that “provide[s] the spur or catalyst which causes employers and unions to self-examine and to self-evaluate their employment practices and to endeavor to eliminate, so far as possible, the last vestiges of an unfortunate and ignominious page in this country’s history.” United States v. N. L. Industries, Inc., 479 F. 2d 354, 379 (CA8 1973).
It is also the purpose of Title VII to make persons whole for injuries suffered on account of unlawful employment discrimination. This is shown by the very fact that Congress took care to arm the courts with full equitable powers. For it is the historic purpose of equity to “secur [e] complete justice,” Brown v. Swann, 10 Pet. 497, 503 (1836); see also Porter v. Warner Holding Co., 328 U. S. 395, 397-398 (1946). “[WJhere federally protected rights have been invaded, it has been the rule from the beginning that courts will be alert to adjust their remedies so as to grant the necessary relief.” Bell v. Hood, 327 U. S. 678, 684 (1946). Title VII deals with legal injuries of an economic character occasioned by racial or other antiminority discrimination. The terms “complete justice” and “necessary relief” have acquired a clear meaning in such circumstances. Where racial discrimination is concerned, “the [district] court has not merely the power but the duty to render a decree which will so far as possible eliminate the discriminatory effects of the past as well as bar like discrimination in the future.” Louisiana v. United States, 380 U. S. 145, 154 (1965). And where a legal injury is of an economic character,
“[t]he general rule is, that when a wrong has been done, and the law gives a remedy, the compensation shall be equal to the injury. The latter is the standard by which the former is to be measured. The injured party is to be placed, as near as may be, in the situation he would have occupied if the wrong had not been committed.” Wicker v. Hoppock, 6 Wall. 94, 99 (1867).
The “make whole” purpose of Title VII is made evident by the legislative history. The backpay provision was expressly modeled on the backpay provision of the National Labor Relations Act. Under that Act, “[m]aking the workers whole for losses suffered on account of an unfair labor practice is part of the vindication of the public policy which the Board. enforces.” Phelps Dodge Corp. v. NLRB, 313 U. S. 177, 197 (1941). See also Nathanson v. NLRB, 344 U. S. 25, 27 (1952); NLRB v. Rutter-Rex Mfg. Co., 396 U. S. 258, 263 (1969). We may assume that Congress was aware that the Board, since its inception, has awarded backpay as a matter of course — not randomly or in the exercise of a standardless discretion, and not merely where employer violations are peculiarly deliberate, egregious, or inexcusable. Furthermore, in passing the Equal Employment Opportunity Act of 1972, Congress considered several bills to limit the judicial power to award backpay. These limiting efforts were rejected, and the backpay provision was re-enacted substantially in its original form. A Section-by-Section Analysis introduced by Senator Williams to accompany the Conference Committee Report on the 1972 Act strongly reaffirmed the “make whole” purpose of Title VII:
“The provisions of this subsection are intended to give the courts wide discretion exercising their equitable powers to fashion the most complete relief possible. In dealing with the present section 706 (g) the courts have stressed that the scope of relief under that section of the Act is intended to make the victims of unlawful discrimination whole, and that the attainment of this objective rests not only upon the elimination of the particular unlawful employment practice complained of, but also requires that persons aggrieved by the consequences and effects of the unlawful employment practice be, so far as possible, restored to a position where they would have been were it not for the unlawful discrimination.” 118 Cong. Rec. 7168 (1972).
As this makes clear, Congress’ purpose in vesting a variety of “discretionary” powers in the courts was not to limit appellate review of trial courts, or to invite inconsistency and caprice, but rather to make possible the “fashion[ing] [of] the most complete relief possible.”
It follows that, given a finding of unlawful discrimination, backpay should be denied only for reasons which, if applied generally, would not frustrate the central statutory purposes of eradicating discrimination throughout the economy and making persons whole for injuries suffered through past discrimination. The courts of appeals must maintain a consistent and principled application of the backpay provision, consonant with the twin statutory objectives, while at the same time recognizing that the trial court will often have the keener appreciation of those facts and circumstances peculiar to particular cases.
The District Court’s stated grounds for denying back-pay in this case must be tested against these standards. The first ground was that Albemarle’s breach of Title VII had not been in “bad faith.” This is not a sufficient reason for denying backpay. Where an employer has shown bad faith — by maintaining a practice which he knew to be illegal or of highly questionable legality — he can make no claims whatsoever on the Chancellor’s conscience. But, under Title VII, the mere absence of bad faith simply opens the door to equity; it does not depress the scales in the employer’s favor. If backpay were awardable only upon a showing of bad faith, the remedy would become a punishment for moral turpitude, rather than a compensation for workers’ injuries. This would read the “make whole” purpose right out of Title VII, for a worker’s injury is no less real simply because his employer did not inflict it in “bad faith.” Title VII is not concerned with the employer’s “good intent or absence of discriminatory intent” for “Congress directed the thrust of the Act to the consequences of employment practices, not simply the motivation.” Griggs v. Duke Power Co., 401 U. S., at 432. See also Watson v. City of Memphis, 373 U. S. 526, 535 (1963); Wright v. Council of City of Emporia, 407 U. S. 451, 461-462 (1972). To condition the awarding of backpay on a showing of “bad faith” would be to open an enormous chasm between injunctive and backpay relief under Title VII. There is nothing on the face of the statute or in its legislative history that justifies the creation of drastic and categorical distinctions between those two remedies.
The District Court also grounded its denial of backpay on the fact that the respondents initially disclaimed any interest in backpay, first asserting their claim five years after the complaint was filed. The court concluded that the petitioners had been “prejudiced” by this conduct. The Court of Appeals reversed on the ground “that the broad aims of Title VII require that the issue of back pay be fully developed and determined even though it was not raised until the post-trial stage of litigation,” 474 F. 2d, at 141.
It is true that Title VII contains no legal bar to raising backpay claims after the complaint for injunctive relief has been filed, or indeed after a trial on that complaint has been had. Furthermore, Fed. Rule Civ. Proc. 54 (c) directs that
“every final judgment shall grant the relief to which the party in whose favor it is rendered is entitled, even if the party has not demanded such relief in his pleadings.”
But a party may not be “entitled” to relief if its conduct of the cause has improperly and substantially prejudiced the other party. The respondents here were not merely tardy, but also inconsistent, in demanding backpay. To deny backpay because a particular cause has been prosecuted in an eccentric fashion, prejudicial to the other party, does not offend the broad purposes of Title VII. This is not to say, however, that the District Court’s ruling was necessarily correct. Whether the petitioners were in fact prejudiced, and whether the respondents’ trial conduct was excusable, are questions that will be open to review by the Court of Appeals, if the District Court, on remand, decides again to decline to make any award of backpay. But the standard of review will be the familiar one of whether the District Court was “clearly erroneous” in its factual findings and whether it “abused” its traditional discretion to locate “a just result” in light of the circumstances peculiar to the case, Langnes v. Green, 282 U. S. 531, 541 (1931). On these issues of procedural regularity and prejudice, the “broad aims of Title VII” provide no ready solution.
Ill
In Griggs v. Duke Power Co., 401 U. S. 424 (1971), this Court unanimously held that Title VII forbids the use of employment tests that are discriminatory in effect unless the employer meets “the burden of showing that any given requirement [has] ... a manifest relationship to the employment in question.” Id., at 432. This burden arises, of course, only after the complaining party or class has made out a prima facie case of discrimination, i. e., has shown that the tests in question select applicants for hire or promotion in a racial pattern significantly different from that of the pool of applicants. See McDonnell Douglas Corp. v. Green, 411 U. S. 792, 802 (1973). If an employer does then meet the burden of proving that its tests are “job related,” it remains open to the complaining party to show that other tests or selection devices, without a similarly undesirable racial effect, would also serve the employer’s legitimate interest in “efficient and trustworthy workmanship.” Id., at 801. Such a showing would be evidence that the employer was using its tests merely as a “pretext” for discrimination. Id., at 804-805. In the present case, however, we are concerned only with the question whether Albemarle has shown its tests to be job related.
The concept of job relatedness takes on meaning from the facts of the Griggs case. A power company in North Carolina had reserved its skilled jobs for whites prior to 1965. Thereafter, the company allowed Negro workers to transfer to skilled jobs, but all transferees — white and Negro — were required to attain national median scores on two tests:
“[T]he Wonderlic Personnel Test, which purports to measure general intelligence, and the Bennett Mechanical Comprehension Test. Neither was directed or intended to measure the ability to learn to perform a particular job or category of jobs. . . .
“. . . Both were adopted, as the Court of Appeals noted, without meaningful study of their relationship to job-performance ability. Rather, a vice president of the Company testified, the requirements were instituted on the Company’s judgment that they generally would improve the overall quality of the work force.” 401 U. S., at 428-431.
The Court took note of “the inadequacy of broad and general testing devices as well as the infirmity of using diplomas or degrees as fixed measures of capability,” id., at 433, and concluded:
“Nothing in the Act precludes the use of testing or measuring procedures; obviously they are useful. What Congress has forbidden is giving these devices and mechanisms controlling force unless they are demonstrably a reasonable measure of job performance. . . . What Congress has commanded is that any tests used must measure the person for the job and not the person in the abstract.” Id., at 436.
Like the employer in Griggs, Albemarle uses two general ability tests, the Beta Examination, to test nonverbal intelligence, and the Wonderlic Test (Forms A and B), the purported measure of general verbal facility which was also involved in the Griggs case. Applicants for hire into various skilled lines of progression at the plant are required to score 100 on the Beta Exam and 18 on one of the Wonderlic Test’s two alternative forms.
The question of job relatedness must be viewed in the context of the plant’s operation and the history of the testing program. The plant, which now employs about 650 persons, converts raw wood into paper products. It is organized into a number of functional departments, each with one or more distinct lines of progression, the theory being that workers can move up the line as they acquire the necessary skills. The number and structure of the lines have varied greatly over time. For many years, certain lines were themselves more skilled and paid higher wages than others, and until 1964 these skilled lines were expressly reserved for white workers. In 1968, many of the unskilled “Negro” lines were “end-tailed” onto skilled “white” lines, but it apparently remains true that at least the top jobs in certain lines require greater skills than the top jobs in other lines. In this sense, at least, it is still possible to speak of relatively skilled and relatively unskilled lines.
In the 1950’s while the plant was being modernized with new and more sophisticated equipment, the Company introduced a high school diploma requirement for entry into the skilled lines. Though the Company soon concluded that this requirement did not improve the quality of the labor force, the requirement was continued until the District Court enjoined its use. In the late 1950’s the Company began using the Beta Examination and the Bennett Mechanical Comprehension Test (also involved in the Griggs case) to screen applicants for entry into the skilled lines. The Bennett Test was dropped several years later, but use of the Beta Test continued.
The Company added the Wonderlic Tests in 1963, for the skilled lines, on the theory that a certain verbal intelligence was called for by the increasing sophistication of the plant’s operations. The Company made no attempt to validate the test for job relatedness, and simply adopted the national “norm” score of 18 as a cut-off point for new job applicants. After 1964, when it discontinued overt segregation in the lines of progression, the Company allowed Negro workers to transfer to the skilled lines if they could pass the Beta and Wonderlic Tests, but few succeeded in doing so. Incumbents in the skilled lines, some of whom had been hired before adoption of the tests, were not required to pass them to retain their jobs or their promotion rights. The record shows that a number of white incumbents in high-ranking job groups could not pass the tests.
Because departmental reorganization continued up to the point of trial, and has indeed continued since that point, the details of the testing program are less than clear from the record. The District Court found that, since 1963, the Beta and Wonderlic Tests have been used in 13 lines of progression, within eight departments. Albemarle contends that at present the tests are used in only eight lines of progression, within four departments.
Four months before this case went to trial, Albemarle engaged an expert in industrial psychology to “validate” the job relatedness of its testing program. He spent a half day at the plant and devised a “concurrent validation” study, which was conducted by plant officials, without his supervision. The expert then subjected the results to statistical analysis. The study dealt with 10 job groupings, selected from near the top of nine of the lines of progression. Jobs were grouped together solely by their proximity in the line of progression; no attempt was made to analyze jobs in terms of the particular skills they might require. All, or nearly all, employees in the selected groups participated in the study — 105 employees in all, but only four Negroes. Within each job grouping, the study compared the test scores of each employee with an independent “ranking” of the employee, relative to each of his coworkers, made by two of the employee's supervisors. The supervisors, who did not know the test scores, were asked to
“determine which ones they felt irrespective of the job that they were actually doing, but in their respective jobs, did a better job than the person they were rating against....”
For each job grouping, the expert computed the “Phi coefficient” of statistical correlation between the test scores and an average of the two supervisorial rankings. Consonant with professional conventions, the expert regarded as “statistically significant” any correlation that could have occurred by chance only five times, or fewer, in 100 trials. On the basis of these results, the District Court found that “[t]he personnel tests administered at the plant have undergone validation studies and have been proven to be job related.” Like the Court of Appeals, we are constrained to disagree.
The EEOC has issued “Guidelines” for employers seeking to determine, through professional validation studies, whether their employment tests are job related. 29 CFR pt. 1607. These Guidelines draw upon and make reference to professional standards of test validation established by the American Psychological Association. The EEOC Guidelines are not administrative “regulations” promulgated pursuant to formal procedures established by the Congress. But, as this Court has heretofore noted, they do constitute “[t]he administrative interpretation of the Act by the enforcing agency,” and consequently they are “entitled to great deference.” Griggs v. Duke Power Co., 401 U. S., at 433-434. See also Espinoza v. Farah Mfg. Co., 414 U. S. 86, 94 (1973).
The message of these Guidelines is the same as that of the Griggs case — that discriminatory tests are impermissible unless shown, by professionally acceptable methods, to be “predictive of or significantly correlated with important elements of work behavior which comprise or are relevant to the job or jobs for which candidates are being evaluated.” 29 CFR § 1607.4 (c).
Measured against the Guidelines, Albemarle’s validation study is materially defective in several respects:
(1) Even if it had been otherwise adequate, the study would not have “validated” the Beta and Wonderlic test battery for all of the skilled lines of progression for which the two tests are, apparently, now required. The study showed significant correlations for the Beta Exam in only three of the eight lines. Though the Wonderlic Test’s Form A and Form B are in theory identical and interchangeable measures of verbal facility, significant correlations for one form but not for the other were obtained in four job groupings. In two job groupings neither form showed a significant correlation. Within some of the lines of progression, one form was found acceptable for some job groupings but not for others. Even if the study were otherwise reliable, this odd patchwork of results would not entitle Albemarle to impose its testing program under the Guidelines. A test may be used in jobs other than those for which it has been professionally validated only if there are “no significant differences” between the studied and unstudied jobs. 29 CFR § 1607.4 (c)(2). The study in this case involved no analysis of the attributes of, or the particular skills needed in, the studied job groups. There is accordingly no basis for concluding that “no significant differences” exist among the lines of progression, or among distinct job groupings within the studied lines of progression. Indeed, the study’s checkered results appear to compel the opposite conclusion.
(2) The study compared test scores with subjective supervisorial rankings. While they allow the use of supervisorial rankings in test validation, the Guidelines quite plainly contemplate that the rankings will be elicited with far more care than was demonstrated here. Albemarle’s supervisors were asked to rank employees by a “standard” that was extremely vague and fatally open to divergent interpretations. As previously noted, each “job grouping” contained a number of different jobs, and the supervisors were asked, in each grouping, to
“determine which ones [employees] they felt irrespective of the job that they were actually doing, but in their respective jobs, did a better job than the person they were rating against....”
There is no way of knowing precisely what criteria of job performance the supervisors were considering, whether each of the supervisors was considering the same criteria or whether, indeed, any of the supervisors actually applied a focused and stable body of criteria of any kind. There is, in short, simply no way to determine whether the criteria actually considered were sufficiently related to the Company’s legitimate interest in job-specific ability to justify a testing system with a racially discriminatory impact.
(3) The Company’s study focused, in most cases, on job groups near the top of the various lines of progression. In Griggs v. Duke Power Co., supra, the Court left open “the question whether testing requirements that take into account capability for the next succeeding position or related future promotion might be utilized upon a showing that such long-range requirements fulfill a genuine business need.” 401 U. S., at 432. The Guidelines take a sensible approach to this issue, and we now endorse it:
“If job progression structures and seniority provisions are so established that new employees will probably, within a reasonable period of time and in a great majority of cases, progress to a higher level, it may be considered that candidates are being evaluated for jobs at that higher level. However, where job progression is not so nearly automatic, or the time span is such that higher level jobs or employees’ potential may be expected to change in significant ways, it shall be considered that candidates are being evaluated for a job at or near the entry level.” 29 CFR § 1607.4 (c) (1).
The fact that the best of those employees working near the top of a line of progression score well on a test does not necessarily mean that that test, or some particular cutoff score on the test, is a permissible measure of the minimal qualifications of new workers entering lower level jobs. In drawing any such conclusion, detailed consideration must be given to the normal speed of promotion, to the efficacy of on-the-job training in the scheme of promotion, and to the possible use of testing as a promotion device, rather than as a screen for entry into low-level jobs. The District Court made no findings on these issues. The issues take on special importance in a case, such as this one, where incumbent employees are permitted to work at even high-level jobs without passing the company’s test battery. See 29 CFR § 1607.11.
(4) Albemarle’s validation study dealt only with job-experienced, white workers; but the tests themselves are given to new job applicants, who are younger, largely inexperienced, and in many instances nonwhite. The APA Standards state that it is “essential” that
“[t]he validity of a test should be determined on subjects who are at the age or in the same educational or vocational situation as the persons for whom the test is recommended in practice.” ¶ C 5.4.
The EEOC Guidelines likewise provide that “[d]ata must be generated and results separately reported for minority and nonminority groups wherever technically feasible.” 29 CFR § 1607.5 (b) (5). In the present case, such “differential validation” as to racial groups was very likely not “feasible,” because years of discrimination at the plant have insured that nearly all of the upper level employees are white. But there has been no clear showing that differential validation was not feasible for lower level jobs. More importantly, the Guidelines provide:
“If it is not technically feasible to include minority employees in validation studies conducted on the present work force, the conduct of a validation study without minority candidates does not relieve any person of his subsequent obligation for validation when inclusion of minority candidates becomes technically feasible.” 29 CFR § 1607.5 (b)(1).
“. . . [Ejvidence of satisfactory validity based on other groups will be regarded as only provisional compliance with these guidelines pending separate validation of the test for the minority group in question.” 29 CFR § 1607.5 (b)(5).
For all these reasons, we agree with the Court of Appeals that the District Court erred in concluding that Albemarle had proved the job relatedness of its testing program and that the respondents were consequently not entitled to equitable relief. The outright reversal by the Court of Appeals implied that an injunction should immediately issue against all use of testing at the plant. Because of the particular circumstances here, however, it appears that the more prudent course is to leave to the District Court the precise fashioning of the necessary relief in the first instance. During the appellate stages of this litigation, the plant has apparently been amending its departmental organization and the use made of its tests. The appropriate standard of proof for job relatedness has not been clarified until today. Similarly, the respondents have not until today been specifically apprised of their opportunity to present evidence that even validated tests might be a “pretext” for discrimination in light of alternative selection procedures available to the Company. We also note that the Guidelines authorize provisional use of tests, pending new validation efforts, in certain very limited circumstances. 29 CFR § 1607.9. Whether such circumstances now obtain is a matter best decided, in the first instance, by the District Court. That court will be free to take such new evidence, and to exercise such control of the Company’s use and validation of employee selection procedures, as are warranted by the circumstances and by the controlling law.
Accordingly, the judgment is vacated, and these eases are remanded to the District Court for proceedings consistent with this opinion. r, . 7 ,
7 It is so ordered.
Mr. Justice Powell took no part in the consideration or decision of these cases.
[Appendix to opinion of the Court follows.]
APPENDIX TO OPINION OF THE COURT CHART A
Results of Validation Study
Test
N Beta W-A W-B Job Group
1. Caustic Operator, Lime Kiln Operator ................ 8 .25 1.00** .47
2. C. E. Recovery Operator, C. E. Recovery 1st Helpers & Evaporator Operators.. 12 .64** .32 .17
3. Wood Yard: Long Log Operators, Log Stackers, Small Equipment Operators & Oilers ................... 14 .00 1.00** .72*
4. Technical Services: B Mill Shift Testmen, Additive men, General Lab. Test-men, General Lab. asst., A Mill Testmen, Samplemen. .50* .75** .64*
5. B Paper Mill: Machine Tenders and Back Tenders____ 16 .00 .50** .34
6. B Paper Mill: Stock Room Operator, Stock Room 1st Helper .................. 8 -.50 .00 .00
7. B Paper Mill: 3rd Hands, 4th Hands & 5th Hands... 21 .43 .81** .60**
8. Wood Yard: Chipper Unloader, Chipper Operator, No. 2 Chain Operator..... 6 .76* -.25 1.00**
9. Pulp Mill: Stock Room Operator, Stock Room 1st Helpers ................. 8 .50 .80* .76*'
10. Power Plant: Power Plant Operator, Power Plant 1st Helper, Power Plant 2nd Helper .................. 12 .34 .75** .66*
NOTE
The job groups are identified in Chart B. N indicates the number of employees tested. A single (double) asterisk indicates the “Phi” coefficient of correlation, shown on the chart, is statistically significant at a 95% (99%) level of confidence. The other coefficients are not statistically significant.
CHART B
Albemarle’s Skilled Lines of Progression
Note: The numbered job groups are those examined in the validation study summarized in Chart A. Testing is no longer required for entry into the Woodyard Department.
The paper mill has changed hands during this litigation, but these changes are irrelevant to the issues considered in this opinion, and the employer interest will be referred to throughout as Albemarle or the Company. The labor union is involved in only the backpay aspect of this litigation.
The relevant procedures may be found at 42 U. S. C. § 2000e-5 (f)(1) (1970 ed., Supp. III). See McDonnell Douglas Corp. v. Green, 411 U. S. 792, 798 (1973); Alexander v. Gardner-Denver Co., 415 U. S. 36, 44-45 (1974). See also n. 8, infra.
Under Title VII backpay liability exists only for practices occurring after the effective date of the Act, July 2, 1965, and accrues only from a date two years prior to the filing of a charge with the EEOC. See 42 U. S. C. § 2000e-5 (g) (1970 ed., Supp. Ill), Thus no award was possible with regard to the plant’s pre-1964 policy of “strict segregation.”
See infra, at 429-430.
419 U. S. 1068 (1974). The Fourth Circuit initially granted a petition to rehear this case en banc. But that petition was ultimately denied, after this Court ruled, on a certified question, that “senior circuit judges who are members of the originally assigned division hearing a case are not authorized by Congress to participate in the determination whether to rehear that case in banc.” 417 U. S. 622, 624 (1974).
For example, compare Kober v. Westinghouse Electric Corp., 480 F. 2d 240 (CA3 1973), with Pettway v. American Cast Iron Pipe Co., 494 F. 2d 211 (CA5 1974), and Head v. Timken Boiler Bearing Co., 486 F. 2d 870 (CA6 1973).
For example, compare Pettway v. American Cast Iron Pipe Co., supra, with Castro v. Beecher, 459 F. 2d 725 (CA1 1972).
The petitioners also contend that no backpay can be awarded to those unnamed parties in the plaintiff class who have not themselves filed charges with the EEOC. We reject this contention. The Courts of Appeals that have confronted the issue are unanimous in recognizing that backpay may be awarded on a class basis under Title VII without exhaustion of administrative procedures by the unnamed class members. See, e. g., Rosen v. Public Service Electric & Gas Co., 409 F. 2d 775, 780 (CA3 1969), and 477 F. 2d 90, 95-96 (CA3 1973); Robinson v. Lorillard Corp., 444 F. 2d 791, 802 (CA4 1971); United States v. Georgia Power Co., 474 F. 2d 906, 919-921 (CA5 1973); Head v. Timken Roller Bearing Co., supra, at 876; Bowe v. Colgate-Palmolive Co., 416 F. 2d 711, 719-721 (CA7 1969); United States v. N. L. Industries, Inc., 479 F. 2d 354, 378-379 (CA8 1973). The Congress plainly ratified this construction of the Act in the course of enacting the Equal Employment Opportunity Act of 1972, Pub. L. 92-261, 86 Stat. 103. The House of Representatives passed a bill, H. R. 1746, 92d Cong., 1st Sess., that would have barred, in § 3 (e), an award of backpay to any individual who “neither filed a charge [with the EEOC] nor was named in a charge or amendment thereto.” But the Senate Committee on Labor and Public Welfare recommended, instead, the re-enactment of the backpay provision without such a limitation, and cited with approval several cases holding that backpay was awardable to class members who had not personally filed, nor been named in, charges to the EEOC. S. Rep. No. 92-415, p. 27 (1971). See also 118 Cong. Rec. 4942 (1972). The Senate passed a bill without the House’s limitation, id., at 4944, and the Conference Committee adopted the Senate position. A Section-by-Section Analysis of the Conference Committee’s resolution notes that “[a] provision limiting class actions was contained in the House bill and specifically rejected by the Conference Committee,” id., at 7168, 7565. The Conference Committee bill was accepted by both Chambers. Id., at 7170, 7573.
Title 42 U. S. C. §2000e-5 (g) (1970 ed., Supp. Ill) provides:
“If the court finds that the respondent has intentionally engaged in or is intentionally engaging in an unlawful employment practice charged in the complaint, the court may enjoin the respondent from engaging in such unlawful employment practice, and order such affirmative action as may be appropriate, which may include, but is not limited to, reinstatement or hiring of employees, with or without back pay (payable by the employer, employment agency, or labor organization, as the case may be, responsible for the unlawful employment practice), or any other equitable relief as the court deems appropriate. Back pay liability shall not accrue from a date more than two years prior to the filing of a charge with the Commission. Interim earnings or amounts earnable with reasonable diligence by the person or persons discriminated against shall operate to reduce the back pay otherwise allowable. No order of the court shall require the admission or reinstatement of an individual as a member of a union, or the hiring, reinstatement, or promotion of an individual as an employee, or the payment to him of any back pay, if such individual was refused admission, suspended, or expelled, or was refused employment or advancement or was suspended or discharged for any reason other than discrimination on account of race, color, religion, sex, or national origin or in violation of section 2000e-3 (a) of this title.”
Eldon, L. C., in Gee v. Pritchard, 2 Swans. *403, *414, 36 Eng. Rep. 670, 674 (1818).
Section 10 (c) of the NLRA, 49 Stat. 454, as amended, 29 U. S. C. § 160 (c), provides that when the Labor Board has found that a person has committed an “unfair labor practice,” the Board “shall issue” an order “requiring such person to cease and desist from such unfair labor practice, and to take such affirmative action including reinstatement of employees with or without back pay, as will effectuate the policies of this subchapter.” The backpay provision of Title VII provides that when the court has found “an unlawful employment practice,” it “may enjoin” the practice “and order such affirmative action as may be appropriate, which may include, but is not limited to, reinstatement or hiring of employees, with or without back pay . . . .” 42 U. S. C. §2000e-5 (g) (1970 ed., Supp. III). The framers of Title VII stated that they were using the NLRA provision as a model. 110 Cong. Rec. 6549 (1964) (remarks of Sen. Humphrey); id., at 7214 (interpretative memorandum by Sens. Clark and Case). In early versions of the Title VII provision on remedies, it was stated that a court “may” issue injunctions, but “shall” order appropriate affirmative action. This anomaly was removed by Substitute Amendment No. 656, 110 Cong. Rec. 12814, 12819 (1964). The framers regarded this as merely a “minor language change,” id., at 12723-12724 (remarks of Sen. Humphrey). We can find here no intent to back away from the NLRA model or to denigrate in any way the status of backpay relief.
“The finding of an unfair labor practice and discriminatory discharge is presumptive proof that some back pay is owed by the employer,” NLRB v. Mastro Plastics Corp., 354 F. 2d 170, 178 (CA2 1965). While the backpay decision rests in the NLRB's discretion, and not with the courts, NLRB v. Rutter-Rex Mfg. Co., 396 U. S. 258, 263 (1969), the Board has from its inception pursued “a practically uniform policy with respect to these orders requiring affirmative action.” NLRB, First Annual Report 124 (1936). “[I]n all but a few cases involving discriminatory discharges, discriminatory refusals to employ or reinstate, or discriminatory demotions in violation of section 8 (3), the Board has ordered the employer to offer reinstatement to the employee discriminated against and to make whole such employee for any loss of pay that he has suffered by reason of the discrimination.” NLRB, Second Annual Report 148 (1937).
As to the unsuccessful effort to restrict class actions for back-pay, see n. 8, supra. In addition, the Senate rejected an amendment which would have required a jury trial in Title VII cases involving backpay, 118 Cong. Rec.. 4917, 4919-4920 (1972) (remarles of Sens. Ervin and Javits), and rejected a provision that would have limited backpay liability to a date two years prior to filing a complaint in court. Compare H. R. 1746, which passed the House, with the successful Conference Committee bill, analyzed at 118 Cong. Rec. 7168 (1972), which adopted a substantially more liberal limitation, i. e., a date two years prior to filing a charge with the EEOC. See 42 U. S. C. § 2000e-5 (g) (1970 ed., Supp. III).
It is necessary, therefore, that if a district court does decline to award backpay, it carefully articulate its reasons.
The District Court thought that the breach of Title VII had not been in “bad faith” because judicial decisions had only recently focused directly on the discriminatory impact of seniority systems. The court also noted that Albemarle had taken some steps to recruit black workers into one of its departments and to eliminate strict segregation through the 1968 departmental merger.
The backpay remedy of the NLRA on which the Title VII remedy was modeled, see n. 11, supra, is fully available even where the “unfair labor practice” was committed in good faith. See, e. g., NLRB v. Rutter-Rex Mfg. Co., 396 U. S., at 265; American Machinery Corp. v. NLRB, 424 F. 2d 1321, 1328-1330 (CA5 1970) ; Laidlaw Corp. v. NLRB, 414 F. 2d 99, 107 (CA7 1969).
Title VII itself recognizes a complete, but very narrow, immunity for employer conduct shown to have been undertaken “in good faith, in conformity with, and in reliance on any written interpretation or opinion of the [Equal Employment Opportunity] Commission.” 42 U. S. C. § 2000e-12 (b). It is not for the courts to upset this legislative choice to recognize only a narrowly defined “good faith” defense.
We note that some courts have denied backpay, and limited their judgments to declaratory relief, in cases where the employer discriminated on sexual grounds in reliance on state “female protective” statutes that were inconsistent with Title VII. See, e. g., Kober v. Westinghouse Electric Corp., 480 F. 2d 240 (CA3 1973); LeBlanc v. Southern Bell Telephone & Telegraph Co., 460 F. 2d 1228 (CA5 1972); Manning v. General Motors Corp., 466 F. 2d 812 (CA6 1972); Rosenfeld v. Southern Pacific Co., 444 F. 2d 1219 (CA9 1971). There is no occasion in this case to decide whether these decisions were correct. As to the effect of Title VII on state statutes inconsistent with it, see 42 U. S. C. § 2000e-7.
See Rosen v. Public Service Electric & Gas Co., 409 F. 2d, at 780 n. 20; Robinson v. Lorillard Corp., 444 F. 2d, at 802-803; United States v. Hayes International Corp., 456 F. 2d 112, 116, 121 (CA5 1972).
The District Court’s stated grounds for denying backpay were, apparently, cumulative rather than independent. The District Court may, of course, reconsider its backpay determination in light of our ruling on the “good faith” question.
In Griggs, the Court was construing 42 U. S. C. §2000e-2 (h), which provides in pertinent part that it shall not “be an unlawful employment practice for an employer to give and to act upon the results of any professionally developed ability test provided that such test, its administration or action upon the results is not designed, intended or used to discriminate because of race, color, religion, sex or national origin.”
Albemarle has informed us that it has now reduced the cut-off score to 17 on the Wonderlic Test.
While the Company contends that the Bennett and Beta Tests were “locally validated” when they were introduced, no record of this validation was made. Plant officials could recall only the barest outlines of the alleged validation. Job relatedness cannot be proved through vague and unsubstantiated hearsay.
As explained by the responsible plant official, the Wonderlic' Test was chosen in rather casual fashion:
“I had had experience with using the Wonderlic before, which is a short form Verbal Intelligence Test, and knew that it had, uh, probably more validation studies behind it than any other short form Verbal Intelligence Test. So, after consultation we decided to institute the Wonderlic, in addition to the Beta, in view of the fact that the mill had changed quite a bit and it had become exceedingly more complex in operation .... [W]e did not, uh, validate it, uh, locally, primarily, because of the, the expense of conducting such a validation, and there were some other considerations, such as, uh, we didn’t know whether we would get the co-operation of the employees that we’d need to validate it against in taking the test, and we certainly have to have that, so, we used National Norms and on my suggestion after study of the Wonderlic and Norms had been established nationally for skilled jobs, we developed a, uh, cut-off score of eighteen (18).”
In the course of a 1971 validation effort, see supra, at 411 and infra, this page and 430, test scores were accumulated for 105 incumbent employees (101 of whom were white) working in relatively high-ranking jobs. Some of these employees apparently took the tests for the first time as part of this study. The Company’s expert testified that the test cutoff scores originally used to screen these incumbents for employment or promotion “couldn’t have been . . . very high scores because some of these guys tested very low, as low as 8 in the Wonderlic test, and as low as 95 in the Beta. They couldn’t have been using very high cut-off scores or they wouldn’t have these low testing employees.”
See the charts appended to this opinion. It should be noted that testing is no longer required for some of the job groups listed.
This “standard” for the ranking was described by the plant official who oversaw the conduct of the study.
The results of the study are displayed on Chart A in the Appendix to this opinion.
American Psychological Association, Standards for Educational and Psychological Tests and Manuals (1966) (hereafter APA Standards). A volume of the same title, containing modifications, was issued in 1974. The EEOC Guidelines refer to the APA Standards at 29 CFR § 1607.5 (a). Very similar guidelines have been issued by the Secretary of Labor for the use of federal contractors. 41 CFR § 60-3.1 et seq.
The Guidelines provide, at 29 CFR §§ 1607.5 (b)(3) and (4):
"(3) The work behaviors or other criteria of employee adequacy which the test is intended to predict or identify must be fully described; and, additionally, in the case of rating techniques, the appraisal form(s) and instructions to the rater (s) must be included as a part of the validation evidence. Such criteria may include measures other than actual work proficiency, such as training time, supervisory ratings, regularity of attendance and tenure. Whatever criteria are used they must represent major or critical work behaviors as revealed by careful job analyses.
“(4) In view of the possibility of bias inherent in subjective evaluations, supervisory rating techniques should be carefuEy developed, and the ratings should be closely examined for evidence of bias. In addition, minorities might obtain unfairly low performance criterion scores for reasons other than supervisor’s prejudice, as when, as new employees, they have had less opportunity to learn job skills. The general point is that all criteria need to be examined to insure freedom from factors which would unfairly depress the scores of minority groups.”
See n. 27, supra.
It cannot escape notice that Albemarle’s study was conducted by plant officials, without neutral, on-the-scene oversight, at a time when this litigation was about to come to trial. Studies so closely controEed by an interested party in litigation must be examined with great care. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
31
] |
FEDERAL BUREAU OF INVESTIGATION et al. v. ABRAMSON
No. 80-1735.
Argued January 11, 1982
Decided May 24, 1982
White, J., delivered the opinion of the Court, in which Burger, C. J., and Powell, Rehnquist, and Stevens, JJ., joined. Blackmun, J., filed a dissenting opinion, in which Brennan, J., joined, post, p. 632. O’Connor, J., filed a dissenting opinion, in which Marshall, J., joined, post, p. 633.
Deputy Solicitor General Getter argued the cause for petitioners. With him on the briefs were Solicitor General Lee, Acting Assistant Attorney General Schiffer, Elinor Hadley Stillman, Leonard Schaitman, and Howard S. Scher.
Sharon T. Nelson argued the cause and filed a brief for respondent.
Briefs of amici curiae urging affirmance were filed by Cornish F. Hitchcock, Alan B. Morrison, David C. Vladeck, and Katherine A. Meyer for Freedom of Information Clearinghouse; and by Bruce W. Sanford, Richard M. Schmidt, Jr., Erwin G. Krasnow, Arthur B. Sackler, and J. Laurent Scharff for the Society of Professional Journalists, Sigma Delta Chi, et al.
Justice White
delivered the opinion of the Court.
The Freedom of Information Act (FOIA), 5 U. S. C. § 552 (1976 ed. and Supp. IV), does not require the disclosure of “investigatory records compiled for law enforcement purposes” when the release of such records would interfere with effective law enforcement, impede the administration of justice, constitute an unwarranted invasion of privacy, or produce certain other specified consequences. § 552(b)(7). The sole question presented in this case is whether information contained in records compiled for law enforcement purposes loses that exempt status when it is incorporated into records compiled for purposes other than law enforcement.
I
Respondent Howard Abramson is a professional journalist interested in the extent to which the White House may have used the Federal Bureau of Investigation (FBI) and its files to obtain derogatory information about political opponents. On June 23, 1976, Abramson filed a request pursuant to FOIA for specific documents relating to the transmittal from the FBI to the White House in 1969 of information concerning particular individuals who had criticized the administration. The Bureau denied the request on grounds that the information was exempt from disclosure pursuant to § 552(b) (6) (Exemption 6) and § 552(b)(7)(C) (Exemption 7(C)), both of which protect against unwarranted invasions of personal privacy. Abramson, believing his first request was flawed by its specificity, filed a much broader request, which was denied for failure to “reasonably describe the records sought” as required by § 552(a)(3).
In December 1977, after unsuccessfully appealing both denials within the agency, Abramson filed suit in the United States District Court for the District of Columbia to enjoin the FBI from withholding the requested records. While the suit was pending, the FBI provided Abramson with 84 pages of documents, some intact and some with deletions. The District Court rejected the Bureau’s assertions that all deleted material was exempt. Abramson v. U. S. Dept. of Justice, Civ. Action No. 77-2206 (Jan. 3, 1979). In response, the FBI submitted an affidavit to the District Court explaining the justification for each deletion. In light of the released material and the Bureau’s affidavit, Abramson modified his request, seeking only the material withheld from a single document consisting of a one-page memorandum from J. Edgar Hoover to John D. Ehrlichman, together with approximately 63 pages of “name check” summaries and attached documents. The “name check” summaries contained information, culled from existing FBI files, on 11 public figures.
The District Court found that the FBI had failed to show that the information was compiled for law enforcement rather than political purposes, but went on to rule that Exemption 7(C) was validly invoked by the Government because disclosure of the withheld materials would constitute an unwarranted invasion of personal privacy. The District Court thus granted the Government’s motion for summary judgment with respect to material withheld pursuant to Exemption 7(C). Abramson v. FBI, Civ. Action No. 77-2206 (Nov. 30, 1979).
The Court of Appeals reversed, holding that with the exception of those documents attached to the summaries that may have been duplicates of original FBI files, the Government had failed to sustain its burden of demonstrating that the documents were compiled for law enforcement purposes, and that Exemption 7(C) was therefore unavailable even though disclosure would constitute an unwarranted invasion of personal privacy. 212 U. S. App. D. C. 58, 658 F. 2d 806 (1980). To reach this conclusion, the Court of Appeals rejected the Government’s claim that Exemption 7(C) was applicable because the “name check” summaries contained information taken from documents in FBI files that had been created for law enforcement purposes. Thus, with the exception noted, the Government’s invocation of Exemption 7(C) was rejected. Because this interpretation of the Exemption has important ramifications for law enforcement agencies, for persons about whom information has been compiled, and for the general public, we granted certiorari. 452 U. S. 937 (1981). We now reverse.
r*H I — <
The Freedom of Information Act sets forth a policy of broad disclosure of Government documents in order “to ensure an informed citizenry, vital to the functioning of a democratic society.” NLRB v. Robbins Tire & Rubber Co., 437 U. S. 214, 242 (1978); EPA v. Mink, 410 U. S. 73, 80 (1973). Yet Congress realized that legitimate governmental and private interests could be harmed by release of certain types of information and provided nine specific exemptions under which disclosure could be refused. Here we are concerned with Exemption 7, which was intended to prevent premature disclosure of investigatory materials which might be used in a law enforcement action. This provision originally exempted “investigatory files compiled for law enforcement purposes except to the extent available by law to a private party.” A sweeping interpretation given the Exemption by some courts permitted the unlimited withholding of files merely by classifying them as investigatory files compiled for law enforcement purposes. As a result, the Exemption underwent a major revision in 1974. As amended, Exemption 7 authorizes disclosure of law enforcement records unless the agency-can demonstrate one of six specific harms. The provision now protects
“investigatory records compiled for law enforcement purposes but only to the extent that the production of such records would (A) interfere with enforcement proceedings, (B) deprive a person of a right to a fair trial or an impartial adjudication, (C) constitute an unwarranted invasion of personal privacy, (D) disclose the identity of a confidential source and, in the case of a record compiled by a criminal law enforcement authority in the course of a criminal investigation, or by an agency conducting a lawful national security intelligence invéstigation, confidential information furnished only by the confidential source, (E) disclose investigative techniques and procedures, or (F) endanger the life or physical safety of law enforcement personnel.” 5 U. S. C. § 552(b)(7).
The language of the Exemption indicates that judicial review of an asserted Exemption 7 privilege requires a two-part inquiry. First, a requested document must be shown to have been an investigatory record “compiled for law enforcement purposes.” If so, the agency must demonstrate that release of the material would have one of the six results specified in the Act.
As the case comes to us, it is agreed that the information withheld by the Bureau was originally compiled for law enforcement purposes. It is also settled that the name check summaries were developed pursuant to a request from the White House for information about certain public personalities and were not compiled for law enforcement purposes. Finally, it is not disputed that if the threshold requirement of Exemption 7 is met — if the documents were compiled for law enforcement purposes — the disclosure of such information would be an unwarranted invasion of privacy. The sole question for decision is whether information originally compiled for law enforcement purposes loses its Exemption 7 protection if summarized in a new document not created for law enforcement purposes.
Ill
No express answer is provided by the statutory language or by the legislative history. The Court of Appeals resolved the question in favor of Abramson by construing the threshold requirement of Exemption 7 in the following manner. The cover letter to the White House, along with the accompanying summaries and attachments, constituted a “record.” Because that “record” was not compiled for law enforcement purposes, the material within it could not qualify for the exemption, regardless of the purpose for which that material was originally gathered and recorded and regardless of the impact that disclosure of such information would produce. The Court of Appeals supported its interpretation by distinguishing between documents and information. “[T]he statutory scheme of the FOIA very clearly indicates that exemptions from disclosure apply only to documents, and not to the use of the information contained in such documents.” 212 U. S. App. D. C., at 65, 658 F. 2d, at 813. A “record” is a “document” and, for the Court of Appeals, the document must be treated as a unit for purposes of deciding whether it was prepared for law enforcement purposes. The threshold requirement for qualifying under Exemption 7 turns on the purpose for which the document sought to be withheld was prepared, not on the purpose for which the material included in the document was collected. The Court of Appeals would apply this rule even when the information for which the exemption is claimed appears in the requested document in the form essentially identical to the original memorialization.
The Court of Appeals’ view is a tenable construction of Exemption 7, but there is another interpretation, equally plausible on the face of the statute, of the requirement that the record sought to be withheld must have been prepared for law enforcement purposes. If a requested document, such as the one sent to the White House in this case, contains or essentially reproduces all or part of a record that was previously compiled for law enforcement reasons, it is reasonably arguable that the law enforcement record does not lose its exemption by its subsequent inclusion in a document created for a nonexempt purpose. The Court of Appeals itself pointed the way to this alternative construction by indicating that Exemption 7 protected attachments to the name check summaries that were duplicates of original records compiled for law enforcement purposes. Those records would not lose their exemption by being included in a later compilation made for political purposes. Although in this case the duplicate law enforcement records were attached to the name check summaries, the result hardly should be different if all or part of the prior record were quoted verbatim in the new document. That document, even though it may be delivered to another agency for a nonexempt purpose, contains a “record” qualifying for consideration under Exemption 7.
The question is whether FOIA permits the same result where the exempt record is not reproduced verbatim but is accurately reflected in summary form. The Court of Appeals would have it that because the FBI summarized the relevant records rather than reproducing them verbatim, the identical information no longer qualifies for the exemption. The originally compiled record and the derivative summary would be treated completely differently although the content of the information is the same and although the reasons for maintaining its confidentiality remain equally strong. We are of the view, however, that the statutory language is reasonably construable to protect that part of an otherwise nonexempt compilation which essentially reproduces and is substantially the equivalent of all or part of an earlier record made for law enforcement uses. Moreover, that construction of the statute rather than the interpretation embraced by the Court of Appeals, more accurately reflects the intention of Congress, is more consistent with the structure of the Act, and more fully serves the purposes of the statute.
FOIA contains no definition of the term “record.” Throughout the legislative history of the 1974 amendments, Representatives and Senators used interchangeably such terms as “documents,” “records,” “matters,” and “information. ” Furthermore, in determining whether information in a requested record should be released, the Act consistently focuses on the nature of the information and the effects of disclosure. After enumerating the nine exemptions from FOIA, Congress expressly directed that “[a]ny reasonably segrega-ble portion of a record” be “provided to any person requesting such record after deletion of the portions which are exempt . . . .” § 552(b). This provision requires agencies and courts to differentiate among the contents of a document rather than to treat it as an indivisible “record” for FOIA purposes. When a record is requested, it is permissible for an agency to divide the record into parts that are exempt and parts that are not exempt, based on the kind of information contained in the respective parts.
The 1974 amendments modified Exemption 7 in two ways. First, by substituting the word “records” for “files,” Congress intended for courts to “consider the nature of the particular document as to which exemption was claimed, in order to avoid the possibility of impermissible ‘commingling’ by an agency’s placing in an investigatory file material that did not legitimately have to be kept confidential.” NLRB v. Robbins Tire & Rubber Co., 437 U. S., at 229-230. Second, by enumerating six particular objectives of the Exemption, the amendments required reviewing courts to “loo[k] to the reasons” for allowing withholding of information. Id., at 230. The requirement that one of six types of harm must be demonstrated to prevent production of a record compiled for law enforcement purposes was a reaction to a line of cases decided by the Court of Appeals for the District of Columbia Circuit which read the original Exemption 7 as protecting all law enforcement files. The amendment requires that the Government “specify some harm in order to claim the exemption” rather than “affording all law enforcement matters a blanket exemption.” 120 Cong. Rec. 36626 (1974), 1975 Source Book 413 (statement of Rep. Reid). The enumeration of these categories of undesirable consequences indicates Congress believed the harm of disclosing this type of information would outweigh its benefits. There is nothing to suggest, and no reason for believing, that Congress would have preferred a different outcome simply because the information is now reproduced in a non-law-enforcement record.
The Court of Appeals would protect information compiled in a law enforcement record when transferred in original form to another agency for nonexempt purposes but would withdraw that protection if the same information or record is transmitted in slightly different form. In terms of the statutory objectives, this distinction makes little sense. If the Court of Appeals is correct that this kind of information should be disclosed, its position leaves an obvious means of qualifying for the exemption — transmittal of the law enforcement records intact. Conversely, to the extent that Congress intended information initially gathered in the course of a law enforcement investigation to remain private, the Court of Appeals’ decision creates a substantial prospect that this purpose, the very reason for Exemption 7’s existence, will no longer be served.
IV
Neither are we persuaded by the several other arguments Abramson submits in support of the decision below.
First, we reject the argument that the legitimate interests in protecting information from disclosure under Exemption 7 are satisfied by other exemptions when a record has been recompiled for a non-law-enforcement purpose. In particular, Abramson submits that Exemption 6 suffices to protect the privacy interest of individuals. Even if this were so with respect to the particular information requested in this case, the threshold inquiry of what constitutes compilation for law enforcement purposes must be considered with regard for all six of the types of harm stemming from disclosure that Congress sought to prevent. Assuming that Exemption 6 provided fully comparable protection against disclosures which would constitute unwarranted invasions of privacy, a questionable proposition itself, no such companion provision in FOIA would halt the disclosure of information that might deprive an individual of a fair trial, interrupt a law enforcement investigation, safeguard confidential law enforcement techniques, or even protect the physical well-being of law enforcement personnel. No other provision of FOIA could compensate for the potential disruption in the flow of information to law enforcement agencies by individuals who might be deterred from speaking because of the prospect of disclosure. It is therefore critical that the eompiled-for-law-enforcement requirement be construed to avoid the release of information that would produce the undesirable results specified.
For much the same reason, the result we reach today is fully consistent with our holding in NLRB v. Sears, Roebuck & Co., 421 U. S. 132, 148-154 (1975), that Exemption 5, § 552(b)(5), an exemption protecting from mandatory disclosure predecisional communications within an agency and other internal documents, does not protect internal advisory communications when incorporated in a final agency decision. The purposes behind Exemption 5, protecting the give-and-take of the decisional process, were not violated by disclosure once an agency chooses expressly to adopt a particular text as its official view. As we have explained above, this cannot be said here. The reasons for an Exemption 7 exemption may well remain intact even though information in a law enforcement record is recompiled in another document for a non-law-enforcement function.
The result is also consistent with the oft-repeated caveat that FOIA exemptions are to be narrowly construed, Department of Air Force v. Rose, 425 U. S. 352, 361 (1976). While Congress established that the basic policy of the Act is in favor of disclosure, it recognized the important interests served by the exemptions. We are not asked in this case to expand Exemption 7 to agencies or material not envisioned by Congress: “It is . . . necessary for the very operation of our Government to allow it to keep confidential certain material such as the investigatory files of the Federal Bureau of Investigation.” S. Rep. No. 813, 89th Cong., 1st Sess., 3 (1965). Reliance on this principle of narrow construction is particularly unpersuasive in this case where it is conceded that the information as originally compiled is exempt under Exemption 7 and where it is the respondent, not the Government, who urges a formalistic reading of the Act.
We are not persuaded that Congress’ undeniable concern with possible misuse of governmental information for partisan political activity is the equivalent of a mandate to release any information which might document such activity. Congress did not differentiate between the purposes for which information was requested. NLRB v. Sears, Roebuck & Co., supra, at 149. Rather, the Act required assessment of the harm produced by disclosure of certain types of information. Once it is established that information was compiled pursuant to a legitimate law enforcement investigation and that disclosure of such information would lead to one of the'listed harms, the information is exempt. Congress thus created a scheme of categorical exclusion; it did not invite a judicial weighing of the benefits and evils of disclosure on a case-by-case basis.
V
We therefore find that the construction adopted by the Court of Appeals, while plausible on the face of the statute, lacks support in the legislative history and would frustrate the purposes of Exemption 7. We hold that information initially contained in a record made for law enforcement purposes continues to meet the threshold requirements of Exemption 7 where that recorded information is reproduced or summarized in a new document prepared for a non-law-enforcement purpose. Of course, it is the agency’s burden to establish that the requested information originated in a record protected by Exemption 7. The Court of Appeals refused to consider such a showing as a sufficient reason for withholding certain information. The judgment of the Court of Appeals is therefore reversed, and the case is remanded to that court for further proceedings consistent with this opinion.
So ordered.
Section 552(b) in its entirety provides:
“This section does not apply to matters that are—
“(1)(A) specifically authorized under criteria established by an Executive order to be kept secret in the interest of national defense or foreign policy and (B) are in fact properly classified pursuant to such Executive order;
“(2) related solely to the internal personnel rules and practices of an agency;
“(3) specifically exempted from disclosure by statute (other than section 552b of this title), provided that such statute (A) requires that the matters be withheld from the public in such a manner as to leave no discretion on the issue, or (B) establishes particular criteria for withholding or refers to particular types of matters to be withheld;
“(4) trade secrets and commercial or financial information obtained from a person and privileged or confidential;
“(5) inter-agency or intra-agency memorandums or letters which would not be available by law to a party other than an agency in litigation with the agency;
“(6) personnel and medical files and similar files the disclosure of which would constitute a clearly unwarranted invasion of personal privacy;
“(7) investigatory records compiled for law enforcement purposes, but only to the extent that the production of such records would (A) interfere with enforcement proceedings, (B) deprive a person of a right to a fair trial or an impartial adjudication, (C) constitute an unwarranted invasion of personal privacy, (D) disclose the identity of a confidential source and, in the case of a record compiled by a criminal law enforcement authority in the course of a criminal investigation, or by an agency conducting a lawful national security intelligence investigation, confidential information furnished only by the confidential source, (E) disclose investigative techniques and procedures, or (F) endanger the life or physical safety of law enforcement personnel;
“(8) contained in or related to examination, operating, or condition reports prepared by, on behalf of, or for the use of an agency responsible for the regulation or supervision of financial institutions; or
“(9) geological and geophysical information and data, including maps, concerning wells.
“Any reasonably segregable portion of a record shall be provided to any person requesting such record after deletion of the portions which are exempt under this subsection.”
Abramson sought the following documents:
“ — Copies of any and all information contained in [FBI] files showing or indicating the transmittal of any documents or information from the FBI to the White House, or any White House aides, for the years 1969 and 1970, concerning the following individuals: Lowell P. Weicker, Jr.; Thomas J. Meskill; Joseph Duffey; Thomas J. Dodd; Alphonsus J. Donahue; John Lup-ton; Wallace C. Barnes; and Emilio Q. Daddario.
“ — Copies of any and all information so transmitted.
“ — An uncensored copy of the Oct. 6, 1969 letter from J. Edgar Hoover to John D. Ehrlichman by which Mr. Hoover transmits ‘memoranda’ on several individuals to Mr. Ehrlichman.
“ — A copy of the original request letter from Mr. Ehrlichman to Mr. Hoover for that data.
“ — Copies of all data so transmitted by the Oct. 6, 1969 letter from Mr. Hoover to Mr. Ehrlichman.
“ — A copy of the receipt signed by the recipient at the White House of the Oct. 6, 1969, letter.” 212 U. S. App. D. C. 58, 60, 658 F. 2d 806, 808 (1980).
In his revised request, Abramson sought the following documents:
—“All written requests and written records of oral or telephone requests from the White House or any person employed by the White House to the FBI for information about any person who was in 1969, 1970, 1971, 1972, 1973, or 1974 the holder of a federal elective office or a candidate for federal elective office.
—“All written replies and records of oral or telephonic replies from the FBI to the White House in response to requests described in paragraph one.
—“Any index or indices to requests or replies described in paragraphs one and two.” Id., at 61, 658 F. 2d, at 809.
The District Court did not consider the summaries and attachments separately for Exemption 7(C) purposes. The Court of Appeals was “satisfied that the ‘name check’ summaries were not compiled for legitimate law enforcement purposes,” but was “less sure” of the “attachments,” being unable to determine their precise nature or the purposes for which they were originally created. The Court of Appeals stated that if the “attachments” documents were already in existence and a part of the FBI files prior to the White House’s “name check” requests, and if these original documents were sent to the White House as initially compiled, without modification, then a determination would have to be made whether these documents meet the threshold requirements of Exemption 7. Thus, the Court of Appeals remanded to the District Court for a finding on whether the “attachments” were the original documents in FBI files and whether they were originally compiled pursuant to a legitimate law enforcement investigation.
The Attorney General’s Memorandum on the 1974 Amendments to the FOIA 6 (1975) reads the amendments in this manner. Respondent places undue emphasis on this document and the direction to first determine whether a record has been compiled for law enforcement purposes and then examine whether one of the six harms are involved. This is, of course, the prescribed order in which a court should interpret the Exemption. It does not necessarily mean, however, that information admittedly compiled in a law enforcement record loses its exemption when recompiled. The Attorney General’s memorandum submits that the test is whether the requested material “reflect[s] or result[s] from investigative efforts” into civil or criminal enforcement matters.” Ibid.
The Court of Appeals supported this distinction by referring to two of its earlier FOIA decisions. Simpson v. Vance, 208 U. S. App. D. C. 270, 648 F. 2d 10 (1980), held that a State Department Biographic Register was not exempt from disclosure even though the information in the Register was extracted from personnel flies which may have been exempt under Exemption 6 of FOIA. Lesar v. United States Department of Justice, 204 U. S. App. D. C. 200, 636 F. 2d 472 (1980), held that summaries of FBI surveillance records did not lose their exempt status because the underlying original surveillance records from which the summaries were compiled may not have been gathered for legitimate law enforcement purposes. As we understand those cases, however, neither of them is inconsistent with the result we reach today.
We would agree with much of Justice O’Connor’s dissenting opinion if we accepted its premise that the language of the statute is “plain” in the sense that it can reasonably be read only as the dissent would read it. But we do not agree with that premise: “The notion that because the words of a statute are plain, its meaning is also plain, is merely pernicious oversimplification.” United States v. Monia, 317 U. S. 424, 431 (1943) (Frankfurter, J., dissenting). Given our view that there is a reasonable alternative construction of Exemption 7, much of Justice O’Connor’s dissent is rhetorical and beside the point. For our duty then is “to find that interpretation which can most fairly be said to be imbedded in the statute, in the sense of being most harmonious with its scheme and with the general purposes that Congress manifested.” NLRB v. Lion Oil Co., 352 U. S. 282, 297 (1957) (Frankfurter, J., concurring in part and dissenting in part).
While Congress’ definition of “records” in the Records Disposal Act and the Presidential Records Act of 1978 was helpful to us in determining that an agency must create or obtain a record before information to which the Government has access can be considered an “agency record,” Forsham v. Harris, 445 U. S. 169, 183-184 (1980), the definition of terms in these Acts does not aid in resolving the issue presented in this case.
See, e. g., 120 Cong. Rec. 17033 (1974), House Committee on Government Operations and Senate Committee on the Judiciary, Freedom of Information Act and Amendments of 1974 (Pub. L. 93-502), Source Book, 94th Cong., 1st Sess., 333 (Joint Comm. Print 1975) (hereafter 1975 Source Book) (remarks of Sen. Hart); 120 Cong. Rec. 17034 (1974), 1975 Source Book 335 (remarks of Sen. Kennedy); 120 Cong. Rec. 36626 (1974), 1975 Source Book 413 (remarks of Rep. Reid); 120 Cong. Rec. 36877-36878 (1974), 1975 Source Book 468 (remarks of Sen. R. Byrd); H. R. Conf. Rep. No. 93-1380, p. 13 (1974), 1975 Source Book 230.
There is no claim that the “name check” summaries are protected against disclosure in toto because of the presence of some material falling squarely within Exemption 7.
Senator Hart, the sponsor of the 1974 amendment, stated specifically that the amendment’s purpose was to respond to four decisions of the Court of Appeals for the District of Columbia Circuit which cumulatively held that all material found in an investigatory file compiled for law enforcement purposes was exempt, even if an enforcement proceeding were neither imminent nor likely. Weisberg v. United States Dept. of Justice, 160 U. S. App. D. C. 71, 74, 489 F. 2d 1195, 1198 (1973), cert. denied, 416 U. S. 993 (1974); Aspin v. Department of Defense, 160 U. S. App. D. C. 231, 237, 491 F. 2d 24, 30 (1973); Ditlow v. Brinegar, 161 U. S. App. D. C. 154, 494 F. 2d 1073 (1974); Center for National Policy Review on Race and Urban Issues v. Weinberger, 163 U. S. App. D. C. 368, 502 F. 2d 370 (1974). These four cases, in Senator Hart’s view, erected a “stone wall” preventing public access to any material in an investigatory file. 120 Cong. Rec. 17033 (1974), 1975 Source Book 332. See NLRB v. Robbins Tire & Rubber Co., 437 U. S. 214, 227-229 (1978). The Conference Report on the 1974 amendment similarly states that the amendment was designed to communicate Congress’ disapproval of these court decisions. H. R. Conf. Rep. No. 93-1380, at 12, 1975 Source Book 229. Because the disapproved decisions cut far more broadly into the Act than the present issue, we cannot infer that Congress intended all subsidiary questions concerning Exemption 7’s scope to be resolved against the Government.
Information transmitted for a non-law-enforcement purpose may well still be used in an ongoing investigation. Moreover, by compromising the confidentiality of information gathered for law enforcement purposes, the Court of Appeals’ decision could result in restricting the flow of essential information to the Government. Deputy Attorney General Schmults stated before the Second Circuit Judicial Conference (May 9, 1981): “The risk of disclosure of FBI records has made private persons, nonfederal law enforcement officials, and informants reticent about providing vital information. Many informants have actually stopped cooperating with the FBI, for example, because they feared that their identities would be disclosed under the Act.” As quoted in Kennedy, Foreword: Is The Pendulum Swinging Away From Freedom of Information?, 16 Harv. Civ. Rights-Civ. Lib. L. Rev. 311, 315 (1981). See FOIA Update 1 (Dept, of Justice, Sept. 1981) (“[Experiences of the FBI and DEA indicate that there is a widespread perception among confidential information sources that federal investigators cannot fully guarantee the confidentiality of information because of FOIA”). The Drug Enforcement Administration claims that 40% of FOIA requests come from convicted felons, many of whom are seeking information with which to identify the informants who helped to convict them. Freedom of Information Act Oversight, Hearings before a Subcommittee of the House Committee on Government Operations, 97th Cong., 1st Sess., 165 (1981) (statement of Jonathan Rose, Dept. of Justice); see also U. S. Dept. of Justice, Attorney General’s Task Force on Violent Crime, Final Report 32 (1981).
The Court has previously recognized that the purposes of the exemptions do not disappear when information is incorporated in a new document or otherwise put to a different use. See NLRB v. Sears, Roebuck & Co., 421 U. S. 132, 166 (1975) (Document protected by Exemption 7 does not become discloseable solely because it is referred to in a final agency opinion; “reasons underlying Congress’ decision to protect investigatory files [remain] applicable”).
“Exemption 6 protects against disclosure of information which would constitute a “clearly unwarranted” invasion of privacy. Exemption 7 does not require that the harm to privacy be “clearly” unwarranted. The distinction is meaningful. As we noted in Department of Air Force v. Rose, 425 U. S. 352, 379, n. 16 (1976), the Conference Committee dropped the “clearly” in response to a Presidential request, 120 Cong. Rec. 33158-33159 (1974), 1975 Source Book 368-372 (letters between President Ford and Sen. Kennedy); 120 Cong. Rec. 34162-34163 (1974), 1975 Source Book 377-380 (letters between President Ford and Cong. Moorhead), and the bill was enacted as reported by the Conference Committee, 88 Stat. 1563. Thus, even with respect to Exemption 7(C), it should not be assumed that Exemption 6 would provide overlapping protection.
To be sure, the rule crafted by the Court of Appeals might deter the interagency transfer of information initially gathered for law enforcement purposes, but it should be remembered that FOIA is legislation directed at securing public access to information, not an Act intended to interdict the flow of information among Government agencies. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
34
] |
GORDON et al. v. LANCE et al.
No. 96.
Argued January 18, 1971
Decided June 7, 1971
Burger, C. J., delivered the opinion of the Court, in which Black, Douglas, Stewart, White, and Blackmun, JJ., joined. Harlan, J., filed a statement concurring in the result, post, p. 8. Brennan and Marshall, JJ., filed a dissenting statement, post, p. 8.
George M. Scott argued the cause and filed briefs for petitioners.
Charles C. Wise, Jr., argued the cause for respondents. .With him on the brief was J. Henry Francis, Jr.
Briefs. of amici curiae urging reversal were filed by Slade Gorton, Attorney General of Washington, and Philip H. Austin, Assistant Attorney General, for the State of Washington et al.; by Thomas M. O’Connor for the City and County of San Francisco; by Francis R. Kirkham and Francis N. Marshall for the California Taxpayers’ Association; and by George E. Svoboda for •Hayes Smith.
Briefs of amici curiae urging affirmance were filed by James R. Ellis for Seattle School District No. 1; by Stephen J. Poliak, William H. Dempsey, Jr., Ralph J. Moore, Jr., and Robert H. Chanin for the National Education Association et al.; by August W. Steinhilber and Robert G. Dixon, Jr., for the National School Boards Association; by David R. Hardy and Robert E. Northrup for the Missouri State Teachers Association; by William B. Beebe, Hershél Shanks, and Allan I. Mendelsohn for the American Association of School Administrators et al.; by Melvin L. Wulf for the American Civil Liberties Union et al.; and by Paul W. Preisler for the Committee for the Equal Weighting of Votes.
■ Briefs of amici curiae were filed by John W. Witt and Joseph Kase, Jr., for the City of San Diego et al., and by Chas. Clafiin Allen, pro se.
Me. Chief Justice Burger
delivered the opinion of the Court.
We granted certiorari to review a challenge to a 60% vote requirement to incur public debt as violative of the Fourteenth Amendment.
The Constitution of West Virginia and certain West Virginia statutes provide that political subdivisions of the State may not incur bonded indebtedness or increase tax rates beyond those established by the Constitution without the approval of 60% of the voters in a referendum election.
On April 29, 1968, the Board of Education of Roane County, West Virginia, submitted to the voters of Roane County a proposal calling for the issuance of general obligation bonds in the amount of $1,830,000 for the purpose of constructing new school buildings and improving existing educational facilities. At the same election, by separate ballot, the voters were asked to authorize the Board of Education to levy additional taxes to support current expenditures and capital improvements. Of the total votes cast, 51.55% favored the bond issues and 51.51% favored the tax levy. Having failed to obtain the requisite 60% affirmative vote, the proposals were declared defeated.
. Following the election, respondents appeared before the Board of Education on behalf of themselves and other persons who had voted in favor of the proposals and demanded that the Board authorize the bonds and the additional taxes. -The Board- refused.'
Respondents then brought this action, seeking a declaratory judgment that the 60% requirements were unconstitutional as violative of the Fourteenth Amendment. In their complaint they alleged that the Roane County^ schools had been basically unimproved since 1946 and fell far below the state average, both in classroom size and facilities. They further alleged that four similar proposals had been previously defeated, although each had received majorities of affirmative votes ranging from 52.51% to 55.84%. The West Virginia trial court dismissed the complaint. On appeal, the West Virginia Supreme Court of Appeals reversed, holding that the state constitutional and. statutory 60% requirements violated the Equal Protection Clause of the Fourteenth Amendment. 153 W. Va. 559, 170 S. E. 2d 783 (1969). We granted certiorari, 397 U. S. 1020 (1970), and for the reasons set forth below, we reverse.
The eourt below relied heavily on two of our holdings dealing with limitations on the right to vote and dilution of voting power. The first was Gray v. Sanders, 372 U. S. 368 (1963), which held that Georgia’s county-unit system violated the Equal Protection Clause, because the votes of primary electors in one county were accorded less weight than the votes of electors in other counties.' The second was Cipriano v. City of Houma, 395 U. S. 701 (1969), in which we held impermissible the limitation to “property taxpayers”' of the right to vote in a revenue bond referendum. From these cases the state court' concluded that West Virginia’s requirement was constitutionally defective, because the votes of those who favored the issuance of the bonds had a proportionately smaller impact on the outcome of the election than the votes of those who opposed issuance of the bonds.
We conclude that the West Virginia court’s reliance on the Gray and Cipriano cases was misplaced. The defect this Court found in those cases lay in the denial or dilution of voting power because of group characteristics — geographic location and property ownership — that bore no valid relation to the interest of those groups in the subject matter of the election; moreover, the dilution or denial was imposed irrespective of how members of those groups actually voted.
. Thus in Gray, supra, at 381 n. 12, we held that the county-unit system would have been defective even if unit votes were allocated strictly in proportion to population. We noted that if a candidate received 60% of the votes cast in a particular county he would receive that county’s entire unit vote, the 40% east for the other candidates being discarded. The defect, however, continued to be geographic discrimination. Votes for the losing candidates were discarded solely because of the county where the votes were cast. Indeed, votes for the winning candidate in a county were likewise devalued, because all marginal votes for him would be discarded and would have no impact on the statewide total.
Cipriano was no more than a reassertion of the principle, consistently recognized, that an individual may not be denied access to the ballot because of some extraneous condition, such as race, e. g., Gomillion v. Lightfoot, 364 U. S. 339 (1960); wealth, e. g., Harper v. Virginia Board of Elections, 383 U. S. 663 (1966); tax status, e. g., Kramer v. Union Free School Dist., 395 U. S. 621 (1969) ; or military status, e. g., Carrington v. Rash, 380 U. S. 89 (1965).
Unlike the restrictions in our previous cases, the West Virginia Constitution singles out no “discrete and insular minority” for special treatment. The three-fifths requirement applies equally to all bond issues for any purpose, whether for schools, sewers, or highways. We are not, therefore, presented with a case like Hunter v. Erickson, 393 U. S. 385 (1969), in which fair housing legislation alone was subject to an automatic referendum requirement.
The class singled out in Hunter was clear — “those-who would benefit from laws barring racial, religious, or ancestral discriminations,” supra, at 391. In contrast we can discern no independently identifiable group or category that favors bonded indebtedness over other forms of financing. Consequently no sector of the population may be said to be “fenced out” from the franchise because of the way they will vote. Cf. Carrington v. Rash, supra, at 94.
Although West Virginia has not denied any group access to the ballot, it has indeed made it more difficult for some kinds of governmental actions to be taken. Certainly any departure from strict majority rule gives disproportionate power to the minority. • But there is nothing in the language, of the Constitution, our history, or our cases that requires that a majority always prevail on every issue. • On the contrary, while we have recognized that state officials are normally chosen by a vote of the majority of the electorate, we have found no constitutional barrier to the selection of a Governor by a state legislature, after no candidate received a majority of the popular vote. Fortson v. Morris, 385 U. S. 231 (1966).
The Federal Constitution itself provides that a simple ■ majority vote is. insufficient on some issues; the provisions . on impeachment and ratification of treaties are but two examples. Moreover, the Bill of Rights removes entire areas of legislation from the. concept of majoritarian supremacy. The constitutions of. many States prohibit or severely limit the power of the legislature to levy new taxes or to create or increase bonded indebtedness, thereby insulating. entire areas from majority control. Whether these matters, of finance and taxation are to be considered as less “important” than matters of treaties, foreign policy, or impeachment of public officers is more properly left to the determination by the States and the people than to the courts operating under the broad mandate of the Fourteenth Amendment. It must be remembered that in voting to issue bonds voters are committing, in part, the credit of infants and of generations yet unborn; and some restriction on such commitment is not an unreasonable demand. That the bond issue may have the desirable objective of providing better education for future generations goes to the wisdom of an indebtedness limitation: it does not alter the basic fact that the balancing of interests is one for the State to resolve.
Wisely or not, the people of the State of West Virginia have long since resolved to remove from a simple majority vote the choice on certain decisions as to what indebtedness may be incurred and . what taxes their children will bear.
We conclude that so long as such provisions do not discriminate against or authorize discrimination against any identifiable class they do not violate the Equal Protection Clause. We see no meaningful distinction between such absolute provisions on debt,. changeable only by constitutional amendment, and provisions that legislative decisions on the same issues require more than a majority vote in the legislature. On the contrary, these latter provisions may, in practice, be less burdensome than the amendment process. Moreover, the same considerations apply whén the ultimate power, rather than being delegated to the legislature, remains with the people, by way of a referendum. Indeed, we see no constitutional distinction between the 60% requirement in the present- case and a state requirement that a given issue be approved by a majority of all registered voters.' Cf. Clay v. Thornton, 253 S. C. 209, 169 S. E. 2d 617 (1969), appeal dismissed sub nom. Turner v. Clay, 397 U. S. 39 (1970).
That West Virginia has adopted a rule of decision, applicable to all bond referenda, by which the strong consensus of three-fifths is required before indebtedness is authorized, does not violate the Equal Protection Clause or any other provision of the Constitution.
Reversed.
While Cipriano involved.a denial of the vote, a percentage reduction of an individual’s voting power in proportion to the amount of property he owned would be similarly defective. See Stewart v. Parish School Board, 310 F. Supp. 1172 (ED La.), aff’d, 400 U. S. 884 (1970).
E. g.,..Indiana Constitution, Art. 10, § 5; Ohio Constitution, Art. 8, § 3; Texas Constitution, Art. 3, § 49; Wisconsin Constitution, Art. 8, § 4.
Compare Reitman v. Mulkey, 387 U. S. 369 (1967).
Some 14 States require an amendment to be apbroved- by two sessions of the legislature, before submission to the people. West Virginia’s- Constitution, Art. 14, § 2, provides for approval by two-thirds of a single legislature and a majority of the voters.
In practice, the latter requirement would be far more burdensome than a 60% requirement. There were 8,913 registered voters in Roane County in 1968, of whom 5,600 voted in the referendum at issue. If a majority of all eligible voters had been required, approval would have required the affirmative votes of over 79% of those voting. See'State of West Virginia, Official Returns of 1970 Primary Election (including the 1968 registration figures).
We intimate no view on the constitutionality of a provision requiring unanimity or giving a veto power to a very small group. Nor do we decide whether a State may, consistently with the Constitution, require extraordinary majorities for the election of public officers. ; | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
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"Comptroller General",
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"National Mediation Board",
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"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
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"Small Business Administration",
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] | [
116
] |
HILLSBOROUGH COUNTY, FLORIDA, et al. v. AUTOMATED MEDICAL LABORATORIES, INC.
No. 83-1925.
Argued April 16, 1985
Decided June 3, 1985
MARSHALL, J., delivered the opinion for a unanimous Court.
Emetine C. Acton argued the cause for appellants. With her on the briefs was Joe Horn Mount.
Paul J. Larkin, Jr., argued the cause pro hac vice for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General Lee, Acting Assistant Attorney General Willard, Deputy Solicitor General Geller, and Margaret E. Clark.
Larry A. Stumpf argued the cause for appellee. With him on the brief was Victoria L. Baden.
Richard Landfield argued the cause for the American Blood Resources Association et al. as amici curiae urging affirmance. With him on the brief was William W. Becker.
Benjamin W. Heineman, Jr., filed a brief for the National Association of Counties et al. as amici curiae urging reversal.
Briefs of amici curiae urging affirmance were filed for the American Blood Commission by Michael H. Cardozo; and for Grocery Manufacturers of America, Inc., by Peter Barton Hutt.
Justice Marshall
delivered the opinion of the Court.
The question presented is whether the federal regulations governing the collection of blood plasma from paid donors pre-empt certain local ordinances.
t — I
Appellee Automated Medical Laboratories, Inc., is a Florida corporation that operates, through subsidiaries, eight blood plasma centers in the United States. One of the centers, Tampa Plasma Corporation (TPC), is located in Hillsborough County, Florida. Appellee’s plasma centers collect blood plasma from donors by employing a procedure called plasmapheresis. Under this procedure, whole blood removed from the donor is separated into plasma and other components, and “at least the red blood cells are returned to the donor,” 21 CFR § 606.3(e) (1984). Appellee sells the plasma to pharmaceutical manufacturers.
Vendors of blood products, such as TPC, are subject to federal supervision. Under § 351(a) of the Public Health Service Act, 58 Stat. 702, as amended, 42 U. S. C. § 262(a), such vendors must be licensed by the Secretary of Health and Human Services (HHS). Licenses are issued only on a showing that the vendor’s establishment and blood products meet certain safety, purity, and potency standards established by the Secretary. 42 U. S. C. § 262(d). HHS is authorized to inspect such establishments for compliance. § 262(c).
Pursuant to § 351 of the Act, the Food and Drug Administration (FDA), as the designee of the Secretary, has established standards for the collection of plasma. 21 CFR §§640.60-640.76 (1984). The regulations require that a licensed physician determine the suitability of a donor before the first donation and thereafter at subsequent intervals of no longer than one year. § 640.63(b)(1). A physician must also inform the donor of the hazards of the procedure and obtain the donor’s consent, §640.61, and must be on the premises when the procedure is performed, §640.62. In addition, the regulations establish minimum standards for donor eligibility, §§640.63(c)-(d), specify procedures that must be followed in performing plasmapheresis, § 640.65, and impose labeling requirements, §640.70.
In 1980, Hillsborough County adopted Ordinances 80-11 and 80-12. Ordinance 80-11 imposes a $225 license fee on plasmapheresis centers within the county. It also requires such centers to allow the County Health Department “reasonable and continuing access” to their premises for inspection purposes, and to furnish information deemed relevant by the Department. See App. 21-23.
Ordinance 80-12 establishes a countywide identification system, which requires all potential donors to obtain from the County Health Department an identification card, valid for six months, that may be used only at the plasmapheresis center specified on the card. The ordinance incorporates by reference the FDA’s blood plasma regulations, but also imposes donor testing and recordkeeping requirements beyond those contained in the federal regulations. Specifically, the ordinance requires that donors be tested for hepatitis prior to registration, that they donate at only one center, and that they be given a breath analysis for alcohol content before each plasma donation. See id., at 24-31.
The county has promulgated regulations to implement Ordinance 80-12. The regulations set the fee for the issuance of an identification card to a blood donor at $2. They also establish that plasma centers must pay the county a fee of $1 for each plasmapheresis procedure performed. See id., at 32-34.
In December 1981, appellee filed suit in the United States District Court for the Middle District of Florida, challenging the constitutionality of the ordinances and their implementing regulations. Appellee argued primarily that the ordinances violated the Supremacy Clause, the Commerce Clause, and the Fourteenth Amendment’s Equal Protection Clause. Ap-pellee sought a declaration that the ordinances were unlawful and a permanent injunction against their enforcement. Id., at 5-20.
In November 1982, following a bench trial, the District Court upheld all portions of the local ordinances and regulations except the requirement that donors be subject to a breath-analysis test. Id., at 40-46. The court rejected the Supremacy Clause challenge, discerning no evidence of federal intent to pre-empt the whole field of plasmapheresis regulation and finding no conflict between the Hillsborough County ordinances and the federal regulations.
In addition, the District Court rejected the claim that the ordinances violate the Equal Protection Clause because they regulate only centers that pay donors for plasma, and not centers in which volunteers donate whole blood. The court identified a rational basis for the distinction: paid donors sell plasma more frequently than volunteers donate whole blood, and paid donors have a higher rate of hepatitis than do volunteer donors.
Finally, the District Court found that, with one exception, the ordinances do not impermissibly burden interstate commerce. It concluded that the breath-analysis requirement would impose a large burden on plasma centers by forcing them to purchase fairly expensive testing equipment, and was not shown to achieve any purpose not adequately served by the subjective evaluations of sobriety already required by the federal regulations.
Automated Medical Laboratories appealed to the Court of Appeals for the Eleventh Circuit, which affirmed in part and reversed in part. 722 F. 2d 1526 (1984). The Court of Appeals held that the FDA’s blood plasma regulations pre-empt all provisions of the county’s ordinances and regulations. The court acknowledged the absence of an express indication of congressional intent to pre-empt. Relying on the pervasiveness of the FDA’s regulations and on the dominance of the federal interest in plasma regulation, however, it found an implicit intent to pre-empt state and local laws on that subject. In addition, the court found a serious danger of conflict between the FDA regulations and the Hillsborough County ordinances, reasoning that “[i]f the County scheme remains in effect, the national blood policy of promoting uniformity and guaranteeing a continued supply of healthy donors will be adversely affected.” Id., at 1533.
The Court of Appeals thus affirmed, albeit on other grounds, the District Court’s invalidation of the breath-analysis requirement. It reversed the District Court’s judgment upholding the remaining requirements of the Hillsborough County ordinances and regulations. In view of its decision, the court did not reach the Commerce Clause and Equal Protection challenges to the county’s scheme. Ibid.
Hillsborough County and the County Health Department appealed to this Court pursuant to 28 U. S. C. § 1254(2). We noted probable jurisdiction, 469 U. S. 1156 (1984), and we now reverse.
I — I I — I
It is a familiar and well-established principle that the Supremacy Clause, U. S. Const., Art. VI, cl. 2, invalidates state laws that “interfere with, or are contrary to,” federal law. Gibbons v. Ogden, 9 Wheat. 1, 211 (1824) (Marshall, C. J.). Under the Supremacy Clause, federal law may supersede state law in several different ways. First, when acting within constitutional limits, Congress is empowered to pre-empt state law by so stating in express terms. Jones v. Rath Packing Co., 430 U. S. 519, 525 (1977). In the absence of express pre-emptive language, Congress’ intent to preempt all state law in a particular area may be inferred where the scheme of federal regulation is sufficiently comprehensive to make reasonable the inference that Congress “left no room” for supplementary state regulation. Rice v. Santa Fe Elevator Corp., 331 U. S. 218, 230 (1947). Pre-emption of a whole field also will be inferred where the field is one in which “the federal interest is so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject.” Ibid.; see Hines v. Davidowitz, 312 U. S. 52 (1941).
Even where Congress has not completely displaced state regulation in a specific area, state law is nullified to the extent that it actually conflicts with federal law. Such a conflict arises when “compliance with both federal and state regulations is a physical impossibility,” Florida Lime & Avocado Growers, Inc. v. Paul, 373 U. S. 132, 142-143 (1963), or when state law “stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress,” Hines v. Davidowitz, supra, at 67. See generally Capital Cities Cable, Inc. v. Crisp, 467 U. S. 691, 698-699 (1984).
We have held repeatedly that state laws can be pre-empted by federal regulations as well as by federal statutes. See, e. g., Capital Cities Cable, Inc. v. Crisp, supra, at 699; Fidelity Federal Savings & Loan Assn. v. De la Cuesta, 458 U. S. 141, 153-154 (1982); United States v. Shimer, 367 U. S. 374, 381-383 (1961). Also, for the purposes of the Supremacy Clause, the constitutionality of local ordinances is analyzed in the same way as that of statewide laws. See, e. g., City of Burbank v. Lockheed Air Terminal, Inc., 411 U. S. 624 (1973).
I — i HH
In arguing that the Hillsborough County ordinances and regulations are pre-empted, appellee faces an uphill battle. The first hurdle that appellee must overcome is the FDA’s statement, when it promulgated the plasmapheresis regulations in 1973, that it did not intend its regulations to be exclusive. In response to comments expressing concern that the regulations governing the licensing of plasmaphere-sis facilities “would pre-empt State and local laws governing plasmapheresis,” the FDA explained in a statement accompanying the regulations that “[t]hese regulations are not intended to usurp the powers of State or local authorities to regulate plasmapheresis procedures in their localities.” 38 Fed. Reg. 19365 (1973).
The question whether the regulation of an entire field has been reserved by the Federal Government is, essentially, a question of ascertaining the intent underlying the federal scheme. See supra, at 712-713. In this case, appellee concedes that neither Congress nor the FDA expressly preempted state and local regulation of plasmapheresis. Thus, if the county ordinances challenged here are to fail they must do so either because Congress or the FDA implicitly pre-empted the whole field of plasmapheresis regulation, or because particular provisions in the local ordinances conflict with the federal scheme. According to appellee, two separate factors support the inference of a federal intent to pre-empt the whole field: the pervasiveness of the FDA’s regulations and the dominance of the federal interest in this area. Appellee also argues that the challenged ordinances reduce the number of plasma donors, and that this effect conflicts with the congressional goal of ensuring an adequate supply of plasma.
The FDA’s statement is dispositive on the question of implicit intent to pre-empt unless either the agency’s position is inconsistent with clearly expressed congressional intent, see Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, 842-845 (1984), or subsequent developments reveal a change in that position. Given appel-lee’s first argument for implicit pre-emption — that the comprehensiveness of the FDA’s regulations evinces an intent to pre-empt — any pre-emptive effect must result from the change since 1973 in the comprehensiveness of the federal regulations. To prevail on its second argument for implicit pre-emption — the dominance of the federal interest in plas-mapheresis regulation — appellee must show either that this interest became more compelling since 1973, or that, in 1973, the FDA seriously underestimated the federal interest in plasmapheresis regulation.
The second obstacle in appellee’s path is the presumption that state or local regulation of matters related to health and safety is not invalidated under the Supremacy Clause. Through the challenged ordinances, Hillsborough County has attempted to protect the health of its plasma donors by preventing them from donating too frequently. See Brief for Appellants 12. It also has attempted to ensure the quality of the plasma collected so as to protect, in turn, the recipients of such plasma. “Where . . . the field that Congress is said to have pre-empted has been traditionally occupied by the States ‘we start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.’” Jones v. Rath Packing Co., 430 U. S., at 525 (quoting Rice v. Santa Fe Elevator Corp., 331 U. S., at 230) (citations omitted). Cf. Kassel v. Consolidated Freightways Corp., 450 U. S. 662, 670 (1981) (deference to state regulation of safety under the dormant Commerce Clause); id., at 681, n. 1 (Brennan, J., concurring in judgment) (same); id., at 691 (Rehnquist, J., dissenting) (same). Of course, the same principles apply where, as here, the field is said to have been pre-empted by an agency, acting pursuant to congressional delegation. Appellee must thus present a showing of implicit pre-emption of the whole field, or of a conflict between a particular local provision and the federal scheme, that is strong enough to overcome the presumption that state and local regulation of health and safety matters can constitutionally coexist with federal regulation.
HH <
Given the clear indication of the FDA’s intention not to preempt and the deference with which we must review the challenged ordinances, we conclude that these ordinances are not pre-empted by the federal scheme.
A
We reject the argument that an intent to pre-empt may be inferred from the comprehensiveness of the FDA’s regulations at issue here. As we have pointed out, given the FDA’s 1973 statement, the relevant inquiry is whether a finding of pre-emption is justified by the increase, since 1973, in the comprehensiveness of the federal regulations. Admittedly, these regulations have been broadened over the years. When they were adopted in 1973, these regulations covered only plasma to be used in injections. In 1976, the regulations were expanded to cover also plasma to be used for the manufacture of “noninjectable” products. 41 Fed. Reg. 10762 (1976). The original regulations also were amended to “clarify and strengthen the existing Source Plasma (Human) regulations in light of FDA inspectional and other regulatory experience.” Ibid.; see also 39 Fed. Reg. 26161 (1974) (first proposing the amendments).
The FDA has not indicated that the new regulations affected its disavowal in 1973 of any intent to pre-empt state and local regulation, and the fact that the federal scheme was expanded to reach other uses of plasma does not cast doubt on the continued validity of that disavowal. Indeed, even in the absence of the 1973 statement, the comprehensiveness of the FDA’s regulations would not justify pre-emption. In New York Dept. of Social Services v. Dublino, 413 U. S. 405 (1973), the Court stated that “[t]he subjects of modern social and regulatory legislation often by their very nature require intricate and complex responses from the Congress, but without Congress necessarily intending its enactment as the exclusive means of meeting the problem.” Id., at 415. There, in upholding state work-incentive provisions against a pre-emption challenge, the Court noted that the federal provisions “had to be sufficiently comprehensive to authorize and govern programs in States which had no . . . requirements of their own as well as cooperatively in States with such requirements.” Ibid. But merely because the federal provisions were sufficiently comprehensive to meet the need identified by Congress did not mean that States and localities were barred from identifying additional needs or imposing further requirements in the field. See also De Canas v. Bica, 424 U. S. 351, 359-360 (1976).
We are even more reluctant to infer pre-emption from the comprehensiveness of regulations than from the comprehensiveness of statutes. As a result of their specialized functions, agencies normally deal with problems in far more detail than does Congress. To infer pre-emption whenever an agency deals with a problem comprehensively is virtually tantamount to saying that whenever a federal agency decides to step into a field, its regulations will be exclusive. Such a rule, of course, would be inconsistent with the federal-state balance embodied in our Supremacy Clause jurisprudence. See Jones v. Rath Packing Co., 430 U. S., at 525.
Moreover, because agencies normally address problems in a detailed manner and can speak through a variety of means, including regulations, preambles, interpretive statements, and responses to comments, we can expect that they will make their intentions clear if they intend for their regulations to be exclusive. Thus, if an agency does not speak to the question of pre-emption, we will pause before saying that the mere volume and complexity of its regulations indicate that the agency did in fact intend to pre-empt. Given the presumption that state and local regulation related to matters of health and safety can normally coexist with federal regulations, we will seldom infer, solely from the comprehensiveness of federal regulations, an intent to pre-empt in its entirety a field related to health and safety.
Appellee also relies on the promulgation of the National Blood Policy by the Department of Health, Education, and Welfare (HEW), as an indication that the federal regulatory scheme is now comprehensive enough to justify complete preemption. See Brief for Appellee 25-26. Such reliance is misplaced.
The National Blood Policy was established in 1974 as “a pluralistic and evolutionary approach to the solution of blood collection and distribution problems.” 39 Fed. Reg. 32702 (1974). The policy contains no regulations; instead, it is a broad statement of goals and a call for cooperation between the Federal Government and the private sector:
“These policies are intended to achieve certain goals but do not detail methods of implementation. In developing the most effective and suitable means of reaching these goals, the Secretary will involve, as appropriate, all relevant public and private sectors and Federal Government agencies in a cooperative effort to provide the best attainable blood services.” Id., at 32703.
The National Blood Policy indicates that federal regulation will be employed only as a last resort: “[I]f the private sector is unable to make satisfactory progress toward implementing these policies, a legislative and/or regulatory approach would have to be considered.” Ibid. The adoption of this policy simply does not support the claim that the federal regulations have grown so comprehensive since 1973 as to justify the inference of complete pre-emption.
B
Appellee’s second argument for pre-emption of the whole field of plasmapheresis regulation is that an intent to preempt can be inferred from the dominant federal interest in this field. We are unpersuaded by the argument. Undoubtedly, every subject that merits congressional legislation is, by definition, a subject of national concern. That cannot mean, however, that every federal statute ousts all related state law. Neither does the Supremacy Clause require us to rank congressional enactments in order of “importance” and hold that, for those at the top of the scale, federal regulation must be exclusive.
Instead, we must look for special features warranting preemption. Our case law provides us with clear standards to guide our inquiry in this area. For example, in the seminal case of Hines v. Davidowitz, 312 U. S. 52 (1941), the Court inferred an intent to pre-empt from the dominance of the federal interest in foreign affairs because “the supremacy of the national power in the general field of foreign affairs ... is made clear by the Constitution,” id., at 62, and the regulation of that field is “intimately blended and intertwined with responsibilities of the national government,” id., at 66; see also Zschernig v. Miller, 389 U. S. 429, 440-441 (1968). Needless to say, those factors are absent here. Rather, as we have stated, the regulation of health and safety matters is primarily, and historically, a matter of local concern. See Rice v. Santa Fe Elevator Corp., 331 U. S., at 230.
There is also no merit in appellee’s reliance on the National Blood Policy as an indication of the dominance of the federal interest in this area. Nothing in that policy takes plasma regulation out of the health-and-safety category and converts it into an area of overriding national concern.
C
Appellee’s final argument is that even if the regulations are not comprehensive enough and the federal interest is not dominant enough to pre-empt the entire field of plasmaphere-sis regulation, the Hillsborough County ordinances must be struck down because they conflict with the federal scheme. Appellee argues principally that the challenged ordinances impose on plasma centers and donors requirements more stringent than those imposed by the federal regulations, and therefore that they present a serious obstacle to the federal goal of ensuring an “adequate supply of plasma.” Tr. of Oral Arg. 24; see Brief for Appellee 30; 37 Fed. Reg. 17420 (1972). We find this concern too speculative to support pre-emption.
Appellee claims that “[t]he evidence at trial indicated that enforcement of the County ordinances would result in an increase in direct costs of plasma production by $1.50 per litre, and a total increase in production costs (including direct and indirect costs) of $7 per litre of plasma, an increase of approximately 15% in the total cost of production.” Brief for Appellee 30. Appellee argues that these increased financial burdens would reduce the number of plasma centers. In addition, appellee claims, the county requirements would reduce the number of donors who only occasionally sell their plasma because such donors would be deterred by the identification-card requirement. Id., at 30-31.
On the basis of the record before it, the District Court rejected each of appellee’s factual assertions. The District Court found that appellee’s cost-of-compliance estimates “were clouded with speculation.” App. 42. It also found that appellee had presented no facts to support its conclusion that “the vendor population would decrease by twenty-five percent.” Ibid. These findings of fact can be set aside only if they are clearly erroneous, Fed. Rule Civ. Proc. 52(a); see Anderson v. Bessemer City, 470 U. S. 564 (1985), and hence come to us with a strong presumption of validity.
More importantly, even if the Hillsborough County ordinances had, in fact, reduced the supply of plasma in that county, it would not necessarily follow that they interfere with the federal goal of maintaining an adequate supply of plasma. Undoubtedly, overly restrictive local legislation could threaten the national plasma supply. Neither Congress nor the FDA, however, has struck a particular balance between safety and quantity; as we have noted, the regulations, which contemplated additional state and local requirements, merely establish minimum safety standards. See 38 Fed. Reg. 19365 (1973); supra, at 710-711. Moreover, the record in this case does not indicate what supply the Federal Government considers “adequate,” and we have no reason to believe that any reduction in the quantity of plasma donated would make that supply “inadequate.”
Finally, the FDA possesses the authority to promulgate regulations pre-empting local legislation that imperils the supply of plasma and can do so with relative ease. See swpra, at 713. Moreover, the agency can be expected to monitor, on a continuing basis, the effects on the federal program of local requirements. Thus, since the agency has not suggested that the county ordinances interfere with federal goals, we are reluctant in the absence of strong evidence to find a threat to the federal goal of ensuring sufficient plasma.
Our analysis would be somewhat different had Congress not delegated to the FDA the administration of the federal program. Congress, unlike an agency, normally does not follow, years after the enactment of federal legislation, the effects of external factors on the goals that the federal legislation sought to promote. Moreover, it is more difficult for Congress to make its intentions known — for example by amending a statute — than it is for an agency to amend its regulations or to otherwise indicate its position.
In summary, given the findings of the District Court, the lack of any evidence in the record of a threat to the “adequacy” of the plasma supply, and the significance that we attach to the lack of a statement by the FDA, we conclude that the Hillsborough County requirements do not imperil the federal goal of ensuring sufficient plasma.
Appellee also argues that the county ordinances conflict with the federal regulations because they prevent individuals with hepatitis from donating their plasma. See supra, at 710. Such plasma is used for the production of hepatitis vaccines, and the federal regulations provide for its collection pursuant to special authorization and under carefully controlled conditions. 21 CFR § 610.41 (1984). To the extent that the Hillsborough County ordinances preclude individuals with hepatitis from donating their plasma, the ordinances are said to stand in the way of the accomplishment of the federal goal of combating hepatitis.
In order to collect plasma from individuals with hepatitis, however, a plasma center must obtain from the FDA, pursuant to §640.75, an exemption from the good-health requirements of § 640.63(c). The record does not indicate that appellee has received the required exemption. As a result, appellee could not collect plasma from individuals with hepatitis even in the absence of the county ordinances. Thus, appellee lacks standing to challenge the ordinances on this ground.
V
We hold that Hillsborough County Ordinances 80-11 and 80-12, and their implementing regulations, are not preempted by the scheme for federal regulation of plasmaphere-sis. The judgment of the Court of Appeals for the Eleventh Circuit is therefore reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
For the purposes of § 1254(2), local ordinances are treated in the same manner as state statutes. See, e. g., New Orleans v. Dukes, 427 U. S. 297, 301 (1976) (per curiam); Doran v. Salem Inn, Inc., 422 U. S. 922, 927, n. 2 (1975).
Appellee does not argue that pre-emption can be inferred from the comprehensiveness of the federal statutes governing plasmapheresis.
Nor do the amendments to the 1973 regulations indicate that the FDA was departing from its earlier statement; most of the changes are technical and provide no basis for inferring an intent that federal regulation be exclusive.
It follows that the FDA’s 1973 statement did not underestimate the federal interest in plasmapheresis regulation.
Two of the amici argue that the county ordinances interfere with the federal interest in uniform plasma standards. There is no merit to that argument. The federal interest at stake here is to ensure minimum standards, not uniform standards. Indeed, the FDA’s 1973 statement makes clear that additional, nonconflicting requirements do not interfere with federal goals, and we have found no reason to doubt the continued validity of that statement. See supra, at 714.
Since the ordinances incorporate the FDA’s regulations, see supra, at 710, they may in fact also provide for the type of exemptions authorized by 21 CFR § 640.75 (1984). If the ordinances were interpreted that way there would be, of course, no conflict. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
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] | [
116
] |
UNITED STATES v. BENEDICT et al., TRUSTEES, et al.
No. 45.
Argued November 8, 1949.
Decided February 13, 1950.
Arnold Raum argued the cause for the United States. Solicitor General Perlman, Assistant Attorney General Caudle, Ellis N. Slack, Lee A. Jackson and Helen Goodner filed a brief for the United States.
Theodore Pearson argued the cause for respondents. With him on the brief was John W. Drye, Jr.
Mr. Justice Burton
delivered the opinion of the Court.
The question presented is whether trustees, who, in 1944, permanently set aside a charitable contribution from gains realized upon the disposition of capital assets held for more than six months, were entitled, in computing the federal income tax of the trust, to deduct the full amount of the contribution, although only half of those gains were taken into account in computing net income. For the reasons hereafter stated, our answer is in the negative.
The respondents are trustees of a trust created by the will of John E. Andrus. The will directs that the net income of the trust be divided into 100 parts, 55 to be paid to certain individual beneficiaries and 45 to the Surdna Foundation, Inc., a charitable corporation. Pursuant to those terms the trustees permanently set aside for the Foundation 45% of the trust’s net income for the fiscal year ended April 30, 1944, the period involved in this case.
In their fiduciary tax return, the trustees reported ordinary net income of $240,567.73, and deducted from it, as a charitable contribution, the $108,255.48 (45% of that net income) which they had set aside for the Surdna Foundation. This was done under § 162 (a) of the Internal Revenue Code. The trustees also reported gains of $60,374.01 on the disposition of capital assets held for more than six months. Of these gains, they took into account only 50%, amounting to $30,187.01, in computing the trust’s taxable income. This was done under § 117 (b). An uncontroverted deduction of $329.60, representing the carry-over of a 1942 loss, reduced this amount to $29,857.41. From this the trustees deducted 45%, representing a proportionate share of the trust’s contribution to the Surdna Foundation. This deduction amounted to $13,435.83, leaving a taxable net income of $16,421.58, on which a tax of $5,480.35 was paid, plus interest.
In 1947 the trustees filed a claim for a refund of $5,157.41. They based their claim upon a 1946 decision of the Tax Court as to the 1941 taxes of a nearly identical trust. Andrus Trust No. 1 v. Commissioner, 7 T. C. 573. On that basis, the trustees claimed a deduction from the aforesaid $29,857.41, not only of a proportionate share of the contribution which the trust had set aside from capital gains, but of the entire amount of that contribution. This increased that deduction from $13,435.83 (45% of $29,857.41) to $27,168.31 (45% of the total capital gains of $60,374.01), and correspondingly reduced the trust’s taxable net income from $16,421.58 to $2,689.10.
In July, 1947, the Court of Appeals for the Second Circuit unanimously reversed the Tax Court in the case relating to 1941 taxes. Commissioner v. Central Hanover Bank Co., 163 F. 2d 208, cert. denied, November, 1947, 332 U. S. 830. The Commissioner, however, took no action on the trustees’ claim for a refund relating to 1944 taxes, and, in 1948, the trustees filed this proceeding for its recovery through the Court of Claims. With one judge dissenting, that court decided in their favor. 112 Ct. Cl. 550, 81 F. Supp. 717. To resolve the resulting conflict, we granted certiorari. 336 U. S. 966.
An illustration based upon the facts in the instant case will bring the statutory problem into clearer focus. A trust realizes gains of $60,000 during the tax year from the sale of capital assets held for more than six months. From these it makes a charitable contribution of 50%. Section 162 (a) of the Code provides that a trust may deduct any part of its “gross income” which it contributes to such a charity as the one selected. Section 117 (b) provides that only 50% of such gains shall be taken into account in computing net income.
The trustees contend that, for tax purposes, the entire $60,000 is “gross income,” that from this amount the $30,000 charitable contribution may be deducted under § 162 (a), and that the entire remaining $30,000 is to be left out of account by force of § 117 (b), thereby leaving no taxable net income, although $30,000 goes to individual beneficiaries. The Commissioner, however, contends that only the $30,000 of the recognized capital gains that is taken into account by force of § 117 (b) constitutes “gross income,” and that necessarily the other $30,000 that is not to be taken into account for tax purposes is not “gross income.” Beginning, thus, with $30,000 of gross income, the Commissioner allows a deduction from it of that proportionate part of the charitable contribution that is attributable to the half of the recognized capital gains which has been taken into account. That deduction amounts to $15,000, leaving a taxable net income of $15,000.
The narrow statutory question thus presented is whether the entire recognized capital gains or only that half taken into account under § 117 (b) shall constitute gross income for tax purposes. Stated conversely, the question is whether that half of a taxpayer’s recognized capital gains that is not taken into account for tax purposes shall be left out of account by way of its initial exclusion from gross income, or by way of its subsequent deduction from gross income. On this precise question the Code is silent. No provision of the Code and nothing in the legislative history or administrative practice expressly settles the course to be followed. We, therefore, seek the purposes of the applicable sections of the Code and adopt that construction which best gives effect to those purposes.
We find that the obvious purpose of § 162 (a) is to encourage the making of charitable contributions out of the gross income of a trust and, to that end, it completely exempts such contributions from income tax, without the limitations imposed upon charitable contributions made by individuals or corporations. This purpose is served by each of the constructions of the Code suggested by the parties. Under either method of computation the beneficiaries of the charitable contribution will receive it in full and free of tax.
We then find that the effect of § 117 (b) is to tax recognized capital gains like ordinary income, except that the tax on capital gains held for more than six months is to be computed on 50% of the amount on which it would be computed if those gains were ordinary income. The Commissioner’s solution accomplishes precisely that result and thus serves that purpose. In the illustration, if the gains were ordinary income, the amount subject to tax, after the deduction of the charitable contribution, would be $30,000. As it is, the amount subject to tax is $15,000. The trustees’ construction in the instant case would result in taxing the capital gains at substantially less than 50% of the amount at which they would be taxed if they were ordinary income. To the extent that the amount subject to tax goes below that percentage, it fails to give effect to the purpose of § 117 (b). In the more extreme circumstances suggested by the illustration, this construction would entirely eliminate the tax.
We, therefore, approve that interpretation of § 117 (b) and the definition of statutory gross income adopted by the Commissioner. We treat the words in § 117 (b), which state that only 50% of certain recognized capital gains “shall be taken into account in computing . . . net income,” as applying to the entire computation of the tax, beginning with the statement of the gross income of the trust and concluding with its taxable net income. We treat that percentage of capital gains which expressly is not to be taken into account in computing taxable net income as also excluded from statutory gross income.
Accordingly, the acceptance by the Commissioner of the original return is approved and the judgment of the Court of Claims is
Reversed.
Mr. Justice Black and Mr. Justice Jackson are of the opinion that the judgment of the Court of Claims should be affirmed for the reasons which it gave.
Mr. Justice Douglas took no part in the consideration or decision of this case.
Mr. Justice Frankfurter.
The contrariety of views expressed by the Tax Court, the Court of Appeals for the Second Circuit, the Court of Claims and now by this Court in the task of harmonizing §§ 22 (a), 117 (b) and 162 (a) of the Internal Revenue Code conclusively proves the opaqueness, if not inherent incongruity, of those provisions. Courts must do the best they can with such materials since the power to write or rewrite legislation is not theirs. But the fact that a taxpayer may astutely apply his income so as to reduce the net base on which a tax is to be levied is not in itself ground for rejecting a construction of the Revenue Code which permits the reduced base, even though the particular mode of distributing his income may not have been contemplated in the enactment of the classes of exemptions and deductions within which the taxpayer brings himself. I, too, recoil from a bizarre result and if legislation is ambiguous its construction should avoid such a result. But the rationale of construction ought not to be based on the impact of a single bizarre instance.
A deduction for trust income applied to charitable purposes should not be disallowed merely because one taxpayer can effect the payment of a lower income tax than another through the mode by which the charitable contribution is made. Thus, where the trust instrument provides that all charitable donations shall be allocated from ordinary income and not from capital gains, the taxpayer may doubtless deduct such charitable contributions in full and may at the same time report any capital gains under the special capital gains provisions of the Code. This would secure the very benefits sought by the taxpayers here. The rule enunciated by the Court may therefore itself rest tax liability on the astuteness shown in drawing the trust instrument allocating income for charitable purposes.
Since I am not alone in entertaining these doubts and they have not been dispelled, it seems appropriate to express them.
“SEC. 162. NET INCOME.
“The net income of the estate or trust shall be computed in the same manner and on the same basis as in the case of an individual, except that—
“ (a) There shall be allowed as a deduction (in lieu of the deduction for charitable, etc., contributions authorized by section 23 (o)) any part of the gross income, without limitation, which pursuant to the terms of the will or deed creating the trust, is during the taxable year paid or permanently set aside for the purposes and in the manner specified in section 23 (o), or is to be used exclusively for religious, charitable, scientific, literary, or educational purposes, or for the prevention of cruelty to children or animals, or for the establishment, acquisition, maintenance or operation of a public cemetery not operated for profit; . . . .” (Emphasis supplied.) 53 Stat. 66, 26 U. S. C. §162 (a).
“SEC. 117. CAPITAL GAINS AND LOSSES.
. . . . .
“(b) Percentage Taken Into Account. — In the casé of a taxpayer, other than a corporation, only the following percentages of. the gain or loss recognized upon the sale or exchange of a capital asset shall be taken into account in computing net capital gain, net capital loss, and net income:
“100 per centum if the capital asset has been held for not more than 6 months;
“50 per centum if the capital asset has been held for more than 6 months.” 53 Stat. 50-51, as amended, 56 Stat. 843, 26 U. S. C. §117 (b).
The will creating the trust contained no provision as to the kind of income from which the charitable contributions were to be set aside, and it is not disputed that the trustees properly set aside the contributions proportionately from capital gains and all other income. There is nothing to indicate that the trustees, in setting aside the contribution, attempted to allocate them to any particular part or percentage of the capital gains. See Helvering v. Bliss, 293 U. S. 144, 149-150; Grey v. Commissioner, 118 F. 2d 153 (C. A. 7th Cir., affirming 41 B. T. A. 234); Scott v. United States, 111 Ct. Cl. 610, 618-620, 78 F. Supp. 811, 815-816; Newbury v. United States, 102 Ct. Cl. 192, 57 F. Supp. 168; Meissner v. Commissioner, 8 T. C. 780; Estate of Traiser v. Commissioner, 41 B. T. A. 228; Montgomery, Federal Taxes, Estates, Trusts and Gifts 179 (1948-1949); 2 Nossaman, Trust Administration and Taxation 115-116 (1945).
See note 1, supra.
See note 2, supra.
See note 1, supra.
See note 2, supra.
United States v. Pleasants, 305 U. S. 357, 363; Old Colony Trust Co. v. Commissioner, 301 U. S. 379, 384; Helvering v. Bliss, 293 U. S. 144, 147.
When the words “without limitation,” in § 162 (a), are read in connection with § 23 (o), 53 Stat. 12, 14-15, as amended, 53 Stat. 880, and 56 Stat. 826, 26 U. S. C. § 23 (o), their effect is only to make inapplicable the limitation of 15%, under § 23 (o), and any other statutory limitation which otherwise might apply to charitable contributions made out of the gross income of an estate or trust. Grey v. Commissioner, 41 B. T. A. 234, 243, aff’d, 118 F. 2d 153. See also, Old Colony Trust Co. v. Commissioner, 301 U. S. 379, 382-384; Commissioner v. Central Hanover Bank Co., 163 F. 2d 208, 211 (C. A. 2d Cir.); Frank Trust of 1931 v. Commissioner, 145 F. 2d 411, 413 (C. A. 3d Cir.); Scott v. United States, 111 Ct. Cl. 610, 618-620, 78 F. Supp. 811, 815-816; Newbury v. United States, 102 Ct. Cl. 192, 57 F. Supp. 168. For the comparable 5% limitation applicable to charitable contributions made by corporations, see 53 Stat. 15-16, as amended, 56 Stat. 822, 26 U. S. C. § 23 (q).
See note 2, supra. The alternative computation of the tax on capital gains provided by § 117 (c) (2) of the Code is consistent with this result. 53 Stat. 51, as amended, 56 Stat. 843-844, 26 U. S. C. § 117 (c) (2).
It is unnecessary to review the intricate arguments presented as to the terminology of the Code. They do not compel the adoption of either interpretation or preclude the conclusion here reached. This is not a case in which the trust or the statute has required or even authorized the trustees to earmark their charitable contributions as coming from any particular items of trust income, or from any particular kind of trust income. The issue does not involve any possible allocation of a charitable deduction to ordinary income rather than to capital gains.
For the requirement that, under § 162 (a), each contribution in order to be deductible must be made or permanently set aside pursuant to the terms of the will or deed creating the trust, and also must be from a part of the gross income of the trust, see Old Colony Trust Co. v. Commissioner, 301 U. S. 379; Frank Trust of 1931 v. Commissioner, 145 F. 2d 411 (C. A. 3d Cir.); Wellman v. Welch, 99 F. 2d 75 (C. A. 1st Cir.); Estate of Tyler v. Commissioner, 9 B. T. A. 255, 262-263.
See Commissioner v. Central Hanover Bank Co., 163 F. 2d 208, 210; Frank Trust of 1931 v. Commissioner, supra; Wellman v. Welch, supra; Green v. Commissioner, 7 T. C. 263, 277; Maloy v. Commissioner, 45 B. T. A. 1104, 1107. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
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"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
68
] |
PUBLIC SERVICE COMMISSION OF THE STATE OF NEW YORK v. FEDERAL POWER COMMISSION et al.
No. 459.
Decided December 14, 1959
Kent H. Brown and George H. Kenny for petitioner in No. 459.
J. David Mann, Jr. and J. Louis Monarch for United Gas Improvement Co., and Vincent P. McDevitt and Samuel Graff Miller for Philadelphia Electric Co., petitioners in No. 473.
Willard W. Gatchell and Howard E. Wahrenbrock for the Federal Power Commission; Richard J. Connor, John T. Miller, Jr., Thomas F. Broman, James B. Henderson and William N. Bonner, jr. for Transcontinental Gas Pipe Line Corp.; W. W. Heard and William J. Grove for Pan American Petroleum Corp.; Chas. B. EUard and Bernard A. Foster, Jr. for Atlantic Refining Co.; Gentry Lee and Bernard A. Foster, Jr. for Cities Service Production Co.; Carl Illig and William J. Merrill for Humble Oil & Refining-Co.; Clayton L. Orh and James D. Parriott for Ohio Oil Co.; Frank C. Bolton and William S. Richardson for Socony Mobil Oil Co., Inc. (successor to Magnolia Petroleum Co.); John C. Snodgrass for Pure Oil Co.; George D. Horning for Union Oil Co. of California; Robert E. May for Húnt, Trustee; Rayburn L. Foster, Harry D. Turner, Kenneth Heady, Charles E. McGee and Lambert McAllister for Phillips Petroleum Co.; Martin A. Row, Robert E. May and Omar L. Crook for Sun Oil Co., respondents.
Briefs of amici curiae in support of petitioners were filed by William M. Bennett for the State of California and the Public Utilities Commission of California; John W. Reynolds,. Attorney General of Wisconsin, N. S. Hefjeman, Deputy Attorney General, Roy G. Tulane, Assistant Attorney General, and William E. Torkelson for the State of Wisconsin and the Public Service Commission of Wisconsin; David Berger for the City of Philadelphia; David Stahl for the City of Pittsburgh; Joe W. Anderson, Roger Arnebergh, Alexander G. Brown, J. Elliott Drinard, N. H. Goldstick, Dion R. Holm, Claude V. Jonesj Walter J. Mattison; John C. Melaniphy, Barnett I. Shur, A. C. Van Soelen, Charles S. Rhyne and J. Parker Connor for the Member Municipalities of the National Institute of Municipal Law Officers; Charles S. Rhyne and J. Parker Connor for the Alabama League of Municipalities; Edward Munce and Thomas M. Kerrigan for,.the Pennsylvania Public Utility Commission; and Edward S. Kirby for Public Service Electric & Gas Co.
Together with No. 473, United Gas Improvement Co. et al. v. Federal Power Commission et al., also on petition for writ of certiorari to the same Count.
Per Curiam.
The motion to substitute Humble Oil & Refining Company, a Delaware corporation, in the place of Humble Oil & Refining Company, a Texas corporation, as a party respondent, is granted. The motions of Public Service Electric and Gas Company and the Alabama League of Municipalities for leave to file briefs, as amici curiae, are granted.
The petitions for writs of certiorari are granted. The judgment of the Court of Appeals is vacated and the cases are remanded to that court with directions to remand the cases to the Federal Power Commission for reconsideration and redetermination in the light of Atlantic Refining Co. v. Public Service Commission of New York, 360 U. S. 378.
Mr. Justice Douglas dissents. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
51
] |
UNITED STATES v. DAVIS et ux.
No. 282.
Argued January 12, 1970
Decided March 23, 1970
Solicitor General Griswold argued the cause for the United States. With him on the brief were Assistant Attorney General Walters, Matthew J. Zinn, and William L. Goldman.
William Waller argued the cause for respondents. With him on the brief was Robert G. McCullough.
Mr. Justice Marshall
delivered the opinion of the Court.
In 1945, taxpayer and E. B. Bradley organized a corporation. In exchange for property transferred to the new company, Bradley received 500 shares of common stock, and taxpayer and his wife similarly each received 250 such shares. Shortly thereafter, taxpayer made an additional contribution to the corporation, purchasing 1,000 shares of preferred stock at a par value of $25 per share.
The purpose of this latter transaction was to increase the company’s working capital and thereby to qualify for a loan previously negotiated through the Reconstruction Einance Corporation. It was understood that the corporation would redeem the preferred stock when the RFC loan had been repaid. Although in the interim taxpayer bought Bradley’s 500 shares and divided them between his son and daughter, the total capitalization of the company remained the same until 1963. That year, after the loan was fully repaid and in accordance with the original understanding, the company redeemed taxpayer’s preferred stock.
In his 1963 personal income tax return taxpayer did not report the $25,000 received by him upon the redemption of his preferred stock as income. Rather, taxpayer considered the redemption as a sale of his preferred stock to the company — a capital gains transaction under § 302 of the Internal Revenue Code of 1954 resulting in no tax since taxpayer’s basis in the stock equaled the amount he received for it. The Commissioner of Internal Revenue, however, did not approve this tax treatment. According to the Commissioner, the redemption of taxpayer’s stock was essentially equivalent to a dividend and was thus taxable as ordinary income under §§301 and 316 of the Code. Taxpayer paid the resulting deficiency and brought this suit for a refund. The District Court ruled in his favor, 274 F. Supp. 466 (D. C. M. D. Tenn. 1967), and on appeal the Court of Appeals affirmed. 408 F. 2d 1139 (C. A. 6th Cir. 1969).
The Court of Appeals held that the $25,000 received by taxpayer was “not essentially equivalent to a dividend” within the meaning of that phrase in § 302 (b)(1) of the Code because the redemption was the final step in a course of action that had a legitimate business (as opposed to a tax avoidance) purpose. That holding represents only one of a variety of treatments accorded similar transactions under § 302 (b)(1) in the circuit courts of appeals. We granted certiorari, 396 U. S. 815 (1969), in order to resolve this recurring tax question involving stock redemptions by closely held corporations. We reverse.
I
The Internal Revenue Code of 1954 provides generally in §§ 301 and 316 for the tax treatment of distributions by a corporation to its shareholders; under those provisions, a distribution is includable in a taxpayer’s gross income as a dividend out of earnings and profits to the extent such earnings exist. There are exceptions to the application of these general provisions, however, and among them are those found in § 302 involving certain distributions for redeemed stock. The basic question in this case is whether the $25,000 distribution by the corporation to taxpayer falls under that section — more specifically, whether its legitimate business motivation qualifies the distribution under § 302 (b)(1) of the Code. Preliminarily, however, we must consider the relationship between §302 (b)(1) and the rules regarding the attribution of stock ownership found in § 318 (a) of the Code.
Under subsection (a) of § 302, a distribution is treated as “payment in exchange for the stock,” thus qualifying for capital gains rather than ordinary income treatment, if the conditions contained in any one of the four paragraphs of subsection (b) are met. In addition to paragraph (l)’s “not essentially equivalent to a dividend” test, capital gains treatment is available where (2) the taxpayer’s voting strength is substantially diminished, (3) his interest in the company is completely terminated, or (4) certain railroad stock is redeemed. Paragraph (4) is not involved here, and taxpayer admits that paragraphs (2) and (3) do not apply. Moreover, taxpayer agrees that for the purposes of §§ 302 (b)(2) and (3) the attribution rules of § 318 (a) apply and he is considered to own the 750 outstanding shares of common stock held by his wife and children in addition to the 250 shares in his own name.
Taxpayer, however, argues that the attribution rules do not apply in considering whether a distribution is essentially equivalent to a dividend under § 302 (b)(1). According to taxpayer, he should thus be considered to own only 25 percent of the corporation’s common stock, and the distribution would then qualify under § 302 (b)(1) since it was not pro rata or proportionate to his stock interest, the fundamental test of dividend equivalency. See Treas. Reg. 1.302-2 (b). However, the plain language of the statute compels rejection of the argument. In subsection (c) of § 302, the attribution rules are made specifically applicable “in determining the ownership of stock for purposes of this section.” Applying this language, both courts below held that § 318 (a) applies to all of § 302, including § 302 (b)(1)— a view in accord with the decisions of the other courts of appeals, a longstanding treasury regulation, and the opinion of the leading commentators.
Against this weight of authority, taxpayer argues that the result under paragraph (1) should be different because there is no explicit reference to stock ownership as there is in paragraphs (2) and (3). Neither that fact, however, nor the purpose and history of § 302 (b)(1) support taxpayer’s argument. The attribution rules— designed to provide a clear answer to what would otherwise be a difficult tax question — formed part of the tax bill that was subsequently enacted as the 1954 Code. As is discussed further, infra, the bill as passed by the House of Representatives contained no provision comparable to § 302 (b) (1). When that provision was added in the Senate, no purpose was evidenced to restrict the applicability of § 318 (a). Rather, the attribution rules continued to be made specifically applicable to the entire section, and we believe that Congress intended that they be taken into account wherever ownership of stock was relevant.
Indeed, it was necessary that the attribution rules apply to §302 (b)(1) unless they were to be effectively eliminated from consideration with regard to §§ 302 (b)(2) and (3) also. For if a transaction failed to qualify under one of those sections solely because of the attribution rules, it would according to taxpayer’s argument nonetheless qualify under §302 (b)(1). We cannot agree that Congress intended so to nullify its explicit directive. We conclude, therefore, that the attribution rules of § 318 (a) do apply; and, for the purposes of deciding whether a distribution is "not essentially equivalent to a dividend” under § 302 (b)(1), taxpayer must be deemed the owner of all 1,000 shares of the company’s common stock.
II
After application of the stock ownership attribution rules, this case viewed most simply involves a sole stockholder who causes part of his shares to be redeemed by the corporation. We conclude that such a redemption is always “essentially equivalent to a dividend” within the meaning of that phrase in § 302 (b)(1) and therefore do not reach the Government’s alternative argument that in any event the distribution should not on the facts of this case qualify for capital gains treatment.
The predecessor of §302 (b)(1) came into the tax law as § 201 (d) of the Revenue Act of 1921, 42 Stat. 228:
“A stock dividend shall not be subject to tax but if after the distribution of any such dividend the corporation proceeds to cancel or redeem its stock at such time and in such manner as to make the distribution and cancellation or redemption essentially equivalent to the distribution of a taxable dividend, the amount received in redemption or cancellation of the stock shall be treated as a taxable dividend ...
Enacted in response to this Court’s decision that pro rata stock dividends do not constitute taxable income, Eisner v. Macomber, 252 U. S. 189 (1920), the provision had the obvious purpose of preventing a corporation from avoiding dividend tax treatment by distributing earnings to its shareholders in two transactions — a pro rata stock dividend followed by a pro rata redemption — that would have the same economic consequences as a simple dividend. Congress, however, soon recognized that even without a prior stock dividend essentially the same result could be effected whereby any corporation, “especially one which has only a few stockholders, might be able to make a distribution to its stockholders which would have the same effect as a taxable dividend.” H. R. Rep. No. 1, 69th Cong., 1st Sess., 5. In order to cover this situation, the law w:as amended to apply “(whether or not such stock was issued as a stock dividend)” whenever a distribution in redemption of stock was made “at such time and in such manner” that'it was essentially equivalent to a taxable dividend. Revenue Act of 1926, § 201 (g), 44 Stat. 11.
This provision of the 1926 Act was carried forward in each subsequent revenue act and finally became § 115 (g)(1) of the Internal Revenue Code of 1939. Unfortunately, however, the policies encompassed within the general language of §115 (g)(1) and its predecessors were not clear, and there resulted much confusion in the tax law. At first, courts assumed that the provision was aimed at tax avoidance schemes and sought only to determine whether such a scheme existed. See, e. g., Commissioner v. Quackenbos, 78 F. 2d 156 (C. A. 2d Cir. 1935). Although later the emphasis changed and the focus was more on the effect of the distribution, many courts continued to find that distributions otherwise like a dividend were not “essentially equivalent” if, for example, they were motivated by a sufficiently strong nontax business purpose. See cases cited n. 2, supra. There was general disagreement, however, about what would qualify as such a purpose, and the result was a case-by-case determination with each case decided “on the basis of the particular facts of the transaction in question.” Bains v. United States, 153 Ct. Cl. 599, 603, 289 F. 2d 644, 646 (1961).
By the time of the general revision resulting in the Internal Revenue Code of 1954, the draftsmen were faced with what has aptly been described as “the morass created by the decisions.” Ballenger v. United States, 301 F. 2d 192, 196 (C. A. 4th Cir. 1962). In an effort to eliminate “the considerable confusion which exists in this area” and thereby to facilitate tax planning, H. R. Rep. No. 1337, 83d Cong., 2d Sess., 35, the authors of the new Code sought to provide objective tests to govern the tax consequences of stock redemptions. Thus, the tax bill passed by the House of Representatives contained no “essentially equivalent” language. Rather, it provided for “safe harbors” where capital gains treatment would be accorded to corporate redemptions that met the conditions now found in §§ 302 (b) (2) and (3) of the Code.
It was in the Senate Finance Committee’s consideration of the tax bill that §302 (b)(1) was added, and Congress thereby provided that capital gains treatment should be available “if the redemption is not essentially equivalent to a dividend.” Taxpayer argues that the purpose was to continue “existing law,” and there is support in the legislative history that §302 (b)(1) reverted “in part” or “in general” to the “essentially equivalent” provision of § 115 (g)(1) of the 1939 Code. According to the Government, even under the old law it would have been improper for the Court of Appeals to rely on “a business purpose for the redemption” and “an absence of the proscribed tax avoidance purpose to bail out dividends at favorable tax rates.” See Northup v. United States, 240 F. 2d 304, 307 (C. A. 2d Cir. 1957); Smith v. United States, 121 F. 2d 692, 695 (C. A. 3d Cir. 1941); cf. Commissioner v. Estate of Bedford, 325 U. S. 283 (1945). However, we need not decide that question, for we find from the history of the 1954 revisions and the purpose of §302 (b)(1) that Congress intended more than merely to re-enact the prior law.
In explaining the reason for adding the “essentially equivalent” test, the Senate Committee stated that the House provisions “appeared unnecessarily restrictive, particularly, in the case of redemptions of preferred stock which might be called by the corporation without the shareholder having any control over when the redemption may take place.” S. Rep. No. 1622, 83d Cong., 2d Sess., 44. This explanation gives no indication that the purpose behind the redemption should affect the result. Rather, in its more detailed technical evaluation of § 302 (b)(1), the Senate Committee reported as follows:
“The test intended to be incorporated in the interpretation of paragraph (1) is in general that currently employed under section 115 (g)(1) of the 1939 Code. Your committee further intends that in applying this test for the future . . . the inquiry will be devoted solely to the question of whether or not the transaction by its nature may properly be characterized as a sale of stock by the redeeming shareholder to the corporation. For this purpose the presence or absence of earnings and profits of the corporation is not material. Example: X, the sole shareholder of a corporation having no earnings or profits causes the corporation to redeem half of its stock. Paragraph (1) does not apply to such redemption notwithstanding the absence of earnings and profits.” S. Rep. No. 1622, supra, at 234.
The intended scope of § 302 (b)(1) as revealed by this legislative history is certainly not free from doubt. However, we agree with the Government that by making the sole inquiry relevant for the future the narrow one whether the redemption could be characterized as a sale, Congress was apparently rejecting past court decisions that had also considered factors indicating the presence or absence of a tax-avoidance motive. At least that is the implication of the example given. Congress clearly-mandated that pro rata distributions be treated under the general rules laid down in §§301 and 316 rather than under § 302, and nothing suggests that there should be a different result if there were a “business purpose” for the redemption. Indeed, just the opposite inference must be drawn since there would not likely be a tax-avoidance purpose in a situation where there were no earnings or profits. We conclude that the Court of Appeals was therefore wrong in looking for a business purpose and considering it in deciding whether the redemption was equivalent to a dividend. Rather, we agree with the Court of Appeals for the Second Circuit that “the business purpose of a transaction is irrelevant in determining dividend equivalence” under § 302 (b)(1). Hasbrook v. United States, 343 F. 2d 811, 814 (1966).
Taxpayer strongly argues that to treat the redemption involved here as essentially equivalent to a dividend is to elevate form over substance. Thus, taxpayer argues, had he not bought Bradley's shares or had he made a subordinated loan to the company instead of buying preferred stock, he could have gotten back his $25,000 with favorable tax treatment. However, the difference between form and substance in the tax law is largely problematical, and taxpayer’s complaints have little to do with whether a business purpose is relevant under § 302 (b)(1). It was clearly proper for Congress to treat distributions generally as taxable dividends when made out of earnings and profits and then to prevent avoidance of that result without regard to motivation where the distribution is in exchange for redeemed stock.
We conclude that that is what Congress did when enacting § 302 (b)(1). If a corporation distributes property as a simple dividend, the effect is to transfer the property from the company to its shareholders without a change in the relative economic interests or rights of the stockholders. Where a redemption has that same effect, it cannot be said to have satisfied the “not essentially equivalent to a dividend” requirement of § 302 (b)(1). Rather, to qualify for preferred treatment under that section, a redemption must result in a meaningful reduction of the shareholder’s proportionate interest in the corporation. Clearly, taxpayer here, who (after application of the attribution rules) was the sole shareholder of the corporation both before and after the redemption, did not qualify under this test. The decision of the Court of Appeals must therefore be reversed and the case remanded to the District Court for dismissal of the complaint.
It is so ordered.
References in this opinion to “taxpayer” are to Maclín P. Davis. His wife is a party solely because joint returns were filed for the year in question.
Only the Second Circuit has unequivocally adopted the Commissioner’s view and held irrelevant the motivation of the redemption. See Levin v. Commissioner, 385 F. 2d 521 (1967); Hasbrook v. United States, 343 F. 2d 811 (1965). The First Circuit, however, seems almost to have come to that conclusion, too. Compare Wiseman v. United States, 371 F. 2d 816 (1967), with Bradbury v. Commissioner, 298 F. 2d 111 (1962).
The other courts of appeals that, have passed on the question are apparently willing to give at least some weight under §302 (b)(1) to the business motivation of a distribution and redemption. See, e. g., Commissioner v. Berenbaum, 369 F. 2d 337 (C. A. 10th Cir. 1966); Kerr v. Commissioner, 326 F. 2d 225 (C. A. 9th Cir. 1964); Ballenger v. United States, 301 F. 2d 192 (C. A. 4th Cir. 1962); Heman v. Commissioner, 283 F. 2d 227 (C. A. 8th Cir. 1960); United States v. Fewell, 255 F. 2d 496 (C. A. 5th Cir. 1958). See also Neff v. United States, 157 Ct. Cl. 322, 305 F. 2d 455 (1962). Even among those courts that consider business purpose, however, it is generally required that the business purpose be related, not to the issuance of the stock, but to the redemption of it. See Commissioner v. Berenbaum, supra; Ballenger v. United States, supra.
See, e. g., Commissioner v. Gordon, 391 U. S. 83, 88-89 (1968). Taxpayer makes no contention that the corporation did not have $25,000 in accumulated earnings and profits.
Section 318 (a) provides in relevant part as follows:
“General rule. — For purposes of those provisions of this sub-chapter to which the rules contained in this section are expressly made applicable—
“(1) Members of family.—
“(A) In general. — An individual shall be considered as owning the stock owned, directly or indirectly, by or for—
“(i) his spouse (other than a spouse who is legally separated from the individual under a decree of divorce or separate maintenance), and
“ (ii) his children, grandchildren, and parents.”
In § 318 (b) the rales contained in subsection (a) are made specifically applicable to “section 302 (relating to redemption of stock).”
See Levin v. Commissioner, 385 F. 2d 521, 526-527 (C. A. 2d Cir. 1967); Commissioner v. Berenbaum, 369 F. 2d 337, 342 (C. A. 10th Cir. 1966); Ballenger v. United States, 301 F. 2d 192, 199 (C. A. 4th Cir. 1962); Bradbury v. Commissioner, 298 F. 2d 111, 116-117 (C. A. 1st Cir. 1962).
See Treas. Reg. 1.302-2 (b).
See B. Bittker & J. Eustice, Federal Income Taxation of Corporations and Shareholders 292 n. 32 (2d ed. 1966).
Of course, this just means that a distribution in redemption to a sole shareholder will be treated under the general provisions of § 301, and it will only be taxed as a dividend under § 316 to the extent that there are earnings and profits.
The Government argues that even if business purpose were relevant under §302 (b)(1), the business purpose present here related only to the original investment and not at all to the necessity for redemption. See cases cited, n. 2, supra. Under either view, taxpayer does not lose his basis in the preferred stock. Under Treas. Reg. 1,302-2 (c) that basis is apphed to taxpayer's common stock.
See Bittker & Eustice, supra, n. 7, at 291: “It is not easy to give § 302 (b) (1) an expansive construction in view of this indication that its major function was the narrow one of immunizing redemp-tions of minority holdings of preferred stock.”
This rejection is confirmed by the Committee’s acceptance of the House treatment of distributions involving corporate contractions — a factor present in many of the earlier “business purpose” redemptions. In describing its action, the Committee stated as follows:
“Your committee, as did the House bill, separates into their significant elements the kind of transactions now incoherently aggregated in the definition of a partial liquidation. Those distributions which may have capital-gain characteristics became they are not made pro rata among the various shareholders would be subjected, at the shareholder level, to the separate tests described in [§§ 301 to 318]. On the other hand, those distributions characterized by what happens solely at the corporate level by reason of the assets distributed would be included as within the concept of a partial liquidation.” S. Rep. No. 1622, supra, at 49. (Emphasis added.) | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
68
] |
FEDERAL TRADE COMMISSION v. CONSOLIDATED FOODS CORP.
No. 422.
Argued March 10-11, 1965.
Decided April 28, 1965.
Solicitor General Cox argued the cause for petitioner. With him on the brief were Assistant Attorney General Orrick, Nathan Lewin, Lionel Kestenbaum, James Mcl. Henderson and George R. Kucik.
Daniel Walker argued the cause for respondent. With him on the brief were Anderson A. Owen, Bruce Bromley, George B. Turner and Allen F. Maulsby.
Herbert Bruce Griswold filed a brief for Trabón Engineering Corp. et al., as amici curiae, urging reversal.
Thomas V. Koykka and Edward D. Crocker filed a brief for Eaton Manufacturing Co., as amicus curiae, urging affirmance.
Mr. Justice Douglas
delivered the opinion of the Court.
The question presented involves an important construction and application of § 7 of the Clayton Act, 38 Stat. 731, as amended, 15 U. S. C. § 18. Consolidated Foods Corp. — which owns food processing plants and a network of wholesale and retail food stores — acquired Gentry, Inc., in 1951. Gentry manufactures principally dehydrated onion and garlic. The Federal Trade Commission held that the acquisition violated § 7 because it gave respondent the advantage of a mixed threat and lure of reciprocal buying in its competition for business and “the power to foreclose competition from a substantial share of the markets for dehydrated onion and garlic.” It concluded, in other words, that the effect of the acquisition “may be substantially to lessen competition” within the meaning of § 7, and it ordered divestiture and gave other relief. -F. T. C.-,-. The Court of Appeals, relying mainly on 10 years of post-acquisition experience, held that the Commission had failed to show a probability that the acquisition would substantially lessen competition, 329 F. 2d 623. The case is here on cer-tiorari. 379 U. S. 912.
We hold at the outset that the “reciprocity” made possible by such an acquisition is one of the congeries of anticompetitive practices at which the antitrust laws are aimed. The practice results in “an irrelevant and alien factor,” - F. T; C., p. -, intruding into the choice among competing products, creating at the least “a priority on the business at equal prices.” International Salt Co. v. United States, 332 U. S. 392, 396-397; Northern Pac. R. Co. v. United States, 356 U. S. 1, 3, 6, 12. Reciprocal trading may ensue not from bludgeoning or coercion but from more subtle arrangements. A threatened withdrawal of orders if products of an affiliate cease being bought, as well as a conditioning of future purchases on the receipt of orders for products of that affiliate, is an anticompetitive practice. Section 7 of the Clayton Act is concerned “with probabilities, not certainties.” Brown Shoe Co. v. United States, 370 U. S. 294, 323; United States v. Philadelphia Nat. Bank, 374 U. S. 321, 362. Reciprocity in trading as a result of an acquisition violates § 7, if the probability of a lessening of competition is shown. We turn then to that, the principal, aspect of the present case.
Consolidated is a substantial purchaser of the products of food processors who in turn purchase dehydrated onion and garlic for use in preparing and packaging their food. Gentry, which as noted is principally engaged in the manufacture of dehydrated onion and garlic, had in 1950, immediately prior to its acquisition by Consolidated, about 32% of the total sales of the dehydrated garlic and onion industry and, together with its principal competitor, Basic Vegetable Products, Inc., accounted for almost 90% of the total industry sales. The remaining 10% was divided between two other firms. By 1958 the total industry output of both products had doubled, Gentry’s share rising to 35% and the combined share of Gentry and Basic remaining at about 90%.
After the acquisition Consolidated (though later disclaiming adherence to any policy of reciprocity) did undertake to assist Gentry in selling. An official of Consolidated wrote as follows to its distributing divisions :
“Oftentimes, it is a great advantage to know when you are calling on a prospect, whether or not that prospect is a supplier of someone within your own organization. Everyone believes in reciprocity providing all things are equal.
“Attached is a list of prospects for our Gentry products. We would like to have you indicate on the list whether or not you are purchasing any of your supplies from them. If so, indicate whether your purchases are relatively large, small or insignificant. . . .
“Will you please refer the list to the proper party in your organization. ... If you have any special suggestions, as to how you could be helpful in properly presenting Gentry to any of those listed, it will be appreciated.”
Food processors who sold to Consolidated stated they would give their onion and garlic business to Gentry for reciprocity reasons if it could meet the price and quality of its competitors’ products. Typical is a letter from Armour and Co.:
“I can assure you that it is the desire of our people to reciprocate and cooperate with you in any way we can in line with good business practices, and I am sure that if our quality obstacles can be overcome, your quotations will receive favorable consideration. We value our relationship with you very highly and are disappointed that we have been unable lately to reciprocate for your fine cooperation on Armour Pantry Shelf Meats.”
Some suppliers responded and gave reciprocal orders. Some who first gave generous orders later reduced them or abandoned the practice. It is impossible to recreate the precise anatomy of the market arrangements following the acquisition, though respondent offers a factual brief seeking to prove that “reciprocity” either failed or was not a major factor in the post-acquisition history.
The Commission found, however, that “merely as a result of its connection with Consolidated, and without any action on the latter’s part, Gentry would have an unfair advantage over competitors enabling it to make sales that otherwise might not have been made.”
And the Commission concluded:
“With two firms accounting for better than 85% of both product lines for eleven successive years, maximum concentration short of monopoly has already been achieved. If it is desirable to prevent a trend toward oligopoly it is a fortiori desirable to remove, so far as possible, obstacles to the creation of genuinely competitive conditions in an oligopolistic industry. Respondent’s reciprocal buying power, obtained through acquisition of Gentry, is just such an anticompetitive obstacle.
“This conclusion is buttressed by the peculiar nature of the dehydrated onion and garlic industry. In the first place, the record shows that Gentry’s leading competitor, Basic Vegetable Products, Inc., has been the innovator and leader in the field. Gentry has recently made technical strides narrowing, although probably not closing, the gap between them. There is also evidence that the third firm, Puccinelli Packing Co., is not only much smaller — commanding only about 10% of each product market — but is considered by many buyers to offer an inferior product and inferior service.” -F. T. C., p.-.
The Court of Appeals, on the other hand, gave post-acquisition evidence almost conclusive weight. It pointed out that, while Gentry’s share of the dehydrated onion market increased by some 7%, its share of the dehydrated garlic market decreased 12%. 329 F. 2d, p. 626. It also relied on apparently unsuccessful attempts at reciprocal buying. Ibid. The Court of Appeals concluded that “Probability can best be gauged by what the past has taught.” Id., p. 627.
The Court of Appeals was not in error in considering the post-acquisition evidence in this case. See United States v. du Pont Co., 353 U. S. 586, 597 et seq., 602 et seq. But we think it gave too much weight to it. Cf. United States v. Continental Can Co., 378 U. S. 441, 463. No group acquiring a company with reciprocal buying opportunities is entitled to a “free trial” period. To give it such would be to distort the scheme of § 7. The “mere possibility” of the prohibited restraint is not enough. (United States v. du Pont & Co., supra, p. 598.) Probability of the proscribed evil is required, as we have noted. If the post-acquisition evidence were given conclusive weight or allowed to override all probabilities, then acquisitions would go forward willy-nilly, the parties biding their time until reciprocity was allowed fully to bloom. It is, of course, true that post-acquisition conduct may amount to a violation of § 7 even though there is no evidence to establish probability in limine. See United States v. du Pont & Co., supra, pp. 597-598. But the force of § 7 is still in probabilities, not in what later transpired. That must necessarily be the case, for once the two companies are united no one knows what the fate of the acquired company and its competitors would have been but for the merger.
Moreover, the post-acquisition evidence here tends to confirm, rather than cast doubt upon, the probable anti-competitive effect which the Commission found the merger would have. The Commission found that Basic’s product was superior to Gentry’s — as Gentry’s president freely and repeatedly admitted. Yet Gentry, in a rapidly expanding market, was able to increase its share of onion sales by 7% and to hold its losses in garlic to a 12% decrease. Thus the Commission was surely on safe ground in reaching the following conclusion:
“If reciprocal buying creates for Gentry a protected market, which others cannot penetrate despite superiority of price, quality, or service, competition is lessened whether or not Gentry can expand its market share. It is for this reason that we reject respondent’s argument that the decline in its share of the garlic market proves the ineffectiveness of reciprocity. We do not know that its share would not have fallen still farther, had it not been for the influence of reciprocal buying. This loss of sales fails to refute the likelihood that Consolidated’s reciprocity power, which it has shown a willingness to exploit to the full, will not immunize a substantial segment of the garlic market from normal quality, price, and service competition.” -F. T. C., p.-,
But the Court of Appeals ignored the Commission’s findings as to the inferiority of Gentry’s product; indeed at one point it even supplanted those findings with its own conclusion that Gentry’s onions were superior:
“Consolidated’s Gentry division in the years following the acquisition, during which time it improved its onion processing equipment to eliminate a problem arising from the presence of wood splinters and achieved a product of higher quality than that of its competitors, increased its share of the rapidly expanding market by only some 7% with respect to dehydrated onion . . . .” 329 F. 2d, p. 626. (Emphasis supplied.)
But the Commission’s contrary conclusion was unquestionably based on substantial evidence, as the following excerpt from the testimony of Gentry’s president particularly indicates:
“Q. You mentioned the fact, Dr. Prater, that Gentry had a reputation of being second to Basic in quality. Was one of the factors involved in the quality competition the wood splinter problem?
“A. Yes, the wood splinter problem has been a problem in the dehydration industry for many years. Basic exploited this extensively, and solved it by improvements in production techniques in the use, or by the use of better methods, and by using, instead of wood trays, trays of aluminum plastic glass fibers. We met this competition partially by the improvement of our production techniques and installation of continuous conveyor dehydrators.”
We do not go so far as to say that any acquisition, no matter how small, violates § 7 if there is a probability of reciprocal buying. Some situations may amount only to de minimis. But where, as here, the acquisition is of a company that commands a substantial share of a market, a finding of probability of reciprocal buying by the Commission, whose expertise the Congress trusts, should be honored, if there is substantial evidence to support it.
The evidence is in our view plainly substantial. Reciprocity was tried over and again and it sometimes worked. The industry structure was peculiar, Basic being the leader with Gentry closing the gap. Moreover there is evidence, as the Commission found, “that many buyers have determined that their source of supply may best be protected by a policy of buying from two suppliers.” When reciprocal buying — or the inducement of it — is added, the Commission observed:
“Buyers are likely to lean toward Basic on the ground of quality, but, in seeking a second, protective supply channel, to purchase from Gentry in the belief that this will further their sales to Consolidated. Not only does Gentry thus obtain sales that might otherwise go to Basic or Puccinelli, but the two-firm oligopoly structure of the industry is strengthened and solidified and new entry by others is discouraged.” -F. T. C., p.-.
We conclude that there is substantial evidence to sustain that conclusion and that the order of the Commission should not have been denied enforcement. The judgment of the Court of Appeals is accordingly
Reversed.
Section 7 reads in pertinent part as follows:
“No corporation engaged in commerce shall acquire, directly or indirectly, the whole or any part of the stock or other share capital and no corporation subject to the jurisdiction of the Federal Trade Commission shall acquire the whole or any part of the assets of another corporation engaged also in commerce, where in any line of commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly.” 15 U. S. C. § 18.
Edwards, Conglomerate Bigness as a Source of Power, in 'Nat. Bur. Eco. Research, Business Concentration and Price Policy (1955), 331, p. 342:
“Where large and powerful concerns encounter each other as seller and buyer, there is sometimes a reciprocal exchange of favors, by which each of the great enterprises strengthens the other.
“The most common form of such a relationship is probably reciprocal buying. A reciprocal buying arrangement may arise either through formal contract or through an informal understanding that may be scarcely distinguishable from a mere policy of cultivating the good will of a large customer. The essence of the arrangement is the willingness of each company to buy from the other, conditioned upon the expectation that the other company will make reciprocal purchases. The goods bought are typicalfy dissimilar in kind, and in the usual case could be obtained from other sources on terms which, aside from the reciprocal purchases, would be no less advantageous. Where such a relationship is well established, it prevents' the competitors of each company from selling to the other company, and affords to each company whatever increase of size and strength can be derived from an assured place as supplier to the other.”
And see Stocking and Mueller, Business Reciprocity and the Size of Firms, 30 J. Bus. U. Chi. 73, 75-77 (1957); Ammer, Realistic Reciprocity, 40 Harv. Bus. Rev. No. 1,116 (1962); Hausman, Reciprocal Dealing and the Antitrust Laws, 77 Harv. L. Rev. 873 (1964).
For a discussion of the conglomerate acquisition (the type involved in the present case) see Report, Federal Trade Commission on The Merger Movement (A Summary Report, 1948), p. 59 et seq.
As stated by the Court of Appeals:
“Immediately prior to the Consolidated-Gentry merger, Basic accounted for 60% and Gentry 28% of dehydrated onion sales. By 1958, these figures were 57% and 35%, respectively. In dehydrated garlic sales, Basic had 36% of the market in 1950 and 50% in 1958, while Gentry’s shares were 51% and 39% for the same years.” 329 F. 2d, p. 625.
The last three sentences were a footnote to the first sentence. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
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"Unidentifiable",
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"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
56
] |
HECKLER, SECRETARY OF HEALTH AND HUMAN SERVICES v. RINGER et al.
No. 82-1772.
Argued February 27, 1984
Decided May 14, 1984
Rehnquist, J., delivered the opinion of the Court, in which Burger, C. J., and White, Blackmun, Powell, and O’Connor, JJ., joined. Stevens, J., filed an opinion concurring in the judgment in part and dissenting in part, in which Brennan and Marshall, JJ., joined, post, p. 627.
Edwin S. Kneedler argued the cause for petitioner. With him on the briefs were Solicitor General Lee, Assistant Attorney General McGrath, Deputy Solicitor General Getter, Anthony J. Steinmeyer, and Margaret E. Clark.
Malcolm J. Harkins III argued the cause for respondents. With him on the brief were Joseph E. Casson and Joseph L. Bianculli.
Eileen P. Sweeney and Sally Hart Wilson filed a brief for the Alliance of Social Security Disability Recipients et al. as amici curiae urging affirmance.
Justice Rehnquist
delivered the opinion of the Court.
Respondents are individual Medicare claimants who raise various challenges to the policy of the Secretary of Health and Human Services (Secretary) as to the payment of Medicare benefits for a surgical procedure known as bilateral carotid body resection (BCBR). The United States District Court for the Central District of California dismissed the action for lack of jurisdiction, finding that in essence respondents are claiming entitlement to benefits for the BCBR procedure and therefore must exhaust their administrative remedies pursuant to 42 U. S. C. § 405(g), before pursuing their action in federal court. The Court of Appeals for the Ninth Circuit reversed and remanded for consideration on the merits. 697 F. 2d 1291 (1982). We granted certiorari to sort out the thorny jurisdictional problems which respondents’ claims present, 463 U. S. 1206 (1983), and we now reverse as to all respondents.
I
Title XVIII of the Social Security Act, 79 Stat. 291, as amended, 42 U. S. C. § 1395 et seq., commonly known as the Medicare Act, establishes a federally subsidized health insurance program to be administered by the Secretary. Part A of the Act, 42 U. S. C. § 1395c et seq., provides insurance for the cost of hospital and related posthospital services, but the Act precludes reimbursement for any “items or services . . . which are not reasonable and necessary for the diagnosis or treatment of illness or injury.” § 1395y(a)(l). The Medicare Act authorizes the Secretary to determine what claims are covered by the Act “in accordance with the regulations prescribed by him.” § 1395ff(a). Judicial review of claims arising under the Medicare Act is available only after the Secretary renders a “final decision” on the claim, in the same manner as is provided in 42 U. S. C. § 405(g) for old age and disability claims arising under Title II of the Social Security Act. 42 U. S. C. § 1395ff(b)(l)(C).
Pursuant to her rulemaking authority, see 42 U. S. C. §§1395hh, 1395Ü (incorporating 42 U. S. C. § 405(a)), the Secretary has provided that a “final decision” is rendered on a Medicare claim only after the individual claimant has pressed his claim through all designated levels of administrative review. First, the Medicare Act authorizes the Secretary to enter into contracts with fiscal intermediaries providing that the latter will determine whether a particular medical service is covered by Part A, and if so, the amount of the reimbursable expense for that service. 42 U. S. C. § 1395h; 42 CFR § 405.702 (1983). If the intermediary determines that a particular service is not covered under Part A, the claimant can seek Teconsideration by the Health Care Financing Administration (HCFA) in the Department of Health and Human Services. 42 CFR §§405.710-405.716 (1983). If denial of the claim is affirmed after reconsideration and if the claim exceeds $100, the claimant is entitled to a hearing before an administrative law judge (AL J) in the same manner as is provided for claimants under Title II of the Act. 42 U. S. C. §§ 1395ff(b)(l)(C), (b)(2); 42 CFR §405.720 (1983). If the claim is again denied, the claimant may seek review in the Appeals Council. 42 CFR §§405.701(c), 405.724 (1983) (incorporating 20 CFR §404.967 (1983)). If the Appeals Council also denies the claim and if the claim exceeds $1,000, only then may the claimant seek judicial review in federal district court of the “Secretary’s final decision.” 42 U. S. C. §§ 1395ff(b)(l)(C), (b)(2).
In January 1979, the Secretary through the HCFA issued an administrative instruction to all fiscal intermediaries, instructing them that no payment is to be made for Medicare claims arising out of the BCBR surgical procedure when performed to relieve respiratory distress. See 45 Fed. Reg. 71431-71432 (1980) (reproducing the instruction). Relying on information from the Public Health Service and a special Task Force of the National Heart, Lung and Blood Institute of the National Institutes of Health, id., at 71426, the HCFA explained that BCBR has been “shown to lack [the] general acceptance of the professional medical community” and that “controlled clinical studies establishing the safety and effectiveness of this procedure are needed.” Id., at 71431. It concluded that the procedure “must be considered investiga-tional” and not “reasonable and necessary” within the meaning of the Medicare Act. Ibid.
Many claimants whose BCBR claims were denied by the intermediaries as a result of the instruction sought review of the denial before ALJs, who were not bound by the Secretary’s instructions to the intermediaries. Until October 1980, ALJs were consistently ruling in favor of individual BCBR claimants. The Appeals Council also authorized payment for BCRB Part A expenses in a consolidated case involving numerous claimants, see In re Ferguson, No. [ XXX-XX-XXXX ] (HHS Appeals Council, Oct. 18, 1979), while stressing that its decision applied only to the claimants involved in that case and was not to be cited as precedent in future cases.
In response to the rulings of the ALJs and the Appeals Council, on October 28, 1980, the Secretary through the HCFA issued a formal administrative ruling, intended to have binding effect on the ALJs and the Appeals Council, see 20 CFR §422.408 (1983), prohibiting them in all individual cases from ordering Medicare payments for BCBR operations occurring after that date. 45 Fed. Reg. 71426-71427 (1980). In the ruling the Secretary noted that she had examined the proceedings in In re Ferguson, had consulted with the Public Health Service, and again had concluded that the BCBR procedure was not “reasonable and necessary” within the meaning of the Medicare Act. Ibid.
On September 18, 1980, respondents in this case filed a complaint in the District Court for the Central District of California, raising numerous challenges focused on the Secretary’s January 1979 instructions to her intermediaries precluding payment for BCBR surgery. On November 7,1980, after the Secretary issued the formal ruling binding on the ALJs and the Appeals Council as well as the intermediaries, respondents amended their complaint to challenge that ruling as well. Respondents relied on 28 U. S. C. § 1381 (federal question), 28 U. S. C. §1361 (mandamus against a federal official), and 42 U. S. C. § 405(g) (Social Security Act), to establish jurisdiction in the District Court.
The individuals named in the amended complaint, who are respondents before this Court, are four individual Medicare claimants. Their physician, Dr. Benjamin Winter, who has developed a special technique for performing BCBR surgery and who has performed the surgery over 1,000 times, prescribed BCBR surgery for all four respondents to relieve their pulmonary problems. Respondents Sanford Holmes, Norman Webster-Zieber, and Jean Vescio had the surgery before October 28, 1980, and all three filed a claim for reimbursement with their fiscal intermediary. At the time that the amended complaint was filed, none of the three had exhausted their administrative remedies, and thus none had received a “final decision” on their claims for benefits from the Secretary. The fourth respondent, Freeman Ringer, informally inquired of the Secretary and learned that BCBR surgery is not covered under the Medicare Act. Thus he has never had the surgery, claiming that he is unable to afford it. App. 32.
The essence of their amended complaint is that the Secretary has a constitutional and statutory obligation to provide payment for BCBR surgery because overwhelmingly her ALJs have ordered payment when they have considered individual BCBR claims. Id., at 9-10. According to the complaint, the Secretary’s instructions to the contrary to her intermediaries violate constitutional due process and numerous statutory provisions in that they force eligible Medicare claimants who have had BCBR surgery to pursue individual administrative appeals in order to get payment, even though ALJs overwhelmingly have determined that payment is appropriate. Id., at 16-22. Regarding the Secretary’s formal administrative ruling, the complaint asserts that the ruling merely reaffirms the instructions and creates an “additional administrative barrier” to Medicare beneficiaries desiring the BCBR treatment, and that it also is unlawful on numerous substantive and procedural grounds. Id., at 23-25. The complaint seeks a declaration that the Secretary’s refusal to find that BCBR surgery is “reasonable and necessary” under the Act is unlawful, an injunction compelling the Secretary to instruct her intermediaries to provide payment for BCBR claims, and an injunction barring the Secretary from forcing claimants to pursue individual administrative appeals in order to obtain payment. Id., at 9-10, 25-27.
The District Court dismissed the complaint in its entirety for lack of jurisdiction. It concluded that “[t]he essence of [respondents’ claim]... is a claim of entitlement [to] benefits for the BCBR procedure,” and that any challenges respondents raise to the Secretary’s procedures are “inextricably intertwined” with their claim for benefits. App. to Pet. for Cert. 14a. Thus the court concluded that 42 U. S. C. § 405(g) with its administrative exhaustion prerequisite provides the sole avenue for judicial review. Relying on our decision in Mathews v. Eldridge, 424 U. S. 319, 330-332 (1976), the court concluded that none of respondents’ claims are so “collateral” to their overall claim for benefits that the exhaustion requirement should be waived as to those claims. Because none of the named respondents have satisfied the exhaustion prerequisite of § 405(g), the court dismissed the complaint.
On appeal the Court of Appeals for the Ninth Circuit reversed. It concluded that the thrust of respondents’ claim is that “the Secretary’s presumptive rule that the BCBR operation is not reasonable and necessary was an unlawful administrative mechanism for determining awards of benefits.” 697 F. 2d, at 1294. The Court of Appeals concluded that to the extent that respondents are seeking to invalidate the Secretary’s 'procedure for determining entitlement to benefits, those claims are cognizable without the requirement of administrative exhaustion under the federal-question statute, 28 U. S. C. §1331, and the mandamus statute, 28 U. S. C. § 1361. 697 F. 2d, at 1294.
The Court of Appeals agreed with the District Court that respondents also had raised substantive claims for benefits, in that they had sought an injunction requiring the Secretary to declare that BCBR is reasonable and necessary under the Act. In the Court of Appeals’ view, the fact that respondents had not sought an actual award of benefits in their complaint did not alter the court’s characterization of a portion of their claim as essentially a claim for benefits. Ibid. Acknowledging that § 405(g) with its exhaustion prerequisite provides the only jurisdictional basis for seeking judicial review of claims for benefits, the court nonetheless concluded that the District Court had erred in requiring respondents to exhaust their administrative remedies in this case. Relying on our opinions in Weinberger v. Salfi, 422 U. S. 749 (1975), and Mathews v. Eldridge, supra, the Court of Appeals concluded that exhaustion would be futile for respondents and that it may not fully compensate them for the injuries they assert because they seek payment without the prejudice— and the necessity of appeal — resulting from the existence of the instructions and the rule. 697 F. 2d, at 1294-1296. Because we disagree with the Court of Appeals’ characterization of the claims at issue in this case and its reading of our precedents, we now reverse.
HH I — i
Preliminarily, we must point out that, although the Court of Appeals seemed not to have distinguished them, there are in fact two groups of respondents in this case. Respondents Holmes, Vescio, and Webster-Zieber constitute one group of respondents, those who have had BCBR surgery before October 28, 1980, and who have requested reimbursement at some, but not all, levels of the administrative process. Although the Court of Appeals did not seem to realize it, there is no dispute that the Secretary’s formal administrative ruling simply does not apply to those three respondents’ claims for reimbursement for their BCBR surgery. Their claims only make sense then if they are understood as challenges to the Secretary’s instructions to her intermediaries, instructions which resulted in those respondents’ having to pursue administrative remedies in order to get payment. They have standing to challenge the formal ruling as well only because, construing their complaint liberally, they argue that the existence of the formal rule creates a presumption against payment of their claims in the administrative process, even though the rule does not directly apply to bar their claims. The relief respondents request is that the Secretary change her policy so as to allow payment for BCBR surgery so that respondents simply will not have to resort to the administrative process.
It seems to us that it makes no sense to construe the claims of those three respondents as anything more than, at bottom, a claim that they should be paid for their BCBR surgery. Arguably respondents do assert objections to the Secretary’s “procedure” for reaching her decision — for example, they challenge her decision to issue a generally applicable rule rather than to allow individual adjudication, and they challenge her alleged failure to comply with the rulemaking requirements of the APA in issuing the instructions and the rule. We agree with the District Court, however, that those claims are “inextricably intertwined” with respondents’ claims for benefits. Indeed the relief that respondents seek to redress their supposed “procedural” objections is the invalidation of the Secretary’s current policy and a “substantive” declaration from her that the expenses of BCBR surgery are reimbursable under the Medicare Act. We conclude that all aspects of respondents’ claim for benefits should be channeled first into the administrative process which Congress has provided for the determination of claims for benefits. We, therefore, disagree with the Court of Appeals’ separation of the particular claims here into “substantive” and “procedural” elements. We disagree in particular with its apparent conclusion that simply because a claim somehow can be construed as “procedural,” it is cognizable in federal district court by way of federal-question jurisdiction.
The third sentence of 42 U. S. C. § 405(h), made applicable to the Medicare Act by 42 U. S. C. § 1B95Ü, provides that § 405(g), to the exclusion of 28 U. S. C. § 1331, is the sole avenue for judicial review for all “claim[s] arising under” the Medicare Act. See Weinberger v. Salfi, supra, at 760-761. Thus, to be true to the language of the statute, the inquiry in determining whether § 405(h) bars federal-question jurisdiction must be whether the claim “arises under” the Act, not whether it lends itself to a “substantive” rather than a “procedural” label. See Mathews v. Eldridge, 424 U. S., at 327 (recognizing that federal-question jurisdiction is barred by 42 U. S. C. § 405(h) even in a case where claimant is challenging the administrative procedures used to terminate welfare benefits).
In Weinberger v. Salfi, supra, at 760-761, we construed the “claim arising under” language quite broadly to include any claims in which “both the standing and the substantive basis for the presentation” of the claims is the Social Security Act. In that case we held that a constitutional challenge to the duration-of-relationship eligibility statute pursuant to which the claimant had been denied benefits, was a “claim arising under” Title II of the Social Security Act within the meaning of 42 U. S. C. § 405(h), even though we recognized that it was in one sense also a claim arising under the Constitution.
Under that broad test, we have no trouble concluding that all aspects of respondents Holmes’, Vescio’s, and Webster-Zieber’s challenge to the Secretary’s BCBR payment policy “aris[e] under” the Medicare Act. It is of no importance that respondents here, unlike the claimants in Weinberger v. Salfi, sought only declaratory and injunctive relief and not an actual award of benefits as well. Following the declaration which respondents seek from the Secretary — that BCBR surgery is a covered service — only essentially ministerial details will remain before respondents would receive reimbursement. Had our holding in Weinberger v. Salfi turned on the fact that claimants there did seek retroactive benefits, we might well have done as the dissent in that case suggested and held that § 405(h) barred federal-question jurisdiction only over claimants’ specific request for benefits, and not over claimants’ declaratory and injunctive claims as well. See 422 U. S., at 798-799, and n. 13 (Brennan, J., dissenting). Thus we hold that the Court of Appeals erred in concluding that any portion of Holmes’, Vescio’s, or Webster-Zieber’s claims here can be channeled into federal court by way of federal-question jurisdiction.
The Court of Appeals also relied on the mandamus statute as a basis for finding jurisdiction over a portion of those three respondents’ claims. We have on numerous occasions declined to decide whether the third sentence of § 405(h) bars mandamus jurisdiction over claims arising under the Social Security Act, either because we have determined that jurisdiction was otherwise available under § 405(g), see Califano v. Yamasaki, 442 U. S. 682, 698 (1979); Mathews v. Eldridge, supra, at 332, n. 12, or because we have determined that the merits of the mandamus claim were clearly insubstantial, Norton v. Mathews, 427 U. S. 524, 528-533 (1976). We need not decide the effect of the third sentence of § 405(h) on the availability of mandamus jurisdiction in Social Security cases here either.
Assuming without deciding that the third sentence of § 405(h) does not foreclose mandamus jurisdiction in all Social Security cases, see generally Dietsch v. Schweiker, 700 F. 2d 865, 867-868 (CA2 1983); Ellis v. Blum, 643 F. 2d 68, 78-82 (CA2 1981), the District Court did not err in dismissing respondents’ complaint here because it is clear that no writ of mandamus could properly issue in this case. The common-law writ of mandamus, as codified in 28 U. S. C. § 1361, is intended to provide a remedy for a plaintiff only if he has exhausted all other avenues of relief and only if the defendant owes him a clear nondiscretionary duty. See Kerr v. United States District Court, 426 U. S. 394, 402-403 (1976) (discussing 28 U. S. C. § 1651); United States ex rel. Girard Trust Co. v. Helvering, 301 U. S. 540, 543-544 (1937).
Here respondents clearly have an adequate remedy in § 405(g) for challenging all aspects of the Secretary’s denial of their claims for payment for the BCBR surgery, including any objections they have to the instructions or to the ruling if either ultimately should play a part in the Secretary’s denial of their claims. The Secretary’s decision as to whether a particular medical service is “reasonable and necessary” and the means by which she implements her decision, whether by promulgating a generally applicable rule or by allowing individual adjudication, are clearly discretionary decisions. See 42 U. S. C. §1395ff(a); see also Heckler v. Campbell, 461 U. S. 458, 467 (1983).
Thus § 405(g) is the only avenue for judicial review of respondents’ Holmes’, Vescio’s, and Webster-Zieber’s claims for benefits, and, when their complaint was filed in District Court, each had failed to satisfy the exhaustion requirement that is a prerequisite to jurisdiction under that provision. We have previously explained that the exhaustion requirement of § 405(g) consists of a nonwaivable requirement that a “claim for benefits shall have been presented to the Secretary,” Mathews v. Eldridge, 424 U. S., at 328, and a waivable requirement that the administrative remedies prescribed by the Secretary be pursued fully by the claimant. Ibid. All three respondents satisfied the nonwaivable requirement by presenting a claim for reimbursement for the expenses of their BCBR surgery, but none satisfied the waivable requirement.
Respondents urge us to hold them excused from further exhaustion and to hold that the District Court could have properly exercised jurisdiction over their claims under § 405(g). We have held that the Secretary herself may waive the exhaustion requirement when she deems further exhaustion futile, Mathews v. Diaz, 426 U. S. 67, 76-77 (1976); Weinberger v. Salfi, 422 U. S., at 766-767. We have also recognized that in certain special cases, deference to the Secretary’s conclusion as to the utility of pursuing the claim through administrative channels is not always appropriate. We held that Mathews v. Eldridge, supra, at 330-332, was such a case, where the plaintiff asserted a procedural challenge to the Secretary’s denial of a pretermination hearing, a claim that was wholly “collateral” to his claim for benefits, and where he made a colorable showing that his injury could not be remedied by the retroactive payment of benefits after exhaustion of his administrative remedies.
The latter exception to exhaustion is inapplicable here where respondents do not raise a claim that is wholly “collateral” to their claim for benefits under the Act, and where they have no colorable claim that an erroneous denial of BCBR benefits in the early stages of the administrative process will injure them in a way that cannot be remedied by the later payment of benefits. And here, it cannot be said that the Secretary has in any sense waived further exhaustion. In the face of the Secretary’s vigorous disagreement, the Court of Appeals concluded that the Secretary’s formal ruling denying payment for BCBR claims rendered further exhaustion by respondents futile. But as we have pointed out above, the administrative ruling is not even applicable to respondents’ claims because they had their surgery before October 28, 1980. We therefore agree with the Secretary that exhaustion is in no sense futile for these three respondents and that the Court of Appeals erred in second-guessing the Secretary’s judgment.
Respondents also argue that there would be a presumption against them as they pursue their administrative appeals because of the very existence of the Secretary’s instructions and her formal ruling and thus that exhaustion would not fully vindicate their claims. The history of this litigation as recited to us by respondents belies that conclusion. Indeed, according to respondents themselves, in every one of 170 claims filed with ALJs between the time of the Secretary’s instructions to her intermediaries and the filing of this lawsuit, before the formal ruling became effective, ALJs allowed recovery for BCBR claims. Brief for Respondents 3. In promulgating the formal ruling, the Secretary took pains to exempt from the scope of the ruling individuals in respondents’ position who may have had the surgery relying on the favorable ALJ rulings. 45 Fed. Reg. 71427 (1980). Although respondents would clearly prefer an immediate appeal to the District Court rather than the often lengthy administrative review process, exhaustion of administrative remedies is in no sense futile for these respondents, and they, therefore, must adhere to the administrative procedure which Congress has established for adjudicating their Medicare claims.
1 — 1 1 — I
Respondent Ringer is in a separate group from the other three respondents in this case. He raises the same challenges to the instructions and to the formal ruling as are raised by the other respondents. His position is different from theirs, however, because he wishes to have the operation and claims that the Secretary's refusal to allow payment for it precludes him from doing so. Because Ringer’s surgery, if he ultimately chooses to have it, would occur after the effective date of the formal ruling, Ringer’s claim for reimbursement, unlike that of the others, would be covered by the formal ruling. Ringer insists that, just as in the case of the other three respondents, the only relief that will vindicate his claim is a declaration that the formal ruling, and presumably the instructions as well, are invalid and an injunction compelling the Secretary to conclude that BCBR surgery is “reasonable and necessary” within the meaning of the Medicare Act. It is only after that declaration and injunction, Ringer insists, that he will be assured of payment and thus only then that he will be able to have the operation.
Again, regardless of any arguably procedural components, we see Ringer’s claim as essentially one requesting the payment of benefits for BCBR surgery, a claim cognizable only under § 405(g). Our discussion of the unavailabilty of mandamus jurisdiction over the claims of the other three respondents is equally applicable to Ringer. As to § 1331 jurisdiction, as with the other three respondents, all aspects of Ringer’s claim “aris[e] under” the Medicare Act in that the Medicare Act provides both the substance and the standing for Ringer’s claim, Weinberger v. Salfi, 422 U.S., at 760-761. Thus, consistent with our decision with respect to the other three respondents, we hold that §§1331 and 1361 are not available as jurisdictional bases for vindicating Ringer’s claim.
Ringer’s situation does differ from that of the other three respondents in one arguably significant way. Because he has not yet had the operation and thus has no reimbursable expenses, it can be argued that Ringer does not yet have a "claim” to present to the Secretary and thus that he does not have a “claim arising under” the Medicare Act so as to be subject to § 405(h)’s bar to federal-question jurisdiction. The argumént is not that Ringer’s claim does not “arise under” the Medicare Act as we interpreted that term in Weinberger v. Salfi; it is rather that it has not yet blossomed into a “claim” cognizable under § 405(g). We find that argument superficially appealing but ultimately unavailing.
Although it is true that Ringer is not seeking the immediate payment of benefits, he is clearly seeking to establish a right to future payments should he ultimately decide to proceed with BCBR surgery. See Attorney Registration & Disciplinary Comm’n v. Schweiker, 715 F. 2d 282, 287 (CA7 1983). The claim for future benefits must be construed as a “claim arising under” the Medicare Act because any other construction would allow claimants substantially to undercut Congress’ carefully crafted scheme for administering the Medicare Act.
If we allow claimants in Ringer’s position to challenge in federal court the Secretary’s determination, embodied in her rule, that BCBR surgery is not a covered service, we would be inviting them to bypass the exhaustion requirements of the Medicare Act by simply bringing declaratory judgment actions in federal court before they undergo the medical procedure in question. Ibid. Congress clearly foreclosed the possibility of obtaining such advisory opinions from the Secretary herself, requiring instead that a claim could be filed for her scrutiny only after the medical service for which payment is sought has been furnished. See 42 U. S. C. §§ 1395d(a), 1395f(a); 42 CFR §§405.1662-495.1667 (1983). Under the guise of interpreting the language of § 405(h), we refuse to undercut that choice by allowing federal judges to issue such advisory opinions. Thus it is not the case that Ringer has no “claim” cognizable under § 405(g); it is that he must pursue his claim under that section in the manner which Congress has provided. Because Ringer has not given the Secretary an opportunity to rule on a concrete claim for reimbursement, he has not satisfied the nonwaivable exhaustion requirement of § 405(g). The District Court, therefore, had no jurisdiction as to respondent Ringer.
With respect to our holding that there is no jurisdiction pursuant to § 1331, the dissent argues that § 405(h) is not a bar to § 1331 jurisdiction because Ringer’s challenge to the Secretary’s rule is “arising under” the Administrative Procedure Act, not the Medicare Act. Post, at 633. But the dissent merely resurrects an old argument that has already been raised and rejected before by this Court in Weinberger v. Salfi, supra. As we have already noted earlier, supra, at 615, the Court rejected the argument that the claimant in Salfi could bring his constitutional challenge to a Social Security Act provision in federal court pursuant to § 1331 because the claim was “arising under” the Constitution, not the Social Security Act. Ringer’s claim may well “aris[e] under” the APA in the same sense that Salfi’s claim arose under the Constitution, but we held in Salfi that the constitutional claim was nonetheless barred by § 405(h). It would be anomalous indeed for this Court to breathe life into the dissent’s already discredited statutory argument in order to give greater solicitude to an APA claim than the Court thought the statute allowed it to give to the constitutional claim in Salfi.
The dissent suggests that Salfi is distinguishable on two grounds. First, it seems to suggest that Salfi is distinguishable because, after rejecting the claim that there was jurisdiction under § 1331, the Court in Salfi went on to conclude that there was jurisdiction under § 405(g). Post, at 633-635. We fail to see how the Court’s conclusion that the claimants in Salfi had satisfied all of the prerequisites to jurisdiction under § 405(g) has anything at all to do with the proper construction of § 405(h). If the dissent is suggesting that the meaning of § 405(h) somehow shifts depending on whether a court finds that the waivable and nonwaivable requirements of § 405(g) are met in any given case, that suggestion is simply untenable.
Second, the dissent seems to suggest that Salfi is distinguishable because the claimants there appended a claim for benefits to their claim for declaratory and injunctive relief as to the unconstitutionality of the statute. Post, at 685-637. Again, as we have already pointed out in text, supra, at 615-616, there is no indication in Salfi that our holding in any way depended on the fact that the claimants there sought an award of benefits. Furthermore, today we explicitly hold that our conclusion that the claims of Holmes, Vescio, and Webster-Zieber are barred by § 405(h) is in no way affected by the fact that those respondents did not seek an award of benefits. Supra, at 615-616. If the dissent finds that the fact that Ringer does not expressly ask that he be paid benefits for his future surgery is crucial to its conclusion that his claims are not barred under § 405(h), it is difficult to see why the dissent also does not conclude that the claims of the other three respondents are not barred by § 405(h) for the same reason.
The crux of the dissent’s position as to § 1331 jurisdiction then seems to be that Ringer’s claims do not “arise under” the Medicare Act so as to be barred by § 405(h) because Ringer and his surgeon have not yet filed, and indeed cannot yet file, a concrete claim for reimbursement because Ringer has not yet had BCBR surgery. Thus, in the dissent’s view, if a clamaint wishes to claim entitlement to benefits in ad-vanee of undergoing the procedure for which payment is sought, his claim does not “arise under” the Medicare Act and hence he is not precluded by § 405(h) from resorting to federal-question jurisdiction. But that argument amounts to no more than an assertion that the substance of Ringer’s claim somehow changes and “arises under” another statute simply because he has not satisfied the procedural prerequisites for jurisdiction which Congress has prescribed in § 405(g).
The substance of Ringer’s claim is identical to the substance of the claims of the other three respondents, claims whose substance and standing we have earlier concluded are derived from the Medicare Act. Supra, at 615-616. As we have earlier noted, supra, at 620, the fairest reading of the rather confusing amended complaint is that all respondents, including Ringer, wish both to invalidate the Secretary’s rule and her instructions and to replace them with a new rule that allows them to get payment for BCBR surgery. While it is true that all of the respondents complain about the presumptive nature of the Secretary’s current rule, it is equally true that they all — including Ringer — complain about the burden of exhaustion of administrative remedies and that they all seek relief that will allow them to receive benefits yet bypass that administrative process altogether. App. 9-10; n. 13, supra. With respect to the other three respondents, we hold today that all their claims — identical to Ringer’s— are inextricably intertwined with what we hold is in essence a claim for benefits and that § 1331 jurisdiction over all their claims is barred by § 405(h). Supra, at 614-616. We decline to hold that the same claim asserted by Ringer should somehow be characterized in a different way for the purpose of §1331 jurisdiction simply because Ringer has not satisfied the prerequisites for jurisdiction under § 405(g).
With respect to our holding that Ringer has not satisfied the nonwaivable requirement of § 405(g), the dissent adopts the remarkable view that the Secretary’s promulgation of a rule regarding BCBR surgery satisfies that nonwaivable requirement. The dissent would thus open the doors of the federal courts in the first instance to everyone — those who can and those who cannot afford to pay their surgeons without reliance on Medicare — who thinks that he might be eligible to participate in the Medicare program, who thinks that someday he might wish to have some kind of surgery, and who thinks that this surgery might somehow be affected by a rule that the Secretary has promulgated. Of course, it is of no great moment to the dissent that after adjudicating his claim in federal court, that individual may simply abandon his musings about having surgery. And it is of no great moment to the dissent that Congress, who surely could have provided a scheme whereby claimants could obtain declaratory judgments about their entitlement to benefits, has instead expressly set up a scheme that requires the presentation of a concrete claim to the Secretary.
The dissent’s declaratory judgment notion effectively ignores the scheme which Congress has created and does nothing less than change the whole character of the Medicare system. The dissent argues that its frustration of Congress’ scheme can be limited to the situation where the Secretary has promulgated a rule, or in the dissent’s words, where she has “already issued an advisory opinion” about a certain surgical procedure in the form of a generally applicable rule. Post, at 642-643. Such a quest for restraint is admirable, but the logic of the dissent’s position makes the quest futile. The dissent’s concern in this case is with those perhaps millions of people, like Ringer, who desire some kind of controversial operation but who are unable to have it because their surgeons will not perform the surgery without knowing in advance whether they will be victorious in challenging the Secretary’s rule in the administrative or later in the judicial process. Post, at 629-630, 643. But that concern exists to the same degree with any claimant, even in the absence of a generally applicable ruling by the Secretary. For example, a surgeon called upon to perform any kind of surgery for a prospective claimant would, in the best of all possible worlds, wish to know in advance whether the surgery is “reasonable and necessary” within the meaning of the Medicare Act. And indeed some such surgeons may well decline to perform the requested surgery because of fear that the Secretary will not find the surgery “reasonable and necessary” and thus will refuse to reimburse them. The logic of the dissent’s position leads to the conclusion that those individuals, as well as Ringer, are entitled to an advance declaration so as to ensure them the opportunity to have the surgery that they desire.
Furthermore, the solution that the dissent provides for Ringer — allowing him to challenge the Secretary’s rule in federal court — hardly solves the problem that the dissent identifies. It is mere speculation to assume, as the dissent does, post, at 636-637, that a surgeon who is unwilling to perform surgery because of the existence of a rule will all of a sudden be willing to perform the surgery if the rule is struck down. That surgeon still faces a risk of not being paid in the administrative process, a risk that may well cause him to refuse to perform the surgery. The only sure way to ensure that all people desiring surgery are able to have it is to allow all of them to go into federal court or into the administrative process in advance of their surgery and get declarations of entitlement. Surely not even the dissent could sanction such a wholesale restructuring of the Medicare system in the face of clear congressional intent to the contrary.
IV
We hold that the District Court was correct in dismissing the complaint as to all respondents. Respondents urge affirmance of the Court of Appeals because “elderly, ill and disabled citizens who [sic] Congress intended to benefit from Social Security Act programs actually have suffered financially as well as physically” from the Secretary’s conclusion that BCBR surgery is never “reasonable and necessary. ” Brief for Respondents 31. But respondents Holmes, Webster-Zieber, and Vescio are not subject to the Secretary’s formal ruling and stood the chance of prevailing in administrative appeals. Respondent Ringer has not undergone the procedure and could prevail only if federal courts were free to give declaratory judgments to anyone covered by Medicare as to whether he would be entitled to reimbursement for a procedure if he decided later to undergo it.
In the best of all worlds, immediate judicial access for all of these parties might be desirable. But Congress, in § 405(g) and § 405(h), struck a different balance, refusing declaratory relief and requiring that administrative remedies be exhausted before judicial review of the Secretary’s decisions takes place. Congress must have felt that cases of individual hardship resulting from delays in the administrative process had to be balanced against the potential for overly casual or premature judicial intervention in an administrative system that processes literally millions of claims every year. If the balance is to be struck anew, the decision must come from Congress and not from this Court.
The judgment of the Court of Appeals is accordingly
Reversed.
Title 42 U. S. C. § 405(g) provides in part as follows:
“Any individual, after any final decision of the Secretary made after a hearing to which he was a party, irrespective of the amount in controversy, may obtain a review of such decision by a civil action commenced within sixty days after the mailing to him of notice of such decision or within such further time as the Secretary may allow. Such action shall be brought in the district court of the United States for the judicial district in which the plaintiff resides, or has his principal place of business, or, if he does not reside or have his principal place of business within any such judicial district, in the United States District Court for the District of Columbia. . . . The court shall have power to enter, upon the pleadings and transcript of the record, a judgment affirming, modifying, or reversing the decision of the Secretary, with or without remanding the cause for a rehearing. The findings of the Secretary as to any fact, if supported by substantial evidence, shall be conclusive. . . . The judgment of the court shall be final except that it shall be subject to review in the same manner as a judgment in other civil actions.”
The Secretary has recognized one exception which is not applicable here. She has provided by regulation that when the facts and her interpretation of the law are not in dispute and when the only factor precluding an award of benefits is a statutory provision which the claimant challenges as unconstitutional, the claimant need not exhaust his administrative remedies beyond the reconsideration stage. 42 CFR §§ 405.718-405.718e (1983); 20 CFR §§404.923-404.928 (1983).
BCBR, first performed in this country in the 1960’s, involves the surgical removal of the carotid bodies, structures the size of a rice grain which are located in the neck and which control the diameter of the bronchial tubes. Proponents of the procedure claim that it reduces the symptoms of pulmonary diseases such as asthma, bronchitis, and emphysema. Although the Secretary concluded that BCBR for that purpose is not “reasonable and necessary” within the meaning of the Medicare Act, she did note that the medical community had accepted the procedure as effective for another purpose, the removal of a carotid body tumor in the neck. 45 Fed. Reg. 71431 (1980).
Respondents objected to the denial of reimbursement for Part B as well as the Part A expenses of BCBR surgery. Part B of the Medicare Act, 42 U. S. C. § 1395j et seq., establishes a voluntary program of supplemental medical insurance covering expenses not covered by the Part A program, such as reasonable charges for physicians’ services, medical supplies, and laboratory tests. Payments for Part B expenses are made by private insurance carriers under contract to the Department of Health and Human Services, 42 U. S. C. § 1395u, and the claimant is entitled to reconsideration of the carrier’s initial denial of those claims. 42 CFR §§ 405.807-405.860 (1983). Congress has not, however, provided for judicial review of the denial of Part B claims. See Schweiker v. McClure, 456 U. S. 188 (1982); United States v. Erika, Inc., 456 U. S. 201 (1982). Thus respondents seem to concede that to the extent that their claims are characterized as claims for Part B benefits, there is no judicial review of those claims under McClure and Erika. Brief for Respondents 1, n. 1. Respondents do argue, however, that to the extent that their claims can be characterized as collateral constitutional challenges, see n. 7, infra, those constitutional challenges are properly before us. In light of our characterization of respondents' claims essentially as claims for benefits, see text at 614, and the fact that whatever constitutional claims respondents assert are clearly too insubstantial to support subject-matter jurisdiction, see Hagans v. Lavine, 415 U. S. 528, 536-538 (1974), we view this case as involving only respondents’ Part A claims.
Respondents requested certification of a class, App. 12, but the District Court dismissed the complaint before ruling on the class certification question.
Dr. Winter is also named as a plaintiff in the amended complaint, but he is pressing no claims on his own behalf before this Court, serving instead as a representative of BCBR claimants pursuant to 20 CFR § 404.1700 et seq. (1983); Brief for Respondents 6, n. 4. Because we find that there is no jurisdiction as to the BCBR claimants whose claims are before this Court, there is of course no jurisdiction as to their representative, Dr. Winter.
In particular respondents contend that the instructions and the formal ruling barring payment for BCBR surgery violate the requirement in 42 U. S. C. § 1395y(a)(l) that payment be made for “reasonable and necessary” medical services and that the policy is arbitrary and capricious under the Administrative Procedure Act (APA), 5 U. S. C. § 706(2), under the provision in 42 U. S. C. § 405(a) authorizing the Secretary to issue “reasonable” rules, and under the Due Process Clause of the Fifth Amendment. They contend that requiring them to pursue administrative remedies in order to obtain BCBR payment violates their rights to prompt administrative action under 5 U. S. C. § 555(b) and §706(2)(A). Finally, they argue that the Secretary violated the rulemaking requirements of the APA, 5 U. S. C. § 553, in issuing the 1979 instructions and the 1980 formal ruling. The complaint also stated objections, not pressed before this Court, to the assignment of BCBR claims to an ALJ other than the one who usually considers Dr. Winter’s patients’ claims, and to the Secretary’s assertion of control over the practice of medicine allegedly in violation of constitutional and statutory provisions.
Amici point out that the District Court failed to grant respondents leave to amend their complaint to challenge the formal ruling, and that the District Court did not in fact consider the issues raised in the amended complaint. Brief for the Alliance of Social Security Disability Recipients and the Gray Panthers as Amici Curiae 7-8, n. 1. The amended complaint, however, merely attacked the new ruling on the same grounds as had been asserted to attack the instructions, and the District Court’s finding of no jurisdiction fairly can be read to apply to the issues raised in the amended complaint as well. It is unclear whether respondents contested the District Court’s apparent failure formally to grant the amendment, but in any event, the Court of Appeals explicitly considered the issues raised in the amended complaint. The Solicitor General has not objected in this Court to the Court of Appeals’ nor to our consideration of those issues, and we will thus regard any possible objection to have been waived.
The Secretary’s formal ruling states:
“Effective Date: As explained above, we have previously issued [a] policy in manual instructions excluding this service from Medicare coverage. However, since ALJs and the Appeals Council have ruled in several cases that claims for these services are payable, it is possible that some beneficiaries, relying on these rulings, have proceeded to have the operation performed in expectation of Medicare payment. In fairness to those beneficiaries, we are making the ruling effective for services furnished after the date of publication [October 28, 1980].” 45 Fed. Reg. 71427 (1980).
One ALJ already expressly has held that the regulation is inapplicable to claimants whose BCBR surgery was performed before October 28, 1980. In re Benjamin Winter, M. D., Representative for 132 Claimants (SSA Office Hearing App., Feb. 27, 1982). Dr. Winter pursued that case administratively during the pendency of this litigation on behalf of several of the named respondents and other BCBR claimants. See n. 12, infra. See also Tr. of Oral Arg. 16-17.
That provision reads as follows:
“The findings and decisions of the Secretary after a hearing shall be binding upon all individuals who were parties to the hearing. No findings of fact or decision of the Secretary shall be reviewed by any person, tribunal, or governmental agency except as herein provided. No action against the United States, the Secretary, or any officer or employee thereof shall be brought under section 1331 or 1346 of title 28 to recover on any claim arising under this subchapter.” 42 U. S. C. § 405(h).
Respondents’ reliance on Mathews v. Diaz, 426 U. S. 67 (1976), is unavailing. In that case, plaintiffs challenged the constitutionality of the duration of residency requirement for enrollment in the Part B Medicare Program. We concluded that the Secretary had waived further exhaustion because he had stipulated that the plaintiffs’ applications would be denied on the basis of the challenged provision, and because he had stipulated that the only issue before the courts was the constitutionality of the provision, an issue beyond the Secretary’s competence. Id., at 76-77. Here, however, the disputed question of coverage for BCBR surgery is peculiarly within the Secretary’s competence, and the formal ruling, which respondents liken to the stipulated denial of plaintiffs’ applications in Diaz, is not even applicable to their claims.
We noted in Weinberger v. Salfi, 422 U. S. 749, 765 (1975), that the purpose of the exhaustion requirement is to prevent “premature interference with agency processes” and to give the agency a chance “to compile a record which is adequate for judicial review.” This case aptly demonstrates the wisdom of Congress’ exhaustion scheme. Several respondents in this case pursued their administrative remedies during the pendency of this litigation, see n. 9, supra, and the claims of respondents Holmes and Webster-Zieber were denied on grounds not even related to the instructions and rule which they now seek to challenge in federal court. Further, the ALJ determined that the formal rule was not even applicable to respondent Vescio’s claim because of the date of her surgery, and he thus concluded that additional evidence was necessary to determine whether she was entitled to payment.
Of course, as we have pointed out, Ringer and the other respondents come quite close to asking just that in asking the federal court to invalidate the Secretary’s rule and to compel the Secretary to declare BCBR surgery “reasonable and necessary” within the meaning of the Medicare Act. Supra, at 610-611, 614, 620; Brief for Respondents 1, 10; App. 25-26.
In 1982 there were 48 million claims filed under Part A of the Medicare Program. Bureau of Program Operations, HCFA, U. S. Department of Health and Human Services, B. P. O. Part A, Intermediary Workload Report (May 1983). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
62
] |
Bruce James ABRAMSKI, Jr., Petitioner
v.
UNITED STATES.
No. 12-1493.
Supreme Court of the United States
Argued Jan. 22, 2014.
Decided June 16, 2014.
Syllabus*
Petitioner Bruce Abramski offered to purchase a handgun for his uncle. The form that federal regulations required Abramski to fill out (Form 4473) asked whether he was the "actual transferee/buyer" of the gun, and clearly warned that a straw purchaser (namely, someone buying a gun on behalf of another) was not the actual buyer. Abramski falsely answered that he was the actual buyer. Abramski was convicted for knowingly making false statements "with respect to any fact material to the lawfulness of the sale" of a gun, 18 U.S.C. § 922(a)(6), and for making a false statement "with respect to the information required ... to be kept" in the gun dealer's records, § 924(a)(1)(A). The Fourth Circuit affirmed.
Held:
1. Abramski's misrepresentation is material under § 922(a)(6). Pp. 2265 - 2274.
(a) Abramski contends that federal gun laws are entirely unconcerned with straw arrangements: So long as the person at the counter is eligible to own a gun, the sale to him is legal under the statute. To be sure, federal law regulates licensed dealer's transactions with "persons" or "transferees" without specifying whether that language refers to the straw buyer or the actual purchaser. But when read in light of the statute's context, structure, and purpose, it is clear this language refers to the true buyer rather than the straw. Federal gun law establishes an elaborate system of in-person identification and background checks to ensure that guns are kept out of the hands of felons and other prohibited purchasers. §§ 922(c), 922(t). It also imposes record-keeping requirements to assist law enforcement authorities in investigating serious crimes through the tracing of guns to their buyers. § 922(b)(5), 923(g). These provisions would mean little if a would-be gun buyer could evade them all simply by enlisting the aid of an intermediary to execute the paperwork on his behalf. The statute's language is thus best read in context to refer to the actual rather than nominal buyer. This conclusion is reinforced by this Court's standard practice of focusing on practical realities rather than legal formalities when identifying the parties to a transaction. Pp. 2265 - 2272.
(b) Abramski argues more narrowly that his false response was not material because his uncle could have legally bought a gun for himself. But Abramski's false statement prevented the dealer from insisting that the true buyer (Alvarez) appear in person, provide identifying information, show a photo ID, and submit to a background check. § 922(b), (c), (t). Nothing in the statute suggests that these legal duties may be wiped away merely because the actual buyer turns out to be legally eligible to own a gun. Because the dealer could not have lawfully sold the gun had it known that Abramski was not the true buyer, the misstatement was material to the lawfulness of the sale. Pp. 2272 - 2274.
2. Abramski's misrepresentation about the identity of the actual buyer concerned "information required by [Chapter 44 of Title 18 of the United States Code] to be kept" in the dealer's records. § 924(a)(1)(A). Chapter 44 contains a provision requiring a dealer to "maintain such records ... as the Attorney General may ... prescribe." § 923(g)(1)(A). The Attorney General requires every licensed dealer to retain in its records a completed copy of Form 4473, see 27 C.F.R. § 478.124(b), and that form in turn includes the "actual buyer" question that Abramski answered falsely. Therefore, falsely answering a question on Form 4473 violates § 924(a)(1)(A). Pp. 2274 - 2275.
706 F.3d 307, affirmed.
KAGAN, J., delivered the opinion of the Court, in which KENNEDY, GINSBURG, BREYER, and SOTOMAYOR, JJ., joined. SCALIA, J., filed a dissenting opinion, in which ROBERTS, C.J., and THOMAS and ALITO, JJ., joined.
Richard D. Dietz, Winston-Salem, NC, for Petitioner.
Joseph R. Palmore, Washington, D.C., for Respondent.
Rhonda Lee Overstreet, Overstreet Sloan, PLLC, Bedford, VA, Adam H. Charnes, Richard D. Dietz, Counsel of Record, Paul J. Foley, Thurston H. Webb, Elizabeth L. Winters, Kilpatrick Townsend & Stockton LLP, Winston-Salem, NC, for Petitioner.
Donald B. Verrilli, Jr., Solicitor General, Counsel of Record, Mythili Raman, Acting Assistant Attorney General, Michael R. Dreeben, Deputy Solicitor General, Joseph R. Palmore, Assistant to the Solicitor General, Thomas E. Booth, Department of Justice, Washington, D.C., for Respondent.
Justice KAGAN delivered the opinion of the Court.
Before a federally licensed firearms dealer may sell a gun, the would-be purchaser must provide certain personal information, show photo identification, and pass a background check. To ensure the accuracy of those submissions, a federal statute imposes criminal penalties on any person who, in connection with a firearm's acquisition, makes false statements about "any fact material to the lawfulness of the sale." 18 U.S.C. § 922(a)(6). In this case, we consider how that law applies to a so-called straw purchaser-namely, a person who buys a gun on someone else's behalf while falsely claiming that it is for himself. We hold that such a misrepresentation is punishable under the statute, whether or not the true buyer could have purchased the gun without the straw.
I
A
Federal law has for over 40 years regulated sales by licensed firearms dealers, principally to prevent guns from falling into the wrong hands. See Gun Control Act of 1968, 18 U.S.C. § 921 et seq. Under § 922(g), certain classes of people-felons, drug addicts, and the mentally ill, to list a few-may not purchase or possess any firearm. And to ensure they do not, § 922(d) forbids a licensed dealer from selling a gun to anyone it knows, or has reasonable cause to believe, is such a prohibited buyer. See Huddleston v. United States, 415 U.S. 814, 825, 94 S.Ct. 1262, 39 L.Ed.2d 782 (1974) ("[T]he focus of the federal scheme," in controlling access to weapons, "is the federally licensed firearms dealer").
