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MIGRA v. WARREN CITY SCHOOL DISTRICT BOARD OF EDUCATION et al.
No. 82-738.
Argued October 11, 1983
Decided January 23, 1984
Blackmun, J., delivered the opinion for a unanimous Court. White, J., filed a concurring opinion, in which Burger, C. J., and Powell, J., joined, post, p. 88.
John R. Vintilla argued the cause for petitioner. With him on the briefs was Francis X. Cook.
James L. Messenger argued the cause for respondents. With him on the briefs were John C. Burkholder and Kimball H. Carey
Briefs of amici curiae urging reversal were filed for the American Civil Liberties Union et al. by Charles S. Sims, Burt Neubome, Gordon Beggs, and Barbara Besser; for the Edwin F. Mandel Legal Aid Clinic by Gary H. Palm; and for the National Education Association by Joy L. Koletsky and Robert H. Chanin.
Stephen H. Sachs, Attorney General of Maryland, Diana G. Motz and Frederick G. Savage, Assistant Attorneys General, and Sheldon Elliot Steinbach filed a brief for the State of Maryland et al. as amici curiae urging affirmance.
Justice Blackmun
delivered the opinion of the Court.
This case raises issues concerning the claim preclusive effect of a state-court judgment in the context of a subsequent suit, under 42 U. S. C. §§ 1983 and 1985 (1976 ed., Supp. V), in federal court.
I
Petitioner, Dr. Ethel D. Migra, was employed by the Warren (Ohio) City School District Board of Education from August 1976 to June 1979. She served as supervisor of elementary education. Her employment was on an annual basis under written contracts for successive school years.
On April 17, 1979, at a regularly scheduled meeting, the Board, with all five of its members present, unanimously adopted a resolution renewing Dr. Migra’s employment as supervisor for the 1979-1980 school year. Being advised of this, she accepted the renewed appointment by letter dated April 18 delivered to a member of the Board on April 23. Early the following morning her letter was passed on to the Superintendent of Schools and to the Board’s President.
The Board, however, held a special meeting, called by its President, on the morning of April 24. Although there appear to have been some irregularities about the call, see Brief for Respondents 19, n., four of the five members of the Board were present. The President first read Dr. Migra’s acceptance letter. Then, after disposing of other business, a motion was made and adopted, by a vote of 3 to 1, not to renew petitioner’s employment for the 1979-1980 school year. Dr. Migra was given written notice of this nonrenewal and never received a written contract of employment for that year. The Board’s absent member, James Culver, learned of the special meeting and of Dr. Migra’s termination after he returned from Florida on April 25 where he had attended a National School Boards Convention.
Petitioner brought suit in the Court of Common Pleas of Trumbull County, Ohio, against the Board and its three members who had voted not to renew her employment. The complaint, although in five counts, presented what the parties now accept as essentially two causes of action, namely, breach of contract by the Board, and wrongful interference by the individual members with petitioner’s contract of employment. The state court, after a bench trial, “reserved and continued” the “issue of conspiracy” and did not reach the question of the individual members’ liability. App. 39. It ruled that under Ohio law petitioner had accepted the employment proffered for 1979-1980, that this created a binding contract between her and the Board, and that the Board’s subsequent action purporting not to renew the employment relationship had no legal effect. Id., at 41-52. The court awarded Dr. Migra reinstatement to her position and compensatory damages. Id., at 52. Thereafter, petitioner moved the state trial court to dismiss without prejudice “the issue of the conspiracy and individual board member liability.” Id., at 53. That motion was granted. Id., at 54. The Ohio Court of Appeals, Eleventh District, in an unreported opinion, affirmed the judgment of the Court of Common Pleas. Review was denied by the Supreme Court of Ohio.
In July 1980, Dr. Migra filed the present action in the United States District Court for the Northern District of Ohio against the Board, its then individual members, and the Superintendent of Schools. Id., at 3. Her complaint alleged that she had become the director of a commission appointed by the Board to fashion a voluntary plan for the desegregation of the District’s elementary schools; that she had prepared a social studies curriculum; that the individual defendants objected to and opposed the curriculum and resisted the desegregation plan; that hostility and ill will toward petitioner developed; and that, as a consequence, the individual defendants determined not to renew petitioner’s contract of employment. Id., at 5-6. Many of the alleged facts had been proved in the earlier state-court litigation. Dr. Migra claimed that the Board’s actions were intended to punish her for the exercise of her First Amendment rights. She also claimed that the actions deprived her of property without due process and denied her equal protection. Her federal claim thus arose under the First, Fifth, and Fourteenth Amendments and 42 U. S. C. §§ 1983 and 1985 (1976 ed., Supp. V). She requested injunctive relief and compensatory and punitive damages. App. 11-12. Answers were filed in due course and shortly thereafter the defendants moved for summary judgment on the basis of res judicata and the bar of the statute of limitations. Id., at 13-24.
The District Court granted summary judgment for the defendants and dismissed the complaint. App. to Pet. for Cert. C-17 — C-31, D-32. The United States Court of Appeals for the Sixth Circuit, by a short unreported order, affirmed. Id., at A-15. See 703 F. 2d 564 (1982). Because of the importance of the issue, and because of differences among the Courts of Appeals, see n. 6, infra, we granted cer-tiorari. 459 U. S. 1102 (1983).
HH HH
The Constitution’s Full Faith and Credit Clause is implemented by the federal full faith and credit statute, 28 U. S. C. § 1738. That statute reads in pertinent part:
“Such Acts, records and judicial proceedings or copies thereof, so authenticated, shall have the same full faith and credit in every court within the United States and its Territories and Possessions as they have by law or usage in the courts of such State, Territory or Possession from which they are taken.”
It is now settled that a federal court must give to a state-court judgment the same preclusive effect as would be given that judgment under the law of the State in which the judgment was rendered. In Allen v. McCurry, 449 U. S. 90 (1980), this Court said:
“Indeed, though the federal courts may look to the common law or to the policies supporting res judicata and collateral estoppel in assessing the preclusive effect of decisions of other federal courts, Congress has specifically required all federal courts to give preclusive effect to state-court judgments whenever the courts of the State from which the judgments emerged would do so. . . .” Id., at 96.
This principle was restated in Kremer v. Chemical Construction Corp., 456 U. S. 461 (1982):
“Section 1738 requires federal courts to give the same preclusive effect to state court judgments that those judgments would be given in the courts of the State from which the judgments emerged.” Id., at 466.
See also Haring v. Prosise, 462 U. S. 306 (1983). Accordingly, in the absence of federal law modifying the operation of § 1738, the preclusive effect in federal court of petitioner’s state-court judgment is determined by Ohio law.
In Allen, the Court considered whether 42 U. S. C. § 1983 modified the operation of § 1738 so that a state-court judgment was to receive less than normal preclusive effect in a suit brought in federal court under § 1983. In that case, the respondent had been convicted in a state-court criminal proceeding. In that proceeding, the respondent sought to suppress certain evidence against him on the ground that it had been obtained in violation of the Fourth Amendment. The trial court denied the motion to suppress. The respondent then brought a § 1983 suit in federal court against the officers who had seized the evidence. The District Court held the suit barred by collateral estoppel (issue preclusion) because the issue of a Fourth Amendment violation had been resolved against the respondent by the denial of his suppression motion in the criminal trial. The Court of Appeals reversed. That court concluded that, because a § 1983 suit was the respondent’s only route to a federal forum for his constitutional claim, and because one of § 1983’s underlying purposes was to provide a federal cause of action in situations where state courts were not adequately protecting individual rights, the respondent should be allowed to proceed to trial in federal court unencumbered by collateral estoppel. This Court, however, reversed the Court of Appeals, explaining:
“[N]othing in the language of § 1983 remotely expresses any congressional intent to contravene the common-law rules of preclusion or to repeal the express statutory requirements of the predecessor of 28 U. S. C. § 1738 .... Section 1983 creates a new federal cause of action. It says nothing about the preclusive effect of state-court judgments.
“Moreover, the legislative history of § 1983 does not in any clear way suggest that Congress intended to repeal or restrict the traditional doctrines of preclusion. . . . [T]he legislative history as a whole . . . lends only the most equivocal support to any argument that, in cases where the state courts have recognized the constitutional claims asserted and provided fair procedures for determining them, Congress intended to override § 1738 or the common-law rules of collateral estoppel and res judicata. Since repeals by implication are disfavored . . . much clearer support than this would be required to hold that § 1738 and the traditional rules of preclusion are not applicable to § 1983 suits.” 449 U. S., at 97-99.
Allen therefore made clear that issues actually litigated in a state-court proceeding are entitled to the same preclusive effect in a subsequent federal § 1983 suit as they enjoy in the courts of the State where the judgment was rendered.
The Court in Allen left open the possibility, however, that the preclusive effect of a state-court judgment might be different as to a federal issue that a § 1983 litigant could have raised but did not raise in the earlier state-court proceeding. 449 U. S., at 97, n. 10. That is the central issue to be resolved in the present case. Petitioner did not litigate her § 1983 claim in state court, and she asserts that the state-court judgment should not preclude her suit in federal court simply because her federal claim could have been litigated in the state-court proceeding. Thus, petitioner urges this Court to interpret the interplay of § 1738 and § 1983 in such a way as to accord state-court judgments preclusive effect in § 1983 suits only as to issues actually litigated in state court.
It is difficult to see how the policy concerns underlying § 1983 would justify a distinction between the issue preclu-sive and claim preclusive effects of state-court judgments. The argument that state-court judgments should have less preclusive effect in § 1983 suits than in other federal suits is based on Congress’ expressed concern over the adequacy of state courts as protectors of federal rights. See, e. g., Mitchum v. Foster, 407 U. S. 225, 241-242 (1972). Allen recognized that the enactment of § 1983 was motivated partially out of such concern, 449 U. S., at 98-99, but Allen nevertheless held that § 1983 did not open the way to relitigation of an issue that had been determined in a state criminal proceeding. Any distrust of state courts that would justify a limitation on the preclusive effect of state judgments in § 1983 suits would presumably apply equally to issues that actually were decided in a state court as well as to those that could have been. If §1983 created an exception to the general preclusive effect accorded to state-court judgments, such an exception would seem to require similar treatment of both issue preclusion and claim preclusion. Having rejected in Allen the view that state-court judgments have no issue pre-clusive effect in § 1983 suits, we must reject the view that § 1983 prevents the judgment in petitioner’s state-court proceeding from creating a claim preclusion bar in this case.
Petitioner suggests that to give state-court judgments full issue preclusive effect but not claim preclusive effect would enable litigants to bring their state claims in state court and their federal claims in federal court, thereby taking advantage of the relative expertise of both forums. Although such a division may seem attractive from a plaintiff’s perspective, it is not the system established by § 1738. That statute embodies the view that it is more important to give full faith and credit to state-court judgments than to ensure separate forums for federal and state claims. This reflects a variety of concerns, including notions of comity, the need to prevent vexatious litigation, and a desire to conserve judicial resources.
In the present litigation, petitioner does not claim that the state court would not have adjudicated her federal claims had she presented them in her original suit in state court. Alternatively, petitioner could have obtained a federal forum for her federal claim by litigating it first in a federal court. Section 1983, however, does not override state preclusion law and guarantee petitioner a right to proceed to judgment in state court on her state claims and then turn to federal court for adjudication of her federal claims. We hold, therefore, that petitioner’s state-court judgment in this litigation has the same claim preclusive effect in federal court that the judgment would have in the Ohio state courts.
t — I HH 1 — 1
It appears to us that preclusion law in Ohio has experienced a gradual evolution, and that Ohio courts recently have applied preclusion concepts more broadly than in the past. For example, in Vasu v. Kohlers, Inc., 145 Ohio St. 321, 61 N. E. 2d 707 (1945), a plaintiff who suffered both personal injury and property damages in an automobile accident was held entitled to maintain a separate suit against the defendant for each type of injury. The theory was that “[ijnjuries to both person and property suffered by the same person as a result of the same wrongful act are infringements of different rights and give rise to distinct causes of action . . . .” Id., at 321, 61 N. E. 2d, at 709 (syllabus ¶4). In Rush v. Maple Heights, 167 Ohio St. 221, 147 N. E. 2d 599 (1958), however, the Supreme Court of Ohio specifically overruled “[paragraph four of the syllabus in the [Vasu] case.” Id., at 221, 235, 147 N. E. 2d, at 599, 607. The new approach was declared to be more in accord with “modern practice,” id., at 235, 147 N. E. 2d, at 607, and was adopted in the hope that it might reduce “much of the vexatious litigation, with its attendant confusion, which has resulted in recent years from the filing of separate petitions by the same plaintiff, one for personal injuries and one for property damage although sustained simultaneously.” Id., at 234-235, 147 N. E. 2d, at 607.
This holding, of course, did not fully solve for the Ohio law the question as to what constitutes a “cause of action” for claim preclusion purposes. The definition of “cause of action” or “claim” is critical in the present context because it seems that a basic rule of Ohio law is that a person is entitled to one lawsuit for each “cause of action” he possesses. Norwood v. McDonald, 142 Ohio St. 299, 52 N. E. 2d 67 (1943); Whitehead v. General Tel. Co., 20 Ohio St. 2d 108, 254 N. E. 2d 10 (1969).
In 1968, the Supreme Court of Ohio twice dealt with the question of what constitutes a cause of action for preclusion purposes. Henderson v. Ryan, 13 Ohio St. 2d 31, 233 N. E. 2d 506; Sharp v. Shelby Mut. Ins. Co., 15 Ohio St. 2d 134, 239 N. E. 2d 49. In each of these cases, although a second action against the defendant was permitted, the court clearly was developing a broader and more expansive attitude toward claim preclusion. See Henderson, 13 Ohio St. 2d, at 35, 38, 233 N. E. 2d, at 509-511; Sharp, 15 Ohio St. 2d, at 140, 239 N. E. 2d, at 54. In addition, the Ohio Supreme Court in 1970 adopted Rule 13 of the Ohio Rules of Civil Procedure establishing a compulsory counterclaim provision like its federal counterpart in Rule 13 of the Federal Rules of Civil Procedure.
Then, in 1982, the Supreme Court of Ohio adopted what appears to be a broad doctrine of preclusion indeed, although in a defensive, not offensive, context. Johnson’s Island, Inc. v. Board of Township Trustees, 69 Ohio St. 2d 241, 431 N. E. 2d 672. The first syllabus by the court recites:
“When in a prior injunction action brought to enjoin the defendant landowner’s violation of a zoning law, the defendant asserts the affirmative defense of nonconforming use, but does not assert the unconstitutionality of the law, the landowner is, on the principle of res judicata, barred from later bringing a declaratory judgment action alleging such law to be unconstitutional.” Ibid., 431 N. E. 2d, at 673.
See also Stromberg v. Board of Ed. of Bratenahl, 64 Ohio St. 2d 98, 413 N. E. 2d 1184 (1980).
In reading the opinion of the District Court in the present litigation, we are unable to determine whether that court was applying what it thought was the Ohio law of preclusion. The opinion cites a Sixth Circuit opinion that purported to enunciate Ohio law, Coogan v. Cincinnati Bar Assn., 431 F. 2d 1209 (1970), and also relied on precedents from other Federal Courts of Appeals applying both federal and state law. Our holding today makes clear that Ohio state preclusion law is to be applied to this case. Prudence also dictates that it is the District Court, in the first instance, not this Court, that should interpret Ohio preclusion law and apply it.
The judgment of the Court of Appeals, accordingly, is vacated, and the case is remanded to that court so that it may instruct the District Court to conduct such further proceedings as are required by, and are consistent with, this opinion.
It is so ordered.
The preclusive effects of former adjudication are discussed in varying and, at times, seemingly conflicting terminology, attributable to the evolution of preclusion concepts over the years. These effects are referred to collectively by most commentators as the doctrine of “res judicata.” See Restatement (Second) of Judgments, Introductory Note before ch. 3 (1982); 18 C. Wright, A. Miller, & E. Cooper, Federal Practice and Procedure § 4402 (1981). Res judicata is often analyzed further to consist of two preclusion concepts: “issue preclusion” and “claim preclusion.” Issue preclusion refers to the effect of a judgment in foreclosing relitigation of a matter that has been litigated and decided. See Restatement, supra, § 27. This effect also is referred to as direct or collateral estoppel. Claim preclusion refers to the effect of a judgment in foreclosing litigation of a matter that never has been litigated, because of a determination that it should have been advanced in an earlier suit. Claim preclusion therefore encompasses the law of merger and bar. See id., Introductory Note before § 24.
This Court on more than one occasion has used the term “res judicata” in a narrow sense, so as to exclude issue preclusion or collateral estoppel. See, e. g., Allen v. McCurry, 449 U. S. 90, 94 (1980); Brown v. Felsen, 442 U. S. 127 (1979). When using that formulation, “res judicata” becomes virtually synonymous with “claim preclusion.” In order to avoid confusion resulting from the two uses of “res judicata,” this opinion utilizes the term “claim preclusion” to refer to the preclusive effect of a judgment in foreclosing litigation of matters that should have been raised in an earlier suit. For a helpful explanation of preclusion vocabulary, see Wright et al., supra, §4402.
It is apparent, from the foregoing recital of facts and of events that took place in the state-court litigation, that the cause of action for reinstatement and for damages was brought to a conclusion in the Ohio courts, but that the cause of action sounding in tort, that is, for wrongful interference with petitioner’s contract of employment, was not. Instead, that cause of action was “reserved and continued,” evidently by the state trial court sua sponte, and was eventually dismissed without prejudice upon petitioner’s motion. This dismissal was subsequent to the entry of judgment on the breach-of-contract cause of action.
Respondents tell us that after petitioner’s favorable judgment in the state court was affirmed by the Ohio Court of Appeals, with review denied by the Supreme Court of Ohio, the Board gave Dr. Migra backpay for the 1979-1980 school year reduced by the amount of unemployment compensation she had received for that period. Brief for Respondents 1-2; Tr. of Oral Arg. 23.
“Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State. And the Congress may by general Laws prescribe the Manner in which such Acts, Records and Proceedings shall be proved, and the Effect thereof.” U. S. Const., Art. IV, § 1.
The respondent had not asserted that the state courts had denied him a “full and fair opportunity” to litigate his search and seizure claim; he therefore was barred by Stone v. Powell, 428 U. S. 465 (1976), from seeking a writ of habeas corpus in federal district court.
Most federal courts that have faced this question have ruled that claim preclusion is applicable to a § 1983 action. See Isaac v. Schwartz, 706 F. 2d 15 (CA1 1983); Nilsen v. City of Moss Point, 701 F. 2d 556 (CA5 1983); Castorr v. Brundage, 674 F. 2d 531 (CA6), cert. denied, 459 U. S. 928 (1982); Lee v. City of Peoria, 685 F. 2d 196 (CA7 1982); Robbins v. District Court of Worth County, Iowa, 592 F. 2d 1015 (CA8), cert. denied, 444 U. S. 852 (1979); Scoggin v. Schrunk, 522 F. 2d 436 (CA9 1975), cert. denied, 423 U. S. 1066 (1976); Spence v. Latting, 512 F. 2d 93 (CA10), cert. denied, 423 U. S. 896 (1975). Some appear to have decided otherwise. See Lombard v. Board of Ed. of City of New York, 502 F. 2d 631 (CA2 1974), cert. denied, 420 U. S. 976 (1975); New Jersey Education Assn. v. Burke, 579 F. 2d 764 (CA3), cert. denied, 439 U. S. 894 (1978).
For comment as to federal-state comity considerations, see Currie, Res Judicata: The Neglected Defense, 45 U. Chi. L. Rev. 317 (1978).
The author of this opinion was in dissent in Allen. The rationale of that dissent, however, was based largely on the fact that the § 1983 plaintiff in that case first litigated his constitutional claim in state court in the posture of his being a defendant in a criminal proceeding. See 449 U. S., at 115—116. In this case, petitioner was in an offensive posture in her state-court proceeding, and could have proceeded first in federal court had she wanted to litigate her federal claim in a federal forum.
In the event that a § 1983 plaintiff’s federal and state-law claims are sufficiently intertwined that the federal court abstains from passing on the federal claims without first allowing the state court to address the state-law issues, the plaintiff can preserve his right to a federal forum for his federal claims by informing the state court of his intention to return to federal court on his federal claims following litigation of his state claims in state court. See, e. g., England v. Louisiana State Board of Medical Examiners, 375 U. S. 411 (1964).
Except for per curiam opinions, the Ohio Supreme Court speaks as a court only through the syllabi of its cases. Cassidy v. Glossip, 12 Ohio St. 2d 17, 18, 24, 231 N. E. 2d 64, 65, 68 (1967). See Ohio v. Gallagher, 425 U. S. 257, 259 (1976); Beck v. Ohio, 379 U. S. 89, 93, and n. 2 (1964); Perkins v. Benguet Mining Co., 342 U. S. 437, 441, and n. 3 (1952). | 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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GTE SYLVANIA, INC., et al. v. CONSUMERS UNION OF THE UNITED STATES, INC., et al.
No. 78-1248.
Argued November 28, 1979
Decided March 19, 1980
Marshall, J., delivered the opinion for a unanimous Court.
Harry L. Shniderman argued the cause for petitioners. With him on the briefs were Bernard G. Segal, James D. Crawford, Deena Jo Schneider, Robert W. Steele, Alan M. Grimaldi, Stephen B. Clarkson, William F. Patten, D. Clifford Crook III, Burton Y. Weitzenfeld, Michael A. Stiegel, Nancy L. Buc, Peter Gartland, and J. Wallace Adair.
Deputy Solicitor General Getter argued the cause for the federal respondents. With him on the brief were Solicitor General McCree and Richard A. Allen.
Alan B. Morrison argued the cause for respondents Consumers Union of the United States, Inc., et al. With him on the brief was Diane B. Cohn.
Mb. Justice Marshall
delivered the opinion of the Court.
This case presents the issue whether information may be obtained under the Freedom of Information Act, 5 U. S. C. § 552, when the agency holding the material has been enjoined from disclosing it by a federal district court.
I
In March 1974, respondent Consumer Product Safety Commission (CPSC) announced that it would hold a public hearing to investigate hazards in the operation of television receivers and to consider the need for safety standards for televisions. 39 Fed. Reg. 10929. In the notice the- CPSC requested from television manufacturers certain information on television-related accidents. After reviewing the material voluntarily submitted, the CPSC through orders, 15 U. S. C. § 2076 (b)(1), and subpoenas, 15 U. S. C. § 2076 (b)(3), obtained from the manufacturers, including petitioners, various accident reports. Claims of confidentiality accompanied most of the reports.
Respondents Consumers Union of the United States, Inc.,, and Public Citizen’s Health Research Group (the requesters) sought disclosure of the accident reports from the CPSC under the Freedom of Information Act. The requesters were given access only to those documents for which no claim of confidentiality had been made by the manufacturers. As for the rest, the CPSC gave the manufacturers an opportunity to substantiate their claims of confidentiality. The requesters agreed to wait until mid-March 1975 for the CPSC’s determination of the availability of those allegedly .confidential documents.
In March 1975, the CPSC informed the requesters and the manufacturers that the documents sought did not fall within any of the exemptions of the Freedom of Information Act, and that even if disclosure was not mandated by that Act, the CPSC would exercise its discretion to release the material on May 1,1975. Upon receiving the notice, petitioners filed suit in the United States District Court for the District of Delaware and three other Federal District Courts, seeking to enjoin disclosure of the allegedly confidential reports. Petitioners contended that release of the information was prohibited by § 6 of the Consumer Product Safety Act, 15 U. S. C. § 2055, by exemptions to the Freedom of Information Act, and by the Trade Secrets Act, 18 U. S. C. § 1905. Petitioners sought temporary restraining orders in all of the actions, and the CPSC consented to such orders in at least some of the cases. Subsequently the manufacturers’ individual actions were consolidated in the District of Delaware, and that court issued a series of temporary restraining orders. Finally, in October 1975 the Delaware District Court entered a preliminary injunction prohibiting release of the documents pending trial. GTE Sylvania Inc. v. Consumer Product Safety Comm’n, 404 F. Supp. 352 (1975).
The requesters did not seek to intervene in the Delaware action, nor did petitioners or the CPSC attempt to have the requesters joined. Instead, on May 5, 1975, the requesters filed the instant action in Federal District Court for the District of Columbia, seeking release of the accident reports under the Freedom of Information Act. Named as defendants in that suit were the CPSC, its Chairman, Commissioners, and Secretary, and all of the petitioners. In September 1975, while the motion for a preliminary injunction was still pending in Delaware, the District Court for the District of Columbia dismissed the requesters’ complaint. . The court observed that the CPSC had. determined that the reports should be disclosed and had assured the court on the public record that disclosure would be made as soon as the agency was not enjoined from doing so. The court concluded that there was no Art. III case or controversy between the plaintiffs and the federal defendants and therefore no jurisdiction. It also held that the complaint failed to state a claim against petitioners upon which relief could be granted since they no longer possessed the records sought by the requesters. Nor could petitioners be subject to suit under the compulsory joinder provision of Federal .Hule of Civil Procedure 19 (a) since that Rule is predicated on the pre-existence of federal jurisdiction over the cause of action, which was not present here. Consumers Union of United States, Inc. v. Consumer Product Safety Comm’n, 400 F. Supp. 848 (DC 1975).
The United States Court of Appeals for the District of Columbia Circuit reversed. Consumers Union of United States, Inc. v. Consumer Product Safety Comm’n, 182. U. S. App. D. C. 351, 561 F. 2d 349 (1977). That court concluded that there was a case or controversy between the plaintiffs and the CPSC on “the threshold question of the scope and effect of the proceedings in Delaware.” Id., at 356, 561 F. 2d, at 354. In addition, the CPSC’s conduct of the Delaware litigation was “not easily reconcilable with its ostensible acceptance of [the requesters’] argument that the requested documents should be disclosed.” Id., at 357, 561 F. 2d, at 355. The Court of Appeals held that the preliminary injunction issued by the Delaware court did not foreclose the requesters’ suit under the Freedom of Information Act. That injunction did not resolve the merits of the claim, but instead was merely pendente lite relief. Thus, the order could not bar the Freedom of Information Act suit in the District of Columbia, although it would weigh in the decision as to which of the two suits should be stayed pending the outcome of the other. The court concluded, however, that such balancing was not required because the Delaware court had entered an order “closing out” that case without further action. The Delaware action was effectively dismissed and therefore the preliminary injunction was “dead” and did not bar the Freedom of Information Act suit. In addition, the CPSC’s efforts in the Delaware action, which the court below considered “less than vigilant,” and the resulting absence of full representation of the prodisclosure argument prevented the preliminary injunction from having preclusive effect.
The manufacturers filed a petition for writ of certiorari. While, that petition was pending, the Delaware District Court granted the manufacturers’ motion for summary judgment and permanently enjoined the CPSC from disclosing the accident data. . GTE Sylvania,. Inc. v. Consumer Product Safety Comm’n, 443 F. Supp. 1152 (1977). We granted certiorari, vacated the judgment of the Court of Appeals for the District of Columbia Circuit, and remanded the case “for further consideration in light of the permanent injunction” entered in Delaware. GTE Sylvania, Inc. v. Consumers Union of United States, Inc., 434 U. S. 1030 (1978).
On remand, the Court of Appeals reaffirmed its holding that there was a case .or controversy within the.meaning of. Art. III. Consumers Union of United States, Inc. v. Consumer Product Safety Comm’n, 192 U. S. App. D. C. 93, 100, 590 F. 2d 1209, 1216 (1978). The court also held that the Delaware permanent injunction should not prevent the continuation of the District of Columbia action. Stare decisis would not require deference to the Delaware court’s decision if it was in error. Collateral estoppel was inapplicable because the requesters were not parties to the Delaware action and an agency’s interests diverge too widely from the private interests of Freedom of Information Act requesters for the agency to constitute an adequate representative. Finally, the principle of comity did not mandate a different result since the requesters were not before the Delaware court. The court below concluded that “none of the familiar anti-relitigation doctrines operates to deprive nonparty requesters of their right to sue for enforcement of the Freedom of Information Act; rather, they remain unaffected by prior litigation solely between the submitters and the involved agency.” Id., at 103, 590 F. 2d, at 1219. The case was remanded to the District Court for a decision on the merits. If that court concluded that the Freedom of Information Act required disclosure of the reports, it could consider enjoining petitioners from enforcing their final judgment awarded by the Delaware court.
We granted certiorari, 441 U. S. 942 (1979), because of the importance of the issue presented. We now reverse.
II
The threshold question raised by petitioners is whether there is a case or controversy as required to establish jurisdiction pursuant to Art. III. Petitioners urge here, as the District Court held below, that since the CPSC agrees with the requesters that the documents should be released under the Freedom of Information Act, there is no actual controversy presented in this suit. We do not agree.
The purpose of the case-or-controversy requirement is to “limit the business of federal courts to questions presented in an adversary context and in a form historically viewed as capable of resolution through the judicial process.” Flast v. Cohen, 392 U. S. 83, 95 (1968). The clash of adverse parties “ ‘sharpens the presentation of issues upon which the court so largely depends for illumination of difficult . . . questions..’ ” O’Shea v. Littleton, 414 U. S. 488, 494 (1974), quoting Baker v. Carr, 369 U. S. 186, 204 (1962). See also Flast v. Cohen, supra, at 96-97. Accordingly, there is no Art. Ill case or controversy when the parties desire “precisely the same result,” Moore v. Charlotte-Mecklenburg Board of Education, 402 U. S. 47, 48 (1971) (per curiam). See also Muskrat v. United States, 219 U. S. 346, 361 (1911).
The CPSC and the requesters do not want “precisely the same result” in this litigation. It is true that the federal defendants have expressed the view that the reports in question should be released and in fact notified the District Court that absent the Delaware injunction the information would be disclosed. See 400 F. Supp., at 853, n. 14. That injunction has been issued, however, and the basic question in this case is the effect of that order on the requesters. The CPSC contends that the injunction prevents it from releasing the documents, while the requesters believe that an equitable decree obtained by the manufacturers in a suit in which those seeking disclosure were not parties cannot deprive them of their rights under the Freedom of Information Act. In short, the issue in this case is whether, given the existence of the Delaware injunction, the CPSC has violated the Freedom of Information Act at all. The federal defendants and the requesters sharply disagree on this question, as has been evidenced at every stage of this litigation. If the requesters prevail on the merits of their claim, the CPSC will be subject to directly contradictory court orders, a prospect which the federal defendants naturally wish to avoid. It cannot be said, therefore, that the parties desire “precisely the same result.” The requirements of Art. Ill have been satisfied.
Ill
The issue squarely presented is whether the Court of Appeals erred in holding that the requesters may obtain the accident reports under the Freedom of Information Act when the agency with possession of the documents has been enjoined from disclosing them by a Federal District Court. The terms of the Act and its legislative history demonstrate that the court below was in error.
The Freedom of Information Act gives federal district courts the jurisdiction “to enjoin the agency from withholding agency records and to order the production of any agency records improperly withheld.” 5 U. S. C. § 552 (a)(4)(B). This section requires a showing of three components: the agency must have (1) improperly (2) withheld (3) agency records. Kissinger v. Reporters Committee for Freedom of the Press, ante, at 150. In this case the sole question is whether the first requirement, that the informatipn has been “improperly” withheld, has been satisfied.
The statute provides no definition of the term “improperly.” The legislative history of the Act, however, makes clear what Congress intended. The Freedom of Information Act was a revision of § 3, the “public information” section, of the Administrative Procedure Act, 5 U. S. C. § 1002 (1964 ed.). The prior law had failed to provide the desired access to information relied upon in Government decisionmaking, and in fact had become “the major statutory excuse for withholding Government records from public view.” H. R. Rep. No. 1497, 89th Cong., 2d Sess., 3 (1966) (hereinafter H. R. Rep. No. 1497). See also id., at 4, 12; S. Rep. No. 813, 89th Cong., 1st Sess., 3, 5 (1965) (hereinafter S. Rep. No. 813); EPA v. Mink, 410 U. S. 73, 79 (1973). Section 3 had several vague phrases upon which officials could rely to refuse requests for disclosure: “in the public interest,” “relating solely to the internal management of . an agency,” “for good cause.” Even material on the public record was available only to “persons properly and directly concerned.” These undefined phrases placed broad discretion in the hands of agency officials in deciding what information to disclose, and that discretion was often abused. The problem was exacerbated by the lack of an adequate judicial remedy for the requesters. See generally H. R. Rep. No. 1497, at 4-6; S. Rep. No. 813, at 4-5; 112 Cong. Rec. 13642, reprinted in Freedom of Information Act Source Book, 93d Cong.,, 2d Sess., 47 (Comm. Print 1974) (remarks of Rep. Moss) (hereinafter Source Book); id., at 52 (remarks of Rep. King); id., at 71 (remarks of Rep. Rumsfeld); EPA v. Mink, supra, at 79.
The Freedom of Information Act was intended “to establish a general philosophy of full agency disclosure,” S. Rep. No. 813, at 3, and to close the “loopholes which allow agencies to deny legitimate information to the public,” ibid. The attention of Congress was primarily focused on the efforts of officials to prevent release of information in order, to hide mistakes or irregularities committed by the agency. Ibid.; H. R. Rep. No. 1497, at 6; Source Book 69 (remarks of Rep. Monagan); id., at 70 (remarks of Rep. Rumsfeld); id., at 73-74 (remarks of Rep. Hall), and on needless denials of information. Examples considered by Congress included the refusal of the Secretary of the Navy to release telephone directories, the decision of the National Science Foundation not to disclose cost estimates submitted by unsuccessful contractors as bids for a multimillion-dollar contract, and the Postmaster General’s refusal to release the names of postal employees. See H. R. Rep. No. 1497, at 5-6.
Thus Congress was largely concerned with the unjustified suppression of information by agency officials. S. Rep. No. 813, at 5. Federal employees were denying requests for documents without an adequate basis for nondisclosure, and Congress wanted to curb this apparently unbridled discretion. Source Book 46-47 (remarks of Rep. Moss); id., at 61 (remarks of Rep. Fascell); id., at 70 (remarks of Rep. Rumsfeld) ; id., at 71 (remarks of Rep. Skubitz); id., at 80 (remarks of Rep. Anderson). It is in this context that Congress gave the federal district courts under the Freedom of Information Act jurisdiction to order the production of “improperly” withheld agency records. It is enlightening that the Senate Report uses the terms “improperly” and “wrongfully” interchangeably. S. Rep. No. 813, at 3, 5, 8.
The present case involves a distinctly different context. The CPSC has not released the documents sought here solely because of the orders issued by the Federal District Court in Delaware. At all times since the filing of the complaint in the instant action the agency has been subject to a temporary restraining order or a preliminary or permanent injunction barring disclosure. There simply has been no discretion for the agency to exercise. The concerns underlying the Freedom of Information Act are inapplicable, for the agency has made no effort to avoid disclosure; indeed, it is not the CPSC’s decision to withhold the documents at all.
The conclusion that the information in this case is not being “improperly” withheld is further supported by the established doctrine that persons subject to an injunctive order issued by a court with jurisdiction are expected to obey that decree until it is modified or reversed, even if they have proper grounds to object to the order. See Howat v. Kansas, 258 U. S. 181, 189-190 (1922); United States v. Mine Workers, 330 U. S. 258 (1947); Walker v. City of Birmingham, 388 U. S. 307, 314-321 (1967); Pasadena City Bd. of Education v. Spangler, 427 U. S. 424, 439 (1976). There is no doubt that the Federal District Court in Delaware had jurisdiction to issue the temporary restraining orders and preliminary and permanent injunctions. Nor were those equitable decrees challenged as “only a frivolous pretense to validity,” Walker v. City of Birmingham, supra, at 315, although of course there is disagreement over whether the District Court erred in issuing the permanent injunction. Under these circumstances, the CPSC was required to obey the injunctions out of “respect for judicial process." 388 U. S., at 321.
There is nothing in the legislative history to suggest that in adopting the Freedom of Information Act to curb agency discretion to conceal information, Congress intended to require an agency to commit contempt of court in order to release documents. Indeed, ' Congress viewed the federal courts as the necessary protectors of the public’s right to know. To construe the lawful obedience of an injunction issued by a federal district court with jurisdiction to enter such a decree as “improperly” withholding documents under the Freedom of Information Act would do violence to the common understanding of the term “improperly” and would extend the Act well beyond the intent of Congress.
We conclude that the CPSC has not “improperly” withheld the accident reports from the requesters under, the Freedom of Information Act. The judgment of the United States Court of Appeals for the District of Columbia Circuit accordingly, is
Reversed.
GTE Sylvania, Inc., RCA Corp., Magnavox Co., Zenith Radio Corp., Motorola, Inc., Warwick Electronics, Inc., and Aeronutronic Ford Corp. filed individual actions in the .District of Delaware. Matsushita Electric Corp. of America, Sharp. Electronic Corp., and Toshiba-America, Inc., filed actions in the Southern District of New York. General Electric Co. filed suit in the Northern District of New York. Admiral Corp. filed suit in the Western District of Pennsylvania. A 13th manufacturer, Teledyne Mid-America Corp., also brought suit, but that action was voluntarily dismissed. See GTE Sylvania Inc. v. Consumer Product Safety Comm’n, 438 F. Supp. 208, 210, n. 1 (Del. 1977).