The statute establishes a detailed scheme to enable the dealer to verify, at the point of sale, whether a potential buyer may lawfully own a gun. Section 922(c) brings the would-be purchaser onto the dealer's "business premises" by prohibiting, except in limited circumstances, the sale of a firearm "to a person who does not appear in person" at that location. Other provisions then require the dealer to check and make use of certain identifying information received from the buyer. Before completing any sale, the dealer must "verif[y] the identity of the transferee by examining a valid identification document" bearing a photograph. § 922(t)(1)(C). In addition, the dealer must procure the buyer's "name, age, and place of residence." § 922(b)(5). And finally, the dealer must (with limited exceptions not at issue here1) submit that information to the National Instant Background Check System (NICS) to determine whether the potential purchaser is for any reason disqualified from owning a firearm. See § 922(t)(1)(A)-(B).
The statute further insists that the dealer keep certain records, to enable federal authorities both to enforce the law's verification measures and to trace firearms used in crimes. See H.R.Rep. No. 1577, 90th Cong., 2d Sess., 14 (1968). A dealer must maintain the identifying information mentioned above ( i.e., name, age, and residence) in its permanent files. See § 922(b)(5). In addition, the dealer must keep "such records of ... sale[ ] or other disposition of firearms ... as the Attorney General may by regulations prescribe." § 923(g)(1)(A). And the Attorney General (or his designee) may obtain and inspect any of those records, "in the course of a bona fide criminal investigation," to "determin[e] the disposition of 1 or more firearms." § 923(g)(7).
To implement all those statutory requirements, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) developed Form 4473 for gun sales. See Supp.
App. 1-6. The part of that form to be completed by the buyer requests his name, birth date, and address, as well as certain other identifying information (for example, his height, weight, and race). The form further lists all the factors disqualifying a person from gun ownership, and asks the would-be buyer whether any of them apply ( e.g., "[h]ave you ever been convicted ... of a felony?"). Id., at 1. Most important here, Question 11.a. asks (with bolded emphasis appearing on the form itself):
"Are you the actual transferee/buyer of the firearm(s) listed on this form? Warning: You are not the actual buyer if you are acquiring the firearm(s) on behalf of another person. If you are not the actual buyer, the dealer cannot transfer the firearm(s) to you." Ibid.
The accompanying instructions for that question provide:
"Question 11.a. Actual Transferee/Buyer: For purposes of this form, you are the actual transferee/buyer if you are purchasing the firearm for yourself or otherwise acquiring the firearm for yourself.... You are also the actual transferee/buyer if you are legitimately purchasing the firearm as a gift for a third party. ACTUAL TRANSFEREE/BUYER EXAMPLES: Mr. Smith asks Mr. Jones to purchase a firearm for Mr. Smith. Mr. Smith gives Mr. Jones the money for the firearm. Mr. Jones is NOT THE ACTUAL TRANSFEREE/BUYER of the firearm and must answer "NO" to question 11.a." Id., at 4.
After responding to this and other questions, the customer must sign a certification declaring his answers "true, correct and complete." Id., at 2. That certification provides that the signator "understand[s] that making any false ... statement" respecting the transaction-and, particularly, "answering 'yes' to question 11.a. if [he is] not the actual buyer"-is a crime "punishable as a felony under Federal law." Ibid. (bold typeface deleted).
Two statutory provisions, each designed to ensure that the dealer can rely on the truthfulness of the buyer's disclosures in carrying out its obligations, criminalize certain false statements about firearms transactions. First and foremost, § 922(a)(6), provides as follows:
"It shall be unlawful ... for any person in connection with the acquisition or attempted acquisition of any firearm or ammunition from [a licensed dealer] knowingly to make any false or fictitious oral or written statement ..., intended or likely to deceive such [dealer] with respect to any fact material to the lawfulness of the sale or other disposition of such firearm or ammunition under the provisions of this chapter."
That provision helps make certain that a dealer will receive truthful information as to any matter relevant to a gun sale's legality. In addition, § 924(a)(1)(A) prohibits "knowingly mak[ing] any false statement or representation with respect to the information required by this chapter to be kept in the records" of a federally licensed gun dealer. The question in this case is whether, as the ATF declares in Form 4473's certification, those statutory provisions criminalize a false answer to Question 11.a.-that is, a customer's statement that he is the "actual transferee/buyer," purchasing a firearm for himself, when in fact he is a straw purchaser, buying the gun on someone else's behalf.
B
The petitioner here is Bruce Abramski, a former police officer who offered to buy a Glock 19 handgun for his uncle, Angel Alvarez. (Abramski thought he could get the gun for a discount by showing his old police identification, though the Government contends that because he had been fired from his job two years earlier, he was no longer authorized to use that card.) Accepting his nephew's offer, Alvarez sent Abramski a check for $400 with "Glock 19 handgun" written on the memo line. Two days later, Abramski went to Town Police Supply, a federally licensed firearms dealer, to make the purchase. There, he filled out Form 4473, falsely checking "Yes" in reply to Question 11.a.-that is, asserting he was the "actual transferee/ buyer" when, according to the form's clear definition, he was not. He also signed the requisite certification, acknowledging his understanding that a false answer to Question 11.a. is a federal crime. After Abramski's name cleared the NICS background check, the dealer sold him the Glock. Abramski then deposited the $400 check in his bank account, transferred the gun to Alvarez, and got back a receipt. Federal agents found that receipt while executing a search warrant at Abramski's home after he became a suspect in a different crime.
A grand jury indicted Abramski for violating §§ 922(a)(6) and 924(a)(1)(A) by falsely affirming in his response to Question 11.a. that he was the Glock's actual buyer. Abramski moved to dismiss both charges. He argued that his misrepresentation on Question 11.a. was not "material to the lawfulness of the sale" under § 922(a)(6) because Alvarez was legally eligible to own a gun. And he claimed that the false statement did not violate § 924(a)(1)(A) because a buyer's response to Question 11.a. is not "required ... to be kept in the records" of a gun dealer. After the District Court denied those motions, see 778 F.Supp.2d 678 (W.D.Va.2011), Abramski entered a conditional guilty plea, reserving his right to challenge the rulings. The District Court then sentenced him to five years of probation on each count, running concurrently.
The Court of Appeals for the Fourth Circuit affirmed the convictions. 706 F.3d 307 (2013). It noted a division among appellate courts on the question Abramski raised about § 922(a)(6)'s materiality requirement: Of three courts to have addressed the issue, one agreed with Abramski that a misrepresentation on Question 11.a. is immaterial if "the true purchaser [here, Alvarez] can lawfully purchase a firearm directly." Id., at 315 (quoting United States v. Polk, 118 F.3d 286, 295 (C.A.5 1997)).2 The Fourth Circuit, however, thought the majority position correct: "[T]he identity of the actual purchaser of a firearm is a constant that is always material to the lawfulness of a firearm acquisition under § 922(a)(6)." 706 F.3d, at 316. The court also held that Abramski's conviction under § 924(a)(1)(A) was valid, finding that the statute required a dealer to maintain the information at issue in its records. Id., at 317.
We granted certiorari, 571 U.S. ----, 134 S.Ct. 421, 187 L.Ed.2d 278 (2013), principally to resolve the Circuit split about § 922(a)(6). In this Court, Abramski renews his claim that a false answer to Question 11.a. is immaterial if the true buyer is legally eligible to purchase a firearm. But Abramski now focuses on a new and more ambitious argument, which he concedes no court has previously accepted. See Brief for Petitioner i.3 In brief, he alleges that a false response to Question 11.a. is never material to a gun sale's legality, whether or not the actual buyer is eligible to own a gun. We begin with that fundamental question, next turn to what has become Abramski's back-up argument under § 922(a)(6), and finally consider the relatively easy question pertaining to § 924(A)(1)(a)'s separate false-statement prohibition. On each score, we affirm Abramski's conviction.
II
Abramski's broad theory (mostly echoed by the dissent) is that federal gun law simply does not care about arrangements involving straw purchasers: So long as the person at the counter is eligible to own a gun, the sale to him is legal under the statute. That is true, Abramski contends, irrespective of any agreement that person has made to purchase the firearm on behalf of someone else-including someone who cannot lawfully buy or own a gun himself. Accordingly, Abramski concludes, his "false statement that he was the [Glock 19's] 'actual buyer,' " as that term was "defined in Question 11.a., was not material"-indeed, was utterly irrelevant-"to the lawfulness of the sale." Id., at 31 (emphasis deleted); see also post, at 2276 - 2277 (opinion of SCALIA, J.). In essence, he claims, Town Police Supply could legally have sold the gun to him even if had truthfully answered Question 11.a. by disclosing that he was a straw-because, again, all the federal firearms law cares about is whether the individual standing at the dealer's counter meets the requirements to buy a gun.4
At its core, that argument relies on one true fact: Federal gun law regulates licensed dealers' transactions with "persons" or "transferees," without specifically referencing straw purchasers. Section 922(d), for example, bars a dealer from "sell[ing] or otherwise dispos[ing] of" a firearm to any "person" who falls within a prohibited category-felons, drug addicts, the mentally ill, and so forth. See supra, at 2262 - 2263; see also § 922(b)(5) (before selling a gun to a "person," the dealer must take down his name, age, and residence); § 922(t)(1) (before selling a gun to a "person," the dealer must run a background check). Similarly, § 922(t)(1)(C) requires the dealer to verify the identity of the "transferee" by checking a valid photo ID. See supra, at 2263; see also § 922(c) (spelling out circumstances in which a "transferee" may buy a gun without appearing at the dealer's premises). Abramski contends that Congress's use of such language alone, sans any mention of "straw purchasers" or "actual buyers," shows that "[i]t is not illegal to buy a gun for someone else." Brief for Petitioner 15-16; Reply Brief 1; see also post, at 2275 - 2278.
But that language merely raises, rather than answers, the critical question: In a straw purchase, who is the "person" or "transferee" whom federal gun law addresses? Is that "person" the middleman buying a firearm on someone else's behalf (often because the ultimate recipient could not buy it himself, or wants to camouflage the transaction)? Or is that "person" instead the individual really paying for the gun and meant to take possession of it upon completion of the purchase? Is it the conduit at the counter, or the gun's intended owner? 5 In answering that inquiry, we must (as usual) interpret the relevant words not in a vacuum, but with reference to the statutory context, "structure, history, and purpose." Maracich v. Spears, 570 U.S. ----, ----, 133 S.Ct. 2191, 2209, 186 L.Ed.2d 275 (2013). All those tools of divining meaning-not to mention common sense, which is a fortunate (though not inevitable) side-benefit of construing statutory terms fairly-demonstrate that § 922, in regulating licensed dealers' gun sales, looks through the straw to the actual buyer.6
The overarching reason is that Abramski's reading would undermine-indeed, for all important purposes, would virtually repeal-the gun law's core provisions. 7 As noted earlier, the statute establishes an elaborate system to verify a would-be gun purchaser's identity and check on his background. See supra, at 2263. It also requires that the information so gathered go into a dealer's permanent records. See supra, at 2263 - 2264. The twin goals of this comprehensive scheme are to keep guns out of the hands of criminals and others who should not have them, and to assist law enforcement authorities in investigating serious crimes. See Huddleston, 415 U.S., at 824, 94 S.Ct. 1262;supra, at 2263 - 2264. And no part of that scheme would work if the statute turned a blind eye to straw purchases-if, in other words, the law addressed not the substance of a transaction, but only empty formalities.
To see why, consider what happens in a typical straw purchase. A felon or other person who cannot buy or own a gun still wants to obtain one. (Or, alternatively, a person who could legally buy a firearm wants to conceal his purchase, maybe so he can use the gun for criminal purposes without fear that police officers will later trace it to him.) Accordingly, the prospective buyer enlists an intermediary to help him accomplish his illegal aim. Perhaps he conscripts a loyal friend or family member; perhaps more often, he hires a stranger to purchase the gun for a price. The actual purchaser might even accompany the straw to the gun shop, instruct him which firearm to buy, give him the money to pay at the counter, and take possession as they walk out the door. See, e.g., United States v. Bowen, 207 Fed.Appx. 727, 729 (C.A.7 2006) (describing a straw purchase along those lines); United States v. Paye, 129 Fed.Appx. 567, 570 (C.A.11 2005) ( per curiam ) (same). What the true buyer would not do-what he would leave to the straw, who possesses the gun for all of a minute-is give his identifying information to the dealer and submit himself to a background check. How many of the statute's provisions does that scenario-the lawful result of Abramski's (and the dissent's) reading of "transferee" and "person"-render meaningless?
Start with the parts of § 922 enabling a dealer to verify whether a buyer is legally eligible to own a firearm. That task, as noted earlier, begins with identification-requesting the name, address, and age of the potential purchaser and checking his photo ID. See § 922(b)(5), (t)(1)(C); supra, at 2263. And that identification in turn permits a background check: The dealer runs the purchaser's name through the NICS database to discover whether he is, for example, a felon, drug addict, or mentally ill person. See § 922(d), (t)(1); supra, at 2263. All those provisions are designed to accomplish what this Court has previously termed Congress's "principal purpose" in enacting the statute-"to curb crime by keeping 'firearms out of the hands of those not legally entitled to possess them.' " Huddleston, 415 U.S., at 824, 94 S.Ct. 1262 (quoting S.Rep. No. 1501, 90th Cong., 2d Sess. 22 (1968)). But under Abramski's reading, the statutory terms would be utterly ineffectual, because the identification and background check would be of the wrong person. The provisions would evaluate the eligibility of mere conduits, while allowing every criminal (and drug addict and so forth) to escape that assessment and walk away with a weapon.
Similarly, Abramski's view would defeat the point of § 922(c), which tightly restricts the sale of guns "to a person who does not appear in person at the licensee's business premises." See supra, at 2263. Only a narrow class of prospective buyers may ever purchase a gun from afar-primarily, individuals who have already had their eligibility to own a firearm verified by state law enforcement officials with access to the NICS database. See 27 C.F.R. § 478.96(b) (2014), 18 U.S.C. § 922(t)(3); n. 1, supra. And even when an individual fits within that category, he still must submit to the dealer a sworn statement that he can lawfully own a gun, as well as provide the name and address of the principal law enforcement officer in his community. See § 922(c)(1). The dealer then has to forward notice of the sale to that officer, in order to allow law enforcement authorities to investigate the legality of the sale and, if necessary, call a stop to it. See § 922(c)(2)-(3). The provision thus prevents remote sales except to a small class of buyers subject to extraordinary procedures-again, to ensure effective verification of a potential purchaser's eligibility. Yet on Abramski's view, a person could easily bypass the scheme, purchasing a gun without ever leaving his home by dispatching to a gun store a hired deliveryman. Indeed, if Abramski were right, we see no reason why anyone (and certainly anyone with less-than-pure motives) would put himself through the procedures laid out in § 922(c): Deliverymen, after all, are not so hard to come by.
And likewise, the statute's record-keeping provisions would serve little purpose if the records kept were of nominal rather than real buyers. As noted earlier, dealers must store, and law enforcement officers may obtain, information about a gun buyer's identity. See §§ 922(b)(5), 923(g); supra, at 2263. That information helps to fight serious crime. When police officers retrieve a gun at a crime scene, they can trace it to the buyer and consider him as a suspect. See National Shooting Sports Foundation, Inc. v. Jones, 716 F.3d 200, 204 (C.A.D.C.2013) (describing law enforcement's use of firearm tracing). Too, the required records enable dealers to identify certain suspicious purchasing trends, which they then must report to federal authorities. See § 923(g)(3) (imposing a reporting obligation when a person buys multiple handguns within five days). But once again, those provisions can serve their objective only if the records point to the person who took actual control of the gun(s). Otherwise, the police will at most learn the identity of an intermediary, who could not have been responsible for the gun's use and might know next to nothing about the actual buyer. See, e.g., United States v. Juarez, 626 F.3d 246, 249 (C.A.5 2010) (straw purchaser bought military-style assault rifles, later found among Mexican gang members, for a buyer known "only as 'El Mano' "). Abramski's view would thus render the required records close to useless for aiding law enforcement: Putting true numbskulls to one side, anyone purchasing a gun for criminal purposes would avoid leaving a paper trail by the simple expedient of hiring a straw.
To sum up so far: All the prerequisites for buying a gun described above refer to a "person" or "transferee." Read Abramski's way ("the man at the counter"), those terms deny effect to the regulatory scheme, as criminals could always use straw purchasers to evade the law.8 Read the other way ("the man getting, and always meant to get, the firearm"), those terms give effect to the statutory provisions, allowing them to accomplish their manifest objects. That alone provides more than sufficient reason to understand "person" and "transferee" as referring not to the fictitious but to the real buyer.
And other language in § 922 confirms that construction, by evincing Congress's concern with the practical realities, rather than the legal niceties, of firearms transactions. For example, § 922(a)(6) itself bars material misrepresentations "in connection with the acquisition," and not just the purchase, of a firearm. That broader word, we have previously held, does not focus on "legal title"-let alone legal title for a few short moments, until another, always intended transfer occurs.
Huddleston, 415 U.S., at 820, 94 S.Ct. 1262. Instead, the term signifies "com[ing] into possession, control, or power of disposal," as the actual buyer in a straw purchase does. Ibid. Similarly, we have reasoned that such a substance-over-form approach draws support from the statute's repeated references to "the sale or other disposition " of a firearm. § 922(a)(6); see § 922(d) (making it unlawful to "sell or otherwise dispose of" a gun to a prohibited person). That term, we have stated, "was aimed at providing maximum coverage." Id., at 826-827, 94 S.Ct. 1262. We think such expansive language inconsistent with Abramski's view of the statute, which would stare myopically at the nominal buyer while remaining blind to the person exiting the transaction with control of the gun.
Finally, our reading of § 922 comports with courts' standard practice, evident in many legal spheres and presumably known to Congress, of ignoring artifice when identifying the parties to a transaction. In United States v. One 1936 Model Ford V-8 De Luxe Coach, Commercial Credit Co., 307 U.S. 219, 59 S.Ct. 861, 83 L.Ed. 1249 (1939), for example, we considered the operation of a statute requiring forfeiture of any interest in property that was used to violate prohibition laws, except if acquired in good faith. There, a straw purchaser had bought a car in his name but with his brother's money, and transferred it to the brother-a known bootlegger-right after driving it off the lot. See id., at 222-223, 59 S.Ct. 861. The Court held the finance company's lien on the car non-forfeitable because the company had no hint that the straw was a straw-that his brother would in fact be the owner. See id., at 224, 59 S.Ct. 861. But had the company known, the Court made clear, a different result would have obtained: The company could not have relied on the formalities of the sale to the " 'straw' purchaser" when it knew that the "real owner and purchaser" of the car was someone different. Id., at 223-224, 59 S.Ct. 861. We have similarly emphasized the need in other contexts, involving both criminal and civil penalties, to look through a transaction's nominal parties to its true participants. See, e.g.,American Needle, Inc. v. National Football League, 560 U.S. 183, 193, 130 S.Ct. 2201, 176 L.Ed.2d 947 (2010) (focusing on "substance rather than form" in assessing when entities are distinct enough to be capable of conspiring to violate the antitrust laws); Gregory v. Helvering, 293 U.S. 465, 470, 55 S.Ct. 266, 79 L.Ed. 596 (1935) (disregarding an intermediary shell corporation created to avoid taxes because doing otherwise would "exalt artifice above reality"). We do no more than that here in holding, consistent with § 922's text, structure, and purpose, that using a straw does not enable evasion of the firearms law.
Abramski, along with the dissent, objects that such action is no circumvention-that Congress made an intentional choice, born of "political compromise," to limit the gun law's compass to the person at the counter, even if merely acting on another's behalf. Reply Brief 11; post, at 10-11. As evidence, Abramski states that the statute does not regulate beyond the initial point of sale. Because the law mostly addresses sales made by licensed dealers, a purchaser can (within wide limits) subsequently decide to resell his gun to another private party. See Reply Brief 11 . And similarly, Abramski says, a purchaser can buy a gun for someone else as a gift. See Brief for Petitioner 26-27, n. 3. Abramski lumps in the same category the transfer of a gun from a nominal to a real buyer-as something, like a later resale or gift, meant to fall outside the statute's (purported) standing-in-front-of-the-gun-dealer scope. See Reply Brief 13; see also post, at 2278 - 2280.
But Abramski and the dissent draw the wrong conclusion from their observations about resales and gifts. Yes, Congress decided to regulate dealers' sales, while leaving the secondary market for guns largely untouched. As we noted in Huddleston, Congress chose to make the dealer the "principal agent of federal enforcement" in "restricting [criminals'] access to firearms." 415 U.S., at 824, 94 S.Ct. 1262. And yes, that choice (like pretty much everything Congress does) was surely a result of compromise. But no, straw arrangements are not a part of the secondary market, separate and apart from the dealer's sale. In claiming as much, Abramski merely repeats his mistaken assumption that the "person" who acquires a gun from a dealer in a case like this one is the straw, rather than the individual who has made a prior arrangement to pay for, take possession of, own, and use that part of the dealer's stock. For all the reasons we have already given, that is not a plausible construction of a statute mandating that the dealer identify and run a background check on the person to whom it is (really, not fictitiously) selling a gun. See supra, at 2267 - 2270. The individual who sends a straw to a gun store to buy a firearm is transacting with the dealer, in every way but the most formal; and that distinguishes such a person from one who buys a gun, or receives a gun as a gift, from a private party.9 The line Congress drew between those who acquire guns from dealers and those who get them as gifts or on the secondary market, we suspect, reflects a host of things, including administrative simplicity and a view about where the most problematic firearm transactions-like criminal organizations' bulk gun purchases-typically occur. But whatever the reason, the scarcity of controls in the secondary market provides no reason to gut the robust measures Congress enacted at the point of sale.
Abramski claims further support for his argument from Congress's decision in 1986 to amend § 922(d) to prohibit a private party (and not just, as originally enacted, a licensed dealer) from selling a gun to someone he knows or reasonably should know cannot legally possess one. See Firearm Owners' Protection Act, § 102(5)(A), 100 Stat. 451-452. According to Abramski, the revised § 922(d) should be understood as Congress's exclusive response to the potential dangers arising from straw purchases. See Brief for Petitioner 26-27. The amendment shows, he claims, that "Congress chose to address this perceived problem in a way other than" by imposing liability under § 922(a)(6) on a straw who tells a licensed dealer that he is the firearm's actual buyer. Reply Brief 14, n. 2.
But Congress's amendment of § 922(d) says nothing about § 922(a)(6)'s application to straw purchasers. In enacting that amendment, Congress left § 922(a)(6) just as it was, undercutting any suggestion that Congress somehow intended to contract that provision's reach. The amendment instead performed a different function: Rather than ensuring that a licensed dealer receives truthful information, it extended a minimal form of regulation to the secondary market. The revised § 922(d) prevents a private person from knowingly selling a gun to an ineligible owner no matter when or how he acquired the weapon: It thus applies not just to a straw purchaser, but to an individual who bought a gun for himself and later decided to resell it. At the same time, § 922(d) has nothing to say about a raft of cases § 922(a)(6) covers, including all the (many) straw purchases in which the frontman does not know that the actual buyer is ineligible. See supra, at 2269. Thus, § 922(d) could not serve as an effective substitute for § 922(a)(6). And the mere potential for some transactions to run afoul of both prohibitions gives no cause to read § 922(d) as limiting § 922(a)(6) (or vice versa). See, e.g., United States v. Batchelder, 442 U.S. 114, 118-126, 99 S.Ct. 2198, 60 L.Ed.2d 755 (1979).10
Abramski's principal attack on his § 922(a)(6) conviction therefore fails. Contrary to his contention, the information Question 11.a. requests-"[a]re you the actual transferee/buyer[?]" or, put conversely, "are [you] acquiring the firearm(s) on behalf of another person[?]"-is relevant to the lawfulness of a gun sale. That is because, for all the reasons we have given, the firearms law contemplates that the dealer will check not the fictitious purchaser's but instead the true purchaser's identity and eligibility for gun ownership. By concealing that Alvarez was the actual buyer, Abramski prevented the dealer from transacting with Alvarez face-to-face, see § 922(c), recording his name, age, and residence, see § 922(b)(5), inspecting his photo ID, see § 922(t)(1)(C), submitting his identifying information to the background check system, see § 922(t)(1)(B), and determining whether he was prohibited from receiving a firearm, see § 922(d). In sum, Abramski thwarted application of essentially all of the firearms law's requirements. We can hardly think of a misrepresentation any more material to a sale's legality.
III
Abramski also challenges his § 922(a)(6) conviction on a narrower ground. For purposes of this argument, he assumes that the Government can make its case when a straw hides the name of an underlying purchaser who is legally ineligible to own a gun. But, Abramski reminds us, that is not true here, because Alvarez could have bought a gun for himself. In such circumstances, Abramski claims that a false response to Question 11.a. is not material. See Brief for Petitioner 28-30. Essentially, Abramski contends, when the hidden purchaser is eligible anyway to own a gun, all's well that ends well, and all should be forgiven.
But we think what we have already said shows the fallacy of that claim: Abramski's false statement was material because had he revealed that he was purchasing the gun on Alvarez's behalf, the sale could not have proceeded under the law-even though Alvarez turned out to be an eligible gun owner. The sale, as an initial matter, would not have complied with § 922(c)'s restrictions on absentee purchases. See supra, at 2268 - 2269. If the dealer here, Town Police Supply, had realized it was in fact selling a gun to Alvarez, it would have had to stop the transaction for failure to comply with those conditions. Yet more, the sale could not have gone forward because the dealer would have lacked the information needed to verify and record Alvarez's identity and check his background. See § 922(b)(5), (t)(1)(B)-(C); supra, at 2267 - 2269. Those requirements, as we have explained, pertain to the real buyer; and the after-the-fact discovery that Alvarez would have passed the background check cannot somehow wipe them away. Accordingly, had Town Police Supply known Abramski was a straw, it could not have certified, as Form 4473 demands, its belief that the transfer was "not unlawful." Supp. App. 3.
An analogy may help show the weakness of Abramski's argument. Suppose a would-be purchaser, Smith, lawfully could own a gun. But further suppose that, for reasons of his own, Smith uses an alias (let's say Jones) to make the purchase. Would anyone say "no harm, no foul," just because Smith is not in fact a prohibited person under § 922(d)? We think not. Smith would in any event have made a false statement about who will own the gun, impeding the dealer's ability to carry out its legal responsibilities. So too here.
Abramski objects that because Alvarez could own a gun, the statute's core purpose-"keeping guns out of the hands" of criminals and other prohibited persons-"is not even implicated." Brief for Petitioner 29. But that argument (which would apply no less to the alias scenario) misunderstands the way the statute works. As earlier noted, the federal gun law makes the dealer "[t]he principal agent of federal enforcement." Huddleston, 415 U.S., at 824, 94 S.Ct. 1262, see supra, at 2270 - 2271. It is that highly regulated, legally knowledgeable entity, possessing access to the expansive NICS database, which has the responsibility to "[e]nsure that, in the course of sales or other dispositions ..., weapons [are not] obtained by individuals whose possession of them would be contrary to the public interest." 415 U.S., at 825. Nothing could be less consonant with the statutory scheme than placing that inquiry in the hands of an unlicensed straw purchaser, who is unlikely to be familiar with federal firearms law and has no ability to use the database to check whether the true buyer may own a gun. And in any event, keeping firearms out of the hands of criminals is not § 922's only goal: The statute's record-keeping provisions, as we have said, are also designed to aid law enforcement in the investigation of crime. See supra, at 2263 - 2264, 2268 - 2269. Abramski's proposed limitation on § 922(a)(6) would undercut that purpose because many would-be criminals remain legally eligible to buy firearms, and thus could use straws to purchase an endless stream of guns off-the-books. See, e.g.,Polk, 118 F.3d, at 289 (eligible gun buyer used straw purchasers to secretly accumulate an "arsenal of weapons" for a "massive offensive" against the Federal Government).
In addition, Abramski briefly notes that until 1995, the ATF took the view that a straw purchaser's misrepresentation counted as material only if the true buyer could not legally possess a gun. See Brief for Petitioner 7-8; n. 8, supra. We may put aside that ATF has for almost two decades now taken the opposite position, after reflecting on both appellate case law and changes in the statute. See Tr. of Oral Arg. 41; Brady Handgun Violence Prevention Act of 1993, § 103, 107 Stat. 1541 (codified at 18 U.S.C. § 922(t)). The critical point is that criminal laws are for courts, not for the Government, to construe. See, e.g., United States v. Apel, 571 U.S. ----, 134 S.Ct. 1144, 1151, 186 L.Ed.2d 75 (2014) ("[W]e have never held that the Government's reading of a criminal statute is entitled to any deference"). We think ATF's old position no more relevant than its current one-which is to say, not relevant at all. Whether the Government interprets a criminal statute too broadly (as it sometimes does) or too narrowly (as the ATF used to in construing § 922(a)(6)), a court has an obligation to correct its error. Here, nothing suggests that Congress-the entity whose voice does matter-limited its prohibition of a straw purchaser's misrepresentation in the way Abramski proposes.
IV
Finally, Abramski challenges his conviction under § 924(a)(1)(A), which prohibits "knowingly mak[ing] any false statement ... with respect to the information required by this chapter to be kept in the records" of a federally licensed dealer. That provision is broader than § 922(a)(6) in one respect: It does not require that the false statement at issue be "material" in any way. At the same time, § 924(a)(1)(A) includes an element absent from § 922(a)(6): The false statement must relate to "information required by this chapter to be kept in [a dealer's] records." Abramski notes that the indictment in this case charged him with only one misrepresentation: his statement in response to Question 11.a. that he was buying the Glock on his own behalf rather than on someone else's. And, he argues, that information (unlike the transferee's "name, age, and place of residence," which he plausibly reads the indictment as not mentioning) was not required " by this chapter "-but only by Form 4473 itself-to be kept in the dealer's permanent records. Brief for Petitioner 32.
We disagree. Included in "this chapter"-Chapter 44 of Title 18-is a provision, noted earlier, requiring a dealer to "maintain such records of ... sale, or other disposition of firearms at his place of business for such period, and in such form, as the Attorney General may by regulations prescribe." § 923(g)(1)(A); supra, at 2263 - 2264. Because of that statutory section, the information that the Attorney General's regulations compel a dealer to keep is information "required by this chapter." And those regulations (the validity of which Abramski does not here contest) demand that every licensed dealer "retain ... as a part of [its] required records, each Form 4473 obtained in the course of" selling or otherwise disposing of a firearm. 27 C.F.R. § 478.124(b). Accordingly, a false answer on that form, such as the one Abramski made, pertains to information a dealer is statutorily required to maintain.11
V
No piece of information is more important under federal firearms law than the identity of a gun's purchaser-the person who acquires a gun as a result of a transaction with a licensed dealer. Had Abramski admitted that he was not that purchaser, but merely a straw-that he was asking the dealer to verify the identity of, and run a background check on, the wrong individual-the sale here could not have gone forward. That makes Abramski's misrepresentation on Question 11.a. material under § 922(a)(6). And because that statement pertained to information that a dealer must keep in its permanent records under the firearms law, Abramski's answer to Question 11.a. also violated § 924(a)(1)(A). Accordingly, we affirm the judgment of the Fourth Circuit.
It is so ordered.
Justice SCALIA, with whom THE CHIEF JUSTICE, Justice THOMAS, and Justice ALITO join, dissenting.
Bruce Abramski bought a gun for his uncle from a federally licensed gun dealer, using money his uncle gave him for that purpose. Both men were legally eligible to receive and possess firearms, and Abramski transferred the gun to his uncle at a federally licensed gun dealership in compliance with state law. When buying the gun, Abramski had to fill out Form 4473 issued by the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF). In response to a question on the form, Abramski affirmed that he was the "actual/transferee buyer" of the gun, even though the form stated that he was not the "actual transferee/buyer" if he was purchasing the gun for a third party at that person's request and with funds provided by that person.
The Government charged Abramski with two federal crimes under the Gun Control Act of 1968, as amended, 18 U.S.C. §§ 921-931: making a false statement "material to the lawfulness of the sale," in violation of § 922(a)(6), and making a false statement "with respect to information required by [the Act] to be kept" by the dealer, in violation of § 924(a)(1)(A). On both counts the Government interprets this criminal statute to punish conduct that its plain language simply does not reach. I respectfully dissent from the Court's holding to the contrary.
I. Section 922(a)(6)
A
Under § 922(a)(6), it is a crime to make a "false ... statement" to a licensed gun dealer about a "fact material to the lawfulness of" a firearms sale. Abramski made a false statement when he claimed to be the gun's "actual transferee/buyer" as Form 4473 defined that term. But that false statement was not "material to the lawfulness of the sale" since the truth-that Abramski was buying the gun for his uncle with his uncle's money-would not have made the sale unlawful. See Kungys v. United States, 485 U.S. 759, 775, 108 S.Ct. 1537, 99 L.Ed.2d 839 (1988) (plurality opinion) (materiality is determined by asking "what would have ensued from official knowledge of the misrepresented fact"); accord id., at 787, 108 S.Ct. 1537 (Stevens, J., concurring in judgment). Therefore, Abramski's conviction on this count cannot stand.
Several provisions of the Act limit the circumstances in which a licensed gun dealer may lawfully sell a firearm. Most prominently, the Act provides that no one may "sell or otherwise dispose of" a firearm to a person who he knows or has reasonable cause to believe falls within one of nine prohibited categories (such as felons, fugitives, illegal-drug users, and the mentally ill). § 922(d). But the Government does not contend that either Abramski or his uncle fell into one of those prohibited categories. And no provision of the Act prohibits one person who is eligible to receive and possess firearms ( e.g., Abramski) from buying a gun for another person who is eligible to receive and possess firearms ( e.g., Abramski's uncle), even at the other's request and with the other's money.
The Government's contention that Abramski's false statement was material to the lawfulness of the sale depends on a strained interpretation of provisions that mention the "person" to whom a dealer "sell[s]" (or "transfer[s]," or "deliver[s]") a gun. A dealer may not "sell or deliver" a firearm to a "person" without recording "the name, age, and place of residence of such person." § 922(b)(5). He may not, without following special procedures, "sell" a firearm to a "person" who does not appear in person at the dealer's business. § 922(c). He may not "transfer" a firearm to a "person" without verifying that person's identity and running a background check. § 922(t)(1). And he may not "sell or deliver" a firearm to a "person" who he knows or has reasonable cause to believe resides in a different State. § 922(b)(3).
The Government maintains that in this case Abramski's uncle was the "person" to whom the dealer "s[old]" the gun, and that the sale consequently violated those provisions. It bases that assertion on the claim that the Gun Control Act implicitly incorporates "principles of agency law." Brief for United States 17. Under those principles, it contends, the individual who walks into a dealer's store, fills out the requisite forms, pays the dealer, and takes possession of the gun is not necessarily the "person" to whom the dealer "sell [s]" the gun. Instead, it says, we must ask whether that individual bought the gun as a third party's common-law agent; if so, then the third party is the "person" to whom the dealer "sell[s]" the gun within the meaning of the relevant statutory provisions. The majority agrees: Although it never explicitly mentions agency law, it declares that if an individual is "buying a firearm on someone else's behalf," the "someone else" is the "person" to whom the dealer "sell[s]" the gun within the meaning of the statute. Ante, at 2267.
I doubt that three of the four provisions at issue here would establish the materiality of Abramski's falsehood even if Abramski's uncle were deemed the "person" to whom the dealer "s[old]" the gun.1 But § 922(b)(3) would unquestionably do so, since it prohibits a dealer from selling a gun to a person who resides in another State, as Abramski's uncle did. That is of no moment, however, because Abramski's uncle was not the "person" to whom the gun was "s[old]."
The contrary interpretation provided by the Government and the majority founders on the plain language of the Act. We interpret criminal statutes, like other statutes, in a manner consistent with ordinary English usage. Flores-Figueroa v. United States, 556 U.S. 646, 650-652, 129 S.Ct. 1886, 173 L.Ed.2d 853 (2009); Jones v. United States, 529 U.S. 848, 855, 120 S.Ct. 1904, 146 L.Ed.2d 902 (2000); Bailey v. United States, 516 U.S. 137, 144-145, 116 S.Ct. 501, 133 L.Ed.2d 472 (1995). In ordinary usage, a vendor sells (or delivers, or transfers) an item of merchandise to the person who physically appears in his store, selects the item, pays for it, and takes possession of it. So if I give my son $10 and tell him to pick up milk and eggs at the store, no English speaker would say that the store "sells" the milk and eggs to me.2 And even if we were prepared to let "principles of agency law" trump ordinary English usage in the interpretation of this criminal statute, those principles would not require a different result. See, e.g.,Restatement (Second) of Agency § 366, Illustration 1 (1957) ("On behalf of P, his disclosed principal, A makes a written contract with T wherein A promises to buy from T, and T agrees to sell to A, certain machinery for $1000.... [If there is fraud in the inducement and A has already paid], A can maintain an action against T for the thousand dollars" (emphasis added)).
Huddleston v. United States, 415 U.S. 814, 94 S.Ct. 1262, 39 L.Ed.2d 782 (1974), on which the majority relies, ante, at 2269, does not suggest otherwise. There we addressed the types of transactions covered by the statutory term "acquisition" in § 922(a)(6) (a term whose meaning is not at issue here), holding that they were not limited to "sale-like transaction[s]" but included a "pawnshop redemption of a firearm." 415 U.S., at 819, 94 S.Ct. 1262. We said nothing about the distinct question of to whom a dealer "sell[s]," "transfer[s]," or "deliver[s]" a firearm in a given transaction. Nor does the case stand, as the majority believes, for "a substance-over-form approach," ante, at 2269. We said the term "acquisition" was " 'aimed at providing maximum coverage,' " ibid. (quoting 415 U.S., at 826-827, 94 S.Ct. 1262), not because substance over form demands that, nor because everything in the Act must be assumed to provide maximum coverage, but because "[t]he word 'acquire' is defined to mean simply 'to come into possession, control, or power of disposal of,' " which gives "no intimation ... that title or ownership would be necessary." Id., at 820, 94 S.Ct. 1262.
Contrary to the majority's assertion that the statute "merely raises, rather than answers, the critical question" of whether Abramski or his uncle was the "person" to whom the dealer "s[old]" the gun, ante, at 2267, the statute speaks to that question directly. Giving the text its plain, ordinary meaning, Abramski, not his uncle, was that "person." That being so, the Government has identified no reason why the arrangement between Abramski and his uncle, both of whom were eligible to receive and possess firearms, was "material to the lawfulness of" the sale.3
B
The majority contends, however, that the Gun Control Act's "principal purpose" of "curb[ing] crime by keeping firearms out of the hands of those not legally entitled to possess them" demands the conclusion that Abramski's uncle was the "person" to whom the dealer "s[old]" the gun. Ante, at 2268 (internal quotation marks omitted). But "no law pursues its purpose at all costs," and the "textual limitations upon a law's scope" are equally "a part of its 'purpose.' " Rapanos v. United States, 547 U.S. 715, 752, 126 S.Ct. 2208, 165 L.Ed.2d 159 (2006) (plurality opinion). The majority's purpose-based arguments describe a statute Congress reasonably might have written, but not the statute it wrote.
The heart of the majority's argument is its claim that unless Abramski's uncle is deemed the "person" to whom the gun was "s[old]," the Act's identification, background-check, and record-keeping requirements would be "render[ed] meaningless." Ante, at 2268. That vastly overstates the consequences. Perhaps the statute would serve the purpose of crime prevention more effectively if the requirements at issue looked past the "man at the counter" to the person "getting, and always meant to get, the firearm." Ante, at 2269. But ensuring that the person taking possession of the firearm from the dealer is eligible to receive and possess a firearm, and recording information about that person for later reference, are by no means worthless functions. On the contrary, they indisputably advance the purpose of crime prevention by making it harder for ineligible persons to acquire guns and easier for the Government to locate those guns in the future; they simply do not advance that purpose to the same degree as a more exacting law might have done.
That the Act's focus on the "man at the counter" in this situation does not render its requirements "meaningless" is confirmed by the Government's concession that the Act has a similar focus in many comparable situations where the gun's immediate purchaser is-to use the majority's phrase-a "mere condui [t]" for a contemplated transfer of the gun to a different person who will "take possession of, own, and use" it. Ante, at 2268, 2271. Consider the following scenarios in which even the Government regards the man at the counter as the "person" to whom the dealer "sell[s]" the gun:
• Guns Intended as Gifts. In the Government's view, an individual who buys a gun "with the intent of making a gift of the firearm to another person" is the gun's "true purchaser." ATF, Federal Firearms Regulations Reference Guide 165 (2005) (hereinafter 2005 ATF Guide). The Government's position makes no exception for situations where the gift is specifically requested by the recipient (as gifts sometimes are). So long as no money changes hands, and no agency relationship is formed, between gifter and giftee, the Act is concerned only with the man at the counter.
• Guns Intended for Resale. Introducing money into the equation does not automatically change the outcome. The Government admits that the man at the counter is the true purchaser even if he immediately sells the gun to someone else. Tr. of Oral Arg. 34-35. And it appears the Government's position would be the same even if the man at the counter purchased the gun with the intent to sell it to a particular third party, so long as the two did not enter into a common-law agency relationship.
• Guns Intended as Raffle Prizes. The Government considers the man at the counter the true purchaser even if he is buying the gun "for the purpose of raffling [it] at an event"-in which case he can provide his own information on Form 4473 and "transfer the firearm to the raffle winner without a Form 4473 being completed or a [background] check being conducted" on the winner. 2005 ATF Guide 195.
If the statute's requirements were "render[ed] meaningless" by treating Abramski rather than his uncle as the true purchaser, then they would be every bit as meaningless in the scenarios just described. The Government's concession that the statute is operating appropriately in each of those scenarios should cause the majority to reevaluate its assumptions about the type and degree of regulation that the statute regards as "meaningful." The majority, it is clear, regards Abramski's interpretation as creating a loophole in the law; but even if that were a fair characterization, why is the majority convinced that a statute with so many admitted loopholes does not contain this particular loophole?
The majority's answer to this argument is that "the individual who sends a straw to a gun store to buy a firearm is transacting with the dealer, in every way but the most formal." Ante, at 2271 (emphasis deleted). That certainly distinguishes that individual from the intended subsequent donee or purchaser; so would the fact that he has orange hair. But it does not establish why that individual, any more than the others, should be thought to be covered by statutory language (the "person" to whom a dealer "sell[s]" a gun) that does not naturally apply. The only thing which can justify that leap is the false imperative to make the statute as effective as possible, rather than as effective as the language indicates Congress desired.4
What the scenarios described above show is that the statute typically is concerned only with the man at the counter, even where that man is in a practical sense a "conduit" who will promptly transfer the gun to someone else. Perhaps that is because Congress wanted a rule that would be easy to understand and to administer, which the Government's proposed agency test-and the majority's apparent adoption of that test sans any mention of agency law-certainly is not. (When counsel for the Government was pressed about hypothetical situations not gift-wrapped as neatly as this case, he said, frankly but unhelpfully, that they would turn on the "factual question" of "[w]hether the purchase was made on behalf of someone else." Tr. of Oral Arg. 49-50.)
Or perhaps Congress drew the line where it did because the Gun Control Act, like many contentious pieces of legislation, was a "compromise" among "highly interested parties attempting to pull the provisions in different directions." Barnhart v. Sigmon Coal Co., 534 U.S. 438, 461, 122 S.Ct. 941, 151 L.Ed.2d 908 (2002); see Director, Office of Workers' Compensation Programs v. Newport News Shipbuilding & Dry Dock Co., 514 U.S. 122, 135-136, 115 S.Ct. 1278, 131 L.Ed.2d 160 (1995). Perhaps those whose votes were needed for passage of the statute wanted a lawful purchaser to be able to use an agent. A statute shaped by political tradeoffs in a controversial area may appear "imperfect" from some perspectives, but "our ability to imagine ways of redesigning the statute to advance one of Congress' ends does not render it irrational." Preseault v. ICC, 494 U.S. 1, 19, 110 S.Ct. 914, 108 L.Ed.2d 1 (1990). We must accept that Congress, balancing the conflicting demands of a divided citizenry, " 'wrote the statute it wrote'-meaning, a statute going so far and no further." Michigan v. Bay Mills Indian Community, 572 U.S. ----, ----, 134 S.Ct. 2024, 2033-34, 188 L.Ed.2d 1071 (2014).
That Abramski's reading does not render the Act's requirements "meaningless" is further evidenced by the fact that, for decades, even ATF itself did not read the statute to criminalize conduct like Abramski's. After Congress passed the Act in 1968, ATF's initial position was that the Act did not prohibit the sale of a gun to an eligible buyer acting on behalf of a third party (even an ineligible one). See Hearings Before the Subcommittee To Investigate Juvenile Delinquency of the Senate Committee on the Judiciary, 94th Cong., 1st Sess., pt. 1, 118 (1975). A few years later, ATF modified its position and asserted that the Act did not "prohibit a dealer from making a sale to a person who is actually purchasing the firearm for another person" unless the other person was "prohibited from receiving or possessing a firearm," in which case the dealer could be guilty of "unlawfully aiding the prohibited person's own violation." ATF, Industry Circular 79-10 (1979), in (Your Guide To) Federal Firearms Regulation 1988-89 (1988), p. 78. The agency appears not to have adopted its current position until the early 1990's. See United States v. Polk, 118 F.3d 286, 295, n. 7 (C.A.5 1997).
The majority deems this enforcement history "not relevant" because the Government's reading of a criminal statute is not entitled to deference. Ante, at 2274. But the fact that the agency charged with enforcing the Act read it, over a period of roughly 25 years, not to apply to the type of conduct at issue here is powerful evidence that interpreting the Act in that way is natural and reasonable and does not make its requirements "meaningless."
C
Even if the statute were wrongly thought to be ambiguous on this point, the rule of lenity would defeat the Government's construction. It is a "familiar principle" that " 'ambiguity concerning the ambit of criminal statutes should be resolved in favor of lenity.' " Skilling v. United States, 561 U.S. 358, 410, 130 S.Ct. 2896, 177 L.Ed.2d 619 (2010). That principle prevents us from giving the words of a criminal statute "a meaning that is different from [their] ordinary, accepted meaning, and that disfavors the defendant." Burrage v. United States, 571 U.S. ----, ----, 134 S.Ct. 881, 891, 187 L.Ed.2d 715 (2014). And it means that when a criminal statute has two possible readings, we do not " 'choose the harsher alternative' " unless Congress has " 'spoken in language that is clear and definite.' " United States v. Bass, 404 U.S. 336, 347-349, 92 S.Ct. 515, 30 L.Ed.2d 488 (1971). For the reasons given above, it cannot be said that the statute unambiguously commands the Government's current reading. It is especially contrary to sound practice to give this criminal statute a meaning that the Government itself rejected for years.
The majority does not mention the rule of lenity apart from a footnote, ante, at 2272, n. 10, responding to this dissent. The footnote concedes that "the text creates some ambiguity" but says that "context, structure, history, and purpose resolve it." Ibid. But for the reasons given above, context and structure do not support the majority's interpretation, history refutes it by showing that the Government itself interpreted the statute more leniently for many years, and "purpose" supports it only if one imputes to the statute a crime-fighting purpose broader than the text discloses (a practice that would nullify the rule of lenity in all cases). See Part I-B, supra. 5 If lenity has no role to play in a clear case such as this one, we ought to stop pretending it is a genuine part of our jurisprudence.
Contrary to the majority's miserly approach, the rule of lenity applies whenever, after all legitimate tools of interpretation have been exhausted, "a reasonable doubt persists" regarding whether Congress has made the defendant's conduct a federal crime, Moskal v. United States, 498 U.S. 103, 108, 111 S.Ct. 461, 112 L.Ed.2d 449 (1990)-in other words, whenever those tools do not decisively dispel the statute's ambiguity. Skilling, supra, at 410, 130 S.Ct. 2896; see, e.g.,Scheidler v. National Organization for Women, Inc., 537 U.S. 393, 409, 123 S.Ct. 1057, 154 L.Ed.2d 991 (2003); Cleveland v. United States, 531 U.S. 12, 25, 121 S.Ct. 365, 148 L.Ed.2d 221 (2000); Crandon v. United States, 494 U.S. 152, 158, 110 S.Ct. 997, 108 L.Ed.2d 132 (1990). "[W]here text, structure, and history fail to establish that the Government's position is unambiguously correct ... we apply the rule of lenity and resolve the ambiguity in [the defendant]'s favor." United States v. Granderson, 511 U.S. 39, 54, 114 S.Ct. 1259, 127 L.Ed.2d 611 (1994). It cannot honestly be said that the text, structure, and history of the Gun Control Act establish as "unambiguously correct" that the Act makes Abramski's conduct a federal crime.
By refusing to apply lenity here, the majority turns its back on a liberty-protecting and democracy-promoting rule that is "perhaps not much less old than construction itself." United States v. Wiltberger, 5 Wheat. 76, 95, 5 L.Ed. 37 (1820) (Marshall, C.J.); see, e.g., 1 W. Blackstone, Commentaries on the Laws of England 88 (1765) ("Penal statutes must be construed strictly"). As Chief Justice Marshall wrote, the rule is "founded on the tenderness of the law for the rights of individuals; and on the plain principle that the power of punishment is vested in the legislative, not in the judicial department." Wiltberger, supra, at 95. It forbids a court to criminalize an act simply because the court deems that act "of equal atrocity, or of kindred character, with those which are enumerated." Id., at 96. Today's majority disregards that foundational principle.
II. Section 924(a)(1)(A)
Under § 924(a)(1)(A), it is a crime to make a "false statement ... with respect to the information required by this chapter to be kept in the records of" a federally licensed gun dealer (emphasis added). "[T]his chapter" refers to chapter 44 of title 18 of the United States Code, which contains the Gun Control Act. §§ 921-931.
The question Abramski answered falsely was whether he was buying the gun for someone else. Did the Act itself require the dealer to record this information? It did not; it simply required him to record "the name, age, and place of residence" of the "person" to whom the firearm was "s[old] or deliver [ed]." § 922(b)(5). As explained above, that "person" was Abramski, not his uncle. See Part I, supra.
But, the majority says, the Act also directs dealers to " 'maintain such records ... as the Attorney General may by regulations prescribe.' " Ante, at 2274 (quoting § 923(g)(1)(A)). So did a regulation require this information to be recorded? Again, no. The relevant regulation provides that a dealer shall
"obtain a Form 4473 from the transferee showing the transferee's name, sex, residence address (including county or similar political subdivision), date and place of birth; height, weight and race of the transferee; the transferee's country of citizenship; the transferee's INS-issued alien number or admission number; the transferee's State of residence; and certification by the transferee that the transferee is not prohibited by the Act from transporting or shipping a firearm in interstate or foreign commerce or receiving a firearm which has been shipped or transported in interstate or foreign commerce or possessing a firearm in or affecting commerce." 27 C.F.R. § 478.124(c)(1) (2014).
The long list of information that this regulation requires to be kept in the dealer's records does not include whether the transferee is buying the gun for an eligible third party.
But wait! the majority says: Another provision of the regulation requires a dealer to " 'retain ... as part of [its] required records, each Form 4473 obtained in the course of' " selling or disposing of a firearm. Ante, at 2274 (quoting 27 C.F.R. § 478.124(a)). Therefore, according to the majority, any "false answer on that Form"-even an answer to a question that is not among those enumerated in the regulation-necessarily "pertains to information a dealer is statutorily required to maintain." Ante, at 2274.
That carries the text of the statute a bridge too far. On the majority's view, if the bureaucrats responsible for creating Form 4473 decided to ask about the buyer's favorite color, a false response would be a federal crime. That is not what the statute says. The statute punishes misstatements "with respect to information required to be kept," § 924(a)(1)(A) (emphasis added), not with respect to "information contained in forms required to be kept." Because neither the Act nor any regulation requires a dealer to keep a record of whether a customer is purchasing a gun for himself or for an eligible third party, that question had no place on Form 4473-any more than would the question whether the customer was purchasing the gun as a gift for a particular individual and, if so, who that individual was. And the statute no more criminalizes a false answer to an ultra vires question on Form 4473 than it criminalizes the purchaser's volunteering of a false e-mail address on that form. Information regarding Abramski's status as a "straw purchaser" was not "information required to be kept," and that is an end of the matter. In my view, that is the best-indeed, the only plausible-interpretation of § 924(a)(1)(A). But at a minimum, the statute is ambiguous, and lenity does the rest. See Part I-C, supra.6
The Court makes it a federal crime for one lawful gun owner to buy a gun for another lawful gun owner. Whether or not that is a sensible result, the statutes Congress enacted do not support it-especially when, as is appropriate, we resolve ambiguity in those statutes in favor of the accused. I respectfully dissent.
The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co., 200 U.S. 321, 337, 26 S.Ct. 282, 50 L.Ed. 499.
The principal exception is for any buyer who has a state permit that has been "issued only after an authorized government official has verified" the buyer's eligibility to own a gun under both federal and state law. § 922(t)(3).
Compare Polk, 118 F.3d, at 294-295, with United States v. Morales, 687 F.3d 697, 700-701 (C.A.6 2012) (a misrepresentation about the true purchaser's identity is material even when he can legally own a gun); United States v. Frazier, 605 F.3d 1271, 1279-1280 (C.A.11 2010) (same).
Reflecting that prior consensus, neither of Abramski's principal amici-the National Rifle Association and a group of 26 States-joins Abramski in making this broader argument. They confine themselves to supporting the more limited claim about straw purchases made on behalf of eligible gun owners, addressed infra, at 2272 - 2274.
The dissent reserves the question whether the false statement would be material if the straw purchaser knew that the true buyer was not eligible to own a firearm. Post, at 2277, n. 2. But first, that reservation is of quite limited scope: Unlike Abramski's back-up argument, which imposes liability whenever the true purchaser cannot legally buy a gun, the dissent's reservation applies only when the straw has knowledge of (or at least reasonable cause to believe) that fact. And as we will later note, straws often do not have such knowledge. See infra, at 2268 - 2269. Second, the reservation (fairly enough for a reservation) rests on an uncertain legal theory. According to the dissent, a straw buyer might violate § 922(a)(6) if a dealer's sale to him aids and abets his violation of § 922(d)-a provision barring knowingly transferring a gun to an ineligible person, see infra, at 2266, 2271 - 2272. But that reasoning presupposes that a firearms dealer acting in the ordinary course of business can ever have the intent needed to aid and abet a crime-a question this Court reserved not six months ago. See Rosemond v. United States, 572 U.S. ----, 134 S.Ct. 1240, 1249, n. 8, 188 L.Ed.2d 248 (2014).
The dissent claims the answer is easy because "if I give my son $10 and tell him to pick up milk and eggs at the store, no English speaker would say that the store 'sells' the milk and eggs to me." Post, at 2277. But try a question more similar to the one the gun law's text raises: If I send my brother to the Apple Store with money and instructions to purchase an iPhone, and then take immediate and sole possession of that device, am I the "person" (or "transferee") who has bought the phone or is he? Nothing in ordinary English usage compels an answer either way.
Contrary to the dissent's view, our analysis does not rest on mere "purpose-based arguments." Post. at 2278. We simply recognize that a court should not interpret each word in a statute with blinders on, refusing to look at the word's function within the broader statutory context. As we have previously put the point, a "provision that may seem ambiguous in isolation is often clarified by the remainder of the statutory scheme ... because only one of the permissible meanings produces a substantive effect that is compatible with the rest of the law." United Sav. Assn. of Tex. v. Timbers of Inwood Forest Associates, Ltd., 484 U.S. 365, 371, 108 S.Ct. 626, 98 L.Ed.2d 740 (1988).
That reading would also, at a stroke, declare unlawful a large part of what the ATF does to combat gun trafficking by criminals. See Dept. of Treasury, Bureau of Alcohol, Tobacco & Firearms, Following the Gun: Enforcing Federal Laws Against Firearms Traffickers, p. xi (June 2000) (noting that in several prior years "[a]lmost half of all [ATF firearm] trafficking investigations involved straw purchasers").
The dissent is mistaken when it says that the ATF's own former view of the statute refutes this proposition. See post, at 2280 - 2281. As we will later discuss, see infra, at 2273 - 2274, the ATF for a time thought that § 922(a)(6) did not cover cases in which the true purchaser could have legally purchased a gun himself. But Abramski's principal argument extends much further, to cases in which straws buy weapons for criminals, drug addicts, and other prohibited purchasers. For the reasons just stated, that interpretation would render the statute all but useless. And although the dissent appeals to a snippet of congressional testimony to suggest that ATF once briefly held that extreme view of the statute, it agrees that by at least 1979 (well over three decades ago), ATF recognized the unlawfulness of straw purchases on behalf of prohibited persons.
The dissent responds: "That certainly distinguishes" the individual transacting with a dealer through a straw from an individual receiving a gun from a private party; "so would the fact that [the former] has orange hair." Post, at 2279. But that is an example of wit gone wrong. Whether the purchaser has orange hair, we can all agree, is immaterial to the statutory scheme. By contrast, whether the purchaser has transacted with a licensed dealer is integral to the statute-because, as previously noted, "the federal scheme ... controls access to weapons" through the federally licensed firearms dealer, who is "the principal agent of federal enforcement." Huddleston v. United States, 415 U.S. 814, 824, 825, 94 S.Ct. 1262, 39 L.Ed.2d 782 (1974); see supra, at 2270 - 2271. In so designing the statute, Congress chose not to pursue the goal of "controll[ing] access" to guns to the nth degree; buyers can, as the dissent says, avoid the statute's background check and record-keeping requirements by getting a gun second-hand. But that possibility provides no justification for limiting the statute's considered regulation of dealer sales.
Nor do we agree with the dissent's argument (not urged by Abramski himself) that the rule of lenity defeats our construction. See post, at 2281 - 2282. That rule, as we have repeatedly emphasized, applies only if, "after considering text, structure, history and purpose, there remains a grievous ambiguity or uncertainty in the statute such that the Court must simply guess as to what Congress intended." Maracich v. Spears, 570 U.S. ----, ----, 133 S.Ct. 2191, 2209, 186 L.Ed.2d 275 (2013) (quoting Barber v. Thomas, 560 U.S. 474, 488, 130 S.Ct. 2499, 177 L.Ed.2d 1 (2010)). We are not in that position here: Although the text creates some ambiguity, the context, structure, history, and purpose resolve it. The dissent would apply the rule of lenity here because the statute's text, taken alone, permits a narrower construction, but we have repeatedly emphasized that is not the appropriate test. See, e.g., Muscarello v. United States, 524 U.S. 125, 138, 118 S.Ct. 1911, 141 L.Ed.2d 111 (1998); Smith v. United States, 508 U.S. 223, 239, 113 S.Ct. 2050, 124 L.Ed.2d 138 (1993).
The dissent argues that our view would impose criminal liability for a false answer even to an "ultra vires question," such as "the buyer's favorite color." Post, at 2282. We need not, and do not, opine on that hypothetical, because it is miles away from this case. As we have explained, see supra at 2267 - 2272, Question 11.a. is not ultra vires, but instead fundamental to the lawfulness of a gun sale. It is, indeed, part and parcel of the dealer's determination of the (true) buyer's "name, age, and place of residence," which § 922(b)(5) requires the dealer to keep. That section alone would justify Abramski's conviction under § 924(a)(1)(A) if the indictment here had clearly alleged that, in addition to answering Question 11.a. falsely, he lied about that buyer's "name, age, and place of residence."
.Sections 922(b)(5), (c), and (t)(1) require the dealer to follow certain procedures with respect to that "person," such as recording his name, dealing with him in person, and checking his background. I doubt whether a falsehood that causes the dealer to neglect those procedures (here, by applying them to the wrong person) is material to the lawfulness of the sale within the meaning of § 922(a)(6) if the sale could have been executed lawfully had the truth been disclosed. Moreover, if that were so-if a falsehood that introduced procedural error into a gun sale were always material to lawfulness-then § 924(a)(1)(A) (discussed in Part II of this opinion), which prohibits making false statements with respect to information required to be recorded in a dealer's records, would be superfluous.
The majority makes the puzzling suggestion that the answer would be different if the sale involved consumer electronics instead of groceries. Ante, at 2267, n. 5. But whether the item sold is a carton of milk, an iPhone, or anything else under the sun, an ordinary English speaker would say that an over-the-counter merchant "sells" the item to the person who pays for and takes possession of it, not the individual to whom that person later transfers the item.
The facts of this case provide no occasion to address whether-as ATF maintained for many years before adopting its current position-a misrepresentation in response to Form 4473's "actual buyer/transferee" question would be "material to the lawfulness of the sale" if the customer intended to transfer the gun to a person who he knew or had reasonable cause to believe was prohibited by the Act from receiving or possessing firearms. A falsehood that conceals an intention of that sort may be material because a dealer who sold the gun knowing of that intention might be "unlawfully aiding" the customer's violation of § 924(d) (and the prohibited person's violation of § 924(g)). Cf. ATF, Industry Circular 79-10 (1979), in (Your Guide To) Federal Firearms Regulation 1988-89 (1988), p. 78; infra, at 2280 - 2281. I need not decide that question here.
The majority's claim that its analysis "does not rest on mere 'purpose-based arguments,' " ante, at 2267, n. 6, rings hollow. The majority says it is relying on the principle that when a statutory provision is "ambiguous" but "only one of the permissible meanings produces a substantive effect that is compatible with the rest of the law," we should adopt that meaning. Ibid. (internal quotation marks omitted). But even if the text at issue here were ambiguous, it is clear that the "substantive effect" of the narrower interpretation is "compatible with"-indeed, it is downright congenial to-"the rest of" the Gun Control Act. The majority's contrary conclusion rests, not on anything in the text or structure of the Act, but on the majority's guess about how far Congress meant to go in pursuit of its crime-prevention "purpose."
The majority is thus entirely wrong to charge that I would apply the rule of lenity "because the statute's text, taken alone, permits a narrower construction," ante, at 2272, n. 10.
The majority professes that it "need not, and do[es] not, opine on" whether it would impose liability for "a false answer even to an 'ultra vires question' " because, given its reasoning on Count One, the question at issue here was "part and parcel of the dealer's determination of the (true) buyer's 'name, age, and place of residence,' which § 922(b)(5) requires the dealer to keep." Ante, at 2274 - 2275, n. 11. But if that is really all the majority means to decide, then why bother to invoke the requirement that the dealer keep such records as the regulations prescribe and the regulation requiring the dealer to keep Form 4473? See ante, at 2274 - 2275. If the majority's ruling is as limited as it claims, it ought to cite § 922(b)(5) and be done.
* * * | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
116
] |
GUESSEFELDT v. McGRATH, ATTORNEY GENERAL, SUCCESSOR TO THE ALIEN PROPERTY CUSTODIAN, et al.
No. 204.
Argued November 29, 1951.
Decided January 28, 1952.
William W. Barron argued the cause for petitioner. With him on the brief was Robert F. Klepinger.
James D. Hill argued the cause for respondents. With him on the brief were Solicitor'General Perlman, Assistant Attorney General Baynton, George B. Searls and Irwin A. Seibel.
Mr. Justice Frankfurter
delivered the opinion of the Court.
This is a case brought under § 9 (a) of the Trading with the Enemy Act, 40 Stat. 411, as amended, 50 U. S. C. App. § 1 et seq., to recover property vested by the Alien Property Custodian. The District Court granted the Government’s motion to dismiss, holding that plaintiff, while not “resident within” Germany within the meaning of § 2 of the Act, , and thus “not an enemy” for the purposes of § 9 (a), was precluded from recovering by § 39 which provides that “No property ... of Germany, Japan, or any national of either such country vested in . . . the Government . . . pursuant to the provisions of this Act, shall be returned to former owners thereof . ...” . 62 Stat. 1240, 1246, 50 U. S. C. App. (Supp. IV, 1946) § 39. 89 F. Supp. 344. The Court of Appeals for the District of Columbia Circuit affirmed. 88 U. S. App. D. C. 383, 191 F. 2d 639. We brought the case here for clarification of the restrictions imposed by and the remedies open under the Trading with the Enemy Act. 342 U. S. 810.
Accepting the allegations' as true for the purpose of dealing with the legal issues raised by the motions to dismiss, the situation before-us may be briefly stated. Guessefeldt, a German citizen, lived continuously in Hawaii from 1896 to 1938. In April of that year he took his family to Germany for a vacation. After the outbreak of war, he was unable to secure passage home before March, 1940, when his re-entry permit expired. When the United States entered the war,, he was involuntarily detained in Germany, first by the Germans and after 1945 by the Russians, until July, 1949, when he returned to this country. During that time he did nothing directly or indirectly to aid the war effort of the enemy.
The first question to be decided is whether the claimant was “resident within” the territory of a nation with which this country was at war within the meaning of §§ 2 and 9 (a) of the Trading with the Enemy Act. He was physically within the enemy’s territory. He contends, however, that the meaning conveyed by “resident within” ■is something more than mere presence; at the least a. domiciliary connotation, if not domicile, is implied. '
Legislative history leaves the meaning shrouded. Some use of the term “domicile” as the touchstone of enemy status is to be found in the Congressional hearings and reports. But on the floor, Representative Montague, one of the managers of the bill, unequivocally stated underdose questioning that the statutory language was intended to cover much more than those domiciled in enemy nations. Yet prisoners of war, expeditionary forces arid “sojourners”, were not, he said, intended to be included. 55 Cong. Rec. 4922.
Guessefeldt retained his American domicile. Moreover, if anything more than mere physical presence in enemy territory is required, it would seem clear that he was not an “enemy” within the meaning of § 2. His stay before the war, as a matter of choice, was short. The circumstances negative any desire for a permanent or long-term connection with Germany. He intended, and indeed attempted, to leave there before this country en~, tered the war. Being there under physical constraint, he is almost literally within the excepted class as authoritatively indicated by Mr. Montague. To hold that “resident within” enemy territory implies something more than mere physical presence and something less than domicile is consistent with the emanations of Congressional purpose manifested in the entire Act, and the relevant extrinsic light, including the decisions of lower' courts on this issue, which we note without specifically approving any of them. See McGrath v. Zander, 85 U. S. App. D. C. 334, 177 F. 2d 649; Josephberg v. Markham, 152 F. 2d 644; Stadtmuller v. Miller, 11 F. 2d 732; Vowinckel v. First Federal Trust Co., 10 F. 2d 19; Sarthou v. Clark, 78 F. Supp. 139.
Guessefeldt has the further obstacle of § 39 to clear before he can succeed. Congress in 1948, so the Govern-merit’s argument runs, adopted' a “policy of nonreturn,” and prohibited the restoration of vestéd property to a “national” of Germany. A citizen is a national, and Guessefeldt is a German citizen. Thus, even though he may, before the enactment of § 39, have been entitled to bring suit as a nonenemy under § 9' (a), that privilege has since been cut off. ‘ To which Guessefeldt counters that § 39 must be construed harmoniously with § 9 (a); the term “national” in the new section must accordingly be taken to mean only those German and Japanese citizens who could not theretofore have enforced the return of their property as of right. Section 39, in the .context of its legislative history and in the light of the scheme and background of the statute, makes the Government’s contention unpersuasive.
It is clear that the Custodian can lawfully vest under § 5 a good deal more than he can hold against a § 9 (a) action. Central Union Trust Co. v. Garvan, 254 U. S. 554; Clark v. Uebersee Finanz-Korp., 332 U. S. 480. Thus Congress had to make provision for the disposal of two classes of vested property. Nonenemy property, lawfully vested under § 5, was recoverable in a suit against the Custodian. § 9 (a); see Becker Steel Co. v. Cummings, 296 U. S. 74. The second class, property owned by “enemies” and therefore not subject to recovery under § 9 (a), was reserved for disposition “[a]fter the end of the war ... as Congress shall direct.” 40 Stat. 411, 423, 50 U. S. C. App. § 12.
After both wars, Congress did adopt measures to dispose of this property. The Treaty of Berlin, 42 Stat. 1939, 1940, at the end of World War I, confirmed the possession of vested enemy property by the United States. Junkers v. Chemical Foundation, Inc., 287 F. 597; Lange v. Wingrave, 295 F. 565; Klein v. Palmer, 18 F. 2d 932. For present purposés it does not matter whether this action was taken simply to secure claims of American citizens against Germany or was regarded as the rightful withholding of spoils of war. In the Settlement of War Claims Act of 1928, 45 Stat. 254, 270, 50 U. S. C. App. §§ 9 (b)(12), (13), (14), (16), 9 (m), Congress provided for the return to admittedly enemy owners of 80% of their vested property. See Cummings v. Deutsche Bank, 300 U. S. 115. Section 32 of the Trading with the Enemy Act, 60 Stat. 50, as amended, 50 U. S. C. App. (Supp. IV, 1946) § 32, enacted after World War II, provided for administrative returns of property to certain classes of “technical” enemies who were ineligible to bring suit under §9 (a). Thus, if § 39 is treated as. dealing only with property not otherwise subject to recovery, the consistency of the pattern of enactment is preserved. On the other hand, if the significant language of the section is regarded as requiring the retention of property which would otherwise be recoverable in a suit under § 9 (a), it would mark the first departure from what appears to be a heretofore consistent Congressional policy.
Section 39 was passed as part of a measure establishing a commission on the problem of compensating American prisoners of war, internees and others who suffered personal injury or property damage at the hands of World War II enemies. Congressional attention was focused on the nature and extent of these claims and methods of adjudicáting them. -The issues involved in § 39 were of peripheral concern. Réading the legislative history in this light, it lends support to the view that § 39 was conceived as dealing with property not otherwise subject to return. Senate hearings opened with detailed testimony analyzing the value of assets which would be left after payments for administration and liquidation, returns under § 32, and disbursements in satisfaction of judgments in suits brought under § 9 (a). Hearings before a Subcommittee of the Senate Committee on the Judiciary on H. R. 4044, 80th Cong., 2d Sess. 12-21. See also id., at 44, and Hearings before the House Committee bn Interstate and Foreign Commerce on H. R. 873, 80th Cong., 1st Sess. 264. It seems clear that the legislation looks to the disposition of this fund, and the conclusion is reinforced by the provision of the section that “The net' proceeds remaining upon the completion of administration, liquidation, and disposition pursuant to the provisions of this Act of any such property or interest therein shall be covered into the Treasury at the earliest practicable date.”
Thé tenor of the hearings demonstrates no purpose to change the existing scope of § 9 (a). The only reason a proviso to that effect was not included in § 39 as passed. seems to be an assumption — unwarranted in the light of other .evidence before the committees discussed below — that a national of any enemy nation had no rights under § 9 (a) in any case. Indeed, the terms “enemy,” “enemy alien,” “enemy national,” and “German or Japanese national” are used interchangeably in the hearings, not only by committee members but by witnesses from the Office of Alien Property, without regard to precise shades of meaning in the context of the Trading with the Enemy Act.
By § 39 Congress was manifesting its “firm resolve not to permit the recurrence of events which after the close of World War I led to the return of enemy property to their former owners.” H. R. Rep. No. 976, 80th Cong., 1st Sess. 2. Those events, as we have seen, culminated in the Settlement of War Claims Act of 1928 permitting enemies as defined in § 2 of the Trading with the Enemy Act to recover 80% of their vested assets. The major controversy on § 39 was whether this reversal of post-World War I policy was justifiable as a matter of international law or appropriate as a course of action for the United States. Opponents of the section considered the “policy of nonreturn” as applied to admitted enemies illegal, or at least unjust, confiscation of private property. To this point — and not to the issue before the Court in' this case — were directed the references in the reports, H. R. Rep. No. 976, 80th Cong., 1st Sess. 2, and debate, 94 Cong. Rec. 550-551, on which the Government relies.
On the other hand, both Senate and House committees had before them testimony calling attention to the very problem now in issue. Hearings before the House Committee on Interstate and Foreign Commerce, supra, at 265; Hearings before a Subcommittee of the Senate Committee on the Judiciary, supra, at 197, 254. And one witness presented a draft substitute for the section,, complex to be sure, which would expressly have saved cases like Guessefeldt’s from the operation of the bill. Id., at 233-236. This suggestion was not acted upon by the committee. Yet taken as a whole, the testimony on this issue was meagre and unimpressive. It was largely in written form, and therefore less likely to have been seen by or to have had impact bn the committee members or to reflect their views. These considerations, taken together with the peripheral character of the problem from the committees’ point pf view, the consistent failure to appreciate the technical significance of the term “enemy, national” in the framework of the Act, and the fact that the matters raised by this testimony were not touched upon in floor debate — all go far to. overcome any presumption that the claimant’s situation was considered by Congress and rejected.
. Moreover, a decision for the Government would require us to decide debatable constitutional questions. In 1 suits by United States citizens, § 9 (a) has been construed, over the Government’s objection, to require repayment of just compensation when the Custodian has liquidated the vested assets. Becker Steel Co. v. Cummings, supra; Henkels v. Sutherland, 271 U. S. 298; see Central Union Trust Co. v. Garvan, 254 U. S. at 566; Stoehr v. Wallace, 255 U. S. 239, 245. Such a construction, it' is said, is necessary to preserve the Act from constitutional doubt. It is clear too that friendly aliens are protected by the Fifth Amendment requirement of just compensation. Russian Volunteer Fleet v. United States, 282 U. S. 481. The question which remains is whether a citizen in Guessefeldt’s position of a nation with which this country-is at war is deemed a friendly alien. More broadly, is any national of an enemy country within the reach of constitutional protection? The thrust of the Government’s argument is that § 39 bars any such claimant on the mere showing of his citizenship. Ex parte Kawato, 317 U. S. 69, holds that as a matter of common law as well as interpretation of the Trading with the Enemy Act, a resident enemy national, even though interned, must be permitted access to American cpurts. And The Venus, 8 Cranch 253, seems to say that at common and international law, in the absence of hostile acts, enemy status, at least for the purpose of trade, follows location and not nationality. Cf. Miller v. United States, 11 Wall. 268, 310-311.
On the other side is Mr.-Justice (then Judge) Cardoza’s careful opinion in Techt v. Hughes, 229 N. Y. 222, 128 N. E. 185, holding that a national of an enemy country, wherever resident, is an enemy alien and that any mitigation of the rigors of that status, as in the right to sue, is a matter of grace. He suggests, however, that “enemy alien” for the purpose of trade with the enemy may be something different than for other purposes, but he had, of course, no occasion to consider whether this difference attained constitutional dimensions. In Klein v. Palmer, supra, a suit by two resident German citizens, one proclaimed a dangerous enemy alien during World War I, against, the Alien- Property Custodian for damages and equitable relief, Judges Hough, L. Hand and Mack held that "the government was. under no constitutional prohibition from confiscating the property of the enemy’s nationals,, whether resident or nonresident.” Id., at 934. It was the court’s view that the class of nonenemies for the purpose of § 2 of the Trading with the Enemy Act was broader than the class entitled to just compensation under the Fifth Amendment.
Certáinly, the constitutional problem is not imaginary, and the claim not frivolous which would have to be rejected to decide in the Government’s favor. Considering that confiscation is not easily to be assumed, a construction that avoids it and is not barred by a fair reading of the legislation is invited.
The concern of the Trading with the Enemy Act is with . problems at once; complicated and far-reaching in their * repercussions. Instead of á carefully matured enactment, the legislation was a makeshift patchwork. Such legis- • lation strongly counsels against literalness of application. It favors a wise latitude of construction in enforcing its purposes. Cf. Clark v. Uebersee Fihanz-Korp., 332 U. S. 480; Markham v. Cabell, 326 U. S. 404; Silesian-American Corp. v. Clark, 332 U. S. 469.
None of the considerations we have canvassed standing' alone is conclusive in favor of the claimant! Perhaps none, by itself, would Justify a decision in his favor. The cumulative effect, however, places such a decision well within the bounds of reasonable construction. We have said enough to show that the question is not free from doubt. On the balance, however, we think § 39 is properly construed as applying only to those German and Japanese nationals otherwise ineligible to bring suit under §9 (a).
The judgment below is
• Reversed.
Mr. Justice Clark took no part in the consideration or decision of this case.
Sec. 2. “The word 'enemy/ as used herein, shall be deemed to mean, for the purposes of such trading and of this Aet—
“(a) Any individual, partnership, or other body of individuals, of any nationality, resident within the territory (including that occupied by the military and naval forces) of any nation with which the United States is at war, or resident outside the United States and doing business within such territory, and any corporation incorporated within such territory of any nation with which the United States is at war or incorporated within any country other than the United States and doing business within such territory.”
Sec. 9. “(a) Any person not an enemy . . . claiming any interest, right, or title in any money or other property which may have been conveyed, transferred, assigned, delivered, or paid to the Alien Property Custodian or seized by him hereunder and held by him or by the Treasurer of the United States, . . . may file with the said custodian a notice of his claim under oath and in such form and containing such particulars as the said custodian shall require; . . . [S]aid claimant may institute a suit in equity in the District Court of the United States for the District of Columbia or in the district court of the United States for the district in which such claimant resides, or, if a corporation, where it has its principal place of business (to which suit the Alien Property Custodian or the Treasurer of the United States; as the case may be, shall be made a party defendant), to establish the interest, right, title, or debt so claimed, and if so established the court shall order the payment, conveyance, transfer, assignment, or delivery to said claimant of the money or other property so held . \ . or the interest therein to which the court shall determine said claimant is entitled.” 50 U. S. C. App. §§ 2, 2 (a), 9 (a).
“Sec. 39. No property or interest therein of Germany, Japan, or any national of either such country vested in or transferred to any officer or agency of the Government at any time after December 17, 1941, pursuant to the provisions of this Act, shall be returned to former owners thereof or their successors in interest, and the United States shall not pay compensation for any such property or interest therein. The net proceeds remaining upon the completion of administration, liquidation, and disposition pursuant to the provisions of this Act of any such property or interest therein shall be covered into the Treasury at the earliest practicable date. Nothing in this section shall be construed to repeal or otherwise affect the operation of the provisions of section 32 of this Act or of the Philippine Property Act of 1946.”
See Statement of Hon. Robert Lansing, Secretary, of State, Hearings before the House Committee on Interstate and Foreign Commerce on H. R. 4704, 65th Cong., 1st Sess. 3, 4. But see id., at 9. Assistant Attorney General Charles Warren, principal draftsman of the bill, testified that it had no application to Germans “domiciled” in this country. Id., at 34. And the House Report speaks of enemy status as being determined “not so much ... by the nationality or allegiance of the individual, ... as by his .. . commercial domicile or residence in enemy territory. The enemy domiciled or residing in the United States is not included . . . .” H. R. Rep. No. 85, 65th Cong., 1st Sess. 2.
The validity of this construction is additionally suggested by, the explanation in the Senate report of the parallel term of § 2, “doing business within such territory.”' According to the report that meant “having a branch or agency actively conducting business within that country.” S. Rep. No. 111, 65th Cong., 1st Sess. 4. That is to say, hot “domiciled” in enemy territory by American corporation law standards, but having a substantial, not casual or transitory connection with it. See also Hearings before a Subcommittee of the Senate Committee on Commerce on H. R. 4960, 65th Cong., 1st Sess. 136-137.
H. R. Rep. No. 976, 80th Cong., 1st Sess. 2.
The Resolution of July 2, 1921, terminating the state of war .with Germany, provided that “All property of the Imperial German Government . . . and of all German nationals which . . . has . . . come into the possession or.under control of . . the United States . . . shall be retained ■. . . and no disposition thereof made, except as shall have been heretofore or specifically heteafter shall be' provided by law.” 42 Stat. 105, 106. By the Treaty bf Versailles, art. 297 (d), “all the exceptional war measures, or measures of transfer . ... shall - be considered as final and binding upon all persons.” In art. 297 (i)., Germany undertook “to compensate her nationals in respect of the, sale or retention of their property, rights or interests in Allied’or Associated States.” The Treaty of Berlin, 42 Stat. 1939, 1940, incorporated these provisions of the Versailles Treaty, together with appendices' defining “exceptional war measures” and cutting off the right of suit by German nationals against American officials on account’ of wartime action. An agreement of August 10, 1922, 42 Stat. 2200, established a- Mixed tílaims Commission to adjudicate claims of American nationals against Germany. Provisions for the return of ■ vested property were made by successive amendments to § 9. Finally, in the Settlement of War Claims Act, 45 Stat. 254, 270, Congress provided for the return of 80% of their vested property to German enemies who would waive their claims to the remaining 20%. Germany in a debt funding agreement of June 23, 1930, deposited bonds with the United States, payments on which were to. be applied to the settlement of awards of the Mixed Claims Commission. When Germany defaulted on these payments, Congress, by Public Resolution No. 53 of June 27, 1934; 48 Stat. 1267, suspended all deliveries of property under the Settlement of War Claims Act to German nationals until Germany should clear up the arrears.
As it passed the House, the bill contained a provision suspending the payment out of vested assets of debts owed by enemies to citizens. In the Senate hearings, Representative Beckworth, who had sponsored that provision, urged the Senate to go further and suspend the payment of so-called “title claims” as well. He presented a draft amendment for the Senate committee’s consideration which provided that “no property . . . shall be returned to former owners- -. . . except as directed by a court under § 9 (a) of the act.” This was to be an addition to the provision which became § 30. Hearings before a Subcommittee of the Senate Committee on the Judiciary on H. R. 4044, 80th Cong., 2d Sess. 124. Both of these provisions were ■ omitted from’ the bill reported by the Senate. Although this bit of legislative history reveals a certain amount of confusion about the operation of the Act, it is tolerably clear from it that the operation of § 9 (a) was not intended to be affected by the legislation.
Other than those, here for review, six district court cases have in volved construction of § 39. The Government contends that five of • these' have accepted' the position it urges in- this case. Schill v. McGrath, 89 F. Supp. 339; Lippmann v. McGrath, 94 F. Supp. 1016; Bellman v. Clark, Civ. No. 47-229 (S. D. N. Y. Nov. 8, 1948); Mittler v. McGrath, Civ. No. 3276-48 (D. D. C. Mar. 31, 1950); Janner v. McGrath, Civ. No. 3685-49 (D. D. C. Mar. 31, 1950). Even if this were true, it .would present no such-settled'liffe of adjudication^ -to give pause to this'Court in upsetting it. But at least three of these cases present no conflict with a decision .in favor: of theclaimant here. In Mittler, Janner and Lippman, plaintiffs are enemies within § 2, thus- ineligible under § 9 (a), and because they are also citizens of Germany must be barred by § 39 whatever the meaning ascribed to the term “national” in that section. The same is possibly true of Schill, since the plaintiff there was interned as a dangerous enemy alien during the war. It might also be added that in McGrath v. Zander, supra, decided after the enactment-of § 39, the Government apparently made no contention that the section would bar the suit, although on the Government’s theory that result would clearly follow. Thus, analysis of the cases shows no such near unanimity in its favor as the Government contends. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
4
] |
UNIVERSITY OF PENNSYLVANIA v. EQUAL EMPLOYMENT OPPORTUNITY COMMISSION
No. 88-493.
Argued November 7, 1989
Decided January 9, 1990
Blackmun, J., delivered the opinion for a unanimous Court.
Rex E. Lee argued the cause for petitioner. With him on the briefs were Steven B. Feirson, Carter G. Phillips, Mark D. Hopson, Nancy J. Bregstein, Shelley Z. Green, and Neil J. Hamburg.
Solicitor General Starr argued the cause for respondent. With him on the briefs were Acting Solicitor General Bry-son, Deputy Solicitors General Wallace and Merrill, Stephen L. Nightingale, Charles A. Shanor, Gwendolyn Young Reams, Lorraine C. Davis, and Harry F. Tepker, Jr
Briefs of amici curiae urging reversal were filed for the American Association of University Professors by William W. Van Alstyne, Ann H. Franke, and Martha A. Toll; for the President and Fellows of Harvard College by Allan A. Ryan, Jr., and Daniel Steiner; for Stanford University et al. by Steven L. Mayer, Iris Brest, Susan K. Hoerger, and Thomas H. Wright, Jr.; and for the American Council on Education by Sheldon Elliot Steinbach.
Susan Deller Ross, R. Bruce Keiner, Jr., and Sarah E. Burns filed a brief for the NOW Legal Defense and Education Fund et al. as amici curiae urging affirmance.
Justice Blackmun
delivered the opinion of the Court.
In this case we are asked to decide whether a university enjoys a special privilege, grounded in either the common law or the First Amendment, against disclosure of peer review materials that are relevant to charges of racial or sexual discrimination in tenure decisions.
I
The University of Pennsylvania, petitioner here, is a private institution. It currently operates 12 schools, including the Wharton School of Business, which collectively enroll approximately 18,000 full-time students.
In 1985, the University denied tenure to Rosalie Tung, an associate professor on the Wharton faculty. Tung then filed a sworn charge of discrimination with respondent Equal Employment Opportunity Commission (EEOC or Commission). App. 23. As subsequently amended, the charge alleged that Tung was the victim of discrimination on the basis of race, sex, and national origin, in violation of § 703(a) of Title VII of the Civil Rights Act of 1964, 78 Stat. 255, as amended, 42 U. S. C. §2000e-2(a) (1982 ed.), which makes it unlawful “to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.”
In her charge, Tung stated that the department chairman had sexually harassed her and that, in her belief, after she insisted that their relationship remain professional, he had submitted a negative letter to the University’s Personnel Committee which possessed ultimate responsibility for tenure decisions. She also alleged that her qualifications were “equal to or better than” those of five named male faculty members who had received more favorable treatment. Tung noted that the majority of the members of her department had recommended her for tenure, and stated that she had been given no reason for the decision against her, but had discovered of her own efforts that the Personnel Committee had attempted to justify its decision “on the ground that the Wharton School is not interested in China-related research.” App. 29. This explanation, Tung’s charge alleged, was a pretext for discrimination: “simply their way of saying they do not want a Chinese-American, Oriental, woman in their school.” Ibid.
The Commission undertook an investigation into Tung’s charge and requested a variety of relevant information from petitioner. When the University refused to provide certain of that information, the Commission’s Acting District Director issued a subpoena seeking, among other things, Tung’s tenure-review file and the tenure files of the five male faculty members identified in the charge. Id., at 21. Petitioner refused to produce a number of the tenure-file documents. It applied to the Commission for modification of the subpoena to exclude what it termed “confidential peer review information,” specifically, (1) confidential letters written by Tung’s evaluators; (2) the department chairman’s letter of evaluation; (3) documents reflecting the internal deliberations of faculty committees considering applications for tenure, including the Department Evaluation Report summarizing the deliberations relating to Tung’s application for tenure; and (4) comparable portions of the tenure-review files of the five males. The University urged the Commission to “adopt a balancing approach reflecting the constitutional and societal interest inherent in the peer review process” and to resort to “all feasible methods to minimize the intrusive effects of its investigations.” Exhibit 2 to EEOC’s Memorandum in Support of Application for Order to Show Cause 6.
The Commission denied the University’s application. It concluded that the withheld documents were needed in order to determine the merit of Tung’s charges. The Commission found: “There has not been enough data supplied in order for the Commission to determine whether there is reasonable cause to believe that the allegations of sex, race and national origin discrimination is [sic] true.” App. to Pet. for Cert. A31. The Commission rejected petitioner’s contention that a letter, which set forth the Personnel Committee’s reasons for denying Tung tenure, was sufficient for disposition of the charge. “The Commission would fall short of its obligation” to investigate charges of discrimination, the EEOC’s order stated, “if it stopped its investigation once [the employer] has . . . provided the reasons for its employment decisions, without verifying whether that reason is a pretext for discrimination.” Id., at A32. The Commission also rejected petitioner’s proposed balancing test, explaining that “such an approach in the instant case . . . would impair the Commission’s ability to fully investigate this charge of discrimination.” Id., at A33. The Commission indicated that enforcement proceedings might be necessary if a response was not forthcoming within 20 days. Ibid.
The University continued to withhold the tenure-review materials. The Commission then applied to the United States District Court for the Eastern District of Pennsylvania for enforcement of its subpoena. The court entered a brief enforcement order. Id., at A35.
The Court of Appeals for the Third Circuit affirmed the enforcement decision. 850 F. 2d 969 (1988). Relying upon its earlier opinion in EEOC v. Franklin and Marshall Col lege, 775 F. 2d 110 (1985), cert. denied, 476 U. S. 1163 (1986), the court rejected petitioner’s claim that policy considerations and First Amendment principles of academic freedom required the recognition of a qualified privilege or the adoption of a balancing approach that would require the Commission to demonstrate some particularized need, beyond a showing of relevance, to obtain peer review materials. Because of what might be thought of as a conflict in approach with the Seventh Circuit’s decision in EEOC v. University of Notre Dame du Lac, 715 F. 2d 331, 337 (1983), and because of the importance of the issue, we granted certiorari limited to the compelled-disclosure question. 488 U. S. 992 (1988), and amended, 490 U. S. 1015 (1989).
II
As it had done before the Commission, the District Court, and the Court of Appeals, the University raises here essentially two claims. First, it urges us to recognize a qualified common-law privilege against disclosure of confidential peer review materials. Second, it asserts a First Amendment right of “academic freedom” against wholesale disclosure of the contested documents. With respect to each of the two claims, the remedy petitioner seeks is the same: a requirement of a judicial finding of particularized necessity of access, beyond a showing of mere relevance, before peer review materials are disclosed to the Commission.
A
Petitioner’s common-law privilege claim is grounded in Federal Rule of Evidence 501. This provides in relevant part:
“Except as otherwise required by the Constitution ... as provided by Act of Congress or in rules prescribed by the Supreme Court . . . , the privilege of a witness . . . shall be governed by the principles of the common law as they may be interpreted by the courts of the United States in the light of reason and experience.”
The University asks us to invoke this provision to fashion a new privilege that it claims is necessary to protect the integrity of the peer review process, which in turn is central to the proper functioning of many colleges and universities. These institutions are special, observes petitioner, because they function as “centers of learning, innovation and discovery.” Brief for Petitioner filed June 23, 1989, p. 24 (hereinafter Brief for Petitioner).
We do not create and apply an evidentiary privilege unless it “promotes sufficiently important interests to outweigh the need for probative evidence . . . .” Trammel v. United States, 445 U. S. 40, 51 (1980). Inasmuch as “[testimonial exclusionary rules and privileges contravene the fundamental principle that ‘the public . . . has a right to every man’s evidence,”’ id., at 50, quoting United States v. Bryan, 339 U. S. 323, 331 (1950), any such privilege must “be strictly construed.” 445 U. S., at 50.
Moreover, although Rule 501 manifests a congressional desire “not to freeze the law of privilege” but rather to provide the courts with flexibility to develop rules of privilege on a case-by-case basis, id., at 47, we are disinclined to exercise this authority expansively. We are especially reluctant to recognize a privilege in an area where it appears that Congress has considered the relevant competing concerns but has not provided the privilege itself. Cf. Branzburg v. Hayes, 408 U. S. 665, 706 (1972). The balancing of conflicting interests of this type is particularly a legislative function.
With all this in mind, we cannot accept the University’s invitation to create a new privilege against the disclosure of peer review materials. We begin by noting that Congress, in extending Title VII to educational institutions and in providing for broad EEOC subpoena powers, did not see fit to create a privilege for peer review documents.
When Title VII was enacted originally in 1964, it exempted an “educational institution with respect to the employment of individuals to perform work connected with the educational activities of such institution.” §702, 78 Stat. 255. Eight years later, Congress eliminated that specific exemption by enacting §3 of the Equal Employment Opportunity Act of 1972, 86 Stat. 103. This extension of Title VII was Congress’ considered response to the widespread and compelling problem of invidious discrimination in educational institutions. The House Report focused specifically on discrimination in higher education, including the lack of access for women and minorities to higher ranking (i. e., tenured) academic positions. See H. R. Rep. No. 92-238, pp. 19-20 (1971). Significantly, opponents of the extension claimed that enforcement of Title VII would weaken institutions of higher education by interfering with decisions to hire and promote faculty members. Petitioner therefore cannot seriously contend that Congress was oblivious to concerns of academic autonomy when it abandoned the exemption for educational institutions.
The effect of the elimination of this exemption was to expose tenure determinations to the same enforcement procedures applicable to other employment decisions. This Court previously has observed that Title VII “sets forth ‘an integrated, multistep enforcement procedure’ that enables the Commission to detect and remedy instances of discrimination.” EEOC v. Shell Oil Co., 466 U. S. 54, 62 (1984), quoting Occidental Life Ins. Co. v. EEOC, 432 U. S. 355, 359 (1977). The Commission’s enforcement responsibilities are triggered by the filing of a specific sworn charge of discrimination. The Act obligates the Commission to investigate a charge of discrimination to determine whether there is “reasonable cause to believe that the charge is true.” 42 U. S. C. §2000e-5(b) (1982 ed.). If it finds no such reasonable cause, the Commission is directed to dismiss the charge. If it does find reasonable cause, the Commission shall “endeavor to eliminate [the] alleged unlawful employment practice by informal methods of conference, conciliation, and persuasion.” Ibid. If attempts at voluntary resolution fail, the Commission may bring an action against the employer. §2000e-5(f)(l).
To enable the Commission to make informed decisions at each stage of the enforcement process, § 2000e-8(a) confers a broad right of access to relevant evidence:
“[T]he Commission or its designated representative shall at all reasonable times have access to, for the purposes of examination, and the right to copy any evidence of any person being investigated . . . that relates to unlawful employment practices covered by [the Act] and is relevant to the charge under investigation.”
If an employer refuses to provide this information voluntarily, the Act authorizes the Commission to issue a subpoena and to seek an order enforcing it. § 2000e-9 (incorporating 29 U. S. C. § 161).
On their face, §§2000e-8(a) and 2000e-9 do not carve out any special privilege relating to peer review materials, despite the fact that Congress undoubtedly was aware, when it extended Title VII’s coverage, of the potential burden that access to such material might create. Moreover, we have noted previously that when a court is asked to enforce a Commission subpoena, its responsibility is to “satisfy itself that the charge is valid and that the material requested is ‘relevant’ to the charge . . . and more generally to assess any contentions by the employer that the demand for information is too indefinite or has been made for an illegitimate purpose.” It is not then to determine “whether the charge of discrimination is ‘well founded’ or ‘verifiable.’” EEOC v. Shell Oil Co., 466 U. S., at 72, n. 26.
The University concedes that the information sought by the Commission in this case passes the relevance test set forth in Shell Oil. Tr. of Oral Arg. 6. Petitioner argues, nevertheless, that Title VII affirmatively grants courts the discretion to require more than relevance in order to protect tenure review documents. Although petitioner recognizes that Title VII gives the Commission broad “power to seek access to all evidence that may be ‘relevant to the charge under investigation,’” Brief for Petitioner 38 (emphasis added), it contends that Title VII’s subpoena enforcement provisions do not give the Commission an unqualified right to acquire such evidence. Id., at 38-41. This interpretation simply cannot be reconciled with the plain language of the text of § 2000e-8(a), which states that the Commission “shall . . . have access” to “relevant” evidence (emphasis added). The provision can be read only as giving the Commission a right to obtain that evidence, not a mere license to seek it.
Although the text of the access provisions thus provides no privilege, Congress did address situations in which an employer may have an interest in the confidentiality of its records. The same §2000e-8 which gives the Commission access to any evidence relevant to its investigation also makes it “unlawful for any officer or employee of the Commission to make public in any manner whatever any information obtained by the Commission pursuant to its authority under this section prior to the institution of any proceeding” under the Act. A violation of this provision subjects the employee to criminal penalties. Ibid. To be sure, the protection of confidentiality that §2000e-8(e) provides is less than complete. But this, if anything, weakens petitioner’s argument. Congress apparently considered the issue of confidentiality, and it provided a modicum of protection. Petitioner urges us to go further than Congress thought necessary to safeguard that value, that is, to strike the balance differently from the one Congress adopted. Petitioner, however, does not offer any persuasive justification for that suggestion.
We readily agree with petitioner that universities and colleges play significant roles in American society. Nor need we question, at this point, petitioner’s assertion that confidentiality is important to the proper functioning of the peer review process under which many academic institutions operate. The costs that ensue from disclosure, however, constitute only one side of the balance. As Congress has recognized, the costs associated with racial and sexual discrimination in institutions of higher learning are very substantial. Few would deny that ferreting out this kind of invidious discrimination is a great, if not compelling, governmental interest. Often, as even petitioner seems to admit, see Reply Brief for Petitioner 15, disclosure of peer review materials will be necessary in order for. the Commission to determine whether illegal discrimination has taken place. Indeed, if there is a “smoking gun” to be found that demonstrates discrimination in tenure decisions, it is likely to be tucked away in peer review files. The Court of Appeals for the Third Circuit expressed, it this way:
“Clearly, an alleged perpetrator of discrimination cannot be allowed to pick and choose the evidence which may be necessary for an agency investigation. There may be evidence of discriminatory intent and of pretext in the confidential notes and memorand[a] which the [college] seeks to protect. Likewise, confidential material pertaining to other candidates for tenure in a similar time frame may demonstrate that persons with lesser qualifications were granted tenure or that some pattern of discrimination appears. . . . [T]he peer review material itself must be investigated to determine whether the evaluations are based in discrimination and whether they are reflected in the tenure decision.” EEOC v. Franklin and, Marshall College, 775 F. 2d, at 116 (emphasis deleted).
Moreover, we agree with the EEOC that the adoption of a requirement that the Commission demonstrate a “specific reason for disclosure,” see Brief for Petitioner 46, beyond a showing of relevance, would place a substantial litigation-producing obstacle in the way of the Commission’s efforts to investigate and remedy alleged discrimination. Cf. Branzburg v. Hayes, 408 U. S., at 705-706. A university faced with a disclosure request might well utilize the privilege in a way that frustrates the EEOC’s mission. We are reluctant to “place a potent weapon in the hands of employers who have no interest in complying voluntarily with the Act, who wish instead to delay as long as possible investigations by the EEOC.” EEOC v. Shell Oil Co., 466 U. S., at 81.
Acceptance of petitioner’s claim would also lead to a wave of similar privilege claims by other employers who play significant roles in furthering speech and learning in society. What of writers, publishers, musicians, lawyers? It surely is not unreasonable to believe, for example, that confidential peer reviews play an important part in partnership determinations at some law firms. We perceive no limiting principle in petitioner’s argument. Accordingly, we stand behind the breakwater Congress has established: unless specifically provided otherwise in the statute, the EEOC may obtain “relevant” evidence. Congress has made the choice. If it dislikes the result, it of course may revise the statute.
Finally, we see nothing in our precedents that supports petitioner’s claim. In United States v. Nixon, 418 U. S. 683 (1974), upon which petitioner relies, we recognized a qualified privilege for Presidential communications. It is true that in fashioning this privilege we noted the importance of confidentiality in certain contexts:
“Human experience teaches that those who expect public dissemination of their remarks may well temper candor with a concern for appearances and for their own interests to the detriment of the decisionmaking process.” Id., at 705.
But the privilege we recognized in Nixon was grounded in the separation of powers between the branches of the Federal Government. “[T]he privilege can be said to derive from the supremacy of each branch within its own assigned area of constitutional duties. Certain powers and privileges flow from the nature of enumerated powers; the protection of the confidentiality of Presidential communications has similar constitutional underpinnings.” Id., at 705-706 (footnote omitted). As we discuss below, petitioner’s claim of privilege lacks similar constitutional foundation.
In Douglas Oil Co. of Cal. v. Petrol Stops Northwest, 441 U. S. 211 (1979), the Court recognized the privileged nature of grand jury proceedings. We noted there that the rule of secrecy dated back to the 17th century, was imported into our federal common law, and was eventually codified in Federal Rule of Criminal Procedure 6(e) as “an integral part of our criminal justice system.” 441 U. S., at 218, n. 9. Similarly, in Clark v. United States, 289 U. S. 1, 13 (1933), the Court recognized a privilege for the votes and deliberations of a petit jury, noting that references to the privilege “bear with them the implications of an immemorial tradition.” More recently, in NLRB v. Sears, Roebuck & Co., 421 U. S. 132 (1975), we construed an exception to the Freedom of Information Act in which Congress had incorporated a well-established privilege for deliberative intraagency documents. A privilege for peer review materials has no similar historical or statutory basis.
B
As noted above, petitioner characterizes its First Amendment claim as one of “academic freedom.” Petitioner begins its argument by focusing our attention upon language in prior cases acknowledging the crucial role universities play in the dissemination of ideas in our society and recognizing “academic freedom” as a “special concern of the First Amendment.” Keyishian v. Board of Regents of University of New York, 385 U. S. 589, 603 (1967). In that case the Court said: “Our Nation is deeply committed to safeguarding academic freedom, which is of transcendent value to all of us and not merely to the teachers concerned.” See also Adler v. Board of Education of City of New York, 342 U. S. 485, 511 (1952) (academic freedom is central to “the pursuit of truth which the First Amendment was designed to protect” (Douglas, J., dissenting)). Petitioner places special reliance on Justice Frankfurter’s opinion, concurring in the result, in Sweezy v. New Hampshire, 354 U. S. 234, 263 (1957), where the Justice recognized that one of “four essential freedoms” that a university possesses under the First Amendment is the right to “determine for itself on academic grounds who may teach” (emphasis added).
Petitioner contends that it exercises this right of determining “on academic grounds who may teach” through the process of awarding tenure. A tenure system, asserts petitioner, determines what the university will look like over time. “In making tenure decisions, therefore, a university is doing nothing less than shaping its own identity.” Brief for Petitioner 19.
Petitioner next maintains that the peer review process is the most important element in the effective operation of a tenure system. A properly functioning tenure system requires the faculty to obtain candid and detailed written evaluations of the candidate’s scholarship, both from the candidate’s peers at the university and from scholars at other institutions. These evaluations, says petitioner, traditionally have been provided with express or implied assurances of confidentiality. It is confidentiality that ensures candor and enables an institution to make its tenure decisions on the basis of valid academic criteria.
Building from these premises, petitioner claims that requiring the disclosure of peer review evaluations on a finding of mere relevance will undermine the existing process of awarding tenure, and therefore will result in a significant infringement of petitioner’s First Amendment right of academic freedom. As more and more peer evaluations are disclosed to the EEOC and become public, a “chilling effect” on candid evaluations and discussions of candidates will result. And as the quality of peer review evaluations declines, tenure committees will no longer be able to rely on them. “This will work to the detriment of universities, as less qualified persons achieve tenure causing the quality of instruction and scholarship to decline.” Id., at 35. Compelling disclosure of materials “also will result in divisiveness and tension, placing strain on faculty relations and impairing the free interchange of ideas that is a hallmark of academic freedom.” Ibid. The prospect of these deleterious effects on American colleges and universities, concludes petitioner, compels recognition of a First Amendment privilege.
In our view, petitioner’s reliance on the so-called academic-freedom cases is somewhat misplaced. In those cases government was attempting to control or direct the content of the speech engaged in by the university or those affiliated with it. In Sweezy, for example, the Court invalidated the conviction of a person found in contempt for refusing to answer questions about the content of a lecture he had delivered at a state university. Similarly, in Keyishian, the Court invalidated a network of state laws that required public employees, including teachers at state universities, to make certifications with respect to their membership in the Communist Party. When, in those cases, the Court spoke of “academic freedom” and the right to determine on “academic grounds who may teach” the Court was speaking in reaction to content-based regulation. See Sweezy v. New Hampshire, 354 U. S., at 250 (plurality opinion discussing problems that result from imposition of a “strait jacket upon the intellectual leaders in our colleges and universities”); Keyishian v. Board of Regents, 385 U. S., at 603 (discussing dangers that are present when a “pall of orthodoxy” is cast “over the classroom”).
Fortunately, we need not define today the precise contours of any academic-freedom right against governmental attempts to influence the content of academic speech through the selection of faculty or by other means, because petitioner does not allege that the Commission’s subpoenas are intended to or will in fact direct the content of university discourse toward or away from particular subjects or points of view. Instead, as noted above, petitioner claims that the “quality of instruction and scholarship [will] decline” as a result of the burden EEOC subpoenas place on the peer review process.
Also, the cases upon which petitioner places emphasis involved direct infringements on the asserted right to “determine for itself on academic grounds who may teach.” In Keyishian, for example, government was attempting to substitute its teaching employment criteria for those already in place at the academic institutions, directly and completely usurping the discretion of each institution. In contrast, the EEOC subpoena at issue here effects no such usurpation. The Commission is not providing criteria that petitioner must use in selecting teachers. Nor is it preventing the University from using any criteria it may wish to use, except those — including race, sex, and national origin — that are proscribed under Title VII. In keeping with Title VIPs preservation of employers’ remaining freedom of choice, see Price Waterhouse v. Hopkins, 490 U. S. 228 (1989) (plurality opinion), courts have stressed the importance of avoiding second-guessing of legitimate academic judgments. This Court itself has cautioned that “judges . . . a§ked to review the substance of a genuinely academic decision . . . should show great respect for the faculty’s professional judgment.” Regents of University of Michigan v. Ewing, 474 U. S. 214, 225 (1985). Nothing we say today should be understood as a retreat from this principle of respect for legitimate academic decisionmaking.
That the burden of which the University complains is neither content based nor direct does not necessarily mean that petitioner has no valid First Amendment claim. Rather, it means only that petitioner’s claim does not fit neatly within any right of academic freedom that could be derived from the cases on which petitioner relies. In essence, petitioner asks us to recognize an expanded right of academic freedom to protect confidential peer review materials from disclosure. Although we are sensitive to the effects that content-neutral government action may have on speech, see, e. g., Heffron v. International Society for Krishna Consciousness, Inc., 452 U. S. 640, 647-648 (1981), and believe that burdens that are less than direct may sometimes pose First Amendment concerns, see, e. g., NAACP v. Alabama ex rel. Patterson, 357 U. S. 449 (1958), we think the First Amendment cannot be extended to embrace petitioner’s claim.
First, by comparison with the cases in which we have found a cognizable First Amendment claim, the infringement the University complains of is extremely attenuated. To repeat, it argues that the First Amendment is infringed by disclosure of peer review materials because disclosure undermines the confidentiality which is Central to the peer review process, and this in turn is central to the tenure process, which in turn is the means by which petitioner seeks to exercise its asserted academic-freedom right of choosing who will teach. To verbalize the claim is to recognize how distant the burden is from the asserted right.
Indeed, if the University’s attenuated claim were accepted, many other generally applicable laws might also be said to infringe the First Amendment. In effect, petitioner says no more than that disclosure of peer review materials makes it more difficult to acquire information regarding the “academic grounds” on which petitioner wishes to base its tenure decisions. But many laws make the exercise of First Amendment rights more difficult. For example, a university cannot claim a First Amendment violation simply because it may be subject to taxation or other government regulation, even though such regulation might deprive the university of revenue it needs to bid for professors who are contemplating working for other academic institutions or in industry. We doubt that the peer review process is any more essential in effectuating the right to determine “who may teach” than is the availability of money. Cf. Buckley v. Valeo, 424 U. S. 1, 19 (1976) (discussing how money is sometimes necessary to effectuate First Amendment rights).
In addition to being remote and attenuated, the injury to academic freedom claimed by petitioner is also speculative. As the EEOC points out, confidentiality is not the norm in all peer review systems. See, e. g., G. Bednash, The Relationship Between Access and Selectivity in Tenure Review Outcomes (1989) (unpublished Ph.D. dissertation, University of Maryland). Moreover, some disclosure of peer evaluations would take place even if petitioner’s “special necessity” test were adopted. Thus, the “chilling effect” petitioner fears is at most only incrementally worsened by the absence of a privilege. Finally, we are not so ready as petitioner seems to be to assume the worst about those in the academic community. Although it is possible that some evaluators may become less candid as the possibility of disclosure increases, others may simply ground their evaluations in specific exam-pies and illustrations in order to deflect potential claims of bias or unfairness. Not all academics will hesitate to stand up and be counted when they evaluate their peers.
The case we decide today in many respects is similar to Bmnzburg v. Hayes, 408 U. S. 665 (1972). In Bmnzburg, the Court rejected the notion that under the First Amendment a reporter could not be required to appear or to testify as to information obtained in confidence without a special showing that the reporter’s testimony was necessary. Petitioners there, like petitioner here, claimed that requiring disclosure of information collected in confidence would inhibit the free flow of information in contravention of First Amendment principles. In the course of rejecting the First Amendment argument, this Court noted that “the First Amendment does not invalidate every incidental burdening of the press that may result from the enforcement of civil or criminal statutes of general applicability.” Id., at 682. We also indicated a reluctance to recognize a constitutional privilege where it was “unclear how often and to what extent informers are actually deterred from furnishing information when newsmen are forced to testify before a grand jury.” Id., at 693. See also Herbert v. Lando, 441 U. S. 153, 174 (1979). We were unwilling then, as we are today, “to embark the judiciary on a long and difficult journey to ... an uncertain destination.” 408 U. S., at 703.
Because we conclude that the EEOC subpoena process does not infringe any First Amendment right enjoyed by petitioner, the EEOC need not demonstrate any special justification to sustain the constitutionality of Title VII as applied to tenure peer review materials in general or to the subpoena involved in this case. Accordingly, we need not address the Commission’s alternative argument that any infringement of petitioner’s First Amendment rights is permissible because of the substantial relation between the Commission’s request and the overriding and compelling state interest in eradicating invidious discrimination.
The judgment of the Court of Appeals is affirmed.
It is so ordered.
Three days before the stated 20-day period expired, petitioner brought suit against the EEOC in the United States District Court for the District of Columbia seeking declaratory and injunctive relief and an order quashing the subpoena. App. 4. The Pennsylvania District Court declined to follow its controlling court’s announced “first-filed” rule, which counsels the stay or dismissal of an action that is duplicative of a previously filed suit in another federal court. See Crosley Corp. v. Hazeltine Corp., 122 F. 2d 925, 929 (CA3 1941), cert. denied, 315 U. S. 813 (1942); Compagnie des Bauxites de Guinea v. Insurance Co. of North America, 651 F. 2d 877, 887, n. 10 (CA3 1981), cert. denied sub nom. Compagnie des Bauxites de Guinea v. Insurance Corp. of Ireland, Ltd., 457 U. S. 1105 (1982). This declination, however, was upheld by the Third Circuit. See 850 F. 2d 969, 972 (1988). Since the applicability of the “first-filed” rule to the facts of this case is not a question on which we granted certiorari, we do not address it.
The Court of Appeals did not rule on the question whether the Commission’s subpoena permits petitioner to engage in any redaction of the disputed records before producing them, because the District Court had not fully considered that issue. The Third Circuit therefore ordered that the case be remanded for further consideration of possible redaction. See id., at 982.
See, e. g., 118 Cong. Rec. 311 (1972) (remarks of Sen. Ervin); id., at 946 (remarks of Sen. Allen); id., at 4919 (remarks of Sen. Ervin).
Similarly, the charging party may bring an action after it obtains a “right-to-sue” letter from the Commission. §2000e-5(f)(l).
The prohibition on Commission disclosure does not apply, for example, to the charging party. See EEOC v. Associated Dry Goods Corp., 449 U. S. 590, 598-604 (1981).
Obvious First Amendment problems would arise where government attempts to direct the content of speech at private universities. Such content-based regulation of private speech traditionally has carried with it a heavy burden of justification. See, e. g., Police Dept. of Chicago v. Mosley, 408 U. S. 92, 95, 98-99 (1972). Where, as was the situation in the academic-freedom cases, government attempts to direct the content of speech at public educational institutions, complicated First Amendment issues are presented because government is simultaneously both speaker and regulator. Cf. Meese v. Keene, 481 U. S. 465, 484, n. 18 (1987) (citing Block v. Meese, 253 U. S. App. D. C. 317, 327-328, 793 F. 2d 1303, 1313-1314 (1986)). See generally, M. Yudof, When Government Speaks (1983).
Petitioner does not argue in this case that race, sex, and national origin constitute “academic grounds” for the purposes of its claimed First Amendment right to academic freedom. Cf. Regents of University of California v. Bakke, 438 U. S. 265, 312-313 (1978) (opinion of Powell, J.).
In Bmnzburg we recognized that the bad-faith exercise of grand jury powers might raise First Amendment concerns. 408 U. S., at 707. The same is true of EEOC subpoena powers. See EEOC v. Shell Oil Co., 466 U. S. 64, 72, n. 26 (1984). There is no allegation or indication of any such abuse by the Commission in this case.
We also do not consider the question, not passed upon by the Court of Appeals, whether the District Court’s enforcement of the Commission’s subpoena will allow petitioner to redact information from the contested materials before disclosing them. See n. 2, supra. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
31
] |
BARTELS et al., doing business as CRYSTAL BALLROOM, v. BIRMINGHAM, COLLECTOR OF INTERNAL REVENUE, et al.
NO. 731.
Argued April 3, 1947.
Decided June 23, 1947.
Clyde B. Charlton and Thomas B. Roberts argued the cause for petitioners. With them on the brief were George E. Brammer and Joseph I. Brody.
Robert L. Stern argued the cause for Birmingham, Collector of Internal Revenue, respondent. With him on the brief were Acting Solicitor General Washington, Sewall Key and Lyle M. Turner.
Robert A. Wilson argued the cause for Williams et al., respondents in No. 731. With him on the brief were Joseph A. Padway and Chauncey A. Weaver.
Mr. Justice Reed
delivered the opinion of the Court.
Petitioners, operators of public dance halls, brought these actions, which were consolidated for trial, against the respondent Collector of Internal Revenue to recover taxes paid under the Social Security Act, Titles VIII and IX, and I. R. C., c. 9, subchap. A and C. Recovery depends on whether petitioners’ arrangements for bands to play at the dance halls made the band leaders and other members of the bands employees of the petitioners or whether, despite the arrangements, the leaders were independent contractors and therefore themselves the employers of the other members. Several band leaders were allowed to intervene in the Bartels case as defendants to protect their own interests. After a recovery in the District Court, 59 F. Supp. 84, was reversed by the Circuit Court of Appeals, Birmingham v. Bartels, 157 F. 2d 295, petitioners sought certiorari which we granted because of the importance of the issue to the administration of the Act. 329 U. S. 711. See United States v. Silk and Harrison v. Greyvan Lines, 331 U. S. 704.
These cases are not concerned with musicians hired by petitioners to play regularly for their dance halls but with “name bands” hired to play for limited engagements at their establishments. These bands are built around a leader whose name, and distinctive style in the presentation and rendition of dance music, is intended to give each band a marked individuality. The leader contracts with different ballroom operators to play at their establishments for a contract price. Almost all of the engagements here involved were one-night stands, some few being for several successive nights. The trial court found, and there is no real dispute, that the leader exercises complete control over the orchestra. He fixes the salaries of the musicians, pays them, and tells them what and how to play. He provides the sheet music and arrangements, the public address system, and the uniforms. He employs and discharges the musicians, and he pays agents’ commissions, transportation and other expenses out of the sum received from the dance hall operators. Any excess is his profit and any deficit his personal loss. The operators of the dance halls furnish the piano but not the other instruments.
The American Federation of Musicians, of which the leaders and the musicians are members, adopted a standard contract known as “Form B.” The terms of this contract create the difficulties in the determination of this case. As compensation to the bands, some contracts call for a guaranteed sum, with the privilege to the bands to take a percentage of the gross. Other contracts are for a fixed sum, only, and others for a percentage of gross, not to exceed a fixed sum. The contract states that the ballroom operator is the employer of the musicians and their leader, and “shall at all times have complete control of the services which the employees will render under the specifications of this contract.” The form paragraph, so far as pertinent, is set out in the margin. The District Court found that the contract was adopted by the Union in order to shift the incidence of the social security taxes from the leader to the ballroom operator, and that it had no practical effect on the relations between the musicians, leader, and operator. The District Court held that the question of employment under the Act was one of fact, and that the contract was only one factor to be considered. Since the District Court believed that the contract was not entered into “by fair negotiation” and that its purpose was to protect the leaders from taxes as employers, it concluded that the contract was of no effect and that the leader was an independent contractor employing the musicians.
The Circuit Court of Appeals thought otherwise. It concluded that the test of employment was the common law test of control, i. e., that one was an employer if he had the “right” to direct what should be done and how it should be done. It concluded that the contract between the parties gave the ballroom operators the “right” to control the musicians and the leader, whether or not the control was actually exercised. While the majority thought that such a contract was not binding on the Government, they thought it was binding on the parties and would control liability for employment taxes if the Bureau of Internal Revenue chose to accept the arrangement as valid. Birmingham v. Bartels, supra, at 300.
The Government here relies entirely on the contract, conceding that otherwise the bandleaders are independent contractors employing the musicians. On the other hand, the bandleaders involved contend also that though the contract be thought inconclusive, the leaders and musicians are employees of the operators. They rely upon the dependence of the orchestra members upon the ballroom operators judged in the light of the purposes of the Act.
In United States v. Silk, supra, we held that the relationship of employer-employee, which determines the liability for employment taxes under the Social Security Act, was not to be determined solely by the idea of control which an alleged employer may or could exercise over the details of the service rendered to his business by the worker or workers. Obviously control is characteristically associated with the employer-employee relationship, but in the application of social legislation employees are those who as a matter of economic reality are dependent upon the business to which they render service. In Silk, we pointed out that permanency of the relation, the skill required, the investment in the facilities for work, and opportunities for profit or loss from the activities were also factors that should enter into judicial determination as to the coverage of the Social Security Act. It is the total situation that controls. These standards are as important in the entertainment field as we have just said, in Silk, that they were in that of distribution and transportation.
Consideration of the regulations of the Treasury and the Federal Security Agency, quoted in Silk, 331 U. S. 704, at note 8, is necessary here. I. R. C., chap. 9, §§ 1429, 1609. Under those regulations, the Government successfully resisted the effort of a leader of a “name” band, like those here involved, to recover social security taxes paid on the wages of the members of his organization. Wil liams v. United States, 126 F. 2d 129. The contract in that case was not “Form B” and did not contain any corresponding control clause. Two years later, the Commissioner of Internal Revenue issued mimeographs 5638, 1944-5-11651, and 5767, 1944-22-11889, 1944 Cum. Bull. 547-48. They were directed at the status of musicians and variety entertainers appearing in theatres, night clubs, restaurants and similar establishments. Collectors and others were therein advised that a “Form B” or similar contract with the entertainers made operators of amusement places liable as employers under the Social Security Act. In the absence of such a contract, that is, in reality, the absence of the control clause of “Form B,” the entertainers, with “short-term engagements for a number of different operators” of amusement places, would be considered “independent contractors.” The argument of respondents to support the administrative interpretation of the regulations is that the Government may accept the voluntary contractual arrangements of the amusement operators and entertainers to shift the tax burden from the band leaders to the operators. Cases are cited to support this position. All of these cases, however, involve the problem of corporate or association entity. They are not pertinent upon the question of contracts to shift tax liability from one taxpayer to another wholly distinct and disconnected corporation or individual. We do not think that such a contractual shift authorizes the Commissioner to collect taxes from one not covered by the taxing statute. The interpretive rulings on the Regulations, referred to in this paragraph, do not have the force and effect of Treasury Decisions. We are of the opinion that such administrative action goes beyond routine and exceeds the statutory power of the Commissioner. Social Security Board v. Nierotko, 327 U. S. 358, 369-70.
This brings us then to a determination of whether the members of a “name band” under the circumstances heretofore detailed are employees pf the operator of the dance hall or of the leader. If the operator is the employer, the leader is also his employee.
We are of the opinion that the elements of employment mark the band leader as the employer in these cases. The leader organizes and trains the band. He selects the members. It is his musical skill and showmanship that determines the success or failure of the organization. The relations between him and the other members are permanent; those between the band and the operator are transient. Maintenance costs are a charge against the price received for the performance. He bears the loss or gains the profit after payment of the members’ wages and the other band expenses.
The judgments of the Circuit Court of Appeals are reversed and those of the District Court are affirmed.
Reversed.
“Witnesseth, That the employer employs the personal services of the employees, as musicians severally, and the employees severally, through their representative, agree to render collectively to the employer services as musicians in the orchestra under the leadership of Griff Williams, according to the following terms and conditions:
“The employer shall at all times have complete control of the services which the employees -will render under the specifications of this contract. On behalf of the employer the Leader will distribute the amount received from the employer to the employees, including himself, as indicated on the opposite side of this contract, or in place thereof on separate memorandum supplied to the employer at or before the commencement of the employment hereunder and take and turn over to the employer receipts therefor from each employee, including himself. The amount paid to the Leader includes the cost of transportation, which will be reported by the Leader to the employer. The employer hereby authorizes the Leader on his behalf to replace any employee who by illness, absence, or for any other reason does not perform any or all of the services provided for under this contract. . .
There is a contention that the contracts were coerced because the operators could not secure these musicians under other arrangements. We do not find it necessary to rely or pass upon that contention.
Edwards v. Chile Copper Co., 270 U. S. 452, 456; Burnet v. Commonwealth Improvement Co., 287 U. S. 415; New Colonial Ice Co. v. Helvering, 292 U. S. 435; Helvering v. Coleman-Gilbert Associates, 296 U. S. 369, 374; Higgins v. Smith, 308 U. S. 473, 477; Gray v. Powell, 314 U. S. 402; Moline Properties, Inc. v. Commissioner, 319 U. S. 436, 439; Interstate Transit Lines v. Commissioner, 319 U. S. 590; Schenley Corp. v. United States, 326 U. S. 432, 437.
See 1944 Cum. Bull., notice, p. I. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
68
] |
NATIONAL LABOR RELATIONS BOARD v. MATTISON MACHINE WORKS.
No. 74.
Argued January 9, 1961.
Decided January 23, 1961.
Norton J. Come argued the cause for petitioner. With him on the brief were Solicitor General Rankin, Stuart Rothman, Dominick L. Manoli and Allan I. Mendelsohn.
J. Warren McCaffrey argued the cause for respondent. With him on the brief was Charles B. Cannon.
Harold A. Katz and Irving M. Friedman filed a brief for the United Automobile, Aircraft & Agricultural Implement Workers of America, as amicus curiae, urging reversal.
Per Curiam.
The judgment of the Court of Appeals is reversed and the case remanded to that court for the entry of a decree enforcing the Board’s order. The refusal of the Court of Appeals to enforce that order because the Board’s notices of election contained a minor and unconfusing mistake in the employer’s corporate name, was plain error. It was well within the Board’s province to find, as it did, upon the record before it that this occurrence had not affected the fairness of the representation election, particularly in the absence of any contrary showing by the employer, upon whom the burden of proof rested in this respect. That finding should have been accepted by the Court of Appeals. In the absence of proof by the employer that there has been prejudice to the fairness of the election such trivial irregularities of administrative procedure do not afford a basis for denying enforcement to an otherwise valid Board order. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
81
] |
METROPOLITAN LIFE INSURANCE CO. et al. v. WARD et al.
No. 83-1274.
Argued October 31, 1984
Decided March 26, 1985
Powell, J., delivered the opinion of the Court, in which Burger, C. J., and White, Blackmun, and Stevens, JJ., joined. O’Connor, J., filed a dissenting opinion, in which Brennan, Marshall, and Rehnquist, JJ., joined, post, p. 883.
Matthew J. Zinn argued the cause for appellants. With him on the briefs was Steven Reed.
Warren B. Lightfoot argued the cause for appellees. With him on the brief for appellee Ward were E. Mabry Rogers and Phillip E. Stano. Robert W. Bradford, Jr., and Harry Cole filed a brief for appellees American Educators Life Insurance Co. et al.
Briefs of amici curiae urging reversal were filed for the State of Connecticut et al. by Dennis J. Roberts II, Attorney General of Rhode Island, Frances X. Bellotti, Attorney General of Massachusetts, Gregory H. Smith, Attorney General of New Hampshire, Joseph I. Lieberman, Attorney General of Connecticut, Elliot F. Gerson, Deputy Attorney General, and John G. Haines, Assistant Attorney General; and for the Life Insurance Council of New York by Peter J. Flanagan.
Briefs of amici curiae urging affirmance were filed for the State of Alaska et al. by Anthony Celebrezze, Jr., Attorney General of Ohio, and Connie J. Harris, Assistant Attorney General, Dave Frohnmayer, Attorney General of Oregon, William F. Gary, Deputy Attorney General, and James E. Mountain, Jr., Solicitor General, Jim Mattox, Attorney General of Texas, and Henry H. Robinson, Assistant Attorney General; for the State of Illinois by Neil F. Hartigan, Attorney General, and Patricia Rosen and Kathryn A. Spalding, Assistant Attorneys General; for Allstate Insurance Co. et al. by Duane C. Quaini; for the Florida Association of Domestic Insurance Companies, Inc., et al. by Robert W. Perkins and Samuel R. Neel III.
Justice Powell
delivered the opinion of the Court.
This case presents the question whether Alabama’s domestic preference tax statute, Ala. Code §§27-4-4 and 27-4-5 (1975), that taxes out-of-state insurance companies at a higher rate than domestic insurance companies, violates the Equal Protection Clause.
I
Since 1955, the State of Alabama has granted a preference to its domestic insurance companies by imposing a substantially lower gross premiums tax rate on them than on out-of-state (foreign) companies. Under the current statutory provisions, foreign life insurance companies pay a tax on their gross premiums received from business conducted in Alabama at a rate of three percent, and foreign companies selling other types of insurance pay at a rate of four percent. Ala. Code § 27-4-4(a) (1975). All domestic insurance companies, in contrast, pay at a rate of only one percent on all types of insurance premiums. § 27-4-5(a). As a result, a foreign insurance company doing the same type and volume of business in Alabama as a domestic company generally will pay three to four times as much in gross premiums taxes as its domestic competitor.
Alabama’s domestic preference tax statute does provide that foreign companies may reduce the differential in gross premiums taxes by investing prescribed percentages of their worldwide assets in specified Alabama assets and securities. §27-4-4(b). By investing 10 percent or more of its total assets in Alabama investments, for example, a foreign life insurer may reduce its gross premiums tax rate from 3 to 2 percent. Similarly, a foreign property and casualty insurer may reduce its tax rate from four to three percent. Smaller tax reductions are available based on investment of smaller percentages of a company’s assets. Ibid. Regardless of how much of its total assets a foreign company places in Alabama investments, it can never reduce its gross premiums tax rate to the same level paid by comparable domestic companies. These are entitled to the one-percent tax rate even if they have no investments in the State. Thus, the investment provision permits foreign insurance companies to reduce, but never to eliminate, the discrimination inherent in the domestic preference tax statute.
Appellants, a group of insurance companies incorporated outside of the State of Alabama, filed claims with the Alabama Department of Insurance in 1981, contending that the domestic preference tax statute, as applied to them, violated the Equal Protection Clause. They sought refunds of taxes paid for the tax years 1977 through 1980. The Commissioner of Insurance denied all of their claims on July 8, 1981.
Appellants appealed to the Circuit Court for Montgomery County, seeking a judgment declaring the statute to be unconstitutional and requiring the Commissioner to make the appropriate refunds. Several domestic companies intervened, and the court consolidated all of the appeals, selecting two claims as lead cases to be tried and binding on all claimants. On cross-motions for summary judgment, the court ruled on May 17, 1982, that the statute was constitutional. Relying on this Court’s opinion in Western & Southern Life Ins. Co. v. State Board of Equalization of California, 451 U. S. 648 (1981), the court ruled that the Alabama statute did not violate the Equal Protection Clause because it served “at least two purposes, in addition to raising revenue: (1) encouraging the formation of new insurance companies in Alabama, and (2) encouraging capital investment by foreign insurance companies in the Alabama assets and governmental securities set forth in the statute.” App. to Juris. Statement 20a-21a. ‘The court also found that the distinction the statute created between foreign and domestic companies was rationally related to those two purposes and that the Alabama Legislature reasonably could have believed that the classification would have promoted those purposes. Id., at 21a.
After their motion for a new trial was denied, appellants appealed to the Court of Civil Appeals. It affirmed the Circuit Court’s rulings as to the existence of the two legitimate state purposes, but remanded for an evidentiary hearing on the issue of rational relationship, concluding that summary judgment was inappropriate on that question because the evidence was in conflict. 437 So. 2d 535 (1983). Appellants petitioned the Supreme Court of Alabama for certiorari on the affirmance of the legitimate state purpose issue, and the State and the intervenors petitioned for review of the remand order. Appellants then waived their right to an evidentiary hearing on the issue whether the statute’s classification bore a rational relationship to the two purposes found by the Circuit Court to be legitimate, and they requested a final determination of the legal issues with respect to their equal protection challenge to the statute. The Supreme Court denied certiorari on all claims. Appellants again waived their rights to an evidentiary hearing on the rational relationship issue and filed a joint motion with the other parties seeking rehearing and entry of a final judgment. The motion was granted, and judgment was entered for the State and the intervenors. 447 So. 2d 142 (1983). This appeal followed, and we noted probable jurisdiction. 466 U. S. 935 (1984). We now reverse.
h-H h-H h-H
Prior to our decision in Western & Southern Life Ins. Co. v. State Board of Equalization of California, supra, the jurisprudence of the applicability of the Equal Protection Clause to discriminatory tax statutes had a somewhat checkered history. Lincoln National Life Ins. Co. v. Read, 325 U. S. 673 (1945), held that so-called “privilege” taxes, required to be paid by a foreign corporation before it would be permitted to do business within a State, were immune from equal protection challenge. That case stood in stark contrast, however, to the Court’s prior decisions in Southern R. Co. v. Greene, 216 U. S. 400 (1910), and Hanover Fire Ins. Co. v. Harding, 272 U. S. 494 (1926), as well as to later decisions, in which the Court had recognized that the Equal Protection Clause placed limits on other forms of discriminatory taxation imposed on out-of-state corporations solely because of their residence. See, e. g., WHYY, Inc. v. Glassboro, 393 U. S. 117 (1968); Allied Stores of Ohio, Inc. v. Bowers, 358 U. S. 522 (1959); Wheeling Steel Corp. v. Glander, 337 U. S. 562 (1949).
In Western & Southern, supra, we reviewed all of these cases for the purpose of deciding whether to permit an equal protection challenge to a California statute imposing a retaliatory tax on foreign insurance companies doing business within the State, when the home States of those companies imposed a similar tax on California insurers entering their borders. We concluded that Lincoln was no more than “a surprising throwback” to the days before enactment of the Fourteenth Amendment and in which incorporation of a domestic corporation or entry of a foreign one had been granted only as a matter of privilege by the State in its unfettered discretion. 451 U. S., at 665. We therefore rejected the longstanding but “anachronis[tic]” rule of Lincoln and explicitly held that the Equal Protection Clause imposes limits upon a State’s power to condition the right of a foreign corporation to do business within its borders. 451 U. S., at 667. We held that “[w]e consider it now established that, whatever the extent of a State’s authority to exclude foreign corporations from doing business within its boundaries, that authority does not justify imposition of more onerous taxes or other burdens on foreign corporations than those imposed on domestic corporations, unless the discrimination between foreign and domestic corporations bears a rational relation to a legitimate state purpose.” Id., at 667-668.
Because appellants waived their right to an evidentiary hearing on the issue whether the classification in the Alabama domestic preference tax statute bears a rational relation, to the two purposes upheld by the Circuit Court, the only question before us is whether those purposes are legitimate.
A
(1)
The first of the purposes found by the trial court to be a legitimate reason for the statute’s classification between foreign and domestic corporations is that it encourages the formation of new domestic insurance companies in Alabama. The State, agreeing with the Court of Civil Appeals, contends that this Court has long held that the promotion of domestic industry, in and of itself, is a legitimate state purpose that will survive equal protection scrutiny. In so contending, it relies on a series of cases, including 'Western & Southern, that are said to have upheld discriminatory taxes. See Bacchus Imports, Ltd. v. Dias, 468 U. S. 263 (1984); Pike v. Bruce Church, Inc., 397 U. S. 137 (1970); Allied Stores of Ohio, Inc. v. Bowers, supra; Parker v. Brown, 317 U. S. 341 (1943); Carmichael v. Southern Coal & Coke Co., 301 U. S. 495 (1937); Board of Education v. Illinois, 203 U. S. 553 (1906).
The cases cited lend little or no support to the State’s contention. In Western & Southern, the case principally relied upon, we did not hold as a general rule that promotion of domestic industry is a legitimate state purpose under equal protection analysis. Rather, we held that California’s purpose in enacting the retaliatory tax — to promote the interstate business of domestic insurers by deterring other States from enacting discriminatory or excessive taxes — was a legitimate one. 451 U. S., at 668. In contrast, Alabama asks us to approve its purpose of promoting the business of its domestic insurers in Alabama by penalizing foreign insurers who also want to do business in the State. Alabama has made no attempt, as California did, to influence the policies of other States in order to enhance its domestic companies’ ability to operate interstate; rather, it has erected barriers to foreign companies who wish to do interstate business in order to improve its domestic insurers’ ability to compete at home.
The crucial distinction between the two cases lies in the fact that Alabama’s aim to promote domestic industry is purely and completely discriminatory, designed only to favor domestic industry within the State, no matter what the cost to foreign corporations also seeking to do business there. Alabama’s purpose, contrary to California’s, constitutes the very sort of parochial discrimination that the Equal Protection Clause was intended to prevent. As Justice Brennan, joined by Justice Harlan, observed in his concurrence in Allied Stores of Ohio, Inc. v. Bowers, 358 U. S. 522 (1959), this Court always has held that the Equal Protection Clause forbids a State to discriminate in favor of its own residents solely by burdening “the residents of other state members of our federation.” Id., at 533. Unlike the retaliatory tax involved in Western & Southern, which only burdens residents of a State that imposes its own discriminatory tax on outsiders, the domestic preference tax gives the “home team” an advantage by burdening all foreign corporations seeking to do business within the State, no matter what they or their States do.
The validity of the view that a State may not constitutionally favor its own residents by taxing foreign corporations at a higher rate solely because of their residence is confirmed by a long line of this Court’s cases so holding. WHYY, Inc. v. Glassboro, 393 U. S., at 119-120; Wheeling Steel Corp. v. Glander, 337 U. S., at 571; Hanover Fire Ins. Co. v. Harding, 272 U. S., at 511; Southern R. Co. v. Greene, 216 U. S., at 417. See Reserve Life Ins. Co. v. Bowers, 380 U. S. 258 (1965) (per curiam). As the Court stated in Hanover Fire Ins. Co., with respect to general tax burdens on business, “the foreign corporation stands equal, and is to be classified with domestic corporations of the same kind.” 272 U. S., at 511. In all of these cases, the discriminatory tax was imposed by the State on foreign corporations doing business within the State solely because of their residence, presumably to promote domestic industry within the State. In relying on these cases and rejecting Lincoln in Western & Southern, we reaffirmed the continuing viability of the Equal Protection Clause as a means of challenging a statute that seeks to benefit domestic industry within the State only by grossly discriminating against foreign competitors.
The State contends that Allied Stores of Ohio, Inc. v. Bowers, supra, shows that this principle has not always held true. In that case, a domestic merchandiser challenged on equal protection grounds an Ohio statute that exempted foreign corporations from a tax on the value of merchandise held for storage within the State. The Court upheld the tax, finding that the purpose of encouraging foreign companies to build warehouses within Ohio was a legitimate state purpose. The State contends that this case shows that promotion of domestic business is a legitimate state purpose under equal protection analysis.
We disagree with the State’s interpretation of Allied Stores and find that the case is not inconsistent with the other cases on which we rely. We agree with the holding of Allied Stores that a State’s goal of bringing in new business is legitimate and often admirable. Allied Stores does not, however, hold that promotion of domestic business by discriminating against foreign corporations is legitimate. The case involves instead a statute that encourages nonresidents— who are not competitors of residents — to build warehouses within the State. The discriminatory tax involved did not favor residents by burdening outsiders; rather, it granted the nonresident businesses an exemption that residents did not share. Since the foreign and domestic companies involved were not competing to provide warehousing services, granting the former an exemption did not even directly affect adversely the domestic companies subject to the tax. On its facts, then, Allied Stores is not inconsistent with our holding here that promotion of domestic business within a State, by discriminating against foreign corporations that wish to compete by doing business there, is not a legitimate state purpose. See 358 U. S., at 532-533 (Brennan, J., concurring).
(2)
The State argues nonetheless that it is impermissible to view a discriminatory tax such as the one at issue here as violative of the Equal Protection Clause. This approach, it contends, amounts to no more than “Commerce Clause rhetoric in equal protection clothing.” Brief for Appellee Ward 22. The State maintains that because Congress, in enacting the McCarran-Ferguson Act, 15 U. S. C. §§ 1011-1015, intended to authorize States to impose taxes that burden interstate commerce in the insurance field, the tax at issue here must stand. Our concerns are much more fundamental than as characterized by the State. Although the McCarran-Ferguson Act exempts the insurance industry from Commerce Clause restrictions, it does not purport to limit in any way the applicability of the Equal Protection Clause. As noted above, our opinion in Western & Southern expressly reaffirmed the viability of equal protection restraints on discriminatory taxes in the insurance context.
Moreover, the State’s view ignores the differences between Commerce Clause and equal protection analysis and the consequent different purposes those two constitutional provisions serve. Under Commerce Clause analysis, the State’s interest, if legitimate, is weighed against the burden the state law would impose on interstate commerce. In the equal protection context, however, if the State’s purpose is found to be legitimate, the state law stands as long as the burden it imposes is found to be rationally related to that purpose, a relationship that is not difficult to establish. See Western & Southern, 451 U. S., at 674 (if purpose is legitimate, equal protection challenge may not prevail so long as the question of rational relationship is “ ‘at least debatable’ ” (quoting United States v. Carotene Products Co., 304 U. S. 144, 154 (1938)).
The two constitutional provisions perform different functions in the analysis of the permissible scope of a State’s power — one protects interstate commerce, and the other protects persons from unconstitutional discrimination by the States. See Bethlehem Motors Corp. v. Flynt, 256 U. S. 421, 423-424 (1921). The effect of the statute at issue here is to place a discriminatory tax burden on foreign insurers who desire to do business within the State, thereby also incidentally placing a burden on interstate commerce. Equal protection restraints are applicable even though the effect of the discrimination in this case is similar to the type of burden with which the Commerce Clause also would be concerned. We reaffirmed the importance of the Equal Protection Clause in the insurance context in Western & Southern and see no reason now for reassessing that view.
In whatever light the State’s position is cast, acceptance of its contention that promotion of domestic industry is always a legitimate state purpose under equal protection analysis would eviscerate the Equal Protection Clause in this context. A State’s natural inclination frequently would be to prefer domestic business over foreign. If we accept the State’s view here, then any discriminatory tax would be valid if the State could show it reasonably was intended to benefit domestic business. A discriminatory tax would stand or fall depending primarily on how a State framed its purpose— as benefiting one group or as harming another. This is a distinction without a difference, and one that we rejected last Term in an analogous context arising under the Commerce Clause. Bacchus Imports, Ltd. v. Dias, 468 U. S., at 273. See n. 6, supra. We hold that under the circumstances of this case, promotion of domestic business by discriminating against nonresident competitors is not a legitimate state purpose.
B
The second purpose found by the courts below to be legitimate was the encouragement of capital investment in the Alabama assets and governmental securities specified in the statute. We do not agree that this is a legitimate state purpose when furthered by discrimination. Domestic insurers remain entitled to the more favorable rate of tax regardless of whether they invest in Alabama assets. Moreover, the investment incentive provision of the Alabama statute does not enable foreign insurance companies to eliminate the discriminatory effect of the statute. No matter how much of their assets they invest in Alabama, foreign insurance companies are still required to pay a higher gross premiums tax than domestic companies. The State’s investment incentive provision therefore does not cure, but reaffirms, the statute’s impermissible classification based solely on residence. We hold that encouraging investment in Alabama assets and securities in this plainly discriminatory manner serves no legitimate state purpose.
IV
We conclude that neither of the two purposes furthered by the Alabama domestic preference tax statute and addressed by the Circuit Court for Montgomery County, see supra, at 873, is legitimate under the Equal Protection Clause to justify the imposition of the discriminatory tax at issue here. The judgment of the Alabama Supreme Court accordingly is reversed, and the case is remanded for further proceedings not inconsistent with this opinion.
It is so ordered.
The origins of Alabama’s domestic preference tax statute date back to 1849, when the first tax on premiums earned by insurance companies doing business in the State was limited to companies not chartered by the State. Act No. 1, 1849 Ala. Acts 5. A domestic preference tax was imposed on and off throughout the years until 1945, when the State restored equality •in taxation of insurance companies in response to this Court’s decision in United States v. South-Eastern Underwriters Assn., 322 U. S. 533 (1944). Act No. 156, 1945 Ala. Acts 196-197. In 1955, the tax was reinstated, Act No. 77, 1955 Ala. Acts 193 (2d Spec. Sess.), and with minor amendments, has remained in effect until the present.
For domestic preference tax purposes, Alabama defines a domestic insurer as a company that both is incorporated in Alabama and has its principal office and chief place of business within the State. Ala. Code § 27-4-1(3) (1975). A corporation that does not meet both of these criteria is characterized as a foreign insurer. § 27-4-1(2).
There are two exceptions to these general rules concerning the rates of taxation of insurance companies. For annuities, the tax rate is one percent for both foreign and domestic insurers, Ala. Code §27-4-4(a) (1975), and for wet marine and transportation insurance, the rate is three-quarters of one percent for both foreign and domestic insurance companies, § 27-4-6(a).
Metropolitan Life Insurance Co., a New York corporation, was chosen to represent the life insurance claimants, and Prudential Property and Casualty Co., a New Jersey corporation, was chosen as representative of the nonlife claimants. See App. 314-315.
The State and the intervenors advanced some 15 additional purposes in support of the Alabama statute. As neither the Circuit Court nor the Court of Civil Appeals ruled on the legitimacy of those purposes, that question is not before us, and we express no view as to it. On remand, the State will be free to advance again its arguments relating to the legitimacy of those purposes.
As the dissent finds our failure to resolve whether Alabama may continue to collect its tax “baffling,” post, at 887, we reemphasize the procedural posture of the case: it arose on a motion for summary judgment. The Court of Civil Appeals upheld the Circuit Court’s ruling that the two purposes identified by it were legitimate, but the appellate court remanded on the issue of rational relationship as to those purposes because it found the evidence in conflict. In order to obtain an expedited ruling, appellants waived their right to an evidentiary hearing only as to the purposes “which the lower courts have determined to be legitimate.” 447 So. 2d 142, 143 (Ala. 1983). Thus, for this Court to resolve whether Alabama may continue to collect the tax, it would have to decide de novo whether any of the other purposes was legitimate, and also whether the statute’s classification bore a rational relationship to any of these purposes — all this, on a record that the Court of Civil Appeals deemed inadequate.
We find the other cases on which the State relies also to be inapposite, to this inquiry. Bacchus Imports, Pike, and Parker discussed whether promotion of local industry is a valid state purpose under the Commerce Clause. The Commerce Clause, unlike the Equal Protection Clause, is integrally concerned with whether a state purpose implicates local or national interests. The Equal Protection Clause, in contrast, is concerned with whether a state purpose is impermissibly discriminatory; whether the discrimination involves local or other interests is not central to the inquiry to be made. Thus, the fact that promotion of local industry is a legitimate state interest in the Commerce Clause context says nothing about its validity under equal protection analysis.' See infra, at 880-881.
Moreover, neither Bacchus nor Pike ruled that a State’s ability to promote domestic industry was unlimited, even under the Commerce Clause. Thus, in Bacchus, although we observed as a general matter that “a State may enact laws pursuant to its police powers that have the purpose and effect of encouraging domestic industry,” 468 U. S., at 271, we held that in so doing, a State may not constitutionally impose a discriminatory burden upon the business of other States, merely to protect and promote local business, id., at 272-273. Accord, Armco Inc. v. Hardesty, 467 U. S. 638, 642 (1984). Likewise, in Pike, the Court held that the state statute promoting a legitimate local interest must “regulat[e] evenhandedly.” 397 U. S., at 142.
Other cases cited by the State are simply irrelevant to the legitimacy of promoting local business at all. Carmichael relates primarily to the validity of a state unemployment compensation scheme, and Board of Education deals with the State’s ability to regulate matters relating to probate. Bowers is the only one of the State’s cases that involves the validity under the Equal Protection Clause of a tax that discriminates on the basis of residence of domestic versus foreign corporations. That case does little, however, to support the State’s contention that promotion of domestic business is a legitimate state purpose. It was concerned with encouraging nonresidents — who are not competitors of residents — to build warehouses within the State. See infra, at 879-880.
Although the promotion of domestic business was not a purpose advanced by the States in support of their taxes in these cases, such promotion is logically the primary reason for enacting discriminatory taxes such as those at issue there.
In fact, as we noted in Western & Southern, the legislative history of the McCarran-Ferguson Act reveals that the Act was Congress’ response only to United States v. South-Eastern Underwriters Assn., 322 U. S. 533 (1944), and that Congress did not intend thereby to give the States any power to tax or regulate the insurance industry other than what they had previously possessed. Thus Congress expressly left undisturbed this Court’s decisions holding that the Equal Protection Clause places limits on a State’s ability to tax out-of-state corporations. See 451 U. S., at 655, n. 6.
It is well established that a corporation is a “person” within the meaning of the Fourteenth Amendment. E. g., Western & Southern, 451 U. S., at 660, n. 12.
Indeed, under the State’s analysis, any discrimination subject to the rational relation level of scrutiny could be justified simply on the ground that it favored one group at the expense of another. This case does not involve or question, as the dissent suggests, post, at 900-901, the broad authority of a State to promote and regulate its own economy. We hold only that such regulation may not be accomplished by imposing dis-criminatorily higher taxes on nonresident corporations solely because they are nonresidents. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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116
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WOELKE & ROMERO FRAMING, INC. v. NATIONAL LABOR RELATIONS BOARD et al.
No. 80-1798.
Argued March 3, 1982
Decided May 24, 1982
Marshall, J., delivered the opinion for a unanimous Court.
John W. Prager, Jr., argued the cause for petitioner in No. 80-1798. With him on the briefs was Dwight L. Armstrong.
Lems K. Scott argued the cause for petitioners in Nos. 80-1808 and 81-91. With him on the briefs for petitioner in No. 81-91 was David H. Wilson, Jr. Thomas M. Triplett filed briefs for petitioner in No. 80-1808.
Norton J. Come argued the cause for respondent National Labor Relations Board. With him on the brief were Solicitor General Lee, Elinor Hadley Stillman, Linda Sher, and John H. Ferguson.
Laurence Gold argued the cause for respondent unions. With him on the brief were Abe F. Levy, Gordon K. Hubei, Richard R. Carney, Laurence J. Cohen, and George Kaufmann.
Together with No. 80-1808, Pacific Northwest Chapter of the Associated Builders & Contractors, Inc. v. National Labor Relations Board et al.; and No. 81-91, Oregon-Columbia Chapter, Associated General Contractors of America, Inc. v. National Labor Relations Board et al., also on certiorari to the same court.
Briefs of amici curiae urging reversal were filed by Kenneth C. McGuiness, Robert E. Williams, and Daniel R. Levinson for the Air Conditioning and Refrigeration Institute et al.; by Richard P. Markey for Associated Builders and Contractors; by Peter G. Nash for Associated General Contractors of America, Inc.; and by Vincent J. Apruzzese, Francis A. Mastro, Lawrence B. Kraus, and Stephen A. Bokat for the Chamber of Commerce of the United States of America.
Briefs of amici curiae were filed by Gerard C. Smetana for Donald Schriver, Inc., et al.; by Michael C. Murphy and Hugh M. Davenport for Georgia Power Co.; by Peter R. Spanos for the National Association of Home Builders; and by Rex H. Reed and Joseph J. Hahn for the National Right to Work Legal Defense Foundation.
Justice Marshall
delivered the opinion of the Court.
In these consolidated cases, petitioners ask us to decide whether union signatory subcontracting clauses that are sought or negotiated in the context of a collective-bargaining relationship are protected by the construction industry proviso to §8(e) of the National Labor Relations Act (Act), 29 U. S. C. § 158(e). Such clauses bar subcontracting except to subcontractors who are signatories to agreements with particular unions. Petitioners also ask us to decide whether a union violates § 8(b)(4)(A) of the Act, 29 U. S. C. § 158 (b)(4)(A), when it pickets to obtain a lawful subcontracting clause.
The United States Court of Appeals for the Ninth Circuit held that subcontracting clauses sought or negotiated in the context of a collective-bargaining relationship are protected by the construction industry proviso even when not limited in application to particular jobsites at which both union and nonunion workers are employed. It further held that picketing to obtain such clauses does not violate § 8(b)(4)(A). See 654 F. 2d 1301 (1981) (en banc). We affirm the holding that the subcontracting clauses at issue here are protected by the construction industry proviso. Because we conclude that the Court of Appeals did not have jurisdiction to consider the picketing question, we do not review that portion of its decision.
I
A
These cases arise out of two separate labor disputes. The first involves petitioner Woelke & Romero Framing, Inc. (Woelke), a framing subcontractor in the construction industry in southern California. From July 1974 to June 1977, Woelke was party to a collective-bargaining agreement with respondent United Brotherhood of Carpenters and Joiners of America (Carpenters). Shortly before this agreement was to expire, Woelke and Carpenters commenced bargaining for the purpose of negotiating a successor agreement. In August 1977, however, the parties reached an impasse over Carpenters’ demand for a union signatory subcontracting clause. This clause would have prohibited Woelke from subcontracting work at any construction jobsite “except to a person, firm or corporation, party to an appropriate, current labor agreement with the appropriate Union, or subordinate body signatory to this Agreement.” 1 App. 86.
In support of Carpenters’ demand for a subcontracting clause, two Carpenters locals picketed Woelke’s construction sites, causing some work stoppages. Woelke filed unfair labor practice charges with the National Labor Relations Board, asserting that the subcontracting clause violated § 8(e) of the Act, which proscribes secondary agreements between unions and employers — that is, agreements that require an employer to cease doing business with another party, in order to influence the labor relations of that party. Woelke argued that because the clause violated § 8(e), Carpenters’ picketing in support of that restriction violated § 8(b)(4)(A), 29 U. S. C. § 158(b)(4)(A).
The Board agreed that the union signatory subcontracting clauses at issue were secondary in thrust. It ruled, however, that they were saved by the construction industry proviso to §8(e), which exempts agreements between a union and employer concerning work to be performed at a construction jobsite. The Board rejected Woelke’s contention that subcontracting clauses are sheltered by the proviso only if they are limited in application to particular jobsites at which both union and nonunion workers are employed. According to the Board, such clauses are lawful whenever they are sought or negotiated “in the context of a collective bargaining relationship.” Carpenters Local No. 944 (Woelke & Romero Framing, Inc.), 239 N. L. R. B. 241, 250 (1978), citing Connell Construction Co. v. Plumbers & Steamfitters, 421 U. S. 616 (1975). The Board further indicated that since the subcontracting clauses were lawful, picketing to obtain a subcontracting proposal was permitted under § 8(b)(4)(A). Carpenters Local No. 944, supra, at 251.
B
The second dispute concerns a collective-bargaining agreement between petitioner Oregon-Columbia Chapter of the Associated General Contractors of America, Inc. (Oregon AGC), and respondent Local 701 of the International Union of Operating Engineers, AFL-CIO (Engineers). Oregon AGC is an association of approximately 200 construction industry employers in Oregon and southwest Washington. Since 1960, the contract between Oregon AGC and the Engineers has contained a subcontracting clause prohibiting Oregon AGC from subcontracting construction jobsite work to “any person, firm or company who does not have an existing labor agreement with the [Engineers] Union covering such work.” 2 App. 9-10; see id., at 12. In addition, the agreement authorized Engineers to take “such action as they deem necessary,” including strikes and other economic self-help, to enforce awards obtained through the grievance and arbitration process on matters covered by the agreement. Id., at 10.
In April 1977, petitioner Pacific Northwest Chapter of the Associated Builders and Contractors, Inc. (Pacific Northwest), a member of Oregon AGC, filed unfair labor practice charges, asserting that the contract between the Oregon AGC and the Engineers violated §8(e). Relying on the same reasoning employed in Carpenters Local No. 944, the Board held that the union signatory subcontracting clauses, standing alone, would be protected by the construction industry proviso. International Union of Operating Engineers, Local No. 701 (Pacific Northwest Chapter of Associated Builders & Contractors, Inc.), 239 N. L. R. B. 274, 277 (1978). With one member dissenting, however, it decided that the provision of the contract permitting the union to enforce the subcontracting clause was not protected by the proviso. Id., at 276.
C
Woelke, Oregon AGC, and Pacific Northwest all sought review of the Board’s orders in the Court of Appeals. The Ninth Circuit panel consolidated the cases and reversed the Board’s decisions. It reasoned that the proviso was designed solely to minimize friction between union and nonunion workers employed at the same jobsite. Thus, the proviso shelters subcontracting clauses “only where a collective bargaining relationship exists and even then only when the employer or his subcontractor has employees who are members of the signatory union at work at some time at the jobsite at which the employer wishes to engage a nonunion subcontractor.” 609 F. 2d 1341, 1347 (1979) (three-judge panel). Because it found that the clauses were unlawful, it did not reach the questions whether picketing or striking either to obtain or enforce a valid subcontracting clause was lawful. Id., at 1351.
At respondents’ request, the cases were reheard en banc. The en banc panel decided to enforce the Board’s orders in their entirety. 654 F. 2d 1301 (1981). The majority held that union signatory subcontracting clauses are protected so long as they are sought or negotiated in the context of a collective-bargaining relationship. Id,., at. 1322. It further held that economic pressure may be used to obtain a subcontracting agreement, but that it may not be employed to enforce a subcontracting agreement. Id., at 1323-1324.
Woelke, Oregon AGC, and Pacific Northwest asked this Court to review the conclusion that the subcontracting agreements sought by respondents are protected by the construction industry proviso. Woelke also asked this Court to decide whether unions violate § 8(b)(4)(A) when they picket to obtain lawful subcontracting clauses. We granted certiorari. 454 U. S. 814 (1981).
H
>
Section 8(e), which was added to the Act by the 1959 Landrum-Griffin Act, Pub. L. 86-257, 73 Stat. 543-544, 29 U. S. C. § 158(e), states:
“It shall be an unfair labor practice for any labor organization and any employer to enter into any contract or agreement, express or implied, whereby such employer ceases or refrains or agrees to cease or refrain from handling, using, selling, transporting or otherwise dealing in any of the products of any other employer, or to cease doing business with any other person, and any contract or agreement entered into heretofore or hereafter containing such an agreement shall be to such extent unenforceable and void.”
The union subcontracting clauses at issue here fall within the general prohibition of § 8(e); they require the general contractor to boycott the services of nonunion subcontractors in order to influence the labor relations policies of the subcontractor. The construction industry proviso to § 8(e) states, however, that
“nothing in this subsection (e) shall apply to an agreement between a labor organization and an employer in the construction industry relating to the contracting or subcontracting of work to be done at the site of the construction, alteration, painting, or repair of a building, structure, or other work.”
Thus, the question we must answer here is whether the union signatory subcontracting clauses sought or obtained by respondent unions are protected by this proviso.
Read literally, the proviso would seem to shelter the subcontracting agreements — it expressly states that § 8(e) does not apply to agreements that limit the contracting of construction site work. In Connell Construction Co. v. Plumbers & Steamfitters, 421 U. S., at 628, however, this Court warned that § 8(e) “must be interpreted in light of the statutory setting and the circumstances surrounding its enactment.” In that case, the Court decided that the proviso did not exempt subcontracting agreements that were not sought or obtained in the context of a collective-bargaining relationship, even though they were covered by the plain language of the statute. The Court reasoned that Congress did not intend to authorize such agreements.
The subcontracting clauses at issue here were sought or negotiated in the context of collective-bargaining relationships. Petitioners argue, however, that we should further confine the scope of the proviso. They contend that Congress designed the proviso to solve the problems that arise when union and nonunion workers are employed at the same jobsite. Thus, it should be interpreted to protect only those agreements that are limited in application to construction projects where both union and nonunion workers are employed.
After examining the construction industry proviso “in light of the statutory setting and the circumstances surrounding its enactment,” Connell Construction Co., supra, at 628, we conclude that it should not be confined as petitioners suggest. The legislative history of § 8(e) and the construction industry proviso clearly indicates that Congress intended to protect subcontracting clauses like those at issue here.
B
Prior to 1959, there were gaps in the existing protections against secondary boycotts. In Carpenters v. NLRB, 357 U. S. 93 (1958) (Sand Door), this Court held that a union could not engage in strikes or other concerted activity to enforce “hot cargo” agreements — agreements that required employers to boycott the goods or services of another party with whom the union had a dispute. However, Sand Door indicated that employers and unions were free to enter into hot cargo agreements, and that compliance was lawful so long as it was voluntary. Id., at 108.
Section 8(e), which prohibits hot cargo agreements, was designed to eliminate the loophole created by the Sand Door decision. See Connell Construction Co., supra, at 628. See also National Woodwork Manufacturers Assn. v. NLRB, 386 U. S. 612, 634 (1967). The provision represents a compromise between bills reported out by the Senate and House. The Senate bill would have outlawed hot cargo agreements only in the trucking industry. 105 Cong. Rec. 6556 (1959), 2 NLRB, Legislative History of the Labor-Management Reporting and Disclosure Act of 1959, pp. 1161— 1162 (1959) (Leg. Hist.). The legislation proposed by the House — the Landrum-Griffin bill — was much broader. It made it an unfair labor practice for any labor organization and any employer to enter into an agreement whereby the employer agrees to “cease doing business with any other person.” H. R. 8400, 86th Cong., 1st Sess., § 705(b)(1) (1959), 1 Leg. Hist. 683. The Conference Committee decided to adopt the House bill. However, the Senate conferees insisted on a proviso that exempted hot cargo agreements in the garment industry, and also agreements relating to work to be done at the site of a construction project. 105 Cong. Rec. 17899 (1959), 2 Leg. Hist. 1432.
The legislative history contains several references to the construction industry proviso. After noting that the proviso extends only to work to be performed at the site of the construction, the Conference Report states:
“The committee of conference does not intend that this proviso should be construed so as to change the present state of the law with respect to the validity of this specific type of agreement relating to work to be done at the site of the construction project or to remove the limitations which the present law imposes with respect to such agreements. Picketing to enforce such contracts would be illegal under the Sand Door case (Local 1976, United Brotherhood of Carpenters v. NLRB, 357 U. S. 93 (1958)). To the extent that such agreements are legal today under section 8(b)(4) of the National Labor Relations Act, as amended, the proviso would prevent such legality from being affected by section 8(e).” H. R. Conf. Rep. No. 1147, 86th Cong., 1st Sess., 39 (1959), 1 Leg. Hist. 943 (emphasis added).
Senator John F. Kennedy, who was chairman of the Conference Committee, provided a similar explanation during subsequent congressional debate.
“The first proviso under new section 8(e) of the National Labor Relations Act is intended to preserve the present state of the law with respect to picketing at the site of a construction project and with respect to the validity of agreements relating to the contracting of work to be done at the site of the construction project.” 105 Cong. Rec. 17900 (1959), 2 Leg. Hist. 1433.
Senator Kennedy also said:
“The Landrum-Griffin bill extended the ‘hot cargo’ provisions of the Senate bill, which we applied only to Teamsters, to all agreements between an employer and a labor union by which the employer agrees not to do business with another concern. The Senate insisted upon a qualification for the clothing and apparel industries and for agreements relating to work to be done at the site of a construction project. Both changes were necessary to avoid serious damage to the pattern of collective bargaining in these industries.” 105 Cong. Rec. 17899 (1959), 2 Leg. Hist. 1432.
Other legislators expressed similar views. They emphasized that the final bill would not change the law with respect to construction site subcontracting agreements. See 105 Cong. Rec. 18128 (1959), 2 Leg. Hist. 1715 (remarks of Rep. Barden); 105 Cong. Rec. 18135 (1959), 2 Leg. Hist. 1721 (remarks of Rep. Thompson); 105 Cong. Rec. 19849 (1959), 2 Leg. Hist. 1823 (postenactment memorandum by Sen. Dirksen); 105 Cong. Rec. 19772 (1959), 2 Leg. Hist. 1858 (post-enactment memorandum by Sen. Goldwater).
These statements reveal that Congress wished “to preserve the status quo” regarding agreements between unions and contractors in the construction industry. National Woodwork Manufacturers Assn., supra, at 637. To the extent that subcontracting agreements were part of the pattern of collective bargaining in the construction industry, and lawful, Congress wanted to ensure that they remained lawful. Given this expression of legislative intent, we can determine whether the clauses challenged in these cases are within the scope of the proviso — or whether petitioners’ narrow interpretation of the proviso is appropriate — by examining Congress’ perceptions regarding the status quo in the construction industry.
There is ample evidence that Congress believed that union signatory contract clauses of the type at issue here were part of the pattern of collective bargaining in the construction industry. Comments made by Senator Kennedy clearly indicate that he believed broad subcontracting agreements were legal in 1959:
“Agreements by which a contractor in the construction industry promises not to subcontract work on a construction site to a nonunion contractor appear to be legal today. They will not be unlawful under section 8(e). The proviso is also applicable to all other agreements involving undertakings not to do work on a construction project site with other contractors or subcontractors regardless of the precise relation between them.” 105 Cong. Rec. 17900 (1959), 2 Leg. Hist. 1433.
Senator Kennedy’s views were shared by other legislators. Senator Curtis, testifying before the Senate Labor Committee, stated that broad subcontracting agreements were not illegal, and were used “extensively” by the building trades unions. Labor-Management Reform Legislation: Hearings on S. 505, S. 748, S. 76, S. 1002, S. 1137, and S. 1311 before the Subcommittee on Labor of the Senate Committee on Labor and Public Welfare, 86th Cong., 1st Sess., 752 (1959) (Senate Hearings). The House Labor Committee heard similar testimony. Representatives of an employer and an independent union complained that employers and unions could lawfully enter into subcontracting clauses, and that, as a result, employers whose employees had selected another union were denied any opportunity to compete for construction jobs. They described agreements very similar to those at issue here. Labor-Management Reform Legislation: Hearings on H. R. 3540, H. R. 3302, H. R. 4473, and H. R. 4474 before a Joint Subcommittee of the House Committee on Education and Labor, 86th Cong., 1st Sess., 2363 (1959) (statement of Howard Lane) (House Hearings); id,., at 2365-2366 (statement of Edward M. Carlton).
Petitioners argue that Congress’ perception of the status quo was inaccurate. According to petitioners, subcontracting clauses were not extensively used in the construction industry prior to 1959, and neither the Board nor the courts had ruled that such clauses were lawful. However, “the relevant inquiry is not whether Congress correctly perceived the then state of the law, but rather what its perception of the state of the law was.” Brown v. GSA, 425 U. S. 820, 828 (1976). In any event, Congress’ belief that subcontracting agreements were common and lawful was accurate.
The Board and the United States Court of Appeals for the District of Columbia Circuit had upheld broad subcontracting clauses. See Associated General Contractors of America, Inc. (St. Maurice, Helmkamp & Musser), 119 N. L. R. B. 1026 (1957), review denied and enf’d sub nom. Operating Engineers Local Union No. 3 v. NLRB, 105 U. S. App. D. C. 307, 266 F. 2d 905, cert. denied sub nom. St. Maurice, Helmkamp & Musser v. NLRB, 361 U. S. 834 (1959). Significantly, petitioners are unable to point to any pre-1959 cases in which a subcontracting agreement was found to be unlawful because it was not limited to particular jobsites at which the signatory union workers were employed.
A report published in 1961, which examined “the prevalence and characteristics of subcontracting provisions in effect in 1959 in the construction industry,” indicates that broad subcontracting agreements were quite common. Lunden, Subcontracting Clauses in Major Contracts, 84 Monthly Lab. Rev. 579 (1961). The study examined 155 construction contracts, covering 700,000 construction workers, and found that 444,000 of those workers were employed under contracts with subcontracting provisions. Id., at 582. The most frequent requirement, found in more than 50 major contracts, obligated contractors to subcontract work only to subcontractors who would apply all the “terms and conditions” of the master agreement. Id., at 715-716. The Lunden report does not describe a single agreement that limited the applicability of a subcontracting restriction to jobsites at which both union and nonunion workers were employed.
In short, Congress believed that broad subcontracting clauses similar to those at issue here were part of the pattern of collective bargaining prior to 1959, and that the Board and the courts had found them to be lawful. This perception was apparently accurate. Thus, endorsing the clauses at issue here is fully consistent with the legislative history of § 8(e) and the construction industry proviso.
r — H HH H-l
Petitioners attach little significance to the legislative history we have just described. Instead, they focus on congressional references to this Court’s decision in NLRB v. Denver Building & Construction Trades Council, 341 U. S. 675 (1951) (Denver Building Trades), which they believe support their narrow interpretation of the proviso. They also contend that if the clause is interpreted to protect any subcontracting agreements sought or obtained in the context of a collective-bargaining agreement, unions will have a potent organizational weapon. However, neither of these arguments compels the adoption of a restricted interpretation of the proviso.
A
Petitioners contend that Congress adopted the construction industry proviso primarily because it wanted to overrule this Court’s decision in Denver Building Trades, supra. That case held that picketing a general contractor’s entire project in order to protest the presence of a nonunion subcontractor is an illegal secondary boycott. According to petitioners, Congress disliked the Denver Building Trades rule because it might lead to uneasy employee relationships on the jobsite: if union workers were forced to work alongside nonunion workers, friction might result. Given this congressional purpose, the proviso should be interpreted as permitting only those subcontracting agreements that are designed to reduce friction at particular jobsites.
Petitioners are correct in suggesting that the decision in Denver Building Trades contributed to Congress’ decision to adopt the construction industry proviso. See Connell Construction Co., 421 U. S., at 629. At the time Congress was considering the proper scope of § 8(e), it had before it several proposals that would have effectively overruled the Denver Building Trades decision. See, e. g., § 702(d) of H. R. 8342, 86th Cong., 1st Sess. (1959), 1 Leg. Hist. 752-753 (Elliot bill). “It was partly in this frame of reference that the [construction industry] proviso to Section 8(e) was written.” 105 Cong. Rec. 20005 (1959), 2 Leg. Hist. 1861 (remarks of Rep. Kearns).
It is clear, however, that those who wished to overrule Denver Building Trades were concerned about more than the possibility of jobsite friction. Critics of Denver Building Trades complained that contractors and subcontractors working together on a single construction project are not the sort of neutral parties that the secondary boycott provisions were designed to protect. They pointed out that the Denver Building Trades rule denied construction workers the right to engage in economic picketing at their place of employment. And they emphasized that the employees of various subcontractors have a close community of interest, and that the wages and working conditions of one set of employees may affect others. In fact, as the Court of Appeals noted, the problem of jobsite friction between union and nonunion workers received relatively little emphasis. See 654 F. 2d, at 1319.
The proviso helps mitigate the impact of the Denver Building Trades decision: although it does not overrule the ban on picketing, it confirms that construction industry unions may enter into agreements that would prohibit the subcontracting of jobsite work to nonunion firms. However, petitioners’ argument — that the proviso was intended primarily as a response to Denver Building Trades, and that it should therefore be interpreted as protecting only those clauses designed to prevent jobsite friction — rests on faulty premises. As we have already shown, see supra, at 654-661, the proviso was not designed solely as a response to the Denver Building Trades problem. And even as a response to Denver Building Trades, the proviso is only partly concerned with jobsite friction.
B
Petitioners further contend that if the subcontracting clauses at issue here are approved, the unions will have a powerful organizing tool. Subcontractors will not be able to obtain work unless their employees are represented by the union. Thus, they will force their employees to become members of the union. In effect, the subcontracting clauses will create a “top-down” pressure for unionization; they will take the representation decision out of the hands of the employees and place it in the hands of the employers.
It is undoubtedly true that one of the central aims of the 1959 amendments to the Act was to restrict the ability of unions to engage in top-down organizing campaigns. See Connell Construction Co., supra, at 632 (discussing legislative history). It is also true that secondary subcontracting agreements like those at issue here create top-down organizing pressure. However, even if the agreements were limited in application to jobsites at which both union and nonunion workers were employed, there would be some topdown organizing effect. Such pressure is implicit in the construction industry proviso. The bare assertion that a particular subcontracting agreement encourages top-down organizing pressure does not resolve the issue we confront in these cases: how much top-down pressure did Congress intend to tolerate when it decided to exempt construction site projects from §8(e)? As we have already explained, we believe that Congress endorsed subcontracting agreements obtained in the context of a collective-bargaining relationship— and decided to accept whatever top-down pressure such clauses might entail. Congress concluded that the community of interests on the construction jobsite justified the top-down organizational consequences that might attend the protection of legitimate collective-bargaining objectives.
The top-down organizing effect of subcontracting clauses sought or obtained in the context of a collective-bargaining relationship is limited in a number of ways by other provisions of the National Labor Relations Act. A subcontractor cannot be subjected to unlimited picketing to force it into a union agreement without regard to the wishes of its employees. See 29 U. S. C. § 158(b)(7)(C). An additional safeguard is provided by § 8(f), 29 U. S. C. § 158(f), which authorizes unions and employers in the construction industry to enter into collective-bargaining agreements, even though the employees of that employer have not designated the union as their lawful bargaining representative. When a union obtains a subcontracting clause from a general contractor, subcontractors frequently attempt to ensure that they remain eligible for work by entering into a § 8(f) agreement—known as a prehire agreement — with the union. If they do so, however, § 8(f) expressly states that their employees may challenge the union’s representative status by filing an election petition with the Board. And the subcontractors themselves, if they do not have a stable work force among whom the union has secured a majority, may be free to repudiate the agreement at any project on which the union has not demonstrated that it represents a majority of their employees. See NLRB v. Iron Workers, 434 U. S. 335 (1978); Giordano Construction Co., 256 N. L. R. B. 47, 47-48, 107 LRRM 1164, 1165-1166 (1981).
Despite petitioners’ assertions to the contrary, nonunion employees are not frozen out of the job market by subcontracting agreements. Even where construction unions successfully negotiate collective-bargaining agreements that require both general contractors and subcontractors to obtain their labor from union hiring halls, the union must refer both members and nonmembers to available jobs. 29 U. S. C. §§ 158(a)(3), 158(b)(2). In addition, Courts of Appeals have suggested that the obligations of union membership that may be required under union security clauses after seven days are limited to the normal financial obligations of membership.
Finally, since the Denver Building Trades rule remains in effect, employees working for firms with whom a construction union has a primary dispute are protected against secondary picketing designed to force them off their current job. And as the Court of Appeals held in these cases, even where construction unions have negotiated secondary clauses that are sheltered by the proviso, they may not enforce them by picketing or other forms of concerted activity. See H. R. Conf. Rep. No. 1147, 86th Cong., 1st Sess., 39 (1959), 1 Leg. Hist. 943; 105 Cong. Rec. 19772 (1959), 2 Leg. Hist. 1858 (postenactment memorandum of Sen. Goldwater).
IV
Petitioner Woelke asks us to reverse the Court of Appeals’ holding that unions do not violate § 8(b)(4)(A) when they picket to obtain a subcontracting clause sheltered by the construction industry proviso. However, the Court of Appeals was without jurisdiction to consider that question. The issue was not raised during the proceedings before the Board, either by the General Counsel or by Woelke. Thus, judicial review is barred by § 10(e) of the Act, 29 U. S. C. § 160(e), which provides that “[n]o objection that has not been urged before the Board . . . shall be considered by the court, unless the failure or neglect to urge such objection shall be excused because of extraordinary circumstances.” See De troit Edison Co. v. NLRB, 440 U. S. 301, 311-312, n. 10 (1979); Garment Workers v. Quality Mfg. Co., 420 U. S. 276, 281, n. 3 (1975); NLRB v. Ochoa Fertilizer Corp., 368 U. S. 318, 322 (1961).
The § 10(e) bar applies even though the Board held that the picketing was not banned by § 8(b)(4)(A). See Carpenters Local No. 944, 239 N. L. R. B., at 251. Woelke could have objected to the Board’s decision in a petition for reconsideration or rehearing. The failure to do so prevents consideration of the question by the courts. See Garment Workers v. Quality Mfg. Co., supra, at 281, n. 3.
Because the Court of Appeals lacks jurisdiction to review objections that were not urged before the Board, we do not reach the question whether the picketing was lawful. Instead, we vacate that portion of the Court of Appeals’ judgment that relates to this issue, and remand with instructions to dismiss.
V
We hold that the construction industry proviso to § 8(e) of the National Labor Relations Act ordinarily shelters union signatory subcontracting clauses that are sought or negotiated in the context of a collective-bargaining relationship, even when not limited in application to particular jobsites at which both union and nonunion workers are employed. This interpretation of the proviso is supported by its plain language, as well as the legislative history. Thus, we affirm the decision below, insofar as it holds that the clauses at issue here were sheltered by the proviso. We further hold that the Court of Appeals was without jurisdiction to decide whether a union violates § 8(b)(4)(A) when it pickets to obtain a lawful subcontracting clause. We vacate that portion of the judgment below, and remand for further proceedings consistent with this opinion.
It is so ordered.
The proposed clause provides in full:
“The Contractor agrees that neither he nor any of his subcontractors on the jobsite will subcontract any work to be done at the site of construction, alteration, painting or repair of a building, structure or other work (including quarries, rock, san[d] and gravel plants, asphalt plants, ready-mix concrete plants, established on or adjacent to the jobsite to process or supply materials for the convenience of the Contractor for jobsite use) except to a person, firm or corporation, party to an appropriate, current labor agreement with the appropriate Union, or subordinate body signatory to this Agreement.” 1 App. 86.
The expiring contract contained a union signatory subcontracting clause that was similar in effect. Id., at 28.
Section 8(b)(4)(A) prohibits coercing “any employer or selfemployed person to join any labor or employer organization or to enter into any agreement which is prohibited by section 8(e).”
The clause provides in full:
“Employers shall not contract any work covered by this Agreement to be done at the site of the construction, alteration, painting, or repair of a building, structure, or other work to any person, firm or company who does not have an existing labor agreement with the Union covering such work.” 2 App. 9-10.
The Board reasoned that the use of self-help measures would violate § 8(b)(4)(B) of the Act, 29 U. S. C. § 158(b)(4)(B). That section makes it an unfair labor practice for a union to force any person to “cease doing business with any other person.”
Petitioner Oregon AGC was technically a respondent in the Board proceeding. However, it supported the position taken by Pacific Northwest.
The only other Court of Appeals to confront this question reached the same conclusion. See Donald Schriver, Inc. v. NLRB, 204 U. S. App. D. C. 4, 25, 635 F. 2d 859, 880 (1980), cert. denied, 451 U. S. 976 (1981), petition for rehearing pending, No. 80-1257.
None of the petitioners sought review of the Court of Appeals’ decision that economic pressure may not be used to enforce subcontracting agreements.
In Connell, the Court was confronted with a novel and apparently foolproof organizational tactic: “stranger” picketing aimed at pressuring employers with whom the union had no collective-bargaining relationship, and whose employees it had no interest in representing, into signing union signatory subcontracting agreements. Because there was no recognitional objective to the picketing, it did not violate § 8(b)(7), 29 U. S. C. § 158(b)(7). And because the subcontracting clause appeared to be protected by the construction industry proviso, the picketing was arguably not prohibited by § 8(b)(4)(A), 29 U. S. C. § 158(b)(4)(A), which bans picketing to secure agreements made unlawful by § 8(e). The Court concluded, however, that the protection of the proviso “extends only to agreements in the context of collective-bargaining relationships.” Connell Construction Co. v. Plumbers & Steamfitters, 421 U. S., at 633. In these cases, we decide a question left unresolved in Connell: the extent to which the proviso shelters agreements sought or obtained within the context of a collective-bargaining relationship.
Since the proviso was added to § 8(e) at the Senate conferees’ insistence, and since Senator Kennedy was chairman of the Senate conferees, his explanation of the clause is entitled to substantial weight.
The employer and union representatives who testified before the House Labor Committee, as well as Senator Curtis, opposed the use of subcontracting clauses, arguing that they forced nonunion contractors out of business. House Hearings 2366; Senate Hearings 752. Significantly, despite this testimony, Congress decided to exclude the construction industry from the scope of § 8(e).
In Operating Engineers Local Union No. 3 v. NLRB, the Court of Appeals approved the Board’s conclusion that a contractor did not violate the Act by complying with a subcontracting clause under which it was not permitted to subcontract engineering work to a firm that did not observe the terms of the union’s contract. The employer and union representatives who testified before the House Labor Committee referred to the case. House Hearings 2364, 2367. The text of the Court of Appeals decision was introduced into the record of the House Hearings. Id., at 801, 803-807.
Petitioners suggest that the Lunden study did not adequately distinguish between broad union signatory clauses like those at issue here and union standards clauses — clauses that permit general contractors to subcontract to nonunion subcontractors, so long as the subcontractors are willing to comply with the standards set forth in the union’s contract. However, the Board’s General Counsel, who conducted his own study of subcontracting restrictions in the construction industry, and who did distinguish between various types of restrictions, found union signatory clauses very similar to those at issue here in roughly 12% of the contracts studied. NLRB General Counsel's Memorandum, Dec. 15, 1976, 93 Lab. Rel. Rep. 390, 404, reprinted in 1976 Lab. Rel. Yearbook 295, 309.
Broad subcontracting clauses have been part of the pattern of collective bargaining in southern California, where the Woelke & Romero case arose, since 1941. See Pierson, Building-Trades Bargaining Plan in Southern California, 70 Monthly Lab. Rev. 14, 17 (1950); see also 1 App. 20-22. The Pierson study also noted that similar bargaining arrangements existed in other localities, including the Portland, Ore., area, where the Pacific Northwest case arose. Pierson, supra, at 15. See also Aaron, The Labor-Management Reporting and Disclosure Act of 1959, 73 Harv. L. Rev. 1086, 1119 (1960) (construction industry proviso “approves the general practice of the building trades to secure from a contractor a promise that he will not subcontract work on the job site to a nonunion subcontractor”).
105 Cong. Rec. 17881, 2 Leg. Hist. 1425 (remarks of Sen. Morse); 105 Cong. Rec. 15541 (1959), 2 Leg. Hist. 1577 (memorandum by Reps. Thompson and Udall); 105 Cong. Rec. 15551-15552 (1959), 2 Leg. Hist. 1588 (memorandum by Rep. Elliott); 105 Cong. Rec. 15852 (1959), 2 Leg. Hist. 1684 (remarks by Rep. Goodell).
It is important to recognize, however, that reducing jobsite friction is a legitimate purpose. The clauses at issue here serve this goal by ensuring that members of the respondent unions need not work alongside nonunion employees.
It may be true, as petitioners emphasize, that the use of union signatory subcontracting clauses will give a particular union a monopoly position in a labor market. However, the Board has previously suggested that in most labor markets, apart from some minor overlaps, there is only one union representing a particular craft. See Carpenters Local 15, 240 N. L. R. B. 252, 261 (1979). In addition, as Congress recognized, see S. Rep. No. 187, 86th Cong., 1st Sess., 28 (1959), a majority of the workers skilled in a particular craft will belong to that union.
Many of these protections would not have been available to limit the top-down organizing effect of the clauses at issue in Connell Construction Co. v. Plumbers & Steamfitters, 421 U. S. 616 (1975).
As we note below, see infra, at 665-666, we do not reach the question whether a union may use economic pressure to obtain a subcontracting agreement. We also do not reach the question whether a union may picket to obtain a prehire agreement.
See Radio Officers v. NLRB, 347 U. S. 17, 40-42 (1954); Teamsters v. NLRB, 365 U. S. 667, 673-677 (1961).
See NLRB v. Hershey Foods Corp., 513 F. 2d 1083, 1085-1087 (CA9 1975); Local 1104, Communications Workers of America v. NLRB, 520 F. 2d 411, 417-420 (CA2 1975), cert. denied, 423 U. S. 1051 (1976). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
81
] |
SECURITIES AND EXCHANGE COMMISSION v. ZANDFORD
No. 01-147.
Argued March 18, 2002 —
Decided June 3, 2002
Matthew D. Roberts argued the cause for petitioner. With him on the briefs were Acting Solicitor General Clement, Deputy Solicitor General Kneedler, David M. Becker, Jacob H. Stillman, Richard M. Humes, Katharine B. Gresham, and Susan S. McDonald.
Steven H. Goldblatt argued the cause for respondent. With him on the brief was Roy T. Englert, Jr.
Briefs of amici curiae urging reversal were filed for AARP et al. by Deborah M. Zuckerman, Stacy J. Canan, Michael R. Schuster, and Kevin Roddy; and for NASD Regulation, Inc., by F. Joseph Worm, Douglas R. Cox, Andrew S. Tulumello, and Elisse B. Walter.
Justice Stevens
delivered the opinion of the Court.
The Securities and Exchange Commission (SEC) filed a civil complaint alleging that a stockbroker violated both § 10(b) of the Securities Exchange Act of 1934, 48 Stat. 891, as amended, 15 U. S. C. § 78j(b), and the SEC’s Rule 10b-5, by selling his customer’s securities and using the proceeds for his own benefit without the customer’s knowledge or consent. The question presented is whether the alleged fraudulent conduct was "in connection with the purchase or sale of any security” within the meaning of the statute and the Rule.
I
Between 1987 and 1991, respondent was employed as a securities broker in the Maryland branch of a New York brokerage firm. In 1987, he persuaded William Wood, an elderly man in poor health, to open a joint investment account for himself and his mentally retarded daughter. According to . the SEC’s complaint, the "stated investment objectives for the account were ‘safety of principal and income.’” App. to Pet. for Cert. 27a. The Woods granted respondent discretion to manage their account and a general power of attorney to engage in securities transactions for their benefit without prior approval. Relying on respondent’s promise to “conservatively invest” their money, the Woods entrusted him with $419,255. Before Mr. Wood’s death in 1991, all of that money was gone.
In 1991, the National Association of Securities Dealers (NASD) conducted a routine examination of respondent’s firm and discovered that on over 25 separate occasions, money had been transferred from the Woods’ account to accounts controlled by respondent. In due course, respondent was indicted in the United States District Court for the District of Maryland on 13 counts of wire fraud in violation, of 18 U. S. C. §1343. App. to Pet. for Cert. 40a. The first count alleged that respondent sold securities in the Woods’ account and then made personal use of the proceeds. Id., at 42a. Each of the other counts alleged that he made wire transfers between Maryland and New York that enabled him to withdraw specified sums from the Woods’ accounts. Id., at 42a-50a. Some of those transfers involved respondent writing checks to himself from a mutual fund account held by the Woods, which required liquidating securities in order to redeem the checks. Respondent was convicted on all counts, sentenced to prison for 52 months, and ordered to pay $10,800 in restitution.
After respondent was indicted, the SEC filed a civil complaint in the same District Court alleging that respondent violated § 10(b) and Rule 10b-5 by engaging in a scheme to defraud the Woods and by misappropriating approximately $343,000 of the Woods’ securities without their knowledge or consent. Id., at 27a. The SEC moved for partial summary judgment after respondent’s criminal conviction, arguing that the judgment in the criminal case estopped respondent from contesting facts that established a violation of § 10(b). Respondent filed a motion seeking discovery on the question whether his fraud had the requisite “connection with” the purchase or sale of a security. The District Court refused to allow discovery and entered summary judgment against respondent. It enjoined him from engaging in future violations of the securities laws and ordered him to disgorge $343,000 in ill-gotten gains.
The Court of Appeals for the Fourth Circuit reversed the summary judgment and remanded with directions for the District Court to dismiss the complaint. 238 F. 3d 559 (2001). It first held that the wire fraud conviction, which only required two findings — (1) that respondent engaged in a scheme to defraud and (2) that he used interstate wire communications in executing the scheme — did not establish all the elements of a § 10(b) violation. Specifically, the conviction did not necessarily establish that his fraud was “in connection with” the sale of a security. Id., at 562. The court then held that the civil complaint did not sufficiently allege the necessary connection because the sales of the Woods’ securities were merely incidental to a fraud that “lay in absconding with the proceeds” of sales that were conducted in “a routine and customary fashion,” id., at 564. Respondent’s “scheme was simply to steal the Woods’ assets” rather than to engage “in manipulation of a particular security.” Id., at 565. Ultimately, the court refused “to stretch the language of the securities fraud provisions to encompass every conversion or theft that happens to involve securities.” Id., at 566. Adopting what amounts to a “fraud on the market” theory of the statute’s coverage, the court held that without some “relationship to market integrity or investor understanding,” there is no violation of § 10(b). Id., at 563.
We granted the SEC’s petition for a writ of certiorari, 534 U. S. 1015 (2001), to review the Court of Appeals’ construction of the phrase “in connection with the purchase or sale of any security.” Because the Court of Appeals ordered the complaint dismissed rather than remanding for reconsideration, we assume the allegations contained therein are true and affirm that disposition only if no set of facts would entitle petitioner to relief. See Hartford Fire Ins. Co. v. California, 509 U. S. 764, 811 (1993). We do not reach the question whether the record supports the District Court’s grant of summary judgment in the SEC’s favor — a question that requires all potential factual disputes to be resolved in respondent’s favor. We merely hold that the allegations of the complaint, if true, entitle the SEC to relief; therefore, the Court of Appeals should not have directed that the complaint be dismissed.
II
Section 10(b) of the Securities Exchange Act makes it “unlawful for any person . . . [t]o use or employ, in connection with the purchase or sale of any security . . . , any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the [SEC] may prescribe.” 15 U. S. C. §78j. Rule 10b-5, which implements this provision, forbids the use, “in connection with the purchase or sale of any security,” of “any device, scheme, or artifice to defraud” or any other “act, practice, or course of business” that “operates ... as a fraud or deceit.” 17 CFR §240.10b-5 (2000). Among .Congress’ objectives in passing the Act was “to insure honest securities markets and thereby promote investor confidence” after the market crash of 1929. United States v. O’Hagan, 521 U. S. 642, 658 (1997); see also United States v. Naftalin, 441 U. S. 768, 775 (1979). More generally, Congress sought “ ‘to substitute a philosophy of full disclosure for the philosophy of caveat emptor and thus to achieve a high standard of business ethics in the securities industry.’ ” Affiliated Ute Citizens of Utah v. United States, 406 U. S. 128, 151 (1972) (quoting SEC v. Capital Gains Research Bureau, Inc., 375 U. S. 180, 186 (1963)).
Consequently, we have explained that the statute should be “construed ‘not technically and restrictively, but flexibly to effectuate its remedial purposes.’” 406 U. S., at 151 (quoting Capital Gains Research Bureau, Inc., 375 U. S., at 195). In its role enforcing the Act, the SEC has consistently adopted a broad reading of the phrase “in connection with the purchase or sale of any security.” It has maintained that a broker who accepts payment for securities that he never intends to deliver, or who sells customer securities with intent to misappropriate the proceeds, violates § 10(b) and Rule 10b-5. See, e.g., In re Bauer, 26 S. E. C. 770 (1947); In re Southeastern Securities Corp., 29 S. E. C. 609 (1949). This interpretation of the ambiguous text of § 10(b), in the context of formal adjudication, is entitled to deference if it is reasonable, see United States v. Mead Corp., 583 U. S. 218, 229-230, and n. 12 (2001). For the reasons set forth below, we think it is. While the statute must not be construed so broadly as to convert every common-law fraud that happens to involve securities into a violation of § 10(b), Marine Bank v. Weaver, 455 U. S. 551, 556 (1982) (“Congress, in enacting the securities laws, did not intend to provide a .broad federal remedy for all fraud”), neither the SEC nor this Court has ever held that there must be a misrepresentation about the value of a particular security in order to run afoul of the Act.
The SEC claims respondent engaged in a fraudulent scheme in which he made sales of his customer’s securities for his own benefit. Respondent submits that the sales themselves were perfectly lawful and that the subsequent misappropriation of the proceeds, though fraudulent, is not properly viewed as having the requisite connection with the sales; in his view, the alleged scheme is not materially different from a simple theft of cash or securities in an investment account. We disagree.
According to the complaint, respondent “engaged in a scheme to defraud” the Woods beginning in 1988, shortly after they opened their account, and that scheme continued throughout the 2-year period during which respondent made a series of transactions that enabled him to convert the proceeds of the sales of the Woods’ securities to his own use. App. to Pet. for Cert. 27a-29a. The securities sales and respondent’s fraudulent practices were not independent events. This is not a case in which, after a lawful transaction had been consummated, a broker decided to steal the proceeds and did so. Nor is it a case in which a thief simply invested the proceeds of a routine conversion in the stock market. Rather, respondent’s fraud coincided with the sales themselves.
Taking the allegations in the complaint as true, each sale was made to further respondent’s fraudulent scheme; each was deceptive because it was neither authorized by, nor disclosed to, the Woods. With regard to the sales of shares in the Woods’ mutual fund, respondent initiated these transactions by writing a check to himself from that account, knowing that redeeming the check would require the sale of securities. Indeed, each time respondent “exercised his power of disposition for his own benefit,” that conduct, “without more,” was a fraud. United States v. Dunn, 268 U. S. 121, 131 (1925). In the aggregate, the sales are properly viewed as a “course of business” that operated as a fraud or deceit on a stockbroker’s customer.
Insofar as the connection between respondent’s deceptive practices and his sale of the Woods’ securities is concerned, the case is remarkably similar to Superintendent of Ins. of N. Y. v. Bankers Life & Casualty Co., 404 U. S. 6 (1971). In that case the directors of Manhattan Casualty Company authorized the sale of the company’s portfolio of treasury bonds because they had been “duped” into believing that the company would receive the proceeds of the sale. Id., at 9. We held that “Manhattan was injured as an investor through a deceptive device which deprived it of any compensation for the sale of its valuable block of securities.” Id., at 10. In reaching this conclusion, we did not ask, as the Fourth Circuit did in this case, whether the directors were misled about the value of a security or whether the fraud involved “manipulation of a particular security.” 238 F. 3d, at 565. In fact, we rejected the Second Circuit’s position in Superintendent of Ins. of N. Y. v. Bankers Life & Casualty Co., 430 F. 2d 355, 361 (1970), that because the fraud against Manhattan did not take place within the context of a securities exchange it was not prohibited by § 10(b). 404 U. S., at 10. We refused to read the statute so narrowly, noting that it “must be read flexibly, not technically and restrictively.” Id., at 12. Although we recognized that the interest in “ ‘preserving the integrity of the securities markets’ ” was one of the purposes animating the statute, we rejected the notion that § 10(b) is limited to serving that objective alone. Ibid. (“We agree that Congress by § 10(b) did not seek to regulate transactions which constitute no more than internal corporate mismanagement. But we read § 10(b) to mean that Congress meant to bar deceptive devices and contrivances in the purchase or sale of securities whether conducted in the organized markets or face to face”).
Like the company directors in Bankers Life, the Woods were injured as investors through respondent’s deceptions, which deprived them of any compensation for the sale of their valuable securities. They were duped into believing respondent would “conservatively invest” their assets in the stock market and that any transactions made on their behalf would be for their benefit for the “ ‘safety of principal and income.’” App. to Pet. for Cert. 27a. The fact that respondent misappropriated the proceeds of the sales provides persuasive evidence that he had violated § 10(b) when he made the sales, but misappropriation is not an essential element of the offense. Indeed, in Bankers Life, we flatly stated that it was “irrelevant” that “the proceeds of the sale that were due the seller were misappropriated.” 404 U. S., at 10. It is enough that the scheme to defraud and the sale of securities coincide.
The Court of Appeals below distinguished Bankers Life on the ground that it involved an affirmative misrepresentation, whereas respondent simply failed to inform the Woods of his intent to misappropriate their securities. 238 F. 3d, at 566. We are not persuaded by this distinction. Respondent was only able to carry out his fraudulent scheme without making an affirmative misrepresentation because the Woods had trusted him to make transactions in their best interest without prior approval. Under these circumstances, respondent’s fraud represents an even greater threat to investor confidence in the securities industry than the misrepresentation in Bankers Life. Not only does such a fraud prevent investors from trusting that their brokers are executing transactions for their benefit, but it undermines the value of a discretionary account like that held by the Woods. The benefit of a discretionary account is that it enables individuals, like the Woods, who lack the time, capacity, or know-how to supervise investment decisions, to delegate authority to a broker who will make decisions in their best interests without prior approval. If such individuals cannot rely on a broker to exercise that discretion for their benefit, then the account loses its added value. Moreover, any distinction between omissions and misrepresentations is illusory in the context of a broker who has a fiduciary duty to her clients. See Chiarella v. United States, 445 U. S. 222,230 (1980) (noting that “silence in connection with the purchase or sale of securities may operate as a fraud actionable under § 10(b)” when there is “a duty to disclose arising from a relationship of trust and confidence between parties to a transaction”); Affiliated Ute Citizens of Utah v. United States, 406 U. S., at 153.
More recently, in Wharf (Holdings) Ltd. v. United Int’l Holdings, Inc., 532 U. S. 588 (2001), our decision that the seller of a security had violated § 10(b) focused on the secret intent of the seller when the sale occurred. The purchaser claimed “that Wharf sold it a security (the option) while secretly intending from the very beginning not to honor the option.” Id., at 597. Although Wharf did not specifically argue that the breach of contract underlying the complaint lacked the requisite connection with a sale of securities, it did assert that the case was merely a dispute over ownership of the option, and that interpreting § 10(b) to include such a claim would convert every breach of contract that happened to involve a security into a violation of the federal securities laws. Id., at 596. We rejected that argument because the purchaser’s claim was not that the defendant failed to carry out a promise to sell securities; rather, the claim was that the defendant sold a security while never intending to honor its agreement in the first place. Id., at 596-597. Similarly, in this case the SEC claims respondent sold the Woods’ securities while secretly intending from the very beginning to keep the proceeds. In Wharf, the fraudulent intent deprived the purchaser of the benefit of the sale whereas here the fraudulent intent deprived the seller of that benefit, but the connection between the deception and the sale in each case is identical.
In United States v. O’Hagan, 521 U. S. 642 (1997), we held that the defendant had committed fraud “in connection with” a securities transaction when he used misappropriated confidential information for trading purposes. We reasoned that “the fiduciary’s fraud is consummated, not when the fiduciary gains the confidential information, but when, without disclosure to his principal, he uses the information to purchase or sell securities. The securities transaction and the breach of duty thus coincide. This is so even though the person or entity defrauded is not the other party to the trade, but is, instead, the source of the nonpublic information.” Id., at 656. The Court of Appeals distinguished O’Hagan by reading it to require that the misappropriated information or assets not have independent value to the client outside the securities market, 238 F. 3d, at 565. We do not read O’Hagan as so limited. In the chief passage cited by the Court of Appeals for this proposition, we discussed the Government’s position that “[t]he misappropriation theory would not.,. apply to a ease in which a person defrauded a bank into giving him a loan or embezzled cash from another, and then used the proceeds of the misdeed to purchase securities,” because in that situation “the proceeds would have value to the malefactor apart from their use in a securities transaction, and the fraud would be complete as soon as the money was obtained.” 521 U. S., at 656 (internal quotation marks omitted). Even if this passage could be read to introduce a new requirement into § 10(b), it would not affect our analysis of this case, because the Woods’ securities did not have value for respondent apart from their use in a securities transaction and the fraud was not complete before the sale of securities occurred.
As in Bankers Life, Wharf, and O’Hagan, the SEC complaint describes a fraudulent scheme in which the securities transactions and breaches of fiduciary duty coincide. Those breaches were therefore “in connection with” securities sales within the meaning of § 10(b). Accordingly, the judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
The scope of Rule 10b-5 is coextensive with the coverage of § 10(b), see United States v. O’Hagan, 521 U. S. 642, 651 (1997); Ernst & Ernst v. Hochfelder, 425 U. S. 185, 214 (1976); therefore, we use § 10(b) to refer to both the statutory provision and the Rule.
The complaint also contained allegations that respondent had engaged in excessive trading, or “churning,” to generate commission income. App. to Pet. for Cert. 30a. That claim was originally excluded from the summary judgment motion, and later abandoned by the SEC.
A summary of the evidence in the Court of Appeals’ opinion affirming the judgment in respondent’s criminal case supports the conclusion that the verdict did not necessarily determine that the fraud was connected with the sale of a security:
“The Government presented ample direct and circumstantial evidence showing that Zandford had engaged in a scheme to defraud the Woods. It showed that: (1) Zandford had systematically transferred large sums of money from the Woods’ account to his own accounts over a nineteen month period; (2) prior to November 1987, the Woods had no relationship with Zandford; (3) Zandford, and not the Woods, benefited from the money transfers; (4) the Woods were vulnerable victims due to their physical and mental limitations; (5) the personal services agreement, the loan, and the vintage car restoration business were not only contrary to the Woods’ stated investment objectives, but they violated the rules of NASD and those of Zandford’s employer that prohibited brokers from engaging in such arrangements; and (6) vehicles owned as part of the vintage car restoration business were titled in the name of Zandford’s girlfriend as opposed to the Woods’ names. Additional evidence showing a scheme to defraud included Zandford’s failure to disclose to his employer the existence of the agreements and personal loans; his failure to report on his taxes or bank loan applications that he received income from acting as the personal representative; and his failure to disclose on his taxes his involvement in a vintage car restoration business. Zandford’s contention that there is insufficient evidence supporting that he had engaged in a scheme to defraud the Woods is meritless.” Id., at 36a-37a.
Nor do we review the District Court’s decision denying respondent discovery — a decision that may have been influenced by respondent’s frequent filings while incarcerated. The District Court noted that respondent “has been an active litigant before and during his incarceration.” Id., at 16a, n. 1 (citing Zandford v. NASD, 30 F. Supp. 2d 1 (DC 1998); Zandford v. NASD, 19 F. Supp. 2d 1 (DC 1998); Zandford v. NASD, 19 F. Supp. 2d 4 (DC 1998); Zandford v. Prudential-Bache Securities, Inc., 112 F. 3d 723 (CA4 1997); Zandford v. Prudential-Bache Securities, Inc., 111 F. 3d 963 (DC 1998) (judgt. order); Zandford v. Prudential-Bache Securities, Inc., Civ. Action No. 94-0036,1995 WL 507169 (D. D. C., Aug. 15, 1995); Zandford v. Prudential-Bache Securities, Inc., Civ. Action No. HAR-90-2568, 1994 WL 150918 (D. Md., Feb. 22, 1994); Zandford v. NASD, Civ. Action No. 93-1274, 1993 WL 580761 (D. D. C., Nov. 5, 1993)).
Contrary to the Court of Appeals’ prediction, 238 F. 3d 559, 566 (CA4 2001), our analysis does not transform every breach of fiduciary duty into a federal securities violation. If, for example, a broker embezzles cash from a client’s account or takes advantage of the fiduciary relationship to induce his client into a fraudulent real estate transaction, then the fraud would not include the requisite connection to a purchase or sale of securities. Tr. of Oral Arg. 16. Likewise, if the broker told his client he was stealing the client’s assets, that breach of fiduciary duty might be in connection with a sale of securities, but it would not involve a deceptive device or fraud. Cf. Santa Fe Industries, Inc. v. Green, 430 U. S. 462, 474-476 (1977). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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104
] |
DEPARTMENT OF HOMELAND SECURITY, Petitioner
v.
Robert J. MACLEAN.
No. 13-894.
Supreme Court of the United States
Argued Nov. 4, 2014.
Decided Jan. 21, 2015.
Ian H. Gershengorn, for Petitioner.
Neal K. Katyal, Washington, DC, for Respondent.
Donald B. Verrilli, Jr., Solicitor General, Counsel of Record, Department of Justice, Washington, DC, for Petitioner.
Thomas Devine, Government Accountability Project, Washington, DC, Neal Kumar Katyal, Counsel of Record, Hagan Scotten, Elizabeth Austin Bonner, Hogan Lovells U.S. LLP, Washington, DC, for Respondents.
Stevan E. Bunnell, General Counsel, U.S. Department of Homeland Security, Washington, DC, Donald B. Verrilli, Jr., Solicitor General, Counsel of Record, Stuart F. Delery, Assistant Attorney General, Ian Heath Gershengorn, Deputy Solicitor General, Eric J. Feigin, Assistant to the Solicitor General, Douglas N. Letter, H. Thomas Byron III, Michael P. Goodman, Attorneys, Department of Justice, Washington, DC, for Petitioner.
Opinion
Chief Justice ROBERTSdelivered the opinion of the Court.
Federal law generally provides whistleblower protections to an employee who discloses information revealing "any violation of any law, rule, or regulation," or "a substantial and specific danger to public health or safety." 5 U.S.C. § 2302(b)(8)(A). An exception exists, however, for disclosures that are "specifically prohibited by law." Ibid.Here, a federal air marshal publicly disclosed that the Transportation Security Administration (TSA) had decided to cut costs by removing air marshals from certain long-distance flights. The question presented is whether that disclosure was "specifically prohibited by law."
I
A
In 2002, Congress enacted the Homeland Security Act, 116 Stat. 2135. As relevant here, that Act provides that the TSA "shall prescribe regulations prohibiting the disclosure of information obtained or developed in carrying out security ... if the Under Secretary decides that disclosing the information would ... be detrimental to the security of transportation." 49 U.S.C. § 114(r)(1)(C).
Around the same time, the TSA promulgated regulations prohibiting the unauthorized disclosure of what it called "sensitive security information." See 67 Fed.Reg. 8351 (2002). The regulations described 18 categories of sensitive security information, including "[s]pecific details of aviation security measures ... [such as] information concerning specific numbers of Federal Air Marshals, deployments or missions, and the methods involved in such operations." 49 CFR § 1520.7(j) (2002). Sensitive security information is not classified, so the TSA can share it with individuals who do not have a security clearance, such as airport employees. Compare Exec. Order 13526, § 4.1, 3 CFR 298, 314-315 (2009 Comp.), with 49 CFR § 1520.11(c) (2013).
B
Robert J. MacLean became a federal air marshal for the TSA in 2001. In that role, MacLean was assigned to protect passenger flights from potential hijackings. See 49 U.S.C. § 44917(a).
On July 26, 2003, the Department of Homeland Security (DHS) issued a confidential advisory about a potential hijacking plot. The advisory said that members of the terrorist group al Qaeda were planning to attack passenger flights, and that they "considered suicide hijackings and bombings as the most promising methods to destroy aircraft in flight, as well as to strike ground targets." App. 16. The advisory identified a number of potential targets, including the United Kingdom, Italy, Australia, and the east coast of the United States. Finally, the advisory warned that at least one of the attacks "could be executed by the end of the summer 2003." Ibid.
The TSA soon summoned all air marshals (including MacLean) for face-to-face briefings about the hijacking plot. During MacLean's briefing, a TSA official told him that the hijackers were planning to "smuggle weapons in camera equipment or children's toys through foreign security," and then "fly into the United States ... into an airport that didn't require them to be screened." Id.,at 92. The hijackers would then board U.S. flights, "overpower the crew or the Air Marshals and ... fly the planes into East Coast targets." Id.,at 93.
A few days after the briefing, MacLean received from the TSA a text message cancelling all overnight missions from Las Vegas until early August. MacLean, who was stationed in Las Vegas, believed that cancelling those missions during a hijacking alert was dangerous. He also believed that the cancellations were illegal, given that federal law required the TSA to put an air marshal on every flight that "present[s] high security risks," 49 U.S.C. § 44917(a)(2), and provided that "nonstop, long distance flights, such as those targeted on September 11, 2001, should be a priority," § 44917(b). See App. 95, 99, 101.
MacLean therefore asked a supervisor why the TSA had canceled the missions. The supervisor responded that the TSA wanted "to save money on hotel costs because there was no more money in the budget." Id.,at 95. MacLean also called the DHS Inspector General's Office to report the cancellations. But a special agent in that office told him there was "nothing that could be done." Id.,at 97.
Unwilling to accept those responses, MacLean contacted an MSNBC reporter and told him about the canceled missions. In turn, the reporter published a story about the TSA's decision, titled "Air Marshals pulled from key flights." Id.,at 36. The story reported that air marshals would "no longer be covering cross-country or international flights" because the agency did not want them "to incur the expense of staying overnight in hotels." Ibid.The story also reported that the cancellations were "particularly disturbing to some" because they "coincide[d] with a new high-level hijacking threat issued by the Department of Homeland Security." Id.,at 37.
After MSNBC published the story, several Members of Congress criticized the cancellations. Within 24 hours, the TSA reversed its decision and put air marshals back on the flights. Id.,at 50.
At first, the TSA did not know that MacLean was the source of the disclosure. In September 2004, however, MacLean appeared on NBC Nightly News to criticize the TSA's dress code for air marshals, which he believed made them too easy to identify. Although MacLean appeared in disguise, several co-workers recognized his voice, and the TSA began investigating the appearance. During that investigation, MacLean admitted that he had disclosed the text message back in 2003. Consequently, in April 2006, the TSA fired MacLean for disclosing sensitive security information without authorization.
MacLean challenged his firing before the Merit Systems Protection Board, arguing in relevant part that his disclosure was protected whistleblowing activity under 5 U.S.C. § 2302(b)(8)(A). The Board held that MacLean did not qualify for protection under that statute, however, because his disclosure was "specifically prohibited by law." 116 M.S.P.R. 562, 569-572 (2011).
The Court of Appeals for the Federal Circuit vacated the Board's decision. 714 F.3d 1301 (2013). The parties had agreed that, in order for MacLean's disclosure to be "specifically prohibited by law," it must have been "prohibited by a statute rather than by a regulation." Id.,at 1308(emphasis added). Thus, the issue before the court was whether the statute authorizing the TSA's regulations-now codified at 49 U.S.C. § 114(r)(1)-"specifically prohibited" MacLean's disclosure. 714 F.3d, at 1308.
The court first held that Section 114(r)(1)was not a prohibition. The statute did "not expressly prohibit employee disclosures," the court explained, but instead empowered the TSA to "prescribe regulations prohibiting disclosure[s]" if the TSA decided that disclosing the information would harm public safety. Id.,at 1309. The court therefore concluded that MacLean's disclosure was prohibited by a regulation, which the parties had agreed could not be a "law" under Section 2302(b)(8)(A). Ibid.
The court then held that, even if Section 114(r)(1)were a prohibition, it was not "sufficiently specific." Ibid.The court explained that a law is sufficiently specific only if it "requires that matters be withheld from the public as to leave no discretion on the issue, or ... establishes particular criteria for withholding or refers to particular types of matters to be withheld." Ibid.(quoting S.Rep. No. 95-969(1978), 1978 U.S.C.C.A.N. 2723). And Section 114(r)(1)did not meet that test because it "provide[d] only general criteria for withholding information and [gave] some discretion to the [TSA] to fashion regulations for prohibiting disclosure." 714 F.3d, at 1309. The court accordingly vacated the Board's decision and remanded for a determination of whether MacLean's disclosure met the other requirements under Section 2302(b)(8)(A). Id.,at 1310-1311.
We granted certiorari. 572 U.S. ----, 134 S.Ct. 2290, 189 L.Ed.2d 172 (2014).
II
Section 2302(b)(8)provides, in relevant part, that a federal agency may not take
"a personnel action with respect to any employee or applicant for employment because of
"(A) any disclosure of information by an employee or applicant which the employee or applicant reasonably believes evidences
"(i) any violation of any law, rule, or regulation, or
"(ii) gross mismanagement, a gross waste of funds, an abuse of authority, or a substantial and specific danger to public health or safety,
"if such disclosure is not specifically prohibited by law and if such information is not specifically required by Executive order to be kept secret in the interest of national defense or the conduct of foreign affairs."
The Government argues that this whistleblower statute does not protect MacLean because his disclosure regarding the canceled missions was "specifically prohibited by law" in two ways. First, the Government argues that the disclosure was specifically prohibited by the TSA's regulations on sensitive security information: 49 CFR §§ 1520.5(a)-(b), 1520.7(j) (2003). Second, the Government argues that the disclosure was specifically prohibited by 49 U.S.C. § 114(r)(1), which authorized the TSA to promulgate those regulations. We address each argument in turn.
A
1
In 2003, the TSA's regulations prohibited the disclosure of "[s]pecific details of aviation security measures ... [such as] information concerning specific numbers of Federal Air Marshals, deployments or missions, and the methods involved in such operations." 49 CFR § 1520.7(j). MacLean does not dispute before this Court that the TSA's regulations prohibited his disclosure regarding the canceled missions. Thus, the question here is whether a disclosure that is specifically prohibited by regulation is also "specifically prohibited by law" under Section 2302(b)(8)(A). (Emphasis added.)
The answer is no. Throughout Section 2302, Congress repeatedly used the phrase "law, rule, or regulation." For example, Section 2302(b)(1)(E)prohibits a federal agency from discriminating against an employee "on the basis of marital status or political affiliation, as prohibited under any law, rule, or regulation." For another example, Section 2302(b)(6)prohibits an agency from "grant[ing] any preference or advantage not authorized by law, rule, or regulation." And for a third example, Section 2302(b)(9)(A)prohibits an agency from retaliating against an employee for "the exercise of any appeal, complaint, or grievance right granted by any law, rule, or regulation."
In contrast, Congress did not use the phrase "law, rule, or regulation" in the statutory language at issue here; it used the word "law" standing alone. That is significant because Congress generally acts intentionally when it uses particular language in one section of a statute but omits it in another.Russello v. United States,464 U.S. 16, 23, 104 S.Ct. 296, 78 L.Ed.2d 17 (1983). Thus, Congress's choice to say "specifically prohibited by law" rather than "specifically prohibited by law, rule, or regulation" suggests that Congress meant to exclude rules and regulations.
The interpretive canon that Congress acts intentionally when it omits language included elsewhere applies with particular force here for two reasons. First, Congress used "law" and "law, rule, or regulation" in close proximity-indeed, in the same sentence. § 2302(b)(8)(A)(protecting the disclosure of "any violation of any law, rule, or regulation ... if such disclosure is not specifically prohibited by law"). Second, Congress used the broader phrase "law, rule, or regulation" repeatedly-nine times in Section 2302alone. See §§ 2302(a)(2)(D)(i), (b)(1)(E), (b)(6), (b)(8)(A)(i), (b)(8)(B)(i), (b)(9)(A), (b)(12), (b)(13), (d)(5). Those two aspects of the whistleblower statute make Congress's choice to use the narrower word "law" seem quite deliberate.
We drew the same inference in Department of Treasury, IRS v. FLRA,494 U.S. 922, 110 S.Ct. 1623, 108 L.Ed.2d 914 (1990). There, the Government argued that the word "laws" in one section of the Civil Service Reform Act of 1978 meant the same thing as the phrase "law, rule, or regulation" in another section of the Act. Id.,at 931, 110 S.Ct. 1623. We rejected that argument as "simply contrary to any reasonable interpretation of the text." Id.,at 932, 110 S.Ct. 1623. Indeed, we held that a statute that referred to "laws" in one section and "law, rule, or regulation" in another "cannot, unless we abandon all pretense at precise communication, be deemed to mean the same thing in both places." Ibid.That inference is even more compelling here, because the statute refers to "law" and "law, rule, or regulation" in the same sentence, rather than several sections apart.
Another part of the statutory text points the same way. After creating an exception for disclosures "specifically prohibited by law," Section 2302(b)(8)(A)goes on to create a second exception for information "specifically required by Executive order to be kept secret in the interest of national defense or the conduct of foreign affairs." This exception is limited to action taken directly by the President. That suggests that the word "law" in the only other exception is limited to actions by Congress-after all, it would be unusual for the first exception to include action taken by executive agencies, when the second exception requires action by the President himself.
In addition, a broad interpretation of the word "law" could defeat the purpose of the whistleblower statute. If "law" included agency rules and regulations, then an agency could insulate itself from the scope of Section 2302(b)(8)(A)merely by promulgating a regulation that "specifically prohibited" whistleblowing. But Congress passed the whistleblower statute precisely because it did not trust agencies to regulate whistleblowers within their ranks. Thus, it is unlikely that Congress meant to include rules and regulations within the word "law."
2
The Government admits that some regulations fall outside the word "law" as used in Section 2302(b)(8)(A). But, the Government says, that does not mean that allregulations are excluded. The Government suggests two interpretations that would distinguish "law" from "law, rule, or regulation," but would still allow the word "law" to subsume the TSA's regulations on sensitive security information.
First, the Government argues that the word "law" includes all regulations that have the "force and effect of law" (i.e.,legislative regulations), while excluding those that do not (e.g.,interpretive rules). Brief for Petitioner 19-22. The Government bases this argument on our decision in Chrysler Corp. v. Brown,441 U.S. 281, 99 S.Ct. 1705, 60 L.Ed.2d 208 (1979). There, we held that legislative regulations generally fall within the meaning of the word "law," and that it would take a "clear showing of contrary legislative intent" before we concluded otherwise. Id.,at 295-296, 99 S.Ct. 1705. Thus, because the TSA's regulations have the force and effect of law, the Government says that they should qualify as "law" under the statute.
The Government's description of Chrysleris accurate enough. But Congress's use of the word "law," in close connection with the phrase "law, rule, or regulation," provides the necessary "clear showing" that "law" does not include regulations. Indeed, using "law" and "law, rule, or regulation" in the same sentence would be a very obscure way of drawing the Government's nuanced distinction between different types of regulations. Had Congress wanted to draw that distinction, there were far easier and clearer ways to do so. For example, at the time Congress passed Section 2302(b)(8)(A), another federal statute defined the words "regulatory order" to include a "rule or regulation, if it has the force and effect of law." 7 U.S.C. § 450c(a) (1976 ed.). Likewise, another federal statute defined the words "State law" to include "all laws, decisions, rules, regulations, or other State action having the effect of law." 29 U.S.C. § 1144(c)(1) (1976 ed.). As those examples show, Congress knew how to distinguish between regulations that had the force and effect of law and those that did not, but chose not to do so in Section 2302(b)(8)(A).
Second, the Government argues that the word "law" includes at least those regulations that were "promulgated pursuant to an express congressional directive." Brief for Petitioner 21. Outside of this case, however, the Government was unable to find a single example of the word "law" being used in that way. Not a single dictionary definition, not a single statute, not a single case. The Government's interpretation happens to fit this case precisely, but it needs more than that to recommend it.
Although the Government argues here that the word "law" includes rules and regulations, it definitively rejected that argument in the Court of Appeals. For example, the Government's brief accepted that the word "law" meant "legislative enactment," and said that the "only dispute" was whether 49 U.S.C. § 114(r)(1)"serve[d] as that legislative enactment." Brief for Respondent in No. 11-3231 (CA Fed.), pp. 46-47. Then, at oral argument, a judge asked the Government's attorney the following question: "I thought I understood your brief to concede that [the word "law"] can't be a rule or regulation, it means statute. Am I wrong?" The Government's attorney responded: "You're not wrong your honor. I'll be as clear as I can. 'Specifically prohibited by law' here means statute." Oral Arg. Audio in No. 11-3231, at 22:42-23:03; see also id.,at 29:57-30:03 ("Now, as we've been discussing here, we're not saying here that [the word "law"] needs to encompass regulations. We're saying statute."). Those concessions reinforce our conclusion that the Government's proposed interpretations are unpersuasive.
In sum, when Congress used the phrase "specifically prohibited by law" instead of "specifically prohibited by law, rule, or regulation," it meant to exclude rules and regulations. We therefore hold that the TSA's regulations do not qualify as "law" for purposes of Section 2302(b)(8)(A).
B
We next consider whether MacLean's disclosure regarding the canceled missions was "specifically prohibited" by 49 U.S.C. § 114(r)(1)itself. As relevant here, that statute provides that the TSA "shall prescribe regulations prohibiting the disclosure of information obtained or developed in carrying out security ... if the Under Secretary decides that disclosing the information would ... be detrimental to the security of transportation." § 114(r)(1)(C).
This statute does not prohibit anything. On the contrary, it authorizessomething-it authorizes the Under Secretary to "prescribe regulations." Thus, by its terms Section 114(r)(1)did not prohibit the disclosure at issue here.
The Government responds that Section 114(r)(1)did prohibit MacLean's disclosure by imposing a "legislative mandate" on the TSA to promulgate regulations to that effect. See Brief for Petitioner 28, 33; see also post,at 2-3 (SOTOMAYOR, J., dissenting).
But the Government pushes the statute too far. Section 114(r)(1)says that the TSA shall prohibit disclosures only "if the Under Secretary decidesthat disclosing the information would ... be detrimental to the security of transportation." § 114(r)(1)(C)(emphasis added). That language affords substantial discretion to the TSA in deciding whether to prohibit any particular disclosure.
The dissent tries to downplay the scope of that discretion, viewing it as the almost ministerial task of "identifyingwhether a particular piece of information falls within the scope of Congress' command." Post,at 3. But determining which documents meet the statutory standard of "detrimental to the security of transportation" requires the exercise of considerable judgment. For example, the Government says that Section 114(r)(1)requires the Under Secretary to prohibit disclosures like MacLean's. The Government also says, however, that the statute does not require the Under Secretary to prohibit an employee from disclosing that "federal air marshals will be absent from important flights, but declining to specify which flights." Reply Brief 23. That fine-grained distinction comes not from Section 114(r)(1)itself, but from the Under Secretary's exercise of discretion. It is the TSA's regulations-not the statute-that prohibited MacLean's disclosure. And as the dissent agrees, a regulation does not count as "law" under the whistleblower statute. See post,at 1.
The Government insists, however, that this grant of discretion does not make Section 114(r)(1)any less of a prohibition. In support, the Government relies on Administrator, FAA v. Robertson,422 U.S. 255, 95 S.Ct. 2140, 45 L.Ed.2d 164 (1975). That case involved the Freedom of Information Act (FOIA), which requires federal agencies to disclose information upon request unless, among other things, the information is "specifically exempted from disclosure by statute." 5 U.S.C. § 552(b)(3). In Robertson,we held that the Federal Aviation Act of 1958 was one such statute, because it gave the Federal Aviation Administration (FAA) "a broad degree of discretion" in deciding whether to disclose or withhold information. 422 U.S., at 266, 95 S.Ct. 2140.
The Government tries to analogize that case to this one. In Robertson,the Government says, the FAA's discretion whether to disclose information did not preclude a finding that the information was "specifically exempted" from disclosure by statute. So too here, the Government says, the TSA's discretion whether to prohibit disclosure of information does not preclude a finding that the information is "specifically prohibited" from disclosure by Section 114(r)(1). See Brief for Petitioner 30.
This analogy fails. FOIA and Section 2302(b)(8)(A)differ in an important way: The provision of FOIA at issue involves information that is "exempted" from disclosure, while Section 2302(b)(8)(A)involves information that is "prohibited" from disclosure.
A statute that exempts information from mandatory disclosure may nonetheless give the agency discretion to release that exempt information to the public. In such a case, the agency's exercise of discretion has no effect on whether the information is "exempted from disclosure by statute"-it remains exempt whatever the agency chooses to do.
The situation is different when it comes to a statute giving an agency discretion to prohibit the disclosure of information. The information is not prohibited from disclosure by statuteregardless of what the agency does. It is the agency's exercise of discretion that determines whether there is a prohibition at all. Thus, when Section 114(r)(1)gave the TSA the discretion to prohibit the disclosure of information, the statute did not create a prohibition-it gave the TSA the power to create one. And because Section 114(r)(1)did not create a prohibition, MacLean's disclosure was not "prohibited by law" under Section 2302(b)(8)(A), but only by a regulation issued in the TSA's discretion.
In any event, Robertsonwas a case about FOIA, not Section 2302, and our analysis there depended on two FOIA-specific factors that are not present here. First, we examined the legislative history of FOIA and determined that Congress did not intend that statute to affect laws like the Federal Aviation Act. 422 U.S., at 263-265, 95 S.Ct. 2140. In particular, we noted that the Civil Aeronautics Board had expressed its view during congressional hearings that the Federal Aviation Act qualified as an exempting statute under FOIA, and that "no question was raised or challenge made" to the agency's view. Id.,at 264-265, 95 S.Ct. 2140. But that legislative history can have no effect on our analysis of Section 2302(b)(8)(A).
Second, we said that the Federal Aviation Act could fail to qualify as an exempting statute only if we read FOIA "as repealing by implication all existing statutes which restrict public access to specific Government records." Id.,at 265, 95 S.Ct. 2140(internal quotation marks omitted). Then, relying on the presumption that "repeals by implication are disfavored," we rejected that interpretation of FOIA. But the presumption against implied repeals has no relevance here. Saying that Section 114(r)(1)is not a prohibition under the whistleblower statute is not the same as saying that the whistleblower statute implicitly repealed Section 114(r)(1). On the contrary, Section 114(r)(1)remains in force by allowing the TSA to deny FOIA requests and prohibit employee disclosures that do not qualify for whistleblower protection under Section 2302(b)(8)(A).
Ultimately, FOIA and Section 2302(b)(8)(A)are different statutes-they have different language, different histories, and were enacted in different contexts. Our interpretation of one, therefore, has no impact whatsoever on our interpretation of the other.
III
Finally, the Government warns that providing whistleblower protection to individuals like MacLean would "gravely endanger public safety." Brief for Petitioner 38. That protection, the Government argues, would make the confidentiality of sensitive security information depend on the idiosyncratic judgment of each of the TSA's 60,000 employees. Id.,at 37. And those employees will "most likely lack access to all of the information that led the TSA to make particular security decisions." Id.,at 38. Thus, the Government says, we should conclude that Congress did not intend for Section 2302(b)(8)(A)to cover disclosures like MacLean's.
Those concerns are legitimate. But they are concerns that must be addressed by Congress or the President, rather than by this Court. Congress could, for example, amend Section 114(r)(1)so that the TSA's prohibitions on disclosure override the whistleblower protections in Section 2302(b)(8)(A)-just as those prohibitions currently override FOIA. See § 114(r)(1)(authorizing the TSA to prohibit disclosures "[n]otwithstanding section 552 of title 5"); see also 10 U.S.C. § 2640(h)("the Secretary of Defense may (notwithstanding any other provision of law) withhold from public disclosure safety-related information that is provided to the Secretary voluntarily by an air carrier for the purposes of this section"). Congress could also exempt the TSA from the requirements of Section 2302(b)(8)(A)entirely, as Congress has already done for the Federal Bureau of Investigation, the Central Intelligence Agency, the Defense Intelligence Agency, the National Geospatial-Intelligence Agency, the National Security Agency, the Office of the Director of National Intelligence, and the National Reconnaissance Office. See 5 U.S.C. § 2302(a)(2)(C)(ii)(I).
Likewise, the President could prohibit the disclosure of sensitive security information by Executive order. Indeed, the Government suggested at oral argument that the President could "entirely duplicate" the regulations that the TSA has issued under Section 114(r)(1). Tr. of Oral Arg. 16-20. Such an action would undoubtedly create an exception to the whistleblower protections found in Section 2302(b)(8)(A).
Although Congress and the President each has the power to address the Government's concerns, neither has done so. It is not our role to do so for them.
The judgment of the United States Court of Appeals for the Federal Circuit is
Affirmed.
Justice SOTOMAYOR, with whom Justice KENNEDYjoins, dissenting.
I agree with much of the Court's opinion. I have no qualms with the Court's conclusion that the phrase "specifically prohibited by law," as used in the Whistleblower Protection Act of 1989(WPA), 5 U.S.C. § 2302(b)(8)(A), does not encompass disclosures prohibited only by regulation. See ante,at 919. Nor do I see any problem in the distinction the Court draws between statutes that prohibitinformation from being disclosed, the violation of which may preclude application of the WPA, and statutes that simply exemptinformation from otherwise-applicable disclosure requirements, which do not trigger the WPA's "prohibited by law" exception. See ante,at 922 - 923.
I part ways with the Court, however, when it concludes that 49 U.S.C. § 114(r)(1)does not itself prohibit the type of disclosure at issue here-the release of information regarding the absence of federal air marshals on overnight flights. Ante,at 921 - 922. That statute provides, in relevant part, that the Transportation Security Administration (TSA) "shallprescribe regulations prohibiting the disclosure of information obtained or developed in carrying out security ... if the Under Secretary decides that disclosing the information would ... be detrimental to the security of transportation." § 114(r)(1)(emphasis added).
The Court reasons, first, that Section 114(r)(1)does not "prohibit anything," but instead simply "authorizes" the TSA to prescribe regulations. Ante,at 921 - 922. But this contention overlooks the statute's use of the word "shall," which, as we have observed, "generally means 'must.' " Gutierrez de Martinez v. Lamagno,515 U.S. 417, 432, n. 9, 115 S.Ct. 2227, 132 L.Ed.2d 375 (1995); see also, e.g.,Federal Express Corp. v. Holowecki,552 U.S. 389, 400, 128 S.Ct. 1147, 170 L.Ed.2d 10 (2008)("Congress' use of the term 'shall' indicates an intent to 'impose discretionless obligations' ") (some internal quotation marks omitted); A. Scalia & B. Garner, Reading Law: The Interpretation of Legal Texts 114 (2012) ("[W]hen the word shallcan reasonably read as mandatory, it ought to be so read"). Section 114(r)(1)does not merely authorizethe TSA to promulgate regulations; it directs it to do so, and describes what those regulations must accomplish.
The Court focuses, second, on the fact that Section 114(r)authorizes the TSA to " 'decid[e]' " whether the disclosure of a particular item of information would in fact be " 'detrimental to the security of transportation.' " Ante,at 921 (emphasis deleted). I certainly agree that this language vests some discretion in the agency.But the agency is required to prevent the disclosure of any information it determines is within Congress' prohibition; its discretion pertains only to identifyingwhether a particular piece of information falls within the scope of Congress' command. In concluding that such residual agency discretion deprives Section 114(r)of prohibitory effect, the Court overlooks the degree of agency involvement that is necessary in the administration of many antidisclosure statutes. Congress cannot be expected to identify with particularity each individual document or datum the release of which it wants to preclude. Often, it will have to leave to an agency or other enforcing authority the tasks of defining-perhaps through regulations-exactly what type of information falls within the scope of the congressional prohibition, and of determining whether a particular item of information fits the bill. The enforcing authority may, as the Court puts it, sometimes be required to make some "fine-grained distinction[s]" in fulfilling this charge, ante,at 922, but that does not change the fact that Congress itself is the source of the prohibition on disclosure.
Indeed, Congress appears to have anticipated the need for agency involvement in the interpretation and enforcement of antidisclosure statutes at the time it enacted the WPA. The Senate Report to the WPA identified only two statutes the violation of which would preclude whistleblower protection, the first being Section 102(d)(3) of the National Security Act of 1947, 61 Stat. 498, which provided that "the Director of Central Intelligence shall be responsible for protecting intelligence sources and methods from unauthorized disclosure." See S.Rep. No. 95-969, pp. 21-22(1978), 1978 U.S.C.C.A.N. 2723. This example clearly suggests Congress contemplated that a statute directing an agency to protect against disclosures and delegating substantial authority to the agency should nevertheless be deemed to impose the relevant prohibition. Section 114(r)(1)'s delegation to the TSA to "decide" whether the release of particular information would be "detrimental to the security of transportation" likewise simply reflects Congress' recognition of the inevitable fact that the agency will be tasked, in the first instance, with enforcing its statutory mandate.
In sum, with Section 114(r)(1), Congress has required agency action that would preclude the release of information "detrimental to the security of transportation." In so doing, Congress has expressed its clear intent to prohibit such disclosures. I would respect its intent, and hold that a disclosure contravening that mandate is "prohibited by law" within the meaning of the WPA.
Having said all that, I appreciate the narrowness of the Court's holding. The Court's conclusion that Section 114(r)does not itself prohibit any disclosures depends entirely on the statutory language directing the agency to "prescribe regulations," and providing that the agency will "decid[e]" what information falls within the statute's purview. See ante,at 921 - 922. From all that appears in the majority opinion, then, this case would likely have turned out differently if Section 114(r)instead provided: "The disclosure of information detrimental to the security of transportation is prohibited, and the TSA shall promulgate regulations to that effect," or "The Under Secretary shall prescribe regulations prohibiting the disclosure of information detrimental to the security of transportation; and such disclosures are prohibited." I myself decline to surrender so fully to sheer formalism, especially where transportation security is at issue and there is little dispute that the disclosure of air marshals' locations is potentially dangerous and was proscribed by the relevant implementing regulation. In so surrendering, however, the Court would appear to have enabled future courts and Congresses to avoid easily the consequences of its ruling, and thus to have limited much of the potential for adverse practical effects beyond this case. But in the interim, at least, the Court has left important decisions regarding the disclosure of critical information completely to the whims of individual employees.
I respectfully dissent.
The syllabus constitutes no part of the opinion of the Court but has been prepared by the Reporter of Decisions for the convenience of the reader. See United States v. Detroit Timber & Lumber Co.,200 U.S. 321, 337, 26 S.Ct. 282, 50 L.Ed. 499.
This statute has a complicated history. It was codified at 49 U.S.C. § 40119(b)(1) when the TSA initially promulgated its regulations on sensitive security information. It was codified at § 114(s)(1) when MacLean disclosed the text message to MSNBC. And it is now codified at § 114(r)(1). The Federal Circuit referred to § 40119(b)(1) in its opinion. Because the statute has remained identical in all relevant respects, however, we and the parties refer to the current version.
The Court does not address respondent's alternative argument, accepted by the Court of Appeals below, that Section 114(r)(1)describes the information encompassed in its prohibitory scope with insufficient particularity to qualify the disclosure here as "specificallyprohibited by law" within the meaning of the WPA. Some of the legislative history of the WPA linked its specificity requirement to the criteria established in Exemption 3 of the Freedom of Information Act, 5 U.S.C. § 552(b)(3), and the Court of Appeals applied this standard. See 714 F.3d 1301, 1309 (C.A.Fed.2013); see also S.Rep. No. 95-969, pp. 21-22(1978), 1978 U.S.C.C.A.N. 2723. MacLean has offered no argument that a WPA anti-disclosure statute must define the relevant category of information with any greater degree of particularity. Assuming the Exemption 3 standard is applicable, I note that Section 114(r)is at least as "specific" as the statutory provisions we have previously held to satisfy Exemption 3's requirements. See, e.g.,Department of Justice v. Julian,486 U.S. 1, 9, 108 S.Ct. 1606, 100 L.Ed.2d 1 (1988)(holding that provisions of Federal Rule of Criminal Procedure 32(c)(3)(A)and former 18 U.S.C. § 4208(c)(1982 ed.) prohibiting disclosure of portions of presentence reports "relat[ed] to confidential sources, diagnostic opinions, and other information that may cause harm to the defendant or to third parties" could justify withholding under Exemption 3 (emphasis added)).
For the same reasons, the agency's decision that a disclosure contravened a statute may not necessarily be determinative in any given WPA case: Although an agency may no doubt receive deference in the interpretation and implementation of a prohibitory statute, ultimately WPA protection will not apply if the agency improperly concluded that a given disclosure was prohibited by that statute. Cf. CIA v. Sims,471 U.S. 159, 168-181, 105 S.Ct. 1881, 85 L.Ed.2d 173 (1985)(according deference to Central Intelligence Agency's expertise, but engaging in an extended analysis of whether the particular information the agency refused to disclose fell within the scope of the statutory prohibition). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
73
] |
TEXAS v. UNITED STATES
No. 97-29.
Argued January 14, 1998
Decided March 31, 1998
S calía, J., delivered the opinion for a unanimous Court.
Javier Aguilar, Special Assistant Attorney General of Texas, argued the cause for appellant. With him on the briefs were Dan Morales, Attorney General, Jorge Vega, First Assistant Attorney General, and Deborah A. Verbil, Special Assistant Attorney General.
Paul R. Q. Wolf son argued the cause for the United States. With him on the brief were Solicitor General Waxman, Acting Assistant Attorney General Pinzler, Deputy Solicitor General Wallace, Mark L. Gross, and Miriam R. Eisenstein.
Daniel J. Popeo filed a brief for the Washington Legal Foundation et al. as amici curiae urging reversal.
Pamela S. Karlan, Laughlin McDonald, Neil Bradley, Cristina Cor-reia, Elaine R. Jones, Theodore M. Shaw, Norman J. Ghachhin, Jacqueline Berrien, Victor A Bolden, and Steven R. Shapiro filed a brief for the American Civil Liberties Union et al. as amici curiae urging affirmance.
Justice Scalia
delivered the opinion of the Court.
Appellant, the State of Texas, appeals from the judgment of a three-judge District Court for the District of Columbia. The State had sought a declaratory judgment that the pre-clearance provisions of § 5 of the Voting Rights Act of 1965, 79 Stat. 439, as amended, 42 U. S. C. § 1973c, do not apply to implementation of certain sections of the Texas Education Code that permit the State to sanction local school districts for failure to meet state-mandated educational achievement levels. This appeal presents the question whether the controversy is ripe.
I
In Texas, both the state government and local school districts are responsible for the public schools. There are more than 1,000 school districts, each run by an elected school board. In 1995, the Texas Legislature enacted a comprehensive scheme (Chapter 39) that holds local school boards accountable to the State for student achievement. Tex. Educ. Code Ann. §§39.021-39.131 (1996). Chapter 39 contains detailed prescriptions for assessment of student academic skills, development of academic performance indicators, determination of accreditation status for school districts, and imposition of accreditation sanctions. It seeks to measure the academic performance of Texas schoolchildren, to reward the schools and school districts that achieve the legislative goals, and to sanction those that fall short.
When a district fails to satisfy the State’s accreditation criteria, the State Commissioner of Education may select from 10 possible sanctions that are listed in ascending order of severity. §§39.131(a)(1)-(10). Those include, “to the extent the [C]ommissioner determines necessary,” § 39.131(a), appointing a master to oversee the district’s operations, § 39.131(a)(7), or appointing a management team to direct the district’s operations in areas of unacceptable performance or to require the district to contract for services from another person, § 39.181(a)(8). When the Commissioner appoints masters or management teams, he “shall clearly define the[ir] powers and duties” and shall review the need for them every 90 days. § 39.131(e). A master or management team may approve or disapprove any action taken by a school principal, the district superintendent, or the district’s board of trustees, and may also direct them to act. §§ 39.131(e)(1), (2). State law prohibits masters or management teams from taking any action concerning a district election, changing the number of members on or the method of selecting the board of trustees, setting a tax rate for the district, or adopting a budget which establishes a different level of spending for the district from that set by the board. §§ 39.131(e)(3)-(6).
Texas is a covered jurisdiction under §5 of the Voting Rights Act of 1965, see 28 CFR pt. 51, App. (1997), and consequently, before it can implement changes affecting voting it must obtain preclearanee from the United States District Court for the District of Columbia or from the Attorney General of the United States. 42 U. S. C. § 1973e. Texas submitted Chapter 39 to the Attorney General for administrative preclearanee. The Assistant Attorney General requested further information, including the criteria used to select special masters and management teams, a detailed description of their powers and duties, and the difference between their duties and those of the elected boards. The State responded by pointing out the limits placed on masters and management teams in § 39.131(e), and by noting that the-actual authority granted “is set by the Commissioner at the time of appointment depending on the needs of the district.” App. to Juris. Statement 99a. After receiving this information, the Assistant Attorney General concluded that the first six sanctions do not affect voting and therefore do not require preclearanee. He did not object to §§ 39.131(a)(7) and (8), insofar as the provisions are “enabling in nature,” but he cautioned that “under certain foreseeable circumstances their implementation may result in a violation of Section 5” which would require preclearanee. Id., at 36a.
On June 7, 1996, Texas filed a complaint in the United States District Court for the District of Columbia, seeking a declaration that § 5 does not apply to the sanctions authorized by §§ 39.131(a)(7) and (8), because (1) they are not changes with respect to voting, and (2) they are consistent with conditions attached to grants of federal financial assistance that authorize and require the imposition of sanctions to ensure accountability of local education authorities. The District Court did not reach the merits of these arguments because it concluded that Texas’s claim was not ripe. We noted probable jurisdiction. 521 U. S. 1150 (1997).
H-i 1 — 4
A claim is not ripe for adjudication if it rests upon “ ‘contingent future events that may not occur as anticipated, or indeed may not occur at all.’” Thomas v. Union Carbide Agricultural Products Co., 473 U. S. 568, 580-581 (1985) (quoting 13A C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure §3532, p. 112 (1984)). Whether Texas will appoint a master or management team under §§ 39.131(a)(7) and (8) is contingent on a number of factors. First, a school district must fall below the state standards. Then, pursuant to state policy, the Commissioner must try first “the imposition of sanctions which do not include the appointment of a master or management team,” App. 10 (Original Complaint ¶12). He may, for example, “order the preparation of a student achievement improvement plan ..., the submission of the plan to the [C]ommissioner for approval, and implementation of the plan,” § 39.131(a)(3), or “appoint an agency monitor to participate in and report to the agency on the activities of the board of trustees or the superintendent,” § 39.131(a)(6). It is only if these less intrusive options fail that a Commissioner may appoint a master or management team, Tr. of Oral Arg. 16, and even then, only “to the extent the [C]ommissioner determines necessary,” § 39.131(a). Texas has not pointed to any particular school district in which the application of § 39.131(a)(7) or (8) is currently foreseen or even likely. Indeed, Texas hopes that there will be no need to appoint a master or management team for any district. Tr. of Oral Arg. 16-17. Under these circumstances, where “we have no idea whether or when such [a sanction] will be ordered,” the issue is not fit for adjudication. Toilet Goods Assn., Inc. v. Gardner, 387 U. S. 158, 163 (1967); see also Renne v. Geary, 501 U. S. 312, 321-322 (1991).
Even if there were greater certainty regarding ultimate implementation of paragraphs (a)(7) and (a)(8) of the statute, we do not think Texas’s claim would be ripe. Ripeness “re-quir[es] us to evaluate both the fitness of the issues for judicial decision and the hardship to the parties of withholding court consideration.” Abbott Laboratories v. Gardner, 387 U. S. 136, 149 (1967). As to fitness of the issues: Texas asks us to hold that under no circumstances can the imposition of these sanctions constitute a change affecting voting. We do not have sufficient confidence in our powers of imagination to affirm such a negative. The operation of the statute is better grasped when viewed in light of a particular application. Here, as is often true, “[d3etermination of the scope ... of legislation in advance of its immediate adverse effect in the context of a concrete case involves too remote and abstract an inquiry for the proper exercise of the judicial function.” Longshoremen v. Boyd, 347 U. S. 222, 224 (1954). In the present ease, the remoteness and abstraction are increased by the fact that Chapter 39 has yet to be interpreted by the Texas courts. Thus, “[postponing consideration of the questions presented, until a more concrete controversy arises, also has the advantage of permitting the state courts further opportunity to construe” the provisions. Renne, supra, at 323.
And as for hardship to the parties: This is not a ease like Abbott Laboratories v. Gardner, supra, at 152, where the regulation at issue had a “direct effect on the day-to-day business” of the plaintiffs, because they were compelled to affix required labeling to their products under threat of criminal sanction. Texas is not required to engage in, or to refrain from, any conduct, unless and until it chooses to implement one of the noneleared remedies. To be sure, if that contingency should arise compliance with the preclearance procedure could delay much needed action. (Prior to this litigation, Texas sought preclearance for the appointment of a master in a Dallas County school district, and despite a request for expedition the Attorney General took 90 days to give approval. See Brief for Appellant 37, n. 28.) But even that inconvenience is avoidable. If Texas is confident that the imposition of a master or management team does not constitute a change affecting voting, it should simply go ahead with the' appointment. Should the Attorney General or a private individual bring suit (and if the matter is as clear, even at this distance, as Texas thinks it is), we have no reason to doubt that a district court will deny a preliminary injunction. See Presley v. Etowah County Comm’n, 502 U. S. 491, 506 (1992); City of Lockhart v. United States, 460 U. S. 125, 129, n. 3 (1983). Texas claims that it suffers the immediate hardship of a “threat to federalism." But that is an abstraction — and an abstraction no graver than the “threat to personal freedom” that exists whenever an agency regulation is promulgated, which we hold inadequate to support suit unless the person’s primary conduct is affected. Cf. Toilet Goods Assn., supra, at 164.
In sum, we find it too speculative whether the problem Texas presents will ever need solving; we find the- legal issues Texas raises not yet fit for our consideration, and the hardship to Texas of biding its time insubstantial. Accordingly, we agree with the District Court that this matter is not ripe for adjudication.
The judgment of the District Court is affirmed.
It is so ordered.
The authority for determinations under §5'has been delegated to the Assistant Attorney General for the Civil Rights Division. 28 CFR §51.3(1997). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
26
] |
RANEY et al. v. BOARD OF EDUCATION OF THE GOULD SCHOOL DISTRICT et al.
No. 805.
Argued April 3, 1968.
Decided May 27, 1968.
Jack Greenberg argued the cause for petitioners. With him on the brief were James M. Nabrit III and Michael Meltsner.
Robert V. Light argued the cause for respondents. With him on the brief was Herschel H. Friday.
Louis F. Claiborne argued the cause for the United States, as amicus curiae. With him on the brief were Solicitor General Griswold, Assistant Attorney General Poliak, Lawrence G. Wallace, and Brian K. Landsberg.
Me. Justice Brennan
delivered the opinion of the Court.
This case presents the question of the adequacy of a “freedom-of-choice” plan as compliance with Brown v. Board of Education, 349 U. S. 294 (Brown II), a question also considered today in No. 695, Green v. County School Board of New Kent County, ante, p. 430. The factual setting is very similar to that in Green.
This action was brought in September 1965 in the District Court for the Eastern District of Arkansas. Injunctive relief was sought against the continued maintenance by respondent Board of Education of an alleged racially segregated school system. The school district has an area of 80 square miles and a population of some 3,000, of whom 1,800 are Negroes and 1,200 are whites. Persons of both races reside throughout the county; there is no residential segregation. The school system consists of two combination elementary and high schools located about 10 blocks apart in Gould, the district’s only major town. One combination, the Gould Schools, is almost all white and the other, the Field Schools, is all-Negro. In the 1964-1965 school year the schools were totally segregated; 580 Negro children attended the Field Schools and 300 white children attended the Gould Schools. Faculties and staffs were and are segregated. There are no attendance zones, each school complex providing any necessary bus transportation for its respective pupils.
The state-imposed segregated system existed at the time of the decisions in Brown v. Board of Education, 347 U. S. 483, 349 U. S. 294. Thereafter racial separation was required by School Board policy. As in Green, respondent first took steps in 1965 to abandon that policy to remain eligible for federal financial aid. The Board adopted a “freedom-of-choice” plan embodying the essentials of the plan considered in Green. It was made immediately applicable to all grades. Pupils are required to choose annually between the Gould Schools and the Field Schools and those not exercising a choice are assigned to the school previously attended.
The experience after three years of operation with “freedom of choice” has mirrored that in Green. Not a single white child has sought to enroll in the all-Negro Field Schools, and although some 80 to 85 Negro children were enrolled in the Gould Schools in 1967, over 85% of the Negro children in the system still attend the all-Negro Field Schools.
This litigation resulted from a problem that arose in the operation of the plan in its first year. The number of children applying for enrollment in the fifth, tenth, and eleventh grades at Gould exceeded the number of places available and applications of 28 Negroes for those grades were refused. This action was thereupon filed on behalf of 16 of these children and others similarly situated. Their complaint sought injunctive relief, among other things, against their being required to attend the Field Schools, against the provision by respondent of public school facilities for Negro pupils inferior to those provided for white pupils, and against respondent’s “otherwise operating a racially segregated school system.” While the case was pending in the District Court, respondent made plans to replace the high school building at Field Schools. Petitioners sought unsuccessfully to enjoin construction at that site, contending that the new high school should be built at the Gould site to avoid perpetuation of the segregated system. Thereafter the District Court, in an unreported opinion, denied all relief and dismissed the complaint. In the District Court’s view the fact that respondent had adopted “freedom of choice” without the compulsion of a court order, that the plan was approved by the Department of Health, Education, and Welfare, and that some Negro pupils had enrolled in the Gould Schools “seems to indicate that this plan is more than a pretense or sham to meet the minimum requirements of the law.” In light of this conclusion the District Court held that petitioners were not entitled to the other relief requested, including an injunction against building the new high school at the Field site. The Court of Appeals for the Eighth Circuit affirmed the dismissal. 381 F. 2d 252. We granted certiorari, 389 U. S. 1034, and set the case for argument following No. 740, Monroe v. Board of Commissioners of the City of Jackson, post, p. 450.
The Court of Appeals suggested that “no issue on the adequacy of the plan adopted by the Board or its implementation was raised in the District Court. Issues not fairly raised in the District Court cannot ordinarily be considered upon appeal.” 381 F. 2d, at 257. Insofar as this refers to the “freedom-of-choice” plan the suggestion is refuted by the record. Not only was the issue embraced by the prayer in petitioners’ complaint for an injunction against respondent “otherwise operating a racially segregated school system” but the adequacy of the plan was tried and argued by the parties and decided by the District Court. Moreover, the Court of Appeals went on to consider the merits, holding, in agreement with the District Court, that “we find no substantial evidence to support a finding that the Board was not proceeding to carry out the plan in good faith.” Ibid. In the circumstances the question of the adequacy of “freedom of choice” is properly before us. On the merits, our decision in Green v. County School Board, supra, establishes that the plan is inadequate to convert to a unitary, nonracial school system. As in Green, “the school system remains a dual system. Rather than further the dismantling of the dual system, the plan has operated simply to burden children and their parents with a responsibility which Brown II placed squarely on the School Board. The Board must be required to formulate a new plan and, in light of other courses which appear open to the Board, such as zoning, fashion steps which promise realistically to convert promptly to a system without a 'white’ school and a ‘Negro’ school, but just schools.” Id., at 441-442.
The petitioners did not press in the Court of Appeals their appeal from the denial of their prayer to have the new high school facilities constructed at the Gould Schools site rather than at the Field Schools site. Due to the illness of the court reporter there was delay in the filing of the transcript of the proceedings in the District Court and meanwhile the construction at the Field Schools site was substantially completed. Petitioners therefore modified their position and urged in the Court of Appeals that respondent be required to convert the Gould Schools to a completely desegregated high school and the Field site to a completely desegregated primary school. The Court of Appeals rejected the proposition on the ground that it “was not presented to the trial court and no opportunity was afforded the parties to offer evidence on the feasibility of such a plan, nor was the trial court given any opportunity to pass thereon.” 381 F. 2d, at 254. Since there must be a remand, petitioners are not foreclosed from making their proposal an issue in the further proceedings.
Finally, we hold that in the circumstances of this case, the District Court’s dismissal of the complaint was an improper exercise of discretion. Dismissal will ordinarily be inconsistent with the responsibility imposed on the district courts by Brown II. 349 U. S., at 299-301. In light of the complexities inhering in the disestablishment of state-established segregated school systems, Brovm II contemplated that the better course would be to retain jurisdiction until it is clear that disestablishment has been achieved. We agree with the observation of another panel of judges of the Court of Appeals for the Eighth Circuit in another case that the district courts “should retain jurisdiction in school segregation cases to insure (1) that a constitutionally acceptable plan is adopted, and (2) that it is operated in a constitutionally permissible fashion so that the goal of a desegregated, non-racially operated school system is rapidly and finally achieved.” Kelley v. Altheimer, 378 F. 2d 483, 489. See also Kemp v. Beasley, 389 F. 2d 178.
The judgment of the Court of Appeals is reversed and the case is remanded to the District Court for further proceedings consistent with this opinion and with our opinion in Green v. County School Board, supra.
It is so ordered.
Compare the developing views of the feasibility of “freedom-of-choice” plans expressed by various panels of the Court of Appeals for the Eighth Circuit in Kemp v. Beasley, 352 F. 2d 14; Clark v. Board of Education, 374 F. 2d 569; Kelley v. Altheimer, 378 F. 2d 483; Kemp v. Beasley, 389 F. 2d 178; and Jackson v. Marvell School District No. 22, 389 F. 2d 740.
The Court of Appeals, while denying petitioners’ request for relief on appeal, did observe that
“there is no showing that the Field facilities with the new construction added could not be converted at a reasonable cost into a completely integrated grade school or into a completely integrated high school when the appropriate time for such course arrives. We note that the building now occupied by the predominantly white Gould grade school had originally been built to house the Gould High School.” 381 F. 2d, at 255. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
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"National Mediation Board",
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"Occupational Safety and Health Review Commission",
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] | [
116
] |
PROCUNIER, CORRECTIONS DIRECTOR, et al. v. MARTINEZ et al.
No. 72-1465.
Argued December 3, 1973
Decided April 29, 1974
Powell, J., delivered the opinion of the Court, in which Burger, C. J., and Brennan, Stewart, White, Marshall, Blackmun, and Rehnquist, JJ., joined-: Marshall,. J., filed a concurring opinion,, in which Brennan, J., joined and in Part II of which Douglas, J.,' joined, post, p. 422. Douglas, J., filed an opinion concurring in the judgment, post, p. 428.
W. Eric Collins, Deputy Attorney General of California, argued the cause for appellants. With him on the briefs were Evelle J. Younger, Attorney General, Edward A. Hinz, Jr., Chiéf Assistant Attorney General, Doris H. Maier,' Assistant Attorney General, and Robert R. Granucci and Thomas A. Brady, Deputy Attorneys General.
■William Bennett Turner argued the cause for appellees. With him on the brief were Mario Obledo, Sanford Jay Rosen, Anthony G. Amsterdam, Jack Greenberg, James M. Nabrit III, Stanley .A. Bass, Lowell Johnston, and Alice Daniel.
Briefs of amici curiae urging affirmance were filed by William R. Fry for the National Paralegal Institute, and by Sheldon Krantz and Stephen Joel Trachtenberg for the Center for Criminal Justice, Boston University School of Law.
Mr. Justice Powell
delivered- the opinion of the ' Court.
This case concerns the constitutionality of certain regulations promulgated by appellant Procunier in his. capacity as Director of the California Department of Corrections. Appellees brought a class action on behalf of themselves and. all other inmates of penal institutions under the Department’s jurisdiction to challenge the rules relating to censorship of prisoner mail and the ban against the use of law' student's and legal paraprofessionals to conduct attorney-client, interviews with inmates. Pursuant to 28 U. S. C. § 2281 a three-judge United States District Court was convened to hear appellees’ request for declaratory and injunctive relief. That court entered summary judgment enjoining continued enforcement of the rules in question and ordering appellants to submit new regulations for the court’s approval. 354 F. Supp. 1092 (ND Cal. 1973). Appellants’ first revisions resulted in counterproposals by appellees.and a court order issued May 30, 1973, requiring further modification of the proposed rules. The second set of revised regulations was approved by the District Court on July 20, 1973, over appellees’ objections. While the first proposed revisions of the Department’s regulations were pending before the District Court, appellants brought this appeal to contest that court’s decision holding the original regulations unconstitutional.
We noted probable jurisdiction. 412 U. S. 948 (1973). We affirm.
I
- First we consider the constitutionality of the Director’s rules restricting the personal correspondence of prison inmates. Under • these regulations, correspondence between inmates of California penal institutions and persons other than licensed attorneys and holders of public office was censored for nonconformity to certain standards. Rule 2401 stated the Department’s general premise that personal correspondence by prisoners is “a privilege, not a right . . . .” More detailed regulations implemented the Department’s policy. Rule 1201 directed inmates not to write letters in which they “unduly complain” or “magnify grievances.” Rule 1205 (d) defined as contraband writings “expressing inflammatory political', racial, religious or other views or beliefs . ...” Finally, Rule 2402 (8) provided that inmates “may not send or receive letters that pertain to criminal activity; are lewd, obscene, or defamatory; contain foreign matter, or are otherwise inappropriate.”
Prison employees screened both incoming and outgoing personal mail for violations of these regulations. No further criteria were provided to help members' of the mailroom staff decide' whether a particular letter contravened any prison rule or policy. When a prison employee found a letter objectionable, he could take one or more of the following actions: (1) refuse to mail or deliver the letter and return it to the author; (2) submit a disciplinary report, which could lead to suspension of mail privileges, or other sanctions; or (3) place a copy of the letter or a summary of its contents in the prisoner’s file, where it might be a factor in determining the inmate’s work and housing assignments and in setting a date for parole eligibility.
The District Court held that the regulations relating to prisoner mail authorized censorship of protected expression without adequate justification in violation of the First Amendment and that they were void for vagueness. The. court also noted that the regulations failed to provide minimum procedural safeguards against error and arbitrariness in the censorship of inmate correspondence. Consequently, it enjoined their continued enforcement.
Appellants contended that the District Court should have abstained from deciding these questions. In that court appellants advanced no reason for abstention other than the assertion that the federal court should defer to the California courts on the basis of comity. The District Court properly rejected this suggestion, noting’ that the mere possibility that a state court might declare the prison regulations unconstitutional is no ground for abstention. Wisconsin v. Constantineau, 400 U. S. 433, 439 (1971).
Appellants now contend that we should vacate the judgment and remand the case to the District Court with instructions to abstain on the basis of two arguments not presented to it. First, they contend that any vagueness challenge to an uninterpreted state statute or regulation is a proper case for abstention. According to appellants, “[t]he very statement'by the district court that the regulations are vague constitutes a compelling reason for abstention.” Brief for Appellants 8-9. As this Court made plain in Baggett v. Bullitt, 377 U. S. 360 (1964), however, not every vagueness challenge to an uninterpreted state statute or regulation constitutes a proper case for abstention. But we need- not decide whether appellants’ contention is controlled by the analysis in Baggett, for the short answer to their argument is that these regulations were neither challenged nor invalidated solely on the ground of vagueness. Appellees also asserted, and the District Court found, that the rules relating to prisoner mail permitted censorship of constitutionally protected expression without adequate justification. In light of the successful First Amendment attack on these regulations, the District Court’s conclusion that they were also unconstitutionally vague hardly “constitutes a compelling reason for abstention.”
As a second ground for abstention appellants rely on Cal. Penal Code § 2600 (4), which assures prisoners the right to receive books, magazines, and periodicals. Although they did not advance this argument to- the District Court, appellants now contend that the interpretation of the .statute by the state courts and its application to the regulations governing prisoner mail might avoid or modify the constitutional questions decided below. Thus appellants seek to establish the essential prerequisite for .abstention — “an uncertain issue of state law,” the resolution of which may eliminate or materially alter the federal constitutional question. Harman v. Forssenius, 380 U. S. 528, 534 (1965). We are not persuaded.
A state court interpretation of § 2600 (4) would not avoid or substantially modify the constitutional question presented here. That statute does not contain any provision purporting to regulate censorship of personal correspondence. It only preserves the right of inmates to receive “newspapers, periodicals, and books” and authorizes prison officials to exclude “obscene publications or writings, and mail containing information concerning where, how, or from whom such matter may' be ob-. tained . . (emphasis added). And the plain meaning of the language is reinforced by recent legislative history. In 1972, a bill was introduced in the California Legislan ture to restrict censorship of personal correspondence by adding an entirely, new subsection to § 2600. The legislature passed the bill, but it was vetoed by Governor Reagan. In light of this history, we think it plain that no reasonable interpretation of § 2600 (4) would avoid or modify the federal constitutional question decided below. Moreover, we are mindful of the high cost of abstention when the federal constitutional challenge concerns facial repugnance to the First Amendment. Zwickler v. Koota, 389 U. S. 241, 252 (1967); Baggett v. Bullitt, 377 U. S., at 379. We therefore proceed to the merits.
A
Traditionally, federal courts have adopted a broad hands-off attitude toward problems of prison administration. In part this policy is the product of various limitations on the scope of federal review of conditions in state penal institutions. More fundamentally, this attitude springs from complementary perceptions about the nature of the problems and the efficacy of judicial intervention. Prison administrators are responsible for maintaining-internal order and discipline, for securing their institutions against unauthorized access or escape, and for rehabilitating, to the extent that human nature and inadequate resources allow, the inmates placed in their custody. The Herculean obstacles to effective discharge of these duties are too apparent to warrant explication. Suffice it to say that the problems of prisons in America are complex and intractable, and, more to the point, they are not readily susceptibly of resolution by decree. Most require expertise, comprehensive' planning, and the commitment of resources, all of which are peculiarly within .the province. of the legislative and executive branches of .''government. For all of those reasons, courts are ill equipped to deal with the increasingly urgent problems of prison administration and reform. Judicial recognition of that fact reflects no more than a healthy sense of realism. Moreover, where state penal institutions are involved, federal courts have a further reason for deference to the appropriate prison authorities. ,
But a policy of judicial restraint cannot encompass any failure to take cognizance of valid constitutional claims whether arising in a federal or státe institution. When a .prison regulation or practice offends á fundamental constitutional guarantee, federal courts will discharge their duty to protect constitutional rights. Johnson v. Avery, 393 U. S. 483, 486 (1969). This is such a case. Although the District Court found the regulations relating to prisoner mail deficient in several respects, the first and principal basis for its decision was the constitutional, command of the First Amendment, as applied to the States by the Fourteenth Amendment..
The issue before us is the. appropriate standard of review for prison regulations restricting fr.eedom of speech. This Court has not previously addressed this question, and the tension between the traditional policy of judicial restraint regarding prisoner complaints and the need to protect constitutional rights has led the' federal courts to adopt a variety of widely inconsistent approaches to the problem. Some have maintained a hands-off posture in the face of constitutional challenges to censorship' of prisoner mail. E. g., McCloskey v. Maryland, 337 F. 2d 72 (CA4 1964); Lee v. Tahash, 352 F. 2d 970 (CA8 1965) (except insofar as mail censorship rules are applied to discriminate against a particular racial or religious group); Krupnick v. Crouse, 366 F. 2d 851 (CA10 1966); Pope v. Daggett, 350 F. 2d 296 (CA10 1965). Another, has required only that censorship of personal correspondence not lack support “in any rational and constitutionally- acceptable concept of a prison system.” Sostre v. McGinnis, 442 F. 2d 178, 199 (CA2 1971), cert. denied sub nom. Oswald v. Sostre, 405 U. S. 978 (1972). At the other extreme some courts have- been willing tp require demonstration of a “compelling state interest” to justify censorship of' prisoner mail. E. g., Jackson v. Godwin, 400 F. 2d 529 (CA5 1968) (decided on both equal protection and First Amendment grounds); Morales v. Schmidt, 340 F. Supp. 544 (WD Wis. 1972); Fortune Society v. McGinnis, 319 F. Supp. 901. (SDNY 1970). Other .courts phrase the standard in similarly demanding terms of “clear and present danger.” E. g., Wilkinson v. Skinner, 462 F. 2d 670, 672-673 (CA2 1972). And.there are various intermediate positions, most notably the view that a “regulation or practice which restricts the right of Tree expression that a prisoner would have enjoyed if he had not been imprisoned must be related both reasonably and necessarily. to the advancement of some justifiable purpose.” E. g., Carothers v. Follette, 314 F. Supp. 1014, 1024 (SDNY 1970) (citations omitted). See also Gates v. Collier, 349 F. Supp. 881, 896 (ND Miss. 1972); LeMon v. Zelker, 358 F. Supp. 554 (SDNY 1972).
This array , of disparate approaches áríd the absence of any generally accepted standard for testing the constitutionality of prisoner mail censorship regulations disserye both the' competing interests at stake. On the one hand, the First' Amendment interests implicated by censorship of inmate • correspondence are given only haphazard and inconsistent protection. On the other, the uncertainty of the constitutional standard makes it impossible for correctional officials to anticipate what is required of them and invites repetitive, piecemeal litigation on behalf of inmates. The result has been unnecessarily ,to perpetuate the involvement of the federal courts in ■ affairs of prison administration. Our task is to formulate a standard of review for prisoner mail censorship .that will be responsive to these concerns.
B
We begin our analysis of the proper standard of review for constitutional challenges to censorship of prisoner mail, with a somewhat different premise from that taken by the other federal courts that have considered the question. For the most part, these courts have dealt with challenges to censorship of prisoner mail as involving broad questions of “prisoners’ rights.” This case is no exception. The District Court stated the issue in general terms as “the applicability of First Amendment rights to prison inmates . . . ,” 354 F. Supp., at 1096, and the arguments of the parties reflect the assumption that the resolution of this case requires an assessment of the extent to which prisoners may claim First Amendment freedoms. In our view this inquiry is unnecessary. In determining the proper standard of review for prison restrictions on inmate correspondence, we have no occasion to consider the extent to which an individual’s right to free speech survives incarceration, for a narrower basis of decision is at hand. In the case of direct personal correspondence between inmates and those who have a particularized interest in communicating with them, mail censorship implicates' more than the right of prisoners.
Communication by letter is not accomplished by the act of writing words on paper. Rather, it is effected only when the letter is read by the addressee. Both parties to the correspondence have an interest in securing that result, and censorship of the communication between them necessarily impinges on the interest of each. Whatever the status of a prisoner’s claim to uncensored correspondence with an -outsider, it is plain that the latter’s interest is grounded in the First Amendment’s, guarantee of freedom of speech. And this does not depend .on whether the nonprisoner correspondent is the author or intended recipient of a particular letter, for the addressee as well as the sender of direct personal correspondence derives from the First and Fourteenth Amendments a protection against unjustified governmental interference with the intended communication. Lamont v. Postmaster General, 381 U. S. 301 (1965); accord, Kleindienst v. Mandel, 408 U. S. 753, 762-765 (1972); Martin v. City of Struthers, 319 U. S. 141, 143 (1943). We do not deal here with difficult questions of the so-called “right to hear” and third-party standing but with a particular means of communication ■ in which the interests of both parties.are inextricably meshed. The wife of a prison inmate who is not permitted to read all' that her husband wanted to say to her has suffered an abridgment of her interest in communicating with him as plain as that which results from censorship of her letter to him. In either event, censorship of prisoner mail works a consequential restriction on the First and Fourteenth Amendments rights of those who are not prisoners.
Accordingly, we reject any attempt to justify censorship of inmate correspondence merely by reference to Certain assumptions about the legal status of prisoners. Into this category of argument falls appellants’ contention that “an inmate’s rights with reference to social correspondence are something fundamentally different than those enjoyed by his free brother.” Brief for Appellants 19. This line of argument and the undemanding standard of review it is intended to support fail to recognize that the First Amendment liberties of free citizens are implicated in censorship of prisoner mail. We therefore turn for guidance, not to cases involving questions of “prisoners’ rights,” but to decisions of this Court dealing with the general problem of incidental restrictions on First Amendment liberties imposed in furtherance of legitimate governmental activities.
As the Court noted in Tinker v. Des Moines School District, 393 U. S. 503, 506 (1969), First Amendment guarantees must be “applied in light of the special characteristics of the . . . environment.” Tinker concerned the interplay between the right -to freedom of speech , of public high school students and “the need for affirming the comprehensive authority of the States and of school officials, consistent with fundamental constitutional safeguards, to prescribe and control conduct in the schools.” Id., at 507. In overruling a school regulation prohibiting .the wearing of antiwar armbands, the Court undertook a careful analysis of the legitimate requirements of orderly school administration in order to ensure that the students were afforded maximum freedom of speech consistent with those requirements. The same approach was followed in Healy v. James, 408 U. S. 169 (1972), where the Court considered the refusal of a state college to grant official recognition to a group of students who wished to organize a local chapter of the Students for a Democratic Society (SDS), a national student organization noted for political activism and campus disruption.. The Court found that neither the identification of the local student group with the national SDS, nor the purportedly dangerous political philosophy of the local group, nor the college administration’s fear of future, unspecified disruptive activities by the students could justify the incursion on the right of free association. ' The Court also found, however, that this right could be limited if necessary to prevent campus disruption, id., at 189-190, n. 20, and remanded the case for determination of whether the students had in fact refused to accept reasonable regulations governing student conduct.
In United States v. O’Brien, 391 U. S. 367 (1968), the Court dealt with incidental restrictions on free speech occasioned by the exercise of the governmental power to conscript men for military service. O’Brien had burned his Selective Service registration certificate on the steps of a courthouse in order to dramatize his opposition to the draft and to our country’s involvement in Vietnam. He was convicted of violating a provision of the Selective Service law that had recently been amended to prohibit knowing destruction or mutilation of registration certificates. O’Brien argued that the purpose and effect of the amendment were to abridge free expression and that the statutory provision was therefore unconstitutional, both as enacted and as applied to him. Although O’Brien’s activity involved “conduct” rather than pure “speech,” the Court did not define away the First Amendment concern, and neither did it rule that the presence- of a communicative intent necessarily rendered O’Brien’s actions -immune to governmental regulation. Instead, it enunciated the following four-part test:
“[A] government regulation is sufficiently justified .if.it is within the constitutional power of the Government; if it furthers an .important or substantial governmental interest; if the governmental interest is unrelated to the suppression,of free expression; and if the incidental restriction on alleged First Amendment freedoms is no greater than is essential to the furtherance of that interest/’ Id., at 377'.
Of course, none of these precedents directly, controls the instant case. In O’Brien the Court considered a federal statute which on its face prohibited certain conduct having no necessary connection with freedom of speech. This led the Court to differentiate between “speech” and “nonspeech” elements of a single course of conduct, a distinction that has little relevance here. Both Tinker and Heady concerned First and Fourteenth Amendment liberties in the context of state educational institutions, a circumstance involving rather different governmental interests than are at. stake here. In broader terms,' however, these precedents involved incidental restrictions on First Amendment liberties by governmental action in furtherance of legitimate and substantial state interest other than suppression of expression. In this sense these cases aré generally analogous to our present inquiry.
' The case at hand arises in the context of prisons. One of. the primary functions of government is the preservation of societal order through enforcement of the criminal íaw, and th.e maintenance of penal institutions is an essential part of that task. The identifiable governmental interests at stake in this task are the preservation of internal order and discipline, the maintenance of institutional security against escape or unauthorized entry, and the rehabilitation of the prisoners. While the weightof professional opinion, seems to be that inmate freedom to correspond with outsiders advances rather than retards the goal of rehabilitation, the legitimate governmental interest in the order and security of penal institutions justifies the imposition of certain restraints on inmate correspondence. Perhaps the most obvious example of justifiable censorship of prisoner mail would be refusal to send or deliver letters concerning escape plans or containing other information concerning proposed criminal activity, whether within or without the prison. Similarly, prison officials may properly refuse to transmit encoded messages. Other less obvious possibilities come to mind, but it is not our purpose to survey the range of circumstances in which particular restrictions on prisoner mail might be warranted by the legitimate demands of prison administration as they exist from time to time in the various kinds of ,penal institutions found in this country. Our. task is to determine the proper, standard for deciding whether a particular regulation or practice relating to inmate correspondence constitutes an impermissible restraint of First Amendment liberties.
Applying the teachings of our prior decisions to the instant context, we hold that censorship of prisoner mail is .justified if the following criteria are met. First, the regulation or practice in question must further an important or substantial governmental interest unrelated to the suppression of expression. Prison officials may not censor inmate correspondence simply to eliminate unflattering or unwelcome opinions or factually inaccurate statements. Rather, they must show that a regulation authorizing mail censorship furthers one or more of the substantial governmental interests of security, order, and rehabilitation. Second, the limitation of First Amendment freedoms must be no greater than is necessary or essential to the protection of the particular governmental interest involved. Thus a restriction on inmate correspondence that furthers an important or substantial interest of penal administration will nevertheless be invalid if its sweep is unnecessarily broad. This does not mean, of course, that, prison administrators may be required to show with certainty that adverse consequences would flow from the failure to censor a particular letter. Some latitude in anticipating the probable consequences of allowing certain speech in a prison environment is essential to the proper discharge of an administrator’s duty. But any regulation or practice that restricts inmate correspondence must be generally necessary to protect one or more of the legitimate governmental interests identified above.
c
On the basis of this standard, we affirm the judgment of the District Court. The regulations invalidated by that court authorized, inter alia, censorship of statements that “unduly complain” or “magnify grievances,” expression of “inflammatory political, racial, religious or other views,” and matter deemed “defamatory” or “otherwise inappropriate.” These regulations fairly invited prison officials and employees to apply their own personal prejudices and opinions as standards for prisoner mail censorship. Not surprisingly, some prison officials used the extraordinary latitude for discretion authorized by the regulations to suppress unwelcome criticism. For ex.ample, at one institution under the Department’s jurisdiction, the checklist used by the maiboom staff authorized rejection of letters “criticizing policy, rules or officials,” and the maiboom sergeant stated in a deposition that he would reject as “defamatory” letters “belittling staff or our judicial system or anything connected with Department of Corrections.” • Correspondence was also censored for “disrespectful comments,” “derogatory remarks,” and the like.
Appellants have failed to show that these broad restrictions on prisoner mail were in any way necessary to the furtherance of a governmental interest unrelated to the suppression of expression. Indeed, the heart of appellants’ position is not that the regulations are justified by a legitimate governmental interest but that they do not need to be. This misconception is not only stated affirmatively; it also• underlies appellants’ discussion of the particular regulations under attack. For example, appellants’ sole defense of the prohibition against matter that is “defamatory” or “otherwise inappropriate” is that ■it is “within the discretion of the prison administrators.” Brief for Appellants 21. Appellants contend that statements that “magnify grievances” or “unduly complain” are. censored “as a precaution against flash riots and in the' ' furtherance of inmate rehabilitatipn.” Id., at 22. But they do not suggest how the magnification of grievances or undue complaining,, which presumably. occurs in outgoing letters, could .possibly lead to flash riots, nor do they specify what contribution the-suppression of complaints makes to the rehabilitation of criminals. And appellants defend the ban against “inflammatory political, racial, religious or other views” on the ground that “[s]uch matter clearly presents a danger to prison security . . . Id., at 21. The regulation, however, is not narrowly drawn to reach only material that might be thought to encourage violence nor is its application limited to incoming letters. In short, the Department’s regulations authorized censorship of prisoner mail far broader than any legitimate interest of penal administration demands ¿nd were properly found invalid by the District Court.
D
We also agree with the District Court that the decision to censor or withhold délivery of a particular letter must be accompanied by minimum procedural safeguards. The interest of prisoners and their correspondents in uncensored communication by letter, grounded as it is in the First Amendment, is plainly a “liberty” interest within the meaning of the Fourteenth Amendment even' though qualified of necessity by the circumstance of imprisonment. As such, it-is protected from arbitrary governmental invasion. See Board of Regents v. Roth, 408 U. S. 564 (1972); Perry v. Sindermann, 408 U. S. 593 (1972). The District Court required that an inmate be notified of the rejection of a letter written by or addressed to him, that the author of that letter be given a reasonable opportunity to protest that decision, and that complaints be referred to a prison official other than the person who originally disapproved the correspondence. These requirements do not appear to be unduly burdensome, nor do appellants so contend. Accordingly, we affirm the judgment of the District Court with respect to the Department’s regulations relating to prisoner mail.
II
The District Court' also enjoined continued enforcement of Administrative Rule MV-IV-02, which provides in pertinent part:
“Investigators for an attorney-of-record will be confined-to not more than two. Such investigators must be licensed by the State or must be members of the State Bar. Designation must be made in writing by the Attorney.”
By restricting access to prisoners to members of the bar and licensed private investigators, this regulation imposed an absolute ban on the use by attorneys of law students and legal paraprofessionals to interview inmate clients. In fact, attorneys could not even, delegate to such persons the task of obtaining prisoners’ signatures on legal documents. The District Court reasoned that this rule constituted an unjustifiable restriction on the right of access to the courts. We agree.
The' constitutional guarantee of due process of law has as a corollary the requirement that prisoners be afforded access to the courts in order to challenge unlawful convictions and to seek redress for violations of their constitutional rights. This means that inmates must have a reasonable opportunity to seek and receive the assistance of attorneys. Regulations and practices that unjustifiably obstruct the availability of professional representation or other aspects of the right of access to the courts are invalid. Ex parte Hull, 312 U. S. 546 (1941).
The District Court found that the rule restricting attorney-client interviews to members of the bar and licensed private investigators inhibited adequate professional representation of indigent inmates. The remoteness of many California penal institutions makes a personal visit to an inmate client a time-consuming undertaking. The court reasoned that the ban against the use of law students or other paraprofessionals for attorney-client interviews would deter some lawyers from representing prisoners who could not afford to pay for their traveling time or that of licensed private investigators. And those lawyers who agreed to do so would waste time that might be employed more efficaciously in working, on the inmates’ legal problems. Allowing law students and paraprofessionals to interview inmates might well reduce the cost of legal representation for prisoners. The District Court therefore concluded that the régulation imposed a substantial burden on the right of access to the courts.
As the District Court recognized, this conclusion does not end the inquiry, for prison administrators are not required to adopt every proposal that may be thought to facilitate prisoner access to the courts. The extent to which that right is burdened by a particular regulation or practice must be weighed against the legitimate interests of penal administration, and the proper regard that judges should give to the expertise and discretionary authority of correctional officials. In this case the ban against the use of law students and other paraprofes-. sional personnel was absolute. Its prohibition was not limited to prospective interviewers who posed some color-able threat to security or to those inmates thought to be especially dangerous. Nor was it shown that a less restrictive regulation would unduly burden the administrative task of screening and monitoring visitors.
Appellants’ enforcement of the regulation in question also created an arbitrary distinction between law students employed by practicing attorneys, and those associated with law school programs providing legal assistance to prisoners. While the Department flatly prohibited interviews of any sort by law students working for attorneys, it freely allowed participants of a number of law school programs to enter the prisons and meet with inmates. These largely unsupervised students were admitted without any security check other than verification of their enrollment in a school program. Of course, the fact that appellants have allowed some persons to conduct attorney-client interviews with prisoners does not mean that they are required to admit others, but the arbitrariness of the distinction between the two categories of law students does reveal the absence of any real justification for the sweeping prohibition of Administrative Rule MV-IV-02. We cannot say that the District Court erred in invalidating this regulation.
This result is mandated by our decision in Johnson v. Avery, 393 U. S. 483 (1969). There the Court struck down a prison regulation prohibiting any inmate from advising or assisting another in the preparation of legal documents. Given the inadequacy of alternative sources of legal assistance, the rule had the effect of denying to illiterate or poorly educated inmates any opportunity to vindicate possibly valid constitutional claims;. The Court found that the regulation impermissibly burdened the right of access to the courts despite the not insignificant state interest in preventing the establishment of personal power structures by unscrupulous jailhouse lawyers and the attendant problems of prison discipline that follow. The countervailing state interest in Johnson is, if anything, more persuasive than any interest advanced by appellants in the instant case.
The judgment is
Affirmed.
Director’s Rule 2401 provided:
“The sending and receiving of mail is a privilege, not a right, and any violation of the rules governing mail privileges either by you or by your correspondents may cause suspension of the mail privileges.”
Director’s Rule 1201 provided:
“INMATE BEHAVIOR: Always conduct yourself in an orderly manner. Do not fight or take part in horseplay or physical encounters except as part of the regular athletic program. Do not agitate, unduly complain, magnify grievances, or behave in any way which might lead to violence.” ••
It is undisputed that the phrases “unduly complain” and "magnify grievances” were applied to personal correspondence.
Director’s Rule 1205 provided:
“The following is contraband:
“d. Any writings or voice recordings expressing inflammatory political, racial, religious or other views or beliefs when not in the immediate possession, of the originator, or when the originator’s possession is used to subvert prison discipline by display or circulation.”
Rule 1205 also provides that writings ’ “not defined as contraband under this rule, but which, if circulated among other inmates, would in the judgment of the warden or superintendent tend to subvert prison order, or discipline, may be placed in the inmate’s property, to which he shall have accfes under supervision.”
At the time of appellees’ amended complaint, Rule 2402 (8) included prohibitions against “prison gossip or discussion of other inmates.” Before the first opinion of the District Court, these provisions were deleted, and the phrase “contain foreign matter” was substituted in their stead.
In Baggett the Court considered the constitutionality of loyalty oaths required of certain state employees as a condition of employment.- For the purpose of applying the doctrine of abstention the Court distinguisherhbetween two kinds of vagueness attacks. Where the case turns on the-applicability of a state statute or regulation to a particular person of a defined course of conduct, resolution of the unsettled question of state law may eliminate any need for constitutional adjudication. 377 U. S., at 376-377. Abstention is therefore appropriate. Where, however, as in this case, the statute or regulation is challenged as vague because individuals to whom it plainly applies simply cannot understand what is required of them and do not wish to forswear all activity arguably within the scope of the vague terms, abstention is not required. Id., at 378. In such a case no single adjudication by a state court could eliminate the constitutional difficulty. Rather it would require “extensive adjudications, under the impact of a variety of factual situations,” to bring the challenged statute or regulation “within the bounds of permissible constitutional certainty.” Ibid!
Cal. Penal Code §2600 provides that “[a] sentence of imprisonment in. a state prison for. any term suspends all the civil rights of .the person so sentenced . . . ,” and it' allows for partial restoration of those rights by the California Adult Authority. The .statute then declares, in pertinent part:
“This section shall be construed so as not to deprive such person of the following civil rights, in accordance with the laws of this state:
“ (4) To purchase, receive, and read any and ah newspapers, periodicals, and books accepted for distribution by the United States Post Office. Pursuant to the provisions of this section, prison authorities shall have the authority- to exclude obscene publications or writings, and mail containing information concerning where, how, or from whom such matter may be obtained; and any-matter of a character tending to incite murder, arson, riot, violent racism, or any other form of violence; and any matter concerning gambling or a lottery... .”
Appellants argue that the correctness of their abstention argument is demonstrated by the District Court’s disposition of Count II of appellees’ amended complaint. In Count II appellees challenged the mail regulations on the ground that their application to correspondence between inmates and attorneys contravened the Sixth and Fourteenth Amendments. Appellees later discovered that, a case was then pending before the Supreme Court of California in which the application of the prison rules to attorney-client mail was being attacked under subsection (2) of §2600, which provides:
“This section shall be construed so as not to deprive [an inmate] of the following civil rights, in accordance with the laws of this state:
“(2) To correspond, confidentially, with any member of the State Bar, or holder of public office, provided that the prison authorities may open and inspect such mail to search for contraband.”
The District Court did stay its hand, and the subsequent decision in In re Jordan, 7 Cal. 3d 930, 600 P. 2d 873 (1972) (holding that § 2600 (2) barred censorship of attorney-client correspondence), rendered Count II moot. This disposition of the claim relating to attorney-client mail is, however, quite irrelevant to appellants’ contention that the District Court should have abstained from deciding whether the mail regulations are constitutional as they apply to personal mail. Subsection (2) of § 2600 speaks directly to the issue of censorship of attorney-client mail but says nothing at all about personal correspondence, and appellants have not informed us of any. challenge to the censorship of ¡personal mail presently pending in the state coufts.
See Note, Decency and Fairness: An Emerging Judicial Role in Prison Reform, 57 Va. L. Rev. 841, 842-844 (1971).
They are also ill suited to act as the front-line agencies for the consideration and resolution of the infinite variety of prisoner complaints.- Moreover; the capacity of our criminal justice system to deal fairly -and fully with legitimate claims will .be impaired by a burgeoning increase of frivolous prisoner complaints. As one means of alleviating this problem, The Chief Justice has suggested that federal and state authorities explore the possibility of instituting internal administrative procedures for disposition of inmate grievances. 59 A. B. A. J. 1125, 1128 (1973). At the Third Circuit Judicial Conference meeting of October 15,1973, at which the problem was addressed, suggestions also included (i) abstention where appropriate to avoid needless consideration of federal constitutional issues; and (ii) the. use of federal magistrates who could be sent into penal institutions to conduct hearings and make findings of fact. We emphasize that- we express no view as to the merit or validity of any particular proposal, but we do think it appropriate to indicate the necessity of prompt and thoughtful consideration by responsible federal and state authorities, of this worsening situation.
Specifically, the District Court held that the regulations authorized restraint of lawful expression. in. violation of the First and Fourteenth Amendments, that they were fatally vague,-and that they failed to provide minimum procedural safeguards against arbitrary- - or erroneous censorship of protected speech.
Different considerations may come into play in the case of mass mailings. No such issue-is raised on these facts, and we intimate no view as.to its proper resolution.
We need not and do not address in this case the validity of a temporary prohibition of an inmate’s personal correspondence as a disciplinary sanction (usually as part of the regimen of solitary-confinement) for violation of prison rules.
Policy Statement 7300.1A of the Federal Bureau of Prisons sets forth the Bureau’s position regarding general correspondence by the prisoners entrusted to its custody: It authorizes all federal institutions to adopt open correspondence regulations and recognizes that any need for restrictions arises primarily from considerations of order and security rather than rehabilitation:'
“Constructive, wholesome contact with the community is a valuable therapeutic tool in the overall correctional process. At the same time, basic controls need to b.e exercised in order to protect the security of the institution, individuals and/or the community-atlárge.”
The recommended policy guideline adopted by the Association of State Correctional Administrators on August 23, 1972, echoes the view that personal correspondence by prison inmates is a generally wholesome activity:
“Correspondence with members of an inmate’s family, close friends, associates and organizations is beneficial to the morale of all confined persons and may form the basis for good adjustment in the institution and the community.”
While not necessarily controlling, the policies followed at other well-run institutions would be relevant to a determination of the need for a particular type of restriction. For example, Policy Statement 7300.1A of the Federal Bureau 'of Prisons specifies that personal. correspondence of inmates in federal prisons, whether incoming ór outgoing, may be rejected for inclusion of the following kinds of material:
“(1) Any material which might violate postal regulations, i. e., threats, blackmail, contraband or which indicate plots of escape.
“(2) Discussions of criminal activities.
“(3) NÓ inmate may be permitted to direct his business while he is in confinement. This does not go to the point of prohibiting correspondence necessary to enable the inmate to protect the property and funds that were legitimately- his . at the time he was committed 1b the institution. Thus, an inmate could correspond about refinancing a mortgage on his home or sign insurance papers, but he could not operate a mortgage or insurance -business while in the institution.
“ (4) Letters containing codes or other obvious attempts to circumvent these regulations will be subject to rejection.
“(5) Insofar as possible, all letters should be written in English, but every effort should be made to accommodate those inmates who are unable to write in English or whose correspondents would be unable to understand a letter written in English. The criminal sophistication of the inmate, the relationship of the inmate and the correspondent are factors to be considered in deciding whether correspondence in a foreign language should be permitted.”
After the District Court held the original regulations uncorfstitutional, revised’ regulations were developed by appellants and approved by the court. Supp to App. 194-200, 211. Although these regulations are not before us for review, tk / are indicative of one solution to the problem. The following provisions govern censorship of prisoner correspondence:
‘-‘CORRESPONDENCE
“A. Criteria- for Disapproval of Inmate Mail
“1. Outgoing Letters'
“Outgoing letters -from inmates of institutions not’ requiring approval of inmate correspondents may be disapproved for mailing only if the content falls as a whole or. in significant part into any of the following categories:
“a. The letter contains threats of physical-harm against any person or threats of criminal activity.
“b. The letter threatens blackmail \ . . or extortion. '
“c. The letter concerns sending contraband in or out of the institutions.
“d. The letter concerns plans to escape.
“e. The letter concerns plans for activities in violation of institutional rules. •
“f. The letter, concerns plans for criminal activity.
“g. The letter is in code and its contents are not understood by reader.
“h. The letter solicits gifts of goods or money from other than family.
“i. The letter is obscene.
“j. The letter contains information which if communicated would create a clear and present danger of violence and physical harm to. a human being. Outgoing letters from inmates of institutions requiring approval of correspondents may.be disapproved only for the foregoing reasons, or if the addressee is not an approved correspondent of the inmate and special permission for the letter has not been obtained.
“2. Incoming Letters
“Incoming letters to inmates may be disapproved for receipt only for the foregoing reasons, or if the letter contains material which would cause severe psychiatric or emotional disturbance to .the inmate, or in an institution requiring approval of -inmate correspondents, is from-a person who is not an approved correspondent and special permission for the letter has not been obtained.
“3. Limitations
“Disapproval of a letter on the basis that it would cause severe psyehiatpe or einptional disturbance to the inmate may be done only by- a member of the institution’s psychiatric staff after consultation • with the inmate’s caseworker.. The staff member may disapprove the letter only, upon a finding that receipt of the letter would be likely to affect prison discipline or security or the inmate’s rehabilitation, and that there is no reasonable alternative means -of ameliorating the disturbance of the inmate. Outgoing or incoming letters may hot be rejected solely upon the ground that they contain criticism of the institution or its personnel.
“4. Notice of Disapproved of Inmate Mail
“a. When an inmate is prohibited from sending a letter, the letter and a written and signed notice stating one of the authorized reasons for disapproval and indicating the portion or portions of the letter causing disapproval will be given the inmate.
• “b. When an inmate is prohibited from receiving a letter, the letter and a written and signed notice stating one of the authorized reasons for disapproval and indicating the portion or portions of the letter causing disapproval will be given the sender. The inmate will be given notice in writing that a letter has been rejected, indicating one of the authorized reasons and the sender’s name.
“c. Material from correspondence which violates the provisions of paragraph one may be placed in an inmate’s file. Other material from correspondence may not be placed in an inmate’s file unless it has been lawfully observed by an employee of the department and is relevant to assessment of the inmate’s rehabilitation. However, such material which is not in violation of the provisions of paragraph one may not be thé subject of disciplinary proceedings against an inmate. An inmate shall be notified in writing of the placing of any material from correspondence in his file.
“d. Administrative review of. inmate grievances regarding the application of this rule may be had in accordance with paragraph DP-1003 of these rules.”
Apparently, the Department’s policy regarding law school programs providing legal assistance to inmates, though well established, is not embodied in any regulation. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
116
] |
WATT, SECRETARY OF THE INTERIOR, et al. v. WESTERN NUCLEAR, INC.
No. 81-1686.
Argued January 17, 1983
Decided June 6, 1983
Marshall, J., delivered the opinion of the Court, in which Burger, C. J., and Brennan, White, and Blackmun, JJ., joined. Powell, J., filed a dissenting opinion, in which Rehnquist, Stevens, and O’Connor, JJ., joined, post, p. 60. Stevens, J., filed a dissenting opinion, post, p. 72.
John H. Garvey argued the cause for petitioners. With him on the briefs were Assistant Attorney General Dinkins, Deputy Solicitor General Claiborne, and Robert L. Klarquist.
Harley W. Shaver argued the cause for respondent. With him on the brief was John H. Licht.
Briefs of amici curiae urging affirmance were filed by Glenn Parker and Steven F. Freudenthal, Attorney General of Wyoming, for the Wyoming Stock Brokers Association et al; and by Thomas E. Meachum and Edward Gould Burton for Eklutna, Inc.
Justice Marshall
delivered the opinion of the Court.
The Stock-Raising Homestead Act of 1916, the last of the great Homestead Acts, provided for the settlement of homesteads on lands the surface of which was “chiefly valuable for grazing and raising forage crops” and “not susceptible of irrigation from any known source of water supply.” 43 U. S. C. § 292. Congress reserved to the United States title to “all the coal and other minerals” in lands patented under the Act. 43 U. S. C. §299. The question presented by this case is whether gravel found on lands patented under the Act is a mineral reserved to the United States.
The Stock-Raising Homestead Act of 1916 (SRHA), 39 Stat. 862, 43 U. S. C. §291 et seq., permitted any person qualified to acquire land under the general homestead laws, Act of May 20, 1862, 12 Stat. 392, as amended, 43 U. S. C. §161 et seq., to make “a stock-raising homestead entry” on “unappropriated, unreserved public lands . . . designated by the Secretary of the Interior as ‘stock-raising lands.’” 43 U. S. C. §291. The Secretary of the Interior was authorized to designate as stockraising lands only
“lands the surface of which is, in his opinion, chiefly valuable for grazing and raising forage crops, do not contain merchantable timber, are not susceptible of irrigation from any known source of water supply, and are of such character that six hundred and forty acres are reasonably required for the support of a family.” 43 U. S. C. §292.
To obtain a patent, an entryman was required to reside on the land for three years, 43 U. S. C. § 293, incorporating by reference 37 Stat. 123, ch. 153, 43 U. S. C. §164, and'“to make permanent improvements upon the land . . . tending to increase the value of the [land] for stock-raising purposes of the value of not less than $1.25 per acre.” 43 U. S. C. § 293.
Section 9 of the Act, the provision at issue in this case, stated that “[a]ll entries made and patents issued . . . shall be subject to and contain a reservation to the United States of all the coal and other minerals in the lands so entered and patented, together with the right to prospect for, mine, and remove the same.” 39 Stat. 864, as amended, 43 U. S. C. § 299. Section 9 further provided that “[t]he coal and other mineral deposits in such lands shall be subject to disposal by the United States in accordance with the provisions of the coal and mineral land laws in force at the time of such disposal.”
B
On February 4, 1926, the United States conveyed a tract of land near Jeffrey City, Wyo., to respondent’s predecessor-in-interest. The land was conveyed by Patent No. 974013 issued pursuant to the SRHA. As required by §9 of the Act, 43 U. S. C. §299, the patent reserved to the United States “all the coal and other minerals” in the land.
In March 1976 respondent Western Nuclear, Inc., acquired a fee interest in a portion of the land covered by the 1926 patent. Western Nuclear is a mining company that has been involved in the mining and milling of uranium ore in and around Jeffrey City since the early 1950’s. In its commercial operations Western Nuclear uses gravel for such purposes as paving and surfacing roads and shoring the shaft of its uranium mine. In view of the expense of having gravel hauled in from other towns, the company decided that it would be economical to obtain a local source of the material, and it acquired the land in question so that it could extract gravel from an open pit on the premises.
After acquiring the land, respondent obtained from the Wyoming Department of Environmental Quality, a state agency, a permit authorizing it to extract gravel from the pit located on the land. Respondent proceeded to remove some 43,000 cubic yards of gravel. It used most of this gravel for paving streets and pouring sidewalks in nearby Jeffrey City, a company town where respondent’s mill and mine workers lived.
On November 3,1975, the Wyoming State Office of the Bureau of Land Management (BLM) served Western Nuclear with a notice that the extraction and removal of the gravel constituted a trespass against the United States in violation of 43 CFR §9239.0-7 (1975), current version at 43 CFR §9239.0-7 (1982), a regulation promulgated by the Department of the Interior under the Materials Act of 1947, 61 Stat. 681, as amended by the Surface Resources Act of 1955, 69 Stat. 367, 30 U. S. C. §§601-615. The regulation provides that “[t]he extraction, severance, injury, or removal of timber or mineral materials from public lands under the jurisdiction of the Department of the Interior, except when authorized by law and the regulations of the Department, is an act of trespass.”
The BLM’s appraisal report described the gravel deposit as follows:
“The deposit located on the property is an alluvial gravel with 6.4 acres of the 14 acre parcel mined for gravel. . . . There are 6-12 inches of overburden on the site .... It is estimated that the deposit thickness will average 10 feet or more in thickness.” 85 I. D. 129, 131 (1978).
In a technical analysis accompanying the appraisal report, geologist William D. Holsheimer observed that “[t]he gravel is overlain by a soil cover of fairly well developed loamy sand, some 12-18 inches in thickness,” and that “[t]here is a relatively good vegetative cover, consisting mainly of sagebrush, and an understory of various native grasses.” Id., at 132. The appraisal report concluded that “the highest and best use of the property is for a mineral material (gravel) site.” Id., at 131.
After a hearing, the BLM determined that Western Nuclear had committed an unintentional trespass. Using a royalty rate of 300 per cubic yard, the BLM ruled that Western Nuclear was liable to the United States for $13,000 in damages for the gravel removed from the site. On appeal to the Interior Board of Land Appeals (IBLA), the IBLA affirmed the ruling that Western Nuclear had committed a trespass, holding that “gravel in a valuable deposit is a mineral reserved to the United States in patents issued under the Stock-Raising Homestead Act.” Id., at 139.
Western Nuclear then filed suit in the United States District Court for the District of Wyoming, seeking review of the Board’s decision pursuant to the Administrative Procedure Act, 5 U. S. C. §701 et seq. The District Court affirmed the ruling that the mineral reservation in the SRHA encompasses gravel. Western Nuclear, Inc. v. Andrus, 475 F. Supp. 654 (1979). Recognizing that “the term ‘mineral’ does not have a closed, precise meaning,” id., at 662, the District Court concluded that the Government’s position is supported by the principle that public land grants are to be narrowly construed, ibid., and by “the legislative history, contemporaneous definitions, and court decisions,” id., at 663.
Respondent appealed to the Court of Appeals for the Tenth Circuit. That court reversed, holding that the gravel extracted by Western Nuclear did not constitute a mineral reserved to the United States under the SRHA. Western Nuclear, Inc. v. Andrus, 664 F. 2d 234 (1981). In reaching this conclusion, the Tenth Circuit relied heavily on a ruling made by the Secretary of the Interior prior to the enactment of the SRHA that land containing valuable deposits of gravel did not constitute “mineral land” beyond the reach of the homestead laws. Id., at 240. The court also relied on an analogy to “ordinary rocks and stones,” id., at 242, which it said cannot be reserved minerals, lest patentees be left with “only the dirt, and little or nothing more.” Ibid. The court reasoned that “if ordinary rocks are not reserved minerals, it follows that gravel, a form of fragmented rock, also is not a reserved mineral.” Ibid.
In view of the importance of the case to the administration of the more than 33 million acres of land patented under the SRHA, we granted certiorari. 456 U. S. 988 (1982). We now reverse.
II
As this Court observed in a case decided before the SRHA was enacted, the word “minerals” is “used in so many senses, dependent upon the context, that the ordinary definitions of the dictionary throw but little light upon its signification in a given case.” Northern Pacific R. Co. v. Soderberg, 188 U. S. 526, 530 (1903). In the broad sense of the word, there is no doubt that gravel is a mineral, for it is plainly not animal or vegetable. But “the scientific division of all matter into the animal, vegetable or mineral kingdom would be absurd as applied to a grant of lands, since all lands belong to the mineral kingdom.” Ibid. While it may be necessary that a substance be inorganic to qualify as a mineral under the SRHA, it cannot be sufficient. If all lands were considered “minerals” under the SRHA, the owner of the surface estate would be left with nothing.
Although the word “minerals” in the SRHA therefore cannot be understood to include all inorganic substances, gravel would also be included under certain narrower definitions of the word. For example, if the term “minerals” were understood in “its ordinary and common meaning [as] a comprehensive term including every description of stone and rock deposit, whether containing metallic or non-metallic substances,” Waugh v. Thompson Land & Coal Co., 103 W. Va. 567, 571, 137 S. E. 895, 897 (1927); see, e. g., Board of County Comm’rs v. Good, 44 N. M. 495, 498, 105 P. 2d 470, 472 (1940); White v. Miller, 200 N. Y. 29, 38-39, 92 N. E. 1065, 1068 (1910), gravel would be included. If, however, the word “minerals” were understood to include only inorganic substances having a definite chemical composition, see, e. g., Ozark Chemical Co. v. Jones, 125 F. 2d 1, 2 (CA10 1941), cert. denied, 316 U. S. 695 (1942); Lillington Stone Co. v. Maxwell, 203 N. C. 151, 152, 165 S. E. 351, 352 (1932); United States v. Aitken, 25 Philippine 7, 14 (1913), gravel would not be included.
The various definitions of the term “minerals” serve only to exclude substances that are not minerals under any common definition of that word. Cf. United States v. Toole, 224 F. Supp. 440 (Mont. 1963) (deposits of peat and peat moss, substances which are high in organic content, do not constitute mineral deposits for purposes of the general mining laws). For a substance to be a mineral reserved under the SRHA, it must be not only a mineral within one or more familiar definitions of that term, as is gravel, but also the type of mineral that Congress intended to reserve to the United States in lands patented under the SRHA. Cf. Andrus v. Charlestone Stone Products Co., 436 U. S. 604, 611 (1978).
The legal understanding of the term “minerals” prevailing in 1916 does not indicate whether Congress intended the mineral reservation in the SRHA to encompass gravel. On the one hand, in Northern Pacific R. Co. v. Soderberg, supra, this Court had quoted with approval a statement in an English case that “ ‘everything except the mere surface, which is used for agricultural purposes; anything beyond that which is useful for any purpose whatever, whether it is gravel, marble, fire clay, or the like, comes within the word “mineral” when there is a reservation of the mines and minerals from a grant of land.’” 188 U. S., at 536 (emphasis added), quoting Midland R. Co. v. Checkley, L. R. 4 Eq. 19, 25 (1867). Soderberg concerned the proper classification of property chiefly valuable for granite quarries under an 1864 statute which granted certain property to railroads but exempted “mineral lands.” The Court held that the property fell within the exemption, concluding that “mineral lands include not merely metalliferous lands, but all such as are chiefly valuable for their deposits of a mineral character, which are useful in the arts or valuable for purposes of manufacture.” 188 U. S., at 536-537.
On the other hand, in 1910 the Secretary of the Interior rejected an attempt to cancel a homestead entry made on land alleged to be chiefly valuable for the gravel and sand located thereon. Zimmerman v. Brunson, 39 L. D. 310, overruled, Layman v. Ellis, 52 L. D. 714 (1929). Zimmerman claimed that gravel and sand found on the property could be used for building purposes and that the property therefore constituted mineral land, not homestead land. In refusing to cancel Brunson’s homestead entry, the Secretary explained that “deposits of sand and gravel occur with considerable frequency in the public domain.” 39 L. D., at 312. He concluded that land containing deposits of gravel and sand useful for building purposes was not mineral land beyond the reach of the homestead laws, except in cases in which the deposits “possess a peculiar property or characteristic giving them a special value.” Ibid.
Respondent errs in relying on Zimmerman as evidence that Congress could not have intended the term “minerals” to encompass gravel. Although the legal understanding of a word prevailing at the time it is included in a statute is a relevant factor to consider in determining the meaning that the legislature ascribed to the word, we do not see how any inference can be drawn that the 64th Congress understood the term “minerals” to exclude gravel. It is most unlikely that many Members of Congress were aware of the ruling in Zimmerman, which was never tested in the courts and was not mentioned in the Reports or debates on the SRHA. Cf. Helvering v. New York Trust Co., 292 U. S. 455, 468 (1934). Even if Congress had been aware oí Zimmerman, there would be no reason to conclude that it approved of the Secretary’s ruling in that case rather than this Court’s opinion in Soder-berg, which adopted a broad definition of the term “mineral” and quoted with approval a statement that gravel is a mineral.
hH h-1
Although neither the dictionary nor the legal understanding of the term “minerals” that prevailed in 1916 sheds much light on the question before us, the purposes of the SRHA strongly support the Government’s contention that the mineral reservation in the Act includes gravel. As explained below, Congress’ underlying purpose in severing the surface estate from the mineral estate was to facilitate the concurrent development of both surface and subsurface resources. While Congress expected that homesteaders would use the surface of SRHA lands for stockraising and raising crops, it sought to ensure that valuable subsurface resources would remain subject to disposition by the United States, under the general mining laws or otherwise, to persons interested in exploiting them. It did not wish to entrust the development of subsurface resources to ranchers and farmers. Since Congress could not have expected that stockraising and raising crops would entail the extraction of gravel deposits from the land, the congressional purpose of facilitating the concurrent development of both surface and subsurface resources is best served by construing the mineral reservation to encompass gravel.
A
The SRHA was the most important of several federal land-grant statutes enacted in the early 1900’s that reserved minerals to the United States rather than classifying lands as mineral or nonmineral. Under the old system of land classification, the disposition of land owned by the United States depended upon whether it was classified as mineral land or nonmineral land, and title to the entire land was disposed of on the basis of the classification. This system of land classification encouraged particular uses of entire tracts of land depending upon their classification as mineral or nonmineral. With respect to land deemed mineral in character, the mining laws provided incentives for the discovery and exploitation of minerals, but the land could not be disposed of under the major land-grant statutes. With respect to land deemed nonmineral in character, the land-grant statutes provided incentives for parties who wished to use the land for the purposes specified in those statutes, but the land was beyond the reach of the mining laws and the incentives for exploration and development that they provided.
For a number of reasons, the system of land classification came to be viewed as a poor means of ensuring the optimal development of the Nation’s mineral resources, and after the turn of the century a movement arose to replace it with a system of mineral reservation. In 1906 President Theodore Roosevelt withdrew approximately 64 million acres of lands thought to contain coal from all forms of entry, citing the prevalence of land fraud and the need to dispose of coal “under conditions which would inure to the benefit of the public as a whole.” 41 Cong. Rec. 2615 (1907). Secretary of the Interior Garfield reported to the President that “the best possible method ... is for the Government to retain the title to the coal,” explaining that “[s]uch a method permits the separation of the surface from the coal and the unhampered use of the surface for purposes to which it may be adapted.” Report of the Secretary of the Interior 15 (1907), H. R. Doc. No. 5, 60th Cong., 1st Sess., 15 (1907). President Roosevelt subsequently urged Congress that “[r]ights to the surface of the public land ... be separated from rights to forests upon it and to minerals beneath it, and these should be subject to separate disposal.” Special Message to Congress, Jan. 22, 1909, 15 Messages and Papers of the Presidents 7266.
Over the next several years Congress responded by enacting statutes that reserved specifically identified minerals to the United States, and in 1916 the shift from land classification to mineral reservation culminated with the enactment of the SRHA. Unlike the preceding statutes containing mineral reservations, the SRHA was not limited to lands classified as mineral in character, and it did not reserve only specifically identified minerals. The SRHA applied to all lands the surface of which the Secretary of the Interior deemed to be “chiefly valuable for grazing and raising forage crops,” 43 U. S. C. § 292, and reserved all the minerals in those lands to the United States.
Congress’ purpose in severing the surface estate from the mineral estate was to encourage the concurrent development of both the surface and subsurface of SRHA lands. The Act was designed to supply “a method for the joint use of the surface of the land by the entryman of the surface thereof and the person who shall acquire from the United States the right to prospect, enter, extract and remove all minerals that may underlie such lands.” H. R. Rep. No. 35, 64th Cong., 1st Sess., 4, 18 (1916) (emphasis added) (hereafter H. R. Rep. No. 35). The Department of the Interior had advised Congress that the law would “induce the entry of lands in those mountainous regions where deposits of mineral are known to exist or are likely to be found,” and that the mineral reservation was necessary because the issuance of “unconditional patents for these comparatively large entries under the homestead laws might withdraw immense areas from prospecting and mineral development.” Letter from First Assistant Secretary of the Interior to Chairman of the House Committee on the Public Lands, Dec. 15, 1915, reprinted in H. R. Rep. No. 35, at 5.
To preserve incentives for the discovery and exploitation of minerals in SRHA lands, Congress reserved “all the coal and other minerals” to the United States and provided that “coal and other mineral deposits . .. shall be subject to disposal by the United States in accordance with the provisions of the coal and mineral land laws in force at the time of such disposal.” 43 U. S. C. §299. The general mining laws were the most important of the “mineral land laws” in existence when the SRHA was enacted. Act of July 4, 1866, 14 Stat. 85; Act of May 10, 1872, 17 Stat. 91, current version at 30 U. S. C. § 21 et seq. Those laws, which have remained basically unchanged through the present day, provide an incentive for individuals to locate claims to federal land containing “valuable mineral deposits.” 30 U. S. C. §22. After a claim has been located, the entryman obtains from the United States the right to exclusive possession of “all the surface included within the lines of [his] locatio[n]” and the right to extract minerals lying beneath the surface. 30 U. S. C. §26. Congress plainly contemplated that mineral deposits on SRHA lands would be subject to location under the mining laws, and the Department of the Interior has consistently permitted prospectors to make entries under the mining laws on SRHA lands.
B
Since Congress intended to facilitate development of both surface and subsurface resources, the determination of whether a particular substance is included in the surface estate or the mineral estate should be made in light of the use of the surface estate that Congress contemplated. As the Court of Appeals for the Ninth Circuit noted in United States v. Union Oil Co. of California, 549 F. 2d 1271, 1274, cert. denied, 434 U. S. 930 (1977), “[t]he agricultural purpose indicates the nature of the grant Congress intended to provide homesteaders via the Act.” See Pacific Power & Light Co., 45 I. B. L. A. 127, 134 (1980) (“When there is a dispute as to whether a particular mineral resource is included in the [SRHA] reservation, it is helpful to consider the manner in which the material is extracted and used”); 1 American Law of Mining § 3.26 (1982) (“The reservation of minerals to the United States [in the SRHA] should ... be construed by considering the purposes both of the grant and of the reservation in terms of the use intended”). Cf. United States v. Isbell Construction Co., 78 I. D. 385, 390 (1971) (holding that gravel is a mineral reserved to the United States under statute authorizing the grant to States of “grazing district land”) (“The reservation of minerals to the United States should be construed by considering the purpose of the grant ... in terms of the use intended”).
Congress plainly expected that the surface of SRHA lands would be used for stockraising and raising crops. This understanding is evident from the title of the Act, from the express provision limiting the Act to lands the surface of which was found by the Secretary of the Interior to be “chiefly valuable for grazing and raising forage crops” and “of such a character that six hundred and forty acres are reasonably required for the support of a family,” 43 U. S. C. §292, and from numerous other provisions in the Act. See, e. g., 43 U. S. C. § 293 (patent can be acquired only if the entryman makes “permanent improvements upon the land entered . . . tending to increase the value of the [land] for stock-raising purposes of the value of not less than $1.25 per acre”); 43 U. S. C. §299 (prospector liable to entryman or patentee for damages to crops caused by prospecting).
Given Congress’ understanding that the surface of SRHA lands would be used for ranching and farming, we interpret the mineral reservation in the Act to include substances that are mineral in character (i. e., that are inorganic), that can be removed from the soil, that can be used for commercial purposes, and that there is no reason to suppose were intended to be included in the surface estate. See 1 American Law of Mining, swpra, § 3.26 (“A reservation of minerals should be considered to sever from the surface all mineral substances which can be taken from the soil and which have a separate value”). Cf. Northern Pacific R. Co. v. Soderberg, 188 U. S., at 536-537 (“mineral lands include not merely metallif-erous lands, but all such as are chiefly valuable for their deposits of a mineral character, which are useful in the arts or valuable for purposes of manufacture”); United States v. Isbell Construction Co., supra, at 390 (“the reservation of minerals should be considered to sever from the surface all mineral substances which can be taken from the soil and have a separate value”) (emphasis in original). This interpretation of the mineral reservation best serves the congressional purpose of encouraging the concurrent development of both surface and subsurface resources, for ranching and farming do not ordinarily entail the extraction of mineral substances that can be taken from the soil and that have separate value.
Whatever the precise scope of the mineral reservation may be, we are convinced that it includes gravel. Like other minerals, gravel is inorganic. Moreover, as the Department of the Interior explained in 1929 when it overruled Zimmerman v. Brunson, 39 L. D. 310 (1910), and held that gravel deposits were subject to location under the mining laws,
“[w]hile the distinguishing special characteristics of gravel are purely physical, notably, small bulk, rounded surfaces, hardness, these characteristics render gravel readily distinguishable by any one from other rock and fragments of rock and are the very characteristics or properties that long have been recognized as imparting to it utility and value in its natural state.” Layman v. Ellis, 52 L. D., at 720.
Insofar as the purposes of the SRHA are concerned, it is irrelevant that gravel is not metalliferous and does not have a definite chemical composition. What is significant is that gravel can be taken from the soil and used for commercial purposes.
Congress certainly could not have expected that homesteaders whose “experience and efforts [were] in the line of stock raising and farming,” Letter from First Assistant Secretary of the Interior to Chairman of the House Committee on the Public Lands (Dec. 15, 1915), reprinted in H. R. Rep. No. 35, at 5, would have the interest in extracting deposits of gravel from SRHA lands that others might have. It had been informed that “[t]he farmer-stockman is not seeking and does not desire the minerals,” ibid., and it would have had no more reason to think that he would be interested in extracting gravel than that he would be interested in extracting coal. Stockraising and raising crops do not ordinarily involve the extraction of gravel from a gravel pit.
If we were to interpret the SRHA to convey gravel deposits to the farmers and stockmen who made entries under the Act, we would in effect be saying that Congress intended to make the exploitation of such deposits dependent solely upon the initiative of persons whose interests were known to lie elsewhere. In resolving the ambiguity in the language of the SRHA, we decline to construe that language so as to produce a result at odds with the purposes underlying the statute. Instead, we interpret the language of the statute in a way that will further Congress’ overriding objective of facilitating the concurrent development of surface and subsurface resources. See, e. g., Mastro Plastics Corp. v. NLRB, 350 U. S. 270, 285 (1956); SEC v. C. M. Joiner Leasing Corp., 320 U. S. 344, 350-351 (1943); Griffiths v. Commissioner, 308 U. S. 355, 358 (1939).
I — I <1
Our conclusion that gravel is a mineral for purposes of the SRHA is supported by the treatment of gravel under other federal statutes concerning minerals. Although the question has not often arisen, gravel has been treated as a mineral under two federal land-grant statutes that, like the SRHA, reserve all minerals to the United States. In construing a statute which allotted certain Indian lands but reserved the minerals therein to the Indians, the Department of the Interior has ruled that gravel is a mineral. Dept, of Interior, Division of Public Lands, Solicitor’s Opinion, M-36379 (Oct. 3, 1956). Similarly, the Interior Board of Land Appeals has held that gravel is reserved to the United States under a statute authorizing grants to States of “grazing district land.” United States v. Isbell Construction Co., 781. D., at 394-396.
It is also highly pertinent that federal administrative and judicial decisions over the past half-century have consistently recognized that gravel deposits could be located under the general mining laws until common varieties of gravel were prospectively removed from the purview of those laws by the Surface Resources Act of 1955, 69 Stat. 368, § 3, 30 U. S. C. §611. See Edwards v. Kleppe, 588 F. 2d 671, 673 (CA9 1978); Charlestone Stone Products Co. v. Andrus, 553 F. 2d 1209, 1214-1215 (CA9 1977), holding as to a separate mining claim rev’d, 436 U. S. 604 (1978); Melluzzo v. Morton, 534 F. 2d 860, 862-865 (CA9 1976); Clear Gravel Enterprises, Inc. v. Keil, 505 F. 2d 180, 181 (CA9 1974) (per curiam); Verrue v. United States, 457 F. 2d 1202, 1203-1204 (CA9 1972); Barrows v. Hickel, 447 F. 2d 80, 82-83 (CA9 1971); United States v. Schaub, 163 F. Supp. 875, 877-878 (Alaska 1958); Taking of Sand and Gravel from Public Lands for Federal Aid Highways, 541. D. 294, 295-296 (1933); Layman v. Ellis, 52 L. D., at 718-721, overruling Zimmerman v. Brunson, 39 L. D. 310 (1910). Cf. United States v. Barngrover, 57 I. D. 533 (1942) (clay and silt deposits); Stephen E. Day, Jr., 50 L. D. 489 (1924) (trap rock). While this Court has never had occasion to decide the appropriate treatment of gravel under the mining laws, the Court did note in United States v. Coleman, 390 U. S. 599, 604 (1968), that gravel deposits had “served as a basis for claims to land patents” under the mining laws prior to the enactment of the Surface Resources Act of 1955.
The treatment of gravel as a mineral under the general mining laws suggests that gravel should be similarly treated under the SRHA, for Congress clearly contemplated that mineral deposits in SRHA lands would be subject to location under the mining laws, and the applicable regulations have consistently permitted such location. Supra, at 51. Simply as a matter of consistent interpretation of statutes concerning the same subject matter, if gravel deposits constituted “mineral deposits” that could be located under the mining laws, then presumptively gravel should constitute a “mineral” reserved to the United States under the SRHA. If gravel were deemed to be part of the surface estate of lands patented under the SRHA, gravel deposits on SRHA lands obviously would not have been locatable, whereas grave/ deposits on other lands would have been locatable. There i§ no indication that Congress intended the mineral reservation in the SRHA to be narrower in scope than the mining laws.
V
Finally, the conclusion that gravel is a mineral reserved to the United States in lands patented under the SRHA is buttressed by “the established rule that land grants are construed favorably to the Government, that nothing passes except what is conveyed in clear language, and that if there are doubts they are resolved for the Government, not against it.” United States v. Union Pacific R. Co., 353 U. S. 112, 116 (1957). See Andrus v. Charlestone Stone Products Co., 436 U. S., at 617; Caldwell v. United States, 250 U. S. 14, 20-21 (1919); Northern Pacific R. Co. v. Soderberg, 188 U. S., at 534. In the present case this principle applies with particular force, because the legislative history of the SRHA reveals Congress’ understanding that the mineral reservation would “limit the operation of this bill strictly to the surface of the lands.” H. R. Rep. No. 35, at 18 (emphasis added). See also 53 Cong. Rec. 1171 (1916) (the mineral reservation “would cover every kind of mineral”; “[a]ll kinds of minerals are reserved”) (Rep. Ferris). In view of the purposes of the SRHA and the treatment of gravel under other federal statutes concerning minerals, we would have to turn the principle of construction in favor of the sovereign on its head to conclude that gravel is not a mineral within the meaning of the Act.
VI
For the foregoing reasons, we hold that gravel is a mineral reserved to the United States in lands patented under the SRHA. Accordingly, the judgment of the Court of Appeals is
Reversed.
The SRHA was effectively suspended by executive action taken pursuant to the Taylor Grazing Act, 48 Stat. 1269, ch. 865, 43 U. S. C. § 315 et seq. Both the SRHA and the general homestead laws were repealed by the Federal Land Policy and Management Act of 1976, 90 Stat. 2743, 43 U. S. C. § 1701 et seq. Existing patents were unaffected by the repeal.
The IBLA also affirmed the BLM’s calculation of damages on the basis of a royalty rate of 300 per cubic yard, rejecting Western Nuclear’s claim that the use of this rate was arbitrary, capricious, and unreasonable. 85 I. D., at 139. The Board adjusted the damages from the appraiser’s rounded-off figure of $13,000 to $12,802.50. Id., at 140.
Following the District Court’s ruling, the Wyoming Stock Growers Association (WSGA), which had intervened in the proceedings, filed a motion requesting that the court alter or amend its order or hold a new trial. It expressed the concern that a ruling in favor of the Government in its action against respondent would mean ranchers could not use gravel on lands patented under the SRHA. At a hearing on the WSGA’s motions, the Government sought to lay this concern to rest:
“What the United States is concerned about are commercial gravel operations. The United States [does] not see how a commercial gravel operation in any way, shape or form lends itself to helping the rancher. All it does is len[d] itself to helping the mineral company or whoever happens to . . . have a commercial operation. In fact, we would think it would take the land out of the ranch production.
“The United States also has no intention of claiming trespass for [the use of] sand and gravel on [the rancher’s] own land for purposes related to ranching. That is not the intent of the United States.”
The Government, the WSGA, and two other intervenors entered into a stipulation providing that the District Court’s judgment would not bar the intervenors “from raising, in the future, issues of fact and law concerning their property rights in sand and gravel.” App. to Pet. for Cert. 44a. The stipulation was approved by the District Court and incorporated in its judgment.
See Dept. of Interior, Report of Director of Bureau of Land Management, 1948, Statistical Appendix, Table 17, p. 22.
Whether gravel is a mineral for purposes of the SRHA is an issue of first impression in the federal courts. In a state condemnation proceeding the New Mexico Supreme Court held, with little explanation, that gravel does not constitute a mineral reserved to the United States under the Act. State ex rel. Highway Comm’n v. Trujillo, 82 N. M. 694, 487 P. 2d 122 (1971).
The specific listing of coal in the reservation clause of the SRHA sheds no light on what Congress meant by the term “minerals.” See Skeen v. Lynch, 48 F. 2d 1044, 1046-1047 (CA10), cert. denied, 284 U. S. 633 (1931). There were special reasons for expressly addressing coal that negate any inference that the phrase “and other minerals” was meant to reserve only substances ejusdem generis. The legal context in which the SRHA was enacted suggests that Congress specifically listed coal to make clear that coal was reserved even though existing law treated it differently from other minerals. Coal had been exempted from the application of the general mining laws. See Coal Lands Act of 1873, 17 Stat. 607, current version at 30 U. S. C. § 71 et seq. In addition, the Coal Lands Acts of 1909 and 1910 permitted the acquisition of lands containing coal under patents reserving the coal to the United States. 35 Stat. 844, current version at 30 U. S. C. § 81; 36 Stat. 583, ch. 318, current version at 30 U. S. C. § 83 et seq. See also Act of Apr. 30, 1912, 37 Stat. 105, ch. 99, 30 U. S. C. § 90. That the express listing of coal was not intended to limit the phrase “other minerals” is confirmed by the alternate use of the phrases “coal and other minerals” and “all minerals” in the House Report on the bill that became the SRHA. See H. R. Rep. No. 35, 64th Cong., 1st Sess., 18 (1916).
Relying on Soderberg, the Supreme Court of Oregon subsequently held that “land more valuable for the building sand it contains than for agriculture ... is mineral within the meaning of the United States mining statutes.” Loney v. Scott, 57 Ore. 378, 385, 112 P. 172, 175 (1910). See also State ex rel. Atkinson v. Evans, 46 Wash. 219, 223-224, 89 P. 565, 567-568 (1907) (relying on Soderberg in holding that land containing valuable deposits of limestone, silica, silicated rock, and clay constituted mineral land under a state statute).
Quite apart from Soderberg, even if Congress had been aware of Zimmerman, there would be little basis for inferring that it intended to follow the specific ruling in that case rather than the. Interior Department’s general approach in classifying land as mineral land or nonmineral land. As a leading contemporary treatise pointed out, 2 C. Lindley, American Law Relating to Mining and Mineral Lands § 424, p. 996, and n. 78 (3d ed. 1914), Zimmerman was inconsistent with the Department’s traditional treatment of the problem. Whereas the Secretary emphasized in Zimmerman that gravel is a common substance, other Department rulings recognized that land containing deposits of other common substances constituted “mineral land” if the deposits were found “in quantity and quality sufficient to render the land more valuable on account thereof than for agricultural purposes.” Pacific Coast Marble Co. v. Northern Pacific R. Co., 25 L. D. 233, 245 (1897). See Bennett v. Moll, 41 L. D. 584 (1912) (pumice); McGlenn v. Wienbroeer, 15 L. D. 370 (1892) (building stone); H. P. Bennett, Jr., 3 L. D. 116 (1884) (building stone); W. H. Hooper, 1 L. D. 560 (1881) (gypsum).
In 1913 the Interior Department itself listed gravel as a mineral in a comprehensive study of the public lands. Dept, of Interior, United States Geological Survey, Bulletin 537, The Classification of the Public Lands 138-139 (1913).
For example, mineral land was exempted from the homestead laws, Act of June 21, 1866, §1, 14 Stat. 66, ch. 127, 43 U. S. C. §201, from statutes granting lands to railroads, Act of July 1, 1862, § 3, 12 Stat. 492; Act of July 2, 1864, § 3, 13 Stat. 367, and from a statute granting land to States for agricultural colleges, Act of July 2, 1862, § 1, ch. 130, 12 Stat. 503. See generally United States v. Sweet, 245 U. S. 563, 567-572 (1918); Deffeback v. Hawke, 115 U. S. 392, 400-401 (1885). If land was classified as mineral land, it could not be conveyed under these statutes.
Land was frequently misclassified as nonmineral. Misclassification resulted both from fraud and from the practical difficulties in telling at the time of classification whether land was more valuable for the minerals it contained than for agricultural purposes. See Deffeback v. Hawke, supra, at 405. Classification depended largely upon affidavits of entrymen, reports by surveyors, information available from field offices of the Land Department, and information provided by persons with an interest in contesting the classification of particular land as nonmineral. Frequent errors were inevitable. See 1 American Law of Mining § 3.1 (1982); West v. Edward Rutledge Timber Co., 244 U. S. 90, 98 (1917). If land was erroneously classified as nonmineral and conveyed under a land-grant statute, the patentee received title to the entire land, including any subsequently discovered minerals. See Diamond Coal & Coke Co. v. United States, 233 U. S. 236, 239-240 (1914); Shaw v. Kellogg, 170 U. S. 312, 342-343 (1898). Absent proof of fraud, see Diamond Coal & Coke Co. v. United States, supra, at 239-240, the Government had no recourse once title passed.
Even with respect to land properly classified as more valuable for agricultural or other purposes than for the minerals it contained, the system of land classification provided incentives only for the use of surface resources. After land was classified as nonmineral and conveyed under a land-grant statute, only the grantee had an incentive to discover and exploit minerals lying beneath the land. If he did not do so, they would remain undeveloped.
The Coal Lands Act of 1909 permitted settlers on lands which President Roosevelt had subsequently withdrawn from entry under the homestead laws to obtain patents which reserved the coal to the United States. 35 Stat. 844, current version at 30 U. S. C. § 81. The Coal Lands Act of 1910 made withdrawn lands available for settlement and permitted settlers to obtain patents which reserved the coal to the United States. 36 Stat. 583, ch. 318, current version at 30 U. S. C. §83 et seq. See also Act of Apr. 30, 1912, 37 Stat. 105, ch. 99, 30 U. S. C. §90. The Agricultural Entry Act of 1914 permitted the acquisition of lands withdrawn from entry, or classified as valuable, because of the phosphate, nitrate, potash, oil, gas, or asphaltic minerals they contained, but provided that patents would reserve to the United States all such minerals. 38 Stat. 509, as amended, 30 U. S. C. § 121 et seq.
This is evident from the provisions in the Act prescribing standards to govern the joint use of SRHA lands by owners of surface estates and prospectors and miners. Section 9 of the SRHA extended to “[a]ny person qualified to locate and enter the coal and other mineral deposits, or having the right to mine and remove the same under the laws of the United States, . . . the right at all times to enter upon the lands entered or patented [under the SRHA] for the purpose of prospecting for coal or other mineral therein.” To protect the homesteader, Congress made it a condition of the prospector’s entry on the land that he “not injure, damage, or destroy the [homesteader’s] permanent improvements,” and also provided that the prospector “shall be liable ... for all damages to the crops on such lands by reason of such prospecting.” Any person who, after discovering minerals, acquires from the United States “the right to mine and remove the same” can “reenter and occupy so much of the surface thereof as may be required for all purposes reasonably incident to the mining or removal,” if he (1) obtains the written consent or waiver of the homesteader, (2) compensates the homesteader for any damages to the “crops or other tangible improvements” on the land, or (3) executes a bond to secure the payment of such damages. In 1949 Congress increased the patentee’s protection by expanding the liability of the prospector or miner to encompass “any damage that may be caused to the value of the land for grazing.” 63 Stat. 215, § 5, 30 U. S. C. § 54.
See Department of the Interior, Circular No. 1278, Mining Claims on the Public Domain, 551. D. 235, 236 (1935); 43 CFR § 185.1 (1939), current version at 43 CFR § 3811.1 (1982). By their own terms, the mining laws apply to “all valuable mineral deposits in lands belonging to the United States.” 30 U. S. C. §22. Like other interests in land owned by the Government (e. g., leaseholds, easements), mineral estates reserved under the SRHA constitute “lands belonging to the United States.” Cf. Devearl W. Dimond, 62 I. D. 260, 262 (1955) (minerals reserved under the SRHA constitute “vacant, unreserved, and undisposed of public lands” under statute adding lands to the Navajo Indian Reservation in Utah). See also Act of Sept. 19, 1964, 78 Stat. 985, § 10, 43 U. S. C. § 1400 (1970 ed.) (for purposes of statute creating Public Land Law Review Commission, “the term ‘public lands’ includes . . . outstanding interests of the United States in lands patented, conveyed in fee or otherwise, under the public land laws”).
In Union Oil the Ninth Circuit held that geothermal steam constitutes a mineral reserved to the United States under the SRHA.
It is important to remember that, in contrast to the situation in Zimmerman v. Brunson, 39 L. D. 310 (1910), where treating gravel as a mineral would have required cancellation of a homestead entry, treating a substance as a mineral under the SRHA in no way calls into question any homestead entries, for the SRHA was not limited to nonmineral land. The only consequence is that title to the substance rests with the United States rather than with the owner of the surface estate, and that if the latter wishes to extract the substance and sell it or use it for commercial purposes, he must first acquire the right to do so from the United States.
We note that this case does not raise the question whether the owner of the surface estate may use a reserved mineral to the extent necessary to carry out ranching and farming activities successfully. Although a literal reading of the SRHA would suggest that any use of a reserved mineral is a trespass against the United States, one of the overriding purposes of the Act was to permit settlers to establish and maintain successful homesteads. There is force to the argument that this purpose would be defeated if the owner of the surface estate were unable to use reserved minerals even where such use was essential for stockraising and raising crops.
An analogy may profitably be drawn to Shiver v. United States, 159 U. S. 491 (1895), in which this Court recognized that an entryman under the homestead laws had a right to cut timber to the extent necessary to establish a homestead, notwithstanding a federal statute making it a crime to cut timber upon “lands of the United States.” A literal interpretation of the two statutes would have led to the conclusion that the entryman had no right to cut timber prior to the perfection of his entry, for the land, including the timber, remained the property of the United States during that period, and the statute concerning timber contained no exception for lands entered under the homestead laws. Id., at 497. The Court rejected this mechanical approach to the problem, emphasizing that “the privilege of residing on the land for five years [the period then necessary to perfect a homestead entry and thus obtain a patent] would be ineffectual if [the homesteader] had not also the right to build himself a house, outbuildings, and fences, and to clear the land for cultivation,” and concluding that “to that extent the [homestead] act limits and modifies” the statute making it a crime to cut timber on public lands. Ibid. Cf. United States v. Cook, 19 Wall. 591, 593 (1874) (although treaty gave Indians only the right to use and occupy certain land, and although “timber while standing is part of the realty, and . . . can only be sold as the land could be,” the Indians’ right of use and occupancy encompassed the right to cut timber “for use upon the premises” or “for the improvement of the land”); Alabama Coal Lands— Act of Apr. 23,1912, 41 L. D. 32, 33 (1912) (“There is at this time no law which provides for the disposition of the coal in these lands. Persons having homestead entries . . . obtain no right to obtain coal therefrom, except for their own domestic use . . .”) (emphasis added).
In this case, however, respondent cannot rely on any right it may have to use reserved minerals to the extent necessary for ranching and farming purposes, since it plainly did not use the gravel it extracted for any such purpose. The gravel was used for commercial operations that were in no way connected with any ranching or farming activity.
That Act provides that “[n]o deposit of common varieties of sand, stone, gravel, pumice, pumicite, or cinders and no deposit of petrified wood shall be deemed a valuable mineral deposit within the meaning of the mining laws of the United States so as to give effective validity to any mining claim hereafter located under such mining laws.” Claims located prior to the effective date of the Act were not affected by its enactment. With respect to deposits of the substances listed in the Act that were not located prior to the effective date of the Act and that are owned by the United States, disposal is permissible only under the Materials Act of 1947, 61 Stat. 681, § 1, as amended, 30 U. S. C. § 601, which provides in pertinent part that “[t]he Secretary [of the Interior], under such rules and regulations as he may prescribe, may dispose of mineral materials (including but not limited to common varieties of the following: sand, stone, gravel, pumice, pumicite, cinders, and clay). . . .”
The Surface Resources Act is by its terms limited to the locatability of claims under the mining laws and does not limit the scope of the mineral reservation in the SRHA. See Dept, of Interior, Division of Public Lands, Solicitor’s Opinion, M-36417 (Feb. 15, 1957).
Charlestone Stone Products Co. involved several different mining claims. In the part of its decision that is pertinent for present purposes, the Ninth Circuit upheld the validity of claims to commercially exploitable deposits of sand and gravel. The Secretary of the Interior did not seek certiorari with respect to this portion of the Ninth Circuit’s decision, limiting his petition for certiorari to that part of the Ninth Circuit’s decision which upheld the validity of a claim to subsurface water. See 436 U. S., at 610 (“The single question presented in the petition is ‘[w]hether water is a locatable mineral under the mining law of 1872’ ”).
The only decision to the contrary, Anchorage Sand & Gravel Co. v. Schubert, 114 F. Supp. 436, 438 (Alaska 1953), aff’d on other grounds, 224 F. 2d 623 (CA9 1955), was never followed in either the District in which it was decided or elsewhere in the Ninth Circuit.
The treatment of valuable deposits of gravel as mineral deposits locatable under the mining laws reflects an application of the “prudent-man test” which the Secretary of the Interior has used to interpret the mining laws since 1894. Under this test, which has been repeatedly approved by this Court, United States v. Coleman, 390 U. S., at 602; Best v. Humboldt Placer Mining Co., 371 U. S. 334, 335-336 (1963); Cameron v. United States, 252 U. S. 450, 459 (1920); Chrisman v. Miller, 197 U. S. 313, 322 (1905), a deposit is locatable if it is “of such a character that a person of ordinary prudence would be justified in the further expenditure of his labor and means, with a reasonable prospect of success, in developing a valuable mine.” Castle v. Womble, 19 L. D. 455, 457 (1894). In the case of “precious metals which are in small supply and for which there is a great demand,” there is ordinarily “little room for doubt that they can be extracted and marketed at a profit.” United States v. Coleman, supra, at 603. In the case of nonmetalliferous substances such as gravel, the Secretary has required proof that “by reason of accessibility, bonafides in development, proximity to market, existence of present demand, and other factors, the deposit is of such value that it can be mined, removed and disposed of at a profit.” Taking of Sand and Gravel from, Public Lands for Federal Aid Highways, 54 I. D. 294, 296 (1933). See Foster v. Seaton, 106 U. S. App. D. C. 253, 255, 271 F. 2d 836, 838 (1959). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
25
] |
BOWEN, SECRETARY OF HEALTH AND HUMAN SERVICES, et al. v. CITY OF NEW YORK et al.
No. 84-1923.
Argued February 26, 1986
Decided June 2, 1986
Powell, J., delivered the opinion for a unanimous Court.
Edwin S. Kneedler argued the cause for petitioners. With him on the briefs were Solicitor General Fried, Assistant Attorney General Willard, Deputy Solicitor General Getter, William Ranter, and Howard S. Scher.
Frederick A. 0. Schwarz, Jr., argued the cause for respondents. With him on the brief were Frederick P. Schaffer, Michael D. Young, Robert Abrams, Attorney General of New York, Robert Hermann, Solicitor General, Paul M. Glickman and Andrea Green, Assistant Attorneys General, Leonard S. Rubenstein, Ambrose Doskow, and Richard L. Claman
Briefs of amici curiae urging affirmance were filed for the State of Alabama et al. by Neil F. Hartigan, Attorney General of Illinois, Roma J. Stewart, Solicitor General, Charles A. Graddick, Attorney General of Alabama, Steve Clark, Attorney General of Arkansas, Jim Smith, Attorney General of Florida, Corinne K. A. Watanabe, Attorney General of Hawaii, Thomas J. Miller, Attorney General of Iowa, David L. Armstrong, Attorney General of Kentucky, William J. Guste, Jr., Attorney General of Louisiana, James E. Tierney, Attorney General of Maine, Stephen H. Sacks, Attorney General of Maryland, Hubert H. Humphrey III, Attorney General of Minnesota, Vicki Sleeper, Special Assistant Attorney General, Edward Lloyd Pittman, Attorney General of Mississippi, William L. Webster, Attorney General of Missouri, Robert M. Spire, Attorney General of Nebraska, Brian McKay, Attorney General of Nevada, W. Cary Edwards, Attorney General of New Jersey, Paul Bardacke, Attorney General of New Mexico, Nicholas Spaeth, Attorney General of North Dakota, Michael C. Turpén, Attorney General of Oklahoma, Mark V. Meierhenry, Attorney General of South Dakota, Jim Mattox, Attorney General of Texas, Charles G. Brown, Attorney General of West Virginia, Bronson C. La Follette, Attorney General of Wisconsin, and A. G. McClintock, Attorney General of Wyoming; for the City of Chicago by James D. Montgomery; for the American Bar Association by William W. Falsgraf and John H. Pickering; for the American Civil Liberties Union et al. by Burt Neubome and Charles S. Sims; for the American Psychiatric Association by Joel I. Klein; for the Association of the Bar of the City of New York by Robert B. McKay, Sheldon H. Elsen, John F. K. Cassidy, Peter L. Zimroth, Alexander R. Sussman, Robinson B. Lacy, and John C. Sullivan; and for the National Institute of Municipal Law Officers by Roy D. Bates, William I. Thornton, Jr., John W. Witt, Roger F. Cutler, and George Agnost.
Justice Powell
delivered the opinion of the Court.
This class action was brought pursuant to 42 U. S. C. § 405(g) challenging an internal policy of the Secretary of Health and Human Services that had the effect of denying disability benefits to numerous claimants who may have been entitled to them. The issues presented are whether the District Court correctly included within the class (i) claimants who had received a final decision on their individual claims for benefits more than 60 days prior to the filing of this action, and (ii) other claimants who had not exhausted their administrative remedies.
I
The Federal Government provides benefits to disabled persons under two distinct programs administered by the Social Security Administration (SSA). The Social Security Disability Insurance Program (SSD) established by Title II of the Social Security Act, 49 Stat. 622, as amended, 42 Ú. S. C. §401 et seq., pays benefits to disabled persons who have contributed to the program and who suffer from a mental or physical disability. The Supplemental Security Income Program (SSI) established by .Title XVI of the Act, 86 Stat. 1465, as amended, 42 U. S. C. § 1381, provides benefits to indigent disabled persons. Both statutes define “disability” as the “inability to engage in any substantial gainful activity. . . .” §§ 423(d)(1)(A), 1382c(a)(3)(A). An individual is found to be under a disability only if “his physical or mental impairment or impairments are of such severity that he is not only unable to do his previous work but cannot, considering his age, education, and work experience, engage in any other kind of substantial gainful work which exists in the national economy.” §§ 423(d)(2)(A), 1382c(a)(3)(B).
Pursuant to statutory authority, the Secretary of Health and Human Services (Secretary) has adopted complex regulations governing eligibility for SSD and SSI payments. 20 CFR pt. 404, subpart P (1985) (SSD); 20 CFR pt. 404, pt. 416, subpart I (1985) (SSI). The regulations for both programs are essentially the same and establish a five-step “sequential evaluation” process. The first step determines whether the claimant is engaged in “substantial gainful activity.” If he is, benefits are denied. 20 CFR § § 404. - 1520(a),(b), 416.920(a),(b) (1985). If he is not engaged in such activity, the process moves to the second step, which decides whether the claimant’s condition or impairment is “severe” — ! e., one that significantly limits his physical or mental ability to do basic work activities. If the impairment is not severe, benefits are denied. §§404.1520(c), 416.920(c). If the impairment is severe, the third step determines whether the claimant’s impairments meet or equal those set forth in the “Listing of Impairments” (listings) contained in subpart P, appendix 1, of the regulations, 20 CFR §§ 404.1520(d), 416.920(d). The listings consist of specified impairments acknowledged by the Secretary to be of sufficient severity to preclude gainful employment. If a claimant’s condition meets or equals the listed impairments, he is conclusively presumed to be disabled and entitled to benefits. If the claimant’s impairments are not listed, the process moves to the fourth step, which assesses the individual’s “residual functional capacity” (RFC); this assessment measures the claimant’s capacity to engage in basic work activities. If the claimant’s RFC permits him to perform his prior work, benefits are denied. §§404.1520(e), 416.920(e). If the claimant is not capable of doing his past work, a decision is made under the fifth and final step whether, in light of his RFC, age, education, and work experience, he has the capacity to perform other work. §§ 404.1520(f), 416.920(f). If he does not, benefits are awarded.
The determination whether an individual is disabled is made initially by a state agency acting under the authority and control of the Secretary. 42 U. S. C. §§ 421(a), 1383b(a); 20 CFR §§404.1503, 416.903 (1985); see Heckler v. Day, 467 U. S. 104, 106, and n. 4 (1984). All decisions by the state agency are subject to Quality Assurance Reviews by the Regional Office and by the Central Baltimore Offices of SSA. If the responsible SSA officials determine during either review that a state agency erred, the case is “returned” to the State for correction.
The disappointed claimant is afforded a three-stage administrative review process beginning with de novo reconsideration by the State of the initial determination. 20 CFR §§ 404.909(a)(1), 416.1409(a) (1985). If a claimant is dissatisfied with the state agency’s decision on reconsideration, he is entitled to a hearing by an administrative law judge (ALJ) within SSA’s Office of Hearings and Appeals. 42 U. S. C. § 405(b)(1) (1982 ed., Supp. II), 42 U. S. C. § 1383(c)(1); 20 CFR §§404.929, 416.1429, 422.201 et seq. (1985).
If the AL J’s decision is adverse to the claimant, the claimant may then seek review by the Appeals Council. 20 CFR §§404.967-404.983, 416.1467-416.1483 (1985). Proceeding through these three stages exhausts the claimant’s administrative remedies. Following the determination at each stage, a disappointed claimant is notified that he must proceed to the next stage within 60 days of notice of the action taken or the decision will be considered binding. E. g., 20 CFR §§404.905, 404.909(a)(1), 416.1405, 416.1409(a), 404.-955(a), 404.968(a)(1), 416.1455(a), 416.1468(a) (1985). Thereafter, he may seek judicial review in federal district court, pursuant to 42 U. S. C. § 405(g). See 42 U. S. C. §§ 421(d), 1383(c)(3); 20 CFR §§404.900(a)(5), 404.981, 416.1400(a)(5), 416.1481, 422.210 (1985).
II
On February 8, 1983, respondents the City of New York, the New York City Health and Hospitals Corporation, and two state officials, suing on their own behalf and as parens patriae, together with eight named individuals, brought this class action against the Secretary and the Commissioner of SSA. They sought relief on behalf of all individuals residing in the State who had applied for or received SSD or SSI benefits on or after April 1, 1980, who had been found by petitioners to have a severe mental impairment, and whose applications for benefits either had been or were to be denied, or whose benefits had been or were to be terminated, based on petitioners’ determination that the claimants were capable of substantial gainful employment.
The gravamen of respondents’ complaint was that petitioners had adopted an unlawful, unpublished policy under which countless deserving claimants were denied benefits. They contended that the policy mandated a presumption — applicable at the level of the initial state psychiatric assessment— that a failure to meet or equal the listings was tantamount to a finding of ability to do at least unskilled work; that the presumption led to routine denials of benefits to eligible claimants; and that such a presumption was arbitrary, capricious, and violative of the Constitution, the Social Security Act, and the applicable regulations. Respondents claimed that this internal policy had the effect of eliminating steps four and five from the sequential evaluation process, and thus ignored the requirement for an individualized RFC assessment to determine whether a claimant with a severe condition is nonetheless able to work. They alleged that the policy was never published in the Federal Register as required by the Administrative Procedure Act, but was nonetheless implemerited through various internal memoranda and the “returns” process by which SSA sends cases back to the States for correction. Respondents contended that failure to make the policy known to claimants denied the individual plaintiffs and class members due process of law.
A
Following a 7-day trial, the District Court held that from 1978 until at least the early months of 1983, SSA followed the covert policy alleged by respondents and that the policy was illegal. City of New York v. Heckler, 578 F. Supp. 1109, 1115 (EDNY 1984). The court noted that the “Act and its regulations require the Secretary to make a realistic, individual assessment of each claimant’s ability to engage in substantial gainful activity. See Heckler v. Campbell, [461 U. S. 458] (1983). The class plaintiffs did not receive that assessment.” Id., at 1124. Rather, as respondents alleged, SSA had consistently “followed a policy which presumes that mentally disabled claimants who do not meet or equal the listings necessarily retain sufficient residual functional capacity to do at least ‘unskilled work.’” Id., at 1115. The District Court further found that these tainted RFC assessments by state review physicians were subsequently given “great weight” by ALJ’s in the administrative appeal process. Id., at 1125. Moreover, “[t]he means of enforcement of the policy, through internal memoranda, returns, and reviews, has meant that the affected SSD or SSI applicant as well as counsel, social workers and advisers for a long time were unaware of its existence.” Id., at 1115. The court stated that evidence of the “fixed clandestine policy against those with mental illness” was overwhelming. Ibid.
The District Court certified a class, and decided that the class properly included claimants who had not exhausted administrative remedies. Relying on Mathews v. Eldridge, 424 U. S. 319 (1976), the court concluded that this was an appropriate case in which to waive the statutory exhaustion requirement. In the court’s view, both parts of the Eldridge test were satisfied here: the claims were collateral to any claim for benefits, and the harm imposed by exhaustion would be irreparable.
Similarly, the District Court decided that the class properly included those who had not complied with the requirement that a claimant seek judicial review within 60 days of the Secretary’s final decision or “within such further time as the Secretary may allow.” 42 U. S. C. § 405(g). The court noted that the 60-day requirement is not jurisdictional, but rather is a statute of limitations waivable by the parties. Mathews v. Eldridge, supra, at 328, n. 9; Weinberger v. Salfi, 422 U. S. 749, 763-764 (1975). Observing that petitioners had made no argument concerning this requirement until their post-trial brief, the court found that “the same reasons which justify implying waiver of the exhaustion requirement are stronger for the sixty day requirement because the statute of limitations is not, as is the exhaustion requirement, ‘central to the requisite grant of subject-matter jurisdiction.’ Weinberger v. Salfi, 422 U. S. 749, 764 ... (1975).” 578 F. Supp., at 1124.
As a remedy, the District Court ordered the Secretary to reopen the decisions denying or terminating benefits, and to redetermine eligibility. As interim relief, the court directed the Secretary to reinstate benefits of all class members who had previously been entitled to benefits but who were subsequently terminated, until the claimant’s eligibility was properly determined.
B
The Court of Appeals for the Second Circuit affirmed. City of New York v. Heckler, 742 F. 2d 729 (1984). On appeal petitioners did not challenge the District Court’s findings of fact or ruling on the merits, but only raised contentions respecting the District Court’s definition of the appropriate class, and the interim relief awarded. With respect to the composition of the class, petitioners asserted that the District Court lacked jurisdiction under § 405(g) over most class members, including (i) claimants who failed to exhaust administrative remedies, and (ii) claimants whose right to pursue administrative or judicial review had lapsed by the time this action was commenced. Id., at 734.
The Court of Appeals rejected petitioners’ argument that the District Court lacked jurisdiction over the claims of class members who had failed to exhaust their administrative remedies. It upheld the District Court’s finding that the harm caused by the wrongful denials was irreparable. While the court did not believe that the claims were “wholly” collateral to claims for benefits, it was satisfied that the class was complaining “fundamentally of a procedural irregularity and not of the Secretary’s substantive standards of eligibility.” Id., at 737. Moreover, the Court of Appeals believed it was significant that the District Court was not asked to and did not rule on the merits of the underlying benefit claims.
The court then rejected petitioners’ contention that the District Court should not have included within the class those claimants who failed to seek judicial review within 60 days of an adverse decision by the Secretary. The court agreed with the District Court that the 60-day limitation is not a jurisdictional requirement, but rather is a statute of limitations. Id., at 738, citing Eldridge, supra, at 328, n. 9; Salfi, supra, at 763-764. The Secretary’s secretive conduct justifled tolling the period “during the time that SSA’s policy of applying the challenged presumption concerning residual functional capacity remained operative but undisclosed.” 742 F. 2d, at 738.
On petition for rehearing, the same panel of the Court of Appeals, per Judge Newman, denied rehearing and in so doing rejected petitioners’ argument that passage of the Social Security Disability Benefits Reform Act of 1984, Pub. L. 98-460, 98 Stat. 1794, required the court to alter its holding with respect to the effect of class members’ failure to comply with § 405(g). City of New York v. Heckler, 755 F. 2d 31 (1985). The Secretary sought a writ of certiorari from this Court. We granted certiorari, 474 U. S. 815 (1985), and now affirm.
Ill
Petitioners renew here arguments rejected by the Court of Appeals. They challenge on jurisdictional grounds inclusion in the class of two groups of claimants: those who failed to bring a court action within 60 days of a final decision of the Secretary, and those who failed to exhaust administrative remedies. We first consider the requirement embodied in § 405(g) that claims must be presented in the District Court within 60 days of a final decision of the Secretary. Petitioners contend that the provision sets the bounds of the District Court’s jurisdiction. This argument is foreclosed by two of our prior decisions that have declared that the 60-day requirement is not jurisdictional, but rather constitutes a period of limitations. Eldridge, supra, at 328, n. 9; Salfi, supra, at 764.
Petitioners next contend that if the 60-day limit is a statute of limitations, it is a condition on the waiver of sovereign immunity and thus must be strictly construed. We have no difficulty agreeing with that statement. See Block v. North Dakota, 461 U. S. 273, 287 (1983). Accepting this proposition, however, does not answer the question whether equitable tolling can be applied to this statute of limitations, for in construing the statute we must be careful not to “assume the authority to narrow the waiver that Congress intended,” United States v. Kubrick, 444 U. S. 111, 118 (1979), or construe the waiver “unduly restrictively.” Block, supra, at 287. In Honda v. Clark, 386 U. S. 484 (1967), the Court held that where consistent with congressional intent, and called for by the facts of the case, it would “apply a traditional equitable tolling principle . . . .” Id., at 501. Petitioners argue that Honda stands for the proposition that equitable tolling is permissible only in cases in which the public treasury is not directly affected. We decline to hold that the doctrine of equitable tolling is so limited. When application of the doctrine is consistent with Congress’ intent in enacting a particular statutory scheme, there is no justification for limiting the doctrine to cases that do not involve monetary relief.
We must determine, therefore, whether equitable tolling is consistent with Congress’ intent in enacting § 405(g), and whether tolling is appropriate on these facts. The statute of limitations we construe in this case is contained in a statute that Congress designed to be “unusually protective” of claimants. Heckler v. Day, 467 U. S., at 106. Moreover, Congress has authorized the Secretary to toll the 60-day limit, thus expressing its clear intention to allow tolling in some cases. While in most cases the Secretary will make the determination whether it is proper to extend the period within which review must be sought, cases may arise where the equities in favor of tolling the limitations period are “so great that deference to the agency’s judgment is inappropriate.” Eldridge, 424 U. S., at 330. As in Honda v. Clark, we conclude that application of a “traditional equitable tolling principle” to the 60-day requirement of § 405(g) is fully “consistent with the overall congressional purpose” and is “nowhere eschewed by Congress.” 386 U. S., at 501.
We conclude, moreover, that on these facts the equities in favor of tolling are compelling. As the Court of Appeals' explained:
“All of the class members who permitted their administrative or judicial remedies to expire were entitled to believe that their Government’s determination of ineligibility was the considered judgment of an agency faithfully executing the laws of the United States. Though they knew of the denial or loss of benefits, they did not and could not know that those adverse decisions had been made on the basis of a systematic procedural irregularity that rendered them subject to court challenge. Where the Government’s secretive conduct prevents plaintiffs from knowing of a violation of rights, statutes of limitations have been tolled until such time as plaintiffs had a reasonable opportunity to learn the facts concerning the cause of action. Since in this case the full extent of the Government’s clandestine policy was uncovered only in the course of this litigation, all class members may pursue this action notwithstanding the 60-day requirement.” 742 F. 2d, at 738 (citations omitted).
In addition to serving its customary purpose, the statute of limitations embodied in § 405(g) is a mechanism by which Congress was able to move cases to speedy resolution in a bureaucracy that processes millions of claims annually. Thus, the limitation serves both the interest of the claimant and the interest of the Government. Tolling, in the rare case such as this, does not undermine the purpose of the 60-day limitations period when viewed in connection with the underlying statute. Rather, it serves the purpose of the Act where, as the Court of Appeals stated, “the Government’s secretive conduct prevents plaintiffs from knowing of a violation of rights . . . .” Ibid. See also Heckler v. Day, supra, at 106. Tolling of the 60-day limitations period was appropriate in this case, and the District Court properly included in the class claimants who had received a final decision from the Secretary, but who did not seek judicial review within the statutory 60-day time period.
IV
Petitioners also contend that the District Court erred in including in the class those members who failed to obtain a “final decision” from the Secretary as required by § 405(g). To obtain a final decision from the Secretary a claimant is required to exhaust his administrative remedies by proceeding through all three stages of the administrative appeals process. Only a claimant who proceeds through all three stages receives a final decision from the Secretary. At the outset, we note that by the time this lawsuit was filed, it was too late for a large number of class members to exhaust their claims, since expiration of the 60-day time limits for administrative appeals barred further access to the administrative appeals process. See 20 CFR §§404.905, 404.909(a)(1), 416.1405, 416.1409(a), 404.955(a), 404.968(a)(1), 416.1455(a), 416.1468(a) (1985). For these claimants, we conclude that exhaustion is excused for the same reasons requiring tolling of the statute of limitations. Since “[m]embers of the class could not attack a policy they could not be aware existed,” 578 F. Supp., at 1118; see Part III, supra, it would be unfair to penalize these claimants for not exhausting under these circumstances.
At the time the suit was filed, however, some claimants may still have had time to exhaust their administrative remedies. The question remains whether it was permissible to include these claimants in the class. Resolution of this question is aided by cases in which we have been called upon to consider issues of exhaustion under § 405(g). See Weinberger v. Salfi, 422 U. S. 749 (1975); Mathews v. Eldridge, supra; Heckler v. Ringer, 466 U. S. 602 (1984). Our decisions teach that the “final decision” requirement embodied in that section
“consists of two elements, only one of which is purely ‘jurisdictional’ in the sense that it cannot be waived by the Secretary in a particular case. The waivable element is the requirement that the administrative remedies prescribed by the Secretary be exhausted. The nonwaivable element is the requirement that a claim for benefits shall have been presented to the Secretary.” Mathews v. Eldridge, 424 U. S., at 328.
Ordinarily, the Secretary has discretion to decide when to waive the exhaustion requirement. But as we held in Eldridge, “cases may arise where a claimant’s interest in having a particular issue resolved promptly is so great that deference to the agency’s judgment is inappropriate.” 424 U. S., at 330.
Two factors influenced the Court’s judgment that Eldridge was a case in which deference to the agency’s determination of finality was not necessary. First, the constitutional challenge brought there was “entirely collateral to [a] substantive claim of entitlement.” Ibid. Second, the claim rested “on the proposition that full relief cannot be obtained at a postdeprivation hearing.” Id., at 331. The petitioner had raised “at least a colorable claim that because of his physical condition and dependency upon the disability benefits, an erroneous termination would damage him in a way not recompensable through retroactive payments.” Ibid.
The claims in this lawsuit are collateral to the claims for benefits that class members had presented administratively. The class members neither sought nor were awarded benefits in the District Court, but rather challenged the Secretary’s failure to follow the applicable regulations.
Moreover, as in Eldridge, the claimants in this case would be irreparably injured were the exhaustion requirement now enforced against them. The District Court found that class members not only were denied the benefits they were seeking, but “[t]he ordeal of having to go through the administrative appeal process may trigger a severe medical setback. Many persons have been hospitalized due to the trauma of having disability benefits cut off. Interim benefits will not adequately protect plaintiffs from this harm. Nor will ultimate success if they manage to pursue their appeals.” 578 F. Supp., at 1118. Petitioners do not challenge this finding here, and therefore, like the Court of Appeals, “[w]e have no reason to disturb Chief Judge Weinstein’s conclusion that the harm caused by wrongful denials was irreparable.” 742 F. 2d, at 736. We should be especially sensitive to this kind of harm where the Government seeks to require claimants to exhaust administrative remedies merely to enable them to receive the procedure they should have been afforded in the first place.
Finally, application of the exhaustion doctrine is “intensely practical.” Eldridge, supra, at 331, n. 11. In Salfi, we explained:
“Exhaustion is generally required as a matter of preventing premature interference with agency processes, so that the agency may function efficiently and so that it may have an opportunity to correct its own errors, to afford the parties and the courts the benefit of its experience and expertise, and to compile a record which is adequate for judicial review.” 422 U. S., at 765.
The ultimate decision of whether to waive exhaustion should not be made solely by mechanical application of the Eldridge factors, but should also be guided by the policies underlying the exhaustion requirement. The purposes of exhaustion would not be served by requiring these class members to exhaust administrative remedies. This case is materially distinguishable from one in which a claimant sues in district court, alleging mere deviation from the applicable regulations in his particular administrative proceeding. In the normal course, such individual errors are fully correctable upon subsequent administrative review since the claimant on appeal will alert the agency to the alleged deviation. Because of the agency’s expertise in administering its own regulations, the agency ordinarily should be given the opportunity to review application of those regulations to a particular factual context. Thus, our holding today does not suggest that exhaustion is to be excused whenever a claimant alleges an irregularity in the agency proceedings.
These claimants stand on a different footing from one arguing merely that an agency incorrectly applied its regulation. Rather, the District Court found a systemwide, unrevealed policy that was inconsistent in critically important ways with established regulations. Nor did this policy depend on the particular facts of the case before it; rather, the policy was illegal precisely because it ignored those facts. The District Court found that the policy was being adhered to by state agencies due to pressure from SSA, and that therefore exhaustion would have been futile. Under these unique circumstances, there was nothing to be gained from permitting the compilation of a detailed factual record, or from agency expertise. Cf. McKart v. United States, 395 U. S. 185, 200 (1969).
In addition, the relief afforded by the District Court is fully consistent with the policies underlying exhaustion. The court did not order that class members be paid benefits. Nor does its decision in any way interfere with the agency’s role as the ultimate determiner of eligibility under the relevant statutes and regulations. Indeed, by ordering simply that the claims be reopened at the administrative level, the District Court showed proper respect for the administrative process. It did no more than the agency would have been called upon to do had it, instead of the District Court, been alerted to the charge that an undisclosed procedure was illegal and had improperly resolved innumerable claims.
Petitioners correctly assert that, had class members exhausted administrative remedies, some might have received benefits despite the illegal policy. It also is likely that many may have been disqualified for reasons having nothing to do with the illegal policy. Such observations, however, merely serve to remind us why exhaustion is the rule in the vast majority of cases; they do not aid the Court in deciding when exhaustion should be excused. We hold that the District Court did not err in waiving exhaustion in this case either with respect to those claimants whose time to pursue further administrative appeals had lapsed, or with respect to those claimants who still had time to pursue administrative remedies.
V
Government agencies administering complex programs that bridge both state and federal bureaucracies necessarily will take certain actions pursuant to policies unknown to the public. We do not suggest that every internal policy that is found to be inconsistent with legal requirements, and arguably touches upon the outcome of a class of cases, will justify tolling the statute of limitations or excusing exhaustion. But, whatever the outer bounds of our holding today, this case falls well within them. While “hard” cases may arise, this is not one of them.
Moreover, we are aware that administrative inconvenience may result from our decision today. But the Secretary had the capability and the duty to prevent the illegal policy found to exist by the District Court. The claimants here were denied the fair and neutral procedure required by the statute and regulations, and they are now entitled to pursue that procedure. The judgment of the Court of Appeals is affirmed.
It is so ordered.
The RFC assessment is made by a review physician employed by the state agency under contract with SSA. His written conclusion becomes part of the administrative record of the claim. See, e. g., Plaintiffs’ Ex. 50, p. 10; App. 148, 158; Record Doc. No. 73; Tr. 27. The District Court found that this assessment is generally given great weight by the administrative law judge on later review. City of New York v. Heckler, 578 F. Supp. 1109, 1125 (EDNY 1984).
The Secretary has not provided for a separate reconsideration stage in disability cessation cases under Title XVI. An SSI recipient whose benefits are terminated, therefore, is entitled to proceed directly to an ALJ hearing if he requests one within 60 days of the initial determination. 20 CFR §§416.1407, 416.1415 (1985).
Title 42 U. S. C. § 405(g), provides in part:
“Any individual, after any final decision of the Secretary made after a hearing to which he was a party, irrespective of the amount in controversy, may obtain a review of such decision by a civil action commenced within sixty days after the mailing to him of notice of such decision or within such further time as the Secretary may allow. Such action shall be brought in the district court of the United States for the judicial district in which the plaintiff resides, or has his principal place of business, or, if he does not reside or have his principal place of business within any such judicial district, in the United States District Court for the District of Columbia. As part of his answer the Secretary shall file a certified copy of the transcript of the record including the evidence upon which the findings and decision complained of are based. The court shall have power to enter, upon the pleadings and transcript of the record, a judgment affirming, modifying, or reversing the decision of the Secretary, with or without remanding the cause for a rehearing. The findings of the Secretary as to any fact, if supported by substantial evidence, shall be conclusive . . .
The District Court noted that in 1983 SSA “yielded to pressure to allow medical vocational allowances for those with mental disabilities. The change was precipitated only after the filing of this lawsuit and after a preliminary injunction was issued on December 22, 1982, in the case of Mental Health Association of Minnesota v. Schweiker, 554 F. Supp. 157 (D. Minn. 1982), aff’d, 720 F. 2d 965 (8th Cir. 1983).” 578 F. Supp., at 1115.
The District Court added:
“On the contrary, SSA relied on bureaucratic instructions rather than individual assessments and overruled the medical opinions of its own consulting physicians that many of those whose claims they were instructed to deny could not, in fact, work. Physicians were pressured to reach ‘conclusions’ contrary to their own professional beliefs in cases where they felt, at the very least, that additional evidence needed to be gathered in the form of a realistic work assessment. The resulting supremacy of bureaucracy over professional medical judgments and the flaunting of published, objective standards is contrary to the spirit and letter of the Social Security Act.
“The Secretary’s practices have violated the requirements of her own regulations. Defendants have ignored the five step sequential evaluation process by presuming that the failure to meet listings at step three or four of the process automatically translates into a residual functional capacity to do unskilled work at steps four and five. The bureaucratic assessment of residual functional capacity if it was done at all was reduced to a paper charade where the SSA physician completed a cursory report or checked off a form knowing the conclusion had to be that the claimant had the capacity for unskilled work. Medical experts demonstrated to the court that the symptoms and restrictions of the listings of impairments do not measure an individual’s capacity for work or his or her ability to withstand the stress of even the least demanding work.” Id,., at 1124.
The class was ultimately defined by the District Court after trial as consisting of:
“All individuals residing in the State of New York who have applied for or received Title II and/or Title XVI benefits and who, between April 1, 1980 and May 15, 1983, were found by the New York Office of Disability Determinations to have a functional psychotic or functional nonpsychotic mental impairment which is severe (i. e., determined under 20 CFR § 404.1520(c) or § 416.930(c) to require evaluation under Appendix I of that Regulation), and whose applications for benefits have been denied or whose benefits have been or will be terminated, on the basis of defendants’ determination that such persons are capable of substantial gainful activity.” App. to Pet. for Cert. 65a.
The class is estimated to include more than 50,000 New York residents. City of New York v. Heckler, 742 F. 2d 729, 731 (CA2 1984).
The District Court also ordered SSA to notify class members that their claims had been reopened, and to inform class members with an appeal pending before an ALJ that such claimants had the option of proceeding with their appeals upon the existing record rather than with the administrative reopening of their case. App. to Pet. for Cert. 65a-66a.
The Court of Appeals affirmed the District Court’s award of interim relief, and petitioners have raised in this Court no issue respecting that portion of the Court of Appeals’ decision.
As an alternative basis for jurisdiction, the Court of Appeals relied on 28 U. S. C. § 1361 “in the event that, upon further review, it is determined that section 405(g) jurisdiction is unavailable to some of the class members.” 742 F. 2d, at 739. Because we conclude that jurisdiction under § 405(g) is available, we do not reach the issue whether mandamus jurisdiction would have been proper in this context.
We reject petitioners’ contention that Salfi and Eldridge do not stand for the proposition that the 60-day requirement is not jurisdictional. In both cases, jurisdiction was premised on § 405(g), and we noted that we did not have to consider whether the 60-day requirement had been satisfied because the issue had not been timely raised below. Eldridge, 424 U. S., at 328, n. 9; Salfi, 422 U. S., at 764. Were the requirement jurisdictional, of course, the Court could not have declined to consider whether it had been satisfied in those cases.
In Honda v. Clark, United States citizens or residents of Japanese descent sought to recover funds vested under the Trading with the Enemy Act, 40 Stat. 411, 50 U. S. C. App. § 1 et seq. Under that Act the United States seized the American assets of businesses owned by Japanese nationals. After the war a mechanism was established to return the assets to their rightful owners or the owners’ creditors. The central problem in that case revolved around the fact that the petitioners failed to file a lawsuit challenging a schedule of payments within the applicable 60-day time period. This Court allowed the limitations period to be tolled during the pendency of related litigation because it was consistent with the statutory scheme and equitable principles to do so. 386 U. S., at 501.
SSA’s regulations governing extensions of time for filing are based on considerations of fairness to claimants. Thus, the Secretary may grant an extension where a suit was not timely filed because of illness, accident, destruction of records, or mistake. Similarly, an extension may be granted where the claimant misunderstands the appeal process or is unable timely to collect necessary information, or where the Secretary undertook action that “misled” the claimant concerning his right to review. 20 CFR §§ 404.911, 416.1411 (1985). The fairness concerns underlying the regulations support our application of equitable tolling in this case.
As we explained in American Pipe & Construction Co. v. Utah, 414 U. S. 538, 554 (1974), statutory limitation periods are
“ ‘designed to promote justice by preventing surprises through the revival of claims that have been allowed to slumber until evidence has been lost, memories have faded, and witnesses have disappeared. The theory is that even if one has a just claim it is unjust not to put the adversary on notice to defend within the period of limitation and that the right to be free of stale claims in time comes to prevail over the right to prosecute them’ ” (quoting Railroad Telegraphers v. Railway Express Agency, Inc., 321 U. S. 342, 348-349 (1944)).
Petitioners argue that when Congress in 1984 made comprehensive revisions in the disability program in the Social Security Disability Benefits Reform Act of 1984, Pub. L. 98-460, 98 Stat. 1794, it reaffirmed the finality requirement of § 405(g). In § 2(d) of the 1984 Act (98 Stat. 1797), Congress provided for remand to the Secretary, for redetermination under the new statutory medical improvement standard, of the claims of any individuals who were included in a class that had been certified in a case involving medical improvement, whether or not each individual class member had personally satisfied the jurisdictional requirements of § 405(g).
Congress took a different approach in cases involving individuals who have mental impairments. In § 5(a) of the 1984 Act, 98 Stat. 1801, Congress directed the Secretary to develop new standards for the evaluation of mental impairments. It then provided in § 5(c) (98 Stat. 1802) that any person who had sought benefits based on a mental impairment and who was found to be not disabled on or after March 1,1981, could reapply to the Secretary and be reevaluated under these new standards.
Thus, petitioners argue that these provisions demonstrate that Congress knew how to grant relief to disability claimants who have not satisfied the exhaustion requirement. We agree with the Court of Appeals’ observation in its decision denying the petition for rehearing:
“The Reform Act is remedial legislation, enacted principally to be of assistance to large numbers of persons whose disability benefits have been terminated. It would be a perverse view of Congressional intent if we were to infer from this beneficial legislation a determination on the part of Congress to deny other disability claimants the fruits of a judgment entered in their favor after a ruling that their claims had been unlawfully processed by the Secretary. What the Secretary is urging us to hold is that the Reform Act renders the finality and exhaustion requirements of section 405(g) more stringent than they were before the passage of the Act.” City of New York v. Heckler, 755 F. 2d 31, 33 (1985). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
105
] |
Pedro Pablo GUERRERO-LASPRILLA, Petitioner
v.
William P. BARR, Attorney General;
Ruben Ovalles, Petitioner
v.
William P. Barr, Attorney General
Nos. 18-776
18-1015
Supreme Court of the United States.
Argued December 9, 2019
Decided March 23, 2020
Noel J. Francisco, Solicitor General, Joseph H. Hunt, Assistant Attorney General, Edwin S. Kneedler, Deputy Solicitor General, Frederick Liu, Assistant to the Solicitor General, Donald E. Keener, John W. Blakeley, W. Manning Evans, Attorneys, Department of Justice, Washington, D.C., for respondent
Mark Andrew Prada, Mario R. Urizar, Prada Urizar, PLLC, Miami, FL, Eugene R. Fidell, Yale Law School, New Haven, CT, Paul W. Hughes, Michael B. Kimberly, Ethan H. Townsend, Andrew A. Lyons-Berg, McDermott Will & Emery LLP, Washington, DC, Andrew J. Pincus, Charles A. Rothfeld, Mayer Brown LLP, Washington, DC, Brian Wolfman, Washington, DC, for petitioners.
Paul W. Hughes, Washington, DC, for the petitioners
Frederick Liu for the respondent.
JUSTICE BREYER delivered the opinion of the Court.
Section 242(a) of the Immigration and Nationality Act, codified as 8 U. S. C. § 1252(a), provides for judicial review of a final Government order directing the removal of an alien from this country. See 66 Stat. 163, as amended, 8 U. S. C. § 1101 et seq . A subdivision of that section limits the scope of that review where the removal rests upon the fact that the alien has committed certain crimes, including aggravated felonies and controlled substance offenses. § 1252(a)(2)(C). Another subdivision, § 1252(a)(2)(D), which we shall call the Limited Review Provision, says that in such instances courts may consider only "constitutional claims or questions of law." The question that these two consolidated cases present is whether the phrase "questions of law" in the Provision includes the application of a legal standard to undisputed or established facts. We believe that it does.
I
The two petitioners before us, Pedro Pablo Guerrero-Lasprilla and Ruben Ovalles, are aliens who lived in the United States. Each committed a drug crime and consequently became removable. App. 33; Record in No. 18-1015, p. 66. In 1998, an Immigration Judge ordered Guerrero-Lasprilla removed. Record in No. 18-776, p. 137. In 2004, the Board of Immigration Appeals ordered Ovalles removed, reversing a decision by an Immigration Judge. App. to Pet. for Cert. in No. 18-1015, pp. 32a-35a. Both removal orders became administratively final, and both petitioners left the country.
Several months after their removal orders became final, each petitioner's window for filing a timely motion to reopen his removal proceedings closed. That is because the Immigration and Nationality Act permits a person one motion to reopen, "a form of procedural relief that asks the Board to change its decision in light of newly discovered evidence or a change in circumstances." Dada v. Mukasey , 554 U.S. 1, 12, 14, 128 S.Ct. 2307, 171 L.Ed.2d 178 (2008) (internal quotation marks omitted). But the motion must usually be filed "within 90 days of the date of entry of a final administrative order of removal." 8 U. S. C. § 1229a(c)(7)(C)(i).
Nonetheless, Guerrero-Lasprilla (in 2016) and Ovalles (in 2017) asked the Board to reopen their removal proceedings. Recognizing that the 90-day time limit had long since passed, both petitioners argued that the time limit should be equitably tolled. Both petitioners, who had become eligible for discretionary relief due to various judicial and Board decisions years after their removal, rested their claim for equitable tolling on Lugo-Resendez v. Lynch , 831 F.3d 337 (CA5 2016). In that case, the Fifth Circuit had held that the 90-day time limit could be "equitably tolled." Id ., at 344. Guerrero-Lasprilla filed his motion to reopen a month after Lugo-Resendez was decided. App. 5. Ovalles filed his motion to reopen eight months after the decision. Id ., at 35. The Board denied both petitioners' requests for equitable tolling, concluding, inter alia , that they had failed to demonstrate the requisite due diligence. App. to Pet. for Cert. in No. 18-1015, at 6a; App. to Pet. for Cert. in No. 18-776, p. 12a.
Guerrero-Lasprilla and Ovalles each asked the Fifth Circuit to review the Board's decision. See 8 U. S. C. § 1252(a)(1) ; 28 U. S. C. § 2342 ; Reyes Mata v. Lynch , 576 U. S. 143, 147, 135 S.Ct. 2150, 192 L.Ed.2d 225 (2015) ("[C]ircuit courts have jurisdiction when an alien appeals from the Board's denial of a motion to reopen a removal proceeding"). The Fifth Circuit denied their requests for review, concluding in both cases that "whether an alien acted diligently in attempting to reopen removal proceedings for purposes of equitable tolling is a factual question." Guerrero-Lasprilla v. Sessions , 737 Fed.Appx. 230, 231 (2018) (per curiam ); Ovalles v. Sessions , 741 Fed.Appx. 259, 261 (2018) (per curiam ). And, given the Limited Review Provision, it "lack[ed] jurisdiction" to review those "factual" claims. 737 Fed.Appx. at 231 ; 741 Fed.Appx. at 261.
Both petitioners claim that the underlying facts were not in dispute, and they asked us to grant certiorari in order to determine whether their claims that the Board incorrectly applied the equitable tolling due diligence standard to the "undisputed" (or established) facts is a "question of law," which the Limited Review Provision authorizes courts of appeals to consider. We agreed to do so.
II
The Limited Review Provision provides that, in this kind of immigration case (involving aliens who are removable for having committed certain crimes), a court of appeals may consider only "constitutional claims or questions of law." 8 U. S. C. § 1252(a)(2)(D). The issue before us is, as we have said, whether the statutory phrase "questions of law" includes the application of a legal standard to undisputed or established facts. If so, the Fifth Circuit erred in holding that it "lack[ed] jurisdiction" to consider the petitioners' claims of due diligence for equitable tolling purposes. We conclude that the phrase "questions of law" does include this type of review, and the Court of Appeals was wrong to hold the contrary.
A
Consider the statute's language. Nothing in that language precludes the conclusion that Congress used the term "questions of law" to refer to the application of a legal standard to settled facts. Indeed, we have at times referred to the question whether a given set of facts meets a particular legal standard as presenting a legal inquiry. Do the facts alleged in a complaint, taken as true, state a claim for relief under the applicable legal standard? See Fed. Rule Civ. Proc. 12(b)(6) ; Neitzke v. Williams , 490 U.S. 319, 326, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989) (" Rule 12(b)(6) authorizes a court to dismiss a claim on the basis of a dispositive issue of law"). Did a Government official's alleged conduct violate clearly established law? See Mitchell v. Forsyth , 472 U.S. 511, 528, n. 9, 105 S.Ct. 2806, 86 L.Ed.2d 411 (1985) ("[T]he appealable issue is a purely legal one: whether the facts alleged ... support a claim of violation of clearly established law"); cf. Nelson v. Montgomery Ward & Co. , 312 U.S. 373, 376, 61 S.Ct. 593, 85 L.Ed. 897 (1941) ("The effect of admitted facts is a question of law"). Even the dissent concedes that we have sometimes referred to mixed questions as raising a legal inquiry. See post, at 1074 - 1075 (opinion of THOMAS, J.). While that judicial usage alone does not tell us what Congress meant by the statutory term "questions of law," it does indicate that the term can reasonably encompass questions about whether settled facts satisfy a legal standard.
We have sometimes referred to such a question, which has both factual and legal elements, as a "mixed question of law and fact." See, e.g., U. S. Bank N. A. v. Village at Lakeridge, LLC , 583 U. S. ----, ----, 138 S.Ct. 960, 966, 200 L.Ed.2d 218 (2018) ("[W]hether the historical facts found satisfy the legal test chosen" is a "so-called 'mixed question' of law and fact" (citing Pullman-Standard v. Swint , 456 U.S. 273, 289, n. 19, 102 S.Ct. 1781, 72 L.Ed.2d 66 (1982) )). And we have often used the phrase "mixed questions" in determining the proper standard for appellate review of a district, bankruptcy, or agency decision that applies a legal standard to underlying facts. The answer to the "proper standard" question may turn on practical considerations, such as whether the question primarily "require[s] courts to expound on the law, particularly by amplifying or elaborating on a broad legal standard" (often calling for review de novo ), or rather "immerse[s] courts in case-specific factual issues" (often calling for deferential review). Village at Lakeridge , 583 U. S., at ----, 138 S.Ct., at 967. But these cases present no such question involving the standard of review. And, in any event, nothing in those cases forecloses the conclusion that the application of law to settled facts can be encompassed within the statutory phrase "questions of law." Nor is there anything in the language of the statute that suggests that "questions of law" excludes the application of law to settled facts.
B
The Government, respondent here, argues to the contrary. Namely, the Government claims that Congress intended to exclude from judicial review all mixed questions. We do not agree. Rather, a longstanding presumption, the statutory context, and the statute's history all support the conclusion that the application of law to undisputed or established facts is a "questio[n] of law" within the meaning of § 1252(a)(2)(D).
1
Consider first "a familiar principle of statutory construction: the presumption favoring judicial review of administrative action." Kucana v. Holder , 558 U.S. 233, 251, 130 S.Ct. 827, 175 L.Ed.2d 694 (2010). Under that "well-settled" and "strong presumption," McNary v. Haitian Refugee Center, Inc. , 498 U.S. 479, 496, 498, 111 S.Ct. 888, 112 L.Ed.2d 1005 (1991), when a statutory provision "is reasonably susceptible to divergent interpretation, we adopt the reading that accords with traditional understandings and basic principles: that executive determinations generally are subject to judicial review." Kucana , 558 U.S. at 251, 130 S.Ct. 827 (quoting Gutierrez de Martinez v. Lamagno , 515 U.S. 417, 434, 115 S.Ct. 2227, 132 L.Ed.2d 375 (1995) ; internal quotation marks omitted); see McNary , 498 U.S. at 496, 111 S.Ct. 888 ("[G]iven [that] presumption ..., it is most unlikely that Congress intended to foreclose all forms of meaningful judicial review"). The presumption can only be overcome by "clear and convincing evidence" of congressional intent to preclude judicial review. Reno v. Catholic Social Services, Inc. , 509 U.S. 43, 64, 113 S.Ct. 2485, 125 L.Ed.2d 38 (1993) (quoting Abbott Laboratories v. Gardner , 387 U.S. 136, 141, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967) ; internal quotation marks omitted); see Cuozzo Speed Technologies, LLC v. Lee , 579 U. S. ----, ---- - ----, 136 S.Ct. 2131, 2140-2141, 195 L.Ed.2d 423 (2016).
We have "consistently applied" the presumption of reviewability to immigration statutes. Kucana , 558 U.S. at 251, 130 S.Ct. 827. And we see no reason to make an exception here. The dissent's "doubts" about the presumption, see post , at 1076 - 1078, do not undermine our recognition that it is a "well-settled" principle of statutory construction, McNary , 498 U.S. at 496, 111 S.Ct. 888. Notably, even the Government does not dispute the soundness of the presumption or its applicability here. See Brief for Respondent 47-48 (arguing only that the presumption is overcome).
As discussed above, we can reasonably interpret the statutory term "questions of law" to encompass the application of law to undisputed facts. See supra, at 1068 - 1069. And as we explain further below, infra , at 1073, interpreting the Limited Review Provision to exclude mixed questions would effectively foreclose judicial review of the Board's determinations so long as it announced the correct legal standard. The resulting barrier to meaningful judicial review is thus a strong indication, given the presumption, that "questions of law" does indeed include the application of law to established facts. That is particularly so given that the statutory context and history point to the same result.
2
Consider next the Limited Review Provision's immediate statutory context. That context belies the Government and the dissent's claim that "questions of law" refers only to "pure" questions and necessarily excludes the application of law to settled facts. See Brief for Respondent 19-26; post , at 1074 - 1076. The Limited Review Provision forms part of § 1252, namely, § 1252(a)(2)(D). The same statutory section contains a provision, § 1252(b)(9), which we have called a " 'zipper clause.' " INS v. St. Cyr , 533 U.S. 289, 313, 121 S.Ct. 2271, 150 L.Ed.2d 347 (2001). We have explained that Congress intended the zipper clause to "consolidate judicial review of immigration proceedings into one action in the court of appeals." Ibid . (internal quotation marks omitted). The zipper clause reads in part as follows:
"Judicial review of all questions of law and fact , including interpretation and application of constitutional and statutory provisions , arising from any action taken ... to remove an alien from the United States under this subchapter shall be available only in judicial review of a final order under this section." § 1252(b)(9) (emphasis added).
Because it is meant to consolidate judicial review, the zipper clause must encompass mixed questions. Indeed, the clause by its very language includes the "application of [a] statutory provisio[n]." Ibid.
The zipper clause accordingly makes clear that Congress understood the statutory term "questions of law and fact" to include the application of law to facts. Reread the zipper clause: It uses the terms "[ (1) ] questions of law and [ (2) ] fact, including " the "application of " statutes, i.e., the application of law to fact. Ibid. (emphasis added). Thus, there are three possibilities: Congress either used (1) "questions of law," (2) "fact," or (3) the combination of both terms to encompass mixed questions. Even the Government does not argue that Congress used "questions of fact" alone to cover mixed questions. Congress thus either meant the term "questions of law" alone to include mixed questions, or it used both "questions of law" and questions of "fact" to encompass mixed questions. The latter interpretation at the very least disproves the Government's argument that Congress consistently uses a three-part typology, referring to mixed questions separately from questions of law or questions of fact (such that "questions of law" cannot include mixed questions). See Brief for Respondent 21; see also post, at 1074 - 1075 (arguing that this Court has often used that three-part typology and thus "questions of law" must exclude mixed questions). And the former interpretation directly supports the conclusion that "questions of law" includes mixed questions. That interpretation gives "questions of law" the same meaning across both provisions. Notably, when Congress enacted the Limited Review Provision, it added language to the end of the zipper clause (following the language quoted above) to clarify that, except as provided elsewhere in § 1252, " 'no court shall have jurisdiction' " to " 'review ... such questions of law or fact.' " § 106, 119 Stat. 311. There is thus every reason to think that Congress used the phrase "questions of law" to have the same meaning in both provisions.
3
Consider also the Limited Review Provision's statutory history and the relevant precedent. The parties agree that Congress enacted the Limited Review Provision in response to this Court's decision in St. Cyr . See Brief for Respondent 16, 27-31; Brief for Petitioners 31-33. In that case, the Court evaluated the effect of various allegedly jurisdiction-stripping provisions, including the predecessor to § 1252(a)(2)(C). That predecessor (which today is modified by the Limited Review Provision) essentially barred judicial review of removal orders based on an alien's commission of certain crimes. See St. Cyr , 533 U.S. at 298, 311, 121 S.Ct. 2271 (citing § 1252(a)(2)(C) (1994 ed., Supp. V)). This Court interpreted that predecessor and the other purportedly jurisdiction-stripping provisions as not barring (i.e., as permitting) review in habeas corpus proceedings, to avoid the serious constitutional questions that would be raised by a contrary interpretation. See St. Cyr , 533 U.S. at 299-305, 314, 121 S.Ct. 2271.
In doing so, the Court suggested that the Constitution, at a minimum, protected the writ of habeas corpus " 'as it existed in 1789.' " Id., at 300-301, 121 S.Ct. 2271. The Court then noted the kinds of review that were traditionally available in a habeas proceeding, which included "detentions based on errors of law, including the erroneous application or interpretation of statutes." Id., at 302, 121 S.Ct. 2271 (emphasis added). And it supported this view by citing cases from the 18th and early 19th centuries. See id., at 302-303, and nn. 18-23, 121 S.Ct. 2271. English cases consistently demonstrate that the "erroneous application ... of statutes" includes the misapplication of a legal standard to the facts of a particular case. See, e.g., Hollingshead's Case , 1 Salk. 351, 91 Eng. Rep. 307 (K. B. 1702); King v. Nathan , 2 Str. 880, 93 Eng. Rep. 914 (K. B. 1724); King v. Rudd , 1 Cowp. 331, 334-337, 98 Eng. Rep. 1114, 1116-1117 (K. B. 1775); King v. Pedley , 1 Leach 325, 326, 168 Eng. Rep. 265, 266 (1784). The Court ultimately made clear that "Congress could, without raising any constitutional questions, provide an adequate substitute [for habeas review] through the courts of appeals." St . Cyr. , 533 U.S. at 314, n. 38, 121 S.Ct. 2271.
Congress took up this suggestion. It made clear that the limits on judicial review in various provisions of § 1252 included habeas review, and it consolidated virtually all review of removal orders in one proceeding in the courts of appeals. See § 106(a), 119 Stat. 310-311 (inserting specific references to 28 U. S. C. § 2241 and " 'any other habeas corpus provision' "). At the same time, Congress added the Limited Review Provision, which permits judicial review of " 'constitutional claims or questions of law,' " the words directly before us now. 119 Stat. 310.
This statutory history strongly suggests that Congress added the words before us because it sought an "adequate substitute" for habeas in view of St. Cyr 's guidance. See supra, at 1071. If so, then the words "questions of law" in the Limited Review Provision must include the misapplication of a legal standard to undisputed facts, for otherwise review would not include an element that St. Cyr said was traditionally reviewable in habeas.
We reach the same conclusion through reference to lower court precedent. After we decided St. Cyr , numerous Courts of Appeals held that habeas review included review of the application of law to undisputed facts. See Cadet v. Bulger , 377 F.3d 1173, 1184 (CA11 2004) ("[W]e hold that the scope of habeas review available in [ 28 U. S. C.] § 2241 petitions by aliens challenging removal orders ... includes ... errors of law, including both statutory interpretations and application of law to undisputed facts or adjudicated facts"); Ogbudimkpa v. Ashcroft , 342 F.3d 207, 222 (CA3 2003) (same); Mu-Xing Wang v. Ashcroft , 320 F.3d 130, 143 (CA2 2003) (same); Singh v. Ashcroft , 351 F.3d 435, 441-442 (CA9 2003) ("[O]ther courts have rejected the Government's argument that only 'purely legal questions of statutory interpretation' permit the exercise of habeas jurisdiction.... We agree with those rulings"). We normally assume that Congress is "aware of relevant judicial precedent" when it enacts a new statute. Merck & Co. v. Reynolds , 559 U.S. 633, 648, 130 S.Ct. 1784, 176 L.Ed.2d 582 (2010). Thus, we should assume that Congress, aware of this precedent (and wishing to substitute review in the courts of appeals for habeas review), would have intended the phrase "questions of law" to include the application of a legal standard to established or undisputed facts.