The theory of the so-called “reverse Freedom of Information Act” suit, that the exemptions to the Act were mandatory bars to disclosure and that therefore submitters of information could sue an agency under the Act in order to enjoin release of material, was squarely rejected in Chrysler Corp. v. Brown, 441 U. S. 281,290-294 (1979).
The Court of Appeals noted that the CPSC took nine months from the date of the initial request for the documents to announce its determination that the material should be disclosed; In addition, the CPSC failed to make even pro forma opposition to the motions for temporary restraining orders and did not object to the manufacturers’ requests for extensions of those orders. Finally, the CPSC moved to dismiss its own interlocutory appeal to the United States Court of Appeals for the Third Circuit, which motion was granted. 182 U. S. App. D. C., at 357, n. 27, 561 F. 2d, at 355, n. 27.
The minute order entered by the Delaware District Court provided that “since the parties do not now know whether further action [after the grant of the preliminary injunction] is contemplated in this litigation, there is no need to maintain these cases as open litigation for statistical' purposes.” Accordingly, the Clerk of that court was ordered to “close these cases for statistical purposes.” The entry specifically stated that “[nothing contained herein shall be considered a dismissal or disposition of the matter and should further proceedings become necessary or desirable, any party may initiate in the same manner as if this minute order had not been entered.” App. to Pet. for Cert. A108.
On petition for rehearing the Court of Appeals was informed that the Delaware ease had only been marked “closed” for statistical purposes and that in fact the Delaware case had become active again soon after the Court of Appeals’ initial ruling. The court nevertheless concluded that “there appears no reason why the litigation should not proceed here,” 184 U. S. App. D. C. 146, 147, 565 F..2d 721, 722 (1977) (per curiam).
The CPSC then moved the Federal District Court in Delaware to transfer that litigation to the District of Columbia pursuant to 28 U. S. C. § 1404. This motion was denied on the grounds that the Delaware action was much further advanced than the District of Columbia suit and a transfer at that late date would only delay a decision on the merits. GTE Sylvania Inc. v. Consumer Product Safety Comm’n, 438 F. Supp. 208 (Del. 1977).
The CPSC had initially taken the position before the Court of Appeals that there was no Art. Ill case or controversy. However, when the case was first before this Court the CPSC announced that- it was now persuaded there was a case or controversy, and it has continued to hold that view throughout this litigation. See Brief for Federal Respondents 21, n. 10; Consumers Union of United States, Inc. v. Consumer Product Safety Comm’n, 192 U. S. App. D. C. 93, 100, n. 33, 590 F. 2d 1209, 1216, n. 33 (1978).
The United States Court of Appeals for the Third Circuit has affirmed the grant of the permanent injunction by the Federal District Court in Delaware, GTE Sylvania, Inc. v. Consumer Product Safety Comm’n, 598 F. 2d 790 (1979), and we have granted certiorari to review that judgment. Consumer Product Safety Comm’n v. GTE Sylvania, Inc., 444 U. S. 979 (1979).
We need not reach the requesters’ argument that the clear conflict between them and the petitioners would produce the necessary case or controversy even if there was no such controversy between the requesters and the federal defendants. We also need not discuss the suggestion of the Court of Appeals that the CPSC does not in fact agree with the re-questers that the documents should be disclosed even absent the Delaware injunction. See n. 3, supra.
We intimate no view on that issue, which is raised in Consumer Product Safety Comm’n v. GTE Sylvania, Inc., No. 79-521, cert. granted, 444 U. S. 979 (1979).
We need not address the issue whether the principle of comity mandated that the District of Columbia court stay or dismiss the action because the Delaware court had jurisdiction over the manufacturers’ suit prior to the filing of the requesters’ complaint. | 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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] | [
17
] | sc_adminaction |
UNITED STATES v. AN ARTICLE OF DRUG... BACTO-UNIDISK....
No. 343.
Argued January 23, 1969.
Decided April 28, 1969.
Lawrence G. Wallace argued the cause for the United States. With him on the brief were Solicitor General Griswold, Assistant Attorney General Vinson, Beatrice Rosenberg, Ronald L. Gainer, and William W. Goodrich.
Edward Brown Williams argued the cause and filed a brief for respondent.
“The term ‘device’... means instruments, apparatus, and contrivances... for use in the diagnosis... of disease in roan...,” It would indeed be difficult to write a clearer description of an antibiotic sensitivity disc,
Mr. Chief Justice Warren
delivered the opinion of the court.
At issue here is the scope of the statutory definition of drug contained in the Federal Food, Drug, and Cosmetic Act and the extent of the Secretary of Health, Education, and Welfare’s regulatory authority under that definition. The specific item involved in this definitional controversy is a laboratory aid known as an antibiotic sensitivity disc, used as a screening test for help in determining the proper antibiotic drug to administer to patients. If the article is a “drug” within the general definition of § 201 of the Federal Food, Drug, and Cosmetic Act (52 Stat. 1040, 21 U. S. C. § 321 (1964 ed., Supp. II)), then the Secretary can subject it to pre-market clearance regulations promulgated pursuant to § 507 of the Act (21 U. S. C. § 357). Section 507 authorizes the Secretary to require batch certification of any antibiotic product which also meets the general drug definition of § 201. If, on the other hand, the article is merely a “device” under the Act, it is subject only to the misbranding and adulteration proscriptions of the Act and does not have to be pre-tested before marketing; and, of course, if the disc does not fall under either definition, the Act itself is totally inapplicable.
When the discs were marketed without complying with the certification regulations of the Secretary, the Government condemned them pursuant to § 334 of the Act (21 U. S. C. § 331) on the assumption that the discs were drugs and thus validly subject to pre-market regulation. In this action following the condemnation, however, the United States District Court for the Eastern District of Michigan held that the discs were not drugs within the meaning of the Act, suggesting that, if anything, they were devices. It therefore ruled that, since pre-market clearance was not required or authorized, the seizure was improper. The Court of Appeals for the Sixth Circuit affirmed on the same reasoning. We reverse.
I.
Some background information about the development of the discs and the controlling legislation is necessary for an understanding of the determinations made by the Secretary and the courts below. Various antibiotics, known more commonly as “wonder drugs” under such familiar names as penicillin, aureomycin, terramycin, tetracycline, and streptomycin, have proved very useful since World War II in treating numerous infectious diseases. Produced biologically, however, these drugs tend to vary greatly in their quality and potency unless developed, and thereafter tested, under very carefully controlled conditions. Consequently, Congress enacted § 507 of the Food, Drug, and Cosmetic Act, directing the Secretary of Health, Education, and Welfare to promulgate regulations establishing such standards of identity, potency, quality, and purity as necessary to ensure the “safety” and “efficacy” of those antibiotics. At present, more than 30 antibiotic drugs are listed (21 CFR § 145.3) with accompanying regulations covering more than 700 pages in the Code of Federal Regulations (21 CFR §§ 141.1-148Z.4).
With the proliferation of the various types of antibiotics, doctors found a need for a screening test to help choose which antibiotic to use in treating a particular infection. A diffusion test, using antibiotic sensitivity discs like the one in question here, soon became a widely employed screening method. In this test, a round paper disc, which has been impregnated with a specific antibiotic, is placed in contact with sample cultures, or isolates, of a patient’s virus, grown in a special culture medium (agar) from a specimen of the patient’s fluid (blood, spinal fluid, sputum, urine, etc.). In those places impregnated with an antibiotic to which the patient’s infection is sensitive, no new isolate will grow, leaving a clear area (an “inhibition zone”); in those places impregnated with a drug to which the infection is resistant, the isolate will grow, leaving no clear area. The disc is used, in conjunction with a patient’s specimen, in laboratory work exclusively, and never comes in contact with any part of the patient’s body itself.
The discs had been in general use for some four years when, in 1960, the Secretary of Health, Education, and Welfare determined to regulate them pursuant to § 507. After notice and an opportunity for public participation, the Commissioner of Food and Drugs, under authority delegated by the Secretary, promulgated regulations requiring pre-clearance, batch-testing, and certification of antibiotic sensitivity discs (25 Fed. Reg. 9369). The Commissioner’s action, the regulations noted, followed “numerous complaints by the medical profession, hospitals, and laboratory technicians” and a resulting extensive survey of the use of the discs. That study found the discs unreliable in their statements of potency with resulting loss of safety and efficacy, and thus found it “vital for the protection of the public health” to adopt the regulations (25 Fed. Reg. 9370).
This case arose in May 1962 as an in rem seizure proceeding against an interstate shipment of a number of cases of sensitivity discs, manufactured by Difco Laboratories, Inc., under the trade name of “Bacto-Unidisk." In condemning the product pursuant to § 301 et seq. of the Food, Drug, and Cosmetic Act, the United States claimed, inter alia, that the product, as a “drug” within the meaning of the Act, had not been certified nor exempted from certification as required by § 507 (21 U. S. C. § 357) and the regulations thereunder and was therefore misbranded under § 502 (21 U. S. C. § 352). The seizure was proper only if the Secretary’s regulations subjecting the discs to the pre-market clearance requirements were authorized by the Act. Since the scope of the Secretary’s pre-market regulatory power over antibiotic drugs under § 507 depends ultimately on the Act’s general definition of “drug” in § 201 (g), the validity of the disc regulations allegedly violated turned on the coverage of the drug definition:
“For the purposes of this chapter—
“(g)(1) The term 'drug’ means (A) articles recognized in the official United States Pharmacopoeia, official Homoeopathic Pharmacopoeia of the United States, or official National Formulary, or any supplement to any of them; and (B) articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or other animals; and (C) articles (other than food) intended to affect the structure or any function of the body of man or other animals; and (D) articles intended for use as a component of any article specified in clauses (A), (B), or (C) of this paragraph; but does not include devices or their components, parts, or accessories.” 21 U. S. C. § 321 (1964 ed., Supp. II).
If, on the other hand, the product was a “device,” only the misbranding, adulteration, and labeling provisions of §§ 501 and 502 applied, and the Secretary’s disc certification regulations were invalidly promulgated. Although a “device” expressly cannot be a “drug” under the last phrase of the drug definition above, a device is given almost a parallel definition in § 201 (h):
“The term ‘device’... means instruments, apparatus, and contrivances, including their components, parts, and accessories, intended (1) for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or other animals; or (2) to affect the structure or any function of the body of man or other animals.” 21 U. S. C. § 321 (h).
Finally, it was established at trial that of the various definitions given above, the operative ones in this case were §201 (g)(1)(B) of the drug provision and §201 (h)(1) of the parallel device definition; the essential question underlying the validity of the regulations, then, was whether the Bacto-Unidisks were “articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man or other animals.”
In resolving this question in the negative and holding the seizure invalid, the District Court noted in a memorandum opinion that the concept of drug is limited in a medical sense to articles administered to man either externally or internally, and ruled that the “evidence affords no basis for the conclusion that the definition of ‘drug’ in the Federal Food, Drug, and Cosmetic Act... was intended by Congress to extend beyond the meaning of that term in medical science, to encompass these sensitivity disks.” The District Court pointed out that although a “literal reading” of §201 (g)(1)(B) “clearly has application to the article libeled herein,” enforcing such an application would be “ridiculous and contrary to common sense.” The court therefore held that the Bacto-Unidisk did not fall within the purview of the Act for the reason that it was not medically a drug, and suggested, without deciding, that the discs would be more appropriately classified as “devices” under the Act.
On appeal, the Court of Appeals for the Sixth Circuit affirmed, accepting the District Court’s conclusions that the Bacto-Unidisk was not a “drug” in the medical sense of the term and that Congress did not intend the statutory definition of “drug” to be any broader than the medical one. 392 F. 2d 21, 23. The court noted that the discs did aid physicians in the determination of what antibiotic to use for the cure, mitigation, or treatment of disease by furnishing useful information, but held that Congress did not intend to apply the statutory phrase “intended for use in the... cure, mitigation, [or] treatment” in such an indirect manner. 392 F. 2d 21, 22. We granted the Government’s petition for certiorari because this interpretation of the Act raised issues of importance in the administration of the Federal Food, Drug, and Cosmetic Act (393 U. S. 911 (1968)).
II.
Although there was some testimony below debating the precise extent of the public health dangers posed by the sensitivity discs, the courts below declined to substitute their judgment for that of the Commissioner of Food and Drugs by determining whether his action was really necessary to protect the public health from a purely medical viewpoint. Rather, the courts below quite properly confined the inquiry to an examination of whether the disc regulations, even if medically unwise, were authorized by the Act, and more specifically, by the Act’s definition of “drug.” Despite the renewed effort here to relitigate the public health issue, we agree with the decision implicitly made by the courts below not to base a resolution of this case on the public need for, or medical wisdom of, the Secretary’s regulations requiring pre-market clearance of antibiotic sensitivity discs. It is enough for us that the expert agency charged with the enforcement of remedial legislation has determined that such regulation is desirable for the public health, for we are hardly qualified to second-guess the Secretary’s medical judgment. Our sole concern is whether the statute’s definition of “drug” authorizes the disc regulations contested here; and while we agree with the lower courts’ limited conception of the issue, for reasons outlined below, we reverse their disposition of it.
Respondent’s primary contention here is that the sensitivity discs are not subject to any of the provisions of the Act because Congress did not intend it to cover articles used so indirectly in the “cure, mitigation, [and] treatment” of disease. Respondent uses the same two-step analysis relied on by the courts below: (1) Congress did not intend to write the drug definition more broadly than does the medical profession, and (2) the medical concept of drug is limited to articles that are administered to man either internally or externally. Alternatively, respondent argues, even if the Act’s “intended for use” language does cover the discs, they must clearly be classified as devices. In view of the legislative history discussed below and the broad, remedial purpose of the Act itself, however, we hesitate to give the critical language such a narrow, restrictive reading in the absence of congressional direction to do so, and we therefore reject the contention that the discs do not properly fall within the purview of the Act. For the same basic reasons, we furthermore reject the argument that the discs, once found to come under the Act’s coverage, must be classified specifically as devices and not drugs.
We need not stop to parse the language of the Act’s definition of drug, for the District Court found, and the parties do not disagree here, that a literal reading of the words “intended for use in the... cure, mitigation, [or] treatment” of disease “clearly has application” to the Bacto-Unidisk. Although respondent again urges that the disc itself does not “treat” a patient in the same way an antibiotic does in terms of personal application, the disc plays at least some role in the selection of the appropriate drug. Thus, the essential question for our determination is whether Congress intended the definition of drug to have the broad coverage the courts below and the parties agree its words allow. Viewing the structure, the legislative history, and the remedial nature of the Act, we think it plain that Congress intended to define “drug” far more broadly than does the medical profession. The reason for including a separate, almost parallel, definition of “devices” in the Act is, as the legislative history shows, relevant to congressional intent. It is therefore helpful to consider both the question of the Act's initial application and the question of the drug-device dichotomy at the same time.
III.
At the outset, it is clear from § 201 that the word “drug” is a term of art for the purposes of the Act, encompassing far more than the strict medical definition of that word. If Congress had intended to limit the statutory definition to the medical one, it could have so stated explicitly, or simply have made reference to the official United States Pharmacopoeia (or the National Formulary), as it did in the first of the three subsections of § 201 (g)(1), and let the definition rest there. The historical expansion of the statute’s definition, furthermore, clearly points out Congress’ intention of going fceyond the medical usage. The 1906 Food and Drug Act, fpr instance, defined “drug” in a rather limited way to include “all medicines and preparations recognized in the United States Pharmacopoeia or National Formulary for internal or external use, and any substance or mixture of substances intended to be used for the cure, mitigation, or prevention of disease of either man or other animals.” 34 Stat. 768, 769. As subsequent congressional action clearly indicates, however, the scope of that original definition has since been greatly enlarged.
The enactment of the 1938 Federal Food, Drug, and Cosmetic Act illustrates the expansion of the definition of drug. One of the changes contemplated in S. 2800, an early version of the Act, defined “drug” to include
“(1) all substances and preparations recognized in the United States Pharmacopoeia, Homoeopathic Pharmacopoeia of the United States, or National Formulary or supplements thereto; and (2) all substances, preparations, and devices intended for use in the cure, mitigation, treatment, or prevention of disease in man or other animals; and (3) all substances and preparations, other than food, and all devices intended to affect the structure or any function of the body.” (See S. Rep. No. 493, 73d Cong., 2d Sess. (1934).) (Emphasis added.)
Senator Copeland of New York, who sponsored the Act, remarked about the inclusion of the word “devices” in his prepared statement introducing S. 2800 as follows:
“The present law defines drugs as substances or mixtures of substances intended to be used for the cure, mitigation, or prevention of disease. This narrow definition permits escape from legal control of all therapeutic or curative devices like electric belts, for example. It also permits the escape of preparations which are intended to alter the structure or some function of the body, as, for example, preparations intended to reduce excessive weight. There are many worthless and some dangerous devices and preparations falling within these classifications. S. 2800 contains ample authority to control them.” (78 Cong. Rec. 8960 (1934).)
The definition was revised in S. 5, 74th Cong., 1st Sess. (1935), to include substances, preparations, and devices intended for diagnostic purposes, as well as for cure, mitigation, treatment, or prevention of disease (S. 5, § 201 (b), S. Rep. No. 361, 74th Cong., 1st Sess. (1935)). As the inclusion of the word “diagnosis” came before the Senate for consideration, a controversy developed on the floor, aimed more at the word “devices,” which was not then before the Senate, than at the word “diagnosis.” 79 Cong. Rec. 4841-4845 (1935). Senator Clark contended that it was not proper to classify devices as drugs, and that diagnostic devices were so broadly defined as to make even a bathroom scale a drug:
“[I]f the devices ought to be outlawed, they ought to be outlawed, and I have no objection to that; but to maintain that a purely mechanical device is a drug and to be treated as a drug in law and in logic and in lexicography is a palpable absurdity, in my opinion.” Id., at 4841.
In answer to Senator Clark’s remark that a bathroom scale would be classified as a drug, Senator Copeland made the following comment:
“Mr. President, I desire to state the effect of this amendment. There are on the market certain electrical devices. A man takes hold of the handles of the machine, and the indicator spins around. It stops at 'appendicitis/ or it stops at'meningitis'.... Such a device is manifestly a fraud upon society. That is what the amendment is designed to deal with.” Id., at 4842.
Despite Senator Copeland's proffered explanation, there was continued criticism during the Senate debates (79 Cong. Rec. 4905-4920, 5215-5234) of the definition on the ground that it would lead to the incongruous result of calling the following items “drugs”: shoulder braces {id., at 4841), radium belts (ibid.), electrical devices (id., at 4842), bathroom weight scales (ibid.), and hospital air conditioning apparatus (id., at 5231). The opposition finally settled on “crutches” (id., at 4913) to signify the ultimate absurdity of the drug definition's broad coverage.
As a result of the criticism on the Senate floor, Senator Copeland proposed an amendment to add a definition of “device” to parallel that of drug, an amendment which was included when the bill was returned to the Senate Committee on Commerce and later agreed to by the Senate without debate. (Id., at 8351-8355.) The ultimate effect of the various amendments, of course, was still to include devices under the control of the Act for the first time, the goal Senator Copeland had originally-set out to achieve. As Congressman Chapman of Kentucky explained to the House after the bill had passed the Senate, “For the first time it is proposed in a bill before Congress to control therapeutic devices.... There are hundreds of worthless contrivances being sold to and used by gullible people. Suffice it to say that a fake contraption for the cure of consumption is just as serious a menace to health as is a worthless drug sold for the same disease.” 80 Cong. Rec. 10236 (1936). According to the Chief of the Food and Drug Administration, the reason for providing a separate definition of devices, instead of using Senator Copeland’s original drug definition, was simply to avoid “the incongruity of classifying certain devices, such as the electric belt, therapeutic lamps, and so forth, as drugs....” (Testimony given during hearings held on S. 5 by a subcommittee of the House Committee on Interstate and Foreign Commerce, 74th Cong., 1st Sess. (1935).) Because of that incongruity as “pointed out by the Senate in the last consideration of the bill,” the official explained, “[t]hey felt it proper to provide an independent definition of ‘devices.’ ” Thus, it is clear that two parallel definitions were provided for semantic reasons only; for the purposes of the Act, the two definitions had the same effect of subjecting both drugs and devices to the adulteration and misbranding provisions. No practical significance to the distinction between the two words arose until the pre-market clearance provisions, similar to the certification regulations for antibiotics enacted in 1945, were added after a drug tragedy in the fall of 1937. (S. 3073, 75th Cong., 2d Sess.) The excepting clause of §201 (g)(1), stating clearly that a drug cannot be a device, was also added in 1938 (S. 5, 75th Cong., 3d Sess., H. R. Rep. No. 2139).
The historical expansion of the definition of drug, and the creation of a parallel concept of devices, clearly show, we think, that Congress fully intended that the Act’s coverage be as broad as its literal language indicates — and equally clearly, broader than any strict medical definition might otherwise allow. Strong indications from legislative history that Congress intended the broad coverage the District Court thought “ridiculous” should satisfy us that the lower courts erred in refusing to apply the Act’s language as written. But we are all the more convinced that we must give effect to congressional intent in view of the well-accepted principle that remedial legislation such as the Food, Drug, and Cosmetic Act is to be given a liberal construction consistent with the Act’s overriding purpose to protect the public health, and specifically, § 507’s purpose to ensure that antibiotic products marketed serve the public with “efficacy” and “safety.” Cf. United States v. Sullivan, 332 U. S. 689, 693-695 (1948); United States v. Dotterweich, 320 U. S. 277, 283-284 (1943).
IV.
Respondent’s alternative contention, that even if its product does fall within the purview of the Act, it is plainly a “device” and therefore by definition necessarily not a “drug,” must also be rejected, we believe, in light of the foregoing analysis. At the outset, it must be conceded that the language of the statute is of little assistance in determining precisely what differentiates a “drug” from a “device”: to the extent that both are intended for use in the treatment, mitigation and cure of disease, the former is an “article” and the latter includes “instruments,” “apparatus,” and “contrivances.” Despite the obvious areas of overlap in definition, we are not entirely without guidance in determining the propriety of the Secretary’s decision below, given the overall goals of the Act and its legislative history.
More specifically, as we have previously held in an analogous situation where the statute’s language seemed insufficiently precise, the “natural way” to draw the line “is in light of the statutory purpose” (SEC v. Ralston Purina Co., 346 U. S. 119, 124H25 (1953)). Since the patient will tend to derive less benefit and perhaps some harm from a particular antibiotic if, though the drug itself was properly batch-tested, it was not the proper antibiotic to use, it was entirely reasonable for the Secretary to determine that the discs, like the antibiotics they serve, are drugs and similarly subject to pre-clearance certification under § 507. An opposite conclusion might undercut the value of testing the antibiotics themselves, for such testing would be a useless exercise if the wrong drug were ultimately administered, even partially as the result of an unreliable disc.
Furthermore, the legislative history, read in light of the statute’s remedial purpose, directs us to read the classification “drug” broadly, and to confine the device exception as nearly as is possible to the types of items Congress suggested in the debates, such as electric belts, quack diagnostic scales, and therapeutic lamps, as well as bathroom weight scales, shoulder braces, air conditioning units, and crutches. In upholding the Secretary’s determination here, without deciding the precise contours of the “device” classification, we need only point out that the exception was created primarily for the purpose of avoiding the semantic incongruity of classifying as drugs (1) certain quack contraptions and (2) basic aids used in the routine operation of a hospital — items characterized more by their purely mechanical nature than by the fact that they are composed of complex chemical compounds or biological substances. Finally, we are supported in the decision to uphold the FDA’s determination that the sensitivity discs fall under the coverage of the Act and specifically under the drug provision thereof by the knowledge that the classification of these discs as drugs may not be as contrary to common medical usage as the District Court and respondent would have us believe.
In upholding the Secretary’s construction of the Act, we are not unmindful of our warning that “[i]n our anxiety to effectuate the congressional purpose of protecting the public, we must take care not to extend the scope of the statute beyond the point where Congress indicated it would stop.” 62 Cases of Jam v. United States, 340 U. S. 593, 600 (1951). Our holding here simply involves an obvious corollary to that principle, that we must take care not to narrow the coverage of a statute short of the point where Congress indicated it should extend.
Reversed.
Mr. Justice Douglas, being of the view that an antibiotic sensitivity disc used by physicians to aid them in determining what antibiotic drug, if any, to give to a patient, is a “device” as defined in § 201 (h) of the Act, not a “drug” as defined in § 201 (g), would affirm the judgment.
See generally L. Goodman & A. Gilman, The Pharmacological Basis of Therapeutics (3d ed., 1965).
See H. R. Rep. No. 702, 79th Cong., 1st Sess. (1945). Section 507, as set forth in 21 U. S. C. § 357, reads as follows:
“(a) The Secretary of Health, Education, and Welfare, pursuant to regulations promulgated by him, shall provide for the certification of batches of drugs composed wholly or partly of any kind of penicillin, streptomycin, chlortetracycline, chloramphenicol, baci-tracin, or any other antibiotic drug, or any derivative thereof. A batch of any such drug shall be certified if such drug has such characteristics of identity and such batch has such characteristics of strength, quality, and purity, as the Secretary prescribes in such regulations as necessary to adequately insure safety and efficacy of use, but shall not otherwise be certified. Prior to the effective date of such regulations the Secretary, in lieu of certification, shall issue a release for any batch which, in his judgment, may be released without risk as to the safety and efficacy of its use. Such release shall prescribe the date of its expiration and other conditions under which it shall cease to be effective as to such batch and as to portions thereof. For purposes of this section and of section 352 (l) of this title, the term 'antibiotic drug’ means any drug intended for use by man containing any quantity of any chemical substance which is produced by a microorganism and which has the capacity to inhibit or destroy microorganisms in dilute solution (including the chemically synthesized equivalent of any such substance).
“(b) Regulations providing for such certifications shall contain such provisions as are necessary to carry out the purposes of this section, including provisions prescribing (1) standards of identity and of strength, quality, and purity; (2) tests and methods of assay to determine compliance with such standards; (3) effective periods for certificates, and other conditions under which they shall cease to be effective as to certified batches and as to portions thereof; (4) administration and procedure; and (5) such fees, specified in such regulations, as are necessary to provide, equip, and maintain an adequate certification service. Such regulations shall prescribe only such tests and methods of assay as will provide for certification or rejection within the shortest time consistent with the purposes of this section.”
See generally Bauer, Kirby, Sherris, & Turck, Antibiotic Susceptibility Testing by a Standardized Single Disk Method, 45 American Journal of Clinical Pathology 493 (1966); Petersdorf & Sherris, Methods and Significance of In Vitro Testing of Bacterial Sensitivity to Drugs, 39 American Journal of Medicine 766 (1965); Gould, The Laboratory Control of Antibiotic Therapy, 3 Chemotherapia 477 (1961); Second Report of the Expert Committee on Antibiotics, Standardization of Methods for Conducting Microbio Sensitivity Tests, World Health Organization Technical Report Series No. 210, pp. 12-17 (1961).
Section 502, as set forth in 21 U. S. C. § 352, reads, in part, as follows:
“A drug or device shall be deemed to be misbranded—
“(l) If it is, or purports to be, or is represented as a drug composed wholly or partly of any kind of penicillin, streptomycin, chlortetracycline, chloramphenicol, bacitracin, or any other antibiotic drug, or any derivative thereof, unless (1) it is from a batch with respect to which a certificate or release has been issued pursuant to section 357 of this title, and (2) such certificate or release is in effect with respect to such drug: Provided, That this subsection shall not apply to any drug or class of drugs exempted by regulations promulgated under section 357 (c) or (d) of this title.”
Respondent’s witnesses established that sensitivity discs are not listed in the United States Pharmacopoeia or the National Formu-lary, and thus do not come within that portion of the definition of “drug” in §201 (g)(1)(A).
The District Court’s opinion is unreported; its pertinent findings of | 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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61
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NIAGARA HUDSON POWER CORP. v. LEVENTRITT.
NO. 211.
Argued December 5, 1950.
Decided January 15, 1951.
Randall J. LeBoeuj, Jr. argued the cause for petitioner in No. 211. With him on the brief were Craigh Leonard and Lauman Martin.
Roger S. Foster argued the cause for petitioner in No. 212. With him on the brief were Solicitor General Perl-man and John F. Davis.
T. Roland Berner and M. Victor Leventritt argued the cause for respondent. With them on the brief was Aaron Lewittes.
Mr. Justice Burton
delivered thie opinion of the Court.
These cases test the validity of the Securities and Exchange Commission’s finding that a plan of reorganization is “fair and equitable” within the meaning of § 11 of the Public Utility Holding Company Act of 1935, although the plan makes no provision for the participation of outstanding stock option warrants relating to the common stock of the company to be reorganized. The basis for the Commission’s conclusion is that it cannot find that there is a reasonable expectation, within the foreseeable future, that the market price of the common stock will exceed the exercise price of the warrants and that, upon consideration of all the circumstances, including the market for the warrants, the Commission cannot find justification for recognizing any present value in the warrants at the expense of the common stock. For the reasons hereinafter stated, we sustain the Commission.
The Niagara Hudson Power Corporation, petitioner in No.'211, is a registered public utility holding company, incorporated under the laws of New York, whose dissolution is contemplated under the reorganization. It has outstanding notes in the amount of $20,000,000; 378,875 shares of first preferred stock, of $100 par value; 105,930 shares of second preferred stock, of $100 par value; 9,580,988% shares of common stock, of $1 par value; and Class B stock option warrants. The warrants represent options to purchase, at any time, up to 497,191% shares of common stock, each warrant entitling the holder to subscribe to 1% shares of common stock upon payment of $50, which is at the rate of approximately $42.86 per share.
The proposed reorganization includes a dissolution plan which is conditioned upon the consummation of a consolidation plan, now consummated. The Commission found both plans to be “necessary to effectuate the provisions of Section 11 (b) (2) of the Act [§ 15 U. S. C. § 79k (b) (2)] and fair and equitable to the persons affected thereby . . . .” Holding Company Act Releases No. 9270, pp. 1, 57; No. 9295, p. 2. Over an objection made by the respondent, M. Victor Leventritt, as a warrant holder, the United States District Court for the Northern District of New York approved the plans and ordered them enforced. 86 F. Supp. 697. On appeal by the respondent, the Court of Appeals for the Second Circuit reversed that part of the order which relates to the warrants, and remanded the cause to the District Court for further proceedings. 179 F. 2d 615. A rehearing was denied, one judge dissenting. The Court of Appeals for the Third Circuit thereafter reached a substantially contrary result in In re Commonwealth & Southern Corp., 184 F. 2d 81. Because of the conflicting nature of the decisions in the Courts of Appeals and the importance of the issue in the application of the Public Utility Holding Company Act, we granted the petitions for certiorari filed separately by the company in No. 211 and the Commission in No. 212. 340 U. S. 809.
At every stage of this proceeding opportunity has been afforded the holders of the warrants to present their claims and they have been fully presented. Respondent has not, however, brought up the record which was made before the Commission and cannot question the sufficiency of the evidence in support of the Commission’s findings as to the intrinsic or investment value of the common stock or as to that of the warrants based on the likelihood of their exercise within the foreseeable future. The appeal attacks the authority of the Commission, as a matter of law, to conclude that, under the circumstances found by it, the dissolution plan is “fair and equitable” within the meaning of § 11 (e) of the Act, where the plan provides for no participation by the outstanding warrants despite their conceded, but low, market value. The Court of Appeals sustained that attack and said: “we cannot agree that there was any evidence ‘substantial’ or insubstantial to support the finding that these ‘warrants’ were wholly worthless.” 179 F. 2d at 618.
The Commission’s answer to the attack is that, within the meaning of § 11 (e) of this Act, it has discretion to approve a plan as “fair and equitable to the persons affected by such plan,” without providing for the participation of the holders of any security that has no recognizable intrinsic or investment value, although it may have a market value which the Commission considers too small “as a practical matter” to be recognized. The Commission stated its conclusions in its original order as follows:
“5. Fairness to the Holders of the Class B Stock Option Warrants of Niagara Hudson
“Under the plans, no provision is made for participation of the Class B stock option warrants of Niagara Hudson and all rights represented by such warrants will terminate upon the dissolution of that company.
“The option warrants entitle their holders to purchase at any time 497,191% shares of Niagara Hudson common stock, each warrant entitling the holder to 1% shares upon payment of $50. This is equivalent to an exercise price of $42.86 for one share. Since 1932, the Niagara Hudson or predecessor company common stock has never sold at a price higher than 18% and has sold as low as %• During the samé period, the option warrants have never sold higher than 5 and have been as low as %. [Appendix F attached to the Commission’s opinion shows that in 1943 they dropped further to Vie, and in 1941 and 1942 to 1/32-] In 1948, the prices for the option warrants ranged from a high of 1 to a low of Vs, and in 1949, from a high of % to a low of %.
“In considering the participation to which option warrant holders may be entitled, the test is basically the same as that applied with respect to the other types of securities, that is, what value, if any, is being given up by the surrender of the rights attaching to that security. The price of $42.86, which a holder of an option warrant would have to pay for one share of Niagara Hudson common stock, is more than 30 times the estimate we have used of $1.39 as foreseeable earnings which would be applicable to that stock on the basis of present investment if Niagara Hudson were to continue. That price is about 3.5 times the recent high market prices for the Niagara Hudson common stock of around 12 per share.
“If we were to assume that Niagara Hudson were to continue and its common stock were to sell in the future at a ratio of 15 times consolidated earnings, which would appear to be a very liberal assumption, it would require per share earnings of $2.86 to result in a price of $42.86 per share. Such earnings would represent an increase of 106% over the approximately $1.39 of earnings which we have found attributable to the present investment. On the basis of the more likely assumption that the price-earnings ratio at which the Niagara Hudson common stock would sell would be something less than 15 times, an even greater increase in earnings would be required to attain a per share price of $42.86.
“Under all the circumstances, we cannot find that there is a reasonable expectation that the market price of Niagara Hudson’s common stock would exceed the exercise price of the option warrants within the foreseeable future. Accordingly, we find that such option warrants have no recognizable value and that the plans satisfy the standard of fairness and equity with respect to such option warrants in excluding them from any participation in the reorganization of Niagara Hudson.” Holding Company Act Release No. 9270, pp. 46-47.
In its foregoing statement the Commission is consistent with the position it has taken as to the preferred and common stock. In accordance with the principles established in Securities & Exchange Comm’n v. Central-Illinois Corp., 338 U. S. 96, and in Otis & Co. v. Securities & Exchange Comm’n, 323 U. S. 624, it has estimated future earnings as a guide for its determination of the intrinsic and investment value of those stocks. It has satisfied itself that the holders of them will receive, in cash or securities, an equitable equivalent of that value. The Commission’s comparable duty in relation to the warrants is first to determine the extent to which they reflect the value of the common stock upon which they have an option. If, for example, the market value of the common stock closely approaches the exercise price stated in. the warrants, or if there is ground for a reasonable expectation that the two may coincide within the foreseeable future, then the warrants would have an intrinsic and investment value directly related to the common stock. Under those circumstances, we assume no plan of reorganization would be fair or equitable within the meaning of § 11 (e) of the Act that did not recognize that value and provide an equitable equivalent for it.
On the other hand, if the market value of the common stock is less than $15 per share and there is no ground for a reasonable expectation that, within the foreseeable future, the value will exceed $15 per share, then an option to buy it at, for example, $1,000 per share obviously would be worthless if the measure of its value depends only upon its convertibility into common stock. With such facts, it is difficult to see how the Commission could justify either the continuance of the warrants or any compensation for them at the expense of the existing common stock. The difference between the example last given and the facts of this case is merely one of degree. Where the line is to be drawn is a matter for the expert judgment of the Commission. The limits of its discretion are also narrowed here by the fact that the future earnings of a public utility company are limited by law to a conservative rate of return upon a governmentally ascertained rate base.
Respondent’s objection in this case is not primarily to the Commission’s computation of the investment value of the warrants insofar as that value is based upon the relationship between their exercise price and the value of the common stock. His claim is rather that the Commission must, as a matter of law, give greater recognition than it has to the market value of the warrants themselves. He contends that the warrants have a valuable “perpetual feature” because the options in the warrants may be exercised “at any time (without limit).” From this premise he reasons that the Commission, as a matter of law, must recognize some present value in the warrants because of the infinite possibilities which inhere in any option that reaches into the infinite future. His premise is partially false because the option in the warrants does not extend beyond the life of the common stock and there is no guaranty of the length of that life. On the other hand, the “perpetual feature” of the option does afford ground for anticipating its survival beyond the short period which limits ordinary estimates of investment values. It reaches beyond the foreseeable into the unexpected and the unpredictable.
The value of this “perpetual feature” may be called the premium value of the warrants as distinguished from their investment value. It takes into account such possibilities as that of a runaway inflation, an unprecedented accumulation of undistributed surplus earnings, an unlikely liberalization of standards of public utility regulation, a surprise discovery of oil on company property, etc. These are considerations which a buyer of “perpetual” warrants on the open market might consider as a basis for speculation in them. Furthermore, because warrants are among the lowest priced of all securities and because their market price tends to fluctuate with the market price of the stock to which they are related, they permit speculation on market trends with a minimum investment. A purchaser thus may be willing to pay a nominal price for a warrant which has no investment value, on the mere chance that it may be saleable in a rising market. This, however, does not provide an adequate reason for allowing a value to the warrants, at the expense of the common stock, in a reorganization under this Act.
This reorganization of a registered public utility holding company is one brought about in the interest of the public. The company is subjected to it by its status as a public utility and by its registration as a holding company under the Act. In determining the fairness and equity of compensation to be allowed holders of warrants, the Commission is not bound as a matter of law, any more than in the case of other securities, to limit itself precisely to the values which the market recognizes. The informed judgment of the Commission, rather than that of the market, has been designated by the Act as the appropriate guide to fairness and equity within the meaning of the Act. Under the standards approved by this Court, that informed judgment looks for investment values on a going-concern basis measured primarily by the Commission’s estimates of earnings within the foreseeable future. In the Otis case, supra, this Court accepted the Commission’s approval of participation by common stock in a reorganization under the Act, even though the assets of the company to be reorganized were insufficient to satisfy the charter liquidation preference of the preferred stock. This Court there accepted the Commission’s estimate that in approximately 15 years the corporation’s earnings would be sufficient to pay dividends on the common stock. On the other hand, in the Central-Illinois ease, supra, we expressly rejected the “colloquial equity” approach of the District Court, which placed special emphasis upon market history.
In the absence of abuse of its discretion, the Commission’s approval of a plan is as lawful and binding when it recognizes a value of zero for a security as when it selects any other figure. The cash allowance it gives to one security it must take from another. In each case, it must determine the fairness and equity of the plan to all who are affected. We conclude, therefore, that in the present instance the Act does not require proof that the warrants are wholly worthless and without all market value in order to sustain the Commission’s judgment that the plan is fair and equitable when it denies participation to them. It is enough that the Commission, within its discretion, has given the warrants careful consideration and that under all the circumstances, including their market value, has found the plan to be fair and equitable within the meaning of § 11 of the Act. Moreover, we find no lack of authority in analogous fields of reorganization for sustaining the general principle that a class of securities may go unrecognized in a reorganization when informed estimates of future earnings indicate that they have no investment value.
The judgment of the Court of Appeals, accordingly, is reversed and that of the District Court is affirmed.
Reversed.
“Sec. 11. (a) . . . .
“(b) It shall be the duty of the Commission . . . :
“(2) To require by order, after notice and opportunity for hearing, that each registered holding company, and each subsidiary company thereof, shall take such steps as the Commission shall find necessary to ensure that the corporate structure or continued existence of any company in the holding-company system does not unduly or unnecessarily complicate the structure, or unfairly or inequitably distribute voting power among security holders, of such holding-company system. . . .
“(e) In accordance with such rules and regulations or order as the Commission may deem necessary or appropriate in the public interest or for the protection of investors or consumers, any registered holding company or any subsidiary company of a registered holding company may, at any time after January 1, 1936, submit a plan to the Commission for the divestment of control, securities, or other assets, or for other action by such company or any subsidiary company thereof for the purpose of enabling such company or any subsidiary company thereof to comply with the provisions of subsection (b). If, after notice and opportunity for hearing, the Commission shall find such plan, as submitted or as modified, necessary to effectuate the provisions of subsection (b) and fair and equitable to the persons affected by such plan; the Commission shall make an order approving such plan; and the Commission, at the request of the company, may apply to a court, in accordance with the provisions of subsection (f) of section 18, to enforce and carry out the terms and provisions of such plan. . . .” (Emphasis added.) 49 Stat. 820, 821, 822, 15 U. S. C. § 79k (b) and (e).
For a summary of the proceedings since 1942 under § 11 (b) (2) of the Act, relating to the Niagara Hudson system, and at first relating to 26 corporate entities, see Niagara Hudson Power Corp., Holding Company Act Release No. 9270, pp. 7-8.
It appears from the warrant certificates that the holder of each “is entitled to purchase at any time (without limit)” shares of common stock at the price stated. It also appears from the certificates that the warrants are a second generation of warrants, having been issued in exchange for warrants of two predecessor corporations “for the purpose of preserving and continuing, as nearly as may be, the rights of the holders of said option warrants, existing at the date of consolidation, according to their respective terms.”
Such findings “are not subject to reexamination by the court unless they are not supported by substantial evidence or were not arrived at ‘in accordance with legal standards.’ ” Securities & Exchange Comm'n v. Central-Illinois Corp., 338 U. S. 96, 126.
“59 We recognize that the holders of the option warrants have a right to purchase common stock at any time, and that this perpetual feature has some present value no matter how remote or speculative the exercise of the right might be. The value to be accorded that right, however, in this case, is so small that as a practical matter we would not be justified in recognizing it for the purposes of a Section 11 reorganization. Cf. Electric Power & Light Corporation, — S. E. C. - (1949), Holding Company Act Release No. 8889.”
In In re Electric Power & Light Corp., Holding Company Act Release No. 8889, aff'd 176 F. 2d 687, the Commission approved a plan allocating shares of common stock to the warrant holders at a ratio of one share of stock for three warrants, in recognition of estimated earnings which indicated the value of the stock in the foreseeable future as between $25 and $30 per share, whereas the exercise price for it stated in the warrants was $25 per share.
See 1 Dewing, The Financial Policy of Corporations (4th ed. 1941), 254; Graham & Dodd, Security Analysis (1934), 258-259, 548-550; Hoagland, Corporation Finance (2d ed. 1938), 177.
What a trader is willing to pay for a warrant is determined by his own estimate of the “prospects of changeGraham & Dodd, Security Analysis (1934), 547. “The privilege [conferred by a warrant upon its holder] constitutes a call upon the future prosperity of the company, and its value will depend upon the hope that the market price of the stock will rise above the stipulated subscription price before the right expires.” Guthmann & Dougall, Corporate Financial Policy (2d ed. 1948), 145.
Berle & Means, in The Modern Corporation and Private Property (1932), stress the difficulty of fixing a value for warrants. “[T]hey maintain market values, which to the uninitiated seem inexplicable.” P. 183. Market quotations for warrants have led “certain observers in the New York market to suggest that the real result of an option warrant is to create a pure gambling counter . . . .” P.184. “[A]t the time when the stock purchase warrants are issued, particularly if they are perpetual, it is almost beyond human wisdom to set any fair price on such options.” Ibid. To the same effect, see Graham & Dodd, pp. 568-570.
In Group of Institutional Investors v. Chicago, M., St. P. & P. R. Co., 318 U. S. 523, the Court approved a railroad reorganization under § 77 of the Bankruptcy Act, 49 Stat. 911, 11 U. S. C. § 205, in which' preferred and common shareholders were wiped out because their equity was not justified by earnings prospects. And in reorganizations under former § 77B of the Bankruptcy Act, 48 Stat. 912, “The criterion of earning capacity is the essential one . . . .” Consolidated Rock Products Co. v. Du Bois, 312 U. S. 510, 526. See 6 Collier on Bankruptcy (14th ed. 1947), 3849-3859. | 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",
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"Department or Secretary of Labor",
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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"
] | [
104
] | sc_adminaction |
CANADA PACKERS, LTD. v. ATCHISON, TOPEKA & SANTA FE RAILWAY CO. et al.
No. 11.
Argued November 8-9, 1966.
Decided December 5, 1966.
Charles B. Myers argued the cause and filed briefs for petitioner.
Harvey Huston argued the cause and filed a brief for respondents.
Louis F. Claiborne, by special leave of Court, argued the cause for the United States, as amicus curiae. On the brief were Solicitor General Marshall, Assistant Attorney General Turner, Richard A. Posner and Robert B. Hummel. Leonard S. Goodman argued the cause for the Interstate Commerce Commission, as amicus curiae, urging reversal. With him on the brief was Robert W. Ginnane.
Per Curiam.
This case concerns the power of the Interstate Commerce Commission in reparations proceedings to determine the reasonableness of a joint through international freight rate. The American railroad respondents and their connecting carriers delivered 131 cars of potash from Carlsbad and Loving, New Mexico, to petitioner’s plants in Canada. Petitioner was charged and it paid a joint through international rate which it later attacked as unreasonable in a reparations proceeding before the Commission. Finding the rate to be unreasonable, the Commission ordered reparations in the amount of the difference between the rate charged and the rate which would have been reasonable at the time. Respondents refused to pay part of this amount on the theory that it represented an alleged overcharge for the Canadian leg of the trip over which the Commission had no jurisdiction under the applicable statute. This action followed in the District Court to collect the unpaid amount. The District Court found for the petitioner, the Court of Appeals reversed, 342 F. 2d 563, and we granted certiorari, 383 U. S. 906.
The provisions of the Interstate Commerce Act apply not only to transportation within the United States but to transportation from or to any place in the United States to or from a foreign country “but only insofar as such transportation . . . takes place within the United States.” 24 Stat. 379, as amended, 49 U. S. C. § 1 (1). The Court of Appeals held that the Commission in this case was without jurisdiction to determine the reasonableness of freight rates for transportation taking place in Canada and hence was without power to order reparations with respect to the Canadian portion of the trip. The respondents, and the United States, the latter differing with the Commission in this case, take a similar view. As an original matter there might well be considerable merit in this position. But the contrary view of the Commission is one of long standing, see Black Horse Tobacco Co. v. Illinois Central R. Co., 17 I. C. C. 588 (1910), and Citizens Gas & Coke Utility v. Canadian Nat. Rys., 325 I. C. C. 527 (1965), and one which this Court has upheld on more than one occasion. News Syndicate Co. v. New York Central R. Co., 275 U. S. 179, squarely held that where a carrier performing transportation within the United States enters into a joint through international rate covering transportation in the United States and abroad, the Commission does have jurisdiction to determine the reasonableness of the joint through rate and to order the carrier performing the domestic service to pay reparations in the amount by which that rate is unreasonable. Lewis-Simas-Jones Co. v. Southern Pacific Co., 283 U. S. 654, and Great Northern R. Co. v. Sullivan, 294 U. S. 458, are in accord. The Court of Appeals and respondents would distinguish these cases, but we think the differences relied on are insubstantial. Indeed, the United States quite candidly requests that we reconsider these older cases and so narrow the powers of the Commission with respect to joint through international rates. It is not shown, however, that the long-standing construction of the statute by both the Commission and this Court has produced any particularly unfortunate consequences and Congress, which could easily change the rule, has not yet seen fit to intervene. In these circumstances, we shall not disturb the construction previously given the statute by this Court, and the decision of the Court of Appeals must be
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",
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"Information Security Oversight Office",
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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",
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"Securities and Exchange Commission",
"Social Security Administration or Commissioner",
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"Department or Secretary of the Treasury",
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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"
] | [
65
] | sc_adminaction |
DANIEL, DIRECTOR, COOK COUNTY DEPARTMENT OF PUBLIC AID, et al. v. GOLIDAY et al.
No. 1211.
Decided May 25, 1970
Per Curiam.
The court below has held that the Due Process Clause of the Fourteenth Amendment requires a State to provide a recipient of public welfare benefits with notice and a hearing prior to “termination, suspension, or reduction” of benefits. This Court's subsequent decisions in Goldberg v. Kelly, 397 U. S. 254, and Wheeler v. Montgomery, 397 U. S. 280, decided March 23, 1970, dealt only with termination and suspension, not reduction, of benefits. We think that the bearing of those decisions on the treatment of benefit reductions should be determined in the first instance by the District Court on a record developed by the parties with specific attention to that issue. Accordingly, the judgment is vacated and the case is remanded to the District Court for further proceedings in conformity with this opinion.
The Chief Justice, Mr. Justice Black, and Mr. Justice Stewart dissent. | 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",
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"Civil Rights Commission",
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] | [
116
] | sc_adminaction |
FISHER et al. v. UNITED STATES et al.
No. 74-18.
Argued November 3, 1975
Decided April 21, 1976
White, J., delivered the opinion of the Court, in which Burger, C. J., and Stewart, Blackmun, Powell, and Rehnquist, JJ., joined. Brennan, J., post, p. 414, and Marshall, J., post, p. 430, filed opinions concurring in the judgment. Stevens, J., took no part in the consideration or decision of the cases.
Richard L. Bazelon argued the cause for petitioners in No. 74-18. With him on the brief was Solomon Fisher. Deputy Solicitor General Wallace argued the cause for petitioners in No. 74-611 and respondents in No. 74-18. With him on the briefs were Solicitor General Bork, Assistant Attorney General Grampton, Stuart A. Smith, and Robert E. Lindsay. Robert E. Goodjriend argued the cause for respondents in No. 74-611. With him on the brief were Edward A. Copley and Cyril D. Kasmir.
Together with No. 740-611, United States et al. v. Kasmir et al., on certiorari to the United States Court of Appeals for the Fifth Circuit.
Stanley H. Stearman filed a brief for the National Society of Public Accountants as amicus curiae urging affirmance in No. 74^611. Richard H. Appert, Louis Bender, Michael I. Saltzman, and James D. Fellers filed a brief for the American Bar Association as amicus curiae in both cases.
Mr. Justice White
delivered the opinion of the Court.
In these two cases we are called upon to decide whether a summons directing an attorney to produce documents delivered to him by his client in connection with the attorney-client relationship is enforceable over claims that the documents were constitutionally immune from summons in the hands of the client and retained that immunity in the hands of the attorney.
I
In each case, an Internal Revenue agent visited the taxpayer or taxpayers and interviewed them in connection with an investigation of possible civil or criminal liability under the federal income tax laws. Shortly after the interviews — one day later in No. 74-611 and a week or two later in No. 74-18 — the taxpayers obtained from their respective accountants certain documents relating to the preparation by the accountants of their tax returns. Shortly after obtaining the documents — later the same day in No. 74-611 and a few weeks later in No. 74-18 — the taxpayers transferred the documents to their lawyers — respondent Kasmir and petitioner Fisher, respectively — each of whom was retained to assist the taxpayer in connection with the investigation. Upon learning of the whereabouts of the documents, the Internal Revenue Service served summonses on the attorneys directing them to produce documents listed therein. In No. 74r-6U, the documents were described as "the following records of Tannebaum Bindler & Lewis [the accounting firm].
"1. Accountant's work papers pertaining to Dr. E. J. Mason's books and records of 1969, 1970 and 1971.[]
“2. Retained copies of E. J. Mason’s income tax returns for 1969, 1970 and 1971.
“3. Retained copies of reports and other correspondence between Tannebaum Bindler & Lewis and Dr. E. J. Mason during 1969, 1970 and 1971.”
In No. 74-18, the documents demanded were analyses by the accountant of the taxpayers’ income and expenses which had been copied by the accountant from the taxpayers’ canceled checks and deposit receipts. In No. 74-611, a summons was also served on the accountant directing him to appear and testify concerning the documents to be produced by the lawyer. In each case, the lawyer declined to comply with the summons directing production of the documents, and enforcement actions were commenced by the Government under 26 U. S. C. §§ 7402 (b) and 7604 (a). In No. 74-611, the attorney raised in defense of the enforcement action the taxpayer’s accountant-client privilege, his attorney-client privilege, and his Fourth and Fifth Amendment rights. In No. 74-18, the attorney claimed that enforcement would involve compulsory self-incrimination of the taxpayers in violation of their Fifth Amendment privilege, would involve a seizure of the papers without necessary compliance with the Fourth Amendment, and would violate the taxpayers’ right to communicate in confidence with their attorney. In No. 74-18 the taxpayers intervened and made similar claims.
In each case the summons was ordered enforced by the District Court and its order was stayed pending appeal. In No. 74-18, 500 F. 2d 683 (CA3 1974), petitioners’ appeal raised, in terms, only their Fifth Amendment claim, but they argued in connection with that claim that enforcement of the summons would involve a violation of the taxpayers’ reasonable expectation of privacy and particularly so in light of the confidential relationship of attorney to client. The Court of Appeals for the Third Circuit after reargument en banc affirmed the enforcement order, holding that the taxpayers had never acquired a possessory interest in the documents and that the papers were not immune in the hands of the attorney. In No. 74-611, a divided panel of the Court of Appeals for the Fifth Circuit reversed the enforcement order, 499 F. 2d 444 (1974). The court reasoned that by virtue of the Fifth Amendment the documents would have been privileged from production pursuant to summons directed to the taxpayer had he retained possession and, in light of the confidential nature of the attorney-client relationship, the taxpayer retained, after the transfer to his attorney, “a legitimate expectation of privacy with regard to the materials he placed in his attorney's custody, that he retained constructive possession of the evidence, and thus... retained Fifth Amendment protection.” Id,., at 453. We granted certiorari to resolve the conflict created. 420 U. S. 906 (1975). Because in our view the documents were not privileged either in the hands of the lawyers or of their clients, we affirm the judgment of the Third Circuit in No. 74-18 and reverse the judgment of the Fifth Circuit in No. 74N511.
II
All of the parties in these cases and the Court of Appeals for the Fifth Circuit have concurred in the proposition that if the Fifth Amendment would have excused a taxpayer from turning over the accountant’s papers had he possessed them, the attorney to whom they are delivered for the purpose of obtaining legal advice should also be immune from subpoena. Although we agree with this proposition for the reasons set forth in Part III, infra, we are convinced that, under our decision in Couch v. United States, 409 U. S. 322 (1973), it is not the taxpayer’s Fifth Amendment privilege that would excuse the attorney from production.
The relevant part of that Amendment provides:
“No person..,. shall be compelled in any criminal case to be a witness against himself.” (Emphasis added.)
The taxpayer’s privilege under this Amendment is not violated by enforcement of the summonses involved in these cases because enforcement against a taxpayer’s lawyer would not “compel” the taxpayer to do anything — and certainly would not compel him to be a “witness” against himself. The Court has held repeatedly that the Fifth Amendment is limited to prohibiting the use of “physical or moral compulsion” exerted on the person asserting the privilege, Perlman v. United States, 247 U. S. 7, 15 (1918); Johnson v. United States, 228 U. S. 457, 458 (1913); Couch v. United States, supra, at 328, 336. See also Holt v. United States, 218 U. S. 245, 252-253 (1910); United States v. Dionisio, 410 U. S. 1 (1973); Schmerber v. California, 384 U. S. 757, 765 (1966); Burdeau v. McDowell, 256 U. S. 465, 476 (1921); California Bankers Assn. v. Shultz, 416 U. S. 21, 55 (1974). In Couch v. United States, supra, we recently ruled that the Fifth Amendment rights of a taxpayer were not violated by the enforcement of a documentary summons directed to her accountant and requiring production of the taxpayer’s own records in the possession of the accountant. We did so on the ground that in such a case “the ingredient of personal compulsion against an accused is lacking.” 409 U. S., at 329.
Here, the taxpayers are compelled to do no more than was the taxpayer in Couch. The taxpayers’ Fifth Amendment privilege is therefore not violated by enforcement of the summonses directed toward their attorneys. This is true whether or not the Amendment would have barred a subpoena directing the taxpayer to produce the documents while they were in his hands.
The fact that the attorneys are agents of the taxpayers does not change this result. Couch held as much, since the accountant there was also the taxpayer’s agent, and in this respect reflected a longstanding view. In Hale v. Henkel, 201 U. S. 43, 69-70 (1906), the Court said that the privilege “was never intended to permit [a person] to plead the fact that some third person might be incriminated by his testimony, even though he were the agent of such person.... [T]he Amendment is limited to a person who shall be compelled in any criminal case to be a witness against himself ” (Emphasis in original.) “It is extortion of information from the accused himself that offends our sense of justice.” Couch v. United States, supra, at 328. Agent or no, the lawyer is not the taxpayer. The taxpayer is the “accused,” and nothing is being extorted from him.
Nor is this one of those situations, which Couch suggested might exist, where constructive possession is so clear or relinquishment of possession so temporary and insignificant as to leave the personal compulsion upon the taxpayer substantially intact. 409 U. S., at 333. In this respect we see no difference between the delivery to the attorneys in these cases and delivery to the accountant in the Couch case. As was true in Couch, the documents sought were obtainable without personal compulsion on the accused.
Respondents in No. 74-611 and petitioners in No. 74-18 argue, and the Court of Appeals for the Fifth Circuit apparently agreed, that if the summons was enforced, the taxpayers’ Fifth Amendment privilege would be, but should not be, lost solely because they gave their documents to their lawyers in order to obtain legal advice. But this misconceives the 'nature of the constitutional privilege. The Amendment protects a person from being compelled to be a witness against himself. Here, the taxpayers retained any privilege they ever had not to be compelled to testify against themselves and not to be compelled themselves to produce private papers in their possession. This personal privilege was in no way decreased by the transfer. It is simply that by reason of the transfer of the documents to the attorneys, those papers may be subpoenaed without compulsion on the taxpayer. The protection of the Fifth Amendment is therefore not available. “A party is privileged from producing evidence but not from its production.” Johnson v. United States, supra, at 458.
The Court of Appeals for the Fifth Circuit suggested that because legally and ethically the attorney was required to respect the confidences of his client, the latter had a reasonable expectation of privacy for the records in the hands of the attorney and therefore did not forfeit his Fifth Amendment privilege with respect to the records by transferring them in order to obtain legal advice. It is true that the Court has often stated that one of the several purposes served by the constitutional privilege against compelled testimonial self-incrimination is that of protecting personal privacy. See, e. g., Murphy v. Waterfront Comm’n, 378 U. S. 52, 55 (1964); Couch v. United States, supra, at 332, 335-336; Tehan v. United States ex rel. Shott, 382 U. S. 406, 416 (1966); Davis v. United States, 328 U. S. 582, 587 (1946). But the Court has never suggested that every invasion of privacy violates the privilege. Within the limits imposed by the language of the Fifth Amendment, which we necessarily observe, the privilege truly serves privacy interests; but the Court has never on any ground, personal privacy included, applied the Fifth Amendment to prevent the otherwise proper acquisition or use of evidence which, in the Court’s view, did not involve compelled testimonial self-incrimination of some sort.
The proposition that the Fifth Amendment protects private information obtained without compelling self-incriminating testimony is contrary to the clear statements of this Court that under appropriate safeguards private incriminating statements of an accused may be overheard and used in evidence, if they are not compelled at the time they were uttered, Katz v. United States, 389 U. S. 347, 354 (1967); Osborn v. United States, 385 U. S. 323, 329-330 (1966); and Berger v. New York, 388 U. S. 41, 57 (1967); cf. Hoffa v. United States, 385 U. S. 293, 304 (1966); and that disclosure of private information may be compelled if immunity removes the risk of incrimination. Kastigar v. United States, 406 U. S. 441 (1972). If the Fifth Amendment protected generally against the obtaining of private information from a man’s mouth or pen or house, its protections would presumably not be lifted by probable cause and a warrant or by immunity. The privacy invasion is not mitigated by immunity; and the Fifth Amendment’s strictures, unlike the Fourth’s, are not removed by showing reasonableness. The Framers addressed the subject of personal privacy directly in the Fourth Amendment. They struck a balance so that when the State’s reason to believe incriminating evidence will be found becomes sufficiently great, the invasion of privacy becomes justified and a warrant to search and seize will issue. They did not seek in still another Amendment — the Fifth — to achieve a general protection of privacy but to deal with the more specific issue of compelled self-incrimination.
We cannot cut the Fifth Amendment completely loose from the moorings of its language, and make it serve as a general protector of privacy — a word not mentioned in its text and a concept directly addressed in the Fourth Amendment. We adhere to the view that the Fifth Amendment protects against “compelled self-incrimination, not [the disclosure of] private information.” United States v. Nobles, 422 U. S. 225, 233 n. 7 (1975).
Insofar as private information not obtained through compelled self-incriminating testimony is legally protected, its protection stems from other sources — the Fourth Amendment's protection against seizures without warrant or probable cause and against subpoenas which suffer from “too much indefiniteness or breadth in the things required to be 'particularly described,’ ” Oklahoma Press Pub. Co. v. Walling, 327 U. S. 186, 208 (1946); In re Horowitz, 482 F. 2d 72, 75-80 (CA2 1973) (Friendly, J.); the First Amendment, see NAACP v. Alabama, 357 U. S. 449, 462 (1958); or evidentiary privileges such as the attorney-client privilege.
Ill
Our above holding is that compelled production of documents from an attorney does not implicate whatever Fifth Amendment privilege the taxpayer might have enjoyed from being compelled to produce them himself. The taxpayers in these cases, however, have from the outset consistently urged that they should not be forced to expose otherwise protected documents to summons simply because they have sought legal advice and turned the papers over to their attorneys. The Government appears to agree unqualifiedly. The difficulty is that the taxpayers have erroneously relied on the Fifth Amendment without urging the attorney-client privilege in so many words. They have nevertheless invoked the relevant body of law and policies that govern the attorney-client privilege. In this posture of the case, we feel obliged to inquire whether the attorney-client privilege applies to documents in the hands of an attorney which would have been privileged in the hands of the client by reason of the Fifth Amendment.
Confidential disclosures by a client to an attorney made in order to obtain legal assistance are privileged. 8 J. Wigmore, Evidence § 2292 (McNaughton rev. 1961) (hereinafter Wigmore); McCormick § 87, p. 175. The purpose of the privilege is to encourage clients to make full disclosure to their attorneys. 8 Wigmore § 2291, and §2306, p. 590; McCormick §87, p. 175, §92, p. 192; Baird v. Koerner, 279 F. 2d 623 (CA9 1960); Modern Woodmen of America v. Watkins, 132 F. 2d 352 (CA5 1942); Prichard v. United States, 181 F. 2d 326 (CA6), aff’d per curiam, 339 U. S. 974 (1950); Schwimmer v. United States, 232 F. 2d 855 (CA8 1956); United States v. Goldfarb, 328 F. 2d 280 (CA6 1964). As a practical matter, if the client knows that damaging information could more readily be obtained from the attorney following disclosure than from himself in the absence of disclosure, the client would be reluctant to confide in his lawyer and it would be difficult to obtain fully informed legal advice. However, since the privilege has the effect of withholding relevant information from the factfinder, it applies only where necessary to achieve its purpose. Accordingly it protects only those disclosures — necessary to obtain informed legal advice — which might not have been made absent the privilege. In re Horowitz, supra, at 81 (Friendly, J.); United States v. Goldfarb, supra; 8 Wigmore § 2291, p. 554; McCormick § 89, p. 185. This Court and the lower courts have thus uniformly held that pre-existing documents which could have been obtained by court process from the client when he was in possession may also be obtained from the attorney by similar process following transfer by the client in order to obtain more informed legal advice. Grant v. United States, 227 U. S. 74, 79-80 (1913); 8 Wigmore § 2307, and cases there cited; McCormick § 90, p. 185; Falsone v. United States, 205 F. 2d 734 (CA5 1953); Sovereign Camp, W. O. W. v. Reed, 208 Ala. 457, 94 So. 910 (1922); Andrews v. Mississippi R. Co., 14 Ind. 169, 98 N. E. 49 (1860); Palatini v. Sarian, 15 N. J. Super. 34, 83 A. 2d 24 (1951); Pearson v. Yoder, 39 Okla. 105, 134 P. 421 (1913); State ex rel Sowers v. Olwell, 64 Wash. 2d 828, 394 P. 2d 681 (1964). The purpose of the privilege requires no broader rule. Pre-existing documents obtainable from the client are not appreciably easier to obtain from the attorney after transfer to him. Thus, even absent the attorney-client privilege, clients will not be discouraged from disclosing the documents to the attorney, and their ability to obtain informed legal advice will remain unfettered. It is otherwise if the documents are not obtainable by subpoena duces tecum or summons while in the exclusive possession of the client, for the client will then be reluctant to transfer possession to the lawyer unless the documents are also privileged in the latter’s hands. Where the transfer is made for the purpose of obtaining legal advice, the purposes of the attorney-client privilege would be defeated unless the privilege is applicable. “It follows, then, that when the client himself would be privileged from production of the document, either as a party at common law... or as exempt from self-incrimination, the attorney having possession of the document is not bound to produce.” 8 Wigmore § 2307, p. 592. Lower courts have so held. Id., § 2307, p. 592 n. 1, and cases there cited; United States v. Judson, 322 F. 2d 460, 466 (CA9 1963); Colton v. United States, 306 F. 2d 633, 639 (CA2 1962). This proposition was accepted by the Court of Appeals for the Fifth Circuit below, is asserted by petitioners in No. 74-18 and respondents in No. 74^611, and was conceded by the Government in its brief and at oral argument. Where the transfer to the attorney is for the purpose of obtaining legal advice, we agree with it.
Since each taxpayer transferred possession of the documents in question from himself to his attorney in order to obtain legal assistance in the tax investigations in question, the papers, if unobtainable by summons from the client, are unobtainable by summons directed to the attorney by reason of the attorney-client privilege. We accordingly proceed to the question whether the documents could have been obtained by summons addressed to the taxpayer while the documents were in his possession. The only bar to enforcement of such summons asserted by the parties or the courts below is the Fifth Amendment’s privilege against self-incrimination. On this question the Court of Appeals for the Fifth Circuit in No. 74-611 is at odds with the Court of Appeals for the Second Circuit in United States v. Beattie, 522 F. 2d 267 (1975), cert. pending, Nos. 75-407, 75-700.
> H-i
The proposition that the Fifth Amendment prevents compelled production of documents over objection that such production might incriminate stems from Boyd v. United States, 116 U. S. 616 (1886). Boyd involved a civil forfeiture proceeding brought by the Government against two partners for fraudulently attempting to import 35 cases of glass without paying the prescribed duty. The partnership had contracted with the Government to furnish the glass needed in the construction of a Government building. The glass specified was foreign glass, it being understood that if part,or all of the glass was furnished from the partnership’s existing duty-paid inventory, it could be replaced by duty-free imports. Pursuant to this arrangement, 29 cases of glass were imported by the partnership duty free. The partners then represented that they were entitled to duty-free entry of an additional 35 cases which were soon to arrive. The forfeiture action concerned these 35 cases. The Government’s position was that the partnership had replaced all of the glass used in construction of the Government building when it imported the 29 cases. At trial, the Government obtained a court order directing the partners to produce an invoice the partnership had received from the shipper covering the previous 29-case shipment. The invoice was disclosed, offered in evidence, and used, over the Fifth Amendment objection of the partners, to establish that the partners were fraudulently claiming a greater exemption from duty than they were entitled to under the contract. This Court held that the invoice was inadmissible and reversed the judgment in favor of the Government. The Court ruled that the Fourth Amendment applied to court orders in the nature of subpoenas duces tecum in the same manner in which it applies to search warrants, id., at 622; and that the Government may not, consistent with the Fourth Amendment, seize a person’s documents or other property as evidence unless it can claim a proprietary interest in the property superior to that of the person from whom the property is obtained. Id., at 623-624. The invoice in question was thus held to have been obtained in violation of the Fourth Amendment. The Court went on to hold that the accused in a criminal case or the defendant in a forfeiture action could not be forced to produce eviden-tiary items without violating the Fifth Amendment as well as the Fourth. More specifically, the Court declared, “a compulsory production of the private books and papers of the owner of goods sought to be forfeited... is compelling him to be a witness against himself, within the meaning of the Fifth Amendment to the Constitution.” Id., at 634-635. Admitting the partnership invoice into evidence had violated both the Fifth and Fourth Amendments.
Among its several pronouncements, Boyd was understood to declare that the seizure, under warrant or otherwise, of any purely evidentiary materials violated the Fourth Amendment and that the Fifth Amendment rendered these seized materials inadmissible. Gouled v. United States, 255 U. S. 298 (1921); Agnello v. United States, 269 U. S. 20 (1925); United States v. Lefkowitz, 285 U. S. 452 (1932). That rule applied to documents as well as to other evidentiary items — “[t]here is no special sanctity in papers, as distinguished from other forms of property, to render them immune from search and seizure, if only they fall within the scope of the principles of the cases in which other property may be seized....” Gouled v. United States, supra, at 309. Private papers taken from the taxpayer, like other “mere evidence,” could not be used against the accused over his Fourth and Fifth Amendment objections.
Several of Boyd’s express or implicit declarations have not stood the test of time. The application of the Fourth Amendment to subpoenas was limited by Hale v. Henkel, 201 U. S. 43 (1906), and more recent cases. See, e. g., Oklahoma Press Pub. Co. v. Walling, 327 U. S. 186 (1946). Purely evidentiary (but “nontestimonial”) materials, as well as contraband and fruits and instru-mentalities of crime, may now be searched for and seized under proper circumstances, Warden v. Hayden, 387 U. S. 294 (1967). Also, any notion that “testimonial” evidence may never be seized and used in evidence is inconsistent with Katz v. United States, 389 U. S. 347 (1967); Osborn v. United States, 386 U. S. 323 (1966); and Berger v. New York, 388 U. S. 41 (1967), approving the seizure under appropriate circumstances of conversations of a person suspected of crime. See also Marron v. United States, 275 U. S. 192 (1927).
It is also clear that the Fifth Amendment does not independently proscribe the compelled production of every sort of incriminating evidence but applies only when the accused is compelled to make a testimonial communication that is incriminating. We have, accordingly, declined to extend the protection of the privilege to the giving of blood samples, Schmerber v. California, 384 U. S. 757, 763-764 (1966); to the giving of handwriting exemplars, Gilbert v. California, 388 U. S. 263, 265-267 (1967); voice exemplars, United States v. Wade, 388 U. S. 218, 222-223 (1967); or the donning of a blouse worn by the perpetrator, Holt v. United States, 218 U. S. 245 (1910). Furthermore, despite Boyd, neither a partnership nor the individual partners are shielded from compelled production of partnership records on self-incrimination grounds. Bellis v. United States, 417 U. S. 85 (1974). It would appear that under that case the precise claim sustained in Boyd would now be rejected for reasons not there considered.
The pronouncement in Boyd that a person may not be forced to produce his private papers has nonetheless often appeared as dictum in later opinions of this Court. See, e. g., Wilson v. United States, 221 U. S. 361, 377 (1911); Wheeler v. United States, 226 U. S. 478, 489 (1913); United States v. White, 322 U. S. 694, 698-699 (1944); Davis v. United States, 328 U. S., at 587-588; Schmerber, supra, at 763-764; Couch v. United States, 409 U. S., at 330; Bellis v. United States, supra, at 87. To the extent, however, that the rule against compelling production of private papers rested on the proposition that seizures of or subpoenas for “mere evidence,” including documents, violated the Fourth Amendment and therefore also transgressed the Fifth, Gouled v. United States, supra, the foundations for the rule have been washed away. In consequence, the prohibition against forcing the production of private papers has long been a rule searching for a rationale consistent with the proscriptions of the Fifth Amendment against compelling a person to give “testimony” that incriminates him. Accordingly, we turn to the question of what, if any, incriminating testimony within the Fifth Amendment’s protection, is compelled by a documentary summons.
A subpoena served on a taxpayer requiring him to produce an accountant’s workpapers in his possession without doubt involves substantial compulsion. But it does not compel oral testimony; nor would it ordinarily compel the taxpayer to restate, repeat, or affirm the truth of the contents of the documents sought. Therefore, the Fifth Amendment would not be violated by the fact alone that the papers on their face might incriminate the taxpayer, for the privilege protects a person only against being incriminated by his own compelled testimonial communications. Schmerber v. California, supra; United States v. Wade, supra; and Gilbert v. California, supra. The accountant’s workpapers are not the taxpayer’s. They were not prepared by the taxpayer, and they contain no testimonial declarations by him. Furthermore, as far as this record demonstrates, the preparation of all of the papers sought in these cases was wholly voluntary, and they cannot be said to contain compelled testimonial evidence, either of the taxpayers or of anyone else. The taxpayer cannot avoid compliance with the subpoena merely by asserting that the item of evidence which he is required to produce contains incriminating writing, whether his own or that of someone else.
The act of producing evidence in response to a subpoena nevertheless has communicative aspects of its own, wholly aside from the contents of the papers produced. Compliance with the subpoena tacitly concedes the existence of the papers demanded and their possession or control by the taxpayer. It also would indicate the taxpayer’s belief that the papers are those described in the subpoena. Curcio v. United | 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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] | [
68
] | sc_adminaction |
VERIZON MARYLAND INC. v. PUBLIC SERVICE COMMISSION OF MARYLAND et al.
No. 00-1531.
Argued December 5, 2001 —
Decided May 20, 2002
Mark L. Evans argued the cause for petitioner Verizon Maryland Inc. With him on the briefs were Michael K. Kellogg, Sean A. Lev, Aaron M. Panner, William P. Barr, Mark J. Mathis, Michael D. Lowe, and David A. Hill. Barbara McDowell argued the cause for the United States. With her on the briefs were Solicitor General Olson, Acting Assistant Attorney General Katsas, Deputy Solicitor General Wallace, Mark B. Stern, Charles W. Scarborough, and John A. Rogovin.
Susan Stevens Miller argued the cause and filed a brief for respondent Public Service Commission of Maryland. Paul M. Smith, William M. Hohengarten, Michael B. DeSanctis, Darryl M. Bradford, John J. Hamill, Thomas F. O’Neil III, William Single IV, and Brian J. Leske filed briefs for respondent MCI WorldCom, Inc., et al.
Together with No. 00-1711, United States v. Public Service Commission of Maryland et al., also on certiorari to the same court.
Lesley Szanto Friedman, Aidan Synnott, Martha F. Davis, Isabelle Katz Pinzler, Steven R. Shapiro, Karen K. Narasaki, Vincent A. Eng, Herbert Semmel, Marcia D. Greenberger, Dina R. Lassow, and Elliot M. Mincberg filed a brief for the NOW Legal Defense and Education Fund et al. as amici curiae urging reversal.