Those who deem legislative history a useful interpretive tool will find that the congressional history of the Limited Review Provision supports this analysis. The House Conference Report refers to St. Cyr and adds that Congress' amendments are designed to "provide an 'adequate and effective' alternative to habeas corpus" in the courts of appeals. H. R. Conf. Rep. No. 109-72, p. 175 (2005) (citing St. Cyr , 533 U.S. at 314, n. 38, 121 S.Ct. 2271 ). The Report adds that the amendments "would not change the scope of review that criminal aliens currently receive." H. R. Conf. Rep. No. 109-72, at 175. And as we know, that "scope of review" included review of decisions applying a legal standard to undisputed or established facts. That is what this Court, in St. Cyr , had said was traditionally available in habeas; and it was how courts of appeals then determined the scope of habeas review. Notably, the legislative history indicates that Congress was well aware of the state of the law in the courts of appeals in light of St. Cyr . See H. R. Conf. Rep. No. 109-72, at 174 (discussing issues on which the Courts of Appeals agreed and those on which they had split after St. Cyr ). The statutory history and precedent, as well as the legislative history, thus support the conclusion that the statutory term "questions of law" includes the application of a legal standard to established facts.
III
The Government makes two significant arguments that we have not yet discussed. First, it points out that § 1252(a)(2)(C) forbids (subject to the Limited Review Provision) review of a removal order based on an alien's commission of certain crimes. If the words "questions of law" include "mixed questions," then for such aliens, the Limited Review Provision excludes only (or primarily) agency fact-finding from review. But if Congress intended no more than that, then why, the Government asks, did it not just say so directly rather than eliminate judicial review and then restore it for "constitutional claims or questions of law?" Brief for Respondent 49-50.
One answer to this question is that the Limited Review Provision applies to more of the statute than the immediately preceding subparagraph. See § 1252(a)(2)(D) (applying notwithstanding "subparagraph (B) or (C), or in any other provision of this chapter (other than this section)"). Another answer is that Congress did not write the Limited Review Provision on a blank slate. Rather, subparagraph (C) initially forbade judicial review, and Congress then simply wrote another subparagraph reflecting our description in St. Cyr of the review traditionally available in habeas (or a substitute for habeas in the courts of appeals). See supra, at 1070 - 1072. That statutory history also illustrates why the dissent errs in relying so significantly on language in subparagraph (C) proscribing judicial review. See post, at 1075 - 1076, 1078 (referring to the "sweeping" and "broad" language of subparagraph (C)). A broad and sweeping reading of subparagraph (C) was precisely what this Court rejected in St. Cyr , and Congress enacted subparagraph (D) in response to that opinion. Subparagraph (C)-constrained as it is by subparagraph (D)-must thus be read in that context.
Second, the Government argues that our interpretation will undercut Congress' efforts to severely limit and streamline judicial review of an order removing aliens convicted of certain crimes. See Brief for Respondent 29-30; see also post, at 1079, n. 5 (noting that the legislative history indicates that Congress intended to streamline removal proceedings by limiting judicial review). The Limited Review Provision, however, will still forbid appeals of factual determinations-an important category in the removal context. And that Provision, taken together with other contemporaneous amendments to § 1252, does streamline judicial review relative to the post- St. Cyr regime, by significantly curtailing habeas proceedings in district courts.
More than that, the Government's interpretation is itself difficult to reconcile with the Provision's basic purpose of providing an adequate substitute for habeas review. That interpretation would forbid review of any Board decision applying a properly stated legal standard, irrespective of how mistaken that application might be. By reciting the standard correctly, the Board would be free to apply it in a manner directly contrary to well-established law. The Government, recognizing the extreme results of its interpretation, suggested at oral argument that the courts of appeals might still be able to review certain "categori[es]" of applications, such as whether someone being in a coma always, sometimes, or never requires equitable tolling. See Tr. of Oral Arg. 38. The Government, however, left the nature and rationale of this approach unclear. The approach does not overcome the problem we have just raised, and seems difficult to reconcile with the language and purposes of the statute.
* * *
For these reasons, we reverse the Fifth Circuit's "jurisdictional" decisions, vacate its judgments, and remand these cases for further proceedings consistent with this opinion.
It is so ordered.
JUSTICE THOMAS, with whom JUSTICE ALITO joins as to all but Part II-A-1, dissenting.
We granted certiorari to decide whether a denial of equitable tolling for lack of due diligence is reviewable as a "question of law" under 8 U. S. C. § 1252(a)(2)(D). Not content with resolving that narrow question, the Court categorically proclaims that federal courts may review immigration judges' applications of any legal standard to established facts in criminal aliens' removal proceedings. Ante , at 1067. In doing so, the majority effectively nullifies a jurisdiction-stripping statute, expanding the scope of judicial review well past the boundaries set by Congress. Because this arrogation of authority flouts both the text and structure of the statute, I respectfully dissent.
I
Under § 1252(a)(2)(C), "[n]otwithstanding any other provision of law (statutory or nonstatutory), ... no court shall have jurisdiction to review any final order of removal against an alien who is removable by reason of having committed [certain] criminal offense[s]." This broad jurisdiction-stripping provision is known as the "criminal-alien bar." The only exceptions to the provision's otherwise all-encompassing language are found in § 1252(a)(2)(D), which states that "[n]othing in subparagraph ... (C) ... shall be construed as precluding review of constitutional claims or questions of law." Thus, under the criminal-alien bar, any claim that neither is constitutional nor raises a question of law is unreviewable. Because petitioners raise no constitutional claim and due diligence in the equitable-tolling context is not a "question of law," their claims are unreviewable.
A
Equitable tolling's due-diligence requirement presents a mixed question of law and fact. A litigant will qualify for equitable tolling only if he "has pursued his rights diligently but some extraordinary circumstance prevents him from bringing a timely action." Lozano v. Montoya Alvarez , 572 U.S. 1, 10, 134 S.Ct. 1224, 188 L.Ed.2d 200 (2014). To determine whether a litigant has exercised due diligence, judges must conduct what this Court has characterized as an " 'equitable, often fact-intensive' " inquiry, considering "in detail" the unique facts of each case to decide whether a litigant's efforts were reasonable in light of his circumstances. Holland v. Florida , 560 U.S. 631, 653-654, 130 S.Ct. 2549, 177 L.Ed.2d 130 (2010) (BREYER, J., for the Court). In other words, courts ask "whether the historical facts found satisfy the legal test," which, as this Court recently (and unanimously) recognized, is a quintessential " 'mixed question' of law and fact." U. S. Bank N. A. v. Village at Lakeridge, LLC , 583 U. S. ----, ----, 138 S.Ct. 960, 966, 200 L.Ed.2d 218 (2018) (quoting Pullman-Standard v. Swint , 456 U.S. 273, 289, n. 19, 102 S.Ct. 1781, 72 L.Ed.2d 66 (1982) ); but see ante , at 1068 - 1069.
B
The text of § 1252(a)(2)(D) authorizes courts to review only "constitutional claims or questions of law." It does not refer to mixed questions of law and fact, and cannot be divined to do so. As the statute's plain language and structure demonstrate, "questions of law" cannot reasonably be read to include mixed questions.
Although the statute does not define "questions of law," longstanding historical practice indicates that the phrase does not encompass mixed questions of law and fact. For well over a century, this Court has recognized questions of law, questions of fact, and mixed questions of law and fact as three discrete categories. See, e.g., Pullman-Standard , supra , at 288, 102 S.Ct. 1781 (distinguishing between a "question of law," a "mixed question of law and fact," and a "pure question of fact"); Ross v. Day , 232 U.S. 110, 116, 34 S.Ct. 233, 58 L.Ed. 528 (1914) (distinguishing between "a mere question of law" and "a mixed question of law and fact"); Bates & Guild Co. v. Payne , 194 U.S. 106, 109, 24 S.Ct. 595, 48 L.Ed. 894 (1904) (distinguishing between "mixed questions of law and fact" and questions "of law alone"); Jewell v. Knight , 123 U.S. 426, 432, 8 S.Ct. 193, 31 L.Ed. 190 (1887) (distinguishing between "questions of law only," "questions of fact," and questions "of mixed law and fact"); Republican River Bridge Co. v. Kansas Pacific R. Co. , 92 U.S. 315, 318-319, 23 L.Ed. 515 (1876) (distinguishing between a "mixed question of law and fact," a "law question," and a "fact [question]"). A leading civil procedure treatise at the time of § 1252(a)(2)(D) 's enactment confirms this understanding. See 9A C. Wright & A. Miller, Federal Practice and Procedure §§ 2588 - 2589 (2d ed. 1995) (distinguishing between conclusions and questions of law, and "mixed questions of law and fact").
The majority resists this conclusion by pointing to cases in which the Court has characterized mixed questions as either legal or factual. But this occasional emphasis on either law or fact does not change the reality that many questions include both. This Court sometimes uses these two categories because "[m]ixed questions are not all alike" and, in certain contexts, this Court must distinguish between them by determining whether they present primarily legal or primarily factual inquiries. Village at Lakeridge , supra , 583 U.S., at ---- - ----, 138 S.Ct., at 966-968 (whether a creditor is a nonstatutory insider presents a factual inquiry); see also Neitzke v. Williams , 490 U.S. 319, 326, 109 S.Ct. 1827, 104 L.Ed.2d 338 (1989) (whether a complaint fails to state a claim presents a legal inquiry).
The Court often uses these labels in contexts that lend themselves to a fact/law dichotomy. For example, it asks whether a question is primarily legal or primarily factual when it needs to determine the appropriate standard of appellate review. See, e.g., Village at Lakeridge , supra , 583 U.S., at ---- - ----, 138 S.Ct., at 967-968. A similar dichotomy arises when the Court considers whether an issue is one for the judge or jury. See, e.g., United States v. Gaudin , 515 U.S. 506, 512, 115 S.Ct. 2310, 132 L.Ed.2d 444 (1995) ("the application-of-legal-standard-to-fact sort of question ..., commonly called a 'mixed question of law and fact,' has typically been resolved by juries" as a fact issue).
But these considerations are irrelevant in the context of a statutory judicial-review provision such as § 1252(a)(2), which contains text that refers only to "questions of law." The federal appellate judges who review claims under this provision are competent to review legal, factual, and mixed questions alike; their authority is constrained only by the statutory text. Our task, therefore, is simply to interpret the words of the statute, which invoke no forced dichotomy because Congress could have easily included mixed questions in the text if it wanted to do so. See, e.g. , 38 U. S. C. § 7292(d) (referring to a "challenge to a law ... as applied to the facts of a particular case" as distinct from "questions of law"). Accordingly, there is no need to place the due-diligence inquiry into either category here.
Moreover, conflating "questions of law" with mixed questions would lead to absurd results in light of the statute's structure. The criminal-alien bar, which directly precedes 8 U. S. C. § 1252(a)(2)(D), is an unequivocally broad jurisdiction-stripping provision, barring review "[n]otwithstanding any other provision of law (statutory or nonstatutory)." § 1252(a)(2)(C). That is the default rule. Section 1252(a)(2)(D) merely delineates two narrow exceptions to this criminal-alien bar-"constitutional claims" and "questions of law."
Reading "questions of law" to include all mixed questions would turn § 1252(a)(2) 's structure on its head. It would transform § 1252(a)(2)(D) 's narrow exception into a broad provision permitting judicial review of all criminal aliens' challenges to their removal proceedings except the precious few that raise only pure questions of fact. Because those questions are already effectively unreviewable under the Immigration and Nationality Act's (INA's) extremely deferential standard, § 1252(b)(4)(B) (Board's "findings of fact are conclusive unless any reasonable adjudicator would be compelled to conclude to the contrary"), this interpretation would reduce the jurisdiction-stripping provision to a near nullity. Put another way, the exception would all but swallow the rule. The logical reading of § 1252(a)(2) is that the exception is narrower than the rule and covers only what is stated in the text: constitutional claims and questions of law.
II
Undeterred by the statute's text and structure, the majority concludes that criminal aliens are entitled to judicial review of any question involving the application of established facts to a legal standard. Ante , at 1067. Even a fact-intensive mixed question like due diligence, which requires "[p]recious little" "legal work," Village at Lakeridge , 583 U. S., at ----, 138 S.Ct., at 968, is a "question of law" according to the majority. To justify its erroneous reading of the text, the majority resorts to the presumption favoring judicial review and to legislative intent. Neither interpretive tool is appropriate for, or helpful to, the majority's analysis.
A
The majority relies heavily on the presumption favoring judicial review of agency action as set out in our modern cases. Ante, at ---- - ----. Even accepting those precedents, which no party asks us to reconsider, the presumption does no work here because the statute's text and structure plainly preclude review of mixed questions.
1
As an initial matter, I have come to have doubts about our modern cases applying the presumption of reviewability. Courts have long understood that they "generally have jurisdiction to grant relief " when individuals are injured by unlawful administrative action. American School of Magnetic Healing v. McAnnulty , 187 U.S. 94, 108, 23 S.Ct. 33, 47 L.Ed. 90 (1902). Applying this well-settled principle, we have refused to read a statute's "silence ... as to judicial review" to preclude such review. Stark v. Wickard , 321 U.S. 288, 309, 64 S.Ct. 559, 88 L.Ed. 733 (1944) ; see also Board of Governors, FRS v. Agnew , 329 U.S. 441, 444, 67 S.Ct. 411, 91 L.Ed. 408 (1947). But the modern presumption of reviewability relied on by the majority today goes far beyond this traditional approach.
The modern presumption developed against the backdrop of the Administrative Procedure Act (APA). See Abbott Laboratories v. Gardner , 387 U.S. 136, 140-141, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967) ; see also Weyerhaeuser Co. v. United States Fish and Wildlife Serv. , 586 U. S. ----, ----, 139 S.Ct. 361, 369-370, 202 L.Ed.2d 269 (2018). In that statute, Congress created a general right of judicial review for individuals injured by agency action. 5 U. S. C. § 702. Notably, however, Congress also specified that this right did not apply when "statutes preclude judicial review." § 701(a)(1).
Rather than recognize that courts should give the words of both the APA and agencies' organic statutes their natural meaning, the Court relied on "[t]he spirit of [legislators'] statements" in Committee Reports and the "broadly remedial purposes of the [APA]" to craft a strong presumption of reviewability. Heikkila v. Barber , 345 U.S. 229, 232, 73 S.Ct. 603, 97 L.Ed. 972 (1953). The Court ultimately concluded that statutory text alone, even that which "appears to bar [judicial review]," is "not conclusive." Id., at 233, 73 S.Ct. 603. Under this approach, a court will yield its jurisdiction "only upon a showing of 'clear and convincing evidence,' " drawn from a statute's purpose and legislative history, that Congress "intended" as much. Abbott Laboratories , supra , at 139, 141, 87 S.Ct. 1507 ; see also ante , at 1069 - 1070.
There are at least three reasons to doubt the soundness of this modern presumption. First, it elevates the supposed purpose or "spirit" of the APA over the statute's text. The "spirit" of a law is nothing more than "the unhappy interpretive conception of a supposedly better policy than can be found in the words of [the] authoritative text." A. Scalia & B. Garner, Reading Law: The Interpretation of Legal Texts 344 (2012). Its invocation represents a "bald assertion of an unspecified and hence unbounded judicial power to ignore what the law says." Id. , at 343. And it is especially problematic to rely on the "spirit" of the APA in actions arising under a separate substantive statute with a judicial-review provision that is entirely distinct from the APA, such as the INA.
Second, the Court's test for rebutting the presumption relies heavily on legislative intent, inviting courts to discern the mental processes of legislators through legislative history. But "[e]ven assuming a majority of Congress read the [legislative history], agreed with it, and voted for [the statute] with the same intent, 'we are a government of laws, not of men, and are governed by what Congress enacted rather than by what it intended.' " Digital Realty Trust, Inc. v. Somers , 583 U. S. ----, ----, 138 S.Ct. 767, 783, 200 L.Ed.2d 15 (2018) (THOMAS, J., concurring in part and concurring in judgment) (quoting Lawson v. FMR LLC , 571 U.S. 429, 459-460, 134 S.Ct. 1158, 188 L.Ed.2d 158 (2014) (Scalia, J., concurring in principal part and concurring in judgment)).
Finally, the clear-and-convincing-evidence requirement appears to conflict with the text of the Constitution. Under Articles I and III, Congress has the authority to establish the jurisdiction of inferior federal courts and to regulate the appellate jurisdiction of this Court. See Art. I, § 8, cl. 9; Art. III, § 2, cl. 2; see also Patchak v. Zinke , 583 U. S. ----, ---- - ----, 138 S.Ct. 897, 906-908, 200 L.Ed.2d 92 (2018). It occasionally wields this power to prevent federal courts from reviewing certain actions through jurisdiction-stripping statutes. See, e.g., 12 U. S. C. §§ 1818(i)(1), 4208 ; 15 U. S. C. § 719h(c)(3) ; 31 U. S. C. § 3730(e)(4)(A). Using this modern presumption, however, the Court has reached the opposite result, despite a statute's plain text. See, e.g., INS v. St. Cyr , 533 U.S. 289, 121 S.Ct. 2271, 150 L.Ed.2d 347 (2001) ; see also ante , at 1069 - 1070. By placing heightened requirements on statutes promulgated under Congress' exclusive authority rather than simply giving effect to their ordinary meaning, courts upset the delicate balance of power reflected in the Constitution's text.
2
Even assuming that the modern presumption is justified and can properly be applied to actions outside the APA context, it does no work in these cases. First, as explained above, "questions of law" cannot reasonably be read to include mixed questions. See supra , at 1074 - 1077; cf. Kucana v. Holder , 558 U.S. 233, 251, 130 S.Ct. 827, 175 L.Ed.2d 694 (2010). But even if it could, the sweeping language of § 1252(a)(2)(C) provides clear and convincing evidence that judicial review of mixed questions is barred. The broad language of that provision leaves no room for ambiguity as to Congress' design. In erecting the criminal-alien bar, Congress unequivocally precluded judicial review of wide swaths of claims. The presumption, to the extent it should apply here at all, is thus firmly rebutted.
The Court nevertheless concludes that the presumption of reviewability dictates today's result. It bases this conclusion on the observation that "interpreting [ § 1252(a)(2)(D) ] to exclude mixed questions would effectively foreclose judicial review of the Board's determinations so long as it announced the correct legal standard." Ante , at 1069 - 1070. But "[t]he resulting barrier to meaningful judicial review" is not a problem in need of a judicial solution, ante, at 1070-it is evidence of Congress' design, which is precisely the sort of "clear and convincing evidence" that should "dislodge the presumption," Kucana , supra , at 252, 130 S.Ct. 827 (internal quotation marks omitted). By using Congress' preclusive design to justify rather than dislodge the presumption, the majority dramatically expands the presumption, rendering it effectively irrebuttable.
B
The majority next relies on the purported purpose of § 1252(a)(2)(D) to justify its reading of the text. It claims that Congress intended to provide an " 'adequate substitute' for habeas in view of St. Cyr 's guidance" regarding the scope of the Suspension Clause. Ante , at 1071 - 1072. As explained above, legislative intent, to the extent it exists independent of the words in the statute, is unhelpful to the proper interpretation of a statute's text. See supra , at 1077 - 1078. But its invocation is especially unhelpful to the majority here. Even assuming Congress looked to St. Cyr when drafting § 1252(a)(2)(D), the limited "guidance" provided in that opinion supports my reading of the statute, not the majority's.
As an initial matter, the Court in St. Cyr expressly declined to resolve "the difficult question of what the Suspension Clause protects." St. Cyr , 533 U.S. at 301, n. 13, 121 S.Ct. 2271. Respondent in that case argued that § 1252(a)(2)(C) would violate the Suspension Clause if it were read to preclude review of all questions of law in habeas proceedings. But rather than affirm that position, the Court concluded that it was enough to merely identify that "substantial constitutional questio[n]" to warrant rejection of the Government's interpretation. Id. , at 300, 121 S.Ct. 2271. Indeed, the meaning of the Suspension Clause and its applicability to removal proceedings remain open questions. See Department of Homeland Security v. Thuraissigiam , --- U.S. ----, 140 S.Ct. 427, 205 L.Ed.2d 244 (2019) (granting certiorari). In explaining its decision, the Court in St. Cyr merely asserted that the Suspension Clause "protects the writ as it existed in 1789" and noted that "there is substantial evidence ... that pure questions of law " were generally covered by the common-law writ. 533 U.S. at 301, 304-305, 121 S.Ct. 2271 (emphasis added; internal quotation marks omitted). The decision said nothing about mixed questions or the application of settled facts to a legal standard.
The majority relies on one sentence of dicta in St. Cyr , which states that the common-law writ addressed "the erroneous application or interpretation of statutes." Id. , at 302, 121 S.Ct. 2271 ; see ante, at 1071. But the application of a statute does not always involve applying facts to a legal standard, nor is it necessarily analogous to the equitable and fact-intensive due-diligence inquiry.
The majority next suggests that Congress was familiar with the underlying details of common-law cases cited in St. Cyr , ante , at 1071, or the lower court decisions expanding on St. Cyr 's dicta, ante , at 1071 - 1072. But such a "fanciful presumption of legislative knowledge" cannot justify the majority's position. Scalia, Reading Law, at 324. And if Congress were presumed to have such a robust knowledge of our precedents, one would certainly expect it to be familiar with our historical practice of using "questions of law" and "mixed questions" as distinct terms. See supra , at 1074 - 1075.
The only guidance provided by St. Cyr 's dicta concerned "pure questions of law." 533 U.S. at 305, 121 S.Ct. 2271 ; see also id. , at 314, n. 38, 121 S.Ct. 2271 ("this case raises only a pure question of law ..., not ... an objection to the manner in which discretion was exercised"). So even if it were appropriate to assume that Congress enacted § 1252(a)(2)(D) with the collective intention of following St. Cyr 's guidance (which it is not), that statutory purpose supports reading "questions of law" to mean just that: "questions of law."
* * *
Ironically, the majority refers to § 1252(a)(2)(D) as the "Limited Review Provision." Ante , at ----. But according to the majority's interpretation, it is anything but "limited"-nearly all claims are reviewable. That reading contradicts the plain text and structure of § 1252(a)(2), which was enacted to strip federal courts of their jurisdiction to review most criminal aliens' claims challenging removal proceedings. The Constitution gives the Legislative Branch the authority to curtail that jurisdiction. We cannot simply invoke this presumption of reviewability to circumvent Congress' decision. Doing so upsets, not preserves, the separation of powers reflected in the Constitution's text. I respectfully dissent.
The majority also cites Mitchell v. Forsyth , 472 U.S. 511, 105 S.Ct. 2806, 86 L.Ed.2d 411 (1985), for the proposition that "whether a given set of facts meet a particular legal standard ... present[s] a legal inquiry." Ante, at 1068. But that case involved a motion for summary judgment, so the inquiry was limited to whether "a given proposition of law was not clearly established at the time the defendant committed the alleged acts." 472 U.S. at 529, n. 10, 105 S.Ct. 2806. It did not concern the application of facts to a legal standard, such as whether "the defendant's actions were in fact unlawful." Ibid.
Even if this statute were interpreted in terms of a fact/law dichotomy, the majority offers no explanation as to why the due-diligence inquiry would fall on the "primarily legal" side of the line.
The majority claims we must read § 1252(a)(2)(C) "in th[e] context" of the purported legislative intent behind § 1252(a)(2)(D). Ante , at 1072 - 1073. As explained below, atextual legislative intent is not an appropriate tool for interpreting a statute. See infra , at 1078 - 1080. But even if it were, the purported legislative intent here supports a narrow reading of § 1252(a)(2)(D) that leaves much of § 1252(a)(2)(C) intact. See infra , at 1077 - 1078.
The majority makes much of the phrase "questions of law and fact" in another subsection of § 1252, known as the "zipper clause," which consolidates judicial review of immigration proceedings. Ante , at 1078 - 1080 (discussing 8 U. S. C. § 1252(b)(9) ). But that language is most naturally read to encompass all three categories-"questions of law," "questions of ... fact," and "questions of law and fact." § 1252(b)(9). At a minimum, the meaning of the zipper clause's text is ambiguous and cannot overcome the plain text of §§ 1252(a)(2)(C)-(D).
To support its reliance on this presumption, the majority cites Merck & Co. v. Reynolds , 559 U.S. 633, 130 S.Ct. 1784, 176 L.Ed.2d 582 (2010). But that case presumed that when Congress used a specific term it imported a particular meaning that courts had given the term through uniform interpretation. See id. , at 647-648, 130 S.Ct. 1784. The majority goes much further here, claiming that Congress' "intent" was to give effect to lower courts' interpretations of this Court's dicta. Ante , at 1072. Contrary to the majority's suggestion, nothing in the legislative history indicates that Congress relied on lower courts' interpretations of St. Cyr in enacting § 1252(a)(2)(D). Congress merely highlighted the "confusion in the federal courts" as one of "the many problems caused by St. Cyr ." H. R. Conf. Rep. No. 109-72, pp. 173-174 (2005). Notably, the Report also stated that "the most significant [problem]" was "that [the] decision allow[ed] criminal aliens to delay their expulsion from the United States for years." Id., at 173. Thus, even if one could divine a shared legislative intent by reading this Conference Report, it would appear that Congress intended to streamline removal proceedings by limiting judicial review to the greatest extent possible under St. Cyr . | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
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"Central Intelligence Agency",
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"Department or Secretary of Commerce",
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] | [
6
] |
NATIONAL LABOR RELATIONS BOARD v. STOWE SPINNING CO. et al.
No. 46.
Argued December 9-10, 1948.
Decided February 28, 1949.
Mozart G. Ratner argued the cause for petitioner. With him on the brief were Solicitor General Perlman, David P. Findling and Ruth Weyand.
Paul C. Whitlock argued the cause and filed a brief for respondents.
Opinion of the Court by
Mr. Justice Murphy,
announced by Mr. Justice Rutledge.
The principal question for decision is whether the circumstances justified the finding of an unfair labor practice. A union organizer was refused the use of a company-owned meeting hall, and the union complained to the Board. After the usual proceedings, the Board found an unfair labor practice had been committed, 70 N. L. R. B. 614. The Court of Appeals refused to enforce the Board’s order, 165 F. 2d 609, and the case is here on certiorari. A subsidiary problem is the breadth of the order we are asked to enforce.
First. We are asked to overrule the Board’s finding that it is an unfair labor practice to discriminate against a union by denying it the only available meeting hall in a company town when the Board finds that the “sole purpose” of the discriminatory denial is “to impede, prevent, and discourage self-organization and collective bargaining by the [company’s] employees within the meaning of Section 7 of the Act.”
North Belmont, North Carolina, is the home of the four respondents’ mills. Interlocking directorates and family ties make the four equal one for our purposes. Each of the mills owns a large number of houses in North Belmont which are rented to employees. At a central location are a school, a theatre, and a building housing a post office, all owned or controlled by the mill owners. In sum, North Belmont is a company town.
In December, 1944, Harris, a union organizer, appeared in North Belmont and began the first organization drive since the textile strike ten years earlier. He decided to begin with employees of respondent Stowe. A meeting hall was needed for the activity, and the post office building was the only choice open to the organizer — he was refused permission to use the school building, and was told that the theatre could be used only for motion pictures. Most of the post office building was erected by respondents for the Patriotic Order Sons of America, a “patriotic secret order to which any male citizen of the United States of good moral character” can belong. Many of respondents’ employees are members; respondents check off monthly dues.
The Order’s president, Baxter Black, told Harris that the proposed meeting might be held in the hall on the payment of a janitor’s fee. Harris emphasized that he was willing to pay for the use of the hall. It is clear he was not asking special favors. Circulars were printed announcing the time and place of the meeting. Thereupon D. P. Stowe, for the four employer-owners, rescinded the permission granted — because Harris was a textile organizer. While the building seems to have been erected on the understanding that only the Patriotic Order might use it, that condition was never enforced until Harris’ union affiliation reached the ears of the owners. Until then the Order had handled its own affairs; Black had been sure that his permission was the final word on the matter.
The Board found that the refusal “to permit use of the hall . . . under the circumstances, constituted unlawful disparity of treatment and discrimination against the Union.” The union’s complaint also charged that several employees had been discharged because of union activity, and again the Board found for the union. The Court of Appeals enforced the reinstatement order, but refused enforcement of the order relating to the use of the hall. On the latter determination we granted certiorari to resolve an asserted conflict with prior decisions of this Court.
Company rules in Republic Aviation Corp. v. Labor Board and Labor Board v. Le Tourneau Company of Georgia, 324 U. S. 793, forbade union solicitation on company property. Under the circumstances the Board found that these rules offended the Act, and we upheld the Board. Stowe tells us that its case is far removed from the principles established in those decisions: the Board is now invading private property unconnected with the plant, for a private purpose, in the very teeth of the Fifth Amendment. “From Magna Charta on down,” we are warned, “the individual has been guaranteed against disseisin of his property.” A privately owned hall is different from the parking lot involved in Le Tourneau’s case.
In the sense suggested by Stowe, the Board finding goes further than those upheld previously by this Court. But in a larger sense it does not. We mention nothing new when we notice that union organization in a company town must depend, even more than usual, on a hands-off attitude on the part of management. And it is clear that one of management’s chief weapons, in attempting to stifle organization, is the denial of a place to meet. We cannot equate a company-dominated North Carolina mill town with the vast metropolitan centers where a number of halls are available within easy reach of prospective union members. We would be ignoring the obvious were we to hold that a common meeting place in a company town is not an important part of the company’s business. The question is of course one of degree. But isolated plants must draw labor, and an element in that drawing power is a community hall of some kind. In the background of discrimination found by the Board in this case, we cannot say that its conclusion should be upset. As we will point out below, the Board may weigh the employer’s expressed motive in determining the effect on employees of management’s otherwise equivocal act.
Stowe contends that its denial of facilities to the union was in accord with § 8 (2) of the Act, prohibiting employer interference with the formation or administration of a labor organization. One Board member agreed, citing a number of cases in which the Board had made a grant of company facilities the basis for unfair practice findings. But Stowe would have the cases hold more than they do. In each of them, granting such facilities to the union was only one facet in a pattern of domination found by the Board. The opinion of the Board in this case states that the “mere granting of a meeting place to a union by an employer under the conditions present here would not ... in and of itself constitute unlawful assistance to that union . . .• .” We have said that the Wagner Act “left to the Board the work of applying the Act’s general prohibitory language in the light of the infinite combinations of events which might be charged as violative of its terms.” Republic Aviation Corp. v. Labor Board, supra, 324 U. S. at 798. Sections 8(1) and 8 (2) of the Act would seem to run into each other in the situation before us, were we to forget that the Board is the agency which weighs the relevance of factual data. Presumptions such as those employed in the Peyton Packing Company case, 49 N. L. R. B. 828, at 843-844, may be important in cases like this one. While the Wagner Act does not ask punishment for evil intent, repeated acts of discrimination may establish a natural tendency to view justifications of other labor practices with some skepticism. Calculating a cumulative effect on employees is not a job for this Court. We cannot say that the Board was wrong as a matter of law in view of the setting. •
The philosophy expressed in the Fifth Amendment does not affect the view we take. The Wagner Act was adopted pursuant to the commerce clause, and certainly can authorize the Board to stop an unfair labor practice as important as the one we are considering. Respondents are unquestionably engaged in interstate commerce within the meaning of the Act. It is not “ ‘every interference with property rights that is within the Fifth Amendment .... Inconvenience, or even some dislocation of property rights, may be necessary in order to safeguard the right to collective bargaining.’ ” 324 U. S. at 802.
Accordingly, we think the Court of Appeals should have upheld the Board’s unfair practice charge.
Second. Stowe’s final contention, that the Board’s order is too broad, is more serious. Stowe is ordered to “cease and desist from . . . refusing to permit the use of the Patriotic Order Sons of America hall by its employees or employees of [the other respondents] or by Textile Workers Union of America, C. I. 0., or any other labor organization, for the purpose of self-organization or collective bargaining.” There are none of the usual qualifications on the face of the order;* one construction would permit unions to use the hall at all times, whatever the legitimate activity of the Patriotic Order.
We are asked to read the decree in its background, and reject what is called a strained construction. Implicit in the order, we are told, is the word “reasonable.” Perhaps this is true. The words of even a judicial decree must be read in their setting. But violation of the order brings the swift retribution of contempt, without the normal safeguards of a full-dress proceeding. Some notice of the prior proceeding must be taken in a contempt action — the very word “reasonable” invites a glance at what has gone before. But too great dependence on the former action places defendants under a restraint that makes the order itself a useless formality. Again the question is of degree.
In this case, however, the Board did not find that the very denial of the hall was an unfair labor practice. It found that the refusal by these respondents was unreasonable because the hall had been given freely to others, and because no other halls were available for organization. Now the Board asks us to enforce an order that simply does not mean what it says. We must require explicit language making it clear that the mere denial of facilities will not subject respondents to punishment for contempt. What the Board found, and all we are considering here, is discrimination. The decree should be modified to order respondents to refrain from any activity which would cause a union’s application to be treated on a different basis than those of others similarly situated.
We therefore direct the Court of Appeals to remand the case to the Board for amendment of its order to conform to the Board’s findings and this opinion.
Reversed and remanded.
Under the Wagner Act, 49 Stat. 449, 29 U. S. C. §§ 151, 158 (1).
The Board found that “A. C. Lineberger is president of the respondents Perfection, Acme, and Linford; J. Harold Lineberger is vice president of the respondents Perfection and Linford, and secretary-treasurer of the respondent Acme; D. P. Stowe is vice president of the respondent Acme and secretary-treasurer of the respondent Perfection. The officers of the respondent Stowe are C. T. Stowe, president; C. P. Stowe, vice president; and R. L. Stowe, secretary-treasurer, all of whom are cousins of D. P. Stowe.”
Stowe’s petition was denied, 334 U. S. 831; the reinstatement order is not being reviewed in this Court.
See Lahne, The Cotton Mill Worker (New York, 1944), pp. 50-51.
See MacDonald, Southern Mill Hills (New York, 1928), p. 34; Blanshard, Labor in Southern Cotton Mills (New York, 1927), p. 64.
See notes 4 and 5.
Respondents do not contest the Board finding that antiunion bias was the cause for their refusal of the hall. And four employees were discharged for union activity. See 165 F. 2d 609, 614. Even in the Republic and Le Tourneau cases no such discrimination was shown. 324 U. S. at 797, 801.
See, for example, Berkshire Knitting Mills v. Labor Board, 139 F. 2d 134 (company union given use of hall denied to outside union); Labor Board v. Carlisle Lumber Co., 94 F. 2d 138 (company union given preference over Board-certified bargaining representative); Labor Board v. Norfolk Shipbuilding & Drydock Corp., 109 F. 2d 128 (recognition of inside union without ascertaining employees’ wishes — inside union given use of company rooms); Labor Board v. Lane Cotton Mills, 111 F. 2d 814 (refusal to bargain with certified union coupled with use of recreation room by company union). And see Cudahy Packing Co. v. Labor Board, 118 F. 2d 295; Matter of Standard Oil of California, 61 N. L. R. B. 1251; Matter of Virginia Electric & Power Co., 44 N. L. R. B. 404, enforced 319 U. S. 533.
Cited and quoted with approval in the Republic case at 803, 804.
We pointed out that neither the Republic nor Le Tourneau cases “is like a mining or lumber camp where the employees pass their rest as well as their work time on the employer’s premises, so that union organization must proceed upon the employer’s premises or be seriously handicapped.” 324 U. S. at 799.
Compare Labor Board v. Lake Superior Lumber Corp., 167 F. 2d 147, 150, where the Board recognized that the employer might impose “lawful and reasonable conditions.” | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
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] | [
81
] |
DeSHANEY, a minor, by his guardian ad litem, et al. v. WINNEBAGO COUNTY DEPARTMENT OF SOCIAL SERVICES et al.
No. 87-154.
Argued November 2, 1988
Decided February 22, 1989
Rehnquist, C. J., delivered the opinion of the Court, in which White, Stevens, O’Connor, Scalia, and Kennedy, JJ., joined. Brennan, J., filed a dissenting opinion, in which Marshall and Blackmun, JJ., joined, post, p. 203. Blackmun, J., filed a dissenting opinion, post, p. 212.
Donald J. Sullivan argued the cause for petitioners. With him on the briefs was Curry First.
Mark J. Mingo argued the cause for respondents. With him on the brief were Wayne M. Yankala and Joel I. Klein.
Deputy Solicitor General Ayer argued the cause for the United States as amicus curiae urging affirmance. With him on the brief were Solicitor General Fried, Assistant Attorney General Bolton, Roy T. Englert, Jr., Barbara L. Herwig, and John S. Koppel.
Briefs of amici curiae urging reversal were filed for the American Civil Liberties Union Children’s Rights Project et al. by Christopher A. Hansen, Marcia Robinson Lowry, John A. Powell, Steven R. Shapiro, and Helen Hershkoff; and for the Massachusetts Committee for Children and Youth by Laura L. Carroll.
Briefs urging affirmance were filed for the State of New York et al. by Robert Abrams, Attorney General of New York, 0. Peter Shenvood, Solicitor General, Peter H. Schiff, Deputy Solicitor General, and Michael S. Buskus, Assistant Attorney General, Joseph I. Lieberman, Attorney General of Connecticut, J. Joseph Curran, Jr., Attorney General of Maryland, Dave Frohnmayer, Attorney General of Oregon, LeRoy S. Zimmerman, Attorney General of Pennsylvania, Donald J. Hanaivay, Attorney General of Wisconsin, and Charles Hoornstra, Assistant Attorney General; and for the National Association of Counties et al. by Bernia Ruth Solomon and Douglas A. Poe.
Givendolyn H. Gregory, August W. Steinhilber, and Thomas A. Shannon filed a brief for the National School Boards Association as amicus curiae.
Chief Justice Rehnquist
delivered the opinion of the Court.
Petitioner is a boy who was beaten and permanently injured by his father, with whom he lived. Respondents are social workers and other local officials who received complaints that petitioner was being abused by his father and had reason to believe that this was the case, but nonetheless did not act to remove petitioner from his father’s custody. Petitioner sued respondents claiming that their failure to act deprived him of his liberty in violation of the Due Process Clause of the Fourteenth Amendment to the United States Constitution. We hold that it did not.
I — I
The facts of this case are undeniably tragic. Petitioner Joshua DeShaney was born in 1979. In 1980, a Wyoming court granted his parents a divorce and awarded custody of Joshua to his father, Randy DeShaney. The father shortly thereafter moved to Neenah, a city located in Winnebago County, Wisconsin, taking, the infant Joshua with him. There he entered into a second marriage, which also ended in divorce.
The Winnebago County authorities first learned that Joshua DeShaney might be a victim of child abuse in January 1982, when his father’s second wife complained to the police, at the time of their divorce, that he had previously “hit the boy causing marks and [was] a prime case for child abuse.” App. 152-153. The Winnebago County Department of Social Services (DSS) interviewed the father, but he denied the accusations, and DSS did not pursue them further. In January 1983, Joshua was admitted to a local hospital with multiple bruises and abrasions. The examining physician suspected child abuse and notified DSS, which immediately obtained an order from a Wisconsin juvenile court placing Joshua in the temporary custody of the hospital. Three days later, the county convened an ad hoc “Child Protection Team” — consisting of a pediatrician, a psychologist, a police detective, the county’s lawyer, several DSS caseworkers, and various hospital personnel — to consider Joshua’s situation. At this meeting, the Team decided that there was insufficient evidence of child abuse to retain Joshua in the custody of the court. The Team did, however, decide to recommend several measures to protect Joshua, including enrolling him in a preschool program, providing his father with certain counselling services, and encouraging his father’s girlfriend to move out of the home. Randy DeShaney entered into a voluntary agreement with DSS in which he promised to cooperate with them in accomplishing these goals.
Based on the recommendation of the Child Protection Team, the juvenile court dismissed the child protection case and returned Joshua to the custody of his father. A month later, emergency room personnel called the DSS caseworker handling Joshua’s case to report that he had once again been treated for suspicious injuries. The caseworker concluded that there was no basis for action. For the next six months, the caseworker made monthly visits to the DeShaney home, during which she observed a number of suspicious injuries on Joshua’s head; she also noticed that he had not been enrolled in school, and that the girlfriend had not moved out. The caseworker dutifully recorded these incidents in her files, along with her continuing suspicions that someone in the DeShaney household was physically abusing Joshua, but she did nothing more. In November 1983, the emergency room notified DSS that Joshua had been treated once again for injuries that they believed to be caused by child abuse. On the caseworker’s next two visits to the DeShaney home, she was told that Joshua was too ill to see her. Still DSS took no action.
In March 1984, Randy DeShaney beat 4-year-old Joshua so severely that he fell into a life-threatening coma. Emergency brain surgery revealed a series of hemorrhages caused by traumatic injuries to the head inflicted over a long pe-, riod of time. Joshua did not die, but he suffered brain damage so severe that he is expected to spend the rest of his life confined to an institution for the profoundly retarded. Randy DeShaney was subsequently tried and convicted of child abuse.
Joshua and his mother brought this action under 42 U. S. C. § 1983 in the United States District Court for the Eastern District of Wisconsin against respondents Winnebago County, DSS, and various individual employees of DSS. The complaint alleged that respondents had deprived Joshua of his liberty without due process of law, in violation of his rights under the Fourteenth Amendment, by failing to intervene to protect him against a risk of violence at his father’s hands of which they knew or should have known. The District Court granted summary judgment for respondents.
The Court of Appeals for the Seventh Circuit affirmed, 812 F. 2d 298 (1987), holding that petitioners had not made out an actionable § 1983 claim for two alternative reasons. First, the court held that the Due Process Clause of the Fourteenth Amendment does not require a state or local governmental entity to protect its citizens from “private violence, or other mishaps not attributable to the conduct of its employees.” Id., at 301. In so holding, the court specifically rejected the position endorsed by a divided panel of the Third Circuit in Estate of Bailey by Oare v. County of York, 768 F. 2d 503, 510-511 (1985), and by dicta in Jensen v. Conrad, 747 F. 2d 185, 190-194 (CA4 1984), cert. denied, 470 U. S. 1052 (1985), that once the State learns that a particular child is in danger of abuse from third parties and actually undertakes to protect him from that danger, a “special relationship” arises between it and the child which imposes an affirmative constitutional duty to provide adequate protection. 812 F. 2d, at 303-304. Second, the court held, in reliance on our decision in Martinez v. California, 444 U. S. 277, 285 (1980), that the causal connection between respondents’ conduct and Joshua’s injuries was too attenuated to establish a deprivation of constitutional rights actionable under § 1983. 812 F. 2d, at 301-303. The court therefore found it unnecessary to reach the question whether respondents’ conduct evinced the “state of mind” necessary to make out a due process claim after Daniels v. Williams, 474 U. S. 327 (1986), and Davidson v. Cannon, 474 U. S. 344 (1986). 812 F. 2d, at 302.
Because of the inconsistent approaches taken by the lower courts in determining when, if ever, the failure of a state or local governmental entity or its agents to provide an individual with adequate protective services constitutes a violation of the individual’s due process rights, see Archie v. Racine, 847 F. 2d 1211, 1220-1223, and n. 10 (CA7 1988) (en banc) (collecting cases), cert, pending, No. 88-576, and the importance of the issue to the administration of state and local governments, we granted certiorari. 485 U. S. 958 (1988). We now affirm.
II
The Due Process Clause of the Fourteenth Amendment provides that “[n]o State shall. . . deprive any person of life, liberty, or property, without due process of law.” Petitioners contend that the State deprived Joshua of his liberty interest in “free[dom] from . . . unjustified intrusions on personal security,” see Ingraham v. Wright, 430 U. S. 651, 673 (1977), by failing to provide him with adequate protection against his father’s violence. The claim is one invoking the substantive rather than the procedural component of the Due Process Clause; petitioners do not claim that the State denied Joshua protection without according him appropriate procedural safeguards, see Morrissey v. Brewer, 408 U. S. 471, 481 (1972), but that it was categorically obligated to protect him in these circumstances, see Youngberg v. Romeo, 457 U. S. 307, 309 (1982).
But nothing in the language of the Due Process Clause itself requires the State to protect the life, liberty, and property of its citizens against invasion by private actors. The Clause is phrased as a limitation on the State’s power to act, • not as a guarantee of certain minimal levels of safety and security. It forbids the State itself to deprive individuals of life, liberty, or property without “due process of law,” but its language cannot fairly be extended to impose an affirmative obligation on the State to ensure that those interests do not come to harm through other means. Nor does history support such an expansive reading of the constitutional text. Like its counterpart in the Fifth Amendment, the Due Process Clause of the Fourteenth Amendment was intended to prevent government “from abusing [its] power, or employing it as an instrument of oppression,” Davidson v. Cannon, supra, at 348; see also Daniels v. Williams, supra, at 331 (“ ‘ “to secure the individual from the arbitrary exercise of the powers of government,’”” and “to prevent governmental power from being ‘used for purposes of oppression’ ”) (internal citations omitted); Parratt v. Taylor, 451 U. S. 527, 549 (1981) (Powell, J., concurring in result) (to prevent the “affirmative abuse of power”). Its purpose was to protect the people from the State, not to ensure that the State protected them from each other. The Framers were content to leave the extent of governmental obligation in the latter area to the democratic political processes.
Consistent with these principles, our cases have recognized that the Due Process Clauses generally confer no affirmative right to governmental aid, even where such aid may be necessary to secure life, liberty, or property interests of which the government itself may not deprive the individual. See, e. g., Harris v. McRae, 448 U. S. 297, 317-318 (1980) (no obligation to fund abortions or other medical services) (discussing Due Process Clause of Fifth Amendment); Lindsey v. Normet, 405 U. S. 56, 74 (1972) (no obligation to provide adequate housing) (discussing Due Process Clause of Fourteenth Amendment); see also Youngberg v. Romeo, supra, at 317 (“As a general matter, a State is under no constitutional duty to provide substantive services for those within its border”). As we said in Harris v. McRae: “Although the liberty protected by the Due Process Clause affords protection against unwarranted government interference ... , it does not confer an entitlement to such [governmental aid] as may be necessary to realize all the advantages of that freedom.” 448 U. S., at 317-318 (emphasis added). If the Due Process Clause does not require the State to provide its citizens with particular protective services, it follows that the State cannot be held liable under the Clause for injuries that could have been averted had it chosen to provide them. As a general matter, then, we conclude that a State’s failure to protect an individual against private violence simply does not constitute a violation of the Due Process Clause.
Petitioners contend, however, that even if the Due Process Clause imposes no affirmative obligation on the State to provide the general public with adequate protective services, such a duty may arise out of certain “special relationships” created or assumed by the State with respect to particular individuals. Brief for Petitioners 13-18. Petitioners argue that such a “special relationship” existed here because the State knew that Joshua faced a special danger of abuse at his father’s hands, and specifically proclaimed, by word and by deed, its intention to protect him against that danger. Id., at 18-20. Having actually undertakén to protect Joshua from this danger — which petitioners concede the State played no part in creating — the State acquired an affirmative “duty,” enforceable through the Due Process Clause, to do so in a reasonably competent fashion. Its failure to discharge that duty, so the argument goes, was an abuse of governmental power that so “shocks the conscience,” Rochin v. California, 342 U. S. 165, 172 (1952), as to constitute a substantive due process violation. Brief for Petitioners 20.
We reject this argument. It is true that in certain limited circumstances the Constitution imposes upon the State affirmative duties of care and protection with respect to particular individuals. In Estelle v. Gamble, 429 U. S. 97 (1976), we recognized that the Eighth Amendment’s prohibition against cruel and unusual punishment, made applicable to the States through the Fourteenth Amendment’s Due Process Clause, Robinson v. California, 370 U. S. 660 (1962), requires the State to provide adequate medical care to incarcerated prisoners. 429 U. S., at 103-104. We reasoned that because the prisoner is unable “ ‘by reason of the deprivation of his liberty [to] care for himself,’” it is only “‘just’” that the State be required to care for him. Ibid., quoting Spicer v. Williamson, 191 N. C. 487, 490, 132 S. E. 291, 293 (1926).
In Youngberg v. Romeo, 457 U. S. 307 (1982), we extended this analysis beyond the Eighth Amendment setting, holding that the substantive component of the Fourteenth Amendment’s Due Process Clause requires the State to provide involuntarily committed mental patients with such services as are necessary to ensure their “reasonable safety” from themselves and others. Id., at 314-325; see id., at 315, 324 (dicta indicating that the State is also obligated to provide such individuals with “adequate food, shelter, clothing, and medical care”). As we explained: “If it is cruel and unusual punishment to hold convicted criminals in unsafe conditions, it must be unconstitutional [under the Due Process Clause] to confine the involuntarily committed — who may not be punished at all — in unsafe conditions.” Id., at 315-316; see also Revere v. Massachusetts General Hospital, 463 U. S. 239, 244 (1983) (holding that the Due Process Clause requires the responsible government or governmental agency to provide medical care to suspects in police custody who have been injured while being apprehended by the police).
But these cases afford petitioners no help. Taken together, they stand only for the proposition that when the State takes a person into its custody and holds him there against his will, the Constitution imposes upon it a corresponding duty to assume some responsibility for his safety and general well-being. See Youngberg v. Romeo, supra, at 317 (“When a person is institutionalized — and wholly dependent on the State[,]... a duty to provide certain services and care does exist”). The rationale for this principle is simple enough: when the State by the affirmative exercise of its power so restrains an individual’s liberty that it renders him unable to care for himself, and at the same time fails to provide for his basic human needs — e. g., food, clothing, shelter, medical care, and reasonable safety — it transgresses the substantive limits on state action set by the Eighth Amendment and the Due Process Clause. See Estelle v. Gamble, supra, at 103-104; Youngberg v. Romeo, supra, at 315-316. The affirmative duty to protect arises not from the State’s knowledge of the individual’s predicament or from its expressions of intent to help him, but from the limitation which it has imposed on his freedom to act on his own behalf. See Estelle v. Gamble, supra, at 103 (“An inmate must rely on prison authorities to treat his medical needs; if the authorities fail to do so, those needs will not be met”). In the substantive due process analysis, it is the State’s, affirmative act of restraining the individual’s freedom to act on his own behalf— through incarceration, institutionalization, or other similar restraint of personal liberty — which is the “deprivation of liberty” triggering the protections of the Due Process Clause, not its failure to act to protect his liberty interests against harms inflicted by other means.
The Estelle-Youngberg analysis simply has no applicability in the present case. Petitioners concede that the harms Joshua suffered occurred not while he was in the State’s custody, but while he was in the custody of his natural father, who was in no sense a state actor. While the State may have been aware of the dangers that Joshua faced in the free world, it played no part in their creation, nor did it do anything to render him any more vulnerable to them. That the State once took temporary custody of Joshua does not alter the analysis, for when it returned him to his father’s custody, it placed him in no worse position than that in which he would have been had it not acted at all; the State does not become the permanent guarantor of an individual’s safety by having once offered him shelter. Under these circumstances, the State had no constitutional duty to protect Joshua.
It may well be that, by voluntarily undertaking to protect Joshua against a danger it concededly played no part in creating, the State acquired a duty under state tort law to provide him with adequate protection against that danger. See Restatement (Second) of Torts § 323 (1965) (one who undertakes to render services to another may in some circumstances be held liable for doing so in a negligent fashion); see generally W. Keeton, D. Dobbs, R. Keeton, & D. Owen, Prosser and Keeton on the Law of Torts § 56 (5th ed. 1984) (discussing “special relationships” which may give rise to affirmative duties to act under the common law of tort). But the claim here is based on the Due Process Clause of the Fourteenth Amendment, which, as we have said many times, does not transform every tort committed by a state actor into a constitutional violation. See Daniels v. Williams, 474 U. S., at 335-336; Parratt v. Taylor, 451 U. S., at 544; Martinez v. California, 444 U. S. 277, 285 (1980); Baker v. McCollan, 443 U. S. 137, 146 (1979); Paul v. Davis, 424 U. S. 693, 701 (1976). A State may, through its courts and legislatures, impose such affirmative duties of care and protection upon its agents as it wishes. But not “all common-law duties owed by government actors were . . . constitutionalized by the Fourteenth Amendment.” Daniels v. Williams, supra, at 335. Because, as explained above, the State had no constitutional duty to protect Joshua against his father’s violence, its failure to do so — though calamitous in hindsight — simply does not constitute a violation of the Due Process Clause.
Judges and lawyers, like other humans, are moved by natural sympathy in a case like this to find a way for Joshua and his mother to receive adequate compensation for the grievous harm inflicted upon them. But before yielding to that impulse, it is well to remember once again that the harm was inflicted not by the State of Wisconsin, but by Joshua’s father. The most that can be said of the state functionaries in this case is that they stood by and did nothing when suspicious circumstances dictated a more active role for them. In defense of them it must also be said that had they moved too soon to take custody of the son away from the father, they would likely have been met with charges of improperly intruding into the parent-child relationship, charges based on the same Due Process Clause that forms the basis for the present charge of failure to provide adequate protection.
The people of Wisconsin may well prefer a system of liability which would place upon the State and its officials the responsibility for failure to act in situations such as the present one. They may create such a system, if they do not' have it already, by changing the tort law of the State in accordance with the regular lawmaking process. But they should not have it thrust upon them by this Court’s expansion of the Due Process Clause of the Fourteenth Amendment.
Affirmed.
As used here, the term “State” refers generically to state and local governmental entities and their agents.
Petitioners also argue that the Wisconsin child protection statutes gave Joshua an “entitlement” to receive protective services in accordance with the terms of the statute, an entitlement which would enjoy due process protection against state deprivation under our decision in Board of Regents of State Colleges v. Roth, 408 U. S. 564 (1972). Brief for Petitioners 24-29. But this argument is made for the first time in petitioners’ brief to this Court: it was not pleaded in the complaint, argued to the Court of Appeals as a ground for reversing the District Court, or raised in the petition for certiorari. We therefore decline to consider it here. See Youngberg v. Romeo, 457 U. S., at 316, n. 19; Dothard v. Rawlinson, 433 U. S. 321, 323, n. 1 (1977); Duignan v. United States, 274 U. S. 195, 200 (1927); Old Jordan Mining Milling Co. v. Société Anonyme des Mines, 164 U. S. 261, 264-265 (1896).
The State may not, of course, selectively deny its protective services to certain disfavored minorities without violating the Equal Protection Clause. See Yick Wo v. Hopkins, 118 U. S. 356 (1886). But no such argument has been made here.
The genesis of this notion appears to lie in a statement in our opinion in Martinez v. California, 444 U. S. 277 (1980). In that case, we were asked to decide, inter alia, whether state officials could be held liable under the Due Process Clause of the Fourteenth Amendment for the death of a private citizen at the hands of a parolee. Rather than squarely confronting the question presented here — whether the Due Process Clause imposed upon the State an affirmative duty to protect — we affirmed the dismissal of the claim on the narrower ground that the causal connection between the state officials’ decision to release the parolee from prison and the murder was too attenuated to establish a “deprivation” of constitutional rights within the meaning of § 1983. Id,, at 284-285. But we went on to say: “[T]he parole board was not aware that appellants’ decedent, as distinguished from the public at large, faced any special danger. We need not and do not decide that a parole officer could never be deemed to ‘deprive’ someone of life by action taken in connection with the release of a prisoner on parole. But we do hold that at least under the particular circumstances of this parole decision, appellants' decedent’s death is too remote a consequence of the parole officers’ action to hold them responsible under the federal civil rights law.” Id., at 285 (footnote omitted).
Several of the Courts of Appeals have read this language as implying that once the State learns that a third party poses a special danger to an identified victim, and indicates its willingness to protect the victim against that danger, a “special relationship” arises between State and victim, giving rise to an affirmative duty, enforceable through the Due Process Clause, to render adequate protection. See Estate of Bailey by Oare v. County of York, 768 F. 2d 503, 510-511 (CA3 1985); Jensen v. Conrad, 747 F. 2d 185, 190-194, and n. 11 (CA4 1984) (dicta), cert. denied, 470 U. S. 1052 (1985)); Balistreri v. Pacifica Police Dept., 855 F. 2d 1421, 1425-1426 (CA9 1988). But see, in addition to the opinion of the Seventh Circuit below, Estate of Gilmore v. Buckley, 787 F. 2d 714, 720-723 (CA1), cert. denied, 479 U. S. 882 (1986); Harpole v. Arkansas Dept. of Human Services, 820 F. 2d 923, 926-927 (CA8 1987); Wideman v. Shallowford Community Hospital Inc., 826 F. 2d 1030, 1034-1037 (CA11 1987).
To make out an Eighth Amendment claim based on the failure to provide adequate medical care, a prisoner must show that the state defendants exhibited “deliberate indifference” to his “serious” medical needs; the mere negligent or inadvertent failure to provide adequate care is not enough. Estelle v. Gamble, 429 U. S., at 105-106. In Whitley v. Albers, 475 U. S. 312 (1986), we suggested that a similar state of mind is required to make out a substantive due process claim in the prison setting. Id., at 326-327.
The Eighth Amendment applies “only after the State has complied with the constitutional guarantees traditionally associated with criminal prosecutions. . . . [T]he State does not acquire the power to punish with which the Eighth Amendment is concerned until after it has secured a formal adjudication of guilt in accordance with due process of law.” Ingraham v. Wright, 430 U. S. 651, 671-672, n. 40 (1977); see also Revere v. Massachusetts General Hospital, 463 U. S. 239, 244 (1983); Bell v. Wolfish, 441 U. S. 520, 535, n. 16 (1979).
Even in this situation, we have recognized that the State “has considerable discretion in determining the nature and scope of its responsibilities.” Youngberg v. Romeo, 457 U. S., at 317.
Of course, the protections of the Due Process Clause, both substantive and procedural, may be triggered when the State, by the affirmative acts of its agents, subjects an involuntarily confined individual to deprivations of liberty which are not among those generally authorized by his confinement. See, e. g., Whitley v. Albers, supra, at 326-327 (shooting inmate); Youngberg v. Romeo, supra, at 316 (shackling involuntarily committed mental patient); Hughes v. Rowe, 449 U. S. 5, 11 (1980) (removing inmate from general prison population and confining him to administrative segregation); Vitek v. Jones, 445 U. S. 480, 491-494 (1980) (transferring inmate to mental health facility).
Complaint ¶ 16, App. 6 (“At relevant times to and until March 8, 1984, [the date of the final beating,] Joshua DeShaney was in the custody and control of Defendant Randy DeShaney”). Had the State by the affirmative exercise of its power removed Joshua from free society and placed him in a foster home operated by its agents, we might have a situation sufficiently analogous to incarceration or institutionalization to give rise to an affirmative duty to protect. Indeed, several Courts of Appeals have held, by analogy to Estelle and Youngberg, that the State may be held liable under the Due Process Clause for failing to protect children in foster homes from mistreatment at the hands of their foster parents. See Doe v. New York City Dept. of Social Services, 649 F. 2d 134, 141-142 (CA2 1981), after remand, 709 F. 2d 782, cert. denied sub nom. Catholic Home Bureau v. Doe, 464 U. S. 864 (1983); Taylor ex rel. Walker v. Ledbetter, 818 F. 2d 791, 794-797 (CA11 1987) (en banc), cert. pending Ledbetter v. Taylor, No. 87-521. We express no view on the validity of this analogy, however, as it is not before us in the present case.
Because we conclude that the Due Process Clause did not require the State to protect Joshua from his father, we need not address respondents’ alternative argument that the individual state actors lacked the requisite “state of mind” to make out a due process violation. See Daniels v. Williams, 474 U. S., at 334, n. 3. Similarly, we have no occasion to consider whether the individual respondents might be entitled to a qualified immunity defense, see Anderson v. Creighton, 483 U. S. 635 (1987), or whether the allegations in the complaint are sufficient to support a § 1983 claim against the county and DSS under Monell v. New York City Dept. of Social Services, 436 U. S. 658 (1978), and its progeny. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
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"Unidentifiable",
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"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
116
] |
FEDERAL MARITIME COMMISSION v. SEATRAIN LINES, INC., et al.
No. 71-1647.
Argued March 21, 1973
Decided May 14, 1973
Marshall, J., delivered the opinion for a unanimous Court.
Edward G. Grids argued the cause for petitioner. With him on the briefs was David Fisher.
Irwin A. Seibel argued the cause for respondents. With him on the brief for the United States were Solicitor General Griswold, Assistant Attorney General Kauper, and William Bradford Reynolds. Marvin J. Coles, Neal M. Mayer, and G. Brockwel Heylin filed a brief for respondent Seatrain Lines, Inc. Odell Kominers and Richard S. Salzman filed a brief for respondents Pacific Far East Line, Inc., et al.
Lawrence E. Walsh, William F. Ragan, and Guy Miller Struve filed a brief for R. J. Reynolds Tobacco Co. as amicus curiae.
Mr. Justice Marshall
delivered the opinion of the Court.
Section 15 of the Shipping Act, 1916, 39 Stat. 733, as amended, 46 U. S. C. § 814, requires all persons subject to the Act to file with the Federal Maritime Commission every agreement within specified categories reached with any other person subject to the Act. The section further empowers the Commission to disapprove, cancel, or modify any such agreement which it finds to be unjustly discriminatory, to the detriment of the commerce of the United States, contrary to the public interest, or violative of the terms of the Act. The Commission is directed to approve all other agreements, and the statute expressly provides that agreements so approved are exempt from the antitrust laws.
The question presently before us is whether a contract which calls for the acquisition of all the assets of one carrier by another carrier and which creates no ongoing obligations is an “agreement” within the meaning of this section. The question is of some importance, since if such contracts are not approved by the Commission, the antitrust laws are fully applicable to them. See Carnation Co. v. Pacific Westbound Conference, 383 U. S. 213 (1966). Cf. United States v. Borden Co., 308 U. S. 188 (1939). But cf. United States Navigation Co. v. Cunard S. S. Co., 284 U. S. 474 (1932); Far East Conference v. United States, 342 U. S. 570 (1952). On the other hand, if they are within the Commission’s jurisdiction, the Commission may approve them even though they are violative of the antitrust laws, although the Commission must take antitrust principles into account in reaching its decision. See Volkswagenwerk Aktiengesellschaft v. FMC, 390 U. S. 261, 273-274 (1968); FMC v. Aktiebolaget Svenska Amerika Linien, 390 U. S. 238, 244-246 (1968).
In this case, the Court of Appeals for the District of Columbia Circuit concluded that § 15 did not confer jurisdiction upon the Commission to approve discrete acquisition-of-assets agreements. In so holding, it followed a prior District Court decision in United States v. R. J. Reynolds Tobacco Co., 325 F. Supp. 656 (NJ 1971), but declined to follow a Ninth Circuit holding that the Commission had such jurisdiction. See Matson Navigation Co. v. FMC, 405 F. 2d 796 (CA9 1968). We granted certiorari in order to resolve this conflict and because the case posed an important issue concerning the interface between the antitrust laws and the Commission’s regulatory powers. We conclude that in enacting § 15, Congress did not intend to invest the Commission with the power to shield from antitrust liability merger or acquisition-of-assets agreements which impose no ongoing responsibilities. Rather, Congress intended to invest the Commission with jurisdiction over only those agreements, or those portions of agreements, which created ongoing rights and responsibilities and which, therefore, necessitated continuous Commission supervision. We therefore affirm the judgment below.
I
This case was initiated when respondent Seatrain Lines, Inc. (Seatrain) filed a protest with the Commission against an agreement reached between Pacific Far East Lines, Inc. (PFEL) and Oceanic Steamship Co. (Oceanic), both of which are’ also respondents here, whereby Oceanic agreed to sell all its assets to PFEL. Under the terms of the agreement, Oceanic promised to transfer its entire fleet and all the related equipment together with Oceanic’s interest in two container ships then being constructed and all of Oceanic’s employees to PFEL. Although Oceanic did not formally merge with PFEL and retained its corporate existence, it was left as a shell corporation wholly without assets. However, Oceanic undertook no continuing obligation not to re-enter the business and compete with PFEL. On October 6, 1970, Oceanic and PFEL notified the Commission of the agreement, but accompanied the notification with an express statement that, in their view, the agreement was not within the Commission’s jurisdiction. The Commission published notice of the agreement, see 35 Fed. Reg. 16114, and allowed 10 days for interested parties to protest and request a hearing. Seatrain filed such a request on October 21, 1970, alleging that it was a potential competitor of PFEL and that the acquisition agreement would have anticompetitive consequences and, hence, was contrary to the public-interest standard of the statute.
Instead of holding a hearing to investigate these allegations, however, the Commission issued a summary order denying the request for an investigation and approving the agreement. The Commission held that “[wjhile section 15 of the Shipping Act, 1916, requires notice and opportunity for hearing, prior to agreement approval, there is no requirement of law that the mere filing of a protest is sufficient to require that a hearing be held before the Commission may grant approval of any protested agreement.” Finding that “the likelihood of any impact at all upon [Seatrain’s] operations which might result from approval of the agreement is a matter of mere speculation,” the Commission concluded that “Seatrain has no standing in this matter, and that its protest is without substance.”
After Seatrain’s petition to reopen was denied, it appealed the Commission’s ruling to the Court of Appeals. Seatrain argued that the Commission was required to hold a hearing on its objection, while the United States, as statutory respondent, and Oceanic and PFEL, as inter venors, argued that the Commission lacked jurisdiction over the agreement. In a comprehensive opinion, the Court of Appeals found it unnecessary to reach the hearing issue, since it found that the Commission “lacks jurisdiction under Section 15 of the Shipping Act, 1916, to approve arrangements of the type involved here, which do not require the continued existence or participation of the parties in such arrangements.” 148 U. S. App. D. C. 424, 441, 460 F. 2d 932, 949 (1972). The Court therefore vacated the Commission’s decision and directed that the agreement be removed from its docket. The case then came here on the Commission’s petition for certiorari. 409 U. S. 1058 (1972).
II
At the outset, it must be recognized that the statutory language neither clearly embraces nor clearly excludes discrete merger or acquisition-of-assets agreements. The situation is therefore fundamentally different from that posed in Volkswagenwerk Aktiengesellschaft v. FMC, relied upon heavily by petitioner, where we held in the context of an ongoing agreement that the Commission’s ruling that the agreement was without its § 15 jurisdiction “simply does not square with the structure of the statute.” 390 U. S., at 275. In this case, the statute is ambiguous in its scope and must therefore be read in light of its history and the governing statutory presumptions.
By its terms, the statute requires those covered by it to “file immediately with the Commission a true copy, or, if oral, a true and complete memorandum, of every agreement ... or modification or cancellation thereof” which falls into any one of seven categories. These are agreements
“[1] fixing or regulating transportation rates or fares; [2] giving or receiving special rates, accommodations, or other special privileges or advantages; [3] controlling, regulating, preventing, or destroying competition; [4] pooling or apportioning earnings, losses, or traffic; [5] allotting ports or restricting or otherwise regulating the number and character of sailings between ports; [6] limiting or regulating in any way the volume or character of freight or passenger traffic to be carried; [7] or in any manner providing for an exclusive, preferential, or cooperative working arrangement.”
None of these seven categories expressly refers to a one-time merger or acquisition-of-assets agreement which imposes no continuing obligation and which, indeed, effectively destroys one of the parties to the agreement. The Commission vigorously argues that such agreements can be interpreted as falling within the third category — which concerns agreements “controlling, regulating, preventing, or destroying competition.” Without more, we might be inclined to agree that many merger agreements probably fit within this category. But a broad reading of the third category would conflict with our frequently expressed view that exemptions from antitrust laws are strictly construed, see, e. g., United States v. McKesson & Robbins, Inc., 351 U. S. 305, 316 (1956), and that “[r]epeals of the antitrust laws by implication from a regulatory statute are strongly disfavored, and have only been found in cases of plain repugnancy between the antitrust and regulatory provisions.” United States v. Philadelphia National Bank, 374 U. S. 321, 350-351 (1963) (footnotes omitted). As we observed only recently: “When . . . relationships are governed in the first instance by business judgment and not regulatory coercion, courts must be hesitant to conclude that Congress intended to override the fundamental national policies embodied in the antitrust laws.” Otter Tail Power Co. v. United States, 410 U. S. 366, 374 (1973). See also Silver v. New York Stock Exchange, 373 U. S. 341 (1963); Pan American World Airways, Inc. v. United States, 371 U. S. 296 (1963); California v. FPC, 369 U. S. 482 (1962); United States v. Borden Co., 308 U. S. 188 (1939). This principle has led us to construe the Shipping Act as conferring only a “limited antitrust exemption” in light of the fact that “antitrust laws represent a fundamental national economic policy.” Carnation Co. v. Pacific Westbound Conference, 383 U. S., at 219, 218.
Our reluctance to construe the third category of agreements broadly so as to include discrete merger arrangements is bolstered by the structure of the Act. It should be noted that of the seven categories, six are expressly limited to ongoing arrangements in which both parties undertake continuing responsibilities. Indeed, even the third category refers to agreements “controlling,” “regulating” and “preventing” competition — all of which are continuing activities. Only the reference to the destruction of competition supports the Commission’s argument that the provision was intended to cover one-time, discrete transactions. But even this reference must be read in light of the final, comprehensive category which refers to agreements “in any manner providing for an exclusive, preferential, or cooperative working arrangement.” As the Court of Appeals noted, this last category was clearly meant as a catchall provision, “intended ... to summarize the type of agreements covered.” 148 U. S. App. D. C., at 427, 460 F. 2d, at 935. Cf. FMB v. Isbrandtsen Co., 356 U. S. 481, 492 (1958). It is, of course, a familiar canon of statutory construction that such clauses are to be read as bringing within a statute categories similar in type to those specifically enumerated. See 2 J. Sutherland, Statutes and Statutory Construction § 4908 et seq. (3d ed. 1943) and cases there cited. Since the summary provision is explicitly limited to “working arrangements]” (emphasis added), it is reasonable to conclude that Congress intended this limitation to apply to the specifically enumerated categories as well.
This reading of the statute is especially compelling in light of the rest of the statutory scheme, which simply does not make sense if the statute is read to encompass one-time agreements creating no continuing obligations. For example, the statute directs the Commission to “disapprove, cancel or modify any agreement . . . whether or not previously approved hy it, that it finds to be unjustly discriminatory or unfair as between carriers, shippers, exporters, importers, or ports, or between exporters from the United States and their foreign competitors, or to operate to the detriment of the commerce of the United States, or to be contrary to the public interest, or to be in violation of this chapter” (emphasis added). The statute thus envisions a continuing supervisory role for the Commission and invests it with power to disallow an agreement after a period of time even though it had initially been permitted. But it is hard to see how the Commission can exercise this supervisory function when there are no continuing obligations to supervise. And we think it unlikely that Congress intended to permit the Commission to approve acquisition-of-assets agreements, allow them to go into effect, and then, sometime in the indefinite future, resuscitate the expired company and unscramble the assets under its continuing power to disapprove agreements previously approved.
Similarly, the provision in the Act which provides that “[t]he Commission shall disapprove any . . . agreement ... on a finding of inadequate policing of the obligations under it” makes no sense unless the agreements create continuing obligations to police. The statutory requirement that “continued approval” shall not be permitted for agreements “between carriers not members of the same conference or conferences of carriers serving different trades that would otherwise be naturally competitive, unless in the case of agreements between carriers, each carrier, or in the case of agreement between conferences, each conference, retains the right of independent action,” suggests an ongoing relationship between the contracting parties. And the requirement that the contracting parties “adopt and maintain reasonable procedures for promptly and fairly hearing and considering shippers’ requests and complaints” can only be understood in the context of a continuing relationship between the contracting parties.
In short, while the statute neither expressly includes nor expressly excludes one-time acquisition-of-assets arrangements, the words must be read in context, and the context makes undeniably clear the ongoing, supervisory role which the Commission was intended to perform. As the Court of Appeals concluded, “'[t]he whole structure of Section 15, not only the first paragraph listing the type agreement covered, shows an intent to grant the Commission authority to deal with agreements of a continuing nature.” 148 U. S. App. D. C., at 427, 460 F. 2d, at 935.
Ill
This construction of the Shipping Act is strongly supported by the legislative history of the Act and by Congress’ treatment of other industries in contemporaneous and related statutes. As this Court recognized in FMB v. Isbrandtsen Co., 356 U. S., at 490, most of the legislative history of the Act is contained in the so-called Alexander Report which culminated a comprehensive investigation into the shipping industry by the House Committee on the Merchant Marine and Fisheries chaired by Congressman Alexander. See House Committee on the Merchant Marine and Fisheries, Report on Steamship Agreements and Affiliations in the American Foreign and Domestic Trade, H. R. Doc. No. 805, 63d Cong., 2d Sess. (1914) (hereinafter Alexander Report). Although legislation designed to carry out the Report’s recommendations initially failed to pass, see H. R. 17328, 63d Cong., 2d Sess., a substantially similar bill was enacted in the next Congress and was clearly intended to write the Alexander proposals into law. See H. R. Rep. No. 659, 64th Cong., 1st Sess., 27; S. Rep. No. 689, 64th Cong., 1st Sess., 7.
After examining some 80 steamship agreements and conference arrangements, the Alexander Committee concluded that “practically all the established lines operating to and from American ports work in harmonious cooperation, either through written or oral agreements, conference arrangements, or gentlemen’s understandings.” Alexander Report 281. The Committee found that this network of agreements, many of them secret, provided a comprehensive system for fixing rates and suppressing competition. See id., at 282-295. As the Committee described the resulting competitive structure of the industry,
“The primary object of [the] conferences and agreements is to prevent new lines from being organized in a trade and to crush existing lines which refuse to comply with conditions prescribed by the combination, or which, for other reasons, are not acceptable as members of the conference. The methods which have been adopted from time to time to eliminate competition show the futility of a weak line attempting to enter a trade in opposition to the combined power of the established lines when united by agreement. By resorting to the use of the ‘fighting ship,’ or to unlimited rate cutting, the conference lines soon exhaust the resources of their antagonists. By distributing the loss resulting from the rate war over the several members of the conference, each constituent line suffers proportionately a much smaller loss than the one line which is fighting the entire group. Moreover, the federated lines can conduct the competitive struggle with the comfortable assurance that, following the retirement of the competing line, they are in a position to reimburse themselves through an increase in rates. To allow conferences, therefore, generally means giving the trade to the lines now enjoying it. Only a powerful line can hope to fight its way into the trade, and with the inevitable result, if successful, that it will join the combination or be allowed to exist by virtue of some rate understanding.” Alexander Report 304-305.
Yet despite these findings, the Committee decided against recommending the outright banning of the conference system. Instead, it chose to place that system under government supervision and to invest an administrative agency with the power to approve or disapprove various conference arrangements. The Committee’s reasons for this decision are crucial to the issue presently before us. The Committee found that:
“[O]pen competition can not be assured for any length of time by ordering existing agreements terminated. The entire history of steamship agreements shows that in ocean commerce there is no happy medium between war and peace when several lines engage in the same trade. Most of the numerous agreements and conference arrangements discussed in the foregoing report were the outcome of rate wars, and represent a truce between the contending lines. To terminate existing agreements would necessarily bring about one of two results: the lines would either engage in rate wars which would mean the elimination of the weak and the survival of the strong, or, to avoid a costly struggle, they would consolidate through common ownership. Neither result can be prevented by legislation, and either would mean a monopoly fully as effective, and it is believed more so, than can exist by virtue of an agreement.” Id., at 416.
Thus, the Committee chose to permit continuation of the conference system, but to curb its abuses by requiring government approval of conference agreements. It did so because it feared that if conferences were abolished, the result would be a net decrease in competition through the mergers and acquisition-of-assets agreements that would result from unregulated rate wars. It is readily apparent that the Commission’s reading of the statute would frustrate this legislative purpose. The Committee gave the Commission power to insulate certain anti-competitive arrangements in order to prevent outright mergers. Yet the Commission would have us construe this authority in such a way as to allow it to shield the mergers themselves — the very thing which Congress intended to prevent. Cf. Carnation Co. v. Pacific Westbound Conference, 383 U. S., at 218-220.
The illogical nature of the Commission’s argument is especially apparent when one remembers that at the time the Act was passed, the Commission was arguably not permitted to take antitrust policies into account when ruling on proposed agreements. We have construed the “public interest” standard contained in the Act as requiring the Commission to consider the antitrust implications of an agreement before approving it. See Volkswagenwerk Aktiengesellschaft v. FMC, 390 U. S., at 274 n. 20; FMC v. Aktiebolaget Svenska Amerika Linien, 390 U. S., at 242-244. Cf. Mediterranean Pools Investigation, 9 F. M. C. 264, 289 (1966). But the “public interest” criterion was not added to the Act until 1961. See 76 Stat. 763. Thus, under the petitioner’s interpretation, at the time the Act was passed, the Commission was arguably required to approve merger agreements despite strong antitrust objections to them if the other criteria of the Act were met. We simply cannot believe that Congress intended to require approval of the very arrangements which, as the legislative history clearly shows, it wanted to prevent.
The legislative history also demonstrates that the Alexander Committee used the term “agreements” as a word of art and that mergers and other arrangements creating no continuing rights and obligations were not included within its definition. As the District Court in United States v. R. J. Reynolds Tobacco Co. observed,
“The catalog or ‘full classification of these agreements’ (i. e., the ‘agreements’ to which the Alexander Committee’s attention was primarily directed and to which its recommendations were exclusively directed) does not include a single agreement of merger or other form of corporate reorganization. The ‘agreements’ represented in the Report are all ‘on-going’ in nature. Most of these ‘agreements’ are cooperative working arrangements. These ‘agreements’ describe practices or regular activities in which two or more shipping companies have agreed to participate over a considerable period of time. None of the ‘agreements’ studied by the Alexander Committee bears the slightest resemblance to an agreement of merger, which is essentially a single, discrete event, which transforms the relationship of the merging parties at the instant of merger.” 325 F. Supp., at 658-659 (footnotes omitted).
Moreover, in the few places where the Committee did discuss mergers, it distinguished sharply between such arrangements and the ongoing agreements to which its recommendations were directed. For example, in summarizing its findings the Committee wrote:
“The numerous methods of controlling competition between water carriers in the domestic trade, referred to in the preceding pages, may be grouped under three headings, viz, (1) control through the acquisition of water lines or the ownership of accessories to the lines; (2) control through agreements or understandings; and (3) control through special practices.” Alexander Report 409 (emphasis added).
As the Reynolds court concluded,
“Consistently throughout the Report, mergers and other corporate reorganizations, when occasionally mentioned, are referred to by the terms ‘consolidation by ownership’ and ‘control through acquisition,’ or variations thereof. Never is the word ‘agreement’ used in the Report to refer to a merger agreement.
It is clear that the Alexander Committee distinguished conceptually between agreements in the sense of on-going, cooperative agreements and agreements of ‘consolidation’ or ‘acquisition’ (of which merger agreements are a form)325 F. Supp., at 659 (footnotes omitted).
Finally, an examination of contemporaneous and related statutes makes clear that when Congress intended to bring acquisitions and mergers under control, it did so in unambiguous language. For example, only a few years prior to passage of the Shipping Act, Congress expressly dealt with mergers involving water carriers. In the Panama Canal Act, 49 U. S. C. § 5 (14), Congress provided that:
“[I]t shall be unlawful for any carrier [as defined in the Interstate Commerce Act] ... to own, lease, operate, control, or have any interest whatsoever (by stock ownership or otherwise, either directly indirectly, through any holding company, or by stockholders or directors in common, or in any other manner) in any common carrier by water operated through the Panama Canal or elsewhere with which such carrier aforesaid does or may compete for traffic or any vessel carrying freight or passengers upon said water route or elsewhere with which said railroad or other carrier aforesaid does or may compete for traffic.”
Similarly, when Congress meant to require agency approval for mergers and acquisitions, it did so unambiguously. Thus, the Interstate Commerce Act, 49 U. S. C. § 5 (2) (a) (i) authorizes the Interstate Commerce Commission to give its approval “for two or more carriers to consolidate or merge their properties or franchises, or any part thereof, into one corporation for the ownership, management, and operation of the properties theretofore in separate ownership.” In the same manner, the Federal Communications Act, 47 U. S. C. § 222 (b)(1) provides:
“It shall be lawful, upon application to and approval by the [Federal Communications] Commission as hereinafter provided, for any two or more domestic telegraph carriers to effect a consolidation or merger; and for any domestic telegraph carrier, as a part of any such consolidation or merger or thereafter, to acquire all or any part of the domestic telegraph properties, domestic telegraph facilities, or domestic telegraph operations of any carrier which is not primarily a telegraph carrier.”
Examination of the Federal Aviation Act is particularly instructive in this regard. Title 49 U. S. C. § 1382 (a) requires air carriers to file with the Civil Aeronautics Board for prior approval
“every contract or agreement ... for pooling or apportioning earnings, losses, trafile, service, or equipment, or relating to the establishment of transportation rates, fares, charges, or classifications, . . . or otherwise eliminating destructive, oppressive, or wasteful competition, or for regulating stops, schedules, and character of service, or for other cooperative working arrangements.”
This provision closely parallels § 15 of the Shipping Act, and was obviously modeled after it. Yet Congress clearly thought the provision insufficient to bring discrete merger and acquisition agreements within the Civil Aeronautics Board’s jurisdiction, since it enacted another, separate provision requiring Board approval when air carriers “consolidate or merge their properties.” 49 U. S. C. § 1378 (a)(1).
IV
In light of these specific grants of merger approval authority, we are unwilling to construe the ambiguous provisions of § 15 to serve this purpose — a purpose for which it obviously was not intended. As the Court of Appeals found, the House Committee which wrote § 15 “neither sought information nor had discussion on ship sale agreements. They were neither part of the problem nor part of the solution.” 148 U. S. App. D. C., at 432, 460 F. 2d, at 940. If, as petitioner contends, there is now a compelling need to fill the gap in the Commission’s regulatory authority, the need should be met in Congress where the competing policy questions can be thrashed out and a resolution found. We are not ready to meet that need by rewriting the statute and legislative history ourselves.
But the Commission contends that since it is charged with administration of the statutory scheme, its construction of the statute over an extended period should be given great weight. See, e. g., NLRB v. Hearst Publications, Inc., 322 U. S. 111 (1944). This proposition may, as a general matter, be conceded, although it must be tempered with the caveat that an agency may not bootstrap itself into an area in which it has no jurisdiction by repeatedly violating its statutory mandate. In this case, however, there is a disjunction between the abstract principle and the empirical data. The court below made a detailed study of the prior Commission cases relied upon by petitioner to bolster its interpretation of the statute and concluded that none of them involved assertion of jurisdiction over a case such as this, where the agreement in question imposed no ongoing obligations. We find it unnecessary to decide whether every prior case decided by the Commission can be reconciled with our opinion today. It is sufficient to note that the cases do not demonstrate the sort of longstanding, clearly articulated interpretation of the statute which would be entitled to great judicial deference, particularly in light of the clear indications that Congress did not intend to vest the Commission with the authority it is now seeking to assert. As this Court held in a related context,
“The construction put on a statute by the agency charged with administering it is entitled to deference by the courts, and ordinarily that construction will be affirmed if it has a 'reasonable basis in law.’ . . . But the courts are the final authorities on issues of statutory construction, FTC v. Colgate-Palmolive Co., 380 U. S. 374, 385, and ‘are not obliged to stand aside and rubber-stamp their affirmance of administrative decisions that they deem inconsistent with a statutory mandate or that frustrate the congressional policy underlying a statute.’ NLRB v. Brown, 380 U. S. 278, 291.” Volkswagenwerk Aktiengesellschaft v. FMC, 390 U. S., at 272.
In this case, we find that the Commission overstepped the limits which Congress placed on its jurisdiction. The judgment of the Court of Appeals must therefore be
Affirmed.
Originally, the Shipping Act conferred jurisdiction on the United States Shipping Board. See 39 Stat. 728, 729, 733. Over the years, the jurisdiction here at issue has been shifted to the United States Shipping Board Bureau of the Department of Commerce, see Exec. Order No. 6166, § 12 (1933), the United States Maritime Commission, see 49 Stat. 1985, the Federal Maritime Board, see 64 Stat. 1273, and finally, the Federal Maritime Commission, see 75 Stat. 840. For convenience, we will follow the practice of the parties and the court below and refer throughout to the “Commission.”
Section 15 provides in pertinent part:
“Every common carrier by water, or other person subject to this chapter, shall file immediately with the Commission a true copy, or, if oral, a true and complete memorandum, of every agreement with another such carrier or other person subject to this chapter, or modification or cancellation thereof, to which it may be a party or conform in whole or in part, fixing or regulating transportation rates or fares; giving or receiving special rates, accommodations, or other special privileges or advantages; controlling, regulating, preventing, or destroying competition; pooling or apportioning earnings, losses, or traffic; allotting ports or restricting or otherwise regulating the number and character of sailings between ports; limiting or regulating in any way the volume or character of freight or passenger traffic to be carried; or in any manner providing for an exclusive, preferential, or cooperative working arrangement. The term 'agreement’ in this section includes understandings, conferences, and other arrangements.
“The Commission shall by order, after notice and hearing, disapprove, cancel or modify any agreement, or any modification or cancellation thereof, whether or not previously approved by it, that it finds to be unjustly discriminatory or unfair as between carriers, shippers, exporters, importers, or ports, or between exporters from the United States and their foreign competitors, or to operate to the detriment of the commerce of the United States, or to be contrary to the public interest, or to be in violation of this chapter, and shall approve all other agreements, modifications, or cancellations. . . .
“Any agreement and any modification or cancellation of any agreement not approved, or disapproved, by the Commission shall be unlawful, and agreements, modifications, and cancellations shall be lawful only when and as long as approved by the Commission . . . .”
Section 15 provides that “[e]very agreement, modification, or cancellation lawful under this section . .. shall be excepted from the provisions of sections 1 to 11 and 15 of Title 15, and amendments and Acts supplementary thereto.” Since the Act makes lawful those agreements approved by the Commission, its effect is to vest the Commission with the power to shield those agreements approved by it from antitrust attack. See Carnation Co. v. Pacific Westbound Conference, 383 U. S. 213, 216 (1966). But cf. FMC v. Aktiebolaget Svenska Amerika Linien, 390 U. S. 238, 242-246 (1968).
In light of our holding that the Commission lacked jurisdiction over this agreement, we do not decide whether the Commission’s decision that Seatrain was not entitled to a hearing would have been proper in a case in which the Commission properly asserted jurisdiction. Cf. Marine Space Enclosures, Inc. v. FMC, 137 U. S. App. D. C. 9, 420 F. 2d 577 (1969).
Direct appeal to the Court of Appeals of final orders of the Commission is authorized by 28 U. S. C. §2342 (3).
See 28 U. S. C. § 2344.
The Commission’s position in this regard is not without irony. In denying Seatrain’s application for a hearing and approving the agreement, the Commission held that Seatrain had failed to make sufficient allegations to show that the acquisition of assets would be destructive of competition. Yet the Commission now contends that it had jurisdiction over the agreement because it was one “preventing” competition.
It is true that “antitrust exemption results, not when an agreement is submitted for filing, but only when the agreement is actually approved.” Volkswagenwerk Aktiengesellschaft v. FMC, 390 U. S. 261, 273 (1968). But the fact remains that an expansive reading of the Commission’s jurisdiction would increase the number of cases subject to potential antitrust immunity.
The statute itself provides no definition of the term “agreement” beyond the statement that “[t]he term ‘agreement’ in this section includes understandings, conferences, and other arrangements.” Although certainly not dispositive, it is at least worthy of note that these synonyms given for “agreement” are all evocative of ongoing activity.
The Reynolds court’s observations were directed at the Committee’s study of foreign trade. In this context, the Committee found that competition was largely frustrated by extensive use of conference arrangements. When the Committee turned to domestic trade, it found that “[u]nlike the practice of water carriers in the foreign trade of the United States, agreements to divide the territory or charge certain rates in the domestic trade are few.” Alexander Report 421. Rather, in the domestic arena, the Committee found that competition was controlled largely through mergers, chiefly between railroads and water carriers. The Commission argues from this fact that Congress intended merger agreements to be filed, since the legislation which was ultimately enacted made no distinction between foreign and domestic trade. But throughout the Report whenever the Committee referred to mergers and acquisitions, it distinguished sharply between them and agreements, for which the filing and approval mechanism was applicable. See the discussion in text. Cf. Note, The Shipping Industry Seeks a Safe Haven: Merger Jurisdiction for the FMC?, 5 Law & Pol. Int’l Bus. 274, 285-286 (1973). Moreover, a careful reading of the Report makes clear that the Committee envisioned other devices for controlling the mergers prevalent in the domestic field. Thus, the Committee noted that the Panama Canal Act of 1912, 49 U. S. C. § 5 (14), already prohibited railroads from owning or controlling water carriers, see infra, at 742, and observed that this requirement went “far toward eliminating some of the undesirable practices which were found by the Committee to exist in the domestic commerce of the United States.” Alexander Report 422. While the Committee made other recommendations with respect to domestic carriers, these merely paralleled its foreign recommendations and, hence, pertained to “agreements” and “arrangements” rather than “mergers” and “acquisitions” which it thought were sufficiently regulated by existing legislation. See id., at 422-424.
The Commission would have us infer that the 1916 Act conferred jurisdiction upon it from an amendment added in 1950 to § 7 of the Clayton Act, 15 U. S. C. § 18, as amended by 64 Stat. 1125, 1126. As amended, the provision specifies that:
“Nothing contained in this section shall apply to transactions duly consummated pursuant to authority given by the Civil Aeronautics Board, Federal Communications Commission, Federal Power Commission, Interstate Commerce Commission, the Securities and Exchange Commission . . . the United States Maritime Commission, or the Secretary of Agriculture.”
As is clear from the face of the statute, the Act confers no new jurisdiction on any of the listed agencies, but merely provides that mergers already exempt from Clayton Act coverage were to be unaffected by changes in the Act. As this Court held in California v. FPC, the amended § 7 was “plainly not a grant of power to adjudicate antitrust issues.” 369 U. S. 482, 486 (1962). Hence, nothing about the Commission’s jurisdiction can be inferred from the inclusion of its predecessor on the list. This view is confirmed by the legislative history of the 1950 amendment. Although acceding to the Commission’s request that it be included in the list of agencies left unaffected by the Clayton Act, see Letter of Grenville Mellen, Vice Chairman, United States Maritime Commission, to Senator Herbert O’Conor, Chairman, Senate Subcommittee to consider H. R. 2734, Sept. 29, 1949, reprinted in Brief for Petitioner 52-54, the Committee made explicit that “[i]n making this addition ... it is not intended that the Maritime Commission, or, for that matter, any other agency included in this category, shall be granted any authority or powers which it does not already possess.” S. Rep. No. 1775, 81st Cong., 2d Sess., 7 (1950). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
48
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SECURITIES AND EXCHANGE COMMISSION et al. v. JERRY T. O’BRIEN, INC., et al.
No. 83-751.
Argued April 17, 1984
Decided June 18, 1984
Deputy Solicitor General Getter argued the cause for petitioners. With him on the briefs were Solicitor General Lee, Samuel A. Alito, Jr., Daniel L. Goelzer, Paul Gonson, Linda D. Fienberg, Larry R. Lavoie, Harry J. Weiss, and Elizabeth A. Spurlock.
William D. Symmes argued the cause for respondents. With him on the brief for respondents Magnuson et al. was Thomas D. Cochran. C. Dean Little and D. William Toone filed a brief for respondents Jerry T. O’Brien, Inc., et al.
Michael P. Cox filed a brief for the North American Securities Administrators Association, Inc., as amicus curiae urging reversal.
Ronald L. Olson filed a brief for Wedbush, Noble, Cooke, Inc., as amicus curiae urging affirmance.
Justice Marshall
delivered the opinion of the Court.
The Securities and Exchange Commission (SEC or Commission) has statutory authority to conduct nonpublic investigations into possible violations of the securities laws and, in the course thereof, to issue subpoenas to obtain relevant information. The question before us is whether the Commission must notify the “target” of such an investigation when it issues a subpoena to a third party.
r — i
This case represents one shard of a prolonged investigation by the SEC into the affairs of respondent Harry F. Magnu-son and persons and firms with whom he has dealt. The investigation began in 1980, when the Commission’s staff reported to the Commission that information in their possession tended to show that Magnuson and others had been trading in the stock of specified mining companies in a manner vio-lative of the registration, reporting, and antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. In response, the Commission issued a Formal Order of Investigation authorizing employees of its Seattle Regional Office to initiate a “private investigation” into the transactions in question and, if necessary, to subpoena testimony and documents “deemed relevant or material to the inquiry.” Complaint, Exhibit A, pp. 3-4.
Acting on that authority, members of the Commission staff subpoenaed financial records in the possession of respondent Jerry T. O’Brien, Inc. (O’Brien), a broker-dealer firm, and respondent Pennaluna & Co. (Pennaluna). O’Brien voluntarily complied, but Pennaluna refused to disgorge the requested materials. Soon thereafter, in response to several inquiries by O’Brien’s counsel, a member of the SEC staff informed O’Brien that it was a “subject” of the investigation.
O’Brien, Pennaluna, and their respective owners promptly filed a suit in the District Court for the Eastern District of Washington, seeking to enjoin the Commission’s investigation and to prevent Magnuson from complying with subpoenas that had been issued to him. Magnuson filed a cross-claim, also seeking to block portions of the investigation. O’Brien then filed motions seeking authority to depose the Commission’s officers and to conduct expedited discovery into the Commission’s files.
The District Court denied respondents’ discovery motions and soon thereafter dismissed their claims for injunctive relief. Jerry T. O’Brien, Inc. v. SEC, No. C-81-546 (ED Wash., Jan. 20, 1982). The principal ground for the court’s decision was that respondents would have a full opportunity to assert their objections to the basis and scope of the SEC’s investigation if and when the Commission instituted a subpoena enforcement action. The court did, however, rule that the Commission’s outstanding subpoenas met the requirements outlined in United States v. Powell, 379 U. S. 48 (1964), for determining whether an administrative summons is judicially enforceable. Specifically, the District Court held that the Commission had a legitimate purpose in issuing the subpoenas, that the requested information was relevant and was not already in the Commission’s possession, and that the issuance of the subpoenas comported with pertinent procedural requirements.
Following the District Court’s decision, the SEC issued several subpoenas to third parties. In response, Magnuson and O’Brien renewed their request to the District Court for injunctive relief, accompanying the request with a motion, pursuant to Rule 62(c) of the Federal Rules of Civil Procedure, for a stay pending appeal. For the first time, respondents expressly sought notice of the subpoenas issued by the Commission to third parties. Reasoning that respondents lacked standing to challenge voluntary compliance with subpoenas by third parties, and that, in any subsequent proceeding brought by the SEC, respondents could move to suppress evidence the Commission had obtained from third parties through abusive subpoenas, the District Court denied the requested relief. Jerry T. O’Brien, Inc. v. SEC, No. C-81-546 (ED Wash., Mar. 25, 1982).
A panel of the Court of Appeals for the Ninth Circuit affirmed the District Court’s denial of injunctive relief with regard to the subpoenas directed at respondents themselves, agreeing with the lower court that respondents had an adequate remedy at law for challenging those subpoenas. 704 F. 2d 1065, 1066-1067 (1983). However, the Court of Appeals reversed the District Court’s denial of respondents’ request for notice of subpoenas issued to third parties. In the Court of Appeals’ view, “targets” of SEC investigations “have a right to be investigated consistently with the Powell standards.” Id., at 1068. To enable targets to enforce this right, the court held that they must be notified of subpoenas issued to others. Id., at 1069.
The Court of Appeals denied the Commission’s request for rehearing and rejected its suggestion for rehearing en banc. 719 F. 2d 300 (1983). Judge Kennedy, joined by four other judges, dissented from the rejection, arguing that the panel decision was unprecedented and threatened the ability of the SEC and other agencies to conduct nonpublic investigations into possible violations of federal law. Ibid.
We granted certiorari because of the importance of the issue presented. 464 U. S. 1038 (1984). We now reverse.
1 — I h-l
Congress has vested the SEC with broad authority to conduct investigations into possible violations of the federal securities laws and to demand production of evidence relevant to such investigations. E. g., 15 U. S. C. §§77s(b), 78u(a), (b). Subpoenas issued by the Commission are not self-enforcing, and the recipients thereof are not subject to penalty for refusal to obey. But the Commission is authorized to bring suit in federal court to compel compliance with its process. E. g., 15 U. S. C. §§77v(b), 78u(c).
No provision in the complex of statutes governing the SEC’s investigative power expressly obliges the Commission to notify the “target” of an investigation when it issues a subpoena to a third party. If such an obligation is to be imposed on the Commission, therefore, it must be derived from one of three sources: a constitutional provision; an understanding on the part of Congress, inferable from the structure of the securities laws, regarding how the SEC should conduct its inquiries; or the general standards governing judicial enforcement of administrative subpoenas enunciated in United States v. Powell, 379 U. S. 48 (1964), and its progeny. Examination of these three potential bases for the Court of Appeals’ ruling leaves us unpersuaded that the notice requirement fashioned by that court is warranted.
A
Our prior cases foreclose any constitutional argument respondents might make in defense of the judgment below. The opinion of the Court in Hannah v. Larche, 363 U. S. 420 (1960), leaves no doubt that neither the Due Process Clause of the Fifth Amendment nor the Confrontation Clause of the Sixth Amendment is offended when a federal administrative agency, without notifying a person under investigation, uses its subpoena power to gather evidence adverse to him. The Due Process Clause is not implicated under such circumstances because an administrative investigation adjudicates no legal rights, id., at 440-443, and the Confrontation Clause does not come into play until the initiation of criminal proceedings, id., at 440, n. 16. These principles plainly cover an inquiry by the SEC into possible violations of the securities laws.
It is also settled that a person inculpated by materials sought by a subpoena issued to a third party cannot seek shelter in the Self-Incrimination Clause of the Fifth Amendment. The rationale of this doctrine is that the Constitution proscribes only compelled self-incrimination, and, whatever may be the pressures exerted upon the person to whom a subpoena is directed, the subpoena surely does not “compel” anyone else to be a witness against himself. Fisher v. United States, 425 U. S. 391, 397 (1976); Couch v. United States, 409 U. S. 322, 328-329 (1973). If the “target” of an investigation by the SEC has no Fifth Amendment right to challenge enforcement of a subpoena directed at a third party, he clearly can assert no derivative right to notice when the Commission issues such a subpoena.
Finally, respondents cannot invoke the Fourth Amendment in support of the Court of Appeals’ decision. It is established that, when a person communicates information to a third party even on the understanding that the communication is confidential, he cannot object if the third party conveys that information or records thereof to law enforcement authorities. United States v. Miller, 425 U. S. 435, 443 (1976). Relying on that principle, the Court has held that a customer of a bank cannot challenge on Fourth Amendment grounds the admission into evidence in a criminal prosecution of financial records obtained by the Government from his bank pursuant to allegedly defective subpoenas, despite the fact that he was given no notice of the subpoenas. Id., at 443, and n. 5. See also Donaldson v. United States, 400 U. S. 517, 522 (1971) (Internal Revenue summons directed to third party does not trench upon any interests protected by the Fourth Amendment). These rulings disable respondents from arguing that notice of subpoenas issued to third parties is necessary to allow a target to prevent an unconstitutional search or seizure of his papers.
B
The language and structure of the statutes administered by the Commission afford respondents no greater aid. The provisions vesting the SEC with the power to issue and seek enforcement of subpoenas are expansive. For example, § 19(b) of the Securities Act of 1933, 48 Stat. 85-86, empowers the SEC to conduct investigations “which, in the opinion of the Commission, are necessary and proper for the enforcement” of the Act and to “require the production of any books, papers, or other documents which the Commission deems relevant or material to the inquiry.” 15 U. S. C. §77s(b). Similarly, §§ 21(a) and 21(b) of the Securities Exchange Act of 1934, 48 Stat. 899, 900, authorize the Commission to “make such investigations as it deems necessary to determine whether any person has violated, is violating, or is about to violate any provision of this chapter [or] the rules or regulations thereunder” and to demand to see any papers “the Commission deems relevant or material to the inquiry.” 15 U. S. C. §§78u(a), (b).
More generally, both statutes vest the SEC with “power to make such rules and regulations as may be necessary or appropriate to implement [their] provisions . . . .” 15 U. S. C. §§ 77s(a), 78w(a)(l). Relying on this authority, the SEC has promulgated a variety of rules governing its investigations, one of which provides that, “[u]nless otherwise ordered by the Commission, all formal investigative proceedings shall be non-public.” 17 CFR §203.5 (1983). In other words, the Commission has formally adopted the policy of not routinely informing anyone, including targets, of the existence and progress of its investigations. To our knowledge, Congress has never questioned this exercise by the Commission of its statutory power. And, in another context, we have held that rulemaking authority comparable to that enjoyed by the SEC is broad enough to empower an agency to “establish standards for determining whether to conduct an investigation publicly or in private.” FCC v. Schreiber, 381 U. S. 279, 292 (1965).
It appears, in short, that Congress intended to vest the SEC with considerable discretion in determining when and how to investigate possible violations of the statutes administered by the Commission. We discern no evidence that Congress wished or expected that the Commission would adopt any particular procedures for notifying “targets” of investigations when it sought information from third parties.
The inference that the relief sought by respondents is not necessary to give effect to congressional intent is reinforced by the fact that, in one special context, Congress has imposed on the Commission an obligation to notify persons directly affected by its subpoenas. In 1978, in response to this Court’s decision in United States v. Miller, supra, Congress enacted the Right to Financial Privacy Act, 92 Stat. 3697,12 U. S. C. § 3401 et seq. That statute accords customers of banks and similar financial institutions certain rights to be notified of and to challenge in court administrative subpoenas of financial records in the possession of the banks. The most salient feature of the Act is the narrow scope of the entitlements it creates. Thus, it carefully limits the kinds of customers to whom it applies, §§3401(4), (5), and the types of records they may seek to protect, §3401(2). A customer’s ability to challenge a subpoena is cabined by strict procedural requirements. For example, he must assert his claim within a short period of time, § 3410(a), and cannot appeal an adverse determination until the Government has completed its investigation, § 3410(d). Perhaps most importantly, the statute is drafted in a fashion that minimizes the risk that customers’ objections to subpoenas will delay or frustrate agency investigations. Thus, a court presented with such a challenge is required to rule upon it within seven days of the Government’s response, § 3410(b), and the pertinent statutes of limitations are tolled while the claim is pending, § 3419. Since 1980, the SEC has been subject to the constraints of the Right to Financial Privacy Act. Pub. L. 96-433, § 3, 94 Stat. 1855, 15 U. S. C. §78u(h)(l). When it made the statute applicable to the SEC, however, Congress empowered the Commission in prescribed circumstances to seek ex parte orders authorizing it to delay notifying bank customers when it subpoenas information about them, thereby further curtailing the ability of persons under investigation to impede the agency’s inquiries. 15 U. S. C. §78u(h)(2).
Considerable insight into the legislators’ conception of the scope of the SEC’s investigatory power can be gleaned from the foregoing developments. We know that Congress recently had occasion to consider the authority of the SEC and other agencies to issue and enforce administrative subpoenas without notifying the persons whose affairs may be exposed thereby. In response, Congress enacted a set of carefully tailored limitations on the agencies’ power, designed “to strike a balance between customers’ right of privacy and the need of law enforcement agencies to obtain financial records pursuant to legitimate investigations.” H. R. Rep. No. 95-1383, p. 33 (1978). The manner in which Congress dealt with this problem teaches us two things. First, it seems apparent that Congress assumed that the SEC was not and would not be subject to a general obligation to notify “targets” of its investigations whenever it issued administrative subpoenas. Second, the complexity and subtlety of the procedures embodied in the Right to Financial Privacy Act suggest that Congress would find troubling the crude and unqualified notification requirement ordered by the Court of Appeals.
C
The last of the three potential footings for the remedy sought by respondents is some other entitlement that would be effectuated thereby. Respondents seek to derive such an entitlement from a combination of our prior decisions. Distilled, their argument is as follows: A subpoena issued by the SEC must comport with the standards set forth in our decision in United States v. Powell, 379 U. S., at 57-58. Not only the recipient of an SEC subpoena, but also any person who would be affected by compliance therewith, has a substantive right, under Powell, to insist that those standards are met. A target of an SEC investigation may assert the foregoing right in two ways. First, relying on Reisman v. Caplin, 375 U. S. 440, 445 (1964), and Donaldson v. United States, 400 U. S., at 529, the target may seek permissive intervention in an enforcement action brought by the Commission against the subpoena recipient. Second, if the recipient of the subpoena threatens voluntarily to turn over the requested information, the target “might restrain compliance” by the recipient, thereby forcing the Commission to institute an enforcement suit. See Reisman v. Caplin, supra, at 450. A target can avail himself of these options only if he is aware of the existence of subpoenas directed at others. To ensure that ignorance does not prevent a target from asserting his rights, respondents conclude, the Commission must notify him when it issues a subpoena to a third party.
There are several tenuous links in respondents’ argument. Especially debatable are the proposition that a target has a substantive right to be investigated in a manner consistent with the Powell standards and the assertion that a target may obtain a restraining order preventing voluntary compliance by a third party with an administrative subpoena. Certainly we have never before expressly so held. For the present, however, we may assume, arguendo, that a target enjoys each of the substantive and procedural rights identified by respondents. Nevertheless, we conclude that it would be inappropriate to elaborate upon those entitlements by mandating notification of targets whenever the Commission issues subpoenas.
Two considerations underlie our decision on this issue. First, administration of the notice requirement advocated by respondents would be highly burdensome for both the Commission and the courts. The most obvious difficulty would involve identification of the persons and organizations that should be considered “targets” of investigations. The SEC often undertakes investigations into suspicious securities transactions without any knowledge of which of the parties involved may have violated the law. To notify all potential wrongdoers in such a situation of the issuance of each subpoena would be virtually impossible. The Commission would thus be obliged to determine the point at which enough evidence had been assembled to focus suspicion on a manageable subset of the participants in the transaction, thereby lending them the status of “targets” and entitling them to notice of the outstanding subpoenas directed at others. The complexity of that task is apparent. Even in cases in which the Commission could identify with reasonable ease the principal targets of its inquiry, another problem would arise. In such circumstances, a person not considered a target by the Commission could contend that he deserved that status and therefore should be given notice of subpoenas issued to others. To assess a claim of this sort, a district court would be obliged to conduct some kind of hearing to determine the scope and thrust of the ongoing investigation. Implementation of this new remedy would drain the resources of the judiciary as well as the Commission.
Second, the imposition of a notice requirement on the SEC would substantially increase the ability of persons who have something to hide to impede legitimate investigations by the Commission. A target given notice of every subpoena issued to third parties would be able to discourage the recipients from complying, and then further delay disclosure of damaging information by seeking intervention in all enforcement actions brought by the Commission. More seriously, the understanding of the progress of an SEC inquiry that would flow from knowledge of which persons had received subpoenas would enable an unscrupulous target to destroy or alter documents, intimidate witnesses, or transfer securities or funds so that they could not be reached by the Government. Especially in the context of securities regulation, where speed in locating and halting violations of the law is so important, we would be loathe to place such potent weapons in the hands of persons with a desire to keep the Commission at bay.
We acknowledge that our ruling may have the effect in practice of preventing some persons under investigation by the SEC from asserting objections to subpoenas issued by the Commission to third parties for improper reasons. However, to accept respondents’ proposal “would unwarrantedly cast doubt upon and stultify the [Commission’s] every investigatory move,” Donaldson v. United States, 400 U. S., at 531. Particularly in view of Congress’ manifest disinclination to require the Commission to notify targets whenever it seeks information from others, see supra, at 746-747, we refuse so to curb the Commission’s exercise of its statutory power.
Ill
Nothing in this opinion should be construed to imply that it would be improper for the SEC to inform a target that it has issued a subpoena to someone else. But, for the reasons indicated above, we decline to curtail the Commission’s discretion to determine when such notice would be appropriate and when it would not. Accordingly, the judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
A Formal Order of Investigation is issued by the Commission only after its staff has conducted a preliminary inquiry, in the course of which “no process is issued [nor] testimony compelled.” 17 CFR § 202.5(a) (1983). The purposes of such an order seem to be to define the scope of the ensuing investigation and to establish limits within which the staff may resort to compulsory process. See H. R. Rep. No. 96-1321, pt. 1, p. 2 (1980).
The relationships between O'Brien, Pennaluna, and their individual owners are not fully elucidated by the papers before us. Because, for the purposes of this litigation, the interests of all of these respondents are identical, hereinafter they will be referred to collectively as O’Brien, except when divergence in their treatment by the courts below requires that they be differentiated.
The principal bases of O’Brien’s suit were that the SEC’s Formal Order of Investigation was defective, that the investigation did not have a valid purpose, that the Commission should have afforded the subjects of the investigation a chance to comment upon it, and that the issues around which the ease revolved had been litigated and settled in another proceeding. Complaint 9-15.
During the pendency of the suit, the Commission, at the District Court’s request, refrained from seeking enforcement of its outstanding subpoenas.
Because no subpoenas were then outstanding against Jerry T. O’Brien, Inc., or O’Brien in his personal capacity, the District Court declined to determine whether the Commission had complied with the Powell standards in demanding records from those respondents.
The District Court granted respondents a brief stay to enable them to petition the Court of Appeals for a longer stay pending disposition of the appeal, but the Court of Appeals refused to enjoin the Commission from proceeding with its investigation. The SEC then filed various subpoena enforcement actions. The Commission has prevailed in at least one of those suits, SEC v. Magnuson, No. 82-1178-Z (Mass., Aug. 11, 1982) (enforcing subpoenas to Magnuson family members); another is still pending, see SEC v. Magnuson, et al., No. C-82-282-RJM (ED Wash., filed Apr. 19, 1982). Cf. Magnuson v. SEC, No. 82-2042 (Idaho, July 27, 1982) (rejecting motion by Magnuson and his wife to quash subpoenas directed to a financial institution).
Because respondents have not cross-petitioned, the validity of the Court of Appeals’ ruling on the merits of respondents’ claims for injunctive relief with regard to the subpoenas directed at themselves is not before us.
The provisions cited in the text are the pertinent provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934, respectively. In conducting the investigation that gives rise to this case, the Commission relied solely on those Acts. Many other statutes administered by the SEC contain similar provisions. See 15 U. S. C. § 79r (Public Utility Holding Company Act of 1935); 15 U. S. C. §77uuu(a) (Trust Indenture Act of 1939); 15 U. S. C. §§ 80a-41(a), (b) (Investment Company Act of 1940); 15 U. S. C. §§ 80b-9(a), (b) (Investment Advisers Act of 1940).
The analogous enforcement provisions for the other statutes administered by the Commission are: 15 U. S. C. § 79r(d) (Public Utility Holding Company Act of 1935); 15 U. S. C. § 77uuu(a) (incorporating by reference 15 U. S. C. §77v(b)) (Trust Indenture Act of 1939); 15 U. S. C. §80a-41(c) (Investment Company Act of 1940); 15 U. S. C. § 80b-9(c) (Investment Advisers Act of 1940).
Cf. United States v. Doe, 465 U. S. 605, 612-613 (1984).
It should be noted that any Fourth Amendment claims that might be asserted by respondents are substantially weaker than those of the bank customer in Miller because respondents, unlike the customer, cannot argue that the subpoena recipients were required by law to keep the records in question. Cf. 425 U. S., at 455-456 (Marshall, J., dissenting).
Cf. Donovan v. Lone Steer, Inc., 464 U. S. 408, 414-415 (1984) (discussing the Fourth Amendment rights of the recipient of an administrative subpoena).
The other statutes administered by the SEC contain similarly broad delegations of investigatory power. See the provisions cited in n. 8, supra.
In practice, virtually all investigations conducted by the Commission are nonpublic. See 3 L. Loss, Securities Regulation 1955 (2d ed. 1961); SEC, Report of the Advisory Committee on Enforcement Policies and Practices 18 (1972).
See H. R. Rep. No. 95-1383, p. 34 (1978) (the purpose of the statute is to fill the gap left by the ruling in Miller that a bank customer has “no standing under the Constitution to contest Government access to financial records”).
In this regard, it is noteworthy that the pertinent congressional Committees expressed their desire that the judiciary not supplement the remedies created by the statute with any implied causes of action. See H. R. Rep. No. 96-1321, pt. 1, p. 10 (1980); H. R. Rep. No. 95-1383, pp. 54, 56, 225, 230 (1978).
The significance of these two lessons is not that they illuminate Congress’ intent when it enacted or when it subsequently amended the crucial provisions vesting the Commission with investigatory authority, see supra, at 743-744. Rather, they inform our determination whether adoption of the remedy proposed by respondents would comport with or disrupt the system of statutes governing the issuance and trading of securities, as that system has been modified and refined by Congress in the years since 1933. In this regard, our inquiry is analogous to the kind of analysis contemplated by the third of the four factors we consider when deciding whether it would be appropriate to create a private right of action as an adjunct to a right created by statute: “[I]s it consistent with the underlying purposes of the legislative scheme to imply such a remedy . . . ?” See, e. g., Cannon v. University of Chicago, 441 U. S. 677, 688, n. 9, 703-708 (1979); Cort v. Ash, 422 U. S. 66, 78 (1975).
The holding of Powell was that the Commissioner of Internal Revenue need not demonstrate probable cause in order to secure judicial enforcement of a summons issued pursuant to §7602 of the Internal Revenue Code. The Court then went on to sketch the requirements that the Commissioner would be obliged to satisfy:
“He must show that the investigation will be conducted pursuant to a legitimate purpose, that the inquiry may be relevant to that purpose, that the information sought is not already within the Commissioner’s possession, and that the administrative steps required by the Code have been followed .... [A] court may not permit its process to be abused. Such an abuse would take place if the summons had been issued for an improper purpose, such as to harass the taxpayer or to put pressure on him to settle a collateral dispute, or for any other purpose reflecting on the good faith of the particular investigation.” 379 U. S., at 57-58 (footnote omitted).
See United States v. LaSalle National Bank, 437 U. S. 298, 313-314 (1978). Some lower courts have held or assumed that the SEC must satisfy these standards in order to obtain enforcement of its subpoenas. E. g., SEC v. ESM Government Securities, Inc., 645 F. 2d 310, 313-314 (CA5 1981). But cf. In re EEOC, 709 F. 2d 392, 398, n. 2 (CA5 1983). Respondents contend that the obligation of an agency to follow pertinent “administrative steps” means in this context that any subpoena issued under the auspices of the SEC must come within the purview of a Formal Order of Investigation, see n. 1, supra. Because of the manner in which we dispose of this case, we have no occasion to pass upon respondents’ characterization or application of our decision in Powell.
In Reisman, the Court indicated in dictum that “both parties summoned [under § 7602] and those affected by a disclosure may appear or intervene before the District Court and challenge the summons by asserting their constitutional or other claims.” 375 U. S., at 445; see id., at 449. Our decision in Donaldson made clear that the right of a third party to intervene in an enforcement action “is permissive only and is not mandatory,” 400 U. S., at 529, and that determination whether intervention should be granted in a particular case requires “[t]he usual process of balancing opposing equities,” id., at 530.
Neither the pertinent statutes nor the Commission’s regulations define the term “target,” so either the Commission or the courts would be obliged at the outset to develop a working definition of the term.
So, for example, the Commission is sometimes called upon to investigate unusually active trading in the stock of a company during the period immediately preceding a tender offer for that stock. In such a case, the Commission may have no idea which (if any) of the thousands of purchasers had improper access to inside information.
Cf. 704 F. 2d 1065, 1069 (CA9 1983) (case below) (“The target’s right could be asserted ... by other appropriate district court proceedings”).
This remedy would also have the effect of laying bare the state of the Commission’s knowledge and intentions midway through investigations. For the reasons sketched below, such exposure could significantly hamper the Commission’s efforts to police violations of the securities laws.
See PepsiCo v. SEC, 563 F. Supp. 828, 832 (SDNY 1983) (To impose a notification requirement on the SEC “would necessarily permit all targets — and presumably all potential targets — effectively to monitor the course and conduct of agency investigations. Experience and common sense should establish that such a power would be greatly abused . . .”); cf. NLRB v. Robbins Tire & Rubber Co., 437 U. S. 214, 239 (1978) (citing the risk that employers or unions would attempt to “coerce or intimidate employees and others who have given statements” as a reason for holding exempt from disclosure under the Freedom of Information Act statements made to the National Labor Relations Board).
Cf. United States v. Arthur Young & Co., 465 U. S. 805, 816 (1984) (“ ‘[A]bsent unambiguous directions from Congress,’ ” the summons power conferred on the Internal Revenue Service by statute should not be restricted by the courts) (quoting United States v. Bisceglia, 420 U. S. 141, 150 (1975)). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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104
] |
PARKER, ACTING COMMISSIONER OF PATENTS AND TRADEMARKS v. FLOOK
No. 77-642.
Argued April 25, 1978
Decided June 22, 1978
Stevens, J., delivered the opinion of the Court, in which BRENNAN, White, Marshall, BlacicmuN, and Powell, JJ., joined. Stewart, J., filed a dissenting opinion, in which Burger, C. J., and Rehnquist, J., joined, post, p. 598.
Deputy Solicitor General Wallace argued the cause for petitioner. On the briefs were Solicitor General McCree, Assistant Attorney General Shenefield, Richard H. Stern, Joseph F. Nakamura, and Jere W. Sears.
D. Dennis Allegretti argued the cause for respondent. With him on the brief were Charles G. Call, Edward W. Remus, and Frank J. Uxa, Jr.
John S. Voorhees and Kenneth E. Krosin filed a brief for the Computer Business Equipment Manufacturers Assn, as amicus curiae urging reversal.
Briefs of amici curiae urging affirmance were filed by Carol A. Cohen for Applied Data Research, Inc.; and by Morton C. Jacobs and David Cohen for the Association of Data Processing Service Organizations.
Briefs of amid curiae were filed by James W. Geriak for the American Patent Law Assn, et al.; by Richard E. Kurtz, Michael G. Gilman, and Charles A. Huggett for Mobil Oil Corp.; and by Reed C. Lawlor and Theodore H. Lassagne for Software Associates, Inc.
Mr. Justice Stevens
delivered the opinion of the Court.
Respondent applied for a patent on a “Method for Updating Alarm Limits.” The only novel feature of the method is a mathematical formula. In Gottschalk v. Benson, 409 U. S. 63, we held that the discovery of a novel and useful mathematical formula may not be patented. The question in this case is whether the identification of a limited category of useful, though conventional, post-solution applications of such a formula makes respondent’s method eligible for patent protection.
I
An “alarm limit” is a number. During catalytic conversion processes, operating conditions such as temperature, pressure, and flow rates are constantly monitored. When any of these “process variables” exceeds a predetermined “alarm limit,” an alarm may signal the presence of an abnormal condition indicating either inefficiency or perhaps danger. Fixed alarm limits may be appropriate for a steady operation, but during transient operating situations, such as start-up, it may be necessary to “update” the alarm limits periodically.
Respondent’s patent application describes a method of updating alarm limits. In essence, the method consists of three steps: an initial step which merely measures the present value of the process variable (e. g., the temperature); an intermediate step which uses an algorithm to calculate an updated alarm-limit value; and a final step in which the actual alarm limit is adjusted to the updated value. The only difference between the conventional methods of changing alarm limits and that described in respondent’s application rests in the second step — the mathematical algorithm or formula. Using the formula, an operator can calculate an updated alarm limit once he knows the original alarm base, the appropriate margin of safety, the .time interval that should elapse between each updating, the current temperature (or other process variable), and the appropriate weighting factor to be used to average the original alarm base and the current temperature.
The patent application does not purport to explain how to select the appropriate margin of safety, the weighting factor, or any of the other variables. Nor does it purport to contain any disclosure relating to the chemical processes at work, the monitoring of process variables, or the means of setting off an alarm or adjusting an alarm system. All that it provides is a formula for computing an updated alarm limit. Although the computations can be made by pencil and paper calculations, the abstract of disclosure makes it clear that the formula is primarily useful for computerized calculations producing automatic adjustments in alarm settings.
The patent claims cover any use of respondent’s formula for updating the value of an alarm limit on any process variable involved in a process comprising the catalytic chemical conversion of hydrocarbons. Since there are numerous processes of that kind in the petrochemical and oil-refining industries, the claims cover a broad range of potential uses of the method. They do not, however, cover every conceivable application of the formula.
II
The patent examiner rejected the application. He found that the mathematical formula constituted the only difference between respondent’s claims and the prior art and therefore a patent on this method “would in practical effect be a patent on the formula or mathematics itself.” The examiner concluded that the claims did not describe a discovery that was eligible for patent protection.
The Board of Appeals of the Patent and Trademark Office sustained the examiner’s rejection. The Board also concluded that the “point of novelty in [respondent’s] claimed method” lay in the formula or algorithm described in the claims, a subject matter that was unpatentable under Benson, supra.
The Court of Customs and Patent Appeals reversed. In re Flook, 559 F. 2d 21. It read Benson as applying only to claims that entirely pre-empt a mathematical formula or algorithm, and noted that respondent was only claiming on the use of his method to update alarm limits in a process comprising the catalytic chemical conversion of hydrocarbons. The court reasoned that since the mere solution of the algorithm would not constitute infringement of the claims, a patent on the method would not pre-empt the formula.
The Acting Commissioner of Patents and Trademarks filed a petition for a writ of certiorari, urging that the decision of the Court of Customs and Patent Appeals will have a debilitating effect on the rapidly expanding computer “software” industry, and will require him to process thousands of additional patent applications. Because of the importance of the question, we granted certiorari, 434 U. S. 1033.
Ill
This case turns entirely on the proper construction of § 101 of the Patent Act, which describes the subject matter that is eligible for patent protection. It does not involve the familiar issues of novelty and obviousness that routinely arise under §§ 102 and 103 when the validity of a patent is challenged. For the purpose of our analysis, we assume that respondent’s formula is novel and useful and that he discovered it. We also assume, since respondent does not challenge the examiner’s finding, that the formula is the only novel feature of respondent’s method. The question is whether the discovery of this feature makes an otherwise conventional method eligible for patent protection.
The plain language of § 101 does not answer the question. It is true, as respondent argues, that his method is a “process” in the ordinary sense of the word. But that was also true of the algorithm, which described a method for converting binary-coded decimal numerals into pure binary numerals, that was involved in Gottschalk v. Benson. The holding that the discovery of that method could not be patented as a “process” forecloses a purely literal reading of § 101. Reasoning that an algorithm, or mathematical formula, is like a law of nature, Benson applied the established rule that a law of nature cannot be the subject of a patent. Quoting from earlier cases, we said:
“ 'A principle, in the abstract, is a fundamental truth; an original cause; a motive; these cannot be patented, as no one can claim in either of them an exclusive right.’ Le Roy v. Tatham, 14 How. 156, 175. Phenomena of nature, though just discovered, mental processes, and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work.” 409 U. S., at 67.
The line between a patentable “process” and an unpatenta-ble “principle” is not always clear. Both are “conception [s] of the mind, seen only by [their] effects when being executed or performed.” Tilghman v. Proctor, 102 U. S. 707, 728. In Benson we concluded that the process application in fact sought to patent an idea, noting that
“[t]he mathematical formula involved here has no substantial practical application except in connection with a digital computer, which means that if the judgment below is affirmed, the patent would wholly pre-empt the mathematical formula and in practical effect would be a patent on the algorithm itself.” 409 U. S., at 71-72.
Respondent correctly points out that this language does not apply to his claims. He does not seek to “wholly preempt the mathematical formula,” since there are uses of his formula outside the petrochemical and oil-refining industries that remain in the public domain. And he argues that the presence of specific “post-solution" activity — the adjustment of the alarm limit to the figure computed according to the formula — distinguishes this case from Benson and makes his process patentable. We cannot agree.
The notion that post-solution activity, no matter how conventional or obvious in itself, can transform an unpatentable principle into a patentable process exalts form over substance. A competent draftsman could attach some form of post-solution activity to almost any mathematical formula; the Pythagorean theorem would not have been patentable, or partially patentable, because a patent application contained a final step indicating that the formula, when solved, could be usefully applied to existing surveying techniques. The concept of patentable subject matter under § 101 is not “like a nose of wax which may be turned and twisted in any direction ....” White v. Dunbar, 119 U. S. 47, 51.
Yet it is equally clear that a process is not unpatentable simply because it contains a law of nature or a mathematical algorithm. See Eibel Process Co. v. Minnesota & Ontario Paper Co., 261 U. S. 45; Tilghman v. Proctor, supra. For instance, in Mackay Radio & Telegraph Co. v. Radio Corp. of America, 306 U. S. 86, the applicant sought a patent on a directional antenna system in which the wire arrangement was determined by the logical application of a mathematical formula. Putting the question of patentability to one side as a preface to his analysis of the infringement issue, Mr. Justice Stone, writing for the Court, explained:
“While a scientific truth, or the mathematical expression of it, is not patentable invention, a novel and useful structure created with the aid of knowledge of scientific truth may be.” Id., at 94.
Funk Bros. Seed Co. v. Kalo Co., 333 U. S. 127, 130, expresses a similar approach:
“He who discovers a hitherto unknown phenomenon of nature has no claim to a monopoly of it which the law recognizes. If there is to be invention from such a discovery, it must come from the application of the law of nature to a new and useful end.”
Mackay Radio and Funk Bros, point to- the proper analysis for this case: The process itself, not merely the mathematical algorithm, must be new and useful. Indeed, the novelty of the mathematical algorithm is not a determining factor at all. Whether the algorithm was in fact known or unknown at the time of the claimed invention, as one of the “basic tools of scientific and technological work,” see Gottschalk v. Benson, 409 U. S., at 67, it is treated as though it were a familiar part of the prior art.
This is also the teaching of our landmark decision in O’Reilly v. Morse, 15 How. 62. In that case the Court rejected Samuel Morse's broad claim covering any use of electromagnetism for printing intelligible signs, characters, or letters at a distance. Id., at 112-121. In reviewing earlier cases applying the rule that a scientific principle cannot be patented, the Court placed particular emphasis on the English case of Neilson v. Harford, Web. Pat. Cases 295, 371 (1844), which involved the circulation of heated air in a furnace system to increase its efficiency. The English court rejected the argument that the patent merely covered the principle that furnace temperature could be increased by injecting hot air, instead of cold into the furnace. That court’s explanation of its decision was relied on by this Court in Morse:
“ Tt is very difficult to distinguish it [the Neilson patent] from the specification of a patent for a principle, and this at first created in the minds of the court much difficulty; but after full consideration, we think that the plaintiff does not merely claim a principle, but a machine, embodying a principle, and a very valuable one. We think the case must he considered as if the principle being well known, the plaintiff had first invented a mode of applying it 15 How., at 115 (emphasis added).
We think this case must also be considered as if the principle or mathematical formula were well known.
Respondent argues that this approach improperly imports into § 101 the considerations of “inventiveness” which are the proper concerns of §§ 102 and 103. This argument is based on two fundamental misconceptions.
First, respondent incorrectly assumes that if a process application implements a principle in some specific fashion, it automatically falls within the patentable subject matter of § 101 and the substantive patentability of the particular process can then be determined by the conditions of §§ 102 and 103. This assumption is based on respondent’s narrow reading of Benson, and is as untenable in the context of § 101 as it is in the context of that case. It would make the determination of patentable subject matter depend simply on the draftsman’s art and would ill serve the principles underlying the prohibition against patents for “ideas” or phenomena of nature. The rule that the discovery of a law of nature cannot be patented rests, not on the notion that natural phenomena are not processes, but rather on the more fundamental understanding that they are not the kind of “discoveries” that the statute was enacted to protect. The obligation to determine what type of discovery is sought to be patented must precede the determination of whether that discovery is, in fact, new or obvious.
Second, respondent assumes that the fatal objection to his application is the fact that one of its components — the mathematical formula — consists of unpatentable subject matter. In countering this supposed objection, respondent relies on opinions by the Court of Customs and Patent Appeals which reject the notion “that a claim may be dissected, the claim components searched in the prior art, and, if the only component found novel is outside the statutory classes of invention, the claim may be rejected under 35 U. S. C. § 101.” In re Chatfield, 545 F. 2d 152, 158 (CCPA 1976). Our approach to respondent’s application is, however, not at all inconsistent with the view that a patent claim must be considered as a whole. Respondent’s process is unpatentable under § 101, not because it contains a mathematical algorithm as one component, but because once that algorithm is assumed to be within the prior art, the application, considered as. a whole, contains no patentable invention. Even though a phenomenon of nature or mathematical formula may be well known, an inventive application of the principle may be patented. Conversely, the discovery of such a phenomenon cannot support a patent unless there is some other inventive concept in its application.
Here it is absolutely clear that respondent’s application contains no claim of patentable invention. The chemical processes involved in catalytic conversion of hydrocarbons are well known, as are the practice of monitoring the chemical process variables, the use of alarm limits to trigger alarms, the notion that alarm limit values must be recomputed and readjusted, and the use of computers for “automatic monitoring-alarming.” Respondent’s application simply provides a new and presumably better method for calculating alarm limit values. If we assume that that method was also known, as we must under the reasoning in Morse, then respondent’s claim is, in effect, comparable to a claim that the formula 2irr can be usefully applied in determining the circumference of a wheel. As the Court of Customs and Patent Appeals has explained, “if a claim is directed essentially to a method of calculating, using a mathematical formula, even if the solution is for a specific purpose, the claimed method is nonstatutory.” In re Richman, 563 F. 2d 1026, 1030 (1977).
To a large extent our conclusion is based on reasoning derived from opinions written before the modern business of developing programs for computers was conceived. The youth of the industry may explain the complete absence of precedent supporting patentability. Neither the dearth of precedent, nor this decision, should therefore be interpreted as reflecting a judgment that patent protection of certain novel and useful computer programs will not promote the progress of science and the useful arts, or that such protection is undesirable as a matter of policy. Difficult questions of policy concerning the kinds of programs that may be appropriate for patent protection and the form and duration of such protection can be answered by Congress on the basis of current empirical data not equally available to this tribunal.
It is our duty to construe the patent statutes as they now read, in light of our prior precedents, and we must proceed cautiously when we are asked to extend patent rights into areas wholly unforeseen by Congress. As Mr. Justice White explained in writing for the Court in Deepsouth Packing Co. v. Laitram Corp., 406 U. S. 518, 531:
“[W] e should not expand patent rights by overruling or modifying our prior cases construing the patent statutes, unless the argument for expansion of privilege is based on more than mere inference from ambiguous statutory language. We would require a clear and certain signal from Congress before approving the position of a litigant who, as respondent here, argues that the beachhead of privilege is wider, and the area of public use narrower, than courts had previously thought. No such signal legitimizes respondent’s position in this litigation.”
The judgment of the Court of Customs and Patent Appeals is
Reversed.
APPENDIX TO OPINION OE THE COURT
Claim 1 of the patent describes the method as follows:
“1. A method for updating the value of at least one alarm limit on at least one process variable involved in a process comprising the catalytic chemical conversion of hydrocarbons wherein said alarm limit has a current value of
Bo+K
“wherein Bo is the current alarm base and K is a predetermined alarm offset which comprises:
“(1) Determining the present value of said process variable, said present value being defined as PYL;
“(2) Determining a new alarm base Bi, using the following equation:
Bi=Bo(1.0-F)+PVL(F)
“where F is a predetermined number greater than zero and less than 1.0;
“(3) Determining an updated alarm limit which is defined as Bi+K; and thereafter
“(4) Adjusting said alarm limit to said updated alarm limit value.” App. 63A.
In order to use respondent’s method for computing a new limit, the operator must make four decisions. Based on his knowledge of normal operating conditions, he first selects the original “alarm base” (Bo); if a temperature of 400 degrees is normal, that may be the alarm base. He next decides on an appropriate margin of safety, perhaps 50 degrees; that is his “alarm offset” (K). The sum of the alarm base and the alarm offset equals the alarm limit. Then he decides on the time interval that will elapse between each updating; that interval has no effect on the computation although it may, of course, be of great practical importance. Finally, he selects a weighting factor (F), which may be any number between 99% and 1%, and which is used in the updating calculation.
If the operator has decided in advance to use an original alarm base (Bo) of 400 degrees, a constant alarm offset (K) of 50 degrees, and a weighting factor (F) of 80%', the only additional information he needs in order to compute an updated alarm limit (UAV), is the present value of the process variable (PYL). The computation of the updated alarm limit according to respondent’s method involves these three steps:
First, at the predetermined interval, the process variable is measured; if we assume the temperature is then 425 degrees, PVL will then equal 425.
Second, the solution of respondent’s novel formula will produce a new alarm base (Bi) that will be a weighted average of the preceding alarm base (Bo) of 400 degrees and the current temperature (PVL) of 425. It will be closer to one or the other depending on the value of the weighting factor (F) selected by the operator. If F is 80%, that percentage of 425 (340) plus 20% (1 — F) of 400 (80) will produce a new alarm base of 420 degrees.
Third, the alarm offset (K) of 50 degrees is then added to the new alarm base (Bx) of 420 to produce the updated alarm limit (UAV) of 470.
The process is repeated at the selected time intervals. In each updating computation, the most recently calculated alarm base and the current measurement of the process variable will be substituted for the corresponding numbers in the original calculation, but the alarm offset and the weighting factor will remain constant.
We use the word “algorithm” in this case, as we did in, Gottschalk v. Benson, 409 U. S. 63, 65, to mean “[a] procedure for solving a given type of mathematical problem
Claim 1 of the patent is set forth in the appendix to this opinion, which also contains a more complete description of these three steps.
App. 13A.
Examples mentioned in the abstract of disclosure include naphtha reforming, petroleum distillate and petroleum residuum cracking, hydro-cracking and desulfurization, aromatic hydrocarbon and paraffin isomerization and disproportionation, paraffin-olefin alkylation, and the like. Id., at 8A.
Id., at 47A.
Id., at 60A.
The term “software” is used in the industry to describe computer programs. The value of computer programs in use in the United States in 1976 was placed at $43.1 billion, and projected at $70.7 billion by 1980 according to one industry estimate. See Brief for the Computer & Business Equipment Manufacturers Assn, as Amicus Curiae 17-18, n. 16.
Title 35 U. S. C. § 101 provides:
“Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”
Section 100 (b) provides:
“The term ‘process? means process, art or method, and includes a new use of a known process, machine, manufacture,, composition of matter, or material.”
The statutory definition of “process” is broad. See n. 8, supra. An argument can be made, however, that this Court has only recognized a process as within the statutory definition when it either was tied to a particular apparatus or operated to change materials to a “different state or thing.” See Cochrane v. Deener, 94 U. S. 780, 787-788. As in Benson, we assume that a valid process patent may issue even if it does not meet one of these qualifications of our earlier precedents. 409 U. S., at 71.
In Benson we phrased the issue in this way:
“The question is whether the method described and claimed is a 'process’ within the meaning of the Patent Act.” Id., at 64.
It should be noted that in Benson there was a specific end use contemplated for the algorithm — utilization of the algorithm in computer programming. See In re Chatfield, 545 F. 2d 152, 161 (CCPA 1976) (Rich, J., dissenting). Of course, as the Court pointed out, the formula had no other practical application; but it is not entirely clear why a process claim is any more or less patentable because the specific end use contemplated is the only one for which the algorithm has any practical application.
In Eibel Process Co. the Court upheld a patent on an improvement on a papermaking machine that made use of the law of gravity to enhance the flow of the product. The patentee, of course, did not claim to have discovered the force of gravity, but that force was an element in his novel conception.
Tilghman v. Proctor involved a process claim for " ‘the manufacturing of fat acids and glycerine from fatty bodies.’ ” The Court distinguished the process from the principle involved as follows:
f,'[T]he claim of the patent is not for a mere principle. The chemical principle or scientific fact upon which it is founded is, that the elements of neutral fat require to be severally united with an atomic equivalent of water in order to separate from each other and become free. This chemical fact was not discovered by Tilghman. He only claims to have invented a particular mode of bringing about the desired chemical union between the fatty elements and water.” 102 U. S., at 729.
See also Risdon Locomotive Works v. Medart, 158 U. S. 68; Tilghman v. Proctor, supra.
Sections 102 and 103 establish certain conditions, such as novelty and nonobviousness, to patentability.
The underlying notion is that a scientific principle, such as that expressed in respondent’s algorithm, reveals a relationship that has always existed.
“An example of such a discovery [of a scientific principle] was Newton’s formulation of the law of universal gravitation, relating the force of attraction between two bodies, F, to their masses, m and m', and the square of the distance, d, between their centers, according to the equation F=mm//d2. But this relationship always existed — even before Newton announced his celebrated law. Such ‘mere’ recognition of a theretofore existing phenomenon or relationship carries with it no rights to exclude others from its enjoyment. . . . Patentable subject matter must be new (novel); not merely heretofore unknown. There is a very compelling reason for this rule. The reason is founded upon the proposition that in granting patent rights, the public must not be deprived of any rights that it theretofore freely enjoyed.” P. Rosenberg, Patent Law Fundamentals, §4, p. 13 (1975).
Section 103, by its own terms, requires that a determination of obviousness be made by considering “the subject matter as a whole.” 35 U. S. C. § 103. Although this does not necessarily require that analysis of what is patentable subject matter under § 101 proceed on the same basis, we agree that it should.
App. 22.
Respondent argues that the inventiveness of his process must be determined as of “the time the invention is made” under § 103, and that, therefore, it is improper to judge the obviousness of his process by assessing the application of the formula as though the formula were part of the prior art. This argument confuses the issue of pátentable subject matter under § 101 with that of obviousness under § 103. Whether or not respondent’s formula can be characterized as “obvious,” his process patent rests solely on the claim that his mathematical algorithm, when related to a computer program, will improve the existing process for updating alarm units. Very simply, our holding today is that a claim for an improved method of calculation, even when tied to a specific end use, is unpatentable subject matter under § 101.
Articles assessing the merits and demerits of patent protection for computer programming are numerous. See, e. g., Davis, Computer Programs and Subject Matter Patentability, 6 Rutgers J. of Computers and Law 1 (1977), and articles cited therein, at 2 n. 5. Even among those who favor patentability of computer programs, there is questioning of whether the 17-year protection afforded by the current Patent Act is either needed or appropriate. See id., at 20 n. 133.
More precisely, it is defined as a number greater than 0, but less than 1. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
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"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
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"Department of Homeland Security",
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"Board of Tax Appeals",
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"NO Admin Action",
"Processing Tax Board of Review"
] | [
93
] |
DONALDSON, POSTMASTER GENERAL, v. READ MAGAZINE, INC. et al.
No. 50.
Argued October 24, 1947.
Reargued January 5, 1948.
Decided March 8, 1948.
Robert L. Stern argued the cause for petitioner. With him on the briefs were Solicitor General Perlman and Paul A. Sweeney, and with them was Assistant Attorney General Ford on the original argument and H. Graham Morison, Melvin Richter and Alvin 0. West on the rear-gument.
John W. Burke, Jr. argued the cause and filed the briefs for respondents. With him on the brief on the reargument was Mac Asbill.
Mr. Justice Black
delivered the opinion of the Court.
This case presents questions as to the validity of an order issued by petitioner, the Postmaster General, which directed that mail addressed to some of respondents be returned to the senders marked “Fraudulent,” and that postal money order sums payable to their order be returned to the remitters.
The respondent Publishers Service Company has conducted many contests to promote the circulation of newspapers in which it has advertised that prizes would be given for the solution of puzzles. Through its corporate subsidiaries, respondents Literary Classics, Inc., and Read Magazine, Inc., it publishes books and two monthly magazines called Read and Facts. The place of business is in New York City.
In 1945 respondents to promote sales of their books put on a nationally advertised project, known as the Facts Magazine Hall of Fame Puzzle Contest. The Postmaster General after a hearing found “upon evidence satisfactory to him” that the “puzzle contest” was “a scheme or device for obtaining money through the mails by means of false and fraudulent pretenses, representations, and promises, in violation of sections 259 and 732 of title 39, United States Code . . . .” Specifically, the Postmaster General found that the representations were false and fraudulent for two principal reasons. First, that prospective contestants were falsely led to believe that they might be eligible to win prizes upon payment of $3 as a maximum sum when in reality the minimum requirement was $9, and as it later developed they were finally called on to pay as much as $42 to be eligible for increased prize offers. Second, the Postmaster General found that though the contest was emphasized in advertisements as a “puzzle contest” it was not a puzzle contest; that respondents knew from experience that the puzzles were so easy that many people would solve all the “puzzles” and that prizes would be awarded only as a result of a tie-breaking letter-essay contest; and that contestants were deliberately misled concerning all these facts by artfully composed advertisements.
The contest was under the immediate supervision of respondents Henry Walsh Lee and Judith S. Johnson, editor-in-chief and “contest editor” respectively of Facts. The Postmaster General’s original fraud order related to mail and money orders directed to
“Puzzle Contest, Facts Magazine; Contest Editor, Facts Magazine; Judith S. Johnson, Contest Editor; Miss J. S. Johnson, Contest Editor; Contest Editor; Facts Magazine; and Henry Walsh Lee, Editor in Chief, Facts Magazine, and their officers and agents as such, at New York, New York.”
Respondents filed a complaint in the United States District Court for the District of Columbia to enjoin enforcement of the order. They alleged its invalidity on the grounds that there was no substantial evidence to support the Postmaster General’s findings of fraud, and that the statutory provisions under which the order was issued authorize the Postmaster General to act as a censor and hence violate the First Amendment. The District Court issued a temporary restraining order but directed that pending further orders respondents should deposit in court all moneys and the proceeds of all checks and money orders received through the mails as qualifying fees for the Hall of Fame Puzzle Contest. After a hearing the respondents’ motion for summary judgment was granted on the ground that the findings were not supported by substantial evidence. 63 F. Supp. 318. The United States Court of Appeals for the District of Columbia affirmed on the same ground, one judge dissenting. 158 F. 2d 542. We granted certiorari.
The case has been twice argued in this Court. Briefs of both parties on the first argument dealt only with the question of whether the Postmaster General’s findings of fraud were supported by substantial evidence. But assuming validity of the findings, questions arose during the first oral argument concerning the scope of the fraud order. That order had included a direction to the New York postmaster to refuse to deliver any mail or to pay any money orders to Facts, its officers and agents, including its editor-in-chief, who was also editor of Read. The two monthly magazines, both published in New York, had an aggregate circulation of nearly five hundred thousand copies. We were told the total deprivation of the right of Facts and of the editor of the two magazines to receive mail and to cash money orders would practically put both magazines out of business. See Milwaukee Publishing Co. v. Burleson, 255 U. S. 407. Furthermore, the order was of indefinite duration and Facts and its affiliates have made a business of conducting contests to promote the circulation of books and magazines. The order, if indefinitely enforced, might have resulted in barring delivery of mail and payment of money orders in relation to other non-fraudulent contests as well as legitimate magazine business. All of the foregoing raised questions about the validity and scope of the original order, if unmodified, which we deemed of sufficient importance to justify further argument. For that reason we set the case down for reargument, requesting parties to discuss the validity and scope of the order, and whether, if invalid by reason of its scope, it could be so modified as to free it from statutory or constitutional objections.
Thereafter, and before reargument, the Postmaster General revoked the order insofar as it applied to Facts magazine, its editor-in-chief, and its officers and agents. As modified, the order bars delivery of mail and payment of money orders only to addressees designated in the contest advertisements:
“Puzzle Contest, Facts Magazine; Contest Editor,
Facts Magazine; Judith S. Johnson, Contest Editor;
Miss J. S. Johnson, Contest Editor; Contest Editor.”
The Postmaster General, so we are informed, does not construe the modified order as forbidding delivery of mail or payment of money orders to Facts magazine or even to Miss Judith (J. S.) Johnson, individually. So construed, the order is narrowly restricted to mail and money orders sent in relation to the Hall of Fame Puzzle Contest found fraudulent, and would not bar deliveries to the magazines, to their editor, or to the three corporate respondents. It would bar deliveries to Judith (J. S.) Johnson, only if sent to her at the designated address and in her capacity as “Contest Editor.” Likewise the District Court’s order impounding funds is limited to qualifying fees received in the Hall of Fame Puzzle Contest. If the Postmaster General’s action in modifying the order is valid, the questions we asked to have argued have largely been eliminated from the original order.
Respondents’ contentions now are: (1) The Postmaster General lacked power to modify his original fraud order, and hence that order remains subject to any and all of its original infirmities. (2) The findings on which the order is based are not supported by substantial evidence. (3) The statutes under which the order was issued violate various constitutional provisions.
First. Respondents’ contention that the Postmaster General was without power to modify the order by elimination of Facts magazine, its editor, and its officers and agents is based almost entirely on their two other grounds for asserting invalidity of the order. Of course, if the order were wholly invalid as to all of the respondents for these reasons, it could not have been validated merely by eliminating some of them from its terms. But laying aside respondents’ other contentions for the moment, we have no doubt as to the Postmaster General’s authority to modify the fraud order.
Having concluded that the original order was broader than necessary to reach the fraud proved, the Postmaster General not only possessed the power but he had the duty to reduce its scope to what was essential for that purpose. The purpose of mail fraud orders is not punishment, but prevention of future injury to the public by denying the use of the mails to aid a fraudulent scheme. See Comm’r v. Heininger, 320 U. S. 467, 474. Such orders if too broad could work great hardships and inflict unnecessary injuries upon innocent persons and businesses. No persuasive reason has been suggested why the Postmaster General should be without power to modify an order of this kind. Such an order is similar to an equitable injunction to restrain future conduct, and like such an injunction should be subject to modification whenever it appears that one or more of the restraints imposed are no longer needed to protect the public. United States v. Swift & Co., 286 U. S. 106, 114; see Skinner & Eddy Corp. v. United States, 249 U. S. 557, 570.
Furthermore, the modification here involved was for respondents’ benefit; it gave them a part of the very relief for which they prayed. It removed the ban against delivery of mail and payment of money orders to their magazine, its editor and its agents — a ban which we were told would have done them irreparable injury if left in effect. The possibility that another order might be entered against the eliminated respondents is too remote to require us to consider the original order as though the modification had never been made. See United States v. Hamburg-American Co., 239 U. S. 466, 475-476.
Nor does the modification subject respondents to any disadvantage in this case in reference to the impounded funds. Those funds are sums sent in as qualifying fees for the scheme found fraudulent. They are in court custody because of the court’s- restraining order; but for it they would have been returned to the senders as ordered by the Postmaster General. Now, as before the fraud order was modified, their disposition is dependent entirely upon the validity of the finding of fraud. Respondents could thus claim the funds only by asserting a right growing out of the scheme found fraudulent. The court having lawful command of such funds must allocate them to the remitters if the order is valid. See Inland Steel Co. v. United States, 306 U. S. 153, 156-158; United States v. Morgan, 307 U. S. 183, 194-195.
Second. Respondents contend that there was no substantial evidence to support the Postmaster General’s findings that they had represented that prizes could be won (1) on payment of only three dollars as contest fees or (2) by the mere solution of puzzles. They say that the very advertisements and circular letters to contestants from which these inferences were drawn by the Postmaster General contained language which showed that the first $3 series of puzzles might result in ties, making necessary a second and maybe a third $3 puzzle series, and that if these three efforts failed to determine the prize winners, they would then be selected on the basis of competitive letters, written by the tied contestants on the subject “The Puzzle I Found Most Interesting and Educational in This Contest.”
There were sentences in the respondents’ advertisements and communications which, standing alone, would have conveyed to a careful reader information as to the nine-dollar fees and the letter-essay feature of the contest. Had these sentences stood alone, doubtless the fraud findings of the Postmaster General would not have been justified. But they did not stand alone. They were but small and inconspicuous portions of lengthy descriptions used by respondents to present their contest to the public in their advertisements and letters. In reviewing-fraud findings of the Postmaster General, neither this Court nor any other is authorized to pick out parts of the advertisements on which respondents particularly rely, decide that these excerpts would have supported different findings, and set aside his order for that reason. We consider all the contents of the advertisements and letters, and all of the evidence, not to resolve contradictory inferences, but only to determine if there was evidence to support the Postmaster General’s findings of fraud. Leach v. Carlile, 258 U. S. 138, 140.
Respondents’ advertisements were long; their form letters to contestants discussing the contest, its terms, and its promises were even longer than the advertisements. Paradoxically, the advertisements constituted at the same time models of clarity and of obscurity — clarity in referring to prizes and to a “puzzle contest,” obscurity in referring to a remote possibility of a letter-essay contest. In bold type, almost an inch high, their advertisements referred to “$10,000 FIRST PRIZE PUZZLE CONTEST.” Time after time they used the words “puzzle” and “puzzle contest.” Conspicuous pictures of sample “puzzles” covered a large part of a page. Rebus “puzzles” Nos. 1 to 4 of the contest were there. An explanation of what each represented appeared above it. The first, it was explained, represented “the inventor of the phonograph and electric light,” the second “a Republican President who became Chief Justice of the Supreme Court.” The last two contained equally helpful clues to the “puzzles.” The advertisements left no doubt that the contest presented an opportunity to win large prizes in connection with solution of puzzles, which puzzles, to say the least, would not be too taxing on the imagination.
Readers who might have felt some reluctance about paying their money to enter an essay contest were not so impressively and conspicuously informed about that prospect; here the advertisement became a model of obscurity. In the lower left corner of one of the advertising pages appeared the “Official Rules of the Contest,” to which rules references were carefully placed in various parts of the advertisement, and which were printed, as the District Court’s opinion observed, “in small type.” There were ten rules. About the middle of Rule 9 appeared the only reference to the possible need for letters as a means of breaking ties. And it is impossible to say that the Postmaster General drew an unreasonable inference in concluding that competitive letter-writing thus obscurely referred to was mentioned only as a remote and unexpected contingency. The same kind of obscurity and doubt occurs in reference to the cost of the contest. The District Court in an opinion holding that the Postmaster General’s findings were not supported by the evidence had this to say about one advertisement which was widely used:
“Indeed, the advertisement is by no means a model of clarity and lucidity. It is diffuse and prolix, and at times somewhat obscure. Many of its salient provisions are printed in rather small type. An intensive and concentrated reading of the entire text is indispensable in order to arrive at an understanding of the entire scheme. Nevertheless, a close analysis of this material discloses the complete plan. Nothing is omitted, concealed or misrepresented. There is no deception. The well-founded criticisms of the plaintiffs’ literature are a far cry from justifying a conclusion that the announcement was a fraud on the public. . . . The conclusion is inevitable that there is no evidence to support the finding of fact on which the fraud order is based and that, therefore, the plaintiff is entitled to a permanent injunction against the enforcement of the order.”
We agree with the District Court that many people are intellectually capable of discovering the cost and nature of this contest by “intensive and concentrated reading” and by close analysis of these advertisements. Nevertheless, we believe that the Postmaster General could reasonably have concluded, as he did, that the advertisements and other writings had been artfully contrived and composed in such manner that they would confuse readers, distract their attention from the fact that the scheme was in reality an essay contest, and mislead them into thinking that they were entering a “rebus puzzle” contest, in which prizes could be won by an expenditure of not more than $3. That respondents’ past experience in similar contests enabled them to know at the beginning that essay writing, not puzzle solutions, would determine prize winners is hardly controvertible on this record. That experience was borne out in this contest by the fact that of the 90,000 contestants who submitted answers to the first series of 80 puzzles, 35,000 solved all of them, and of that number 27,000 had completed the first set of “tie-breaking puzzles” when the fraud order was issued. Under the circumstances, to advertise this as a puzzle contest instead of what it actually was cannot be attributed to a mere difference in “nomenclature”; such conduct falls far short of that fair dealing of which fraud is the antithesis.
Advertisements as a whole may be completely misleading although every sentence separately considered is literally true. This may be because things are omitted that should be said, or because advertisements are composed or purposefully printed in such way as to mislead. Wiser v. Lawler, 189 U. S. 260, 264; Farley v. Simmons, 99 F. 2d 343, 346; see also cases collected in 6 Eng. Rul. Cas. 129-131. That exceptionally acute and sophisticated readers might have been able by penetrating analysis to have deciphered the true nature of the contest’s terms is not sufficient to bar findings of fraud by a fact-finding tribunal. Questions of fraud may be determined in the light of the effect advertisements would most probably produce on ordinary minds. Durland v. United States, 161 U. S. 306-313, 314; Wiser v. Lawler, supra at 264; Oesting v. United States, 234 F. 304, 307. People have a right to assume that fraudulent advertising traps will not be laid to ensnare them. “Laws are made to protect the trusting as well as the suspicious.” Federal Trade Comm’n v. Standard Education Society, 302 U. S. 112, 116.
The Postmaster General found that respondents’ advertisements had been deliberately contrived to divert readers’ attention from material but adroitly obscured facts. That finding has substantial support in the evidence. The District Court and the Court of Appeals were wrong in holding the evidence insufficient.
Third. It is contended that §§ 259 and 732 of 39 U. S. C., the sections under which this order was issued, are in conflict with various constitutional provisions and that the statutes should be held unenforceable for this reason. Specifically, it is argued that the sections authorize a prior censorship and thus violate the First Amendment; authorize unreasonable searches and seizures in violation of the Fourth Amendment; violate the due process clause of the Fifth Amendment; deny the kind of trial guaranteed in criminal proceedings by the Sixth Amendment and by Art. Ill, § 2, cl. 3; and inflict unusual punishment in violation of the Eighth Amendment.
In 1872 Congress first authorized the Postmaster General to forbid delivery of registered letters and payment of money orders to persons or companies found by the Postmaster General to be conducting an enterprise to obtain money by false pretenses through the use of the mails. 17 Stat. 322-323, 39 U. S. C. § 732. In the same statute Congress made it a crime to place letters, circulars, advertisements, etc., in the mails for the purpose of carrying out such fraudulent artifices or schemes. 17 Stat. 323, 18 U. S. C. § 338. In 1889 Congress declared “non-mailable” letters and other matter sent to help perpetrate frauds. 25 Stat. 874, 39 U. S. C. § 256. In 1895 the Postmaster General’s fraud order powers were extended to cover all letters or other matter sent by mail. 28 Stat. 964, 39 U. S. C. § 259. And Congress has passed many more statutes, such, for illustration, as the Securities and Exchange Act, 48 Stat. 77, 906, 15 U. S. C. § 77 (e), and the Federal Trade Commission Act as amended, 52 Stat. 114, 15 U. S. C. § 52, to protect people against fraudulent use of the mails.
All of the foregoing statutes, and others which need not be referred to specifically, manifest a purpose of Congress to utilize its powers, particularly over the mails and in interstate commerce, to protect people against fraud. This governmental power has always been recognized in this country and is firmly established. The particular statutes here attacked have been regularly enforced by the executive officers and the courts for more than half a century. They are now part and parcel of our governmental fabric. This Court in 1904, in the case of Public Clearing House v. Coyne, 194 U. S. 497, sustained the constitutional power of Congress to enact the laws. The decision there rejected all the contentions now urged against the validity of the statutes in their entirety, insofar as the present contentions have any possible merit. No decision of this Court either before or after the Coyne case has questioned the power of Congress to pass these laws. The Coyne case has been cited with approval many times.
Recognizing that past decisions of this Court if adhered to preclude acceptance of their contentions, respondents urge that certain of our decisions since the Coyne case have partially undermined the philosophy on which it rested. Respondents refer particularly to comparatively recent decisions under the First and Fourteenth Amendments. None of the recent cases to which respondents refer, however, provide the slightest support for a contention that the constitutional guarantees of freedom of speech and freedom of the press include complete freedom, uncontrollable by Congress, to use the mails for perpetration of swindling schemes.
We reject the contention that we should overrule the Coyne case and declare these fraud order statutes to be wholly void and unenforceable.
An additional argument urged by respondents is that the fraud order statutes as interpreted and applied by the Postmaster General in this case violate some of the constitutional provisions above mentioned. We consider this suggestion only in connection with the modified order. Its future effect is merely to enjoin the continuation of conduct found fraudulent. Carried no further than this, the order has not even a slight resemblance to punishment — it only keeps respondents from getting the money of others by false pretenses and deprives them of a right to speak or print only to the extent necessary to protect others from their fraudulent artifices. And so far as the impounding order is concerned, of course respondents can have no just or legal claim to money mailed to them as a result of their fraudulent practices. Nor does the modified order jeopardize respondents’ magazine except to the extent, if any, that its circulation might be dependent on monies received from this contest scheme found fraudulent. A contention cannot be seriously considered which assümes that freedom of the press includes a right to raise money to promote circulation by deception of the public.
The order as modified is valid and its enforcement should not have been enjoined. The judgments of the United States Court of Appeals for the District of Columbia and of the District Court are reversed. The cause is remanded to the District Court to dismiss the petition for injunction and to provide for proper return to the remitters of the impounded funds sent in response to the fraudulent advertisements and communications.
It is so ordered.
“This case is ordered restored to the docket for reargument. On reargument counsel need not further discuss the sufficiency of the evidence to support the Postmaster General’s findings. They are requested to discuss the following:
"1. Does the fraud order prohibit delivery of mail and postal money orders to Facts Magazine and all its employees, including its editor-in-chief ? If so,
“(a) Is the order within the Postmaster General’s authority under 39 U. S. C. Secs. 259, 732?
“(b) If so, do these code provisions, in violation of the First Amendment or any other constitutional provisions, abridge the freedom of speech or press of either the senders or the sendees of the mail or the money orders?
“2. Does the fraud order prohibit indefinitely the delivery of mail or money orders which relate to subject matters or contests other than the contest on which the order is based? If so,
“(a) Is the order within the Postmaster General’s statutory authority ?
“(b) If so, are these code provisions in conflict with the Constitution of the United States ?
“3. Assuming that the order is in conflict with the code provisions or the Constitution, can it be modified in such way as to free it from statutory or constitutional objections? If so, by whom can the order be modified and by what procedure?”
Grosjean v. American Press Co., 297 U. S. 233, 245-249; Near v. Minnesota, 283 U. S. 697, 713, et seq.; Bridges v. California, 314 U. S. 252, 260-263; Craig v. Harney, 331 U. S. 367; Milwaukee Publishing Co. v. Burleson, 255 U. S. 407. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
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"State Agency",
"Unidentifiable",
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"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
111
] |
MATHEWS, SECRETARY OF HEALTH, EDUCATION, AND WELFARE v. De CASTRO
No. 75-1197.
Argued November 8, 1976
Decided December 13, 1976
Assistant Attorney General Lee argued the cause for appellant. With him on the briefs were Solicitor General Bork, Deputy Solicitor General Jones, and Leonard Schaitman.
Marvin A. Brusman argued the cause for appellee. With him on the brief was Theodore R. Sherwin.
Mr. Justice Stewart
delivered the opinion of the Court.
Under the Social Security Act a married woman whose husband retires or becomes disabled is granted benefits if she has a minor or other dependent child in her care. A divorced woman whose former husband retires or becomes disabled does not receive such benefits. The issue in the present case is whether this difference in the statutory treatment of married and divorced women is permissible under the Fifth Amendment to the United States Constitution.
I
Section 202 (b)(1) of the Social Security Act, 49 Stat. 623, as added and amended, 42 U. S. C. § 402 (b) (1) (1970 ed. and Supp. V), provides for the payment of “wife's insurance benefits.” To qualify under this section a woman must be the wife or “divorced wife” of an individual entitled to old-age or disability benefits. Then, assuming that she meets the other statutory requirements, the woman is eligible to receive a monthly payment if she “has attained age 62 or (in the case of a wife) has in her care (individually or jointly with [her husband]) a child entitled to a child’s insurance benefit. . . .” 42 U. S. C. § 402 (b) (1) (B) (emphasis supplied). As the italicized phrase indicates, a woman under 62 who has in her care an entitled child must currently be married to the wage earner in order to be eligible to receive benefits. A divorced woman receives monthly payments if she is 62 or over and her ex-husband retires or becomes disabled, but if she is under 62, she receives no benefits even if she has a young or disabled child in her care.
The appellee, Helen De Castro, was divorced from her husband in 1968, after more than 20 years of marriage. She cares for a disabled child who is eligible for and receives child’s insurance benefits under the Act. In May 1971 her former husband applied for and later was granted old-age insurance benefits. Mrs. De Castro applied for wife’s insurance benefits shortly thereafter. At the time of her ■application she was 56 years old. Her application was denied by the Secretary of Health, Education, and Welfare because no wife’s benefits are payable to a divorced wife under 62 years of age.
Mrs. De Castro then filed suit in the United States District Court for the Northern District of Illinois, seeking judicial review of the Secretary’s decision. Her complaint alleged that § 202 (b) (1) (B) of the Social Security Act “operates to arbitrarily discriminate against divorced wives,” and prayed for an order directing the Secretary to pay benefits to her, a declaration that § 202 (b)(1)(B) is unconstitutional, and an injunction against that section’s application.
A three-judge court was convened pursuant to 28 U. S. C. §§ 2281, 2282. The court considered the parties’ cross-motions for summary judgment and granted the relief prayed for in the complaint, holding that the wife’s benefits provision “invidiously discriminates against divorced wives . . . in violation of the Fifth Amendment.” De Castro v. Weinberger, 403 F. Supp. 23, 30. Central to the court’s ruling was its determination that “there is no rational basis for concluding that a married wife having a dependent child in her care has a greater economic need than a divorced wife caring for such a child.” Id., at 28. The Secretary appealed directly to this Court under 28 U. S. C. § 1252, and we noted probable jurisdiction, 425 U. S. 957.
II
The basic principle that must govern an assessment of any constitutional challenge to a law providing for governmental payments of monetary benefits is well established. Governmental decisions to spend money to improve the general public welfare in one way and not another are “not confided to the courts. The discretion belongs to Congress, unless the choice is clearly wrong, a display of arbitrary power, not an exercise of judgment.” Helvering v. Davis, 301 U. S. 619, 640. In enacting legislation of this kind a government does not deny equal protection “merely because the classifications made by its laws are imperfect. If the classification has some 'reasonable basis/ it does not offend the Constitution simply because the classification 'is not made with mathematical nicety or because in practice it results in some inequality.' ” Dandridge v. Williams, 397 U. S. 471, 485.
To be sure, the standard by which legislation such as this must be judged “is not a toothless one,” Mathews v. Lucas, 427 U. S. 495, 510. But the challenged statute is entitled to a strong presumption of constitutionality. “So long as its judgments are rational, and not invidious, the legislature's efforts to tackle the problems of the poor and the needy are not subject to a constitutional straitjacket.” Jefferson v. Hackney, 406 U. S. 535, 546. It is with this principle in mind that we consider the specific constitutional issue presented by this litigation.
The old-age and disability insurance aspects of the Social Security system do not purport to be general public assistance laws that simply pay money to those who need it most. That was not the predominant purpose of these benefit provisions when they were enacted or when they were amended. Rather, the primary objective was to provide workers and their families with basic protection against hardships created by the loss of earnings due to illness or old age.
The wife’s insurance benefit at issue here is consistent with this overriding legislative aim: It enables a married woman already burdened with dependent children to meet the additional need created when her husband reaches old age or becomes disabled. Accordingly, the District Court’s observation that many divorced women receive inadequate child-support payments, while undoubtedly true, is hardly in point. The same can be said of the District Court’s statement that “there is no rational basis for concluding that a married wife having a dependent child in her care has a greater economic need than a divorced wife caring for such a child.” For whatever relevance these observations might have in a case involving a constitutional attack on a statute that gave monetary benefits to women based on their general overall need, that is not this case.
Section 202 (b)(1)(B) of the Act addresses the particular consequences for his family of a wage earner’s old age or disability. Congress could rationally have decided that the resultant loss of family income, the extra expense that often attends illness and old age, and the consequent disruption in the family’s economic well-being that may occur when the husband stops working justify monthly payments to a wife who together with her husband must still care for a dependent child.
Indeed, Congress took note of exactly these kinds of factors when it amended the Social Security Act in 1958. Between 1950 and 1958 wives under retirement age with dependent children received benefits only when their husbands became entitled to old-age insurance payments. Social Security Act Amendments of 1950, § 101 (a), 64 Stat. 482. Congress then amended the Act to provide the same benefits when the wage earner becomes disabled. Social Security Amendments of 1958, § 205 (b)(1), 72 Stat. 1021. Both the House and Senate Committee reports accompanying the proposed legislation explained that the purpose of the monthly payments was to give “recognition to the problems confronting families whose breadwinners” stop work. The focus was specifically on “adequate protection for [the husband’s] family,” and the reports mentioned the high medical expenses often associated with disability and the possibility that the wife might have to forgo work in order to care for her disabled husband. H. R. Rep. No. 2288, 85th Cong,, 2d Sess., 12-13 (1958); S. Rep. No. 2388, 85th Cong.,, 2d Sess., 10-11 (1958).
In view of the legislative purpose, it is hardly surprising that the congressional judgment evidently was a different one with respect to divorced women. Divorce by its nature works a drastic change ■ in the economic and personal relationship between a husband and wife. Ordinarily it means that they will go their separate ways. Congress could have rationally assumed that divorced husbands and wives depend less on each other for financial and other support than do couples who stay married. The problems that a divorced wife may encounter when her former husband becomes old or disabled may well differ in kind and degree from those that a woman married to a retired or disabled husband must face. For instance, a divorced wife need not forgo work in order to stay at home to care for her disabled husband. She may not feel the pinch of the extra expenses accompanying her former husband’s old age or disability. In short, divorced couples typically live separate lives. It was not irrational for Congress to recognize this basic fact in deciding to defer monthly payments to divorced wives of retired or disabled wage earners until they reach the age of 62.
This is not to say that a husband’s old age or disability may never affect his divorced wife. Many women receive alimony or child support after divorce that their former husbands might not be able to pay when they stop work. But even for this group' — which does not include the appellee in the present case — Congress was not constitutionally obligated to use the Social Security Act to subsidize support payments. It could rationally decide that the problems created for divorced women remained less pressing than those faced by women who continue to live with their husbands.
In any event, the constitutional question “is not whether a statutory provision precisely filters out those, and only those, who are in the factual position which generated the congressional concern reflected in the statute.” Weinberger v. Salfi, 422 U. S. 749, 777. We conclude, accordingly, that the statutory classifications involved in this case are not of such an order as to infringe upon the Due Process Clause of the Fifth Amendment.
The judgment is reversed.
It is so ordered.
Mr. Justice Marshall concurs in the judgment.
It is well settled that the Fifth Amendment's Due Process Clause encompasses equal protection principles. See, e. g., Weinberger v. Salfi, 422 U. S. 749, 768-770.
Title 42 U. S. C. § 402 (b) (1) (1970 ed. and Supp. V) provides in full:
"(b) Wife’s insurance benefits.
“(1) The wife (as defined in section 416 (b) of this title) and every divorced wife (as defined in section 416 (d) of this title) of an individual entitled to old-age or disability insurance benefits, if such wife or such divorced wife—
“(A) has filed application for wife’s insurance benefits,
“(B) has attained age 62 or (in the case of a wife) has in her care (individually or jointly with such individual) at the time of filing such application a child entitled to a child’s insurance benefit on the basis of the wages and self-employment income of such individual,
“ (C) in the case of a divorced wife, is not married, and
“(D) is not entitled to old-age or disability insurance benefits, or is entitled to old-age or disability insurance benefits based on a primary insurance amount which is less than one-half of the primary insurance amount of such individual,
“shall (subject to subsection (s) of this section) be entitled to a wife’s insurance benefit for each month, beginning with the first month in which she becomes so entitled to such insurance benefits and ending with the month preceding the first month in which any of the following occurs—
“(E) she dies,
“(F) such individual dies,
“(G) in the case of a wife, they are divorced and either (i) she has not attained age 62, or (ii) she has attained age 62 but has not been married to such individual for a period of 20 years immediately before the date the divorce became effective,
“(H) in the case of a divorced wife, she marries a person other than such individual,
“(I) in the case of a wife who has not attained age 62, no child of such individual is entitled to a child’s insurance benefit,
“(J) she becomes entitled to an old-age or disability insurance benefit based on a primary insurance amount which is equal to or exceeds one-half of the primary insurance amount of such individual, or
“(K) such individual is not entitled to disability insurance benefits and is not entitled to old-age insurance benefits.”
The Act defines “divorced wife” as “a woman divorced from an individual, but only if she had been married to such individual for a period of 20 years immediately before the date the divorce became effective.” 42 U. S. C. §416 (d)(1). The term “divorce” refers to a divorce a vinculo matrimonii. § 416 (d) (4).
The conditions upon which a child is entitled to receive “child’s insurance benefits” are set out in § 202 (d) of the Act, 42 U. S. C. § 402 (d) (1970 ed. and Supp. V). Generally, the child must be dependent on the wage earner and either under 18 years old (or a full-time student under 22 years old) or under a disability.
The Act also provides for the payment of “widow’s insurance benefits” and “mother’s insurance benefits.” 42 U. S. C. §§402 (e), (g) (1970 ed. and Supp. V). Divorced and married women, with or without dependent children, are eligible to receive monthly payments under these sections in certain circumstances not pertinent here.
The old-age and disability insurance programs are distinct from the provisions for public assistance to the aged and disabled also contained in the Social Security Act. 42 U. S. C. §§ 301-306, 1351-1355, partially repealed by Pub. L. No. 92-603, §§303 (a), (b), 86 Stat. 1484; 42 U. S. C. §§ 1381 — 1383c (1970 ed., Supp. V). The insurance programs are contributory in nature and are designed to prevent public dependency by protecting workers and their families against common economic hazards. Congress in 1935 contemplated that the old-age insurance benefits would be “payable wholly regardless of the need of the recipient.” H. R. Rep. No. 615, 74th Cong., 1st Sess., 1 (1935). The public-assistance-for-the-aged program, on the other hand, was designed “to provide for old people who are dependent upon the public for support . . . ,” id., at 4, and the statute specifically referred to “aged needy individuals.” Social Security Act, § 1, 49 Stat. 620. See also H. R. Rep. No. 615, supra, at 3-6; S. Rep. No. 628, 74th Cong., 1st Sess., 4r-7 (1935); Message of the President Recommending Legislation on Economic Security, H. R. Doc. No. 81,74th Cong,, 1st Sess., 20-28 (1935).
In 1950 the Act was amended to provide for grants-in-aid to the States so that assistance could be furnished “to needy individuals eighteen years of age or older who are permanently and totally disabled.” Social Security Act Amendments of 1950, § 351, 64 Stat. 555. In 1956 Congress created a program for disability insurance benefits. Social Security Amendments of 1956, § 103 (a), 70 Stat. 815. Again, the insurance program, unlike the public assistance provisions, was not need based, but instead was designed to protect against the specific economic hardships created by involuntary, premature retirement. See H. R. Rep. No. 1300, 81st Cong., 1st Sess., 27-28, 53-54 (1949); Recommendations for Social Security Legislation, Reports of the Advisory Council on Social Security, S. Doc. No. 208, 80th Cong., 2d Sess., 69-70, 95-97 (1949); S. Rep. No. 2133, 84th Cong., 2d Sess., 3-4 (1956); H. R. Rep. No. 1189, 84th Cong., 1st Sess., 3-6 (1955).
“Wife’s insurance benefits” first became part of the Social Security-Act in 1939. Amendments enacted that year provided for monthly payments to wives 65 years or older whose husbands were entitled to old-age benefits. Social Security Act Amendments of 1939, § 201, 53 Stat. 1362. In 1950 Congress dropped the age requirement for women with retired husbands and entitled children in their care. Social Security Act Amendments of 1950, § 101 (a), 64 Stat. 482. In 1958 Congress extended similar benefits to wives of any age who had entitled children and disabled husbands. Social Security Amendments of 1958, §205 (b)(1), 72 Stat. 1021. While the legislative history of the 1950 amendments is sparse, the congressional purpose presumably was to recognize a family need created when the husband reaches old age and stops working. Certainly the sole purpose could not have been to allow the wife to remain at home to take care of the child, as the appellee suggests, because the presence of the retired husband at home ordinarily would ensure parental supervision. Similarly, when Congress provided benefits in 1958 to wives with disabled husbands, it had purposes beyond the mere encouragement of the wife to stay home and take care of the children. See H. R. Rep. No. 2288, 85th Cong., 2d Sess., 12-13 (1958); S. Rep. No. 2388, 85th Cong., 2d Sess., 10-11 (1958). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
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"Central Intelligence Agency",
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"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
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"Federal Energy Administration",
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"Federal Maritime Commission",
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"Federal Reserve Board of Governors",
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"Federal Trade Commission",
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"General Accounting Office",
"Comptroller General",
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"Department or Secretary of Health and Human Services",
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"Internal Revenue Service, Collector, Commissioner, or District Director of",
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"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
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"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
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] | [
61
] |
ESCONDIDO MUTUAL WATER CO. et al. v. LA JOLLA BAND OF MISSION INDIANS et al.
No. 82-2056.
Argued March 26, 1984
Decided May 15, 1984
White, J., delivered the opinion for a unanimous Court.
Paul D. Engstmnd argued the cause for petitioners. With him on the brief were Donald R. Lincoln, Leroy A. Wright, John R. Schell, Kent H. Foster, and C. Emerson Duncan II.
Jerome M. Feit argued the cause for respondent Federal Energy Regulatory Commission urging reversal. With him on the briefs were Stephen R. Melton, Arlene Pianko Groner, and Kristina Nygaard.
Elliott Schulder argued the cause for respondent Secretary of the Interior. With him on the brief were Solicitor General Lee, Assistant Attorney General Ha-bicht, Deputy Solicitor General Claiborne, Dirk D. Snel, and James C. Kilboume. Robert S. Pelcyger argued the cause for respondents La Jolla Band of Mission Indians et al. With him on the brief were Scott B. McElroy, Jeanne S. Whiteing, and Arthur J. Gajarsa.
Briefs of amici curiae urging reversal were filed for the American Public Power Association et al. by Robert L. McCarty, George H. Williams, Jr., Donald H. Hamburg, Christopher D. Williams, Frances E. Francis, and Robert C. McDiarmid; for the Edison Electric Institute by William J. Madden, Jr., Frederick T. Searls, Peter B. Kelsey, and WilliamL. Fang; and for the Joint Board of Control of the Flathead, Mission and Jocko Valley Irrigation Districts of the Flathead Irrigation Project, Montana, by Frank J. Martin, Jr., and John D. Sharer.
Patrick A. Parenteau filed a brief for the National Wildlife Federation et al. as amici curiae.
Justice White
delivered the opinion of the Court.
Section 4(e) of the Federal Power Act (FPA), 41 Stat. 1066, as amended, 16 U. S. C. § 797(e), authorizes the Federal Energy Regulatory Commission (Commission) to issue licenses for the construction, operation and maintenance of hydroelectric project works located on the public lands and reservations of the United States, including lands held in trust for Indians. The conditions upon which such licenses may issue are contained in §4(e) and other provisions of the FPA. The present case involves a dispute among the Commission, the Secretary of the Interior (Secretary), and several Bands of the Mission Indians over the role each is to play in determining what conditions an applicant must meet in order to obtain a license to utilize hydroelectric facilities located on or near six Mission Indian Reservations.
I
The San Luis Rey River originates near the Palomar
Mountains in northern San Diego County, Cal. In its natural condition, it flows through the reservations of the La Jolla, Rincon, and Pala Bands of Mission Indians. The reservations of the Pauma, Yuima, and three-quarters of the reservation of the San Pasqual Bands of Mission Indians are within the river’s watershed. These six Indian reservations were permanently established pursuant to the Mission Indian Relief Act of 1891 (MIRA), ch. 65, 26 Stat. 712.
Since 1895, petitioner Escondido Mutual Water Co. (Mutual) and its predecessor in interest have diverted water out of the San Luis Rey River for municipal uses in and around the cities of Vista and Escondido. The point of diversion is located within the La Jolla Reservation, upstream from the other reservations. Mutual conveys the water from the diversion point to Lake Wohlford, an artificial storage facility, by means of the Escondido canal, which crosses parts of the La Jolla, Rincon, and San Pasqual Reservations.
In 1915, Mutual constructed the Bear Valley powerhouse downstream from Lake Wohlford. Neither Lake Wohlford nor the Bear Valley plant is located on a reservation. In 1916, Mutual completed construction of the Rincon powerhouse, which is located on the Rincon Reservation. Both of these powerhouses generate electricity by utilizing waters diverted from the river through the canal.
Following the enactment of the Federal Water Power Act of 1920, ch. 285, 41 Stat. 1063 (codified as Part I of the FPA, 16 U. S. C. §791a et seq.), Mutual applied to the Commission for a license covering its two hydroelectric facilities. In 1924, the Commission issued a 50-year license covering the Escondido diversion dam and canal, Lake Wohlford, and the Rincon and Bear Valley powerhouses.
The present dispute began when the 1924 license was about to expire. In 1971, Mutual and the city of Escondido filed an application with the Commission for a new license. In 1972, the Secretary requested that the Commission recommend federal takeover of the project after the original license expired. Later that year, the La Jolla, Rincon, and San Pasqual Bands, acting pursuant to § 15(b) of the FPA, applied for a nonpower license under the supervision of Interior, to take effect when the original license expired. The Pauma and Pala Bands eventually joined in this application.
After lengthy hearings on the competing applications, an Administrative Law Judge concluded that the project was not subject to the Commission’s licensing jurisdiction because the power aspects of the project were insignificant in comparison to the project’s primary purpose — conveying water for domestic and irrigation consumption. 6 FERC ¶ 63,008 (1977). The Commission, however, reversed that decision and granted a new 30-year license to Mutual, Escondido, and the Vista Irrigation District, which had been using the canal for some time to convey water pumped from Lake Henshaw, a lake located some nine miles above Mutual’s diversion dam. 6 FERC ¶ 61,189 (1979).
In its licensing decision, the Commission made three rulings that are the focal point of this case. First, the Commission ruled that §4(e) of the FPA did not require it to accept without modification conditions which the Secretary deemed necessary for the adequate protection and utilization of the reservations. Accordingly, despite the Secretary’s insistence, the Commission refused to prohibit the licensees from interfering with the Bands’ use of a specified quantity of water, id., at 61,415, and n. 146, or to require that water pumped from a particular groundwater basin not be transported through the licensed facilities without the written consent of the five Bands, id., at 61,145, and n. 147. Other conditions proposed by the Secretary were similarly rejected or modified. See id., at 61,414-61,417. Second, although it imposed some conditions on the licensees in order to “preclude any possible interference or inconsistency of the power license . . . with the purpose for which the La Jolla, Rincon, and San Pasqual reservations were created,” id., at 61,424-61,425, the Commission refused to impose similar conditions for the benefit of the Pala, Pauma, and Yuima Reservations, ruling that its § 4(e) obligation in that respect applies only to reservations that are physically occupied by project facilities. Finally, the Commission rejected the arguments of the Bands and the Secretary that a variety of statutes, including § 8 of the MIRA, required the licensees to obtain the “consent” of the Bands before the license could issue.
On appeal, the Court of Appeals for the Ninth Circuit reversed each of these three rulings. Escondido Mutual Water Co. v. FERC, 692 F. 2d 1223, amended, 701 F. 2d 826 (1983). The court held that § 4(e) requires the Commission to accept without modification any license conditions recommended by the Secretary, subject to subsequent judicial review of the propriety of the conditions, that the Commission is required to satisfy its § 4(e) obligations with respect to all six of the reservations affected by the project and not just the three through which the canal passes, and that §8 of the MIRA requires the licensees to obtain right-of-way permits from the La Jolla, Rincon, and San Pasqual Bands before using the licensed facilities located on the reservations. Mutual, Escondido, and Vista filed the present petition for certiorari, which we granted, 464 U. S. 913 (1983), challenging all three of the Court of Appeals’ rulings. We address each in turn.
II
Section 4(e) provides that licenses issued under that section “shall be subject to and contain such conditions as the Secretary of the department under whose supervision such reservation falls shall deem necessary for the adequate protection and utilization of such reservations.” 16 U. S. C. § 797(e). The mandatory nature of the language chosen by Congress appears to require that the Commission include the Secretary’s conditions in the license even if it disagrees with them. Nonetheless, petitioners argue that an examination of the statutory scheme and legislative history of the Act shows that Congress could not have meant what it said. We disagree.
We first note the difficult nature of the task facing petitioners. Since it should be generally assumed that Congress expresses its purposes through the ordinary meaning of the words it uses, we have often stated that “ ‘[ajbsent a clearly expressed legislative intention to the contrary, [statutory] language must ordinarily be regarded as conclusive.’” North Dakota v. United States, 460 U. S. 300, 312 (1983) (quoting Consumer Product Safety Comm’n v. GTE Sylvania, Inc., 447 U. S. 102, 108 (1980)). Congress’ apparent desire that the Secretary’s conditions “shall” be included in the license must therefore be given effect unless there are clear expressions of legislative intent to the contrary.
Petitioners initially focus on the purpose of the legislation that became the relevant portion of the FPA. In 1920, Congress passed the Federal Water Power Act in order to eliminate the inefficiency and confusion caused by the “piecemeal, restrictive, negative approach” to licensing prevailing under prior law. First Iowa Hydro-Electric Cooperative v. FPC, 328 U. S. 152, 180 (1946). See H. R. Rep. No. 61, 66th Cong., 1st Sess., 4-5 (1919). Prior to passage of the Act, the Secretaries of the Interior, War, and Agriculture each had authority to issue licenses for hydroelectric projects on lands under his respective jurisdiction. The Act centralized that authority by creating a Commission, consisting of the three Secretaries, vested with exclusive authority to issue licenses. Petitioners contend that Congress could not have intended to empower the Secretary to require that conditions be included in the license over the objection of the Commission because that would frustrate the purpose of centralizing licensing procedures.
Congress was no doubt interested in centralizing federal licensing authority into one agency, but it is clear that it did not intend to relieve the Secretaries of all responsibility for ensuring that reservations under their respective supervision were adequately protected. In a memorandum explaining the administration bill, the relevant portion of which was enacted without substantive change, O. C. Merrill, one of the chief draftsmen of the Act and later the first Commission Secretary, explained that creation of the Commission “will not interfere with the special responsibilities which the several Departments have over the National Forests, public lands and navigable rivers.” Memorandum on Water Power Legislation from O. C. Merrill, Chief Engineer, Forest Service, dated October 31, 1917, App. 371. With regard to what became § 4(e), he wrote:
“4. Licenses for power sites within the National Forests to be subject to such provisions for the protection of the Forests as the Secretary of Agriculture may deem necessary. Similarly, for parks and other reservations under the control of the Departments of the Interior and of War. Plans of structures involving navigable streams to be subject to the approval of the Secretary of War.
“This provision is for the purpose of preserving the administrative responsibility of each of the three Departments over lands and other matters within their exclusive jurisdiction.” Id., at 373-374.
Similarly, during hearings on the bill, Secretary of Agriculture Houston explained that the Grand Canyon did not need to be exempted from the licensing provisions, stating:
“I can see no special reason why the matter might not be handled safely under the provisions of the proposed measure, which requires that developments on Government reservations may not proceed except with the approval of the three heads of departments — the commission — with such safeguards as the head of the department immediately charged with the reservation may deem wise.” Water Power: Hearings before the House Committee on Water Power, 65th Cong., 2d Sess., 677 (1918) (emphasis added).
The Members of Congress understood that under the Act the Secretary of the Interior had authority with respect to licenses issued on Indian reservations over and above that possessed by the other Commission members. Senator Walsh of Montana, a supporter of the Act, explained:
“[W]hen an application is made for a license to construct a dam within an Indian reservation, the matter goes before the commission, which consists of the Secretary of War, the Secretary of the Interior, and the Secretary of Agriculture. They all agree that it is in the public interest that the license should be granted, or a majority of them so agree. Furthermore, the head of the department must agree; that is to say, the Secretary of the Interior in the case of an Indian reservation must agree that the license shall be issued.” 59 Cong. Rec. 1564 (1920) (emphasis added).
It is thus clear enough that while Congress intended that the Commission would have exclusive authority to issue all licenses, it wanted the individual Secretaries to continue to play the major role in determining what conditions would be included in the license in order to protect the resources under their respective jurisdictions. The legislative history concerning §4(e) plainly supports the conclusion that Congress meant what it said when it stated that the license “shall. . . contain such conditions as the Secretary . . . shall deem necessary for the adequate protection and utilization of such reservations.”
Petitioners next argue that a literal reading of the conditioning proviso of §4(e) cannot be squared with other portions of the statutory scheme. In particular, they note that the same proviso that grants the Secretary the authority to qualify the license with the conditions he deems necessary also provides that the Commission must determine that “the license will not interfere or be inconsistent with the purpose for which such reservation was created or acquired.” 16 U. S. C. § 797(e). Requiring the Commission to include the Secretary’s conditions in the license over its objection, petitioners maintain, is inconsistent with granting the Commission the power to determine that no interference or inconsistency will result from issuance of the license because it will allow the Secretary to “veto” the decision reached by the Commission. Congress could not have intended to “‘paralyze with one hand what it sought to promote with the other,”’ American Paper Institute, Inc. v. American Electric Power Service Corp., 461 U. S. 402, 421 (1983) (quoting Clark v. Uebersee Finanz-Korporation, A.G., 332 U. S. 480, 489 (1947)), petitioners contend.
This argument is unpersuasive because it assumes the very question to be decided. All parties agree that there are limits on the types of conditions that the Secretary can require to be included in the license: the Secretary has no power to veto the Commission’s decision to issue a license and hence the conditions he insists upon must be reasonably related to the protection of the reservation and its people. The real question is whether the Commission is empowered to decide when the Secretary’s conditions exceed the permissible limits. Petitioners’ argument assumes that the Commission has the authority to make that decision. However, the statutory language and legislative history conclusively indicate that it does not; the Commission “shall” include in the license the conditions the Secretary deems necessary. It is then up to the courts of appeals to determine whether the conditions are valid.
Petitioners contend that such a scheme of review is inconsistent with traditional principles of judicial review of administrative action. If the Commission is required to include the conditions in the license even though it does not agree with them, petitioners argue, the courts of appeals will not be in a position to grant deference to the Commission’s findings and conclusions because those findings and conclusions will not be included in the license. However, that is apparently exactly what Congress intended. If the Secretary concludes that the conditions are necessary to protect the reservation, the Commission is required to adopt them as its own, and the court is obligated to sustain them if they are reasonably related to that goal, otherwise consistent with the FPA, and supported by substantial evidence. The fact that in reality it is the Secretary’s, and not the Commission's, judgment to which the court is giving deference is not surprising since the statute directs the Secretary, and not the Commission, to decide what conditions are necessary for the adequate protection of the reservation. There is nothing in the statute or the review scheme to indicate that Congress wanted the Commission to second-guess the Secretary on this matter.
In short, nothing in the legislative history or statutory scheme is inconsistent with the plain command of the statute that licenses issued within a reservation by the Commission pursuant to §4(e) “shall be subject to and contain such conditions as the Secretary . . . shall deem necessary for the adequate protection and utilization of such reservations.” Since the Commission failed to comply with this statutory command when it issued the license in this case, the Court of Appeals correctly reversed its decision in this respect.
Í — t l-H f — (
The Court of Appeals also concluded that the Commission’s §4(e) obligations to accept the Secretary’s proposed conditions and to make findings as to whether the license is consistent with the reservation’s purpose applied to the Pala, Yuima, and Pauma Reservations even though no licensed facilities were located on these reservations. Petitioners contend that this conclusion is erroneous. We agree.
Again, the statutory language is informative and largely dispositive. Section 4(e) authorizes the Commission:
“To issue licenses ... for the purpose of constructing . . . dams ... or other project works . . . upon any part of the public lands and reservations of the United States . . . Provided, That licenses shall be issued within any reservation only after a finding by the Commission that the license will not interfere or be inconsistent with the purpose for which such reservation was created or acquired, and shall be subject to and contain such conditions as the Secretary of the department under whose supervision such reservation falls shall deem necessary for the adequate protection and utilization of such reservations . . . .”
If a project is licensed “within” any reservation, the Commission must make a “no interference or inconsistency” finding with respect to “such” reservation, and the Secretary may impose conditions for the protection of “such” reservation. Nothing in the section requires the Commission to make findings about, or the Secretary to impose conditions to protect, any reservation other than the one within which project works are located. The section imposes no obligation on the Commission or power on the Secretary with respect to reservations that may somehow be affected by, but will contain no part of, the licensed project works.
The Court of Appeals, however, purported to discover an ambiguity in the term “within. ” Positing that the term “reservations” includes not only tribal lands but also tribal water rights, the Court of Appeals reasoned that since a project could not be “within” a water right, the term must have a meaning other than its literal one. This effort to circumvent the plain meaning of the statute by creating an ambiguity where none exists is unpersuasive.
There is no doubt that “reservations” include “interests in lands owned by the United States” and that for many purposes water rights are considered to be interests in lands. See 1 R. Clark, Waters and Water Rights §53.1 p. 345 (1967). But it does not follow that Congress intended the “reservations” spoken of in § 4(e) to include water rights. The section deals with project works to be located “upon” and “within” a reservation. As the Court of Appeals itself indicated, the section does tend to “paint a geographical picture in the mind of the reader,” 692 F. 2d, at 1236, and we find the Court of Appeals’ and respondents’ construction of the section to be quite untenable. Congress intended the obligation of the Commission and the conditioning power of the Secretary to apply only with respect to the specific reservation upon which any project works were to be located and not to other reservations that might be affected by the project.
The Court of Appeals sought to bolster its conclusion by noting that a literal reading of the term “within” would leave a gap in the protection afforded the Bands by the FPA because “a project may turn a potentially useful reservation into a barren waste without ever crossing it in the geographical sense — e. g., by diverting the waters which would otherwise flow through or percolate under it.” Ibid. This is an unlikely event, for in this respect the Bands are adequately protected by other provisions of the statutory scheme. First, the Bands cannot be deprived of any water to which they have a legal right. The Commission is expressly forbidden to adjudicate water rights, 16 U. S. C. § 821, and the license applicant must submit satisfactory evidence that he has obtained sufficient water rights to operate the project authorized in the license, 16 U. S. C. § 802(b). Second, if the Bands are using water, the rights to which are owned by the license applicant, the Commission is empowered to require that the license applicant continue to let the Bands use this water as a condition of the license if the Commission determines that the Bands’ use of the water constitutes an overriding beneficial public use. 16 U. S. C. § 803(a). See California v. FPC, 345 F. 2d 917, 923-924 (CA9), cert. denied, 382 U. S. 941 (1965). The Bands’ interest in the continued use of the water will accordingly be adequately protected without requiring the Commission to comply with § 4(e) every time one of the reservations might be affected by a proposed project.