Briefs of amici curiae urging affirmance were filed for the State of Illinois by James E. Ryan, Attorney General, Joel D. Bertocchi, Solicitor General, A. Benjamin Goldgar and Michael P. Doyle, Assistant Attorneys General, Myra L. Karegianes, John P. Kelliher, and Thomas R. Stan ton; and for the Virginia State Corporation Commission by William H. Chambliss.
Justice Scalia
delivered the opinion of the Court.
These cases present the question whether federal district courts have jurisdiction over a telecommunication carrier’s claim that the order of a state utility commission requiring reciprocal compensation for telephone calls to Internet Service Providers violates federal law.
I
The Telecommunications Act of 1996 (1996 Act or Act), Pub. L. 104-104, 110 Stat. 56, created a new telecommunications regime designed to foster competition in local telephone markets. Toward that end, the Act imposed various obligations on incumbent local-exchange carriers (LECs), including a duty to share their networks with competitors. See 47 U. S. C. § 251(c) (1994 ed., Supp. V). When a new entrant seeks access to a market, the incumbent LEC must “provide . . . interconnection with” the incumbent’s existing network, § 251(c)(2), and the carriers must then establish “reciprocal compensation arrangements” for transporting and terminating the calls placed by each others’ customers, § 251(b)(5). As we have previously described, see AT&T Corp. v. Iowa Utilities Bd., 525 U. S. 366, 371-373 (1999), an incumbent LEC “may negotiate and enter into a binding agreement” with the new entrant “to fulfill the duties” imposed by §§ 251(b) and (c), but “without regard to the standards set forth” in those provisions. §§ 252(a)(1), 251(c)(1). That agreement must be submitted to the state commission for approval, § 252(e)(1), which may reject it if it discriminates against a carrier not a party or is not consistent with “the public interest, convenience, and necessity,” § 252(e)(2)(A).
As required by .the Act, the incumbent LEG in Maryland, petitioner Verizon Maryland Inc., formerly known as Bell Atlantic Maryland, Inc., negotiated an interconnection agreement with competitors, including MFS Intelenet of Maryland, later acquired by respondent MCI WorldCom, Inc. The Maryland Public Service Commission (Commission) approved the agreement. Six months later, Verizon informed WorldCom that it would no longer pay reciprocal compensation for telephone calls made by Verizon’s customers to the local access numbers of Internet Service Providers (ISPs), claiming that ISP traffic was not “local traffic” subject to the reciprocal compensation agreement because ISPs connect customers to distant Web sites. WorldCom disputed Verizon’s claim and filed a complaint with the Commission. The Commission found in favor of WorldCom, ordering Verizon “to timely forward all future interconnection payments owed [WorldCom] for telephone calls placed to an ISP” and to pay WorldCom any reciprocal compensation that it had withheld pending resolution of the dispute. Verizon appealed to a Maryland state court, which affirmed the order.
Subsequently, the Federal Communications Commission (FCC) issued a ruling — later vacated by the Court of Appeals for the District of Columbia Circuit, see Bell Atlantic Tel. Cos. v. FCC, 206 F. 3d 1 (2000) — which categorized ISP-bound calls as nonlocal for purposes of reciprocal compensation but concluded that, absent a federal compensation mechanism for those calls, state commissions could construe interconnection agreements as requiring reciprocal compensation. Verizon filed a new complaint with the Commission, arguing that the FCC ruling established that Verizon was no longer required to provide reciprocal compensation for ISP traffic. In a 3-to-2 decision, the Commission rejected this contention, concluding that, as a matter of state contract law, WorldCom and Verizon had agreed to treat ISP-bound calls as local traffic subject to reciprocal compensation.
Verizon filed an action in the United States District Court for the District of Maryland, citing 47 U. S. C. § 252(e)(6) and 28 U. S. C. § 1331 as the basis for jurisdiction, and naming as defendants the Commission, its individual members in their official capacities, WorldCom, and other competing LECs. In its complaint, Verizon sought declaratory and injunctive relief from the Commission’s order, alleging that the determination that Verizon must pay reciprocal compensation to WorldCom for ISP traffic violated the 1996 Act and the FCC ruling.
The District Court dismissed the action, and a divided panel of the Court of Appeals for the Fourth Circuit affirmed. 240 F. 3d 279 (2001). The Fourth Circuit held that the Commission had not waived its immunity from suit by voluntarily participating in the regulatory scheme set up under the 1996 Act, and that the doctrine of Ex parte Young, 209 U. S. 123 (1908), does not permit suit against the individual commissioners in their official capacities. It then held that neither 47 U. S. C. § 252(e)(6) nor 28 U. S. C. § 1331 provides a basis for jurisdiction over Verizon’s claims against the private defendants. Both Verizon and the United States, an intervenor below, petitioned this Court for review of the four questions resolved by the Fourth Circuit. Because we had previously granted certiorari in Mathias v. WorldCom Technologies, Inc., 532 U. S. 903 (2001), which raised all but the question whether § 1331 provides a basis for jurisdiction, we granted certiorari only on the §1331 question and set the case for oral argument in tandem with Mathias. 533 U. S. 928 (2001). After oral argument, for reasons explained in our decision in Mathias released today, post, p. 682, we granted certiorari on the remaining three questions presented in these cases. 534 U. S. 1072 (2001).
II
WorldCom, Verizon, and the United States contend that 47 U.S.C. §252(e)(6) and 28 U.S.C. §1331 independently grant federal courts subject-matter jurisdiction to determine whether the Commission’s order requiring that Verizon pay WorldCom reciprocal compensation for ISP-bound calls violates the 1996 Act. Section 252 sets forth procedures relating to formation and commission approval of interconnection agreements, and commission approval and continuing review of interconnection terms and conditions (called “[statements of generally available terms,” § 252(f)) filed by LECs. Section 252(e)(6) provides, in relevant part: “In any case in which a State commission makes a determination under this section, any party aggrieved by such determination may bring an action in an appropriate Federal district court to determine whether the agreement or statement meets the requirements of section 251 of this title and this section.” The determination at issue here is neither the approval or disapproval of a negotiated agreement nor the approval or disapproval of a statement of generally available terms. WorldCom, Verizon, and the United States argue, however, that a state commission’s authority under § 252 implicitly encompasses the authority to interpret and enforce an interconnection agreement that the commission has approved, and that an interpretation or enforcement decision is therefore a “determination under [§ 252]” subject to federal review. Whether the text of § 252(e)(6) can be so construed is a question we need not decide. For we agree with the parties’ alternative contention, that even if § 252(e)(6) does not confer jurisdiction, it at least does not divest the district courts of their authority under 28 U. S. C. § 1331 to review the Commission’s order for compliance with federal law.
Verizon alleged in its complaint that the Commission violated the Act and the FCC ruling when it ordered payment of reciprocal compensation for ISP-bound calls. Verizon sought a declaratory judgment that the Commission’s order was unlawful, and an injunction prohibiting its enforcement. We have no doubt that federal courts have jurisdiction under § 1331 to entertain such a suit. Verizon seeks relief from the Commission’s order “on the ground that such regulation is pre-empted by a federal statute which, by virtue of the Supremacy Clause of the Constitution, must prevail,” and its claim “thus presents a federal question which the federal courts have jurisdiction under 28 U. S. C. § 1331 to resolve.” Shaw v. Delta Air Lines, Inc., 463 U. S. 85, 96, n. 14 (1983).
The Commission contends that since the Act does not create a private cause of action to challenge the Commission’s order, there is no jurisdiction to entertain such a suit. We need express no opinion on the premise of this argument. “It is firmly established in our cases that the absence of a valid (as opposed to arguable) cause of action does not implicate subject-matter jurisdiction, i. e., the courts’ statutory or constitutional power to adjudicate the case.” Steel Co. v. Citizens for Better Environment, 523 U. S. 83, 89 (1998). As we have said, “the district court has jurisdiction if ‘the right of the petitioners to recover under their complaint will be sustained if the Constitution and laws of the United States are given one construction and will be defeated if they are given another,’ unless the claim ‘clearly appears to be immaterial and made solely for the purpose of obtaining jurisdiction or where such a claim is wholly insubstantial and frivolous.’” Ibid, (citations omitted). Here, resolution of Verizon’s claim turns on whether the Act, or an FCC ruling issued thereunder, precludes the Commission from ordering payment of reciprocal compensation, and there is no suggestion that Verizon’s claim is “ ‘immaterial’ ” or “ ‘wholly insubstantial and frivolous.’ ” Ibid.
Verizon’s claim thus falls within 28 U. S. C. § 1331’s general grant of jurisdiction, and contrary to the Fourth Circuit’s conclusion, nothing in 47 U. S. C. § 252(e)(6) purports to strip this jurisdiction. Section 252(e)(6) provides for federal review of an agreement when a state commission “makes a determination under [§ 252].” If this does not include (as WorldCom, Verizon, and the United States claim it does) the interpretation or enforcement of an interconnection agreement, then § 252(e)(6) merely makes some other actions by state commissions reviewable in federal court. This is not enough to eliminate jurisdiction under § 1331. Although the situation is not precisely parallel (in that here the elimination of federal district-court review would not amount to the elimination of all review), we think what we said in Abbott Laboratories v. Gardner, 387 U. S. 136, 141 (1967), is nonetheless apt: “The mere fact that some acts are made reviewable should not suffice to support an implication of exclusion as to others.” (Internal quotation marks and citation omitted.) And here there is nothing more than that mere fact. Section 252 does not establish a distinctive review mechanism for the commission actions that it covers (the mechanism is the same as § 1331: district-court review), and it does not distinctively limit the substantive relief available. Cf. United States v. Fausto, 484 U. S. 439, 448-449 (1988). Indeed, it does not even mention subject-matter jurisdiction, but reads like the conferral of a private right of action (“[A]ny party aggrieved by such determination may bring an action in an appropriate Federal district court,” § 252(e)(6)). Cf. Steel Co., supra, at 90-91 (even a statutory provision that uses the word “jurisdiction” may not relate to “subject-matter jurisdiction”); see also Davis v. Passman, 442 U. S. 228, 239, n. 18 (1979).
And finally, none of the other provisions of the Act evince any intent to preclude federal review of a commission determination. If anything, they reinforce the conclusion that § 252(e)(6)’s silence on the subject leaves the jurisdictional grant of § 1331 untouched. For where otherwise applicable jurisdiction was meant to be excluded, it was excluded expressly. Section 252(e)(4) provides: “No State court shall have jurisdiction to review the action of a State commission in approving or rejecting an agreement under this section.” In sum, nothing in the Act displays any intent to withdraw federal jurisdiction under § 1331; we will not presume that the statute means what it neither says nor fairly implies.
III
The Commission nonetheless contends that the Eleventh Amendment bars Verizon’s claim against it and its individual commissioners. WorldCom, Verizon, and the United States counter that the Commission is subject to suit because it voluntarily participated in the regulatory regime established by the Act. Whether the Commission waived its immunity is another question we need not decide, because — as the same parties also argue — even absent waiver, Verizon may proceed against the individual commissioners in their official capacities, pursuant to the doctrine of Ex parte Young, 209 U. S. 123 (1908).
In determining whether the doctrine of Ex parte Young avoids an Eleventh Amendment bar to suit, a court need only conduct a “straightforward inquiry into whether [the] complaint alleges an ongoing violation of federal law and seeks relief properly characterized as prospective.” Idaho v. Coeur d’Alene Tribe of Idaho, 521 U. S. 261, 296 (1997) (O’Connor, J., joined by Scalia and Thomas, JJ., concurring in part and concurring in judgment); see also id., at 298-299 (Souter, J., joined by Stevens, Ginsburg, and Breyer, JJ., dissenting). Here Verizon sought injunctive and declaratory relief, alleging that the Commission’s order requiring payment of reciprocal compensation was preempted by the 1996 Act and an FCC ruling. The prayer for injunctive relief — that state officials be restrained from enforcing an order in contravention of controlling federal law — clearly satisfies our “straightforward inquiry.” We have approved injunction suits against state regulatory commissioners in like contexts. See, e. g., Prentis v. Atlantic Coast Line Co., 211 U. S. 210, 230 (1908) (“[W]hen the rate is fixed a bill against the commission to restrain the members from enforcing it will not be bad ... as a suit against a State, and will be the proper form of remedy”); Alabama Pub. Serv. Comm’n v. Southern R. Co., 341 U. S. 341, 344, n. 4 (1951); McNeill v. Southern R. Co., 202 U. S. 543 (1906); Smyth v. Ames, 169 U. S. 466 (1898); Reagan v. Farmers' Loan & Trust Co., 154 U. S. 362 (1894). Indeed, Ex parte Young itself was a suit against state officials (including state utility commissioners, though only the state attorney general appealed) to enjoin enforcement of a railroad commission’s order requiring a reduction in rates. 209 U. S., at 129. As for Verizon’s prayer for declaratory relief: That, to be sure, seeks a declaration of the past, as well as the future, ineffectiveness of the Commission’s action, so that the past financial liability of private parties may be affected. But no past liability of the State, or of any of its commissioners, is at issue. It does not impose upon the State “a monetary loss resulting from a past breach of a legal duty on the part of the defendant state officials.” Edelman v. Jordan, 415 U. S. 651, 668 (1974). Insofar as the exposure of the State is concerned, the prayer for declaratory relief adds nothing to the prayer for injunction.
The Fourth Circuit suggested that Verizon’s claim could not be brought under Ex parte Young, because the Commission’s order was probably not inconsistent with federal law after all. 240 F. 3d, at 295-297. The court noted that the FCC ruling relied upon by Verizon does not seem to require compensation for ISP traffic; that the Court of Appeals for the District of Columbia Circuit has vacated the ruling; and that the Commission interpreted the interconnection agreement under state contract-law principles. It may (or may not) be true that the FCC’s since-vacated ruling does not support Verizon’s claim; it may (or may not) also be true that state contract law, and not federal law as Verizon contends, applies to disputes regarding the interpretation of Verizon’s agreement. But the inquiry into whether suit lies under Ex parte Young does not include an analysis of the merits of the claim. See Coeur d'Alene, supra, at 281 ("An allegation of an ongoing violation of federal law ... is ordinarily sufficient” (emphasis added)).
Nor does the 1996 Act display any intent to foreclose jurisdiction under Ex parte Young — as we concluded the Indian Gaming Regulatory Act did in Seminole Tribe of Fla. v. Florida, 517 U. S. 44 (1996). There an Indian Tribe sued the State of Florida for violating a duty to negotiate imposed under that Act, 25 U. S. C. § 2710(d)(3). Congress had specified the means to enforce that duty in § 2710(d)(7), a provision “intended ... not only to define, but also to limit significantly, the duty imposed by § 2710(d)(3).” 517 U. S., at 74. The “intricate procedures set forth in that provision” prescribed that a court could issue an order directing the State to negotiate, that it could require the State to submit to mediation, and that it could order that the Secretary of the Interior be notified. Id., at 74-75. We concluded that “this quite modest set of sanctions” displayed an intent not to provide the “more complete and more immediate relief” that would otherwise be available under Ex parte Young. 517 U. S., at 75. Permitting suit under Ex parte Young was thus inconsistent with the “detailed remedial scheme,” 517 U. S., at 74 — and the limited one — that Congress had prescribed to enforce the State’s statutory duty to negotiate. The Commission’s argument that § 252(e)(6) constitutes a detailed and exclusive remedial scheme like the one in Seminole Tribe, implicitly excluding Ex parte Young actions, is without merit. That section provides only that when state commissions make certain “determinations,” an aggrieved party may bring suit in federal court to establish compliance with the requirements of §§251 and 252. Even with regard to the “determinations” that it covers, it places no restriction on the relief a court can award. And it does not even say whom the suit is to be brought against — the state commission, the individual commissioners, or the carriers benefiting from the state commission’s order. The mere fact that Congress has authorized federal courts to review whether the Commission’s action complies with §§251 and 252 does not without more “impose upon the State a liability that is significantly more limited than would be the liability imposed upon the state officer under Ex parte Young.” Seminole Tribe, supra, at 75-76.
* * *
We conclude that 28 U. S. C. § 1331 provides a basis for jurisdiction over Verizon’s claim that the Commission’s order requiring reciprocal compensation for ISP-bound calls is pre-empted by federal law. We also conclude that the doctrine of Ex parte Young permits Verizon’s suit to go forward against the state commissioners in their official capacities. We vacate the judgment of the Court of Appeals and remand these cases for further proceedings consistent with this opinion.
It is so ordered.
Justice O’Connor took no part in the consideration or decision of these cases.
Section 1.61 of the interconnection agreement provides: ‘“Reciprocal Compensation’ is As Described in the Act, and refers to the payment arrangements that recover costs incurred for the transport and termination of Local Traffic originating on one Party’s network and terminating on the other Party’s network.” In turn, §1.44 defines “‘Local Traffic’” as “traffic that is originated by a Customer of one Party on that Party’s network and terminates to a Customer of the other Party on that other Party’s network, .within a given local calling area, or expanded area service (‘EAS’) area, as defined in [Bell Atlantic’s] effective Customer tariffs. Local Traffic does not include traffic originated or terminated by a commercial mobile radio service carrier.”
The Fourth Circuit suggested that both Maryland law and the Federal Communications Act of 1934 grant the Commission authority to interpret and enforce interconnection agreements that it approves under §252. 240 F. 3d 279, 304 (2001) (citing 47 U. S. C. § 152(b), and Md. Pub. Util. Cos. Code Ann. §2-113 (1998)). The parties dispute whether it is in fact federal or state law that confers this authority, but no party contends that the Commission lacked jurisdiction to interpret and enforce the agreement.
The Commission also suggests that the Rooker-Feldman doctrine precludes a federal district court from exercising jurisdiction over Verizon’s claim. See District of Columbia Court of Appeals v. Feldman, 460 U. S. 462 (1983); Rooker v. Fidelity Trust Co., 263 U. S. 413 (1923). The Rooker-Feldman doctrine merely recognizes that 28 U. S. C. § 1331 is a grant of original jurisdiction, and does not authorize district courts to exercise appellate jurisdiction over state-court judgments, which Congress has reserved to this Court, see § 1257(a). The doctrine has no application to judicial review of executive action, including determinations made by a state administrative agency. | 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
] | sc_adminaction |
NATIONAL LABOR RELATIONS BOARD v. OCHOA FERTILIZER CORP. et al.
No. 37.
Argued November 16, 1961.
Decided December 18, 1961.
Solicitor General Cox argued the cause for petitioner. With him on the brief were Stuart Rothman, Dominick L. Manoli and Norton J. Come.
No appearance for respondents.
Mr. Justice Brennan
delivered the opinion of the Court.
The respondents, an employer and two labor organizations, waived the procedures for adjudgment of the allegations of an unfair labor practice complaint issued against them under the National Labor Relations Act, and agreed upon the form of a cease-and-desist order to be entered by the National Labor Relations Board against them. The complaint alleged that the employer violated §8 (a)(1), (2) and (3), and the labor organizations § 8 (b) (1) (A) and (2), of the Act, as amended, by executing and maintaining a collective bargaining agreement which conditioned employment upon union membership, vested the respondent unions with exclusive control over hiring, and provided for the checkoff of union dues and fees. The prohibitions of the consent order were not limited to the relationship between the employer and the two labor organizations. The respondent employer was directed to refrain from performing, maintaining or giving effect to such an agreement with the respondent unions, “or any other labor organization,” and from otherwise unlawfully encouraging membership in the respondent unions, “or any other labor organization,” by discrimination as to hire, tenure, or terms or conditions of employment ; and the respondent unions were directed to refrain from performing, maintaining, or giving effect to such an agreement with the respondent employer, “or any other employer, over which the Board will assert jurisdiction,” and from otherwise causing or attempting to cause the respondent employer, “or any other employer over which the Board will assert jurisdiction” to discharge, refuse to hire, or otherwise discriminate against any employee in violation of § 8 (a) (3) of the Act.
The respondents also agreed that “any United States Court of Appeals for any appropriate circuit may on application by the Board, enter a decree enforcing the Order of the Board . . . ,” and that “Respondents waive all defenses to the entry of the decree . . . .” R. 29. The Board petitioned the Court of Appeals for the First Circuit for enforcement of the order pursuant to § 10 (e) of the Act. The enforcement petition submitted the order in the form agreed upon and recited the terms of the settlement stipulation.
The Court of Appeals, sua sponte, and initially without filing an opinion giving reasons supporting its action, entered a decree which excised the phrases “or any other labor organization” and “or any other employer over which the Board will assert jurisdiction” wherever they appeared in the consent order and the compliance notices, and enforced the order as so modified. Subsequently, on the Board’s second motion for reconsideration, the Court reconsidered its action in light of the opinion of the Court of Appeals for the Second Circuit in Labor Board v. Combined Century Theatres, Inc., 46 LRR Man. 2858. That case held that in the face of a like stipulation “and in the absence of any exception to the order taken before the Board or the showing of any extraordinary circumstances, the Court will not consider respondents’ objections.” The motipn for rehearing was denied in an opinion covering the present case and six others in which the Court of Appeals had similarly modified orders entered by the Board. 283 F. 2d 26. Because we believed the case presented an important question of authority of the Court of Appeals in the premises we granted certiorari. 365 U. S. 833.
The authority of the Court of Appeals to modify Board orders when the Board petitions for their enforcement derives from the provision of § 10 (e) authorizing the court “to make and enter a decree enforcing, modifying, and enforcing as so modified, or setting aside in whole or in part the order of the Board.” However, the immediately following sentence of § 10 (e) provides that “No objection that has not been urged before the Board, its member, agent, or agency, shall be considered by the court, unless the failure or neglect to urge such objection shall be excused because of extraordinary circumstances.” At least when the Board has not “patently traveled outside the orbit of its authority,” Labor Board v. Cheney California Lumber Co., 327 U. S. 385, 388, our cases have uniformly held that in the absence of a showing within the statutory exception of “extraordinary circumstances” the failure or neglect of the respondent to urge an objection in the Board's proceedings forecloses judicial consideration of the objection in enforcement proceedings. Marshall Field & Co. v. Labor Board, 318 U. S. 253; May Department Stores Co. v. Labor Board, 326 U. S. 376, 386, n. 5; Labor Board v. Cheney California Lumber Co., supra; Labor Board v. Seven-Up Bottling Co., 344 U. S. 344, 350; Labor Board v. District 50, 355 U. S. 453, 463-464. These cases involved contested proceedings before the Board, as did Labor Board v. Express Publishing Co., 312 U. S. 426, and Communications Workers v. Labor Board, 362 U. S. 479, upon which the Court of Appeals relied. The limitation of § 10 (e) applies a fortiori to the consideration of an objection to enforcement made by a respondent who has consented to the terms of the order. See Labor Board v. Combined Century Theatres, Inc., supra.
We understand the opinion of the Court of Appeals to hold that the limitation of § 10 (e) is inapplicable when the record contains no findings or facts supporting the order — that “affirmative reasons must appear to warrant broad injunctions.” 283 F. 2d, at 29-30. The Court noted that there were no such findings or facts in this record — not even a “stipulation disclosing facts which warrant broad relief.” Id., at 31. The court reasoned that the limitation of § 10 (e) was therefore no barrier to its sua sponte revision of the order and stated that “We do not think that consent makes the difference.” Id., at 31. Contrary to the Court of Appeals, we think that consent makes a significant difference; it relieves the Board of the very necessity of making a supporting record. A decree rendered by consent “is always affirmed, without considering the merits of the cause.” Nashville, Chattanooga & St. Louis R. Co. v. United States, 113 U. S. 261, 266. There are not here applicable any of the exceptions, such as a claim of lack of actual consent, or of fraud in the procurement of the order, or of lack of federal jurisdiction. See Swift & Co. v. United States, 276 U. S. 311, 324.
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’s order.
It is so ordered.
Mr. Justice Douglas dissents.
The complaint issued on amended charges filed by an individual denied employment. It issued in the name of the Regional Director for the 24th Region, Puerto Rico, acting on behalf of the General Counsel. The settlement agreement was reached following the issuance of the complaint. The respondents stipulated that they expressly waived “a hearing, an Intermediate Report of a Trial Examiner, the filing of exceptions to such Intermediate Report, oral arguments before the Board, and all further and other proceedings to which [they] . . . may be entitled . . . under the Act or the Rules and Regulations of the Board.” R. 23. See 49 Stat. 453, as amended, 29 U. S. C. § 160 (b), (c); 29 CFR, 1961 Cum. Supp., §§ 101.9, 102.46.
The consent order also provided for the posting in English and in Spanish of agreed-upon forms of compliance notices.
Section 10 (e), 49 Stat. 454, as amended, 29 U. S. C. § 160 (e), is as follows:
“(e) Petition to court for enforcement of order; proceedings; review of judgment.
“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. Upon the filing of such petition, the court shall cause notice thereof to be served upon such person, and thereupon shall have jurisdiction of the proceeding and of the question determined therein, and shall have power to grant such temporary relief or restraining order as it deems just and proper, and to make and enter a decree enforcing, modifying, and enforcing as so modified, or setting aside in whole or in part the order of the Board. No objection that has not been urged before the Board, its member, agent, or agency, shall be considered by the court, unless the failure or neglect to urge such objection shall be excused because of extraordinary circumstances. The findings of the Board with respect to questions of fact if supported by substantial evidence on the record considered as a whole shall be conclusive. If either party shall apply to the court for leave to adduce additional evidence and shall show to the satisfaction of the court that such additional evidence is material and that there were reasonable grounds for the failure to adduce such evidence in the hearing before the Board, its member, agent, or agency, the court may order such additional evidence to be taken before the Board, its member, agent, or agency, and to be made a part of the record. The Board may modify its findings as to the facts, or make new findings by reason of additional evidence so taken and filed, and it shall file such modified or new findings, which findings with respect to questions of fact if supported by substantial evidence on the record considered as a whole shall be conclusive, and shall file its recommendations, if any, for the modification or setting aside of its original order. Upon the fifing of the record with it the jurisdiction of the court shall be exclusive and its judgment and decree shall be final, except that the same shall be subject to review by the appropriate United States court of appeals if application was made to the district court as here-inabove provided, and by the Supreme Court of the United States upon writ of certiorari or certification as provided in section 1254 of Title 28.”
The respondents honored their agreement not to contest the enforcement of the consent order both in the Court of Appeals and in this Court. Only the Board appeared by the Solicitor General in this Court to brief and argue the cause.
Two of the cases are presently pending in this Court on petition for writ of certiorari. Labor Board v. Las Vegas Sand & Gravel Corp., certiorari granted later and judgment reversed, post, p. 400; Labor Board v. Local 476, Plumbers, certiorari granted later and judgment reversed, post, p. 401.
The order here consented to would be within the Board’s authority under appropriate circumstances. See, e. g., Labor Board v. Springfield Building & Construction Trades Council, 262 F. 2d 494, 498-499. | 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
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ZEMEL v. RUSK, SECRETARY OF STATE, et al.
No. 86.
Argued March 1, 1965.
Decided May 3, 1965.
Leonard B. Boudin argued the cause for appellant. With him on the briefs were Victor Babinowitz and Samuel Gruber.
Solicitor General Cox argued the cause for appellees. With him on the brief were Assistant Attorney General Yeagley, Daniel M. Friedman, Bruce J. Terris, Kevin T. Maroney and Lee B. Anderson.
Edward J. Ennis and Melvin L. Wulj filed a brief for the American Civil Liberties Union, as amicus curiae, urging reversal.
Isidore Englander and Joseph Forer filed a brief for Anatol Schlosser, as amicus curiae.
Mr. Chief Justice Warren
delivered the opinion of the Court.
The questions for decision are whether the Secretary of State is statutorily authorized to refuse to validate the passports of United States citizens for travel to Cuba, and, if he is, whether the exercise of that authority is constitutionally permissible. We answer both questions in the affirmative.
Prior to 1961 no passport was required for travel anywhere in the Western Hemisphere. On January 3 of that year, the United States broke diplomatic and consular relations with Cuba. On January 16 the Department of State eliminated Cuba from the area for which passports were not required, and declared all outstanding United States passports (except those held by persons already in Cuba) to be invalid for travel to or in Cuba “unless specifically endorsed for such travel under the authority of the Secretary of State.” A companion press release stated that the Department contemplated granting exceptions to “persons whose travel may be regarded as being in the best interests of the United States, such as newsmen or businessmen with previously established business interests.”
Through an exchange of letters in early 1962, appellant, a citizen of the United States and holder of an otherwise valid passport, applied to the State Department to have his passport validated for travel to Cuba as a tourist. His request was denied. On October 30, 1962, he renewed the request, stating that the purpose of the proposed trip was “to satisfy my curiosity about the state of affairs in Cuba and to make me a better informed citizen.” The request again was denied, on the ground that the purpose of the trip did not meet the previously prescribed standards for such travel.
On December 7, 1962, appellant instituted this suit against the Secretary of State and the Attorney General in the United States District Court for the District of Connecticut, seeking a judgment declaring: (1) that he was entitled under the Constitution and laws of the United States to travel to Cuba and to have his passport validated for that purpose; (2) that his travel to Cuba and the use of his passport for that purpose would not violate any statute, regulation, or passport restriction; (3) that the Secretary’s restrictions upon travel to Cuba were invalid; (4) that the Passport Act of 1926 and § 215 of the Immigration and Nationality Act of 1952 were unconstitutional; (5) that the Secretary’s refusal to grant him a passport valid for Cuba violated rights guaranteed him by the Constitution and the United Nations Declaration of Human Rights; and (6) that denial of the passport endorsement without a formal hearing violated his rights under the Fifth Amendment. The complaint also requested that the Secretary be directed to validate appellant’s passport for travel to Cuba and that the Secretary and the Attorney General be enjoined from interfering with such travel. In his amended complaint, appellant added to his constitutional attack on the 1926 and 1952 Acts a prayer that the Secretary and the Attorney General be enjoined from enforcing them.
On appellant’s motion, and over the objection of appellees, a three-judge court was convened. On cross-motions for summary judgment, the court, by a divided vote, granted the Secretary of State’s motion for summary judgment and dismissed the action against the Attorney General, 228 F. Supp. 65 (D. C. D. Conn. 1964). We postponed consideration of the jurisdictional question to the hearing of the case on the merits, 379 U. S. 809.
I.
A direct appeal to this Court from a district court lies under 28 U. S. C. § 1253 (1958 ed.) only “from an order granting or denying... an interlocutory or permanent injunction in any civil action, suit or proceeding required by any Act of Congress to be heard and determined by a district court of three judges.” Thus we must deal first with the Government’s contention that a three-judge court was improperly convened, for if the contention is correct, this Court lacks jurisdiction over the appeal. Phillips v. United States, 312 U. S. 246, 248.
Section 2282 of Title 28 of the United States Code requires the impanelling of a three-judge court in any case where the relief sought is “[a]n interlocutory or permanent injunction restraining the enforcement, operation or execution of any Act of Congress for repugnance to the Constitution of the United States....” On its face, appellant’s amended complaint, by calling upon the court below to enjoin the enforcement of the Passport Act of 1926 and § 215 of the Immigration and Nationality Act of 1952,-on the ground that those statutes are unconstitutional, meets the requirements of § 2282. The Solicitor General notes that appellant would be accorded full relief by the voiding of the Secretary’s order. It is true that appellant’s argument — that either the Secretary’s order is not supported by the authority granted him by Congress, or the statutes granting that authority are unconstitutional — is two-pronged. But we have often held that a litigant need not abandon his nonconstitutional arguments in order to obtain a three-judge court: “the joining in the complaint of a nonconstitutional attack along with the constitutional one does not dispense with the necessity to convene such a court.”
The Solicitor General, apparently conceding — as all three judges below agreed — that appellant’s Fifth Amendment attack is substantial, cf. Kent v. Dulles, 357 U. S. 116, 125; Aptheker v. Secretary of State, 378 U. S. 500, 505-506, argues that it is in reality an attack upon an administrative, as opposed to a legislative, policy, and therefore, under cases like Phillips v. United States, 312 U. S. 246, and Ex parte Bransford, 310 U. S. 354, a three-judge court need not have been convened. We need not evaluate this contention, for appellant’s complaint also attacks the 1926 and 1952 Acts on the ground that “they contain no standards and are therefore an invalid delegation of legislative power.” This allegation cannot be brushed aside as an attack upon the actions of the Secretary; in arguing invalid delegation, appellant has quite clearly assailed the statutes themselves. The Solicitor General therefore meets the delegation argument on another ground: by labeling it “frivolous.” Although we do not accept appellant’s delegation argument, infra, pp. 17-18, we cannot agree that it is so insubstantial as to compel a district court to read it out of the complaint and refuse to convene a three-judge court. Compare William Jameson & Co. v. Morgenthau, 307 U. S. 171; Schneider v. Rusk, 372 U. S. 224. Indeed, we explicitly noted in Kent v. Dulles, supra, at 129, that if we had held that the Secretary’s refusal to issue a passport to petitioner in that case was supported by the 1926 and 1952 Acts, we would then have been obliged to consider whether those Acts were void for invalid delegation.
The complaint therefore launches a substantial constitutional attack upon two federal statutes, and prays that their operation be enjoined. Cf. Idlewild Liquor Corp. v. Epstein, 370 U. S. 713, 715. We hold that the three-judge court was properly convened, and that we therefore have jurisdiction over the appeal.
H-1 I — i
We think that the Passport Act of 1926, 44 Stat. 887, 22 U. S. C. § 211a (1958 ed.), embodies a grant of authority to the Executive to refuse to validate the passports of United States citizens for travel to Cuba. That Act provides, in pertinent part:
“The Secretary of State may grant and issue passports... under such rules as the President shall designate and prescribe for and on behalf of the United States....”
This provision is derived from § 23 of the Act of August 18, 1856, 11 Stat. 52, 60-61, which had, prior to 1926, been re-enacted several times without substantial change. The legislative history of the 1926 Act and its predecessors does not, it is true, affirmatively indicate an intention to authorize area restrictions. However, its language is surely broad enough to authorize area restrictions, and there is no legislative history indicating an intent to exclude such restrictions from the grant of authority; these factors take on added significance when viewed in light of the fact that during the decade preceding the passage of the Act, the Executive had imposed both peacetime and wartime area restrictions. As a result of a famine in Belgium in 1915, the State Department stopped issuing passports for use in that country except to “applicants obliged to go thither by special exigency or authorized by Red Cross or Belgian Relief Commission.” Ill Hack-worth, Digest of International Law, p. 526 (1942). Beginning December 9, 1914, and continuing through World War I, passports were validated only for specific purposes and specific countries. No passports were issued for travel in Germany and Austria until July 18, 1922, and none for the Soviet Union until approximately September 1923. Hearings before the Senate Committee on Foreign Relations on Department of State Passport Policies, 85th Cong., 1st Sess., pp. 63-64. The use in the 1926 Act of language broad enough to permit executive imposition of area restrictions, after the Executive had several times in the recent past openly asserted the power to impose such restrictions under predecessor statutes containing substantially the same language, supports the conclusion that Congress intended in 1926 to maintain in the Executive the authority to make such restrictions.
This construction of the Act is reinforced by the State Department’s continued imposition of area restrictions during both times of war and periods of peace since 1926. For a period of about seven months following the outbreak of war between Italy and Ethiopia in 1935, the Department declined to issue passports for travel in Ethiopia, except to journalists, Red Cross representatives, and others able to show a “compelling exigency” necessitating such travel. In cases where persons did not include Ethiopia in their applications, but were — -by reason of the mention in their applications of adjacent countries — suspected of intending to travel therein, their passports were stamped “not valid for use in Ethiopia.” Ill Hackworth, su-pra, pp. 531-532. Following the outbreak of the Spanish Civil War in 1936, passports were stamped “not valid for travel in Spain,” with exceptions for newspapermen and persons furnishing medical assistance. Id., at 533-534. A similar restriction was placed on travel to China in August 1937, in view of “the disturbed situation in the Far East.” Passports were validated for travel to China only “in exceptional circumstances,” and in no case for women or children. Id., at 532-533.
On March 31, 1938, the President, purporting to act pursuant to the 1926 Act, specifically authorized the Secretary to impose area restrictions in the issuance of passports, Exec. Order No. 7856, 3 Fed. Reg. 681, 687:
“The Secretary of State is authorized in his discretion to refuse to issue a passport, to restrict a passport for use only in certain countries, to restrict it against use in certain countries, to withdraw or cancel a passport already issued, and to withdraw a passport for the purpose of restricting its validity or use in certain countries.”
This Executive Order is still in force. 22 CFR § 51.75. In September 1939, travel to Europe was prohibited except with a passport specially validated for such travel; passports were so validated only upon a showing of the “imperativeness” of the travel. Departmental Order No. 811, 4 Fed. Reg. 3892.
Area restrictions have also been imposed on numerous occasions since World War II. Travel to Yugoslavia was restricted in the late 1940’s as a result of a series of incidents involving American citizens. Dept. State Press Conf., May 9, 1947. Travel to Hungary was restricted between December 1949 and May 1951, and after December 1951. In June 1951, the State Department began to stamp passports “not valid for travel in Czechoslovakia,” and declared that all passports outstanding at that time were not valid for such travel. 24 Dept. State Bull. 932. In May 1952, the Department issued a general order that all new passports would be stamped not valid for travel to Albania, Bulgaria, Communist China, Czechoslovakia, Hungary, Poland, Rumania and the Soviet Union. 26 id., at 736. In October 1955, the Secretary announced that passports would no longer require special validation for travel to Czechoslovakia, Hungary, Poland, Rumania and the Soviet Union, but would be stamped invalid for travel “to the following areas under control of authorities with which the United States does not have diplomatic relations: Albania, Bulgaria, and those portions of China, Korea and Viet-Nam under communist control.” 33 id:, at 777. In February 1956, the restriction on travel to Hungary was reimposed. 34 id., at 246-248. And in late 1956, passports were for a brief period stamped invalid for travel to or in Egypt, Israel, Jordan and Syria. 35 id., at 756.
Even if there had been no passport legislation enacted since the 1926 Act, the post-1926 history of executive imposition of area restrictions, as well as the pre-1926 history, would be of relevance to our construction of the Act. The interpretation expressly placed on a statute by those charged with its administration must be given weight by courts faced with the task of construing the statute. Udall v. Tollman, 380 U. S. 1, 16-18; Norwegian Nitrogen Co. v. United States, 288 U. S. 294, 315. Under some circumstances, Congress’ failure to repeal or revise in the face of such administrative interpretation has been held to constitute persuasive evidence that that interpretation is the one intended by Congress. In this case, however, the inference is supported by more than mere congressional inaction. For in 1952 Congress, substantially re-enacting laws which had been passed during the First and Second World Wars, provided that after the issuance of a presidential proclamation of war or national emergency, it would be unlawful to leave or enter the United States without a valid passport. Section 215 of the Immigration and Nationality Act of 1952, 66 Stat. 190, 8 U. S. C. § 1185 (1958 ed.). The Solicitor General urges that in view of the issuance in 1953 of a presidential proclamation of national emergency which is still outstanding, travel in violation of an area restriction imposed on an otherwise valid passport is unlawful under the 1952 Act. The correctness of this interpretation is a question we do not reach on this appeal, see infra, pp. 18-20. But whether or not the new legislation was intended to attach criminal penalties to the violation of area restrictions, it certainly was not meant to cut back upon the power to impose such restrictions. Despite 26 years of executive interpretation of the 1926 Act as authorizing the imposition of area restrictions, Congress in 1952, though it once again enacted legislation relating to passports, left completely untouched the broad rule-making authority granted in the earlier Act. Cf. Norwegian Nitrogen Co. v. United States, supra, at 313.
This case is therefore not like Kent v. Dulles, supra, where we were unable to find, with regard to the sort of passport refusal involved there, an administrative practice sufficiently substantial and consistent to warrant the conclusion that Congress had implicitly approved it. Appellant reminds us that in summarizing the Secretary’s practice in Kent, we observed:
“So far as material here, the cases of refusal of passports generally fell into two categories. First, questions pertinent to the citizenship of the applicant and his allegiance to the United States had to be resolved by the Secretary.... Second, was the question whether the applicant was participating in illegal conduct, trying to escape the toils of the law, promoting passport frauds, or otherwise engaging in conduct which would violate the laws of the United States.” 357 U. S., at 127.
It must be remembered, in reading this passage, that the issue involved in Kent was whether a citizen could be denied a passport because of his political beliefs or associations. In finding that history did not support the position of the Secretary in that case, we summarized that history “so far as matérial here” — that is, so far as material to passport refusals based on the character of the particular applicant. In this case, however, the Secretary hgs refused to validate appellant’s passport not because of any characteristic peculiar to appellant, but rather because of foreign policy considerations affecting all citizens.
III.
Having concluded that the Secretary of State’s refusal to validate appellant’s passport for travel to Cuba is supported by the authority granted by Congress in the Passport Act of 1926, we must next consider whether that refusal abridges any constitutional right of appellant. Although we do not in this case reach the question of whether the 1952 Act should be read to attach criminal penalties to travel to an area for which one’s passport is not validated, we must, if we are to approach the constitutional issues presented by this appeal candidly, proceed on the assumption that the Secretary’s refusal to validate a passport for a given area acts as a deterrent to travel to that area. In Kent v. Dulles, supra, at 125, we held that “ft]he right to travel is a part of the ‘liberty’ of which the citizen cannot be deprived without due process of law under the Fifth Amendment.” See also Ap-theker v. Secretary of State, supra, at 505-506. However, the fact that a liberty cannot be inhibited without due process of law does not mean that it can under no circumstances be inhibited.
The requirements of due process are a function not only of the extent of the governmental restriction imposed, but also of the extent of the necessity for the restriction. Cuba is the only area in the Western Hemisphere controlled by a Communist government. It is, moreover, the judgment of the State Department that a major goal of the Castro regime is to export its Communist revolution to the rest of Latin America. The United States and other members of the Organization of American States have determined that travel between Cuba and the other countries of the Western Hemisphere is an important element in the spreading of subversion, and many have therefore undertaken measures to discourage such travel. It also cannot be forgotten that in the early days of the Castro regime, United States citizens were arrested and imprisoned without charges. We think, particularly in view of the President’s statutory obligation to “use such means, not amounting to acts of war, as he may think necessary and proper” to secure the release of an American citizen unjustly deprived of his liberty by a foreign government, that the Secretary has justifiably concluded that travel to Cuba by American citizens might involve the Nation in dangerous international incidents, and that the Constitution does not require him to validate passports for such travel.
The right to travel within the United States is of course also constitutionally protected, cf. Edwards v. California, 314 U. S. 160. But that freedom does not mean that areas ravaged by flood, fire or pestilence cannot be quarantined when it can be demonstrated that unlimited travel to the area would directly and materially interfere with the safety and welfare of the area or the Nation as a whole. So it is with international travel. That the restriction which is challenged in this case is supported by the weightiest considerations of national security is perhaps best pointed up by recalling that the Cuban missile crisis of October 1962 preceded the filing of appellant’s complaint by less than two months.
Appellant also asserts that the Secretary’s refusal to validate his passport for travel to Cuba denies him rights guaranteed by the First Amendment. His claim is different from that which was raised in Kent v. Dulles, supra, and Aptheker v. Secretary of State, supra, for the refusal to validate appellant’s passport does not result from any expression or association on his part; appellant is not being forced to choose between membership in an organization and freedom to travel. Appellant’s allegation is, rather, that the “travel ban is a direct interference with the First Amendment rights of citizens to travel abroad so that they might acquaint themselves at first hand with the effects abroad of our Government’s policies, foreign and domestic, and with conditions abroad which might affect such policies.” We must agree that the Secretary’s refusal to validate passports for Cuba renders less than wholly free the flow of information concerning that country. While we further agree that this is a factor to be considered in determining whether appellant has been denied due process of law, we cannot accept the contention of appellant that it is a First Amendment right which is involved. For to the extent that the Secretary’s refusal to validate passports for Cuba acts as an inhibition (and it would be unrealistic to assume that it does not), it is an inhibition of action. There are few restrictions on action which could not be clothed by ingenious argument in the garb of decreased data flow. For example, the prohibition of unauthorized entry into the White House diminishes the citizen’s opportunities to gather information he might find relevant to his opinion of the way the country is being run, but that does not make entry into the White House a First Amendment right. The right to speak and publish does not carry with it the unrestrained right to gather information.
Finally, appellant challenges the 1926 Act on the ground that it does not contain sufficiently definite standards for the formulation of travel controls by the Executive. It is important to bear in mind, in appraising this argument, that because of the changeable and explosive nature of contemporary international relations, and the fact that the Executive is immediately privy to information which cannot be swiftly presented to, evaluated by, and acted upon by the legislature, Congress — in giving the Executive authority over matters of foreign affairs — must of necessity paint with a brush broader than that it customarily wields in domestic areas.
“Practically every volume of the United States Statutes contains one or more acts or joint resolutions of Congress authorizing action by the President in respect of subjects affecting foreign relations, which either leave the exercise of the power to his unrestricted judgment, or provide a standard far more general than that which has always been considered requisite with regard to domestic affairs.” United States v. Curtiss-Wright Corp., 299 U. S. 304, 324.
This does not mean that simply because a statute deals with foreign relations, it can grant the Executive totally unrestricted freedom of choice. However, the 1926 Act contains no such grant. We have held, Kent v. Dulles, supra, and reaffirm today, that the 1926 Act must take its content from history: it authorizes only those passport refusals and restrictions “which it could fairly be argued were adopted by Congress in light of prior administrative practice.” Kent v. Dulles, supra, at 128. So limited, the Act does not constitute an invalid delegation.
IV.
Appellant’s complaint sought not only an order compelling the Secretary of State to validate his passport for travel to Cuba, but also a declaration that appellant “is entitled under the Constitution and laws of the United States to travel to Cuba,” and an order enjoining the Secretary and the Attorney General from interfering with such travel. Read in the context of the arguments appellant makes here, it appears that the intent of the complaint was that these latter prayers should be considered only in the event that the court decided that the Secretary lacks authority to refuse to validate appellant’s passport for Cuba. However, the complaint can- also be read to incorporate a request that, even if the court should find that the Secretary does have such authority, it go on to decide whether appellant can be criminally prosecuted, under § 215 (b) of the Immigration and Nationality Act of 1952, 66 Stat. 190, 8 U. S. C. § 1185 (b) (1958 ed.), for travel in violation of an area restriction. That section provides:
“After such proclamation as is provided for in subsection (a) has been made and published and while such proclamation is in force, it shall, except as otherwise provided by the President, and subject to such limitations and exceptions as the President may authorize and prescribe, be unlawful for any citizen of the United States to depart from or enter, or attempt to depart from or enter, the United States unless he bears a valid passport.”
A proclamation of the sort referred to was issued in 1953 and remains on the books. Pres. Proc. No. 3004, 67 Stat. c31; cf. Exec. Order No. 11037, 3 CFR 621 (1959-1963 Comp.). We hold that on either interpretation of the complaint, the court below was correct in refusing to reach the issue of criminal liability.
There are circumstances under which courts properly make exceptions to the general rule that equity will not interfere with the criminal processes, by entertaining actions for injunction or declaratory relief in advance of criminal prosecution. See Evers v. Dwyer, 358 U. S. 202; Terrace v. Thompson, 263 U. S. 197. However, the Declaratory Judgment Act, 28 U. S. C. § 2201 (1958 ed.), “is an enabling Act, which confers a discretion on the courts rather than an absolute right upon the litigant.” Public Serv. Comm’n v. Wycoff Co., 344 U. S. 237, 241. The complaint filed in this case does not specify the sort of travel to Cuba appellant has in mind — e. g., whether he plans to proceed to Cuba directly or travel there via one or more other countries. Nor can we tell from the papers filed whether the Government will, in the event appellant journeys to Cuba, charge him under § 215 (b) with leaving the United States on a carrier bound for Cuba with a passport not validated for Cuba; leaving the United States with such a passport with the intent of traveling to Cuba before he returns home; leaving the United States with such a passport on a journey which in fact takes him to Cuba; re-entering the United States with such a passport after having visited Cuba; some other act — or whether it will charge him at all. Whether each or any of these gradations of fact or charge would make a difference as to criminal liability is an issue on which the District Court wisely took no position. Nor do we. For if we are to avoid rendering a series of advisory opinions, adjudication of the reach and constitutionality of § 215 (b) must await a concrete fact situation. Compare Federation of Labor v. McAdory, 325 U. S. 450.
The District Court therefore correctly dismissed the complaint, and its judgment is
Affirmed.
This procedural claim was abandoned in the District Court and has not been urged here.
Florida Lime Growers v. Jacobsen, 362 U. S. 73, 80; see also Allen v. Grand Central Aircraft Co., 347 U. S. 535; Lee v. Bickell, 292 U. S. 415; Sterling v. Constantin, 287 U. S. 378.
See also Douglas v. Noble, 261 U. S. 165.
The convening of a three-judge court in this case surely coincides with the legislative policy underlying the passage of §2282:
“The legislative history of § 2282 and of its complement, § 2281... indicates that these sections were enacted to prevent a single federal judge from being able to paralyze totally the operation of an entire regulatory scheme, either state or federal, by issuance of a broad injunctive order.... Repeatedly emphasized during the congressional debates on § 2282 were the heavy pecuniary costs of the unforeseen and debilitating interruptions in the administration of federal law which could be wrought by a single judge’s order, and the great burdens entailed in coping with harassing actions brought one after another to challenge the operation of an entire statutory scheme, wherever jurisdiction over government officials could be acquired, until a judge was ultimately found who would grant the desired injunction.” Kennedy v. Mendoza-Martinez, 372 U. S. 144, 154-155.
Appellant in this case does not challenge merely a “single, unique exercise” of the Secretary’s authority, cf. Phillips v. United States, supra, at 253. On the contrary, this suit seeks to “paralyze totally the operation of an entire regulatory scheme,” indeed, a regulatory scheme designed and administered to promote the security of the Nation.
The Secretary of State, rather than the President, imposed the restriction on travel to Cuba. However, Congress has provided that “[t]he Secretary of State shall perform such duties as shall from time to time be enjoined on or intrusted to him by the President relative to... such... matters respecting foreign affairs as the President of the United States shall assign to the department... R. S. § 202, 5 U. S. C. § 156 (1958 ed.). The President, in turn, has authorized the Secretary in his discretion “to restrict a passport for use only in certain countries [or] to restrict it against use in certain countries....” Exec. Order No. 7856, 3 Fed. Reg. 681, 687, 22 CFR § 51.75.
United States v. Cerecedo Hermanos y Compania, 209 U. S. 337; Service v. Dulles, 354 U. S. 363, 380; Labor Board v. Gullett Gin Co., 340 II. S. 361, 366.
22 Dept. State Bull. 399; 26 id., at 7.
Norwegian Nitrogen Co. v. United States, supra, at 313; Costanzo v. Tillinghast, 287 U. S. 341, 345; United States v. Midwest Oil Co., 236 U. S. 459, 472-473.
Act, of May 22, 1918, 40 Stat. 559; Act of June 21, 1941, 55 Stat.. 252.
Pres. Proc. No. 3004, 67 Stat. c31; cf. Exec. Order No. 11037, 3 CFR 621 (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? | [
"Army and Air Force Exchange Service",
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"Department or Secretary of State",
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"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",
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"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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"Internal Revenue Service, Collector, Commissioner, or District Director of",
"Information Security Oversight Office",
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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",
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"National Security Agency",
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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",
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"Renegotiation 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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"NO Admin Action",
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] | [
27
] | sc_adminaction |
OKLAHOMA v. UNITED STATES CIVIL SERVICE COMMISSION.
No. 84.
Argued October 17, 18, 1946.
Decided February 10, 1947.
Mac Q. Williamson, Attorney General of Oklahoma, and James W. Bounds, Assistant Attorney General, argued the cause and filed a brief for petitioner.
Ralph F. Fuchs argued the cause for respondent. With him on the brief were Solicitor General McGrath, Assistant Attorney General Sonnett, Paul A. Sweeney and Samuel D. Slade.
Mr. Justice Reed
delivered the opinion of the Court.
This proceeding brings to this Court another phase of the Hatch Act. The petitioner, the State of Oklahoma, objects to the enforcement by the United States Civil Service Commission of § 12 (a) of the Act.
France Paris has been a member of the State Highway Commission of Oklahoma since January 14, 1943. He was elected chairman of the Democratic State Central Committee for Oklahoma for his third term in February 1942 and he occupied such position continuously until October 18, 1943, when he resigned. On October 12, 1943, the Civil Service Commission issued its letter of charges in the matter of France Paris and the State of Oklahoma, in which it notified Mr. Paris and Oklahoma that information which the Civil Service Commission had received warranted an investigation into an alleged improper political activity on the part of France Paris under the provisions of § 12 of the Hatch Act. The charge was that since January 14, 1943, Mr. Paris had been an officer of Oklahoma whose principal employment was and is in connection with an activity financed in whole or in part by loans and grants from a federal agency of the United States and that during such time Mr. Paris also held a political party office, to wit, the chairmanship of the State Central Committee above referred to. It later developed that no general election occurred in Oklahoma in 1943. The State Democratic Headquarters had been closed on January 4, 1943, by Mr. Paris and were later reopened during the year under the direct charge of the vice-chairman of that committee, we assume prior to Mr. Paris’ resignation on October 18, 1943. On June 14 the committee sponsored a “Victory Dinner” in Oklahoma City. The trial court found as follows:
“This dinner was designed to provide the National Democratic Committee and the State Democratic Committee with funds to discharge a deficit incurred by their political activities and to provide funds for contemplated future activities. It also promoted the sale of war bonds and did result in the sale of approximately $14,500,000.00 in war bonds. The dinner netted the Democratic party, which was conceded to be a political party, approximately $30,000.00. The dinner was staged under the general supervision of the Governor of the state and the details were handled by a committee appointed by the Governor. W. G. Johnston was chairman of this committee. France Paris was an ex officio member of the committee and he advised with the Governor concerning the dinner and called the meeting to order and introduced the toastmaster, but he was not active in planning or arranging the dinner.”
The Civil Service Commission determined that these facts constituted taking an active part in political management and in political campaigns. It considered that the violation warranted Mr. Paris’ removal from the office of Highway Commissioner of Oklahoma. It ordered that notice of the aforesaid determinations be given pursuant to § 12 (b) of the Hatch Act. This order foreshadowed, if Mr. Paris was not removed, a further order by the Commission under § 12 (b) to the appropriate federal agency that certain highway grants to Oklahoma should be withheld “in an amount equal to two years compensation” of Mr. Paris.
Pursuant to § 12 (c) the State of Oklahoma, after having received notice of the Civil Service Commission’s determination, instituted these proceedings for the review of the order in the proper district court of the United States. That court upheld the action of the Civil Service Commission, 61 F. Supp. 355, and this action was affirmed by the Circuit Court of Appeals for the Tenth Circuit. State of Oklahoma v. United States Civil Service Commission, 153 F. 2d 280. Certiorari was sought and allowed because of the importance of the issues involved in the administration of justice, 328 U. S. 831, under § 12 (c), 53 Stat. 1147, as amended, 54 Stat. 767, and § 240a of the Judicial Code.
The state contends that the judgments below are invalid for the following reasons:
“(1) The Hatch Political Activity Act, in so far as it attempts to regulate the internal affairs of a state, is an invasion of the sovereignty of the states in violation of the United States Constitution. It further is invalid as an unlawful delegation of power.
“(2) If valid, the Act applies only to ‘active’ participation in political management or political campaigns. Such ‘active’ participation is not shown to be present in this case.
“(3) If valid, the Act did not warrant the United States Civil Service Commission in ordering the removal of a state officer or, alternatively, the application of a penalty to the State of Oklahoma.
“(4) The decisions of the lower courts place an intolerable and unjustified restriction upon the right of an aggrieved person to a complete judicial review under the Hatch Political Activity Act.”
First. The Government’s first contention is that the petitioner, the State of Oklahoma, has no standing to attack the constitutionality of § 12. It is argued that the state has no legal capacity to question the manner in which the United States limits the appropriation of funds through § 12 (a); that § 12 (b) is merely procedural to assure that the statutory requirements are observed and that § 12 (c) is a safeguard against the exercise of arbitrary power by the Commission, not a permission to wage an attack on the entire arrangement.
If this contention is treated as an objection to the state’s capacity to bring this suit, as no objection was made until the memorandum for the respondent on the petition for certiorari, it would be out of time. A failure to object in the trial court to a party’s capacity is a waiver of that defect. Parker v. Motor Boat Sales, 314 U. S. 244, 251. On the other hand, if the contention is treated as meaning that no justiciable controversy as to the constitutionality of § 12 (a) exists because petitioner suffers no in jury which it may protect legally from the withdrawal by the United States of a portion of a grant-in-aid, the objection, as it questions judicial power to act on that point, is timely although first made in this Court. We think that the latter position more correctly reflects respondent’s contention. The Commission urges the cases listed in note 2 above as showing that the relation between the state and federal government arising out of grants-in-aid are political and that the order of the Commission that Paris be removed was not mandatory. We therefore treat the issue as properly before us.
The issue is whether Oklahoma can challenge the constitutionality of § 12 on statutory review of a Commission order. Subsection (c) gives to any party aggrieved a judicial review of the Commission order. The review is \ on the entire record and extends to questions of fact and \ questions of law. The order is to be affirmed if the court determines that it is “in accordance with law.” If the court determines the order is not in accordance with law, the proceeding is to be remanded to the Commission “with directions either to make such determination or order as the court shall determine to be in accordance with law or to take such further proceedings as, in the opinion of the court, the law requires.” We think the challenge can be made in these review proceedings to the constitutionality of the law upon which the order under review is predicated....
The activities of the Highway Commission of Oklahoma were financed in part by loans and grants from a federal agency during all the pertinent times. This was the organization of which Paris was a member. During the period in question, January 15, 1943, to October 18, 1943, while Paris was also Chairman of the Democratic State Central Committee, the United States through allotment by federal statute contributed over $2,000,000 for the highway work of the Oklahoma Commission. Nothing indicates that these sums were to be received by Oklahoma otherwise than in accordance with regular statutory apportionment among the states of federal highway funds and we assume the sums were to be so received by Oklahoma. Congress may create legally enforceable rights where none before existed. Payments were not made at the unfettered inclination of a federal disbursing officer or highway agency but according to statutory standards, compliance with which entitled Oklahoma to receive her proper share of the federal appropriations for highway construction through state agencies. If it were not for § 12, Oklahoma would have been legally entitled to receive payment from the federal disbursing office of the sums, including the amount that § 12 (b) authorizes the Civil Service Commission to require the disbursing or allocating federal agency to withhold from its loans or grants. Oklahoma had a legal right to receive federal highway funds by virtue of certain congressional enactments and under the terms therein prescribed. Violation of such a statutory right normally creates a justiciable cause of action even without a specific statutory authorization for review. It may be that before the payment of those funds to Oklahoma Congress could have withdrawn the grant without legal responsibility for such action either in its officers or the National Government. Perhaps, before disbursement, it could add of its own free will any additional requirements but when it erected administrative bars, that is, a condition that a part of the allotment might be withheld by action of the Commission, with judicial review of the Commission’s determination, we think those bars left to Oklahoma the right to receive all federal highway funds allotted to that state, subject only to the condition that the limitation on the right to receive the funds complied with the Constitution. Issues presented by this suit, even though raised by a state, are closely akin to private wrongs. Either the state employee or the state may be the party aggrieved and may maintain the action for judicial review. The power to examine into the constitutionality of the conditions was given the federal courts by the grant of the authority to review the legality of the Civil Service order. Therefore when by § 12 a right of review of the Civil Service Commission’s order is given to Oklahoma, we are of the opinion that the constitutionality of the statutory basis, § 12 (a), of the order is open for adjudication.
Congress has power to fix the conditions for review of administrative orders. By providing for judicial review of the orders of the Civil Service Commission, Congress made Oklahoma’s right to receive funds a matter of judicial cognizance. Oklahoma’s right became legally enforceable. Interference with the payment of the full allotment of federal highway funds to Oklahoma made the statutory proceeding to set aside the order a case or controversy between Oklahoma and the Commission, whose order Oklahomawas authorized to chanenge. A reading of § 12 will show the special interest Oklahoma had in preventing the exercise of the Civil Service Commission’s power to direct that Oklahoma’s funds be withheld. It was named as the employer affected by § 12 (a). Notices were sent to it. Funds allotted to Oklahoma were to be withheld "under certain conditions. It was a “party aggrieved.” When it brought this suit, under this statutory authority, Oklahoma was entitled to a judicial determination as to whether the order of the Civil Service Commission was “in accordance with law.” Was the order within the competency of the Commission? That question of competency included the issue of the constitutionality of the basis for the order, § 12 (a). Only if the statutory basis for an order is within constitutional limits can it be said that the resulting order is legal. To determine that question, the statutory review must include the power to determine the constitutionality of § 12 (a).
The cases cited by the Government as pointing toward lack of power to adjudicate the constitutionality of § 12 are inapposite. None deny to a court with jurisdiction by statute to review the legality of administrative orders the power to examine the constitutionality of the statute by virtue of which the order was entered. The authorities in note 2 above, relied upon by the Government, do not hold or imply a position contrary to our conclusion. In Massachusetts v. Mellon, 262 U. S. 447, the Commonwealth and others sought decrees to enjoin the enforcement of the Federal Maternity Act. This Court denied federal jurisdiction, p. 480, because no burden was placed upon a state and no right infringed, p. 482. Perkins v. Lukens Steel Co., 310 U. S. 113, denied a manufacturer who desired to sell to the Government the right to question a government official’s definition of “locality,” which the official was required by statute to make to determine the minimum wages of the “locality” under the Public Contracts Act. The denial of federal jurisdiction to decide the question was because no “litigable rights” to deal with the United States had been bestowed by the statute on the would be seller, pp. 125 and 127. The prospective seller by statute or otherwise had nothing to do with the conditions of purchase fixed by the United States. Alabama Power Co. v. Ickes, 302 U. S. 464, denied that the power company had any enforceable legal right to be free of competition, financed by illegal loans, p. 479. This present Oklahoma case is differentiated from each of the foregoing by the authority for statutory review and by the existence of the legally enforceable right to receive allocated grants without unlawful deductions....
We do not think the rule that one may not in the same proceeding both rely upon and assail a statute is applicable to the present situation. In the cases the.Government cites, the litigants had received or sought advantages from the statute that they wished to attack, advantages other than the mere right to sue. What we are concerned with in this case is not an estoppel to sue but the allowable scope of the statutory jurisdiction.
From this point of view, the respondent urges that the Congress did not intend to create a justiciable right broad enough to include an attack upon the constitutionality of § 12 (a). We think the final sentence of § 12 (c), note 1 supra, comes near to demonstrating the unsoundness of such a contention. It reads:
“If any provision of this subsection is held to be invalid as applied to any party with respect to any-determination or order of the Commission, such determination or order shall thereupon become final and effective as to such party in the same manner as if such provision had not been enacted.”
We do not see that this sentence can mean anything other than that the invalidity (unconstitutionality) of any provision of subsection 12 (b) should not affect the determination of the Civil Service Commission. In view of our conclusion hereinafter expressed that § 12 (a) is constitutional, whether the Commission’s determination would be enforceable without a particular statutory provision is not involved in this case.
The Government urges that the absence of legislative consideration of attacks on the constitutionality of § 12 through the provision for judicial review negatives “the conclusion that Congress intended Section 12 (c) as an avenue of attack on Section 12 (a).” But we do not agree that this lack of extended discussion of the scope of the judicial review by implication denies to a litigant the right to attack constitutionality. The final form of judicial review is different from that first proposed. 86 Cong. Rec. 2468. No change of purpose, however, appears. The proposer of judicial review feared arbitrary-action. Id., 2469. Others a violation of political liberty. It was thought the latter objection might be reached without right of judicial review. No one intimated constitutionality could not be reached with judicial review. None of the subsequent changes in the bill are effective to modify this construction of the scope of this judicial review.
Second. Petitioner’s chief reliance for its contention that § 12 (a) of the Hatch Act is unconstitutional as applied to Oklahoma in this proceeding is that the so-called penalty provisions invade the sovereignty bf a state in such a way as to violate the Tenth Amendment by providing for “possible forfeiture of state office or alternative penalties against the state.” Oklahoma says § 12 (c) “provides that the commencement of an appeal from an order of the Commission: ‘... shall not operate as a stay of such determination or order unless (1) it is specifically so ordered by the court, and (2) such officer or employee is suspended from his office or employment during the pendency of such proceedings....’” The coercive effect of the authorization to withhold sums allocated to a state is relied upon as an interference with the reserved powers of the state.
In United Public Workers v. Mitchell, decided this day, ante, p. 75, we have considered the constitutionality of this provision from the viewpoint of interference with a federal employee’s freedom of expression in political matters and as to whether acting as an official of a political party violates the provision in § 12 (a) against taking part in political management or in political campaigns. We do not think that the facts in this case require any further discussion of that angle. We think that acting as chairman of the Democratic State Central Committee and acting, ex off do, as a member of the “Victory Dinner” committee for the purpose of raising funds for the Democratic Party and for selling war bonds constitute taking an active part in political management. While the United States is not concerned with, and has no power to regulate, local political activities as such of state officials, it does have power to fix the terms upon which its money allotments to states shall be disbursed.
The Tenth Amendment does not forbid the exercise of this power in the way that Congress has proceeded in this case. As pointed out in United States v. Darby, 312 U. S. 100, 124, the Tenth Amendment has been consistently construed “as not depriving the national government of authority to resort to all means for the exercise of a granted power which are appropriate and plainly adapted to the permitted end.” The end sought by Congress through the Hatch Act is better public service by requiring those who administer funds for national needs to abstain from active political partisanship. So even though the action taken by Congress does have effect upon certain activities within the state, it has never been thought that such effect made the federal act invalid. As nothing in this record shows any attempt to suspend Mr. Paris from his duties as a member of the State Highway Commission, we are not called upon to deal with the assertion of Oklahoma that a state officer may be suspended by a federal court if § 12 is valid. There is an adequate separability clause. No penalty was imposed upon the state. A hearing was had, conformably to § 12, and the conclusion was reached that Mr. Paris’ active participation in politics justified his removal from membership on the Highway Commission. Oklahoma chose not to remove him. We do not see any violation of the state’s sovereignty in the hearing or order. Oklahoma adopted the “simple expedient” of not yielding to what she urges is federal coercion. Compare Massachusetts v. Mellon, 262 U. S. 447, 482. The offer of benefits to a state by the United States dependent upon cooperation by the state with federal plans, assumedly for the general welfare, is not unusual.
In order to give the Civil Service Commission adequate standards to measure active participation in political activities, Congress adopted § 15 of the Hatch Act, quoted above in note 1. By this section Congress made the test of political activity for state employees the same as the test then in effect for employees in the classified civil service. The Commission had at that time determined that “service on or for any political committee or similar organization is prohibited.” This could only mean that service on such a committee was active participation in politics. Such determination was made a matter of record by Senator Hatch in charge of the bill during debate on the scope of political prohibition. Obviously the activities of Mr. Paris were covered by the purpose and language of § 12. The words of § 12 (a) requiring Mr. Paris’ abstention from “any active part in political management or political campaigns” are derived from Rule I of the Civil Service Commission and have persisted there since 1907.
Oklahoma also argues that the Civil Service Commission determination that the acts of Mr. Paris constitute such a violation of § 12 (a) as to warrant his removal from his state office is not in accordance with law but arbitrary, unreasonable and an abuse of discretion. The facts of Mr. Paris’ activities and his connection with the Democratic State Central Committee during his tenure of office as a member of the Highway Commission of Oklahoma have been stated. The Circuit Court of Appeals said, 153 F. 2d at 284, “Manifestly, the Commission had solid footing in the Act for the conclusion that removal of Paris from office was warranted.” We agree.
Finally, petitioner says that § 12 (c), note 1, supra, authorizes a review of “every minute detail of the case” to “determine whether sufficient facts exist to support the order of the Commission, decide whether the statute has been reasonably and justly applied, and independently resolve the entire question as though the federal court had been the forum in the first instance.” The basis for this argument, in so far as it differs from that referred to in the preceding paragraph, is drawn from the language of § 12 (c) that “The review by the court shall be on the record entire, including all of the evidence taken on the hearing, and shall extend to questions of fact and questions of law.... The court shall affirm the Commission’s determination or order, or its modified determination or order, if the court determines that the same is in accordance with law.” As the facts were stipulated and no objection has been taken to the findings of fact, 61 F. Supp. 355, 357 (5); 153 F. 2d 280, 283, the attack, on this issue, is limited to an examination into whether or not the Commission abused its discretion in the order of removal. As heretofore stated, the provisions for review underwent changes during the passage of the Act. As finally adopted, however, the reviewing court is directed to remand when it determines that the action of the Commission “is not in accordance with law.” § 12 (c). The question of “the removal of an officer or employee,” § 12 (b), note 1, supra, we think is a matter of administrative discretion. Since under Rule I of the Civil Service Commission the taking of “any active part in political management or political campaigns” had been determined by the Commission to include service on a political committee, see notes 37 and 38 of United Public Workers v. Mitchell, ante, p. 75, it is clear Mr. Paris’ position violated § 15 of the Hatch Act. Note 1, supra. It could hardly be said that the determination of the Commission in ordering his removal was an abuse of its discretion. See 61 F. Supp. at 357 (6) and (7); 153 F. 2d at 283-84.
Judgment affirmed.
Mr. Justice Murphy and Mr. Justice Jackson took no part in the consideration or decision of this case.
Mr. Justice Black and Mr. Justice Rutledge dissent.
See United Public Workers v. Mitchell, decided today, ante, p. 75.
53 Stat. 1147, as amended, 54 Stat. 767:
“Sec. 12. (a) No officer or employee of any State or local agency whose principal employment is in connection with any activity which is financed in whole or in part by loans or grants made by the United States or by any Federal agency shall... take any active part in political management or in political campaigns....
“(b) If any Federal agency charged with the duty of making any loan or grant of funds of the United States for use in any activity by any officer or employee to whom the provisions of subsection (a) are applicable has reason to believe that any such officer or employee has violated the provisions of such subsection, it shall make a report with respect thereto to the United States Civil Service Commission (hereinafter referred to as the ‘Commission’). Upon the receipt of any such report, or upon the receipt of any other information which seems to the Commission to warrant an investigation, the Commission shall fix a time and place for a hearing, and shall by registered mail send to the officer or employee charged with the violation and to the State or local agency employing such officer or employee a notice setting forth a summary of the alleged violation and the time and place of such hearing. At such hearing (which shall be not earlier than ten days after the mailing of such notice) either the officer or employee or the State or local agency, or both, may appear with counsel and be heard. After such hearing, the Commission shall determine whether any violation of such subsection has occurred and whether such violation, if any, warrants the removal of the officer or employee by whom it was committed from his office or employment, and shall by registered mail notify such officer or employee and the appropriate State or local agency of such determination. If in any case the Commission finds that such officer or employee has not been removed from his office or employment within thirty days after notice of a determination by the Commission that such violation warrants his removal, or that he has been so removed and has subsequently (within a period of eighteen months) been appointed to any office or employment in any State or local agency in such State, the Commission shall make and certify to the appropriate Federal agency an order requiring it to withhold from its loans or grants to the State or local agency to which such notification was given an amount equal to two years’ compensation at the rate such officer or employee was receiving at the time of such violation; except that in any case of such a subsequent appointment to a position in another State or local agency which receives loans or grants from any Federal agency, such order shall require the withholding of such amount from such other State or local agency:....
“(c) Any party aggrieved by any determination or order of the Commission under subsection (b) may, within thirty days after the mailing of notice of such determination or order, institute proceedings for the review thereof by filing a written petition in the district court of the United States for the district in which such officer or employee resides; but the commencement of such proceedings shall not operate as a stay of such determination or order unless (1) it is specifically so ordered by the court, and (2) such officer or employee is suspended from his office or employment during the pendency of such proceedings. A copy of such petition shall forthwith be served upon the Commission, and thereupon the Commission shall certify and file in the court a transcript of the record upon which the determination or the order complained of was made. The review by the court shall be on the record entire, including all of the evidence taken on the hearing, and shall extend to questions of fact and questions of law.... The court shall affirm the Commission’s determination or order, or its modified determination or order, if the court determines that the same is in accordance with law. If the court determines that any such determination or order, or modified determination or order, is not in accordance with law, the court shall remand the proceeding to the Commission with directions either to make such determination or order as the court shall determine to be in accordance with law or to take such further proceedings as, in the opinion of the court, the law requires. The judgment and decree of the court shall be final, subject to review by the appropriate circuit court of appeals as in other cases, and the judgment and decree of such circuit court of appeals shall be final, subject to review by the Supreme Court of the United States on certiorari or certification as provided in sections 239 and 240 of the Judicial Code, as amended (U. S. C., 1934 edition, title 28, secs. 346 and 347). If any provision of this subsection is held to be invalid as applied to any party with respect to any determination or order of the Commission, such determination or order shall thereupon become final and effective as to such party in the same manner as if such provision had not been enacted.
“Sec. 15. The provisions of this Act which prohibit persons to whom such provisions apply from taking any active part in political management or in political campaigns shall be deemed to prohibit the same activities on the part of such persons as the United States Civil Service Commission has heretofore determined are at the time this section takes effect prohibited on the part of employees in the classified civil service of the United States by the provisions of the civil-service rules prohibiting such employees from taking any active part in political management or in political campaigns.”
Massachusetts v. Mellon, 262 U. S. 447, 482; Perkins v. Lukens Steel Co., 310 U. S. 113; Alabama Power Co. v. Ickes, 302 U. S. 464, 479, are cited as authority, together with other cases.
A respondent can support his judgment on any ground that appears in the record. LeTulle v. Scofield, 308 U. S. 415, 421; Gainesville v. Brown-Crummer Co., 277 U. S. 54, 59.
See note 1, supra, § 12 (c).
See Federal Highway Act, 42 Stat. 212, as amended, 23 U. S. C. § 1-117.
Cf. Columbia System v. United States, 316 U. S. 407, 422.
See Deitrick v. Greaney, 309 U. S. 190, 198, 200-201; Steele v. Louisville & Nashville Railroad Co., 323 U. S. 192, 202.
See the discussion in Colegrove v. Green, 328 U. S. 549.
American Power Co. v. S. E. C., 325 U. S. 385, 389.
Federal Power Commission v. Pacific Power & Light Co., 307 U. S. 156, 159.
Chicago Junction Case, 264 U. S. 258, 266 (Second); Z. & F. Assets Realization Corp. v. Hull, 311 U. S. 470, 485.