Respondents additionally contend that under other provisions of the FPA the § 4(e) proviso at issue applies any time a reservation is “affected” by a licensed project even if none of the licensed facilities is actually located on the reservation. They rely in particular on § 23(b), which provides that project works can be constructed without a license on nonnavigable waters over which Congress has jurisdiction under its Commerce Clause powers only if, among other things, “no public lands or reservations are affected.” 16 U. S. C. §817. Respondents argue that it would make no sense to conclude that Congress intended to require the Commission to exercise its licensing jurisdiction when a reservation is “affected” by such a project if it did not also intend to afford those reservations all of the protections outlined in § 4(e). However, that is exactly the conclusion that the language of §4(e) compels, and, contrary to respondents’ argument, there is nothing illogical about such a scheme.
Under §4(e), the Commission is authorized to license projects in two general types of situations — when the project is located on waters (navigable or nonnavigable) over which Congress has jurisdiction under the Commerce Clause and when the project is located upon any public lands or reservations. It is clear that the Commission’s obligations to make a “no inconsistency or no interference” determination and to include the Secretary’s conditions in the license apply only in the latter situation — when the license is issued “within any reservation.” The fact that a person is required to obtain a license in the former situation any time a project on non-navigable waters affects a reservation indicates only that Congress concluded that in such circumstances the possible disruptive effects of such a project were so great that the Commission should regulate the project through its licensing powers. That is not, as respondents seem to imply, a meaningless gesture if all of the provisions of § 4(e) do not apply.
Even if the Commission is not required to comply with all of the requirements of § 4(e) when it issues such a license, it is still required to shape the license so that the project is best adapted, among other things, for the improvement and utilization of water-power development and for “other beneficial public uses, including recreational purposes.” 16 U. S. C. § 803(a). In complying with that duty, the Commission is clearly entitled to consider how the project will affect any federal reservations and to require the licensee to structure the project so as to avoid any undue injury to those reservations. See Udall v. FPC, 387 U. S. 428, 450 (1967). As noted supra, at 782, the Commission can even require that, as a condition of the license, the licensee surrender some of its water rights in order to protect such reservations if the Commission determines that such action would be in the public interest. However, it is clear that Congress concluded that reservations were not entitled to the added protection provided by the proviso of § 4(e) unless some of the licensed works were actually within the reservation.
The scheme crafted by Congress in this respect is sufficiently clear to require us to hold that the Commission must make its “no inconsistency or interference” determination and include the Secretary’s conditions in the license only with respect to projects located “within” the geographical boundaries of a federal reservation.
C
The final issue presented for review is whether § 8 of the MIRA requires licensees to obtain the consent of the Bands before they operate licensed facilities located on reservation lands. Section 8 provides in relevant part:
“Subsequent to the issuance of any tribal patent or of any individual trust patent. . any citizen of the United States, firm, or corporation may contract with the tribe, band, or individual for whose use and benefit any lands are held in trust by the United States, for the right to construct a flume, ditch, canal, pipe, or other appliances for the conveyance of water over, across, or through such lands, which contract shall not be valid unless approved by the Secretary of the Interior under such conditions as he may see fit to impose.” 26 Stat. 714.
The Court of Appeals concluded that this provision, which by its terms authorizes private parties to enter into a contract with the Bands, precludes the Commission from licensing those parts of the project that occupy reservation land without the consent of the Indians. When the legislative histories of § 8 and of the FPA are considered, however, the Court of Appeals’ interpretation cannot stand.
Section 8 appeared in the MIRA just prior to its passage. Several irrigation companies were seeking rights-of-way across the reservations. The Secretary had concluded that irrigation ditches and flumes would benefit both the settlers and the Indians. H. R. Rep. No. 3282, 50th Cong., 1st Sess., 3-4 (1888). Two Attorneys General, however, had ruled that only Congress could authorize the alienation of Indian lands. Lemhi Indian Reservation, 18 Op. Atty. Gen. 563 (1887); Dam at Lake Winnibigoshish, 16 Op. Atty. Gen. 552 (1880). In fight of these opinions, the Secretary prepared an amendment to the bill, authorizing the Bands to contract for the sale of rights-of-way, subject to Interior’s approval. H. R. Rep. No. 3282, supra, at 2. Section 8 was therefore designed to authorize the Indians and the Secretary to grant rights-of-way to third parties; it was not intended to act as a limit on the sovereign authority of the Federal Government to acquire or grant rights-of-way over public lands and reservations.
In essence, § 8 increased the Bands’ authority over its land so that they had almost the same rights as other private landowners. The Bands were authorized to negotiate with any private party wishing to acquire rights-of-way and to enter into any agreement with those parties, something they were previously unable to do. And, until some overriding authority was invoked, the Bands, like private landowners, had complete discretion whether to grant rights-of-way for hydroelectric project facilities. However, there is no indication that once Congress exercised its sovereign authority to use the land for such purposes the Bands were to have more power to stop such action than would a private landowner in the same situation — both are required to permit such use upon payment of just compensation. Therefore, the only question is whether Congress decided to exercise that authority with respect to Indian lands when it enacted the FPA. The answer to that inquiry was clearly articulated in a somewhat different context more than 20 years ago.
“The Federal Power Act constitutes a complete and comprehensive plan ... for the development, transmission and utilization of electric power in any of the streams or other bodies of water over which Congress has jurisdiction under its commerce powers, and upon the public lands and reservations of the United States under its property powers. See § 4(e). It neither overlooks nor excludes Indians or lands owned or occupied by them. Instead, as has been shown, the Act specifically defines and treats with lands occupied by Indians— ‘tribal lands embraced within Indian reservations.’ See §§3(2) and 10(e). The Act gives every indication that, within its comprehensive plan, Congress intended to include lands owned or occupied by any person or persons, including Indians.” FPC v. Tuscarora Indian Nation, 362 U. S. 99, 118 (1960).
It is equally clear that, when enacting the FPA, Congress did not intend to give Indians some sort of special authority to prevent the Commission from exercising the licensing authority it was receiving from Congress. Indeed, Congress squarely considered and rejected such a proposal. During the course of the debate concerning the legislation, the Senate amended the bill to require tribal consent for some projects. Section 4(e) of the Senate version of the bill provided that “in respect to tribal lands embraced within Indian reservations, which said lands were ceded to Indians by the United States by treaty, no license shall be issued except by and with the consent of the council of the tribe.” 59 Cong. Rec. 1534 (1920). However, that amendment was stricken from the bill by the Conference, the conferees stating that they “saw no reason why waterpower use should be singled out from all other uses of Indian reservation land for special action of the council of the tribe.” H. R. Conf. Rep. No. 910, 66th Cong., 2d Sess., 8 (1920).
In short, while § 8 of the MIRA gave the Bands extensive authority to determine whether to grant rights-of-way for water projects, that authority did not include the power to override Congress’ subsequent decision that all lands, including tribal lands, could, upon compliance with the provisions of the FPA, be utilized to facilitate licensed hydroelectric projects. Under the FPA, the Secretary, with the duty to safeguard reservations, may condition, but may not veto, the issuance of a license for project works on an Indian reservation. We cannot believe that Congress nevertheless intended to leave a veto power with the concerned tribe or tribes. The Commission need not, therefore, seek the Bands’ permission before it exercises its licensing authority with respect to their lands.
V
The Court of Appeals correctly determined that the Commission was required to include in the license any conditions which the Secretary of the Interior deems necessary for the protection and utilization of the three reservations in which project works are located. It was in error, however, in concluding that the Commission was required to fulfill this and its other §4(e) obligations with respect to the other three reservations affected by the project and that §8 of the MIRA empowered the Bands to prevent the licensing of facilities on their lands. The court’s judgment is affirmed in part and reversed in part, and the case is remanded to the court for further proceedings consistent with this opinion.
It is so ordered.
The term “Commission” refers to the Federal Power Commission prior to October 1, 1977, and to the Federal Energy Regulatory Commission thereafter. See 42 U. S. C. §§ 7172(a), 7295(b).
The Yuima tracts of land are under the jurisdiction of the Pauma Band. Thus, while there are six Mission Indian Reservations involved in the present dispute, only five Indian Bands are represented.
Various agreements, dating back to 1894, among the Secretary, the Bands whose land the canal traverses, and Mutual and its predecessor purportedly grant Mutual rights-of-way for the canal in exchange for supplying certain amounts of water to the Bands. The validity of these agreements is the subject of separate, pending litigation instituted by the Bands in 1969. Rincon Band of Mission Indians v. Escondido Mutual Water Co., Nos. 69-217S, 72-276-S, and 72-271-S (SD Cal.).
In addition, the Bands have sued the United States pursuant to the Indian Claims Commission Act, ch. 959, 60 Stat. 1049, 25 U. S. C. §70 et seq. (1976 ed.), for failure to protect their water rights. Long v. United States, No. 80-A1 (Cl. Ct.). That proceeding is also pending.
Section 14(b), 16 U. S. C. § 807(b), of the FPA authorizes the Commission to recommend to Congress that the Federal Government take over a project following expiration of the license. If Congress enacts legislation to that effect, the project is operated by the Government upon payment to the original licensee of its net investment in the project and certain severance damages.
Section 15(b), 16 U. S. C. § 808(b), authorizes the Commission to grant a license for use of a project as a “nonpower” facility if it finds the project no longer is adapted to power production. In that event, the new licensee must make the same payments to the original licensee that are required of the United States pursuant to § 14(b). See n. 4, supra.
Earlier, the Secretary and the La Jolla, Rincon, and San Pasqual Bands filed complaints with the Commission, alleging that Mutual violated the provisions of the 1924 license by permitting the Vista Irrigation District to use the project facilities and by using the canal to divert water pumped from a lake created by Vista nine miles above Mutual’s diversion dam. They sought, among other things, an increase in the annual charges paid to the Bands under the license. These complaints were considered in conjunction with the competing applications, and the Commission awarded readjusted annual charges to the three Bands. The Commission’s resolution of that issue is not before us.
The Bear Valley powerhouse has a generating capacity of only 520 kilowatts. The Rincon powerhouse is capable of producing only 240 kilowatts. The Administrative Law Judge noted that “[t]he horsepower generated by the entire project is not even the equivalent to that produced by a half dozen modern automobiles.” 6 FERC, at 65,093.
The Commission concluded that § 4(e) required it “to give great weight to the judgments and proposals of the Secretaries of the Interior and Agriculture” but that under § 10(a) it retained ultimate authority for determining “the extent to which such conditions will in fact be included in particular licenses.” 6 FERC, at 61,414.
Groundwater is water beneath the surface of the earth. The condition suggested by the Secretary applied to water which Vista pumped from the Warner groundwater basin underlying Lake Henshaw and its headwaters in order to augment the natural flows into the lake.
For example, the Commission required the licensees to permit the three Bands to use certain quantities of water under certain circumstances. See id., at 61,424-61,432.
Judge Anderson dissented from the order entered on petition for rehearing, 701 F. 2d, at 827-831, concluding that neither § 8 of the MIRA nor § 16 of the Indian Reorganization Act, 25 U. S. C. § 476, requires that tribal consent be obtained before the Bands’ lands can be used for a hydroelectric project licensed under the FPA. He also concluded that the Secretary’s §4(e) conditions have to be included in the license only to the extent they are reasonable and that the reasonableness determination is to be made initially by the Commission.
The Court of Appeals affirmed the Commission’s conclusion that it had jurisdiction over the project, and the parties have not sought review of that ruling.
The Commission did not petition for review of the Court of Appeals’ decision but filed a brief and appeared at oral argument urging reversal. Since the Commission’s arguments largely parallel those presented by Mutual, Escondido, and Vista, our use of the term petitioners includes the Commission.
In 1930, the Commission was reorganized as a five-person body, independent from the Secretaries. Act of June 23,1930, ch. 572, 46 Stat. 797.
Between 1914 and 1917, four bills dealing with the licensing of hydroelectric projects were introduced into Congress, none successfully. In 1918, a bill prepared by the Secretaries of War, the Interior, and Agriculture, at the direction of President Wilson, was introduced. H. R. 8716, 65th Cong., 2d Sess. (1918). It contained the language of the §4(e) proviso basically as it is now framed. Because of the press of World War I and other concerns, the legislation was not enacted until 1920. See J. Kerwin, Federal Water-Power Legislation 217-263 (1926).
Petitioners note that in 1930, when the structure of the Commission was changed, see n. 14, supra, James Lawson, then Acting Chief Counsel of the Commission, stated that under the structure then in existence, “[t]he Commission now has power to override the head of a department as to the consistency of a license with the purpose of any reservation.” Investigation of Federal Regulation of Power: Hearings pursuant to S. Res. 80 and S. 3619 before the Senate Committee on Interstate Commerce, 71st Cong., 2d Sess., 358 (1930). This snippet of postenactment history does not help petitioners’ cause at all. All parties agree that the Commission has the authority to make a finding that “the license will not interfere or be inconsistent with the purpose for which such reservation was created or acquired.” 16 U. S. C. § 797(e) (emphasis added). This is separate from the Secretary’s authority to condition the license for the adequate protection and utilization of the reservation. Lawson’s statement was clearly concerned with the former. Indeed, a contemporaneous memorandum by the Commission’s legal staff (of which Lawson was the head), stated that the Secretary of the Interior had authority under what is now § 4(e) “ ‘to prescribe conditions to be inserted in the license for the protection and utilization of the reservation.’” Brief for Secretary of the Interior 33, quoting Memorandum of Sept. 20, 1929, p. 23. It may well be that in a particular case the conditions suggested by the Secretary will unduly undermine the Commission’s licensing judgment. However, as noted infra, at 777, and n. 19, that is a determination the court of appeals is to make.
Similarly misplaced is petitioners’ reliance on the fact that once the bill was passed, President Wilson, at the request of the Secretary, withheld his signature until Congress agreed that it would pass legislation in its next session removing national parks and monuments from the scope of the Act. Contrary to petitioners’ assertion, this does not show that the Secretary knew that § 4(e) did not grant him enough authority to protect these lands, which were within his “conditioning” jurisdiction. Rather, the Secretary objected to the inclusion of national parks and monuments in the legislation because he believed that Congress, not the Commission, should decide on a case-by-case basis whether any hydroelectric development should occur in these areas. H. R. Rep. No. 1299, 66th Cong., 3d Sess., 2 (1921).
Even the Secretary concedes that the conditions must be “reasonable and supported by evidence in the record.” Brief for Secretary of the Interior 37. See also Tr. of Oral Arg. 20.
By its terms, §4(e) requires that the conditions must be “necessary for the adequate protection and utilization of such reservations.” At oral argument, the Secretary agreed that the conditions should ultimately be sustained only if they “are reasonably related to the purpose of ensuring that the purposes of the reservation are adequately protected, and that the reservation is adequately utilized.” Id., at 22.
Section 313(b) of the FPA provides that the Commission’s orders, including licenses, can be reviewed “in the United States court of appeals for any circuit wherein the licensee ... is located or has its principal place of business, or in the United States Court of Appeals for the District of Columbia.” 16 U. S. C. § 825i(b).
Of course, the Commission is not required to argue in support of the conditions if it objects to them. Indeed, it is free to express its disagreement with them, not only in connection with the issuance of the license but also on review. Similarly, the Commission can refuse to issue a license if it concludes that, as conditioned, the license should not issue. In either event, the license applicant can seek review of the conditions in the court of appeals, but the court is to sustain the conditions if they are consistent with law and supported by the evidence presented to the Commission, either by the Secretary or other interested parties. 16 U. S. C. § 8251(b).
We note that in the unlikely event that none of the parties to the licensing proceeding seeks review, the conditions will go into effect notwithstanding the Commission’s objection to them since the Commission is not authorized to seek review of its own decisions. The possibility that this might occur does not, however, dissuade us from interpreting the statute in accordance with its plain meaning. Congress apparently decided that if no party was interested in the differences between the Commission and the Secretary, the dispute would best be resolved in a nonjudicial forum.
Petitioners also contend that the Secretary’s authority to impose conditions on the license is inconsistent with the Commission’s authority and responsibility under § 10(a) to determine that “the project adopted . . . will be best adapted to a comprehensive plan ... for the improvement and utilization of water-power development, and for other beneficial public uses.” 16 U. S. C. § 803(a). Our discussion of the alleged conflict between the Commission’s authority to make its “no interference or inconsistency” determination and the Secretary’s conditioning authority applies with equal force to this contention. The ultimate decision whether to issue the license belongs to the Commission, hut the Secretary’s proposed conditions must be included if the license issues. Any conflict between the Commission and the Secretary with respect to whether the conditions are consistent with the statute must be resolved initially by the courts of appeals, not the Commission.
Petitioners’ assertion that the conditions proposed by the Secretary in this case were outside the Commission’s authority to adopt goes to the validity of the conditions, an issue not before this Court. It may well be that the conditions imposed by the Secretary are inconsistent with the provisions of the FPA and that they are therefore invalid (something we do not decide), but that issue is not for the Commission to decide in the first instance but is reserved for the court of appeals at the instance of the licensees and with the participation of the Commission if it is inclined to present its views.
Petitioners also contend that the Commission’s longstanding interpretation of § 4(e) is entitled to deference, citing language from its early decisions. E. g., Pigeon River Lumber Co., 1 F. P. C. 206, 209 (1935); Southern California Edison Co., 8 F. P. C. 364, 386 (1949). Petitioners concede, however, that the Commission never actually rejected any of the Secretary’s conditions until 1975. Pacific Gas & Electric Co., 53 F. P. C. 523, 526 (1975). Even then, the issue was not squarely presented because there was some question whether § 4(e) even applied in that proceeding. Ibid. It is therefore far from clear that the Commission’s interpretation is a longstanding one. More importantly, an agency’s interpretation, even if well established, cannot be sustained if, as in this case, it conflicts with the clear language and legislative history of the statute.
Mutual, Escondido, and Vista assert that § 4(e) is not at issue in this case because this is a relicensing procedure governed by § 15(a). The Commission was of a different view and dealt with the case as an original licensing procedure since the new license included facilities not covered by the 1924 license and since the project being relicensed was “so materially different from the [pjroject . . . which was initially licensed in 1924 that little more than the project number remains the same.” 6 FERC ¶ 61,189, p. 61,411 (1979). The licensees did not object to this conclusion in their petition for rehearing to the Commission, and they may not challenge it now. 16 U. S. C. § 825Z(b). Accordingly, we have no reason to decide whether § 4(e) applies to relicensing proceedings.
Section 3(2) of the FPA provides:
“ ‘[Reservations’ means national forests, tribal lands embraced within Indian reservations, military reservations, and other lands and interests in lands owned by the United States, and withdrawn, reserved, or withheld from private appropriation and disposal under the public land laws . . . 16 U. S. C. §796(2).
Indeed, in another provision of the Act, Congress provided that the term “project” includes “all water-rights . . . lands, or interests in lands the use and occupancy of which are necessary or appropriate in the maintenance” of a “unit of improvement or development.” 16 U. S. C. § 796(11). Had Congress thought that water rights were always covered by the term “interests in land,” it would not have felt it necessary to refer to water rights.
The statute authorizes the construction of project works without a license on nonnavigable waters over which Congress has Commerce Clause jurisdiction if the Commission finds that “the interests of interstate or foreign commerce would [not] be affected by such proposed construction . . . and if no public lands or reservations are affected.” 16 U. S. C. § 817.
27 Trust patents were issued on September 13, 1892, for the La Jolla and Rincon Reservations, and on July 10, 1910, for the San Pasqual Reservation.
The Bands’ situation was somewhat different since it was necessary to secure the approval of the Secretary for any such contracts.
The FPA requires that when licenses involve tribal lands within a reservation, “the Commission shall ... fix a reasonable annual charge for the use thereof.” 16 U. S. C. § 803(e). When a licensed facility is on private land, the licensee must acquire the appropriate right-of-way from the landowner either by private negotiation or through eminent domain. 16 U. S. C. §814.
The Bands suggest that even in the absence of § 8 of the MIRA, their consent would be necessary before the license could issue because of their sovereign power to prevent the use of their lands without their consent. Brief for Respondents La Jolla Band of Mission Indians et al. 37-39. However, it is highly questionable whether the Bands have inherent authority to prevent a federal agency from carrying out its statutory responsibility since such authority would seem to be inconsistent with their status. See Oliphant v. Suquamish Indian Tribe, 435 U. S. 191, 208-209 (1978). In any event, it is clear that all aspects of Indian sovereignty are subject to defeasance by Congress, United States v. Wheeler, 435 U. S. 313, 323 (1978), and, from the legislative history of the FPA, supra, at 787, that Congress intended to permit the Commission to issue licenses without the consent of the tribes involved. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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43
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MAISLIN INDUSTRIES, U. S., INC., et al. v. PRIMARY STEEL, INC., et al.
No. 89-624.
Argued April 16, 1990
Decided June 21, 1990
Brennan, J., delivered the opinion of the Court, in which White, Marshall, Blackmun, O’ConnoR, Scalia, and Kennedy, JJ., joined. Scalia, J., filed a concurring opinion, post, p. 136. Stevens, J., filed a dissenting opinion, in which Rehnquist, C. J., joined, post, p. 138.
Thomas M. Auchincloss, Jr., argued the cause for petitioners. With him on the briefs were Brian L. Troiano and David G. Sperry.
Deputy Solicitor General Merrill argued the cause for respondents. With him on the brief for the Interstate Commerce Commission, respondent under this Court’s Rule 12.4, were Solicitor General Siarr, Michael R. Dreeben, Robert S. Burk, and Ellen D. Hanson. Henry M. Wick, Jr., Charles J. Streiff, and Edioard E. Schmitt filed a brief for respondent Primary Steel, Inc.
Briefs of amici curiae urging reversal were filed for McLean Trucking Co. et al. by Paul O. Taylor; for Oneida Motor Freight, Inc., by Joseph L. Steinfeld, Jr., Robert B. Walker, and Miles L. Kavaller; for Overland Express, Inc., by James A. Kvauer and James M. Carr; and for Robert Yaquinto, Jr., by Louis J. Wade.
Briefs of amici curiae urging affirmance were filed for the National-American Wholesale Grocers’ Association et al. by William H. Borghesani. Jr., and Martin W. Bercovici; for Shippers National Freight Claim Council, Inc., by William J. Augello and Fritz R. Kahn; for the National Industrial Transportation League et al. by Frederic L. Wood, Nicholas J. DiMi-chael, Richard D. Fortin, Jan S. Amundson, Quentin Riegel, and Daniel J. Sweeney; and for Supreme Beef Processors, Inc., by John W. Bryant.
Justice Brennan
delivered the opinion of the Court.
Under the Interstate Commerce Act (Act), 49 U. S. C. §10101 et seq. (1982 ed.), motor common carriers must file their rates with the Interstate Commerce Commission (ICC or Commission), and both carriers and shippers must adhere to these rates. This case requires us to determine the validity of a policy recently adopted by the ICC that relieves a shipper of the obligation of paying the filed rate when the shipper and carrier have privately negotiated a lower rate. We hold that this policy is inconsistent with the Act.
I
A
The ICC regulates interstate transportation by motor common carriers to ensure that rates are both reasonable and nondiscriminatory. See 49 U. S. C. §§ 10101(a), 10701(a), 10741(b) (1982 ed.). The Act provides that a “common carrier . . . may not subject a person, place, port, or type of traffic to unreasonable discrimination.” § 10741. In addition, the Act states that “[a] rate . . . , classification, rule, or practice related to transportation or service . . . must be reasonable.” § 10701(a). The ICC has primary responsibility for determining whether a rate or practice is reasonable. See Texas & Pacific R. Co. v. Abilene Cotton Oil Co., 204 U. S. 426, 440-442 (1907). The Commission may investigate the reasonableness of a rate “on its own initiative or on complaint.” § 11701(a). When the Commission determines that a rate or practice violates the statute, it “shall prescribe the rate ... or practice to be followed.” § 10704(b)(1). Moreover, motor common carriers are liable “for damages resulting from the imposition of rates for transportation or service the Commission finds to be in violation” of the Act. 49 U. S. C. § 11705(b)(3) (1982 ed., Supp. V).
The Act requires a motor common carrier to “publish and file with the Commission tariffs containing the rates for transportation it may provide.” 49 U. S. C. § 10762(a)(1) (1982 ed.). The Act also specifically prohibits a carrier from providing services at any rate other than the filed (also known as the tariff) rate:
“Except as provided in this subtitle, a carrier providing transportation or service subject to the jurisdiction of the Interstate Commerce Commission . . . shall provide that transportation or service only if the rate for the transportation or service is contained in a tariff that is in effect under this subchapter. That carrier may not charge or receive a different compensation for that transportation or service than the rate specified in the tariff whether by returning a part of that rate to a person, giving a person a privilege, allowing the use of a facility that affects the value of that transportation or service, or another device.” § 10761(a).
Deviation from the filed rate may result in the imposition of civil or criminal sanctions on the carrier or shipper. See §§ 11902-11904.
As the Court has frequently stated, the statute does not permit either a shipper’s ignorance or the carrier’s misquotation of the applicable rate to serve as a defense to the collection of the filed rate. See Southern Pacific Transp. Co. v. Commercial Metals Co., 456 U. S. 336, 352 (1982); Louisville & Nashville R. Co. v. Maxwell, 237 U. S. 94, 97 (1915). In 1986, however, the ICC concluded that changes in the motor carrier industry “clearly warrant a tempering of the former harsh rule of adhering to the tariff rate in virtually all cases.” NITL — Petition to Institute Rulemaking on Negotiated Motor Common Carrier Rates, 3 I. C. C. 2d 99, 106 (1986) (Negotiated Rates I). Under the new policy, when cases are referred to the Commission, it “decid[es] if the collection of undercharges would be an unreasonable practice.” Id., at 100.
In Negotiated Rates I, the Commission adverted to a growing trend in the motor carrier industry whereby carriers and shippers negotiate rates lower than those on file with the ICC, and the shippers are billed for and remit payment at the negotiated rate. In many instances, however, the negotiated rate is never filed with the ICC. In some of those cases, the carrier subsequently files for bankruptcy and the trustee bills the shipper for the difference between the tariff rate and the negotiated rate, arguing that § 10761 compels the collection of the filed rather than negotiated rate. Id., at 99. The Commission concluded that, under such circumstances, “it could be fundamentally unfair not to consider a shipper’s equitable defenses to a claim for undercharges.” Id., at 103. The Commission reasoned that the passage of the Motor Carrier Act of 1980, which significantly deregulated the motor carrier industry, justified the change in policy, for the new competitive atmosphere made strict application of § 10761 unnecessary to deter discrimination. 3 I. C. C. 2d, at 106. Moreover, the Commission asserted that it had authority under § 10701 to determine whether the collection of the undercharge in a particular case would constitute an unreasonable practice. Id., at 103.
The ICC clarified its new policy in NITL — Petition to Institute Rulemaking on Negotiated Motor Common Carrier Rates, 5 I. C. C. 2d 623 (1989) (Negotiated Rates II). The Commission explained that its policy did not recognize “equitable defenses” but rather applied the “affirmative statutory requirement] and obligatio[n]” of § 10701 that a carrier’s practices be reasonable. Id., at 631, n. 18. “[T]he Commission is finding to be an unreasonable practice ... a course of conduct consisting of: (1) negotiating a rate; (2) agreeing to a rate that the shipper reasonably relies upon as being lawfully filed; (3) failing, either willfully or otherwise, to publish the rate; (4) billing and accepting payment at the negotiated rate for (sometimes) numerous shipments; and (5) then demanding additional payment at higher rates.” Id., at 628, n 11.
B
This case involves the application of the Commission’s new Negotiated Rates policy. It arises from an action by petitioner Maislin Industries, U. S., Inc. (Maislin), to recover freight undercharges for 1,081 interstate shipments performed for a shipper, respondent Primary Steel (Primary), by petitioner’s subsidiary, Quinn Freight Lines (Quinn). From 1981 to 1983, Quinn, a motor common carrier certificated by the ICC, privately negotiated rates with Primary that were lower than Quinn’s rates then on file with the ICC. Quinn never filed the negotiated rates with the ICC.
In 1983, Maislin filed for bankruptcy, and a postpetition audit of its accounts revealed undercharges of $187,923.36 resulting from billing Primary at the negotiated, rather than filed, rates. The agents of the bankrupt estate, pursuant to the authorization of the Bankruptcy Court, issued balance due bills to Primary for these undercharges. When Primary refused to pay the amounts demanded, the estate brought suit in the United States District Court for the Western District of Missouri under 49 U. S. C. § 11706(a) (1982 ed.) for the difference between the filed rates and the negotiated rates.
In its answer, Primary alleged that since the parties had negotiated lower rates, rebilling at the tariff rates would constitute an unreasonable practice in violation of §10701; that the tariff rates themselves were not “reasonable” within the meaning of § 10701; and that the asserted tariff rates were otherwise inapplicable to the shipments at issue. The District Court, finding these matters to be within the primary jurisdiction of the ICC, stayed the proceeding at Primary’s request and referred the case to the Commission. App. 6-8.
The ICC ruled in Primary’s favor, rejecting Maislin’s argument that the Commission lacked the statutory power to release a shipper from liability for such undercharges. Relying on Negotiated Rates I, the ICC reiterated that § 10701 authorized it to “consider all the circumstances surrounding an undercharge suit” to determine whether collection of the filed rate would constitute an unreasonable practice. App. to Pet. for Cert. 35a. In the Commission’s view, its role was “to undertake an analysis of whether a negotiated but unpublished rate existed, the circumstances surrounding assessment of the tariff rate, and any other pertinent facts.” Id., at 36a. With respect to the instant controversy, the ICC concluded that Quinn and Primary had negotiated rates other than the tariff rates' and that Primary had relied on Quinn to file the rates with the ICC. “Primary reasonably believed that the amounts quoted and billed by Quinn were the correct total charges for the transportation services it performed, that the amounts were reached as the result of negotiations between Primary and Quinn, and that, since full payment was made by [Primary],” Maislin was not entitled to recover the filed rates. Id., at 43a.
The case returned to the District Court where both parties moved for summary judgment. The court granted summary judgment for Primary, rejecting Maislin’s argument that the ICC’s new policy was, in effect, an impermissible recognition of equitable defenses to the application of the filed rate. The District Court concluded that the ICC’s policy of determining case by case whether the collection of undercharges would be an unreasonable practice under § 10701 was based on a permissible construction of the Act. 705 F. Supp. 1401, 1405-1406 (1988). The court also determined that the ICC’s finding that Maislin had engaged in an unreasonable practice was supported by substantial evidence. Id., at 1406-1407.
The Court of Appeals for the Eighth Circuit affirmed, agreeing that the approach taken by the ICC was consistent with the Act. The court reasoned that “[s]ection 10761(a), which mandates the collection of tariff rates, is only part of an overall regulatory scheme administered by the ICC, and there is no provision in the [Act] elevating this section over section 10701, which requires that tariff rates be reasonable.” 879 F. 2d 400, 405 (1989). The court concluded: “[T]he proper authority to harmonize these competing provisions is the ICC. . . . The approach taken by the ICC does not abolish the filed rate doctrine, but merely allows the ICC to consider all of the circumstances, including equitable defenses, to determine if strict adherence to the filed rate doctrine would constitute an unreasonable practice.” Ibid, (citation omitted). Because the Courts of Appeals have disagreed on the important issue whether the ICC’s Negotiated Rates policy is consistent with the Act, we granted certiorari. 493 U. S. 1041 (1990).
II
The Act requires a motor common carrier to publish its rates in a tariff filed with the Commission. 49 U. S. C. § 10762 (1982 ed.). This Court has long understood that the filed rate governs the legal relationship between shipper and carrier. In Keogh v. Chicago & Northwestern R. Co., 260 U. S. 166, 163 (1922), the Court explained:
“The legal rights of shipper as against carrier in respect to a rate are measured by the published tariff. Unless and until suspended or set aside, this rate is made, for all purposes, the legal rate, as between carrier and shipper. The rights as defined by the tariff cannot be varied or enlarged by either contract or tort of the carrier. . . . This stringent rule prevails, because otherwise the paramount purpose of Congress — prevention of unjust discrimination-might be defeated.” (Citations omitted.)
See Square D Co. v. Niagara Frontier Tariff Bureau, Inc., 476 U. S. 409, 415-417 (1986); Abilene Cotton Oil, 204 U. S., at 439; Texas & Pacific R. Co. v. Mugg, 202 U. S. 242, 245 (1906); Gulf, C. & S. F. R. Co. v. Hefley, 158 U. S. 98, 101 (1895). The duty to file rates with the Commission, see § 10762, and the obligation to charge only those rates, see § 10761, have always been considered essential to preventing price discrimination and stabilizing rates. “In order to render rates definite and certain, and to prevent discrimination and other abuses, the statute require[s] the filing and publishing of tariffs specifying the rates adopted by the carrier, and ma[kes] these the legal rates, that is, those which must be charged to all shippers alike.” Arizona Grocery Co. v. Atchison, T. & S. F. R. Co., 284 U. S. 370, 384 (1932).
Given the close interplay between the duties imposed by §§ 10761-10762 and the statutory prohibition on discrimination, see § 10741, this Court has read the statute to create strict filed rate requirements and to forbid equitable defenses to collection of the filed tariff. See Mugg, supra, at 245; Hefley, supra, at 101. The classic statement of the “filed rate doctrine,” as it has come to be known, is explained in Louisville & Nashville R. Co. v. Maxwell, 237 U. S. 94 (1915). In that case, the Court held that a passenger who purchased a train ticket at a rate misquoted by the ticket agent did not have a defense against the subsequent collection of the higher tariff rate by the railroad.
“Under the Interstate Commerce Act, the rate of the carrier duly filed is the only lawful charge. Deviation from it is not permitted upon any pretext. Shippers and travelers are charged with notice of it, and they as well as the carrier must abide by it, unless it is found by the Commission to be unreasonable. Ignorance or misquotation of rates is not an excuse for paying or charging either less or more than the rate filed. This rule is undeniably strict and it obviously may work hardship in some cases, but it embodies the policy which has been adopted by Congress in the regulation of interstate commerce in order to prevent unjust discrimination.” Id., at 97.
This rigid approach was deemed necessary to prevent carriers from intentionally “misquoting” rates to shippers as a means of offering them rebates or discounts. See S. Rep. No. 46, 49th Cong., 1st Sess., 181, 188-190, 198-200 (1886). As the Commission itself found: “[P]ast experience shows that billing clerks and other agents of carriers might easily-become experts in the making of errors and mistakes in the quotation of rates to favored shippers, while other shippers, less fortunate in their relations with carriers and whose traffic is less important, would be compelled to pay the higher published rates.” Poor v. Chicago, B. & Q. R. Co., 12 I. C. C. 418, 421-422 (1907); see also Western Transp. Co. v. Wilson & Co., 682 F. 2d 1227, 1230-1231 (CA7 1982). Despite the harsh effects of the filed rate doctrine, we have consistently adhered to it. See, e. g., Thurston Motor Lines, Inc. v. Jordan K. Rand, Ltd., 460 U. S. 533, 535 (1983); Southern Pacific Transp. Co., 456 U. S., at 343-344; Baldwin v. Scott County Milling Co., 307 U. S. 478, 484-485 (1939); Louisville & Nashville R. Co. v. Central Iron & Coal Co., 265 U. S. 59, 65 (1924).
The filed rate doctrine, however, contains an important caveat: The filed rate is not enforceable if the ICC finds the rate to be unreasonable. See Maxwell, supra, at 97 (filed rate applies “unless it is found by the Commission to be ■unreasonable”) (emphasis added); see also Keogh, supra, at 163 (“The legal rights of shipper as against carrier in respect to a rate are measured by the published tariff. Unless and until suspended or set aside, this rate is made, for all purposes, the legal rate”) (emphasis added). The filed rate doctrine, therefore, follows from the requirement that only filed rates be collected, as commanded by §§ 10761 and 10762, the requirement that rates not be discriminatory, see § 10741, and the requirement of § 10701 that carriers adopt reasonable rates and practices. As we explained in Arizona Grocery, supra, although the filed rate is the legal rate, the Act
“did not abrogate, but [rather] expressly affirmed, the common-law duty to charge no more than a reasonable rate .... In other words, the legal rate was not made by the statute a lawful rate — it was lawful only if it was reasonable. Under [the Act] the shipper was bound to pay the legal rate; but if he could show that it was unreasonable he might recover reparation.
“The Act altered the common law by lodging in the Commission the power theretofore exercised by courts, of determining the reasonableness of a published rate. If the finding on this question was against the carrier, reparation was to be awarded the shipper, and only the enforcement of the award was relegated to the courts.” Id., at 384-385 (footnote omitted).
In the instant case, the Commission did not find that the rates were unreasonable," but rather concluded that the carrier had engaged in an unreasonable practice in violation of § 10701 that should preclude it from collecting the filed rates. The Commission argues that under the filed rate doctrine, a finding that the carrier engaged in an unreasonable practice should, like a finding that the filed rate is unreasonable, disentitle the carrier to collection of the filed rate. We have never held that a carrier’s unreasonable practice justifies departure from the filed tariff schedule. But we need not resolve this issue today because we conclude that the justification for departure from the filed tariff schedule that the ICC set forth in its Negotiated Rates policy rests on an interpretation of the Act that is contrary to the language and structure of the statute as a whole and the requirements that make up the filed rate doctrine in particular.
Under the Negotiated Rates policy, the ICC has determined that a carrier engages in an unreasonable practice when it attempts to collect the filed rate after the parties have negotiated a lower rate. The ICC argues that its conclusion is entitled to deference because § 10701 does not specifically address the types of practices that are to be considered unreasonable and because its construction is rational and consistent with the statute. See Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, 843 (1984).
We disagree. For a century, this Court has held that the Act, as it incorporates the filed rate doctrine, forbids as discriminatory the secret negotiation and collection of rates lower than the filed rate. See supra, at 126-128. By refusing to order collection of the filed rate solely because the parties had agreed to a lower rate, the ICC has permitted the very price discrimination that the Act by its terms seeks to prevent. See 49 U. S. C. § 10741 (1982 ed.). As we stated in Armour Packing Co. v. United States, 209 U. S. 56, 81 (1908):
“If the rates are subject to secret alteration by special agreement then the statute will fail of its purpose to establish a rate duly published, known to all, and from which neither shipper nor carrier may depart. . . . [The Act] has provided for the establishing of one rate, to be filed as provided, subject to change as provided, and that rate to be while in force the only legal rate. Any other construction of the statute opens the door to the possibility of the very abuses of unequal rates which it was the design of the statute to prohibit and punish.”
Congress has not diverged from this interpretation and we decline to revisit it ourselves. See California v. FERC, 495 U. S. 490, 499 (1990) (recognizing the respect “this Court must accord to longstanding and well-entrenched decisions, especially those interpreting statutes that underlie complex regulatory regimes”). Once we have determined a statute’s clear meaning, we adhere to that determination under the doctrine of stare decisis, and we judge an agency’s later interpretation of the statute against our prior determination of the statute’s meaning. Labeling the carrier’s conduct an “unreasonable practice” cannot disguise the fact that the ICC is justifying deviation from the filed rate purely on the ground that the carrier and shipper have privately negotiated a lower rate. Stripped of its semantic cover, the Negotiated Rates policy and, more specifically, the Commission’s interpretation of “unreasonable practices” thus stand revealed as flatly inconsistent with the statutory scheme as a whole, cf. Fort Stewart Schools v. FLRA, 495 U. S. 641, 645 (1990); Dole v. Steelworkers, 494 U. S. 26, 32 (1990), and §§10761 and 10762 in particular.
Nor can the Negotiated Rates policy be justified as a remedy for the carrier’s failure to comply with § 10762’s directive to file the negotiated rate with the ICC. See Negotiated Rates I, 3 I. C. C. 2d, at 103. The Commission argues that the carrier should not receive a windfall, i. e., the higher filed rate, from its failure to comply with the statute. See Brief for Federal Respondent 25-27. But § 10761 requires the carrier to collect the filed rate, and we have never accepted the argument that such “equities” are relevant to the application of §10761. See, e. g., Maxwell, 237 U. S., at 97. Indeed, strict adherence to the filed rate has never been justified on the ground that the carrier is equitably entitled to that rate, but rather that such adherence, despite its harsh consequences in some cases, is necessary to enforcement of the Act. See supra, at 126-128.
Compliance with §§ 10761 and 10762 is “utterly central” to the administration of the Act. Regular Common Carrier Conference v. United States, 253 U. S. App. D. C. 305, 308, 793 F. 2d 376, 379 (1986). “Without [these provisions] . . . it would be monumentally difficult to enforce the requirement that rates be reasonable and nondiscriminatory, . . . and virtually impossible for the public to assert its right to challenge the lawfulness of existing proposed rates.” Ibid, (citations omitted). Although the ICC argues that the Negotiated Rates policy does not “abolis[h] the requirement in section 10761 that carriers must continue to charge the tariff rate,” App. to Pet. for Cert. 36a, the policy, by sanctioning adherence to unfiled rates, undermines the basic structure of the Act. The ICC cannot review in advance the reasonableness of unfiled rates. Likewise, other shippers cannot know if they should challenge a carrier’s rates as discriminatory when many of the carrier’s rates are privately negotiated and never disclosed to the ICC. Thus, although we agree that the Commission may have discretion to craft appropriate remedies for violations of the statute, see ICC v. American Trucking Assns., Inc., 467 U. S. 354, 364-365 (1984), the “remedy” articulated in the Negotiated Rates policy effectively renders nugatory the requirements of §§ 10761 and 10762 and conflicts directly with the core purposes of the Act.
The ICC maintains, however, that the passage of the Motor Carrier Act of 1980 (MCA), Pub. L. 96-296, 94 Stat. 793, justifies its Negotiated Rates policy. The MCA substantially deregulated the motor carrier industry in many ways in an effort to “promote competitive and efficient transportation services.” Pub. L. 96-296, §4, formerly codified at 49 U. S. C. § 10101(a)(7) (1976 ed., Supp. V). In addition to loosening entry controls, see §5, codified at 49 U. S. C. §10922 (1982 ed.), the MCA also created a zone of reasonableness within which carriers can raise rates without interference from the ICC. See §11, codified at 49 U. S. C. §10708 (1982 ed.). More importantly, the MCA also allows motor carriers to operate as both common carriers and contract carriers. See § 10(b)(1), amending 49 U. S. C. § 10930(a) (1982 ed.). A contract carrier transports property under exclusive agreements with a shipper, see § 10102(14), and the Commission has exempted all motor contract carriers from the requirements of §§ 10761 and 10762. See Exemption of Motor Contract Carriers from Tariff Filing Requirements, 133 M. C. C. 150 (1983), aff’d sub nom. Central & Southern Motor Freight Tariff Assn., Inc. v. United States, 244 U. S. App. D. C. 226, 757 F. 2d 301, cert. denied, 474 U. S. 1019 (1985). The Commission has also relaxed the regulations relating to motor common carriers, most significantly, by allowing decreased rates to go into effect one day after the filing of a tariff. See Short Notice Effectiveness for Independently Filed Rates, 1 I. C. C. 2d 146 (1984), aff’d sub nom. Southern Motor Gamers Rate Conference v. United States, 773 F. 2d 1561 (CA11 1985). In Negotiated Rates I and II, the Commission concluded that in light of the more competitive environment, strict adherence to the filed rate doctrine “is inappropriate and unnecessary to deter discrimination today.” Negotiated Rates I, 3 I. C. C., at 106. According to the Commission, “ ‘the inability of a shipper to rely on a carrier’s interpretation of a tariff is a greater evil than the remote possibility that a carrier might intentionally misquote an applicable tariff rate to discriminate illegally between shippers.’” Ibid., quoting Seaboard System R. Co. v. United States, 794 F. 2d 635, 638 (CA11 1986).
We reject this argument. Although the Commission has both the authority and expertise generally to adopt new policies when faced with new developments in the industry, see American Trucking Assns., Inc. v. Atchison, T. & S. F. R. Co., 387 U. S. 397, 416 (1967), it does not have the power to adopt a policy that directly conflicts with its governing statute. Nothing in the MCA repeals §§ 10761 and 10762 or casts doubt on our prior interpretation of those sections. Generalized congressional exhortations to “increase competition” cannot provide the ICC authority to alter the well-established statutory filed rate requirements. As we said in Square D Co. v. Niagara Frontier Tariff Bureau, Inc., with respect to a similarly longstanding judicial interpretation of the Act:
“Congress must be presumed to have been fully cognizant of this interpretation of the statutory scheme, which had been a significant part of our settled law for over half a century, and . . . Congress did not see fit to change it when Congress carefully reexamined this area of the law in 1980. [Respondent has] pointed to no specific statutory provision or legislative history indicating a specific congressional intention to overturn the longstanding . . . construction; harmony with the general legislative purpose is inadequate for that formidable task.” 476 U. S., at 420 (footnotes omitted).
See also California v. FERC, 495 U. S., at 498, 499-500. Even before the passage of the MCA, Congress had allowed the Commission to exempt motor contract carriers from the requirement that they adhere to the published tariff, see 49 U. S. C. § 10761(b) (1982 ed.), demonstrating that Congress is aware of the requirement and has deliberately chosen not to disturb it with respect to motor common carriers.’ If strict adherence to §§ 10761 and 10762 as embodied in the filed rate doctrine has become an anachronism in the wake of the MCA, it is the responsibility of Congress to modify or eliminate these sections.
Accordingly, the judgment of the Court of Appeals is reversed, and the cause is remanded for further proceedings consistent with this opinion.
It is so ordered.
The Act states that when reviewing the reasonableness of a carrier's rates, the Commission “shall authorize revenue levels that are adequate under honest, economical, and efficient management to cover total operating expenses . . . plus a reasonable profit." 49 U. S. C. § 10701(e) (1982 ed.).
Section 11902 provides that a shipper who knowingly receives a rebate or offset against the filed rate is liable to the Government for a civil penalty in an amount equal to three times the rebate. Section 11903(a) states that any person who “knowingly offers, grants, gives, solicits, accepts, or receives” service at less than the filed rate “shall be fined at least $1,000 but not more than $20,000, imprisoned for not more than 2 years, or both.” A carrier who willfully fails to file and publish its tariffs is subject to the same penalty. See § 11903(b); see also § 11904 (corporate liability).
The Commission stated that its new policy did not "abrogate Section 10761. Rather, we emphasize that carriers must continue to charge the tariff rate, as provided in the statute. The issue here is simply whether we have the authority to consider all the circumstances surrounding an undercharge suit.” NITL — Petition to Institute Rulemaking on Negotiated Motor Common Carrier Rates, 3 I. C. C. 2d 99, 103 (1986) (citations omitted). The Commission rejected a proposal by the National Industrial Transportation League (NITL) that would have declared the negotiated rate to be the maximum reasonable rate. The Commission concluded that the proposal conflicted with § 10761 because it created a “per se determination that, as a matter of law, the negotiated rate would apply.” Id., at 102.
The Commission stated: “[0]ur Negotiated Rates policy does not represent a relaxed interpretation of § 10761, but rather a separate determination under § 10701. But even if it were viewed as a reinterpretation of a previously strict construction of § 10761, it would be . . . well within this agency’s authority (and indeed duty) to reinterpret the Interstate Commerce Act, based on upon experience gained and changing circumstances.” NITL — Petition to Institute Rulemaking on Negotiated Motor Common Carrier Rates, 5 I. C. C. 2d 623, 631 (1989) (citing American Trucking Assns., Inc. v. Atchison T. & S. F. R. Co., 387 U. S. 397, 416 (1967)).
Section 11706(a) provides:
“A common carrier providing transportation or service subject to the jurisdiction of the Interstate Commerce Commission . . . must begin a civil action to recover charges for transportation or service provided by the carrier within 3 years after the claim accrues.”
See App. to Pet. for Cert. 36a-38a. The Commission relied primarily on two “rate sheets” to find that negotiated rates existed. According to the Commission, a three-page rate sheet prepared by Primary in 1981 demonstrated that Quinn, through its agent James McGowan, had negotiated a five percent across-the-board increase in rates above those in Quinn's tariff on file with the ICC. Sometime in 1982, when Primary notified Quinn that it would need relief from the rates in order to continue using Quinn, the parties orally negotiated a decrease in the rates. Primary prepared a new rate sheet which was sent to all the relevant individuals. Subsequently, whenever rates were needed for destinations other than those shown on the rate sheet, McGowan would set a new rate based on the mileage involved. The ICC concluded that “there is evidence of offers, acceptances, and approvals by the involved parties” before each of the shipments in question. Id., at 36a; see also id., at 38a.
See id., at 43a. This finding was based on the fact that McGowan represented that his superiors had approved the rates on the written rate sheets. See id., at 40a. The Commission noted that Primary’s representative was never given an actual tariff documenting that the agreed-upon rates had been filed with the ICC and that Primary’s representative had no training with respect to tariffs, but the Commission concluded that the representative “understood that Quinn would do whatever was necessary to implement the agreed upon rates. ” Id., at 32a. The Commission specifically found that “[wjhile Quinn may not have taken appropriate steps to legalize the quoted rates, it has not been demonstrated that this occurred as a result of any intent to engage in unlawful conduct." Id., at 42a.
Compare In re Caravan Refrigerated Cargo, Inc. (Supreme Beef Processors), 864 F. 2d 388 (CA5 1989), with Delta Traffic Service, Inc. v. Transtop, Inc., 902 F. 2d 101 (CA1 1990); Orscheln Bros. Truck Lines, Inc. v. Zenith Electric Corp., 899 F. 2d 642 (CAT 1990); West Coast Truck Lines, Inc. v. Weyerhaeuser Co., 893 F. 2d 1016 (CA9 1990); Delta Traffic Service, Inc. v. Appco Paper & Plastics Corp., 893 F. 2d 472 (CA2 1990).
See also Louisville & Nashville R. Co. v. Central Iron & Coal Co., 265 U. S. 59, 65 (1924) (“No contract of the carrier could reduce the amount legally payable; or release from liability a shipper who had assumed an obligation to pay the charges. Nor could any act or omission of the carrier (except the running of the statute of limitations) estop or preclude it from enforcing payment of the full amount by a person liable therefor”); Kansas City Southern R. Co. v. Carl, 227 U. S. 639, 653 (1913) (“Neither the intentional nor accidental misstatement of the applicable published rate will bind the carrier or shipper. The lawful rate is that which the carrier must exact and that which the shipper must pay. The shipper’s knowledge of the lawful rate is conclusively presumed”).
The ICC did not determine whether the tariff rates were unreasonable even though primary respondent requested such a determination. We therefore must assume, for purposes of our decision today, that the rates were reasonable. The issue of the reasonableness of the tariff rates is open for exploration on remand.
None of our cases involving a determination by the ICC that the carrier engaged in an unreasonable practice have required departure from the filed tariff schedule altogether; instead, they have required merely the application of a different filed tariff. For example, in Hewitt-Robins Inc. v. Eastern Freight-Ways, Inc., 371 U. S. 84, 86 (1962), the Commission’s finding that a carrier had engaged in an unreasonable practice by routing intrastate shipments over interstate routes required only the application of a different filed rate, i. e., the intrastate rates, rather than departure from the tariff schedule entirely. See also Adams v. Mills, 286 U. S. 397, 412 (1932) (reparations ordered constituted difference between one filed rate and another). Likewise, the cases in which the ICC has determined that a carrier engaged in an unreasonable practice by requiring a certain notation attached to the bill of lading to qualify the shipper for a reduced tariff also did not require deviation from the filed tariff. See Standard Brands, Inc. v. Central R. Co. of New Jersey, 350 I. C. C. 555 (1974); Carriers Traffic Service, Inc. v. Anderson, Clayton & Co., 881 F. 2d 475, 481-482 (CA7 1989) (collecting cases).
Even if the equities of the situation were relevant, it is difficult to see how the equities favor the shipper. One would think that a shipper who has the market power to require a carrier to reduce his tariffs could also require proof from a carrier that the negotiated rates had been filed before tendering the shipment, especially since there are commercial services providing up-to-the-minute details of the carrier’s rate schedule. But see Fort Howard Paper Co. v. Maislin Industries, U. S., Inc., No. MC-C-10983 (I. C. C. Aug. 4, 1987), p. 5 (unreasonable practice found even when the shipper had a copy of the tariff). Nevertheless, the Commission argues that if § 10761 “prevailed over the requirement of reasonable practices, a carrier could intentionally engage in ‘bait and switch’ tactics by negotiating one rate, fraudulently representing that it was properly filed, and then insisting upon collection of a higher tariff rate.” Brief for Federal Respondent 30. We note first that the Commission determined that there was no intentional or fraudulent conduct in this case. Moreover, any carrier who engaged in such conduct could be punished under 49 U. S. C. § 11903(b) (1982 ed.). Finally, this risk of intentional misconduct on the part of a carrier has always existed and has never been considered sufficient to justify a less stringent interpretation of § 10761.
The Act specifically provides that the Commission may "grant relief” from the filing requirements to motor contract carriers “when relief is consistent with the public interest and the transportation policy.” §§ 10761(b), 10762(f); see also § 10702(b). The Commission concluded that granting a classwide exemption rather than individual exemptions was both in the public interest and consistent with the purpose behind the Act. See Exemption of Motor Contract Carriers from Tariff Filing Require ments, 133 M. C. C., at 156-158. The Commission has also allowed contract carriers to obtain permits to serve entire classes of unnamed shippers. See Issuance of Permits Authorizing Industrywide Service, 133 M. C. C. 298 (1983).
The Act provides that rates will not go into effect until 30 days after the filing of a tariff, see § 10762(c)(3), but specifically allows the Commission to reduce the period if “cause exists.” § 10762(d)(1). The Commission determined that cause existed to reduce the waiting period to one day after the filing of a tariff reducing rates and seven days after the filing of a tariff increasing rates. See Short Notice Effectiveness for Independently Filed Rates, 1 I. C. C. 2d, at 150-160. In addition, the Commission has determined that neither tariffs applicable to a single shipper nor rates providing volume discounts are per se discriminatory. See Rates for a Named Shipper or Receiver, 367 I. C. C. 2d 959 (1984); Petition for Declaratory Order — Lawfulness of Volume Discount Rates by Motor Common Carriers of Property, 365 I. C. C. 711 (1982). We express no view today on the validity of such policies.
Moreover, in the Household Goods Transportation Act of 1980, Pub. L. 96-454, 94 Stat. 2011, Congress provided that “motor common carriers] providing transportation of household goods . . . may, subject to the provisions of this chapter (including the general tariff requirements of section 10762 of this title), establish a rate for the transportation of household goods which is based on the carrier’s written, binding estimate of charges for providing such transportation.” 49 U. S. C. § 10735(a)(1) (1982 ed., Supp. V) (emphasis added). This exception for household goods carriers also demonstrates that Congress is aware of, but has elected not to eliminate as applied to other motor common carriers, the general requirements of §§ 10761 and 10762. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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65
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BOARD OF EDUCATION OF ROGERS, ARKANSAS, et al. v. McCLUSKEY, by his next friend, McCLUSKEY
No. 81-1577.
Decided July 2, 1982
Per Curiam.
Respondent, a 10th-grade student in the Rogers, Ark., School District, left school on October 21,1980, after the first period without permission, and, with four other students, consumed alcohol and became intoxicated. When he returned to school later that day to go on a band trip, he was notified that he was suspended from school. His parents were notified the next day that their son had been suspended pending a hearing before the Rogers School Board; a hearing was scheduled for October 29. At the hearing before the Board, none of the five students denied that they had been drinking, and the Board voted to expel all five for the remainder of the semester.
Respondent immediately sought injunctive relief under 42 U. S. C. § 1983 (1976 ed., Supp. IV), and the case was heard by the United States District Court for the Western District of Arkansas on December 4. The District Court decided that the School Board had violated respondent’s right to substantive due process, and ordered that he be granted credit for the semester during which he was suspended and that all references to his suspension be expunged from his school records.
The District Court’s action was based on its interpretation of the School Board’s rules and its conclusions concerning which rules the Board invoked in suspending respondent. There is no doubt that the Board had the authority to suspend respondent under §§9 and 10 of its written Policies on Pupil Suspension. Section 9 provides that the Board may suspend or expel any student “for good cause.” Section 10 defines “good cause,” and provides that it includes “sale, use or possession of alcoholic beverages or illegal drugs.” Thus it was clearly within the Board’s discretion to suspend a student for becoming intoxicated.
The District Court decided that the Board had acted under § 11 of its rules, which provides for mandatory suspension when it applies. Section 11 provides:
“For the protection of other pupils in the school grades 9-12, the school board shall expel for the remainder of the semester with loss of credit for the semester’s work any pupil whenever it has been established to the satisfaction of the board, or the superintendent, or the principal, or his assistant in charge, that the pupil has on school premises or at school sponsored activities (including trips) used, sold, been under the influence of, or been in possession of narcotics or other hallucinogenics, drugs, or controlled substances classified as such by Act 590 of 1971, as amended.”
There was conflicting testimony concerning which section the Board had invoked. The letters sent to respondent’s parents informing them of the suspension and the hearing cited both § 10 and § 11. Adams, a Board member and a lawyer, testified that he based his motion to expel McCluskey on § 10 because he had doubts about the applicability of §11. The Chairman of the Board testified that the Board had suspended students under § 11 for alcohol offenses for the past five years.
The District Court found as a matter of fact that the Board acted under §11 when it suspended respondent. It then went on to decide that § 11 did not apply to alcohol. Section 11 applies to “narcotics or other hallucinogenics, drugs, or controlled substances classified as such by Act 590 of 1971, as amended.” Act 590, Ark. Stat. Ann. §82-2602(e) (Supp. 1981), specifically exempts alcohol from its coverage; therefore, alcohol is not a “controlled substance.” Nor is it a “narcotic or other hallucinogenic.” The District Court also concluded that alcohol is not a “drug.” While technically alcohol is a drug, the District Court noted, it is not considered a drug in common parlance. For this reason, the District Court concluded, the Board had acted unreasonably by suspending respondent under § 11. It held that the Board violated substantive due process by suspending him under the mandatory terms of § 11, even though the Board had discretion to suspend him under § 10.
A divided Court of Appeals for the Eighth Circuit affirmed. 662 F. 2d 1263 (1981). It reviewed the District Court’s conclusion that the Board acted under § 11 rather than §10 under the clearly-erroneous standard of Federal Rule of Civil Procedure 52(a), and held that the District Court’s conclusion passed muster. It also affirmed the District Court’s holding that §11 cannot reasonably be interpreted to apply to alcohol because “the express terms of section 11 apply only to ‘drugs’ and expressly exempt alcohol.” 662 F. 2d, at 1267. For this reason, the Court of Appeals concluded, Wood v. Strickland, 420 U. S. 308 (1975), was distinguishable. There this Court had stated that “§1983 does not extend the right to relitigate in federal court evidentiary questions arising in school disciplinary proceedings or the proper construction of school regulations.” Id., at 326. Although this Court had plainly stated that federal courts were not authorized to construe school regulations, the Court of Appeals concluded that Wood v. Strickland was distinguishable because the school board in that case had construed its regulations reasonably while here the Board had construed its regulations unreasonably. 662 F. 2d, at 1267. Judge McMillian dissented because he concluded that Wood v. Strickland barred federal courts from construing the school regulations involved in this case differently than the Board had construed them.
Wood v. Strickland plainly requires that the Court of Appeals be reversed. There high school girls were expelled for “spiking” a punch served at a school meeting by adding two bottles of malt liquor. The malt liquor had an alcoholic content of 3.2% and the alcoholic content of the spiked punch was estimated at 0.91%. 420 U. S., at 326. The Court of Appeals had set aside the girls’ expulsions because they had been expelled for adding an alcoholic beverage to the punch, but a state statute defined “intoxicating liquor” as a beverage with an alcoholic content exceeding 5%, and the court thought the 5% rule of the statute should apply to the school regulation. We held that the court erred in substituting its own notions for the school board’s definition of its rules:
“[T]he Court of Appeals was ill advised to supplant the interpretation of the regulation of those officers who adopted it and are entrusted with its enforcement.” Id., at 325.
The Court continued, as noted supra, by stating that
“§ 1983 does not extend the right to relitigate in federal court evidentiary questions arising in school disciplinary proceedings or the proper construction of school regulations.” Id., at 326 (emphasis added).
The Court of Appeals and the District Court plainly erred in distinguishing Wood v. Strickland on the ground that the Board’s interpretation of § 11 in this case was unreasonable while the school board’s construction of “alcoholic beverage” in Wood v. Strickland was reasonable. A case may be hypothesized in which a school board’s interpretation of its rules is so extreme as to be a violation of due process, but this is surely not that case. The Board’s interpretation of § 11 is reasonable. Contrary to the Court of Appeals, alcohol is not expressly exempted from the coverage of § 11. Section 11 covers “controlled substances classified as such by Act 590,” and Act 590 expressly exempts alcohol from its coverage. Therefore, alcohol is not a “controlled substance” under § 11. But § 11 also covers “drugs,” and, as the District Court conceded, alcohol is a “drug.” Moreover, § 11 mandates suspension of students under the influence of drugs while on school premises. Section 10, which gives the Board discretion to suspend students for drug use, is not limited in its application to drug use on school premises. It is reasonable to conclude that the regulations require suspension for any drug use, including use of alcohol, on school premises, while permitting suspension for drug use off school premises.
In any case, even if the District Court’s and the Court of Appeals’ views of § 11 struck us as clearly preferable to the Board’s — which they do not — the Board’s interpretation of its regulations controls under Wood v. Strickland. The Chairman of the Board testified that the Board had interpreted § 11 as requiring the suspension of students found intoxicated on school grounds for a number of years prior to respondent’s suspension, and it is undisputed that the Board had the authority to suspend students for that reason. We conclude that the District Court and the Court of Appeals plainly erred in replacing the Board’s construction of § 11 with their own notions under the facts of this case. Accordingly, the petition for certiorari is granted, and the judgment of the Court of Appeals is
Reversed.
The Board has since amended its regulations so as to remove all question that suspension for the remainder of the semester is mandatory if a student is intoxicated on school premises. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
116
] |
UNITED STATES et al. v. SEATRAIN LINES, INC.
No. 61.
Argued December 9, 1946.
Decided January 6, 1947.
Edward M. Reidy argued the cause for the United States and the Interstate Commerce Commission, appellants. With him on the briefs were Solicitor General McGrath, Assistant Solicitor General Washington, Assistant Attorney General Berge, Frederick Bernays Wiener, Edward Dumbauld and Daniel W. Knowlton.
Wilbur La Roe, Jr. argued the cause for respondent. With him on the brief were Parker McCollester and Arthur L. Winn, Jr.
Mr. Justice Black
delivered the opinion of the Court.
Seatrain is and long has been a common carrier of goods by water. Its harbor facilities and vessels have been constructed to enable it to perform a distinctive type of water carriage. Loaded railroad cars can be hoisted and transported in its vessels, thereby eliminating such things as trouble, time and breakage, said to be incident to loading and unloading goods from railroad cars. See United States v. Pennsylvania R. Co., 323 U. S. 612. Seatrain vessels also have tank space for carriage of liquid cargoes in bulk.
Part III of the Interstate Commerce Act, 54 Stat. 929,49 U. S. C. § 901, et seg., subjected water carriers to the jurisdiction of the Interstate Commerce Commission. Section 309 (a) of that Act required them to obtain certificates of public convenience and necessity from the Commission. The same section contains a proviso commonly referred to as the grandfather clause. It provides that any water carrier, with an exception not here material, which was in bona fide operation as a common carrier by water on January 1, 1940, shall be entitled to a certificate to continue operations over the route or routes which it had been serving previous to that date without determination by the Commission of the question of public convenience and necessity.
May 29, 1941, Seatrain filed two applications with the Commission to obtain certificates for two different routes, one of which it had operated since 1932, and another which it had begun to operate in 1940 shortly after passage of the water carrier provisions. Seatrain’s application described its operation on each route as that of a “common carrier by water of commodities generally.” After due notice had been given to all interested parties, Division 4 of the Commission conducted investigations, satisfied itself as to the right of Seatrain to be granted both applications under the provisions of the Act, made appropriate findings, and concluded that Seatrain was entitled to engage in transportation on both the routes as “a common carrier by water of commodities generally.” A single certificate to carry “commodities generally between the ports of New York, N. Y., New Orleans, La., and Texas City, Tex., by way of the Atlantic Ocean and the Gulf of Mexico” was accordingly issued to Seatrain. By its terms it became effective August 10,1942, subject “to such terms, conditions, and limitations as are now, or may hereafter be, attached to the exercise of such authority by this Commission.”
A year and a half later, January 27, 1944, the Commission, on its own motion, ordered that the proceedings be reopened for the purpose of determining whether the 1942 certificate should not be modified so as to deprive Seatrain of the right to carry commodities generally. Seatrain appeared and moved to vacate and rescind the Commission’s order to reopen the proceedings on the ground that the Commission was without statutory authority to make the alteration proposed. Seatrain’s motion was rejected. At the subsequent hearing on the proposed modification, Seatrain declined to offer evidence, resting its case entirely on the Commission’s lack of authority to reconsider and alter the original certificate. After argument, the Commission entered an order canceling the former certificate and directing that a different one be issued. 260 I. C. C. 430. The proposed new certificate in effect deprived Sea-train of the right to carry goods generally between the ports it served, and limited it to operations only “as a common carrier by the ‘seatrain’ type of vessels, in interstate or foreign commerce, in the transportation of liquid cargoes in bulk; of empty railroad cars; and of property loaded in freight cars received from and delivered to rail carriers and transported without transfer from the freight cars between the ports of New York, N. Y., New Orleans, La., and Texas City, Tex.”
Seatrain then brought this action before a three-judge District Court under 28 U. S. C. §§ 41 (28), 47, to set aside the Commission’s order. The District Court set aside the order on the ground that the Commission had exceeded its statutory authority in reopening the proceeding and altering the certificate. The District Court further held that even if the Commission would have had power under different circumstances to alter a certificate, it should not have done so in this case where, as the Court found from evidence before it but which had not been before the Commission, Seatrain had expended large sums of money in reliance upon the complete validity of its certificate. 64 F. Supp. 156. We need not consider the Commission’s objection to the District Court’s admission of evidence not heard by the Commission since we agree with the District Court that the Commission was without authority to cancel this certificate.
In altering Seatrain’s certificate, the Commission held that a certificate authorizing the carriage of “commodities generally” does not embrace the right to carry loaded or unloaded railroad cars; that consequently the original certificate granted Seatrain actually deprived it of any future right to carry railroad cars — its chief business; that issuance of the original certificate to carry commodities generally was consequently an inadvertent error, patent on the face of the record, which the Commission has the right and power to change at any time the matter comes to its attention. But Seatrain argues that, far from restoring the right to which it was entitled under the original proceedings, the new order actually results in a drastic limitation on the nature of the equipment and service Seatrain is privileged to employ in loading and carrying freight, and could bar delivery or receipt of freight to or from any consignees except railroads.
We need not determine the Commission’s statutory power to correct clerical mistakes, since we are persuaded from Seatrain’s applications for its certificates, from the information supplied to the Commission indicating that Seatrain had long transported goods of all kinds loaded in freight cars to consignees other than railroads, from the findings of the Commission, and from the course of the earlier decisions of the Commission regarding Sea-train, that the issuance of the original certificate was not an “inadvertent” error which the Commission’s subsequent action was intended to correct. For all these indicate that prior to and at the time of the issuance of the Seatrain certificate it was the understanding of Seatrain and the Commission that its transportation of “commodities generally” included carriage of freight cars and that carriage of freight cars would not exclude carriage of commodities generally. Moreover, the Seatrain application was not reopened for consideration by the Commission until its decision in Foss Launch & Tug Co., 260 I. C. C. 103, decided December 18, 1943. There the Commission pointedly ruled for the first time that a certificate to carry “commodities generally” did not authorize water carriage of loaded or unloaded freight cars — so-called “car-ferry service.” Thus it seems apparent that the Seatrain proceedings were reopened not to correct a mere clerical error, but to execute the new policy announced in the Foss case. This conclusion is supported by the fact that in prior proceedings involving Seatrain, the Commission had rejected the contention that Seatrain’s vessels could be classed as “car ferries,” and had concluded that they were ocean-going water carriers.
Since the proceedings apparently were not reopened to correct a mere clerical error but were more likely an effort to revoke or modify substantially Seatrain’s original certificate under the new policy announced in the Foss case, the question remains whether the Act authorizes such alterations. The water carrier provisions are part of the general pattern of the Interstate Commerce Act which grants the Commission power to regulate railroads and motor carriers as well as water carriers. The Commission is authorized to issue certificates to all three types of carriers. But it is specifically empowered to revoke only the certificates of motor carriers. Section 212 (a), Part II, Interstate Commerce Act, 49 Stat. 555, 49 U. S. C. §312 (a). In fact, when the water carrier provisions were pending in Congress, the Commission’s spokesman, Commissioner Eastman, seems specifically to have requested the Congress to include no power to revoke a certificate. The Commissioner explained that while the power to revoke motor carriers’ certificates was essential as an effective means of enforcement of the motor carrier section, it was not necessary to use such sanctions in the regulation of water carriers. It is contended nonetheless that the Commission has greater power to revoke water carrier certificates, where Congress granted no specific authority at all, than to cancel and revoke motor carrier certificates, where specific but limited authority was granted. But in ruling upon its power to revoke motor carrier certificates, the Commission itself has held that unless it can find a reason to revoke a motor carrier’s certificate, which reason is specifically set out in § 212 (a), it cannot revoke such a certificate under its general statutory-power to alter orders previously made. Smith Bros. Revocation of Certificate, 33 M. C. C. 465.
It is argued, however, that this proceeding does not effect a partial revocation of Seatrain’s certificate, but is merely an exercise of the Commission’s statutory power under § 309 (d) to fix “terms, conditions, and limitations” for water carrier certificate holders. Whether the Commission could, under this authority, have imposed a restriction in an original certificate as to the type of service a water carrier could utilize to serve its shippers best is by no means free from doubt. Yet the alleged authority to alter a certificate after it has been finally granted so as to limit the type of service is certainly no greater than the Commission’s authority to limit the type of service when issuing the original certificate. It is of some significance that § 208, which prescribes the authority of the Commission in granting certificates to motor carriers, authorizes the Commission to “specify the service to be rendered” by those carriers. But § 309, which empowers the Commission to grant certificates to water carriers, does not authorize the Commission to specify “the service to be rendered.” Furthermore, § 309 (d), relating to water carrier certificates, specifically provides “That no terms, conditions, or limitations shall restrict the right of the carrier to add to its equipment, facilities, or service within the scope of such certificate, as the development of the business and the demands of the public shall require . . .” The language of this section would seem to preclude the Commission from attaching terms and conditions to a certificate which would deprive the public of the best type of service which could be rendered between ports by a water carrier. In view of this difference between the statutory authority of the Commission to prescribe the service of water carriers and of motor carriers, our decisions relating to the Commission’s power as to motor carriers in this respect are not controlling as to the Commission’s power to regulate the details of the service of water carriers. We can find no authority for alteration of Seatrain’s certificate from the Commission’s power to fix "terms and conditions.”
Nor do we think that the Commission’s ruling was justified by the language of §315 (c) which authorizes it to “suspend, modify, or set aside its orders under this part upon such notice and in such manner as it shall deem proper.” That the word “order,” as here used, was intended to describe something different from the word “certificate” used in other places, is clearly shown by the way both these words are used in the Act. Section 309 describes the certificate, the method of obtaining it, and its scope and effect, but it nowhere refers to the word “order.” Section 315 of the Act, having specific reference to orders, and which in subsection (c), here relied on, authorizes suspension, alteration, or modification of orders, nowhere mentions the word “certificate.” It is clear that the “orders” referred to in § 315 (c) are formal commands of the Commission relating to its procedure and the rates, fares, practices, and like things coming within its authority. But, as the Commission has said as to motor carrier certificates, while the procedural “orders” antecedent to a water carrier certificate can be modified from time to time, the certificate marks the end of that proceeding. The certificate, when finally granted and the time fixed for rehearing it has passed, is not subject to revocation in whole or in part except as specifically authorized by Congress. Consequently, the Commission was without authority to revoke Seatrain’s certificate. That certificate, properly interpreted, authorized it to carry commodities generally, including freight cars, on the routes for which the certificate originally issued. The judgment of the District Court is
Affirmed.
Me. Justice Rutledge concurs in the result.
For a description of Seatrain equipment, see Investigation of Seatrain Lines, Inc., 1951. C. C. 215, 218-222.
See Investigation of Seatrain Lines, Inc., supra; Seatrain Lines, Inc. v. Akron, C. & Y. R. Co., 226 I. C. C. 7; Hoboken Manufacturers’ R. Co. v. Abilene & Southern R. Co., 248 I. C. C. 109, but see Commissioner Patterson dissenting, id. at 120.
24 Stat. 379 (as amended), 49 U. S. C. § 1 et seq. (railroads); 49 Stat. 543, 54 Stat. 919,49 U. S. C. § 301 et seq. (motor carriers); 54 Stat. 929,49 U. S. C. § 901 et seq. (water carriers).
Commissioner Eastman, Chairman of the Commission’s Legislative Committee, reporting to the Senate Committee on Interstate Commerce on S. 2009 on January 29, 1940, stated, “This bill leaves section 212 (a) unchanged, and has no corresponding provision in the new part III. While there is room for argument, we are inclined to believe that provision for the revocation or suspension of water carrier certificates or permits is not essential, if adequate penalty provisions are provided for violations of part III. Revocation or suspension, in the case of motor carriers, is believed to be the most effective means of enforcement, since there are so many such carriers, and the operations of the great majority are so small, that enforcement through penal actions in courts presents many practical difficulties; but this should not be true of water carriers.”
Chicago, St. P., M. & O. R. Co. v. United States, 322 U. S. 1; Crescent Express Lines v. United States, 320 U. S. 401; Noble v. United States, 319 U. S. 88. See also Smith Bros. Revocation of Certificate, 33 M. C. C. 465; Quaker City Bus Co., 38 M. C. C. 603.
And §§ 316 and 317 of the Act pointedly treat an order as one thing and a certificate as another.
See Smith Bros. Revocation of Certificate, supra, Quaker City Bus Co., supra. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
65
] |
WESTERN MARYLAND RAILWAY CO. v. ROGAN et al., CONSTITUTING THE STATE TAX COMMISSION OF MARYLAND.
No. 205.
Argued November 28-29, 1950.
Decided February 26, 1951.
William C. Purnell argued the cause and filed a brief for appellant.
Hall Hammond, Attorney General of Maryland, and Harrison L. Winter argued the cause and filed a brief for appellees.
Mr. Justice Douglas
delivered the opinion of the Court.
This is a companion case to Canton R. Co. v. Rogan, ante, p. 511. This appellant likewise challenges the validity under Art. I, § 10, cl. 2 of the Constitution of the application of the Maryland franchise tax to the extent that the gross receipts by which the tax is measured include revenues derived from the transportation of goods moving in foreign trade.
Western Maryland Railway Company is an interstate common carrier by rail with lines in Maryland, West Virginia and Pennsylvania. It operates several piers in the port of Baltimore for handling cargoes of coal, ores and general merchandise, as well as a grain elevator. A substantial proportion of Western Maryland’s freight traffic from and to these facilities consists of the transportation of goods imported into or to be exported from the United States.
The present case concerns the taxable years 1945 and 1946. For 1945 Western Maryland reported gross receipts of $33,156,236.74, of which the State Tax Commission, pursuant to the statutory formula, apportioned $13,219,822.62 to Maryland. For 1946 the amounts were $30,844,132.74 and $12,322,817.41 respectively. In subsequent amended returns Western Maryland excluded from taxable receipts the sums of $2,505,322.58 for 1945 and $5,405,559.44 for 1946. It claimed that these amounts represented revenues from the transportation over its lines of exports and imports and were therefore beyond the state’s power to tax. After a hearing, the Commission rejected this contention. Its assessment was sustained, and the case is here on appeal.
What we have said in Canton R. Co. v. Rogan, supra, is dispositive of this case. The present facts illustrate how wide a zone of tax immunity would be created if the contrary holding were made in the Canton R. Co. case. There we were dealing with the handling of exports and imports within a port. Here we have transportation of exports and imports to and from the port. If Maryland were required to grant tax immunity to the services involved in getting the exports to the port and the imports to their destination, so would any other State. The ultimate impact of such a holding is difficult to measure, since manifold services are involved in the movement of exports and imports within the country. Problems of this nature, like many problems in the law, involve the drawing of lines. So far as taxes on activities connected with bringing exports to or imports from the ship are concerned, we think the line must be drawn at the water’s edge. Whether loading and unloading would be exempt is a question we reserve.
Affirmed.
The Chief Justice took no part in the consideration or decision of this case.
[For opinion of Mr. Justice Jackson, joined by Mr. Justice Frankfurter, reserving judgment in this case and in No. 96, Canton R. Co. v. Rogan, see ante, p. 511.]
Md. Ann. Code (1943 Supp.), Art. 81, §§ 94% and 95. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
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"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
116
] |
CHEROKEE NATION OF OKLAHOMA et al. v. LEAVITT, SECRETARY OF HEALTH AND HUMAN SERVICES, et al.
No. 02-1472.
Argued November 9, 2004
Decided March 1, 2005
Breyer, J., delivered the opinion of the Court, in which Stevens, O’Connor, Kennedy, Souter, Thomas, and Ginsburg, JJ., joined. Scalia, J., filed an opinion concurring in part, post, p. 647. Rehnquist, C. J., took no part in the decision of the cases.
Lloyd B. Miller argued the cause for petitioners in No. 02-1472 and respondent in No. 03-853. With him on the briefs were Arthur Lazarus, Jr., Harry R. Sachse, William R. Perry, Carter G. Phillips, and Stephen B. Kinnaird.
Sri Srinivasan argued the cause for the federal parties in both cases. With him on the brief were Acting Solicitor General Clement, Assistant Attorney General Keisler, Deputy Solicitor General Kneedler, Barbara C. Biddle, Jeffrica Jenkins Lee, and Aleav M. Azar II.
Together with No. 03-853, Leavitt, Secretary of Health and Human Services v. Cherokee Nation of Oklahoma, on certiorari to the United States Court of Appeals for the Federal Circuit.
Briefs of amici curiae urging reversal in No. 02-1472 and affirmance in No. 03-853 were filed for the National Congress of American Indians by Edward C. DuMont; and for the Tunica-Biloxi Tribe of Louisiana by Michael P. Gross and C. Bryant Rogers. Ian Heath Gershengorn, Donald B. Verrilli, Jr., Herbert L. Fenster, and Robin S. Conrad filed a brief for the Chamber of Commerce of the United States of America et al. as amici curiae urging affirmance in No. 03-853.
Geoffrey D. Strommer, Joseph H. Webster, and Charles A. Hobbs filed a brief for the Seldovia Village Tribe as amicus curiae.
Justice Breyer
delivered the opinion of the Court.
The United States and two Indian Tribes have entered into agreements in which the Government promises to pay certain “contract support costs” that the Tribes incurred during fiscal years (FYs) 1994 through 1997. The question before us is whether the Government’s promises are legally binding. We conclude that they are.
I
The Indian Self-Determination and Education Assistance Act (Act), 88 Stat. 2203, as amended, 25 U. S. C. § 450 et seq. (2000 ed. and Supp. II), authorizes the Government and Indian tribes to enter into contracts in which the tribes promise to supply federally funded services, for example tribal health services, that a Government agency would otherwise provide. See §450f(a); see also §450a(b). The Act specifies that the Government must pay a tribe’s costs, including administrative expenses. See §§ 450j-1(a)(1) and (2). Administrative expenses include (1) the amount that the agency would have spent “for the operation of the progra[m]” had the agency itself managed the program, § 450j-1(a)(1), and (2) “contract support costs,” the costs at issue here. § 450j-l(a)(2).
The Act defines “contract support costs” as other “reasonable costs” that a federal agency would not have incurred, but which nonetheless “a tribal organization” acting “as a contractor” would incur “to ensure compliance with the terms of the contract and prudent management.” Ibid. “[Contract support costs” can include indirect administrative costs, such as special auditing or other financial management costs, § 450j-1(a)(3)(A)(ii); they can include direct costs, such as workers’ compensation insurance, § 450j-l(a)(3)(A)(i); and they can include certain startup costs, § 450j — 1 (a)(5). Most contract support costs are indirect costs “generally calculated by applying an ‘indirect cost rate’ to the amount of funds otherwise payable to the Tribe.” Brief for Federal Parties 7; see 25 U. S. C. §§ 450b(f)-(g).
The first case before us concerns Shoshone-Paiute contracts for FYs 1996 and 1997 and a Cherokee Nation contract for 1997. The second case concerns Cherokee Nation contracts for FYs 1994, 1995, and 1996. In each contract, the Tribe agreed to supply health services that a Government agency, the Indian Health Service, would otherwise have provided. See, e.g., App. 88-92 (Shoshone-Paiute Tribal Health Compact), 173-175 (Compact between the United States and the Cherokee Nation). Each contract included an “Annual Funding Agreement” with a Government promise to pay contract support costs. See, e. g., id., at 104-128, 253-264. In each instance, the Government refused to pay the full amount promised because, the Government says, Congress did not appropriate sufficient funds.
Both cases began as administrative proceedings. In the first case, the Tribes submitted claims seeking payment under the Contract Disputes Act of 1978, 92 Stat. 2383, 41 U. S. C. §601 et seq., and the Act, 25 U. S. C. §§450m-1(a), (d), 458cc(h), from the Department of the Interior (which manages the relevant appropriations). See, e. g., App. 150-151, 201-203. The Department denied their claim; they then brought a breach-of-contract action in the Federal District Court for the Eastern District of Oklahoma seeking $3.5 million (Shoshone-Paiute) and $3.4 million (Cherokee Nation). See Cherokee Nation of Okla. v. Thompson, 311 F. 3d 1054, 1059 (CA10 2002). The District Court found against the Tribes. Cherokee Nation of Okla. v. United States, 190 F. Supp. 2d 1248 (ED Okla. 2001). And the Court of Appeals for the Tenth Circuit affirmed. 311 F. 3d 1054 (2002).
In the second case, the Cherokee Nation submitted claims to the Department of the Interior. See App. 229-230. A contracting officer denied the claims; the Board of Contract Appeals reversed this ruling, ordering the Government to pay $8.5 million in damages. Cherokee Nation of Okla., 1999-2 BCA ¶ 30,462, p. 150488; App. to Pet. for Cert. in No. 03-853, pp. 38a-40a. The Government sought judicial review in the Court of Appeals for the Federal Circuit. The Federal Circuit affirmed the Board’s determination for the Tribe. Thompson v. Cherokee Nation of Okla., 334 F. 3d 1075 (2003).
In light of the identical nature of the claims in the two cases and the opposite results that the two Courts of Appeals have reached, we granted certiorari. We now affirm the Federal Circuit’s judgment in favor of the Cherokee Nation, and we reverse the Tenth Circuit’s judgment in favor of the Government.
II
The Government does not deny that it promised to pay the relevant contract support costs. . Nor does it deny that it failed to pay. Its sole defense consists of the argument that it is legally bound by its promises if, and only if, Congress appropriated sufficient funds, and that, in this instance, Congress failed to do so.
The Government in effect concedes yet more. It does not deny that, were these contracts ordinary procurement contracts, its promises to pay would be legally binding. The Tribes point out that each year Congress appropriated far more than the amounts here at issue (between $1,277 billion and $1,419 billion) for the Indian Health Service “to carry out,” inter alia, “the Indian Self-Determination Act.” See 107 Stat. 1408 (1993); 108 Stat. 2527-2528 (1994); 110 Stat. 1321-189 (1996); id., at 3009-212 to. 3009-213. These appropriations Acts contained no relevant statutory restriction.
The Tribes (and their amici) add, first, that this Court has said that
“a fundamental principle of appropriations law is that where Congress merely appropriates lump-sum amounts without statutorily restricting what can be done with those funds, a clear inference arises that it does not intend to impose legally binding restrictions, and indicia in committee reports and other legislative history as to how the funds should or are expected to be spent do not establish any legal requirements on the agency.” Lincoln v. Vigil, 508 U. S. 182, 192 (1993) (internal quotation marks omitted).
See also International Union, United Auto., Aerospace & Agricultural Implement Workers of America v. Donovan, 746 F. 2d 855, 860-861 (CADC 1984) (Scalia, J.); Blackhawk Heating & Plumbing Co. v. United States, 224 Ct. Cl. 111, 135, and n. 9, 622 F. 2d 539, 552, and n. 9 (1980).
The Tribes and their amici add, second, that as long as Congress has appropriated sufficient legally unrestricted funds to pay the contracts at issue, the Government normally cannot back out of a promise to pay on grounds of “insufficient appropriations,” even if the contract uses language such as “subject to the availability of appropriations,” and even if an agency’s total lump-sum appropriation is insufficient to pay all the contracts the agency has made. See Ferris v. United States, 27 Ct. Cl. 542, 546 (1892) (“A contractor who is one of several persons to be paid out of an appropriation is not chargeable with knowledge of its administration, nor can his legal rights be affected or impaired by its maladministration or by its diversion, whether legal or illegal, to other objects”); see also Blackhawk, supra, at 135, and n. 9, 622 F. 2d, at 552, and n. 9.
As we have said, the Government denies none of this. Thus, if it is nonetheless to demonstrate that its promises were not legally binding, it must show something special about the promises here at issue. That is precisely what the Government here tries, but fails, to do.
A
The Government initially argues that the Act creates a special kind of “self-determination eontrac[t]” with a “unique, government-to-government nature” that differentiates it from “standard government procurement contracts.” Brief for Federal Parties 4. Because a tribe does not bargain with the Government at arm’s length, id., at 24, the law should charge it with knowledge that the Government has entered into other, similar contracts with other tribes; the tribe should bear the risk that a total lump-sum appropriation (though sufficient to cover its own contracts) will not prove sufficient to pay all similar contracts, id., at 23-25. Because such a tribe has elected to “ste[p] into the shoes of a federal agency,” id., at 25, the law should treat it like an agency; and an agency enjoys no legal entitlement to receive promised amounts from Congress, id., at 24-25. Rather, a tribe should receive only the portion of the total lump-sum appropriation allocated to it, not the entire sum to which a private contractor might well be entitled. Id., at 24.
The Government finds support for this special treatment of its promises made pursuant to the Act by pointing to a statutory provision stating that “‘no [self-determination] contract . . . shall be construed to be a procurement contract,’ ” id., at 23 (quoting 25 U. S. C. §450b(j); alterations in original). It finds supplementary support in another provision that says that a tribe need not deliver services ‘“in excess of the amount of funds awarded/” Brief for Federal Parties 24 (quoting 25 U. S. C. §4501(c); citing § 458aaa-7(k)).
These statutory provisions, in our view, fall well short of providing the support the Government needs. In general, the Act’s language runs counter to the Government’s view. That language strongly suggests that Congress, in respect to the binding nature of a promise, meant to treat alike promises made under the Act and ordinary contractual promises (say, those made in procurement contracts). The Act, for example, uses the word “contract” 426 times to describe the nature of the Government’s promise; and the word “contract” normally refers to “a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty,” Restatement (Second) of Contracts §1 (1979). The Act also describes payment of contract support costs in a provision, setting forth a sample “Contract.” 25 U. S. C. § 450l(c) (Model Agreement §§ 1(a)(1), (b)(4)). Further, the Act says that if the Government refuses to pay, then contractors are entitled to “money damages” in accordance with the Contract Disputes Act. 25 U. S. C. §450m-1(a); see also §§450m-1(d), 458ee(h).
Neither do the Act’s general purposes support any special treatment. The Act seeks greater tribal self-reliance brought about through more “effective and meaningful participation by the Indian people” in, and less “Federal domination” of, “programs for, and services to, Indians.” §450a(b). The Act also reflects a congressional concern with Government’s past failure adequately to reimburse tribes’ indirect administrative costs and a congressional decision to require payment of those costs in the future. See, e. g., § 450j—1(g); see also §§ 450j-1(a), (d)(2).
The specific statutory language to which the Government points — stating that tribes need not spend funds “in excess of the amount of funds awarded,” § 450i(c) (Model Agreement § 1(b)(5)) — does not help the Government. Cf. Brief for Federal Parties 18. This kind of statement often appears in ordinary procurement contracts. See, e.g., 48 CFR §52.232-20(d)(2) (2004) (sample “Limitation of Cost” clause); see generally W. Keyes, Government Contracts Under the Federal Acquisition Regulation § 32.38, p. 724 (3d ed. 2003). Nor can the Government find adequate support in the statute’s statement that “no [self-determination] contract . . . shall be construed to be a procurement contract.” 25 U. S. C. §450b(j). In context, that statement seems designed to relieve tribes and the Government of the technical burdens that often accompany procurement, not to weaken a contract’s binding nature. Cf. 41 CFR §3-4.6001 (1976) (applying procurement rules to tribal contracts); S. Rep. No. 100-274, p. 7 (1987) (noting that application of procurement rules to contracts with tribes “resulted in excessive paperwork and unduly burdensome reporting requirements”); id., at 18-19 (describing decision not to apply procurement rules to tribal contracts as intended to “greatly reduc[e]” the federal bureaucracy associated with them). Finally, we have found no indication that Congress believed or accepted the Government’s current claim that, because of mutual self-awareness among tribal contractors, tribes, not the Government, should bear the risk that an unrestricted lump-sum appropriation would prove insufficient to pay all contractors. Compare Brief for Federal Parties 23-24 with Ferris, 27 Ct. Cl., at 546.
B
The Government next points to an Act proviso, which states:
“Notwithstanding any other provision in this subchap-ter, the provision of funds under this subchapter is [1] subject to the availability of appropriations and the Secretary [2] is not required to reduce funding for programs, projects, or activities serving a tribe to make funds available to another tribe or tribal organization under this subchapter.” 25 U. S. C. §450j-1(b) (emphasis and bracketed numbers added).
The Government believes that the two italicized phrases, taken separately or together, render its promises nonbinding.
1
We begin with phrase [2]. This phrase, says the Government, makes nonbinding a promise to pay one tribe’s costs where doing so would require funds that the Government would otherwise devote to “programs, projects, or activities serving ... another tribe,” ibid. See Brief for Federal Parties 27-36. This argument is inadequate, however, for at the least it runs up against the fact — found by the Federal Circuit, see 334 F. 3d, at 1093-1094, and nowhere here denied— that the relevant congressional appropriations contained other unrestricted funds, small in amount but sufficient to pay the claims at issue. And as we have said, supra, at 636-638, the Government itself tells us that, in the case of ordinary contracts, say, procurement contracts,
“if the amount of an unrestricted appropriation is sufficient to fund the contract, the contractor is entitled to payment even if the agency has allocated the funds to another purpose or assumes other obligations that exhaust the funds.” Brief for Federal Parties 23 (emphasis added).
See, e. g., Lincoln, 508 U. S., at 192; Blackhawk, 224 Ct. Cl., at 135, and n. 9, 622 F. 2d, at 552, and n. 9; Ferris, supra, at 546.
The Government argues that these other funds, though legally unrestricted (as far as the appropriations statutes’ language is concerned), were nonetheless unavailable to pay “contract support costs” because the Government had to use those funds to satisfy a critically important need, namely, to pay the costs of “inherent federal functions,” such as the cost of running the Indian Health Service’s central Washington office. Brief for Federal Parties 9-10, 27-34. This argument cannot help the Government, however, for it amounts to no more than a claim that the agency has allocated the funds to another purpose, albeit potentially a very important purpose. If an important alternative need for funds cannot rescue the Government from the binding effect of its promises where ordinary procurement contracts are at issue, it cannot rescue the Government here, for we can find nothing special in the statute’s language or in the contracts.
The Government’s best effort to find something special in the statutory language is unpersuasive. The Government points to language that forbids the Government to enter into a contract with a tribe in which it promises to pay the tribe for performing federal functions. See 25 U. S. C. § 458aaa-6(c)(1)(A)(ii); see also §§450f(a)(2)(E), 450j-1(a)(1), 450l(c) (Model Agreement § 1(a)(2)). Language of this kind, however, which forbids the Government to contract for certain kinds of services, says nothing about the source of funds used to pay for the supply of contractually legitimate activities (and that is what is at issue here).
We recognize that agencies may sometimes find that they must spend unrestricted appropriated funds to satisfy needs they believe more important than fulfilling a contractual obligation. But the law normally expects the Government to avoid such situations, for example, by refraining from making less essential contractual commitments; or by asking Congress in advance to protect funds needed for more essential purposes with statutory earmarks; or by seeking added funding from Congress; or, if necessary, by using unrestricted funds for the more essential purpose while leaving the contractor free to pursue appropriate legal remedies arising because the Government broke its contractual promise. See New York Airways, Inc. v. United States, 177 Ct. Cl. 800, 808-811, 369 F. 2d 743, 747-748 (1966) (per curiam); 31 U. S. C. §§ 1341(a)(1)(A) and (B) (Anti-Deficiency Act); 41 U. S. C. § 601 et seq. (Contract Disputes Act); 31 U. S. C. § 1304 (Judgment Fund); see generally 2 General Accounting Office, Principles of Federal Appropriations Law 6-17 to 6-19 (2d ed. 1992) (hereinafter GAO Redbook). The Government, without denying that this is so as a general matter of procurement law, says nothing to convince us that a different legal rule should apply here.
2
Phrase [1] of the proviso says that the Government’s provision of funds under the Act is “subject to the availability of appropriations.” 25 U.S.C. §450j—1(b). This language does not help the Government either. Language of this kind is often used with respect to Government contracts. See, e.g., 22 U.S.C. §2716(a)(1); 42 U.S.C. §§6249(b)(4), 12206(d)(1). This kind of language normally makes clear that an agency and a contracting party can negotiate a contract prior to the beginning of a fiscal year but that the contract will not become binding unless and until Congress appropriates funds for that year. See, e.g., Blackhawk, supra, at 133-138, 622 F. 2d, at 551-553; see generally 1 GAO Redbook 4-6 (3d ed. 2004); 2 id., at 6-6 to 6-8, 6-17 to 6-19 (2d ed. 1992). It also makes clear that a Government contracting officer lacks any special statutory authority needed to bind the Government without regard to the availability of appropriations. See Ferris, 27 Ct. Cl., at 546; New York Airways, supra, at 809-813, 369 F. 2d, at 748-749; Dougherty v. United States, 18 Ct. Cl. 496, 503 (1883); 31 U.S.C. §§ 1341(a)(1)(A) and (B) (providing that without some such special authority, a contracting officer cannot bind the Government in the absence of an appropriation). Since Congress appropriated adequate unrestricted funds here, phrase [1], if interpreted as ordinarily understood, would not help the Government.
The Government again argues for a special interpretation. It says the language amounts to “an affirmative grant of authority to the Secretary to adjust funding levels based on appropriations.” Brief for Federal Parties 41 (emphasis in original). In so arguing, the Government in effect claims (on the basis of this language) to have the legal right to disregard its contractual promises if, for example, it reasonably finds other, more important uses for an otherwise adequate lump-sum appropriation.
In our view, however, the Government must again shoulder the burden of explaining why, in the context of Government contracts, we should not give this kind of statutory language its ordinary contract-related interpretation, at least in the absence of a showing that Congress meant the contrary. We believe it important to provide a uniform interpretation of similar language used in comparable statutes, lest legal uncertainty undermine contractors’ confidence that they will be paid, and in turn increase the cost to the Government of purchasing goods and services. See, e. g., Franconia Associates v. United States, 536 U. S. 129, 142 (2002); United States v. Winstar Corp., 518 U. S. 839, 884-885, and n. 29 (1996) (plurality opinion); id., at 913 (Breyer, J., concurring); Lynch v. United States, 292 U. S. 571, 580 (1934). The Government, in our view, has provided no convincing argument for a special, rather than ordinary, interpretation here.
The Government refers to legislative history, see Brief for Federal Parties 41-42 (citing, e. g., S. Rep. No. 100-274, at 48, 57), but that history shows only that Executive Branch officials would have liked to exercise discretionary authority to allocate a lump-sum appropriation too small to pay for all the contracts that the Government had entered into; the history does not show that Congress granted such authority. Nor can we find sufficient support in the other statutory provisions to which the Government points. See 25 U. S. C. §450j-1 (c)(2) (requiring the Government to report underpayments of promised contract support costs); 107 Stat. 1408 (Appropriations Act for FY 1994) (providing that $7.5 million for contract support costs in “initial or expanded” contracts “shall remain available” until expended); 108 Stat. 2528 (same for FY 1995); 110 Stat. 1321-189 (same for FY 1996); id., at 3009-213 (same for FY 1997). We cannot adopt the Government’s special interpretation of phrase [1] of the proviso.
C
Finally, the Government points to a later enacted statute, § 314 of the Department of the Interior and Related Agencies Appropriations Act, 1999, which says:
“Notwithstanding any other provision of law [the] amounts appropriated to or earmarked in committee reports for the ... Indian Health Service ... for payments to tribes ... for contract support costs ... are the total amounts available for fiscal years 1994 through 1998 for such purposes.” 112 Stat. 2681-288 (emphasis added).
See Brief for Federal Parties 45-50. The Government adds that congressional Committee Reports “earmarked,” i. e., restricted, appropriations available to pay “contract support costs” in each of FYs 1994 through 1997. Id., at 48. And those amounts have long since been spent. See id., at 12. Since those amounts “are the total amounts available for” payment of “contract support costs,” the Government says, it is unlawful to pay the Tribes’ claims. Id., at 45-48.
The language in question is open to the interpretation that it retroactively bars payment of claims arising under 1994 through 1997 contracts. It is also open to another interpretation. Just prior to Congress’ enactment of § 314, the Interior Department’s Board of Contract Appeals considered a case similar to the present ones and held that the Government was legally bound to pay amounts it had promised in similar contracts. Alamo Navajo School Bd., Inc. and Miccosukee Corp., 1998-2 BCA ¶ 29,831, p. 147681 (1997), and ¶ 29,832, p. 147699 (1998). The Indian Health Service contemporaneously issued a draft document that suggested the use of unspent funds appropriated in prior years to pay unpaid “contract support costs.” App. 206-209. Indeed, the document referred to use of unobligated funds from years including 1994 through 1997 to pay “contract support cost” debts. Id., at 206-207. Section 314’s language may be read as simply forbidding the Service to use those leftover funds for that purpose.
On the basis of language alone we would find either interpretation reasonable. But there are other considerations. The first interpretation would undo a binding governmental contractual promise. A statute that retroactively repudiates the Government’s contractual obligation may violate the Constitution. See, e. g., Winstar, supra, at 875-876 (plurality opinion); Perry v. United States, 294 U. S. 330, 350-351 (1935); Lynch, supra, at 579-580; United States v. Klein, 13 Wall. 128, 144-147 (1872); see also, e. g., Winstar, supra, at 884-885, and n. 29 (plurality opinion) (describing practical disadvantages flowing from governmental repudiation); Lynch, supra, at 580 (same). And such an interpretation is disfavored. See Clark v. Martinez, ante, at 380-382; Zadvydas v. Davis, 533 U. S. 678, 689 (2001); Edward J. DeBartolo Corp. v. Florida Gulf Coast Building & Constr. Trades Council, 485 U. S. 568, 575 (1988). This consideration tips the balance against the retroactive interpretation.
The Government, itself not relying on either interpretation, offers us a third. It says that the statute simply clarifies earlier ambiguous appropriations language that was wrongly read as unrestricted. Brief for Federal Parties 48 (citing Red Lion Broadcasting Co. v. FCC, 395 U. S. 367, 380-381 (1969)). The earlier appropriations statutes, however, were not ambiguous. The relevant ease law makes clear that restrictive language contained in Committee Reports is not legally binding. See, e. g., Lincoln, 508 U. S., at 192; International Union, 746 F. 2d, at 860-861; Blackhawk, 224 Ct. Cl., at 135, and n. 9, 622 F. 2d, at 552, and n. 9. No other restrictive language exists. The earlier appropriations statutes unambiguously provided unrestricted lump-sum appropriations. We therefore cannot accept the Government’s interpretation of § 314.
Hence we, like the Federal Circuit, are left with the second interpretation, which we adopt, concluding that Congress intended it in the circumstances. See Zadvydas, supra, at 689; cf. 334 F. 3d, at 1092. So interpreted, the provision does not bar recovery here.
For these reasons, we affirm the judgment of the Federal Circuit; we reverse the judgment of the Tenth Circuit; and we remand the cases for further proceedings consistent with this opinion.
It is so ordered.
The Chief Justice took no part in the decision of these cases. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
25
] |
WALTERS v. METROPOLITAN EDUCATIONAL ENTERPRISES, INC., et al.
No. 95-259.
Argued November 6, 1996
Decided January 14, 1997
Constantine John Gekas argued the cause for petitioner in No. 95-259. With him on the briefs was Adrianne S. Harvitt. Deputy Solicitor General Waxman argued the cause for petitioner in No. 95-779. On the briefs were Solicitor General Days, Acting Solicitor General Dellinger, Assistant Attorney General Patrick, Deputy Solicitor General Bender, Beth S. Brinkmann, C. Gregory Stewart, Gwendolyn Young Reams, Carolyn L. Wheeler, and C. Gregory Stewart.
Patrick J. Falahee, Jr., argued the cause and filed a brief for respondents in both cases.
Together with No. 95-779, Equal Employment Opportunity Commission v. Metropolitan Educational Enterprises, Inc., et al., also on certio-rari to the same court.
Briefs of amici curiae urging reversal were filed for the American Federation of Labor and Congress of Industrial Organizations by Jonathan P. Hiatt, Marsha S. Berzon, Virginia A. Seitz, and Laurence Gold; for the Lawyers’ Committee for Civil Rights Under Law by Lawrence J. Latto, Herbert J. Hansell, Paul C. Saunders, Norman Redlich, Barbara R. Armuine, Thomas J. Henderson, Richard T. Seymour, and Teresa A. Ferrante; and for the Women’s Legal Defense Fund et al. by Judith L. Lichtman, Donna R. Lenhoff, and Helen L. Norton. brief for the Illinois
Donald J. State Chamber of Commerce et al. as amici curiae urging affirmance. Foundation et al. as
Sharon L. amici curiae.
Justice Scalia
delivered the opinion of the Court.
Title VII of the Civil Rights employer who “has fifteen or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year.” 78 Stat. 253, as amended, 42 U. S. C. § 2000e(b). These cases present the question whether an employer “has” an employee on any working day on which the employer maintains an employment relationship with the employee, or only on working days on which the employee is actually receiving compensation from the employer.
I
Petitioner Darlene Walters was employed by respondent Metropolitan Educational Enterprises, Inc., a retail distributor of encyclopedias, dictionaries, and other educational materials. In 1990, she filed a charge with the Equal Employment Opportunity Commission (EEOC), claiming that Metropolitan had discriminated against her on account of her sex in failing to promote her to the position of credit manager. Soon after that, Metropolitan fired her.
On April 7,1993, petitioner EEOC filed suit against Metropolitan and its owner, respondent Leonard Bieber (hereinafter collectively Metropolitan), alleging that the firing constituted unlawful retaliation. Walters intervened in the suit. Metropolitan filed a motion to dismiss for lack of subject-matter jurisdiction, claiming that the company did not pass the 15-employee threshold for coverage under Title VII.
The District Court granted Metropolitan’s motion to dismiss, 864 F. Supp. 71 (ND Ill. 1994), relying on Zimmerman v. North American Signal Co., 704 F. 2d 347, 354 (CA7 1983), which affirmed a District Court’s decision to count employees toward the 15-employee threshold only on days on which they actually performed work or were being compensated despite their absence. On appeal from the District Court’s judgment, the Court of Appeals reaffirmed Zimmerman. 60 F. 3d 1225 (CA7 1995). We granted certiorari. 516 U. S. 1171 (1996).
II
Petitioners’ suit rests on Title VII’s antiretaliation provision, 42 U. S. C. § 2000e-3(a), which makes it unlawful for an employer to discriminate against any of its employees for filing complaints of discrimination. Metropolitan was subject to Title VII, however, only if, at the time of the alleged retaliation, it met the statutory definition of “employer,” to wit: “a person engaged in an industry affecting commerce who has fifteen or more employees for each working day in each of twenty or more calendar weeks in the current or preceding calendar year.” §2000e(b).
Metropolitan’s “working days” are Monday through Friday, and the “current” and “preceding” calendar years for purposes of the retaliatory-discharge claim are 1990 and 1989. The parties have stipulated that Metropolitan failed to satisfy the 15-employee threshold in 1989. During most of 1990, Metropolitan had between 15 and 17 employees on its payroll on each working day; but in only nine weeks of the year was it actually compensating 15 or more employees on each working day (including paid leave as compensation). The difference resulted from the fact that Metropolitan had two part-time hourly employees who ordinarily skipped one working day each week.
A
The parties agree that, on any particular day, all of the individuals with whom an employer has an employment relationship are “employees” of that employer. See 42 U. S. C. §2000e(f) (defining “employee” to mean “an individual employed by an employer”). Thus, individuals who are not receiving compensation from their employer on the day in question nonetheless qualify as “employees” on that day for purposes of §2000e(b)’s definition of “employer.” Respondents contend, however, and the Seventh Circuit held here, that an employer “has” an employee for a particular working day within the meaning of § 2000e(b) only when he is actually compensating the individual on that day. This position has also been adopted by the Eighth Circuit. See EEOC v. Garden & Associates, Ltd., 956 F. 2d 842, 843 (1992).
Petitioners “has” an employee is no different from the test for when an individual is an employee: whether the employer has an employment relationship with the individual on the day in question. This test is generally called the “payroll method,” since the employment relationship is most readily demonstrated by the individual’s appearance on the employer’s payroll. The payroll method was approved in dictum by the Fifth Circuit in Dumas v. Mount Vernon, 612 F. 2d 974, 979, n. 7 (1980), and was adopted by the First Circuit in Thurber v. Jack Reilly’s, Inc., 717 F. 2d 633, 634-635 (1983), cert. denied, 466 U. S. 904 (1984); see also Vera-Lozano v. International Broadcasting, 50 F. 3d 67, 69-70 (CA1 1995) (reaffirming • Thurber). The payroll method has also been adopted by the EEOC under the Age Discrimination in Employment Act of 1967, which defines “employer” in precisely the way Title VII does. See 29 U. S. C. § 630(b); Equal Employment Opportunity Commission Notice No. N-915-052, Policy Guidance: Whether Part-Time Employees Are Employees (Apr. 1990), reprinted in App. to Pet. for Cert. 30a-40a (hereinafter EEOC Policy Guidance). The Department of Labor has likewise adopted the payroll method under the Family and Medical Leave Act of 1993, which defines “employer” as a person who “employs 50 or more employees for each working day during each of 20 or more calendar workweeks in the current or preceding calendar year.” See 29 U. S. C. §2611(4)(A)(i); 29 CFR §§825.105(b)-(d) (1996). In its administration of Title VII, the EEOC has expressed a preference for the payroll method, see EEOC Policy Guidance, but it lacks rulemaking authority over the issue, see 42 U. S. C. § 2000e-12(a); EEOC v. Arabian American Oil Co., 499 U. S. 244, 257 (1991).
We think that the payroll method represents the fair reading of the statutory language, which sets as the criterion the number of employees that the employer “has” for each working day. In the absence of an indication to the contrary, words in a statute are assumed to bear their “ordinary, contemporary, common meaning.” Pioneer Investment Services Co. v. Brunswick Associates Ltd. Partnership, 507 U. S. 380, 388 (1993) (internal quotation marks and citation omitted). In common parlance, an employer “has” an employee if he maintains an employment relationship with that individual. See 1 The New Shorter Oxford English Dictionary 1198 (1993) (def. 2: defining “have” to mean to “[p]ossess in a certain relationship”); American Heritage Dictionary 828 (3d ed. 1992) (def. 2: defining “have” to mean “to occupy a particular relation to”; giving as an example “had a great many disciples”); Webster’s New International Dictionary 1145 (2d ed. 1950) (def. 2: defining “have” to mean “[t]o possess, as something which appertains to, is connected with, or affects, one”; giving as an example “to have an ungrateful son”).
employees he had for a given working day, he would give as the answer the number of employees who were actually performing work on that day. That is possibly so. Language is a subtle enough thing that the phrase “have an employee for a given working day” (as opposed to “have an employee on a given day”) may be thought to convey the idea that the employee must actually be working on the day in question. But no one before us urges that interpretation of the language, which would count even salaried employees only on days that they are actually working. Such a disposition is so improbable and so impossible to administer (few employers keep daily attendance records of all their salaried employees) that Congress should be thought to have prescribed it only if the language could bear no other meaning. Metropolitan’s own proposed test does not focus on the question, “How many employees did you have at work on a particular working day?” but rather the question, “How many employees were you compensating on that day?” That question, unlike the other one, simply cannot be derived from any possible reading of the text.
B
The Court of Appeals rejected the straightforward meaning of “has fifteen or more employees” in § 2000e(b) because of a different supposed consequence of the added statutory qualification “for each working day.” In its view, if only the employment relationship were the intended focus, the statute would simply have required the employer to “ha[ve] fifteen or more employees ... in each of twenty or more calendar weeks,” without the further refinement “for each working day” of each of those weeks. This point would have some force (though it would still not produce the Court of Appeals’ focus on the number of employees being compen sated on a particular day) if indeed the ordinary meaning of “has fifteen or more employees” rendered “for each working day” superfluous. Statutes must be interpreted, if possible, to give each word some operative effect. United States v. Menasche, 348 U. S. 528, 538-539 (1955). But we do not agree that giving “has fifteen or more employees” its ordinary meaning renders “for each working day” superfluous. Without that qualification, it would be unclear whether an employee who departed in the middle of a calendar week would count toward the 15-employee minimum for that week; with the qualification, it is clear that he does not. Similarly, the adjective “working” within the phrase “for each working day” eliminates any ambiguity about whether employees who depart after the end of the workweek, but before the end of the calendar week, count toward the 15-employee minimum for that week.
The Court of Appeals thought that the mere exclusion of part-week employees was an improbable purpose of the phrase. “[Instances where employees begin work on Wednesdays or depart on Thursdays,” it said, “are unlikely to occur with sufficient frequency to merit inclusion in a federal anti-discrimination statute.” 60 F. 3d, at 1228. But it is not a matter of carving out special treatment for this (supposedly minuscule) class — as would be the case if, without the phrase “for each working day,” part-week employees would unquestionably be counted toward the statutory minimum. Without the phrase one would not be sure whether to count them or not, and in at least some cases the matter would have to be litigated. (Does a company have 15 employees “in” a week where, on all except the last workday, it has only 14? “In” a week where it hires a new employee on Saturday, a nonworkday, to begin on the next Monday? “In” a week where, in mid-week, one of 14 employees quits and is replaced by a different 14th employee?) We are decidedly of the view that the “mere” elimination of evident ambiguity is ample — indeed, admirable — justification for the inclusion of a statutory phrase; and that purpose alone is enough to “merit” enactment of the phrase at issue here. Moreover, the phenomenon of midweek commencement and termination of employment seems to us not as rare as the Court of Appeals believed. For many businesses payday, and hence hiring- and firing-day, is the end of the month rather than the end of the week. Metropolitan itself experienced 10 midweek arrivals or departures from its roughly 15-employee work force during 1990. Brief for Petitioner in No. 95-259, pp. 10-11.
Metropolitan points produces some strange consequences with regard to the coverage of Title VII. For example, an employee who works irregular hours, perhaps only a few days a month, will be counted toward the 15-employee minimum for every week in the month. Metropolitan’s approach reduces this problem (though it does not eliminate it entirely): The employee will be counted so long as he works one hour each day of the workweek. On the other hand, Metropolitan’s approach produces unique peculiarities of its own: A company that has 15 employees working for it on each day of a 5-day workweek is covered, but if it decides to add Saturday to its workweek with only one less than its full complement of employees, it will become exempt from coverage (despite being in fact a “larger” business). Unsalaried employees who work the same number of hours per week are counted or not counted, depending on how their hours are scheduled. A half-time worker who works only mornings is counted; a half-time worker who works alternate days is not. The fact is that neither interpretation of the coverage provision can cause it to be an entirely accurate measure of the size of a business.
In any event, Metropolitan to practical consequences as the basis for deciding the question before us. The approach it suggests would turn the coverage determination into an incredibly complex and expensive factual inquiry. Applying it in the present cases required the parties to spend 10 months poring over Metropolitan’s payroll registers, timecards, work diaries, and other timekeeping records to determine, for each working day of a 2-year period, how many employees were at work, how many were being paid on salaries, how many were on paid holiday leave, how many were on paid vacation leave, and how many were on paid sick leave. For an employer with 15 employees and a 5-day workweek, the number of daily working histories for the 2-year period is 7,800. The problems with Metropolitan’s compensation-based approach are magnified when employees are “compensated” on days off in ways less clear cut than holiday, vacation, or sick leave. If, for example, employees accumulate seniority rights or entitlements to holiday bonuses on their unpaid days off, it would be necessary to determine (or litigate) whether they are “receiving compensation” on those days for purposes of the coverage determination. Under the interpretation we adopt, by contrast, all one needs to know about a given employee for a given year is whether the employee started or ended employment during that year and, if so, when. He is counted as an employee for each working day after arrival and before departure.
Ill
As we have described, in determining the existence of an employment relationship, petitioners look first and primarily to whether the individual in question appears on the employer’s payroll. Metropolitan did not challenge this aspect of petitioners’ approach; its objection was the more basic one that existence of an employment relationship was not the criterion. For their part, petitioners emphasize that what is ultimately critical under their method is the existence of an employment relationship, not appearance on the payroll; an individual who appears on the payroll but is not an “employee” under traditional principles of agency law, see, e. g., Nationwide Mut. Ins. Co. v. Darden, 503 U. S. 318, 323-324 (1992), would not count toward the 15-employee minimum. We agree with petitioners that the ultimate touchstone under § 2000e(b) is whether an employer has employment relationships with 15 or more individuals for each working day in 20 or more weeks during the year in question.
The parties’ stipulation in 1990 during which Metropolitan satisfied the 15-employee threshold using the payroll approach does not correspond precisely to the counting method petitioners have advocated here. The stipulation was arrived at by counting the number of employees on the payroll in each week of 1990, without regard to whether these employees were employed on each working day of the week. However, subtracting the nine weeks in which Metropolitan experienced midweek employment changes in 1990 from the 47 weeks of that year in which, according to the parties’ stipulation, Metropolitan had employment relationships with 15 or more employees, leaves 38 weeks in which Metropolitan satisfied the 15-employee threshold under the interpretation we adopt. Therefore, Metropolitan was an “employer” within the meaning of §2000e(b) for purposes of petitioners’ retaliatory-discharge claim.
* * *
The judgment of the Court of Appeals is reversed, and the cases are remanded for further proceedings consistent with this opinion.
It is so ordered.
Walters (but not the EEOC) alleged that, in addition to violating Title VII’s antiretaliation provision, Metropolitan also violated the basic antidis-crimination provision, 42 U. S. C. § 2000e-2(a), by failing to promote her to credit manager in September 1989. In granting Metropolitan’s motion to dismiss, the District Court stated that the relevant years for determining Metropolitan’s status as an employer were 1989 and 1990. 864 F. Supp. 71, 72 (ND Ill. 1994). For purposes of Walters’ discrimination claim, however, the relevant years were 1988 and 1989. Because Walters did not mention this issue in her petition for certiorari or her brief on the merits, we treat any objection to the District Court’s disposition of the matter as waived. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
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"Federal Housing Administration",
"Federal Home Loan Bank Board",
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"Comptroller General",
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"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
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"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
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"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
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"Renegotiation Board",
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"Railroad Retirement Board",
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"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
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"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
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"Unidentifiable",
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"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
31
] |
FARMERS RESERVOIR & IRRIGATION CO. v. McCOMB, WAGE & HOUR ADMINISTRATOR.
NO. 128.
Argued December 16, 1948.
Decided June 27, 1949.
Frank N. Bancroft and John P. Akolt argued the cause for the company. With them on the brief was Walter W. Blood.
Jeter S. Ray argued the cause for the Wage & Hour Administrator. With him on the brief were Solicitor General Perlman, William S. Tyson and Bessie Margolin.
Mr. Chief Justice Vinson
delivered the opinion of the Court.
The principal question to be decided in this case is whether the employees of a mutual ditch company are exempt from the provisions of the Fair Labor Standards Act as persons employed in agriculture. The company is the Farmers Reservoir & Irrigation Company, a Colorado corporation having an authorized capital stock of $1,050,000 and an authorized bonded indebtedness of $850,000, $450,000 of which is presently outstanding in the hands of the public. The company has central offices in Denver. It owns four large and several small reservoirs and a system of canals from 200 to 300 miles long, all in Colorado. The-sole activity of the corporation is the collection, storage and distribution of water for irrigation purposes. The water is diverted from the public streams of Colorado, stored in the company’s reservoirs and distributed to farmers through the company’s canals.
The company is.a mutual one. It does not sell water. It distributes it only to its own stockholders, who are each entitled to a limited quantity for each share of stock held. The income of the company is derived largely from assessments levied on the stockholders annually to pay for the costs of operating the system. ■ There are no profits and no dividends.
The company did not comply with either the record keeping or the wages and hours provisions of the Fair Labor Standards Act, and the Administrator sought an injunction directed against continuation of these alleged violations. The company claimed that its employees were not subject to the Act. These employees fall into two categories. First, there are the field employees— ditch riders, lake tenders and maintenance men. Their activity, in general, consists of the physical operation, control and maintenance of the company’s canals, reservoirs, and headgates. The second category comprises the company’s office force in Denver. For purposes of this case it contains only one occupant — the company’s bookkeeper.
The District Court held that the field employees were engaged in the production of goods for commerce, as those terms, are defined in § 3 of the Agfc, but that the bookkeeper was not. It held, however, that all of the company’s employees were exempt under .§ 13 (a) (6) as persons “employed in agriculture.” This second holding was reversed, as to the field employees, by the Court of Appeals for the Tenth Circuit, one judge dissenting, and, in No. 128, we granted the company’s petition for certiorari on the exemption issue. The Court oí Appeals did not pass on the bookkeeper’s status. It regarded his case as moot because his salary was said by the company, in its brief, to have been raised to $210 per month while the appeal was pending. The court regarded this as sufficient to establish his exemption as an administrative employee under § 13 (a) (1) of the Act and therefore-limited its consideration and its reversal of the District Court to the field employees. In No. 196, we granted the Administrator’s cross-petition with respect to the bookkeeper.
It is conceded here that the courts below were correct in holding that the field emploj'ees are engaged in the production of goods for commerce. The company, however, argues that this requires the conclusion that they are employed in agriculture. This argument rests on the fact that the activities of the company and its employees are entirely confined within the State of Colorado. The company diverts water in Colorado, stores it in Colorado, distributes it in Colorado to farmers who, finally, consume it in Colorado. The only products moving in interstate commerce are the agricultural commodities produced by the farmers who consume the company’s water. Hence, it is said that we can hold that the company’s employees are engaged in the production of goods for interstate commerce only if we say that their work in supplying water to the farmers is an integral part of the production of the farm products which are shipped in interstate commerce. But that production is, of course, agriculture. Hence, the company’s employees, if they are engaged in the production of goods for commerce, must be exempt as persons employed in agriculture.
The argument rests on a misconstruction of § 3 (j) of the Fair Labor Standards Act — the section which the courts below relied on in concluding that the field employees of the company are engaged in the production of goods for commerce. Section 3 (j) provides that “for the purposes of this Act an employee shall be deemed to have been engaged in the production of goods if such employee was employed ... in any process or occupation necessary to the production thereof.” From the beginning, this Court has refused either to read this provision out of the Act by limiting the coverage of the Act to those actually engaged in production or, on the other hand, to expand it so as to include every process or occupation affecting production for commerce. We have held that, if an occupation, not itself production for commerce, has “a close and immediate tie” with the process of production, it comes within the provisions of § 3 (j). Applying this standard, the Court of Appeals quite properly held that the field employees here are engaged in an occupation necessary, in the statutory sense, for the production of agricultural commodities shipped in commerce. .
But the conclusion that the work is necessary to agricultural production does not require us to say that it is agricultural production. This distinction between necessity and identity, or, differently phrased, between production in the normal sense and production in the special sense defined in § 3 (j), disposes of the company’s contention. The question here is whether the occupation of the field' employees of the ditch company can itself be termed agriculture. The answer to that question is not predetermined by the fact that the occupation is within the scope of the Act because it has' a necessary connection, in commerce, with agricultural production.
Agriculture, as an occupation, includes more'than the elemental process of planting, growing and harvesting crops. There are,a host of incidental activities which are necessary to that process. ' Whether a párticular type of activity is agricultural depends, in large measure, upon the way in which that activity is organized in a particular society. The determination cannot be made in the abstract. In less advanced societies the agricultural function includes many types of activity which, in others, are not agricultural. The fashioning of tools, the provision of fertilizer, the processing of the product, to mention only a few examples, are functions which, in some societies, are performed on the farm by farmers as part of their normal agricultural routine. Economic progress, however, is characterized by a progressive division of labor and separation of function. Tools are’made by a tool manufacturer, who specializes in that kind of ■work and supplies them to the farmer. The compost heap is replaced by factory-produced fertilizers. Power-is derived from electricity and gasoline rather than supplied by the farmer’s mules. Wheat is gro und at the mill. In this way, functions which are necessary to the total economic process of supplying an agricultural product become, in the process of economic development and specialization, separate and independent productive functions operated in conjunction with the agricultural function but no longer a part of it. Thus, the question as to whether a particular type of activity is agricultural is not determined by the necessity of the activity to agriculture nor by the physical similarity of the activity to that done by farmers in other situations. The question is whether the activity in the particular case is carried on as part of the agricultural function or is separately organized as an independent productive activity. The farmhand who cares for the farmer’s mules or prepares his fertilizer is engaged in agriculture. But the maintenance man in a power plant and the packer in a fertilizer factory are not employed in agriculture, even if their activity is necessary to farmers and replaces work previously done by farmers. The production of power and the manufacture of fertilizer are independent productive functions, not agriculture.
In the absence of a detailed definition of agriculture we should be compelled to determine whether the activity concerned in the present case — the diversion, storage and distribution óf water for irrigation purposes— is carried on as part of the agricultural function or is so separately organized and conducted as to be treated as an. independent, nonagricultural productive function. Fortunately, however, the Fair Labor Standards Act provides a carefully considered definition which is of substantial aid in helping us to make that determination.
The definition is contained in § 3 (f) of the Fair Labor Standards Act. It says:
“Sec. 3 (f). ‘Agriculture’ includes farming in all its branches and among other things includes the cultivation and tillage of the soil, dairying,' the production, cultivation, growing, and harvesting of any agricultural or horticultural commodities (including commodities defined as agricultural commodities in section 15 (g) of the Agricultural Marketing Act, as amended), the raising of livestock, bees, fur-bearing animals, or poultry, and any practices (including any forestry or lumbering operations) performed by a farmer or on a farm as an incident to or in conjunction with such farming operations, including preparation for market, delivery to storage or to market or to carriers for transportation to market.”
As can be readily seen, this definition has two distinct branches. First, there is the primary meaning. Agriculture includes farming in all its branches. Certain specific practices such as cultivation and tillage of the soil, dairying, etc., are listed as being ■ included in this primary meaning. Second, there is the broader meaning. Agriculture is defined to include things other than farming as so illustrated. It includes any practices, whether or not themselves farming practices, which are performed either by a farmer or on a farm, incidently to or in conjunction with "such” farming operations.
Dealing with these two branches of the definition in order, it is clear, first, that the occupation in which the company’s employees are engaged is not farming. The company owns no farms and raises no crops. Irrigation, strictly defined — that is the actual watering of the soil— may no doubt be called farming. And the work of the farmers in seeing to it that the water released from the company’s ditches is properly distributed to the growing plants undoubtedly is included in farming as being part of the process of cultivating and tilling the soil. But the .significant fact in this case is that this work is not done , by the company’s employees. There is a clear and definite division of function. The ditch company carries the water in its own canals to the lands of the farmers. When a farmer desires , water so that he can irrigate his fields he notifies the company. . Its employees then operate the headgates, which are located on the company’s canals and which the farmers are forbidden to operate, so that the appropriate quantity of water can pass out of the company’s canals and off the company’s land into the farmer’s irrigation ditches. The responsibility of the company’s employees ceases when they so release the water. The water is supplied-to the farmer at the head-gates and he takes it over there and uses it, in his own laterals, as he sees fit, to irrigate his crops.
The ditch company, then, is not engaged in cultivating or tilling the soil or in growing any agricultural commodity. It is contended, however, that it is nevertheless engaged in farming because of the use, in the definition, of the words “production.... of any agricultural . . . commodities”- in addition to. -the words cultivation, tillage, harvesting, etc. Since produce is defined in § 3 (j) of the Act so as to include, “for purposes of this Act,” any occupation necessary to production, it is argued that production of' agricultural commodities includes any occupation necessary to the production of agricultural commodities. It is thus argued that in the case of agriculture, as distinguished from other exemptions, Congress did provide that the exemption should include not only the occupation named but also all of those other occupations whose work is necessary to it.
If Congress intended to convey that meaning by using the word production in the definition of agriculture, we should, of course, give the definition its intended scope. But we do not “make a fortress out of the dictionary.” And we have, therefore; consistently refused to pervert the process of interpretation by mechanically applying definitions in unintended contexts. . Lawson v. Suwannee S. S. Co., 336 U. S. 198.(1949); Atlantic Cleaners & Dyers v. United States, 286 U. S. 427 (1932). In the present case, the legislative history confirms what a natural reading oHhe language of the agricultural exemption would indica —the word production was not there used in the artificial t*. ' special sense in which it was defined in § 3 (j). Certainly, if it were meant in that sense, it would make surplusage of .the remainder of the carefully wrought definition. And it would hardly have been innocuously placed among such specific terms as “cultivation,” “tillage,” “growing,” and “harvesting.” ■
But we need not speculate on the congressional meaning. The history of the use of the word production is crystal clear. It was added to the definition of agriculture in order to take care of a special situation — the production of turpentine and gum rosins by a process involving the tapping of living trees. There had been indications that such activity would not be considered agriculture, since turpentine is neither cultivated nór grown. And a special amendment, § 15 (g), had been added to the Agricultural Marketing Act specifying that commodities so produced were to be considered agricultural commodities for the purposes of that Act. To insure the inclusion of the process within the agricultural exemption of the Fair Labor Standards Act, the wprd “production” was added to § 3 (f) in conjunction with the words “including commodities defined as agricultural commodities in section 15 (g) of the Agricultural Marketing Act,, as amended.”
It is unnecessary to decide whether, in view of this history, the word production in the agricultural exemption should be limited to those specific products defined in § 15 (g) of the Agricultural Marketing Act or should be given its normal meaning. The only question here is whether the word was used in the special expanded meaning defined in § 3 (j) of the present Act. It is clear that it was not used in this special sense. And it follows that it does not encompass the work of the company’s employees who cannot be said, in any normal use of the term, to be engaged in the production of agricultural commodities. Their work is necessary to agricultural production, but it is not production.
The work of the company’s employees is not, then, farming. But, coming to the second branch of the definition of agriculture, it. is equally clear that it does constitute a practice performed as an incident to or in conjunction with farming. If the Act exempted all such practices, the company would be exempt. But the exemption is limited. Such practices are exempt only if they are performed by a farmer or on a farm.
This language was carefully considered by Congress. As originally introduced, the exemption covered such practices only if performed by a farmer. On the floor of the. Senate it was'objected that this would exclude the threshing of wheat or other functions necessary to the farmer if those functions were not performed by the farmer and his hands, but by separate companies organized for and devoted solely to that particular job. To take care of that situation the words “or on a farm” were added to the definition. Thus, the wheat threshing companies, even though they were separate enterprises, were included in the exemption because their work was incidental to farming and was done on the farm. In the face of this careful use of language, we are required to limit the exemption as Congress intended it should be limited, to practices performed by a farmer or on a farm. In the present case it is clear that the work of the company’s employees is done neither on a farm or by farmers.
Clearly, it is not done on a farm. Nor, we think, is it done “by a farmer.” , Since we have already said that the company’s employees are not engaged in farming, it is perhaps too obvious that the work that they do is-not done by farmers. But an argument to the contrary is made. It is based on the fact that the company is a mutual one, owned by the farmers whom it serves. It is argued that the company is therefore merely a formal conduit or agent, by - which the farmers cooperatively operate their common water supply system and cooperatively employ the men. The men are, therefore, said to be farmers because they are said to be employed by farmers.
Even if it were conceded that the exemption includes the work óf persons who do no farming but are employed by farmers, it still does not include the company’s employees because they are not, in fact, so employed. There is a difference between the hiring of mutual servants by a group of employers and the creation by them of a separate business Organization, with its own officers, property, and bonded indebtedness, which in turn hires working men. Those working men are in no real sense employees of the shareholders of the organization. They' are hired by. the organization, fired by the organization, controlled and directed by the organization, and paid by it. The fact that the organization is. a corporate one adds to the picture, but is not controlling. The controlling fact is that the company has been set up by the farmers as an independent entity to operate an integrated, unitary water supply system. The function of supplying water has thus beén divorced by ihe farmers from the farming operation and set up as a separate and self-contained activity in which the farmers are forbidden, by the.company's by-laws, to interfere. Those employed in that activity are employed by the company, not by the farmers who own the company. The fact that the company is not operated for profit is immaterial. It is nonetheless the employer. Of course, if Congress had intended the absence of profit to be material and had provided that the employees of agricultural cooperatives should be exempted because their work is done for the benefit of the farmers who own the cooperatives, we should honor that provision. But. the legislative history of the existing definition clearly shows that no such result was intended.
We conclude therefore that the Court of Appeals correctly determined that the field employees of the company are not exempt from the provisions of the Fair Labor Standards Act as persons employed in agriculture.
There remains for consideration the bookkeeper’s case. The Court of Appeals limited its reversal of the District Court to the field employees because it regarded the bookkeeper as exempt, in, any event, as an administrative employee. We need not decide whether it erred in so doing, since the company in this Court disclaims — as it did in the District Court — any reliance on the administrative exemption. And our discussion with regard to the field employees makes it clear that the Court of Appeals decision is, in the absence of any claim of administrative exemption, equally applicable to the bookkeeper. It has been stipulated that his work is a necessary part of the operation of the company’s water supply system. The fact that it is clerical rather than manual is immaterial. Borden Co. v. Borella, 325 U. S. 679 (1945). It follows that his case , is on all fours with that of the field workers and that he is engaged, as they are, in the production of goods for commerce and is not exempt as employed in agriculture. The judgment of the Court of Appeals, reversing the District Court and remanding the case to it, should, therefore, be treated as'applicable to both types of employee.
As so modified, the judgment is
Affirmed.
52 Stat. 1060,29 U. S. C. §§ 201-219.
67 F. 2d 911 (1948).
52 Stat. 1061, 29 U. S. C. § 203 (j).
Emphasis added.
Kirschbaum Co. v. Walling, 316 U. S. 517, 525 (1942); Armour & Co. v. Wantock, 323 U. S. 126 (1944); Roland Co. v. Walling, 326 U. S. 657, 663 (1946).
“Ne'e.essary” understates the case. The water supplied by the company’s employees is, in this case, an indispensable prerequisite for agricultural production. Cultivation began only with irrigation and it will end if the irrigation ceases. Under such eircurhstances, there can be no doubt of the immediacy of the connection ¡between the production, by the farmers, for commerce and the work of the company’s field employees in providing water for irrigation.
The fallacy of the notion that an exemption carries with it all occupations whose nexus with interstate commerce is the-exempted occupation is demonstrated by authority as well as by logic. In Boutell v. Walling, 327 U. S. 463 (1946), for example, the question was whether men who were employed by a service company to service trucks carrying goods in' interstate commerce were exempt, under § 13 (b) (1), as the employees of an interstate carrier subject to regulation by the Interstate Commerce Commission. Their only connection with commerce was their work on the trucks of the interstate carrier. The Court divided as to whether the employees were themselves employed by the carrier within the meaning of the Motor Carrier Act and, therefore, exempt. But there was no suggestion in either of the opinions in the case that, if not employed by the carrier, they were nevertheless exempt because their only connection with interstate commerce was through an enterprise which was itself exempt.
In only one case brought to our attention was a contention pre-r sented similar to that made here. In Dize v. Maddrix, 144 F. 2d 584 (1944), aff’d, 324 U. S. 697 (1945), the local manufacture of boxes was held to be. within the Act because the boxes were used by fishermen to ship their fish in interstate commerce. The fishermen were exempt under-a specific exemption in the Act covering fishing, and it was argued that" the manufacturer of the boxes should therefore be exempt as “fishing” because its only connection with commerce was through fishing. The argument was rejected summarily.
Meeker Cooperative Light & Power Assn. v. Phillips, 158 F. 2d 698 (1946).
McComb v. Super-A Fertilizer Works, 165 F. 2d 824 (1948).
Article VII, § 5 of the Company’s By-Laws provides as follows:
“All headgates in the Company’s canals shall be operated and maintained by and under the exclusive control of this company and no stockholder or any other person shall have the right to interfere with, reconstruct, repair, change, or alter, open or close said headgates or any of them in any manner whatsoever.”
L. Hand, J., in Cabell v. Markham, 148 F. 2d 737, 739 (1945), aff’d, 326 U. S. 404 (1945).
See S. Rep. No. 230, 71st Cong., 2d Sess. (1930).
46 Stat. 1550, 12 U. S. C. § 1141j (g). This language originated in S. 2354, 71st Congress'. That bill was reported to the Senate (S. Rep. No. 230) and passed. • 72 Cong. Rec. 7016 (1930). It did not come to a vote in the House. Its substance was added by the Senáte to H. R. 16836, an. amendment to the oleomargarine tax laws, and in this form became law. See-74 Cong. Rec. 6688, 7196 (1931).
H. R. Rep. No. 2738, 75th Cong., 3d Sess., p. 2. The word “production” was not actually contained in. either the House or Senate bills as originally passed. The Senate bill, S. 2475, 75th Cong., 1st Sess., as passed, contained the reference to § 15 (g) of the Agricultural Marketing Act in the following way: “. . . ‘agriculture’ . . . further includes the definition contained in subdivision (g) of section 15 of the Agricultural Marketing Act . . . See 81 Cong. Rec. 7659 (1937). This language was faulty, since the section referred to was not a .definition of agriculture but of an agricultural commodity. .The language .was retained in this form when the bill was first debated in the House. See 82 Cong. Rec. 1580, 1690 (1937). The .Housé voted to recommit the bill. Id. at 1835. In committee, the definition of agriculture was completely redrafted and the reference to the Agricultural Marketing Act omitted. See H. R. Rep. No. 2182, 75th Cong., 3d Sess. (1938). The bill passed the House in this form. In conference, it was agreed thajfc the House version of the definition of agriculture should be adopted, with three stated exceptions. Only one of the three is relevant here — the reinsertion of the reference to the Agricultural Marketing Act.' The word “production” was added in conjunction with-that reference and was obviously used only to make the reference grammatically correct. The committee report states the change in this way: “The production of commodities defined as agricultural commodities in section 15 (g) of the Agricultural Marketing Act is included within the definition of agriculture . . . .” H. R. Rep. No. 2738, 75th Cong., 3d Sess., p. 29 (1938). ■
Although not relevant here, there is the additional requirement that the practices be incidental to “such” farming. Thus, processing on a farm of commodities produced by other farmers is incidental to or in conjunction with the farming operation of the other farmers and not incidental to or in conjunction with the farming operation of the farmer on whose premises the processing is done. Such processing is, therefore, not within the definition of agriculture. Bowie v. Gonzalez, 117 F. 2d 11 (1941).
“Mr. TYDINGS. ... In the case I visualize . . . the farmer is not performing the service. The man to whom I refer makes a business of doing nothing but threshing. He owns his own machine, and hauls it from farm to farm, and enters into contracts with fanners to thresh' their crops; the point being that while he is dealing with an agricultural commodity, he is not necessarily a farmer, and he is not doing work ordinarily done by a farmer.
. “Mr; BORAH. He is doing the exact work which the farmer did before he took it up.
“Mr. TYDINGS. That is true; but I do not think the bill is drawn in sufficient detail to bring the man to whom I refer under its provisions of exemption.” 81 Cong. Rec. 7653 (1937). See also the comments of Senator Bone, id. at 7659.
81 Cong. Rec. 7888 (1937).
See n. 10, supra.
The debate in both Houses shows a clear awareness that the employees of farmers cooperative associations would not be exempted as employees of farmers'. At various times amendments were offered, and adopted, exempting the employees of certain types of cooperatives. See 81 Cong. Rec. f947 (1937), 82 Cong. Rec. 1783 (1937).- All'such special exemptions were, however, omitted from the bill as it finally became law. See also Interpretative Bulletin, issued by the Administrator, Wage & Hour Division, 29 C. F.-R. 1947 Supp., §§780.81, 780.82".
While it lacks relevance to the question of congressional intention in 1938, Wid may note that the precise question here involved was discussed at length on the Senate floor in 1946 in connection with certain améndments to the Fair Labor Standards Act. It.was clearly, stated, without objection, that employees of an irrigation company which supplied water to farmers were, like the employees of a power company which supplies’ electricity to farmers, hot exempt as employed in agriculture. ’ 92 Cong. Ree. 2318-23Í9 (1946). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
70
] |
UNITED STATES DEPARTMENT OF AGRICULTURE, EMERGENCY CROP AND FEED LOANS v. REMUND, ADMINISTRATOR.
No. 417.
Argued February 5, 1947.
Decided March 17, 1947.
Paul A. Sweeney argued the cause for petitioner. With him on the brief were Acting Solicitor General Washing ton, Assistant Attorney General Sonnett, Melvin Richter and Philip Elman.
Dwight Campbell submitted on brief for the respondent.
Opinion of the Court by
Mr. Justice Murphy,
announced by Mr. Justice Rutledge.
We are faced here with the problem of whether, in a state probate proceeding, a claim asserted by the Farm Credit Administration through certain of its officials for and on behalf of the United States is entitled to priority under § 3466 of the Revised Statutes, 31 U. S. C. § 191.
The Governor of the Farm Credit Administration, pursuant to the Acts of February 23, 1934, and June 19, 1934, extended emergency feed and crop loans totalling $370.00 to Wilhelm Buttke, a South Dakota farmer. Most of these loans remained unpaid. On December 26, 1941, Buttke died intestate, leaving an estate insufficient to pay all of his debts. Respondent was appointed administrator of the estate. On March 2, 1942, an authorized agent of the Governor of the Farm Credit Administration filed in the County Court of Roberts County, South Dakota, a claim against the estate for $523.80, the amount of the unpaid indebtedness plus interest. This claim was made “for and on behalf of the United States of America” and a priority therefor on behalf of the United States was asserted under § 3466 of the Revised Statutes.
The County Court denied preference to this claim. But it did allow the claim in the amount of $79.53, which represented the pro rata share of a common creditor’s claim. This decision was affirmed by the Circuit Court of the Fifth Judicial Circuit of South Dakota and by the Supreme Court of South Dakota. 70 S. D. —, 23 N. W. 2d 281. The latter court felt that the Acts of February 23, 1934, and June 19, 1934, created an exception to § 3466 and that the claimed priority should accordingly be refused on the authority of United States v. Guaranty Trust Co., 280 U. S. 478. We granted certiorari because of the important problems thereby raised.
The relevant portion of § 3466 of the Revised Statutes provides that “. . . whenever the estate of any deceased debtor, in the hands of the executors or administrators, is insufficient to pay all the debts due from the deceased, the debts due to the United States shall be first satisfied . . . .”
Initially, it is suggested that § 3466 is inapplicable since the claim in issue is not a debt due to the United States. The claim grows out of the seven notes executed by the deceased to “the Governor of the Farm Credit Administration, or order, at Washington, D. C.” These notes stated that they were “given as evidence of a loan made by the Governor of the Farm Credit Administration.” On the premise that the Farm Credit Administration is an entity separate and distinct from the United States Government, the argument is made that obligations due the Farm Credit Administration fall outside the priority established by § 3466. We cannot agree.
The Farm Credit Administration is plainly one of the many administrative units of the United States Government, established to carry out the functions delegated to it by Congress. It bears none of the features of a government corporation with a legal entity separate from that of the United States, whatever difference that might make as to the application of § 3466. Cf. Sloan Shipyards Corp. v. United States Fleet Corp., 258 U. S. 549. It had its inception in 1933 as an independent agency, assuming the functions of the Federal Farm Board and the Federal Farm Loan Board. Executive Order No. 6084. In 1939, it was transferred to the Department of Agriculture and placed under the general supervision and direction of the Secretary of Agriculture. Reorganization Plan No. 1, § 401 (a), 53 Stat. 1429, 4 Fed. Reg. 2730. Its functions, personnel and property were then consolidated in 1942 with those of certain other agencies to form the Food Production Administration of the Department of Agriculture. Executive Order No. 9280, 7 Fed. Reg. 10179. At no time has the Farm Credit Administration been other than an unincorporated agency of the United States Government, administering and lending funds appropriated by Congress out of the United States Treasury and returning the money to the Treasury upon repayment. In short, it is an integral part of the governmental mechanism. And the use of a name other than that of the United States cannot change that fact. United States v. Fontenot, 33 F. Supp. 629; In re Wilson, 23 F. Supp. 236; Federal Reserve Bank of Dallas v. Smylie, (Tex. Civ. App.) 134 S. W. 2d 838; Helms v. Emergency Crop & Seed Loan Office, 216 N. C. 581, 5 S. E. 2d 822. See also North Dakota-Montana Wheat Growers’ Assn. v. United States, 66 F. 2d 573. Hence any debt owed the Farm Credit Administration is a debt owed the United States within the meaning of § 3466.
Moreover, the priority given by § 3466 to a debt due to the United States is unaffected by the fact that a claim based upon that debt is filed in the name of an agency of the United States or an authorized officer of such an agency. It is enough that there is an obligation owed the United States. Whether the claim is filed in the name of the United States or in the name of an officer or agency is immaterial; in the latter instance, the claim is necessarily filed on behalf of the United States and the legal effect is the same as if it had been filed in that name. Nothing in the language or policy of § 3466 justifies any other conclusion. It follows that the method of filing in this case cannot be questioned. The claim was filed in the name of the Governor of the Farm Credit Administration “for and on behalf of the United States of America”— an explicit recognition of the legal realities involved.
The main contention, however, is that the purpose of the statutes under which the loans were made is inconsistent with § 3466, thereby rendering it inapplicable. The Acts of February 23, 1934, and June 19, 1934, authorized feed and crop loans to farmers in drought and storm-stricken areas of the nation. It is said that the prime purpose of these Acts was to restore the credit of the farmers and that to give effect to § 3466 would impair that credit. Reliance is placed upon United States v. Guaranty Trust Co., supra. This Court there held that § 3466 was inapplicable to the collection of loans made by the Government to railroad carriers to rehabilitate and maintain their credit status; it was felt that to give priority under such circumstances would defeat the purpose of the legislation by impairing the credit of the railroads. See also Cook County National Bank v. United States, 107 U. S. 445.
But it is manifest that the purpose of the Acts of February 23, 1934, and June 19, 1934, was to give emergency relief to distressed farmers rather than to restore their credit status. These were but two of a series of emergency feed and crop loan statutes enacted at various times from 1921 to 1938, a period when farmers were the victims of repeated crop failures and adverse economic conditions. Their credit was often impaired, but their most urgent need was for money to purchase feed and to plant crops; without such money, distress and unemployment might have been their lot. It was to meet that urgent need that Congress passed these statutes.
More specifically, the two Acts under consideration were designed to make loans available to those farmers who were unable to secure credit from the Production Credit Associations, organized pursuant to the Farm Credit Act of 1933. It was recognized that many farmers could not qualify for loans from those Associations. Some method of lending aid and assistance to those who had no credit and no money with which to buy feed for their livestock and seeds for their crops was essential in the absence of a more direct form of Government relief. S. Rep. 148, 73d Cong., 2d Sess.; H. Rep. 521, 73d Cong., 2d Sess. As was said by Representative Kerr, “Let it be remembered that the Government is not seeking to make an investment; this is simply an endeavor to finance the farmers of this country who are utterly unable to finance themselves.” 78 Cong. Rec. 1959. See United States v. Thomas, 107 F. 2d 765, 766; Person v. United States, 112 F. 2d 1, 2.
We conclude that there is no irreconcilable conflict between giving emergency loans to distressed farmers and giving priority to the collection of these loans pursuant to § 3466. Such priority could in no way impair the aid which the farmers sought through these loans; nor could it embarrass the farmers in their daily operations. Moreover, these loans called for a first lien on crops growing or to be grown, or on livestock. The conditions prevailing in 1934 made this type of security uncertain and there is no indication that Congress meant such a lien to be the sole security to which the Government could look for repayment.
We reiterate what was said in United States v. Emory, 314 U. S. 423, 433: “Only the plainest inconsistency would warrant our finding an implied exception to the operation of so clear a command as that of § 3466.” In this case, as in that, we think such inconsistency is wholly wanting. United States v. Guaranty Trust Co., supra, is therefore inapposite.
Reversed.
Mr. Justice Douglas would affirm the judgment on the authority of United States v. Guaranty Trust Co., 280 U. S. 478.
48 Stat. 354.
48 Stat. 1021, 1056.
41 Stat. 1347; 42 Stat. 467 ; 43 Stat. 110; 44 Stat. 1245, 1251; 45 Stat. 1306, as amended by 46 Stat. 3; 46 Stat. 78, as amended by 46 Stat. 254; 46 Stat. 1032, as amended by 46 Stat. 1160; 46 Stat. 1276; 47 Stat. 5; 47 Stat. 795; 48 Stat. 354; 48 Stat. 1056; 49 Stat. 28; 50 Stat. 5; 52 Stat. 27.
48 Stat. 257. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
36
] |
ORING v. STATE BAR OF CALIFORNIA
No. 87-1224.
Argued January 10, 1988
Decided January 23, 1989
Theodore A. Cohen argued the cause for appellant. With him on the briefs was Scott Spolin.
Diane C. Yu argued the cause for appellee. With her on the brief were Tndtt A. Richey, Jr., and Erica Tabachnick.
Per Curiam.
The appeal is dismissed for want of a properly presented federal question. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
116
] |
IDAHO DEPARTMENT OF EMPLOYMENT v. SMITH
No. 76-1291.
Decided December 5, 1977
Per Curiam.
Petitioner challenges a ruling of the Idaho Supreme Court that the denial of unemployment benefits to otherwise eligible persons who attend school during the day violates the Equal Protection Clause of the Fourteenth Amendment. Idaho Code § 72-1312 (a) (1973) states that “no person shall be deemed to be unemployed while he is attending a regular established school excluding night school . . . The Idaho Supreme Court held that this provision impermissibly discriminates between those unemployed persons who attend night school and those who attend school during the day and that petitioner could not constitutionally deny unemployment benefits to an otherwise eligible person such as respondent whose attendance at daytime classes would not interfere with employment in her usual occupation and did not affect her availability for full-time work. We grant the petition for certiorari and reverse the judgment of the Idaho Supreme Court.
The holding below misconstrues the requirements of the Equal Protection Clause in the field of social welfare and economics. This Court has consistently deferred to legislative determinations concerning the desirability of statutory classifications affecting the regulation of economic activity and the distribution of economic benefits. “If the classification has some 'reasonable basis/ it does not offend the Constitution simply because the classification 'is not made with mathematical nicety or because in practice it results in some inequality.’ ” Dandridge v. Williams, 397 U. S. 471, 485 (1970), quoting Lindsley v. Natural Carbonic Gas Co., 220 U. S. 61, 78 (1911). See also Massachusetts Board of Retirement v. Murgia, 427 U. S. 307 (1976); Mathews v. De Castro, 429 U. S. 181 (1976); Jefferson v. Hackney, 406 U. S. 535 (1972). The legislative classification at issue here passes this test. It was surely rational for the Idaho Legislature to conclude that daytime employment is far more plentiful than nighttime work and, consequently, that attending school during daytime hours imposes a greater restriction upon obtaining full-time employment than does attending school at night. In a world of limited resources, a State may legitimately extend unemployment benefits only to those who are willing to maximize their employment potential by not restricting their availability during the day by attending school. Moreover, the classification serves as a predictable and convenient means for distinguishing between those who are likely to be students primarily and part-time workers only secondarily and thus ineligible for unemployment compensation and those who are primarily full-time workers and students only secondarily without the necessity of making costly individual eligibility determinations which would deplete available resources. The fact that the classification is imperfect and that the availability of some students desiring full-time employment may not be substantially impaired by their attendance at daytime classes does not, under the cases cited supra, render the statute invalid under the United States Constitution.
Reversed. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
116
] |
BOWEN, SECRETARY OF HEALTH AND HUMAN SERVICES v. OWENS et al.
No. 84-1905.
Argued February 26, 1986
Decided May 19, 1986
Powell, J., delivered the opinion of the Court, in which Burger, C. J., and White, Rehnquist, Stevens, and O’Connor, JJ., joined. Marshall, J., filed a dissenting opinion, in which Brennan, J., joined, post, p. 350. Blackmun, J., filed a dissenting opinion, post, p. 354.
Deputy Solicitor General Kuhl argued the cause for appellant. With her on’the briefs were Solicitor General Fried, Assistant Attorney General Willard, Deputy Solicitor General Geller, Edwin S. Kneedler, and William Kanter.
Gill Deford argued the cause for appellees. With him on the brief were Neal S. Dudovitz, Peter Komlos-Hrobsky, Sally Hart Wilson, and Eileen P. Sweeney.
Justice Powell
delivered the opinion of the Court.
Certain provisions of the Social Security Act in effect between 1979 and 1983 authorized payment of survivor’s benefits from a wage earner’s account to a widowed spouse who remarried after age 60, but not to a similarly situated divorced widowed spouse. The question in this case is whether those provisions violated the equal protection component of the Due Process Clause of the Fifth Amendment.
I
The Social Security Act (Act) originally provided only primary benefits to qualified wage earners. Congress later provided secondary benefits to wives, widows, dependent children, and surviving parents of the wage earner. At that time, widows and other secondary beneficiaries would lose their entitlement to survivor’s benefits upon a subsequent marriage. In 1950, Congress extended secondary benefits to dependent husbands and widowers, subject to the same restriction. In 1958, Congress created an exception to this remarriage rule so that if a widow or widower married an individual who received benefits under the Act, neither would forfeit survivor’s benefits.
Until 1965, divorced wives, including those who had outlived their former spouse (divorced widows), were not eligible for the same benefits provided to wives and widows. In that year, Congress amended § 202(b) of the Act to extend wife’s benefits to a divorced wife and survivor’s benefits to a divorced widow if the recipient had been married to her former husband for at least 20 years, and had received more than one-half of her support from him or an agreement or court order required him to make substantial contributions to her support. Pub. L. 89-97, § 308(a), 79 Stat. 375-376. Divorced wives and divorced widows were also subject to the same remarriage rule that had been applied to widows and widowers. In these amendments, however, Congress changed the remarriage rule as it applied to widows and widowers. The new rule provided that if a widow or widower over age 60 married someone who was not entitled to receive certain benefits under the Act, she or he would not completely forfeit survivor’s benefits. Instead, the benefits were reduced to half of the primary wage earner’s benefits. §§ 333(a)(1) and (b)(1), 79 Stat. 403, 404.
In 1977, Congress again relaxed the remarriage provision for widows and widowers, allowing them to receive unreduced survivor’s benefits if they remarried after age 60. The effective date of that amendment was 1979. Pub. L. 95-216, §§ 336(a)(3), (b)(3), (c)(1), 91 Stat. 1547. But Congress retained until 1983 the provision that generally barred a divorced wife or divorced widow from receiving benefits upon remarriage. See §§ 202(b)(1)(C), (b)(3), §§ 202(e)(1)(A), (e)(1)(F). The present case involves this temporary disparity in benefits received upon remarriage.
As a result of a pair of District Court sex discrimination opinions that invalidated portions of the Act, Ambrose v. Califano, CCH Unempl. Ins. Rep. ¶ 17,702 (Ore. 1980); Oli ver v. Califano, CCH Unempl. Ins. Rep. ¶ 15,244 (ND Cal. 1977), the Secretary of Health and Human Services (Secretary) promulgated regulations providing that divorced husbands and divorced widowers would receive husband’s benefits and survivor’s benefits to the same extent as divorced wives and divorced widows received wife’s benefits and survivor’s benefits. 44 Fed. Reg. 34480, 34483-34484 (1979); see 20 CFR §§404.331, 404.336 (1985). In 1983 Congress amended the Act to incorporate these regulatory changes. Pub. L. 98-21, § 301(b)(1), 97 Stat. 111. In the same bill, Congress provided that divorced widowed spouses who remarry after age 60 are eligible to receive survivor’s benefits in the same manner as widows and widowers.
II
Appellee Buenta Owens married Russell Judd in 1937 and was divorced from him in 1968. In 1978, when she was 61, she married appellee Kenneth Owens. Judd died on June 19,1982. On July 30,1982, Owens applied for widow’s benefits on Judd’s earnings account as a divorced widow. Her claim was denied on August 27,1982, because she had remarried. She sought administrative reconsideration, contending that the statutory provision denying benefits because of her remarriage was unconstitutional. Her claim again was denied. Subsequently, Owens and the Secretary entered into an agreement stipulating that the only disputed issue was the constitutionality of the provisions of the Act that at that time denied widow’s benefits to divorced widows who remarried. See 42 U. S. C. §§ 402(e)(1)(A), (e)(4). The parties also stipulated that, but for the relevant provisions, Owens’ right to the benefits had been established. Based on that agreement, the parties waived any further administrative review. On April 19, 1983, Owens filed this action in the United States District Court for the Central District of California, and sought to represent a nationwide class of divorced widowed spouses.
On December 23, 1983, the District Court rejected Owens’ constitutional challenge. Applying the rational-basis standard of review, the court reasoned that Congress was justified in taking one step at a time in extending benefits to spouses who had remarried. While Owens’ motion to alter or amend the judgment under Federal Rule of Civil Procedure 59 was pending, the 1983 amendments to the Act went into effect, so that all otherwise eligible members of the class became entitled to receive monthly survivor’s benefits beginning in January 1984. Subsequently, the court certified a nationwide plaintiffs’ class, consisting of all divorced widowed spouses who remarried after age 60 and who were denied benefits between December 1978 and January 1984.
On October 5, 1984, the District Court reversed its prior ruling on the merits and held the challenged provisions unconstitutional. The court agreed with the Secretary that Congress rationally could assume that widowed spouses are generally more dependent on income from the deceased wage earner than are divorced widowed spouses. It reasoned, however, that because Congress in 1977 had chosen to treat surviving divorced spouses and widowed spouses in the same manner upon the death of the wage earner, there was no logical basis for distinguishing between the two classes of individuals upon their subsequent remarriage. The Secretary appealed directly to this Court pursuant to 28 U. S. C. § 1252. We noted probable jurisdiction, Heckler v. Owens, 474 U. S. 1046 (1985). We now reverse.
Ill
Congress faces an unusually difficult task in providing for the distribution of benefits under the Act. The program is a massive one, and requires Congress to make many distinctions among classes of beneficiaries while making allocations from a finite fund. In that context, our review is deferential. “Governmental decisions to spend money to improve the general public welfare in one way and not another are ‘not confided to the courts. The discretion belongs to Congress, unless the choice is clearly wrong, a display of arbitrary power, not an exercise of judgment.’” Mathews v. De Castro, 429 U. S. 181, 185 (1976), quoting Helvering v. Davis, 301 U. S. 619, 640 (1937). As this Court explained in Flemming v. Nestor, 363 U. S. 603, 611 (1960):
“Particularly when we deal with a withholding of a non-contractual benefit under a social welfare program such as [Social Security], we must recognize that the Due Process Clause can be thought to interpose a bar only if the statute manifests a patently arbitrary classification, utterly lacking in rational justification.”
When the challenged classification in this case is examined in the light of these principles, it cannot be said that the distinctions Congress made were arbitrary or irrational.
A
We have previously noted that “[t]he entitlement of any secondary beneficiary is predicated on his or her relationship to a contributing wage earner.” Califano v. Jobst, 434 U. S. 47, 52 (1977). In determining who is eligible for such benefits, the scope of the program does not allow for “individualized proof on a case-by-case basis.” Ibid. Congress “has elected to use simple criteria, such as age and marital status, to determine probable dependency.” Ibid. In particular, Congress has used marital status as a general guide to dependency on the wage earner: “The idea that marriage changes dependency is expressed throughout the Social Security Act.” Id., at 52, n. 8. One example of this assumption is Congress’ original decision to terminate the benefits of all secondary beneficiaries, including widowed spouses, who remarried. When Congress subsequently made divorced widowed spouses eligible for survivor’s benefits, it also imposed on them the rule that remarriage terminated benefits. This remarriage rule was based on the assumption that remarriage altered the status of dependency on the wage earner. This Court upheld the validity of that general assumption in Jobst. Id., at 53.
Congress was not constitutionally obligated to continue to extend benefits to any remarried secondary beneficiary. It nevertheless chose to do so, but in gradual steps. In 1965, Congress provided that if a widow or widower remarried after age 60, she or he would receive reduced benefits. In 1977, Congress provided that if a widow or widower remarried after age 60, she or he would continue to receive full survivor’s benefits. Finally, in 1983, Congress amended the Act to provide that divorced widowed spouses who remarry after age 60 may receive survivor’s benefits in the same manner as widows and widowers. Appellees complain that Congress’ failure in 1977 to extend benefits to divorced widowed spouses who had remarried was irrational.
This Court consistently has recognized that in addressing complex problems a legislature “may take one step at a time, addressing itself to the phase of the problem which seems most acute to the legislative mind.” Williamson v. Lee Optical Co., 348 U. S. 483, 489 (1955). That is precisely what Congress has done in this case. When Congress decided to create some exceptions to the remarriage rule, it was not required to take an all-or-nothing approach. Instead, it chose to proceed more cautiously. It had valid reasons for doing so.
The House version of the 1977 bill contained a complete elimination of the general rule terminating benefits upon a subsequent marriage. H. R. Rep. No. 95-702, pt. 1, pp. 47-48 (1977). The House version would have created in the first year of operation alone 670,000 more beneficiaries than under the pre-1977 system, costing $1.3 billion in additional benefits each year. Ibid,. Faced with these concerns, Congress reasonably could decide to “concentrate limited funds where the need [was] likely to be greatest.” Califano v. Boles, 443 U. S. 282, 296 (1979). It chose only to create an exception for widows and widowers, who presumably were more likely to depend on their spouses for financial support than were divorced widows and widowers. While it may have been feasible to have extended benefits to divorced widowed spouses in 1979 rather than 1983, Congress was not constitutionally obligated to do so.
Congress’ adjustments of this complex system of entitlements necessarily create distinctions among categories of beneficiaries, a result that could be avoided only by making sweeping changes in the Act instead of incremental ones. A constitutional rule that would invalidate Congress’ attempts to proceed cautiously in awarding increased benefits might deter Congress from making any increases at all. The Due Process Clause does not impose any such “‘constitutional straitjacket.’” De Castro, 429 U. S., at 185, quoting Jefferson v. Hackney, 406 U. S. 535, 546 (1972). As we recognized in Jobst:
“Congress could reasonably take one firm step toward the goal of eliminating the hardship caused by the general marriage rule without accomplishing its entire objective in the same piece of legislation. Williamson v. Lee Optical Co., 348 U. S. 483, 489. Even if it might have been wiser to take a larger step, the step Congress did take was in the right direction and had no adverse impact on persons like the Jobsts.” 434 U. S., at 57-58.
Congress drew a reasonable line in a process that soon increased benefits to all relevant beneficiaries.
B
The District Court correctly reasoned that under De Castro and Boles, it was rational for Congress to assume that divorced widowed spouses are generally less dependent upon the resources of their former spouses than are widows and widowers. It held, however, that because Congress had chosen to treat widowed spouses and divorced widowed spouses identically upon the death of the wage earner, there was no rational basis for distinguishing between them if they remarried. The logic of the District Court’s position depends on a showing that Congress did not distinguish between divorced widowed spouses and widowed spouses prior to remarriage. Apparently the District Court inferred that because both divorced widowed spouses and widowed spouses were entitled to survivor’s benefits, Congress viewed the groups as equally dependent on the wage earner. Such an inference is belied by the history and provisions of the Act.
When Congress first began to make divorced wives eligible for wives’ benefits in 1965, it focused on that group of divorced wives whose marriages ended after many years, when they might be “too old to build up a substantial social security earnings record even if [they] can find a job.” H. R. Rep. No. 213, 89th Cong., 1st Sess., 107-108 (1965). To that end, divorced wives were eligible for wife’s benefits only if they had been married to the wage earner for 20 years and received substantial support from him. It was not until 1972 that Congress dropped the requirement of showing support from the wage earner. Even then, Congress retained the 20-year marriage requirement.
Congress has made the same distinctions in its treatment of divorced widowed spouses. When they first became eligible for survivor’s benefits in 1965, it was under the same basic eligibility rules that applied to divorced spouses. During the relevant time of this lawsuit, divorced spouses and divorced widowed spouses had to have been married to the wage earner for at least 10 years to receive benefits. That precondition did not have to be met by spouses or widows.
These eligibility requirements demonstrate that Congress adhered to the general assumption, approved in De Castro, that divorce normally reduces dependency on the wage earner. The fact that Congress awards benefits to divorced widowed spouses once the eligibility requirements are met does not necessarily mean that their dependency is equivalent to that of widows or widowers. Congress may view the 10-year-marriage requirement as a lesser showing of dependency, but still sufficient to justify extension of benefits. Presumably Congress concluded that remarriage sufficiently reduced that lesser dependency to the point where it could conclude that benefits no longer were appropriate. These views would be consistent with the position Congress has taken throughout the history of the Act that divorced spouses are less dependent on the wage earner than spouses. Because divorced widowed spouses did not enter into marriage with the same level of dependency on the wage earner’s account as widows or widowers, it was rational for Congress to treat these groups differently after remarriage.
IV
The judgment of the District Court is reversed, and the case is remanded for proceedings consistent with this opinion.
It is so ordered.
In 1972, Congress eliminated the requirement that a divorced wife or divorced widow show a specified level of support from her former husband, but retained the 20-years-of-marriage requirement. Pub. L. 92-603, §§ 114(a), (b), 86 Stat. 1348.
Congress also reduced the 20-years-of-marriage requirement for divorced wives and divorced widows to 10 years.
Appellee Kenneth Owens had been married to Dorothy L. Owens for over 34 years when they were divorced in 1978. In that same year he married Buenta Owens. He was 60 years old. In 1982 he applied for survivor’s benefits based on the earnings account of his former wife, who had died. His claim was denied at the initial stage and again in a reconsideration decision in 1983. He and the Secretary also reached an agreement to waive any further administrative review. Kenneth Owens filed suit in the United States District Court for the Central District of California, challenging the constitutionality of the statutory provisions with an argument virtually identical to his wife’s. When he filed his lawsuit, the District Court already had ruled in favor of the Secretary in Buenta Owens’ suit, and her motion for reconsideration was pending. The court consolidated Kenneth Owens' suit with that of his wife. Kenneth Owens died during the pendency of this suit before this Court. Buenta Owens moved to be substituted for him as an appellee in this case, a motion we granted on February 24, 1985. Because appellees raise identical arguments, the discussion of Kenneth Owens’ case is subsumed in the discussion of Buenta Owens’ case.
The Secretary disputes the propriety of the class certification and in particular the District Court’s conclusion that the waiver of further administrative review as to the named appellees had the effect of waiving exhaustion requirements as to all the members of the class. Because we reject the equal protection claim, we do not reach the class certification issue.
In 1958, Congress amended this strict remarriage rule to provide that benefits would not be terminated if a widow or widower married a person who was also entitled to benefits under the Act. Pub. L. 85-840, §§ 307(b), (e), 72 Stat. 1031.
In addition to widowed spouses and divorced widowed spouses, the expanded class of beneficiaries would have included surviving parents and surviving children.
The contemporaneous legislative history does not reveal what portion of that figure would have been attributable to divorced widowed spouses. A budgetary report on the 1983 amendments that eliminated the distinction between widowed spouses and divorced widowed spouses estimated the cost of that amendment as less than $50 million a year. Congress in 1977 was not required to separate out the $1.3 billion cost figure by subcategories. It was free to continue to extend benefits following marriage only to that group of secondary beneficiaries most closely tied to the wage earner, consistent with the general purposes of the Act. That $50 million annual cost is sufficient to justify fiscal concern. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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62
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UNITED STATES et al. v. LOCKE et al.
No. 83-1394.
Argued November 6, 1984
Decided April 1, 1985
MARSHALL, J., delivered the opinion of the Court, in which Burger, C. J., and White, Blackmun, Rehnquist, and O’Connor, JJ., joined. O’Connor, J., filed a concurring opinion, post, p. 110. Powell, J., filed a dissenting opinion, post, p. 112. Stevens, J., filed a dissenting opinion, in which Brennan, J., joined, post, p. 117.
Carolyn F. Corwin argued the cause for appellants. With her on the briefs were Solicitor General Lee, Assistant Attorney General Habicht, Deputy Solicitor General Claiborne, David C. Shilton, and Arthur E. Gowran.
Harold A. Swafford argued the cause for appellees. With him on the brief was John W. Hoffman.
Laurens H. Silver and John Leshy filed a brief for the Sierra Club as amicus curiae urging reversal.
Briefs of amici curiae urging affirmance were filed for the State of Nevada by Brian McKay, Attorney General, and James C. Smith, Deputy Attorney General; for the Alaska Miners Association et al. by Ronald A. Zumbrun and Robin L. Rivett; for the Colorado Mining Association by Randy L. Parcel; for Mobil Oil Corp. by Stephen D. Alfers and William A. Hillhouse II; and for the Mountain States Legal Foundation by K. Preston Oade, Jr.
Justice Marshall
delivered the opinion of the Court.
The primary question presented by this appeal is whether the Constitution prevents Congress from providing that holders of unpatented mining claims who fail to comply with the annual filing requirements of the Federal Land Policy and Management Act of 1976 (FLPMA), 43 U. S. C. § 1744, shall forfeit their claims.
I
From the enactment of the general mining laws in the 19th century until 1976, those who sought to make their living by locating and developing minerals on federal lands were virtually unconstrained by the fetters of federal control. The general mining laws, 30 U. S. C. §22 et seq., still in effect today, allow United States citizens to go onto unappropriated, unreserved public land to prospect for and develop certain minerals. “Discovery” of a mineral deposit, followed by the minimal procedures required to formally “locate” the deposit, gives an individual the right of exclusive possession of the land for mining purposes, 30 U. S. C. § 26; as long as $100 of assessment work is performed annually, the individual may continue to extract and sell minerals from the claim without paying any royalty to the United States, 30 U. S. C. §28. For a nominal sum, and after certain statutory conditions are fulfilled, an individual may patent the claim, thereby purchasing from the Federal Government the land and minerals and obtaining ultimate title to them. Patenting, however, is not required, and an unpatented mining claim remains a fully recognized possessory interest. Best v. Humboldt Placer Mining Co., 371 U. S. 334, 335 (1963).
By the 1960’s, it had become clear that this 19th-century laissez-faire regime had created virtual chaos with respect to the public lands. In 1975, it was estimated that more than 6 million unpatented mining claims existed on public lands other than the national forests; in addition, more than half the land in the National Forest System was thought to be covered by such claims. S. Rep. No. 94-583, p. 65 (1975). Many of these claims had been dormant for decades, and many were invalid for other reasons, but in the absence of a federal recording system, no simple way existed for determining which public lands were subject to mining locations, and whether those locations were valid or invalid. Ibid. As a result, federal land managers had to proceed slowly and cautiously in taking any action affecting federal land lest the federal property rights of claimants be unlawfully disturbed. Each time the Bureau of Land Management (BLM) proposed a sale or other conveyance of federal land, a title search in the county recorder’s office was necessary; if an outstanding mining claim was found, no matter how stale or apparently abandoned, formal administrative adjudication was required to determine the validity of the claim.
After more than a decade of studying this problem in the context of a broader inquiry into the proper management of the public lands in the modern era, Congress in 1976 enacted FLPMA, Pub. L. 94-579, 90 Stat. 2743 (codified at 43 U. S. C. §1701 et seq.). Section 314 of the Act establishes a federal recording system that is designed both to rid federal lands of stale mining claims and to provide federal land managers with up-to-date information that allows them to make informed land management decisions. For claims located before FLPMA’s enactment, the federal recording system imposes two general requirements. First, the claims must initially be registered with the BLM by filing, within three years of FLPMA’s enactment, a copy of the official record of the notice or certificate of location. 90 Stat. 2743, § 314(b), 43 U. S. C. § 1744(b). Second, in the year of the initial recording, and “prior to December 31” of every year after that, the claimant must file with state officials and with BLM a notice of intention to hold the claim, an affidavit of assessment work performed on the claim, or a detailed reporting form. 90 Stat. 2743, § 314(a), 43 U. S. C. § 1744(a). Section 314(c) of the Act provides that failure to comply with either of these requirements “shall be deemed conclusively to constitute an abandonment of the mining claim ... by the owner.” 43 U. S. C. § 1744(c).
The second of these requirements — the annual filing obligation — has created the dispute underlying this appeal. Appellees, four individuals engaged “in the business of operating mining properties in Nevada,” purchased in 1960 and 1966 10 unpatented mining claims on public lands near Ely, Nevada. These claims were major sources of gravel and building material: the claims are valued at several million dollars, and, in the 1979-1980 assessment year alone, appel-lees’ gross income totaled more than $1 million. Throughout the period during which they owned the claims, appellees complied with annual state-law filing and assessment work requirements. In addition, appellees satisfied FLPMA’s initial recording requirement by properly filing with BLM a notice of location, thereby putting their claims on record for purposes of FLPMA.
At the end of 1980, however, appellees failed to meet on time their first annual obligation to file with the Federal Government. After allegedly receiving misleading information from a BLM employee, appellees waited until December 31 to submit to BLM the annual notice of intent to hold or proof of assessment work performed required under § 314(a) of FLPMA, 43 U. S. C. § 1744(a). As noted above, that section requires these documents to be filed annually “prior to December 31.” Had appellees checked, they further would have discovered that BLM regulations made quite clear that claimants were required to make the annual filings in the proper BLM office “on or before December 30 of each calendar year.” 43 CFR §3833.2-1(a) (1980) (current version at 43 CFR §3833.2-1(b)(1) (1984)). Thus, appellees’ filing was one day too late.
This fact was brought painfully home to appellees when they received a letter from the BLM Nevada State Office informing them that their claims had been declared abandoned and void due to their tardy filing. In many cases, loss of a claim in this way would have minimal practical effect; the claimant could simply locate the same claim again and then rerecord it with BLM. In this case, however, relocation of appellees’ claims, which were initially located by appellees’ predecessors in 1952 and 1954, was prohibited by the Common Varieties Act of 1955, 30 U. S. C. §611; that Act prospectively barred location of the sort of minerals yielded by appellees’ claims. Appellees’ mineral deposits thus es-cheated to the Government.
After losing an administrative appeal, appellees filed the present action in the United States District Court for the District of Nevada. Their complaint alleged, inter alia, that § 314(c) effected an unconstitutional taking of their property without just compensation and denied them due process. On summary judgment, the District Court held that § 314(c) did indeed deprive appellees of the process to which they were constitutionally due. 573 F. Supp. 472 (1983). The District Court reasoned that § 314(c) created an impermissible irrebuttable presumption that claimants who failed to make a timely filing intended to abandon their claims. Rather than relying on this presumption, the Government was obliged, in the District Court’s view, to provide individualized notice to claimants that their claims were in danger of being lost, followed by a post-filing-deadline hearing at which the claimants could demonstrate that they had not, in fact, abandoned a claim. Alternatively, the District Court held that the 1-day late filing “substantially complied” with the Act and regulations.
Because a District Court had held an Act of Congress unconstitutional in a civil suit to which the United States was a party, we noted probable jurisdiction under 28 U. S. C. § 1252. 467 U. S. 1225 (1984). We now reverse.
I — I I — I
Appeal under 28 U. S. C. § 1252 brings before this Court not merely the constitutional question decided below, but the entire case. McLucas v. DeChamplain, 421 U. S. 21, 31 (1975); United States v. Raines, 362 U. S. 17, 27, n. 7 (1960). The entire case includes nonconstitutional questions actually decided by the lower court as well as nonconstitutional grounds presented to, but not passed on, by the lower court. United States v. Clark, 445 U. S. 23, 27-28 (1980). These principles are important aids in the prudential exercise of our appellate jurisdiction, for when a case arrives here by appeal under 28 U. S. C. § 1252, this Court will not pass on the constitutionality of an Act of Congress if a construction of the Act is fairly possible, or some other nonconstitutional ground fairly available, by which the constitutional question can be avoided. See Heckler v. Mathews, 465 U. S. 728, 741-744 (1984); Johnson v. Robison, 415 U. S. 361, 366-367 (1974); cf. United States v. Congress of Industrial Organizations, 335 U. S. 106, 110 (1948) (appeals under former Criminal Appeals Act); see generally Ashwander v. TVA, 297 U. S. 288, 347 (1936) (Brandeis, J., concurring). Thus, we turn first to the nonconstitutional questions pressed below.
III
A
Before theDistrict Court, appellees asserted that the § 314(a) requirement of a filing “prior to December 31 of each year” should be construed to require a filing “on or before December 31.” Thus, appellees argued, their December 31 filing had in fact complied with the statute, and the BLM had acted ultra vires in voiding their claims.
Although the District Court did not address this argument, the argument raises a question sufficiently legal in nature that we choose to address it even in the absence of lower court analysis. See, e. g., United States v. Clark, supra. It is clear to us that the plain language of the statute simply cannot sustain the gloss appellees would put on it. As even counsel for appellees conceded at oral argument, § 314(a) “is a statement that Congress wanted it filed by December 30th. I think that is a clear statement. . . .” Tr. of Oral Arg. 27; see also id., at 37 (“A literal reading of the statute would require a December 30th filing . . .”). While we will not allow a literal reading of a statute to produce a result “demonstrably at odds with the intentions of its drafters,” Griffin v. Oceanic Contractors, Inc., 458 U. S. 564, 571 (1982), with respect to filing deadlines a literal reading of Congress’ words is generally the only proper reading of those words. To attempt to decide whether some date other than the one set out in the statute is the date actually “intended” by Congress is to set sail on an aimless journey, for the purpose of a filing deadline would be just as well served by nearly any date a court might choose as by the date Congress has in fact set out in the statute. “Actual purpose is sometimes unknown,” United States Railroad Retirement Board v. Fritz, 449 U. S. 166, 180 (1980) (Stevens, J., concurring), and such is the case with filing deadlines; as might be expected, nothing in the legislative history suggests why Congress chose December 30 over December 31, or over September 1 (the end of the assessment year for mining claims, 30 U. S. C. §28), as the last day on which the required filings could be made. But “[deadlines are inherently arbitrary,” while fixed dates “are often essential to accomplish necessary results.” United States v. Boyle, 469 U. S. 241, 249 (1984). Faced with the inherent arbitrariness of filing deadlines, we must, at least in a civil case, apply by its terms the date fixed by the statute. Cf. United States Railroad Retirement Board v. Fritz, supra, at 179.
Moreover, BLM regulations have made absolutely clear since the enactment of FLPMA that “prior to December 31” means what it says. As the current version of the filing regulations states:
“The owner of an unpatented mining claim located on Federal lands . . . shall have filed or caused to have been filed on or before December SO of each calendar year . . . evidence of annual assessment work performed during the previous assessment year or a notice of intention to hold the mining claim.” 43 CFR § 3833.2-1(b)(1) (1984) (emphasis added).
See also 43 CFR § 3833.2-1(a) (1982) (same); 43 CFR § 3833.2-1(a) (1981) (same); 43 CFR §3833.2-1(a) (1980) (same); 43 CFR § 3833.2-1(a) (1979) (same); 43 CFR §3833.2-1(a)(1) (1978) (“prior to” Dec. 31); 43 CFR §3833.2-1(a)(1) (1977) (“prior to” Dec. 31). Leading mining treatises similarly inform claimants that “[i]t is important to note that the filing of a notice of intention or evidence of assessment work must be done prior to December 31 of each year, i. e., on or before December 30.” 2 American Law of Mining § 7.23D, p. 150.2 (Supp. 1983) (emphasis in original); see also 23 Rocky Mountain Mineral Law Institute 25 (1977) (same). If appellees, who were businessmen involved in the running of a major mining operation for more than 20 years, had any questions about whether a December 31 filing complied with the statute, it was incumbent upon them, as it is upon other businessmen, see United States v. Boyle, supra, to have checked the regulations or to have consulted an attorney for legal advice. Pursuit of either of these courses, rather than the submission of a last-minute filing, would surely have led appellees to the conclusion that December 30 was the last day on which they could file safely.
In so saying, we are not insensitive to the problems posed by congressional reliance on the words “prior to December 31.” See post, p. 117 (Stevens, J., dissenting). But the fact that Congress might have acted with greater clarity or foresight does not give courts a carte blanche to redraft statutes in an effort to achieve that which Congress is perceived to have failed to do. “There is a basic difference between filling a gap left by Congress’ silence and rewriting rules that Congress has affirmatively and specifically enacted.” Mobil Oil Corp. v. Higginbotham, 436 U. S. 618, 625 (1978). Nor is the Judiciary licensed to attempt to soften the clear import of Congress’ chosen words whenever a court believes those words lead to a harsh result. See Northwest Airlines, Inc. v. Transport Workers, 451 U. S. 77, 98 (1981). On the contrary, deference to the supremacy of the Legislature, as well as recognition that Congressmen typically vote on the language of a bill, generally requires us to assume that “the legislative purpose is expressed by the ordinary meaning of the words used.” Richards v. United States, 369 U. S. 1, 9 (1962). “Going behind the plain language of a statute in search of a possibly contrary congressional intent is ‘a step to be taken cautiously’ even under the best of circumstances.” American Tobacco Co. v. Patterson, 456 U. S. 63, 75 (1982) (quoting Piper v. Chris-Craft Industries, Inc., 430 U. S. 1, 26 (1977)). When even after taking this step nothing in the legislative history remotely suggests a congressional intent contrary to Congress’ chosen words, and neither appellees nor the dissenters have pointed to anything that so suggests, any further steps take the courts out of the realm of interpretation and place them in the domain of legislation. The phrase “prior to” may be clumsy, but its meaning is clear. Under these circumstances, we are obligated to apply the “prior to December 31” language by its terms. See, e. g., American Tobacco Co. v. Patterson, supra, at 68; Consumer Product Safety Comm’n v. GTE Sylvania, Inc., 447 U. S. 102, 108 (1980).
The agency’s regulations clarify and confirm the import of the statutory language by making clear that the annual filings must be made on or before December 30. These regulations provide a conclusive answer to appellees’ claim, for where the language of a filing deadline is plain and the agency’s construction completely consistent with that language, the agency’s construction simply cannot be found “sufficiently unreasonable” as to be unacceptable. FEC v. Democratic Senatorial Campaign Committee, 454 U. S. 27, 39 (1981).
We cannot press statutory construction “to the point of disingenuous evasion” even to avoid a constitutional question. Moore Ice Cream Co. v. Rose, 289 U. S. 373, 379 (1933) (Cardozo, J.). We therefore hold that BLM did not act ultra vires in concluding that appellees’ filing was untimely.
B
Section 314(c) states that failure to comply with the filing requirements of §§ 314(a) and 314(b) “shall be deemed conclusively to constitute an abandonment of the mining claim.” We must next consider whether this provision expresses a congressional intent to extinguish all claims for which filings have not been made, or only those claims for which filings have not been made and for which the claimants have a specific intent to abandon the claim. The District Court adopted the latter interpretation, and on that basis concluded that § 314(c) created a constitutionally impermissible irrebut-table presumption of abandonment. The District Court reasoned that, once Congress had chosen to make loss of a claim turn on the specific intent of the claimant, a prior hearing and findings on the claimant’s intent were constitutionally required before the claim of a nonfiling claimant could be extinguished.
In concluding that Congress was concerned with the specific intent of the claimant even when the claimant had failed to make the required filings, the District Court began from the fact that neither § 314(c) nor the Act itself defines the term “abandonment” as that term appears in § 314(c). The District Court then noted correctly that the common law of mining traditionally has drawn a distinction between “abandonment” of a claim, which occurs only upon a showing of the claimant’s intent to relinquish the claim, and “forfeiture” of a claim, for which only noncompliance with the requirements of law must be shown. See, e. g., 2 American Law of Mining §8.2, pp. 195-196 (1983) (relied upon by the District Court). Given that Congress had not expressly stated in the statute any intent to depart from the term-of-art meaning of “abandonment” at common law, the District Court concluded that § 314(c) was intended to incorporate the traditional common-law distinction between abandonment and forfeiture. Thus, reasoned the District Court, Congress did not intend to cause a forfeiture of claims for which the required filings had not been made, but rather to focus on the claimant’s actual intent. As a corollary, the District Court understood the failure to file to have been intended to be merely one piece of evidence in a factual inquiry into whether a claimant had a specific intent to abandon his property.
This construction of the statutory scheme cannot withstand analysis. While reference to common-law conceptions is often a helpful guide to interpreting open-ended or undefined statutory terms, see, e. g., NLRB v. Amax Coal Co., 453 U. S. 322, 329 (1981); Standard Oil Co. v. United States, 221 U. S. 1, 59 (1911), this principle is a guide to legislative intent, not a talisman of it, and the principle is not to be applied in defiance of a statute’s overriding purposes and logic. Although § 314(c) is couched in terms of a conclusive presumption of “abandonment,” there can be little doubt that Congress intended § 314(c) to cause a forfeiture of all claims for which the filing requirements of §§ 314(a) and 314(b) had not been met.
To begin with, the Senate version of § 314(c) provided that any claim not properly recorded “shall be conclusively presumed to be abandoned and shall be void.” S. 507, 94th Cong., 1st Sess., §311 (1975). The Committee Report accompanying S. 507 repeatedly indicated that failure to comply with the filing requirements would make a claim “void.” See S. Rep. No. 94-583, pp. 65, 66 (1975). The House legislation and Reports merely repeat the statutory language without offering any explanation of it, but it is clear from the Conference Committee Report that the undisputed intent of the Senate — to make “void” those claims for which proper filings were not timely made — was the intent of both Chambers. The Report stated: “Both the Senate bill and House amendments provided for recordation of mining claims and for extinguishment of abandoned claims.” H. R. Rep. No. 94-1724, p. 62 (1976) (emphasis added).
In addition, the District Court’s construction fails to give effect to the “deemed conclusively” language of § 314(c). If the failure to file merely shifts the burden to the claimant to prove that he intends to keep the claim, nothing “conclusive” is achieved by § 314(c). The District Court sought to avoid this conclusion by holding that § 314(c) does extinguish automatically those claims for which initial recordings, as opposed to annual filings, have not been made; the District Court attempted to justify its distinction between initial recordings and annual filings on the ground that the dominant purpose of § 314(c) was to avoid forcing BLM to the “awesome task of searching every local title record” to establish initially a federal recording system. 573 F. Supp., at 477. Once this purpose had been satisfied by an initial recording, the primary purposes of the “deemed conclusively” language, in the District Court’s view, had been met. But the clear language of § 314(c) admits of no distinction between initial recordings and annual filings: failure to do either “shall be deemed conclusively to constitute an abandonment.” And the District Court’s analysis of the purposes of § 314(c) is also misguided, for the annual filing requirements serve a purpose similar to that of the initial recording requirement; millions of claims undoubtedly have now been recorded, and the presence of an annual filing obligation allows BLM to keep the system established in §314 up to date on a yearly basis. To put the burden on BLM to keep this system current through its own inquiry into the status of recorded claims would lead to a situation similar to that which led Congress initially to make the federal recording system self-executing. The purposes of a self-executing recording system are implicated similarly, if somewhat less substantially, by both the annual filing obligation and the initial recording requirement, and the District Court was not empowered to thwart these purposes or the clear language of § 314(c) by concluding that § 314(c) was actually concerned with only initial recordings.
For these reasons, we find that Congress intended in § 314(c) to extinguish those claims for which timely filings were not made. Specific evidence of intent to abandon is simply made irrelevant by § 314(c); the failure to file on time, in and of itself, causes a claim to be lost. See Western Mining Council v. Watt, 643 F. 2d 618, 628 (CA9 1981).
C
A final statutory question must be resolved before we turn to the constitutional holding of the District Court. Relying primarily on Hickel v. Oil Shale Corp., 400 U. S. 48 (1970), the District Court held that, even if the statute required a filing on or before December 30, appellees had “substantially complied” by filing on December 31. We cannot accept this view of the statute.
The notion that a filing deadline can be complied with by filing sometime after the deadline falls due is, to say the least, a surprising notion, and it is a notion without limiting principle. If 1-day late filings are acceptable, 10-day late filings might be equally acceptable, and so on in a cascade of exceptions that would engulf the rule erected by the filing deadline; yet regardless of where the cutoff line is set, some individuals will always fall just on the other side of it. Filing deadlines, like statutes of limitations, necessarily operate harshly and arbitrarily with respect to individuals who fall just on the other side of them, but if the concept of a filing deadline is to have any content, the deadline must be enforced. “Any less rigid standard would risk encouraging a lax attitude toward filing dates,” United States v. Boyle, 469 U. S., at 249. A filing deadline cannot be complied with, substantially or otherwise, by filing late — even by one day. Hickel v. Oil Shale Corp., supra, does not support a contrary conclusion. Hickel suggested, although it did not hold, that failure to meet the annual assessment work requirements of the general mining laws, 30 U. S. C. §28, which require that “not less than $100 worth of labor shall be performed or improvements made during each year,” would not render a claim automatically void. Instead, if an individual complied substantially but not fully with the requirement, he might under some circumstances be able to retain possession of his claim.
These suggestions in Hickel do not afford a safe haven to mine owners who fail to meet their filing obligations under any federal mining law. Failure to comply fully with the physical requirement that a certain amount of work be performed each year is significantly different from the complete failure to file on time documents that federal law commands be filed. In addition, the general mining laws at issue in Hickel do not clearly provide that a claim will be lost for failure to meet the assessment work requirements. Thus, it was open to the Court to conclude in Hickel that Congress had intended to make the assessment work requirement merely an indicium of a claimant’s specific intent to retain a claim. Full compliance with the assessment work requirements would establish conclusively an intent to keep the claim, but less than full compliance would not by force of law operate to deprive the claimant of his claim. Instead, less than full compliance would subject the mine owner to a case-by-case determination of whether he nonetheless intended to keep his claim. See Hickel, supra, at 56-57.
In this case, the statute explicitly provides that failure to comply with the applicable filing requirements leads automatically to loss of the claim. See Part II-B, supra. Thus, Congress has made it unnecessary to ascertain whether the individual in fact intends to abandon the claim, and there is no room to inquire whether substantial compliance is indicative of the claimant’s intent — intent is simply irrelevant if the required filings are not made. Hickel’s discussion of substantial compliance is therefore inapposite to the statutory scheme at issue here. As a result, Hickel gives miners no greater latitude with filing deadlines than other individuals have.
> HH
Much of the District Court’s constitutional discussion necessarily falls with our conclusion that § 314(c) automatically deems forfeited those claims for which the required filings are not timely made. The District Court’s invalidation of the statute rested heavily on the view that § 314(c) creates an “irrebuttable presumption that mining claims are abandoned if the miner fails to timely file” the required documents — that the statute presumes a failure to file to signify a specific intent to abandon the claim. But, as we have just held, § 314(c) presumes nothing about a claimant’s actual intent; the statute simply and conclusively deems such claims to be forfeited. As a forfeiture provision, § 314(c) is not subject to the individualized hearing requirement of such irrebuttable presumption cases as Vlandis v. Kline, 412 U. S. 441 (1973), or Cleveland Bd. of Education v. LaFleur, 414 U. S. 632 (1974), for there is nothing to suggest that, in enacting § 314(c), Congress was in any way concerned with whether a particular claimant’s tardy filing or failure to file indicated an actual intent to abandon the claim.
There are suggestions in the District Court’s opinion that, even understood as a forfeiture provision, § 314(c) might be unconstitutional. We therefore go on to consider whether automatic forfeiture of a claim for failure to make annual filings is constitutionally permissible. The framework for analysis of this question, in both its substantive and procedural dimensions, is set forth by our recent decision in Texaco, Inc. v. Short, 454 U. S. 516 (1982). There we upheld a state statute pursuant to which a severed mineral interest that had not been used for a period of 20 years automatically lapsed and reverted to the current surface owner of the property, unless the mineral owner filed a statement of claim in the county recorder’s office within 2 years of the statute’s passage.
A
Under Texaco, we must first address the question of affirmative legislative power: whether Congress is authorized to “provide that property rights of this character shall be extinguished if their owners do not take the affirmative action required by the” statute. Id., at 525. Even with respect to vested property rights, a legislature generally has the power to impose new regulatory constraints on the way in which those rights are used, or to condition their continued retention on performance of certain affirmative duties. As long as the constraint or duty imposed is a reasonable restriction designed to further legitimate legislative objectives, the legislature acts within its powers in imposing such new constraints or duties. See, e. g., Village of Euclid v. Ambler Realty, Co., 272 U. S. 365 (1926); Turner v. New York, 168 U. S. 90, 94 (1897); Vance v. Vance, 108 U. S. 514, 517 (1883); Terry v. Anderson, 95 U. S. 628 (1877). “[Ljegis-lation readjusting rights and burdens is not unlawful solely because it upsets otherwise settled expectations.” Usery v. Turner Elkhorn Mining Co., 428 U. S. 1, 16 (1976) (citations omitted).
This power to qualify existing property rights is particularly broad with respect to the “character” of the property rights at issue here. Although owners of unpatented mining claims hold fully recognized possessory interests in their claims, see Best v. Humboldt Placer Mining Co., 371 U. S. 334, 335 (1963), we have recognized that these interests are a “unique form of property.” Ibid. The United States, as owner of the underlying fee title to the public domain, maintains broad powers over the terms and conditions upon which the public lands can be used, leased, and acquired. See, e. g., Kleppe v. New Mexico, 426 U. S. 529, 589 (1976).
“A mining location which has not gone to patent is of no higher quality and no more immune from attack and investigation than are unpatented claims under the homestead and kindred laws. If valid, it gives to the claimant certain exclusive possessory rights, and so do homestead and desert claims. But no right arises from an invalid claim of any kind. All must conform to the law under which they are initiated; otherwise they work an unlawful private appropriation in derogation of the rights of the public.” Cameron v. United States, 252 U. S. 450, 460 (1920).