Federal Power Commission v. Pacific Power & Light Co., 307 U. S. 156, 159; Federal Communications Commission v. Sanders Brothers Radio Station, 309 U. S. 470, 476; American Power Co. v. S. E. C., 325 U. S. 385, 390; Parker v. Fleming, 329 U. S. 531,
Cf. Labor Board v. Jones & Laughlin, 301 U. S. 1, 25, 43, 49; Norwegian Nitrogen Products Co. v. United States, 288 U. S. 294, 321-24; United States v. Ruzicka, 329 U. S. 287, 294.
Judicial review normally includes issues of the constitutionality of enactments and action thereunder. 60 Stat. 237, 243 | 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 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",
"Office of Economic Opportunity",
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"Office of Price Administration, or Price Administrator",
"Office of Personnel Management",
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"Occupational Safety and Health Review Commission",
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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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] | [
19
] | sc_adminaction |
O’LONE, ADMINISTRATOR, LEESBURG PRISON COMPLEX, et al. v. ESTATE OF SHABAZZ et al.
No. 85-1722.
Argued March 24, 1987
Decided June 9, 1987
Rehnquist, C. J., delivered the opinion of the Court, in which White, Powell, O’Connor, and Scalia, JJ., joined. Brennan, J., filed a dissenting opinion, in which Marshall, Blackmun, and Stevens, JJ., joined, post, p. 354.
Laurie M. Hodian, Deputy Attorney General of New Jersey, argued the cause for petitioners. With her on the briefs were W. Cary Edwards, Attorney General, and James J. Ciancia, Assistant Attorney General.
Roger Clegg argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General Fried, Assistant Attorney General Weld, and Deputy Solicitor General Bryson.
James Katz argued the cause and filed a brief for respondents.
A brief of amici curiae urging reversal was filed for the Commonwealth of Pennsylvania et al. by LeRoy S. Zimmerman, Attorney General of Pennsylvania, Amy Za/pp, Deputy Attorney General, John G. Knorr III, Senior Deputy Attorney General, and Andrew S. Gordon, Chief Deputy Attorney General, Charles A. Graddick, Attorney General of Alabama, Ronald W. Lorensen, Acting Attorney General of Alaska, Robert K. Corbin, Attorney General of Arizona, Steven Clark, Attorney General of Arkansas, John K. Van de Kamp, Attorney General of California, Duane Woodard, Attorney General of Colorado, Charles M. Oberly III, Attorney General of Delaware, Jim Smith, Attorney General of Florida, Corinne K. A. Watanabe, Attorney General of Hawaii, James T. Jones, Attorney General of Idaho, Linley E. Pearson, Attorney General of Indiana, Robert P. Stephan, Attorney General of Kansas, William J. Guste, Jr., Attorney General of Louisiana, Stephen H. Sachs, Attorney General of Maryland, Francis X. Bellotti, Attorney General of Massachusetts, Frank J. Kelley, Attorney General of Michigan, Hubert H. Humphrey III, Attorney General of Minnesota, Edwin 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, Lacy H. Thornburg, Attorney General of North Carolina, Nicholas J. 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, Mark V. Meierhenry, Attorney General of South Dakota, W. J. Michael Cody, Attorney General of Tennessee, Mary Sue Terry, Attorney General of Virginia, Kenneth 0. Eikenberry, Attorney General of Washington, A. G. McClintock, Attorney General of Wyoming, and James R. Murphy, Acting Corporate Counsel of the District of Columbia.
Briefs of amici curiae urging affirmance were filed for the American Civil Liberties Union et al. by Eric Neisser, Alvin J. Bronstein, David B. Goldstein, Edward I. Koren, and Elizabeth Alexander; for the American Jewish Congress et al. by Marc D. Stem and Amy Adelson; for the Catholic League for Religious and Civil Rights et al. by Steven Frederick McDowell; for the Christian Legal Society et al. by Michael J. Woodruff and Samuel E. Ericsson; for the Prisoners’ Rights Project of the Legal Aid Society of the city of New York et al. by Philip L. Weinstein, David A. Lems, and Stephen M. Latimer; for Imam Jamil Abdullah Al-Amin et al. by Ellen J. Winner, James G. Abourezk, and Albert P. Mokhiber; and for Len Marek et al. by Steven C. Moore and Walter R. Echo-Hawk.
Chief Justice Rehnquist
delivered the opinion of the Court.
This case requires us to consider once again the standard of review for prison regulations claimed to inhibit the exercise of constitutional rights. Respondents, members of the Islamic faith, were prisoners in New Jersey’s Leesburg State Prison. They challenged policies adopted by prison officials which resulted in their inability to attend Jumu’ah, a weekly Muslim congregational service regularly held in the main prison building and in a separate facility known as “the Farm.” Jumu’ah is commanded by the Koran and must be held every Friday after the sun reaches its zenith and before the Asr, or afternoon prayer. See Koran 62: 9-10; Brief for Imam Jamil Abdullah Al-Amin et al. as Amici Curiae 18-31. There is no question that respondents’ sincerely held religious beliefs compelled attendance at Jumu’ah. We hold that the prison regulations here challenged did not violate respondents’ rights under the Free Exercise Clause of the First Amendment to the United States Constitution.
Inmates at Leesburg are placed in one of three custody classifications. Maximum security and “gang minimum” security inmates are housed in the main prison building, and those with the lowest classification — full minimum — live in “the Farm.” Both respondents were classified as gang minimum security prisoners when this suit was filed, and respondent Mateen was later classified as full minimum.
Several changes in prison policy prompted this litigation. In April 1983, the New Jersey Department of Corrections issued Standard 853, which provided that inmates could no longer move directly from maximum security to full minimum status, but were instead required to first spend a period of time in the intermediate gang minimum status. App. 147. This change was designed to redress problems that had arisen when inmates were transferred directly from the restrictive maximum security status to full minimum status, with its markedly higher level of freedom. Because of serious overcrowding in the main building, Standard 853 further mandated that gang minimum inmates ordinarily be assigned jobs outside the main building. Ibid. These inmates work in details of 8 to 15 persons, supervised by one guard. Standard 853 also required that full minimum inmates work outside the main institution, whether on or off prison grounds, or in a satellite building such as the Farm. Ibid.
Corrections officials at Leesburg implemented these policies gradually and, as the District Court noted, with some difficulty. Shabazz v. O’Lone, 595 F. Supp. 928, 929 (NJ 1984). In the initial stages of outside work details for gang minimum prisoners, officials apparently allowed some Muslim inmates to work inside the main building on Fridays so that they could attend Jumu’ah. This alternative was eventually eliminated in March 1984, in light of the directive of Standard 853 that all gang minimum inmates work outside the main building.
Significant problems arose with those inmates assigned to outside work details. Some avoided reporting for their assignments, while others found reasons for returning to the main building during the course of the workday (including their desire to attend religious services). Evidence showed that the return of prisoners during the day resulted in security risks and administrative burdens that prison officials found unacceptable. Because details of inmates were supervised by only one guard, the whole detail was forced to return to the main gate when one prisoner desired to return to the facility. The gate was the site of all incoming foot and vehicle traffic during the day, and prison officials viewed it as a high security risk area. When an inmate returned, vehicle traffic was delayed while the inmate was logged in and searched.
In response to these burdens, Leesburg officials took steps to ensure that those assigned to outside details remained there for the whole day. Thus, arrangements were made to have lunch and required medications brought out to the prisoners, and appointments with doctors and social workers were scheduled for the late afternoon. These changes proved insufficient, however, and prison officials began to study alternatives. After consulting with the director of social services, the director of professional services, and the prison’s imam and chaplain, prison officials in March 1984 issued a policy memorandum which prohibited inmates assigned to outside work details from returning to the prison during the day except in the case of emergency.
The prohibition of returns prevented Muslims assigned to outside work details from attending Jumu’ah. Respondents filed suit under 42 U. S. C. § 1983, alleging that the prison policies unconstitutionally denied them their Free Exercise rights under the First Amendment, as applied to the States through the Fourteenth Amendment. The District Court, applying the standards announced in an earlier decision of the Court of Appeals for the Third Circuit, concluded that no constitutional violation had occurred. The District Court decided that Standard 853 and the March 1984 prohibition on returns “plausibly advance” the goals of security, order, and rehabilitation. 595 F. Supp., at 934. It rejected alternative arrangements suggested by respondents, finding that “no less restrictive alternative could be adopted without potentially compromising a legitimate institutional objective.” Ibid.
The Court of Appeals, sua sponte hearing the case en banc, decided that its earlier decision relied upon by the District Court was not sufficiently protective of prisoners’ free exercise rights, and went on to state that prison policies could be sustained only if:
“the state . . . show[s] that the challenged regulations were intended to serve, and do serve, the important penological goal of security, and that no reasonable method exists by which [prisoners’] religious rights can be accommodated without creating bona fide security problems. The expert testimony of prison officials should be given due weight, but such testimony is not dispositive of the issue whether no reasonable adjustment is possible. . . . Where it is found that reasonable methods of accommodation can be adopted without sacrificing either the state’s interest in security or the prisoners’ interest in freely exercising their religious rights, the state’s refusal to allow the observance of a central religious practice cannot be justified and violates the prisoner’s first amendment rights.” Shabazz v. O’Lone, 782 F. 2d 416, 420 (CA3 1986) (footnotes omitted).
In considering whether a potential method of accommodation is reasonable, the court added, relevant factors include cost, the effects of overcrowding, understaffing, and inmates’ demonstrated proclivity to unruly conduct. See id., at 420, n. 3. The case was remanded to the District Court for reconsideration under the standards enumerated in the opinion. We granted certiorari to consider the important federal constitutional issues presented by the Court of Appeals’ decision, and to resolve apparent confusion among the Courts of Appeals on the proper standards to be applied in considering prisoners’ free exercise claims. 479 U. S. 881 (1986).
Several general principles guide our consideration of the issues presented here. First, “convicted prisoners do not forfeit all constitutional protections by reason of their conviction and confinement in prison.” Bell v. Wolfish, 441 U. S. 520, 545 (1979). See Turner v. Safley, ante, at 84; Jones v. North Carolina Prisoners’ Labor Union, Inc., 433 U. S. 119, 129 (1977). Inmates clearly retain protections afforded by the First Amendment, Pell v. Procunier, 417 U. S. 817, 822 (1974), including its directive that no law shall prohibit the free exercise of religion. See Cruz v. Beto, 405 U. S. 319 (1972) (per curiam). Second, “[l]awful incarceration brings about the necessary withdrawal or limitation of many privileges and rights, a retraction justified by the considerations underlying our penal system.” Price v. Johnston, 334 U. S. 266, 285 (1948). The limitations on the exercise of constitutional rights arise both from the fact of incarceration and from valid penological objectives — including deterrence of crime, rehabilitation of prisoners, and institutional security. Pell v. Procunier, supra, at 822-823; Procunier v. Martinez, 416 U. S. 396, 412 (1974).
In considering the appropriate balance of these factors, we have often said that evaluation of penological objectives is committed to the considered judgment of prison administrators, “who are actually charged with and trained in the running of the particular institution under examination.” Bell v. Wolfish, supra, at 562. See Turner v. Safley, ante, at 86-87. To ensure that courts afford appropriate deference to prison officials, we have determined that prison regulations alleged to infringe constitutional rights are judged under a “reasonableness” test less restrictive than that ordinarily applied to alleged infringements of fundamental constitutional rights. See, e. g., Jones v. North Carolina Prisoners’ Labor Union, Inc., supra, at 128. We recently restated the proper standard: “[W]hen a prison regulation impinges on inmates’ constitutional rights, the regulation is valid if it is reasonably related to legitimate penological interests.” Turner v. Safiey, ante, at 89. This approach ensures the ability of corrections officials “to anticipate security problems and to adopt innovative solutions to the intractable problems of prison administration,” ibid., and avoids unnecessary intrusion of the judiciary into problems particularly ill suited to “resolution by decree.” Procunier v. Martinez, supra, at 405. See also Turner v. Safley, ante, at 89; Bell v. Wolfish, supra, at 548.
We think the Court of Appeals decision in this case was wrong when it established a separate burden on prison officials to prove “that no reasonable method exists by which [prisoners’] religious rights can be accommodated without creating bona fide security problems.” 782 F. 2d, at 420. See also id., at 419 (Prison officials should be required “to produce convincing evidence that they are unable to satisfy their institutional goals in any way that does not infringe inmates’ free exercise rights”). Though the availability of accommodations is relevant to the reasonableness inquiry, we have rejected the notion that “prison officials . . . have to set up and then shoot down every conceivable alternative method of accommodating the claimant’s constitutional complaint.” Turner v. Safley, ante, at 90-91. By placing the burden on prison officials to disprove the availability of alternatives, the approach articulated by the Court of Appeals fails to reflect the respect and deference that the United States Constitution allows for the judgment of prison administrators.
Turning to consideration of the policies challenged in this case, we think the findings of the District Court establish clearly that prison officials have acted in a reasonable manner. Turner v. Safley drew upon our previous decisions to identify several factors relevant to this reasonableness determination. First, a regulation must have a logical connection to legitimate governmental interests invoked to justify it. Ante, at 89-90. The policies at issue here clearly meet that standard. The requirement that full minimum and gang minimum prisoners work outside the main facility was justified by concerns of institutional order and security, for the District Court found that it was “at least in part a response to a critical overcrowding in the state’s prisons, and ... at least in part designed to ease tension and drain on the facilities during that part of the day when the inmates were outside the confines of the main buildings.” 595 F. Supp., at 929. We think it beyond doubt that the standard is related to this legitimate concern.
The subsequent policy prohibiting returns to the institution during the day also passes muster under this standard. Prison officials testified that the returns from outside work details generated congestion and delays at the main gate, a high risk area in any event. Return requests also placed pressure on guards supervising outside details, who previously were required to “evaluate each reason possibly justifying a return to the facilities and either accept or reject that reason.” Id., at 931. Rehabilitative concerns further supported the policy; corrections officials sought a simulation of working conditions and responsibilities in society. Chief Deputy Ucci testified: “One of the things that society demands or expects is that when you have a job, you show up on time, you put in your eight hours, or whatever hours you are supposed to put in, and you don’t get off... . If we can show inmates that they’re supposed to show up for work and work a full day, then when they get out at least we’ve done something.” Tr. 89. These legitimate goals were advanced by the prohibition on returns; it cannot seriously be maintained that “the logical connection between the regulation and the asserted goal is so remote as to render the policy arbitrary or irrational.” Turner v. Safley, ante, at 89-90.
Our decision in Turner also found it relevant that “alternative means of exercising the right. . . remain open to prison inmates.” Ante, at 90. There are, of course, no alternative means of attending Jumu’ah; respondents’ religious beliefs insist that it occur at a particular time. But the very stringent requirements as to the time at which Jumu’ah may be held may make it extraordinarily difficult for prison officials to assure that every Muslim prisoner is able to attend that service. While we in no way minimize the central importance of Jumu’ah to respondents, we are unwilling to hold that prison officials are required by the Constitution to sacrifice legitimate penological objectives to that end. In Turner, we did not look to see whether prisoners had other means of communicating with fellow inmates, but instead examined whether the inmates were deprived of “all means of expression.” Ante, at 92. Here, similarly, we think it appropriate to see whether under these regulations respondents retain the ability to participate in other Muslim religious ceremonies. The record establishes that respondents are not deprived of all forms of religious exercise, but instead freely observe a number of their religious obligations. The right to congregate for prayer or discussion is “virtually unlimited except during working hours,” Tr. 182 (testimony of O’Lone), and the state-provided imam has free access to the prison. Muslim prisoners are given different meals whenever pork is served in the prison cafeteria. Special arrangements are also made during the month -long observance of Ramadan, a period of fasting and prayer. During Ramadan, Muslim prisoners are awakened at 4 a.m. for an early breakfast, and receive dinner at 8:30 each evening. We think this ability on the part of respondents to participate in other religious observances of their faith supports the conclusion that the restrictions at issue here were reasonable.
Finally, the case for the validity of these regulations is strengthened by examination of the impact that accommodation of respondents’ asserted right would have on other inmates, on prison personnel, and on allocation of prison resources generally. See Turner v. Safley, ante, at 90. Respondents suggest several accommodations of their practices, including placing all Muslim inmates in one or two inside work details or providing weekend labor for Muslim inmates. See Brief for Respondents 52-53. As noted by the District Court, however, each of respondents’ suggested accommodations would, in the judgment of prison officials, have adverse effects on the institution. Inside work details for gang minimum inmates would be inconsistent with the legitimate concerns underlying Standard 853, and the District Court found that the extra supervision necessary to establish weekend details for Muslim prisoners “would be a drain on scarce human resources” at the prison. 595 F. Supp., at 932. Prison officials determined that the alternatives would also threaten prison security by allowing “affinity groups” in the prison to flourish. Administrator O’Lone testified that “we have found out and think almost every prison administrator knows that any time you put a group of individuals together with one particular affinity interest . . . you wind up with ... a leadership role and an organizational structure that will almost invariably challenge the institutional authority.” Tr. 179-180. Finally, the officials determined that special arrangements for one group would create problems as “other inmates [see] that a certain segment is escaping a rigorous work detail” and perceive favoritism. Id., at 178-179. These concerns of prison administrators provide adequate support for the conclusion that accommodations of respondents’ request to attend Jumu’ah would have undesirable results in the institution. These difficulties also make.clear that there are no “obvious, easy alternatives to the policy adopted by petitioners.” Turner v. Safley, ante, at 93.
We take this opportunity to reaffirm our refusal, even where claims are made under the First Amendment, to “substitute our judgment on . . . difficult and sensitive matters of institutional administration,” Block v. Rutherford, 468 U. S. 576, 588 (1984), for the determinations of those charged with the formidable task of running a prison. Here the District Court decided that the regulations alleged to infringe constitutional rights were reasonably related to legitimate peno-logical objectives. We agree with the District Court, and it necessarily follows that the regulations in question do not offend the Free Exercise Clause of the First Amendment to the United States Constitution. The judgment of the Court of Appeals is therefore
Reversed.
Respondent Shabazz died on January 15, 1986.
Our decision in Turner v. Safiey rejected respondents’ principal argument in this case — that more rigorous scrutiny is appropriate unless a court can conclude that the activity for which prisoners seek protection is “presumptively dangerous.” See Brief for Respondents 30. See also Abdul Wali v. Coughlin, 754 F. 2d 1015, 1033 (CA2 1985). As we noted in Turner, ante, at 89, “[t]he determination that an activity is ‘presumptively dangerous’ appears simply to be a conclusion about the reasonableness of the prison restriction in light of the articulated security concerns. It therefore provides a tenuous basis for creating a hierarchy of standards of review.”
Nor are we convinced that heightened scrutiny is appropriate whenever regulations effectively prohibit, rather than simply limit, a particular exercise of constitutional rights. See Brief for Respondents 30. As Turner makes clear, the presence or absence of alternative accommodations of prisoners’ rights is properly considered a factor in the reasonableness analysis rather than a basis for heightened scrutiny. See Turner, ante, at 88, 90-91. | 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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COMMISSIONER OF INTERNAL REVENUE v. FIRST SECURITY BANK OF UTAH, N. A., et al.
No. 70-305.
Argued January 10, 1972
Decided March 21, 1972
Powell, J., delivered the opinion of the Court, in which Burger, C. J., and Douglas, BrenNAN, Stewart, and RehNquist, JJ., joined. Marshall, J., filed a dissenting opinion, post, p. 407. BlackmuN, J., filed a dissenting opinion, in which White, J., joined, post, p. 418.
Ernest J. Brown argued the cause for petitioner. On the brief were Solicitor General Griswold, Acting Assistant Attorney General Ugast, Matthew J. Zinn, and Bennet N. Hollander.
Stephen H. Anderson argued the cause for respondents. With him on the brief was S. J. Quinney.
Ernest Getz filed a brief for Bud Kouts Chevrolet Co. et al. as amici curiae urging affirmance.
Mr. Justice Powell
delivered the opinion of the Court.
This case presents for review a determination by the Commissioner of Internal Revenue (Commissioner), pursuant to § 482 of the Internal Revenue Act, that the income of taxpayers within a controlled group should be reallocated to reflect the true taxable income of each. Deficiencies were assessed against respondents. The Tax Court affirmed the Commissioner’s action, and respondents appealed to the Court of Appeals for the Tenth Circuit. That court reversed the decision of the Tax Court, 436 F. 2d 1192 (1971), and we granted the Commissioner’s petition for certiorari to resolve a conflict between the decision below and that in Local Finance Corp. v. Commissioner, 407 F. 2d 629 (CA7), cert. denied, 396 U. S. 956 (1969). We now affirm the decision of the Court of Appeals.
Respondents, First Security Bank of Utah, N. A., and First Security Bank of Idaho, N. A. (the Banks), are national banks that, during the tax years, were wholly owned subsidiaries of First Security Corp. (Holding Company). Other, non-bank, subsidiaries of the Holding Company, relevant to this case, were First Security Co. (Management Company), Ed. D. Smith & Sons, an insurance agency (Smith), and— from June 1954 — First Security Life Insurance Company of Texas (Security Life). Beginning in 1948, the Banks offered to arrange for borrowers credit life, health, and accident insurance (credit life insurance). The Tax Court found that they did this “for several reasons,” including (1) offering a service increasingly supplied by competing financial institutions, (2) obtaining the benefit of the additional collateral that credit insurance provides by repaying loans upon the death, injury, or illness of the borrower, and (3) providing an “additional source of income — part of the premiums from the insurance — to Holding Company or its subsidiaries.”
Until 1954, any borrower who elected to purchase this insurance was referred by the Banks to two independent insurance companies. The premium rate charged was $1 per $100 of coverage per year, the rate commonly charged in the industry. The Insurance Commissioners of the States involved — Utah, Idaho, and Texas — accepted this rate. The Banks followed a routine procedure in making this insurance available to customers. The lending officer would explain the function and availability of credit insurance. If the customer desired the coverage, the necessary form was completed, a certificate of insurance was delivered, and the premium was collected or added to the customer’s loan. The Banks then forwarded the completed forms and premiums to Management Company, which maintained records of the insurance purchased and forwarded the premiums to the insurance carrier. Management Company also processed claims filed under the policies. The cost to each of the Banks for the actual time devoted to explaining and processing the insurance was less than $2,000 per year, characterized by the courts below as “negligible.” The cost to Management Company of the services rendered by it was also negligible, slightly in excess of $2,000 per year.
It was the custom in the insurance business (although not invariably followed), regardless of the cost of incidental paperwork, to pay a “sales commission” — ranging from 40% to 55% of net premiums collected — to a party who originated or generated the business. But the Banks had been advised by counsel that they could not lawfully conduct the business of an insurance agency or receive income resulting from their customers’ purchase of credit life insurance. Neither the Banks nor any of their officers were licensed to sell insurance, and there is no question here of unlawfully acting as unlicensed agents. The Banks received no commissions or other income on or with respect to the credit insurance generated by them. During the period from 1948 to 1954 commissions were paid by the independent companies writing the insurance directly, to Smith, one of the wholly owned subsidiaries of Holding Company. These commissions were reported as taxable income, not by Smith, but by Management Company which had rendered the services above described. During this period (1948-1954), the Commissioner did not attempt to allocate the commissions to the Banks.
In 1954, Holding Company organized Security Life, a new wholly owned subsidiary licensed to engage in the insurance business. A new procedure was then adopted with respect to placing credit life insurance. It was referred by the Banks to, and written by an independent company, American National Insurance Company of Galveston, Texas (American National), at the same rate to the customer. American National then reinsured the policies with Security Life pursuant to a “treaty of reinsurance.” For assuming the risk under the policies sold to the Banks’ customers, Security Life retained 85% of the premiums. American National, which furnished actuarial and accounting services, received the remaining 15%. No sales commissions were paid. Under this new plan, the Banks continued to offer credit life insurance to their borrowers in the same manner as before.
Security Life was not a paper corporation. It commenced business in 1954 with an initial capital of $25,000, which was increased in 1956 to $100,000. Although it did not become a full-line insurance company (contemplated as a possibility when organized), its reinsurance business was substantial. The risks assumed by it had grown to $41,350,000 by the end of 1959, and it had paid substantial claims.
Security Life reported the entire amount of reinsurance premiums, 85% of the premiums charged, in its income for the years 1955-1959. Because the income of life insurance companies then was subject to a lower effective tax rate than that of ordinary corporations, the total tax liability for Holding Company and its subsidiaries was less than it would have been had Security Life paid a part of the premium to the Banks or Management Company as sales commissions. Pursuant to his § 482 power to allocate gross income among controlled corporations in order to reflect the actual incomes of the corporations, the Commissioner determined that 40% of Security Life’s premium income was allocable to the Banks as compensation for originating and processing the credit life insurance. It is the Commissioner’s view that the 40% of the premium income so allocated is the equivalent of commissions that the Banks earned and must be included in their “true taxable income.”
The parties agree that § 482 is designed to prevent “artificial shifting, milking, or distorting of the true net incomes of commonly controlled enterprises.” Treasury Regulations provide:
“The purpose of section 482 is to place a controlled taxpayer on a tax parity with an uncontrolled taxpayer, by determining according to the standard of an uncontrolled taxpayer, the true taxable income from the property and business of a controlled taxpayer. . . . The standard to be applied in every case is that of an uncontrolled taxpayer dealing at arm’s length with another uncontrolled taxpayer.”
The question we must answer is whether there was a shifting or distorting of the Banks’ true net income resulting from the receipt and retention by Security Life of the premiums above described.
We note at the outset that the Banks could never have received a share of these premiums; National banks are authorized to act as insurance agents when located in places having a population not exceeding 5,000 inhabitants, 12 U. S. C. A. § 92. Although § 92 does not explicitly prohibit banks in places with a population of over 5,000 from acting as insurance agents, courts have held that it does so by implication. The Comptroller of the Currency has acquiesced in this holding, and the Court of Appeals for the Tenth Circuit expressed its agreement in the opinion below.
The penalties for violation of the banking laws include possible forfeiture of a bank’s franchise and personal liability of directors. The Tax Court found that the Banks, upon advice of counsel, “held the belief that it would be contrary to Federal banking law ... to receive income resulting from their customers’ purchase of credit insurance” and, pursuant to this belief, “the two Banks have never received or attempted to receive commissions or reinsurance premiums resulting from their customers’ purchase of credit insurance.”
Petitioner does not contest this finding by the Tax Court or the holding in this respect of the Court of Appeals below. Accordingly, we assume for purposes of this decision that the Banks were prohibited from receiving insurance-related income, although this prohibition did not apply to non-bank subsidiaries of Holding Company.
We know of no decision of this Court wherein a person has been found to have taxable income that he did not receive and that he was prohibited from receiving. In cases dealing with the concept of income, it has been assumed that the person to whom the income was attributed could have received it. The underlying assumption always has been that in order to be taxed for income, a taxpayer must have complete dominion over it. “The income that is subject to a man’s unfettered command and that he is free to enjoy at his own option may be taxed to him as his income, whether he sees fit to enjoy it or not.” Corliss v. Bowers, 281 U. S. 376, 378 (1930).
It is, of course, well established that income assigned before it is received is nonetheless taxable to the assignor. But the assignment-of-income doctrine assumes that the income would have been received by the taxpayer had he not arranged for it to be paid to another. In Harrison v. Schaffner, 312 U. S. 579, 582 (1941), we said:
“[0]ne vested with the right to receive income [does] not escape the tax by any kind of anticipatory arrangement, however skillfully devised, by which he procures payment of it to another, since, by the exercise of his power to command the income, he enjoys the benefit of the income on which the tax is laid.”
One of the Commissioner’s regulations for the implementation of § 482 expressly recognizes the concept that income implies dominion or control of the taxpayer. It provides as follows:
“The interests controlling a group of controlled taxpayers are assumed to have complete power to cause each controlled taxpayer so to conduct its affairs that its transactions and accounting records truly reflect the taxable income from the property and business of each of the controlled taxpayers.”
This regulation is consistent with the control concept heretofore approved by this Court, although in a different context. The regulation, as applied to the facts in this case, contemplates that Holding Company — the controlling interest — must have “complete power” to shift income among its subsidiaries. It is only where this power exists, and has been exercised in such a way that the “true taxable income” of a subsidiary has been understated, that the Commissioner is authorized to reallocate under § 482. But Holding Company had no such power unless it acted in violation of federal banking laws. The “complete power” referred to in the regulations hardly includes the power to force a subsidiary to violate the law.
Apart from the inequity of attributing to the Banks taxable income that they have not received and may not lawfully receive, neither the statute nor our prior decisions require such a result. We are not faced with a situation such as existed in those cases, urged by the Commissioner, in which we held the proceeds of criminal activities to be taxable. Those cases concerned situations in which the taxpayer had actually received funds. Moreover, the illegality involved was the act that gave rise to the income. Here the originating and referring of the insurance, a practice widely followed, is acknowledged to be legal. Only the receipt of insurance commissions or premiums thereon by national banks is not. Had the Banks ignored the banking laws, thereby risking the loss of their charters and subjecting their officers to personal liability, the illegal-income cases would be relevant. But the Banks from the inception of their use of credit life insurance in 1948 were careful never to place themselves in that position. We think that fairness requires the tax to fall on the party that actually receives the premiums rather than on the party that cannot.
In L. E. Shunk Latex Products, Inc. v. Commissioner, 18 T. C. 940 (1952), the Tax Court considered a closely analogous situation. The same interest controlled a manufacturer and a distributor of rubber prophylactics. The OPA Price Regulations of World War II became effective on December 1, 1941. Prior thereto the distributor had raised its prices to retailers, but the manufacturer had not increased the prices charged to its affiliated distributor. The Commissioner, acting under § 482, attempted to allocate some of the distributor’s income to the manufacturer on the ground that a portion of the distributor’s profits was in fact earned by the manufacturer, even though the manufacturer was prohibited by the OPA regulations from increasing its prices. In holding that the Commissioner had acted improperly, the Tax Court said that he had “no authority to attribute to petitioners income which they could not have received.” 18 T. C., at 961.
It is argued, finally, that the “services” rendered by the Banks in making credit insurance available to customers “would have been compensated had the corporations been dealing with each other at arm’s length.” The short answer is that the proscription against acting as insurance agent and receiving compensation therefor applies to all national banks located in places with population in excess of 5,000 inhabitants. It applies equally to such banks whether or not they are controlled by a holding company. If these Banks had been independent of any such control — as most banks are — no commissions or premiums could have been received lawfully and there would have been no taxable income. As stated in the Treasury Regulations, the “purpose of section 482 is to place a controlled taxpayer on a tax parity with an uncontrolled taxpayer . . . .” We think our holding comports with such parity treatment.
We conclude that the premium income received by Security Life could not be attributable to the Banks. Holding Company did not utilize its control over the Banks and Security Life to distort their true net incomes. The Commissioner’s exercise of his § 482 authority was therefore unwarranted in this case. The judgment below is
Affirmed.
Title 26 U. S. C. §482 provides:
“In any ease of two or more organizations, trades, or businesses (whether or not incorporated, whether or not organized in the United States, and whether or not affiliated) owned or controlled directly or indirectly by the same interests, the Secretary or his delegate may distribute, apportion, or allocate gross income, deductions, credits, or allowances between or among such organizations, trades, or businesses, if he determines that such distribution, apportionment, or allocation is necessary in order to prevent evasion of taxes or clearly to reflect the income of any of such organizations, trades, or businesses.”
The corporate income tax imposes the same rate of taxation on taxable income up to $25,000 and the same rate for income greater than $25,000. 26 U. S. C. § 11. Therefore, if, excluding the sales commissions in question, we assume, as seems likely, that before 1954 the income of both respondents and of Management Company exceeded $25,000, then the total taxes paid by the Holding
Company subsidiaries would not be affected if the commissions were allocated wholly to respondents, or to Management Company, or partially to all three.
This plan was proposed to Holding Company by American National, which was making similar recommendations to other financial institutions. The Tax Court found that insurance companies anticipated that lending institutions would soon begin to form their own affiliated life insurance companies to write the credit insurance, which was proving to be a profitable business. Such a move by lending institutions would deprive the independent insurance companies of substantial credit insurance business. The type of plan recommended by American National was intended to salvage a portion of such business by charging a fee for the actuarial, accounting, and other services made available to Security Life, which reinsured the entire risk. T. C. Memo 1967-256.
Taxpayers are, of course, generally free to structure their business affairs as they consider to be in their best interests, including lawful structuring (which may include holding companies) to minimize taxes. Perhaps the classic statement of this principle is Judge Learned Hand’s comment in his dissenting opinion in Commissioner v. Newman, 159 F. 2d 848, 850-851 (CA2 1947):
“Over and over again courts have said that there is nothing sinister in so arranging one’s affairs as to keep taxes as low as possible. Everybody does so, rich or poor; and all do right, for nobody owes any public duty to pay more than the law demands: taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.”
See Knetsch v. United States, 364 U. S. 361, 365 (1960); Chirelstein, Learned Hand’s Contribution to the Law of Tax Avoidance, 77 Yale L. J. 440 (1968).
The opinion of the Tax Court, supra, includes tables showing the profitability of Security Life. Its net worth (capital and surplus) increased from $161,370.52 at the end of 1955 to $1,050,220 at the end of 1959, despite the paying out of claims and claims expenses over the five-year period totaling $525,787.91. The Tax Court found that: “Although Security Life’s business proved to be successful, there was no way to judge at the outset whether it would succeed. In relation to its capital structure, Security Life reinsured a large amount of risk.”
Both the Life Insurance Company Tax Act for 1955, 70 Stat. 36, applicable to the years 1955-1957, and the Life Insurance Company Income Tax Act of 1959, 73 Stat. 112, applicable to later years, accorded preferential tax treatment to life insurance companies.
The Commissioner made an alternative allocation to Management Company. Because it upheld his allocation to the Banks, the Tax Court rejected this alternative. In reversing the allocation to the Banks, the Court of Appeals found the record insufficient to pass on the alternative allocation. It therefore ordered that the case be remanded to the Tax Court for further consideration. The alternative allocation is therefore not before us.
See 26 CFR §1.482-1 (a)(6) (1971).
B. Bittker & J. Eustice, Federal Income Taxation of Corporations and Shareholders p. 15-21 (3d ed. 1971).
26 CFR § 1.482-1 (b) (1) (1971). The first regulations interpreting this section of the statute were issued in 1934. They have remained virtually unchanged. Jenks, Treasury Regulations Under Section 482, 23 Tax Lawyer 279 (1970).
The court below held that the mere generation of business does not necessarily result in taxable income. As we decide this case on a different ground, we need not consider the circumstances in which the origination or referral of business may or may not result in taxable income to the originating party. We do agree that origination of business does not necessarily result in such income. In this case if the Banks had been unaffiliated with any other entities (i. e., had been separate, independent banks, unaffiliated with any holding company group), they would nevertheless have performed the “services” that the Commissioner asserts resulted in taxable income. These services — namely the negligible paperwork and the referring of the credit insurance to a company licensed to write it — were performed (as the Tax Court noted) for the convenience of bank customers and to assure additional collateral for loans. They also may have been necessary to meet competition. The fact of affiliation, enabling referral of the business to another subsidiary in the holding company group, does not alter the character of what was done. The act which is relevant, in terms of generating insurance premiums and commissions, is the referral of the business. Whether this referral is to an affiliated or an unaffiliated insurance company should make no difference as to whether the bank, which never receives the income, has earned it.
Section 92 of the National Bank Act was enacted in 1916. When the statutes were revised in 1918 and re-enacted, §92 was omitted. The revisers of the United States Code have omitted it from recent editions of the Code. However, the Comptroller of the Currency considers § 92 to be effective and he still incorporates the provision in his Regulations, 12 CFR §§21-2.5 (1971).
Saxon v. Georgia Association of Independent Insurance Agents, Inc., 399 F. 2d 1010 (CA5 1968). See Commissioner v. Morris Trust, 367 F. 2d 794, 795 (CA4 1966).
12 CFR §§ 2.1-2.5 (1971).
Findings of fact and opinion in T. C. Memo 1967-256, p. 67-1456, filed Dec. 27, 1967, in this case.
Mr. . Justice Marshall’s dissenting opinion is based on the “crucial fact . . . [that] respondents [the Banks] have already violated the federal statute and regulations by soliciting insurance premiums.” The statute, 12 U. S. C. A. § 92, prohibits a national bank from acting “as the agent” of an insurance company “by soliciting and selling insurance and collecting premiums on policies.” Mr. Justice Marshall concludes that the banks have violated this statute, and notes that “the penalties . . . are indeed severe.”
This finding of illegality, with respect to conduct of the Banks extending back to 1948, is without support either in the record or in any authority cited. Indeed, the record is to the contrary. The Tax Court found as a fact that there was no “agency agreement” between the Banks and the insurance companies; it further found that the Banks “made available” the credit insurance to their customers. There is no finding, and nothing in the record to support a finding, that the Banks were agents of the insurance companies or that they engaged in “selling insurance” within the meaning of the statute. The Banks no doubt “solicited” in the sense that they encouraged their customers to take out the insurance. But in the absence of an agency relationship, and in view of the undisputed fact that the Banks received no commissions or premiums, it cannot be said that there was a violation of the statute. Moreover, the Banks were regularly examined by the federal banking authorities “looking for violations in the national banking laws.” The making of credit insurance available to customers was and is a common practice in the banking business. There is no suggestion that the federal banking authorities considered this service to customers to be a violation of the law as long as the Banks received no commissions or fees. This administrative interpretation over many years is entitled to great weight.
The dissenting opinion raises this serious issue for the first time. It was not raised at any stage in the proceedings below. Nor was it briefed or argued in this Court. The Commissioner, the Tax Court, the Court of Appeals, and the Solicitor General all assumed that the Banks’ conduct in this respect was perfectly lawful. But quite apart from the consistent administrative acceptance and from the assumptions by the Commissioner and the courts below, we think there is no basis for a finding of this serious statutory violation.
See Helvering v. Horst, 311 U. S. 112 (1940) (assignment of interest coupons attached to bonds owned by taxpayer); Lucas v. Earl, 281 U. S. 111 (1930) (taxpayer assigned to wife one-half interest in his earnings). See generally Commissioner v. Sunnen, 333 U. S. 591 (1948), and cases discussed therein at 604-610.
26 CFR § 1.482-1 (b) (1) (1971).
James v. United States, 366 U. S. 213 (1961); Rutkin v. United States, 343 U. S. 130 (1952).
12 U. S. C. § 93.
Thus, in Commissioner v. Lester, 366 U. S. 299 (1961), in determining that a taxpayer should not be taxed on alimony payments to his divorced wife, the Court determined that it was more consistent with the basic precepts of income tax law that the wife, who received and had power to spend the payments, should be taxed rather than the husband who actually earned the money.
As noted at the outset of this opinion, certiorari was granted to resolve the conflict between the decision below and that in Local Finance Corp. v. Commissioner, 407 F. 2d 629 (CA7 1969). The Tax Court in this case felt bound to follow Local Finance Corp., which was decided subsequently to L. E. Shunk Latex Products, Inc. v. Commissioner, 18 T. C. 940 (1952). For the reasons stated in the opinion above, we think Local Finance Corp. was erroneously decided and that the earlier views of the Tax Court were correct.
See Teschner v. Commissioner, 38 T. C. 1003, 1009 (1962):
“In the case before us, the taxpayer, while he had no power to dispose of income, had a power to appoint or designate its recipient. Does the existence or exercise of such a power alone give rise to taxable income in his hands ? We think clearly not. In Nicholas A. Stavroudis, 27 T. C. 583, 590 (1956), we found it to be settled doctrine that a power to direct the distribution of trust income to others is not alone sufficient to justify the taxation of that income to the possessor of such a power.”
See dissenting opinion of Mr. Justice Blackmun, post, at 422.
If an unafSliated bank were able to provide the insurance at a cheaper rate because no commissions were paid, this would benefit the customers but would result in no taxable income.
26 CFR § 1.482-1 (b)(1) (1971). | 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.",
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"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",
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"Board of Tax Appeals",
"General Land Office or Commissioners",
"NO Admin Action",
"Processing Tax Board of Review"
] | [
68
] | sc_adminaction |
CALERO-TOLEDO et al. v. PEARSON YACHT LEASING CO.
No. 73-157.
Argued January 7, 1974
Decided May 15, 1974
Brennan, J., delivered the opinion of the Court, in which Burger, C. J., and White, Marshall, Bláckmun, Powell, and Rehnquist, JJ., joined, and in Parts I and II of which Stewart, J., joined. White, J., filed a concurring opinion, in which Powell, J., joined, post, p. 691. Stewart, J., filed a separate statement, post, p. 690. Douglas, J., filed an opinion dissenting in part, in which Stewart, J., joined in part, post, p. 691.
Lynn R. Coleman argued the cause for appellants. With him on the brief were Francisco de Jesus-Schuck, Attorney General of Puerto Rico, and Miriam Naviera de Rodon, Solicitor General.
, Gustavo A. Gelpi argued the cause and filed a brief for appellee.
Solicitor General Bork, Assistant Attorney General Petersen, Deputy Solicitor General Frey, Gerald P. Norton, Jerome M. Feit, and Joseph S. Daoies, Jr., filed a brief for the United States as amicus curiae urging reversal.
Mr. Justice Brennan
delivered the opinion of the Court.
The question presented is whether the Constitution is violated by application to appellee, the lessor of a yacht, of Puerto Rican statutes providing' for seizure and.forfeiture of vessels used for unlawful purposes when (1) the yacht was seized without prior notice or hearing after allegedly being used by a lessee for an - unlawful purpose, and (2) the appellee was neither involved in nor aware of the act of the lessee which resulted in the forfeiture.
- In March 1971, appellee, Pearson Yacht Leasing Co., leased a pleasure yacht to two Puerto Rican residents. Puerto Rican authorities' discovered marihuana on board the yacht in early May 1972, and charged one of the lessees with violation of the Controlled Substances Act of Puerto Rico, P. R. Laws Ann., Tit. 24, •§ 2101 et seq. (Supp. 1973). On July 11,1972, the Superintendent of Police seized the yacht pursuant to P. R. Laws Ann., Tit. 24, §§ 2512 (a)(4), (b) (Supp. 1973), and Tit. 34, § 1722 (1971), which provide that vessels used to. transport, or to. facilitate the transportation of, controlled substances,.including marihuana, are subject to seizure and forfeiture to the Commonwealth of Puerto Rico. The vessel was seized without prior notice to appellee or either lessee and without a prior adversary hearing. The lessees, who had registered the yacht with the Ports Authority of the Commonwealth, were thereafter given notice within 10 days of the seizure, as required by § 1722 (a). But when a challenge to the seizure was not made within 15.days after service of the notice, the yacht was forfeited for official use of the Government of Puerto Rico pursuant to § 1722 (c). Appellee shortly thereafter first learned of the seizure and forfeiture when attempting to repossess the yacht from the lessees, because of their apparent failure to pay rent.. It is conceded that appellee was. “in no way.. involved in the criminal enterprise carried oh'by : [the]' lessee” and “had no knowledge that its property was being used in connection with or in•• violation of [Puerto Rican Law].”
. Qfi November 6, 1972, appellee filed this suit, seeking a» declaration that application of P. R. Laws'Ann., Tit. 24, §§ 2512 (a)(4), (b), and Tit.- 34, § 1722, had(l) unconstitutionally denied it due process of law insofar as the statutes authorized appellants, the Superintendent of Police.and the Chief of the Office of Transportation of the Commonwealth, to seize the yacht without notice or a prior adversary hearing, and (2) unconstitutionally deprived appellee of its property without just compensation. Injunctive relief was also sought.
A three-judge District Court, relying principally upon Fuentes v. Shevin, 407 U. S. 67 (1972), held that the. failure of the statutes to provide for preseizure notice and hearing rendered them constitutionally defective. 363 F. Supp. 1337, 1342-1343 (PR 1973). Viewing United States v. United States Coin & Currency, 401 U. S. 715 (1971), as having effectively overruled our prior decisions that the property owner’s innocence has no constitutional significance for purposes of forfeiture, the District Court further declared that the Puerto Rican statutes, insofar as applied to forfeit appellee’s interest in the yacht, unconstitutionally deprived it of property without just compensation. 363 F. Supp., at 1341-1342. Appellants were ^accordingly enjoined from enforcing the statutes “insofar as they deny the owner or person in charge of property an opportunity for a hearing due to the lack of notice, before the seizure and forfeiture of its property and insofar as a penalty is imposed upon innocent parties.” Id., at 1343-1344. We noted probable jurisdiction. 414 U. S. 816 (1973). We reverse.
I
Although the parties consented to the convening of the three-judge court and hence do not challenge our jurisdiction to decide this direct appeal, we nevertheless may not entertain the appeal under 28 U. S. C. § 1253 unless statutes of Puerto Rico are “State statute [s]” for purposes of the Three-Judge.Court Act, 28 U. S. C. § 2281. We therefore turn first to that question.
In Stainback v. Mo Hock Ke Lok Po, 336 U. S. 368 (4949), this Court held.that enactments of the Territory of. Hawaii were not “State statute[s] ” for purposes of Judicial Code § 266, the predecessor to 28 U. S. C. § 2281, reasoning:
“While, of course, great respect is to be paid to the enactments of a territorial legislature by all courts as it is to the- adjudications of territorial courts, the predominant reason for the énactment of Judicial Code § 266 does not exist as respects territories. This reason was a congressional purpose to avoid unnecessary interference with the. laws of a sovereign state. In our dual system of government, the position of the state as sovereign over matters not ruled by the Constitution requires a deference to state legislative action beyond that required for the laws of a territory. A territory is subject'to congressional regulation.” 336 U. S., at 377-378 (footnotes omitted) (emphasis added).
Similar reasoning — that the purpose of insulating a sovereign Spate’s laws from interference by a single judge would not be furthered by broadly interpreting the word “State” — led the Court of Appeals for the First Circuit some 55 years ago to hold § 266 inapplicable to the laws of the' Territory of Puerto Rico. Benedicto v. West India & Panama Tel. Co., 256 F. 417 (1919).
Congress, however, created.the Commonwealth of Puerto Rico after Benedicto was decided. Following the Spanish-American War, Puerto Rico was ceded to this country in the Treaty of Paris, 30 Stat. 1754 (1898). A brief interlude of military control Was followed by congressional enactment of a series of Organic Acts fob the government of the island. Initially these enactments established a local governmental structure with high officials appointed by the President. These Acts also retained veto power in the President, and Congress over local legislation. By 1950, however, pressures for greater autonomy led to congressional enactment of Pub. L. 600, 64 Stat. 319, which offered the people of Puerto Rico a compact whereby they might-establish a government under their own constitution. Puerto Rico accepted the compact, and on July 3, 1952, Congress approved, with minor amendments, a constitution adopted by -the Puerto Rican populace, 66 Stat.,327; see note accompanying 48 U. S. C.J 731d. Pursuant to that constitution the Commonwealth now “elects its Governor and legislature; appoints its judges, all cabinet officials, and lesser officials in the executive branch; sets its own educational policies; determines its own budget; and amends its own civil and criminal code.” Leibowitz, The Applicability of Fed-era! Law to the Commonwealth of Puerto Rico, 56 Geo. L. J. 219, 221 (1967); see 28 Dept. of State Bull. 584-589 (1953); Americana of Puerto Rico, Inc. v. Kaplus, 368 F. 2d 431 (CA3 1966); Magruder, The Commonwealth Status of Puerto Rico, 15 U. Pitt. L. Rev. 1 (1953).
These significant changes in Puerto Rico’s governmental structure formed the backdrop to Judge Magruder’s observations in Mora v. Mejias, 206 F. 2d 377 (CA1 1953):
“[I]t may be that the Commonwealth of Puerto Rico — ‘El Estado Libre Asociado de Puerto Rico’ in the Spanish version — organized as a body politic by the. people of Puerto. Rico under their owp constitution,. pursuant to the terms of the compact offered to them in‘Pub. L. 600, and by them accepted, is a State-within the meaning of 28 U. S. C. §2281. The preamble to this constitution refers to the Commonwealth.. T which ‘in the- exercise of our natural rights, we [the people of Puerto Rico] now create within our union with 'the -United States of America,’ Puerto Rico has thus not become a State in the federal Union like.the 48 States, but it would seem to have become a State within a common and accepted meaning of the word. Cf. State of Texas v. White, 1868, 7 Wall. 700, 721.... It is a political entity-created by the act and with the consent of the people of Puerto Rico and joined in union with the United States of America under the terms of the compact.
“A serious argument could therefore be made that the Commonwealth of Puerto Rico is a State within the intendment and policy of 28 U. S. C. § 2281.... If the constitution of the Commonwealth of Puerto Rico is really a ‘constitution’ — as the Congress says it is, 66 Stat. 327, — and- not just another Organic Act approved and enacted by the Congress, then the question is whether the Commonwealth of Puerto Rico is to be deemed ‘sovereign over matters not ruled by the Constitution’, of the United States and thus a ‘State’ within the policy, of 28 U. S. C. §2281, which enactment, in prescribing a'three-judge federal district court, expresses ‘a deference to. state legislative action beyond that required for- the laws of. a territory’ [Stainhack v. Mo Hock Ke Lok Po( 336 U. S., at 378]. whose local affairs are subject tó congressionál regulation.” 206 F. 2d, at 387-388 (footnote omitted).
Lower federal courts. since 1953 have adopted ^this analysis and concluded that Puerto Rico is' to be deemed “sovereign over matters not ruled by the Constitution” and thus a State within the policy of the'Three-Judge Court Act.. See Mora v. Mejias, 115 F. Supp. 610 (PR 1953); Marin v. University of Puerto Rico, 346 F. Supp. 470, 481 (PR 1972); Suarez v. Administrador del Deporte Hipico de Puerto Rico, 354 F. Supp. 320 (PR 1972). And in Wackenhut Corp. v. Aponte, 386 U. S. 268 (1967), we summarily affirmed the decision of a three-judge court for the District of Puerto Rico that had ordered abstention and said:
“[Application of the doctrine of abstention is particularly appropriate in a case... involving] the construction and validity of a statute of the Commonwealth of Puerto Rico. For a due regard for the status of that Commonwealth under its compact with the Congress of the United States dictates, we believe, that it should have the primary opportunity through its. courts to determine the intended scope of its own legislation and. to pass upon the validity of that legislation under its own constitution as well as under the Constitution of the United States.” 266>F. Supp. 401, 405 (.1966).
Although the question of Puerto Rico’s status, under 28 U. S. C. § 2281 was raised in neither the Jurisdictional Statement nor the Motion to Affirm in Wackenhut, and we do not normally feel ourselves bound by a sub silentio exercise of jurisdiction, see Hagans v. Lavine, 415 U. S. 528, 533-535, n. 5 (1974); United States v. More, 3 Cranch 159, 172 (1805), this Court has noted that in threéjudge court cases, “where... the responsibility [is] on the courts to see that the three-judge rule [is] followed,” unexplained action may take on added significance. Stainback v. Mo Hock Ke Lok Po, 336 U. S., at 379-380. This is particularly so, when as in Wackenhut, the opinion supporting the judgment over which we exercised appellate jurisdiction had expressed the view that, abstention was appropriate for reasons of comity, an oft-repeated justification for the abstention doctrine, see, e. g., Railroad Comm’n of Texas v. Pullman Co., 312 U. S. 496, 500 (1941), as well as the principal underpinning of the Three-Judge Court Act. See Steffel v. Thompson, 415 U. S. 452, 465-466 (1974).
While still of the view, that §’2281 is not “a measure of broad social policy to be construed with- great liberality,” Phillips v. United States, 312 U. S. 246, 251 (1941), we believe that the established federal judiciál practice of' treating enactments of the Commonwealth of Puerto Rico as “State statute[s]” for purposes of the Three-Judge Court Act, serves, and does not expand, the purposes of § 2281. We therefore hold that a'three-judge court was properly convened under that statute, and that direct appeal to this Court was proper under 28 U. S. C. § 1253. Accordingly, we now'turn to the merits.
II
Appellants challenge the District Court’s holding that the appellee was denied düe process of law by the omission from § 2512(b),,as it incorporates § 1722, of provisions for preseizure notice and hearing. They argue that seizure for purposes of forfeiture is one of those “ ‘extraordinary situations’ that justify postponing notice and opportunity for a hearing.” Fuentes v. Shepin, 407 U. S., at 90; see Sniadach v. Family Finance Corp., 395 U. S. 337, 339 (1969); Boddie v. Connecticut, 401 U. S. 371, 378-379 (1971). We agree.
In holding that lack of preseizure notice and hearing denied due process, the District. Court réiied primarily upon our decision in Fuentes v. Shevin, supra. Fuentes involved the validity of Floridá and Pennsylvania replevin statutes permitting creditors to seize goods allegedly wrongfully detained. A writ of replevin could be obtained under the Florida statute upon the creditor’s bare assertion to a, court clerk that he was entitled to the próperty, and under the Pennsylvania statute, upon filing an.affidavit' fixing the value of the property, without alleging legal entitlement-to the property. Fuentes-held that the statutory procedures deprived debtors of their property without due process by failing to provide for hearings “ 'at a meaningful time.- ” 407 U. S., at 80.
Fuentes reaffirmed, however, that, in limited circumstances, immediate seizure of a property interest, without, an opportunity for prior hearing, is constitutionally permissible.'Such circumstances are those in which
“the seizure has,been directly fiecessary to secure an important governmental or.general public interest. Second, there has been a special need for very prompt action. Third, the State'has. képt. strict control over its monopoly of legitimate force: the person initiating the seizure has been a-government official responsible for determining, under the standards of a narrowly drawn statute, that it was necessary and justified in the particular instance.” Id., at 91.
Thus, for example, due process is not denied when postponement of notice and hearing is necessary to protect the public from contaminated food, North American Storage Co. v. Chicago, 211 U. S. 306 (1908) from a bank failure, Coffin Bros. & Co. v. Bennett, 277 U. S. 29 (1928); or from misbranded drugs, Ewing v. Mytinger & Casselberry, Inc., 339 U. S. 594 (1950); or to aid the collection of taxes, Phillips v. Commissioner, 283 U. S. 589 (1931); or the war effort, United States v. Pfitsch, 256 U. S. 547 (1921).
The considerations that justified postponement of notice and hearing in those cases are present here. First, seizure under the Puerto Rican statutes serves significant governmental purposes: Seizure peripits Puerto Rico to assert in rem jurisdiction over the property in order to conduct forfeiture proceedings,. thereby fostering the public interest in preventing continued illicit use of the property and in enforcing criminal sanctions. Second, preseizure notice and hearing might frustrate the interests served by the statutes, since the property seized — as here, a yacht — will often be of a sort that could be removed to another jurisdiction, destroyed, or concealed, if advance warning of confiscation were given. And finally, unlike the situation in Fuentes, seizure'is not initiated by self-interested private parties; rather, Commonwealth officials determine whether seizure is appropriate under the.provisions of the Puerto.Rican statutes. In these circumstances, we hold that this case presents an “extraordinary” situation in which postponement of notice and hearing until after. seizure did not deny due process.
m
Appellants next argue that the District Court, erred in holding that the forfeiture statutes unconstitutionally authorized the taking for government use of innocent parties’ property without -just compensation. They urge that a long line of prior decisions of this Court éstablish the principle that statutory forfeiture schemes are not rendered unconstitutional because of their applicability to the property iñterests. of innocents, and further that United States v. United States Coin & Currency, 401 U. S. 715 (1971), did not — contrary.to the opinion of the District Court — overrule those prior precedents sub silentio. We agree. The historical background, of forfeiture statutes in this country and this. Court’s prior decisions sustaining their constitutionality lead to that conclusion.
At common law the value of an inanimate object directly or indirectly causing the accidental.death of a King’s subject was forfeited to the Crown as a deodand. The origins of the deodand are traceable to Biblical and pre-Judeo-Christian practices, which reflected the view that the instrument of death was accused and,that religious expiation was required. See O. Holmes, The Common Law, c. 1 (1881). The value of the instrument was forfeited to the King, in the belief that the King would provide -the money' for Masses to be said, for the good of the dead man’s soul, or insure that the deodand was put to charitable uses. 1 W. Blackstóne, Commentaries *300. When application of the deodand to religious or eleemosynary purposes ceased, and the deodand became a source of Crown revenue, the institution was justified as a penalty for carelessness.
Forfeiture also resulted at common law from conviction for felonies and treason. The convicted felon forfeited his chattels to the Crown and his lands escheated to his lord; the convicted traitor forfeited all of his property, real and personal, to the Crown. See 3 W. Holdsworth, History of English Law 68-71 (3d ed. 1927); 1 F. Pollock & F. Maitland, History of English Law 351 (2d ed. 1909). The basis for these forfeitures was that a breach of the criminal law was an offense to the King’s peace, which was felt to justify denial of the right to own property. See 1 W. Blackstone, Commentaries *299. •
In addition, English Law provided for statutory forfeitures of offending objects used in violation of the customs and revenue laws — likely a product of the. confluence and merger of the deodand tradition and the belief that the right to own property could be denied the wrongdoer. Statutory forfeitures were most often enforced under the in rem procedure utilized in the Court of Exchequer to forfeit the property of felons. See 3 W. Blackstone, Commentaries *261-262; C. J. Hendry Co. v. Moore, 318 U. S. 133, 137-138 (1943).
. Deodands did not become part of the common-iaw tradition of this country. See Parker-Harris Co. v. Tate 135 Tenn. 509, 188 S. W. 54 (1916). Nor has forfeiture of estates as a consequence of federal criminal conviction been permitted, see 18 U. S. C. § 3563; Rev. Stat. § 5326 (1874); 1 Stat. 117 (1790). Forfeiture of estates resulting from a conviction for treason has been constitutionally proscribed by Art. Ill, s 3, though forfeitures of estates for the lifetime of a traitor have been sanctioned, see Wallach v. Van Riswick, 92 U. S. 202 (1876). But “[l]ong before the adoption of the Constitution the common law courts in the Colonies — and later in the states during the period of Confederation — were exercising jurisdiction, in rem in the enforcement of [English and local] forfeiture statutes,” C. J. Hendry Co. v. Moore, supra, at 139, which provided’ for the forfeiture of commodities and vessels used in violations of customs and revenue laws. See id., at 145-148; Boyd v. United States, 116 U. S. 616, 623 (1886). And almost immediately after adoption of the Constitution, ships and cargoes involved’ in customs offenses were made subject to forfeiture under, federal law, as were vessels used to deliver slaves to foreign countries, and somewhat later those used to deliver slaves to this country. The enactment of forfeiture statutes has not abated; contemporary federal and state forfeiture statutes reach virtually any type of property that might be used in the conduct of a criminal enterprise.
Despite this proliferation of forfeiture enactments, the innocence of the owner of property subject’to forfeiture has almost uniformly been rejected as a defense. Thus, Mr. Justice Story observed in The Palmyra, 12 Wheat. 1 (1827), that a conviction for piracy was not a prerequisite to a proceeding to forfeit a ship allegedly engaged in piratical aggression in violation of a federal statute:
“It is well known, that at the common law, immany _ cases of felonies, the party forfeited his goods and chattels to the crown. The forfeiture did; not, strictly speaking, attach in rem; but it was a part, or at least a consequence, of the judgment of conviction.... [T]he [Crown’s right to the goods and chattels] attached only by the conviction of the offender.... But this doctrine never was applied to seizures and forfeitures, created by statute, in rem, cognizable on the revenue side of the Exchequer. The thing is here primarily considered as the offender, or rather the offence is attached primarily to the thing; and this, whether the offence be malum" prohibitum, or malum in se.... [T]he practice has been, and so this Coürt understand the law to be, that the proceeding in rem stands independent of, and wholly unaffected by any criminal proceeding in personam.” Id., at 14-15.
This rationale was relied upon to sustain the statutory forfeiture of a vessel found to have been engaged in piratical conduct where the innocence of the owner was “fully established.” United States v. Brig Malek Adhel, 2 How. 210, 238 (1844). The vessel was “treated as the offender,” without regard to the owner’s conduct,, “as the only adequate means of suppressing the offence or wrong, or insuring an indemnity to the injured party.” Id., at 233.
Dobbins’s Distillery v. United States, 96 U. S. 395 (1878), is an illustration of how severely this principle has been applied. That case involved a lessee’s violations of the revenue laws which led to the seizure of real.and personal property used in connection with a distillery. The lessor’s assertions of innocence were rejected as a defense to a federal statutory forfeiture of his entire property, for the offense “attached primarily to the distillery, and the real and personal property used in connection with the same, without any regard whatsoever to the personal misconduct or responsibility of the owner, beyond what necessarily arises from the fact that he leased the property to the distiller, and suffered it to be occupied and used by the lessee as a distillery.” Id., at 401; see United States v. Stowell, 133 U. S. 1, 13-14 (1890).
Decisions reaching the same conclusion have continued into this century. In Goldsmith-Grant Co. v. United States, 254 U. S. 505 (1921), it was held that the federal tax-fraud' forfeiture statute did not deprive an innocent owner of his property in violation of the Fifth Amendment. There, the claimant was a conditional vendor of a taxicab that had been used in the1 removal and concealment of distilled spirits upon which the federal tax was unpaid. Although recognizing that arguments against the application of the statute to (¡over an innocent owner were not without force, the Court rejected them, saying:
“In breaches of revenue provisions some forms of property, are facilities, and therefore it may be said, that Congress interposes the care and responsibility of their owners in aid of the prohibitions of the law and its punitive provisions, by ascribing to the property a certain personality, a power of complicity arid guilt in the wrong. In such case there is some analogy to the law óf deodand by which a personal chattel that was the immediate cause of the death of any reasonable creature was- forfeited. To the superstitious reason to which the rule was ascribed, Blackstone adds ‘that such misfortunes are in part owing to the negligence of the owner, and therefore he is. properly punished by such forfeiture.’...
“But whether the reason for [the forfeiture] be artificial or real, it is too firmly fixed in the punitive and remedial jurisprudence of the country. to be. now displaced.” Id., at 510-511.
See also United States v. One Ford Coupe Automobile, 272 U. S. 321 (1926) (Brandeis, J.); General Motors Acceptance Corp. v. United States, 286 U. S. 49 (1932) (Cardozo, J.). In Van Oster v. Kansas, 272 U. S. 465 (1926),. the Court upheld, against a Fourteenth Amendment attack, a forfeiture under state law of an innocent owner’s interest in an automobile that he had entrusted to an alleged wrongdoer. Judicial inquiry into the guilt or innocence of the owner could be dispensed with, the Court held, because state lawmakers, in the exercise of the police power, were free to determine that certain uses-of property were undesirable and then establish “a secondary defense against a forbidden use....” Id., at 467.
'Plainly, the Puerto Rican forfeiture statutes further the punitive and deterrent purposes that have been found sufficient to uphold, against constitutional challenge, the application of other forfeiture statutes to the property of innocents. Forfeiture of conveyances that have been used — and may be used again — in violation of the narcotics laws fosters the purposes served by the underlying criminal statutes, both by.preventing further illicit use of the conveyance and by imposing an economic penalty, thereby rendering illegal, behavior unprofitable. See, e. g., H. R. Rep. No. 1064, 76th Cong., 1st Sess. (1939); S. Rep. No. 926, 76th Cong., 1st Sess. (1939); H. R. Rep. No. 2751, 81st Cong., 2d Sess. (1950); S. Rep. No. 1755, 81st Cong., 2d Sess. (1950). To. the extent that such forfeiture provisions are applied to lessors, bailors^ or secured creditors who are innocent of any wrongdoing, confiscation may have the desirable effect of inducing them to exercise greater care in transferring possession of their property. Cf. United States v. One Ford Coach, 307 U. S. 219, 238-241 (1939) (Douglas, J., dissenting).
Against the legitimate governmental interests served by the Puerto Rican statutes and the long line of this Court’s decisions which squarely collide with appellee’s assertion of a constitutional violation, the District Court opposed our decision in United States v. United States Coin & Currency, 401 U. S. 715 (1971). This reliance was misplaced. In Coin & Currency,.the Government claimed that the; privilege against self-incrimination could not be asserted in a forfeiture proceeding under 26 U. S. C. § 7302 by one in possession of money seized from him when used in an | 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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"Comptroller of Currency",
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"Civil Service Commission, U.S.",
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] | [
116
] | sc_adminaction |
ELDER et al. v. BRANNAN, SECRETARY OF AGRICULTURE.
NO. 474.
Argued April 11, 1951.
Decided May 7, 1951.
Morton Liftin argued the cause for the Secretary of Agriculture. With him on the briefs were Solicitor General Perlman, Assistant Attorney General Baldridge and Samuel D. Slade. Acting Assistant Attorney General Clapp was also on the brief in No. 473.
Robert D. Elder and Greene Chandler Furman, pro se, argued the cause and filed a brief. C. L. Dawson was also on the brief.
Mr. Justice Clark
delivered the opinion of the Court.
These actions involve questions concerning the precise scope of rights to employment in the federal service granted by the Veterans’ Preference Act of 1944. 58 Stat. 387, 5 U. S. C. (1946 ed.) §§ 851 et seq. The ultimate issues are two: (1) whether under § 12 of the Act veterans with temporary war-service appointments are entitled to retention preference over nonveterans with the equivalent of classified civil service status when reduction-in-force discharges are made; and (2) whether the reemployment rights of veterans lawfully discharged are governed by § 12 retention priorities or by other provisions of the Act.
We treat these cases together, as did the courts below, and shall refer to Elder and Furman as petitioners. Petitioners are honorably discharged veterans and as such are concededly entitled to whatever benefits the Act affords. They were appointed associate attorneys in the Office of the Solicitor of the Department of Agriculture in July and August 1943. At the time of their appointments, a civil service regulation was in effect under which all appointments as attorneys were to be limited to the duration of the war plus six months, and persons so appointed were not to acquire a classified (competitive) civil service status. On May 29, 1947, petitioners and eighteen other attorneys in the Department were notified that, because of a reduction in force compelled by lack of funds, they would be separated from service on June 30 following. Nonveteran attorneys with the equivalent of classified status were to be retained. The selection was made on the basis of civil service retention-preference regulations — under § 12 — which plainly required that nonveterans with classified status or its equivalent be given a higher retention priority than veterans without.
Plaintiffs appealed to the Commission, which subsequently found that their separation was in accord with the statute and regulations. Meanwhile, however, they instituted these actions in the District Court for the District of Columbia, alleging first that they had acquired a classified status, and hence were entitled under the regulations to a retention priority over nonveterans; second, that in any event, the statute gave veterans an absolute retention priority regardless of status, and that Commission regulations to the contrary were invalid.
While these actions were pending, the Department came into additional funds, and several attorneys not reached for separation resigned voluntarily or transferred. The Department then rehired nine of the attorneys previously separated, the first of whom took office on October 27, 1947. Some of the attorneys rehired were nonveterans with a lower reduction-in-force retention priority than that possessed by petitioners at the time all were separated. On this ground, the latter amended their complaints before the District Court to allege in addition that they had been deprived of a preferential right to “reemployment” or “reinstatement.” The Secretary moved for a summary judgment, and the District Court granted the motion. On appeal, the Court of Appeals affirmed the judgment that petitioners’ separation from the service was lawful. But it found that the allegations concerning violation of reemployment or reinstatement rights were well founded. The court therefore reversed and remanded with directions that the Secretary be given leave to deny the facts alleged. 87 U. S. App. D. C. 117,184 F. 2d 219. From this judgment, the parties filed cross-petitions for review. Petitioners sought review of the judgment that their separation was lawfully carried out. The Secretary sought review of the judgment that petitioners’ allegations as to deprivation of reemployment or reinstatement rights stated a cause of action under the statute. We granted certiorari because of the obvious impact of these issues on federal employment policies. 340 U. S. 928 (1951).
For reasons outlined below, we agree that petitioners’ separation from service was in full accord with the statute. We disagree with the holding that the allegations of the complaint are sufficient to state an unlawful deprivation of a preferential right to reemployment.
I.
As the Court of Appeals pointed out, there is no merit in petitioners’ contention that they had acquired a classified civil service status and were thus entitled under the regulations to retention preference over all nonveterans. The validity of petitioners’ discharge, therefore, turns on the validity of the Commission’s retention-preference regulations. 5 CER (Supp. 1947) § 20.3. These regulations were adopted pursuant to § 12 of the Veterans’ Preference Act, 5 U. S. C. § 861, which reads in part as follows:
“In any reduction in personnel in any civilian service of any Federal agency, competing employees shall be released in accordance with Civil Service Commission regulations which shall give due effect to tenure of employment, military preference, length of service, and efficiency ratings: Provided, . . . That preference employees whose efficiency ratings are ‘good’ or better shall be retained in preference to all other competing employees and that preference employees whose efficiency ratings are below ‘good’ shall be retained in preference to competing nonpreference employees who have equal or lower efficiency ratings . . . .” (Emphasis added.)
The regulations first define “competing” employees on the basis of tenure of employment. The highest priority is given Group A, which includes (1) employees having classified civil service status, and (2) those holding positions excepted from examination requirements and whose appointments are without time limitation. Group B, second in retention priority, includes employees without classified status or whose appointments are limited to the duration of the war plus six months. Group C is composed of employees appointed for one year or less. The regulations then classify employees within each group on the basis of veterans’ preference and efficiency ratings. Subgroups A-l, B-l and C-l include employees with both veterans’ preference and efficiency ratings of “good” or better. Subgroups A-2, B-2 and C-2 include those with “good” or better efficiency ratings but without veterans’ preference. Under these regulations, petitioners, as war-service employees, were classified B-l, and were separated while some nonveteran attorneys with an A-2 classification (permanent employees) were retained. The Secretary had no other choice, since the regulations group employees by tenure and limit the reach of veterans’ preference to competing employees of the same group.
Petitioners contend that this feature violates the statute, that the proviso of § 12 plainly gives veterans with an efficiency rating of “good” or better an absolute preference over all other employees, with or without classified status or its equivalent. But the proviso, like the body of § 12, contains the term “competing” employees, which necessarily implies that a veteran’s preference operates only within a defined group. And since the statute does not supply a definition, we must determine from the legislative history of the Act, and from prior legislation and regulations, whether the Commission’s definition may reasonably be said to “carry into full effect the provisions, intent, and purpose [of the statute].” 5 U. S. C. § 868.
This Court made a similar examination in Hilton v. Sullivan, 334 U. S. 323 (1948). The decision in that case upheld the retention-preference regulations insofar as they granted veterans with classified status an absolute priority over nonveterans of the same status regardless of length of service. The Court stated that in the light of all pertinent history “no other interpretation of [§ 12] . . . can fairly be reached.” Id. at 336. Since “length of service” and “tenure of employment” appear as parallel terms in the body of § 12, it can be argued that if the proviso eliminates length of service as a barrier to veterans’ preference, it also eliminates tenure. But this ignores a crucial difference in the historical treatment of these two factors. Executive orders and Civil Service regulations prior to 1944 had consistently disregarded length of service in giving veterans preference over non-veterans with the same tenure — a fact stressed in the Hilton case. Id. at 336-337. On the other hand, the regulations had just as consistently distinguished “competing” groups on the basis of tenure, and had confined the scope of veterans’ preference to employees of the same group. As early as 1932, the Commission provided that reduction in force was to be carried out in inverse order of tenure, permanent employees to be separated last. The rule was still in force at the time the Veterans’ Preference Act of 1944 was passed. 5 CFR (Supp. 1943) § 12.304.
Moreover, the legislative history of the Act is barren of any indication that this long-established separation of “competing” employees on the basis of tenure was to be broken down and subordinated to veterans’ preference. In general, the Act was designed to “give legislative sanction to existing veterans’ preference” and to “give some additional strength” to that preference. Additional rights granted were specifically brought to the Congress’ attention. One addition which was stressed, for example, was the third proviso of § 12, which grants preference to veteran employees of an agency when that agency is replaced or any of its functions transferred to another administrative body. But, in the only interpretive discussion of the proviso here involved, Commissioner Flem-ming stated that it “simply continues what has been in practice throughout the entire Federal service since 1923.” More important, two bills earlier proposed by veterans’ organizations would have specifically granted the right which plaintiffs claim in this case — absolute preference in retention regardless of tenure. These bills were rejected in favor of § 12 as enacted, the language of which was proposed by the Commission itself. In sum, the Commission’s retention regulations can hardly be called invalid for making a distinction on the basis of tenure when they reflect a long-standing definition of “competing” groups, when they were issued by the agency which proposed the statutory language finally adopted, and when Congress indicated no intent whatsoever to supply a new standard.
Two further points remain. Petitioners contend that, apart from § 12, veterans were given an absolute preference by § 4 of the Act of 1912, 37 Stat. 413, and that the preference so granted was carried over by the saving clause in § 18 of the 1944 Act. 5 U. S. C. § 867. The flaw in this argument, as the court below pointed out, is that § 4 by its terms was confined to the classified civil service. Its features were subsequently applied, under Executive Orders, within the unclassified service, but as indicated above, temporary appointment veterans never had retention preference over permanent tenure nonvet-erans. Alternatively, petitioners contend that § 2 of the 1944 Act in and of itself extends absolute preference to veterans with limited tenure. 5 U. S. C. § 851. But it seems apparent that § 2 gives no specific preference rights at all. The section contains only a general statement of policy, a listing of preferred groups, and a specification of federal positions covered. It provides that “preference shall be given” in certification for appointment, appointment, reinstatement, reemployment and retention; it does not delineate what that preference shall be. The details are spelled out in subsequent sections of the Act, retention preference being governed by § 12. Cf. Hilton v. Sullivan, supra. Section 2 was described throughout the legislative history as merely “defining the groups to whom preference was to be granted.”
Since retention rights are governed by § 12, and since the regulations are consistent with the statute, petitioners were properly separated from their positions in the federal service.
II.
The complaint that plaintiffs were wrongfully denied preference in rehiring rests solely on the allegation that the Department reemployed attorneys with a lower classification on the retention register. The Court of Appeals concluded that this allegation, not denied by the Secretary, was sufficient to state a cause of action under the statute. It held that § 2 of the statute granted “reinstatement and re-employment” preference rights, and that these rights were measured by the retention-preference regulations under § 12. 87 U. S. App. D. C. 117, 120, 184 F. 2d 219, 222 (C. A. D. C. Cir. 1950). Neither of these holdings withstands analysis. Section 2, as has been indicated, grants no specific rights except insofar as it maybe thought to preserve, in conjunction with § 18, any rights previously arising from statute, executive order or regulation and not granted by the other sections of the 1944 Act.