Claimants thus must take their mineral interests with the knowledge that the Government retains substantial regulatory power over those interests. Cf. Energy Reserves Group, Inc. v. Kansas Power & Light Co., 459 U. S. 400, 413 (1983). In addition, the property right here is the right to a flow of income from production of the claim. Similar vested economic rights are held subject to the Government’s substantial power to regulate for the public good the conditions under which business is carried out and to redistribute the benefits and burdens of economic life. See, e. g., National Railroad Passenger Corporation v. Atchison, T. & S. F. R. Co., 470 U. S. 451, 468-469 (1985); Usery v. Turner Elkhorn Mining Co., supra; see generally Walls v. Midland Carbon Co., 254 U. S. 300, 315 (1920) (“[I]n the interest of the community, [government may] limit one [right] that others may be enjoyed”).
Against this background, there can be no doubt that Congress could condition initial receipt of an unpatented mining claim upon an agreement to perform annual assessment work and make annual filings. That this requirement was applied to claims already located by the time FLPMA was enacted and thus applies to vested claims does not alter the analysis, for any “retroactive application of [FLPMA] is supported by a legitimate legislative purpose furthered by rational means.” Pension Benefit Guaranty Corporation v. R. A. Gray & Co., 467 U. S. 717, 729 (1984). The purposes of applying FLPMA’s filing provisions to claims located before the Act was passed — to rid federal lands of stale mining claims and to provide for centralized collection by federal land managers of comprehensive and up-to-date information on the status of recorded but unpatented mining claims — are clearly legitimate. In addition, § 314(c) is a reasonable, if severe, means of furthering these goals; sanctioning with loss of their claims those claimants who fail to file provides a powerful motivation to comply with the filing requirement, while automatic invalidation for noncompliance enables federal land managers to know with certainty and ease whether a claim is currently valid. Finally, the restriction attached to the continued retention of a mining claim imposes the most minimal of burdens on claimants; they must simply file a paper once a year indicating that the required assessment work has been performed or that they intend to hold the claim. Indeed, appellees could have fully protected their interests against the effect of the statute by taking the minimal additional step of-patenting the claims. As a result, Congress was well within its affirmative powers in enacting the filing requirement, in imposing the penalty of extinguishment set forth in § 314(c), and in applying the requirement and sanction to claims located before FLPMA was passed.
B
We look next to the substantive effect of § 314(c) to determine whether Congress is nonetheless barred from enacting it because it works an impermissible intrusion on constitutionally protected rights. With respect to the regulation of private property, any such protection must come from the Fifth Amendment’s proscription against the taking of private property without just compensation. On this point, however, Texaco is controlling: “this Court has never required [Congress] to compensate the owner for the consequences of his own neglect.” 454 U. S., at 530. Appellees failed to inform themselves of the proper filing deadline and failed to file in timely fashion the documents required by federal law. Their property loss was one appellees could have avoided with minimal burden; it was their failure to file on time— not the action of Congress — that caused the property right to be extinguished. Regulation of property rights does not “take” private property when an individual’s reasonable, investment-backed expectations can continue to be realized as long as he complies with reasonable regulatory restrictions the legislature has imposed. See, e. g., Miller v. Schoene, 276 U. S. 272, 279-280 (1928); Terry v. Anderson, 95 U. S., at 632-633; cf. Hawkins v. Barney’s Lessee, 5 Pet. 457, 465 (1831) (“What right has any one to complain, when a reasonable time has been given him, if he has not been vigilant in asserting his rights?”).
C
Finally, the Act provides appellees with all the process that is their constitutional due. In altering substantive rights through enactment of rules of general applicability, a legislature generally provides constitutionally adequate process simply by enacting the statute, publishing it, and, to the extent the statute regulates private conduct, affording those within the statute’s reach a reasonable opportunity both to familiarize themselves with the general requirements imposed and to comply with those requirements. Texaco, 454 U. S., at 532; see also Anderson National Bank v. Luckett, 321 U. S. 233, 243 (1944); North Laramie Land Co. v. Hoffman, 268 U. S. 276, 283 (1925). Here there can be no doubt that the Act’s recording provisions meet these minimal requirements. Although FLPMA was enacted in 1976, owners of existing claims, such as appellees, were not required to make an initial recording until October 1979. This 3-year period, during which individuals could become familiar with the requirements of the new law, surpasses the 2-year grace period we upheld in the context of a similar regulation of mineral interests in Texaco. Moreover, the specific annual filing obligation at issue in this case is not triggered until the year after which the claim is recorded initially; thus, every claimant in appellees’ position already has filed once before the annual filing obligations come due. That these claimants already have made one filing under the Act indicates that they know, or must be presumed to know, of the existence of the Act and of their need to inquire into its demands. The requirement of an annual filing thus was not so unlikely to come to the attention of those in the position of appellees as to render unconstitutional the notice provided by the 3-year grace period.
Despite the fact that FLPMA meets the three standards laid down in Texaco for the imposition of new regulatory restraints on existing property rights, the District Court seemed to believe that individualized notice of the filing deadlines was nonetheless constitutionally required. The District Court felt that such a requirement would not be “overly burdensome” to the Government and would be of great benefit to mining claimants. The District Court may well be right that such an individualized notice scheme would be a sound means of administering the Act. But in the regulation of private property rights, the Constitution offers the courts no warrant to inquire into whether some other scheme might be more rational or desirable than the one chosen by Congress; as long as the legislative scheme is a rational way of reaching Congress’ objectives, the efficacy of alternative routes is for Congress alone to consider. “It is enough to say that the Act approaches the problem of [developing a national recording system] rationally; whether a [different notice scheme] would have been wiser or more practical under the circumstances is not a question of constitutional dimension.” Usery v. Turner Elkhorn Mining, 428 U. S., at 19. Because we deal here with purely economic legislation, Congress was entitled to conclude that it was preferable to place a substantial portion of the burden on claimants to make the national recording system work. See ibid.; Weinberger v. Salfi, 422 U. S. 749 (1975); Mourning v. Family Publications Service, Inc., 411 U. S. 356 (1973). The District Court therefore erred in invoking the Constitution to supplant the valid administrative scheme established by Congress. The judgment below is reversed, and the case is remanded for further proceedings consistent with this opinion.
It is so ordered.
See generally Strauss, Mining Claims on Public Lands: A Study of Interior Department Procedures, 1974 Utah L. Rev. 185, 193, 215-219.
The text of 43 U. S. C. §1744 provides, in relevant part, as follows:
“Recordation of Mining Claims
“(a) Filing requirements
“The owner of an unpatented lode or placer mining claim located prior to October 21, 1976, shall, within the three-year period following October 21, 1976 and prior to December 31 of each year thereafter, file the instruments required by paragraphs (1) and (2) of this subsection. . . .
“(1) File for record in the office where the location notice or certificate is recorded either a notice of intention to hold the mining claim (including but not limited to such notices as are provided by law to be filed when there has been a suspension or deferment of annual assessment work), an affidavit of assessment work performed thereon, on a detailed report provided by section 28-1 of title 30, relating thereto.
“(2) File in the office of the Bureau designated by the Secretary a copy of the official record of the instrument filed or recorded pursuant to paragraph (1) of this subsection, including a description of the location of the mining claim sufficient to locate the claimed lands on the ground.
“(b) Additional filing requirements
“The owner of an unpatented lode or placer mining claim or mill or tunnel site located prior to October 21, 1976 shall, within the three-year period following October 21, 1976, file in the office of the Bureau designated by the Secretary a copy of the official record of the notice of location or certificate of location, including a description of the location of the mining claim or mill or tunnel site sufficient to locate the claimed lands on the ground. The owner of an unpatented lode or placer mining claim or mill or tunnel site located after October 21, 1976 shall, within ninety days after the date of location of such claim, file in the office of the Bureau designated by the Secretary a copy of the official record of the notice of location or certificate of location, including a description of the location of the mining claim or mill or tunnel site sufficient to locate the claimed lands on the ground.
“(c) Failure to file as constituting abandonment; defective or untimely filing
“The failure to file such instruments as required by subsections (a) and (b) of this subsection shall be deemed conclusively to constitute an abandonment of the mining claim or mill or tunnel site by the owner; but it shall not be considered a failure to file if the instrument is defective or not timely filed for record under other Federal laws permitting filing or recording thereof, or if the instrument is filed for record by or on behalf of some but not all of the owners of the mining claim or mill or tunnel site.”
A somewhat different scheme applies to claims located after October 21, 1976, the date the Act took effect.
Complaint ¶ 2.
Id., ¶ 15.
573 F. Supp. 472, 474 (1983). From 1960 to 1980, total gross income from the claims exceeded $4 million. Ibid.
An affidavit submitted to the District Court by one of appellees’ employees stated that BLM officials in Ely had told the employee that the filing could be made at the BLM Reno office “on or before December 31, 1980.” Affidavit of Laura C. Locke ¶ 3. The 1978 version of a BLM question and answer pamphlet erroneously stated that the annual filings had to be made “on or before December 31” of each year. Staking a Mining Claim on Federal Lands 9-10 (1978). Later versions have corrected this error to bring the pamphlet into accord with the BLM regulations that require the filings to be made “on or before December 30.”
Justice Stevens and Justice Powell seek to make much of this pamphlet and of the uncontroverted evidence that appellees were told a December 31 filing would comply with the statute. See post, at 117, 122, 128. However, at the time appellees filed in 1980, BLM regulations and the then-current pamphlets made clear that the filing was required “on or before December 30.” Thus, the dissenters’ reliance on this pamphlet would seem better directed to the claim that the United States was equitably estopped from forfeiting appellees’ claims, given the advice of the BLM agent and the objective basis the 1978 pamphlet provides for crediting the claim that such advice was given. The District Court did not consider this estoppel claim. Without expressing any view as to whether, as a matter of law, appellees could prevail on such a theory, see Heckler v. Community Health Services of Crawford County, Inc., 467 U. S. 51 (1984), we leave any further treatment of this issue, including fuller development of the record, to the District Court on remand.
That the District Court decided the case on both constitutional and statutory grounds does not affect this Court’s obligation under 28 U. S. C. § 1252 to take jurisdiction over the case; as long as the unconstitutionality of an Act of Congress is one of the grounds of decision below in a civil suit to which the United States is a party, appeal lies directly to this Court. United States v. Rock Royal Co-operative, Inc., 307 U. S. 533, 541 (1939).
Another District Court in the West similarly has declared § 314(c) unconstitutional with respect to invalidation of claims based on failure to meet the initial recordation requirements of § 314(a) in timely fashion. Rogers v. United States, 575 F. Supp. 4 (Mont. 1982).
When the nonconstitutional questions have not been passed on by the lower court, we may vacate the decision below and remand with instructions that those questions be decided, see Youakim v. Miller, 425 U. S. 231 (1976), or we may choose to decide those questions ourselves without benefit of lower court analysis, see United States v. Clark. The choice between these options depends on the extent to which lower court factfinding and analysis of the nonconstitutional questions will be necessary or useful to our disposition of those questions.
Statutory filing deadlines are generally subject to the defenses of waiver, estoppel, and equitable tolling. See Zipes v. Trans World Airlines, Inc., 455 U. S. 385, 392-398 (1982). Whether this general principle applies to deadlines that run in favor of the Government is a question on which we express no opinion today. In addition, no showing has been made that appellees were in any way “unable to exercise the usual care and diligence” that would have allowed them to meet the filing deadline or to learn of its existence. See United States v. Boyle, 469 U. S. 241, 253 (1985) (Brennan, J., concurring). Of course, at issue in Boyle was an explicit provision in the Internal Revenue Code that provided a reasonable-cause exception to the Code’s filing deadlines, while FLPMA contains no analogous provision.
Legislative drafting books are filled with suggestions that the phrase “prior to” be replaced with the word “before,” see, e. g., R. Dickerson, Materials on Legal Drafting 293 (1981), but we have seen no suggestion that “prior to” be replaced with “on or before” — a phrase with obviously different substantive content.
We note that the United States Code is sprinkled with provisions that require action “prior to” some date, including at least 14 provisions that contemplate action “prior to December 31.” See 7 U. S. C. § 609(b)(5); 12 U. S. C. § 1709(o)(1)(E); 12 U. S. C. § 1823(g); 12 U. S. C. § 1841(a)(5)(A); 22 U. S. C. § 3784(e); 26 U. S. C. § 503(d)(1); 33 U. S. C. § 1319(a)(5)(B); 42 U. S. C. § 415(a)(7)(E)(ii) (1982 ed., Supp. III); 42 U. S. C. § 1962(d)-17(b); 42 U. S. C. § 5614(b)(5); 42 U. S. C. § 7502(a)(2); 42 U. S. C. §7521 (b)(2); 43 U. S. C. § 1744(a); 50 U. S. C. App. § 1741(b)(1). Dozens of state statutes and local ordinances undoubtedly incorporate similar “prior to December 31” deadlines. In addition, legislatures know how to make explicit an intent to allow action on December 31 when they employ a December 31 date in a statute. See, e.g., 7 U. S. C. § 609(b)(2); 22 U. S. C. §§ 3303 (b)(3)(B) and (c); 43 U. S. C. §256a.
It is unclear whether the arguments advanced by the dissenters are meant to apply to all of these provisions, or only to some of them; if the latter, we are given little guidance as to how a court is to go about the rather eclectic task of choosing which “prior to December 31” deadlines it can interpret “flexibly.” Understandably enough, the dissenters seek to disavow any intent to call all these “prior to December 31” deadlines into question and assure us that this is a “unique case,” post, at 117, n. 4 (Powell, J., dissenting), involving a “unique factual matrix,” post, at 128 (Stevens, J., dissenting). The only thing we can find unique about this particular December 31 deadline is that the dissenters are willing to go through such tortured reasoning to evade it.
The Senate bill required only initial recordings, not annual filings, but this factor is not significant in light of the actions of the Conference Committee; the clear structure of the Senate bill was to impose the sanction of claim extinguishment on those who failed to make whatever filings federal law required.
Since 1982, BLM regulations have provided that filings due on or before December 30 will be considered timely if postmarked on or before December 30 and received by BLM by the close of business on the following January 19. 43 CFR §3833.0-5(m) (1983). Appellees and the dissenters attempt to transform this regulation into a blank check generally authorizing “substantial compliance” with the filing requirements. We disagree for two reasons. First, the regulation was not in effect when appellees filed in 1980; it therefore cannot now be relied on to validate a purported “substantial compliance” in 1980. Second, that an agency has decided to take account of holiday mail delays by treating as timely filed a document postmarked on the statutory filing date does not require the agency to accept all documents hand-delivered any time before January 19. The agency rationally could decide that either of the options in this sort of situation — requiring mailings to be received by the same date that hand-deliveries must be made or requiring mailings to be postmarked by that date — is a sound way of administering the statute.
Justice Stevens further suggests that BLM would have been well within its authority to promulgate regulations construing the statute to allow for December 31 filings. Assuming the correctness of this suggestion, the fact that two interpretations of a statute are equally reasonable suggests to us that the agency’s interpretation is sufficiently reasonable as to be acceptable. See FEC v. Democratic Senatorial Campaign Committee, 454 U. S. 27, 39 (1981).
Appellees suggest that Texaco, Inc. v. Short, 454 U. S. 516 (1982), further requires that the restriction imposed be substantively reasonable in the sense that it adequately relate to some common-law conception of the nature of the property right involved. Thus, appellees point to the fact that, in Texaco, failure to file could produce a forfeiture only if, in addition, the mineral interest had lain dormant for 20 years; according to appellees, conjunction of a 20-year dormancy period with failure to file a statement of claim sufficiently indicated abandonment, as that term is understood at common law, to justify the statute.
Common-law principles do not, however, entitle an individual to retain his property until the common law would recognize it as abandoned. Legislatures can enact substantive rules of law that treat property as forfeited under conditions that the common law would not consider sufficient to indicate abandonment. See Hawkins v. Barney’s Lessee, 5 Pet. 457, 467 (1831) (“What is the evidence of an individual having abandoned his rights or property? It is clear that the subject is one over which every community is at liberty to make a rule for itself”). As long as proper notice of these rules exists, and the burdens they impose are not so wholly disproportionate to the burdens other individuals face in a highly regulated society that some people are being forced “alone to bear public burdens which, in all fairness and justice, must be borne by the public as a whole,” Armstrong v. United States, 364 U. S. 40, 49 (1960), the burden imposed is a reasonable restriction on the property right. Here Congress has chosen to redefine the way in which an unpatented mining claim can be lost through imposition of a filing requirement that serves valid public objectives, imposes the most minimal of burdens on property holders, and takes effect only after appellees have had sufficient notice of their need to comply and a reasonable opportunity to do so. That the filing requirement meets these standards is sufficient, under Texaco, to make it a reasonable restriction on the continued retention of the property right.
As a result, this is not a case in which individual notice of a statutory-change must be given because a statute is “sufficiently unusual in character, and triggered in circumstances so commonplace, that an average citizen would have no reason to regard the triggering event as calling for a heightened awareness of one’s legal obligations.” Texaco, 454 U. S., at 547 (Brennan, J., dissenting).
BLM does provide for notice and a hearing on the adjudicative fact of whether the required filings were actually made, and appellees availed themselves of this process by appealing, to the Department of Interior Board of Land Appeals, the BLM order that extinguished their claims for failure to make a timely filing.
In the exercise of its administrative discretion, BLM for the last several years has chosen to mail annual reminder notices to claimants several months before the end of the year; according to the Government, these notices state: “[Y]ou must file on or before 12/30 [of the relevant year]. Failure to file timely with the proper BLM office will render your claim abandoned.” Brief for Appellants 31-32, n. 22. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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25
] |
MINNESOTA STATE BOARD FOR COMMUNITY COLLEGES v. KNIGHT et al.
No. 82-898.
Argued November 1, 1983
Decided February 21, 1984
O’Connor, J., delivered the opinion of the Court, in which Burger, C. J., and White, Blackmun, and Rehnquist, JJ., joined. Marshall, J., filed an opinion concurring in the judgment, post, p. 292. Brennan, J., filed a dissenting opinion, post, p. 295. STEVENS, J., filed a dissenting opinion, in all but Part III of which Brennan, J., joined, and in all but Part II of which Powell, J., joined, post, p. 300.
Eric R. Miller argued the cause for appellants. With him on the briefs for appellants in No. 82-977 was Donald W. Selzer, Jr. Hubert H. Humphrey III, Attorney General of Minnesota, and Donald J. Mueting, Sheila S. Fishman, and Brad P. Engdahl, Special Assistant Attorneys General, filed briefs for appellant in No. 82-898.
Edwin Vieira, Jr., argued the cause for appellees. With him on the brief was Darel F. Swenson.
Together with No. 82-977, Minnesota Community College Faculty Association et al. v. Knight et al., also on appeal from the same court.
J. Albert Woll, Marsha S. Berzon, and Laurence Gold filed a brief for the American Federation of Labor and Congress of Industrial Organizations as amicus curiae urging reversal.
Ann H. Franke, Lawrence White, and Ralph S. Spritzer filed a brief for the American Association of University Professors as amicus curiae.
Justice O’Connor
delivered the opinion of the Court.
The State of Minnesota authorizes its public employees to bargain collectively over terms and conditions of employment. It also requires public employers to engage in official exchanges of views with their professional employees on policy questions relating to employment but outside the scope of mandatory bargaining. If professional employees forming an appropriate bargaining unit have selected an exclusive representative for mandatory bargaining, their employer may exchange views on nonmandatory subjects only with the exclusive representative. The question presented in these cases is whether this restriction on participation in the nonmandatory-subject exchange process violates the constitutional rights of professional employees within the bargaining unit who are not members of the exclusive representative and who may disagree with its views. We hold that it does not.
I
A
In 1971, the Minnesota Legislature adopted the Public Employment Labor Relations Act (PELRA), Minn. Stat. § 179.61 et seq. (1982), to establish “orderly and constructive relationships between all public employers and their employees . . . .” § 179.61. The public employers covered by the law are, broadly speaking, the State and its political subdivisions, agencies, and instrumentalities. §179.63. In its amended form, as in its original form, PELRA provides for the division of public employees into appropriate bargaining units and establishes a procedure, based on majority support within a unit, for the designation of an exclusive bargaining agent for that unit. §§179.67,179.71,179.741. The statute requires public employers to “meet and negotiate” with exclusive representatives concerning the “terms and conditions of employment,” which the statute defines to mean “the hours of employment, the compensation therefor . . . , and the employer’s personnel policies affecting the working conditions of the employees.” §§179.63, 179.67, 179.71. The employer’s and employees’ representatives must seek an agreement in good faith. § 179.63, subd. 16.
PELRA also grants professional employees, such as college faculty, the right to “meet and confer” with their employers on matters related to employment that are outside the scope of mandatory negotiations. §§179.63, 179.65. This provision rests on the recognition that “professional employees possess knowledge, expertise, and dedication which is helpful and necessary to the operation and quality of public services and which may assist public employers in developing their policies.” § 179.73. The statute declares it to be the State’s policy to “encourage close cooperation between public employers and professional employees” by providing for “meet and confer” sessions on all employment-related questions not subject to mandatory bargaining. Ibid. There is no statutory provision concerning the “meet and confer” process, however, that requires good-faith efforts to reach agreement. See Minneapolis Federation of Teachers Local 59 v. Minneapolis Special School Dist. No. 1, 258 N. W. 2d 802, 804, n. 2 (Minn. 1977).
PELRA requires professional employees to select a representative to “meet and confer” with their public employer. Minn. Stat. § 179.73 (1982). If professional employees in an appropriate bargaining unit have an exclusive representative to “meet and negotiate” with their employer, that representative serves as the “meet and confer” representative as well. Indeed, the employer may neither “meet and negotiate” nor “meet and confer” with any members of that bargaining unit except through their exclusive representative. §179.66, subd. 7. This restriction, however, does not prevent professional employees from submitting advice or recommendations to their employer as part of their work assignment. Ibid. Moreover, nothing in PELRA restricts the right of any public employee to speak on any “matter related to the conditions or compensation of public employment or their betterment” as long as doing so “is not designed to and does not interfere with the full faithful and proper performance of the duties of employment or circumvent the rights of the exclusive representative if there be one.” § 179.65, subd. 1.
B
Appellant Minnesota State Board for Community Colleges (State Board) operates the Minnesota community college system. At the time of trial, the system comprised 18 institutions located throughout the State. Each community college is administered by a president, who reports, through the chancellor of the system, to the State Board.
Prior to 1971, Minnesota’s community colleges were governed in a variety of ways. On some campuses, faculty had a strong voice in administrative policymaking, expressed through organizations such as faculty senates. On other campuses, the administration consulted very little with the faculty. Irrespective of the level of faculty involvement in governance, however, the administrations of the colleges retained final authority to make policy.
Following enactment of PELRA, appellant Minnesota Community College Faculty Association (MCCFA) was designated the exclusive representative of the faculty of the State’s community colleges, which had been deemed a single bargaining unit. MCCFA has “met and negotiated” and “met and conferred” with the State Board since 1971. The result has been the negotiation of successive collective-bargaining agreements in the intervening years and, in order to implement the “meet and confer” provision, a restructuring of governance practices in the community college system.
On the state level, MCCFA and the Board established “meet and confer” committees to discuss questions of policy applicable to the entire system. On the campus level, the MCCFA chapters and the college administrations created local “meet and confer” committees — also referred to as “exchange of views” committees — to discuss questions of policy applicable only to the campus. The committees on both levels have discussed such topics as the selection and evaluation of administrators, academic accreditation, student affairs, curriculum, and fiscal planning — all policy matters within the control of the college administrations and the State Board. App. to Juris. Statement A-49.
The State Board considers the views expressed by the statewide faculty “meet and confer” committees to be the faculty’s official collective position. It recognizes, however, that not every instructor agrees with the official faculty view on every policy question. Not every instructor in the bargaining unit is a member of MCCFA, and MCCFA has selected only its own members to represent it on “meet and confer” committees. Accordingly, all faculty have been free to communicate to the State Board and to local administrations their views on questions within the coverage of the statutory “meet and confer” provision. Id., at A-50, A-52. They have frequently done so. With the possible exception of a brief period of adjustment to the new governance structure, during which some administrators were reluctant to communicate informally with faculty, individual faculty members have not been impeded by either MCCFA or college administrators in the communication of their views on policy questions. Id., at A-50. Nor has PELRA ever been construed to impede such communication.
c
Appellees are 20 Minnesota community college faculty instructors who are not members of MCCFA. In December 1974, they filed suit in the United States District Court for the District of Minnesota, challenging the constitutionality of MCCFA’s exclusive representation of community college faculty in both the “meet and negotiate” and “meet and confer” processes. A three-judge District Court was convened to hear the case. A Special Master appointed by the court conducted the trial in 1980 and submitted recommended findings of fact in early 1981. Id., at A-54 to A-81. The three-judge District Court issued its findings of fact in late 1981, id., at A-32 to A-54, and its decision on the legal claims in early 1982, 571 F. Supp. 1.
The court rejected appellees’ attack on the constitutionality of exclusive representation in bargaining over terms and conditions of employment, relying chiefly on Abood v. Detroit Board of Education, 431 U. S. 209 (1977). The court agreed with appellees, however, that PELRA, as applied in the community college system, infringes First and Fourteenth Amendment speech and associational rights of faculty who do not wish to join MCCFA. By granting MCCFA the right to select the faculty representatives for the “meet and confer” committees and by permitting MCCFA to select only its own members, the court held, PELRA unconstitutionally deprives non-MCCFA instructors of “a fair opportunity to participate in the selection of governance representatives.” 571 F. Supp., at 10. The court granted declaratory relief in accordance with its holdings and enjoined MCCFA from selecting “meet and confer” representatives without providing all faculty the fair opportunity that its selection practice had unconstitutionally denied.
Appellees, the State Board, and MCCFA all filed appeals with this Court, invoking jurisdiction under 28 U. S. C. § 1253. The Court summarily affirmed the judgment insofar as the District Court held the “meet and negotiate” provisions of PELRA to be valid. Knight v. Minnesota Community College Faculty Assn., 460 U. S. 1048 (1983). The Court thus rejected appellees’ argument, based on A. L. A. Scheckter Poultry Corp. v. United States, 295 U. S. 495 (1935), and on Carter v. Carter Coal Co., 298 U. S. 238 (1936), that PELRA unconstitutionally delegated legislative authority to private parties. The Court’s summary affirmance also rejected the constitutional attack on PELRA’s restriction to the exclusive representative of participation in the “meet and negotiate” process.
On March 28, 1983, the Court noted probable jurisdiction in the appeals by the Board and MCCFA. 460 U. S. 1050. Several weeks later, following an election held pursuant to a newly established scheme for selecting “meet and confer” representatives, the three-judge District Court modified its injunction to require a specific voting system for the selection of faculty “meet and confer” representatives. This Court permitted appellants to add to their appeal a challenge to this new relief. 462 U. S. 1104 (1983). We now reverse the District Court’s holding that the “meet and confer” provisions of PELRA deprive appellees of their constitutional rights.
n
>
Appellees do not and could not claim that they have been unconstitutionally denied access to a public forum. A “meet and confer” session is obviously not a public forum. It is a fundamental principle of First Amendment doctrine, articulated most recently in Perry Education Assn. v. Perry Local Educators’ Assn., 460 U. S. 37, 45-46 (1983), that for government property to be a public forum, it must by long tradition or by government designation be open to the public at large for assembly and speech. Minnesota college administration meetings convened to obtain faculty advice on policy questions have neither by long tradition nor by government designation been open for general public participation. The District Court did not so find, 571 F. Supp., at 9, and appel-lees do not contend otherwise.
The rights at issue in these cases are accordingly wholly unlike those at stake in Madison Joint School District No. 8 v. Wisconsin Employment Relations Comm’n, 429 U. S. 167 (1976). The Court in that case upheld a claim of access to a public forum, applying standard public-forum First Amendment analysis. See Perry Education Assn. v. Perry Local Educators’ Assn., supra, at 45 (citing Madison Joint School District as an example of a case involving a “forum generally open to the public” for expressive activity). The school board meetings at issue there were “opened [as] a forum for direct citizen involvement,” 429 U. S., at 175, and “public participation [was] permitted,” id., at 169. The First Amendment was violated when the meetings were suddenly closed to one segment of the public even though they otherwise remained open for participation by the public at large. These cases, by contrast, involve no selective closure of a generally open forum, and hence any reliance on the Madison case would be misplaced.
Indeed, the claim in these cases is not even a claim of access to a nonpublic forum, such as the school mail system at issue in Perry Education Assn. A private organization there claimed a right of access to government property for use in speaking to potentially willing listeners among a group of private individuals and public officials not acting in an official capacity. The organization claimed no right to have anyone, public or private, attend to its message. See also United States Postal Service v. Greenburgh Civic Assns., 453 U. S. 114 (1981) (postal letterbox); Greer v. Spock, 424 U. S. 828 (1976) (military base); Lehman v. City of Shaker Heights, 418 U. S. 298 (1974) (advertising space on municipal bus); Adderley v. Florida, 385 U. S. 39 (1966) (county jail). Ap-pellees here make a claim quite different from those made in the nonpublic-forum cases. They do not contend that certain government property has been closed to them for use in communicating with private individuals or public officials not acting as such who might be willing to listen to them. Rather, they claim an entitlement to a government audience for their views.
“Meet and confer” sessions are occasions for public employers, acting solely as instrumentalities of the State, to receive policy advice from their professional employees. Minnesota has simply restricted the class of persons to whom it will listen in its making of policy. Thus, appellees’ principal claim is that they have a right to force officers of the State acting in an official policymaking capacity to listen to them in a particular formal setting. The nonpublic-forum cases concern government’s authority to provide assistance to certain persons in communicating with other persons who would not, as listeners, be acting for the government. As the discussion below makes clear, the claim that government is constitutionally obliged to listen to appellees involves entirely different considerations from those on which resolution of nonpublic-forum cases turn. Hence, the nonpublic-forum cases are largely irrelevant to assessing appellees’ novel constitutional claim.
The District Court agreed with appellees’ claim to the extent that it was limited to faculty participation in governance of institutions of higher education. The court reasoned that “issues in higher education have a special character.” 571 F. Supp., at 8. Tradition and public policy support the right of faculty to participate in policymaking in higher education, the court stated, and the “right of expression by faculty members also holds a special place under our Constitution.” Id., at 8-9. Because of the “vital concern for academic freedom,” the District Court concluded, “when the state compels creation of a representative governance system in higher education and utilizes that forum for ongoing debate and resolution of virtually all issues outside the scope of collective bargaining, it must afford every faculty member a fair opportunity to participate in the selection of governance representatives.” Id., at 9-10.
This conclusion is erroneous. Appellees have no constitutional right to force the government to listen to their views. They have no such right as members of the public, as government employees, or as instructors in an institution of higher education.
1
The Constitution does not grant to members of the public generally a right to be heard by public bodies making decisions of policy. In Bi-Metallic Investment Co. v. State Board of Equalization, 239 U. S. 441 (1915), this Court rejected a claim to such a right founded on the Due Process Clause of the Fourteenth Amendment. Speaking for the Court, Justice Holmes explained:
“Where a rule of conduct applies to more than a few people it is impracticable that every one should have a direct voice in its adoption. The Constitution does not require all public acts to be done in town meeting or an assembly of the whole. General statutes within the state power are passed that affect the person or property of individuals, sometimes to the point of ruin, without giving them a chance to be heard. Their rights are protected in the only way that they can be in a complex society, by their power, immediate or remote, over those who make the rule.” Id., at 445.
In Madison Joint School District No. 8 v. Wisconsin Employment Relations Comm’n, which sustained a First Amendment challenge to a restriction on access to a public forum, the Court recognized the soundness of Justice Holmes’ reasoning outside the due process context. The Court stated: “Plainly, public bodies may confine their meetings to specified subject matter and may hold nonpublic sessions to transact business.” 429 U. S., at 175, n. 8.
Policymaking organs in our system of government have never operated under a constitutional constraint requiring them to afford every interested member of the public an opportunity to present testimony before any policy is adopted. Legislatures throughout the Nation, including Congress, frequently enact bills on which no hearings have been held or on which testimony has been received from only a select group. Executive agencies likewise make policy decisions of widespread application without permitting unrestricted public testimony. Public officials at all levels of government daily make policy decisions based only on the advice they decide they need and choose to hear. To recognize a constitutional right to participate directly in government policymaking would work a revolution in existing government practices.
Not least among the reasons for refusing to recognize such a right is the impossibility of its judicial definition and enforcement. Both federalism and separation-of-powers concerns would be implicated in the massive intrusion into state and federal policymaking that recognition of the claimed right would entail. Moreover, the pragmatic considerations identified by Justice Holmes in Bi-Metallic Investment Co. v. State Board of Equalization, supra, are as weighty today as they were in 1915. Government makes so many policy decisions affecting so many people that it would likely grind to a halt were policymaking constrained by constitutional requirements on whose voices must be heard. “There must be a limit to individual argument in such matters if government is to go on.” Id., at 445. Absent statutory restrictions, the State must be free to consult or not to consult whomever it pleases.
However wise or practicable various levels of public participation in various kinds of policy decisions may be, this Court has never held, and nothing in the Constitution suggests it should hold, that government must provide for such participation. In Bi-Metallic the Court rejected due process as a source of an obligation to listen. Nothing in the First Amendment or in this Court’s case law interpreting it suggests that the rights to speak, associate, and petition require government policymakers to listen or respond to individuals’ communications on public issues. Indeed, in Smith v. Arkansas State Highway Employees, 441 U. S. 463, 464-466 (1979), the Court rejected the suggestion. No other constitutional provision has been advanced as a source of such a requirement. Nor, finally, can the structure of government established and approved by the Constitution provide the source. It is inherent in a republican form of government that direct public participation in government policymaking is limited. See The Federalist No. 10 (J. Madison). Disagreement with public policy and disapproval of officials’ responsiveness, as Justice Holmes suggested in Bi-Metallic, supra, is to be registered principally at the polls.
2
Appellees thus have no constitutional right as members of the public to a government audience for their policy views. As public employees, of course, they have a special interest in public policies relating to their employment. Minnesota’s statutory scheme for public-employment labor relations recognizes as much. Appellees’ status as public employees, however, gives them no special constitutional right to a voice in the making of policy by their government employer.
In Smith v. Arkansas State Highway Employees, supra, a public employees’ union argued that its First Amendment rights were abridged because the public employer required employees’ grievances to be filed directly with the employer and refused to recognize the union’s communications concerning its members’ grievances. The Court rejected the argument.
“The public employee surely can associate, and speak freely and petition openly, and he is protected by the First Amendment from retaliation for doing so. See Pickering v. Board of Education, 391 U. S. 563, 574-575 (1968); Shelton v. Tucker, 364 U. S. 479 (1960). But the First Amendment does not impose any affirmative obligation on the government to listen, to respond or, in this context, to recognize the association and bargain with it.” Id., at 465 (footnote omitted).
The Court acknowledged that “[t]he First Amendment protects the right of an individual to speak freely, to advocate ideas, to associate with others, and to petition his government for redress of grievances.” Id., at 464. The government had not infringed any of those rights, the Court concluded. “[A]ll that the [government] has done in its challenged conduct is simply to ignore the union. That it is free to do.” Id., at 466.
The conduct challenged here is the converse of that challenged in Smith. There the government listened only to individual employees and not to the union. Here the government “meets and confers” with the union and not with individual employees. The applicable constitutional principles are identical to those that controlled in Smith. When government makes general policy, it is under no greater constitutional obligation to listen to any specially affected class than it is to listen to the public at large.
3
The academic setting of the policymaking at issue in these cases does not alter this conclusion. To be sure, there is a strong, if not universal or uniform, tradition of faculty participation in school governance, and there are numerous policy arguments to support such participation. See American Association for Higher Education — National Education Association, Faculty Participation in Academic Governance (1967); Brief for American Association of University Professors as Amicus Curiae 3-10. But this Court has never recognized a constitutional right of faculty to participate in policymaking in academic institutions.
In several cases the Court has recognized that infringement of the rights of speech and association guaranteed by the First and Fourteenth Amendments “ ‘in the case of teachers brings the safeguards of those amendments vividly into operation.’” Shelton v. Tucker, 364 U. S. 479, 487 (1960) (quoting Wieman v. Updegraff, 344 U. S. 183, 195 (1952) (Frankfurter, J., concurring)). Those cases, however, involved individuals’ rights to express their views and to associate with others for communicative purposes. See, e. g., Keyishian v. Board of Regents of University of New York, 385 U. S. 589 (1967); Shelton v. Tucker, supra; Sweezy v. New Hampshire, 354 U. S. 234 (1957). These rights do not entail any government obligation to listen. Smith v. Arkan sas State Highway Employees, 441 U. S. 463 (1979). Even assuming that speech rights guaranteed by the First Amendment take on a special meaning in an academic setting, they do not require government to allow teachers employed by it to participate in institutional policymaking. Faculty involvement in academic governance has much to recommend it as a matter of academic policy, but it finds no basis in the Constitution.
B
Although there is no constitutional right to participate in academic governance, the First Amendment guarantees the right both to speak and to associate. Appellees’ speech and associational rights, however, have not been infringed by Minnesota’s restriction of participation in “meet and confer” sessions to the faculty’s exclusive representative. The State has in no way restrained appellees’ freedom to speak on any education-related issue or their freedom to associate or not to associate with whom they please, including the exclusive representative. Nor has the State attempted to suppress any ideas.
It is doubtless true that the unique status of the exclusive representative in the “meet and confer” process amplifies its voice in the policymaking process. But that amplification no more impairs individual instructors’ constitutional freedom to speak than the amplification of individual voices impaired the union’s freedom to speak in Smith v. Arkansas State Highway Employees, supra. Moreover, the exclusive representative’s unique role in “meet and negotiate” sessions amplifies its voice as much as its unique role in “meet and confer” sessions, yet the Court summarily affirmed the District Court’s approval of that role in these cases. Amplification of the sort claimed is inherent in government’s freedom to choose its advisers. A person’s right to speak is not infringed when government simply ignores that person while listening to others.
Nor is appellees’ right to speak infringed by the ability of MCCFA to “retaliate” for protected speech, as the District Court put it, by refusing to appoint them to the “meet and confer” committees. The State of Minnesota seeks to obtain MCCFA’s views on policy questions, and MCCFA has simply chosen representatives who share its views on the issues to be discussed with the State. MCCFA’s ability to “retaliate” by not selecting those who dissent from its views no more unconstitutionally inhibits appellees’ speech than voters’ power to reject a candidate for office inhibits the candidate’s speech. See Branti v. Finkel, 445 U. S. 507, 533 (1980) (POWELL, J., dissenting).
Similarly, appellees’ associational freedom has not been impaired. Appellees are free to form whatever advocacy groups they like. They are not required to become members of MCCFA, and they do not challenge the monetary contribution they are required to make to support MCCFA’s representation activities. Appellees may well feel some pressure to join the exclusive representative in order to give them the opportunity to serve on the “meet and confer” committees or to give them a voice in the representative’s adoption of positions on particular issues. That pressure, however, is no different from the pressure they may feel to join MCCFA because of its unique status in the “meet and negotiate” process, a status the Court has summarily approved. Moreover, the pressure is no different from the pressure to join a majority party that persons in the minority always feel. Such pressure is inherent in our system of government; it does not create an unconstitutional inhibition on associational freedom.
c
Unable to demonstrate an infringement of any First Amendment right, appellees contend that their exclusion from “meet and confer” sessions denies them equal protection of the laws in violation of the Fourteenth Amendment. This final argument is meritless. The interest of appellees that is affected — the interest in a government audience for their policy views — finds no special protection in the Constitution. There being no other reason to invoke heightened scrutiny, the challenged state action “need only rationally further a legitimate state purpose” to be valid under the Equal Protection Clause. Perry Education Assn. v. Perry Local Educators’ Assn., 460 U. S., at 54. PELRA certainly meets that standard. The State has a legitimate interest in ensuring that its public employers hear one, and only one, voice presenting the majority view of its professional employees on employment-related policy questions, whatever other advice they may receive on those questions. Permitting selection of the “meet and confer” representatives to be made by the exclusive representative, which has its unique status by virtue of majority support within the bargaining unit, is a rational means of serving that interest.
If it is rational for the State to give the exclusive representative a unique role in the “meet and negotiate” process, as the summary affirmance in appellees’ appeal in this litigation presupposes, it is rational for the State to do the same in the “meet and confer” process. The goal of reaching agreement makes it imperative for an employer to have before it only one collective view of its employees when “negotiating.” See Abood v. Detroit Board of Education, 431 U. S., at 224. Similarly, the goal of basing policy decisions on consideration of the majority view of its employees makes it reasonable for an employer to give only the exclusive representative a particular formal setting in which to offer advice on policy. Ap-pellees’ equal protection challenge accordingly fails.
hH I — 1 t — t
The District Court erred in holding that appellees had been unconstitutionally denied an opportunity to participate in their public employer’s making of policy. Whatever the wisdom of Minnesota’s statutory scheme for professional employee consultation on employment-related policy, in academic or other settings, the scheme violates no provision of the Constitution. The judgment of the District Court is therefore
Reversed.
MCCFA is affiliated with the Minnesota Education Association (MEA) and the National Education Association (NEA), also appellants in these eases.
Since 1980, the “community college instructional unit” has been defined by statute. Minn. Stat. § 179.741 (1982).
Indeed, both the Board and the local administrations have regularly made efforts to supplement the “official” advice with other, unofficial communications. Prior to each on-campus Board meeting, the Board has made itself available to persons who wish to express their views individually or in groups. In addition, many faculty members have met with or written to the Board or the system’s chancellor to communicate their individual views. On the local level, college presidents have used a variety of means to solicit opinions from their instructors and students, including making themselves available at collegewide “town meetings” or at commons areas, hosting luncheons and breakfasts, appearing at faculty meetings, and inviting faculty advice through maintenance of an “open-door” policy. See App. A-57, A-61 to A-64, A-83 to A-84, A-99 to A-103. Thus, while the “meet and confer” process gives weight to an official collective faculty position as formulated by the faculty’s exclusive representative, all instructors have ample opportunity to express their views to their employer on subjects within the purview of the “meet and confer” process.
The repeated suggestions in Justice Stevens’ dissent that the state employer and state employees have been prohibited or deterred by the statute from talking with each other on policy questions, e. g., post, at 302-307, 310-311, 312, 322, misunderstand the statute and are flatly contradicted by the District Court’s findings. All that the statute prohibits is the formal exchange of views called a “meet and confer” session. It in no way impairs the ability of individual employees or groups of employees to express their views to their employer outside that formal context, and there has been no suggestion in these cases that, after an initial period of adjustment to PELRA, any such communication of views has ever been restrained because it was challenged as constituting a formal “meet and confer” session. None of the testimony selectively quoted by Justice Stevens’ dissent recites a single instance of such restraint, and the quoted passages make clear that the prohibition on the employer’s holding “meet and confer” sessions with anyone but the exclusive representative has been understood to bar only a certain type of formal exchange, not other exchanges of views. E. g., post, at 305, n. 6, 307, n. 9.
Indeed, the District Court made the following findings of fact: “[A]ll faculty have the right to informally communicate their individual views to administrators and [the State Board] and MCCFA have never attempted to deny or abridge such rights.” App. to Juris. Statement A-50. “The right of all faculty, both members and nonmembers of MCCFA, to communicate informally and individually with administrative officials has not been impaired ....” Id., at A-52. “The plaintiffs have failed to demonstrate any direct, indirect, actual or potential impairment of their associational and free speech rights, except as indicated in [three findings].” Ibid. Those findings were that plaintiffs are impaired in their ability to participate in the “meet and confer” process by their nonmembership in MCCFA, that some plaintiffs felt pressure to join MCCFA because of this reduced opportunity to participate in the “meet and confer” process, and that free speech contrary to MCCFA positions could potentially be chilled by MCCFA’s authority to select “meet and confer” representatives. Id., at A-51 to A-52. “The plaintiffs have not demonstrated,” however, “that any faculty member’s exercise of free speech has been impaired in practice by virtue of this potential inhibition.” Id., at A-52. In short, the District Court found that the only restriction on asserted speech rights was the restriction on the opportunity of nonmembers of MCCFA to participate in “meet and confer” sessions.
The Board and MCCFA established a new process for selecting “meet and confer” representatives and held the prescribed election before this Court noted probable jurisdiction. The new process allowed each faculty member to nominate candidates, to run for election, and to vote for each vacancy on both state and local committees. For a voter’s ballot to be counted, though, the voter had to cast votes for as many candidates as there were slots to be filled. Only MCCFA members ran for the statewide committees. At the local level, several non-MCCFA instructors ran for office, and MCCFA ran slates of candidates at each institution. Only MCCFA members were elected.
Upon appellees’ motion for further relief, the District Court ruled that the new selection scheme failed to provide appellees “the opportunity to participate meaningfully in the meet and confer process.” App. A-192. The court ordered that new elections be conducted using a cumulative voting system, under which voters could concentrate their multiple votes on a particular candidate, thereby enhancing the possibility that a non-MCCFA candidate would be elected.
Appellants challenge the District Court’s modified order of relief separate and apart from its holding that PELRA is unconstitutional as applied. In light of our disposition on the issue of PELRA’s constitutionality, we need not address the validity of the District Court’s remedy.
Justice Stevens’ dissent suggests that somehow the Constitution itself opened the school board meeting as a public forum. Post, at 319, n. 28. To the extent that the suggestion is that something other than government designation or long tradition can make government property a public forum, it is a radical departure from elementary First Amendment doctrine. Justice Stevens offers no indication of what he would substitute for the current test.
Justice Stevens’ dissent also states that the First Amendment prohibits “the exclusion of persons from access to the organs of government based on [a] desire to give one side a monopoly in expressing its views.” Ibid. Presumably, the President and every other public official and governmental body would be required to select the group they listen to on policy questions without regard to viewpoint. The suggestion is discussed at greater length infra, at 283-285, but merely to state it is to see that it has shocking implications for our political system wholly unsupported by anything this Court has ever held.
Even supposing that a state official acting on behalf of the State in a policymaking capacity could raise a First Amendment objection to the State’s instructions concerning how he conducted his official activity, there is no such claim in these cases. Moreover, appellees have no standing to raise any such claim on behalf of community college administrators.
Police Department of Chicago v. Mosley, 408 U. S. 92 (1972), is an equal protection version of a nonpublic-forum case. The plaintiffs in Mosley sought access to government property for use in communicating to potentially willing listeners among a group of private individuals or public officials not acting in an official capacity. It has no more relevance to the claim of appellees in these cases than do the First Amendment nonpublic-forum cases.
Although an individual employee may have certain due process rights that a union does not have, these cases involve no claimed deprivation of life, liberty, or property without due process.
Justice Stevens’ discussion of the right to “a meaningful opportunity to express one’s views” and of First Amendment associational rights is beside the point. Post, at 308-314. Such rights, whatever their scope, entail no government obligation to listen, and that is what is claimed by appellees. Smith v. Arkansas State Highway Employees, 441 U. S. 463, 464-466 (1979). None of the cases cited by Justice Stevens even considers, let alone supports, a right to be heard by the government on policy questions.
In particular, Healy v. James, 408 U. S. 169 (1972), concerns a group’s claim of access to a forum to use in communicating among themselves and with other potentially willing listeners. As pointed out supra, at 280-283, these cases involve no such claim to a forum. Rather, appellees claim a right to be listened to by persons acting solely in their capacity as representatives of the State. Healy is therefore utterly irrelevant to the validity of appellees’ claim.
Under PELRA, public employees are not required to join the organization that acts as their exclusive representative. Minn. Stat. § 179.65, subd. 2 (1982). Nonmembers may, however, be required to pay a fair-share fee to the exclusive representative to cover costs related to negotiating on behalf of the entire bargaining unit. Ibid. This requirement is not at issue in this lawsuit, although it is subject to certain constitutional constraints. See Abood v. Detroit Board of Education, 431 U. S. 209, 217-237 (1977) (mandatory contributions valid if for bargaining, administration, and grievance activities of exclusive representative but not if for other, ideological activities).
Justice Stevens quotes certain of the District Court’s findings as if to suggest that they undercut our holding. Post, at 308. The suggestion is meritless. The finding that “the weight and significance of individual speech interests have been consciously derogated in favor of systematic, official expression,” 571 F. Supp. 1, 8 (1982), is merely one way of saying that the State of Minnesota, as a deliberate policy matter, is committed to listening to the exclusive representative on public employer policy questions. Moreover, it is perfectly true, and perfectly unobjectionable, that “the primary mechanism for any significant faculty-administration communication on . . . policy questions,” App. to Juris. Statement A-49, is the “meet and confer” process. It is likewise obvious and of no legal consequence that the “meet and confer” process “is the only significant forum for the faculty to resolve virtually every issue outside the scope of mandatory bargaining.” 571 F. Supp., at 9.
The last statement quoted by Justice Stevens draws a general conclusion about PELRA: “This structure effectively blocks any meaningful expression by faculty members who are excluded from the formal process.” Ibid. Given that it appears in the midst of the District Court’s analysis and not with its findings of fact, the statement was probably intended, and in any case is most sensibly read, as a mixed statement of law and fact, depending for its truth on a definition of “meaningful” that must be based on legal principles. However the statement is read, though, appellees have no constitutional right to be heard on policy questions, and their speech and associational freedoms have been wholly unimpaired.
Abood held that employees may not be compelled to support a union’s ideological activities unrelated to collective bargaining. The basis for the holding that associational rights were infringed was the compulsory collection of dues from dissenting employees. 431 U. S., at 232-237. Contrary to the suggestion of Justice Stevens’ dissent, see post, at 316, 321-322, Abood, did not even discuss, let alone adopt, any general bar on “exclusivity” outside the collective-bargaining context. Of course, these cases involve no claim that anyone is being compelled to support MCCFA’s activities. See n. 11, supra. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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116
] |
Jefferson B. SESSIONS, III, Attorney General, Petitioner
v.
James Garcia DIMAYA.
No. 15-1498.
Supreme Court of the United States
Argued Jan. 17, 2017.
Reargued Oct. 2, 2017.
Decided April 17, 2018.
Edwin S. Kneedler, Washington, D.C., for Petitioner.
E. Joshua Rosenkranz, New York, NY, for Respondent.
Ian Heath Gershengorn, Acting Solicitor General, Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Edwin S. Kneedler, Deputy Solicitor General, John F. Bash, Assistant to the Solicitor General, Donald E. Keener, Bryan S. Beier, Attorneys, Department of Justice, Washington, D.C., for Petitioner.
Andrew Knapp, Southwestern Law School, Los Angeles, CA, E. Joshua Rosenkranz, Thomas M. Bondy, Brian P. Goldman, Naomi J. Mower, Randall C. Smith, Ned Hirschfeld, Orrick, Herrington & Sutcliffe LLP, New York, NY, for Respondent.
Justice KAGAN announced the judgment of the Court and delivered the opinion of the Court with respect to Parts I, III, IV-B, and V, and an opinion with respect to Parts II and IV-A, in which Justice GINSBURG, Justice BREYER, and Justice SOTOMAYOR join.
Three Terms ago, in Johnson v. United States, this Court held that part of a federal law's definition of "violent felony" was impermissibly vague. See 576 U.S. ----, 135 S.Ct. 2551, 192 L.Ed.2d 569 (2015). The question in this case is whether a similarly worded clause in a statute's definition of "crime of violence" suffers from the same constitutional defect. Adhering to our analysis in Johnson, we hold that it does.
I
The Immigration and Nationality Act (INA) renders deportable any alien convicted of an "aggravated felony" after entering the United States. 8 U.S.C. § 1227(a)(2)(A)(iii). Such an alien is also ineligible for cancellation of removal, a form of discretionary relief allowing some deportable aliens to remain in the country. See §§ 1229b(a)(3), (b)(1)(C). Accordingly, removal is a virtual certainty for an alien found to have an aggravated felony conviction, no matter how long he has previously resided here.
The INA defines "aggravated felony" by listing numerous offenses and types of offenses, often with cross-references to federal criminal statutes. § 1101(a)(43) ; see Luna Torres v. Lynch, 578 U.S. ----, ----, 136 S.Ct. 1619, 1623, 194 L.Ed.2d 737 (2016). According to one item on that long list, an aggravated felony includes "a crime of violence (as defined in section 16 of title 18...) for which the term of imprisonment [is] at least one year." § 1101(a)(43)(F). The specified statute, 18 U.S.C. § 16, provides the federal criminal code's definition of "crime of violence." Its two parts, often known as the elements clause and the residual clause, cover:
"(a) an offense that has as an element the use, attempted use, or threatened use of physical force against the person or property of another, or
"(b) any other offense that is a felony and that, by its nature, involves a substantial risk that physical force against the person or property of another may be used in the course of committing the offense."
Section 16(b), the residual clause, is the part of the statute at issue in this case.
To decide whether a person's conviction "falls within the ambit" of that clause, courts use a distinctive form of what we have called the categorical approach. Leocal v. Ashcroft, 543 U.S. 1, 7, 125 S.Ct. 377, 160 L.Ed.2d 271 (2004). The question, we have explained, is not whether "the particular facts" underlying a conviction posed the substantial risk that § 16(b) demands. Ibid. Neither is the question whether the statutory elements of a crime require (or entail) the creation of such a risk in each case that the crime covers. The § 16(b) inquiry instead turns on the "nature of the offense" generally speaking. Ibid. (referring to § 16(b)'s "by its nature" language). More precisely, § 16(b) requires a court to ask whether "the ordinary case" of an offense poses the requisite risk. James v. United States, 550 U.S. 192, 208, 127 S.Ct. 1586, 167 L.Ed.2d 532 (2007) ; see infra, at 1213 - 1214.
In the case before us, Immigration Judges employed that analysis to conclude that respondent James Dimaya is deportable as an aggravated felon. A native of the Philippines, Dimaya has resided lawfully in the United States since 1992. But he has not always acted lawfully during that time. Twice, Dimaya was convicted of first-degree burglary under California law. See Cal. Penal Code Ann. §§ 459, 460(a). Following his second offense, the Government initiated a removal proceeding against him. Both an Immigration Judge and the Board of Immigration Appeals held that California first-degree burglary is a "crime of violence" under § 16(b). "[B]y its nature," the Board reasoned, the offense "carries a substantial risk of the use of force." App. to Pet. for Cert. 46a. Dimaya sought review in the Court of Appeals for the Ninth Circuit.
While his appeal was pending, this Court held unconstitutional part of the definition of "violent felony" in the Armed Career Criminal Act (ACCA), 18 U.S.C. § 924(e). ACCA prescribes a 15-year mandatory minimum sentence if a person convicted of being a felon in possession of a firearm has three prior convictions for a "violent felony." § 924(e)(1). The definition of that statutory term goes as follows:
"any crime punishable by imprisonment for a term exceeding one year ... that-
"(i) has as an element the use, attempted use, or threatened use of physical force against the person of another; or
"(ii) is burglary, arson, or extortion, involves use of explosives, or otherwise involves conduct that presents a serious potential risk of physical injury to another. " § 924(e)(2)(B) (emphasis added).
The italicized portion of that definition (like the similar language of § 16(b) ) came to be known as the statute's residual clause. In Johnson v. United States, the Court declared that clause "void for vagueness" under the Fifth Amendment's Due Process Clause. 576 U.S., at --- ------, 135 S.Ct., at 2561-2563.
Relying on Johnson , the Ninth Circuit held that § 16(b), as incorporated into the INA, was also unconstitutionally vague, and accordingly ruled in Dimaya's favor. See Dimaya v. Lynch, 803 F.3d 1110, 1120 (2015). Two other Circuits reached the same conclusion, but a third distinguished ACCA's residual clause from § 16's. We granted certiorari to resolve the conflict. Lynch v. Dimaya, 579 U.S. ----, 137 S.Ct. 31, 195 L.Ed.2d 902 (2016).
II
"The prohibition of vagueness in criminal statutes," our decision in Johnson explained, is an "essential" of due process, required by both "ordinary notions of fair play and the settled rules of law." 576 U.S., at ----, 135 S.Ct., at 2557 (quoting Connally v. General Constr. Co., 269 U.S. 385, 391, 46 S.Ct. 126, 70 L.Ed. 322 (1926) ). The void-for-vagueness doctrine, as we have called it, guarantees that ordinary people have "fair notice" of the conduct a statute proscribes. Papachristou v. Jacksonville, 405 U.S. 156, 162, 92 S.Ct. 839, 31 L.Ed.2d 110 (1972). And the doctrine guards against arbitrary or discriminatory law enforcement by insisting that a statute provide standards to govern the actions of police officers, prosecutors, juries, and judges. See Kolender v. Lawson, 461 U.S. 352, 357-358, 103 S.Ct. 1855, 75 L.Ed.2d 903 (1983). In that sense, the doctrine is a corollary of the separation of powers-requiring that Congress, rather than the executive or judicial branch, define what conduct is sanctionable and what is not. Cf. id., at 358, n. 7, 103 S.Ct. 1855 ("[I]f the legislature could set a net large enough to catch all possible offenders, and leave it to the courts to step inside and say who could be rightfully detained, [it would] substitute the judicial for the legislative department" (internal quotation marks omitted)).
The Government argues that a less searching form of the void-for-vagueness doctrine applies here than in Johnson because this is not a criminal case. See Brief for Petitioner 13-15. As the Government notes, this Court has stated that "[t]he degree of vagueness that the Constitution [allows] depends in part on the nature of the enactment": In particular, the Court has "expressed greater tolerance of enactments with civil rather than criminal penalties because the consequences of imprecision are qualitatively less severe." Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 498-499, 102 S.Ct. 1186, 71 L.Ed.2d 362 (1982). The removal of an alien is a civil matter. See Arizona v. United States, 567 U.S. 387, 396, 132 S.Ct. 2492, 183 L.Ed.2d 351 (2012). Hence, the Government claims, the need for clarity is not so strong; even a law too vague to support a conviction or sentence may be good enough to sustain a deportation order. See Brief for Petitioner 25-26.
But this Court's precedent forecloses that argument, because we long ago held that the most exacting vagueness standard should apply in removal cases. In Jordan v. De George, we considered whether a provision of immigration law making an alien deportable if convicted of a "crime involving moral turpitude" was "sufficiently definite." 341 U.S. 223, 229, 71 S.Ct. 703, 95 L.Ed. 886 (1951). That provision, we noted, "is not a criminal statute" (as § 16(b) actually is). Id., at 231, 71 S.Ct. 703 ; supra, at 1210 - 1211. Still, we chose to test (and ultimately uphold) it "under the established criteria of the 'void for vagueness' doctrine" applicable to criminal laws. 341 U.S., at 231, 71 S.Ct. 703. That approach was demanded, we explained, "in view of the grave nature of deportation," ibid. -a "drastic measure," often amounting to lifelong "banishment or exile," ibid. (quoting Fong Haw Tan v. Phelan, 333 U.S. 6, 10, 68 S.Ct. 374, 92 L.Ed. 433 (1948) ).
Nothing in the ensuing years calls that reasoning into question. To the contrary, this Court has reiterated that deportation is "a particularly severe penalty," which may be of greater concern to a convicted alien than "any potential jail sentence." Jae Lee v. United States, 582 U.S. ----, ----, 137 S.Ct. 1958, 1968, 198 L.Ed.2d 476 (2017) (quoting Padilla v. Kentucky, 559 U.S. 356, 365, 368, 130 S.Ct. 1473, 176 L.Ed.2d 284 (2010) ). And we have observed that as federal immigration law increasingly hinged deportation orders on prior convictions, removal proceedings became ever more "intimately related to the criminal process." Chaidez v. United States, 568 U.S. 342, 352, 133 S.Ct. 1103, 185 L.Ed.2d 149 (2013) (quoting Padilla, 559 U.S., at 365, 130 S.Ct. 1473 ). What follows, as Jordan recognized, is the use of the same standard in the two settings.
For that reason, the Government cannot take refuge in a more permissive form of the void-for-vagueness doctrine than the one Johnson employed. To salvage § 16's residual clause, even for use in immigration hearings, the Government must instead persuade us that it is materially clearer than its now-invalidated ACCA counterpart. That is the issue we next address, as guided by Johnson 's analysis.
III
Johnson is a straightforward decision, with equally straightforward application here. Its principal section begins as follows: "Two features of [ACCA's] residual clause conspire to make it unconstitutionally vague." 576 U.S., at ----, 135 S.Ct., at 2557. The opinion then identifies each of those features and explains how their joinder produced "hopeless indeterminacy," inconsistent with due process. Id., at ----, 135 S.Ct., at 2558. And with that reasoning, Johnson effectively resolved the case now before us. For § 16's residual clause has the same two features as ACCA's, combined in the same constitutionally problematic way. Consider those two, just as Johnson described them:
"In the first place," Johnson explained, ACCA's residual clause created "grave uncertainty about how to estimate the risk posed by a crime" because it "tie[d] the judicial assessment of risk" to a hypothesis about the crime's "ordinary case." Id., at ----, 135 S.Ct., at 2557. Under the clause, a court focused on neither the "real-world facts" nor the bare "statutory elements" of an offense. Ibid. Instead, a court was supposed to "imagine" an "idealized ordinary case of the crime"-or otherwise put, the court had to identify the "kind of conduct the 'ordinary case' of a crime involves." Ibid. But how, Johnson asked, should a court figure that out? By using a "statistical analysis of the state reporter? A survey? Expert evidence? Google? Gut instinct?" Ibid. (internal quotation marks omitted). ACCA provided no guidance, rendering judicial accounts of the "ordinary case" wholly "speculative." Ibid. Johnson gave as its prime example the crime of attempted burglary. One judge, contemplating the "ordinary case," would imagine the "violent encounter" apt to ensue when a "would-be burglar [was] spotted by a police officer [or] private security guard." Id., at ---------, 135 S.Ct., at 2558. Another judge would conclude that "any confrontation" was more "likely to consist of [an observer's] yelling 'Who's there?' ... and the burglar's running away." Id., at ----, 135 S.Ct., at 2558. But how could either judge really know? "The residual clause," Johnson summarized, "offer[ed] no reliable way" to discern what the ordinary version of any offense looked like. Ibid. And without that, no one could tell how much risk the offense generally posed.
Compounding that first uncertainty, Johnson continued, was a second: ACCA's residual clause left unclear what threshold level of risk made any given crime a "violent felony." See ibid. The Court emphasized that this feature alone would not have violated the void-for-vagueness doctrine: Many perfectly constitutional statutes use imprecise terms like "serious potential risk" (as in ACCA's residual clause) or "substantial risk" (as in § 16's). The problem came from layering such a standard on top of the requisite "ordinary case" inquiry. As the Court explained:
"[W]e do not doubt the constitutionality of laws that call for the application of a qualitative standard such as 'substantial risk' to real-world conduct; the law is full of instances where a man's fate depends on his estimating rightly ... some matter of degree[.] The residual clause, however, requires application of the 'serious potential risk' standard to an idealized ordinary case of the crime. Because the elements necessary to determine the imaginary ideal are uncertain[,] this abstract inquiry offers significantly less predictability than one that deals with the actual ... facts." Id., at ----, 135 S.Ct., at 2561 (some internal quotation marks, citations, and alterations omitted).
So much less predictability, in fact, that ACCA's residual clause could not pass constitutional muster. As the Court again put the point, in the punch line of its decision: "By combining indeterminacy about how to measure the risk posed by a crime with indeterminacy about how much risk it takes for the crime to qualify as a violent felony, the residual clause" violates the guarantee of due process. Id., at ----, 135 S.Ct., at 2558.
Section 16's residual clause violates that promise in just the same way. To begin where Johnson did, § 16(b) also calls for a court to identify a crime's "ordinary case" in order to measure the crime's risk. The Government explicitly acknowledges that point here. See Brief for Petitioner 11 (" Section 16(b), like [ACCA's] residual clause, requires a court to assess the risk posed by the ordinary case of a particular offense"). And indeed, the Government's briefing in Johnson warned us about that likeness, observing that § 16(b) would be "equally susceptible to [an] objection" that focused on the problems of positing a crime's ordinary case. Supp. Brief for Respondent, O.T. 2014, No. 13-7120, pp. 22-23. Nothing in § 16(b) helps courts to perform that task, just as nothing in ACCA did. We can as well repeat here what we asked in Johnson : How does one go about divining the conduct entailed in a crime's ordinary case? Statistical analyses? Surveys? Experts? Google? Gut instinct? See Johnson, 576 U.S., at ----, 135 S.Ct., at 2557 ; supra, at 1213 - 1214; post, at 1231 - 1232 (GORSUCH, J., concurring in part and concurring in judgment). And we can as well reiterate Johnson 's example: In the ordinary case of attempted burglary, is the would-be culprit spotted and confronted, or scared off by a yell? See post, at 1231 - 1232 (opinion of GORSUCH, J.) (offering other knotty examples). Once again, the questions have no good answers; the "ordinary case" remains, as Johnson described it, an excessively "speculative," essentially inscrutable thing. 576 U.S., at ----, 135 S.Ct., at 2558 ; accord post, at 1256 (THOMAS, J., dissenting).
And § 16(b) also possesses the second fatal feature of ACCA's residual clause: uncertainty about the level of risk that makes a crime "violent." In ACCA, that threshold was "serious potential risk"; in § 16(b), it is "substantial risk." See supra, at 1211, 1212. But the Government does not argue that the latter formulation is any more determinate than the former, and for good reason. As THE CHIEF JUSTICE's valiant attempt to do so shows, that would be slicing the baloney mighty thin. See post, at 1244 - 1245 (dissenting opinion). And indeed, Johnson as much as equated the two phrases: Return to the block quote above, and note how Johnson -as though anticipating this case-refers to them interchangeably, as alike examples of imprecise "qualitative standard[s]." See supra, at 1214; 576 U.S., at ----, 135 S.Ct., at 2561. Once again, the point is not that such a non-numeric standard is alone problematic: In Johnson 's words, "we do not doubt" the constitutionality of applying § 16(b)'s "substantial risk [standard] to real-world conduct." Id., at ----, 135 S.Ct., at 2561 (internal quotation marks omitted). The difficulty comes, in § 16's residual clause just as in ACCA's, from applying such a standard to "a judge-imagined abstraction"-i.e., "an idealized ordinary case of the crime." Id., at ----, ----, 135 S.Ct., at 2558, 2561. It is then that the standard ceases to work in a way consistent with due process.
In sum, § 16(b) has the same "[t]wo features" that "conspire[d] to make [ACCA's residual clause] unconstitutionally vague." Id., at ----, 135 S.Ct., at 2557. It too "requires a court to picture the kind of conduct that the crime involves in 'the ordinary case,' and to judge whether that abstraction presents" some not-well-specified-yet-sufficiently-large degree of risk. Id., at ----, 135 S.Ct., at 2556-2557. The result is that § 16(b) produces, just as ACCA's residual clause did, "more unpredictability and arbitrariness than the Due Process Clause tolerates." Id., at ----, 135 S.Ct., at 2558.
IV
The Government and dissents offer two fundamentally different accounts of how § 16(b) can escape unscathed from our decision in Johnson . Justice THOMAS accepts that the ordinary-case inquiry makes § 16(b)"impossible to apply." Post, at 1256. His solution is to overthrow our historic understanding of the statute: We should now read § 16(b), he says, to ask about the risk posed by a particular defendant's particular conduct. In contrast, the Government, joined by THE CHIEF JUSTICE, accepts that § 16(b), as long interpreted, demands a categorical approach, rather than a case-specific one. They argue only that "distinctive textual features" of § 16's residual clause make applying it "more predictable" than its ACCA counterpart. Brief for Petitioner 28, 29. We disagree with both arguments.
A
The essentials of Justice THOMAS's position go as follows. Section 16(b), he says, cannot have one meaning, but could have one of two others. See post, at 1256. The provision cannot demand an inquiry merely into the elements of a crime, because that is the province of § 16(a). See supra, at 1211 (setting out § 16(a)'s text). But that still leaves a pair of options: the categorical, ordinary-case approach and the "underlying-conduct approach," which asks about the specific way in which a defendant committed a crime. Post, at 1255. According to Justice THOMAS, each option is textually viable (although he gives a slight nod to the latter based on § 16(b)'s use of the word "involves"). See post, at 1254 - 1256. What tips the scales is that only one-the conduct approach-is at all "workable." Post, at 1256. The difficulties of the ordinary-case inquiry, Justice THOMAS rightly observes, underlie this Court's view that § 16(b) is too vague. So abandon that inquiry, Justice THOMAS urges. After all, he reasons, it is the Court's "plain duty," under the constitutional avoidance canon, to adopt any reasonable construction of a statute that escapes constitutional problems. Post, at 1256 - 1257 (quoting United States ex rel. Attorney General v. Delaware & Hudson Co., 213 U.S. 366, 407, 29 S.Ct. 527, 53 L.Ed. 836 (1909) ).
For anyone who has read Johnson , that argument will ring a bell. The dissent there issued the same invitation, based on much the same reasoning, to jettison the categorical approach in residual-clause cases. 576 U.S., at --- ------, 135 S.Ct., at 2578-2580 (opinion of ALITO, J.). The Court declined to do so. It first noted that the Government had not asked us to switch to a fact-based inquiry. It then observed that the Court "had good reasons" for originally adopting the categorical approach, based partly on ACCA's text (which, by the way, uses the word "involves" identically) and partly on the "utter impracticability" of the alternative. Id., at ----, 135 S.Ct., at 2562 (majority opinion). "The only plausible interpretation" of ACCA's residual clause, we concluded, "requires use of the categorical approach"-even if that approach could not in the end satisfy constitutional standards. Ibid. (internal quotation marks and alteration omitted).
The same is true here-except more so. To begin where Johnson did, the Government once again "has not asked us to abandon the categorical approach in residual-clause cases." Ibid. To the contrary, and as already noted, the Government has conceded at every step the correctness of that statutory construction. See supra, at 1214 - 1215. And this time, the Government's decision is even more noteworthy than before-precisely because the Johnson dissent laid out the opposite view, presenting it in prepackaged form for the Government to take off the shelf and use in the § 16(b) context. Of course, we are not foreclosed from going down Justice THOMAS's path just because the Government has not done so. But we find it significant that the Government cannot bring itself to say that the fact-based approach Justice THOMAS proposes is a tenable interpretation of § 16's residual clause.
Perhaps one reason for the Government's reluctance is that such an approach would generate its own constitutional questions. As Justice THOMAS relates, post, at 1253, 1256 - 1257, this Court adopted the categorical approach in part to "avoid[ ] the Sixth Amendment concerns that would arise from sentencing courts' making findings of fact that properly belong to juries." Descamps v. United States, 570 U.S. 254, 267, 133 S.Ct. 2276, 186 L.Ed.2d 438 (2013). Justice THOMAS thinks that issue need not detain us here because "the right of trial by jury ha[s] no application in a removal proceeding." Post, at 1256 - 1257 (internal quotation marks omitted). But although this particular case involves removal, § 16(b) is a criminal statute, with criminal sentencing consequences. See supra, at 1211. And this Court has held (it could hardly have done otherwise) that "we must interpret the statute consistently, whether we encounter its application in a criminal or noncriminal context." Leocal, 543 U.S., at 12, n. 8, 125 S.Ct. 377. So Justice THOMAS's suggestion would merely ping-pong us from one constitutional issue to another. And that means the avoidance canon cannot serve, as he would like, as the interpretive tie breaker.
In any event, § 16(b)'s text creates no draw: Best read, it demands a categorical approach. Our decisions have consistently understood language in the residual clauses of both ACCA and § 16 to refer to "the statute of conviction, not to the facts of each defendant's conduct." Taylor v. United States, 495 U.S. 575, 601, 110 S.Ct. 2143, 109 L.Ed.2d 607 (1990) ; see Leocal, 543 U.S., at 7, 125 S.Ct. 377 ( Section 16"directs our focus to the 'offense' of conviction ... rather than to the particular facts"). Simple references to a "conviction," "felony," or "offense," we have stated, are "read naturally" to denote the "crime as generally committed." Nijhawan v. Holder, 557 U.S. 29, 34, 129 S.Ct. 2294, 174 L.Ed.2d 22 (2009) ; see Leocal, 543 U.S., at 7, 125 S.Ct. 377 ; Johnson, 576 U.S., at ----, 135 S.Ct., at 2561-2562. And the words "by its nature" in § 16(b) make that meaning all the clearer. The statute, recall, directs courts to consider whether an offense, by its nature, poses the requisite risk of force. An offense's "nature" means its "normal and characteristic quality." Webster's Third New International Dictionary 1507 (2002). So § 16(b) tells courts to figure out what an offense normally-or, as we have repeatedly said, "ordinarily"-entails, not what happened to occur on one occasion. And the same conclusion follows if we pay attention to language that is missing from § 16(b). As we have observed in the ACCA context, the absence of terms alluding to a crime's circumstances, or its commission, makes a fact-based interpretation an uncomfortable fit. See Descamps, 570 U.S., at 267, 133 S.Ct. 2276. If Congress had wanted judges to look into a felon's actual conduct, "it presumably would have said so; other statutes, in other contexts, speak in just that way." Id., at 267-268, 133 S.Ct. 2276. The upshot of all this textual evidence is that § 16's residual clause-like ACCA's, except still more plainly-has no "plausible" fact-based reading. Johnson, 576 U.S., at ----, 135 S.Ct., at 2562.
And finally, the "utter impracticability"-and associated inequities-of such an interpretation is as great in the one statute as in the other. Ibid. This Court has often described the daunting difficulties of accurately "reconstruct [ing]," often many years later, "the conduct underlying [a] conviction." Ibid. ; Descamps, 570 U.S., at 270, 133 S.Ct. 2276 ; Taylor, 495 U.S., at 601-602, 110 S.Ct. 2143. According to Justice THOMAS, we need not worry here because immigration judges have some special factfinding talent, or at least experience, that would mitigate the risk of error attaching to that endeavor in federal courts. See post, at 1257 - 1258. But we cannot see putting so much weight on the superior factfinding prowess of (notoriously overburdened) immigration judges. And as we have said before, § 16(b) is a criminal statute with applications outside the immigration context. See supra, at 1211, 1217. Once again, then, we have no ground for discovering a novel interpretation of § 16(b) that would remove us from the dictates of Johnson .
B
Agreeing that is so, the Government (joined by THE CHIEF JUSTICE) takes a narrower path to the same desired result. It points to three textual discrepancies between ACCA's residual clause and § 16(b), and argues that they make § 16(b) significantly easier to apply. But each turns out to be the proverbial distinction without a difference. None relates to the pair of features-the ordinary-case inquiry and a hazy risk threshold-that Johnson found to produce impermissible vagueness. And none otherwise affects the determinacy of the statutory inquiry into whether a prior conviction is for a violent crime. That is why, contrary to the Government's final argument, the experience of applying both statutes has generated confusion and division among lower courts.
1
The Government first-and foremost-relies on § 16(b)'s express requirement (absent from ACCA) that the risk arise from acts taken "in the course of committing the offense." Brief for Petitioner 31. (THE CHIEF JUSTICE's dissent echoes much of this argument. See post, at 1236 - 1237.) Because of that "temporal restriction," a court applying § 16(b) may not "consider risks arising after " the offense's commission is over. Ibid. In the Government's view, § 16(b)'s text thereby demands a "significantly more focused inquiry" than did ACCA's residual clause. Id., at 32.
To assess that claim, start with the meaning of § 16(b)'s "in the course of" language. That phrase, understood in the normal way, includes the conduct occurring throughout a crime's commission-not just the conduct sufficient to satisfy the offense's formal elements. The Government agrees with that construction, explaining that the words "in the course of" sweep in everything that happens while a crime continues. See Tr. of Oral Arg. 57-58 (Oct. 2, 2017) (illustrating that idea with reference to conspiracy, burglary, kidnapping, and escape from prison). So, for example, conspiracy may be a crime of violence under § 16(b) because of the risk of force while the conspiracy is ongoing (i.e., "in the course of" the conspiracy); it is irrelevant that conspiracy's elements are met as soon as the participants have made an agreement. See ibid. ; United States v. Doe, 49 F.3d 859, 866 (C.A.2 1995). Similarly, and closer to home, burglary may be a crime of violence under § 16(b) because of the prospects of an encounter while the burglar remains in a building (i.e., "in the course of" the burglary); it does not matter that the elements of the crime are met at the precise moment of his entry. See Tr. of Oral Arg. 57-58 (Oct. 2, 2017); James, 550 U.S., at 203, 127 S.Ct. 1586. In other words, a court applying § 16(b) gets to consider everything that is likely to take place for as long as a crime is being committed.
Because that is so, § 16(b)'s "in the course of" language does little to narrow or focus the statutory inquiry. All that the phrase excludes is a court's ability to consider the risk that force will be used after the crime has entirely concluded-so, for example, after the conspiracy has dissolved or the burglar has left the building. We can construct law-school-type hypotheticals fitting that fact pattern-say, a burglar who constructs a booby trap that later knocks out the homeowner. But such imaginative forays cannot realistically affect a court's view of the ordinary case of a crime, which is all that matters under the statute. See supra, at 1211 - 1212, 1213 - 1214. In the ordinary case, the riskiness of a crime arises from events occurring during its commission, not events occurring later. So with or without § 16(b)'s explicit temporal language, a court applying the section would do the same thing-ask what usually happens when a crime goes down.
And that is just what courts did when applying ACCA's residual clause-and for the same reason. True, that clause lacked an express temporal limit. But not a single one of this Court's ACCA decisions turned on conduct that might occur after a crime's commission; instead, each hinged on the risk arising from events that could happen while the crime was ongoing. See, e.g., Sykes v. United States, 564 U.S. 1, 10, 131 S.Ct. 2267, 180 L.Ed.2d 60 (2011) (assessing the risks attached to the "confrontations that initiate and terminate" vehicle flight, along with "intervening" events); Chambers v. United States, 555 U.S. 122, 128, 129 S.Ct. 687, 172 L.Ed.2d 484 (2009) (rejecting the Government's argument that violent incidents "occur[ring] long after" a person unlawfully failed to report to prison rendered that crime a violent felony). Nor could those decisions have done otherwise, given the statute's concern with the ordinary (rather than the outlandish) case. Once again, the riskiness of a crime in the ordinary case depends on the acts taken during-not after-its commission. Thus, the analyses under ACCA's residual clause and § 16(b) coincide.
The upshot is that the phrase "in the course of" makes no difference as to either outcome or clarity. Every offense that could have fallen within ACCA's residual clause might equally fall within § 16(b). And the difficulty of deciding whether it does so remains just as intractable. Indeed, we cannot think of a single federal crime whose treatment becomes more obvious under § 16(b) than under ACCA because of the words "in the course of." The phrase, then, cannot cure the statutory indeterminacy Johnson described.
Second, the Government (and again, THE CHIEF JUSTICE's dissent, see post, at 1244 - 1245) observes that § 16(b) focuses on the risk of "physical force" whereas ACCA's residual clause asked about the risk of "physical injury." The § 16(b) inquiry, the Government says, "trains solely" on the conduct typically involved in a crime. Brief for Petitioner 36. By contrast, the Government continues, ACCA's residual clause required a second inquiry: After describing the ordinary criminal's conduct, a court had to "speculate about a chain of causation that could possibly result in a victim's injury." Ibid. The Government's conclusion is that the § 16(b) inquiry is "more specific." Ibid.
But once more, we struggle to see how that statutory distinction would matter. To begin with, the first of the Government's two steps-defining the conduct in the ordinary case-is almost always the difficult part. Once that is accomplished, the assessment of consequences tends to follow as a matter of course. So, for example, if a crime is likely enough to lead to a shooting, it will also be likely enough to lead to an injury. And still more important, § 16(b) involves two steps as well-and essentially the same ones. In interpreting statutes like § 16(b), this Court has made clear that "physical force" means "force capable of causing physical pain or injury." Johnson v. United States, 559 U.S. 133, 140, 130 S.Ct. 1265, 176 L.Ed.2d 1 (2010) (defining the term for purposes of deciding what counts as a "violent" crime). So under § 16(b) too, a court must not only identify the conduct typically involved in a crime, but also gauge its potential consequences. Or said a bit differently, evaluating the risk of "physical force" itself entails considering the risk of "physical injury." For those reasons, the force/injury distinction is unlikely to affect a court's analysis of whether a crime qualifies as violent. All the same crimes might-or, then again, might not-satisfy both requirements. Accordingly, this variance in wording cannot make ACCA's residual clause vague and § 16(b) not.
Third, the Government briefly notes that § 16(b), unlike ACCA's residual clause, is not preceded by a "confusing list of exemplar crimes." Brief for Petitioner 38. (THE CHIEF JUSTICE's dissent reiterates this argument, with some additional references to our caselaw. See post, at 1246 - 1248.) Here, the Government is referring to the offenses ACCA designated as violent felonies independently of the residual clause (i.e., burglary, arson, extortion, and use of explosives). See supra, at 1212. According to the Government, those crimes provided "contradictory and opaque indications" of what non-specified offenses should also count as violent. Brief for Petitioner 38. Because § 16(b) lacks any such enumerated crimes, the Government concludes, it avoids the vagueness of ACCA's residual clause.
We readily accept a part of that argument. This Court for several years looked to ACCA's listed crimes for help in giving the residual clause meaning. See, e.g., Begay v. United States, 553 U.S. 137, 142, 128 S.Ct. 1581, 170 L.Ed.2d 490 (2008) ; James, 550 U.S., at 203, 127 S.Ct. 1586. But to no avail. As the Government relates (and Johnson explained), the enumerated crimes were themselves too varied to provide such assistance. See Brief for Petitioner 38-40; 576 U.S., at ----, 135 S.Ct., at 2561. Trying to reconcile them with each other, and then compare them to whatever unlisted crime was at issue, drove many a judge a little batty. And more to the point, the endeavor failed to bring any certainty to the residual clause's application. See Brief for Petitioner 38-40.
But the Government's conclusion does not follow. To say that ACCA's listed crimes failed to resolve the residual clause's vagueness is hardly to say they caused the problem. Had they done so, Johnson would not have needed to strike down the clause. It could simply have instructed courts to give up on trying to interpret the clause by reference to the enumerated offenses. (Contrary to THE CHIEF JUSTICE's suggestion, see post, at 1247 - 1248, discarding an interpretive tool once it is found not to actually aid in interpretation hardly "expand[s]" the scope of a statute.) That Johnson went so much further-invalidating a statutory provision rather than construing it independently of another-demonstrates that the list of crimes was not the culprit. And indeed, Johnson explicitly said as much. As described earlier, Johnson found the residual clause's vagueness to reside in just "two" of its features: the ordinary-case requirement and a fuzzy risk standard. See 576 U.S., at ---------, 135 S.Ct., at 2557-2558 ; supra, at 1213 - 1214. Strip away the enumerated crimes-as Congress did in § 16(b) -and those dual flaws yet remain. And ditto the textual indeterminacy that flows from them.
2
Faced with the two clauses' linguistic similarity, the Government relies significantly on an argument rooted in judicial experience. Our opinion in Johnson , the Government notes, spoke of the longstanding "trouble" that this Court and others had in "making sense of [ACCA's] residual clause."
576 U.S., at ----, 135 S.Ct., at 2559-2560 ; see Brief for Petitioner 45. According to the Government, § 16(b) has not produced "comparable difficulties." Id., at 46. Lower courts, the Government claims, have divided less often about the provision's meaning, and as a result this Court granted certiorari on "only a single Section 16(b) case" before this one. Ibid. "The most likely explanation," the Government concludes, is that " Section 16(b) is clearer" than its ACCA counterpart. Id., at 47.
But in fact, a host of issues respecting § 16(b)'s application to specific crimes divide the federal appellate courts. Does car burglary qualify as a violent felony under § 16(b) ? Some courts say yes, another says no. What of statutory rape? Once again, the Circuits part ways. How about evading arrest? The decisions point in different directions. Residential trespass? The same is true. Those examples do not exhaust the current catalogue of Circuit conflicts concerning § 16(b)'s application. See Brief for National Immigration Project of the National Lawyers Guild et al. as Amici Curiae 7-18 (citing divided appellate decisions as to the unauthorized use of a vehicle, firearms possession, and abduction). And that roster would just expand with time, mainly because, as Johnson explained, precious few crimes (of the thousands that fill the statute books) have an obvious, non-speculative-and therefore undisputed-"ordinary case." See 576 U.S., at ---------, 135 S.Ct., at 2557-2558.
Nor does this Court's prior handling of § 16(b) cases support the Government's argument. To be sure, we have heard oral argument in only two cases arising from § 16(b) (including this one), as compared with five involving ACCA's residual clause (including Johnson ). But while some of those ACCA suits were pending before us, we received a number of petitions for certiorari presenting related issues in the § 16(b) context. And after issuing the relevant ACCA decisions, we vacated the judgments in those § 16(b) cases and remanded them for further consideration. That we disposed of the ACCA and § 16(b) petitions in that order, rather than its opposite, provides no reason to disregard the indeterminacy that § 16(b) shares with ACCA's residual clause.
And of course, this Court's experience in deciding ACCA cases only supports the conclusion that § 16(b) is too vague. For that record reveals that a statute with all the same hallmarks as § 16(b) could not be applied with the predictability the Constitution demands. See id., at ------- --, 135 S.Ct., 2558-2560; supra, at 1213- 1215. The Government would condemn us to repeat the past-to rerun the old ACCA tape, as though we remembered nothing from its first showing. But why should we disregard a lesson so hard learned? "Insanity," Justice Scalia wrote in the last ACCA residual clause case before Johnson , "is doing the same thing over and over again, but expecting different results." Sykes, 564 U.S., at 28, 131 S.Ct. 2267 (dissenting opinion). We abandoned that lunatic practice in Johnson and see no reason to start it again.
V
Johnson tells us how to resolve this case. That decision held that "[t]wo features of [ACCA's] residual clause conspire[d] to make it unconstitutionally vague." 576 U.S., at ----, 135 S.Ct., at 2557. Because the clause had both an ordinary-case requirement and an ill-defined risk threshold, it necessarily "devolv[ed] into guesswork and intuition," invited arbitrary enforcement, and failed to provide fair notice. Id., at ----, 135 S.Ct., at 2559. Section 16(b) possesses the exact same two features. And none of the minor linguistic disparities in the statutes makes any real difference. So just like ACCA's residual clause, § 16(b)"produces more unpredictability and arbitrariness than the Due Process Clause tolerates." Id., at ----, 135 S.Ct., at 2558. We accordingly affirm the judgment of the Court of Appeals.
It is so ordered.
Justice GORSUCH, concurring in part and concurring in the judgment.
The analysis thus differs from the form of categorical approach used to determine whether a prior conviction is for a particular listed offense (say, murder or arson). In that context, courts ask what the elements of a given crime always require-in effect, what is legally necessary for a conviction. See, e.g., Descamps v. United States, 570 U.S. 254, 260-261, 133 S.Ct. 2276, 186 L.Ed.2d 438 (2013) ; Moncrieffe v. Holder, 569 U.S. 184, 190-191, 133 S.Ct. 1678, 185 L.Ed.2d 727 (2013).
Compare Shuti v. Lynch, 828 F.3d 440 (C.A.6 2016) (finding § 16(b) unconstitutionally vague); United States v. Vivas-Ceja, 808 F.3d 719 (C.A.7 2015) (same), with United States v. Gonzalez-Longoria, 831 F.3d 670 (C.A.5 2016) (en banc) (upholding § 16(b) ).
Johnson also anticipated and rejected a significant aspect of Justice THOMAS's dissent in this case. According to Justice THOMAS, a court may not invalidate a statute for vagueness if it is clear in any of its applications-as he thinks is true of completed burglary, which is the offense Dimaya committed. See post, at 1250 - 1252. But as an initial matter, Johnson explained that supposedly easy applications of the residual clause might not be "so easy after all." 576 U.S., at --- ------, 135 S.Ct., at 2560. The crime of completed burglary at issue here illustrates that point forcefully. See id., at ----, 135 S.Ct., at 2558 (asking whether "an ordinary burglar invade[s] an occupied home by night or an unoccupied home by day"); Dimaya v. Lynch, 803 F.3d 1110, 1116, n. 7 (C.A.9 2015) (noting that only about seven percent of burglaries actually involve violence); Cal. Penal Code Ann. §§ 459, 460 (West 2010) (sweeping so broadly as to cover even dishonest door-to-door salesmen). And still more fundamentally, Johnson made clear that our decisions "squarely contradict the theory that a vague provision is constitutional merely because there is some conduct that clearly falls within the provision's grasp." 576 U.S., at ----, 135 S.Ct., at 2561.
THE CHIEF JUSTICE's dissent makes light of the difficulty of identifying a crime's ordinary case. In a single footnote, THE CHIEF JUSTICE portrays that task as no big deal: Just eliminate the "atypical" cases, and (presto!) the crime's nature and risk are revealed. See post, at 1226, n. 1. That rosy view-at complete odds with Johnson -underlies his whole dissent (and especially, his analysis of how § 16(b) applies to particular offenses, see post, at 1226 - 1229). In effect, THE CHIEF JUSTICE is able to conclude that § 16(b) can survive Johnson only by refusing to acknowledge one of the two core insights of that decision.
For example, in United States v. Hayes, 555 U.S. 415, 129 S.Ct. 1079, 172 L.Ed.2d 816 (2009), this Court held that a firearms statute referring to former crimes as "committed by" specified persons requires courts to consider underlying facts. Id., at 421, 129 S.Ct. 1079. And in Nijhawan v. Holder, 557 U.S. 29, 129 S.Ct. 2294, 174 L.Ed.2d 22 (2009), the Court similarly adopted a non-categorical interpretation of one of the aggravated felonies listed in the INA because of the phrase, appended to the named offense, "in which the loss to the victim or victims exceeds $10,000." Id., at 34, 36, 129 S.Ct. 2294 (emphasis deleted). Justice THOMAS suggests that Nijhawan rejected the relevance of our ACCA precedents in interpreting the INA's aggravated-felony list-including its incorporation of § 16(b). Post, at 1257 - 1258. But that misreads the decision. In Nijhawan, we considered an item on the INA's list that looks nothing like ACCA, and we concluded-no surprise here-that our ACCA decisions did not offer a useful guide. As to items on the INA's list that do mirror ACCA, the opposite conclusion of course follows.
In response to repeated questioning at two oral arguments, the Government proposed one (and only one) such crime-but we disagree that § 16(b)'s temporal language would aid in its analysis. According to the Government, possession of a short-barreled shotgun could count as violent under ACCA but not under § 16(b) because shooting the gun is "not in the course of committing the crime of possession." Tr. of Oral Arg. 59-60 (Oct. 2, 2017); see Tr. of Oral Arg. 6-7 (Jan. 17, 2017); Brief for Petitioner 32-34. That is just wrong: When a criminal shoots a gun, he does so while ("in the course of ") possessing it (except perhaps in some physics-defying fantasy world). What makes the offense difficult to classify as violent is something different: that while some people use the short-barreled shotguns they possess to commit murder, others merely store them in a nearby firearms cabinet-and it is hard to settle which is the more likely scenario. Compare Johnson, 576 U.S., at ---------, 135 S.Ct., at 2584 (ALITO, J., dissenting) ("It is fanciful to assume that a person who [unlawfully possesses] a notoriously dangerous weapon is unlikely to use that weapon in violent ways"), with id., at ----, 135 S.Ct., at 2565 (THOMAS, J., concurring) (Unlawful possession of a short-barreled shotgun "takes place in a variety of ways ... many, perhaps most, of which do not involve likely accompanying violence" (internal quotation marks omitted)). But contrary to THE CHIEF JUSTICE's suggestion, see post, at 1245 - 1246 (which, again, is tied to his disregard of the ordinary-case inquiry, see supra, at 1215, n. 4), that issue must be settled no less under § 16(b) than under ACCA.
And, THE CHIEF JUSTICE emphasizes, we decided that one unanimously! See post, at ---- (discussing Leocal v. Ashcroft, 543 U.S. 1, 125 S.Ct. 377, 160 L.Ed.2d 271 (2004) ). But one simple application does not a clear statute make. As we put the point in Johnson : Our decisions "squarely contradict the theory that a vague provision is constitutional merely because there is some conduct that clearly falls within the provision's grasp." 576 U.S., at ----, 135 S.Ct., at 2561 ; see supra, at 1215, n. 4.
Compare Escudero-Arciniega v. Holder, 702 F.3d 781, 784-785 (C.A.5 2012) (per curiam ) (yes, it does), and United States v. Guzman-Landeros, 207 F.3d 1034, 1035 (C.A.8 2000) (per curiam ) (same), with Sareang Ye v. INS, 214 F.3d 1128, 1133-1134 (C.A.9 2000) (no, it does not).
Compare Aguiar v. Gonzales, 438 F.3d 86, 89-90 (C.A.1 2006) (statutory rape involves a substantial risk of force); Chery v. Ashcroft, 347 F.3d 404, 408-409 (C.A.2 2003) (same); and United States v. Velazquez-Overa, 100 F.3d 418, 422 (C.A.5 1996) (same), with Valencia v. Gonzales, 439 F.3d 1046, 1052 (C.A.9 2006) (statutory rape does not involve such a risk).
Compare Dixon v. Attorney Gen., 768 F.3d 1339, 1343-1346 (C.A.11 2014) (holding that one such statute falls under § 16(b) ), with Flores-Lopez v. Holder, 685 F.3d 857, 863-865 (C.A.9 2012) (holding that another does not).
Compare United States v. Venegas-Ornelas, 348 F.3d 1273, 1277-1278 (C.A.10 2003) (residential trespass is a crime of violence), with Zivkovic v. Holder, 724 F.3d 894, 906 (C.A.7 2013) (it is not).
From all we can tell-and all the Government has told us, see Brief for Petitioner 45-52-lower courts have also decided many fewer cases involving § 16(b) than ACCA's residual clause. That disparity likely reflects the Government's lesser need to rely on § 16(b). That provision is mainly employed (as here) in the immigration context, to establish an "aggravated felony" requiring deportation. See supra, at 1211. But immigration law offers many other ways to achieve that result. The INA lists 80 or so crimes that count as aggravated felonies; only if a conviction is not for one of those specified offenses need the Government resort to § 16(b) (or another catch-all provision). See Luna Torres v. Lynch, 578 U.S. ----, ----, 136 S.Ct. 1619, 1623, 194 L.Ed.2d 737 (2016). By contrast, ACCA enumerates only four crimes as a basis for enhancing sentences; the Government therefore had reason to use the statute's residual clause more often.
See, e.g., Armendariz-Moreno v. United States, 555 U.S. 1133, 129 S.Ct. 993, 173 L.Ed.2d 288 (2009) (vacating and remanding for reconsideration in light of Begay v. United States, 553 U.S. 137, 128 S.Ct. 1581, 170 L.Ed.2d 490 (2008), and Chambers v. United States, 555 U.S. 122, 129 S.Ct. 687, 172 L.Ed.2d 484 (2009) ); Castillo-Lucio v. United States, 555 U.S. 1133, 129 S.Ct. 993, 173 L.Ed.2d 288 (2009) (same); Addo v. Mukasey, 555 U.S. 1132, 129 S.Ct. 991, 173 L.Ed.2d 284 (2009) (vacating and remanding in light of Chambers ); Serna-Guerra v. Holder, 556 U.S. 1279, 129 S.Ct. 2764, 174 L.Ed.2d 268 (2009) (same); Reyes-Figueroa v. United States, 555 U.S. 1132, 129 S.Ct. 998, 173 L.Ed.2d 286 (2009) (same).
Vague laws invite arbitrary power. Before the Revolution, the crime of treason in English law was so capaciously construed that the mere expression of disfavored opinions could invite transportation or death. The founders cited the crown's abuse of "pretended" crimes like this as one of their reasons for revolution. See Declaration of Independence ¶ 21. Today's vague laws may not be as invidious, but they can invite the exercise of arbitrary power all the same-by leaving the people in the dark about what the law demands and allowing prosecutors and courts to make it up.
The law before us today is such a law. Before holding a lawful permanent resident alien like James Dimaya subject to removal for having committed a crime, the Immigration and Nationality Act requires a judge to determine that the ordinary case of the alien's crime of conviction involves a substantial risk that physical force may be used. But what does that mean? Just take the crime at issue in this case, California burglary, which applies to everyone from armed home intruders to door-to-door salesmen peddling shady products. How, on that vast spectrum, is anyone supposed to locate the ordinary case and say whether it includes a substantial risk of physical force? The truth is, no one knows. The law's silence leaves judges to their intuitions and the people to their fate. In my judgment, the Constitution demands more.
*
I begin with a foundational question. Writing for the Court in Johnson v. United States, 576 U.S. ----, 135 S.Ct. 2551, 192 L.Ed.2d 569 (2015), Justice Scalia held the residual clause of the Armed Career Criminal Act void for vagueness because it invited "more unpredictability and arbitrariness" than the Constitution allows. Id., at ----, 135 S.Ct., at 2558. Because the residual clause in the statute now before us uses almost exactly the same language as the residual clause in Johnson , respect for precedent alone would seem to suggest that both clauses should suffer the same judgment.
But first in Johnson and now again today Justice THOMAS has questioned whether our vagueness doctrine can fairly claim roots in the Constitution as originally understood. See, e.g., post, at 1242 - 1245 (dissenting opinion); Johnson, supra, at 1226 - 1233 (opinion concurring in judgment) ( 576 U.S., at ---- - ----, 135 S.Ct., at 2566-2573 ). For its part, the Court has yet to offer a reply. I believe our colleague's challenge is a serious and thoughtful one that merits careful attention. At day's end, though, it is a challenge to which I find myself unable to subscribe. Respectfully, I am persuaded instead that void for vagueness doctrine, at least properly conceived, serves as a faithful expression of ancient due process and separation of powers principles the framers recognized as vital to ordered liberty under our Constitution.
Consider first the doctrine's due process underpinnings. The Fifth and Fourteenth Amendments guarantee that "life, liberty, or property" may not be taken "without due process of law." That means the government generally may not deprive a person of those rights without affording him the benefit of (at least) those "customary procedures to which freemen were entitled by the old law of England." Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 28, 111 S.Ct. 1032, 113 L.Ed.2d 1 (1991) (Scalia, J., concurring in judgment) (internal quotation marks omitted). Admittedly, some have suggested that the Due Process Clause does less work than this, allowing the government to deprive people of their liberty through whatever procedures (or lack of them) the government's current laws may tolerate. Post, at 1243, n. 1 (opinion of THOMAS, J.) (collecting authorities). But in my view the weight of the historical evidence shows that the clause sought to ensure that the people's rights are never any less secure against governmental invasion than they were at common law. Lord Coke took this view of the English due process guarantee. 1 E. Coke, The Second Part of the Institutes of the Laws of England 50 (1797). John Rutledge, our second Chief Justice, explained that Coke's teachings were carefully studied and widely adopted by the framers, becoming " 'almost the foundations of our law.' " Klopfer v. North Carolina, 386 U.S. 213, 225, 87 S.Ct. 988, 18 L.Ed.2d 1 (1967). And many more students of the Constitution besides-from Justice Story to Justice Scalia-have agreed that this view best represents the original understanding of our own Due Process Clause. See, e.g., Murray's Lessee v. Hoboken Land & Improvement Co., 18 How. 272, 277, 15 L.Ed. 372 (1856) ; 3 J. Story, Commentaries on the Constitution of the United States § 1783, p. 661 (1833); Pacific Mut., supra, at 28-29, 111 S.Ct. 1032 (opinion of Scalia, J.); Eberle, Procedural Due Process: The Original Understanding, 4 Const. Comment. 339, 341 (1987).
Perhaps the most basic of due process's customary protections is the demand of fair notice. See Connally v. General Constr. Co., 269 U.S. 385, 391, 46 S.Ct. 126, 70 L.Ed. 322 (1926) ; see also Note, Textualism as Fair Notice, 123 Harv. L. Rev. 542, 543 (2009) ("From the inception of Western culture, fair notice has been recognized as an essential element of the rule of law"). Criminal indictments at common law had to provide "precise and sufficient certainty" about the charges involved. 4 W. Blackstone, Commentaries on the Laws of England 301 (1769) (Blackstone). Unless an "offence [was] set forth with clearness and certainty," the indictment risked being held void in court. Id., at 302 (emphasis deleted); 2 W. Hawkins, Pleas of the Crown, ch. 25, §§ 99, 100, pp. 244-245 (2d ed. 1726) ("[I]t seems to have been anciently the common practice, where an indictment appeared to be [in]sufficient, either for its uncertainty or the want of proper legal words, not to put the defendant to answer it").
The same held true in civil cases affecting a person's life, liberty, or property. A civil suit began by obtaining a writ-a detailed and specific form of action asking for particular relief. Bellia, Article III and the Cause of Action, 89 Iowa L. Rev. 777, 784-786 (2004) ; Subrin, How Equity Conquered Common Law: The Federal Rules of Civil Procedure in Historical Perspective, 135 U. Pa. L. Rev. 909, 914-915 (1987). Because the various civil writs were clearly defined, English subjects served with one would know with particularity what legal requirement they were alleged to have violated and, accordingly, what would be at issue in court. Id., at 917 ; Moffitt, Pleadings in the Age of Settlement, 80 Ind. L.J. 727, 731 (2005). And a writ risked being held defective if it didn't provide fair notice. Goldington v. Bassingburn, Y.B. Trin. 3 Edw. II, f. 27b (1310) (explaining that it was "the law of the land" that "no one [could] be taken by surprise" by having to "answer in court for what [one] has not been warned to answer").
The requirement of fair notice applied to statutes too. Blackstone illustrated the point with a case involving a statute that made "stealing sheep, or other cattle" a felony. 1 Blackstone 88 (emphasis deleted). Because the term "cattle" embraced a good deal more then than it does now (including wild animals, no less), the court held the statute failed to provide adequate notice about what it did and did not cover-and so the court treated the term "cattle" as a nullity. Ibid. All of which, Blackstone added, had the salutary effect of inducing the legislature to reenter the field and make itself clear by passing a new law extending the statute to "bulls, cows, oxen," and more "by name." Ibid.
This tradition of courts refusing to apply vague statutes finds parallels in early American practice as well. In The Enterprise, 8 F.Cas. 732 (No. 4,499) (C.C.N.Y. 1810), for example, Justice Livingston found that a statute setting the circumstances in which a ship may enter a port during an embargo was too vague to be applied, concluding that "the court had better pass" the statutory terms by "as unintelligible and useless" rather than "put on them, at great uncertainty, a very harsh signification, and one which the legislature may never have designed." Id., at 735. In United States v. Sharp, 27 F.Cas. 1041 (No. 16,264) (C.C.Pa.1815), Justice Washington confronted a statute which prohibited seamen from making a "revolt." Id., at 1043. But he was unable to determine the meaning of this provision "by any authority ... either in the common, admiralty, or civil law." Ibid . As a result, he declined to "recommend to the jury, to find the prisoners guilty of making, or endeavouring to make a revolt, however strong the evidence may be." Ibid.
Nor was the concern with vague laws confined to the most serious offenses like capital crimes. Courts refused to apply vague laws in criminal cases involving relatively modest penalties. See, e.g., McJunkins v. State, 10 Ind. 140, 145 (1858). They applied the doctrine in civil cases too. See, e.g., Drake v. Drake, 15 N.C. 110, 115 (1833) ; Commonwealth v. Bank of Pennsylvania, 3 Watts & Serg. 173, 177 (Pa.1842). As one court put it, "all laws" "ought to be expressed in such a manner as that its meaning may be unambiguous, and in such language as may be readily understood by those upon whom it is to operate." McConvill v. Mayor and Aldermen of Jersey City, 39 N.J.L. 38, 42 (1876). " 'It is impossible ... to dissent from the doctrine of Lord Coke, that acts of parliament ought to be plainly and clearly, and not cunningly and darkly penned, especially in penal matters.' " Id., at 42-43.
These early cases, admittedly, often spoke in terms of construing vague laws strictly rather than declaring them void. See, e.g., post, at 1243 - 1244 (opinion of THOMAS, J.); Johnson, 576 U.S., at ---------, 135 S.Ct., at 2567-2568 (opinion of THOMAS, J.). But in substance void the law is often exactly what these courts did: rather than try to construe or interpret the statute before them, judges frequently held the law simply too vague to apply. Blackstone, for example, did not suggest the court in his illustration should have given a narrowing construction to the term "cattle," but argued against giving it any effect at all . 1 Blackstone 88; see also Scalia, Assorted Canards of Contemporary Legal Analysis, 40 Case W. Res. L. Rev. 581, 582 (1989) ("I doubt ... that any modern court would go to the lengths described by Blackstone in its application of the rule that penal statutes are to be strictly construed"); Note, Indefinite Criteria of Definiteness in Statutes, 45 Harv. L. Rev. 160, n. 3 (1931) (explaining that "since strict construction, in effect, nullified ambiguous provisions, it was but a short step to declaring them void ab initio "); supra, at 1226, n. 1 (state courts holding vague statutory terms "void" or "null").
What history suggests, the structure of the Constitution confirms. Many of the Constitution's other provisions presuppose and depend on the existence of reasonably clear laws. Take the Fourth Amendment's requirement that arrest warrants must be supported by probable cause, and consider what would be left of that requirement if the alleged crime had no meaningful boundaries. Or take the Sixth Amendment's mandate that a defendant must be informed of the accusations against him and allowed to bring witnesses in his defense, and consider what use those rights would be if the charged crime was so vague the defendant couldn't tell what he's alleged to have done and what sort of witnesses he might need to rebut that charge. Without an assurance that the laws supply fair notice, so much else of the Constitution risks becoming only a "parchment barrie[r]" against arbitrary power. The Federalist No. 48, p. 308 (C. Rossiter ed. 1961) (J. Madison).
Although today's vagueness doctrine owes much to the guarantee of fair notice embodied in the Due Process Clause, it would be a mistake to overlook the doctrine's equal debt to the separation of powers. The Constitution assigns "[a]ll legislative Powers" in our federal government to Congress. Art. I, § 1. It is for the people, through their elected representatives, to choose the rules that will govern their future conduct. See The Federalist No. 78, at 465 (A. Hamilton) ("The legislature ... prescribes the rules by which the duties and rights of every citizen are to be regulated"). Meanwhile, the Constitution assigns to judges the "judicial Power" to decide "Cases" and "Controversies." Art. III, § 2. That power does not license judges to craft new laws to govern future conduct, but only to "discer[n] the course prescribed by law" as it currently exists and to "follow it" in resolving disputes between the people over past events. Osborn v. Bank of United States, 9 Wheat. 738, 866, 6 L.Ed. 204 (1824).
From this division of duties, it comes clear that legislators may not "abdicate their responsibilities for setting the standards of the criminal law," Smith v. Goguen, 415 U.S. 566, 575, 94 S.Ct. 1242, 39 L.Ed.2d 605 (1974), by leaving to judges the power to decide "the various crimes includable in [a] vague phrase," Jordan v. De George, 341 U.S. 223, 242, 71 S.Ct. 703, 95 L.Ed. 886 (1951) (Jackson, J., dissenting). For "if the legislature could set a net large enough to catch all possible offenders, and leave it to the courts to step inside and say who could be rightfully detained, and who should be set at large[,][t]his would, to some extent, substitute the judicial for the legislative department of government." Kolender v. Lawson, 461 U.S. 352, 358, n. 7, 103 S.Ct. 1855, 75 L.Ed.2d 903 (1983) (internal quotation marks omitted). Nor is the worry only that vague laws risk allowing judges to assume legislative power. Vague laws also threaten to transfer legislative power to police and prosecutors, leaving to them the job of shaping a vague statute's contours through their enforcement decisions. See Grayned v. City of Rockford, 408 U.S. 104, 108-109, 92 S.Ct. 2294, 33 L.Ed.2d 222 (1972) ("A vague law impermissibly delegates basic policy matters to policemen, judges, and juries for resolution on an ad hoc and subjective basis").
These structural worries are more than just formal ones. Under the Constitution, the adoption of new laws restricting liberty is supposed to be a hard business, the product of an open and public debate among a large and diverse number of elected representatives. Allowing the legislature to hand off the job of lawmaking risks substituting this design for one where legislation is made easy, with a mere handful of unelected judges and prosecutors free to "condem[n] all that [they] personally disapprove and for no better reason than [they] disapprove it." Jordan, supra, at 242, 71 S.Ct. 703 (Jackson, J., dissenting). Nor do judges and prosecutors act in the open and accountable forum of a legislature, but in the comparatively obscure confines of cases and controversies. See, e.g., A. Bickel, The Least Dangerous Branch: The Supreme Court at the Bar of Politics 151 (1962) ("A vague statute delegates to administrators, prosecutors, juries, and judges the authority of ad hoc decision, which is in its nature difficult if not impossible to hold to account, because of its narrow impact"). For just these reasons, Hamilton warned, while "liberty can have nothing to fear from the judiciary alone," it has "every thing to fear from" the union of the judicial and legislative powers. The Federalist No. 78, at 466. No doubt, too, for reasons like these this Court has held "that the more important aspect of vagueness doctrine 'is not actual notice, but ... the requirement that a legislature establish minimal guidelines to govern law enforcement' " and keep the separate branches within their proper spheres. Kolender, supra, at 358, 103 S.Ct. 1855 (quoting Goguen, supra, at 575, 94 S.Ct. 1242 (emphasis added)).
*
Persuaded that vagueness doctrine enjoys a secure footing in the original understanding of the Constitution, the next question I confront concerns the standard of review. What degree of imprecision should this Court tolerate in a statute before declaring it unconstitutionally vague? For its part, the government argues that where (as here) a person faces only civil, not criminal, consequences from a statute's operation, we should declare the law unconstitutional only if it is "unintelligible." But in the criminal context this Court has generally insisted that the law must afford "ordinary people ... fair notice of the conduct it punishes." Johnson, 576 U.S., at ----, 135 S.Ct., at 2557. And I cannot see how the Due Process Clause might often require any less than that in the civil context either. Fair notice of the law's demands, as we've seen, is "the first essential of due process." Connally, 269 U.S., at 391, 46 S.Ct. 126. And as we've seen, too, the Constitution sought to preserve a common law tradition that usually aimed to ensure fair notice before any deprivation of life, liberty, or property could take place, whether under the banner of the criminal or the civil law. See supra, at 1224 - 1227.
First principles aside, the government suggests that at least this Court's precedents support adopting a less-than-fair-notice standard for civil cases. But even that much I do not see. This Court has already expressly held that a "stringent vagueness test" should apply to at least some civil laws-those abridging basic First Amendment freedoms. Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 499, 102 S.Ct. 1186, 71 L.Ed.2d 362 (1982). This Court has made clear, too, that due process protections against vague laws are "not to be avoided by the simple label a State chooses to fasten upon its conduct or its statute." Giaccio v. Pennsylvania, 382 U.S. 399, 402, 86 S.Ct. 518, 15 L.Ed.2d 447 (1966). So the happenstance that a law is found in the civil or criminal part of the statute books cannot be dispositive. To be sure, this Court has also said that what qualifies as fair notice depends "in part on the nature of the enactment." Hoffman Estates, 455 U.S., at 498, 102 S.Ct. 1186. And the Court has sometimes "expressed greater tolerance of enactments with civil rather than criminal penalties because the consequences of imprecision are qualitatively less severe." Id., at 498-499, 102 S.Ct. 1186. But to acknowledge these truisms does nothing to prove that civil laws must always be subject to the government's emaciated form of review.
In fact, if the severity of the consequences counts when deciding the standard of review, shouldn't we also take account of the fact that today's civil laws regularly impose penalties far more severe than those found in many criminal statutes? Ours is a world filled with more and more civil laws bearing more and more extravagant punishments. Today's "civil" penalties include confiscatory rather than compensatory fines, forfeiture provisions that allow homes to be taken, remedies that strip persons of their professional licenses and livelihoods, and the power to commit persons against their will indefinitely. Some of these penalties are routinely imposed and are routinely graver than those associated with misdemeanor crimes-and often harsher than the punishment for felonies. And not only are "punitive civil sanctions ... rapidly expanding," they are "sometimes more severely punitive than the parallel criminal sanctions for the same conduct ." Mann, Punitive Civil Sanctions: The Middleground Between Criminal and Civil Law, 101 Yale L.J. 1795, 1798 (1992) (emphasis added). Given all this, any suggestion that criminal cases warrant a heightened standard of review does more to persuade me that the criminal standard should be set above our precedent's current threshold than to suggest the civil standard should be buried below it.
Retreating to a more modest line of argument, the government emphasizes that this case arises in the immigration context and so implicates matters of foreign relations where the Executive enjoys considerable constitutional authority. But to acknowledge that the President has broad authority to act in this general area supplies no justification for allowing judges to give content to an impermissibly vague law.
Alternatively still, Justice THOMAS suggests that, at least at the time of the founding, aliens present in this country may not have been understood as possessing any rights under the Due Process Clause. For support, he points to the Alien Friends Act of 1798. An Act Concerning Aliens § 1, 1 Stat. 571; post, at 1244 - 1248 (opinion of THOMAS, J.). But the Alien Friends Act-better known as the "Alien" part of the Alien and Sedition Acts-is one of the most notorious laws in our country's history. It was understood as a temporary war measure, not one that the legislature would endorse in a time of tranquility. See, e.g., Fehlings, Storm on the Constitution: The First Deportation Law, 10 Tulsa J. Comp. & Int'l L. 63, 70-71 (2002). Yet even then it was widely condemned as unconstitutional by Madison and many others. It also went unenforced, may have cost the Federalist Party its existence, and lapsed a mere two years after its enactment. With this fuller view, it seems doubtful the Act tells us a great deal about aliens' due process rights at the founding.
Besides, none of this much matters. Whether Madison or his adversaries had the better of the debate over the constitutionality of the Alien Friends Act, Congress is surely free to extend existing forms of liberty to new classes of persons-liberty that the government may then take only after affording due process. See, e.g., Sandin v. Conner, 515 U.S. 472, 477-478, 115 S.Ct. 2293, 132 L.Ed.2d 418 (1995) ; Easterbrook, Substance and Due Process, 1982 S.Ct. Rev. 85, 88 ("If ... the constitution, statute, or regulation creates a liberty or property interest, then the second step-determining 'what process is due'-comes into play"). Madison made this very point, suggesting an alien's admission in this country could in some circumstances be analogous to "the grant of land to an individual," which "may be of favor not of right; but the moment the grant is made, the favor becomes a right, and must be forfeited before it can be taken away." Madison's Report 319. And, of course, that's exactly what Congress eventually chose to do here. Decades ago, it enacted a law affording Mr. Dimaya lawful permanent residency in this country, extending to him a statutory liberty interest others traditionally have enjoyed to remain in and move about the country free from physical imprisonment and restraint. See Dimaya v. Lynch, 803 F.3d 1110, 1111 (C.A.9 2015) ; 8 U.S.C. §§ 1101(20), 1255. No one suggests Congress had to enact statutes of this sort. And exactly what processes must attend the deprivation of a statutorily afforded liberty interest like this may pose serious and debatable questions. Cf. Murray's Lessee, 18 How., at 277 (approving summary procedures in another context). But however summary those procedures might be, it's hard to fathom why fair notice of the law-the most venerable of due process's requirements-would not be among them. Connally, 269 U.S., at 391, 46 S.Ct. 126.
Today, a plurality of the Court agrees that we should reject the government's plea for a feeble standard of review, but for a different reason. Ante, at 1212 - 1213. My colleagues suggest the law before us should be assessed under the fair notice standard because of the special gravity of its civil deportation penalty. But, grave as that penalty may be, I cannot see why we would single it out for special treatment when (again) so many civil laws today impose so many similarly severe sanctions. Why, for example, would due process require Congress to speak more clearly when it seeks to deport a lawfully resident alien than when it wishes to subject a citizen to indefinite civil commitment, strip him of a business license essential to his family's living, or confiscate his home? I can think of no good answer.
*
With the fair notice standard now in hand, all that remains is to ask how it applies to the case before us. And here at least the answer comes readily for me: to the extent it requires an "ordinary case" analysis, the portion of the Immigration and Nationality Act before us fails the fair notice test for the reasons Justice Scalia identified in Johnson and the Court recounts today.
Just like the statute in Johnson , the statute here instructs courts to impose special penalties on individuals previously "convicted of" a "crime of violence." 8 U.S.C. §§ 1227(a)(2)(A)(iii), 1101(a)(43)(F). Just like the statute in Johnson , the statute here fails to specify which crimes qualify for that label. Instead, and again like the statute in Johnson , the statute here seems to require a judge to guess about the ordinary case of the crime of conviction and then guess whether a "substantial risk" of "physical force" attends its commission. 18 U.S.C. § 16(b) ; Johnson, 576 U.S., at ---------, 135 S.Ct., at 2556-2558. Johnson held that a law that asks so much of courts while offering them so little by way of guidance is unconstitutionally vague. And I do not see how we might reach a different judgment here.
Any lingering doubt is resolved for me by taking account of just some of the questions judges trying to apply the statute using an ordinary case analysis would have to confront. Does a conviction for witness tampering ordinarily involve a threat to the kneecaps or just the promise of a bribe? Does a conviction for kidnapping ordinarily involve throwing someone into a car trunk or a noncustodial parent picking up a child from daycare? These questions do not suggest obvious answers. Is the court supposed to hold evidentiary hearings to sort them out, entertaining experts with competing narratives and statistics, before deciding what the ordinary case of a given crime looks like and how much risk of violence it poses? What is the judge to do if there aren't any reliable statistics available? Should (or must) the judge predict the effects of new technology on what qualifies as the ordinary case? After all, surely the risk of injury calculus for crimes like larceny can be expected to change as more thefts are committed by computer rather than by gunpoint. Or instead of requiring real evidence, does the statute mean to just leave it all to a judicial hunch? And on top of all that may be the most difficult question yet: at what level of generality is the inquiry supposed to take place? Is a court supposed to pass on the ordinary case of burglary in the relevant neighborhood or county, or should it focus on statewide or even national experience? How is a judge to know? How are the people to know?
The implacable fact is that this isn't your everyday ambiguous statute. It leaves the people to guess about what the law demands-and leaves judges to make it up. You cannot discern answers to any of the questions this law begets by resorting to the traditional canons of statutory interpretation. No amount of staring at the statute's text, structure, or history will yield a clue. Nor does the statute call for the application of some preexisting body of law familiar to the judicial power. The statute doesn't even ask for application of common experience. Choice, pure and raw, is required. Will, not judgment, dictates the result.
*
Having said this much, it is important to acknowledge some limits on today's holding too. I have proceeded on the premise that the Immigration and Nationality Act, as it incorporates § 16(b) of the criminal code, commands courts to determine the risk of violence attending the ordinary case of conviction for a particular crime. I have done so because no party before us has argued for a different way to read these statutes in combination; because our precedent seemingly requires this approach; and because the government itself has conceded (repeatedly) that the law compels it. Johnson, supra, at 1217, 135 S.Ct., at 2561-2562 ; Taylor v. United States, 495 U.S. 575, 600, 110 S.Ct. 2143, 109 L.Ed.2d 607 (1990) ; Brief for Petitioner 11, 30, 32, 36, 40, 47 (conceding that an ordinary case analysis is required).
But any more than that I would not venture. In response to the problems engendered by the ordinary case analysis, Justice THOMAS suggests that we should overlook the government's concession about the propriety of that approach; reconsider our precedents endorsing it; and read the statute as requiring us to focus on the facts of the alien's crime as committed rather than as the facts appear in the ordinary case of conviction. Post, at 1252 - 1259. But normally courts do not rescue parties from their concessions, maybe least of all concessions from a party as able to protect its interests as the federal government. And normally, too, the crucible of adversarial testing is crucial to sound judicial decisionmaking. We rely on it to "yield insights (or reveal pitfalls) we cannot muster guided only by our own lights." Maslenjak v. United States, 582 U.S. ----, ----, 137 S.Ct. 1918, 1931, 198 L.Ed.2d 460 (2017) (GORSUCH, J., concurring in part and concurring in judgment).
While sometimes we may or even must forgo the adversarial process, I do not see the case for doing so today. Maybe especially because I am not sure Justice THOMAS's is the only available alternative reading of the statute we would have to consider, even if we did reject the government's concession and wipe the precedential slate clean. We might also have to consider an interpretation that would have courts ask not whether the alien's crime of conviction ordinarily involves a risk of physical force, or whether the defendant's particular crime involved such a risk, but whether the defendant's crime of conviction always does so. After all, the language before us requires a conviction for an "offense ... that, by its nature, involves a substantial risk of physical force." 18 U.S.C. § 16(b) (emphasis added). Plausibly, anyway, the word "nature" might refer to an inevitable characteristic of the offense; one that would present itself automatically, whenever the statute is violated. See 10 Oxford English Dictionary 247 (2d ed. 1989). While I remain open to different arguments about our precedent and the proper reading of language like this, I would address them in another case, whether involving the INA or a different statute, where the parties have a chance to be heard and we might benefit from their learning.
It's important to note the narrowness of our decision today in another respect too. Vagueness doctrine represents a procedural, not a substantive, demand. It does not forbid the legislature from acting toward any end it wishes, but only requires it to act with enough clarity that reasonable people can know what is required of them and judges can apply the law consistent with their limited office. Our history surely bears examples of the judicial misuse of the so-called "substantive component" of due process to dictate policy on matters that belonged to the people to decide. But concerns with substantive due process should not lead us to react by withdrawing an ancient procedural protection compelled by the original meaning of the Constitution.
Today's decision sweeps narrowly in yet one more way. By any fair estimate, Congress has largely satisfied the procedural demand of fair notice even in the INA provision before us. The statute lists a number of specific crimes that can lead to a lawful resident's removal-for example, murder, rape, and sexual abuse of a minor. 8 U.S.C. § 1101(a)(43)(A). Our ruling today does not touch this list. We address only the statute's "residual clause" where Congress ended its own list and asked us to begin writing our own. Just as Blackstone's legislature passed a revised statute clarifying that "cattle" covers bulls and oxen, Congress remains free at any time to add more crimes to its list. It remains free, as well, to write a new residual clause that affords the fair notice lacking here. Congress might, for example, say that a conviction for any felony carrying a prison sentence of a specified length opens an alien to removal. Congress has done almost exactly this in other laws. See, e.g., 18 U.S.C. § 922(g). What was done there could be done here.
But those laws are not this law. And while the statute before us doesn't rise to the level of threatening death for "pretended offences" of treason, no one should be surprised that the Constitution looks unkindly on any law so vague that reasonable people cannot understand its terms and judges do not know where to begin in applying it. A government of laws and not of men can never tolerate that arbitrary power. And, in my judgment, that foundational principle dictates today's result. Because I understand them to be consistent with what I have said here, I join Parts I, III, IV-B, and V of the Court's opinion and concur in the judgment.
Chief Justice ROBERTS, with whom Justice KENNEDY, Justice THOMAS, and Justice ALITO join, dissenting.
In Johnson v. United States, we concluded that the residual clause of the Armed Career Criminal Act was unconstitutionally vague, given the "indeterminacy of the wide-ranging inquiry" it required. 576 U.S. ----, ----, 135 S.Ct. 2551, 2557, 192 L.Ed.2d 569 (2015). Today, the Court relies wholly on Johnson -but only some of Johnson -to strike down another provision, 18 U.S.C. § 16(b). Because § 16(b) does not give rise to the concerns that drove the Court's decision in Johnson , I respectfully dissent.
I
The term "crime of violence" appears repeatedly throughout the Federal Criminal Code. Section 16 of Title 18 defines it to mean:
"(a) an offense that has as an element the use, attempted use, or threatened use of physical force against the person or property of another, or
"(b) any other offense that is a felony and that, by its nature, involves a substantial risk that physical force against the person or property of another may be used in the course of committing the offense."
This definition of "crime of violence" is also incorporated in the definition of "aggravated felony" in the Immigration and Nationality Act. 8 U.S.C. § 1101(a)(43)(F) ("aggravated felony" includes "a crime of violence (as defined in section 16 of title 18, but not including a purely political offense) for which the term of imprisonment [is] at least one year" (footnote omitted)). A conviction for an aggravated felony carries serious consequences under the immigration laws. It can serve as the basis for an alien's removal from the United States, and can preclude cancellation of removal by the Attorney General. §§ 1227(a)(2)(A)(iii), 1229b(a)(3).
Those consequences came to pass in respondent James Dimaya's case. An Immigration Judge and the Board of Immigration Appeals interpreted § 16(b) to cover Dimaya's two prior convictions for first-degree residential burglary under California law, subjecting him to removal. To stave off that result, Dimaya argued that the language of § 16(b) was void for vagueness under the Due Process Clause of the Fifth Amendment.
The parties begin by disputing whether a criminal or more relaxed civil vagueness standard should apply in resolving Dimaya's challenge. A plurality of the Court rejects the Government's argument in favor of a civil standard, because of the "grave nature of deportation," Jordan v. De George, 341 U.S. 223, 231, 71 S.Ct. 703, 95 L.Ed. 886 (1951) ; see ante, at 1226 (plurality opinion); Justice GORSUCH does so for broader reasons, see ante, at 1218 - 1231 (GORSUCH, J., concurring in part and concurring in judgment). I see no need to resolve which standard applies, because I would hold that § 16(b) is not unconstitutionally vague even under the standard applicable to criminal laws.
II
This is not our first encounter with § 16(b). In Leocal v. Ashcroft, 543 U.S. 1, 125 S.Ct. 377, 160 L.Ed.2d 271 (2004), we were asked to decide whether either subsection of § 16 covers a particular category of state crimes, specifically DUI offenses involving no more than negligent conduct. 543 U.S., at 6, 125 S.Ct. 377. Far from finding § 16(b)"hopeless[ly] indetermina[te]," Johnson, 576 U.S., at ----, 135 S.Ct., at 2558, we considered the provision clear and unremarkable: "while § 16(b) is broader than § 16(a) in the sense that physical force need not actually be applied," the provision "simply covers offenses that naturally involve a person acting in disregard of the risk that physical force might be used against another in committing an offense," Leocal, 543 U.S., at 10-11, 125 S.Ct. 377. Applying that standard to the state offense at issue, we concluded-unanimously-that § 16(b)"cannot be read to include [a] conviction for DUI causing serious bodily injury under Florida law." Id., at 11, 125 S.Ct. 377.
Leocal thus provides a model for how courts should assess whether a particular crime "by its nature" involves a risk of the use of physical force. At the outset, our opinion set forth the elements of the Florida DUI statute, which made it a felony "for a person to operate a vehicle while under the influence and, 'by reason of such operation, caus[e] ... [s]erious bodily injury to another.' " 543 U.S., at 7, 125 S.Ct. 377. Our § 16(b) analysis, in turn, focused on those specific elements in concluding that a Florida offender's acts would not naturally give rise to the requisite risk of force "in the course of committing the offense." Id., at 11, 125 S.Ct. 377. "In no 'ordinary or natural' sense," we explained, "can it be said that a person risks having to 'use' physical force against another person in the course of operating a vehicle while intoxicated and causing injury." Ibid.
The Court holds that the same provision we had no trouble applying in Leocal is in fact incapable of reasoned application. The sole justification for this turnabout is the resemblance between the language of § 16(b) and the language of the residual clause of the Armed Career Criminal Act (ACCA) that was at issue in Johnson . The latter provision defined a "violent felony" to include "any crime punishable by imprisonment for a term exceeding one year ... that ... is burglary, arson, or extortion, involves use of explosives, or otherwise involves conduct that presents a serious potential risk of physical injury to another. " 18 U.S.C. § 924(e)(2)(B)(ii) (emphasis added).
In Johnson , we concluded that the ACCA residual clause (the "or otherwise" language) gave rise to two forms of intractable uncertainty, which "conspire [d]" to render the provision unconstitutionally vague. 576 U.S., at ----, 135 S.Ct., at 2557. First, the residual clause asked courts to gauge the "potential risk" of "physical injury" posed by the conduct involved in the crime. Ibid. That inquiry, we determined, entailed not only an evaluation of the "criminal's behavior," but also required courts to consider "how the idealized ordinary case of the crime subsequently plays out." Ibid. Second, the residual clause obligated courts to compare that risk to an indeterminate standard-one that was inextricably linked to the provision's four enumerated crimes, which presented differing kinds and degrees of risk. Id., at ----, 135 S.Ct., at 2558. This murky confluence of features, each of which "may [have been] tolerable in isolation," together "ma[de] a task for us which at best could be only guesswork." Id., at ----, 135 S.Ct., at 2560.
Section 16(b) does not present the same ambiguities. The two provisions do correspond to some extent. Under our decisions, both ask the sentencing court to consider whether a particular offense, defined without regard to the facts of the conviction, poses a specified risk. And, relevant to both statutes, we have explained that in deciding whether statutory elements inherently produce a risk, a court must take into account how those elements will ordinarily be fulfilled. See James v. United States, 550 U.S. 192, 208, 127 S.Ct. 1586, 167 L.Ed.2d 532 (2007) (this categorical inquiry asks "whether the conduct encompassed by the elements of the offense, in the ordinary case, presents" the requisite risk). In the Court's view, that effectively resolves this case. But the Court too readily dismisses the significant textual distinctions between § 16(b) and the ACCA residual clause. See also ante, at 1224 (opinion of GORSUCH, J.). Those differences undermine the conclusion that § 16(b) shares each of the "dual flaws" of that clause. Ante, at 1221 - 1222 (majority opinion).
To begin, § 16(b) yields far less uncertainty "about how to estimate the risk posed by a crime." Johnson, 576 U.S., at ----, 135 S.Ct., at 2557. There are three material differences between § 16(b) and the ACCA residual clause in this respect. First, the ACCA clause directed the reader to consider whether the offender's conduct presented a "potential risk" of injury. Forced to give meaning to that befuddling choice of phrase-which layered one indeterminate term on top of another-we understood the word "potential" to signify that "Congress intended to encompass possibilities even more contingent or remote than a simple 'risk.' " James, 550 U.S., at 207-208, 127 S.Ct. 1586. As we explained in Johnson , that made for a "speculative" inquiry "detached from statutory elements." 576 U.S., at ----, 135 S.Ct., at 2558. In other words, the offense elements could not constrain the risk inquiry in the manner they do here. See Leocal, 543 U.S., at 11, 125 S.Ct. 377. The "serious potential risk" standard also forced courts to assess in an expansive way the "collateral consequences" of the perpetrator's acts. For example, courts had to take into account the concern that others might cause injury in attempting to apprehend the offender. See Sykes v. United States, 564 U.S. 1, 8-9, 131 S.Ct. 2267, 180 L.Ed.2d 60 (2011). Section 16(b), on the other hand, asks about "risk" alone, a familiar concept of everyday life. It therefore calls for a commonsense inquiry that does not compel a court to venture beyond the offense elements to consider contingent and remote possibilities.
Second, § 16(b) focuses exclusively on the risk that the offender will "use [ ]" "physical force" "against" another person or another person's property. Thus, unlike the ACCA residual clause, " § 16(b) plainly does not encompass all offenses which create a 'substantial risk' that injury will result from a person's conduct." Leocal, 543 U.S., at 10, n. 7, 125 S.Ct. 377 (emphasis added). The point is not that an inquiry into the risk of "physical force" is markedly more determinate than an inquiry into the risk of "physical injury." But see ante, at 1220 - 1221. The difference is that § 16(b) asks about the risk that the offender himself will actively employ force against person or property. That language does not sweep in all instances in which the offender's acts, or another person's reaction, might result in unintended or negligent harm.
Third, § 16(b) has a temporal limit that the ACCA residual clause lacked: The "substantial risk" of force must arise "in the course of committing the offense." Properly interpreted, this means the statute requires a substantial risk that the perpetrator will use force while carrying out the crime. See Leocal, 543 U.S., at 10, 125 S.Ct. 377 ("The reckless disregard in § 16 relates ... to the risk that the use of physical force against another might be required in committing a crime."). The provision thereby excludes more attenuated harms that might arise following the completion of the crime. The ACCA residual clause, by contrast, contained no similar language restricting its scope. And the absence of such a limit, coupled with the reference to "potential" risks, gave courts free rein to classify an offense as a violent felony based on injuries that might occur after the offense was over and done. See, e.g., United States v. Benton, 639 F.3d 723, 732 (C.A.6 2011) (finding that "solicitation to commit aggravated assault" qualified under the ACCA residual clause on the theory that the solicited individual might subsequently carry out the requested act).
Why does any of this matter? Because it mattered in Johnson . More precisely, the expansive language in the ACCA residual clause contributed to our determination that the clause gave rise to "grave uncertainty about how to estimate the risk posed by a crime." 576 U.S., at ----, 135 S.Ct., at 2558. "Critically," we said-a word that tends to mean something-"picturing the criminal's behavior is not enough ." Ibid. (emphasis added). Instead, measuring "potential risk" "seemingly require[d] the judge to imagine how the idealized ordinary case of the crime subsequently plays out ." Ibid. (emphasis added). Not so here. In applying § 16(b), considering "the criminal's behavior" is enough.
Those three distinctions-the unadorned reference to "risk," the focus on the offender's own active employment of force, and the "in the course of committing" limitation-also mean that many hard cases under ACCA are easier under § 16(b). Take the firearm possession crime from Johnson itself, which had as its constituent elements (1) unlawfully (2) possessing (3) a short-barreled shotgun. None of those elements, "by its nature," carries "a substantial risk" that the possessor will use force against another "in the course of committing the offense." Nothing inherent in the act of firearm possession, even when it is unlawful, gives rise to a substantial risk that the owner will then shoot someone. See United States v. Serafin, 562 F.3d 1105, 1113 (C.A.10 2009) (recognizing that "Leocal instructs [a court] to focus not on whether possession will likely result in violence, but instead whether one possessing an unregistered weapon necessarily risks the need to employ force to commit possession"). Yet short-barreled shotgun possession presented a closer question under the ACCA residual clause, because the "serious potential risk" language seemingly directed us to consider "the circumstances and conduct that ordinarily attend the offense," in addition to the offense itself. Johnson, 576 U.S., at ----, 135 S.Ct., at 2582 (ALITO, J., dissenting); see id., at ------- --, 135 S.Ct., at 2584 (reasoning that the crime must qualify because "a person who chooses to break the law and risk the heavy criminal penalty incurred by possessing a notoriously dangerous weapon is [likely] to use that weapon in violent ways").
Failure to report to a penal institution, the subject of Chambers v. United States, 555 U.S. 122, 129 S.Ct. 687, 172 L.Ed.2d 484 (2009), is another crime "whose treatment becomes more obvious under § 16(b) than under ACCA," ante, at 1220. In Chambers, the Government argued that the requisite risk of injury arises not necessarily at the time the offender fails to report to prison, but instead later, when an officer attempts to recapture the fugitive. 555 U.S., at 128, 129 S.Ct. 687. The majority is correct that we ultimately "reject[ed]" the Government's contention. Ante, at 1219 - 1220. But we did so after "assum[ing] for argument's sake" its premise-that is, "the relevance of violence that may occur long after an offender fails to report." 555 U.S., at 128, 129 S.Ct. 687 ; see id., at 129, 129 S.Ct. 687 (looking at 160 cases of "failure to report" and observing that "none at all involved violence ... during the commission of the offense itself, [nor] during the offender's later apprehension"). The "in the course of committing the offense" language in § 16(b) helpfully forecloses that debate.
DUI offenses are yet another example. Because § 16(b) asks about the risk that the offender will "use[ ]" "physical force," we readily concluded in Leocal that the subsection does not cover offenses where the danger arises from the offender's negligent or accidental conduct, including drunk driving. 543 U.S., at 11, 125 S.Ct. 377. Applying the ACCA residual clause proved more trying. When asked to decide whether the clause covered drunk driving offenses, a majority of the Court concluded that the answer was no. Begay v. United States, 553 U.S. 137, 128 S.Ct. 1581, 170 L.Ed.2d 490 (2008). Our decision was based, however, on the inference that the clause must cover only "purposeful, 'violent,' and 'aggressive' conduct"-a test derived not from the "conduct that presents a serious potential risk of physical injury" language, but instead by reference to (what we guessed to be) the unifying characteristics of the enumerated offenses. Id., at 144-145, 128 S.Ct. 1581. Four Members of the Court criticized that test, see id., at 150-153, 128 S.Ct. 1581 (Scalia, J., concurring in judgment); id., at 158-160, 162-163, 128 S.Ct. 1581 (ALITO, J., dissenting), though they themselves disagreed about whether DUIs were covered, see id., at 153-154, 128 S.Ct. 1581 (opinion of Scalia, J.); id., at 156-158, 128 S.Ct. 1581 (opinion of ALITO, J.). And the Court distanced itself from the Begay requirement only a few years later when confronting the crime of vehicular flight. See Sykes, 564 U.S., at 12-13, 131 S.Ct. 2267 ; Johnson, 576 U.S., at ---------, 135 S.Ct., at 2559-2560.
Which brings me to the second part of the Court's analysis: its objection that § 16(b), like the ACCA residual clause, leaves "uncertainty about the level of risk that makes a crime 'violent.' "Ante, at 1215. The "substantial risk" standard in § 16(b) is significantly less confusing because it is not tied to a disjointed list of paradigm offenses. Recall that the ACCA provision defined a "violent felony" to include a crime that "is burglary, arson, or extortion, involves use of explosives, or otherwise involves conduct that presents a serious potential risk of physical injury to another." 18 U.S.C. § 924(e)(2)(B)(ii) (emphasis added). As our Court recognized early on, that "otherwise" told the reader to understand the "serious potential risk of physical injury" standard by way of the four enumerated crimes. James, 550 U.S., at 203, 127 S.Ct. 1586. But how, exactly? That question dogged our residual clause cases for years, until we said no más in Johnson .
In our first foray, James, we resolved the case by asking whether the risk posed by the crime of attempted burglary was "comparable to that posed by its closest analog among the enumerated offenses," which was completed burglary. 550 U.S., at 203, 127 S.Ct. 1586. While that rule "[took] care of attempted burglary," it "offer[ed] no help at all with respect to the vast majority of offenses, which have no apparent analog among the enumerated crimes." Johnson, 576 U.S., at ----, 135 S.Ct., at 2558. The James dissent, for its part, would have determined the requisite degree of risk from the least dangerous of the enumerated crimes, and compared the offense to that. 550 U.S., at 218-219, 127 S.Ct. 1586 (opinion of Scalia, J.). But that approach also proved to be harder than it sounded. See id., at 219-227, 127 S.Ct. 1586.
After James came Begay, in which we concluded that the enumerated offenses served as an independent limitation on the kind of crime that could qualify. 553 U.S., at 142, 128 S.Ct. 1581 ; see Chambers, 555 U.S., at 128, 129 S.Ct. 687 (applying the Begay standard). As discussed, that test was short lived (though we did not purport to wholly repudiate it). See Sykes, 564 U.S., at 13, 131 S.Ct. 2267. Finally, in Sykes -our penultimate residual clause case-we acknowledged the prior use of the closest-analog test in James, but instead focused on whether the risk posed by vehicular flight was "similar in degree of danger" to the listed offenses of arson and burglary. 564 U.S., at 8-10, 131 S.Ct. 2267. As a result, Justice Scalia's dissent characterized the Sykes majority as applying the test from his prior dissent in James, not James itself. See 564 U.S., at 29-30, 33, 131 S.Ct. 2267. This series of precedents laid bare our "repeated inability to craft a principled test out of the statutory text," id., at 34, 131 S.Ct. 2267 (opinion of Scalia, J.), as the Court ultimately acknowledged in Johnson, 576 U.S., at ----, 135 S.Ct., at 2558-2559.
The enumerated offenses, and our Court's failed attempts to make sense of them, were essential to Johnson 's conclusion that the residual clause "leaves uncertainty about how much risk it takes for a crime to qualify as a violent felony." Id., at ----, 130 S.Ct., at 2558. As Johnson explained, the issue was not that the statute employed a fuzzy standard. That kind of thing appears in the statute books all the time. Id., at ----, ----, 135 S.Ct., at 2558, 2561. In the majority's retelling today, the difficulty inhered solely in the fact that the statute paired such a standard with the ordinary case inquiry. See ante, at 1214, 1215 - 1216, 1221 - 1222. But that account sidesteps much of Johnson 's reasoning. See 576 U.S., at ---------, ----, ---------, ----, 135 S.Ct., at 2556-2558, 2558, 2558-2560, 2561. Our opinion emphasized that the word "otherwise" "force[d]" courts to interpret the amorphous standard "in light of" the four enumerated crimes, which are "not much more similar to one another in kind than in degree of risk posed." Id., at ----, ----, 135 S.Ct., at 2558, 2559. Or, as Johnson put it more vividly, "[t]he phrase 'shades of red,' standing alone, does not generate confusion or unpredictability; but the phrase 'fire-engine red, light pink, maroon, navy blue, or colors that otherwise involve shades of red' assuredly does so." Id., at ----, 135 S.Ct., at 2561. Indeed, the author of Johnson had previously, and repeatedly, described this feature of the residual clause as the "crucial ... respect" in which the law was problematic. See James, 550 U.S., at 230, n. 7, 127 S.Ct. 1586 (opinion of Scalia, J.); Sykes, 564 U.S., at 35, 131 S.Ct. 2267 (opinion of Scalia, J.).
With § 16(b), by contrast, a court need simply consider the meaning of the word "substantial"-a word our Court has interpreted and applied innumerable times across a wide variety of contexts. The court does not need to give that familiar word content by reference to four different offenses with varying amounts and kinds of risk.
In its effort to recast a considerable portion of Johnson as dicta, the majority speculates that if the enumerated offenses had truly mattered to the outcome, the Court would have told lower courts to "give up on trying to interpret the clause by reference to" those offenses, rather than striking down the provision entirely. Ante, at 1221. No litigant in Johnson suggested that solution, which is not surprising. Such judicial redrafting could have expanded the reach of the criminal provision-surely a job for Congress alone.
In any event, I doubt the majority's proposal would have done the trick. And that is because the result in Johnson did not follow from the presence of one frustrating textual feature or another. Quite the opposite: The decision emphasized that it was the "sum" of the "uncertainties" in the ACCA residual clause, confirmed by years of experience, that "convince[d]" us the provision was beyond salvage. Johnson, 576 U.S., at ----, 135 S.Ct., at 2560. Those failings do not characterize the provision at issue here.
III
The more constrained inquiry required under § 16(b) -which asks only whether the offense elements naturally carry with them a risk that the offender will use force in committing the offense-does not itself engender "grave uncertainty about how to estimate the risk posed by a crime." And the provision's use of a commonplace substantial risk standard-one not tied to a list of crimes that lack a unifying feature-does not give rise to intolerable "uncertainty about how much risk it takes for a crime to qualify." That should be enough to reject Dimaya's facial vagueness challenge.
Because I would rely on those distinctions to uphold § 16(b), the Court reproaches me for not giving sufficient weight to a "core insight" of Johnson . Ante, at 1215, n. 4; see ante, at 1231 (opinion of GORSUCH, J.) (arguing that § 16(b) runs afoul of Johnson "to the extent [ § 16(b) ] requires an 'ordinary case' analysis"). But the fact that the ACCA residual clause required the ordinary case approach was not itself sufficient to doom the law. We instead took pains to clarify that our opinion should not be read to impart such an absolute rule. See Johnson, 576 U.S., at ----, 135 S.Ct., at 2560. I would adhere to that careful holding and not reflexively extend the decision to a different statute whose reach is, on the whole, far more clear.
The Court does the opposite, and the ramifications of that decision are significant. First, of course, today's holding invalidates a provision of the Immigration and Nationality Act-part of the definition of "aggravated felony"-on which the Government relies to "ensure that dangerous criminal aliens are removed from the United States." Brief for United States 54. Contrary to the Court's back-of-the-envelope assessment, see ante, at 1222, n. 12, the Government explains that the definition is "critical" for "numerous" immigration provisions. Brief for United States 12.
In addition, § 16 serves as the universal definition of "crime of violence" for all of Title 18 of the United States Code. Its language is incorporated into many procedural and substantive provisions of criminal law, including provisions concerning racketeering, money laundering, domestic violence, using a child to commit a violent crime, and distributing information about the making or use of explosives. See 18 U.S.C. §§ 25(a)(1), 842(p)(2), 1952(a), 1956(c)(7)(B)(ii), 1959(a)(4), 2261(a), 3561(b). Of special concern, § 16 is replicated in the definition of "crime of violence" applicable to § 924(c), which prohibits using or carrying a firearm "during and in relation to any crime of violence," or possessing a firearm "in furtherance of any such crime." §§ 924(c)(1)(A), (c)(3). Though I express no view on whether § 924(c) can be distinguished from the provision we consider here, the Court's holding calls into question convictions under what the Government warns us is an "oft-prosecuted offense." Brief for United States 12.
Because Johnson does not compel today's result, I respectfully dissent.
Justice THOMAS, with whom Justice KENNEDY and Justice ALITO join as to Parts I-C-2, II-A-1, and II-B, dissenting.
I agree with THE CHIEF JUSTICE that 18 U.S.C. § 16(b), as incorporated by the Immigration and Nationality Act (INA), is not unconstitutionally vague. Section 16(b) lacks many of the features that caused this Court to invalidate the residual clause of the Armed Career Criminal Act (ACCA) in Johnson v. United States, 576 U.S. ----, 135 S.Ct. 2551, 192 L.Ed.2d 569 (2015). ACCA's residual clause-a provision that this Court had applied four times before Johnson -was not unconstitutionally vague either. See id., at ----, 135 S.Ct., 2563-2564 (THOMAS, J., concurring in judgment); id., at ---------, 135 S.Ct., at 2580-2583 (ALITO, J., dissenting). But if the Court insists on adhering to Johnson , it should at least take Johnson at its word that the residual clause was vague due to the " 'sum' " of its specific features. Id., at ----, 135 S.Ct., at 2560 (majority opinion). By ignoring this limitation, the Court jettisons Johnson 's assurance that its holding would not jeopardize "dozens of federal and state criminal laws." Id., at ----, 135 S.Ct., at 2561.
While THE CHIEF JUSTICE persuasively explains why respondent cannot prevail under our precedents, I write separately to make two additional points. First, I continue to doubt that our practice of striking down statutes as unconstitutionally vague is consistent with the original meaning of the Due Process Clause. See id., at ------- --, 135 S.Ct., at 2566-2567 (opinion of THOMAS, J.). Second, if the Court thinks that § 16(b) is unconstitutionally vague because of the "categorical approach," see ante, at 1209 - 1216, then the Court should abandon that approach-not insist on reading it into statutes and then strike them down. Accordingly, I respectfully dissent.
I
I continue to harbor doubts about whether the vagueness doctrine can be squared with the original meaning of the Due Process Clause-and those doubts are only amplified in the removal context. I am also skeptical that the vagueness doctrine can be justified as a way to prevent delegations of core legislative power in this context. But I need not resolve these questions because, if the vagueness doctrine has any basis in the Due Process Clause, it must be limited to cases in which the statute is unconstitutionally vague as applied to the person challenging it. That is not the case for respondent, whose prior convictions for first-degree residential burglary in California fall comfortably within the scope of § 16(b).
A
The Fifth Amendment's Due Process Clause provides that no person shall be "deprived of life, liberty, or property, without due process of law." Section 16(b), as incorporated by the INA, cannot violate this Clause unless the following propositions are true: The Due Process Clause requires federal statutes to provide certain minimal procedures, the vagueness doctrine is one of those procedures, and the vagueness doctrine applies to statutes governing the removal of aliens. Although I need not resolve any of these propositions today, each one is questionable. I will address them in turn.
1
First, the vagueness doctrine is not legitimate unless the "law of the land" view of due process is incorrect. Under that view, due process "require[s] only that our Government ... proceed ... according to written constitutional and statutory provision[s]
before depriving someone of life, liberty, or property." Nelson v. Colorado, 581 U.S. ----, ----, n. 1, 137 S.Ct. 1249, 1264, n. 1, 197 L.Ed.2d 611 (2017) (THOMAS, J., dissenting) (internal quotation marks omitted). More than a half century after the founding, the Court rejected this view of due process in Murray's Lessee v. Hoboken Land & Improvement Co., 18 How. 272, 15 L.Ed. 372 (1856). See id., at 276 (holding that the Due Process Clause "is a restraint on the legislative as well as on the executive and judicial powers of the government"). But the textual and historical support for the law-of-the-land view is not insubstantial.
2
Even under Murray's Lessee, the vagueness doctrine is legitimate only if it is a "settled usag[e] and mod[e] of proceeding existing in the common and statute law of England, before the emigration of our ancestors." Id ., at 277. That proposition is dubious. Until the end of the 19th century, "there is little indication that anyone ... believed that courts had the power under the Due Process Claus[e] to nullify statutes on [vagueness] ground[s]." Johnson, supra, at ----, 135 S.Ct., at 2569 (opinion of THOMAS, J.). That is not because Americans were unfamiliar with vague laws. Rather, early American courts, like their English predecessors, addressed vague laws through statutory construction instead of constitutional law. See Note, Void for Vagueness: An Escape From Statutory Interpretation, 23 Ind. L.J. 272, 274-279 (1948). They invoked the rule of lenity and declined to apply vague penal statutes on a case-by-case basis. See Johnson, 576 U.S., at ---------, 135 S.Ct., at 2566-2568 (opinion of THOMAS, J.); e.g., ante, at 1225 - 1226, and n. 1 (GORSUCH, J., concurring in part and concurring in judgment) (collecting cases). The modern vagueness doctrine, which claims the judicial authority to "strike down" vague legislation on its face, did not emerge until the turn of the 20th century. See Johnson, 576 U.S., at ---------, 135 S.Ct., at 2568-2570 (opinion of THOMAS, J.).
The difference between the traditional rule of lenity and the modern vagueness doctrine is not merely semantic. Most obviously, lenity is a tool of statutory construction, which means States can abrogate it-and many have. Hall, Strict or Liberal Construction of Penal Statutes, 48 Harv. L. Rev. 748, 752-754 (1935) ; see also Scalia, Assorted Canards of Contemporary Legal Analysis, 40 Case W. Res. L. Rev. 581, 583 (1989) ("Arizona, by the way, seems to have preserved a fair and free society without adopting the rule that criminal statutes are to be strictly construed" (citing Ariz. Rev. Stat. § 1-211C (1989))). The vagueness doctrine, by contrast, is a rule of constitutional law that States cannot alter or abolish. Lenity, moreover, applies only to "penal" statutes, 1 Blackstone, Commentaries on the Laws of England 88 (1765), but the vagueness doctrine extends to all regulations of individual conduct, both penal and nonpenal, Johnson, 576 U.S., at ----, 135 S.Ct., at 2566 (opinion of THOMAS, J.); see also Note, Indefinite Criteria of Definiteness in Statutes, 45 Harv. L. Rev. 160, 163 (1931) (explaining that the modern vagueness doctrine was not merely an "extension of the rule of strict construction of penal statutes" because it "expressly include[s] civil statutes within its scope," reflecting a "regrettable disregard" for legislatures). In short, early American courts were not applying the modern vagueness doctrine by another name. They were engaged in a fundamentally different enterprise.
Tellingly, the modern vagueness doctrine emerged at a time when this Court was actively interpreting the Due Process Clause to strike down democratically enacted laws-first in the name of the "liberty of contract," then in the name of the "right to privacy." See Johnson, 576 U.S., at ---------, 135 S.Ct., at 2568-2570 (opinion of THOMAS, J.). That the vagueness doctrine "develop[ed] on the federal level concurrently with the growth of the tool of substantive due process" does not seem like a coincidence. Note, 23 Ind. L.J., at 278. Like substantive due process, the vagueness doctrine provides courts with "open-ended authority to oversee [legislative] choices." Kolender v. Lawson, 461 U.S. 352, 374, 103 S.Ct. 1855, 75 L.Ed.2d 903 (1983) (White, J., dissenting). This Court, for example, has used the vagueness doctrine to invalidate antiloitering laws, even though those laws predate the Declaration of Independence. See Johnson, supra, at ---- (opinion of THOMAS, J.) ( 576 U.S., at ----, 135 S.Ct., at 2568 ) (discussing Chicago v. Morales, 527 U.S. 41, 119 S.Ct. 1849, 144 L.Ed.2d 67 (1999) ).
This Court also has a bad habit of invoking the Due Process Clause to constitutionalize rules that were traditionally left to the democratic process. See, e.g., Williams v. Pennsylvania, 579 U.S. ----, 136 S.Ct. 1899, 195 L.Ed.2d 132 (2016) ; BMW of North America, Inc. v. Gore, 517 U.S. 559, 116 S.Ct. 1589, 134 L.Ed.2d 809 (1996) ; Foucha v. Louisiana, 504 U.S. 71, 112 S.Ct. 1780, 118 L.Ed.2d 437 (1992) ; cf. Montgomery v. Louisiana, 577 U.S. ----, 136 S.Ct. 718, 193 L.Ed.2d 599 (2016). If vagueness is another example of this practice, then that is all the more reason to doubt its legitimacy.
3
Even assuming the Due Process Clause prohibits vague laws, this prohibition might not apply to laws governing the removal of aliens. Cf. Johnson, 576 U.S., at ----, n. 7, 135 S.Ct., at 2581, n. 7 (opinion of THOMAS, J.) (stressing the need for specificity when assessing alleged due process rights). The Founders were familiar with English law, where " 'the only question that ha[d] ever been made in regard to the power to expel aliens [was] whether it could be exercised by the King without the consent of Parliament.' " Demore v. Kim, 538 U.S. 510, 538, 123 S.Ct. 1708, 155 L.Ed.2d 724 (2003) (O'Connor, J., concurring in part and concurring in judgment) (quoting Fong Yue Ting v. United States, 149 U.S. 698, 709, 13 S.Ct. 1016, 37 L.Ed. 905 (1893) ). And, in this country, the notion that the Due Process Clause governed the removal of aliens was not announced until the 20th century.
Less than a decade after the ratification of the Bill of Rights, the founding generation had an extensive debate about the relationship between the Constitution and federal removal statutes. In 1798, the Fifth Congress enacted the Alien Acts. One of those Acts, the Alien Friends Act, gave the President unfettered discretion to expel any aliens "he shall judge dangerous to the peace and safety of the United States, or shall have reasonable grounds to suspect are concerned in any treasonable or secret machinations against the government thereof." An Act Concerning Aliens § 1, 1 Stat. 571. This statute was modeled after the Aliens Act 1793 in England, which similarly gave the King unfettered discretion to expel aliens as he "shall think necessary for the publick Security." 33 Geo. III, ch. 4, § 18, in 39 Eng. Stat. at Large 16. Both the Fifth Congress and the States thoroughly debated the Alien Friends Act. Virginia and Kentucky enacted resolutions (anonymously drafted by Madison and Jefferson) opposing the Act, while 10 States enacted counter-resolutions condemning the views of Virginia and Kentucky. See Fehlings, Storm on the Constitution: The First Deportation Law, 10 Tulsa J. Comp. & Int'l L. 63, 85, 103 (2002).
The Jeffersonian Democratic-Republicans, who viewed the Alien Friends Act as a threat to their party and the institution of slavery, raised a number of constitutional objections. Some of the Jeffersonians argued that the Alien Friends Act violated the Fifth Amendment's Due Process Clause. They complained that the Act failed to provide aliens with all the accouterments of a criminal trial. See, e.g., Kentucky Resolutions ¶ 6, in 4 The Debates in the Several Conventions on the Adoption of the Federal Constitution 541-542 (J. Elliot ed. 1836) (Elliot's Debates); 8 Annals of Cong. 1982-1983 (1798) (statement of Rep. Gallatin); Madison's Report on the Virginia Resolutions (Jan. 7, 1800), in 6 Writings of James Madison 361-362 (G. Hunt ed. 1906) (Madison's Report).
The Federalists gave two primary responses to this due process argument. First, the Federalists argued that the rights of aliens were governed by the law of nations, not the Constitution. See, e.g., Randolph, Debate on Virginia Resolutions, in The Virginia Report of 1799-1800, pp. 34-35 (1850) (Virginia Debates) (statement of George K. Taylor) (arguing that aliens "were not a party to the [Constitution]" and that "cases between the government and aliens ... arise under the law of nations"); id., at 100 (statement of William Cowan) (identifying the source of rights "as to citizens, the Constitution; as to aliens, the law of nations"); A. Addison, A Charge to the Grand Juries of the County Courts of the Fifth Circuit of the State of Pennsylvania 18 (1799) (Charge to the Grand Juries) ("[T]he Constitution leaves aliens, as in other countries, to the protection of the general principles of the law of nations"); Answer to the Resolutions of the State of Kentucky, Oct. 29, 1799, in 4 Records of the Governor and Council of the State of Vermont 528 (1876) (denying "that aliens had any rights among us, except what they derived from the law of nations, and rights of hospitality"). The law of nations imposed no enforceable limits on a nation's power to remove aliens. See, e.g., 1 E. de Vattel, Law of Nations, §§ 230-231, pp. 108-109 (J. Chitty et al. transl. and ed. 1883).
Second, the Federalists responded that the expulsion of aliens "did not touch life, liberty, or property." Virginia Debates 34. The founding generation understood the phrase "life, liberty, or property" to refer to a relatively narrow set of core private rights that did not depend on the will of the government. See Wellness Int'l Network, Ltd. v. Sharif, 575 U.S. ----, ---------, 135 S.Ct. 1932, 1942-1943, 191 L.Ed.2d 911 (2015) (THOMAS, J., dissenting); Nelson, Adjudication in the Political Branches, 107 Colum. L. Rev. 559, 566-568 (2007) (Nelson). Quasi-private rights-"privileges" or "franchises" bestowed by the government on individuals-did not qualify and could be taken away without judicial process. See B & B Hardware, Inc. v. Hargis Industries, Inc., 575 U.S. ----, ----, 135 S.Ct. 1293, 1304-1305, 191 L.Ed.2d 222 (2015) (THOMAS, J., dissenting); Nelson 567-569. The Federalists argued that an alien's right to reside in this country was one such privilege. See, e.g., Virginia Debates 34 (arguing that "ordering away an alien ... was not a matter of right, but of favour," which did not require a jury trial); Report of the Select Committee of the House of Representatives, Made to the House of Representatives on Feb. 21, 1799, 9 Annals of Cong. 2987 (1799) (stating that aliens "remain in the country ... merely as matter of favor and permission" and can be removed at any time without a criminal trial); Charge to the Grand Juries 11-13 (similar). According to the Minority Address of the Virginia Legislature (anonymously drafted by John Marshall), "[T]he right of remaining in our country is vested in no alien; he enters and remains by the courtesy of the sovereign power, and that courtesy may at pleasure be withdrawn" without judicial process. Address of the Minority in the Virginia Legislature to the People of that State 9-10 (1799) (Virginia Minority Address). Unlike "a grant of land," the "[a]dmission of an alien to residence ... is revocable, like a permission." A. Addison, Analysis of the Report of the Committee of the Virginia Assembly 23 (1800). Removing a resident alien from the country did not affect "life, liberty, or property," the Federalists argued, until the alien became a naturalized citizen. See id., at 23-24; Charge to the Grand Juries 11-13. That the alien's permanent residence was conferred by statute would not have made a difference. See Nelson 571, 580-582; Teva Pharmaceuticals USA, Inc. v. Sandoz, Inc., 574 U.S. ----, ----, n. 2, 135 S.Ct. 831, 848, n. 2, ---L.Ed.2d ---- (2015) (THOMAS, J., dissenting).
After the Alien Friends Act lapsed in 1800, Congress did not enact another removal statute for nearly a century. The States enacted their own removal statutes during this period, see G. Neuman, Strangers to the Constitution 19-43 (1996), and I am aware of no decision questioning the legality of these statutes under State due-process or law-of-the-land provisions. Beginning in the late 19th century, the Federal Government reinserted itself into the regulation of immigration. When this Court was presented with constitutional challenges to Congress' removal laws, it initially rejected them for many of the same reasons that Marshall and the Federalists had cited in defense of the Alien Friends Act. Although the Court rejected the Federalists' argument that resident aliens do not enjoy constitutional rights, see Wong Wing v. United States, 163 U.S. 228, 238, 16 S.Ct. 977, 41 L.Ed. 140 (1896), it agreed that civil deportation statutes do not implicate "life, liberty, or property," see, e.g., Harisiades v. Shaughnessy, 342 U.S. 580, 584-585, 72 S.Ct. 512, 96 L.Ed. 586 (1952) ("[T]hat admission for permanent residence confers a 'vested right' on the alien [is] not founded in precedents of this Court"); United States ex rel. Turner v. Williams, 194 U.S. 279, 290, 24 S.Ct. 719, 48 L.Ed. 979 (1904) ("[T]he deportation of an alien who is found to be here in violation of law is not a deprivation of liberty without due process of law"); Fong Yue Ting, 149 U.S., at 730, 13 S.Ct. 1016 ("[Deportation] is but a method of enforcing the return to his own country of an alien who has not complied with [statutory] conditions.... He has not, therefore, been deprived of life, liberty, or property without due process of law"); id., at 713-715, 13 S.Ct. 1016 (similar). Consistent with this understanding, "federal immigration laws from 1891 until 1952 made no express provision for judicial review." Demore, 538 U.S., at 538, 123 S.Ct. 1708 (opinion of O'Connor, J.).
It was not until the 20th century that this Court held that nonpenal removal statutes could violate the Due Process Clause. See Wong Yang Sung v. McGrath, 339 U.S. 33, 49, 70 S.Ct. 445, 94 L.Ed. 616 (1950). That ruling opened the door for the Court to apply the then-nascent vagueness doctrine to immigration statutes. But the Court upheld vague standards in immigration laws that it likely would not have tolerated in criminal statutes. See, e.g., Boutilier v. INS, 387 U.S. 118, 122, 87 S.Ct. 1563, 18 L.Ed.2d 661 (1967) ( " 'psychopathic personality' "); Jordan v. De George, 341 U.S. 223, 232, 71 S.Ct. 703, 95 L.Ed. 886 (1951) (" 'crime involving moral turpitude' "); cf. Mahler, supra, at 40 (" 'undesirable residents' "). Until today, this Court has never held that an immigration statute is unconstitutionally vague.
Thus, for more than a century after the founding, it was, at best, unclear whether federal removal statutes could violate the Due Process Clause. And until today, this Court had never deemed a federal removal statute void for vagueness. Given this history, it is difficult to conclude that a ban on vague removal statutes is a "settled usag[e] and mod[e] of proceeding existing in the common and statute law of England, before the emigration of our ancestors" protected by the Fifth Amendment's Due Process Clause. Murray's Lessee, 18 How., at 277.
B
Instead of a longstanding procedure under Murray's Lessee, perhaps the vagueness doctrine is really a way to enforce the separation of powers-specifically, the doctrine of nondelegation. See Chapman & McConnell, Due Process as Separation of Powers, 121 Yale L.J. 1672, 1806 (2012) ("Vague statutes have the effect of delegating lawmaking authority to the executive"). Madison raised a similar objection to the Alien Friends Act, arguing that its expansive language effectively allowed the President to exercise legislative (and judicial) power. See Madison's Report 369-371. And this Court's precedents have occasionally described the vagueness doctrine in terms of nondelegation. See, e.g., Grayned v. City of Rockford, 408 U.S. 104, 108-109, 92 S.Ct. 2294, 33 L.Ed.2d 222 (1972) ("A vague law impermissibly delegates basic policy matters"). But they have not been consistent on this front. See, e.g., Aptheker v. Secretary of State, 378 U.S. 500, 516, 84 S.Ct. 1659, 12 L.Ed.2d 992 (1964) (" 'The objectionable quality of vagueness ... does not depend upon ... unchanneled delegation of legislative powers' "); Maynard v. Cartwright, 486 U.S. 356, 361, 108 S.Ct. 1853, 100 L.Ed.2d 372 (1988) ( "Objections to vagueness under the Due Process Clause rest on the lack of notice").
I agree that the Constitution prohibits Congress from delegating core legislative power to another branch. See Department of Transportation v. Association of American Railroads, 575 U.S. ----, ----, 135 S.Ct. 1225, 1241, 191 L.Ed.2d 153 (2015) (AAR ) (THOMAS, J., concurring in judgment) ("Congress improperly 'delegates' legislative power when it authorizes an entity other than itself to make a determination that requires an exercise of legislative power"); accord, Whitman v. American Trucking Assns., Inc., 531 U.S. 457, 487, 121 S.Ct. 903, 149 L.Ed.2d 1 (2001) (THOMAS, J., concurring). But I locate that principle in the Vesting Clauses of Articles I, II, and III-not in the Due Process Clause. AAR, supra, at ---------, 135 S.Ct., at 1228-1229 (opinion of THOMAS, J.); see also Hampton v. Mow Sun Wong, 426 U.S. 88, 123, 96 S.Ct. 1895, 48 L.Ed.2d 495 (1976) (Rehnquist, J., dissenting) ("[T]hat there was an improper delegation of authority ... has not previously been thought to depend upon the procedural requirements of the Due Process Clause"). In my view, impermissible delegations of legislative power violate this principle, not just delegations that deprive individuals of "life, liberty, or property," Amdt. 5.
Respondent does not argue that § 16(b), as incorporated by the INA, is an impermissible delegation of power. See Brief for Respondent 50 (stating that "there is no delegation question" in this case). I would not reach that question here, because this case can be resolved on narrower grounds. See Part I-C, infra . But at first blush, it is not at all obvious that the nondelegation doctrine would justify wholesale invalidation of § 16(b).
If § 16(b) delegates power in this context, it delegates power primarily to the Executive Branch entities that administer the INA-namely, the Attorney General, immigration judges, and the Board of Immigration Appeals (BIA). But Congress does not "delegate" when it merely authorizes the Executive Branch to exercise a power that it already has. See AAR, supra, at ----, 135 S.Ct., at 1229 (opinion of THOMAS, J.). And there is some founding-era evidence that "the executive Power," Art. II, § 1, includes the power to deport aliens.
Blackstone-one of the political philosophers whose writings on executive power were "most familiar to the Framers," Prakash & Ramsey, The Executive Power Over Foreign Affairs, 111 Yale L.J. 231, 253 (2001) -described the power to deport aliens as executive and located it with the King. Alien friends, Blackstone explained, are "liable to be sent home whenever the king sees occasion." 1 Commentaries on the Laws of England 252 (1765). When our Constitution was ratified, moreover, "[e]minent English judges, sitting in the Judicial Committee of the Privy Council, ha[d] gone very far in supporting the ... expulsion, by the executive authority of a colony, of aliens." Demore, 538 U.S., at 538, 123 S.Ct. 1708 (opinion of O'Connor, J.) (quoting Fong Yue Ting, 149 U.S., at 709, 13 S.Ct. 1016 ). Some of the Federalists defending the Alien Friends Act similarly argued that the President had the power to remove aliens. See, e.g., Virginia Debates 35 (statement of George K. Taylor) (arguing that the power to remove aliens is "most properly entrusted" with the President, since "[h]e, by the Constitution, was bound to execute the laws" and is "the executive officer, with whom all persons and bodies whatever were accustomed to communicate"); Virginia Minority Address 9 (arguing that the removal of aliens "is a measure of general safety, in its nature political and not forensic, the execution of which is properly trusted to the department which represents the nation in all its interior relations"); Charge to the Grand Juries 29-30 ("As a measure of national defence, this discretion, of expulsion or indulgence, seems properly vested in the branch of the government peculiarly charged with the direction of the executive powers, and of our foreign relations. There is in it a mixture of external policy, and of the law of nations, that justifies this disposition"). More recently, this Court recognized that "[r]emoval decisions" implicate "our customary policy of deference to the President in matters of foreign affairs" because they touch on "our relations with foreign powers and require consideration of changing political and economic circumstances." Jama v. Immigration and Customs Enforcement, 543 U.S. 335, 348, 125 S.Ct. 694, 160 L.Ed.2d 708 (2005) (internal quotation marks omitted). Taken together, this evidence makes it difficult to confidently conclude that the INA, through § 16(b), delegates core legislative power to the Executive.
Instead of the Executive, perhaps § 16(b) impermissibly delegates power to the Judiciary, since the Courts of Appeals often review the BIA's application of § 16(b). I assume that, at some point, a statute could be so devoid of content that a court tasked with interpreting it "would simply be making up a law-that is, exercising legislative power." Lawson, Delegation and Original Meaning, 88 Va. L. Rev. 327, 339 (2002) ; see id., at 339-340 (providing examples such as a gibberish-filled statute or a statute that requires " 'goodness and niceness' "). But I am not confident that our modern vagueness doctrine-which focuses on whether regulations of individual conduct provide "fair warning," are "clearly defined," and do not encourage "arbitrary and discriminatory enforcement," Grayned, 408 U.S., at 108, 92 S.Ct. 2294 ; Kolender, 461 U.S., at 357, 103 S.Ct. 1855 -accurately demarcates the line between legislative and judicial power. The Founders understood that the interpretation of legal texts, even vague ones, remained an exercise of core judicial power. See Perez v. Mortgage Bankers Assn., 575 U.S. ----, ---------, 135 S.Ct. 1199, 1216-1217, 191 L.Ed.2d 186 (2015) (THOMAS, J., concurring in judgment); Hamburger, The Constitution's Accommodation of Social Change, 88 Mich. L. Rev. 239, 303-310 (1989). Courts were expected to clarify the meaning of such texts over time as they applied their terms to specific cases. See id., at 309-310 ; Nelson, Originalism and Interpretive Conventions, 70 U. Chi. L. Rev. 519, 526 (2003). Although early American courts declined to apply vague or unintelligible statutes as appropriate in individual cases, they did not wholesale invalidate them as unconstitutional delegations of legislative power. See Johnson, 576 U.S., at ---------, and n. 3, 135 S.Ct., at 2567-2568, and n. 3 (opinion of THOMAS, J.).
C
1
I need not resolve these historical questions today, as this case can be decided on narrower grounds. If the vagueness doctrine has any basis in the original meaning of the Due Process Clause, it must be limited to case-by-case challenges to particular applications of a statute. That is what early American courts did when they applied the rule of lenity. See id., at ----, 135 S.Ct., at 2560. And that is how early American courts addressed constitutional challenges to statutes more generally. See ibid. ("[T]here is good evidence that [antebellum] courts ... understood judicial review to consist 'of a refusal to give a statute effect as operative law in resolving a case,' a notion quite distinct from our modern practice of ' "strik[ing] down" legislation' " (quoting Walsh, Partial Unconstitutionality, 85 N.Y.U.L. Rev. 738, 756 (2010) )).
2
This Court's precedents likewise recognize that, outside the First Amendment context, a challenger must prove that the statute is vague as applied to him. See Holder v. Humanitarian Law Project, 561 U.S. 1, 18-19, 130 S.Ct. 2705, 177 L.Ed.2d 355 (2010) ; United States v. Williams, 553 U.S. 285, 304, 128 S.Ct. 1830, 170 L.Ed.2d 650 (2008) ; Maynard, 486 U.S., at 361, 108 S.Ct. 1853 ; Hoffman Estates v. Flipside, Hoffman Estates, Inc., 455 U.S. 489, 495, and n. 7, 102 S.Ct. 1186, 71 L.Ed.2d 362 (1982) (collecting cases). Johnson did not overrule these precedents. While Johnson weakened the principle that a facial challenge requires a statute to be vague "in all applications," 576 U.S., at ----, 135 S.Ct., at 2561 (emphasis added), it did not address whether a statute must be vague as applied to the person challenging it. That question did not arise because the Court concluded that ACCA's residual clause was vague as applied to the crime at issue there: unlawful possession of a short-barreled shotgun. See id., at ----, 135 S.Ct., at 2560.
In my view, § 16(b) is not vague as applied to respondent. When respondent committed his burglaries in 2007 and 2009, he was "sufficiently forewarned ... that the statutory consequence ... is deportation." De George, 341 U.S., at 232, 71 S.Ct. 703. At the time, courts had "unanimous[ly]" concluded that residential burglary is a crime of violence, and not "a single opinion ... ha [d] held that [it] is not ." United States v. M.C. E., 232 F.3d 1252, 1255-1256 (C.A.9 2000) ; see also United States v. Davis, 881 F.2d 973, 976 (C.A.11 1989) (explaining that treating residential burglary as a crime of violence was "[i]n accord with common law tradition and the settled law of the federal circuits"). Residential burglary "ha[d] been considered a violent offense for hundreds of years ... because of the potential for mayhem if burglar encounters resident." United States v. Pinto, 875 F.2d 143, 144 (C.A.7 1989). The Model Penal Code had recognized that risk, see ALI, Model Penal Code § 221.1, Comment 3(c), p. 75 (1980); the Sentencing Commission had recognized that risk; see United States Sentencing Commission, Guidelines Manual § 4B1.2(a)(2) (Nov. 2006); and this Court had repeatedly recognized that risk, see, e.g., James v. United States, 550 U.S. 192, 203, 127 S.Ct. 1586, 167 L.Ed.2d 532 (2007) ; Taylor v. United States, 495 U.S. 575, 588, 110 S.Ct. 2143, 109 L.Ed.2d 607 (1990). In Leocal v. Ashcroft, 543 U.S. 1, 125 S.Ct. 377, 160 L.Ed.2d 271 (2004), this Court unanimously agreed that burglary is the "classic example" of a crime of violence under § 16(b), because it "involves a substantial risk that the burglar will use force against a victim in completing the crime." Id., at 10, 125 S.Ct. 377.
That same risk is present with respect to respondent's statute of conviction-first-degree residential burglary, Cal.Penal Code Ann. §§ 459, 460(a) (West 1999). The California Supreme Court has explained that the State's burglary laws recognize "the dangers to personal safety created by the usual burglary situation." People v. Davis, 18 Cal.4th 712, 721, 76 Cal.Rptr.2d 770, 958 P.2d 1083, 1089 (1998) (emphasis added). " '[T]he fact that a building is used as a home ... increases such danger,' " which is why California elevates residential burglary to a first-degree offense. People v. Rodriguez, 122 Cal.App.4th 121, 133, 18 Cal.Rptr.3d 550, 558 (2004) ; see also People v. Wilson, 208 Cal.App.3d 611, 615, 256 Cal.Rptr. 422, 425 (1989) ("[T]he higher degree ... is intended to prevent those situations which are most dangerous, most likely to cause personal injury" (emphasis deleted)). Although unlawful entry is not an element of the offense, courts "unanimous [ly]" agree that the offense still involves a substantial risk of physical force. United States v. Avila, 770 F.3d 1100, 1106 (C.A.4 2014) ; accord, United States v. Maldonado, 696 F.3d 1095, 1102, 1104 (C.A.10 2012) ; United States v. Scanlan, 667 F.3d 896, 900 (C.A.7 2012) ; United States v. Echeverria-Gomez, 627 F.3d 971, 976 (C.A.5 2010) ; United States v. Becker, 919 F.2d 568, 573 (C.A.9 1990). First-degree residential burglary requires entry into an inhabited dwelling, with the intent to commit a felony, against the will of the homeowner-the key elements that create the risk of violence. See United States v. Park, 649 F.3d 1175, 1178-1180 (C.A.9 2011) ; Avila, supra, at 1106-1107; Becker, supra, at 571, n. 5. As this Court has explained, "[t]he main risk of burglary arises not from the simple physical act of wrongfully entering onto another's property, but rather from the possibility of a face-to-face confrontation between the burglar and a third party." James, supra, at 203, 127 S.Ct. 1586.
Drawing on Johnson and the decision below, the Court suggests that residential burglary might not be a crime of violence because " 'only about seven percent of burglaries actually involve violence.' " Ante, at 1214, n. 3 (citing Dimaya v. Lynch, 803 F.3d 1110, 1116, n. 7 (C.A.9 2015) ); see Bureau of Justice Statistics, S. Catalano, National Crime Victimization Survey: Victimization During Household Burglary 1 (Sept. 2010), https://www.bjs.gov/content/pub/pdf/vdhb.pdf (as last visited Apr. 13, 2018). But this statistic-which measures actual violence against a member of the household, see id., at 1, 12 -is woefully underinclusive. It excludes other potential victims besides household members-for example, "a police officer, or a bystande[r] who comes to investigate," James, supra, at 203, 127 S.Ct. 1586. And § 16(b) requires only a risk of physical force, not actual physical force, and that risk would seem to be present whenever someone is home during the burglary. Further, Johnson is not conclusive because, unlike ACCA's residual clause, § 16(b) covers offenses that involve a substantial risk of physical force "against the person or property of another." (Emphasis added.) Surely the ordinary case of residential burglary involves at least one of these risks. According to the statistics referenced by the Court, most burglaries involve either a forcible entry (e.g., breaking a window or slashing a door screen), an attempted forcible entry, or an unlawful entry when someone is home. See Bureau of Justice Statistics, supra, at 2 (Table 1). Thus, under any metric, respondent's convictions for first-degree residential burglary are crimes of violence under § 16(b).
3
Finally, if facial vagueness challenges are ever appropriate, I adhere to my view that a law is not facially vague " '[i]f any fool would know that a particular category of conduct would be within the reach of the statute, if there is an unmistakable core that a reasonable person would know is forbidden by the law.' " Morales, 527 U.S., at 112, 119 S.Ct. 1849 (THOMAS, J., dissenting) (quoting Kolender, 461 U.S., at 370-371, 103 S.Ct. 1855 (White, J., dissenting)). The residual clause of ACCA had such a core. See Johnson, 576 U.S., at ----, 135 S.Ct., at 2560 ; id., at ------- --, 135 S.Ct., at 2580-2581 (ALITO, J., dissenting). And § 16(b) has an even wider core, as THE CHIEF JUSTICE explains. Thus, the Court should not have invalidated § 16(b), either on its face or as applied to respondent.
II
Even taking the vagueness doctrine and Johnson at face value, I disagree with the Court's decision to invalidate § 16(b). The sole reason that the Court deems § 16(b) unconstitutionally vague is because it reads the statute as incorporating the categorical approach-specifically, the "ordinary case" approach from ACCA's residual clause. Although the Court mentions "[t]wo features" of § 16(b) that make it vague-the ordinary-case approach and an imprecise risk standard-the Court admits that the second feature is problematic only in combination with the first. Ante, at 1214. Without the ordinary-case approach, the Court "do[es] not doubt" the constitutionality of § 16(b). Ante, at 1215.
But if the categorical approach renders § 16(b) unconstitutionally vague, then constitutional avoidance requires us to make a reasonable effort to avoid that interpretation. And a reasonable alternative interpretation is available: Instead of asking whether the ordinary case of an alien's offense presents a substantial risk of physical force, courts should ask whether the alien's actual underlying conduct presents a substantial risk of physical force. I will briefly discuss the origins of the categorical approach and then explain why the Court should abandon it for § 16(b).
A
1
The categorical approach originated with Justice Blackmun's opinion for the Court in Taylor v. United States, 495 U.S. 575, 110 S.Ct. 2143, 109 L.Ed.2d 607 (1990). The question in Taylor was whether ACCA's reference to "burglary" meant burglary as defined by state law or burglary in the generic sense. After "devoting 10 pages of [its] opinion to legislative history," id., at 603, 110 S.Ct. 2143 (Scalia, J., concurring in part and concurring in judgment), and finding that Congress had made "an inadvertent casualty in [the] complex drafting process," id., at 589-590, 110 S.Ct. 2143 (majority opinion), the Court concluded that ACCA referred to burglary in the generic sense, id., at 598, 110 S.Ct. 2143. The Court then addressed how the Government would prove that a defendant was convicted of generic burglary, as opposed to another offense. Id., at 599-602, 110 S.Ct. 2143. Taylor rejected the notion that the Government could introduce evidence about the "particular facts" of the defendant's underlying crime. Id., at 600, 110 S.Ct. 2143. Instead, the Court adopted a "categorical approach," which focused primarily on the "statutory definition of the prior offense." Id., at 602, 110 S.Ct. 2143.
Although Taylor was interpreting one of ACCA's enumerated offenses, this Court later extended the categorical approach to ACCA's residual clause. See James, 550 U.S., at 208, 127 S.Ct. 1586. That extension required some reworking. Because ACCA's enumerated-offenses clause asks whether a prior conviction "is burglary, arson, or extortion," 18 U.S.C. § 924(e)(2)(B)(ii), Taylor instructed courts to focus on the definition of the underlying crime. The residual clause, by contrast, asks whether a prior conviction "involves conduct that presents a serious potential risk of physical injury to another." § 924(e)(2)(B)(ii). Thus, the Court held that the categorical approach for the residual clause asks "whether the conduct encompassed by the elements of the offense, in the ordinary case, presents a serious potential risk of injury to another." James, supra, at 208, 127 S.Ct. 1586 (emphasis added). This "ordinary case" approach allowed courts to apply the residual clause without inquiring into the individual facts of the defendant's prior crime.
Taylor gave a few reasons why the categorical approach was the correct reading of ACCA, see 495 U.S., at 600-601, 110 S.Ct. 2143, but the "heart of the decision" was the Court's concern with limiting the amount of evidence that the parties could introduce at sentencing. Shepard v. United States, 544 U.S. 13, 23, 125 S.Ct. 1254, 161 L.Ed.2d 205 (2005). Specifically, the Court was worried about potential violations of the Sixth Amendment. If the parties could introduce evidence about the defendant's underlying conduct, then sentencing proceedings might devolve into a full-blown minitrial, with factfinding by the judge instead of the jury. See id., at 24-26, 125 S.Ct. 1254 ; Taylor, supra, at 601, 110 S.Ct. 2143. While this Court's decision in Almendarez-Torres v. United States, 523 U.S. 224, 118 S.Ct. 1219, 140 L.Ed.2d 350 (1998), allows judges to find facts about a defendant's prior convictions, a full-blown minitrial would look "too much like" the kind of factfinding that the Sixth Amendment requires the jury to conduct. Shepard, 544 U.S., at 25, 125 S.Ct. 1254. By construing ACCA to require a categorical approach, then, the Court was following "[t]he rule of reading statutes to avoid serious risks of unconstitutionality." Ibid.
2
I disagreed with the Court's decision to extend the categorical approach to ACCA's residual clause. See James, 550 U.S., at 231-232, 127 S.Ct. 1586 (dissenting opinion). The categorical approach was an " 'unnecessary exercise,' " I explained, because it created the same Sixth Amendment problem that it tried to avoid. Id., at 231, 127 S.Ct. 1586. Absent waiver, a defendant has the right to have a jury find "every fact that is by law a basis for imposing or increasing punishment," including the fact of a prior conviction. Apprendi v. New Jersey, 530 U.S. 466, 501, 120 S.Ct. 2348, 147 L.Ed.2d 435 (2000) (THOMAS, J., concurring). The exception recognized in Almendarez-Torres for prior convictions is an aberration, has been seriously undermined by subsequent precedents, and should be reconsidered. See Mathis v. United States, 579 U.S. ----, ----, 136 S.Ct. 2243, 2258-2259, 195 L.Ed.2d 604 (2016) (THOMAS, J., concurring);
Shepard, supra, at 27-28, 125 S.Ct. 1254 (THOMAS, J., concurring in part and concurring in judgment). In my view, if the Government wants to enhance a defendant's sentence based on his prior convictions, it must put those convictions in the indictment and prove them to a jury beyond a reasonable doubt.
B
My objection aside, the ordinary-case approach soon created problems of its own. The Court's attempt to avoid the Scylla of the Sixth Amendment steered it straight into the Charybdis of the Fifth. The ordinary-case approach that was created to honor the individual right to a jury is now, according to the Court, so vague that it deprives individuals of due process.
I see no good reason for the Court to persist in reading the ordinary-case approach into § 16(b). The text of § 16(b) does not mandate the ordinary-case approach, the concerns that led this Court to adopt it do not apply here, and there are no prudential reasons for retaining it. In my view, we should abandon the categorical approach for § 16(b).
1
The text of § 16(b) does not require a categorical approach. The INA declares an alien deportable if he is "convicted of an aggravated felony" after he is admitted to the United States. 8 U.S.C. § 1227(a)(2)(A)(iii). Aggravated felonies include "crime[s] of violence" as defined in § 16. § 1101(a)(43)(F). Section 16, in turn, defines crimes of violence as follows:
"(a) an offense that has as an element the use, attempted use, or threatened use of physical force against the person or property of another, or
"(b) any other offense that is a felony and that, by its nature, involves a substantial risk that physical force against the person or property of another may be used in the course of committing the offense."
At first glance, § 16(b) is not clear about the precise question it poses. On the one hand, the statute might refer to the metaphysical "nature" of the offense and ask whether it ordinarily involves a substantial risk of physical force. On the other hand, the statute might refer to the underlying facts of the offense that the offender committed; the words "by its nature," "substantial risk," and "may" would mean only that an offender who engages in risky conduct cannot benefit from the fortuitous fact that physical force was not actually used during his offense. The text can bear either interpretation. See Nijhawan v. Holder, 557 U.S. 29, 33-34, 129 S.Ct. 2294, 174 L.Ed.2d 22 (2009) ("[I]n ordinary speech words such as 'crime,' 'felony,' 'offense,' and the like sometimes refer to a generic crime ... and sometimes refer to the specific acts in which an offender engaged on a specific occasion"). It is entirely natural to use words like "nature" and "offense" to refer to an offender's actual underlying conduct.
Although both interpretations are linguistically possible, several factors indicate that the underlying-conduct approach is the better one. To begin, § 16(b) asks whether an offense "involves" a substantial risk of force. The word "involves" suggests that the offense must necessarily include a substantial risk of force. See The New Oxford Dictionary of English 962 (2001) ("include (something) as a necessary part or result"); Random House Dictionary of the English Language 1005 (2d ed. 1987) ("1. to include as a necessary circumstance, condition, or consequence"); Oxford American Dictionary 349 (1980) ("1. to contain within itself, to make necessary as a condition or result"). That condition is always satisfied if the Government must prove that the alien's underlying conduct involves a substantial risk of force, but it is not always satisfied if the Government need only prove that the "ordinary case" involves such a risk. See Johnson, 576 U.S., at ----, 135 S.Ct., at 2580 (ALITO, J., dissenting). Tellingly, the other aggravated felonies in the INA that use the word "involves" employ the underlying-conduct approach. See 8 U.S.C. § 1101(a)(43)(M)(i) ("an offense that involves fraud or deceit in which the loss to the victim or victims exceeds $10,000"); § 1101(h)(3) ("any crime of reckless driving or of driving while intoxicated or under the influence of alcohol or of prohibited substances if such crime involves personal injury to another"). As do the similarly worded provisions of the Comprehensive Crime Control Act of 1984, the bill that contained § 16(b). See, e.g., 98 Stat. 2059 (elevating the burden of proof for the release of "a person found not guilty only by reason of insanity of an offense involving bodily injury to, or serious damage to the property of, another person, or involving a substantial risk of such injury or damage"); id., at 2068 (establishing the sentence for drug offenses "involving" specific quantities and types of drugs); id., at 2137 (defining violent crimes in aid of racketeering to include "attempting or conspiring to commit a crime involving maiming, assault with a dangerous weapon, or assault resulting in serious bodily injury").
A comparison of § 16(b) and § 16(a) further highlights why the former likely adopts an underlying-conduct approach. Section 16(a) covers offenses that have the use, attempted use, or threatened use of physical force "as an element." Because § 16(b) covers "other" offenses and is separated from § 16(a) by the disjunctive word "or," the natural inference is that § 16(b) asks a different question. In other words, § 16(b) must require immigration judges to look beyond the elements of an offense to determine whether it involves a substantial risk of physical force. But if the elements are insufficient, where else should immigration judges look to determine the riskiness of an offense? Two options are possible, only one of which is workable.
The first option is to consult the underlying facts of the alien's crime and then assess its riskiness. This approach would provide a definitive answer in every case. And courts are already familiar with this kind of inquiry. Cf. Johnson, supra, at ----, 135 S.Ct., at 2561 (noting that "dozens" of similarly worded laws ask courts to assess "the riskiness of conduct in which an individual defendant engages on a particular occasion "). Nothing suggests that Congress imposed a more limited inquiry when it enacted § 16(b) in 1984. At the time, Congress had not yet enacted ACCA's residual clause, this Court had not yet created the categorical approach, and this Court had not yet recognized a Sixth Amendment limit on judicial factfinding at sentencing, see Chambers v. United States, 555 U.S. 122, 132, 129 S.Ct. 687, 172 L.Ed.2d 484 (2009) (ALITO, J., concurring in judgment).
The second option is to imagine the "ordinary case" of the alien's crime and then assess the riskiness of that hypothetical offense. But the phrase "ordinary case" does not appear in the statute. And imagining the ordinary case, the Court reminds us, is "hopeless[ly] indetermina[te]," "wholly 'speculative,' " and mere "guesswork." Ante, at 1213 - 1214, 1223 (quoting Johnson, supra, at --------- (576 U.S., at ----, ----, 135 S.Ct., at 2558 )); see also Chambers, supra, at 133, 129 S.Ct. 687 (opinion of ALITO, J.) (observing that the categorical approach is "nearly impossible to apply consistently"). Because courts disfavor interpretations that make a statute impossible to apply, see A. Scalia & B. Garner, Reading Law 63 (2012), this Court should reject the ordinary-case approach for § 16(b) and adopt the underlying-facts approach instead. See Johnson, supra, at ----, 135 S.Ct., at 2578 (ALITO, J., dissenting) ("When another interpretation is ready at hand, why should we assume that Congress gave the clause a meaning that is impossible-or even, exceedingly difficult-to apply").
2
That the categorical approach is not the better reading of § 16(b) should not be surprising, since the categorical approach was never really about the best reading of the text. As explained, this Court adopted that approach to avoid a potential Sixth Amendment problem with sentencing judges conducting minitrials to determine a defendant's past conduct. But even assuming the categorical approach solved this Sixth Amendment problem in criminal cases, no such problem arises in immigration cases. "[T]he provisions of the Constitution securing the right of trial by jury have no application" in a removal proceeding. Turner, 194 U.S., at 290, 24 S.Ct. 719. And, in criminal cases, the underlying-conduct approach would be perfectly constitutional if the Government included the defendant's prior conduct in the indictment, tried it to a jury, and proved it beyond a reasonable doubt. See Johnson, 576 U.S., at ----, 135 S.Ct., at 2579 (ALITO, J., dissenting). Nothing in § 16(b) prohibits the Government from proceeding this way, so the plurality is wrong to suggest that the underlying-conduct approach would necessarily "ping-pong us from one constitutional issue to another." Ante, at 1217.
If constitutional avoidance applies here at all, it requires us to reject the categorical approach for § 16(b). According to the Court, the categorical approach is unconstitutionally vague. And, all agree that the underlying-conduct approach would not be. See Johnson, 576 U.S., at ----, 135 S.Ct., at 2561 (majority opinion) ("[W]e do not doubt the constitutionality of laws that call for the application of a qualitative standard such as 'substantial risk' to real-world conduct"). Thus, if the underlying-conduct approach is a "reasonabl[e]" interpretation of § 16(b), it is our "plain duty" to adopt it. United States ex rel. Attorney General v. Delaware & Hudson Co., 213 U.S. 366, 407, 29 S.Ct. 527, 53 L.Ed. 836 (1909). And it is reasonable, as explained above.
In Johnson , the Court declined to adopt the underlying-conduct approach for ACCA's residual clause. See 576 U.S., at ---------, 135 S.Ct., at 2561-2562. The Court concluded that the categorical approach was the only reasonable reading of ACCA because the residual clause uses the word "convictions." Id., at ----, 135 S.Ct., at 2561-2562. The Court also stressed the "utter impracticability of requiring a sentencing court to reconstruct, long after the original conviction, the conduct underlying that conviction." Ibid.
Neither of these arguments is persuasive with respect to the INA. Moreover, this Court has already rejected them. In Nijhawan, this Court unanimously concluded that one of the aggravated felonies in the INA-"an offense that ... involves fraud or deceit in which the loss to the victim or victims exceeds $10,000," § 1101(a)(43)(M)(i) -applies the underlying-conduct approach, not the categorical approach. 557 U.S., at 32, 129 S.Ct. 2294. Although the INA also refers to "convict[ions]," § 1227(a)(2)(A)(iii), the Court was not swayed by that argument. The word "convict[ion]" means only that the defendant's underlying conduct must " 'be tied to the specific counts covered by the conviction,' " not "acquitted or dismissed counts or general conduct." Id., at 42, 129 S.Ct. 2294. As for the supposed practical problems with proving an alien's prior conduct, the Court did not find that argument persuasive either. "[T]he 'sole purpose' of the 'aggravated felony' inquiry," the Court explained, " 'is to ascertain the nature of a prior conviction; it is not an invitation to relitigate the conviction itself.' " Ibid. And because the INA places the burden on the Government to prove an alien's conduct by clear and convincing evidence, § 1229a(c)(3)(A), "uncertainties caused by the passage of time are likely to count in the alien's favor," id., at 42, 129 S.Ct. 2294.
There are additional reasons why the practical problems identified in Johnson should not matter for § 16(b) -even assuming they should have mattered for ACCA's residual clause, see Lewis v. Chicago, 560 U.S. 205, 217, 130 S.Ct. 2191, 176 L.Ed.2d 967 (2010) ("[I]t is not our task to assess the consequences of each approach and adopt the one that produces the least mischief. Our charge is to give effect to the law Congress enacted"). In a removal proceeding, any difficulties with identifying an alien's past conduct will fall on immigration judges, not federal courts. But those judges are already accustomed to finding facts about the conduct underlying an alien's prior convictions, since some of the INA's aggravated felonies employ the underlying-conduct approach. The BIA has instructed immigration judges to determine such conduct based on "any evidence admissible in removal proceedings," not just the elements of the offense or the record of conviction. See Matter of Babaisakov, 24 I. & N. Dec. 306, 307 (2007). No one has submitted any evidence that the BIA's approach has been "utter[ly] impracticab[le]" or "daunting[ly] difficul[t]" in practice. Ante, at 1218. And even if it were, "how much time the agency wants to devote to the resolution of particular issues is ... a question for the agency itself." Ali v. Mukasey, 521 F.3d 737, 741 (C.A.7 2008). Hypothetical burdens on the BIA should not influence how this Court interprets § 16(b).
In short, we should not blithely assume that the reasons why this Court adopted the categorical approach for ACCA's residual clause also apply to the INA's list of aggravated felonies. As Nijhawan explained, "the 'aggravated felony' statute, unlike ACCA, contains some language that refers to generic crimes and some language that almost certainly refers to the specific circumstances in which a crime was committed." 557 U.S., at 38, 129 S.Ct. 2294. "The question" in each case is "to which category [the aggravated felony] belongs." Ibid. As I have explained, § 16(b) belongs in the underlying-conduct category. Because that is the better reading of § 16(b)' s text-or at least a reasonable reading-the Court should have adopted it here.
3
I see no prudential reason for maintaining the categorical approach for § 16(b). The Court notes that the Government "explicitly acknowledges" that § 16(b) employs the categorical approach. Ante, at 1215. But we cannot permit the Government's concessions to dictate how we interpret a statute, much less cause us to invalidate a statute enacted by a coordinate branch. See United States Nat. Bank of Ore. v. Independent Ins. Agents of America, Inc., 508 U.S. 439, 446-447, 113 S.Ct. 2173, 124 L.Ed.2d 402 (1993) ; Young v. United States, 315 U.S. 257, 258-259, 62 S.Ct. 510, 86 L.Ed. 832 (1942). This Court's "traditional practice" is to "refus[e] to decide constitutional questions" when other grounds of decision are available, "whether or not they have been properly raised before us by the parties." Neese v. Southern R. Co., 350 U.S. 77, 78, 76 S.Ct. 131, 100 L.Ed. 60 (1955) (per curiam ); see also Vermeule, Saving Constructions, 85 Geo. L.J. 1945, 1948-1949 (1997) (explaining that courts commonly "decide an antecedent statutory issue, even one waived by the parties, if its resolution could preclude a constitutional claim"). This Court has raised potential saving constructions "on our own motion" when they could avoid a ruling on constitutional vagueness grounds, even in cases where the Government was a party. United States v. L. Cohen Grocery Co., 255 U.S. 81, 88, 41 S.Ct. 298, 65 L.Ed. 516 (1921). We should have followed that established practice here.
Nor should stare decisis prevent us from rejecting the categorical approach for § 16(b). This Court has never held that § 16(b) incorporates the ordinary-case approach. Although Leocal held that § 16(b) incorporates a version of the categorical approach, the Court must not feel bound by that decision, as it largely overrules it today. See ante, at 1222, n. 7. Surely the Court cannot credibly invoke stare decisis to defend the categorical approach-the same approach it says only a "lunatic" would continue to apply. Ante, at 1223. If the Court views the categorical approach that way-the same way Johnson viewed it-then it must also agree that "[s]tanding by [the categorical approach]
would undermine, rather than promote, the goals that stare decisis is meant to serve." 576 U.S., at ----, 135 S.Ct., at 2563. That is especially true if the Court's decision leads to the invalidation of scores of similarly worded state and federal statutes, which seems even more likely after today than it did after Johnson . Instead of adhering to an interpretation that it thinks unconstitutional and then using that interpretation to strike down another statute, the Court should have taken this opportunity to abandon the categorical approach for § 16(b) once and for all.
* * *
The Court's decision today is triply flawed. It unnecessarily extends our incorrect decision in Johnson . It uses a constitutional doctrine with dubious origins to invalidate yet another statute (while calling into question countless more). And it does all this in the name of a statutory interpretation that we should have discarded long ago. Because I cannot follow the Court down any of these rabbit holes, I respectfully dissent.
Many state courts also held vague laws ineffectual. See, e.g., State v. Mann, 2 Ore. 238, 240-241 (1867) (holding statute that prohibited "gambling devices" was "void" because "the term has no settled and definite meaning"); Drake v. Drake, 15 N.C. 110, 115 (1833) (explaining that "if the terms in which [a statute] is couched be so vague as to convey no definite meaning to those whose duty it is to execute it ... it is necessarily inoperative"); McConvill v. Mayor and Aldermen of Jersey City, 39 N.J.L. 38, 44 (1876) (holding that an ordinance was "bad for vagueness and uncertainty in the thing forbidden"); State v. Boon, 1 N.C. 103, 105 (1801) (refusing to apply a statute because "no punishment whatever can be inflicted; without using a discretion and indulging a latitude, which in criminal cases ought never to be allowed a Judge"); Ex parte Jackson, 45 Ark. 158, 164 (1885) (declaring a statutory prohibition on acts "injurious to the public morals" to be "vague" and "simply null" (emphasis deleted)); McJunkins v. State, 10 Ind. 140, 145 (1858) ("It would therefore appear that the term public indecency has no fixed legal meaning-is vague and indefinite, and cannot in itself imply a definite offense"); Jennings v. State, 16 Ind. 335, 336 (1861) ("We are of opinion that for want of a proper definition, no act is made criminal by the terms 'public indecency,' employed in the statute"); Commonwealth v. Bank of Pennsylvania, 3 Watts & Serg. 173, 177 (Pa.1842) (holding "the language of [shareholder election] legislation so devoid of certainty" that "no valid election [could have] been held, and that none can be held without further legislation"); Cheezem v. State, 2 Ind. 149, 150 (1850) (finding statute to "contai[n] no prohibition of any kind whatever" and thus declaring it "a nullity"); see also Note, Statutory Standards of Personal Conduct: Indefiniteness and Uncertainty as Violations of Due Process, 38 Harv. L. Rev. 963, 964, n. 4 (1925) (collecting cases).
See, e.g., Virginia Resolutions in 4 Debates on the Federal Constitution 528 (J. Elliot ed. 1836) (explaining that the Act, "by uniting legislative and judicial powers to those of executive, subverts ... the particular organization, and positive provisions of the federal constitution"); Madison's Report on the Virginia Resolutions (Jan. 7, 1800) in 17 Papers of James Madison 318 (D. Mattern ed. 1991) (Madison's Report) (contending that the Act violated "the only preventive justice known to American jurisprudence," because "[t]he ground of suspicion is to be judged of, not by any judicial authority, but by the executive magistrate alone"); L. Canfield & H. Wilder, The Making of Modern America 158 (H. Anderson et al. eds. 1952) ("People all over the country protested against the Alien and Sedition Acts"); M. Baseler, "Asylum for Mankind": America, 1607-1800, p. 287 (1998) ("The election of 1800 was a referendum on-and a repudiation of-the Federalist 'doctrines' enunciated in the debates" over, among other things, the Alien Friends Act); Moore, Aliens and the Constitution, 88 N.Y.U.L. Rev. 801, 865, n. 300 (2013) ( "The Aliens Act and Sedition Act were met with widespread criticism"); Lindsay, Immigration, Sovereignty, and the Constitution of Foreignness, 45 Conn. L. Rev. 743, 759 (2013) ("[T]he [Alien Friends] Act proved wildly unpopular among the American public, and contributed to the Republican electoral triumph in 1800 and the subsequent demise of the Federalist Party"). Whether the law was unenforced or, at most, enforced only once, the literature is not quite clear. Compare Sidak, War, Liberty, and Enemy Aliens, 67 N.Y.U.L. Rev. 1402, 1406 (1992) (explaining the Act was never enforced); Cole, Enemy Aliens, 54 Stan. L. Rev. 953, 989 (2002) (same); Klein & Wittes, Preventative Detention in American Theory and Practice, 2 Harv. Nat'l Sec. J. 85, 102, n. 71 (2011) (same); Rosenfeld, Deportation Proceedings and Due Process of Law, 26 Colum. Hum. Rts. L. Rev. 713, 726, 733 (1995) (same); with Fehlings, Storm on the Constitution: The First Deportation Law, 10 Tulsa J. Comp. & Int'l L. 63, 109 (2002) (stating that the Act was enforced once, on someone who was planning on leaving the country in a few months anyway).
This Court already and long ago held that due process requires affording aliens the "opportunity, at some time, to be heard" before some lawful authority in advance of removal-and it's unclear how that opportunity might be meaningful without fair notice of the law's demands. The Japanese Immigrant Case, 189 U.S. 86, 101, 23 S.Ct. 611, 47 L.Ed. 721 (1903). Nor do the cases Justice THOMAS cites hold that a statutory right to lawful permanent residency in this country can be withdrawn without due process. Post, at ---- (dissenting opinion). Rather, each merely holds that the particular statutory removal procedures under attack comported with due process. See Harisiades v. Shaughnessy, 342 U.S. 580, 584-585, 72 S.Ct. 512, 96 L.Ed. 586 (1952) (rejecting argument that an "alien is entitled to constitutional [due process] protection ... to the same extent as the citizen " before removal (emphasis added)); United States ex rel. Turner v. Williams, 194 U.S. 279, 289-290, 24 S.Ct. 719, 48 L.Ed. 979 (1904) (deporting an alien found to be in violation of a constitutionally valid law doesn't violate due process); Fong Yue Ting v. United States, 149 U.S. 698, 730, 13 S.Ct. 1016, 37 L.Ed. 905 (1893) (deporting an alien who hasn't "complied with the conditions" required to stay in the country doesn't violate due process). Even when it came to judicially unenforceable privileges in the past, "executive officials had to respect statutory privileges that had been granted to private individuals and that Congress had not authorized the officials to abrogate." Nelson, Adjudication in the Political Branches, 107 Colum. L. Rev. 559, 581 (2007) (emphasis deleted). So in a case like ours it would've been incumbent on any executive official to determine that the alien committed a qualifying crime and statutory vagueness could pose a disabling problem even there.
All this "ordinary case" caveat means is that while "[o]ne can always hypothesize unusual cases in which even a prototypically violent crime might not present a genuine risk," courts should exclude those atypical cases in assessing whether the offense qualifies. James, 550 U.S., at 208, 127 S.Ct. 1586. As we have explained, under that approach, it is not the case that "every conceivable factual offense covered by a statute" must pose the requisite risk "before the offense can be deemed" a crime of violence. Ibid. But the same is true of the categorical approach generally. See ibid. (using the terms just quoted to characterize both the ordinary case approach and the categorical approach for enumerated offenses set forth in Taylor v. United States, 495 U.S. 575, 110 S.Ct. 2143, 109 L.Ed.2d 607 (1990) ); Moncrieffe v. Holder, 569 U.S. 184, 191, 133 S.Ct. 1678, 185 L.Ed.2d 727 (2013) ; Gonzales v. Duenas-Alvarez, 549 U.S. 183, 193, 127 S.Ct. 815, 166 L.Ed.2d 683 (2007).
The Court protests that this straightforward analysis fails to take account of the crime's ordinary case. Ante, at 1219 - 1220, n. 6. But the fact that the element of "possession" may "take[ ] place in a variety of ways"-for instance, one may possess a firearm "in a closet, in a storeroom, in a car, in a pocket," "unloaded, disassembled, or locked away," Johnson, 576 U.S., at ----, 135 S.Ct., at 2565 (THOMAS, J., concurring in judgment)-matters very little. That is because none of the alternative ways of satisfying that element produce a substantial risk that the possessor will use physical force against the person or property of another. And no one would say that a person "possesses" a gun by firing it or threatening someone with it. Cf. id., at ----, 135 S.Ct., at 2565 (opinion of THOMAS, J.) ("[T]he risk that the Government identifies arises not from the act of possessing the weapon, but from the act of using it."). The Court's insistence that this offense is nonetheless "difficult to classify" under § 16(b), ante, at 1220, n. 6, is surprising in light of our assessment, just two Terms ago, that § 16 does not cover "felon-in-possession laws and other firearms offenses," Luna Torres v. Lynch, 578 U.S. ----, ----, 136 S.Ct. 1619, 1630, 194 L.Ed.2d 737 (2016).
To name a round dozen: Ayestas v. Davis, 584 U.S. ----, ----, 138 S.Ct. 1080, 1093-1094, --- L.Ed.2d ---- (2018) ; Life Technologies Corp. v. Promega Corp., 580 U.S. ----, ---------, 137 S.Ct. 734, 739-742, 197 L.Ed.2d 33 (2017) ; Virginia v. Hicks, 539 U.S. 113, 119-120, 122-124, 123 S.Ct. 2191, 156 L.Ed.2d 148 (2003) ; Toyota Motor Mfg., Ky., Inc. v. Williams, 534 U.S. 184, 196-198, 122 S.Ct. 681, 151 L.Ed.2d 615 (2002) ; Slack v. McDaniel, 529 U.S. 473, 483-484, 120 S.Ct. 1595, 146 L.Ed.2d 542 (2000) ; Gentile v. State Bar of Nev., 501 U.S. 1030, 1075-1076, 111 S.Ct. 2720, 115 L.Ed.2d 888 (1991) ; Cage v. Louisiana, 498 U.S. 39, 41, 111 S.Ct. 328, 112 L.Ed.2d 339 (1990) (per curiam ); Steadman v. SEC, 450 U.S. 91, 98, 101 S.Ct. 999, 67 L.Ed.2d 69 (1981) ; Palermo v. United States, 360 U.S. 343, 351-353, 79 S.Ct. 1217, 3 L.Ed.2d 1287 (1959) ; United States v. E.I. du Pont de Nemours & Co., 353 U.S. 586, 593-596, 77 S.Ct. 872, 1 L.Ed.2d 1057 (1957) ; Levinson v. Spector Motor Service, 330 U.S. 649, 670-671, 67 S.Ct. 931, 91 L.Ed. 1158 (1947) ; Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938).
The Court also finds it probative that "a host of issues" respecting § 16(b)"divide" the lower courts. Ante, at 1222. Yet the Court does little to explain how those alleged conflicts vindicate its particular concern about the provision (namely, the ordinary case inquiry). And as the Government illustrates, many of those divergent results likely can be chalked up to material differences in the state offense statutes at issue. Compare Escudero-Arciniega v. Holder, 702 F.3d 781, 783-785 (C.A.5 2012) (per curiam ) (reasoning that New Mexico car burglary "requires that the criminal lack authorization to enter the vehicle-a requirement alone which will most often ensure some force [against property] is used"), with Sareang Ye v. INS, 214 F.3d 1128, 1134 (C.A.9 2000) (finding it relevant that California car burglary does not require unlawful or unprivileged entry); see Reply Brief 17-20, and nn. 5-6.
See, e.g., In re Winship, 397 U.S. 358, 382-384, 90 S.Ct. 1068, 25 L.Ed.2d 368 (1970) (Black, J., dissenting); Rosenkranz, The Objects of the Constitution, 63 Stan. L. Rev. 1005, 1041-1043 (2011) ; Berger, "Law of the Land" Reconsidered, 74 Nw. U.L. Rev. 1, 2-17 (1979); Corwin, The Doctrine of Due Process of Law Before the Civil War, 24 Harv. L. Rev. 366, 368-373 (1911) ; see also 4 The Papers of Alexander Hamilton 35 (Syrett & Cooke eds. 1962) ("The words 'due process' have a precise technical import, and ... can never be referred to an act of legislature").
Before the 19th century, when virtually all felonies were punishable by death, English courts would sometimes go to extremes to find a reason to invoke the rule of lenity. See Hall, Strict or Liberal Construction of Penal Statutes, 48 Harv. L.Rev. 748, 751 (1935) ; e.g., ante, at 1225 - 1227 (GORSUCH, J., concurring in part and concurring in judgment) (citing Blackstone's discussion of a case about "cattle"). As the death penalty became less common, courts on this side of the Atlantic tempered the rule of lenity, clarifying that the rule requires an "ambiguity" in the text and cannot be used "to defeat the obvious intention of the legislature." United States v. Wiltberger, 5 Wheat. 76, 5 L.Ed. 37 (1820) (Marshall, C.J.).
Early American courts also declined to apply nonpenal statutes that were "unintelligible." Johnson v. United States, 576 U.S. ----, ----, n. 3, 135 S.Ct. 2551, 2568, n. 3, 192 L.Ed.2d 569 (2014) (THOMAS, J., concurring in judgment); e.g., ante, at 1225 - 1226, and n. 1 (opinion of GORSUCH, J.) (collecting cases). Like lenity, however, this practice reflected a principle of statutory construction that was much narrower than the modern constitutional vagueness doctrine. Unintelligible statutes were considered inoperative because they were impossible to apply to individual cases, not because they were unconstitutional for failing to provide "fair notice." See Johnson, 576 U.S., at ----, n. 3, 135 S.Ct., at 2568, n. 3 (opinion of THOMAS, J.).
This distinction between penal and nonpenal statutes would be decisive here because, traditionally, civil deportation laws were not considered penal. See Bugajewitz v. Adams, 228 U.S. 585, 591, 33 S.Ct. 607, 57 L.Ed. 978 (1913) ; Fong Yue Ting v. United States, 149 U.S. 698, 709, 730, 13 S.Ct. 1016, 37 L.Ed. 905 (1893). Although this Court has applied a kind of strict construction to civil deportation laws, that practice did not emerge until the mid-20th century. See Fong Haw Tan v. Phelan, 333 U.S. 6, 10, 68 S.Ct. 374, 92 L.Ed. 433 (1948).
The Jeffersonian Democratic-Republicans who opposed the Alien Friends Act primarily represented slave States, and their party's political strength came from the South. See Fehlings, Storm on the Constitution: The First Deportation Law, 10 Tulsa J. Comp. & Int'l L. 63, 84 (2002). The Jeffersonians opposed any federal control over immigration, which their constituents feared would be used to pre-empt State laws that prohibited the entry of free blacks. Id., at 84-85 ; see also Berns, Freedom of the Press and the Alien and Sedition Laws: A Reappraisal, 1970 S.Ct. Rev. 109, 116 ("Whether pro- or anti-slavery, most southerners, including Jefferson and Madison ... were united behind a policy of denying to the national government any competence to deal with the question of slavery"). The fear was that "mobile free Negroes would intermingle with slaves, encourage them to run away, and foment insurrection." I. Berlin, Slaves Without Masters 92 (1974).
The Jeffersonians also argued that the Alien Friends Act violated due process because, if aliens disobeyed the President's orders to leave the country, they could be convicted of a crime and imprisoned without a trial. See, e.g., Kentucky Resolutions ¶ 6, 4 Elliot's Debates 541. That charge was false. The Alien Friends Act gave federal courts jurisdiction over alleged violations of the President's orders. See § 4, 1 Stat. 571.
The Sixth Amendment is, thus, not a reason to maintain the categorical approach in criminal cases. Contra, ante, at 1217 - 1218 (plurality opinion). Even if it were, the Sixth Amendment does not apply in immigration cases like this one. See Part II-B-2, infra . The plurality contends that, if it must contort the text of § 16(b) to avoid a Sixth Amendment problem in criminal cases, then it must also contort the text of § 16(b) in immigration cases, even though the Sixth Amendment problem does not arise in the immigration context. See ante, at 1217 - 1218, 1218. But, as I have explained elsewhere, this "lowest common denominator" approach to constitutional avoidance is both ahistorical and illogical. See Clark v. Martinez, 543 U.S. 371, 395-401, 125 S.Ct. 716, 160 L.Ed.2d 734 (2005) (dissenting opinion).
See, e.g., 18 U.S.C. § 3553(a)(2) (directing sentencing judges to consider "the nature and circumstances of the offense"); Schware v. Board of Bar Examiners of N. M., 353 U.S. 232, 242-243, 77 S.Ct. 752, 1 L.Ed.2d 796 (1957) (describing "the nature of the offense" committed by a bar applicant as "recruiting persons to go overseas to aid the Loyalists in the Spanish Civil War"); TXO Production Corp. v. Alliance Resources Corp., 509 U.S. 443, 482, 113 S.Ct. 2711, 125 L.Ed.2d 366 (1993) (O'Connor, J., dissenting) (describing "the nature of the offense at issue" as not "involving grave physical injury" but rather as a "business dispute between two companies in the oil and gas industry"); United States v. Broce, 488 U.S. 563, 585-587, 109 S.Ct. 757, 102 L.Ed.2d 927 (1989) (Blackmun, J., dissenting) (describing "the nature of the charged offense" in terms of the specific facts alleged in the indictment); People v. Golba, 273 Mich.App. 603, 611, 729 N.W.2d 916, 922 (2007) ("[T]he underlying factual basis for a conviction governs whether the offense 'by its nature constitutes a sexual offense against an individual who is less than 18 years of age.' " (quoting Mich. Comp. Laws § 28.722(e)(xi) (2006) )); A Fix for Animal Abusers, Boston Herald, Nov. 22, 2017, p. 16 ("prosecutors were so horrified at the nature of his offense-his torture of a neighbor's dog"); P. Ward, Attorney of Convicted Ex-Official Accuses Case's Judge, Pittsburgh Post-Gazette, Nov. 10, 2015, p. B1 (identifying the "nature of his offense" as "taking money from an elderly, widowed client, and giving it to campaign funds"); Cross-Burning-Article Painted an Inaccurate Picture of Young Man in Question, Seattle Times, Aug. 12, 1991, p. A9 ("[The defendant] took no steps to prevent the cross that was burned from being constructed on his family's premises and later ... assisted in concealing a second cross.... This was the nature of his offense"); N. Libman, A Parole/Probation Officer Talks With Norma Libman, Chicago Tribune, May 29, 1988, p. I31 (describing "the nature of the offense" as "not serious" if "there was no definitive threat on life" or if "the dollar- and cents- amount was not great"); E. Walsh, District-U.S. Argument Delays Warrant for Escapee's Arrest, Washington Post, May 29, 1986, p. C1 (describing "the nature of Murray's alleged offenses" as "point [ing] at two officers a gun that was later found to contain one round of ammunition"). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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6
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TIFFANY FINE ARTS, INC., et al. v. UNITED STATES et al.
No. 83-1007.
Argued October 31, 1984
Decided January 9, 1985
Marshall, J., delivered the opinion for a unanimous Court.
Michael D. Savage argued the cause for petitioners. With him on the brief was David M. Rubin.
Deputy Solicitor General Wallace argued the cause for respondents. With him on the brief were Assistant Attorney General Archer, Charles E. Brookhart, and William A. Whitledge
Richard J. Sideman filed a brief for First Western Government Securities, Inc., et al. as amici curiae urging reversal.
Justice Marshall
delivered the opinion of the Court.
The question presented in this case is whether the Internal Revenue Service (IRS) must comply with the “John Doe” summons procedures of § 7609(f) of the Internal Revenue Code of 1954, 26 U. S. C. § 7609(f), when it serves a summons on a named taxpayer for the dual purpose of investigating both the tax liability of that taxpayer and the tax liabilities of other, unnamed parties.
I
Petitioner Tiffany Fine Arts, Inc., is a holding company for various subsidiaries that promote tax shelters. On October 6,1981, Revenue Agent Joel Lewis issued four summonses to Tiffany, pursuant to 26 U. S. C. § 7602(a). This provision empowers the IRS to serve a summons on any person, without prior judicial approval, if the information sought is necessary to ascertain that person’s tax liability. The summonses requested Tiffany’s financial statements for the fiscal years ending October 31,1979, and October 31, 1980, as well as a list of the names, addresses, Social Security numbers, and employer identification numbers of persons who had acquired from Tiffany licenses to distribute a medical device known as the “Pedi-Pulsor.” Tiffany refused to comply with the summonses, and the Government then brought an enforcement action in the United States District Court for the Southern District of New York, pursuant to 26 U. S. C. §§ 7402(b) and 7604(a).
Tiffany opposed enforcement, principally on the ground that the IRS’s request for the names of the licensees indicated clearly that the IRS’s “primary purpose” was to audit the Pedi-Pulsor licensees, not Tiffany itself. Tiffany offered to produce records in which the names of the licensees were redacted. It took the position that, if the IRS were truly interested in only Tiffany’s liability, the redacted records would be sufficient for an adequate investigation.
According to Tiffany, if the IRS wanted to go further and obtain the names of all the licensees, it could not proceed solely under § 7602, but would have to comply also with the requirements of § 7609(f), which applies to John Doe summonses. Under § 7609(f), the IRS cannot serve a summons seeking information on the tax liabilities of unnamed taxpayers without obtaining prior judicial approval at an ex parte proceeding.
The IRS rejected Tiffany’s offer of redacted documents. In an affidavit filed in support of the Government’s enforcement petition, Revenue Agent Lewis asserted:
“I am conducting an investigation, one purpose of which is to ascertain the correctness of the consolidated income tax returns filed by [Tiffany] for the fiscal years ending October 31, 1979, and October 31, 1980. One aspect of my investigation into the correctness of Tiffany’s consolidated corporate income tax returns concerns possible underreporting of income received and questionable business deductions claimed by Tiffany and its subsidiaries.” App. 14a.
In a supplemental affidavit, Agent Lewis conceded that “[i]t is certainly possible that once the individual [Pedi-Pulsor] licensees are identified further inquiry will be made into whether they correctly reported their income tax liabilities.” Id., at 24a. He reasserted, however, that one purpose of his investigation was to audit Tiffany; in particular, he sought to ascertain whether Tiffany had failed to report recourse and nonrecourse notes provided to Tiffany by the Pedi-Pulsor licensees. According to Lewis, the investigation of Tiffany could not be performed properly with redacted documents.
The District Court found that the IRS had made a sufficient showing of its interest in auditing Tiffany’s returns and enforced the summonses. The United States Court of Appeals for the Second Circuit affirmed. 718 F. 2d 7 (1983). It held that the John Doe provisions of § 7609(f) apply only when “the IRS issue[s] a summons to an identifiable party in whom it ha[s] no interest in order to investigate the potential tax liabilities of unnamed third parties.” Id., at 13. Given the District Court’s finding that one purpose of the summonses was to investigate Tiffany, § 7609(f) was not relevant here “even assuming that the summonses . . . were issued to Tiffany partly for the purpose of investigating Tiffany’s customers.” Id., at 13-14.
The Federal Courts of Appeals are divided on the scope of § 7609(f). The Eighth and Eleventh Circuits, like the Second Circuit in this case, have held that the IRS need not comply with § 7609(f) when it seeks information on unnamed third parties as long as one purpose of the summons is to carry out a legitimate investigation of the named summoned party. See United States v. Barter Systems, Inc., 694 F. 2d 163 (CA8 1982); United States v. Gottlieb, 712 F. 2d 1363 (CA11 1983). In contrast, the Sixth Circuit has taken the opposite position, holding that the IRS must comply with § 7609(f) whenever it seeks information on unnamed third parties— even in cases in which one of the purposes of the IRS is to investigate the named recipient of the summons. United States v. Thompson, 701 F. 2d 1175 (1983). We granted certiorari to resolve this conflict. 466 U. S. 925 (1984). We affirm.
II
Congress enacted §7609 in response to two decisions in which we gave a broad construction to the IRS’s general summons power under § 7602(a). It is therefore useful to review those cases before embarking on an analysis of the statutory provision.
In Donaldson v. United States, 400 U. S. 517 (1971), the IRS issued to an employer a § 7602 summons seeking records prepared by the employer that would be relevant to an investigation of the tax liability of one of its employees. The employee obtained a preliminary injunction restraining his employer from complying with the summons. The Government then moved for enforcement. In response, the employer stated that it would have complied with the summons “‘were it not for’ the preliminary injunction.” Id., at 521. The employee, however, filed motions to intervene in the proceedings, under Federal Rule of Civil Procedure 24(a)(2), in order to oppose enforcement. He stated that he had an interest in the outcome of the enforcement action and that this interest would not be adequately represented by his employer. We held that the employee’s interest was not legally protectible and affirmed the denial of the employee’s motions for intervention.
Four years later, we decided United States v. Bisceglia, 420 U. S. 141 (1975). In Bisceglia, the IRS issued to a bank a § 7602 summons for the purpose of identifying an unnamed individual who had deposited a large amount of money in severely deteriorated bills. The bills appeared to have been stored for a long period of time under abnormal conditions, and the IRS suspected that they had been hidden to avoid taxes. Although we recognized the danger that the IRS might use its §7602 summons power to “conduct ‘fishing expeditions’ into the private affairs of bank depositors,” id., at 150-151, we concluded that, on the facts of the case, the IRS had not abused its power. Thus, we held that the summons was enforceable.
Section 7609, the provision at issue in this case, was clearly a response to these decisions. Both the Senate and the House Reports accompanying the bill that became §7609 focused exclusively on the problem of “third-party summonses” — that is, summonses served on a party that, like the employer in Donaldson and the bank in Bisceglia, is not the taxpayer under investigation. S. Rep. No. 94-938, p. 368 (1976); H. R. Rep. No. 94-658, p. 306 (1975). In fact, Donaldson and Bisceglia were the only two cases cited in the texts of the Reports.
Referring to Donaldson, the House Report noted that, under the then-existing law, “there is no legal requirement that the taxpayer (or other party) to whose business or transactions the summoned records relate be informed that a third-party summons has been served.” H. R. Rep. No. 94-658, at 306-307; see also S. Rep. No. 94-938, at 368. Referring to Bisceglia, both Reports stated:
“In certain cases, where the [IRS] has reason to believe that certain transactions have occurred which may affect the tax liability of some taxpayer, but is unable for some reason to determine the specific taxpayer who may be involved, the [IRS] may serve a so-called ‘John Doe’ summons, which means that books and records relating to certain transactions are requested, although the name of the taxpayer is not specified.” S. Rep. No. 94-938, at 368; H. R. Rep. No. 94-658, at 306.
Both Reports asserted that the standards enunciated in Donaldson and Bisceglia might “unreasonably infringe on the civil rights of taxpayers, including the right to privacy.” S. Rep. No. 94-938, at 368; H. R. Rep. No. 94-658, at 307. Section 7609 stems from this concern. To deal with the problem of a third-party summons in a case in which the IRS knows the identity of the taxpayer being investigated, Congress enacted §§ 7609(a) and (b); these subsections require that the IRS give notice of the summons to that taxpayer, and give the taxpayer the right “to intervene in any proceeding with respect to the enforcement of such summons.” In this provision, Congress modified the result reached in Donaldson.
In the case of a John Doe summons, where the IRS does not know the identity of the taxpayer under investigation, advance notice to that taxpayer is, of course, not possible. As a substitute for the procedures of §§ 7609(a). and (b), Congress enacted § 7609(f), which provides:
“Any summons . . . which does not identify the person with respect to whose liability the summons is issued may be served only after a court proceeding in which the Secretary establishes that—
“(1) the summons relates to the investigation of a particular person or ascertainable group or class of persons,
“(2) there is a reasonable basis for believing that such person or group or class of persons may fail or may have failed to comply with any provision of any internal revenue law, and
“(3) the information sought to be obtained from the examination of the records (and the identity of the person or persons with respect to whose liability the summons is issued) is not readily available from other sources” (emphasis added).
See also § 7609(h)(2) (providing that these determinations be made ex parte, solely on the basis of the IRS’s petition and supporting affidavits). Section § 7609(f) was a response to concerns that our decision in Bisceglia did not provide sufficient restraints, in the John Doe context, on the IRS’s exercise of its summons power. See In re Tax Liabilities of John Does, 671 F. 2d 977, 979 (CA6 1982). With this background in mind, we turn to consider the application of the provision to the facts of this case.
Ill
The legal issue here is starkly posed. The District Court found as a matter of fact — and the Court of Appeals affirmed — that the IRS was pursuing a legitimate investigation of Tiffany’s tax liability. At the same time, the Court of Appeals assumed, and the Government does not dispute, that the IRS also intended to investigate the tax liabilities of the unnamed Pedi-Pulsor licensees. The question before us, then, is whether the IRS must comply with § 7609(f) in the case of such dual purpose summonses.
This Court has recognized that there is “a formidable line of precedent construing congressional intent to uphold the claimed enforcement authority of the [IRS] if [this] authority is necessary for the effective enforcement of the revenue laws and is not undercut by contrary legislative purposes.” United States v. Euge, 444 U. S. 707, 715-716 (1980). Just last Term, we reemphasized that “restrictions upon the IRS summons power should be avoided ‘absent unambiguous directions from Congress.’ ” United States v. Arthur Young & Co., 465 U. S. 805, 816 (1984) (quoting United States v. Bisceglia, 420 U. S., at 150). Thus we examine whether the statute and legislative history indicate that Congress expressly considered the problem presented here, and attempt to discern the congressional purposes in enacting § 7609(f).
A
We find that the language of the statute is of little direct help in determining how to treat dual purpose summonses. By their terms, the John Doe provisions of § 7609(f) apply to a summons “which does not identify the person with respect to whose liability the summons is issued.” Tiffany argues that the term “person” in the statute must be read as “person” or “persons.” Tr. of Oral Arg. 6. It then contends that, because the Pedi-Pulsor licensees are persons not identified in the summonses, § 7609(f) literally applies. See United States v. Thompson, 701 F. 2d, at 1178-1179.
The Government’s construction is diametrically at odds with Tiffany’s:
“Section 7609(f) by its terms applies only if a summons ‘does not identify the person with respect to whose liability [it] is issued.’ That simply is not the case here. The summonses enforced by the district court explicitly were issued ‘[i]n the matter of the tax liability of Tiffany Fine Arts Inc. & Subsidiaries.’” Brief for United States 13.
See United States v. Barter Systems, Inc., 694 F. 2d, at 168.
The task that the parties ask us to engage in is to determine whether the statutory reference to “the person” should be read as “every person” or whether it should be read as “at least one person.” We are reluctant, on the basis of the statutory language alone, to reach even a tentative conclusion about the scope of § 7609(f). Neither construction strikes us as clearly compelling.
Turning our attention to the legislative history, we note that the facts of this case are different from those of Donaldson and Bisceglia in one important respect: The summonses here were served on a party that was itself under IRS investigation. Congress did not address this situation in 1976 when it enacted the John Doe provisions. The Reports contain no mention of a summons issued for the dual purpose of investigating both the tax liability of the summoned party and the tax liabilities of unnamed parties. They focus exclusively on summonses issued to parties not themselves under investigation. We conclude that Congress did not expressly consider the problem of dual purpose summonses.
B
We, therefore, turn to consider whether dual purpose summonses give rise to the same concerns that prompted Congress to enact § 7609(f). The Reports discuss only one specific congressional worry: that the party receiving a summons would not have a sufficient interest in protecting the privacy of the records if that party was not itself a target of the summons. S. Rep. No. 94-938, at 368-369; H. R. Rep. No. 94-658, at 307. Such a taxpayer might have little incentive to oppose enforcement vigorously. Then, with no real adversary, the IRS could use its summons power to engage in “fishing expeditions” that might unnecessarily trample upon taxpayer privacy. S. Rep. No. 94-938, at 373; H. R. Rep. No. 94-658, at 311. Congress determined that when the IRS uses its summons power not to conduct a legitimate investigation of an ascertainable target, but instead to look around for targets to investigate, the privacy rights of taxpayers are infringed unjustifiably. See S. Rep. No. 94-938, at 368; H. R. Rep. No. 94-658, at 307.
In response to this concern, §§ 7609(a) and (b) gave the real parties in interest — those actually being investigated — the right to intervene in the enforcement proceedings. Similarly, the John Doe requirements of § 7609(f) were adopted as a substitute for the procedures of §§ 7609(a) and (b). In effect, in the John Doe context, the court takes the place of the affected taxpayer under §§ 7609(a) and (b) and exerts a restraining influence on the IRS. However, § 7609(f) provides no opportunity for the unnamed taxpayers to assert any “personal defenses,” such as attorney-client or Fifth Amendment privileges that might be asserted under §§ 7609(a) and (b). See H. R. Rep. No. 94-658, at 309; see also S. Rep. No. 94-938, at 370. What § 7609(f) does is to provide some guarantee that the information that the IRS seeks through a summons is relevant to a legitimate investigation, albeit that of an unknown taxpayer.
When, as in this case, the summoned party is itself under investigation, the interests at stake are very different. First, by definition, the IRS is not engaged in a “fishing expedition” when it seeks information relevant to a legitimate investigation of a particular taxpayer. In such cases, any incidental effect on the privacy rights of unnamed taxpayers is justified by the IRS’s interest in enforcing the tax laws. More importantly, the summoned party will have a direct incentive to oppose enforcement. In such circumstances, the vigilance and self-interest of the summoned party — complemented by its right to resist enforcement— will provide some assurance that the IRS will not strike out arbitrarily or seek irrelevant materials. See, e. g., United States v. Powell, 379 U. S. 48, 57-58 (1964) (“[The IRS] must show that the investigation will be conducted pursuant to a legitimate purpose, that the inquiry may be relevant to the purpose, that the information sought is not already within the [IRS’s] possession, and that the administrative steps required by the Code have been followed”). Here, for example, Tiffany argued vigorously — albeit unsuccessfully— against enforcement of the summonses.
This is not to say, of course, that as long as the summoned party is under investigation, the IRS will be guaranteed an adversary. It is possible that the summoned party, even if it is itself being investigated, will not oppose enforcement, and that as a result the IRS might obtain some information that is relevant only to the liabilities of unnamed taxpayers. We recognize that the privacy rights of the unnamed taxpayers might then be unnecessarily trampled upon. Congress, however, did not seek to ensure that the IRS have an adversary in all summons proceedings. All that it did was require that a party with a real interest in the investigation — or the district court in the John Doe context — have standing to challenge the IRS’s exercise of its summons authority. It is not up to us, in construing the scope of this authority, to identify a problem that did not trouble Congress, or to attempt to correct it. We therefore conclude that, where the summoned party is itself being investigated, that party’s self-interest provides sufficient protection against the evils that Congress sought to remedy when it enacted § 7609(f).
We reject Tiffany’s argument that, under the decision below, the IRS can circumvent the requirements of § 7609(f) merely by stating that the summoned party is under investigation. We do not find that argument persuasive for two reasons. First, in such a case, the summoned party would still have a sufficient interest in opposing enforcement, as it would have no way of ascertaining that the IRS was not in fact seeking to investigate it. This party would be an interested adversary, and the concerns to which § 7609(f) was addressed would thus be significantly attenuated. More importantly, if the district court finds in the enforcement proceeding that the IRS does not in fact intend to investigate the summoned party, or that some of the records requested are not relevant to a legitimate investigation of the summoned party, the IRS could not obtain all the information it sought unless it complied with § 7609(f).
Our conclusion that the congressional concerns are adequately met without resort to § 7609(f) when the summoned party is itself under investigation should not be read to imply that the IRS can obtain from that party, without complying with § 7609(f), information that is relevant only to the investigation of unnamed taxpayers. In order to obtain such information, the IRS would have to satisfy the requirements of § 7609(f). Therefore, when the IRS does not comply with § 7609(f), the focus must be on whether the information sought is relevant to the investigation of the summoned party. Thus, we discuss next whether the names of the Pedi-Pulsor licensees were relevant to an investigation of Tiffany’s tax liability.
C
During the enforcement proceedings, Tiffany argued that it was possible to perform an investigation of its tax liability without resort to the names of all the Pedi-Pulsor licensees. We have never held, however, that the IRS must conduct its investigations in the least intrusive way possible. Instead, the standard is one of relevance. See United States v. Powell, supra, at 57. The Government argues persuasively that contact with the licensees might be necessary to verify that the transactions reported by Tiffany actually occurred. In fact, Tiffany itself acknowledged the relevance of the requested information, as it offered the IRS the names of certain licensees: “They might want to check a number of them at random, and this we are willing to do because we understand that they are entitled to review [Tiffany’s] books.” App. 35. Tiffany refused, however, to provide all of the names, as it did not think that in the course of its investigation of Tiffany, the IRS would want to audit “50 out of 50 or 150 out of 150 participants.” Ibid.
On the record before us, we agree with the Government that the names of the licensees “may be relevant” to the legitimate investigation of Tiffany. United States v. Powell, supra, at 57. The decision of how many, and which, licensees to contact is one for the IRS — not Tiffany — to make. Having already found that Congress provided no “unambiguous direction” on the question whether the IRS needs to comply with § 7609(f) in the case of dual purpose summonses, and that the IRS’s failure to comply with these requirements when serving such summonses does not undermine the goals that Congress sought to promote through § 7609(f), we conclude that the summonses here were properly enforced.
IV
We hold that where, pursuant to §7602, the IRS serves a summons on a known taxpayer with the dual purpose of investigating both the tax liability of that taxpayer and the tax liabilities of unnamed parties, it need not comply with the requirements for John Doe summonses set out in § 7609(f), as long as all the information sought is relevant to a legitimate investigation of the summoned taxpayer. The judgment of the Court of Appeals is therefore affirmed.
It is so ordered.
The other petitioners are subsidiaries of Tiffany Fine Arts, Inc. Throughout this opinion, we refer to petitioners collectively as “Tiffany.”
This section provides:
“For the purpose of ascertaining the correctness of any return, making a return where none has been made, determining the liability of any person for any internal revenue tax or the liability at law or in equity of any transferee or fiduciary of any person in respect to any internal revenue tax, or collecting any such liability, the Secretary or his delegate is authorized—
“(1) To examine any books, papers, records, or other data which may be relevant or material to such inquiry;
“(2) To summon the person liable for tax or required to perform the act, or any officer or employee of such person, or any person having possession, custody, or care of books of account containing entries relating to the business of the person liable for tax or required to perform the act, or any other person the Secretary [or his delegate] may deem proper, to appear before the Secretary [or his delegate] at a time and place named in the summons and to produce such books, papers, records, or other data, and to give such testimony, under oath, as may be relevant or material to such inquiry; and
“(3) To take such testimony of the person concerned, under oath, as may be relevant or material to such inquiry.”
According to Tiffany’s president, “the Pedi-Pulsor, is designed to permit bed ridden patients to prevent deep vein thrombosis through leg movement assisted by the Pedi-Pulsor.” Affidavit in Opposition to Order to Show Cause, App. 16-17.
Two of the summonses also requested production of the list of clients who acquired lithographs from Tiffany. After ascertaining that Tiffany did not in fact market lithographs, the IRS dropped its request for this information.
“A ‘John Doe’ summons is, in essence, a direction to a third party to surrender information concerning taxpayers whose identity is currently unknown to the IRS.” In re Tax Liabilities of John Does, 671 F. 2d 977, 978 (CA6 1982).
Tiffany devotes considerable energy to arguing that “the summonses were issued principally with respect to the tax liabilities of Tiffany’s clients.” Brief for Petitioners 11. Under our holding in this case, it is irrelevant whether this was the IRS’s primary or secondary purpose; all that matters is that the IRS was pursuing a legitimate investigation of Tiffany. In any event, “this Court has frequently noted its reluctance to disturb findings of fact concurred in by two lower courts.” Rogers v. Lodge, 458 U. S. 613, 623 (1982). See Blau v. Lehman, 368 U. S. 403, 408-409 (1962). On the record before us, we see no reason to upset the finding below.
Amici First Western Government Securities and Samuels, Kramer & Co. argue that the Reports refer to a case in which the summoned party was itself under investigation. The summons referred to in the example cited by amici was issued “to obtain the names of corporate shareholders involved in a taxable reorganization which had been characterized by the corporation (in a letter to its shareholders) as a nontaxable transaction.” S. Rep. No. 94-938, p. 373 (1976); H. R. Rep. No. 94-658, p. 311 (1975). According to amici, in such a case the corporation itself must have been under investigation.
The Reports do not indicate, however, the name of the case. Nor do they indicate whether the summons was issued to the corporation, or whether the IRS was in fact interested in the corporate tax liability. Amici do not tell us to which actual case the Reports referred. The Government, in contrast, states that the example in question could have referred to only one reported case: United States v. Armour, 376 F. Supp. 318 (Conn. 1974). In that case, the IRS issued summonses to bank officials in order to learn the names of shareholders for whom the bank held shares.
Given the scarcity of facts provided with the example, we simply cannot tell whether a dual purpose summons was involved. Moreover, even if we found a case that was consistent with amici’s reading of the example, we would have no way of knowing whether Congress was referring to that case rather than to Armour. We are therefore disinclined to place great weight on the argument advanced by amici.
We also find that it was well within the District Court’s discretion to conclude, after reviewing the submissions of the parties and holding oral argument, that an evidentiary hearing on the question of enforcement was unnecessary. See United States v. Morgan Guaranty Trust Co., 572 F. 2d 36, 42-43, n. 9 (CA2), cert. denied sub nom. Keech v. United States, 439 U. S. 822 (1978). As we stated in Donaldson v. United States, 400 U. S. 517, 527 (1971), “the burden of showing an abuse of the court’s process is on the taxpayer.” Even if factually true, the central argument raised by Tiffany before the District Court — that the IRS’s primary, but not sole, interest was to investigate the licensees — did not provide a basis for quashing the summonses. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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68
] |
NATIONAL LABOR RELATIONS BOARD v. EXCHANGE PARTS CO.
No. 26.
Argued December 11, 1963.
Decided January 13, 1964.
Dominick L. Manoli argued the cause for petitioner. With him on the brief were Solicitor General Cox, Arnold Ordman and Norton J. Come.
Karl H. Mueller argued the cause and filed a brief for respondent.
Mr. Justice Harlan
delivered the opinion of the Court.
This case presents a question concerning the limitations which §8 (a)(1) of the National Labor Relations Act, 49 Stat. 452 (1935), as amended, 29 U. S. C. § 158 (a)(1), places on the right of an employer to confer economic benefits on his employees shortly before a representation election. The precise issue is whether that section prohibits the conferral of such benefits, without more, where the employer’s purpose is to affect the outcome of the election. We granted the National Labor Relations Board’s petition for certiorari, 373 U. S. 931, to clear up a possible conflict between the decision below and those of other Courts of Appeals on an important question of national labor policy. For reasons given in this opinion, we conclude that the judgment below must be reversed.
The respondent, Exchange Parts Company, is engaged in the business of rebuilding automobile parts in Fort Worth, Texas. Prior to November 1959 its employees were not represented by a union. On November 9, 1959, the International Brotherhood of Boilermakers, Iron Shipbuilders, Blacksmiths, Forgers and Helpers, AFL-CIO, advised Exchange Parts that the union was conducting an organizational campaign at the plant and that a majority of the employees had designated the union as their bargaining representative. On November 16 the union petitioned the Labor Board for a representation election. The Board conducted a hearing on December 29, and on February 19, 1960, issued an order directing that an election be held. The election was held on March 18, 1960.
At two meetings on November 4 and 5, 1959, C. V. McDonald, the Vice-President and General Manager of Exchange Parts, announced to the employees that their “floating holiday” in 1959 would fall on December 26 and that there would be an additional “floating holiday” in 1960. On February 25, six days after the Board issued its election order, Exchange Parts held a dinner for employees at which Vice-President McDonald told the employees that they could decide whether the extra day of vacation in 1960 would be a “floating holiday” or would be taken on their birthdays. The employees voted for the latter. McDonald also referred to the forthcoming representation election as one in which, in the words of the trial examiner, the employees would “determine whether . . . [they] wished to hand over their right to speak and act for themselves.” He stated that the union had distorted some of the facts and pointed out the benefits obtained by the employees without a union. He urged all the employees to vote in the election.
On March 4 Exchange Parts sent its employees a letter which spoke of “the Empty Promises of the Union” and “the fact that it is the Company that puts things in your envelope . . . .” After mentioning a number of benefits, the letter said: “The Union can’t put any of those things in your envelope — only the Company can do that.” Further on, the letter stated: “. . . [I]t didn’t take a Union to get any of those things and ... it won’t take a Union to get additional improvements in the future.” Accompanying the letter was a detailed statement of the benefits granted by the company since 1949 and an estimate of the monetary value of such benefits to the employees. Included in the statement of benefits for 1960 were the birthday holiday, a new system for computing overtime during holiday weeks which had the effect of increasing wages for those weeks, and a new vacation schedule which enabled employees to extend their vacations by sandwiching them between two weekends. Although Exchange Parts asserts that the policy behind the latter two benefits was established earlier, it is clear that the letter of March 4 was the first general announcement of the changes to the employees. In the ensuing election the union lost.
The Board, affirming the findings of the trial examiner, found that the announcement of the birthday holiday and the grant and announcement of overtime and vacation benefits were arranged by Exchange Parts with the intention of inducing the employees to vote against the union. It found that this conduct violated §8 (a)(1) of the National Labor Relations Act and issued an appropriate order. On the Board’s petition for enforcement of the order, the Court of Appeals rejected the finding that the announcement of the birthday holiday was timed to influence the outcome of the election. It accepted the Board’s findings with respect to the overtime and vacation benefits, and the propriety of those findings is not in controversy here. However, - noting that “the benefits were put into effect unconditionally on a permanent basis, and no one has suggested that there was any implication the benefits would be withdrawn if the workers voted for the union,” 304 F. 2d 368, 375, the court denied enforcement of the Board’s order. It believed that it was not an unfair labor practice under § 8 (a) (1) for an employer to grant benefits to its employees in these circumstances.
Section 8 (a)(1) makes it an unfair labor practice for an employer “to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7.” Section 7 provides:
“Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, arid shall also have the right to refrain from any or all of such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in section 8 (a)(3).” 49 Stat. 452 (1935), as amended, 29 U. S. C. § 157.
We think the Court of Appeals was mistaken in concluding that the conferral of employee benefits while a representation election is pending, for the purpose of inducing employees to vote against the union, does not “interfere with” the protected right to organize.
The broad purpose of § 8 (a)(1) is to establish “the right of employees to organize for mutual aid without employer interference.” Republic Aviation Corp. v. Labor Board, 324 U. S. 793, 798. We have no doubt that it prohibits not only intrusive threats and promises but also conduct immediately favorable to employees which is undertaken with the express purpose of impinging upon their freedom of choice for or against unionization and is reasonably calculated to have that effect. In Medo Photo Supply Corp. v. Labor Board, 321 U. S. 678, 686, this Court said: “The action of employees with respect to the choice of their bargaining agents may be induced by favors bestowed by the employer as well as by his threats or domination.” Although in that case there was already a designated bargaining agent and the offer of “favors” was in response to a suggestion of the employees that they would leave the union if favors were bestowed, the principles which dictated the result there are fully applicable here. The danger inherent in well-timed increases in benefits is the suggestion of a fist inside the velvet glove. Employees are not likely to miss the inference that the source of benefits now conferred is also the source from which future benefits must flow and which may dry up if it is not obliged. The danger may be diminished if, as in this case, the benefits are conferred permanently and unconditionally. But the absence of conditions or threats pertaining to the particular benefits conferred would be of controlling significance only if it could be presumed that no question of additional benefits or renegotiation of existing benefits would arise in the future; and, of course, no such presumption is tenable.
Other Courts of Appeals have found a violation of §8 (a)(1) in the kind of conduct involved here. See, e. g., Labor Board v. Pyne Molding Corp., supra; Indiana Metal Products Corp. v. Labor Board, supra. It is true, as the court below pointed out, that in most cases of this kind the increase in benefits could be regarded as “one part of an overall program of interference and restraint by the employer,” 304 F. 2d, at 372, and that in this case the questioned conduct stood in isolation. Other unlawful conduct may often be an indication of the motive behind a grant of benefits while an election is pending, and to that extent it is relevant to the legality of the grant; but when as here the motive is otherwise established, an employer is not free to violate § 8 (a)(1) by conferring benefits simply because it refrains from other, more obvious violations. We cannot' agree with the Court of Appeals that enforcement of the Board’s order will have the “ironic” result of “discouraging benefits for labor.” 304 F. 2d, at 376. The beneficence of an employer is likely to be ephemeral if prompted by a threat of unionization which is subsequently removed. Insulating the right of collective organization from calculated good will of this sort deprives employees of little that has lasting value.
Reversed.
See, e. g., Indiana Metal Products Corp. v. Labor Board, 202 F. 2d 613 (C. A. 7th Cir.); Labor Board v. Pyne Molding Corp., 226 F. 2d 818 (C. A. 2d Cir.).
The italics appear in the original letter.
The inference was made almost explicit in Exchange Parts’ letter to its employees of March 4, already quoted, which said: “The Union can’t put any of those . . . [benefits] in your envelope — only the Company can do that.” (Original italics.) We place no reliance, however, on these or other words of the respondent dissociated from its conduct. Section 8 (c) of the Act, 61 Stat. 142 (1947), 29 U. S. C. § 158 (c), provides that the expression or dissemination of “any views, argument, or opinion” “shall not constitute or be evidence of an unfair labor practice under any of the provisions of this Act, if such expression contains no threat of reprisal or force or promise of benefit.” | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
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"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
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"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
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"Veterans' Administration or Board of Veterans' Appeals",
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"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
81
] |
KNEBEL, SECRETARY OF AGRICULTURE v. HEIN
No. 75-1261.
Argued November 29, 1976
Decided January 11, 1977
Stephen L. Urbanczyk argued the cause pro hac vice for appellant in No. 75-1261. With him on the briefs were Solicitor General Bork, Assistant Attorney General Lee, Deputy Solicitor General Jones, and William Kanter. Lornd Lawhead Williams, Special Assistant Attorney General of Iowa, argued the cause for appellants in No. 75-1355. With her on the briefs was Richard C. Turner, Attorney General.
Robert Bartels, by appointment of the Court, 426 U. S. 945, argued the cause and filed a brief for appellees in both cases.
Together with No. 75-1355, Burns, Comm’r, Dept. of Social Services of Iowa, et al. v. Hein, also on appeal from the same court.
Ralph Santiago Abascal, Lorelei Joy Borland, and Ronald F. Pollack filed a brief for Sandra Chek et al. as amici curiae in both cases.
Mr. Justice Stevens
delivered the opinion of the Court.
Under the program administered by the Secretary of Agriculture and cooperating state agencies pursuant to the Food Stamp Act of 1964, 78 Stat. 703, 7 U. S. C. § 2011 et seg. (1970 ed. and Supp. V), certain low-income households are entitled to purchase food coupons at a discount. The price an eligible household must pay for food stamps is determined, in part, by its “income” as defined in the applicable federal and state regulations. Under those regulations a transportation allowance, which appellee receives from the State of Iowa .and uses to defray the cost of commuting to a nurses’ training program, is treated as “income.” The questions presented on this appeal are whether those regulations are authorized by the statute and, if so, whether they are constitutional.
Appellee Hein, a divorced woman with custody of two children, is the head of a household receiving assistance. Prior to September 1972, she paid only $46 for food stamps with a retail value of $92. Thereafter she received a grant from the State which paid her tuition at a nurses’ training school, plus a transportation allowance of $44 per month. The actual monthly expense of commuting between her residence in Muscatine, Iowa, and the school in Davenport amounted to at least $44. The allowance nevertheless increased the “income” which determined the price of her food stamps, resulting in a $12 price increase.
After exhausting state administrative remedies, appellee filed a class action in the United States District Court for the Southern District of Iowa seeking to enjoin the enforcement of the Iowa regulations requiring that transportation allowances be included in income. Because the constitutionality of the regulations was challenged, a three-judge court was convened pursuant to 28 U. S. C. § 2281. The District Court originally held the Iowa regulation invalid as inconsistent with the regulations of the Secretary of Agriculture. 371 F. Supp. 1091 (1974). While the State’s appeal was pending in this Court, the Secretary promulgated a clarifying amendment eliminating the basis for the District Court’s holding. We therefore vacated the original judgment, 419 U. S. 989.
On remand, the Secretary of Agriculture was joined as an additional defendant. The District Court then held both the state and the federal regulations invalid. 402 F. Supp. 398 (1975). The court could identify no rational basis for treating as income a training allowance which is fully expended for its intended purpose. Consequently, the court reasoned, the regulation did not implement the statutory objective of providing adequate nutrition for low-income families. Since the allowance did not increase appellee’s “food purchasing power,” the District Court felt that it was totally irrational for the allowance to increase the cost of appellee’s food stamps. This analysis led to the conclusion that the regulation conflicted with the Food Stamp Act and discriminated against recipients of transportation allowances in violation of the equal protection guarantee explicit in the Fourteenth Amendment and implicit in the Due Process Clause of the Fifth Amendment.
We are persuaded that the statute authorized the Secretary and the State of Iowa to issue the challenged regulations and that the regulations are constitutional.
The salutary purpose and the broad outlines of the federal food stamp program are well known. The Food Stamp Act authorizes the Secretary to “formulate and administer a food stamp program” which will provide an eligible household “an opportunity to obtain a nutritionally adequate diet,” 7 U. S. C. § 2013 (a). He is to “prescribe the amounts of household income and other financial resources, including both liquid and nonliquid assets, to be used as criteria of eligibility,” 7 U. S. C. § 2014 (b)'(1970 ed., Supp. V). The charge for the coupons is to “represent a reasonable investment on the part of the household, but in no event more than 30 per centum of the household’s income . . . .” § 2016 (b). Finally, the Secretary “shall issue such regulations, not inconsistent with this chapter, as he deems necessary or appropriate for the effective and efficient administration of the food stamp program.” § 2013(c).
Under the statute’s broad delegation of authority, the Secretary might have defined income in a variety of ways. He might, for example, have treated wages differently from training allowances. He decided, however, to adopt a definition of income which includes wages, welfare payments, training allowances, and most other monetary receipts. Only a few specific deductions are allowed. These deductions do not include any itemized deduction for commuting expenses of either students or workers. Instead, there is a standardized deduction of 10% of the wages or training allowance (including tuition grants and travel allowances), which is intended to cover incidental expenses.
The District Court was correct that the regulations operate somewhat unfairly in appellee’s case. Nevertheless, we are satisfied that they are the product of a valid exercise of the Secretary’s statutory authority. Perhaps it might have been more equitable to allow a deduction for all commuting expenses, or for the expenses of commuting to a training program, or — as the order of the District Court provides — just for such expenses covered by state transportation allowances. But the availability of alternatives does not render the Secretary’s choice invalid. Moreover, a plainly acceptable reason exists for rejecting each of these possible alternatives.
Allowing a deduction for all transportation expenses would create significant administrative costs as well as risks of disparate treatment. Disparate treatment of trainees and wage earners could be criticized as unfairly discriminating against the worker. Similar criticism can be leveled against the order entered by the District Court in this case, under which members of the class would fare better than workers with equally low receipts and equally high expenses.
The District Court’s primary reason for invalidating the regulations was its view that transportation grants do not increase food purchasing power. But the grant does give a household more food purchasing power than another household which receives no grant but incurs similar nondeductible expenses related to training or employment. Moreover, nothing in the statute requires that deductions include all necessary nonfood expenditures. On the contrary, the requirement in § 2016 (b) that the price of the food stamps shall not exceed 30% of the household’s income, assumes that 70% of that income may be expended on nonfood necessities. Thus, there is a built-in allowance for necessary expenses beyond the specific deductions.
We conclude that the federal regulations defining income were reasonably adopted by the Secretary in the performance of his statutory duty to “formulate and administer a food stamp program’’ and are therefore within the Secretary’s statutory authority. Since there is no question about the constitutionality of the statute itself, the implementation of the statutory purpose provides a sufficient justification for both the federal regulations and the parallel state regulations to avoid any violation of equal protection guarantees. See, e. g., Weinberger v. Salfi, 422 U. S. 749, 768-770; Mathews v. De Castro, ante, at 185. Nor do the regulations embody any conclusive presumption. They merely represent two reasonable judgments: first, that recipients of state travel allowances should be treated like other trainees and like wage earners; and second, that the standard 10% deduction, coupled with the 30% ceiling on coupon purchase prices, provides an acceptable mechanism for dealing with ordinary expenses such as commuting. The Constitution requires no more. See Salfi, supra, at 771-777.
Reversed.
It was stipulated that prior to November 28, 1973, Ms. Hein had no savings and only the following elements of income:
“a. $28.75 a month rent from a house in which she owns a part interest;
“b. $220 ADC;
“c. $44 Work and Training Allowance; and
“d. $36 food stamp bonus.” App. 24r-25.
This assistance was granted under the Iowa Work and Training Program, authorized by Iowa Code Ann. §§249C.l, et seq. (Supp. 1976). The program is partially funded by the State and partially by the Federal Government. Such funding is now provided under Title XX of the Social Security Act, 42 U. S. C. § 1397a et seq. (1970 ed., Supp. V).
The record is actually somewhat unclear on this point. However, the District Court construed a stipulation regarding appellee’s “allowance for necessary commuting” as indicating that she actually was required to spend that amount. For purposes of decision, we accept the District Court’s construction. It should be noted, however, that if appellee was a full-time student, she would receive the full $44 even if her actual expenses were less. If she was a part-time student, she would be reimbursed on the basis of mileage, up to a maximum of $44 per month. The record does not disclose whether she was a full-time or part-time student.
Under the regulations the tuition payment and the transportation allowance were both added to income. Then, an amount equal to the full tuition cost, plus 10% of the tuition payment and 10% of the transportation allowance, was deducted from income. The record does not disclose the tuition cost, or whether the proper deduction of 10% of that amount was made.
The District Court defined the class represented by appellee to include all persons receiving transportation allowances pursuant to individual education and training plans whose allowances were included in, and not deducted from, income for purposes of determining the price they had to pay for food stamps. 371 F. Supp. 1091, 1093 n. 1 (1974).
Under 7 U. S. C. § 2014, state “plans of operation” submitted to the Secretary are not to be approved “unless the standards of eligibility meet those established by the Secretary.” The Secretary’s regulations set out the standards of eligibility which must be applied by the state agency. 7 CFR § 271.3 (c) (1976). The validity of the state regulations is at issue because they formed the direct basis for the change in appellee’s food stamp price; the federal regulations are challenged because they now authorize the state regulations. See n. 7, infra.
The clarifying amendment specifically precluded “deductions ... for any other educational expenses such as . . . transportation.” 7 CFR §271.3 (c) (1) (iii) (f) (1976).
The District Court ordered the defendants to cease including in income “any amount received ... as reimbursement for necessary commuting expenses, pursuant to an Individual Education and Training Plan, unless such amount is deducted from such person’s monthly net income in determining such person’s adjusted net income.” 402 F. Supp. 398, 408 (1975). The court also ordered defendants to recompute the amounts which members of the class should have paid for food stamps and to allow them a credit against future purchases in the amount of the past overcharge.
“The federal food stamp program was established in 1964 in an effort to alleviate hunger and malnutrition among the more needy segments of our society. 7 U. S. C. § 2011. Eligibility for participation in the program is determined on a household rather than an individual basis. 7 CFR § 271.3 (a). An eligible household purchases sufficient food stamps to provide that household with a nutritionally adequate diet. The household pays for the stamps at a reduced rate based upon its size and cumulative income. The food stamps are then used to purchase food at retail stores, and the Government redeems the stamps at face value, thereby paying the difference between the actual cost of the food and the amount paid by the household for the stamps. See 7 U. S. C. §§ 2013 (a), 2016, 2025 (a).” United States Dept. of Agriculture v. Moreno, 413 U. S. 528, 529-530.
The regulation provides, in part, that income includes:
“(a) All compensation for services performed as an employee
“(f) Payments received from federally aided public assistance programs, general assistance programs, or other assistance programs based on need;
“(g) Payments received from Government-sponsored programs such as . . . the Work Incentive Program, or Manpower Training Program
“(i) Cash gifts or awards ... for support, maintenance, or the expenses of education . . .
“(1) Rents, dividends, interest, royalties, and all other payments from any source whatever which may be construed to be a gain or benefit 7 CFR §271.3 (c)(1) (i) (1976).
The deductions which are relevant for present purposes are these:
“(a) Ten per centum of income from compensation for services performed as an employee or training allowance not to exceed $30 per household per month. This deduction shall be made before the following deductions . . .
“(d) The payments necessary for the care of a child or other persons when necessary for a household member to accept or continue employment, or training or education which is preparatory for employment . . . .”
“(f) Tuition and mandatory fees assessed by educational institutions (no deductions shall be made for any other education expenses such as, but not limited to, the expense of books, school supplies, meals at school, and transportation).” 7 CFR § 271.3 (c) (1) (iii) (1976).
These regulations have undergone change during the course of this litigation. The express exclusion of transportation expenses as a possible educational deduction was added in response to the District Court’s holding at a prior stage of the litigation that such a deduction was required by the regulations. See supra, at 290-291. More recently, the system of itemized deductions set forth in the text was replaced by a standardized deduction for all households. 41 Fed. Reg. 18788 (1976). We are told that enforcement of the new regulations has been enjoined. Brief for Appellant in No. 75-1261, p. 5 n. 3. This case would not become moot if the new regulations go into effect, because of the compensatory relief ordered by the District Court. See n. 8, supra.
7 CFR § 271.3 (c) (1) (iii) (a) (1976). A separate deduction is allowed for job- or training-related child-care expenses. 7 CFR § 271.3 (c) (1) (iii) (d) (1976).
Deductions for such incidental expenses are allowed in calculating income from self-employment. See 7 CFR § 271.3 (c) (1) (i) (6) (1976). Appellee does not contend that the Secretary is required to take this approach with respect to wage earners. The statute before us, unlike that considered in Shea v. Vialpando, 416 U. S. 251, contains no indication that Congress meant to require individualized consideration of employment-related expenses. Given that the treatment of wage earners is valid, it follows that similar treatment of trainees is valid.
The Court’s recent comment on a regulatory choice made by the Federal Reserve Board in its administration of the Truth in Lending Act, 15 U. S. C. § 1601 et seq., is relevant. In Mourning v. Family Publications Serv., Inc., 411 U. S. 356, 371-372, the Court stated:
“That some other remedial provision might be preferable is irrelevant. We have consistently held that where reasonable minds may differ as to which of several remedial measures should be chosen, courts should defer to the informed experience and judgment of the agency to whom Congress delegated appropriate authority. Northwestern Co. v. FPC, 321 U. S. 119, 124 (1944); National Broadcasting Co. v. United States, 319 U. S. 190, 224 (1943); American Telephone & Telegraph Co. v. United States, 299 U. S. 232, 236 (1936).”
The record includes a letter dated March 11, 1974, from the Deputy-General Counsel of the Department of Agriculture explaining the reasoning underlying a portion of the regulations. He stated:
“When these regulations were originally under consideration, it was administratively determined that tuition and mandatory fees are readily determinable, are uniform for all students, and are the primary costs of education (particularly college education) over and above a student’s ordinary costs of living. It was also determined that the administrative burden of determining and verifying the expenses for the infinite variety of other outlays which may be incurred for education would be undue. Further, these other expenses, because of personal preference or otherwise, vary greatly from person to person and thus from household to household.”
The fact that the Internal Revenue Code does not allow a deduction from income for commuting expenses lends support to the view that there is some reasonable basis for the Secretary’s judgment in formulating these regulations. See Commissioner v. Flowers, 326 U. S. 465.
For some full-time students’ who are members of the class this reasoning rests on a faulty premise; for them, the grant may exceed actual transportation expenses.
We are informed that the “average purchase requirement for a food stamp household is now 24 percent of net income,” Jurisdictional Statement in No. 75-1261, pp. 10-11, n. 3. See also 7 CFR § 271.10, App. A (1976).
The District Court also believed that an exclusion from income was required by what it perceived to be the Act’s policy favoring education. This policy was thought to be embodied in 7 U. S. C. § 2014 (c), which exempts bona fide students from the requirement that able-bodied adults register for work as a prerequisite to receiving food stamps. 402 F. Supp., at 405. This section expresses, if anything, only a policy that students and trainees not be treated less favorably than workers. Allowing trainees an exclusion for travel allowances would give them more favorable treatment than wage earners, who do not get a deduction for commuting expenses.
It is also contended that the regulations at issue work at cross-purposes with Title XX of the Social Security Act, which provides funding for the state program under which the travel allowance was paid. This contention is true only in the sense that the net benefit of the travel allowance is reduced by the increase in food stamp prices. But this is equally true of other government benefits, such as AFDC, which appellee concedes are properly included in income. Brief for Appellee 23-24. We find no indication that Congress intended different treatment for training allowances. Cf. 42 U. S. C. § 4636; Hamilton v. Butz, 520 F. 2d 709 (CA9 1975). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
3
] |
UNITED STATES ex rel. ACCARDI v. SHAUGHNESSY, DISTRICT DIRECTOR OF THE IMMIGRATION AND NATURALIZATION SERVICE.
No. 366.
Argued February 2, 1954.
Decided March 15, 1954.
Jack Wasserman argued the cause and filed a brief for petitioner.
Marvin E. Frankel argued the cause for respondent. With him on the brief were Acting Solicitor General Stern, Assistant Attorney General Olney, Beatrice Rosenberg and Robert G. Maysack.
Mr. Justice Clark
delivered the opinion of the Court.
This is a habeas corpus action in which the petitioner attacks the validity of the denial of his application for suspension of deportation under the provisions of § 19 (c) of the Immigration Act of 1917. Admittedly deport-able, the petitioner alleged, among other things, that the denial of his application by the Board of Immigration Appeals was prejudged through the issuance by the Attorney General in 1952, prior to the Board’s decision, of a confidential list of “unsavory characters’-’ including petitioner’s name, which made it impossible for him “to secure fair consideration of his case.” The District Judge refused the offer of proof, denying the writ on the allegations of the petitioner without written opinion. A divided panel of the Court of Appeals for the Second Circuit affirmed. 206 F. 2d 897. We granted certiorari. 346 U. S. 884.
The Justice Department’s immigration file on petitioner reveals the following relevant facts. He was born in Italy of Italian parents in 1909 and entered the United States by train from Canada in 1932 without immigration inspection and without an immigration visa. This entry clearly falls under § 14 of the Immigration Act of 1924 and is the uncontested ground for deportation. The deportation proceedings against him began in 1947. In 1948 he applied for suspension of deportation pursuant to § 19 (c) of the Immigration Act of 1917. This section as amended in 1948 provides, in pertinent part, that:
“In the case of any alien (other than one to whom subsection (d) of this section is applicable) who is deportable under any law of the United States and who has proved good moral character for the preceding five years, the Attorney General may . . . suspend deportation of such alien if he is not ineligible for naturalization or if ineligible, such ineligibility is solely by reason of his race, if he finds (a) that such deportation would result in serious economic detriment to a citizen or legally resident alien who is the spouse, parent, or minor child of such deportable alien; or (b) that such alien has resided continuously in the United States for seven years or more and is residing in the United States upon July 1, 1948.” 8 U. S. C. (1946 ed., Supp. V) § 155 (c).
Hearings on the deportation charge and the application for suspension of deportation were held before officers of the Immigration and Naturalization Service at various times from 1948 to 1952. A hearing officer ultimately found petitioner deportable and recommended a denial of discretionary relief. On July 7, 1952, the Acting Commissioner of Immigration adopted the officer’s findings and recommendation. Almost nine months later, on April 3, 1953, the Board of Immigration Appeals affirmed the decision of the hearing officer. A warrant of deportation was issued the same day and arrangements were made for actual deportation to take place on April 24, 1953.
The scene of action then shifted to the United States District Court for the Southern District of New York. One day before his scheduled deportation petitioner sued out a writ of habeas corpus. District Judge Noonan dismissed the writ on April 30 and his order, formally entered on May 5, was never appealed. Arrangements were then made for petitioner to depart on May 19. However, on May 15, his wife commenced this action by filing a petition for a second writ of habeas corpus. New grounds were alleged, on information and belief, for attacking the administrative refusal to suspend deportation. The principal ground is that on October 2, 1952— after the Acting Commissioner’s decision in the case but before the decision of the Board of Immigration Appeals— the Attorney General announced at a press conference that he planned to deport certain “unsavory characters”; on or about that date the Attorney General prepared a confidential list of one hundred individuals, including petitioner, whose deportation he wished; the list was circulated by the Department of Justice among all employees in the Immigration Service and on the Board of Immigration Appeals; and that issuance of the list and related publicity amounted to public prejudgment by the Attorney General so that fair consideration of petitioner’s case by the Board of Immigration Appeals was made impossible. Although an opposing affidavit submitted by government counsel denied “that the decision was based on information outside of the record” and contended that the allegation of prejudgment was “frivolous,” the same counsel repeated in a colloquy with the court a statement he had made at the first habeas corpus hearing — “that this man was on the Attorney General’s proscribed list of alien deportees.”
District Judge Clancy did not order a hearing on the allegations and summarily refused to issue a writ of habeas corpus. An appeal was taken to the Court of Appeals for the Second Circuit with the contention that the allegations required a hearing in the District Court and that the writ should have been issued if the allegations were proved. A majority of the Court of Appeals’ panel thought the administrative record amply supported a refusal to suspend deportation; found nothing in the record to indicate that the administrative officials considered anything but that record in arriving at a decision in the case; and ruled that the assertion of mere “suspicion and belief” that extraneous matters were considered does not require a hearing. Judge Frank dissented.
The same questions presented to the Court of Appeals were raised in the petition for certiorari and are thus properly before us. The crucial question is whether the alleged conduct of the Attorney General deprived petitioner of any of the rights guaranteed him by the statute or by the regulations issued pursuant thereto.
Eegulations with the force and effect of law supplement the bare bones of § 19 (c). The regulations prescribe the procedure to be followed in processing an alien’s application for suspension of deportation. Until the 1952 revision of the regulations, the procedure called for decisions at three separate administrative levels below the Attorney General — hearing officer, Commissioner, and the Board of Immigration Appeals. The Board is appointed by the Attorney General, serves at his pleasure, and operates under regulations providing that: “In considering and determining . . . appeals, the Board of Immigration Appeals shall exercise such discretion and power conferred upon the Attorney General by law as is appropriate and necessary for the disposition of the case. The decision of the Board . . . shall be final except in those cases reviewed by the Attorney General . . . .” 8 CFR, 1949, § 90.3 (c). See 8 CFR, Rev. 1952, § 6.1 (d)(1). And the Board was required to refer to the Attorney General for review all cases which:
“(a) The Attorney General directs the Board to refer to him.
“(b) The chairman or a majority of the Board believes should be referred to the Attorney General for review of its decision.
“(c) The Commissioner requests be referred to the Attorney General by the Board and it agrees.” 8 CFR, 1949, § 90.12. See 8 CFR, Rev. 1952, § 6.1 (h)(1)-
The regulations just quoted pinpoint the decisive fact in this case: the Board was required, as it still is, to exercise its own judgment when considering appeals. The clear import of broad provisions for a final review by the Attorney General himself would be meaningless if the Board were not expected to render a decision in accord with its own collective belief. In unequivocal terms the regulations delegate to the Board discretionary authority as broad as the statute confers on the Attorney General; the scope of the Attorney General’s discretion became the yardstick of the Board’s. And if the word “discretion” means anything in a statutory or administrative grant of power, it means that the recipient must exercise his authority according to his own understanding and conscience. This applies with equal force to the Board and the Attorney General. In short, as long as the regulations remain operative, the Attorney General denies himself the right to sidestep the Board or dictate its decision in any manner.
We think the petition for habeas corpus charges the Attorney General with precisely what the regulations forbid him to do: dictating the Board’s decision. The petition alleges that the Attorney General included the name of petitioner in a confidential list of “unsavory characters” whom he wanted deported; public announcements clearly reveal that the Attorney General did not regard the listing as a mere preliminary to investigation and deportation; to the contrary, those listed were persons whom the Attorney General “planned to deport.” And, it is alleged, this intention was made quite clear to the Board when the list was circulated among its members. In fact, the Assistant District Attorney characterized it as the “Attorney General’s proscribed list of alien deportees.” To be sure, the petition does not allege that the “Attorney General ordered the Board to deny discretionary relief to the listed aliens.” It would be naive to expect such a heavy-handed way of doing things. However, proof was offered and refused that the Commissioner of Immigration told previous counsel of petitioner, “We can’t do a thing in your case because the Attorney General has his [petitioner’s] name on that list of a hundred.” We believe the allegations are quite sufficient where the body charged with the exercise of discretion is a nonstatutory board composed of subordinates within a department headed by the individual who formulated, announced, and circulated such views of the pending proceeding.
It is important to emphasize that we are not here reviewing and reversing the manner in which discretion was exercised. If such were the case we would be discussing the evidence in the record supporting or undermining the alien’s claim to discretionary relief. Rather, we object to the Board’s alleged failure to exercise its own discretion, contrary to existing valid regulations.
If petitioner can prove the allegation, he should receive a new hearing before the Board without the burden of previous proscription by the list. After the recall or cancellation of the list, the Board must rule out any consideration thereof and in arriving at its decision exercise its own independent discretion, after a fair hearing, which is nothing more than what the regulations accord petitioner as a right. Of course, he may be unable to prove his allegation before the District Court; but he is entitled to the opportunity to try. If successful, he may still fail to convince the Board or the Attorney General, in the exercise of their discretion, that he is entitled to suspension, but at least he will have been afforded that due process required by the regulations in such proceedings.
Reversed.
39 Stat. 889, as amended, 8 U. S. C. (1946 ed., Supp. V) § 155 (c). Section 405 is the savings clause of the Immigration and Nationality Act of 1952 and its subsection (a) provides that:
“Nothing contained in this Act, unless otherwise specifically provided therein, shall be construed to affect the validity of any . . . proceeding which shall be valid at the time this Act shall take effect; or to affect any . . . proceedings . . . brought ... at the time this Act shall take effect; but as to all such . . . proceedings, . . . the statutes or parts of statutes repealed by this Act are, unless otherwise specifically provided therein, hereby continued in force and effect. . . . An application for suspension of deportation under section 19 of the Immigration Act of 1917, as amended, . . . which is pending on the date of enactment of this Act [June 27, 1952], shall be regarded as a proceeding within the meaning of this subsection.” 66 Stat. 280, 8 U. S. C. (1952 ed.), p. 734.
Since Accardi’s application for suspension of deportation was made in 1948, § 19 (c) of the 1917 Act continues to govern this proceeding rather than its more stringent equivalent in the 1952 Act, § 244, 66 Stat. 214, 8 U. S. C. (1952 ed.) § 1254.
“Any alien who at any time after entering the United States is found to have been at the time of entry not entitled under this Act to enter the United States . . . shall be taken into custody and deported in the same manner as provided for in sections 19 and 20 of the Immigration Act of 1917 . . . .” 43 Stat. 162, 8 U. S. C. (1946 ed.) § 214. This ground for deportation is perpetuated by § 241 (a) (1) and (2) of the Immigration and Nationality Act of 1952. 66 Stat. 204, 8 U. S. C. (1952 ed.) § 1251 (a)(1) and (2).
Meanwhile, Accardi moved the Board of Immigration Appeals to reconsider his case. The motion was denied on May 8.
Res judicata does not apply to proceedings for habeas corpus. Salinger v. Loisel, 265 U. S. 224 (1924); Wong Doo v. United States, 265 U. S. 239 (1924).
The first ground was that "in all similar cases the Board of Immigration Appeals has exercised favorable discretion and its refusal to do so herein constitutes an abuse of discretion.” This is a wholly frivolous contention, adequately disposed of by the Court of Appeals. 206 F. 2d 897, 901. Another allegation charged "that the Department of Justice maintains a confidential file with respect to [Joseph Accardi].” But at no place does the petition elaborate on this charge, nor does the petition allege that discretionary relief was denied because of information contained in a confidential file. Although the petition does allege that “because of consideration of matters outside the record of his immigration hearing, discretionary relief has been denied,” this allegation seems to refer to the “confidential list” discussed in the body of the opinion. Hence we assume that the charge of reliance on confidential information merely repeats the principal allegation that the Attorney General’s prejudgment of Accardi’s case by issuance of the “confidential list” caused the Board to deny discretionary relief.
The applicable regulations in effect during most of this proceeding appear at 8 CFR, 1949, Pts. 150 and 90 and 8 CFR, 1951 Pocket Supp., Pts. 150, 151 and 90. The corresponding sections in the 1952 revision of the regulations, promulgated pursuant to the Immigration and Nationality Act of 1952, may be found at 8 CFR, Rev. 1952, Pts. 242-244 and 6; 8 CFR, 1954 Pocket Supp., Pts. 242-244 and 6; 19 Fed. Reg. 930.
See Boske v. Comingore, 177 U. S. 459 (1900); United States ex rel. Bilokumsky v. Tod, 263 U. S. 149, 155 (1923); Bridges v. Wixon, 326 U. S. 135, 150-156 (1945).
See the Bilokumsky and Bridges cases cited in note 7, supra. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
6
] |
UNITED STATES v. BURKE et al.
No. 91-42.
Argued January 21, 1992
Decided May 26, 1992
Blackmun, J., delivered the opinion of the Court, in which Rehnquist, C. J., and White, Stevens, and Kennedy, JJ., joined. Scalia, J., post, p. 242, and Souter, J., post, p. 246, filed opinions concurring in the judgment. O’Connor, J., filed a dissenting opinion, in which Thomas, J., joined, post, p. 248.
Jeffrey R, Minear argued the cause for the United States. On the briefs were Solicitor General Starr, Assistant Attorney General Peterson, Deputy Solicitor General Wallace, Kent L. Jones, Ann Belanger Durney, and Bruce R. Ellisen.
Joseph E. Finley argued the cause for respondents. With him on the brief was Lucinda M. Finley.
Briefs of amici curiae urging affirmance were filed for the American Association of Retired Persons by Steven S. Zaleznick, Cathy Ventrell-Monsees, Raymond C. Fay, and Thomas F. Joyce; for the American Civil Liberties Union et al. by C. Cabell Chinnis, Jr., Alison C. Wetherfield, Martha F. Davis, Steven R. Shapiro, Isabelle Katz Pinzler, Julius L. Chambers, and Charles Stephen Ralston; for the Equal Employment Advisory Council by Robert E. Williams and Douglas S. McDowell; for Equal Rights Advocates, Inc., by Stephen V. Bomse, Nancy L. Davis, and Maria Blanco; for Women Employed et al. by Michael B. Erp, Mary K. O’Melveny, and Stephen G. Seliger; for the National Employment Lawyers Association by Robert B. Fitzpatrick; and for the National Women’s Law Center by Walter J. Rockier.
Raymond C. Fay, Alan M. Serwer, and Thomas F. Joyce filed a brief for the United Airlines Pilot Group as amicus curiae.
Justice Blackmun
delivered the opinion of the Court.
In this case we decide whether a payment received in settlement of a backpay claim under Title VII of the Civil Rights Act of 1964, 78 Stat. 253, as amended, 42 U. S. C. § 2000e et seq., is excludable from the recipient’s gross income under § 104(a)(2) of the federal Internal Revenue Code, 26 U. S. C. § 104(a)(2), as “damages received ... on account of personal injuries.”
I
The relevant facts are not in dispute. In 1984, Judy A. Hutcheson, an employee of the Tennessee Valley Authority (TVA), filed a Title VII action in the United States District Court for the Eastern District of Tennessee alleging that TVA had discriminated unlawfully in the payment of salaries on the basis of sex. The Office and Professional Employees International Union, which represented the affected employees, intervened. Among the represented employees were respondents Therese A. Burke, Cynthia R. Center, and Linda G. Gibbs.
The complaint alleged that TVA had increased the salaries of employees in certain male-dominated pay schedules, but had not increased the salaries of employees in certain female-dominated schedules. In addition, the complaint alleged that TVA had lowered salaries in some female-dominated schedules. App. in No. 90-5607 (CA6) (hereinafter App.), pp. 28-32 (Second Amended Complaint). The plaintiffs sought injunctive relief as well as backpay for all affected female employees. Id., at 33-34. The defendants filed a counterclaim against the union alleging, among other things, fraud, misrepresentation, and breach of contract. Id., at 35.
After the District Court denied cross-motions for summary judgment, the parties reached a settlement. TVA agreed to pay $4,200 to Hutcheson and a total of $5 million for the other affected employees, to be distributed under a formula based on length of service and rates of pay. Id., at 70-71, 76-77. Although TVA did not withhold taxes on the $4,200 for Hutcheson, it did withhold, pursuant to the agreement, federal income taxes on the amounts allocated to the other affected employees, including the three respondents here.
Respondents filed claims for refund of the taxes withheld from the settlement payments. The Internal Revenue Service (IRS) disallowed those claims. Respondents then brought a refund action in the United States District Court for the Eastern District of Tennessee, claiming that the settlement payments should be excluded from their respective gross incomes under § 104(a)(2) of the Internal Revenue Code as “damages received (whether by suit or agreement and whether as lump sums or as periodic payments) on account of personal injuries or sickness.” The District Court ruled that, because respondents sought and obtained only back wages due them as a result of TVA’s discriminatory underpayments rather than compensatory or other damages, the settlement proceeds could not be excluded from gross income as “damages received ... on account of personal injuries.” 90-1 USTC ¶ 50,203 (1990).
The United States Court of Appeals for the Sixth Circuit, by a divided vote, reversed. 929 F. 2d 1119 (1991). The Court of Appeals concluded that exclusion under § 104(a)(2) turns on whether the injury and the claim are “personal and tort-like in nature.” Id., at 1121. “If the answer is in the affirmative,” the court held, “then that is the beginning and end of the inquiry.” Id., at 1123 (internal quotation marks omitted). The court concluded that TVA’s unlawful sex discrimination constituted a personal, tort-like injury to respondents, and rejected the Government’s attempt to distinguish Title VII, which authorizes no compensatory or punitive damages, from other statutes thought to redress personal injuries. See id., at 1121-1123. Thus, the court held, the award of backpay pursuant to Title VII was excludable from gross income under § 104(a)(2).
The dissent in the Court of Appeals, 929 F. 2d, at 1124, took the view that the settlement of respondents’ claims for earned but unpaid wage differentials — wages that would have been paid and would have been subjected to tax absent TVA’s unlawful discrimination — did not constitute compensation for “loss due to a tort,” as required under § 104(a)(2). See id., at 1126.
We granted certiorari to resolve a conflict among the Courts of Appeals concerning the exclusion of Title VII backpay awards from gross income under § 104(a)(2). 602 U. S. 806 (1991).
II
A
The definition of gross income under the Internal Revenue Code sweeps broadly. Section 61(a), 26 U. S. C. § 61(a), provides that “gross income means all income from whatever source derived,” subject only to the exclusions specifically enumerated elsewhere in the Code. As this Court has recognized, Congress intended through § 61(a) and its statutory precursors to exert “the full measure of its taxing power,” Helvering v. Clifford, 309 U. S. 331, 334 (1940), and to bring within the definition of income any “accessio[n] to wealth.” Commissioner v. Glenshaw Glass Co., 348 U. S. 426, 431 (1955). There is no dispute that the settlement awards in this case would constitute gross income within the reach of § 61(a). See Brief for Respondents 9-10.
The question, however, is whether the awards qualify for special exclusion from gross income under § 104(a), which provides in relevant part that “gross income does not include — ”
“(2) the amount of any damages received (whether by suit or agreement and whether as lump sums or as periodic payments) on account of personal injuries or sickness ... .”
Neither the text nor the legislative history of § 104(a)(2) offers any explanation of the term “personal injuries.” Since 1960, however, IRS regulations formally have linked identification of a personal injury for purposes of § 104(a)(2) to traditional tort principles: “The term ‘damages received (whether by suit or agreement)’ means an amount received . . . through prosecution of a legal suit or action based upon tort or tort type rights, or through a settlement agreement entered into in lieu of such prosecution.” 26 CFR § 1.104-1(c) (1991). See Threlkeld v. Commissioner, 87 T. C. 1294, 1305 (1986) (“The essential element of an exclusion under section 104(a)(2) is that the income involved must derive from some sort of tort claim against the payor. ... As a result, common law tort law concepts are helpful in deciding whether a taxpayer is being compensated for a ‘personal injury’”) (internal quotation marks omitted), aff’d, 848 F. 2d 81 (CA6 1988).
A “tort” has been defined broadly as a “civil wrong, other than breach of contract, for which the court will provide a remedy in the form of an action for damages.” See W. Keeton, D. Dobbs, R. Keeton, & D. Owen, Prosser and Keeton on the Law of Torts 2 (1984). Remedial principles thus figure prominently in the definition and conceptualization of torts. See R. Heuston, Salmond on the Law of Torts 9 (12th ed. 1957) (noting that “an action for damages” is “an essential characteristic of every true tort,” and that, even where other relief, such as an injunction, may be available, “in all such cases it is solely by virtue of the right to damages that the wrong complained of is to be classed as a tort”). Indeed, one of the hallmarks of traditional tort liability is the availability of a broad range of damages to compensate the plaintiff “fairly for injuries caused by the violation of his legal rights.” Carey v. Piphus, 435 U. S. 247, 257 (1978). Although these damages often are described in compensatory terms, see Memphis Community School Dist. v. Stachura, 477 U. S. 299, 306 (1986), in many cases they are larger than the amount necessary to reimburse actual monetary loss sustained or even anticipated by the plaintiff, and thus redress intangible elements of injury that are “deemed important, even though not pecuniary in [their] immediate consequence[s].” D. Dobbs, Law of Remedies 136 (1973). Cf. Molzof v. United States, 502 U. S. 301, 306-307 (1992) (compensatory awards that exceed actual loss are not prohibited as “punitive” damages under the Federal Tort Claims Act).
For example, the victim of a physical injury may be permitted, under the relevant state law, to recover damages not only for lost wages, medical expenses, and diminished future earning capacity on account of the injury, but also for emotional distress and pain and suffering. See Dobbs, at 540-551; Threlkeld v. Commissioner, 87 T. C., at 1300. Similarly, the victim of a “dignitary” or nonphysical tort such as defamation may recover not only for any actual pecuniary loss (e. g., loss of business or customers), but for “impairment of reputation and standing in the community, personal humiliation, and mental anguish and suffering.” Gertz v. Robert Welch, Inc., 418 U. S. 323, 350 (1974). See also Dobbs, at 510-520. Furthermore, punitive or exemplary damages are generally available in those instances where the defendant’s misconduct was intentional or reckless. See id., at 204-208; Molzof v. United States, supra.
We thus agree with the Court of Appeals’ analysis insofar as it focused, for purposes of § 104(a)(2), on the nature of the claim underlying respondents’ damages award. See 929 F. 2d, at 1121; Threlkeld v. Commissioner, 87 T. C., at 1305. Respondents, for their part, agree that this is the appropriate inquiry, as does the dissent. See Brief for Respondents 9-12; post, at 250. In order to come within the § 104(a)(2) income exclusion, respondents therefore must show that Title VII, the legal basis for their recovery of backpay, redresses a tort-like personal injury in accord with the foregoing principles. We turn next to this inquiry.
B
Title VII of the Civil Rights Act of 1964 makes it an unlawful employment practice for an employer “to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.” 42 U. S. C. §2000e-2(a)(1). If administrative remedies are unsuccessful, an aggrieved employee may file suit in a district court, § 2000e-5(f)(1), although the Courts of Appeals have held that Title VII plaintiffs, unlike ordinary tort plaintiffs, are not entitled to a jury trial. See, e. g., Johnson v. Georgia Highway Express, Inc., 417 F. 2d 1122, 1125 (CA5 1969). See also Curtis v. Loether, 415 U. S. 189, 192-193 (1974) (describing availability of jury trials for common-law forms of action); id., at 196-197, n. 13 (citing Title VII cases). If the court finds that the employer has engaged in an unlawful employment practice, it may enjoin the practice and “order such affirmative action as may be appropriate, which may include, but is not limited to, reinstatement or hiring of employees, with or without back pay ... or any other equitable relief as the court deems appropriate.” §2000e-5(g).
It is beyond question that discrimination in employment on the basis of sex, race, or any of the other classifications protected by Title VII is, as respondents argue and this Court consistently has held, an invidious practice that causes grave harm to its victims. See Brief for Respondents 35-39; Griggs v. Duke Power Co., 401 U. S. 424 (1971). The fact that employment discrimination causes harm to individuals does not automatically imply, however, that there exists a tort-like “personal injury” for purposes of federal income tax law.
Indeed, in contrast to the tort remedies for physical and nonphysical injuries discussed above, Title VII does not allow awards for compensatory or punitive damages; instead, it limits available remedies to backpay, injunctions, and other equitable relief. See §2000e-5(g); Patterson v. McLean Credit Union, 491 U. S. 164, 182, n. 4 (1989) (noting that a plaintiff in a Title VII action is “limited to a recovery of backpay”); Great American Fed. Sav. & Loan Assn. v. Novotny, 442 U. S. 366, 374-375 (1979); Sparrow v. Commissioner, 292 U. S. App. D. C. 259, 262-263, 949 F. 2d 434, 437-438 (1991) (collecting cases). An employee wrongfully discharged on the basis of sex thus may recover only an amount equal to the wages the employee would have earned from the date of discharge to the date of reinstatement, along with lost fringe benefits such as vacation pay and pension benefits; similarly, an employee wrongfully denied a promotion on the basis of sex, or, as in this case, wrongfully discriminated against in salary on the basis of sex, may recover only the differential between the appropriate pay and actual pay for services performed, as well as lost benefits.
The Court previously has observed that Title VII focuses on “legal injuries of an economic character,” see Albemarle Paper Co. v. Moody, 422 U. S. 405, 418 (1975), consisting specifically of the unlawful deprivation of full wages earned or due for services performed, or the unlawful deprivation of the opportunity to earn wages through wrongful termination. The remedy, correspondingly, consists of restoring victims, through backpay awards and injunctive relief, to the wage and employment positions they would have occupied absent the unlawful discrimination. See id., at 421 (citing 118 Cong. Rec. 7168 (1972)). Nothing in this remedial scheme purports to recompense a Title VII plaintiff for any of the other traditional harms associated with personal injury, such as pain and suffering, emotional distress, harm to reputation, or other consequential damages (e.g., a ruined credit rating). See Walker v. Ford Motor Co., 684 F. 2d 1355, 1364-1365, n. 16 (CA11 1982).
No doubt discrimination could constitute a “personal injury” for purposes of § 104(a)(2) if the relevant cause of action evidenced a tort-like conception of injury and remedy. Cf. Curtis v. Loether, 415 U. S., at 195-196, n. 10 (noting that “under the logic of the common law development of a law of insult and indignity, racial discrimination might be treated as a dignitary tort” (internal quotation marks omitted)). Indeed, the circumscribed remedies available under Title VII stand in marked contrast not only to those available under traditional tort law, but under other federal antidiscrimination statutes, as well. For example, Rev. Stat. § 1977, 42 U. S. C. § 1981, permits victims of race-based employment discrimination to obtain a jury trial at which “both equitable and legal relief, including compensatory and, under certain circumstances, punitive damages” may be awarded. Johnson v. Railway Express Agency, Inc., 421 U. S. 454, 460 (1975). The Court similarly has observed that Title VIII of the Civil Rights Act of 1968, whose fair housing provisions allow for jury trials and for awards of compensatory and punitive damages, “sounds basically in tort” and “contrasts sharply” with the relief available under Title VII. Curtis v. Loether, 415 U. S., at 195, 197; 42 U. S. C. § 3613(c).
Notwithstanding a common-law tradition of broad tort damages and the existence of other federal antidiscrimination statutes offering similarly broad remedies, Congress declined to recompense Title VII plaintiffs for anything beyond the wages properly due them — wages that, if paid in the ordinary course, would have been fully taxable. See L. Frolik, Federal Tax Aspects of Injury, Damage, and Loss 70 (1987). Thus, we cannot say that a statute such as Title VII, whose sole remedial focus is the award of back wages, redresses a tort-like personal injury within the meaning of § 104(a)(2) and the applicable regulations.
Accordingly, we hold that the backpay awards received by respondents in settlement of their Title VII claims are not excludable from gross income as “damages received ... on account of personal injuries” under § 104(a)(2). The judgment of the Court of Appeals is reversed.
It is so ordered.
The pretax figures for the three respondents ranged from $673 to $928; the federal income tax withheld ranged from $114 to $186. 90-1 USTC ¶ 50,203, p. 83,747 (1990). Although respondents also sought a refund of taxes withheld from their incomes pursuant to the Federal Insurance Contributions Act (FICA), 26 U. S. C. § 3101 et seq., neither the parties nor the courts below addressed the distinct analytical question whether back-pay received under Title VII constitutes “wages” subject to taxation for FICA purposes. See 26 U. S. C. § 3101(a) (imposing percentage tax on “wages”), § 3121(a) (defining “wages” as “all remuneration for employment”). Hence, we confine our analysis in this case to the federal income tax question.
The Civil Rights Act of 1991 recently amended Title'VII to authorize the recovery of compensatory and punitive damages in certain circumstances. See nn. 8 and 12, infra.
Compare the Sixth Circuit’s opinion in this ease with Sparrow v. Commissioner, 292 U. S. App. D. C. 259, 949 F. 2d 434 (1991) (Title VII backpay awards not excludable), and Thompson v. Commissioner, 866 F. 2d 709 (CA4 1989) (same). See also Johnston v. Harris County Flood Control Dist., 869 F. 2d 1565, 1579-1580 (CA5 1989) (noting, for purposes of district court consideration of tax liability in computing damages, that Title VII backpay awards may not be excluded under § 104(a)(2)), cert. denied, 493 U. S. 1019 (1990).
Section 104, entitled “Compensation for injuries or sickness,” provides similar exclusions from gross income for amounts received for personal injuries or sickness under worker’s compensation programs (§ 104(a)(1)), accident or health insurance (§ 104(a)(3)), and certain federal pension programs (§ 104(a)(4)).
See, e. g., H. R. Rep. No. 1337, 83d Cong., 2d Sess., 15 (1954); S. Rep. No. 1622, 83d Cong., 2d Sess., 15-16 (1954).
Although the IRS briefly interpreted §104(a)(2)’s statutory predecessor, § 213(b)(6) of the Revenue Act of 1918, 40 Stat. 1066, to restrict the scope of personal injuries to physical injuries, see S. 1384, 2 Cum. Bull. 71 (1920) (determining, on basis of statutory text and “history of the legislation” that “it appears more probable .. . that the term ‘personal injuries,’ as used therein means physical injuries only”); Knickerbocker, The Income Tax Treatment of Damages, 47 Cornell L. Q. 429, 431 (1962), the courts and the IRS long since have recognized that § 104(a)(2)’s reference to “personal injuries” encompasses, in accord with common judicial parlance and conceptions, see Black’s Law Dictionary 786 (6th ed. 1990); 1 S. Speiser, C. Krause, & A. Gans, American Law of Torts 6 (1983), nonphysical injuries to the individual, such as those affecting emotions, reputation, or character, as well. See, e. g., Rickel v. Commissioner, 900 F. 2d 655, 658 (CA3 1990) (noting that “it is judicially well-established that the meaning of ‘personal injuries’ in this context encompasses both nonphysical as well as physical injuries”); Roemer v. Commissioner, 716 F. 2d 693, 697 (CA9 1983) (noting that § 104(a)(2) “says nothing about physical injuries,” and that “[t]he ordinary meaning of a personal injury is not limited to a physical one”); Rev. Rule 85-98, 1985-2 Cum. Bull. 51 (holding that the § 104(a)(2) exclusion “makes no distinction between physical or emotional injuries”); 1972-2 Cum. Bull. 3, acquiescing in Seay v. Commissioner, 58 T. C. 32, 40 (1972) (holding that damages received for “personal embarrassment,” “mental strain,” and injury to “personal reputation” may be excluded under § 104(a)(2), and noting prior rulings regarding alienation of affections and defamation). See also B. Bittker & L. Lokken, Federal Taxation of Income, Estates and Gifts 13-11 (2d ed. 1989); Burke & Friel, Tax Treatment of Employment-Related Personal Injury Awards, 50 Mont. L. Rev. 13, 21 (1989).
Congress' 1989 amendment to § 104(a)(2) provides further support for the notion that “personal injuries” includes physical as well as nonphysical injuries. Congress rejected a bill that would have limited the § 104(a)(2) exclusion to cases involving “physical injury or physical sickness.” See H. R. Rep. No. 101-247, pp. 1354-1355 (1989) (describing proposed § 11641 of H. R. 3299, 101st Cong., 1st Sess. (1989)). At the same time, Congress amended § 104(a) to allow the exclusion of punitive damages only in cases involving “physical injury or physical sickness.” Pub. L. 101-239, § 7641(a), 103 Stat. 2379,26 U. S. C. § 104(a) (1988 ed., Supp. I). The enactment of this limited amendment addressing only punitive damages shows that Congress assumed that other damages (i. e., compensatory) would be excluded in cases of both physical and nonphysical injury.
Notwithstanding Justice Scalia’s contention in his separate opinion that the term “personal injuries” must be read as limited to “health”related injuries, see post, at 244, the foregoing authorities establish that § 104(a)(2) in fact encompasses a broad range of physical and nonphysical injuries to personal interests. Justice Scalia implicitly acknowledges that the plain meaning of the statutory phrase can support this well-established view. See post, at 243-244.
The dissent nonetheless contends that we “misapprehen[d] the nature of the inquiry required by § 104(a)(2) and the IRS regulation” by “[focusing on [the] remedies” available under Title VII. See post, at 249-250. As discussed above, however, the concept of a “tort” is inextricably bound up with remedies — specifically damages actions. Thus, we believe that consideration of the remedies available under Title VII is critical in determining the “nature of the statute” and the “type of claim” brought by respondents for purposes of § 104(a)(2). See post, at 250.
As discussed below, the Civil Rights Act of 1991, Pub. L. 102-166, 105 Stat. 1071, amended Title VII in significant respects. Respondents do not contend that these amendments apply to this case. See Tr. of Oral Arg. 35-36. We therefore examine the law as it existed prior to November 21, 1991, the effective date of the 1991 Act. See Pub. L. 102-166, § 402(a), 105 Stat. 1099. Unless otherwise indicated, all references are to the “unamended” Title VII.
Some courts have allowed Title VII plaintiffs who were wrongfully discharged and for whom reinstatement was not feasible to recover “front pay” or future lost earnings. See, e. g., Shore v. Federal Express Corp., 777 F. 2d 1155, 1158-1160 (CA6 1985).
Title VIPs remedial scheme was expressly modeled on the backpay provision of the National Labor Relations Act. See Albemarle Paper Co. v. Moody, 422 U.S. 405, 419-420, and n. 11 (1975); 29 U. S. C. § 160(c) (Board shall order persons to “cease and desist” from unfair labor practices and to take “affirmative action including reinstatement of employees with or without back pay”). This Court previously has held that backpay awarded under the Labor Act to an unlawfully discharged employee constitutes “wages” for purposes of the Social Security Act. See Social Security Board v. Nierotko, 327 U. S. 358 (1946).
Respondents’ attempts to prove that Title VII redresses a personal injury by relying on this Court’s characterizations of other antidiscrimination statutes are thus unpersuasive in light of those statutes’ differing remedial schemes. For example, respondents’ reliance on Goodman v. Lukens Steel Co., 482 U. S. 656 (1987), is misplaced, as that case involved the interpretation of § 1981. See Brief for Respondents 35-37. Respondents’ attempt to apply the Court’s statement in Curtis v. Loether, 415 U. S., at 195, that Title VIII “sounds basically in tort” to the Title VII context similarly fails. See Brief for Respondents 32. Indeed, Curtis itself distinguishes Title VII from Title VIII on a host of different grounds. See 415 U. S., at 196-197. The dissent commits the same error as respondents in attempting to analogize suits arising under Title VII to those involving other federal antidiscrimination statutes for purposes of § 104(a)(2). See post, at 250-252.
Respondents contend that Congress’ recent expansion of Title VII’s remedial scope supports their argument that Title VII claims are inherently tort-like in nature. See Brief for Respondents 34. Under the Civil Rights Act of 1991, victims of intentional discrimination are entitled to a jury trial, at which they may recover compensatory damages for “future pecuniary losses, emotional pain, suffering, inconvenience, mental anguish, loss of enjoyment of life, and other nonpecuniary losses,” as well as punitive damages. See Pub. L. 102-166, 105 Stat. 1073. Unlike respondents, however, we believe that Congress’ decision to permit jury trials and compensatory and punitive damages under the amended Act signals a marked change in its conception of the injury redressable by Title VII, and cannot be imported back into analysis of the statute as it existed at the time of this lawsuit. See, e. g., H. R. Rep. No. 102-40, pt. 1, pp. 64-65 (1991) (Report of Committee on Education and Labor) (“Monetary damages also are necessary to make discrimination victims whole for the terrible injury to their careers, to their mental and emotional health, and to their self-respect and dignity”); id., pt. 2, p. 25 (Report of Committee on the Judiciary) (“The limitation of relief under Title VII to equitable remedies often means that victims of intentional discrimination may not recover for the very real effects of the discrimination”).
Our holding that damages received in settlement of a Title VII claim are not properly excludable under § 104(a)(2) finds support in longstanding rulings of the IRS. See, e. g., Rev. Rule 72-341, 1972-2 Cum. Bull. 32 (payments by corporation to its employees in settlement of Title VII suit must be included in the employees’ gross income, as the payments “were based on compensation that they otherwise would have received”). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
68
] |
BERMAN et al., EXECUTORS, v. PARKER et al.
No. 22.
Argued October 19, 1954.
Decided November 22, 1954.
James C. Toomey and Joseph H. Schneider argued the cause for appellants. With them on the brief was Albert Ginsberg.
Solicitor General Sobeloff argued the cause for appel-lees. Assistant Attorney General Morton, Oscar H. Davis, Roger P. Marquis, George F. Riseling and William S. Cheatham were with him on a brief for the District of Columbia Redevelopment Land Agency and the National Capital Planning Commission, appellees.
Vernon E. West, Chester H. Gray, Milton D. Korman, Harry L. Walker and J. Hampton Baumgartner, Jr. filed a brief for Renah F. Camalier and Louis W. Prentiss, Commissioners of the District of Columbia, appellees.
Mr. Justice Douglas
delivered the opinion of the Court.
This is an appeal (28 U. S. C. § 1253) from the judgment of a three-judge District Court which dismissed a complaint seeking to enjoin the condemnation of appellants’ property under the District of Columbia Redevelopment Act of 1945, 60 Stat. 790, D. C. Code, 1951, §§ 5-701-5-719. The challenge was to the constitutionality of the Act, particularly as applied to the taking of appellants’ property. The District Court sustained the constitutionality of the Act. 117 F. Supp. 705.
By § 2 of the Act, Congress made a “legislative determination” that “owing to technological and sociological changes, obsolete lay-out, and other factors, conditions existing in the District of Columbia with respect to substandard housing and blighted areas, including the use of buildings in alleys as dwellings for human habitation, are injurious to the public health, safety, morals, and welfare; and it is hereby declared to be the policy of the United States to protect and promote the welfare of the inhabitants of the seat of the Government by eliminating all such injurious conditions by employing all means necessary and appropriate for the purpose.”
Section 2 goes on to declare that acquisition of property is necessary to eliminate these housing conditions. .
Congress further finds in § 2 that these ends cannot be attained “by the ordinary operations of private enterprise alone without public participation”; that “the sound replanning and redevelopment of an obsolescent or obsolescing portion” of the District “cannot be accomplished unless it be done in the light of comprehensive and coordinated planning of the whole of the territory of the District of Columbia and its environs”; and that “the acquisition and the assembly of real property and the leasing or sale thereof for redevelopment pursuant to a project area redevelopment plan ... is hereby declared to be a public use.”
Section 4 creates the District of Columbia Redevelopment Land Agency (hereinafter called the Agency), composed of five members, which is granted power by § 5 (a) to acquire and assemble, by eminent domain and otherwise, real property for “the redevelopment of blighted territory in the District of Columbia and the prevention, reduction, or elimination of blighting factors or causes of blight.”
Section 6 (a) of the Act directs the National Capital Planning Commission (hereinafter called the Planning Commission) to make and develop “a comprehensive or general plan” of the District, including “a land-use plan” which designates land for use for “housing, business, industry, recreation, education, public buildings, public reservations, and other general categories of public and private uses of the land.” Section 6 (b) authorizes the Planning Commission to adopt redevelopment plans for specific project areas. These plans are subject to the approval of the District Commissioners after a public hearing; and they prescribe the various public and private land uses for the respective areas, the “standards of population density and building intensity,” and “the amount or character or class of any low-rent housing.” § 6 (b).
Once the Planning Commission adopts a plan and that plan is approved by the Commissioners, the Planning Commission certifies it to the Agency. § 6 (d). At that point, the Agency is authorized to acquire and assemble the real property in the area. Id.
After the real estate has been assembled, the Agency is authorized to transfer to public agencies the land to be devoted to such public purposes as streets, utilities, recreational facilities, and schools, § 7 (a), and to lease or sell the remainder as an entirety or in parts to a redevelopment company, individual, or partnership. § 7 (b), (f). The leases or sales must provide that the lessees or purchasers will carry out the redevelopment plan and that “no use shall be made of any land or real property included in the lease or sale nor any building or structure erected thereon” which does not conform to the plan, §§7 (d), 11. Preference is to be given to private enterprise over public agencies in executing the redevelopment plan. §7 (g).
The first project undertaken under the Act relates to Project Area B in Southwest Washington, D. C. In 1950 the Planning Commission prepared and published a comprehensive plan for the District. Surveys revealed that in Area B, 64.3% of the dwellings were beyond repair, 18.4% needed major repairs, only 17.3% were satisfactory ; 57.8% of the dwellings had outside toilets, 60.3% had no baths, 29.3% lacked electricity, 82.2% had no wash basins or laundry tubs, 83.8% lacked central heating. In the judgment of the District’s Director of Health it was necessary to redevelop Area B in the interests of public health. The population of Area B amounted to 5,012 persons, of whom 97.5% were Negroes.
The plan for Area B specifies the boundaries and allocates the use of the land for various purposes. It makes detailed provisions for types of dwelling units and provides that at least one-third of them are to be low-rent housing with a maximum rental of $17 per room per month.
After a public hearing, the Commissioners approved the plan and the Planning Commission certified it to the Agency for execution. The Agency undertook the preliminary steps for redevelopment of the area when this suit was brought.
Appellants own property in Area B at 712 Fourth Street, S. W. It is not used as a dwelling or place of habitation. A department store is located on it. Appellants object to the appropriation of this property for the purposes of the project. They claim that their property may not be taken constitutionally for this project. It is commercial, not residential property; it is not slum housing; it will be put into the project under the management of a private, not a public, agency and redeveloped for private, not public, use. That is the argument; and the contention is that appellants’ private property is being taken contrary to two mandates of the Fifth Amendment — (1) “No person shall ... be deprived of . . . property, without due process of law”; (2) “nor shall private property be taken for public use, without just compensation.” To take for the purpose of ridding the area of slums is one thing; it is quite another, the argument goes, to take a man’s property merely to develop a better balanced, more attractive community. The District Court, while agreeing in general with that argument, saved the Act by construing it to mean that the Agency could condemn property only for the reasonable necessities of slum clearance and prevention, its concept of “slum” being the existence of conditions “injurious to the public health, safety, morals and welfare.” 117 F. Supp. 705, 724-725.
The power of Congress over the District of Columbia includes all the legislative powers which a state may exercise over its affairs. See District of Columbia v. Thomp son Co., 346 U. S. 100, 108. We deal, in other words, with what traditionally has been known as the police power. An attempt to define its reach or trace its outer limits is fruitless, for each case must turn on its own facts. The definition is essentially the product of legislative determinations addressed to the purposes of government, purposes neither abstractly nor historically capable of complete definition. Subject to specific constitutional limitations, when the legislature has spoken, the public interest has been declared in terms well-nigh conclusive. In such cases the legislature, not the judiciary, is the main guardian of the public needs to be served by social legislation, whether it be Congress legislating concerning the District of Columbia (see Block v. Hirsh, 256 U. S. 135) or the States legislating concerning local affairs. See Olsen v. Nebraska, 313 U. S. 236; Lincoln Union v. Northwestern Co., 335 U. S. 525; California State Association v. Maloney, 341 U. S. 105. This principle admits of no exception merely because the power of eminent domain is involved. The role of the judiciary in determining whether that power is being exercised for a public purpose is an extremely narrow one. See Old Dominion Co. v. United States, 269 U. S. 55, 66; United States ex rel. T. V. A. v. Welch, 327 U. S. 546, 552.
Public safety, public health, morality, peace and quiet, law and order — these are some of the more conspicuous examples of the traditional application of the police power to municipal affairs. Yet they merely illustrate the scope of the power and do not delimit it. See Noble State Bank v. Haskell, 219 U. S. 104, 111. Misc.able and disreputable housing conditions may do more than spread disease and crime and immorality. They may also suffocate the spirit by reducing the people who live there to the status of cattle. They may indeed make living an almost insufferable burden. They may also be an ugly sore, a blight on the community which robs it of charm, which makes it a place from which men turn. The misery of housing may despoil a community as an open sewer may ruin a river.
We do not sit to determine whether a particular housing project is or is not desirable. The concept of the public welfare is broad and inclusive. See Day-Brite Lighting, Inc. v. Missouri, 342 U. S. 421, 424. The values it represents are spiritual as well as physical, aesthetic as well as monetary. It is within the power of the legislature to determine that the community should be beautiful as well as healthy, spacious as well as clean, well-balanced as well as carefully patrolled. In the present case, the Congress and its authorized agencies have made determinations that take into account a wide variety of values. It is not for us to reappraise them. If those who govern the District of Columbia decide that the Nation’s Capital should be beautiful as well as sanitary, there is nothing in the Fifth Amendment that stands in the way.
Once the object is within the authority of Congress, the right to realize it through the exercise of eminent domain is clear. For the power of eminent domain is merely the means to the end. See Luxton v. North River Bridge Co., 153 U. S. 525, 529-530; United States v. Gettysburg Electric R. Co., 160 U. S. 668, 679. Once the object is within the authority of Congress, the means by which it will be attained is also for Congress to determine, Here one of the means chosen is the use of private enterprise for redevelopment of the area. Appellants argue that this makes the project a taking from one businessman for the benefit of another businessman. But the means of executing the project are for Congress and Congress alone to determine, once the public purpose has been established. See Luxton v. North River Bridge Co., supra; cf. Highland v. Russell Car Co., 279 U. S. 253. The public end may be as well or better served through an agency of private enterprise than through a department of government — or so the Congress might conclude. We cannot say that public ownership is the sole method of promoting the public purposes of community redevelopment projects. What we have said also disposes of any contention concerning the fact that certain property owners in the area may be permitted to repurchase their properties for redevelopment in harmony with the over-all plan. That, too, is a legitimate means which Congress and its agencies may adopt, if they choose.
In the present case, Congress and its authorized agencies attack the problem of the blighted parts of the community on an area rather than on a structure-by-structure basis. That, too, is opposed by appellants. They maintain that since their building does not imperil health or safety nor contribute to the making of a slum or a blighted area, it cannot be swept into a redevelopment plan by the mere dictum of the Planning Commission or the Commissioners. The particular uses to be made of the land in the project were determined with regard to the needs of the particular community. The experts concluded that if the community were to be healthy, if it were not to revert again to a blighted or slum area, as though possessed of a congenital disease, the area must be planned as a whole. It was not enough, they believed, to remove existing buildings that were insanitary or unsightly. It was important to redesign the whole area so as to eliminate the conditions that cause slums — the overcrowding of dwellings, the lack of parks, the lack of adequate streets and alleys, the absence of recreational areas, the lack of light and air, the presence of outmoded street patterns. It was believed that the piecemeal approach, the removal of individual structures that were offensive, would be only a palliative. The entire area needed redesigning so that a balanced, integrated plan could be developed for the region, including not only new homes but also schools, churches, parks, streets, and shopping centers. In this way it was hoped that the cycle of decay of the area could be controlled and the birth of future slums prevented. Cf. Gohld Realty Co. v. Hartford, 141 Conn. 135, 141-144, 104 A. 2d 365, 368-370; Hunter v. Redevelopment Authority, 195 Va. 326, 338-339, 78 S. E. 2d 893, 900-901. Such diversification in future use is plainly relevant to the maintenance of the desired housing standards and therefore within congressional power.
The District Court below suggested that, if such a broad scope were intended for the statute, the standards contained in the Act would not be sufficiently definite to sustain the delegation of authority. 117 F. Supp. 705, 721. We do not agree. We think the standards prescribed were adequate for executing the plan to eliminate not only slums as narrowly defined by the District Court but also the blighted areas that tend to produce slums. Property may of course be taken for this redevelopment which, standing by itself, is innocuous and unoffending. But we have said enough to indicate that it is the need of the area as a whole which Congress and its agencies are evaluating. If owner after owner were permitted to resist these redevelopment programs on the ground that his particular property was not being used against the public interest, integrated plans for redevelopment would suffer greatly. The argument pressed on us is, indeed, a plea to substitute the landowner’s standard of the public need for the standard prescribed by Congress. But as we have already stated, community redevelopment programs need not, by force of the Constitution, be on a piecemeal basis — lot by lot, building by building.
It is not for the courts to oversee the choice of the boundary line nor to sit in review on the size of a particular project area. Once the question of the public purpose has been decided, the amount and character of land to be taken for the project and the need for a particular tract to complete the integrated plan rests in the discretion of the legislative branch. See Shoemaker v. United States, 147 U. S. 282, 298; United States ex rel. T. V. A. v. Welch, supra, 554; United States v. Carmack, 329 U. S. 230, 247.
The District Court indicated grave doubts concerning the Agency’s right to take full title to the land as distinguished from the objectionable buildings located on it. 117 F. Supp. 705, 715-719. We do not share those doubts. If the Agency considers it necessary in carrying out the redevelopment project to take full title to the real property involved, it may do so. It is not for the courts to determine whether it is necessary for successful consummation of the project that unsafe, unsightly, or insanitary buildings alone be taken or whether title to the land be included, any more than it is the function of the courts to sort and choose among the various parcels selected for condemnation.
The rights of these property owners are satisfied when they receive that just compensation which the Fifth Amendment exacts as the price of the taking.
The judgment of the District Court, as modified by this opinion, is
Affirmed.
The Act does not define either “slums” or “blighted areas.” Section 3 (r), however, states:
“ ‘Substandard housing conditions’ means the conditions obtaining in connection with the existence of any dwelling, or dwellings, or housing accommodations for human beings, which because of lack of sanitary facilities, ventilation, or light, or because of dilapidation, overcrowding, faulty interior arrangement, or any combination of these factors, is in the opinion of the Commissioners detrimental to the safety, health, morals, or welfare of the inhabitants of the District of Columbia.” | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
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"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
116
] |
COMMISSIONER OF INTERNAL REVENUE v. BOLLINGER et al.
No. 86-1672.
Argued January 13, 1988
Decided March 22, 1988
Scalia, J., delivered the opinion of the Court, in which all other Members joined, except Kennedy, J., who took no part in the consideration or decision of the case.
Alan I. Horowitz argued the cause for petitioner. With him on the briefs were Solicitor General Fried, Acting Assistant Attorney General Durney, Deputy Solicitor General Lauber, Richard Farber, and Teresa E. McLaughlin.
Charles R. Hembree argued the cause for respondents. With him on the brief was Philip E. Wilson.
F. Kelleher Riess filed a brief for Gary R. Frink et al. as amici curiae urging affirmance.
Justice Scalia
delivered the opinion of the Court.
Petitioner, the Commissioner of Internal Revenue, challenges a decision by the United States Court of Appeals for the Sixth Circuit holding that a corporation which held record title to real property as agent for the corporation’s shareholders was not the owner of the property for purposes of federal income taxation. 807 F. 2d 65 (1986). We granted certiorari, 482 U. S. 913 (1987), to resolve a conflict in the Courts of Appeals over the tax treatment of corporations purporting to be agents for their shareholders. Compare George v. Commissioner, 803 F. 2d 144, 148-149 (CA5 1986), cert. pending, No. 86-1152, with Frink v. Commissioner, 798 F. 2d 106, 109-110 (CA4 1986), cert. pending, No. 86-1151.
I
Respondent Jesse C. Bollinger, Jr., developed, either individually or in partnership with some or all of the other respondents, eight apartment complexes in Lexington, Kentucky. (For convenience we will refer to all the ventures as “partnerships.”) Bollinger initiated development of the first apartment complex, Creekside North Apartments, in 1968. The Massachusetts Mutual Life Insurance Company agreed to provide permanent financing by lending $1,075,000 to “the corporate nominee of Jesse C. Bollinger, Jr.” at an annual interest rate of eight percent, secured by a mortgage on the property and a personal guarantee from Bollinger. The loan commitment was structured in this fashion because Kentucky’s usury law at the time limited the annual interest rate for noncorporate borrowers to seven percent. Ky. Rev. Stat. §§360.010, 360.025 (1972). Lenders willing to provide money only at higher rates required the nominal debtor and record titleholder of mortgaged property to be a corporate nominee of the true owner and borrower. On October 14, 1968, Bollinger incorporated Creekside, Inc., under the laws of Kentucky; he was the only stockholder. The next day, Bollinger and Creekside, Inc., entered into a written agreement which provided that the corporation would hold title to the apartment complex as Bollinger’s agent for the sole purpose of securing financing, and would convey, assign, or encumber the property and disburse the proceeds thereof only as directed by Bollinger; that Creekside, Inc., had no obligation to maintain the property or assume any liability by reason of the execution of promissory notes or otherwise; and that Bollinger would indemnify and hold the corporation harmless from any liability it might sustain as his agent and nominee.
Having secured the commitment for permanent financing, Bollinger, acting through Creekside, Inc., borrowed the construction funds for the apartment complex from Citizens Fidelity Bank and Trust Company. Creekside, Inc., executed all necessary loan documents including the promissory note and mortgage, and transferred all loan proceeds to Bollinger’s individual construction account. Bollinger acted as general contractor for the construction, hired the necessary employees,‡ and paid the expenses out of the construction account. When construction was completed, Bollinger obtained, again through Creekside, Inc., permanent financing from Massachusetts Mutual Life in accordance with the earlier loan commitment. These loan proceeds were used to pay off the Citizens Fidelity construction loan. Bollinger hired a resident manager to rent the apartments, execute leases with tenants, collect and deposit the rents, and maintain operating records. The manager deposited all rental receipts into, and paid all operating expenses from, an operating account, which was first opened in the name of Creekside, Inc., but was later changed to “Creekside Apartments, a partnership.” The operation of Creekside North Apartments generated losses for the taxable years 1969, 1971, 1972,1973, and 1974, and ordinary income for the years 1970, 1975, 1976, and 1977. Throughout, the income and losses were reported by Bollinger on his individual income tax returns.
Following a substantially identical pattern, seven other apartment complexes were developed by respondents through seven separate partnerships. For each venture, a partnership executed a nominee agreement with Creekside, Inc., to obtain financing. (For one of the ventures, a different Kentucky corporation, Cloisters, Inc., in which Bollinger had a 50 percent interest, acted as the borrower and titleholder. For convenience, we will refer to both Creekside and Cloisters as “the corporation.”) The corporation transferred the construction loan proceeds to the partnership’s construction account, and the partnership hired a construction supervisor who oversaw construction. Upon completion of construction, each partnership actively managed its apartment complex, depositing all rental receipts into, and paying all expenses from, a separate partnership account for each apartment complex. The corporation had no assets, liabilities, employees, or bank accounts. In every case, the lenders regarded the partnership as the owner of the apartments and were aware that the corporation was acting as agent of the partnership in holding record title. The partnerships reported the income and losses generated by the apartment complexes on their partnership tax returns, and respondents reported their distributive share of the partnership income and losses on their individual tax returns.
The Commissioner of Internal Revenue disallowed the losses reported by respondents, on the ground that the standards set out in National Carbide Corp. v. Commissioner, 336 U. S. 422 (1949), were not met. The Commissioner contended that National Carbide required a corporation to have an arm’s-length relationship with its shareholders before it could be recognized as their agent. Although not all respondents were shareholders of the corporation, the Commissioner took the position that the funds the partnerships disbursed to pay expenses should be deemed contributions to the corporation’s capital, thereby making all respondents constructive stockholders. Since, in the Commissioner’s view, the corporation rather than its shareholders owned the real estate, any losses sustained by the ventures were attributable to the corporation and not respondents. Respondents sought a redetermination in the United States Tax Court. The Tax Court held that the corporation was the agent of the partnerships and should be disregarded for tax purposes. 48 TCM 1443 (1984), ¶ 84, 560 P-H Memo TC. On appeal, the United States Court of Appeals for the Sixth Circuit affirmed. 807 F. 2d 65 (1986). We granted the Commissioner’s petition for certiorari.
II
For federal income tax purposes, gain or loss from the sale or use of property is attributable to the owner of the property. See Helvering v. Horst, 311 U. S. 112, 116-117 (1940); Blair v. Commissioner, 300 U. S. 5, 12 (1937); see also Commissioner v. Sunnen, 333 U. S. 591, 604 (1948). The problem we face here is that two different taxpayers can plausibly be regarded as the owner. Neither the Internal Revenue Code nor the regulations promulgated by the Secretary of the Treasury provide significant guidance as to which should be selected. It is common ground between the parties, however, that if a corporation holds title to property as agent for a partnership, then for tax purposes the partnership and not the corporation is the owner. Given agreement on that premise, one would suppose that there would be agreement upon the conclusion as well. For each of respondents’ apartment complexes, an agency agreement expressly provided that the corporation would “hold such property as nominee and agent for” the partnership, App. to Pet. for Cert. 21a, n. 4, and that the partnership would have sole control of and responsibility for the apartment complex. The partnership in each instance was identified as the principal and owner of the property during financing, construction, and operation. The lenders, contractors, managers, employees, and tenants — all who had contact with the development — knew that the corporation was merely the agent of the partnership, if they knew of the existence of the corporation at all. In each instance the relationship between the corporation and the partnership was, in both form and substance, an agency with the partnership as principal.
The Commissioner contends, however, that the normal indicia of agency cannot suffice for tax purposes when, as here, the alleged principals are the controlling shareholders of the alleged agent corporation. That, it asserts, would undermine the principle of Moline Properties v. Commissioner, 319 U. S. 436 (1943), which held that a corporation is a separate taxable entity even if it has only one shareholder who exercises total control over its affairs. Obviously, Moline’s separate-entity principle would be significantly compromised if shareholders of closely held corporations could, by clothing the corporation with some attributes of agency with respect to particular assets, leave themselves free at the end of the tax year to make a claim — perhaps even a good-faith claim— of either agent or owner status, depending upon which choice turns out to minimize their tax liability. The Commissioner does not have the resources to audit and litigate the many cases in which agency status could be thought debatable. "Hence, the Commissioner argues, in this shareholder context he can reasonably demand that the taxpayer meet a prophylactically clear test of agency.
We agree with that principle, but the question remains whether the test the Commissioner proposes is appropriate. The parties have debated at length the significance of our opinion in National Carbide Corp. v. Commissioner, supra. In that case, three corporations that were wholly owned subsidiaries of another corporation agreed to operate their production plants as “agents” for the parent, transferring to it all profits except for a nominal sum. The subsidiaries reported as gross income only this sum, but the Commissioner concluded that they should be taxed on the entirety of the profits because they were not really agents. We agreed, reasoning first, that the mere fact of the parent’s control over the subsidiaries did not establish the existence of an agency, since such control is typical of all shareholder-corporation relationships, id., at 429-434; and second, that the agreements to pay the parent all profits above a nominal amount were not determinative since income must be taxed to those who actually earn it without regard to anticipatory assignment, id., at 435-436. We acknowledged, however, that there was such a thing as “a true corporate agent... of [an] owner-principal,” id., at 437, and proceeded to set forth four indicia and two requirements of such status, the sum of which has become known in the lore of federal income tax law as the “six National Carbide factors”:
“[1] Whether the corporation operates in the name and for the account of the principal, [2] binds the principal by its actions, [3] transmits money received to the principal, and [4] whether receipt of income is attributable to the services of employees of the principal and to assets belonging to the principal are some of the relevant considerations in determining whether a true agency exists. [5] If the corporation is a true agent, its relations with its principal must not be dependent upon the fact that it is owned by the principal, if such is the case. [6] Its business purpose must be the carrying on of the normal duties of an agent.” Ibid, (footnotes omitted).
We readily discerned that these factors led to a conclusion of nonagency in National Carbide itself. There each subsidiary had represented to its customers that it (not the parent) was the company manufacturing and selling its products; each had sought to shield the parent from service of legal process; and the operations had used thousands of the subsidiaries’ employees and nearly $20 million worth of property and equipment listed as assets on the subsidiaries’ books. Id., at 425, 434, 438, and n. 21.
The Commissioner contends that the last two National Carbide factors are not satisfied in the present case. To take the last first: The Commissioner argues that here the corporation’s business purpose with respect to the property at issue was not “the carrying on of the normal duties of an agent,” since it was acting not as the agent but rather as the owner of the property for purposes of Kentucky’s usury law. We do not agree. It assuredly was not acting as the owner in fact, since respondents represented themselves as the principals to all parties concerned with the loans. Indeed, it was the lenders themselves who required the use of a corporate nominee. Nor does it make any sense to adopt a contrary-to-fact legal presumption that the corporation was the principal, imposing a federal tax sanction for the apparent evasion of Kentucky’s usury law. To begin with, the Commissioner has not established that these transactions were an evasion. Respondents assert without contradiction that use of agency arrangements in order to permit higher interest was common practice, and it is by no means clear that the practice violated the spirit of the Kentucky law, much less its letter. It might well be thought that the borrower does not generally require usury protection in a transaction sophisticated enough to employ a corporate agent — assuredly not the normal modus operandi of the loan shark. That the statute positively envisioned corporate nominees is suggested by a provision which forbids charging the higher corporate interest rates “to a corporation, the principal asset of which shall be the ownership of a one (1) or two (2) family dwelling,” Ky. Rev. Stat. §360.025(2) (1987) — which would seem to prevent use of the nominee device for ordinary home-mortgage loans. In any event, even if the transaction did run afoul of the usury law, Kentucky, like most States, regards only the lender as the usurer, and the borrower as the victim. See Ky. Rev. Stat. § 360.020 (1987) (lender liable to borrower for civil penalty), § 360.990 (lender guilty of misdemeanor). Since the Kentucky statute imposed no penalties upon the borrower for allowing himself to be victimized, nor treated him as in pari delicto, but to the contrary enabled him to pay back the principal without any interest, and to sue for double the amount of interest already paid (plus attorney’s fees), see Ky. Rev. Stat. § 360.020 (1972), the United States would hardly be vindicating Kentucky law by depriving the usury victim of tax advantages he would otherwise enjoy. In sum, we see no basis in either fact or policy for holding that the corporation was the principal because of the nature of its participation in the loans.
Of more general importance is the Commissioner’s contention that the arrangements here violate the fifth National Carbide factor — that the corporate agent’s “relations with its principal must not be dependent upon the. fact that it is owned by the principal.” The Commissioner asserts that this cannot be satisfied unless the corporate agent and its shareholder principal have an “arm’s-length relationship” that includes the payment of a fee for agency services. The meaning of National Carbide’s fifth factor is, at the risk of understatement, not entirely clear. Ultimately, the relations between a corporate agent and its owner-principal are always dependent upon the fact of ownership, in that the owner can cause the relations to be altered or terminated at any time. Plainly that is not what was meant, since on that interpretation all subsidiary-parent agencies would be invalid for tax purposes, a position which the National Carbide opinion specifically disavowed. We think the fifth National Carbide factor — so much more abstract than the others — was no more and no less than a generalized statement of the concern, expressed earlier in our own discussion, that the separate-entity doctrine of Moline not be subverted.
In any case, we decline to parse the text of National Carbide as though that were itself the governing statute. As noted earlier, it is uncontested -that the law attributes tax consequences of property held by a genuine agent to the principal; and we agree that it is reasonable for the Commissioner to demand unequivocal evidence of genuineness in the corporation-shareholder context, in order to prevent evasion of Moline. We see no basis, however, for holding that unequivocal evidence can only consist of the rigid requirements (arm’s-length dealing plus agency fee) that the Commissioner suggests. Neither of those is demanded by the law of agency, which permits agents to be unpaid family members, friends, or associates. See Restatement (Second) of Agency §§ 16, 21, 22 (1958). It seems to us that the genuineness of the agency relationship is adequately assured, and tax-avoiding manipulation adequately avoided, when the.fact that the corporation is acting as agent for its shareholders with respect to a particular asset is set forth in a written agreement at the time the asset is acquired, the corporation functions as agent and not principal with respect to the asset for all purposes, and the corporation is held out as the agent and not principal in all dealings with third parties relating to the asset. Since these requirements were met here, the judgment of the Court of Appeals is
Affirmed.
Justice Kennedy took no part in the consideration or decision of this case. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
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"General Accounting Office",
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"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
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"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
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"Legal Services Corporation",
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"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
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"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
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"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
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"NO Admin Action",
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] | [
68
] |
MRVICA v. ESPERDY, DISTRICT DIRECTOR, IMMIGRATION AND NATURALIZATION SERVICE.
No. 353.
Argued March 5, 1964.
Decided March 30, 1964.
Edith Lowenstein argued the cause and filed a brief for petitioner.
Richard W. Schmude argued the cause for respondent. With him on the brief were Solicitor General Cox, Assistant Attorney General Miller, Louis F. Claiborne and Beatrice Rosenberg.
Mr. Justice Harlan
delivered the opinion of the Court.
This case involves construction of the provisions of § 249 of the Immigration and Nationality Act, 66 Stat. 163, 219, 8 U. S. C. § 1259, which in certain circumstances permits an alien illegally in this country to apply for a record of lawful admission into the United States for permanent residence.
The petitioner is a native and citizen of Yugoslavia, who entered this country under a temporary landing permit in January 1940, as a nonimmigrant crewman attached to a merchant ship. He remained beyond the period allowed by the permit without permission until September 4, 1942, when a warrant for his deportation was issued. Soon thereafter, he signed as a member of the crew of a Yugoslav ship about to depart from the United States. The ship sailed with the petitioner on board on October 6, 1942, and, after calling at several ports in Chile, returned to the United States on December 19, 1942. The petitioner was detained on board ship for several days, but was then allowed to go ashore for medical treatment. He has not left the country since.
In 1951, new deportation proceedings were instituted against the petitioner, whose presence in this country apparently had meanwhile gone unnoticed by the immigration authorities. He was again found subject to deportation but was granted the privilege of voluntary departure. This decision of the hearing officer was affirmed by the Assistant Commissioner, whose order became final on March 22,1954, when the Board of Immigration Appeals entered an order dismissing the petitioner’s appeal. Other proceedings followed, which ultimately resulted in 1959 in an order that the petitioner be deported to Yugoslavia. The petitioner’s application for the status of a permanent resident under § 249 of the Immigration and Nationality Act was denied on the ground, explained more fully below, that his departure in 1942 made him ineligible for such discretionary relief because it deprived him of the prerequisite continuous residence in the United States since 1940. In 1960 the petitioner brought this action in the United States District Court for review of the administrative ruling and a declaratory judgment that he was eligible for relief under § 249. The District Court granted summary judgment for the respondent, 202 F. Supp. 214, which the Court of Appeals affirmed, 317 F. 2d 220. We granted certiorari, 375 U. S. 894, and now affirm the rulings below.
Section 249 of the Immigration and Nationality Act provides:
“A record of lawful admission for permanent residence may, in the discretion of the Attorney General and under such regulations as he may prescribe, be made in the case of any alien, as of the date of the approval of his application or, if entry occurred prior to July 1, 1924, as of the date of such entry, if no such record is otherwise available and such alien shall satisfy the Attorney General that he is not inadmissible under section 212 (a) insofar as it relates to criminals, procurers and other immoral persons, subversives, violators of the narcotic laws or smugglers of aliens, and he establishes that he—
“(a) entered the United States prior to June 28, 1940;
“(b) has had his residence in the United States continuously since such entry;
“(c) is a person of good moral character; and
It is agreed by both sides that the petitioner satisfies all the specified criteria except the requirement of continuous residence since an entry prior to June 28, 1940. The question for decision is whether his departure from the United States in 1942 and his absence from this country for several months thereafter defeat his claim to a continuous residence here since 1940.
The petitioner, whose case has been earnestly and ably pressed before us, concedes that he was ordered deported in 1942 and that his departure “executed” the order of deportation. There can be no doubt that this latter point is correct. Legislation then applicable provided that “. . . any alien ordered deported . . . who has left the United States shall be considered to have been deported in pursuance of law, irrespective of the source from which the expenses of his transportation were defrayed or of the place to which he departed.” Act of March 4, 1929, § 1 (b), 45 Stat. 1551, 8 U. S. C. (1940 ed.) § 180 (b). Any possible doubt of the import of this provision is removed by H. R. Rep. No. 2418, 70th Cong., 2d Sess., 6, which explained the provision as follows:
“Owing to the inadequacy of the appropriations now made for enforcement of deportation provisions under existing law, the Department of Labor has, in many cases, after a warrant of deportation has been issued, refrained from executing the warrant and deporting the alien, at the expense of the appropriation, to the country to which he might be deported, upon the condition that the alien voluntarily, at his own expense, leave the United States. Some doubt exists whether an alien so departing has been 'deported.’ Subsection (b) of section 3 of the bill [the provision quoted above] therefore removes any possible doubt on this question by providing that in such cases the alien shall be considered to have been deported in pursuance of law.”
The petitioner’s departure was thus properly treated as a deportation by the Immigration and Naturalization Service, officials of which marked the warrant for deportation as “executed” and prepared papers, including a “Description of Person Deported,” recording his deportation and the manner in which it was accomplished. The latter document also noted that the petitioner had a Yugoslavian passport.
The petitioner challenges none of the above. He pitches his argument on the statutory definition of “residence” as “the place of general abode; the place of general abode of a person means his principal, actual dwelling place in fact, without regard to intent.” Immigration and Nationality Act, §101 (a) (33), 66 Stat. 170, 8 U. S. C. § 1101 (a)(33). The petitioner argues that the statute makes “residence” a question of observable fact, and that, on this basis, his residence throughout the 1942 voyage must be taken as having remained in the United States. He points to various circumstances surrounding his departure which, he argues, establish that his “residence,” as defined above, was not interrupted in 1942, although he was physically absent from the United States for the period of the voyage.
The facts on which the petitioner relies are of two kinds. He points first to such typical indicia of residence as the maintenance of a bank account in this country and continued membership in a domestic union. More weight, however, is placed on the inclusion in the warrant for the petitioner’s deportation in 1942 of a “Ninth Proviso clause,” which provided:
“If the alien returns to the United States from time to time and upon inspection is found to be a bona fide seaman and entitled to shore leave, except for prior deportation, admission under the 9th Proviso of Section 3 of the Act of February 5, 1917, in reference to this ground of inadmissibility is hereby authorized for such time as the alien may be admitted as a seaman.”
This clause, included in the warrant pursuant to statutory authority, relieved the petitioner of the combined effect of provisions making arrest and deportation a basis for exclusion and depriving an alien seaman subject to exclusion of landing privileges. The petitioner suggests that due to wartime conditions deportation to Yugoslavia was impossible in 1942 and that the order of deportation was therefore in reality but a formality or fiction, everyone involved understanding, as the “Ninth Proviso clause” is said to attest, that he would be readmitted when his ship returned.
This argument contradicts what is plainly shown by the record. There is nothing in the order of deportation, in the endorsement of its “execution,” or in any of the subsequent proceedings to indicate that the deportation order was not what it purported to be. No reason is suggested why the immigration authorities should have gone through a meaningless ritual of deportation for the purpose of not deporting the petitioner. The ameliorative clause on which the petitioner relies indicates, if anything, that the petitioner was not intended to be readmitted as a resident; his admission was conditioned on a finding that he was “a bona fide seaman and entitled to shore leave” and was authorized only “for such time as the alien may be admitted as a seaman.”
Once these arguments are laid to rest, the proper disposition of this case is clear and unavoidable. By express legislative directive, the petitioner’s departure in 1942 is for present purposes to be regarded as a deportation. We think it beyond dispute that one who has been deported does not continue to have his residence here, whatever may be the significance of other factors in the absence of a valid deportation. In an early case, this Court stated:
“The order of deportation ... is but a method of enforcing the return to his own country of an alien who has not complied with the conditions upon the performance of which the government of the nation, acting within its constitutional authority and through the proper departments, has determined that his continuing to reside here shall depend.” Fong Yue Ting v. United States, 149 U. S. 698, 730.
It would be quite impossible to consider that a deported alien, whose re-entry into this country within a year of deportation would be a felony, nevertheless continues to reside in this country.
The obvious purpose of deportation is to terminate residence. It would defy common understanding and disregard clear legislative intent were we to hold that that purpose had not been achieved in this instance.
The judgment is
Affirmed.
The exact date of the petitioner’s entry is uncertain. Both parties state in their briefs that he entered on January 21, 1940, which is the date given by the petitioner at a deportation hearing in 1952. In the warrant for the petitioner’s deportation which issued in 1942, the date of entry is given as January 25, 1940, which is the date of entry established at a deportation hearing in 1942.
In his brief, the petitioner states that he came ashore “by reason of the permission granted him prior to sailing,” Brief p. 4, presumably a reference to the “Ninth Proviso clause” contained in the 1942 order of deportation, which is discussed hereafter. In the hearing which preceded the later deportation order of 1952, the petitioner testified that he came ashore pursuant to special permission granted him because he was ill, which was the finding of the hearing officer. Which of these grounds was the actual basis for admission is, for reasons appearing later, immaterial to the disposition of this case.
The 1958 amendment of § 249, inter alia, removed the requirement that an alien applying for relief under that section not be “subject to deportation.” Compare 66 Stat. 219 with 72 Stat. 546. The petitioner argues that this change indicates a legislative judgment favorable to his situation. But the humanitarian motives which may have prompted the 1958 amendment do not reach the present case, which is concerned with the requirement of continuous residence, left untouched by the amendment.
This enactment was for purposes of excluding a deported alien from subsequent admission and making it a felony for such alien to enter or attempt to enter the United States. Act of March 4, 1929, §1 (a), 45 Stat. 1551, 8 U. S. C. (1940 ed.) § 180 (a). It has been carried forward in the current provisions and made applicable to the Immigration and Nationality Act generally. § 101 (g), 66 Stat. 173, 8 U. S. C. §1101 (g).
There is no foundation for the suggestion that in 1942 there was a special kind of departure called “reshipment” which did not have the effect of executing the outstanding deportation order. The petitioner’s “reshipment” was nothing more or less than his signing on board ship and departing on it. The notation “Reshipped” on the deportation warrant was scrawled in pencil on the back of the warrant. It was made by an unidentified person for an unknown purpose, and appears underneath the endorsement of the warrant’s execution by the Immigration Inspector. (More relevant in this connection is the fact that the name of the ship on which the petitioner departed and the date of his departure appear in the blank for the “steamer and date on which deported” — italics added — on the official “Description of Person Deported.”)
The petitioner had recently been through a deportation hearing. Just one month before his departure he had been ordered deported. In those circumstances, it can scarcely be maintained that he did not understand his departure to be pursuant to the warrant for his deportation. (Any doubts on this score must assuredly have been cleared up by his detention on board ship on his return.)
Indeed, discussion of the manner of the petitioner’s departure seems beside the point in view of his concession that his departure executed the warrant for his deportation. (If by his departure he managed to execute the warrant for his deportation but nevertheless remain undeported, he was able to improve his status by leaving the country. The suggestion is untenable.)
“. . . [T]he Commissioner General of Immigration with the approval of the Secretary of Labor shall issue rules and prescribe conditions, including exaction of such bonds as may be necessary, to control and regulate the admission and return of otherwise inadmissible aliens applying for temporary admission.” Act of February 5, 1917, §3, 39 Stat. 875, 878, 8 U. S. C. (1940 ed.) § 136(q). Similar provisions are included in the current statute. Immigration and Nationality Act, § 212 (d)(3), 66 Stat. 187, 8 U. S. C. §1182 (d)(3).
Act of March 4, 1929, § 1 (a), 45 Stat. 1551, 8 U. S. C. (1940 ed.) § 180 (a), carried forward in the Immigration and Nationality Act, §§ 212 (a) (17), 276, 66 Stat. 183, 229, 8 U. S. C. §§ 1182 (a) (17), 1326.
Act of March 4, 1929, § 1 (c), 45 Stat. 1551, 8 U. S. C. (1940 ed.) § 180 (c). Compare the related provisions of the Immigration and Nationality Act, § 252 (a), 66 Stat. 220, 8 U. S. C. § 1282 (a).
Immigration and Nationality Act, § 276, 66 Stat. 229, 8 U. S. C. § 1326. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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67
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SUPREME COURT OF VIRGINIA et al. v. FRIEDMAN
No. 87-399.
Argued March 21, 1988
Decided June 20, 1988
Kennedy, J., delivered the opinion of the Court, in which Brennan, White, Marshall, Blackmun, Stevens, and O’Connor, JJ., joined. Rehnquist, C. J., filed a dissenting opinion, in which Scalia, J., joined, post, p. 70.
Gregory E. Lucyk, Assistant Attorney General of Virginia, argued the cause for appellants. With him on the briefs were Mary Sue Terry, Attorney General, Gail Starling Marshall, Deputy Attorney General, and William H. Hauser, Senior Assistant Attorney General.
Cornish F. Hitchcock argued the cause for appellee. With him on the brief were Alan B. Morrison' and John J. McLaughlin.
A brief of amici curiae urging reversal was filed for the State of Wyoming et al. by Joseph B. Meyer, Attorney General, and Mary B. Guthrie, Senior Assistant Attorney General, joined by the Attorneys General for their respective States as follows: Neil F. Hartigan of Illinois, Thomas J. Miller of Iowa, and Anthony J. Celebrezze, Jr., of Ohio.
Briefs of amici curiae urging affirmance were filed for the American Corporate Counsel Association by Lawrence A. Salibra II; and for the New York State Bar Association by Maryann Saccomando Freedman, Monroe H. Freedman, and Ronald J. Levine.
Justice Kennedy
delivered the opinion of the Court.
Qualified lawyers admitted to practice in other States may be admitted to the Virginia Bar “on motion,” that is, without taking the bar examination which Virginia otherwise requires. The State conditions such admission on a showing, among other matters, that the applicant is a permanent resident of Virginia. The question for decision is whether this residency requirement violates the Privileges and Immunities Clause of the United States Constitution, Art. IV, § 2, cl. 1. We hold that it does.
I
Myrna E. Friedman was admitted to the Illinois Bar by examination in 1977 and to the District of Columbia Bar by reciprocity in 1980. From 1977 to 1981, she was employed by the Department of the Navy in Arlington, Virginia, as a civilian attorney, and from 1982 until 1986, she was an attorr ney in private practice in Washington, D. C. In January 1986, she became associate general counsel for ERC International, Inc., a Delaware corporation. Friedman practices and maintains her offices at the company’s principal place of business in Vienna, Virginia. Her duties at ERC International include drafting contracts and advising her employer and its subsidiaries on matters of Virginia law.
From 1977 to early 1986, Friedman lived in Virginia. In February 1986, however, she married and moved to her husband’s home in Cheverly, Maryland. In June 1986, Friedman applied for admission to the Virginia Bar on motion.
The applicable rule, promulgated by the Supreme Court of Virginia pursuant to statute, is Rule 1A:1. The Rule permits admission on motion of attorneys who are licensed to practice in another jurisdiction, provided the other jurisdiction admits Virginia attorneys without examination. The applicant must have been licensed for at least five years and the Virginia Supreme Court must determine that the applicant:
“(a) Is a proper person to practice law.
“(b) Has made such progress in the practice of law that it would be unreasonable to require him to take an examination.
“(c) Has become a permanent resident of the Commonwealth.
“(d) Intends to practice full time as a member of the Virginia bar.”
In a letter accompanying her application, Friedman alerted the Clerk of the Virginia Supreme Court to her change of residence, but argued that her application should nevertheless be granted. Friedman gave assurance that she would be engaged full-time in the practice of law in Virginia, that she would be available for service of process and court appearances, and that she would keep informed of local rules. She also asserted that “there appears to be no reason to discriminate against my petition as a nonresident for admission to the Bar on motion,” that her circumstances fit within the purview of this Court’s decision in Supreme Court of New Hampshire v. Piper, 470 U. S. 274 (1985), and that accordingly she was entitled to admission under the Privileges and Immunities Clause of the Constitution, Art. IV, §2, cl. 1. See App. 34-35.
The Clerk wrote Friedman that her request had been denied. He explained that because Friedman was no longer a permanent resident of the Commonwealth of Virginia, she was not eligible for admission to the Virginia Bar pursuant to Rule 1A:1. He added that the court had concluded that our decision in Piper, which invalidated a residency requirement imposed on lawyers who had passed a State’s bar examination, was “not applicable” to the “discretionary requirement in Rule 1A:1 of residence as a condition of admission by reciprocity.” App. 51-52.
Friedman then commenced this action, against the Supreme Court of Virginia and its Clerk, in the United States District Court for the Eastern District of Virginia. She alleged that the residency requirement of Rule 1A:1 violated the Privileges and Immunities Clause. The District Court entered summary judgment in Friedman’s favor, holding that the requirement of residency for admission without examination violates the Clause.
The Court of Appeals for the Fourth Circuit unanimously affirmed. 822 F. 2d 423 (1987). The court first rejected appellants’ threshold contention that the Privileges and Immunities Clause was not implicated by the residency requirement of Rule 1A:1 because the Rule did not absolutely prohibit the practice of law in Virginia by nonresidents. Id., at 427-428. Turning to the justifications offered for the Rule, the court rejected, as foreclosed by Piper, the theory that the different treatment accorded to nonresidents could be justified by the State’s interest in enhancing the quality of legal practitioners. The court was also unpersuaded by appellant’s contention that the residency requirement promoted compliance with the Rule’s full-time practice requirement, an argument the court characterized as an unsupported assertion that “residents are more likely to honor their commitments to practice full-time in Virginia than are nonresidents.” Id., at 429. Thus, the court concluded that there was no substantial reason for the Rule’s discrimination against nonresidents, and that the discrimination did not bear a substantial relation to the objectives proffered by appellants.
The Supreme Court of Virginia and its Clerk filed a timely notice of appeal. We noted probable jurisdiction, 484 U. S. 923 (1987), and we now affirm.
I — I 1 — 4
Article IV, §2, cl. 1, of the Constitution provides that the “Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States.” The provision was designed “to place the citizens of each State upon the same footing with citizens of other States, so far as the advantages resulting from citizenship in those States are concerned.” Paul v. Virginia, 8 Wall. 168, 180 (1869). See also Toomer v. Witsell, 334 U. S. 385, 395 (1948) (the Privileges and Immunities Clause “was designed to insure to a citizen of State A who ventures into State B the same privileges which the citizens of State B enjoy”). The Clause “thus establishes a norm of comity without specifying the particular subjects as to which citizens of one State coming within the jurisdiction of another are guaranteed equality of treatment.” Austin v. New Hampshire, 420 U. S. 656, 660 (1975).
While the Privileges and Immunities Clause cites the term “Citizens,” for analytic purposes citizenship and residency are essentially interchangeable. See United Building & Construction Trades Council v. Mayor and Council of Camden, 465 U. S. 208, 216 (1984). When examining claims that a citizenship or residency classification offends privileges and immunities protections, we undertake a two-step inquiry. First, the activity in question must be “ ‘sufficiently basic to the livelihood of the Nation’ ... as to fall within the purview of the Privileges and Immunities Clause . . . .” Id., at 221-222, quoting Baldwin v. Montana Fish & Game Comm’n, 436 U. S. 371, 388 (1978). For it is “‘[ojnly with respect to those “privileges” and “immunities” bearing on the vitality of the Nation as a single entity’ that a State must accord residents and nonresidents equal treatment.” Supreme Court of New Hampshire v. Piper, 470 U. S., at 279, quoting Baldwin, supra, at 383. Second, if the challenged restriction deprives nonresidents of a protected privilege, we will invalidate it only if we conclude that the restriction is not closely related to the advancement of a substantial state interest. Piper, supra, at 284. Appellants assert that the residency requirement offends neither part of this test. We disagree.
A
Appellants concede, as they must, that our decision in Piper establishes that a nonresident who takes and passes an examination prescribed by the State, and who otherwise is qualified for the practice of law, has an interest in practicing law that is protected by the Privileges and Immunities Clause. Appellants contend, however, that the discretionary admission provided for by Rule 1A:1 is not a privilege protected by the Clause for two reasons. First, appellants argue that the bar examination “serves as an adequate, alternative means of gaining admission to the bar. ” Brief for Appellants 20. In appellants’ view, “[s]o long as any applicant may gain admission to a State’s bar, without regard to residence, by passing the bar examination,” id., at 21, the State cannot be said to have discriminated against nonresidents “as a matter of fundamental concern.” Id., at 19. Second, appellants argue that the right to admission on motion is not within the purview of the Clause because, without offense to the Constitution, the State could require all bar applicants to pass an examination. Neither argument is persuasive.
We cannot accept appellants’ first theory because it is quite inconsistent with our precedents. We reaffirmed in Piper the well-settled principle that “‘one of the privileges which the Clause guarantees to citizens of State A is that of doing business in State B on terms of substantial equality with the citizens of that State.’” Piper, supra, at 280, quoting Toomer v. Witsell, supra, at 396. See also United Building & Construction Trades Council, supra, at 219 (“Certainly, the pursuit of a common calling is one of the most fundamental of those privileges protected by the Clause”). After reviewing our precedents, we explicitly held that the practice of law, like other occupations considered in those cases, is sufficiently basic to the national economy to be deemed a privilege protected by the Clause. See Piper, supra, at 280-281. The clear import of Piper is that the Clause is implicated whenever, as is the case here, a State does not permit qualified nonresidents to practice law within its borders on terms of substantial equality with its own residents.
Nothing in our precedents, moreover, supports the contention that the Privileges and Immunities Clause does not reach a State’s discrimination against nonresidents when such discrimination does not result in their total exclusion from the State. In Ward v. Maryland, 12 Wall. 418 (1871), for example, the Court invalidated a statute under which residents paid an annual fee of $12 to $150 for a license to trade foreign goods, while nonresidents were required to pay $300. Similarly, in Toomer, supra, the Court held that nonresident fishermen could not be required to pay a license fee 100 times the fee charged to residents. In Hicklin v. Orbeck, 437 U. S. 518 (1978), the Court invalidated a statute requiring that residents be hired in preference to nonresidents for all positions related to the development of the State’s oil and gas resources. Indeed, as the Court of Appeals correctly noted, the New Hampshire rule struck down in Piper did not result in the total exclusion of nonresidents from the practice of law in that State. 822 F. 2d, at 427 (citing Piper, supra, at 277, n. 2).
Further, we find appellants’ second theory — that Virginia could constitutionally require that all applicants to its bar take and pass an examination — quite irrelevant to the question whether the Clause is applicable in the circumstances of this case. A State’s abstract authority to require from resident and nonresident alike that which it has chosen to demand from the nonresident alone has never been held to shield the discriminatory distinction from the reach of the Privileges and Immunities Clause. Thus, the applicability of the Clause to the present case no more turns on the legality vel non of an examination requirement than it turned on the inherent reasonableness of the fees charged to nonresidents in Toomer and Ward. The issue instead is whether the State has burdened the right to practice law, a privilege protected by the Privileges and Immunities Clause, by discriminating among otherwise equally qualified applicants solely on the basis of citizenship or residency. We conclude it has.
B
Our conclusion that the residence requirement burdens a privilege protected by the Privileges and Immunities Clause does not conclude the matter, of course; for we repeatedly have recognized that the Clause, like other constitutional provisions, is not an absolute. See, e. g., Piper, supra, at 284; United Building & Construction Trades Council, 465 U. S., at 222; Toomer, 334 U. S., at 396. The Clause does not preclude disparity in treatment where substantial reasons exist for the discrimination and the degree of discrimination bears a close relation to such reasons. See United Building & Construction Trades Council, supra, at 222. In deciding whether the degree of discrimination bears a sufficiently close relation to the reasons proffered by the State, the Court has considered whether, within the full panoply of legislative choices otherwise available to the State, there exist alternative means of furthering the State’s purpose without implicating constitutional concerns. See Piper, supra, at 284.
Appellants offer two principal justifications for the Rule’s requirement that applicants seeking admission on motion reside within the Commonwealth of Virginia. First, they contend that the residence requirement assures, in tandem with the full-time practice requirement, that attorneys admitted on motion will have the same commitment to service and familiarity with Virginia law that is possessed by applicants securing admission upon examination. Attorneys admitted on motion, appellants argue, have “no personal investment” in the jurisdiction; consequently, they “are entitled to no presumption that they will willingly and actively participate in bar activities and obligations, or fulfill their public service responsibilities to the State’s client community.” Brief for Appellants 26-27. Second, appellants argue that the residency requirement facilitates enforcement of the full-time practice requirement of Rule 1A:1. We find each of these justifications insufficient to meet the State’s burden of showing that the discrimination is warranted by a substantial state objective and closely drawn to its achievement.
We acknowledge that a bar examination is one method of assuring that the admitted attorney has a stake in his or her professional licensure and a concomitant interest in the integrity and standards of the bar. A bar examination, as we know judicially and from our own experience, is not a casual or lighthearted exercise. The question, however, is whether lawyers who are admitted in other States and seek admission in Virginia are less likely to respect the bar and further its interests solely because they are nonresidents. We cannot say this is the case. While Pvper relied on an examination requirement as an indicium of the nonresident’s commitment to the bar and to the State’s legal profession, see Piper, 470 U. S., at 285, it does not follow that when the State waives the examination it may make a distinction between residents and nonresidents.
Friedman’s case proves the point. She earns her living working as an attorney in Virginia, and it is of scant relevance that her residence is located in the neighboring State of Maryland. It is indisputable that she has a substantial stake in the practice of law in Virginia. Indeed, despite appellants’ suggestion at oral argument that Friedman’s case is “atypical,” Tr. of Oral Arg. 51, the same will likely be true of all nonresident attorneys who are admitted on motion to the Virginia Bar, in light of the State’s requirement that attorneys so admitted show their intention to maintain an office and a regular practice in the State. See Application of Brown, 213 Va. 282, 286, n. 3, 191 S. E. 2d 812, 815, n. 3 (1972) (interpreting full-time practice requirement of Rule 1A:1). This requirement goes a long way toward ensuring that such attorneys will have an interest in the practice of law in Virginia that is at least comparable to the interest we ascribed in Piper to applicants admitted upon examination. Accordingly, we see no reason to assume that nonresident attorneys who, like Friedman, seek admission to the Virginia bar on motion will lack adequate incentives to remain abreast of changes in the law or to fulfill their civic duties.
Further, to the extent that the State is justifiably concerned with ensuring that its attorneys keep abreast of legal developments, it can protect these interests through other equally or more effective means that do not themselves infringe constitutional protections. While this Court is not well positioned to dictate specific legislative choices to the State, it is sufficient to note that such alternatives exist and that the State, in the exercise of its legislative prerogatives, is free to implement them. The Supreme Court of Virginia could, for example, require mandatory attendance at periodic continuing legal education courses. See Piper, supra, at 285, n. 19. The same is true with respect to the State’s interest that the nonresident bar member does his or her share of volunteer and pro bono work. A “nonresident bar member, like the resident member, could be required to represent indigents and perhaps to participate in formal legal-aid work.” Piper, supra, at 287 (footnote omitted).
We also reject appellants’ attempt to justify the residency restriction as a necessary aid to the enforcement of the full-time practice requirement of Rule 1A:1. Virginia already requires, pursuant to the full-time practice restriction of Rule 1A:1, that attorneys admitted on motion maintain an office for the practice of law in Virginia. As the Court of Appeals noted, the requirement that applicants maintain an office in Virginia facilitates compliance with the full-time practice requirement in nearly the identical manner that the residency restriction does, rendering the latter restriction largely redundant. 822 F. 2d, at 429. The office requirement furnishes an alternative to the residency requirement that is not only less restrictive, but also is fully adequate to protect whatever interest the State might have in the full-time practice restriction.
Ill
We hold that Virginia’s residency requirement for admission to the State’s bar without examination violates the Privileges and Immunities Clause. The nonresident’s interest in practicing law on terms of substantial equality with those enjoyed by residents is a privilege protected by the Clause. A State may not discriminate against nonresidents unless it shows that such discrimination bears a close relation to the achievement of substantial state objectives. Virginia has failed to make this showing. Accordingly, the judgment of the Court of Appeals is affirmed.
It is so ordered.
The District Court did not address Friedman’s claims that the residency requirement of Rule 1A:1 also violates the Commerce Clause and the Equal Protection Clause of the Fourteenth Amendment. The Court of Appeals did not pass on these contentions either, and our resolution of Friedman’s claim that the residency requirement violates the Privileges and Immunities Clause makes it unnecessary for us to reach them. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
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"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
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"Veterans' Administration or Board of Veterans' Appeals",
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"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
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"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
116
] |
SCHLUDE et ux. v. COMMISSIONER OF INTERNAL REVENUE.
No. 80.
Argued December 10, 1962.
Decided February 18, 1963.
Carl F. Bauersfeld argued the cause for petitioners. With him on the briefs was Robert Ash.
Assistant Attorney General Oberdorfer argued the cause for respondent. With him on the brief were Solicitor General Cox and Harry Baum.
Dean Acheson, Fontaine C. Bradley, John T. Sapienza, Robert L. Randall and Alvin Friedman filed briefs for the American Institute of Certified Public Accountants, as amicus curiae, urging reversal.
Mr. Justice White
delivered the opinion of the Court.
This is still another chapter in the protracted problem of the time certain items are to be recognized as income for the purposes of the federal income tax. The Commissioner of Internal Revenue increased the 1952, 1953 and 1954 ordinary income of the taxpayers by including in gross income for those years amounts received or receivable under contracts executed during those years despite the fact that the contracts obligated taxpayers to render performance in subsequent periods. These increases produced tax deficiencies which the taxpayers unsuccessfully challenged in the Tax Court on the ground that the amounts could be deferred under their accounting method. On appeal, the Court of Appeals for the Eighth Circuit agreed with the taxpayers and reversed the Tax Court, 283 F. 2d 234, the decision having been rendered prior to ours in American Automobile Assn. v. United States, 367 U. S. 687. Following the American Automobile Association case, certiorari in this case was granted, the judgment of the lower court vacated, 367 U. S. 911, and the cause remanded for further consideration in light of American Automobile Association. 368 U. S. 873. In a per curiam opinion, the Court of Appeals held that in view of American Automobile Association, the taxpayers’ accounting method “does not, for income tax purposes, clearly reflect income” and affirmed the judgment for the Commissioner, 296 F. 2d 721. We brought the case back once again to consider whether the lower court misapprehended the scope of American Automobile Association. 370 U. S. 902.
Taxpayers, husband and wife, formed a partnership to operate ballroom dancing studios (collectively referred to as “studio”) pursuant to Arthur Murray, Inc., franchise agreements. Dancing lessons were offered under either of two basic contracts. The cash plan contract required the student to pay the entire down payment in cash at the time the contract was executed with the balance due in installments thereafter. The deferred payment contract required only a portion of the down payment to be paid in cash. The remainder of the down payment was due in stated installments and the balance of the contract price was to be paid as designated in a negotiable note signed at the time the contract was executed.
Both types of contracts provided that (1) the student should pay tuition for lessons in a certain amount, (2) the student should not be relieved of his obligation to pay the tuition, (3) no refunds would be made, and (4) the contract was noncancelable. The contracts prescribed a specific number of lesson hours ranging from five to 1,200 hours and some contracts provided lifetime courses entitling the student additionally to two hours of lessons per month plus two parties a year for life. Although the contracts designated the period during which the lessons had to be taken, there was no schedule of specific dates, which were arranged from time to time as lessons were given.
Cash payments received directly from students and amounts received when the negotiable notes were discounted at the bank or fully paid were deposited in the studio’s general bank account without segregation from its other funds. The franchise agreements required the studio to pay to Arthur Murray, Inc., on a weekly basis, 10% of these cash receipts as royalty and 5% of the receipts in escrow, the latter to continue until a $20,000 indemnity fund was accumulated. Similarly, sales commissions for lessons sold were paid at the time the sales receipts were deposited in the studio’s general bank account.
The studio, since its inception in 1946, has kept its books and reported income for tax purposes on an accrual system of accounting. In addition to the books, individual student record cards were maintained showing the number of hours taught and the number still remaining under the contract. The system, in substance, operated as follows. When a contract was entered into, a “deferred income” account was credited for the total contract price. At the close of each fiscal period, the student record cards were analyzed and the total number of taught hours was multiplied by the designated rate per hour of each contract. The resulting sum was deducted from the deferred income account and reported as earned income on the financial statements and the income tax return. In addition, if there had been no activity in a contract for over a year, or if a course were reduced in amount, an entry would be made canceling the untaught portion of the contract, removing that amount from the deferred income account, and recognizing gain to the extent that the deferred income exceeded the balance due on the contract, i. e., the amounts received in advance. The amounts representing lessons taught and the gains from cancellations constituted the chief sources of the partnership’s gross income. The balance of the deferred income account would be carried forward into the next fiscal year to be increased or decreased in accordance with the number of new contracts, lessons taught and cancellations recognized.
Deductions were also reported on the accrual basis except that the royalty payments and the sales commissions were deducted when paid irrespective of the period in which the related receipts were taken into income. Three certified public accountants testified that in their opinion the accounting system employed truly reflected net income in accordance with commercial accrual accounting standards.
The Commissioner included in gross income for the years in question not only advance payments received in
5 The following schedule reflects ordinary net income on the studio’s books and returns: cash but the full face amounts of notes and contracts executed during the respective years. The Tax Court and the Court of Appeals upheld the Commissioner, but the United States in this Court has retreated somewhat and does not now claim the includibility in gross income of future payments which were not evidenced by a note and which were neither due by the terms of the contract nor matured by performance of the related services. The question remaining for decision, then, is this: Was it proper for the Commissioner, exercising his discretion under § 41, 1939 Code, and § 446 (b), 1954 Code, to reject the studio’s accounting system as not clearly reflecting income and to include as income in a particular year advance payments by way of cash, negotiable notes and contract installments falling due but remaining unpaid during that year? We hold that it was since we believe the problem is squarely controlled by American Automobile Association, 367 IT. S. 687.
Gross income:
1952 1953 1954
Contract amounts transferred to earned income.. $143,949.63 $243,277.46 $325,266.97
Gains from cancellation... 26,861.40 19,483.36 28,448.61
Other income. 4,041.21 11,426.23 16,987.31
Total. 174,852.24 274,187.05 370,702.89
Deductions. 137,267.91 223,390.69 301,609.76
Ordinary net income 37,584.33 50,796.36 69,093.13
The Court there had occasion to consider the entire legislative background of the treatment of prepaid income. The retroactive repeal of § 452 of the 1954 Code, “the only law incontestably permitting the practice upon which [the taxpayer] depends,” was regarded as reinstating long-standing administrative and lower court rulings that accounting systems deferring prepaid income could be rejected by the Commissioner.
“[T]he fact is that § 452 for the first time specifically declared petitioner’s system of accounting to be acceptable for income tax purposes, and overruled the long-standing position of the Commissioner and courts to the contrary. And the repeal of the section the following year, upon insistence by the Treasury that the proposed endorsement of such tax accounting would have a disastrous impact on the Government’s revenue, was just as clearly a mandate from the Congress that petitioner’s system was not acceptable for tax purposes.” 367 U. S., at 695.
Confirming that view was the step-by-step approach of Congress in granting the deferral privilege to only limited groups of taxpayers while exploring more deeply the ramifications of the entire problem.
Plainly, the considerations expressed in American Automobile Association are apposite here. We need only add here that since the American Automobile Association decision, a specific provision extending the deferral practice to certain membership corporations was enacted, § 456,1954 Code, added by § 1, Act of July 26, 1961, 75 Stat. 222, continuing, at least so far, the congressional policy of treating this problem by precise provisions of narrow applicability. Consequently, as in the American Automobile Association case, we invoke the “long-established policy of the Court in deferring, where possible, to congressional procedures in the tax field,” and, as in that case, we cannot say that the Commissioner’s rejection of the studio’s deferral system was unsound.
The American Automobile Association case rested upon an additional ground which is also controlling here. Relying upon Automobile Club of Michigan v. Commissioner, 353 U. S. 180, the Court rejected the taxpayer’s system as artificial since the advance payments related to services which were to be performed only upon customers’ demands without relation to fixed dates in the future. The system employed here suffers from that very same vice, for the studio sought to defer its cash receipts on the basis of contracts which did not provide for lessons on fixed dates after the taxable year, but left such dates to be arranged from, time to time by the instructor and his student. Under the contracts, the student could arrange for some or all of the additional lessons or could simply allow their rights under the contracts to lapse. But even though the student did not demand the remaining lessons, the contracts permitted the studio to insist upon payment in accordance with the obligations undertaken and to retain whatever prepayments were made without restriction as to use and without obligation of refund. At the end of each period, while the number of lessons taught had been meticulously reflected, the studio was uncertain whether none, some or all of the remaining lessons would be rendered. Clearly, services were rendered solely on demand in the fashion of the American Automobile Association and Automobile Club of Michigan cases.
Moreover, percentage royalties and sales commissions for lessons sold, which were paid as cash was received from students or from its note transactions with the bank, were deducted in the year paid even though the related items of income had been deferred, at least in part, to later periods. In view of all these circumstances, we hold the studio’s accrual system vulnerable under § 41 and § 446 (b) with respect to its deferral of prepaid income. Consequently, the Commissioner was fully justified in including payments in cash or by negotiable note in gross income for the year in which such payments were received. If these payments are includible in the year of receipt because their allocation to a later year does not clearly reflect income, the contract installments are likewise includible in gross income, as the United States now claims, in the year they become due and payable. For an accrual basis taxpayer “it is the right to receive and not the actual receipt that determines the inclusion of the amount in gross income,” Spring City Co. v. Commissioner, 292 U. S. 182, 184; Commissioner v. Hansen, 360 U. S. 446, and here the right to receive these installments had become fixed at least at the time they were due and payable.
We affirm the Court of Appeals insofar as that court held includible the amounts representing cash receipts, notes received and contract installments due and payable. Because of the Commissioner’s concession, we reverse that part of the judgment which included amounts for which services had not yet been performed and which were not due and payable during the respective periods and we remand the case with directions to return the case to the Tax Court for a redetermination of the proper income tax deficiencies now due in light of this opinion.
It is so ordered.
The controversy turns upon the accounting method employed by a partnership in which the taxpayers were equal partners. Since a partnership is not a taxable entity, the partners being liable in their individual capacities for their distributive share of partnership income, § 181, Int. Rev. Code of 1939; § 701, Int. Rev. Code of 1954, the proper statement of the partnership’s income affects only the tax liabilities of the partners individually. However, as there is no other dispute in the case, for convenience the discussion will center upon the partnership’s accounting method without further mention of its effect upon the respective tax liabilities of the partners.
Although the contracts stated they were noncancelable, the studio frequently rewrote contracts reducing the number of lessons for a smaller sum of money. Also, despite the fact that the contracts provided that no refunds would be made, and despite the fact that the studio discouraged refunds, occasionally a refund would be made on a canceled contract.
Notes taken from the students were ordinarily transferred, with full recourse, to a local bank which would deduct the interest charges and credit the studio with approximately 50% of the face amount. The remaining 50% was held in a reserve account, unavailable to the studio, until the note was fully paid, at which time the reserved amount was transferred to the studio’s general bank account.
Though the studio is not a taxable entity, it is still required to prepare and file an information return showing, inter alia, items of gross income and allowable deductions. § 187, 1939 Code; § 6031, 1954 Code.
“Upon reconsideration, however, we concede the error of accruing future payments which are neither due as a matter of contract, nor matured by performance of the related services. Indeed, the Studio’s right to collect the installment on its due date depends on its continuing ability and willingness to perform. Until that time, its right to receive payment has not fully ripened.” Brief for the United States, p. 67.
“SEC. 41. GENERAL RULE.
“The net income shall be computed upon the basis of the taxpayer’s annual accounting period (fiscal year or calendar year, as the case may be) in accordance with the method of accounting regularly employed in keeping the books of such taxpayer; but if no such method of accounting has been so employed, or if the method employed does not clearly reflect the income, the computation shall be made in accordance with such method as in the opinion of the Commissioner does clearly reflect the income. If the taxpayer’s annual accounting period is other than a fiscal year as defined in section 48 or if the taxpayer has no annual accounting period or does not keep books, the net income shall be computed on the basis of the calendar year.”
“SEC. 446. GENERAL RULE FOR METHODS OF ACCOUNTING.
“(a) GeNeral Rule. — Taxable income shall be computed under the method of accounting on the basis of which the taxpayer regularly computes his income in keeping his books.
“(b) Exceptions. — If no method of accounting has been regularly used by the taxpayer, or if the method used does not clearly reflect income, the computation of taxable income shall be made under such method as, in the opinion of the Secretary or his delegate, does clearly reflect income.
“(c) Permissible Methods. — Subject to the provisions of subsections (a) and (b), a taxpayer may compute taxable income under any of the following methods of accounting—
“(1) the cash receipts and disbursements method;
“(2) an accrual method;
“(3) any other method permitted by this chapter; or
“(4) any combination of the foregoing methods permitted under regulations prescribed by the Secretary or his delegate.”
The treatment of “gains from cancellations” underlines this aspect of the case. These gains, representing amounts paid or promised in advance of lessons given, were recognized in those periods in which the taxpayers arbitrarily decided the contracts were to be deemed canceled. The studio made no attempt to report estimated cancellations in the year of receipt, choosing instead to defer these gains to periods bearing no economic relationship to the income recognized. Cf. Continental Tie & Lumber Co. v. United States, 286 U. S. 290.
Negotiable notes are regarded as the equivalent of cash receipts, to the extent of their fair market value, for the purposes of recognition of income. § 39.22 (a)-4, Treas. Reg. 118, 1939 Code; § 1.61-2 (d)(4), Treas. Reg., 1954 Code; Mertens, Federal Income Taxation (1961), § 11.07. See Pinellas Ice Co. v. Commissioner, 287 U. S. 462.
See note 3, supra. See also § 41, 1939 Code. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
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"Central Intelligence Agency",
"Commodity Futures Trading Commission",
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"Department or Secretary of Education",
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"Equal Employment Opportunity Commission",
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"Federal Bureau of Investigation or Director",
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"National Endowment for the Arts",
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"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
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"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
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"State Agency",
"Unidentifiable",
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"Department of Homeland Security",
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"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
68
] |
STRYCKER’S BAY NEIGHBORHOOD COUNCIL, INC. v. KARLEN et al.
No. 79-168.
Decided January 7, 1980
Together with No. 79-181, City of New York v. Karlen et al.; and No. 79-184, Secretary of Homing and Urban Development v. Karlen et al., also on petitions for certiorari to the same court.
Per Curiam.
The protracted nature of this litigation is perhaps best illustrated by the identity of the original federal defendant, “George Romney, Secretary of the Department of Housing and Urban Development.” At the center of this dispute is the site of a proposed low-income housing project to be constructed on Manhattan’s Upper West Side. In 1962, the New York City Planning Commission (Commission), acting in conjunction with the United States Department of Housing and Urban Development (HUD), began formulating a plan for the renewal of 20 square blocks known as the “West Side Urban Renewal Area” (WSURA) through a joint effort on the part of private parties and various government agencies. As originally written, the plan called for a mix of 70% middle-income housing and 30% low-income housing and designated the site at issue here as the location of one of the middle-income projects. In 1969, after substantial progress toward completion of the plan, local agencies in New York determined that the number of low-income units proposed for WSURA would be insufficient to satisfy an increased need for such units. In response to this shortage the Commission amended the plan to designate the site as the future location of a high-rise building containing 160 units of low-income housing. HUD approved this amendment in December 1972.
Meanwhile, in October 1971, the Trinity Episcopal School Corp. (Trinity), which had participated in the plan by building a combination school and middle-income housing development at a nearby location, sued in the United States District Court for the Southern District of New York to enjoin the Commission and HUD from constructing low-income housing on the site. The present respondents, Roland N. Karlen, Alvin C. Hudgins, and the Committee of Neighbors To Insure a Normal Urban Environment (CONTINUE), intervened as plaintiffs, while petitioner Strycker’s Bay Neighborhood Council, Inc., intervened as a defendant.
The District Court entered judgment in favor of petitioners. See Trinity Episcopal School Corp. v. Romney, 387 F. Supp. 1044 (1974). It concluded, inter alia, that petitioners had not violated the National Environmental Policy Act of 1969 (NEPA), 83 Stat. 852, 42 U. S. C. § 4321 et seq.
On respondents’ appeal, the Second Circuit affirmed all but the District Court’s treatment of the NEPA claim. See Trinity Episcopal School Corp. v. Romney, 523 F. 2d 88 (1975). While the Court of Appeals agreed with the District Court that HUD was not required to prepare a full-scale environmental impact statement under § 102 (2) (C) of NEPA, 42 U. S. C. § 4332 (2)(C), it held that HUD had not complied with § 102 (2) (E), which requires an agency to “study, develop, and describe appropriate alternatives to recommended courses of action in any proposal which involves unresolved conflicts concerning alternative uses of available resources.” 42 U. S. C. §4332 (2)(E). See 523 F. 2d., at 92-95. According to the Court of Appeals, any consideration by HUD of alternatives to placing low-income housing on the site “was either highly limited or nonexistent.” Id., at 94. Citing the “background of urban environmental factors” behind HUD’s decision, the Court of Appeals remanded the case, requiring HUD to prepare a “statement of possible alternatives, the consequences thereof and the facts and reasons for and against. . . .” Ibid. The statement was not to reflect “HUD’s concept or the Housing Authority’s views as to how these agencies would choose to resolve the city’s low income group housing situation,” but rather was to explain “how within the framework of the Plan its objective of economic integration can best be achieved with a minimum of adverse environmental impact.” Ibid. The Court of Appeals believed that, given such an assessment of alternatives, “the agencies with the cooperation of the interested parties should be able to arrive at an equitable solution.” Id., at 95.
On remand, HUD prepared a lengthy report entitled Special Environmental Clearance (1977), After marshaling the data, the report asserted that, “while the choice of Site 30 for development as a 100 percent low-income project has raised valid questions about the potential social environmental impacts involved, the problems associated with the impact on social fabric and community structures are not considered so serious as to require that this component be rated as unacceptable.” Special Environmental Clearance Report 42. The last portion of the report incorporated a study wherein the Commission evaluated nine alternative locations for the project and found none of them acceptable. While HUD’s report conceded that this study may not have considered all possible alternatives, it credited the Commission’s conclusion that any relocation of the units would entail an unacceptable delay of two years or more. According to HUD, “[m]eas-ured against the environmental costs associated with the minimum two-year delay, the benefits seem insufficient to justify a mandated substitution of sites.” Id., at 54.
After soliciting the parties’ comments on HUD’s report, the District Court again entered judgment in favor of petitioners. See Trinity Episcopal School Corp. v. Harris, 445 P. Supp. 204 (1978). The court was “impressed with [HUD’s analysis] as being thorough and exhaustive,” id., at 209-210, and found that “HUD’s consideration of the alternatives was neither arbitrary nor capricious”; on the contrary, “[i]t was done in good faith and in full accordance with the law.” Id., at 220.
On appeal, the Second Circuit vacated and remanded again. Karlen v. Harris, 590 F. 2d 39 (1978). The appellate court focused upon that part of HUD’s report where the agency considered and rejected alternative sites, and in particular upon HUD’s reliance on the delay such a relocation would entail. The Court of Appeals purported to recognize that its role in reviewing HUD’s decision was defined by the Administrative Procedure Act (APA), 5 U. S. C. § 706 (2) (A), which provides that agency actions should be set aside if found to be “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. . . .” Additionally, however, the Court of Appeals looked to “[t] he provisions of NEPA” for “the substantive standards necessary to review the merits of agency decisions. . . 590 F. 2d, at 43. The Court of Appeals conceded that HUD had “given ‘consideration’ to alternatives” to redesignating the site. Id., at 44. Nevertheless, the court believed that “ ‘consideration’ is not an end in itself.” Ibid. . Concentrating on HUD’s finding that development of an alternative location would entail an unacceptable delay, the appellate court held that such delay could not be “an overriding factor” in HUD’s decision to proceed with the development. Ibid. According to the court, when HUD considers such projects, “environmental factors, such as crowding low-income housing into a concentrated area, should be given determinative weight.” Ibid. The Court of Appeals therefore remanded the case to the District Court, instructing HUD to attack the shortage of low-income housing in a manner that would avoid the “concentration” of such housing on Site 30. Id., at 45.
In Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U. S. 519, 558 (1978), we stated that NEPA, while establishing “significant substantive goals for the Nation,” imposes upon agencies duties that are “essentially procedural.” As we stressed in that case, NEPA was designed “to insure a fully informed and well-considered decision,” but not necessarily “a decision the judges of the Court of Appeals or of this Court would have reached had they been members of the decisionmaking unit of the agency.” Ibid. Vermont Yankee cuts sharply against the Court of Appeals’ conclusion that an agency, in selecting a course of action, must elevate environmental concerns over other appropriate considerations. On the contrary, once an agency has made a decision subject to NEPA’s procedural requirements, the only role for a court is to insure that the agency has considered the environmental consequences; it cannot “ ‘interject itself within the area of discretion of the executive as to the choice of the action to be taken.' ” Kleppe v. Sierra Club, 427 U. S, 390, 410, n. 21 (1976). See also FPC v. Transcontinental Gas Pipe Line Corp., 423 U.S. 326 (1976).
In the present litigation there is no doubt that HUD considered the environmental consequences of its decision to re-designate the proposed site for low-income housing. NEPA requires no more. The petitions for certiorari are granted, and the judgment of the Court of Appeals is therefore
Reversed.
At the time of the Court of Appeals’ decision, this section was numbered 102 (2) (D) and was codified at 42 U. S. C. § 4332 (2) (D) (1970 ed.). Congress redesignated it two weeks later. See Act of Aug. 9, 1975, Pub. L. 94-83, 89 Stat. 424.
If we could agree with the dissent that the Court of Appeals held that HUD had acted “arbitrarily” in redesignating the site for low-income housing, we might also agree that plenary review is warranted. But the District Court expressly concluded that HUD had not acted arbitrarily or capriciously and our reading of the opinion of the Court of Appeals satisfies us that it did not overturn that finding. Instead, the appellate court required HUD to elevate environmental concerns over other, admittedly legitimate, considerations. Neither NEPA nor the APA provides any support for such a reordering of priorities by a reviewing court. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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63
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SHELL OIL CO. v. IOWA DEPARTMENT OF REVENUE
No. 87-984.
Argued October 4, 1988
Decided November 8, 1988
Kenneth S. Geller argued the cause for appellant. With him on the briefs were Mark I. Levy, Steven C. Stryker, William D. Peltz, and James W. Hall.
Harry M. Griger, Special Assistant Attorney General of Iowa, argued the cause for appellee. With him on the brief was Thomas J. Miller, Attorney General.
Deputy Solicitor General Wallace argued the cause for the United States as amicus curiae urging affirmance. With him on the brief were Solicitor General Fried, Assistant Attorney General Rose, Richard J. Lazarus, and Richard Farber.
Briefs of amici curiae urging affirmance were filed for the State of New Jersey et al. by Cary Edwards, Attorney General of New Jersey, James J. Ciancia, Assistant Attorney General, and Ma'ry R. Hamill and John P. Miscione, Deputy Attorneys General, and by the Attorneys General for their respective States as follows: Robert K. Corbin of Arizona, John Steven Clark of Arkansas, Duane Woodard of Colorado, James T. Jones of Idaho, J. Joseph Curran, Jr., of Maryland, Hubert H. Humphrey III of Minnesota, William L. Webster of Missouri, Mike Greely of Montana, Robert Abrams of New York, Nicholas J. Spaeth of North Dakota, Dave Frohnmayer of Oregon, and T. Travis Medlock of South Carolina; for the Florida Department of Revenue by Robert A. Butterworth, Attorney General of Florida, Joseph C. Mellichamp III, Assistant Attorney General, and Sharon A. Zahner; and for the Multistate Tax Commission by Eugene F. Corrigan.
John K. Van de Kamp, Attorney General of California, Robert F. Tyler, Supervising Deputy Attorney General, and Robert D. Milam, Deputy Attorney General, filed a brief for the State of California as amicus curiae.
Justice Marshall
delivered the opinion of the Court.
In this appeal, we must decide whether the Outer Continental Shelf Lands Act (OCSLA), 67 Stat. 462, 43 U. S. C. § 1331 et seq. (1982 ed. and Supp. Ill), prevents Iowa from including income earned from the sale of oil and gas extracted from the Outer Continental Shelf (OCS) in the apportionment formula it uses to calculate in-state taxable income. We hold that it does not.
I
Shell Oil Company (Shell) is a unitary business, incorporated in Delaware. Its activities include producing, transporting, and marketing oil and gas and the products that are made from them. Shell extracts oil and gas not only within various States but also on the OCS, which is defined by the OCSLA as all those submerged lands three or more geographical miles from the United States coastline. Between 1977 and 1980, the tax years at issue in this case, a portion of Shell’s gross revenues was derived from the sale of oil and gas extracted from the OCS and the sale of products made from OCS oil and gas.
During the years at issue, Shell sold all of its OCS natural gas directly at the wellhead platform located above the OCS. Nearly all of its OCS crude oil, by contrast, was transferred via pipelines to the continental United States, where Shell either sold it to third parties or refined it. The refining process typically involves the commingling of OCS crude oil with crude oil purchased or drawn by Shell from other places. Thus, the original source of oil in any Shell-refined product is indeterminable.
Shell’s principal business in the State of Iowa during the years at issue was the sale of oil and chemical products which it had manufactured and refined outside of Iowa. These products included OCS crude oil that had been commingled with non-OCS crude oil.
Iowa imposes an income tax on corporations doing business in Iowa. Iowa Code §422.33(2) (1987). For a unitary business like Shell, that income tax is determined by a single-factor apportionment formula based on sales. Under that formula, Iowa taxes the share of a corporation’s overall net income that is “reasonably attributable to the trade or business within the state.” Ibid. We have previously upheld Iowa’s sales-based apportionment formula against Due Process and Commerce Clause challenges in Moorman Manufacturing Co. v. Bair, 437 U. S. 267 (1978).
Between 1977 and 1980, Shell filed Iowa tax returns in which it adjusted the Iowa formula to exclude a figure which it stated reflected “income earned” from the OCS. The Iowa Department of Revenue audited Shell’s returns and rejected this modification. Accordingly, the Iowa Department of Revenue found Shell’s tax payment deficient. Shell challenged that determination, claiming at a hearing before the Iowa Department of Revenue that inclusion of OCS-derived income in the tax base of Iowa’s apportionment formula violated the OCSLA. The hearing officer rejected that contention. Shell appealed to the Polk County District Court, which affirmed the administrative decision, No. AA952 (Oct. 3, 1986), App. to Juris. Statement 15a (Polk County opinion), and to the Iowa Supreme Court, which also affirmed. Kelly-Springfield Tire Co. v. Iowa State Board of Tax Review, 414 N. W. 2d 113 (1987). Both courts concluded, based upon an examination of the text and history of the OCSLA, that the OCSLA did not pre-empt Iowa’s apportionment formula. We noted probable jurisdiction, 484 U. S. 1058 (1988), and now affirm.
II
We have previously held that Iowa’s apportionment formula is permissible under the Commerce Clause. Moorman Manufacturing Co. v. Bair, supra. Shell’s argument here is purely one of federal statutory pre-emption. It contends that, in passing the OCSLA, Congress intended to impose stricter requirements on a taxing State’s apportionment formula than those imposed by the operation of the Commerce Clause alone. Shell points to the text and history of the OCSLA which it believes evince a clear congressional intent to preclude States from including in their apportionment , formulas income arising from the sale of OCS oil and gas. In assessing this claim, we review first the text and then the history of the OCSLA.
Shell’s argument is that the plain language of the OCSLA enacts an “absolute and categorical” prohibition on state taxation of income arising from sales of OCS gas and oil. Brief for Appellant 13. Shell relies specifically on subsections 1333(a)(2)(A) and (a)(3) which provide, in pertinent part, as follows:
“(2)(A) To the extent that they are applicable and not inconsistent with this subchapter or with other Federal laws and regulations . . . , the civil and criminal laws of each adjacent State . . . are declared to be the law of the United States for that portion of the subsoil and seabed of the outer Continental Shelf, and artificial islands and fixed structures erected thereon, which would be within the area of the State if its boundaries were extended seaward to the outer margin of the outer Continental Shelf .... All of such applicable laws shall be administered and enforced by the appropriate officers and courts of the United States. State taxation laios shall not apply to the outer Continental Shelf.
“(3) The provisions of this section for adoption of State law as the law of the United States shall never be interpreted as a basis for claiming any interest in or jurisdiction on behalf of any State for any purpose over the seabed and subsoil of the outer Continental Shelf, or the property and natural resources thereof or the revenues therefrom.” 43 U. S. C. §§ 1333(a)(2)(A) and (a)(3) (emphasis added).
It is, of course, well settled that “when a federal statute unambiguously forbids the States to impose a particular kind of tax . . . , courts need not look beyond the plain language of the federal statute to determine whether a state statute that imposes such a tax is pre-empted.” Aloha Airlines, Inc. v. Director of Taxation of Hawaii, 464 U. S. 7, 12 (1983). But the meaning of words depends on their context. Shell reads the italicized language above without reference to the statutory context when it argues that these statutory words ban States from including income from OCS oil and gas in an apportionment formula.
We believe that § 1333(a)(2)(A), read in its entirety, supports a narrower interpretation. Subsection 1333(a)(2)(A) begins by clarifying which laws will apply to offshore activity on the OCS. It declares that the civil and criminal laws of the States adjacent to OCS sites will apply. Subsection 1333(a)(2)(A) goes on to create an exception to this general incorporation. It is highly significant to us that § 1333(a)(2)(A) refers specifically to “adjacent State[s],” 43 U. S. C. § 1333(a)(2)(A) (emphasis added). The subsequent reference in the subsection to “state taxation laws” can only be read in light of this antecedent reference to “adjacent State[s].” It is clearly included lest this federal incorporation be deemed to incorporate as well the tax codes of adjacent States.
The ensuing subsection, 1333(a)(3), was similarly drafted to prevent tax claims by adjacent States. It states that the incorporation of state law “as the law of the United States” is never to be interpreted by the States whose law has been incorporated to give them jurisdiction over the property or revenues of the OCS. Reading the statutory provisions in the context of the entire section in which they appear, we therefore believe that in enacting subsections 1333(a)(2)(A) and 1333(a)(3), Congress had the more limited purpose of prohibiting adjacent States from claiming that it followed from the incorporation of their civil and criminal law that their tax codes were also directly applicable to the OCS.
The background and legislative history of the OCSLA confirm this textual reading and refute Shell’s view of broader pre-emption. The OCSLA grew out of a dispute, which first developed in the 1930’s, between the adjacent States and the Federal Government over territorial jurisdiction and ownership of the OCS and, particularly, the right to lease the submerged lands for oil and gas exploration. S. Rep. No. 133, 83d Cong., 1st Sess., 21 (1953). The adjacent States claimed jurisdiction over the submerged lands and their rich oil, gas, and mineral deposits, id., at 6, and some had even extended their territorial boundaries as far as the outer edge of the OCS. Id., at 11. After this Court, in a series of opinions, ruled that the Federal Government, and not the adjacent States, had exclusive jurisdiction over the OCS, United States v. Louisiana, 339 U. S. 699, 705 (1950); United States v. Texas, 339 U. S. 707, 717-718 (1950); United States v. California, 332 U. S. 19, 38-39 (1947), Congress, in 1953, passed the OCSLA.
In passing the OCSLA, Congress intended to provide “for the orderly development of offshore resources.” United States v. Maine, 420 U. S. 515, 527 (1975). Congress was concerned with defining territorial jurisdiction between the adjacent States and the Federal Government as to the submerged lands, particularly with reference to leasing oil and gas rights. The OCSLA states that “the subsoil and seabed of the outer Continental Shelf appertain to the United States and are subject to its jurisdiction, control, and power of disposition . . . .” 43 U. S. C. § 1332. Thus, “[b]y passing the OCS Act, Congress ‘emphatically implemented its view that the United States has paramount rights to the seabed beyond the three-mile limit . . . Maryland v. Louisiana, 451 U. S. 725, 752-753, n. 26 (1981) (quoting United States v. Maine, supra, at 526).
Once the Court ruled that the OCS was subject to the exclusive jurisdiction and control of the Federal Government, Congress was faced with the problem of which civil and criminal laws should govern activity on the OCS sites. The Constitution and the laws of the United States were extended to cover the OCS. 43 U. S. C. § 1333(a)(2)(A). Congress recognized, however, that because of its interstitial nature, federal law would not provide a sufficiently detailed legal framework to govern life on “the miraculous structures which will rise from the sea bed of the [OCS].” Christopher, The Outer Continental Shelf Lands Act: Key to a New Frontier, 6 Stan. L. Rev. 23, 37 (1953). The problem before Congress was to incorporate the civil and criminal laws of the adjacent States, and yet, at the same time, reflect the strong congressional decision against allowing the adjacent States a direct share in the revenues of the OCS, by making it clear that state taxation codes were not to be incorporated. Id., at 37, 41.
In debates over the OCSLA, representatives of the adjacent States had argued that, despite exclusive federal jurisdiction over the OCS, their States should retain an interest in direct revenues from the OCS, and that they should be allowed the power to tax OCS production and activity extra-territorially. In particular, Senator Long of Louisiana argued that the adjacent States should have a share of OCS revenues since they would be providing services to OCS workers. S. Rep. No. 411, 83d Cong., 1st Sess., 67 (1953) (minority report of Sen. Long); see also 99 Cong. Rec. 7261 (1953) (remarks of Sen. Long).
Opponents of such adjacent-state extraterritorial taxation argued that extending the adjacent States’ power to tax beyond their borders would be “unconstitutional,” 99 Cong. Rec. 2506 (1953) (remarks of Rep. Celler); id., at 2524 (remarks of Rep. Machrowicz); id., at 2571-2572 (remarks of Rep. Keating), and that it would confer a windfall benefit upon the few adjacent States at the expense of the inland States. Id., at 2523 (remarks of Rep. Rodino); id., at 2524 (remarks of Rep. Machrowicz).
In the House, the Representatives of the adjacent States pressed for the inclusion of language in the OCSLA authorizing them to collect severance and production taxes. The House version of the bill, as reported out of Subcommittee No. 1 of the House Judiciary Committee, contained the present language prohibiting direct taxation by adjacent States. See 99 Cong. Rec. 2571 (1953) (remarks of Rep. Keating). The House Judiciary Committee amended the subsection to allow adjacent States to collect severance and production taxes. Ibid. See also, H. R. 4198, 83d Cong., 1st Sess. §8(a) (1953). On the House floor, however, that provision was deleted and replaced by the prohibition on state taxation which appears in 43 U. S. C. § 1333(a)(2)(A). 99 Cong. Rec. 2569, 2571-2573 (1953).
There is no reliable support in the legislative history of the OCSLA for Shell’s view that state income taxes are pre-empted. During a long speech criticizing the OCSLA because it prevented the adjacent States from imposing severance and production taxes, Senator Long mentioned, in passing, that employers on the OCS would not be subject to the state corporate profits tax. See S. Rep. No. 411, supra, at 67; see also 99 Cong. Rec. 7261 (1953). Shell, however, is unable to point to any other reference in the legislative history to corporate income taxes beyond this one remark by a vocal opponent of the OCSLA. This Court does not usually accord much weight to the statements of a bill’s opponents. “ ‘[T]he fears and doubts of the opposition are no authoritative guide to the construction of legislation.’ ” Gulf Offshore Co. v. Mobil Oil Corp., 453 U. S. 473, 483 (1981) (quoting Schwegmann Bros. v. Calvert Distillers Corp., 341 U. S. 384, 394 (1951)). Moreover, Senator Long’s remarks were apparently premised on the assumption that the private lessees on the OCS would not also engage in business activities within the taxing State’s borders. See 99 Cong. Rec. 7261 (1953); S. Rep. No. 411, supra, at 67. Finally, it is entirely possible that Senator Long was referring to a corporate income tax which, unlike Iowa’s, was not measured by an apportionment formula. See Texas Co. v. Cooper, 236 La. 380, 107 So. 2d 676 (1958) (Louisiana tax collector has statutory power to determine an oil company’s income by separate accounting rather than statutory apportionment method). We therefore find that Shell’s reliance on an isolated statement by Senator Long is misplaced.
In sum, the language, background, and history of the OCSLA leave no doubt that Congress was exclusively concerned with preventing the adjacent States from asserting, on the basis of territorial claims, jurisdiction to assess direct taxes on the OCS. We believe that Congress primarily intended to prohibit those direct taxes commonly imposed by States adjacent to offshore production sites: for example, severance and production taxes. See Maryland v. Louisiana, 451 U. S., at 753, n. 26 (“It is clear that a State has no valid interest in imposing a severance tax on federal OCS land”). This prohibition is a far cry from prohibiting a State from including income from OCS-derived oil and gas in a constitutionally permissible apportionment scheme.
Shell’s argument hinges on the mistaken premise that including OCS-derived income in the preapportionment tax base is tantamount to the direct taxation of OCS production. But income that is included in the preapportionment tax base is not, by virtue of that inclusion, taxed by the State. Only the fraction of total income that the apportionment formula determines (by multiplying the income tax base by the apportionment fraction) to be attributable to Iowa’s taxing jurisdiction is taxed by Iowa. As our Commerce Clause analysis of apportionment formulas has made clear, the inclusion of income in the preapportioned tax base of a state apportionment formula does not amount to extraterritorial taxation. This Court has repeatedly emphasized that the function of an apportionment formula is to determine the portion of a unitary business’ income that can be fairly attributed to in-state activities. Exxon Corp. v. Wisconsin Dept. of Revenue, 447 U. S. 207, 219 (1980); Mobil Oil Corp. v. Commissioner of Taxes of Vermont, 445 U. S. 425, 440 (1980). Thus, Shell’s claim that Iowa is taxing income attributable to the OCS cannot be squared with its concession that Iowa’s apportionment formula is consistent with the Commerce Clause.
A contrary result — forbidding the inclusion of income from OCS-derived oil and gas in Iowa’s apportionment formula— would give oil companies doing business on the OCS a significant exemption from corporate income taxes in all States which measure corporate income with an apportionment formula. Congress has the power to confer such an exemption, of course, but we find no evidence that it intended to do so in the OCSLA.
Finally, we reject a secondary argument made by Shell. It argues that even if the OCSLA allows a State to include in its preapportioned tax base the sales of OCS crude oil which occur off the OCS, the taxing State may not include in that base income from the natural gas sales made at the OCS wellhead. On its face, the OCSLA makes no such distinction and, in general, it is irrelevant for the makeup of the apportionment formula’s unitary tax base that third-party sales occur outside of the State. See Exxon Corp., supra, at 228-229. Actual sales on the OCS (as opposed to internal accounting sales) are not taxed directly by any State because they are not included in the numerator of the sales ratio. See n. 3, supra. From the inclusion of such sales in the apportionment formula’s tax base, it does not follow that the dollar amount derived from the formula (which is a fraction of the unitary tax base) includes income not fairly attributable to Iowa.
Ill
For the reasons set out above, we reject Shell’s argument that Congress intended, when it passed the OCSLA, to prohibit the inclusion, in a constitutionally permissible apportionment formula, of income from OCS oil and gas. We hold that the OCSLA prevents any State, adjacent or inland, from asserting extraterritorial taxing jurisdiction over OCS lands but that the inclusion of income derived from the OCS in the unitary tax base of a constitutionally permissible apportionment formula does not amount to extraterritorial taxation by the taxing State. Accordingly, the judgment of the Iowa Supreme Court is hereby affirmed.
It is so ordered.
The Iowa Code defines a unitary business as one which is “carried on partly within and partly without a state where the portion of the business carried on within the state depends on or contributes to the business outside the state.” Iowa Code §422.32(5) (1987).
The OCS includes “all submerged lands lying seaward and outside of the area of lands beneath navigable waters as defined in section 1301 of this title.” 43 U. S. C. §1331. “[L]ands beneath navigable waters” include all submerged lands within three geographical miles of the coastline of the United States. § 1301.
Iowa Code §422.33(2) (1987) provides, in pertinent part, as follows: “(2) If the trade or business of the corporation is carried on entirely within the state, the tax shall be imposed on the entire net income, but if the trade or business is carried on partly within and partly without the state, the tax shall be imposed only on the portion of the net income reasonably attributable to the trade or business within the state, said net income attributable to the state to be determined as follows:
“(b)(4) Where income is derived from the manufacture or sale of tangible personal property, the part thereof attributable to business within the state shall be in that proportion which the gross sales made within the state bear to the total gross sales.”
Iowa defines income by reference to federal taxable income which it then adjusts under Iowa law. Iowa Code §§422.32(6) and (11) (1987).
Described as a formula, the method for calculating the portion of Shell’s total income which is subject to Iowa income tax is as follows:
Shell adjusted the Iowa formula, set out above, see n. 3, as follows:
The OCS “sales” which Shell sought to deduct from the denominator of the sales ratio included both actual sales at the wellhead, which occur only in the ease of gas, and, “sales” of oil, which, measured by an internal Shell accounting technique, record transfers between Shell divisions. Shell also sought to deduct the income from such sales from the income multiplier.
Shell’s appeal before the Iowa Supreme Court was consolidated with a tax appeal by Kelly-Springfield Tire.
As Judge Learned Hand so eloquently noted: “Words are not pebbles in alien juxtaposition; they have only a communal existence; and not only does the meaning of each interpenetrate the other, but all in their aggregate take their purport from the setting in which they are used . . . .” NLRB v. Federbush. Co., 121 F. 2d 954, 957 (CA2 1941).
There is, in any event, evidence that the Senate thought that § 1333(a)(2)(A) was intended to duplicate § 1333(a)(3)’s prohibition on adjacent state claims of interest in or jurisdiction over the OCS. The floor manager of the Senate bill, Senator Cordon, explained that the language of § 1333(a)(2)(A) stating that “[sjtate taxation laws shall not apply to the outer Continental Shelf” was requested by the House conferees “in a superabundance of caution.” 99 Cong. Rec. 10471-10472 (1953). According to Senator Cordon, the language “adds nothing to and took nothing from the bill as it passed the Senate.” Ibid.
Christopher noted that the “whole circle of legal problems" typically resolved under state law could arise on the OCS, because the large crews working on the great offshore structures would “die, leave wills, and pay taxes. They will fight, gamble, borrow money, and perhaps even kill. They will bargain over their working conditions and sometimes they will be injured on the job." 6 Stan. L. Rev., at 37.
Shell’s reliance on the fact that the OCS is an exclusive federal enclave is misplaced. Iowa is not attempting to tax property within the OCS. White Mountain Apache Tribe v. Bracken, 448 U. S. 136 (1980). Nor does any policy of the OCSLA prevent States from including OCS-derived income in a constitutionally permissible apportionment formula. Ramah Navajo School Bd., Inc. v. Bureau of Revenue of New Mexico, 458 U. S. 832 (1982).
Although aimed specifically at the adjacent States, the prohibition against direct taxes obviously also applies to inland States, like Iowa. Before this Court’s rulings and passage of the OCSLA, the adjacent States could conceivably have claimed the right to impose a severance or production tax based on oil and gas removed from the OCS, on the grounds that their territorial boundaries extended, or should be deemed to extend, far out into the ocean. Iowa, or any landlocked State, wmuld have appeared foolish in making such a claim. After the passage of the OCSLA, both the adjacent and the landlocked States are precluded from imposing such taxes on OCS activities. See Polk County opinion, at 4. Likewise, both adjacent and landlocked States may include income from OCS-derived oil and gas in an otherwise constitutionally permissible apportionment formula. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
116
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NORTH DAKOTA et al. v. UNITED STATES
No. 88-926.
Argued October 31, 1989
Decided May 21, 1990
Stevens, J., announced the judgment of the Court and delivered an opinion, in which Rehnquist, C. J., and White and O’Connor, JJ., joined. Scalia, J., filed an opinion concurring in the judgment, post, p. 444. Brennan, J., filed an opinion concurring in the judgment in part and dissenting in part, in which Marshall, Blackmun, and Kennedy, JJ., joined, post, p. 448.
Nicholas J. Spaeth, Attorney General of North Dakota, argued the cause for appellants. With him on the brief were Steven E. Noack and Laurie J. Loveland, Assistant Attorneys General.
Michael R. Lazerwitz argued the cause for the United States. With him on the brief were Solicitor General Starr, Assistant Attorney General Peterson, Deputy Solicitor General Wallace, and Richard Farber.
Briefs of amici curiae urging reversal were filed for the National Alcoholic Beverage Control Association et al. by Jamen M. Goldberg; for the National Beer Wholesalers’ Association, Inc., by Ernest Gellhom and Erwin N. Griswold; and for the National Conference of State Legislatures et al. by Benna Ruth Solomon, Beate Bloch, and Barry Friedman.
Justice Stevens
announced the judgment of the Court and delivered an opinion, in which The Chief Justice, Justice White, and Justice O’Connor join.
The United States and the State of North Dakota exercise concurrent jurisdiction over the Grand Forks Air Force Base and the Minot Air Force Base. Each sovereign has its own separate regulatory objectives with respect to the area over which it has authority. The Department of Defense (DoD), which operates clubs and package stores located on those bases, has sought to reduce the price that it pays for alcoholic beverages sold on the bases by instituting a system of competitive bidding. The State, which has established a liquor distribution system in order to promote temperance and ensure orderly market conditions, wishes to protect the integrity of that system by requiring out-of-state shippers to file monthly reports and to affix a label to each bottle of liquor sold to a federal enclave for domestic consumption. The clash between the State’s interest in preventing thé diversion of liquor and the federal interest in obtaining the lowest possible price forms the basis for the Federal Government’s Supremacy Clause and pre-emption challenges to the North Dakota regulations.
I
The United States sells alcoholic beverages to military personnel and their families at clubs and package stores on its military bases. The military uses revenue from these sales to support a morale, welfare, and recreation program for personnel and their families. .See 32 CFR §261.3 (1989); DoD Directive 1015.1 (Aug. 19, 1981). Before December 1985, no federal statute governed the purchase of liquor for these establishments. From December 19, 1985, to October 19, 1986, federal law required military bases to purchase alcoholic beverages only within their home State. See Pub. L. 99-190, §8099, 99 Stat. 1219. Effective October 30, 1986, Congress eliminated the requirement that the military purchase liquor from within the State and directed that distilled spirits be “procured from the most competitive source, price and other factors considered.” Pub. L. 99-661, §313, 100 Stat. 3853, 10 U. S. C. § 2488(a).
In accordance with this statute, the DoD has developed a joint-military purchasing program to buy liquor in bulk directly from the Nation’s primary distributors who offer the lowest possible prices. Purchases are made pursuant to a DoD regulation which provides:
“ ‘The Department of Defense shall cooperate with local, state, and federal officials to the degree that their duties relate to the provisions of this chapter. However, the purchase of all alcoholic beverages for resale at any camp, post, station, base, or other DoD installation within the United States shall be in such a manner and under such conditions as shall obtain for the government the most advantageous contract, price and other considered factors. These other factors shall not be construed as meaning any submission to state control, nor shall cooperation be construed or represented as an admission of any legal obligation to submit to state control, pay state or local taxes, or purchase alcoholic beverages within geographical boundaries or at prices or from suppliers prescribed by any state.’” 32 CFR §261.4 (1989).
Since long before the enactment of the most recent procurement statute, the State of North Dakota has regulated the importation and distribution of alcoholic beverages within its borders. See N. D. Cent. Code ch. 5 (1987 and Supp. 1989). Under the State’s regulatory system, there are three levels of liquor distributors: out-of-state distillers/suppliers, state-licensed wholesalers, and state-licensed retailers. Distillers/suppliers may sell to only licensed wholesalers or federal enclaves. N. D. Admin. Code §84-02-01-05(2) (1986). Licensed wholesalers, in turn, may sell to licensed retailers, other licensed wholesalers, and federal enclaves. N. D. Cent. Code §5-03-01 (1987). Taxes are imposed at both levels of distribution. N. D. Cent. Code §5-03-07 (1987); N. D. Cent. Code ch. 57-39.2 (Supp. 1989). In order to monitor the importation of liquor, the State since 1978 has required all persons bringing liquor into the State to file monthly reports documenting the volume of liquor they have imported. The reporting regulation provides:
“All persons sending or bringing liquor into North Dakota shall file a North Dakota Schedule A Report of all shipments and returns for each calender month with the state treasurer. The report must be postmarked on or before the fifteenth day of the following month.” N. D. Admin. Code §84-02-01-05(1) (1986).
Since 1986, the State has also required out-of-state distillers who sell liquor directly to a federal enclave to affix labels to each individual item, indicating that the liquor is for domestic consumption only within the federal enclave. The labels may be purchased from the state treasurer for a small sum or printed by the distillers/suppliers themselves according to a state-approved format. App. 34. The labeling regulation provides:
“All liquor destined for delivery to a federal enclave in North Dakota for domestic consumption and not transported through a licensed North Dakota wholesaler for delivery to such bona fide federal enclave in North Dakota shall have clearly identified on each individual item that such shall be for consumption within the federal enclave exclusively. Such identification must be in a form and manner prescribed by the state treasurer.” N. D. Admin. Code §84-02-01-05(7) (1986).
Within the State of North Dakota, the United States operates two military bases: Grand Forks Air Force Base and Minot Air Force Base. The State and Federal Government exercise concurrent jurisdiction over both. Shortly after the effective date of the procurement statute permitting the military to make purchases from out of state, the state treasurer conducted a meeting with out-of-state suppliers to explain the labeling and reporting requirements. App. 34. Five out-of-state distillers and importers thereupon informed federal military procurement officials that they would not ship liquor to the North Dakota bases because of the burden of complying with the North Dakota regulations. A sixth supplier, Kobrand Importers, Inc., increased its prices from between $0.85 and $20.50 per case to reflect the cost of labeling and reporting.
The United States instituted this action in the United States District Court for the District of North Dakota seeking declaratory and injunctive relief against the application of the State’s regulations to liquor destined for federal enclaves. The District Court denied the United States’ cross-motion for summary judgment and granted the State’s motion. The court reasoned that there was no conflict between the state and federal regulations because the state regulations did not prevent the Government from obtaining beverages at the “lowest cost.” 675 F. Supp. 555, 557 (1987). A divided United States Court of Appeals for the Eighth Circuit reversed. 856 F. 2d 1107 (1988). While recognizing that “nothing in the record compels us to believe that the regulations are a pretext to require in-state purchases,” id., at 1113, the majority held that the regulations impermissibly made out-of-state distillers less competitive with local wholesalers. Ibid. Chief Judge Lay argued in dissent that the effect on the Federal Government was a permissible incident of regulations passed pursuant to the State’s powers under the Twenty-first Amendment. Id., at 1115-1116. We noted probable jurisdiction, 489 U. S. 1095 (1989), and now reverse.
II
The Court has considered the power of the States to pass liquor control regulations that burden the Federal Government in four cases since the ratification of the Twenty-first Amendment. See Collins v. Yosemite Park & Curry Co., 304 U. S. 518 (1938); Hostetter v. Idlewild Bon Voyage Liquor Corp., 377 U. S. 324 (1964); United States v. Mississippi Tax Comm’n, 412 U. S. 363 (1973) (Mississippi Tax Comm’n I); United States v. Mississippi Tax Comm’n, 421 U. S. 599 (1975) (Mississippi Tax Comm’n II); see also Johnson v. Yellow Cab Transit Co., 321 U. S. 383 (1944). In each of those cases, we concluded that the State has no authority to regulate in an area or over a transaction that fell outside of its jurisdiction. In Collins, we held that the Twenty-first Amendment did not give the States the power to regulate the use of alcohol within a national park over which the Federal Government had exclusive jurisdiction. In Hostetter, we held that the Twenty-first Amendment conferred no authority to license the sale of tax-free liquors at an airport for delivery to foreign destinations made under the supervision of the United States Bureau of Customs. Mississippi Tax Comm’n I held that the State had no authority to regulate a transaction between an out-of-state liquor supplier and a federal military base within the exclusive federal jurisdiction. And, in Mississippi Tax Comm’n II, we held that the State has no authority to tax directly a federal instrumentality on an enclave over which the United States exercised concurrent jurisdiction.
At the same time, however, within the area of its jurisdiction, the State has “virtually complete control” over the importation and sale of liquor and the structure of the liquor distribution system. See California Retail Liquor Dealers Assn. v. Midcal Aluminum, Inc., 445 U. S. 97, 110 (1980); see also Capital Cities Cable, Inc. v. Crisp, 467 U. S. 691, 712 (1984); California Board of Equalization v. Young’s Market Co., 299 U. S. 59 (1936). The Court has made clear that the States have the power to control shipments of liquor during their passage through their territory and to take appropriate steps to prevent the unlawful diversion of liquor into their regulated intrastate markets. In Hostetter, we stated that our decision in Collins, striking down the California Alcoholic Beverage Control Act as applied to an exclusive federal reservation, might have been otherwise if “California had sought to regulate or control the transportation of the liquor there involved from the time of its entry into the State until its delivery at the national park, in the interest of preventing unlawful diversion into her territory.” 377 U. S., at 333. We found that the state licensing law there under attack was unlawful because New York “ha[d] not sought to regulate or control the passage of intoxicants through her territory in the interest of preventing their unlawful diversion into the internal commerce of the State. As the District Court emphasized, this cáse does not involve ‘measures aimed at preventing unlawful diversion or use of alcoholic beverages within New York.’ 212 F. Supp., at 386.” Id., at 333-334.
In Mississippi Tax Comm’n I, supra, after holding that the State could n'ot impose its normal markup on sales to the military bases, we added that “a State may, in the absence of conflicting federal regulation, properly exercise its police powers to regulate and control such shipments during their passage through its territory insofar as necessary to prevent the ‘unlawful diversion’ of liquor ‘into the internal commerce of the State.’” 412 U. S., at 377-378 (citations omitted).
The two North Dakota regulations fall within the core of the State’s power under the Twenty-first Amendment. In the interest of promoting temperance, ensuring orderly market conditions, and raising revenue, the State has established a comprehensive system for the distribution of liquor within its borders. That system is unquestionably legitimate. See Carter v. Virginia, 321 U. S. 131 (1944); California Board of Equalization v. Young’s Market Co., 299 U. S. 59 (1936). The requirements that an out-of-state supplier which transports liquor into the State affix a label to each bottle of liquor destined for delivery to a federal enclave and that it report the volume of liquor it has transported are necessary components of the regulatory regime. Because liquor sold at Grand Forks and Minot Air Force Bases has been purchased directly from out-of-state suppliers, neither the markup nor the state taxes paid by liquor wholesalers and retailers in North Dakota is reflected in the military purchase price. Moreover, the federal enclaves are not governed by state laws with respect to the sale of intoxicants; the military establishes the type of liquor it sells, the minimum age of buyers, and the days and times its package stores will be open. The risk of diversion into the retail market and disruption of the liquor distribution system is thus both substantial and real. It is necessary for the State to record the volume of liquor shipped into the State and to identify those products which have not been distributed through the State’s liquor distribution system. The labeling and reporting requirements unquestionably serve valid state interests. Given the special protection afforded to state liquor control policies by the Twenty-first Amendment, they are supported by a strong presumption of validity and should not be set aside lightly. See, e. g., Capital Cities Cable, Inc. v. Crisp, 467 U. S., at 714.
Ill
State law may run afoul of the Supremacy Clause in two distinct ways: The law may regulate the Government directly or discriminate against it, see McCulloch v. Maryland, 4 Wheat. 316, 425-437 (1819), or it may conflict with an affirmative command of Congress. See Gibbons v. Ogden, 9 Wheat. 1, 211 (1824); see also Hillsborough County v. Automated Medical Laboratories, Inc., 471 U. S. 707, 712-713 (1985). The Federal Government’s attack on the regulations is based on both grounds of invalidity.
The Government argues that the state provisions governing the distribution of liquor by out-of-state shippers “regulate” governmental actions and are therefore invalid directly under the Supremacy Clause. The argument is unavailing. State tax laws, licensing provisions, contract laws, or even “a statute or ordinance regulating the mode of turning at the corner of streets,” Johnson v. Maryland, 254 U. S. 51, 56 (1920), no less than the reporting and labeling regulations at issue in this case, regulate federal activity in the sense that they make it more costly for the Government to do its business. At one time, the Court struck down many of these state regulations, see Panhandle Oil Co. v. Mississippi ex rel. Knox, 277 U. S. 218, 222 (1928) (state tax on military contractor); Dobbins v. Commissioners of Erie County, 16 Pet. 435 (1842) (tax on federal employee); Gillespie v. Oklahoma, 257 U. S. 501 (1922) (tax on lease of federal property); Weston v. City Council of Charleston, 2 Pet. 449 (1829) (tax on federal bond), on the theory that they interfered with “the constitutional means which have been legislated by the government of the United States to carry into effect its powers.” Dobbins, 16 Pet., at 449. Over 50 years ago, however, the Court decisively rejected the argument that any state regulation which indirectly regulates the Federal Government’s activity is unconstitutional, see James v. Dravo Contracting Co., 302 U. S. 134 (1937), and that view has now been “thoroughly repudiated.” South Carolina v. Baker, 485 U. S. 505, 520 (1988); see also California Board of Equalization v. Sierra Summit, Inc., 490 U. S. 844, 848 (1989); Cotton Petroleum Corp. v. New Mexico, 490 U. S. 163, 174 (1989).
The Court has more recently adopted a functional approach to claims of governmental immunity, accommodating of the full range of each sovereign’s legislative authority and respectful of the primary role of Congress in resolving conflicts between the National and State Governments. See United States v. County of Fresno, 429 U. S. 452, 467-468 (1977); cf. Garcia v. San Antonio Metropolitan Transit Auth., 469 U. S. 528 (1985). Whatever burdens are imposed on the Federal Government by a neutral state law regulating its suppliers “are but normal incidents of the organization within the same territory of two governments.” Helvering v. Gerhardt, 304 U. S. 405, 422 (1938); see also South Carolina v. Baker, 485 U. S., at 520-521; Penn Dairies, Inc. v. Milk Control Comm’n of Pennsylvania, 318 U. S. 261, 271 (1943); Graves v. New York ex rel. O’Keefe, 306 U. S. 466, 487 (1939). A state regulation is invalid only if it regulates the United States directly- or discriminates against the Federal Government or those with whom it deals. South Carolina v. Baker, 485 U. S., at 523; County of Fresno, 429 U. S., at 460. In addition, the question whether a state regulation discriminates against the Federal Government cannot be viewed in isolation. Rather, the entire regulatory system should be analyzed to determine whether it is discriminatory “with regard to the economic burdens that result.” Washington v. United States, 460 U. S. 536, 544 (1983). Claims to any further degree of immunity must be resolved under principles of congressional pre-emption. See, e. g., Penn Dairies, Inc. v. Milk Control Comm’n, 318 U. S., at 271; James v. Dravo Contracting Co., 302 U. S., at 161.
Application of these principles to the North Dakota regulations demonstrates that they do not violate the intergovernmental immunity doctrine. There is no claim in this case, nor could there be, that North Dakota regulates the Federal Government directly. See United States v. New Mexico, 455 U. S. 720 (1982); Hancock v. Train, 426 U. S. 167 (1976); Mississippi Tax Comm’n II, 421 U. S., at 608-610; Mayo v. United States, 319 U. S. 441, 447 (1943). Both the reporting requirement and the labeling regulation operate against suppliers, not the Government, and concerns about direct interference with the Federal Government, see City of Detroit v. Murray Corp. of America, 355 U. S. 489, 504-505 (1958) (opinion of Frankfurter, J.), therefore are not implicated. In this respect, the regulations cannot be distinguished from the price control regulations and taxes imposed on Government contractors that we have repeatedly upheld against constitutional challenge. See United States v. City of Detroit, 355 U. S. 466 (1958); Penn Dairies, Inc., 318 U. S., at 279-280; Alabama v. King & Boozer, 314 U. S. 1, 8 (1941).
Nor can it be said that the regulations discriminate against the Federal Government or those with whom it deals. The nondiscrimination rule finds its reason in the principle that the States may not directly obstruct the activities of the Federal Government. McCulloch v. Maryland, 4 Wheat., at 425-437. Since a regulation imposed on one who deals with the Government has as much potential to obstruct governmental functions as a regulation imposed on the Government itself, the Court has required that the regulation be one that is imposed on some basis unrelated to the object’s status as a Government contractor or supplier, that is, that it be imposed equally on other similarly situated constituents of the State. See, e. g., United States v. County of Fresno, 429 U. S., at 462-464. Moreover, in analyzing the constitutionality of a state law, it is not appropriate to look to the most narrow provision addressing the Government or those with whom it deals. A state provision that appears to treat the Government differently on the most specific level of analysis may, in its broader regulatory context, not be discriminatory. We have held that “[t]he State does not discriminate against the Federal Government and those with whom it deals unless it treats someone else better than it treats them.” Washington v. United States, 460 U. S., at 544-545.
The North Dakota liquor control regulations, the regulatory regime of which the Government complains, do not disfavor the Federal Government but actually favor it. The labeling and reporting regulations are components of an extensive system of statewide regulation that furthers legitimate interests in promoting temperance and controlling the distribution of liquor, in addition to raising revenue. The system applies to all liquor retailers in the State. In this system, the Federal Government is favored over all those who sell liquor in the State.' All other liquor retailers are required to purchase from state-licensed wholesalers, who are legally bound to comply with the State’s liquor distribution system. N. D. Cent. Code §5-03-01.1 (1987). The Government has the option, like the civilian retailers in the State, to purchase liquor from licensed wholesalers. However, alone among retailers in the State, the Government also has the option to purchase liquor from out-of-state wholesalers if those wholesalers comply with the labeling and reporting regulations. The system does not discriminate “with regard to the economic burdens that result.” Washington, 460 U. S., at 544. A regulatory regime which so favors the Federal Government cannot be considered to discriminate against it.
• IV
The conclusion that the labeling regulation does not violate the intergovernmental immunity doctrine does not end the inquiry into whether the regulation impermissibly interferes with federal activities. Congress has the power to confer immunity from state regulation on Government suppliers beyond that conferred by the Constitution alone, see, e. g., United States v. New Mexico, 455 U. S., at 737-738; Penn Dairies, Inc., 318 U. S., at 275, even when the state regulation is enacted pursuant to the State’s powers under the Twenty-first Amendment. Capital Cities Cable, Inc. v. Crisp, 467 U. S., at 713. But when the Court is asked to set aside a regulation at the core of the State’s powers under the Twenty-first Amendment, as when it is asked to recognize an implied exemption from state taxation, see Rockford Life Ins. Co. v. Illinois Dept. of Revenue, 482 U. S. 182, 191 (1987), it must proceed with particular care. Capital Cities Cable, 467 U. S., at 714. Congress has not here spoken with sufficient clarity to pre-empt North Dakota’s attempt to protect its liquor distribution system.
The Government’s claim that the regulations are preempted rests upon a federal statute and federal regulation. The federal statute is 10 U. S. C. §2488, which governs the procurement of alcoholic beverages by nonappropriated fund instrumentalities. It provides simply that purchases of alcoholic beverages for resale on military installations “shall be made from the most competitive source, price and other factors considered,” § 2488(a)(1), but that malt beverages and wine shall be purchased from sources within the State in which the installation is located. It may be inferred from the latter provision as well as from the provision, elsewhere in the Code, that alcoholic beverages purchased for resale in Alaska and Hawaii must be purchased in state, Act of Oct. 30, 1986, Pub. L. 99-591, §9090, 100 Stat. 3341-116, that Congress intended for the military to be free in the other 48 States to purchase liquor from out-of-state wholesalers. It follows that the States may not directly restrict the military from purchasing liquor out of state. That is the central lesson of our decisions in Paul v. United States, 371 U. S. 245 (1963); United States v. Georgia Public Service Comm’n, 371 U. S. 285 (1963); Public Utilities Comm’n of California v. United States, 355 U. S. 534 (1958); and Leslie Miller, Inc. v. Arkansas, 352 U. S. 187 (1956), in which we invalidated state regulations that prohibited what federal law required. We stated in Paul that there was a “collision . . . clear and acute,” between the federal law which required competitive bidding among suppliers and the state law which directly limited the extent to which suppliers could compete. 371 U. S., at 253.
It is one thing, however, to say that the State may not pass regulations which directly obstruct federal law; it is quite another to say that they cannot pass regulations which incidentally raise the costs to the military. Any number of state laws may make it more costly for the military to purchase liquor. As Chief Judge Lay observed in dissent, “[c]ompliance with regulations regarding the importation of raw materials, general operations of the distillery or brewery, treatment of employees, bottling, and shipping necessarily increase the cost of liquor.” 856 F. 2d, at 1116. Highway tax laws and safety laws may make it more costly for the military to purchase from out-of-state shippers.
The language used in the 1986 procurement statute does not expressly pre-empt any of these state regulations or address the problem of unlawful diversion of liquor from military bases into the civilian market. It simply states that covered alcoholic beverages shall be obtained from the most competitive source, price and other factors considered. As the District Court observed, however, “‘[IJowest cost’ is a relative term.” 675 F. Supp., at 557. The fact that the reporting and labeling regulations, like safety laws or minimum wage laws, increase the costs for out-of-state shippers does not prevent the Government from obtaining liquor at the most competitive price, but simply raises that price. The procurement statute does not cut such a wide swath through state law as to invalidate the reporting and labeling regulations.
In this case the most competitive source for alcoholic beverages are out-of-state distributors whose prices are lower than those charged by North Dakota wholesalers regardless of whether the labeling and reporting requirements are enforced. The North Dakota regulations, which do not restrict the parties from whom the Government may purchase liquor or its ability to engage in competitive bidding, but at worst raise the costs of selling to the military for certain shippers, do not directly conflict with the federal statute.
V
The DoD regulation restates, in slightly different language, the statutory requirement that distilled spirits be “procured from the most competitive source, price and other factors considered,” but it does not purport to carry a greater pre-emptive power than the statutory command itself. It is Congress — not the DoD — that has the power to pre-empt otherwise valid state laws, and there is no language in the relevant statute that either pre-empts state liquor distribution laws or delegates to the DoD the power to pre-empt such state laws.
Nor does the text of the DoD regulation itself purport to pre-empt any state laws. See California Coastal Comm’n v. Granite Rock Co., 480 U. S. 572, 583 (1987); Hillsborough County v. Automated Medical Laboratories, Inc., 471 U. S., at 717-718. It directs the military to consider various factors in determining “the most advantageous contract, price and other considered factors,” but that command cannot be understood to pre-empt state laws that have the incidental effect of raising costs for the military. Indeed, the regulation specifically envisions some regulation by state law, for it provides that the Department “shall cooperate with local [and] state . . . officials ... to the degree that their duties relate to the provisions of this chapter.” The regulation does admonish that such cooperation should not be construed as an admission that the military is obligated to submit to state control or required to buy from suppliers located within the State or prescribed by the State. The North Dakota regulations, however, do not require the military to submit to state control or to purchase alcoholic beverage from suppliers within the State or prescribed by the State. The DoD regulation has nothing to say about labeling or reporting by out-of-state suppliers.
When the Court is confronted with questions relating to military discipline and military operations, we properly defer to the judgment of those who must lead our Armed Forces in battle. But in questions relating to the allocation of power between the Federal and State Governments on civilian commercial issues, we heed the command of Congress without any special deference to the military’s interpretation of that command.
The present record does not establish the precise burdens the reporting and labeling regulations will impose on the Government, but there is no evidence that they will be substantial. The reporting requirement has been in effect since 1978 and there is no evidence that it has caused any supplier to raise its costs or stop supplying the military. Although the labeling regulation has caused a few suppliers either to adjust their prices or to cease direct shipments to the bases, there has been no showing that there are not other suppliers willing to enter the market and there is no indication that the Government has made any attempt to secure other out-of-state suppliers. The cost of the labels is approximately three to five cents if purchased from the state treasurer, and the distillers have the right to print their own labels if they prefer. App. 34. Even in the initial stage of enforcing the requirement for the two bases in North Dakota, various distillers and suppliers have already notified the state treasurer that they intend to comply with the new regulations. Ibid. And, even if its worst predictions are fulfilled, the military-will still be the most favored customer in the State.
It is Congress, not this Court, which is best situated to evaluate whether the federal interest in procuring the most inexpensive liquor outweighs .the State’s legitimate interest in preventing diversion. Congress has already effected a compromise by excluding beer and wine and the States of Hawaii and Alaska from the 1986 statute. It may also decide to prohibit labels entirely or prescribe their use on a nationwide basis. It would be both an unwise and an unwarranted extension of the intergovernmental immunity doctrine for this Court to hold that the burdens associated with the labeling and reporting requirements — no matter how trivial they may prove to be — are sufficient to make them unconstitutional. The judgment of the Court of Appeals is reversed.
It is so ordered.
Congress kept the rule requiring in-state purchases of distilled spirits for installations in Hawaii and Alaska and of beer and wine for installations throughout the United States. Act of Oct. 30, 1986, Pub. L. 99-591, §9090, 100 Stat. 3341-116.
The parties stipulated to concurrent jurisdiction but offered no further information. App. 16. A territory under concurrent jurisdiction is generally subject to the plenary authority of both the Federal Government and the State for the purposes of the regulation of liquor as well as the exercise of other police powers. See, e. g., United States v. Mississippi Tax Comm’n, 412 U. S. 363, 379-380 (1973); James v. Dravo Contracting Co., 302 U. S. 134, 141-142 (1937); Surplus Trading Co. v. Cook, 281 U. S. 647, 650-651 (1930). The parties have not argued that North Dakota ceded its authority to regulate the importation of liquor destined for federal bases.
The five are Heublein, Inc., James B. Beam, Joseph Seagram & Sons, Inc., Somerset Importers, and Hiram Walker & Sons, Inc. App. 26.
Section 2 of the Twenty-first Amendment provides:
“The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.”
A member of the National Conference of State Liquor Administrators executed an affidavit describing the following types of misconduct that North Dakota liquor regulations are intended to prevent:
“a. Diversion of alcohol off a federal enclave in Hawaii by a dependent of a Department of Defense employee in quantities large enough to supply the dependent’s own liquor store in the private sector.
“b. Loss of quantities of alcohol from the time the supplier delivered the product to the Department of Defense personnel to the time when the product was to be inventoried or taken by Department of Defense personnel to another facility.
“c. Purchases of alcohol is [sic] quantities so large that the only logical explanation is that the alcohol was diverted from the military base into a state’s stream of commerce. This occurred in the state of Washington as documented by the Washington State Liquor Control Board’s February 20, 1987, letter to Mr. Chapman Cox, Assistant Secretary of Defense at the Pentagon in Washington, D. C. A copy of that letter is attached hereto as Attachment 1. The Washington State Liquor Control Board letter describes purchases of alcohol in quantities so large that on-base personnel would have had to individually consume 85 cases each during the fiscal year 1986. This amounts to 1,020 bottles or approximately 5 bottles per person per day, including Sundays and holidays.” App. 36.
Cf. Rice v. Rehner, 463 U. S. 713, 724 (1983) (“The State has an unquestionable interest in the liquor traffic that occurs within its borders”).
Thus, for example, in Public Utilities Comm’n of California v. United States, 355 U. S. 534 (1958), we put to one side “eases where, absent a conflicting federal regulation, a State seeks to impose safety or other requirements on a contractor who does business for the United States.” Id., at 543. We invalidated the state law because there was a clear conflict between the state policy of regulation of negotiated rates and the federal policy, expressed in statute and regulation, of negotiated rates. Id., at 544. Similarly, in Leslie Miller, Inc. v. Arkansas, 352 U. S. 187 (1956), the state licensing law came into direct conflict with “the action which Congress and the Department of Defense ha[d] taken to insure the reliability of persons and companies contracting with the Federal Government.” Id., at 190. Paul v. United States, 371 U. S. 245 (1963), involved the Armed Services Procurement Act and regulations promulgated thereunder. We stated that the collision between the federal policy, expressed in these laws, and the state policy was “clear and acute.” Id., at 253. In United States v. Georgia Public Service Comm’n, 371 U. S. 285 (1963), we relied upon the passage by Congress of the Federal Property and Administrative Services Act, which spoke too clearly to permit any state regulation of competitive bidding or negotiation.
In discussing why it was proper to convene a three-judge court, the Court in Georgia Public Service Comm’n did state: “Direct conflict between a state law and federal constitutional provisions raises of course a question under the Supremacy Clause but one of broader scope than where the alleged conflict is only between a state statute and a federal statute that might be resolved by the construction given either the state or the federal law.” Id., at 287 (citing Kesler v. Department of Public Safety of Utah, 369 U. S. 153 (1962)). That statement constituted an explanation for the assertion of jurisdiction, not an expression of a general principle of implied intergovernmental immunity. Under 28 U. S. C. § 2281 (1970 ed.), a three-judge court was required whenever a state statute was sought to be enjoined “upon the ground of the unconstitutionality of such statute”; Kesler held that such a court was required, and the Constitution was implicated, when the conflicting state and federal laws were clear. Georgia Public Service Comm’n raised a “broader” question because it could not “be resolved by the construction given either the state or the federal law.” 371 U. S., at 287. In Swift & Co. v. Wickham, 382 U. S. 111 (1965), we overruled Kesler and explained that the variant of Supremacy Clause jurisprudence there discussed was that which is implicated when “a state measure conflicts with a federal requirement.” 382 U. S., at 120.
Justice Brennan would strike down the labeling regulation because it subjects the military to special surcharges and forces it to pay higher instate prices. Post, at 458. Yet, he would uphold the reporting requirement, whose costs are also a component of the out-of-state supplier’s expenses, presumably on the grounds that there has been no showing that those costs have been passed on to the military. Post, at 464, n. 9. Whereas five companies stopped supplying the military after the labeling regulation went into effect and a sixth raised prices by as much as $20.50 per case, post, at 458, the Government introduced no evidence that the reporting regulation interfered with the military’s policy of purchasing from the most competitive source. Post, at 464, n. 9. Justice Brennan’s test contains no standard by which “burdensomeness” may be measured. Would a state regulation that forced one company to stop dealing with the Government be invalid? What about a regulation that raised prices to the military, not by $20.50, but by $5 a ease? We prefer to rely upon our traditional standai’d of “burden” — that specified by Congress and, in its absence, that which exceeds the burden imposed on other comparably situated citizens of the State — and decline to embark on an approach that would either result in the invalidation or the trial, by some undisclosed standard, of every state regulation that in any way touched federal activity.
“The danger of hindrance of the Federal Government in the use of its property, resulting in erosion of the fundamental command of the Supremacy Clause, is at its greatest when the State may, through regulation or taxation, move directly against the activities of the Government.” City of Detroit v. Murray Corp. of America, 355 U. S. 489, 504 (1958) (opinion of Frankfurter, J.).
In our opinion in Washington v. United States, we made the following comment on our holding in United States v. County of Fresno, 429 U. S. 452 (1977):
“We rejected the United States’ contention that the tax system discriminated against lessees of federal property. Because the economic burden of a tax imposed on the owner of nonexempt property is ordinarily passed on to the lessee, we explained that those who leased property from the Federal Government were no worse off than their counterparts in the private sector. 429 U.' S., at 464-465.” 460 U. S., at 543.
See swpra, at 427-428. The fact that this regulation was promulgated in 1982 makes it rather clear that it was not intended to address the problem of labeling or reporting regulations or otherwise to enlarge the authority to make out-of-state purchases as permitted by the 1986 statute.
The statute pursuant to which the DoD regulation was promulgated does not even speak to the purchase of liquor by the military. It provides in part:
“The Secretary of Defense is authorized to make such regulations as he may deem to be appropriate governing the sale, consumption, possession of or traffic in beer, wine, or any other intoxicating liquors to or by members of the Armed Forces ... at or near any camp, station, post, or other place primarily occupied by members of the Armed Forces . . . .” 65 Stat. 88, 50 U. S. C. App. §473 (1982 ed.). | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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"Federal Reserve System",
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"National Credit Union Administration",
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"National Enforcement Commission",
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"National Mediation Board",
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] | [
23
] |
FEDERAL POWER COMMISSION v. MEMPHIS LIGHT, GAS & WATER DIVISION et al.
No. 72-486.
Argued March 27, 1973
Decided May 7, 1973
Douglas, J., delivered the opinion for a unanimous Court.
Samuel Huntington argued the cause for petitioner in No. 72-486. With him on the brief were Solicitor General Griswold, Leo E. Forquer, and George W. McHenry, Jr. Christopher T. Boland argued the cause for petitioner in No. 72-488. With him on the briefs were Melvin Richter and Robert O. Koch.
George E. Morrow argued the cause for respondent Memphis Light, Gas & Water Division in both cases. With him on the brief was Reuben Goldberg. Richard A. Solomon argued the cause and filed a brief for respondent Public Service Commission for the State of New York in both cases. Charles F. Wheatley, Jr., and William T. Miller filed a brief for respondent American public Gas Assn, in both cases.
Together with No. 72-488, Texas Gas Transmission Corp. v. Memphis Light, Gas & Water Division et al., also on certiorari to the same court.
Briefs of amici curiae urging reversal in both cases were filed by Jerome J. McGrath for the Independent Natural Gas Association of America, and by Thomas M. Debevoise for Jersey Central Power & Light Co. et al.
Me. Justice Douglas
delivered the opinion of the Court.
We granted certiorari in these cases to determine whether § 441 of the Tax Reform Act of 1969, 26 U. S. C. § 167 (l), circumscribes the authority of the Federal Power Commission under the Natural Gas Act, 52 Stat. 821, as amended, 15 U. S. C. § 717 et seg., to permit a regulated utility to change its method of computing depreciation for ratemaking purposes from “flow-through” to “normalization” with respect to property acquired prior to 1970 as well as “replacement” property.
Since the resolution of this issue depends largely on the background and history of § 441 and the Commission’s regulatory powers, a brief review is in order at the outset. Section 167 of the Internal Revenue Code authorized taxpayers, including regulated utilities, to use accelerated or liberalized depreciation in calculating their federal income taxes. The Commission retained jurisdiction to prescribe the depreciation method to be used by regulated utilities in calculating their federal income tax expense for ratemaking purposes. Initially, the Commission required utilities to compute their cost of service, which includes federal income taxes, as if they were using straight-line depreciation. This method, referred to as “normalization,” was designed to avoid giving the present customers of a utility the benefits of tax deferral attributable to accelerated depreciation. If a utility used accelerated depreciation in determining its actual tax liability, the difference between the taxes actually paid and the higher taxes reflected as a cost of service for ratemaking purposes was required to be placed in a deferred tax reserve account. See Amere Gas Utilities Co., 15 F. P. C. 760.
It soon became apparent that accelerated depreciation in practice resulted in permanent tax savings. Because most utilities had growing or at least stable plant investments, the depreciation allowances from additional and replacement equipment offset the declining depreciation allowance on existing property. Accordingly, the Commission required utilities using accelerated depreciation for tax purposes to use the same method for calculating their cost of service and, thus, to “flow through” any tax savings to their customers. Alabama-Tennessee Natural Gas Co., 31 F. P. C. 208, aff'd sub nom. Alabama-Tennessee Natural Gas Co. v. FPC, 359 F. 2d 318 (CA5). Subsequently, the Commission decided that it would impute the use of accelerated depreciation for ratemaking purposes regardless of the method used for computing actual taxes. Midwestern Gas Transmission Co., 36 F. P. C. 61, aff’d sub nom. Midwestern Gas Transmission Co. v. FPC, 388 F. 2d 444 (CA7).
When the House and Senate considered tax reform legislation in 1969, both were concerned with the loss of tax revenues that stemmed from the combined effect of accelerated depreciation for computing federal taxes (leading to higher deductions) and flow-through for fixing rates (leading to lower rates and thus lower gross revenues) . Section 441 of the Tax Reform Act, which added § 167 (l) to the Internal Revenue Code, was designed in general to “freeze” existing depreciation practices. As passed by the House, § 441 would have established three rules with respect to existing depreciable property:
“(1) If straight line depreciation is presently being taken, then no faster depreciation is to be permitted as to that property.
“(2) If the taxpayer is taking accelerated depreciation and is 'normalizing’ its deferred taxes, then it must go to the straight line method unless it continues to normalize as to that property.
“(3) If the taxpayer is taking accelerated depreciation and flowing through to its customers the benefits of the deferred taxes, then the taxpayer must continue to do so, unless the appropriate regulatory agency permits a change as to that property.”
The Senate bill as passed was similar to that of the House, except that utilities on flow-through were given the right to elect within 180 days “to shift from the flow-through to the straight-line method, with or without the permission of the appropriate regulatory agency, or . . . with the permission of the regulatory agency to shift to the normalization method . This election was to apply both to new and existing property. In conference, however, it was agreed that this right of election would apply only to property acquired by the utility after 1969 to expand its facilities.
Thus, as added to the Internal Revenue Code in 1969, § 167 (Z) distinguishes between two basic types of “public utility property”: “pre-1970 property,” which is property acquired by the taxpayer before January 1, 1970 (§ 167 (l)(3)(B)), and all other property, referred to as “post-1969 property” (§ 167 (Z) (3) (C)). A further distinction is drawn between post-1969 property “which increases the productive or operational capacity of the taxpayer” (expansion property) and post-1969 property which merely replaces existing property (§ 167 (l) (4) (A)). With respect to pre-1970 property, a utility may use (1) straight-line depreciation, (2) the method used prior to August 1969 if it also employs normalization, or (3) accelerated depreciation with flow-through, but only if that method was used prior to August 1969 (§167 (J)(l)). With respect to post-1969 property, a utility may use (1) straight-line depreciation, (2) accelerated depreciation with normalization, or (3) accelerated depreciation with flow-through if the utility used flow-through prior to August 1969 (§ 167 (l) (2)). In addition, under § 167 (1) (4) (A), a utility may elect to abandon accelerated depreciation with flow-through with respect to post-1969 expansion property.
The proceedings in issue here involve Texas Gas Transmission Corp., the operator of a major interstate pipeline system certificated by the Federal Power Commission. Although Texas Gas utilized accelerated depreciation with flow-through prior to the adoption of the Tax Reform Act, it filed a proposed rate increase with the Commission on June 27, 1969, based upon “the proposed discontinuance of the use of liberalized depreciation and the reversion to a straight-line method of tax depreciation.” After § 167 (l) was enacted, Texas Gas advised the Commission that it intended to exercise the election provided in § 167 (l) (4) (A) and sought permission to use accelerated depreciation with normalization with respect to its post-1969 expansion property. It also sought assurance, before it made the election, that it would be able to change from flow-through to straight-line or, preferably, accelerated depreciation with normalization with respect to its pre-1970 property and post-1969 replacement property.
The Commission, holding that its authority “to determine whether a company may effect such a change is not diminished” under the Tax Reform Act, permitted Texas Gas to change from flow-through to normalization for ratemaking purposes. Opinion No. 578, 43 F. P. C. 824, 828, rehearing denied, 44 F. P. C. 140. The Commission reasoned that the basis of its decisions in Alabama-Tennessee and Midwestern would no longer be applicable if Texas Gas were to switch to normalization with respect to post-1969 expansion property. In that event, the tax savings resulting from the deferral attributable to accelerated depreciation would not be permanent. Rather, if Texas Gas were required to continue flow-through for all but its new expansion property, it would be faced with a steadily increasing cost of service which would necessitate repeated rate increases. Under these circumstances, the Commission concluded: “Texas Gas is correct in contending that normalization in computing the tax allowance for rate purposes with respect to its pre-1970 facilities offers more hope for stability of rates for its customers and more assurance that the company can earn its fair rate of return without future rate increases. Further benefits of normalization are that it will improve the company’s before tax coverage of interest, thereby enhancing the quality of its securities, and that it will help alleviate present day cash shortages.” Id., at 829-830.
The Court of Appeals, on petitions for review, reversed the Commission’s order. 149 U. S. App. D. C. 238, 462 F. 2d 853, rehearing denied, id., at 250, 462 F. 2d, at 865. Although the Court recognized that the version of the Tax Reform Act passed by the House would have supported the Commission’s order, it held that the limited nature of the election provision as finally passed deprived the Commission of authority to permit regulated utilties to abandon flow-through with respect to their existing and replacement property. We reverse and remand to the Court of Appeals for further proceedings consistent with this opinion.
The present cases concern solely the depreciation methods used by utilities in calculating their federal income tax expenses for ratemaking purposes.
In § 441 of the Tax Reform Act of 1969, Congress dealt primarily with a revenue measure under the tax laws and only indirectly with the regulatory power of the Commission under the Natural Gas Act. We have had before us on numerous occasions cases arising under the Natural Gas Act. In the early case of FPC v. Hope Natural Gas Co., 320 U. S. 591, we emphasized two aspects of the power of the Commission to fix “just and reasonable” rates under 15 U. S. C. § 717. First, was the desire “to protect consumers against exploitation,” 320 U. S., at 610, and second, was the aim to promote the “financial integrity” of the natural gas companies as measured, not only by revenues sufficient to recover operating expenses and capital costs, id., at 603, but also by revenues “sufficient to assure confidence in the financial integrity of the enterprise, so as to maintain its credit and to attract capital.” Ibid. We mention those matters because (1) the treatment of depreciation bears on rates and (2) there is no indication in the legislative history of this tax measure that Congress desired to modify, as respects the precise issue involved here, the broad discretion of the Commission delineated in Hope Natural Gas and in other rate cases.
Under § 4 (a) of the Natural Gas Act, 15 U. S. C. § 717c (a), all rates and charges made by a natural gas company subject to the Commission’s jurisdiction must be “just and reasonable.” Section 4 (e), 15 U. S. C. § 717c (e), sets forth the procedures whereby the Commission can determine whether a proposed rate schedule is lawful, and § 5, 15 U. S. C. § 717d, gives the Commission certain powers to fix rates and charges. Finally, under § 9 (a), 15 U. S. C. § 717h (a), the Commission may “require natural-gas companies to carry proper and adequate depreciation and amortization accounts in accordance with such rules, regulations, and forms of account as the Commission may prescribe.” In FPC v. United Gas Pipe Line Co., 386 U. S. 237, 243, the Court stated:
“One of [the Commission’s] statutory duties is to determine just and reasonable rates which will be sufficient to permit the company to recover its costs of service and a reasonable return on its investment. Cost of service is therefore a major focus of inquiry. Normally included as a cost of service is a proper allowance for taxes, including federal income taxes. The determination of this allowance, as a general proposition, is obviously within the jurisdiction of the Commission.”
The lower courts have allowed the Commission broad discretion in determining proper depreciation methods for ratemaking purposes. See, e. g., Alabama-Tennessee Natural Gas Co. v. FPC, 359 F. 2d 318; Midwestern Gas Transmission Co. v. FPC, 388 F. 2d 444.
Section 167 (l), to be sure, does not leave this discretion untouched. For example, a utility using straight-line depreciation with respect to its pre-1970 property could not switch to accelerated depreciation, nor could a utility be required to switch to flow-through with respect to pre-1970 property. See §167(i)(l). But § 167 (l) on its face does not preclude the Commission from éxercising its statutory powers to permit a utility to abandon flow-through. Section 167(1) (1)(B) provides that “[i]n the case of any pre-1970 public utility property, the taxpayer may use the applicable 1968 method for such property if — (i) the taxpayer used a flow-through method of accounting” prior to August 1969. (Emphasis added.)
The Court of Appeals, however, found error in the Commission’s action based on its detailed and considered analysis of the legislative history of § 167 (l). It concluded that “the final version of the bill limits the applicability of the right of election to post-1969 expansion (non-replacement) property alone.” 149 U. S. App. D. C., at 246, 462 F. 2d, at 861 (emphasis in original). It reasoned as follows. At the House stage the action of the Commission would have been justified to switch to normalization because, as already noted, the House Report stated:
“Your committee’s bill provides that, in the case of existing property, the following rules are to apply:
“(1) If straight line depreciation is presently being taken, then no faster depreciation is to be permitted as to that property.
“(2) If the taxpayer is taking accelerated depreciation and is 'normalizing’ its deferred taxes, then it must go to the straight line method unless it continues to normalize as to that property.
“(3) If the taxpayer is taking accelerated depreciation and flowing through to its customers the benefits of the deferred taxes, then the taxpayer must continue to do so, unless the appropriate regulatory agency permits a change as to that property.” (Emphasis added.)
The word “existing” property as used in that Report included “replacement” property in the mind of the Court of Appeals.
The Senate version of the bill would have permitted Texas Gas to shift from liberalized depreciation with flow-through either to straight-line depreciation or with the Commission’s approval to liberalized depreciation with normalization. 149 U. S. App. D. C., at 247, 462 F. 2d, at 862.
The Court of Appeals, however, concluded that because the right of election was restricted while the bill was in conference to apply only to post-1969 expansion property, the Commission could not permit a utility to change its method with respect to existing or replacement property. Ibid. It relied on the following four paragraphs from the Conference Report.
“The House bill provides that in the case of certain listed regulated industries (the furnishing or sale of . . . gas through a local distribution system, . . . and transportation of gas by pipeline) a taxpayer is not permitted to use accelerated depreciation unless it ‘normalizes’ the current income tax reduction resulting from the use of such accelerated depreciation. . . .
“This rule is not to apply in the case of a taxpayer that is at present flowing through the tax reduction to earnings for purposes of computing its allowable expenses on its regulated books of account. Also, if the taxpayer is now using straight line depreciation as to any public utility property it may not change to accelerated depreciation as to that property.
“The Senate amendment makes the following changes in the House bill: . . . (d) an election is permitted to be made within 180 days after the date of enactment by a company at present on flow-through to come under the rules of the bill . . . .
“The conference substitute (sec. 44-1 of the substitute and sec. 167 (l) of the code) follows the Senate amendment except that the special provision referred to in (e) above is stricken and the 180-day election (item (d), above) is modified to apply to new property and not to replacement property. Even in the case of new property, however, the right to change over from the flowthrough method is to be available only to the extent the new property increases the productive or operational capacity of the company” (Emphasis added.)
From these four paragraphs the Court of Appeals concluded that the second paragraph of the Conference Report prohibits Texas Gas from abandoning liberalized depreciation with flow-through and that the right of election was restricted to post-1969 expansion property only.
The second paragraph, however, as we read it, when it uses the words “This rule” refers, not to the final bill, but to the initial House bill. That initial bill, as summarized in the House Report, as already noted, had somewhat different provisions for depreciation. The first paragraph of the quotation from the Conference Report in our view summarized the House’s proposed second rule. The words “This rule” in the second paragraph, therefore, refer to the House’s proposed second rule. Only the third paragraph of the excerpt reached the changes made by the Senate. Only the fourth paragraph resolved the differences between the two bills. There is nothing in either the third or the fourth paragraph to indicate that the election authorized by the Conference Report was to limit or replace the three general rules proposed by the House, the third House-proposed rule authorizing precisely what the Commission allowed in this case. The second paragraph, read in the context of the Conference Report, does not state that the Commission-lacks authority to permit a company on flow-through to abandon it with respect to existing property. It only states that a company on flow-through may remain on flow-through. Thus, it is solely a limitation on the requirement that a company must normalize if it wants to continue accelerated depreciation with respect to pre-1970 property. This is entirely consistent with the structure of § 167 (l) (1).
Nor is the extension of the 180-day election to post-1969 expansion property a limiting factor. The “reasonable” allowance for depreciation of post-1969 property as used in § 167 (l)(2) includes in subparagraph (C) “the applicable 1968 method, if, with respect to its pre-1970 public utility property of the same (or similar) kind most recently placed in service, the taxpayer used a flow-through method of accounting for its July 1969 accounting period.” But § 167 (l) (4) (A) provides that where the taxpayer makes an election within the 180-day period, paragraph (2)(C) shall not apply with respect to any post-1969 public utility property “to the extent that such property constitutes property which increases the productive or operational capacity of the taxpayer” and does not represent “the replacement of existing capacity.”
Thus, the Act recognizes ways for a utility to abandon flow-through with respect to existing property. A utility cannot do so on its own; the overriding authority is in the Federal Power Commission. The staff of the Joint Committee on Internal Revenue Taxation prepared a General Explanation of this tax measure in which it stated:
“If the taxpayer was taking accelerated depreciation and flowing through to its customers the benefits of the deferred taxes as of August 1, 1969, then the taxpayer would continue to do so (except for a special election procedure discussed below), unless the appropriate regulatory agency permits a change as to that property.”
This document goes on to state that as respects new property a utility on flow-through must remain on flow-through “unless the regulatory agency permits it to change (or unless the election below applies).”
This document provides a compelling contemporary indication that the Federal Power Commission was not deprived of its authority to permit abandonment of flow-through, even though utilities had the right not to have flow-through apply to their expansion property.
The Court of Appeals relied on comments both in the House and in the Senate Reports of the desire of Congress to “freeze” the current practices relating to depreciation especially as respects “the more flourishing utility industries.”
As we read the Reports, the purpose was to forestall switches to faster methods of depreciation, to guard against widespread rate increases, and to avoid putting some utilities at a competitive disadvantage. But the “freeze” was not put in absolute terms. Shifts from straight-line to accelerated depreciation were outlawed, as were shifts from normalization to flow-through on existing property. We find no trace of a suggestion that the Federal Power Commission was denied authority to determine whether on particular facts the abandonment of flow-through by a utility within the parameter of the Tax Reform Act of 1969 would be in the public interest as envisaged by the Natural Gas Act, even though it might increase rates. The “freeze” certainly was designed to cover changes to faster methods of tax depreciation but not changes to slower methods of tax depreciation that the Commission might permit.
The Court of Appeals sustained the Commission as respects the post-1969 expansion property of Texas Gas, and reversed it as respects the pre-1970 and post-1969 nonexpansion property. The Court of Appeals did not reach the validity of the Commission’s order, assuming the Commission was correct in its reading of the Tax Reform Act of 1969, as we think it was. The Court of Appeals did, however, state that § 167 (l) “should not be construed to prevent” the Commission from finding in “extraordinary circumstances” that consumer interests “would be furthered by permitting the abandonment of flow-through.” But it added: “It is clear, however, that such consumer interests would not be furthered by permitting Texas Gas to abandon flow-through in the circumstances presented by the case at bar.” 149 U. S. App. D. C., at 250, 462 F. 2d, at 865. The Commission in its petition for certiorari states that in connection with the main question raised it would argue, if the petition were granted, that its decision on the merits was correct in all respects. And in its brief on the merits it urges us to decide the merits. But by statute the Court of Appeals is the tribunal where review must be sought; and we remand the cases to it for proceedings consistent with this opinion. We note in closing, however, that the judgment of the Court of Appeals is reversed in toto. Its holding that the consumer interests were not furthered by the Commission's action is short of the application of the appropriate standard for review. As already noted, under Hope Natural Gas rates are “just and reasonable” only if consumer interests are protected and if the financial health of the pipeline in our economic system remains strong.
Reversed and remanded.
Section 167 (a) provides that “[t]here shall be allowed as a depreciation deduction a reasonable allowance for the exhaustion, wear and tear (including a reasonable allowance for obsolescence)” of qualified property. Section 167 (b) defines “reasonable allowance” to include an allowance computed under the declining balance method and the sum-of-the-years-digits method, as well as the straight-line method. Under the declining-balance and sum-of-the-years-digits method, both commonly referred to as accelerated or liberalized depreciation methods, depreciation allowances in the early years are higher than under the straight-line method, but steadily decrease over the useful life of the asset. Under the straight-line method, the depreciation allowance for an asset remains equal over its useful life.
Federal income taxes are properly included as an expense under the cost-of-service ratemaking utilized by the Commission in the regulation of rates for sales of natural gas subject to its jurisdiction under the Natural Gas Act, 15 U. S. C. § 717 et seq. See FPC v. United Gas Pipe Line Co., 386 U. S. 237, 243.
See H. R. Rep. No. 91-413, pt. 1, pp. 131-132; S. Rep. No. 91-552, p. 172.
See H. R. Rep. No. 91-413, pt. 1, pp. 132-133; S. Rep. No. 91-552, p. 172.
H R. Rep. No. 91-413, pt. 1, p. 133.
S. Rep. No. 91-552, p. 173.
See H. R. Conf. Rep. No. 91-782, p. 313.
Section 167 (l) (3) (A) provides:
“The term ‘public utility property’ means property used predominantly in the trade or business of the furnishing or sale of—
“(i) electrical energy, water, or sewage disposal services,
“ (ii) gas or steam through a local distribution system,
"(in) telephone services, or other communication services if furnished or sold by the Communications Satellite Corporation for purposes authorized by the Communications Satellite Act of 1962 (47 U. S. C. [§] 701), or
“(iv) transportation of gas or steam by pipeline,
“if the rates for such furnishing or sale, as the case may be, have been established or approved by a State or political subdivision thereof, by any agency or instrumentality of the United States, or by a public service or public utility commission or other similar body of any State or political subdivision thereof.”
In Order No. 404, 43 F. P. C. 740, rehearing denied, 44 F. P. C. 16, the Commission announced that as a general policy it would permit utilities making the election under § 167 (l) (4) (A) to use accelerated depreciation with normalization with respect to their expansion property. The Court of Appeals, in the same decision under review here, affirmed this order. 149 U. S. App. D. C. 238, 250, 462 F. 2d 853, 865. That part of the court’s decision is not before us.
The Commission’s order reads:
“ (A) In the computation of its Federal Income Tax allowance for ratemaking purposes as well as for accounting purposes, Texas Gas is permitted to use liberalized depreciation with normalization with respect to its property other than that subject to election under Section 167 (l) (4) (A) of the Internal Revenue Code as amended by Section 441 of the Tax Reform Act of 1969. Such election applies to property constructed or acquired on or after January 1, 1970, to the extent it increases the productive or operational capacity of the company and does not represent the replacement of existing capacity. Texas Gas may reflect any such change in its rates, as well as any change in costs arising from its proposed election. In computing its cost-of-service for ratemaking purposes balances in Account 282 [deferred tax reserve account] should continue to be deducted from the rate base.” 43 F. P. C. 824, 831.
Memphis Light, Gas & Water Division, a municipally owned distributor of natural gas and a city-gate customer of Texas Gas, and the Public Service Commission of the State of New York petitioned the Court of Appeals for review of the Commission’s Opinion No. 578. Each had filed an application for rehearing before the Commission which was denied in Opinion No. 578-A. Both the Federal Power Commission (in No. 72-486) and Texas Gas (in No. 72-488) petitioned this Court for a writ of certiorari.
H. R. Rep. No. 91-413, pt. 1, p. 133.
S. Rep. No. 91-552, pp. 173-174
“The [Senate] committee amendments, while in most respects the same as the House provisions, differ in one principal area. The amendments permit an election to be made within 180 days after the date of enactment of the bill for a utility covered by this provision to shift from the flow-through to the straight-line method, with or without the permission of the appropriate regulatory agency, or permit it with the permission of the regulatory agency to shift to the normalization method (that is, to come under general rules of the bill).
“This election applies both as to new and existing property. . . . Since the company would no longer be permitted to use accelerated depreciation (unless the agency later permits it to normalize), the agency would not be able to impute the use of accelerated depreciation with flow-through.” (Emphasis added.)
H. R. Conf. Rep. No. 91-782, pp. 312-313.
H. R. Rep. No. 91-413, pt. 1, p. 133.
The second rule, as noted, provided, “If the taxpayer is taking accelerated depreciation and is ‘normalizing’ its deferred taxes, then it must go to the straight line method unless it continues to normalize as to that property.” Ibid.
The third rule, as noted, provided, “If the taxpayer is taking accelerated depreciation and flowing through to its customers the benefits of the deferred taxes, then the taxpayer must continue to do so, unless the appropriate regulatory agency permits a change as to that property.” Ibid.
General Explanation of the Tax Reform Act of 1969, H. R. 13270, 91st Cong., p. 151.
Ibid.
H. R. Rep. No. 91-413, pt. 1, pp. 132-133.
S. Rep. No. 91-552, p. 172
Ibid.
Section 19 (b) of the Natural Gas Act, 15 U. S. C. § 717r (b), provides:
“Any party to a proceeding under this chapter aggrieved by an order issued by the Commission in such proceeding may obtain a review of such order in the court of appeals of the United States for any circuit wherein the natural-gas company to which the order relates is located or has its principal place of business, or in the United States Court of Appeals for the District of Columbia [Circuit] . . . | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
51
] |
O’KEEFFE, DEPUTY COMMISSIONER, BUREAU OF EMPLOYEES’ COMPENSATION, U. S. DEPARTMENT OF LABOR v. SMITH, HINCHMAN & GRYLLS ASSOCIATES, INC., et al.
No. 307.
Decided March 29, 1965.
Solicitor General Cox, Assistant Attorney General Douglas and Morton Hollander for petitioner.
George W. Ericksen for respondents.
Per Curiam.
Robert C. Ecker drowned during a Saturday outing while boating on a South Korean lake. At the time of his death he was employed at a defense base in South Korea by the respondent, Smith, Hinchman & Grylls Associates, a government contractor.
The decedent had been hired in the United States under an oral contract the terms of which provided that he was to be transported to South Korea at his employer’s expense, remain there for two years, and then, at his employer’s expense, be transported back to the United States. The employer paid his rent and provided him with a per diem expense allowance for each day of the year, including weekends and holidays, to cover “the necessary living expenditures in the Korean economy.” He worked on a “365 day per year basis . . . subject to call to the job site at any time.” He “quite often” worked on Saturdays and Sundays and at other times outside the normal work day. The employer considered all its employees to be “in the course of regular occupation from the time they leave the United States until their return.” The employer expected the decedent and its other employees to seek recreation away from the job site on weekends and holidays.
Based upon the above stipulated facts, the Deputy Commissioner of the Bureau of Employees’ Compensation, United States Department of Labor, petitioner herein, determined “that the accident and the subsequent death of the decedent arose out of and in the course of employment.” 222 F. Supp. 4, 6. He therefore awarded death benefits to the decedent’s widow and a minor child in accordance with the terms of the Longshoremen’s and Harbor Workers’ Compensation Act, 44 Stat. 1424, as amended, 33 U. S. C. § 901 et seq. (1958 ed.), as extended by the Defense Base Act, 55 Stat. 622, as amended, 42 U. S. C. § 1651 et seq. (1958 ed.). The employer and its insurance carrier, respondents herein, then brought this action in the United States District Court for the Middle District of Florida to set aside and enjoin the enforcement of this compensation award. The District Court affirmed the compensation award and granted the Deputy Commissioner’s motion for summary judgment. 222 F. Supp. 4. A panel of the Court of Appeals for the Fifth Circuit summarily reversed and set aside the award. 327 F. 2d 1003. But compare the later decision of another panel of the Fifth Circuit in O’Keeffe v. Pan American World Airways, Inc., 338 F. 2d 319.
The petition for writ of certiorari is granted and the judgment of the Court of Appeals is reversed. Section 2 (2) of the Act, 33 U. S. C. § 902 (2) (1958 ed.), provides workmen’s compensation for any “accidental injury or death arising out of and in the course of employment.” Section 19 (a), 33 U. S. C. § 919 (a) (1958 ed.), provides for the filing of a “claim for compensation” and specifies that “the deputy commissioner shall have full power and authority to hear and determine all questions in respect of such claim.” Section 20 (a), 33 U. S. C. § 920 (a) (1958 ed.), provides that “[i]n any proceeding for the enforcement of a claim for compensation under this chapter it shall be presumed, in the absence of substantial evidence to the contrary . . . [t]hat the claim comes within the provisions of this chapter.” Finally, § 21 (b), 33 U. S. C. § 921 (b) (1958 ed.), provides that the Deputy Commissioner’s compensation order may be suspended and set aside by a reviewing court only “[i]f not in accordance with law.”
In cases decided both before and after the passage of the Administrative Procedure Act, 60 Stat. 237, as amended, 5 U. S. C. § 1001 et seq. (1958 ed.), the Court has held that the foregoing statutory provisions limit the scope of judicial review of the Deputy Commissioner’s determination that a “particular injury arose out of and in the course of employment.” Cardillo v. Liberty Mutual Ins. Co., 330 U. S. 469, 477-478; O’Leary v. Brown-Pacific-Maxon, Inc., 340 U. S. 504, 507-508.
“It matters not that the basic facts from which the Deputy Commissioner draws this inference are undisputed rather than controverted. ... It is likewise immaterial that the facts permit the drawing of diverse inferences. The Deputy Commissioner alone is charged with the duty of initially selecting the inference which seems most reasonable and his choice, if otherwise sustainable, may not be disturbed by a reviewing court. . . . Moreover, the fact that the inference of the type here made by the Deputy Commissioner involves an application of a broad statutory term or phrase to a specific set of facts gives rise to no greater scope of judicial review.. . .” Cardillo v. Liberty Mutual Ins. Co., supra, at 478.
The rule of judicial review has therefore emerged that the inferences drawn by the Deputy Commissioner are to be accepted unless they are irrational or “unsupported by substantial evidence on the record ... as a whole.” O’Leary v. Brown-Pacific-Maxon, Inc., supra, at 508.
The Brown-Pacific-Maxon case held that the standard to be applied by the Deputy Commissioner does not require “a causal relation between the nature of employment of the injured person and the accident. Thom v. Sinclair, [1917] A. C. 127, 142. Nor is it necessary that the employee be engaged at the time of the injury in activity of benefit to his employer. All that is required is that the ‘obligations or conditions’ of employment create the ‘zone of special danger’ out of which the injury arose.” Id., at 507. And, borrowing from language in Matter of Waters v. Taylor Co., 218 N. Y. 248, 252, 112 N. E. 727, 728, the Court in Brown-Pacific-Maxon drew the line only at cases where an employee had become “so thoroughly disconnected from the service of his employer that it would be entirely unreasonable to say that injuries suffered by him arose out of and in the course of his employment.” 340 U. S., at 507. This standard is in accord with the humanitarian nature of the Act as exemplified by the statutory command that “[i]n any proceeding for the enforcement of a claim for compensation under this chapter it shall be presumed, in the absence of substantial evidence to the contrary . . . [t]hat the claim comes within the provisions of this chapter.” § 20 (a), 33 U. S. C. §920 (a).
In this case, the Deputy Commissioner, applying the Brown-Pacific-Maxon standard to the undisputed facts, concluded “that the accident and the subsequent death of the decedent arose out of and in the course of employment.” 222 F. Supp. 4, 6. The District Court, likewise applying the Brown-Padfic-Maxon standard, held “that the Deputy Commissioner was correct in his finding that the conditions of the deceased’s employment created a zone where the deceased Ecker had to seek recreation under exacting and unconventional conditions and that therefore the accident and death of the decedent arose out of and in the course of employment.” 222 F. Supp., at 9.
We agree that the District Court correctly affirmed the finding of the Deputy Commissioner. While this Court may not have reached the same conclusion as the Deputy Commissioner, it cannot be said that his holding that the decedent’s death, in a zone of danger, arose out of and in the course of his employment is irrational or without substantial evidence on the record as a whole. The decedent was hired to work in the exacting and unconventional conditions of Korea. His transportation over and back was to be at the employer’s expense, and while there he was considered to be working on a 365-day-per-year basis, subject to call at the job site at any time, and quite often he worked Saturdays and Sundays and at other times outside the working day. The employer considered decedent and all other employees at this hazardous overseas base to be “in the course of regular occupation from the time they leave the United States until their return.” Finally, the employer provided neither housing nor recreational activities for its employees, but expected them to live, while necessarily in the country to perform its work, under the exacting and dangerous conditions of Korea. The employer paid decedent’s rent and provided him with a per diem expense allowance for each day of the year, including weekends and holidays, to cover the necessary living expenses in the Korean economy. The accident here occurred on an outing for a short period of time on a lake located only 30 miles from the employer’s job site. In the words of the District Court, “It was reasonable to conclude that recreational activities contributed to a higher efficiency of the employer’s work and that when conducted in the restricted area of employment, on a work day, so to speak,, and in a manner not prohibited by the employer, such activity was an incident of the employment.” 222 F. Supp. 4, 9.
The dissent, while giving lip service to the Brown-Pacific-Maxon standards, would reverse the determination of the Deputy Commissioner and District Court here, as well as the Deputy Commissioner and the Courts of Appeals in other cases, that the several accidents involved were within the “zone of special danger.” As Brown-Pacific-Maxon made clear, it is just this type of determination which the statute leaves to the Deputy Commissioner subject only to limited judicial review. Indeed, this type of determination, depending as it does on an analysis of the many factors involved in the area of the employment, would seem to be one peculiarly for the Deputy Commissioner.
The District Court therefore correctly upheld the determination of the Deputy Commissioner and the Court of Appeals erred in summarily reversing its judgment. Cf. O’Keeffe v. Pan American World Airways, Inc., 338 F. 2d 319 (C. A. 5th Cir. 1964); Pan American World Airways, Inc. v. O’Hearne, 335 F. 2d 70 (C. A. 4th Cir. 1964); Self v. Hanson, 305 F. 2d 699 (C. A. 9th Cir. 1962); Hastorf-Nettles, Inc. v. Pillsbury, 203 F. 2d 641 (C. A. 9th Cir. 1953).
Since we believe that the Deputy Commissioner and District Court properly applied the Brown-Pacific-Maxon standard, and since we deem it necessary to preserve the integrity of the administrative process established by Congress to effectuate the statutory scheme, the judgment of the Court of Appeals is
Reversed. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
30
] |
UNITED STATES v. RADIO CORPORATION OF AMERICA et al.
No. 54.
Argued December 8, 1958.
Decided February 24, 1959.
Solicitor General Rankin argued the cause for the United States. With him on the brief were Assistant Attorney General Hansen, Daniel M. Friedman, Bernard M. Hollander and Raymond M. Carlson.
Bernard G. Segal argued the cause for appellees. With him on the brief were Edward W. Mullinix, Josephine H. Klein and Lawrence J. McKay.
Mr. Chief Justice
Warren delivered the opinion of the Court.
Appellees, Radio Corporation of America and National Broadcasting Company, are defendants in this civil antitrust action brought by the Government under § 4 of the Sherman Act, 15 U. S. C. § 4. After holding a preliminary hearing on three of appellees’ affirmative defenses to that action, the federal district judge dismissed the complaint. 158 F. Supp. 333. The Government appealed directly to this Court under the Expediting Act, 15 U. S. C. § 29. The principal question presented is whether approval by the Federal Communications Commission of appellees’ agreement to exchange their Cleveland television station for one in Philadelphia bars this independent action by the Government which attacks the exchange as being in furtherance of a conspiracy to violate the federal antitrust laws.
The Government’s complaint generally alleged the following facts. In 1954, National Broadcasting Company (NBC), a wholly owned subsidiary of Radio Corporation of America (RCA), owned five very high frequency (YHF) television stations. The stations were located in the following market areas: New York, which is the country’s largest market; Chicago, second; Los Angeles, third; Cleveland, tenth; and Washington D. C., eleventh. According to the Government’s allegations, in March 1954, NBC and RCA originated a continuing conspiracy to acquire stations in five of the eight largest market areas in the country. Since Philadelphia is the country’s fourth largest market area, acquisition of a Philadelphia station in exchange for appellees’ Cleveland or Washington station would achieve one goal of the conspiracy.
One Philadelphia station, WPTZ, was owned by Westinghouse Broadcasting Company. This station and a Westinghouse-owned station in Boston were affiliated with the NBC network. In addition, Westinghouse desired NBC affiliation for a station to be acquired in Pittsburgh. In order to force Westinghouse to exchange its Philadelphia station for NBC’s Cleveland station, it is alleged that NBC threatened Westinghouse with loss of the network affiliation of its Boston and Philadelphia stations, and threatened to withhold affiliation from its Pittsburgh station to be acquired. NBC also threatened to withhold network affiliation from any new VHF or UHE (ultra high frequency) stations which Westinghouse might acquire. By thus using its leverage as a network, NBC is alleged to have forced Westinghouse to agree to the exchange contract under consideration. Under the terms of. that contract NBC was to acquire the Philadelphia station, while Westinghouse was to acquire NBC’s Cleveland station plus three million dollars.
The Government asked that the conspiracy be declared violative of § 1 of the Sherman Act, 15 U. S. C. § 1, that the appellees be divested of such assets as the District Court deemed appropriate, that “such other and additional relief as may be proper” be awarded, and that the Government recover costs of the suit.
Appellees’ affirmative defenses arose out of the fact that the exchange had been approved by the Federal Communications Commission. FCC approval was required under § 310 (b) of the Communications Act of 1934, 48 Stat. 1086, as amended, 66 Stat. 716, 47 U. S. C. § 310 (b). Under that Section, appellees filed applications setting forth the terms of the transaction and the reasons for requesting the exchange. The Commission instituted proceedings to determine whether the exchange met the statutory requirements of § 310, that the “public interest, convenience, and necessity” would be served. They were not adversary proceedings. After extensive investigation of the transaction, the Commission was still not satisfied that the exchange would meet the statutory standards, and, over three dissents, issued letters seeking additional information on various subjects, including antitrust problems, under § 309 (b) of the Act. After receiving answers to the letters, the Commission, without holding a hearing, on December 21,1955, granted the application to exchange stations.
It was stipulated below that in passing upon the application, the Commission had all the information before it which has now been made the basis of the Government’s complaint. It further appears that during the FCC proceedings the Justice Department was informed as to the evidence in the FCC’s possession. It was further stipulated, and we assume, that the FCC decided all issues relative to the antitrust laws that were before it, and that the Justice Department had the right to request a hearing under § 309 (b), to file a protest under § 309 (c), to seek a rehearing under § 405, and to seek judicial review of the decision under §402 (b). See Far East Conference v. United States, 342 U. S. 570, 576; U. S. ex rel. Chapman v. Federal Power Comm’n, 345 U. S. 153, 155, 156. The Department of Justice took none of these actions. Accordingly, on January 22, 1956, after the period in which the Department could have sought review had expired, NBC and Westinghouse consummated the exchange transaction according to their contract. The Department did not file the present complaint until December 4, 1956, over ten months later.
Against this background, appellees assert that the FCC had authority to pass on the antitrust questions presented, <md, in any case, that the regulatory scheme of the Communications Act has so displaced that of the Sherman Act that the FCC had primary jurisdiction to license the exchange transaction, with the result that any attack for antitrust reasons on the exchange transaction must have been by direct review of the license grant. Relying on this premise, they then contend that the only method available to the Government for redressing its antitrust grievances was to intervene in the FCC proceedings; that since it did not, the antitrust issues were determined adversely to it when the exchange was approved, so that it is barred by principles of collateral estoppel and res judicata; and that in any case the long delay between approval of the exchange and filing of this suit bars the suit because of laches.
I.
Whether these contentions are to prevail depends substantially upon the extent to which Congress authorized the FCC to pass on antitrust questions, and this in turn requires examination of the relevant legislative history. Two sections of the Communications Act of 1934, 48 Stat. 1064, as amended, 47 U. S. C. § 151 et seq., deal specifically with antitrust considerations, Sections 311 and 313:
“Sec. 311. The Commission is hereby directed to refuse a station license and/or the permit hereinafter required for the construction of a station to any per-. son (or to any person directly or indirectly controlled by such person) whose license has been revoked by a court under section 313.
“Sec. 313. All laws of the United States relating to unlawful restraints and monopolies and to combinations, contracts, or agreements in restraint of trade are hereby declared to be applicable to the manufacture and sale of and to trade in radio apparatus and devices entering into or affecting interstate or foreign commerce and to interstate or foreign radio communications. Whenever in any suit, action, or proceeding, civil or criminal, brought under the provisions of any of said laws or in any proceedings brought to enforce or to review findings and orders of the Federal Trade Commission or other governmental agency in respect of any matters as to which said Commission or other governmental agency is by law authorized to act, any licensee shall be found guilty of the violation of the provisions of such laws or any of them, the court, in addition to the penalties imposed by said laws, may adjudge, order, and/or decree that the license of such licensee shall, as of the date the decree or judgment becomes finally effective or as of such other date as the said decree shall fix, be revoked and that all rights under such license shall thereupon cease: Provided, however, That such licensee shall have the same right of appeal or review as is provided by law in respect of other decrees and judgments of said court.”
These provisions were taken from the Radio Act of 1927 They appear to have originated in a bill drafted by Congressman White of Maine, H. R. 5589, 69th Cong., 1st Sess. What is now § 311 appeared as the third paragraph of § 2 (C) of that bill, while what is now § 313 appeared as § 2 (G). In the hearings on the bill before the House Committee, Congressman Reid of Illinois asked Judge Davis, Department of Commerce representative, whether the Secretary of Commerce had any discretion to refuse a license under § 2 (C) (now § 311) to a party which the Secretary believed to be violating the antitrust laws. The following colloquy ensued:
Judge Davis. “He has no discretion under this act.”
Congressman Reid. “They have to be found guilty first; is that the idea?”
Congressman White. “Yes. In other words, I tried to get away from placing upon the secretary the determination of a judicial question of that character. That involves, of course, a determination as to the facts; it requires a knowledge of the law and it requires an application of the law to the facts, and then it requires the exercise of judicial powers, if you leave that in his discretion, and I tried to lift it away from the secretary.”
Later on, the question arose as to what grounds were available to the Secretary to revoke licenses under § 2 (F) (now § 312). After Congressman White mentioned one statutory ground, Congressman Reid observed:
“Yes; but you’do not include unlawful combinations and monopolies and contracts or agreements in restraint of trade. That is not covered.”
Congressman White. “No; not in that section.”
Congressman Davis of Tennessee. “Those are covered in ‘G’ [now § 313].”
Congressman White. “That is a judicial question and we have left it to the courts to pass on that.”
This failure to include a provision permitting refusal of a license for antitrust violations in the absence of a judicial determination caused Congressman Davis to insert a lengthy Minority Report on H. R. 9108, which was old H. R. 5589 reintroduced by Congressman White. Consequently, when the bill (then numbered H. R. 9971) reached the floor of the House, Congressman Davis attempted to insert a number of amendments which would have strengthened the antitrust aspects of the bill. See 67 Cong. Rec. 5484, 5485. All were defeated, including an amendment to § 2 (C) (now § 311) which would have required refusal of a license to any company “found by any Federal court or the commission to have been unlawfully monopolizing” radio communication. (Emphasis supplied.) See 67 Cong. Rec. 5501-5504, 5555.
Thus, in the Senate consideration of a version of the bill, when asked whether there was “anything in the bill providing in case the applicant for a permit is found to be acting in violation of the Sherman antitrust law or controls a monopoly that the commission may pass upon the question,” Senator Dill of Washington, who was in charge of the bill in the Senate, replied:
“The bill provides that in case anybody has been convicted under the Sherman antitrust law or any other law relating to monopoly he shall be denied a license; but the bill does not attempt to make the commission the judge as to whether or not certain conditions constitute a monopoly; it rather leaves that to the court.”
Congress adjourned before any action could be taken on the bill at that session. At the next session, a Conference Committee reported out the version of the bills which became the Radio Act of 1927, with now § 311 being § 13 of the Act and now § 313 being § 15 of the Act, despite the vigorous but unsuccessful opposition of Congressman Davis in the House, see, e. g., 68 Cong. Rec. 2577, and Senator Pittman of Nevada in the Senate. See, e. g., 68 Cong. Rec. 3032, 3034.
Only one change was made in those two Sections when they were incorporated into the Communications Act. Section 311 was modified merely to authorize rather than to require the revocation of a license by the Commission after a court had found a radio broadcaster in violation of the antitrust laws, but had not ordered its license revoked, 48 Stat. 1086. In all other respects §§13 and 15 of the Radio Act were identical with, and had the same purpose as, §§311 and 313 of the Communications Act.
While this history compels the conclusion that the FCC was not intended to have any authority to pass on antitrust violations as such, it is equally clear that courts retained jurisdiction to pass on alleged antitrust violations irrespective of Commission action. Thus § 311, as originally enacted in 1934, 48 Stat. 1086, read as follows:
“The Commission is hereby directed to refuse a station license and/or the permit hereinafter required for the construction of a station to any person (or to any person directly or indirectly controlled by such person) whose license has been revoked by a court under section 313, and is hereby authorized to refuse such station license and/or permit to any other person (or to any person directly or indirectly controlled by such person) which has been finally adjudged guilty by a Federal court of unlawfully monopolizing or attempting unlawfully to monopolize, radio communication, directly or indirectly, through the control of the manufacture or sale of radio apparatus, through exclusive traffic arrangements, or by any other means, or to have been using unfair methods of competition. The granting of a license shall not estop the United States or any person aggrieved from proceeding against such person for violating the law against unfair methods of competition or for a violation of the law against unlawful restraints and monopolies and/or combinations, contracts, or agreements in restraint of trade, or from instituting proceedings for the dissolution of such corporation.” (Emphasis supplied.)
Appellees attempt to avoid the force of the italicized sentence in two ways. First, they point to its repeal in the 1952 amendments to the Act, 66 Stat. 716. That repeal was occasioned by objections from the industry that it was unfair for radio broadcasters who had been found in violation of the antitrust laws to be subject to license refusals by the Commission, even when the court as a part of its decree did not see fit to order the license revoked under § 313. See S. Rep. No. 142, 82d Cong., 1st Sess. 9. Congress accordingly repealed all of the Section following the first comma, including the italicized sentence. It apparently considered that inherent in the scheme of the Act was the right to challenge under the antitrust laws even transactions approved by the Commission, for the Conference Committee carefully noted that repeal of the italicized sentence would not curtail such a right:
“To the extent that this section of the conference substitute will eliminate from section 311 of the present law the last sentence, which is quoted above, the committee of conference does not feel that this is of any legal significance. It is the view of the members of the conference committee that the last sentence of the present section 311 is surplusage and that by omitting it from the present law the power of the United States or of any private person to proceed under the antitrust laws would not be curtailed or affected in any way.”
Thus, appellees’ reliance on repeal of the last sentence of § 311 is clearly misplaced.
Second, appellees urge that the italicized sentence as originally enacted had a very narrow scope; that it was intended to insure only that the granting of a license would not estop the Government from prosecuting antitrust violations subsequent to the transaction giving rise to the license proceeding, or of which the transaction was merely a small part. They argue that the sentence was intended to permit only actions such as in Packaged Programs v. Westinghouse Broadcasting Co., 255 F. 2d 708. But the language of the sentence cannot be naturally read in such a narrow manner, and it would take persuasive legislative history so to restrict its application. Appellees point to no such history, nor to any cases so holding.
Thus,- the legislative history of the Act reveals that the Commission was not given the power to decide antitrust issues as such, and that Commission action was not intended to prevent enforcement of the antitrust laws in federal courts.
II.
We now reach the question whether, despite the legislative history, the over-all regulatory scheme of the Act requires invocation of a primary jurisdiction doctrine. The doctrine originated with Mr. Justice (later Chief Justice) White in Texas & Pacific R. Co. v. Abilene Cotton Oil Co., 204 U. S. 426. It was grounded on the necessity for administrative uniformity, and, in that particular case, for maintenance of uniform rates to all shippers. A second reason for the doctrine was suggested by Mr. Justice Brandeis in Great Northern R. Co. v. Merchants Elevator Co., 259 U. S. 285, 291, where he pointed to the need for administrative skill “commonly to be found only in a body of experts” in handling the “intricate facts” of, in that case, the transportation industry.
Thus, when questions arose as to the applicability of the doctrine to transactions allegedly violative of the antitrust laws, particularly involving fully regulated industries whose members were forced to charge only reasonable rates approved by the appropriate commission, this Court found the doctrine applicable. United States v. Pacific & Arctic R. Co., 228 U. S. 87; Keogh v. Chicago & N. W. R. Co., 260 U. S. 156; United States Navigation Co. v. Cunard S. S. Co., 284 U. S. 474; Georgia v. Pennsylvania R. Co., 324 U. S. 439; Far East Conference v. United States, 342 U. S. 570. At the same time, this Court carefully noted that the doctrine did not apply when the action was only for the purpose of dissolving the conspiracy through which the allegedly invalid rates were set, for in such a case there would be no interference with rate structures or a regulatory scheme. United States v. Pacific & Arctic R. Co., supra; Georgia v. Pennsylvania R. Co., supra. The decisions sometimes emphasized the need for administrative uniformity and uniform rates, Keogh v. Chicago & N. W. R. Co., supra, while at other times they emphasized the need for administrative experience in distilling the relevant facts in a complex industry as a foundation for later court action. United States Navigation Co. v. Cunard S. S. Co., supra, and Far East Conference v. United States, supra, as explained in Federal Maritime Board v. Isbrandtsen Co., 356 U. S. 481, 497-499.
The cases all involved, however, common carriers by rail and water. These carriers could charge only the published tariff, and that tariff must have been found by the appropriate agency to have been reasonable. Free rate competition was modified by federal controls. The Court’s concern was that the agency which was expert in, and responsible for, administering those controls should be given the opportunity to determine questions within its special competence as an aid to the courts in resolving federal antitrust policy and federal regulatory patterns into a cohesive whole. That some resolution is necessary when the antitrust policy of free competition is placed beside a regulatory scheme involving fixed rates is obvious. Cf. McLean Trucking Co. v. United States, 321 U. S. 67. Accordingly, this Court consistently held that when rates and practices relating thereto were challenged under the antitrust laws, the agencies had primary jurisdiction to consider the reasonableness of such rates and practices in the light of the many relevant factors including alleged antitrust violations, for otherwise sporadic action by federal courts would disrupt an agency’s delicate regulatory scheme, and would throw existing rate structures out of balance.
While the television industry is also a regulated industry, it is regulated in a very different way. That difference is controlling. Radio broadcasters, including television broadcasters, see Allen B. Dumont Laboratories v. Carroll, 184 F. 2d 153, are not included in the definition of common carriers in § 3 (h) of the Communications Act, 47 U. S. C. § 153 (h), as are telephone and telegraph companies. Thus the extensive controls, including rate regulation, of Title II of the Communications Act, 47 U. S. C. §§ 201-222, do not apply. Television broadcasters remain free to set their own advertising rates. As this Court said in Federal Communications Comm’n v. Sanders Bros. Radio Station, 309 U. S. 470, 474:
“In contradistinction to communication by telephone and telegraph, which the Communications Act recognizes as a common carrier activity and regulates accordingly in analogy to the regulation of rail and other carriers by the Interstate Commerce Commission, the Act recognizes that broadcasters are not common carriers and are not to be dealt with as such. Thus the Act recognizes that the field of broadcasting is one of free competition. The sections dealing with broadcasting demonstrate that Congress has not, in its regulatory scheme, abandoned the principle of free competition as it has done in the case of railroads . . . .”
Thus, there being no pervasive regulatory scheme, and no rate structures to throw out of balance, sporadic action by federal courts can work no mischief. The justification for primary jurisdiction accordingly disappears.
The facts of this case illustrate that analysis. Appel-lees, like unregulated business concerns, made a business judgment as to the desirability of the exchange. Like unregulated concerns, they had to make this judgment with knowledge that the exchange might run afoul of the antitrust laws. Their decision varied from that of an unregulated concern only in that they also had to obtain the approval of a federal agency. But scope of that approval in the case of the FCC was limited to the statutory standard, “public interest, convenience, and necessity.” See, generally, Federal Radio Comm’n v. Nelson Bros. Co., 289 U. S. 266; Federal Communications Comm’n v. Pottsville Broadcasting Co., 309 U. S. 134; Federal Communications Comm’n v. Sanders Bros. Radio Station, supra; Federal Communications Comm’n v. RCA Communications, 346 U. S. 86. The monetary terms of the exchange were set by the parties, and were of concern to the Commission only as they might have affected the ability of the parties to serve the public. Even after approval, the parties were free to complete or not to complete the exchange as their sound business judgment dictated. In every sense, the question faced by the parties was solely one of business judgment (as opposed to regulatory coercion), save only that the Commission must have found that the “public interest” would be served by their decision to make the exchange. No pervasive regulatory scheme was involved.
This is not to imply that federal antitrust policy may not be considered in determining whether the “public interest, convenience, and necessity” will be served by proposed action of a broadcaster, for this Court has held the contrary. National Broadcasting Co. v. United States, 319 U. S. 190, 222-224. Moreover, in a given case the Commission might find that antitrust considerations alone would keep the statutory standard from being met, as when the publisher of the sole newspaper in an area applies for a license for the only available radio and television facilities, which, if granted, would give him a monopoly of that area’s major media of mass communication. See 98 Cong. Rec. 7399; Mansfield Journal Co. v. Federal Communications Comm’n, 86 U. S. App. D. C. 102, 107, 108, 180 F. 2d 28, 33, 34.
III.
The other contentions of appellees fall of their own weight if the FCC has no power to decide antitrust questions. Thus, before we can find the Government collaterally estopped by the FCC licensing, we must find “whether or not in the earlier litigation the representative of the United States had authority to represent its interests in a final adjudication of the issue in controversy.” Sunshine Anthracite Coal Co. v. Adkins, 310 U. S. 381, 403. (Emphasis supplied.) But the issue in controversy before the Commission was whether the exchange would serve the public interest, not whether § 1 of the Sherman Act had been violated. Consequently, there could be no estoppel. Res judicata principles are even more inapposite.
Similarly, there could be no laches unless the Government was under some sort of a duty to go forward in the FCC proceedings. But unless the FCC had power to decide the antitrust issues, and we have held that it did not, the Government had no duty either to enter the FCC proceedings or to seek review of the license grant.
Accordingly, the judgment of the District Court dismissing the action is reversed and the case is remanded for further proceedings not inconsistent with this opinion.
It is so ordered.
Mr. Justice Harlan concurs in the result, believing, as he understands part “I” of the Court’s opinion to hold, that a Commission determination of “public interest, convenience, and necessity” cannot either constitute a binding adjudication upon any antitrust issues that may be involved in the Commission’s proceeding or serve to exempt a licensee pro tanto from the antitrust laws, and that these considerations alone are dispositive of this appeal.
Mr. Justice Frankfurter and Mr. Justice Douglas took no part in the consideration or decision of this case.
Under present FCC regulations, NBC can own no more than five stations, 47 CFR, 1958, § 3.636, so that acquisition of a new station would require that an existing one be relinquished.
Federal Communications Commission Report No. 2793, Public Notice 27067, December 28, 1955.
Commissioner Bartley dissented from the action, urging that hearings should have been held because the facts theretofore revealed by the investigation had raised “serious questions as to the desirability and possible legality of the competitive practices followed by the network in obtaining dominance of major broadcast markets.” He suggested that there was “a substantial question whether, once the Commission grants its approval to these transfers, certain provisions of the Clayton Act (viz. 15 U. S. C. Section 18) might prevent Federal Trade Commission and Justice Department from taking any effective action in the event they concluded that possible violations of the anti-trust laws were involved.” (Emphasis by the Commissioner.) Commissioner Doerfer, joined by Commissioner Mack, responded that it was unnecessary to hold a hearing because the investigation had fully revealed the facts. He concluded, however: “It is difficult to see how approval of this exchange may effectively preclude other governmental agencies from examining into this or any other transaction of the network companies.”
44 Stat. 1162. See H. R. Conf. Rep. No. 1918, 73d Cong., 2d Sess. 47, 49.
“The Secretary of Commerce is hereby directed to refuse a station license and/or the permit hereinafter required for the construction of a station to any person, firm, company, or corporation,- or any subsidiary thereof, which has been found guilty by any Federal court of unlawfully monopolizing or attempting to unlawfully monopolize radio communication, directly or indirectly, through the control of the manufacture or sale of radio apparatus, through exclusive traffic arrangements, or by any other means. The granting of a license shall not estop the United States or any person aggrieved from prosecuting such person, firm, company, or corporation for a violation of the law against unlawful restraints and monopolies and/or combinations, contracts, or agreements in restraint of trade.”
“All laws of the United States relating to unlawful restraints and monopolies and to combinations, contracts, or agreements in restraint of trade are hereby declared to be applicable to the manufacture and sale of and to trade in radio apparatus and devices entering into or affecting interstate or foreign commerce and to interstate or foreign radio communications. Whenever in any suit, action, or proceeding, civil or criminal, brought under the provisions of any of said laws or in any proceedings brought to enforce or to review findings and orders of the Federal Trade Commission or other governmental agency in respect of any matters as to which said commission or other governmental agency is by law authorized to act, any licensee shall be found guilty of the violation of the provisions of such laws or any of them, the court, in addition to the penalties imposed by said laws, may adjudge, order, and/or decree that the license of such licensee shall, as of the date the decree or judgment becomes finally effective or as of such other date as the said decree shall fix, be revoked and that all rights under such license shall thereupon cease: Provided, however, That such licensee shall have the same right of appeal or review as is provided by law .in respect of other decrees and judgments of said court.”
As then phrased, the Act was to be administered primarily by the Secretary of Commerce.
Hearings before the House Committee on the Merchant Marine and Fisheries on H. It. 5589, 69th Cong., 1st Sess. 27.
Id., at 29.
See H. R. Rep. No. 404, 69th Cong., 1st Sess. 6, 16, 23.
67 Cong. Rec. 12507.
H. R. Conf. Rep. No. 1918, 73d Cong., 2d Sess. 47, 49.
H. R. Cotof. Rep. No. 2426, 82d Cong., 2d Sess. 19.
We recently explained the nature of the doctrine in United States v. Western Pacific R. Co., 352 U. S. 59, 63-64:
“The doctrine of primary jurisdiction, like the rule requiring exhaustion of administrative remedies, is concerned with promoting proper relationships between the courts and administrative agencies charged with particular regulatory duties. ‘Exhaustion’ applies where a claim is cognizable in the first instance by an administrative agency alone; judicial interference is withheld until the administrative process has run its course. ‘Primary jurisdiction,’ on the other hand, applies where a claim is originally cognizable in the courts, and comes into play whenever enforcement of the claim requires the resolution of issues which, under a regulatory scheme, have been placed within the special competence of an administrative body; in such a case the judicial process is suspended pending referral of such issues to the administrative body for its views.’’
See, generally, 3 Davis, Administrative Law Treatise, §§ 19.05, 19.06; Jaffe, Primary Jurisdiction Reconsidered: The Anti-Trust Laws, 102 U. of Pa. L. Rev. 577; Schwartz, Legal Restriction of Competition in the Regulated Industries: An Abdication of Judicial Responsibility, 67 Harv. L. Rev. 436; von Mehren, The Antitrust Laws and Regulated Industries: The Doctrine of Primary Jurisdiction, 67 Harv. L. Rev. 929.
This followed because, in the words of Mr. Justice Brandeis in Keogh v. Chicago & N. W. R. Co., supra, at 161, "... a combination of carriers to fix reasonable and non-discriminatory rates may be illegal.” This Court in Georgia v. Pennsylvania R. Co., supra, took the position that shippers were entitled to have rates filed by carriers who were not parties to a conspiracy, even though the rates filed were the lowest which would be found to be reasonable. The risk that future filings would be at the uppermost limits of the zone of reasonableness was too great, and damage from the conspiratorial filings was presumed to flow. Of course, when the agency is permitted to exempt from antitrust coverage rates filed cooperatively, the doctrine equally applies to an attack on the alleged conspiracy. United States Navigation Co. v. Cunard S. S. Co., supra; Far East Conference v. United States, supra.
Under Title II, common carriers are required to furnish communications service on reasonable request and may charge only just and reasonable rates, § 201. Such carriers must file rates with the FCC, and can charge only the rates as filed, § 203. The Commission may hold hearings on the lawfulness of filed rates, § 204, and after hearings may itself set the applicable rate, § 205. Cf. 49 U. S. C. § 15 et seq., 46 U. S. C. § 817. In view of this extensive regulation, Congress has provided that certain actions of telephone and telegraph companies may be exempted from the antitrust laws by the Commission, § 221 (a) and § 222 (c) (1). Cf. 49 U. S. C. §§ 5(11), 5b (9) and 46 U. S. C. § 814. Such exemptions are, however, subject to review, see Federal Maritime Board v. Isbrandtsen Co., 356 U. S. 481.
This conclusion is re-enforced by the Commission’s disavowal of either the power or the desire to foreclose the Government from antitrust actions aimed at transactions which the Commission has licensed. This position was taken both before the district judge below, and in a Supplemental Memorandum filed in this Court, page 8:
“Concurrent with the jurisdiction of the Department of Justice to enforce the Sherman Act, the Commission, of course, has jurisdiction to designate license applications for hearing on public interest questions arising out of facts which might also constitute violations of the antitrust laws. This does not mean, however, that its action on these public interest questions of communications policy is a determination of the antitrust issues as such. Thus, while the Commission may deny applications as not in the public interest where violations of the Sherman Act have been determined to exist, its approval of transactions which might involve Sherman Act violations is not a determination that the Sherman Act has not been violated, and therefore cannot forestall the United States from subsequently bringing an antitrust suit challenging those transactions.”
Nor was this position taken merely for the purposes of this litigation, for it has been the view of the Commission over a period of years. See Report on Uniform Policy as to Violation by Applicants of Laws of United States, FCC Docket No. 9572 (1950), 1 Pike and Fischer, Radio Regulation, Part III, 91:495; National Broadcasting Co. v. United States, 319 U. S. 190. Since, as Mr. Justice Brandeis observed, the doctrine of primary jurisdiction rests in part upon the need for the skill of a “body of experts,” it would be odd to impose the doctrine when the experts deny the relevance of their skill.
See also Report on Uniform Policy as to Violation by Applicants of Laws of United States, FCC Docket No. 9572, 1 Pike and Fischer, Radio Regulation, Part III, 91:495.
It is relevant to note that the Commission is not expressly required to give the Government notice that antitrust issues have been raised in a §310 (b) proceeding. Compare §222 (c)(1) of the Act relating to common carriers, which expressly makes consolidations and mergers exempt from antitrust coverage if approved by the Commission, but which also expressly requires that notice be given to the Attorney General of the United States prior to approval. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
37
] |
FEDERAL TRADE COMMISSION v. COLGATE-PALMOLIVE CO. et al.
No. 62.
Argued December 10, 1964.
Decided April 5, 1965.
Philip B. Heymann argued the cause for petitioner. With him on the briefs were Solicitor General Cox, Assistant Attorney General Orrick and James Mcl. Henderson.
John F. Sonnett argued the cause for respondents. With him on the brief for Colgate-Palmolive Co. was Arthur Mermin. On the brief for Ted Bates & Co., Inc., were H. Thomas Austem and William H. Allen.
Briefs of amici curiae, urging affirmance, were filed by Mahlon F. Perkins, Jr., for the American Association of Advertising Agencies, Inc., and by Gilbert H. Weil for the Association of National Advertisers, Inc.
Mr. Chief Justice Warren
delivered the opinion of the Court.
The basic question before us is whether it is a deceptive trade practice, prohibited by § 5 of the Federal Trade Commission Act, to represent falsely that a televised test, experiment, or demonstration provides a viewer with visual proof of a product claim, regardless of whether the product claim is itself true.
The case arises out of an attempt by respondent Colgate-Palmolive Company to prove to the television public that its shaving cream, “Rapid Shave,” outshaves them all. Respondent Ted Bates & Company, Inc., an advertising agency, prepared for Colgate three one-minute commercials designed to show that Rapid Shave could soften even the toughness of sandpaper. Each of the commercials contained the same “sandpaper test.” The announcer informed the audience that, “To prove rapid shave’s super-moisturizing power, we put it right from the can onto this tough, dry sandpaper. It was apply ... soak . . . and off in a stroke.” While the announcer was speaking, Rapid Shave was applied to a substance that appeared to be sandpaper, and immediately thereafter a razor was shown shaving the substance clean.
The Federal Trade Commission issued a complaint against respondents Colgate and Bates charging that the commercials were false and deceptive. The evidence before the hearing examiner disclosed that sandpaper of the type depicted in the commercials could not be shaved immediately following the application of Rapid Shave, but required a substantial soaking period of approximately 80 minutes. The evidence also showed that the substance resembling sandpaper was in fact a simulated prop, or “mock-up,” made of plexiglass to which sand had been applied. However, the examiner found that Rapid Shave could shave sandpaper, even though not in the short time represented by the commercials, and that if real sandpaper had been used in the commercials the inadequacies of television transmission would have made it appear to viewers to be nothing more than plain, colored paper. The examiner dismissed the complaint because neither misrepresentation — concerning the actual moistening time or the identity of the shaved substance— was in his opinion a material one that would mislead the public.
The Commission, in an opinion dated December 29, 1961, reversed the hearing examiner. It found that since Rapid Shave could not shave sandpaper within the time depicted in the commercials, respondents had misrepresented the product’s moisturizing power. Moreover, the Commission found that the undisclosed use of a plexiglass substitute for sandpaper was an additional material misrepresentation that was a deceptive act separate and distinct from the misrepresentation concerning Rapid Shave’s underlying qualities. Even if the sandpaper could be shaved just as depicted in the commercials, the Commission found that viewers had been misled into believing they had seen it done with their own eyes. As a result of these findings the Commission entered a cease- and-desist order against the respondents.
An appeal was taken to the Court of Appeals for the First Circuit which rendered an opinion on November 20, 1962. That court sustained the Commission’s conclusion that respondents had misrepresented the qualities of Rapid Shave, but it would not accept the Commission’s order forbidding the future use of undisclosed simulations in television commercials. It set aside the Commission’s order and directed that a new order be entered. On May 7, 1963, the Commission, over the protest of respondents, issued a new order narrowing and clarifying its original order to comply with the court’s mandate. The Court of Appeals again found unsatisfactory that portion of the order dealing with simulated props and refused to enforce it. We granted certiorari, 377 U. S. 942, to consider this aspect of the case and do not have before us any question concerning the misrepresentation that Rapid Shave could shave sandpaper immediately after application, that being conceded.
I.
A threshold question presented is whether the petition for certiorari was filed within 90 days after the entry of the judgment below as required by 28 U. S. C. § 2101 (c) (1958 ed.). Respondents claim that the failure of the Commission to seek certiorari from the judgment of the Court of Appeals rendered on November 20, 1962, barred a subsequent order prohibiting the use of simulated props in commercials that offer visual proof of a product claim.
After a court of appeals has set aside an order of the Commission on a point of law, the Commission may seek certiorari if it disagrees with the court’s legal conclusion. Section 5 (i) of the Federal Trade Commission Act contemplates that when the time for filing a petition for cer-tiorari has passed without a petition being filed, the Commission will enter an order in accordance with the mandate of the court of appeals. The Commission may not merely restate its former position in a new order and then apply for certiorari when the court of appeals reiterates its previous objection. As was said in Federal Power Comm’n v. Idaho Power Co., 344 U. S. 17, 20, “If the court did no more by the second judgment than to restate what it had decided by the first one . . . the 90 days would start to run from the first judgment.” To the same effect see Federal Trade Comm’n v. Minneapolis-Honeywell Regulator Co., 344 U. S. 206, 211. However, it has also been held that when a reviewing court finds a legal error in an administrative order, the agency is not foreclosed upon the remand of the case from enforcing the legislative policy of the act it administers, provided the new order does not conflict with the reviewing court’s mandate.
Obviously, the court which drafted the mandate is normally in the best position to determine whether the Commission’s subsequent order is consistent with the mandate, but this Court is never foreclosed from determining the issue for itself. The resolution of this issue in the present case requires a detailed analysis of the various opinions, mandates and orders issued by the Commission and the Court of Appeals.
In its initial opinion, dated December 29,1961, the Commission commented that the heart of the commercials was the visual “sandpaper test” which was designed to leave the viewer with the impression that he had actually seen such an experiment being performed. The Commission expressed the view that without this visible proof of Rapid Shave’s moisturizing ability some viewers might not have been persuaded to buy the product. The Commission then entered into a far-reaching discussion on the use of mock-ups in television and the relationship between “truth” and “television salesmanship,” and finally concluded that the use of the plexiglass prop was a deceptive practice. The Commission’s order was as inclusive as its discussion. It ordered both repondents to cease and desist from:
“Representing, directly or by implication, in describing, explaining, or purporting to prove the quality or merits of any product, that pictures, depictions, or demonstrations . . . are genuine or accurate representations ... of, or prove the quality or merits of, any product, when such pictures, depictions, or demonstrations are not in fact genuine or accurate representations ... of, or do not prove the quality or merits of, any such product.” (Emphasis added.)
The Court of Appeals understandably was concerned with the broad language in the Commission’s opinion and order, especially' since the Commission was not dealing with an established deceptive practice but was applying the flexible standards of § 5 to a hitherto unexplored area. The breadth of the Commission’s order was potentially limitless, apparently establishing a per se rule prohibiting the use of simulated props in all television commercials, since commercials by definition describe “the qualities or merits” of products. The court’s impression that the order was “quite ambiguous” was not alleviated when in oral argument counsel for the Commission stated that if a prominent person appeared on television saying “I love Lipsom’s iced tea,” while drinking something that appeared to be tea but in fact was not, the commercial would be a deceptive practice.
In light of the Commission’s order and its oral argument, the court concluded that it was the Commission’s intention to prohibit all simulated props in television commercials. The court could not agree with this position since it believed that “where the only untruth is that the substance [the viewer] sees on the screen is artificial, and the visual appearance is otherwise a correct and accurate representation of the product itself, he is not injured.” But, in setting aside the Commission’s order, the court gave little specific guidance for the drafting of a new one. It merely criticized the Commission for holding that mock-ups are “illegal per se,” and indicated that the Commission’s order “may” have been too broad in other respects as well.
Following the decision by the Court of Appeals, the Commission entered a new “proposed final order” on February 18, 1963. This order was accompanied by an explanatory opinion that admitted error in the original disposition of the case and expressed an intention to eliminate the errors found by the Court of Appeals. The Commission explained that its new order was not directed toward the broad prohibition of all undisclosed simulated props in commercials, but merely toward prohibiting respondents from misrepresenting to the public that it was seeing for itself a test, experiment or demonstration which purportedly proved a product claim. According to the Commission, the television commercial in question did not merely tell viewers that the experiment had been or could be performed, but instead told them that they were seeing it for themselves and did not have to take the seller’s word for it. This, and not the mere use of a prop, was the misrepresentation found to be a deceptive practice. Over the vigorous objection of respondents, the Commission issued its final order on May 7, 1963. Both respondents were ordered to cease and desist from:
“Unfairly or deceptively advertising 'any . . . product by presenting a test, experiment or demonstration that (1) is represented to the public as actual proof of a claim made for the product which is material to inducing its sale, and (2) is not in fact a genuine test, experiment or demonstration being conducted as represented and does not in fact constitute actual proof of the claim, because of the undisclosed use and substitution of a mock-up or prop instead of the product, article, or substance represented to be used therein.”
Respondents again appealed to the Court of Appeals. Despite the urgings of respondents that it limit its review to a determination whether the Commission’s order was consistent with the previous mandate, the court re-examined the Commission’s new order on the merits. The court recognized that the new order no longer prohibited the use of all simulated props in commercials, but found that it would be impossible under it to distinguish between commercials which depicted a test, experiment or demonstration, and those which did not. The court held that so long as there is an accurate portrayal of a product’s attributes or performance there is no deceit and instructed the Commission, “as we thought we had directed it before,” to enter an order merely prohibiting respondents from using mock-ups to demonstrate something which in fact could not be accomplished.
We hold that the Commission’s order of May 7, 1963, was not in disregard of the Court of Appeals’ first mandate and was a good-faith attempt to incorporate the legal principles contained therein. An examination of the Commission’s first order and accompanying opinion shows an overriding emphasis on mock-ups as such and a failure to articulate with precision the actual deceptive practice found. As a result, it is not surprising that the court criticized the order as “ambiguous,” interpreted it as prohibiting the substitution of a mock-up for a product in any commercial, and found that it rested on a premise that mock-ups were “illegal per se.” It is true that the court also said that viewers are interested in what they see and not in the means by which they see it, but this statement occurred immediately after the court discussed the contention in oral argument that it would be a deceptive practice to represent that a person was drinking “Lip-som’s iced tea” when in fact he was not. The only clear directive in the court’s mandate was for the Commission to remove the “fundamental error [which] so permeates the order” — i. e., the error that every use of mock-ups is a deceptive practice.
We find it inconceivable that the Commission could have successfully sought certiorari from this judgment. Had it done so, it would have been forced to argue either that every use of mock-ups in commercials is a deceptive practice, an apparently unintended theory, or that this Court should reinstate the Commission’s decision on a theory of its own, something the Court said it would not do in Securities & Exchange Comm’n v. Chenery Corp., 332 U. S. 194, 196.
Support is given our conclusion by the refusal of the Court of Appeals to declare that the Commission’s subsequent order was inconsistent with the previous mandate. However, even if the first opinion of the Court of Appeals could somehow be construed to hold as a matter of law that it is never a deceptive practice to use undisclosed props in a commercial designed to convince a viewer that he is seeing for himself proof of a seller’s claims, we find that the Commission acted reasonably in construing the mandate more narrowly. The Commission’s vague first order had spawned a correspondingly vague opinion by the Court of Appeals. If the court meant its first opinion to say more than we have attributed to it, it was not until the second opinion that the court clearly articulated its reasoning. Therefore, at the least the court’s second opinion resolved a genuine ambiguity in the first, and the time within which certiorari had to be requested dates from the second judgment. See Federal Trade Comm’n v. Minneapolis-Honeywell Regulator Co., 344 U. S. 206, 211.
II.
In reviewing the substantive issues in the case, it is well to remember the respective roles of the Commission and the courts in the administration of the Federal Trade Commission Act. When the Commission was created by Congress in 1914, it was directed by § 5 to prevent “ [u] nfair methods of competition in commerce.” Congress amended the Act in 1938 to extend the Commission’s jurisdiction to include “unfair or deceptive acts or practices in commerce” — a significant amendment showing Congress’ concern for consumers as well as for competitors. It is important to note the generality of these standards of illegality; the proscriptions in § -5 are flexible, “to be defined with particularity by the myriad of cases from the field of business.” Federal Trade Comm’n v. Motion Picture Advertising Service Co., 344 U. S. 392, 394.
This statutory scheme necessarily gives the Commission an influential role in interpreting § 5 and in applying it to the facts of particular cases arising out of unprecedented situations. Moreover, as an administrative agency which deals continually with cases in the area, the Commission is often in a better position than are courts to determine when a practice is “deceptive” within the meaning of the Act. This Court has frequently stated that the Commission’s judgment is to be given great weight by reviewing courts. This admonition is especially true with respect to allegedly deceptive advertising since the finding of a § 5 violation in this field rests so heavily on inference and pragmatic judgment. Nevertheless, while informed judicial determination is dependent upon enlightenment gained from administrative experience, in the last analysis the words “deceptive practices” set forth a legal standard and they must get their final meaning from judicial construction. Cf. Federal Trade Comm’n v. R. F. Keppel & Bro., Inc., 291 U. S. 304, 314.
We are not concerned in this case with the clear misrepresentation in the commercials concerning the speed with which Rapid Shave could shave sandpaper, since the Court of Appeals upheld the Commission’s finding on that matter and the respondents have not challenged the finding here. We granted certiorari to consider the Commission’s conclusion that even if an advertiser has himself conducted a test, experiment or demonstration which he honestly believes will prove a certain, product claim, he may not convey to television viewers the false impression that they are seeing the test, experiment or demonstration for themselves, when they are not because of the undisclosed use of mock-ups.
We accept the Commission’s determination that the commercials involved in this case contained three representations to the public: (1) that sandpaper could be shaved by Rapid Shave; (2) that an experiment had been conducted which verified this claim; and (3) that the viewer was seeing this experiment for himself. Respondents admit that the first two representations were made, but deny that the third was. The Commission, however, found to the contrary, and, since this is a matter of fact resting on an inference that could reasonably be drawn from the commercials themselves, the Commission’s finding should be sustained. For the purposes of our review, we can assume that the first two representations were true; the focus of our consideration is on the third, which was clearly false. The parties agree that § 5 prohibits the intentional misrepresentation of any fact which would constitute a material factor in a purchaser’s decision whether to buy. They differ, however, in their conception of what “facts” constitute a “material factor” in a purchaser’s decision to buy. Respondents submit, in effect, that the only material facts are those which deal with the substantive qualities of a product. The Commission, on the other hand, submits that the misrepresentation of any fact so long as it materially induces a purchaser’s decision to buy is a deception prohibited by §5.
The Commission’s interpretation of what is a deceptive practice seems more in line with the decided cases than that of respondents. This Court said in Federal Trade Comm’n v. Algoma Lumber Co., 291 U. S. 67, 78: “[T]he public is entitled to get what it chooses, though the choice may be dictated by caprice or by fashion or perhaps by ignorance.” It has long been considered a deceptive practice to state falsely that a product ordinarily sells for an inflated price but that it is being offered at a special reduced price, even if the offered price represents the actual value of the product and the purchaser is receiving his money’s worth. Applying respondents’ arguments to these cases, it would appear that so long as buyers paid no more than the product was actually worth and the product contained the qualities advertised, the misstatement of an inflated original price was immaterial.
It has also been held a violation of § 5 for a seller to misrepresent to the public that he is in a certain line of business, even though the misstatement in no way affects the qualities of the product. As was said in Federal Trade Comm’n v. Royal Milling Co., 288 U. S. 212, 216:
“If consumers or dealers prefer to purchase a given article because it was made by a particular manufacturer or class of manufacturers, they have a right to do so, and this right cannot be satisfied by imposing upon them an exactly similar article, or one equally as good, but having a different origin.”
The courts of appeals have applied this reasoning to the merchandising of reprocessed products that are as good as new, without a disclosure that they are in fact reprocessed. And it has also been held that it is a deceptive practice to misappropriate the trade name of another.
Respondents claim that all these cases are irrelevant to our decision because they involve misrepresentations related to the product itself and not merely to the manner in which an advertising message is communicated. This distinction misses the mark for two reasons. In the first place, the present case is not concerned with a mode of communication, but with a misrepresentation that viewers have objective proof of a seller’s product claim over and above the seller’s word. Secondly, all of the above cases, like the present case, deal with methods designed to get a consumer to purchase a product, not with whether the product, when purchased, will perform up to expectations. We find an especially strong similarity between the present case and those cases in which a seller induces the public to purchase an arguably good product by misrepresenting his line of business, by concealing the fact that the product is reprocessed, or by misappropriating another’s trademark. In each the seller has used a misrepresentation to break down what he regards to be an annoying or irrational habit of the buying public — the preference for particular manufacturers or known brands regardless of a product’s actual qualities, the prejudice against reprocessed goods, and the desire for verification of a product claim. In each case the seller reasons that when the habit is broken the buyer will be satisfied with the performance of the product he receives. Yet, a misrepresentation has been used to break the habit and, as was stated in' Algoma Lumber, a misrepresentation for such an end is not permitted.
We need not limit ourselves to the cases already mentioned because there are other situations which also illustrate the correctness of the Commission’s finding in the present case. It is generally accepted that it is a deceptive practice to state falsely that a product has received a testimonial from a respected source. In addition, the Commission has consistently acted to prevent sellers from falsely stating that their product claims have been “certified.” We find these situations to be indistinguishable from the present case. We can assume that in each the underlying product claim is true and in each the seller actually conducted an experiment sufficient to prove to himself the truth of the claim. But in each the seller has told the public that it could rely on something other than his word concerning both the truth of the claim and the validity of his experiment. We find it an immaterial difference that in one case the viewer is told to rely on the word of a celebrity or authority he respects, in another on the word of a testing agency, and in the present case on his own perception of an undisclosed simulation.
Respondents again insist that the present case is not like any of the above, but is more like a case in which a celebrity or independent testing agency has in fact submitted a written verification of an experiment actually observed, but, because of the inability of the camera to transmit accurately an impression of the paper on which the testimonial is written, the seller reproduces it on another substance so that it can be seen by the viewing-audience. This analogy ignores the finding of the Commission that in the present case the seller misrepresented to the public that it was being given objective proof of a product claim. In respondents’ hypothetical the objective proof of the product claim that is offered, the word of the celebrity or agency that the experiment was actually conducted, does exist; while in the case before us the objective proof offered, the viewer’s own perception of an actual experiment, does not exist. Thus, in respondents’ hypothetical, unlike the present case, the use of the undisclosed mock-up does not conflict with the seller’s claim that there is objective proof.
We agree with the Commission, therefore, that the undisclosed use of plexiglass in the present commercials was a material deceptive practice, independent and separate from the other misrepresentation found. We find unpersuasive respondents’ other objections to this conclusion. Respondents claim that it will be impractical to inform the viewing public that it is not seeing an actual test, experiment or demonstration, but we think it inconceivable that the ingenious advertising world will be unable, if it so desires, to conform to the Commission’s insistence that the public be not misinformed. If, however, it becomes impossible or impractical to show simulated demonstrations on television in a truthful manner, this indicates that television is not a medium that lends itself to this type of commercial, not that the commercial must survive at all costs. Similarly unpersuasive is respondents’ objection that the Commission’s decision discriminates against sellers whose product claims cannot be “verified” on television without the use of simulations. All methods of advertising do not equally favor every seller. If the inherent limitations of a method do not permit its use in the way a seller desires, the seller cannot by material misrepresentation compensate for those limitations.
Respondents also claim that the Commission reached out to decide a question not properly before it and has presented this Court with an abstract question. They argue that since the commercials in the present case misrepresented the time element involved in shaving sandpaper, this Court should not consider the additional misrepresentation that the public had objective proof of the seller’s claim. As we have already said, these misrepresentations are separate and distinct, and we fail to see why respondents should be sheltered from a cease-and-desist order with respect to one deceptive practice merely because they also engaged in another.
Respondents finally object to what they consider to be the absence of an adequate record to sustain the Commission’s finding. It is true that in its initial stages the case was concerned more with the misrepresentation about the product’s underlying qualities than with the misrepresentation that objective proof was being given. Nevertheless, both misrepresentations were in the case from the beginning, and respondents were never prejudicially misled into believing that the second question was not being considered. Nor was it necessary for the Commission to conduct a survey of the viewing public before it could determine that the commercials had a tendency to mislead, for when the Commission finds deception it is also authorized, within- the bounds of reason, to infer that the deception will constitute a material factor in a purchaser’s decision to buy. See Federal Trade Comm’n v. Raladam Co., 316 U. S. 149, 152. We find the record in this case sufficient to support the Commission’s findings.
III.
We turn our attention now to the order issued by the Commission. It has been repeatedly held that the Commission has wide discretion in determining the type of order that is necessary to cope with the unfair practices found, e. g., Jacob Siegel Co. v. Federal Trade Comm’n, 327 U. S. 608, 611, and that Congress has placed the primary responsibility for fashioning orders upon the Commission, Federal Trade Comm’n v. National Lead Co., 352 U. S. 419, 429. For these reasons the courts should not “lightly modify” the Commission’s orders. Federal Trade Comm’n v. Cement Institute, 333 U. S. 683, 726. However, this Court has also warned that an order’s prohibitions “should be clear and precise in order that they may bé understood by those against whom they are directed,” Federal Trade Comm’n v. Cement Institute, supra, at 726, and that “[t]he severity of possible penalties prescribed ... for violations of orders which have become final underlines the necessity for fashioning orders which are, at the outset, sufficiently clear and precise to avoid raising serious questions as to their meaning and application.” Federal Trade Comm’n v. Henry Broch & Co., 368 U. S. 360, 367-368.
The Court of Appeals has criticized the reference in the Commission’s order to “test, experiment or demonstration” as not capable of practical interpretation. It could find no difference between the Rapid Shave commercial and a commercial which extolled the goodness of ice cream while giving viewers a picture of a scoop of mashed potatoes appearing to be ice cream. We do not understand this difficulty. In the ice cream case the mashed potato prop is not being used for additional proof of the product claim, while the purpose of the Rapid Shave commercial is to give the viewer objective proof of the claims made. If in the ice cream hypothetical the focus of the commercial becomes the undisclosed potato prop and the viewer is invited, explicitly or by implication, to see for himself the truth of the claims about the ice cream’s rich texture and full color, and perhaps compare it to a “rival product,” then the commercial has become similar to the one now before us. Clearly, however, a commercial which depicts happy actors delightedly eating ice cream that is in fact mashed potatoes or drinking a product appearing to be coffee but which is in fact some other substance is not covered by the present order.
The crucial terms of the present order — “test, experiment or demonstration . . . represented ... as actual proof of a claim” — are as specific as the circumstances will permit. If respondents in their subsequent commercials attempt .to come as close to the line of misrepresentation as the Commission’s order permits, they may without specifically intending to do so cross into the area proscribed by this order. However, it does not seem “unfair to require that one who deliberately goes perilously close to an area of proscribed conduct shall take the risk that he may cross the line.” Boyce Motor Lines, Inc. v. United States, 342 U. S. 337, 340. .. In commercials where the emphasis is on the seller’s word, and not on the viewer’s own perception, the respondents need not fear that an undisclosed use of props is prohibited by the present order. On the other hand, when the commercial not only makes a claim, but also invites the viewer to rely on his own perception for demonstrative proof of the claim, the respondents will be aware that the use of undisclosed props in strategic places might be a material deception. We believe that respondents will have no difficulty applying the Commission’s order to the vast majority'of their contemplated future commercials. If, however, a situation arises in which respondents are sincerely unable to determine whether a proposed course of action would violate the present order, they can, by complying with the Commission’s rules, oblige the Commission to give them definitive advice as to whether their proposed action, if pursued, would constitute compliance with the order.
Finally, we find no defect in the provision of the order which prohibits respondents from engaging in similar practices with respect to “any product” they advertise. The propriety of a broad order depends upon the specific circumstances of the case, but the courts will not interfere except where the remedy selected has no reasonable relation to the unlawful practices found to exist. In this case the respondents produced three different commercials which employed the same deceptive practice. This we believe gave the Commission a sufficient basis for believing that the respondents would be inclined to use similar commercials with respect to the other products they advertise. We think it reasonable for the Commission to frame its order broadly enough to prevent respondents from engaging in similarly illegal practices in future advertisements. As was said in Federal Trade Comm’n v. Ruberoid Co., 343 U. S. 470, 473: “[T]he Commission is not limited to prohibiting the illegal practice in the precise form in which it is found to have existed in the past.” Having been caught violating the Act, respondents “must expect some fencing in.” Federal Trade Comm’n v. National Lead Co., 352 U. S. 419, 431.
“(b) Any respondent subject to a Commission order may request advice from the Commission as to whether a proposed course of action, if pursued by it, will constitute compliance with such order. The request for advice should be submitted in writing to the Secretary of the Commission and should include full and complete information regarding the proposed course of action. On the basis of the facts submitted, as well as other information available to the Commission, the Commission will inform the respondent whether or not the proposed course of action, if pursued, would constitute compliance with its order.
“(c) The Commission may at any time reconsider its approval of any report of compliance or any advice given under this section and, where the public interest requires, rescind or revoke its prior approval or advice. In such event the respondent will be given notice of the Commission’s intent to revoke or rescind and will be given an opportunity to submit its views to the Commission. The Commission will not proceed against a respondent for violation of an order with respect to any action which was taken in good faith reliance upon the Commission’s approval or advice under this section, where all relevant facts were fully, completely and accurately presented to the Commission and where such action was promptly discontinued upon notification of rescission or revocation of the Commission’s approval.”
The judgment of the Court of Appeals is reversed and the case remanded for the entry of a judgment enforcing the Commission’s order.
Reversed and remanded.
38 Stat. 717, as amended, 52 Stat. 111, 15 U. S. C. §45 (a)(1) (1958 ed.):
“Unfair methods of competition in commerce, and unfair or deceptive acts or practices in commerce, are declared unlawful.”
52 Stat. 114, as amended, 15 U. S. C. § 45 (i) (1958 ed.):
“If the order of the Commission is modified or set aside by the court of appeals, and if (1) the time allowed for filing a petition for certiorari has expired and no such petition has been duly filed, or (2) the petition for certiorari has been denied, or (3) the decision of the court has been affirmed by the Supreme Court, then the order of the Commission rendered in accordance with the mandate of the court of appeals shall become final on the expiration of thirty'' days from the time such order of the Commission was rendered, unless within such thirty days either party has instituted proceedings to have such order corrected so that it will accord with the mandate, in which event the order of the Commission shall become final when so corrected.”
Securities & Exchange Comm’n v. Chenery Corp., 332 U. S. 194, 200; Federal Communications Comm’n v. Pottsville Broadcasting Co., 309 U. S. 134, 145.
See Labor Board v. Donnelly Garment Co., 330 U. S. 219, 227; Federal Communications Comm’n v. Pottsville Broadcasting Co., supra, note 3, at 141.
59 F. T. C. 1452, 1477-1478.
310 F. 2d 89, 94.
Ibid.
Colgate-Palmolive Co., No. 7736, FTC, May 7, 1963. An additional clause was added to the order for the benefit of respondent Bates in recognition of the different positions of clients and advertising agencies, which often do not have all the information about a product that the client has. The clause reads: “provided, however, that it shall be a defense hereunder that respondent neither knew nor had reason to know that the product, article or substance used in the test, experiment or demonstration was a mock-up or prop.”
326 F. 2d 517, 523.
310 F. 2d 89, 94.
38 Stat. 719 (1914), as amended, 15 U. S. C. §45 (a)(1) (1958 ed.).
52 Stat. 111 (1938), 15 U. S. C. §45 (a)(1) (1958 ed.).
See, e. g., Federal Trade Comm’n v. Motion Picture Advertising Service Co., 344 U. S. 392, 396; Federal Trade Comm’n v. Raladam Co., 316 U. S. 149, 152.
See Universal Camera Corp. v. Labor Board, 340 U. S. 474, 488; Federal Trade Comm’n v. Pacific States Paper Trade Assn., 273 U. S. 52, 63.
Brief for Petitioner, p. 13; Brief for Respondent Colgate, p. 22; Brief for Respondent Bates, p. 14.
Brief for Respondent Colgate, p. 16: “What [the buyer] is interested in is whether the actual product he buys will look and perform the way it appeared on his television set.” Id., at 17: “[A] buyer’s real concern is with the truth of the substantive claims or promises made to him, not with the means used to make them.” Id,., at 20: “[T]he Commission’s error was to confuse the substantive claim made for a product with the means by which such claim was conveyed.”
Brief for Respondent Bates, pp. 2-3: “If the viewer or reader of the advertisement buys the product, and it will do exactly what the portrayal in the advertisement asserts it will do, can there be any unlawful misrepresentation?” Id., at 13-14: “What induces the buyer to purchase is the claim that the product will perform as represented in the portrayed test. That is the material claim.” Id., at 25: “It is not a representation in any way relating to the product or to its purchase, so that even if the strained suggestion that there is such an implied representation were realistic, the representation plainly would be immaterial.”
Federal Trade Comm’n v. Standard Education Society, 302 U. S. 112, 115-117; Kalwajtys v. Federal Trade Comm’n, 237 F. 2d 654, 656 (C. A. 7th Cir. 1956), cert. denied, 352 U. S. 1025.
Kerran v. Federal Trade Comm’n, 265 F. 2d 246 (C. A. 10th Cir. 1959), cert. denied sub nom. Double Eagle Ref. Co. v. Federal Trade Comm’n, 361 U. S. 818; Mohawk Ref. Corp. v. Federal Trade Comm’n, 263 F. 2d 818 (C. A. 3d Cir. 1959), cert. denied, 361 U. S. 814.
E. g., Niresk Industries, Inc. v. Federal Trade Comm’n, 278 F. 2d 337 (C. A. 7th Cir. 1960), cert. denied, 364 U. S. 883.
E. g., Niresk Industries, Inc. v. Federal Trade Comm’n, supra, note 19; Howe v. Federal Trade Comm’n, 148 F. 2d 561 (C. A. 9th Cir. 1945), cert. denied, 326 U. S. 741.
See, e. g., Stipulation 9083, 55 F. T. C. 2101 (1958); Stipulation 8966, 54 F. T. C. 1953 (1957).
The Commission’s rules, 16 CFR §3.26 (1964 Supp.), provide:
Federal Trade Comm’n v. National Lead Co., 352 U. S. 419, 429; Federal Trade Comm’n v. Ruberoid Co., 343 U. S. 470, 473; Jacob Siegel Co. v. Federal Trade Comm’n, 327 U. S. 608, 612. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
"Army and Air Force Exchange Service",
"Atomic Energy Commission",
"Secretary or administrative unit or personnel of the U.S. Air Force",
"Department or Secretary of Agriculture",
"Alien Property Custodian",
"Secretary or administrative unit or personnel of the U.S. Army",
"Board of Immigration Appeals",
"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
"Benefits Review Board",
"Civil Aeronautics Board",
"Bureau of the Census",
"Central Intelligence Agency",
"Commodity Futures Trading Commission",
"Department or Secretary of Commerce",
"Comptroller of Currency",
"Consumer Product Safety Commission",
"Civil Rights Commission",
"Civil Service Commission, U.S.",
"Customs Service or Commissioner or Collector of Customs",
"Defense Base Closure and REalignment Commission",
"Drug Enforcement Agency",
"Department or Secretary of Defense (and Department or Secretary of War)",
"Department or Secretary of Energy",
"Department or Secretary of the Interior",
"Department of Justice or Attorney General",
"Department or Secretary of State",
"Department or Secretary of Transportation",
"Department or Secretary of Education",
"U.S. Employees' Compensation Commission, or Commissioner",
"Equal Employment Opportunity Commission",
"Environmental Protection Agency or Administrator",
"Federal Aviation Agency or Administration",
"Federal Bureau of Investigation or Director",
"Federal Bureau of Prisons",
"Farm Credit Administration",
"Federal Communications Commission (including a predecessor, Federal Radio Commission)",
"Federal Credit Union Administration",
"Food and Drug Administration",
"Federal Deposit Insurance Corporation",
"Federal Energy Administration",
"Federal Election Commission",
"Federal Energy Regulatory Commission",
"Federal Housing Administration",
"Federal Home Loan Bank Board",
"Federal Labor Relations Authority",
"Federal Maritime Board",
"Federal Maritime Commission",
"Farmers Home Administration",
"Federal Parole Board",
"Federal Power Commission",
"Federal Railroad Administration",
"Federal Reserve Board of Governors",
"Federal Reserve System",
"Federal Savings and Loan Insurance Corporation",
"Federal Trade Commission",
"Federal Works Administration, or Administrator",
"General Accounting Office",
"Comptroller General",
"General Services Administration",
"Department or Secretary of Health, Education and Welfare",
"Department or Secretary of Health and Human Services",
"Department or Secretary of Housing and Urban Development",
"Administrative agency established under an interstate compact (except for the MTC)",
"Interstate Commerce Commission",
"Indian Claims Commission",
"Immigration and Naturalization Service, or Director of, or District Director of, or Immigration and Naturalization Enforcement",
"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
"Department or Secretary of Labor",
"Loyalty Review Board",
"Legal Services Corporation",
"Merit Systems Protection Board",
"Multistate Tax Commission",
"National Aeronautics and Space Administration",
"Secretary or administrative unit or personnel of the U.S. Navy",
"National Credit Union Administration",
"National Endowment for the Arts",
"National Enforcement Commission",
"National Highway Traffic Safety Administration",
"National Labor Relations Board, or regional office or officer",
"National Mediation Board",
"National Railroad Adjustment Board",
"Nuclear Regulatory Commission",
"National Security Agency",
"Office of Economic Opportunity",
"Office of Management and Budget",
"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
"Occupational Safety and Health Administration",
"Occupational Safety and Health Review Commission",
"Office of Workers' Compensation Programs",
"Patent Office, or Commissioner of, or Board of Appeals of",
"Pay Board (established under the Economic Stabilization Act of 1970)",
"Pension Benefit Guaranty Corporation",
"U.S. Public Health Service",
"Postal Rate Commission",
"Provider Reimbursement Review Board",
"Renegotiation Board",
"Railroad Adjustment Board",
"Railroad Retirement Board",
"Subversive Activities Control Board",
"Small Business Administration",
"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
"Selective Service System",
"Department or Secretary of the Treasury",
"Tennessee Valley Authority",
"United States Forest Service",
"United States Parole Commission",
"Postal Service and Post Office, or Postmaster General, or Postmaster",
"United States Sentencing Commission",
"Veterans' Administration or Board of Veterans' Appeals",
"War Production Board",
"Wage Stabilization Board",
"State Agency",
"Unidentifiable",
"Office of Thrift Supervision",
"Department of Homeland Security",
"Board of General Appraisers",
"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
56
] |
SAMPSON, ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, et al. v. MURRAY
No. 72-403.
Argued November 14, 1973
Decided February 19, 1974
RehNquist, J., delivered the opinion of the Court, in which BurgeR, C. J., and Stewart, White, Blackmun, and Powell, JJ., joined. Douglas, J., filed a dissenting opinion, post, p. 92. Marshall, J., filed a dissenting opinion, in which BreNNAN, J., joined, post, p. 97.
Keith A. Jones argued the cause for petitioners. With him on the briefs were Solicitor General Bork, Assistant Attorney General Wood, Acting Assistant Attorney General Jaffe, Samuel Huntington, and Walter H. Fleischer.
Thomas J. McGrew argued the cause for respondent pro hac vice. With him on the brief was James A. Dobkin.
Mr. Justice Rehnquist
delivered the opinion of the Court.
Respondent is a probationary employee in the Public Buildings Service of the General Services Administration (GSA). In May 1971, approximately four months after her employment with GSA began, she was advised in writing by the Acting Commissioner of the Public Buildings Service, W. H. Sanders, that she would be discharged from her position on May 29, 1971. She then filed this action in the United States District Court for the District of Columbia, seeking to temporarily enjoin her dismissal pending her pursuit of an administrative appeal to the Civil Service Commission. The District Court granted a temporary restraining order, and after an adversary hearing extended the interim injunc-tive relief in favor of respondent until the Acting Commissioner of the Public Buildings Service testified about the reasons for respondent’s dismissal.
A divided Court of Appeals for the District of Columbia Circuit affirmed, rejecting the Government’s contention that the District Court had no authority whatever to grant temporary injunctive relief in this class of cases, and holding that the relief granted by the District Court in this particular case was within the permissible bounds of its discretion. We granted certiorari, sub nom. Kunzig v. Murray, 410 U. S. 981 (1973). We agree with the Court of Appeals that the District Court is not totally without authority to grant interim injunctive relief to a discharged Government employee, but conclude that, judged by the standards which we hold must govern the issuance of such relief, the issuance of the temporary injunctive relief by the District Court in this case cannot be sustained.
I
Respondent was hired as a program analyst by the Public Buildings Service after previous employment in the Defense Intelligence Agency. Under the regulations of the Civil Service Commission, this career conditional appointment was subject to a one-year probationary period. Applicable regulations provided that respondent, during this initial term of probation, could be dismissed without being afforded the greater procedural advantages available to permanent employees in ' the competitive service. The underlying dispute between the parties arises over whether the more limited procedural requirements applicable to probationary employees were satisfied by petitioners in this case.
The procedural protections which the regulations accord to most dismissed probationary employees are limited. Commonly a Government agency may dismiss a probationary employee found unqualified for continued employment simply “by notifying him in writing as to why he is being separated and the effective date of the action.” More elaborate procedures are specified when the ground for terminating a probationary employee is “for conditions arising before appointment.” In such cases the regulations require that the employee receive “an advance written notice stating the reasons, specifically and in detail, for the proposed action”; that the employee be given an opportunity to respond in writing and to furnish affidavits in support of his response; that the agency “consider” any answer filed by the employee in reaching its decision; and that the employee be notified of the agency’s decision at the earliest practicable date. Respondent contends that her termination was based in part on her activities while in the course of her previous employment in the Defense Intelligence Agency, and that therefore she was entitled to an opportunity to file an answer under this latter provision.
The letter which respondent received from the Acting Commissioner, notifying her of the date of her discharge, stated that the reason for her discharge was her “complete unwillingness to follow office procedure and to accept direction from [her] supervisors.” After receipt of the letter, respondent's counsel met with a GSA personnel officer to discuss her situation and, in the course of the meeting, was shown a memorandum prepared by an officer of the Public Buildings Service upon which Sanders apparently based his decision to terminate respondent's employment. The memorandum contained both a discussion of respondent's conduct in her job with the Public Buildings Service and a discussion of her conduct during her previous employment at the Defense Intelligence Agency. Relying upon the inclusion of the information concerning her previous employment, respondent’s counsel requested that she be given a detailed statement of the charges against her and an opportunity to reply — the procedures to which she would be entitled under the regulations if in fact the basis of her discharge had been conduct during her previous employment. This request was denied:
Respondent then filed an administrative appeal with the Civil Service Commission pursuant to the provisions of 5 CFR § 315.806 (c), alleging that her termination was subject to § 315.805 and was not effected in accordance with the procedural requirements of that section. While her administrative appeal was pending undecided, she filed this action. Her complaint alleged that the agency had failed to follow the appropriate Civil Service regulations, alleged that her prospective discharge would deprive her of income and cause her to suffer the embarrassment of being wrongfully discharged, and requested a temporary restraining order and interim injunctive relief against her removal from employment pending agency determination of her appeal. The District Court granted the temporary restraining order at the time of the filing of respondent’s complaint, and set a hearing on the application for a temporary injunction for the following week.
At the hearing on the temporary injunction, the District Court expressed its desire to hear the testimony of Sanders in person, and refused to resolve the controversy on the basis of his affidavit which the Government offered to furnish. When the Government declined to produce Sanders, the court ordered the temporary-injunctive relief continued, stating that “Plaintiff may suffer immediate and irreparable injury, loss and damage before the Civil Service Commission can consider Plaintiff’s claim.” The Government, desiring to test the authority of the District Court to enter such an order, has not produced Sanders, and the interim relief awarded respondent continues in effect at this time.
On the Government’s appeal to the Court of Appeals for the District of Columbia Circuit, the order of the District Court was affirmed. Although recognizing that “Congress presumably could remove the jurisdiction of the District Courts to grant such equitable interim relief, in light of the remedies available,” the court found that the District Court had the power to grant relief in the absence of an explicit prohibition from Congress. The Court of Appeals decided that the District Court acted within the bounds of permissible discretion in requiring Sanders to appear and testify, and in continuing the temporary injunctive relief until he was produced as a witness by the Government.
II
While it would doubtless be intellectually neater to completely separate the question whether a District Court has authority to issue any temporary injunctive relief at the behest, of a discharged Government employee from the question whether the relief granted in this case was proper, we do not believe the questions may be thus bifurcated into two watertight compartments. We believe the basis for our decision can best be illuminated by taking up the various arguments which the parties urge upon us.
Petitioners point out, and the Court of Appeals below apparently recognized, that Congress has given the District Courts no express statutory authorization to issue temporary “stays” in Civil Service cases. Although Congress has often specifically conferred such authority when it so desired — for example, in the enabling statutes establishing the NLRB, the FTC, the FPC, and the SEC — the statutes governing the Civil Service Commission are silent on the question. The rules and regulations promulgated pursuant to a broad grant of statutory authority likewise make no provision for interlocutory judicial intervention.
The Court of Appeals nevertheless found that the district courts had traditional power to grant stays in such personnel cases. Commenting upon the Government’s arguments for reversal below, the court stated:
“It is asserted that the Civil Service Commission has been given exclusive review jurisdiction. But, as noted initially, there is no statutory power in the Civil Service Commission to grant a temporary stay of discharge. Prior to the Civil Service Act a United States District Court would certainly have had jurisdiction and power to grant such temporary relief. The statute did not explicitly take it away, nor implicitly by conferring such jurisdiction and power on the CSC; we hold the District Court still has jurisdiction and may exercise the power under established standards in appropriate circumstances.”
If the issue were to turn solely on the earlier decisions of this Court examining the authority of federal courts to intervene in disputes about governmental employment, we think this assumption of the Court of Appeals is wrong. In Keim v. United States, 177 U. S. 290 (1900), this Court held that the Court of Claims had no authority to award damages to an employee who claimed he had .been wrongfully discharged by his federal employer. In White v. Berry, 171 U. S. 366 (1898), a Government employee had sought to enjoin his employer from dismissing him from office, alleging that the removal would violate both the Civil Service Act and the applicable regulations. The Circuit Court assumed jurisdiction and issued an order prohibiting the defendant from interfering with the plaintiff’s discharge of his duty “ 'until he shall be removed therefrom by proper proceedings had under the Civil Service Act and the rules and regulations made thereunder or by judicial proceedings at law This Court reversed. Discussing the apparently well-established principle that “ 'a court of equity will not, by injunction, restrain an executive officer from making a wrongful removal of a subordinate appointee,’ ” the Court held that “the Circuit Court, sitting in equity, was without jurisdiction to grant the relief asked.”
Respondent’s case, then, must succeed, if at all, despite earlier established principles regarding equitable intervention in disputes over tenure of governmental employees, and not because of them. Much water has flowed over the dam since 1898, and cases such as Service v. Dulles, 354 U. S. 363 (1957), cited by the District Court in its memorandum opinion in this case, establish that federal courts do have authority to review the claim of a discharged governmental employee that the agency effectuating the discharge has not followed administrative regulations. In that case, however, judicial proceedings were not commenced until the administrative remedy had been unsuccessfully pursued. The fact that Government personnel decisions are now ultimately subject to the type of judicial review sought in Service v. Dulles, supra, does not, without more, create the authority to issue interim injunctive relief which was held lacking in cases such as White v. Berry, supra.
The Court of Appeals found support for its affirmance of the District Court's grant of injunctive relief in Scripps-Howard Radio v. FCC, 316 U. S. 4 (1942). In Scripps-Howard the licensee of a Cincinnati radio station petitioned the FCC to vacate an order permitting a Columbus radio station to change its frequency and to increase its broadcasting power. The licensee also requested a hearing. When the Commission denied the petition, the licensee filed a statutory appeal in the Court of Appeals for the District of Columbia and, in conjunction with the docketing of the appeal, asked the court to stay the FCC order pending its decision. The Court of Appeals, apparently departing from a longstanding policy of issuing such stays, declined to do so in this case and ultimately certified the question of its power to this Court.
This Court held that the Court of Appeals had power to issue the stay, analogizing it to the traditional stay granted by an appellate court pending review of an inferior court's decision:
“It has always been held, therefore, that as part of its traditional equipment for the administration of justice/'"’- a federal court can stay the enforcement of a judgment pending the outcome of an appeal.”
But in Scripps-Howard, the losing party before the agency sought an interim stay of final agency action pending statutory judicial review. A long progression of cases in this Court had established the authority of a court, empowered by statute to exercise appellate jurisdiction, to issue appropriate writs in aid of that jurisdiction. The All Writs Act, first enacted as a part of the Judiciary Act of 1789, provided statutory confirmation of this authority. This Court in Scripps-Howard held that the same principles governed the authority of courts charged by statute with judicial review of agency decisions, and that the authority to grant a stay exists in such a court even though not expressly conferred by the statute which confers appellate jurisdiction.
Scripps-Howard, supra, of course, is not the instant case. The authority of the District Court to review agency action under Service v. Dulles, supra, does not come into play until it may be authoritatively said that the administrative decision to discharge an employee does in fact fail to conform to applicable regulations. Until administrative action has become final, no court is in a position to say that such action did or did not conform to applicable regulations. Here respondent had obtained no administrative determination of her appeal at the time she brought the action in the District Court. She was in effect asking that court to grant her, on an interim basis, relief which the administrative agency charged with review of her employer’s action could grant her only after it had made a determination on the merits.
While both the District Court and the Court of Appeals characterized the District Court’s intervention as a “stay,” the mandatory retention of respondent in the position from which she was dismissed actually served to provide the most extensive relief which she might conceivably obtain from the agency after its review on the merits. It may well be that the Civil Service Commission, should it have agreed with respondent’s version of the basis for her dismissal, would prohibit the final separation of respondent unless and until proper procedures had been followed. But this is not to say that it would hold respondent to be entitled to full reinstatement with the attendant tension with her superiors that the agency intended to avoid by dismissing her. Congress has provided that a wrongfully dismissed employee shall receive full payment and benefits for any time during which the employee was wrongfully discharged from employment. The Civil Service Commission could conceivably accommodate the conflicting claims in this case by directing respondent’s superiors to provide her with an opportunity to reply by affidavit, and by ordering that she receive backpay for any period of her dismissal prior to the completion of the type of dismissal procedure required by the regulations.
The Court in Scripps-Howard recognized that certain forms of equitable relief could not properly be granted by federal courts. The Court specifically contrasted the stay of' a license grant and the stay of a license denial, finding that the latter would have no effect:
“Of course, no court can grant an applicant an authorization which the Commission has refused. No order that the Court of Appeals could make would enable an applicant to go on the air when the Commission has denied him a license to do so. A stay of an order denying an application would in the nature of things stay nothing. It could not operate as an affirmative authorization of that which the Commission has refused to authorize.”
Surely that conclusion would not vary depending upon whether the radio station had started broadcasting on its own initiative and sought to stay a Commission order directing it to cease. Yet here the District Court did authorize, on an interim basis, relief which the Civil Service Commission had neither considered nor authorized — the mandatory reinstatement of respondent in her Government position. We are satisfied that Scripps-Howard, involving as it did the traditional authority of reviewing courts to grant stays, provides scant support for the injunction issued here.
The Court of Appeals also relied upon FTC v. Dean Foods Co., 384 U. S. 597 (1966), in reaching its decision. There a closely divided Court held that a Court of Appeals having ultimate jurisdiction to review orders of the Federal Trade Commission might, upon the Commission’s application, grant a temporary injunction to preserve the controversy before the agency. The Commission’s application alleged, and the court accepted, that refusal to grant the injunction would result in the practical disappearance of one of the entities whose merger the Commission sought to challenge. The disappearance, in turn, would mean that the agency, and the court entrusted by statute with authority to review the agency’s decision, would be incapable of implementing their statutory duties by fashioning effective relief. Thus invocation of the All Writs Act, as a preservative of jurisdiction, was considered appropriate.
Neither the reviewing jurisdiction of the Civil Service Commission nor that of the District Court would be similarly frustrated by a decision of the District Court remitting respondent to her administrative remedy. Certainly the Civil Service Commission will be able to weigh respondent’s contentions and to order necessary relief without the aid of the District Court injunction. In direct contrast to the claim of the FTC in Dean Foods that its jurisdiction would be effectively defeated by denial of relief, the Commission here has argued that judicial action interferes with .the normal agency processes. And we see nothing in the record to suggest that any judicial review available under the doctrine of Service v. Dulles would be defeated in the same manner as review in Dean Foods.
We are therefore unpersuaded that the temporary injunction granted by the District Court in this case was justified either by our prior decisions dealing with the availability of injunctive relief to discharged federal employees, or by those dealing with the authority of reviewing courts to grant temporary stays or injunctions pending full appellate review. If the order of the District Court in this case is to be upheld, the authority must be found elsewhere.
Ill
This Court observed in Scripps-Howard that “[t]he search for significance in the silence of Congress is too often the pursuit of a mirage,” 316 U. S., at 11, and this observation carries particular force when a statutory scheme grants broad regulatory latitude to an administrative agency. In Scripps-Howard a careful review of the relevant statutory provisions and legislative history persuaded this Court that Congress had not intended to nullify the power of an appellate court, having assumed jurisdiction after an agency decision, to issue stays in aid of its jurisdiction. The Court noted, in particular, that stays were allowed in other cases processed through the FCC and that the Court of Appeals had routinely issued stays in similar cases before undertaking an unexpected shift in policy. But, at the other end of the spectrum, in Arrow Transportation Co. v. Southern R. Co., 372 U. S. 658 (1963), this Court held that a specific congressional grant of power to the ICC to suspend proposed rate modifications precluded the District Court from extending the suspension by temporary injunction. This was true despite arguments that district courts traditionally had such power and that Congress did not explicitly revoke the power by statute. The Court there said:
“The more plausible inference is that Congress meant to foreclose a judicial power to interfere with the timing of rate changes which would be out of harmony with the uniformity of rate levels fostered by the doctrine of primary jurisdiction.”
The overall scheme governing employees of the Federal Government falls neatly within neither of these precedents. Unlike Scripps-Howard, traditional stay practice lends little support to the sort of relief which the District Court granted respondent here, and the precedents dealing with the availability of equitable relief to discharged Government employees are quite unfavorable to respondent. Unlike Arrow Transportation, supra, the administrative structure is far more a creature of agency regulations than of statute. We are thus not prepared to conclude that Congress in this class of cases has wholly divested the district courts of their customary authority to grant temporary injunctive relief, and to that extent we agree with the Court of Appeals. But merely because the factors Relied upon by the Government do not establish that the district courts are wholly bereft of the authority claimed for them here does not mean, as the Court of Appeals appeared to believe, that temporary injunctive relief in this class of cases is to be dispensed without regard to those factors. While considerations similar to those found sufficient in Arrow Transportation to totally deprive the district courts of equitable authority do not have that force here, they nonetheless are entitled to great weight in the equitable balancing process which attends the grant of injunctive relief.
We are dealing in this case not with a permanent Government employee, a class for which Congress has specified certain substantive and procedural protections, but with a probationary employee, a class which Congress has specifically recognized as entitled to less comprehensive procedures. Title 5 U. S. C. § 3321, derived from the original Pendleton Act, requires the creation of this classification:
“The President may prescribe rules, which shall provide, as nearly as conditions of good administration warrant, that there shall be a period of probation before an appointment in the competitive service becomes absolute.”
It is also clear from other provisions in the Civil Service statutory framework that Congress expected probationary employees to have fewer procedural rights than permanent employees in the competitive service. For example, preference eligibles, commonly veterans, are entitled to hearing procedures extended to persons in the competitive service only after they have completed “a probationary or trial period.” Persons suspended for national security reasons are given expanded protection provided they have completed a trial or probationary period.
The Civil Service regulations are consistent with these statutes. These regulations are promulgated by the Civil Service Commission as authorized by Congress in 5 U. S. C. §§ 1301-1302. Part 752, the regulations governing adverse agency actions, provides certain procedural safeguards for employees but, as did the statutes cited above, exempts “employee [s] currently serving a probationary or trial period.” Such employees are remitted to the procedures specified in subpart H of Part 315, the procedures at issue here. Under § 752.202 of the regulations permanent competitive service employees are to be retained in an active-duty status only during the required 30-day-notice period, and the Commission is given no authority to issue additional stays. It cannot prevent the dismissal of an employee or order his reinstatement prior to hearing and determining his appeal on the merits. Reasonably, a probationary employee could be entitled to no more than retention on active duty for the period preceding the effective date of his discharge.
Congress has also provided a broad remedy for cases of improper suspension or dismissal. The Back Pay Act of 1948 supplemented the basic Lloyd-LaFollette Act of 1912 and provided that any person in the competitive Civil Service who was unjustifiably discharged and later restored to his position was entitled to full backpay for the time he was out of work. The benefits of this Act were extended to additional employees, including probationary employees, in 1966. Respondent was eligible for full compensation for any period of improper discharge under this section.
As we have noted, respondent’s only substantive claim, either before the District Court or in her administrative appeal, was that petitioners had violated the regulations promulgated by the Civil Service Commission. Those same regulations provided for an appeal to the agency which promulgated the regulations and further provided that until that appeal had been heard on the merits, the employer’s discharge of the employee was to remain in effect. Respondent, however, sought judicial intervention before fully utilizing the administrative scheme.
The District Court, exercising its equitable powers, is bound to give serious weight to the obviously disruptive effect which the grant of the temporary relief awarded here was likely to have on the administrative process. When we couple with this consideration the historical denial of all equitable relief by the federal courts in cases such as White v. Berry, 171 U. S. 366 (1898), the well-established rule that the Government has traditionally been granted the widest latitude in the “dispatch of its own internal affairs,” Cafeteria Workers v. McElroy, 367 U. S. 886, 896 (1961), and the traditional unwillingness of courts of equity to enforce contracts for personal service either at the behest of the employer or of the employee, 5A A. Corbin, Contracts § 1204 (1964), we think that the Court of Appeals was quite wrong in routinely applying to this case the traditional standards governing more orthodox “stays.” See Virginia Petroleum Jobbers Assn. v. FPC, 104 U. S. App. D. C. 106, 259 F. 2d 921 (1958). Although we do not hold that Congress has wholly foreclosed the granting of preliminary injunctive relief in such cases, we do believe that respondent at the very least must make a showing of irreparable injury sufficient in kind and degree to override these factors cutting against the general availability of preliminary injunctions in Government personnel cases. We now turn to the showing made to the District Court on that issue, and to the Court of Appeals’ treatment of it.
IY
The Court of Appeals said in its opinion:
“Without passing on the merits of Mrs. Murray’s contention that she will suffer irreparable harm if the sought-for-relief is not granted (a task for the District Court here), we note that there was a determination that such a loss of employment could be 'irreparable harm’ in Reeber v. Rossell (1950), a case quite similar to that at bar. We agree with the Reeber court that such a loss of employment can amount to irreparable harm, and that injunctive relief may be a proper remedy pending the final administrative determination of the validity of the discharge by the Civil Service Commission.”
At another point in its opinion, the Court of Appeals said:
“As the District Court here felt that the hearing on the motion for the preliminary injunction could not be completed until Mr. Sanders was produced to testify, it was proper for him to continue the stay, in order to preserve the status quo pending the completion of the hearing.”
The court in its supplemental opinion filed after the Government's petition for rehearing further expanded its view of this aspect of the case:
“The court’s opinion does not hold, and the trial judge has not yet held, that interim relief is -proper in Mrs. Murray’s case, but we do hold that the trial judge may consider granting such relief, as this is inherent in his historical equitable role.”
In form the order entered by the District Court now before us is a continuation of the temporary restraining order originally issued by that court. It is clear from the Court of Appeals’ opinion that that court so construed it. But since the order finally settled upon by the District Court was in no way limited in time, the provisions of Fed. Rule Civ. Proc. 65 come into play. That Rule states, in part:
“(b) A temporary restraining order may be granted without written or oral notice to the adverse party or his attorney only if (1) it clearly appears from specific facts shown by affidavit or by the verified complaint that immediate and irreparable injury, loss, or damage will result to the applicant before the adverse party or his attorney can be heard in opposition .... Every temporary restraining order granted without notice . . . shall define the injury and state why it is irreparable and why the order was granted without notice; and shall expire by its terms within such time after entry, not to exceed 10 days, as the court fixes, unless within the time so fixed the order, for good cause shown, is extended for a like period or unless the party against whom the order is directed consents that it may be extended for a longer period.”
The Court of Appeals whose judgment we are reviewing has held that a temporary restraining order continued beyond the time permissible under Rule 65 must be treated as a preliminary injunction, and must conform to the standards applicable to preliminary injunctions. National Mediation Board v. Airline Pilots Assn., 116 U. S. App. D. C. 300, 323 F. 2d 305 (1963). We believe that this analysis is correct, at least in the type of situation presented here, and comports with general principles imposing strict limitations on the scope of temporary restraining orders. A district court, if it were able to shield its orders from appellate review merely by designating them as temporary restraining orders, rather than as preliminary injunctions, would have virtually unlimited authority over the parties in an injunctive proceeding. In this case, where an adversary hearing has been held, and the court’s basis for issuing the order strongly challenged, classification of the potentially unlimited order as a temporary restraining order seems particularly unjustified. Therefore we view the order at issue here as a preliminary injunction.
We believe that the Court of Appeals was quite wrong in suggesting that at this stage of the proceeding the District Court need not have concluded that there was actually irreparable injury. This Court has stated that “[t]he basis of injunctive relief in the federal courts has always been irreparable harm and inadequacy of legal remedies,” Beacon Theatres, Inc. v. Westover, 359 U. S. 500, 506-507 (1959), and the Court of Appeals itself in Virginia Petroleum Jobbers Assn. v. FPC, 104 U. S. App. D. C. 106, 259 F. 2d 921 (1958), has recognized as much. Yet the record before us indicates that no witnesses were heard on the issue of irreparable injury, that respondent’s complaint was not verified, and that the affidavit she submitted to the District Court did not touch in any way upon considerations relevant to irreparable injury. We are therefore somewhat puzzled about the basis for the District Court’s conclusion that respondent “may suffer immediate and irreparable injury.” The Government has not specifically urged this procedural issue here, however, and the Court of Appeals in its opinion discussed the elements upon which it held that the District Court might base a conclusion of irreparable injury. Respondent’s unverified complaint alleged that she might be deprived of her income for an indefinite period of time, that spurious and unrebutted charges against her might remain on the record, and that she would suffer the embarrassment of being wrongfully discharged in the presence of her coworkers. The Court of Appeals intimated that either loss of earnings or damage to reputation might afford a basis for a finding of irreparable injury and provide a basis for temporary injunctive relief. We disagree.
Even under the traditional standards of Virginia Petroleum Jobbers, supra, it seems clear that the temporary-loss of income, ultimately to be recovered, does not usually constitute irreparable injury. In that case the court stated:
“The key word in this consideration is irreparable. Mere injuries, however substantial, in terms of money, time and energy necessarily expended in the absence of a stay, are not enough. The possibility that adequate compensatory or other corrective relief will be available at a later date, in the ordinary course of litigation, weighs heavily against a claim of irreparable harm.”
This premise is fortified by the Back Pay Act discussed above. This Act not only affords monetary relief which will prevent the loss of earnings on a periodic basis from being “irreparable injury” in this type of case, but its legislative history suggests that Congress contemplated that it would be the usual, if not the exclusive, remedy for wrongful discharge. The manager of the bill on the floor of the Senate, Senator Langer, commented on the bill at the time of its passage:
“[It] . . . provides that an agency or department of the Government may remove any employee at any time, but that the employee shall then have a right of appeal. When he is removed, he is of course off the pay roll. If he wins the appeal, it is provided that he shall be paid for the time during which he was suspended.”
Respondent’s complaint also alleges, as a basis for relief, the humiliation and damage to her reputation which may ensue. As a matter of first impression it would seem that no significant loss of reputation would be inflicted by procedural irregularities in effectuating respondent’s discharge, and that whatever damage might occur would be fully corrected by an administrative determination requiring the agency to conform to the applicable regulations. Respondent’s claim here is not that she could not as a matter of statutory or administrative right be discharged, but only that she was entitled to additional procedural safeguards in effectuating the discharge.
Assuming for the purpose of discussion that respondent had made a satisfactory showing of loss of income and had supported the claim that her reputation would be damaged as a result of the challenged agency action, we think the showing falls far short of the type of irreparable injury which is a necessary predicate to the issuance of a temporary injunction in this type of case. We therefore reverse the decision of the Court of Appeals which approved the action of the District Court.
It is so ordered.
Murray v. Kunzig, 149 U. S. App. D. C. 256, 462 F. 2d 871 (1972). For a discussion of the Court of Appeals’ jurisdiction, and the jurisdiction of this Court, see infra, at 86-88.
5 CFR § 315.801.
Compare 5 CFR §§ 315.801-315.807 with 5 CFR § 752.101 et seq.
5 CFR § 315.804.
5 CFR § 315.805.
Section 315.805 reads in full:
Ҥ 315.805 Termination of probationers for conditions arising before appointment.
“When an agency proposes to terminate an employee serving a probationary or trial period for reasons based in whole or in part on conditions arising before his appointment, the employee is entitled to the following:
“(a) Notice oj •proposed, adverse action. The employee is entitled to an advance written notice stating the reasons, specifically and in detail, for the proposed action.
“(b) Employee’s answer. The employee is entitled to a reasonable time for filing a written answer to the notice of proposed adverse action and for furnishing affidavits in support of his answer. If the employee answers, the agency shall consider the answer in reaching its decision.
“(c) Notice oj adverse decision. The employee is entitled to be notified of the agency’s decision at the earliest practicable date. The agency shall deliver the decision to the employee at or before the time the action will be made effective. The notice shall be in writing, inform the employee of the reasons for the action, inform the employee of his right of appeal to the appropriate office of the Commission, and inform him of the time limit within which the appeal must be submitted as provided in §315.806 (d).”
Section 315.806 (c) reads:
“A probationer whose termination is subject to § 315.805 may appeal on the ground that his termination was not effected in accordance with the -procedural requirements of that section.”
The order of the District Court stated in full:
“It appearing to the Court from the affidavits and accompanying exhibits that a Temporary Restraining Order, pending the appearance before this Court of Mr. W. H. Sanders, Acting Commissioner, Public Buildings Service, should issue because, unless Defendants are restrained from terminating Plaintiff's employment, Plaintiff may suffer immediate and irreparable injury, loss and damage before the Civil Service Commission can consider Plaintiff’s claim,
“NOW, THEREFORE, IT IS ORDERED, that the Temporary Restraining Order issued by this Court at twelve o’clock p. m., May 28, 1971, is continued until the appearance of the aforesaid W. H. Sanders.
“IT IS FURTHER ORDERED that a copy of this Order be served by the United States Marshal on Defendants forthwith.”
149 U. S. App. D. C., at 262 n. 21, 462 F. 2d, at 877 n. 21.
Id., at 263-264, 462 F. 2d, at 878-879.
29 U. S. C. §§ 160 (j), (l).
15 U. S. C. §53 (a).
16 U. S. C. § 825m (a).
15 U. S. C. §§ 77t (b), 78u (e).
Respondent does suggest that 5. U. S. C. § 705 may confer authority to grant relief in this case. That section reads:
“When an agency finds that justice so requires, it may postpone the effective date of action taken by it, pending judicial review. On such conditions as may be required and to the extent necessary to prevent irreparable injury, the reviewing court, including the court to which a case may be taken on appeal from or on application for certiorari or other writ to a reviewing court, may issue all necessary and appropriate process to postpone the effective date of an agency action or to preserve status or rights pending conclusion of the review proceedings.”
The relevant legislative history of that section, however, indicates that it was primarily intended to reflect existing law under the Scripps-Howard doctrine, discussed infra, and not to fashion new rules of intervention for District Courts. See S. Rep. No. 752, 79th Cong., 1st Sess., 27, 44 (1945). Thus respondent’s various contentions may be grouped under her primary theory discussed in the text.
149 U. S. App. D. C., at 265, 462 F. 2d, at 880 (footnotes omitted).
The Court there expressed the traditional judicial deference to administrative processes in the following terms:
“The appointment to an official position in the Government, even if it be simply a clerical position, is not a mere ministerial act, but one involving the exercise of judgment. The appointing power must determine the fitness of the applicant; whether or not he is the proper one to discharge the duties of the position. Therefore it is one of those acts over which the courts have no general supervising power.
“In the absence of specific provision to the contrary, the power of removal from office is incident to the power of appointment. ‘It cannot for a moment be admitted that it was the intention of the Constitution that those offices which are denominated inferior offices should be held during life. And if removable at pleasure, by whom is such removal to be made? In the absence of all constitutional provision or statutory regulation it would seem to be a sound and necessary rule to consider the power of removal as incident to the power of appointment.’ In re Hennen, 13 Pet. 230, 259; Parsons v. United States, 167 U. S. 324. Unless, therefore, there be some specific provision to the contrary, the action of the Secretary of the Interior in removing the petitioner from office on account of inefficiency is beyond review in the courts either by mandamus to reinstate him or by compelling payment of salary as though he had not been removed.” 177 U. S., at 293-294.
The plaintiff in White protested that he was being discharged because of his political affiliation, a basis for discharge specifically prohibited under the Civil Service rules. 171 U. S., at 367-368. Such a contention obviously went to the heart of the Civil Service legislation, since a primary purpose of that system was to remove large sectors of Government employment from the political “spoils system” which had previously played a large part in the selection and discharge of Government employees. See generally H. Kaplan, The Law of Civil Service 1-22 (1958).
171 U. S., at 374-376.
The Court quoted from Morgan v. Nunn, 84 F. 551 (CCMD Term. 1898), and noted that “[sjimilar decisions have been made in other Circuit Courts of the United States.” 171 U. S., at 377-378.
Id., at 378.
In Service an employee discharged under the provisions of the McCarran Rider, 65 Stat. 581, contended that the Secretary of State had not followed departmental regulations in effecting his dismissal. This Court agreed with plaintiff’s position and decided that his “dismissal cannot stand.” 354 U. S., at 388. However, the employee in that case had made a full effort to secure administrative review of his discharge prior to filing suit in the District Court. These efforts, as the Court noted, id., at 370, had “proved unsuccessful.” In the present case respondent has petitioned the court before ascertaining whether administrative relief will be granted.
See n. 22, supra.
The Court pointed out that “even though the Radio Act of 1927 contained no provisions dealing with the authority for the Court of Appeals for the District of Columbia to stay orders of the Commission on appeal, the Court had been issuing stays as a matter of course wherever they were found to be appropriate, without objection by the Commission.” Scripps-Howard Radio v. FCC, 316 U. S. 4, 13 (1942).
The precise question certified was:
“ ‘Where, pursuant to the provisions of Section 402 (b) of the Communications Act of 1934, an appeal has been taken, to the United States Court of Appeals, from an order of the Federal Communications Commission, does the court, in order to preserve the status quo pending appeal, have power to stay the execution of the Commissions order from which the appeal was taken, pending the determination of the appeal?’” Id., at 6.
The wording of the question certified makes clear that the Court was faced only with the situation in which an appeal has been filed seeking review of completed agency action.
Id., at 9-10. In the Court’s opinion a footnote, herein designated with an asterisk, referred to the All Writs Act, 28 U. S. C. § 1651 (a), which reads:
“The Supreme Court and all courts established by Act of Congress may issue all writs necessary or appropriate in aid of their respective jurisdictions and agreeable to the usages and principles of law.” The reliance of the Court on this provision was noted by the Court of Appeals in its opinion in this case. 149 U. S. App. D. C., at 261 n. 17, 462 F. 2d, at 876 n. 17.
See n. 25, supra.
For example, the two cases cited by the Court in Scripps-Howard involved situations in which a court accepted appeal jurisdiction and, in connection with that acceptance, issued a stay of the decision below. See In re Claasen, 140 U. S. 200 (1891) (writ of error to this Court); In re McKenzie, 180 U. S. 536 (1901) (appeal taken to the Circuit Court of Appeals). The All Writs Act, n. 26, supra, provided the authority in each case.
See n. 26, supra.
See n. 22, supra. As noted above, the employee in Service sought to have the Secretary’s action declared invalid within the administrative system. He sought judicial relief only after it became evident that no administrative relief would be forthcoming.
The Back Pay Act is found at 5 U. S. C. § 5596. The pertinent provisions read:
“ (b) An employee of an agency who, on the basis of an administrative determination or a timely appeal, is found by appropriate authority under applicable law or regulation to have undergone an unjustified or unwarranted personnel action that has resulted in the withdrawal or reduction of all or a part of the pay, allowances, or differentials of the employee—
“(1) is entitled, on correction of the personnel action, to receive for the period for which the personnel action was in effect an amount equal to all or any part of the pay, allowances, or differentials, as applicable, that the employee normally would have earned during that period if the personnel action had not occurred, less any amounts earned by him through other employment during that period . . . .”
3 16 U. S., at 14.
A preliminary question of importance in Dean Foods was whether the Commission, in the absence of express statutory authorization, could petition the Court of Appeals for preliminary relief. This Court said:
“[T]he Commission is a governmental agency to which Congress has entrusted, inter alia, the enforcement of the Clayton Act, granting it the power to order divestiture in appropriate cases. At the same time, Congress has given the courts of appeals jurisdiction to review final Commission action. It would stultify congressional purpose to say that the Commission did not have the incidental power to ask the courts of appeals to exercise their authority derived from the All Writs Act.” 384 U. S., at 606.
A contrary decision, the Court felt, would have made it virtually impossible for the Commission itself to undertake review of the proposed merger. The congressional grant of authority to the FTC in Clayton Act cases thus could have been frustrated.
Id., at 599-600. The complaint charged that one of the parties to the merger “ 'as an entity will no longer exist,’ ” id., at 599, and that "consummation of the agreement would ‘prevent the Commission from devising, or render it extremely difficult for the Commission to devise, any effective remedy after its decision on the merits.’ ” Id., at 600. The Commission therefore was affirmatively asserting that the administrative remedy which it was authorized to fashion was inadequate.
Id., at 601.
In Dean Foods the Commission confessed its inability to fashion effective administrative relief. But petitioners here admit no such thing. Rather they strongly assert that the Back Pay Act, n. 31, supra, provides a complete remedy for any procedural irregularities which may have occurred in this case.
316 U. S., at 11-13.
The Court compared the provisions of §§ 402 (a) and 402 (b) of the Communications Act of 1934, 48 Stat. 1064. The former section specifically authorized temporary stays, through application of the Urgent Deficiencies Appropriation Act of Oct. 22, 1913, 38 Stat. 208, of orders of the Federal Communications Commission which were under review — with certain exceptions. Those exceptions, which included the order there at issue, were treated under § 402 (b) which made no specific provision for such stays. The Court thus was required to consider whether Congress deliberately sought to deprive courts of a power in those cases not governed by the Urgent Deficiencies Act which had been expressly authorized for those cases which were governed by the Act.
See n. 24, supra.
Although acknowledging that the legislative history did not clearly establish “a design to extinguish whatever judicial power may have existed prior to 1910 to suspend proposed rates,” the Court concluded: “[W]e cannot suppose that Congress, by vesting the new suspension power in the Commission, intended to give backhanded approval to the exercise of a judicial power which had brought the whole problem to a head.” 372 U. S., at 664.
Id., at 668. (Emphasis in original.)
See 5 U. S. C. § 7501.
22 Stat. 404.
See 5 U. S. C. §2108 (3).
5 U. S. C. §§ 7511-7512. Section 7511 defines a “preference eligible employee” as “a permanent or indefinite preference eligible who has completed a probationary or trial period as an employee of an Executive agency or as an individual employed by the government of the District of Columbia . . . ,” subject to certain exceptions. Section 7512 provides that such an employee must receive written notice of the reasons for proposed adverse action, a chance to reply in writing and by affidavit, and notice of an adverse decision. A probationary employee, under the regulations, has more limited rights. See 5 CFR §315.801 et seq.
5 U. S. C. § 7532 (c)(2).
Title 5 U. S. C. § 3301 et seq. grants to the President authority to promulgate rules and regulations governing the Civil Service. Title 5 U. S. C. § 1301 provides that “[t]he Civil Service Commission shall aid the President, as he may request, in preparing the rules he prescribes under this title for the administration of the competitive service.” Title 5 U. S. C. § 1302 empowers the Commission to prescribe regulations, “subject to the rules prescribed by the President . . . .”
5 CFR §752.103 (a)(5).
5 CFR § 315.801 et seq.
Title 5 CFR §752.202 (d) reads in part:
“Except as provided in paragraph (e) of this section, an employee against whom adverse action is proposed is entitled to be retained in an active duty status during the notice period.”
Section 752.202 (a)(1) provides that “at least 30 full days' advance written notice” is required.
See n. 31. supra.
80 Stat. 94, 95.
These considerations were set forth by the majority below as follows:
“(1) Has the petitioner made a strong showing that he is likely to prevail on the merits of his appeal? (2) Has the petitioner shown that without such relief he will be irreparably injured? (3) Would the issuance of a stay substantially harm other parties interested in the proceedings? (4) Where lies the public interest?” 149 U. S. App. D. C., at 263, 462 F. 2d, at 878.
Id., at 262, 462 F. 2d, at 877 (emphasis in original).
Id., at 265, 462 F. 2d, at 880.
Id., at 270, 462 F. 2d, at 885 (emphasis in original).
See n. 8, supra.
The Court of Appeals for the Second Circuit, in an opinion cited by the Court of Appeals for the District of Columbia Circuit in National Mediation Board v. Airline Pilots Assn., 116 U. S. App. D. C. 300, 323 F. 2d 305 (1963), described these principles as follows: “It is because the remedy is so drastic and may have such adverse consequences that the authority to issue temporary restraining orders is carefully hedged in Rule 65 (b) by protective provisions. And the most important of these protective provisions is the limitation on the time during which such an order can continue to be effective.
“It is for the same reason, the possibility of drastic consequences which cannot later be corrected, that an exception is made to the final judgment rule to permit review of preliminary injunctions. 28 U. S. C. § 1292 (a)(1). To deny review of an order that has all the potential danger of a preliminary injunction in terms of duration, because it is issued without a preliminary adjudication of the basic rights involved, would completely defeat the purpose of this provision.
“We hold, therefore, that the continuation of the temporary restraining order beyond the period of statutory authorization, having, as it does, the same practical effect as the issuance of a preliminary injunction, is appealable within the meaning and intent of 28 U. S. C. § 1292 (a)(1).” Pan American World Airways v. Flight Engineers’ Assn., 306 F. 2d 840, 843 (1962). (Citations omitted; emphasis in original.)
Our Brother Marshall, in his dissenting opinion, nevertheless suggests that a district court can totally or partially impede review of an indefinite injunctive order by failing to make any findings of fact or conclusions of law. It would seem to be a consequence of this reasoning that an order which neglects to comply with one rule may be saved from the normal appellate review by its failure to comply with still another rule. We do not find this logic convincing. Admittedly, the District Court did not comply with Fed. Rule Civ. Proc. 52 (a), but we do not think that we are thereby foreclosed from examining the record to determine if sufficient allegations or sufficient evidence supports the issuance of injunctive relief. As discussed below, nothing in the pleadings or affidavits, or in the testimony at the hearing before the District Court, demonstrates that this is an extraordinary case supporting the award of judicial relief. See n. 68, infra.
We note that Rule 65 requires a showing of irreparable injury for the issuance of a temporary restraining order as well. Therefore, for the purposes of this part of the discussion, it would make no difference that the order was styled a temporary restraining order, rather than a preliminary injunction.
The affidavit in its entirety states:
“JEANNE M. MURRAY, being first duly sworn, deposes as follows:
“1. I am presently employed by the Public Buildings Service of the General Services Administration (GSA) as a Program Analyst, GS-13.
“2. On May 20, 1971, at approximately five p. m., I was given a letter signed by Mr. W. H. Sanders, Acting Commissioner of the Public Buildings Service, informing me that my employment was to be terminated as of Saturday, May 29, 1971.
“3. I have never been told that GSA’s Personnel files contain adverse information about my service in the Defense Intelligence Agency (DIA), nor have I ever seen a memorandum dealing with my employment there.
“4. I worked for slightly over a year at the DIA, and I have been informed by the Acting Chief of Staff of the DIA, Rear Admiral D. E. Bergin, that my personnel file at DIA contains nothing derogatory to me.
“5. In recent weeks, I was informed by Mr. William Mulroney, a DIA employee, that someone from GSA had been making inquiries of DIA personnel about my term of service there.”
Complaint, par. 12.
149 U. S. App. D. C., at 262, 462 F. 2d, at 877.
The Court of Appeals held that the Government's failure to produce witness Sanders, after the District Court chose to hear him orally, rather than to rely on his affidavit, allowed the District Court to continue the temporary restraining order until Sanders appeared. We have no doubt that a district court in appropriate circumstances may be justified in resolving against a party refusing to produce a witness under his control the relevant issues upon which that witness' testimony might have touched. But it is clear from the record that the testimony of the witness Sanders was desired to test the basis upon which respondent was discharged, testimony which, of course, would go to the issue of respondent’s ultimate chances for success on the merits. While the District Court may well have been entitled to resolve that issue against the Government at that stage of the proceeding, this conclusion in no way dispenses with the necessity for a conclusion that irreparable injury will occur, since that is a separate issue that must be proved to the satisfaction of the Court by the person seeking equitable relief.
It should be noted that Virginia Petroleum Jobbers dealt with a fact situation quite dissimilar to this one. There the Federal Power Commission had denied petitioner leave to intervene in proceedings before the Commission. In conjunction with appeal of that decision the petitioner had filed a “motion for a stay of further proceedings pending completion of [the Court’s] review of the Commission’s orders denying intervention or rehearing.” 104 U. S. App. D. C., at 109, 259 F. 2d, at 924. Such a fact situation was far closer to the traditional situation in which equity powers have been employed to grant a stay pending appeal than is the situation involved in the instant case.
Id,., at 110, 259 F. 2d, at 925 (emphasis in original).
N. 31, supra.
94 Cong. Rec. 6681 (1948).
We recognize that cases may arise in which the circumstances surrounding an employee’s discharge, together with the resultant effect on the employee, may so far depart from the normal situation that irreparable injury might be found. Such extraordinary cases are hard to define in advance of their occurrence. We have held that an insufficiency of savings or difficulties in immediately obtaining other employment — external factors common to most discharged employees and not attributable to any unusual actions relating to the discharge itself — will not support a finding of irreparable injury, however severely they may affect a particular individual. But we do not wish to be understood as foreclosing relief in the genuinely extraordinary situation. Use of the court’s injunctive power, however, when discharge of probationary employees is an issue, should be reserved for that situation rather than employed in the routine case. See also Wettre v. Hague, 74 F. Supp. 396 (Mass. 1947); vacated and remanded on other grounds, 168 F. 2d 825 (CA1 1948).
Where, as here, conduct prior to appointment as a probationary employee as well as conduct during the period of employment is alleged to be the basis of the discharge, the requirements of procedural due process are obvious. We said in Wieman v. Updegraff, 344 U. S. 183, 192, “It is sufficient to say that constitutional protection does extend to the public servant whose exclusion pursuant to a statute is patently arbitrary or discriminatory.” And see Schwartz v. Covington, 341 F. 2d 537, 538. | What follows is an opinion from the Supreme Court of the United States. Your task is to identify the federal agency involved in the administrative action that occurred prior to the onset of litigation. If the administrative action occurred in a state agency, respond "State Agency". Do not code the name of the state. The administrative activity may involve an administrative official as well as that of an agency. If two federal agencies are mentioned, consider the one whose action more directly bears on the dispute;otherwise the agency that acted more recently. If a state and federal agency are mentioned, consider the federal agency. Pay particular attention to the material which appears in the summary of the case preceding the Court's opinion and, if necessary, those portions of the prevailing opinion headed by a I or II. Action by an agency official is considered to be administrative action except when such an official acts to enforce criminal law. If an agency or agency official "denies" a "request" that action be taken, such denials are considered agency action. Exclude: a "challenge" to an unapplied agency rule, regulation, etc.; a request for an injunction or a declaratory judgment against agency action which, though anticipated, has not yet occurred; a mere request for an agency to take action when there is no evidence that the agency did so; agency or official action to enforce criminal law; the hiring and firing of political appointees or the procedures whereby public officials are appointed to office; attorney general preclearance actions pertaining to voting; filing fees or nominating petitions required for access to the ballot; actions of courts martial; land condemnation suits and quiet title actions instituted in a court; and federally funded private nonprofit organizations. | What is the agency involved in the administrative action? | [
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] | [
60
] |