Nor are we able to accept the ruling that reinstatement or reemployment preferences are to be measured by retention-preference regulations under § 12. Reemployment preferences are specially dealt with elsewhere in the Act. Section 15 provides that all preference eligibles who have been separated without fault on their part may — at their request — have their names placed on all appropriate registers or employment lists for positions for which they are qualified. 5 U. S. C. § 864. It further provides that their eligibility for reappointment is then governed by § § 7 and 8 of the Act, dealing with appointments in general. 5 U. S. C. §§ 856, 857. The names of preference eligibles are placed on the appropriate registers or lists in accordance with their respective numerical ratings, which are augmented by 10 points in the case of disabled veterans, their wives, or unmarried widows of deceased veterans; 5 points in the case of other preference eligibles. 5 U. S. C. § 852. The appointing officer may pass over a veteran in favor of a nonveteran, but if he does so he must file in writing his reasons therefor, and the Commission must examine those reasons to determine their sufficiency. Section 15 further provides that no appointment shall be made from an examination register, except of 10-point preference eligibles, when there are three or more names of preference eligibles on any appropriate reemployment list for the position to be filled.
There is no persuasive reason why the provisions of § 15 are not applicable in this case. Petitioners make a twofold argument to the contrary: (1) that their right was to preference in “reinstatement” rather than in “reemployment,” and that “reinstatement” preference is granted and governed by § 2; (2) that § 15 applies only to the competitive civil service, from which attorneys were excepted by regulations taking effect May 1, 1947. 12 Fed. Reg. 2839, 5 CFR (Supp. 1947) § 6.4. Even if valid, the first contention is of no help to petitioners. “Reinstatement” — to the extent it had any peculiar meaning in civil service parlance prior to the time that 1944 Act was passed — meant reemployment of a person upon formal request of the appointing officer. 1 Fed. Reg. 602, 5 CFR §§ 9.1, 9.101 (1939). The preference accorded veterans was that they might be reinstated without time limit, whereas a request for reinstatement of nonveterans had to come within specified periods after their separation. The term was not confined to reappointment to a position formerly held. An involuntarily separated employee could be reinstated in any part of the service, and the Commission was authorized to provide for similar reinstatement of any classified status employee. The apparent analogue of this type of reemployment is contained in § 13 of the 1944 Act, which provides that any preference eligible “who has resigned or who has been dismissed or furloughed” may be appointed to any position for which he is eligible “at the request of any appointing officer.” 5 U. S. C. § 862. Petitioners would interpret § 2 as creating an entirely new and absolute right of preference in “reinstatement,” not dependent upon the request of the appointing officer. Such an interpretation would not only stretch § 2 beyond its apparent and intended scope, but would in effect strike § 15 off the books, since no veteran would ever have cause to use the limited preference in reemployment there granted.
The second claim, that § 15 covers reemployment only in positions within the competitive civil service, is clearly erroneous. The section provides that the name of a preference eligible be placed on appropriate registers and lists “for every position for which his qualifications have been established, as maintained by the Civil Service Commission, or as shall be maintained by any agency or project of the Federal Government . . . .”
Petitioners were lawfully separated from their positions in the Department of Agriculture. Their rights to preference in reemployment were governed by § 15 of the Act. They were entitled to those rights only if they requested that their names be placed on the appropriate reemployment list. Their complaints contain no allegation that they made such a request. And even if they did so, their preference rights were violated only if the appointing officer failed to follow the procedures specified by §§ 7, 8, 15 and pertinent regulations. Again, there are no such allegations in the complaints. The complaints as they stand are fatally defective in these respects, and unless petitioners on remand are able to supply the missing links in allegations and proof, the Secretary is entitled to a summary judgment.
The judgment of the Court of Appeals is affirmed in part and reversed in part, and the cases are remanded to the District Court for further proceedings in conformity with this opinion.
So ordered.
Mr. Justice Black dissents.
Executive Order 9063, issued February 16, 1942, and in effect at all times relevant, authorized the Civil Service Commission to formulate special procedures for the recruitment of personnel during the war, and further provided that
“[p]ersons appointed solely by reason of any special procedures adopted under authority of this order . . . shall not thereby acquire a classified (competitive) civil-service status, but, in the discretion of the Civil Service Commission, may be retained for the duration of the war and for six months thereafter.” 3 CFR (Cum. Supp. 1943) 1091. On March 16, 1942, the Board of Legal Examiners, functioning under the Commission, amended its regulations to provide that all appointment to attorney positions be effected under this Executive Order, and be limited to the duration of the war plus six months. 7 Fed. Reg. 2201. See also Executive Order 9230, 7 Fed. Reg. 6665, 3 CFR (Cum. Supp. 1943) 1201, 1202. This regulation was continued in effect by § 17.1 (g) of the Board’s regulations, 5 CFR (Cum. Supp. 1943) § 17.1 (g), and § 17.1 (g) remained in effect when, by Executive Order 9358 of July 1, 1943, 8 Fed. Reg. 9175, the functions of the Board were vested in the Commission itself. No plausible reason has been or could be advanced for holding this regulation invalid.
Minute of the Civil Service Commission, August 11, 1932. See Civil Service Commission, Acts, Rules and Regulations (as amended to September 15, 1934), p. 54.
Statement of Representative Starnes, author of the bill, Hearings before Senate Committee on Civil Service on S. 1762 and H. R. 4115, 78th Cong., 2d Sess. 8-9; statement of Representative Ram-speck, Chairman of the Civil Service Committee, 90 Cong. Rec. 3505 (1944).
Hearings, supra, note 3 at 9-10. For a specification of this and other additions to veterans’ rights, see also, 90 Cong. Rec. 3503; S. Rep. No. 907, 78th Cong., 2d Sess. 2-4; H. R. Rep. No. 1289, 78th Cong., 2d Sess. 3-4.
Hearings, supra, note 3 at 27.
H. R. 5101, 76th Cong., 1st Sess.; H. R. 5147, 76th Cong., 1st Sess.
H. R. Rep. No. 1289, supra, note 4 at 6.
H. R. Rep. No. 1289, supra, note 4 at 3; S. Rep. No. 907, supra, note 4 at 2; 90 Cong. Rec. 3503.
The provisions of Part 9 were superseded in part by the wartime service regulations adopted in 1943, § 18.8 of which provided that former employees with at least one year’s service “may be reappointed by war service appointment to any position for which he meets the standards,” and further provided that veterans who would have status for reinstatement under Part 9 could be reemployed without regard to length of prior service. 5 CFR (Supp. 1943) § 18.8. | 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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"Bureau of Indian Affairs",
"Bureau of Prisons",
"Bonneville Power Administration",
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"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",
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"Department or Secretary of Education",
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MUELLER et al. v. ALLEN et al.
No. 82-195.
Argued April 18, 1983 —
Decided June 29, 1983
William I. Kampf argued the cause for petitioners. With him on the brief were James A. Lee, Jr., Charles S. Sims, and Burt Neubome.
Douglas C. Blomgren, Special Assistant Attorney General of Minnesota, argued the cause for respondents. With him on the brief for respondent Allen were Hubert H. Humphrey III, Attorney General, Catharine F. Haukedahl, Special Assistant Attorney General, and William P. Marshall. John R. Kenefiek filed a brief for respondents Becker et al. Timothy P. Quinn and Andrew J. Eisenzimmer filed a brief for respondents Berthiaume et al.
Briefs of amici curiae urging reversal were filed by Lee Boothby and Robert W. Nixon for Americans United for Separation of Church and State; by John W. Baker for the Baptist Joint Committee on Public Affairs; and by Russell C. Brown for the Minnesota Association of School Administrators et al.
Briefs of amici curiae urging affirmance were filed by Solicitor General Lee, Assistant Attorney General McGrath, Deputy Assistant Attorney General Kuhl, John H. Garvey, Robert E. Kopp, and Michael F. Hertz for the United States; by Edward McGlynn Gaffney, Jr., for the Council for American Private Education et al.; by Nathan Lewin, Daniel D. Chazin, and Dennis Rapps for the National Jewish Commission on Law and Public Affairs; by David J. Young for Citizens for Educational Freedom; and by Wilfred R. Caron, Edward Bennett Williams, and John A. Liekweg for the United States Catholic Conference.
Briefs of amici curiae were filed by Charles E. Rice for the Catholic League for Religious and Civil Rights; by Henry C. Clausen for United Americans for Public Schools; by John J. Donnelly for Parents Rights, Inc.; by Gwendolyn H. Gregory, August W. Steinhilber, and Thomas A. Shannon for the National School Boards Association; by William H. Mellor III and Maxwell A. Miller for the Mountain Legal States Foundation et al; and by Robert Chanin, Laurence Gold, Nathan Z. Dershowitz, and Marc D. Stem for the National Committee for Public Education and Religious Liberty et al.
Justice Rehnquist
delivered the opinion of the Court.
Minnesota allows taxpayers, in computing their state income tax, to deduct certain expenses incurred in providing for the education of their children. Minn. Stat. §290.09, subd. 22 (1982). The United States Court of Appeals for the Eighth Circuit held that the Establishment Clause of the First Amendment, as made applicable to the States by the Fourteenth Amendment, was not offended by this arrangement. Because this question was reserved in Committee for Public Education v. Nyquist, 413 U. S. 756 (1973), and because of a conflict between the decision of the Court of Appeals for the Eighth Circuit and that of the Court of Appeals for the First Circuit in Rhode Island Federation of Teachers v. Norberg, 630 F. 2d 855 (CA1 1980), we granted certiorari. 459 U. S. 820 (1982). We now affirm.
Minnesota, like every other State, provides its citizens with free elementary and secondary schooling. Minn. Stat. §§120.06, 120.72 (1982). It seems to be agreed that about 820,000 students attended this school system in the most recent school year. During the same year, approximately 91,000 elementary and secondary students attended some 500 privately supported schools located in Minnesota, and about 95% of these students attended schools considering themselves to be sectarian.
Minnesota, by a law originally enacted in 1955 and revised in 1976 and again in 1978, permits state taxpayers to claim a deduction from gross income for certain expenses incurred in educating their children. The deduction is limited to actual expenses incurred for the “tuition, textbooks and transportation” of dependents attending elementary or secondary schools. A deduction may not exceed $500 per dependent in grades K through 6 and $700 per dependent in grades 7 through 12. Minn. Stat. §290.09, subd. 22 (1982).
Petitioners — certain Minnesota taxpayers — sued in the United States District Court for the District of Minnesota claiming that §290.09, subd. 22, violated the Establishment Clause by providing financial assistance to sectarian institutions. They named as defendants, respondents here, the Commissioner of the Department of Revenue of Minnesota and several parents who took advantage of the tax deduction for expenses incurred in sending their children to parochial schools. The District Court granted respondents’ motion for summary judgment, holding that the statute was “neutral on its face and in its application and does not have a primary effect of either advancing or inhibiting religion.” 514F. Supp. 998, 1008 (1981). On appeal, the Court of Appeals affirmed, concluding that the Minnesota statute substantially benefited a “broad class of Minnesota citizens.” 676 F. 2d 1195, 1205 (1982).
Today’s case is no exception to our oft-repeated statement that the Establishment Clause presents especially difficult questions of interpretation and application. It is easy enough to quote the few words constituting that Clause— “Congress shall make no law respecting an establishment of religion.” It is not at all easy, however, to apply this Court’s various decisions construing the Clause to governmental programs of financial assistance to sectarian schools and the parents of children attending those schools. Indeed, in many of these decisions we have expressly or implicitly acknowledged that “we can only dimly perceive the lines of demarcation in this extraordinarily sensitive area of constitutional law.” Lemon v. Kurtzman, 403 U. S. 602, 612 (1971), quoted in part with approval in Nyquist, 413 U. S., at 761, n. 5.
One fixed principle in this field is our consistent rejection of the argument that “any program which in some manner aids an institution with a religious affiliation” violates the Establishment Clause. Hunt v. McNair, 413 U. S. 734, 742 (1973). See, e. g., Bradfield v. Roberts, 175 U. S. 291 (1899); Walz v. Tax Comm’n, 397 U. S. 664 (1970). For example, it is now well established that a State may reimburse parents for expenses incurred in transporting their children to school, Everson v. Board of Education, 330 U. S. 1 (1947), and that it may loan secular textbooks to all schoolchildren within the State, Board of Education v. Allen, 392 U. S. 236 (1968).
Notwithstanding the repeated approval given programs such as those in Allen and Everson, our decisions also have struck down arrangements resembling, in many respects, these forms of assistance. See, e. g., Lemon v. Kurtzman, supra; Levitt v. Committee for Public Education, 413 U. S. 472 (1973); Meek v. Pittenger, 421 U. S. 349 (1975); Wolman v. Walter, 433 U. S. 229, 237-238 (1977). In this case we are asked to decide whether Minnesota’s tax deduction bears greater resemblance to those types of assistance to parochial schools we have approved, or to those we have struck down. Petitioners place particular reliance on our decision in Committee for Public Education v. Nyquist, supra, where we held invalid a New York statute providing public funds for the maintenance and repair of the physical facilities of private schools and granting thinly disguised “tax benefits,” actually amounting to tuition grants, to the parents of children attending private schools. As explained below, we conclude that § 290.09, subd. 22, bears less resemblance to the arrangement struck down in Nyquist than it does to assistance programs upheld in our prior decisions and those discussed with approval in Nyquist.
The general nature of our inquiry in this area has been guided, since the decision in Lemon v. Kurtzman, supra, by the “three-part” test laid down in that case:
“First, the statute must have a secular legislative purpose; second, its principal or primary effect must be one that neither advances nor inhibits religion... ; finally, the statute must not foster ‘an excessive government entanglement with religion.’” Id., at 612-613.
While this principle is well settled, our cases have also emphasized that it provides “no more than [a] helpful signpos[t]” in dealing with Establishment Clause challenges. Hunt v. McNair, supra, at 741. With this caveat in mind, we turn to the specific challenges raised against §290.09, subd. 22, under the Lemon framework.
Little time need be spent on the question of whether the Minnesota tax deduction has a secular purpose. Under our prior decisions, governmental assistance programs have consistently survived this inquiry even when they have run afoul of other aspects of the Lemon framework. See, e. g., Lemon v. Kurtzman, supra; Meek v. Pittenger, supra, at 363; Wolman v. Walter, supra, at 236. This reflects, at least in part, our reluctance to attribute unconstitutional motives to the States, particularly when a plausible secular purpose for the State’s program may be discerned from the face of the statute.
A State’s decision to defray the cost of educational expenses incurred by parents — regardless of the type of schools their children attend — evidences a purpose that is both secular and understandable. An educated populace is essential to the political and economic health of any community, and a State’s efforts to assist parents in meeting the rising cost of educational expenses plainly serves this secular purpose of ensuring that the State’s citizenry is well educated. Similarly, Minnesota, like other States, could conclude that there is a strong public interest in assuring the continued financial health of private schools, both sectarian and nonsectarian. By educating a substantial number of students such schools relieve public schools of a correspondingly great burden — to the benefit of all taxpayers. In addition, private schools may serve as a benchmark for public schools, in a manner analogous to the “TVA yardstick” for private power companies. As Justice Powell has remarked:
“Parochial schools, quite apart from their sectarian purpose, have provided an educational alternative for millions of young Americans; they often afford wholesome competition with our public schools; and in some States they relieve substantially the tax burden incident to the operation of public schools. The State has, moreover, a legitimate interest in facilitating education of the highest quality for all children within its boundaries, whatever school their parents have chosen for them.” Wolman v. Walter, supra, at 262 (concurring in part, concurring in judgment in part, and dissenting in part).
All these justifications are readily available to support §290.09, subd. 22, and each is sufficient to satisfy the secular purpose inquiry of Lemon.
We turn therefore to the more difficult but related question whether the Minnesota statute has “the primary effect of advancing the sectarian aims of the nonpublic schools.” Committee for Public Education v. Regan, 444 U. S. 646, 662 (1980); Lemon v. Kurtzman, 403 U. S., at 612-613. In concluding that it does not, we find several features of the Minnesota tax deduction particularly significant. First, an essential feature of Minnesota’s arrangement is the fact that §290.09, subd. 22, is only one among many deductions — such as those for medical expenses, §290.09, subd. 10, and charitable contributions, §290.21, subd. 3 — available under the Minnesota tax laws. Our decisions consistently have recognized that traditionally “[legislatures have especially broad latitude in creating classifications and distinctions in tax statutes,” Regan v. Taxation With Representation of Wash., 461 U. S. 540, 547 (1983), in part because the “familiarity with local conditions” enjoyed by legislators especially enables them to “achieve an equitable distribution of the tax burden.” Madden v. Kentucky, 309 U. S. 83, 88 (1940). Under our prior decisions, the Minnesota Legislature’s judgment that a deduction for educational expenses fairly equalizes the tax burden of its citizens and encourages desirable expenditures-for educational purposes is entitled to substantial deference.
Other characteristics of §290.09, subd. 22, argue equally strongly for the provision’s constitutionality. Most importantly, the deduction is available for educational expenses incurred by all parents, including those whose children attend public schools and those whose children attend nonsectarian private schools or sectarian private schools. Just as in Widmar v. Vincent, 454 U. S. 263, 274 (1981), where we concluded that the State’s provision of a forum neutrally “available to a broad class of nonreligious as well as religious speakers” does not “confer any imprimatur of state approval,” ibid., so here: “[t]he provision of benefits to so broad a spectrum of groups is an important index of secular effect.” Ibid.
In this respect, as well as others, this case is vitally different from the scheme struck down in Nyquist. There, public assistance amounting to tuition grants was provided only to parents of children in nonpublic schools. This fact had considerable bearing on our decision striking down the New York statute at issue; we explicitly distinguished both Allen and Everson on the grounds that “[i]n both cases the class of beneficiaries included all schoolchildren, those in public as well as those in private schools.” 413 U. S., at 782-783, n. 38 (emphasis in original). Moreover, we intimated that “public assistance (e. g., scholarships) made available generally without regard to the sectarian-nonsectarian, or public-nonpublic nature of the institution benefited,” ibid., might not offend the Establishment Clause. We think the tax deduction adopted by Minnesota is more similar to this latter type of program than it is to the arrangement struck down in Nyquist. Unlike the assistance at issue in Nyquist, § 290.09, subd. 22, permits all parents — whether their children attend public school or private — to deduct their children’s educational expenses. As Widmar and our other decisions indicate, a program, like §290.09, subd. 22, that neutrally provides state assistance to a broad spectrum of citizens is not readily subject to challenge under the Establishment Clause.
We also agree with the Court of Appeals that, by channeling whatever assistance it may provide to parochial schools through individual parents, Minnesota has reduced the Establishment Clause objections to which its action is subject. It is true, of course, that financial assistance provided to parents ultimately has an economic effect comparable to that of aid given directly to the schools attended by their children. It is also true, however, that under Minnesota’s arrangement public funds become available only as a result of numerous private choices of individual parents of school-age children. For these reasons, we recognized in Nyquist that the means by which state assistance flows to private schools is of some importance: we said that “the fact that aid is disbursed to parents rather than to... schools” is a material consideration in Establishment Clause analysis, albeit “only one among many factors to be considered.” 41B U. S., at 781. It is noteworthy that all but one of our recent cases invalidating state aid to parochial schools have involved the direct transmission of assistance from the State to the schools themselves. The exception, of course, was Nyquist, which, as discussed previously, is distinguishable from this case on other grounds. Where, as here, aid to parochial schools is available only as a result of decisions of individual parents no “imprimatur of state approval,” Widmar, supra, at 274, can be deemed to have been conferred on any particular religion, or on religion generally.
We find it useful, in the light of the foregoing characteristics of §290.09, subd. 22, to compare the attenuated financial benefits flowing to parochial schools from the section to the evils against which the Establishment Clause was designed to protect. These dangers are well described by our statement that “ ‘[w]hat is at stake as a matter of policy [in Establishment Clause cases] is preventing that kind and degree of government involvement in religious life that, as history teaches us, is apt to lead to strife and frequently strain a political system to the breaking point.’ ” Nyquist, 413 U. S., at 796, quoting Walz v. Tax Comm’n, 397 U. S., at 694 (opinion of Harlan, J.). It is important, however, to “keep these issues in perspective”:
“At this point in the 20th century we are quite far removed from the dangers that prompted the Framers to include the Establishment Clause in the Bill of Rights. See Walz v. Tax Comm’n, 397 U. S. 664, 668 (1970). The risk of significant religious or denominational control over our democratic processes — or even of deep political division along religious lines — is remote, and when viewed against the positive contributions of sectarian schools, any such risk seems entirely tolerable in light of the continuing oversight of this Court.” Wolman, 433 U. S., at 263 (Powell, J., concurring in part, concurring in judgment in part, and dissenting in part).
The Establishment Clause of course extends beyond prohibition of a state church or payment of state funds to one or more churches. We do not think, however, that its prohibition extends to the type of tax deduction established by Minnesota. The historic purposes of the Clause simply do not encompass the sort of attenuated financial benefit, ultimately controlled by the private choices of individual parents, that eventually flows to parochial schools from the neutrally available tax benefit at issue in this case.
Petitioners argue that, notwithstanding the facial neutrality of §290.09, subd. 22, in application the statute primarily benefits religious institutions. Petitioners rely, as they did below, on a statistical analysis of the type of persons claiming the tax deduction. They contend that most parents of public school children incur no tuition expenses, see Minn. Stat. §120.06 (1982), and that other expenses deductible under §290.09, subd. 22, are negligible in value; moreover, they claim that 96% of the children in private schools in 1978-1979 attended religiously affiliated institutions. Because of all this, they reason, the bulk of deductions taken under §290.09, subd. 22, will be claimed by parents of children in sectarian schools. Respondents reply that petitioners have failed to consider the impact of deductions for items such as transportation, summer school tuition, tuition paid by parents whose children attended schools outside the school districts in which they resided, rental or purchase costs for a variety of equipment, and tuition for certain types of instruction not ordinarily provided in public schools.
We need not consider these contentions in detail. We would be loath to adopt a rule grounding the constitutionality of a facially neutral law on annual reports reciting the extent to which various classes of private citizens claimed benefits under the law. Such an approach would scarcely provide the certainty that this field stands in need of, nor can we perceive principled standards by which such statistical evidence might be evaluated. Moreover, the fact that private persons fail in a particular year to claim the tax relief to which they are entitled — under a facially neutral statute — should be of little importance in determining the constitutionality of the statute permitting such relief.
Finally, private educational institutions, and parents paying for their children to attend these schools, make special contributions to the areas in which they operate. “Parochial schools, quite apart from their sectarian purpose, have provided an educational alternative for millions of young Americans; they often afford wholesome competition with our public schools; and in some States they relieve substantially the tax burden incident to the operation of public schools.” Wolman, supra, at 262 (Powell, J., concurring in part, concurring in judgment in part, and dissenting in part). If parents of children in private schools choose to take especial advantage of the relief provided by §290.09, subd. 22, it is no doubt due to the fact that they bear a particularly great financial burden in educating their children. More fundamentally, whatever unequal effect may be attributed to the statutory classification can fairly be regarded as a rough return for the benefits, discussed above, provided to the State and all taxpayers by parents sending their children to parochial schools. In the light of all this, we believe it wiser to decline to engage in the type of empirical inquiry into those persons benefited by state law which petitioners urge.
Thus, we hold that the Minnesota tax deduction for educational expenses satisfies the primary effect inquiry of our Establishment Clause cases.
Turning to the third part of the Lemon inquiry, we have no difficulty in concluding that the Minnesota statute does not “excessively entangle” the State in religion. The only plausible source of the “comprehensive, discriminating, and continuing state surveillance,” 403 U. S., at 619, necessary to run afoul of this standard would lie in the fact that state officials must determine whether particular textbooks qualify for a deduction. In making this decision, state officials must disallow deductions taken for “instructional books and materials used in the teaching of religious tenets, doctrines or worship, the purpose of which is to inculcate such tenets, doctrines or worship.” Minn. Stat. §290.09, subd. 22 (1982). Making decisions such as this does not differ substantially from making the types of decisions approved in earlier opinions of this Court. In Board of Education v. Allen, 392 U. S. 236 (1968), for example, the Court upheld the loan of secular textbooks to parents or children attending nonpublic schools; though state officials were required to determine whether particular books were or were not secular, the system was held not to violate the Establishment Clause. See also Wolman v. Walter, 433 U. S. 229 (1977); Meek v. Pittenger, 421 U. S. 349 (1975). The same result follows in this case.
For the foregoing reasons, the judgment of the Court of Appeals is
Affirmed.
Minnesota Stat. § 290.09, subd. 22 (1982), permits a taxpayer to deduct from his or her computation of gross income the following:
“Tuition and transportation expense. The amount he has paid to others, not to exceed $500 for each dependent in grades K to 6 and $700 for each dependent in grades 7 to 12, for tuition, textbooks and transportation of each dependent in attending an elementary or secondary school situated in Minnesota, North Dakota, South Dakota, Iowa, or Wisconsin, wherein a resident of this state may legally fulfill the state’s compulsory attendance laws, which is not operated for profit, and which adheres to the provisions of the Civil Rights Act of 1964 and chapter 363. As used in this subdivision, ‘textbooks’ shall mean and include books and other instructional materials and equipment used in elementary and secondary schools in teaching only those subjects legally and commonly taught in public elementary and secondary schools in this state and shall not include instructional books and materials used in the teaching of religious tenets, doctrines or worship, the purpose of which is to inculcate such tenets, doctrines or worship, nor shall it include such books or materials for; or transportation to, extracurricular activities including sporting events, musical or dramatic events, speech activities, driver’s education, or programs of a similar nature.”
Both lower courts found that the statute permits deduction of a range of educational expenses. The District Court found that deductible expenses included:
“1. Tuition in the ordinary sense.
“2. Tuition to public school students who attend public schools outside their residence school districts.
“3. Certain summer school tuition.
“4. Tuition charged by a school for slow learner private tutoring services. “5. Tuition for instruction provided by an elementary or secondary school to students who are physically unable to attend classes at such school.
“6. Tuition charged by a private tutor or by a school that is not an elementary or secondary school if the instruction is acceptable for credit in an elementary or secondary school.
“7. Montessori School tuition for grades K through 12.
“8. Tuition for driver education when it is part of the school curriculum.”
514 F. Supp. 998, 1000 (1981).
The Court of Appeals concurred in this finding.
In addition, the District Court found that the statutory deduction for “textbooks” included not only “secular textbooks” but also:
“1. Cost of tennis shoes and sweatsuits for physical education.
“2. Camera rental fees paid to the school for photography classes.
“3. Ice skates rental fee paid to the school.
“4. Rental fee paid to the school for calculators for mathematics classes. “5. Costs of home economics materials needed to meet minimum requirements.
“6. Costs of special metal or wood needed to meet minimum requirements of shop classes.
“7. Costs of supplies needed to meet minimum requirements of art classes. “8. Rental fees paid to the school for musical instruments.
“9. Cost of pencils and special notebooks required for class.” Ibid.
The Court of Appeals accepted this finding.
In Lemon v. Kurtzman, the Court concluded that the State’s reimbursement of nonpublic schools for the cost of teachers’ salaries, textbooks, and instructional materials, and its payment of a salary supplement to teachers in nonpublic schools, resulted in excessive entanglement of church and state. In Levitt v. Committee for Public Education, we struck down on Establishment Clause grounds a state program reimbursing nonpublic schools for the cost of teacher-prepared examinations. Finally, in Meek v. Pittenger and Wolman v. Walter, we held unconstitutional a direct loan of instructional materials to nonpublic schools, while upholding the loan of textbooks to individual students.
Section 290.09 contains no express statements of legislative purpose, and its legislative history offers few unambiguous indications of actual intent. The absence of such evidence does not affect our treatment of the statute.
Deductions for charitable contributions, allowed by Minnesota law, Minn. Stat. § 290.21, subd. 3 (1982), include contributions to religious institutions, and exemptions from property tax for property used for charitable purposes under Minnesota law include property used for wholly religious purposes, § 272.02. In each case, it may be that religious institutions benefit very substantially from the allowance of such deductions. The Court’s holding in Walz v. Tax Comm’n, 397 U. S. 664 (1970), indicates, however, that this does not require the conclusion that such provisions of a State’s tax law violate the Establishment Clause.
Our decision in Committee for Public Education v. Nyquist, 413 U. S. 756 (1973), is not to the contrary on this point. We expressed considerable doubt there that the “tax benefits” provided by New York law properly could be regarded as parts of a genuine system of tax laws. Plainly, the outright grants to low-income parents did not take the form of ordinary tax benefits. As to the benefits provided to middle-income parents, the Court said:
“The amount of the deduction is unrelated to the amount of money actually expended by any parent on tuition, but is calculated on the basis of a formula contained in the statute. The formula is apparently the product of a legislative attempt to assure that each family would receive a carefully estimated net benefit, and that the tax benefit would be comparable to, and compatible with, the tuition grant for lower income families.” Id., at 790 (footnote omitted).
Indeed, the question whether a program having the elements of a “genuine tax deduction” would be constitutionally acceptable was expressly reserved in Nyquist, supra, at 790, n. 49. While the economic consequences of the program in Nyquist and that in this case may be difficult to distinguish, we have recognized on other occasions that “the form of the [State’s assistance to parochial schools must be examined] for the light that it casts on the substance.” Lemon v. Kurtzman, 403 U. S., at 614. The fact that the Minnesota plan embodies a “genuine tax deduction” is thus of some relevance, especially given the traditional rule of deference accorded legislative classifications in tax statutes.
Likewise, in Sloan v. Lemon, 413 U. S. 825, 832 (1973), where we held that a Pennsylvania statute violated the First Amendment, we emphasized that “the State [had] singled out a class of its citizens for a special economic benefit.” We also observed in Widmar that “empirical evidence that religious groups will dominate [the school’s] open forum,” 454 U. S., at 275, might be relevant to analysis under the Establishment Clause. We address this infra, at 400-402.
Our full statement was:
“Allen and Everson differ from the present litigation in a second important respect. In both cases the class of beneficiaries included all schoolchildren, those in public as well as those in private schools. See also Tilton v. Richardson, [403 U. S. 672 (1971)], in which federal aid was made available to all institutions of higher learning, and Walz v. Tax Comm’n, supra, in which tax exemptions were accorded to all educational and charitable nonprofit institutions.... Because of the manner in which we have resolved the tuition grant issue, we need not decide whether the significantly religious character of the statute’s beneficiaries might differentiate the present cases from a case involving some form of public assistance (e. g., scholarships) made available generally without regard to the sectarian-nonsectarian, or public-nonpublic nature of the institution benefited.... Thus, our decision today does not compel... the conclusion that the educational assistance provisions of the ‘G. I. Bill,’ 38 U. S. C. § 1651, impermissibly advance religion in violation of the Establishment Clause.” 413 U. S., at 782-783, n. 38. See also, id., at 775.
Petitioners cite a “Revenue Analysis” prepared in 1976 by the Minnesota Department of Revenue, which states that “[o]nly those taxpayers having dependents in nonpublic elementary or secondary schools are affected by this law since tuition, transportation and textbook expenses for public school students are paid for by the school district.” Brief for Petitioners 38. We fail to see the significance of the report; it is no more than a capsule description of the tax deduction provision. As discussed below, and as the lower courts expressly found, the analysis is plainly mistaken, as a factual matter, regarding the effect of §290.09, subd. 22. Moreover, several memoranda prepared by the Minnesota Department of Revenue in 1979 — stating that a number of specific expenses may be deducted by parents with children in public | 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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"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
] | sc_adminaction |
VITARELLI v. SEATON, SECRETARY OF THE INTERIOR, et al.
No. 101.
Argued April 1-2, 1959.
Decided June 1, 1959.
Clifford J. .Hynning argued the cause for petitioner. With him on the brief was Harry E. Sprogell.
John G. Laughlin, Jr. argued the cause for respondents. With him on the brief were Solicitor General Rankin, Assistant Attorney General Doub and Samuel D. Slade.
Mr. Justice Harlan
delivered the opinion of the Court.
This case concerns, the legality of petitioner’s discharge as an employee of the Department of the Interior.. Vitarelli, an educator holding a. doctor’s degree from Columbia University,"' was appointed in 1952 by the Department of the Interior as an Education and Training Specialist in the Education Department of the Trust Territory of the Pacific Islands, at Koror in the Palau District, a mandated area for which this country has. responsibility.
By a letter dated March 30, 1954, respondent Secretary’s predecessor in office notified petitioner of his suspension from duty without pay, effective April 2, 1954, assigning as ground therefor various charges. Essentially, the charges were that petitioner from 1941 to 1945 had been in “sympathetic association” with three named persons alleged to have been members of or in sympathetic association with the Communist Party, and had concealed from the Government the true extent of these associations at the time of a previous inquiry into them; that he had registered as a supporter of the American Labor Party in New York City in 1945, had subscribed to the USSR Information Bulletin, and had purchased copies of the Daily Worker and New Masses; and that because such associations and activities tended to show that petitioner was “not reliable or trustworthy” his continued employment might be “contrary to the best interests of national security.”
Petitioner filed a written answer to the statement of charges, and appeared before a security hearing board on June 22 and July 1, 1954. At this hearing no evidence was adduced by the Department in support of the charges, nor did any witness testify against petitioner. Petitioner testified at length, and presented four witnesses, and he and the witnesses were extensively cross-examined by the security officer and the members of the hearing board. On September 2, 1954, a notice of dismissal effective September 10,1954, was sent petitioner over the signature of the Secretary, reciting that the dismissal was “in the interest of national security for the reasons specifically set forth in the letter of charges, dated March 30, 1954.” This was followed on September 21, 1954, with the filing of a “Notification of Personnel Action” setting forth the Secretary’s action. The record does not show that a copy of this document was ever sent to petitioner.
After having failed to obtain reinstatement by a demand upon the Secretary, petitioner filed suit in the United States District Court for the District of Columbia seeking a declaration that his dismissal had been illegal and ineffective and an injunction requiring his reinstatement. On October 10, 1956, while the case was pending in the District Court, a copy of a new “Notification of Personnel Action,” dated September 21, 1954, and reciting that it was “a revision of and replaces the original bearing the same date,’’.was filed in the District Court, and another copy of this document was delivered to petitioner shortly thereafter. This notification was identical with the one already mentioned, except that it omitted any reference to the reason for petitioner’s discharge and to the authority under which it was carried out. Thereafter the District Court granted summary judgment for the respondent. That judgment was affirmed by the Court of Appeals, one judge dissenting. 102 U. S. App. D. C. 316, 253 F. 2d 338. We granted certiorari to consider the validity of petitioner’s discharge. 358 U. S.,871.
The Secretary’s letter of March 30, 1954, and notice of dismissal of September 2, 1954, both relied upon Exec. Order No. 10450, 18 Fed. Reg. 2489 (1953), the Act of August 26, 1950, 64 Stat. 476, 5 U. S. C. § 22-1 et seq., and Department of the Interior Order No. 2738, all relating to discharges of government employees on security or loyalty grounds, as the authority for petitioner’s dismissal. In Cole v. Young, 351 U. S. 536, this Court. held that the statute referred to did not apply to government employees in positions not designated as “sensitive.” Respondent takes the position that since petitioner’s position in government service has át no time been designated as sensitive the effect of Cole, which was decided after the 1954 dismissal of petitioner, was to render also inapplicable to petitioner Department of the Interior Order No. 2738, under which the proceedings relating to petitioner’s dismissal were had. It is urged that in this state of affairs petitioner, who coneededly was at no time within the protection of the Civil Service Act, Veterans' Preference Act, or any other statute relating to employment rights of government employees, and who, as a “Schedule A” employee, could have been summarily discharged by the Secretary at any time without the giving of a reason, under no circumstances could be entitled to more than that which he has already received — namely, an “expunging” from the record of his 1954 discharge of any reference to the authority or reasons therefor.’
Respondent misconceives the effect of our decision in Cole. It is true that the Act of August 26, 1950, and the Executive Order did not alter the power of the Secretary to discharge summarily an employee in petitioner’s status, without the giving of any reason. Nor did the Department’s own regulations preclude such a course. Since, however, the Secretary gratuitously decided to give a reason, and that reason was national security, he was obligated to conform to the procedural standards he had formulated in Order No. 2738 for the dismissal of employees on security grounds. Service v. Dulles, 354 U. S. 363. That Order on its face applies to all security discharges in the Department of the Interior, including such discharges of Schedule A employees. Cole v. Young established that the Act of August 26, 1950, did not permit the discharge of nonsensitive employees pursuant to procedures authorized by that Act if those procedures were more summary than those to which the employee would have been entitled by virtue of any pre-existing statute or regulation. That decision cannot, however, justify noncompliance by the Secretary with regulations promulgated by him in the departmental Order, which as to petitioner afford greater procedural protections in the case of a dismissal stated to be for security reasons than in the case of dismissal without any statement of reasons. Having chosen to procéed against petitioner on security grounds, the Secretary here, as in Service, was bound by the regulations which he himself had promulgated for dealing with such cases, even though without such regulations he could have discharged petitioner summarily.
Petitioner makes various contentions as to the constitutional invalidity of the procedures provided by Order No. 2738. He further urges that even assuming the validity of the governing procedures, his dismissal cannot stand because the notice of suspension and hearing given him did not comply with the Order. We find it unnecessary to reach the constitutional issues, for we think that petitioner’s second position is well taken and must be sustained.
Preliminarily, it should be said that departures from departmental regulations in matters of this kind involve more than mere consideration of procedural irregularities. For in proceedings of this nature, in which the ordinary rules of evidence do not apply, in which matters involving the disclosure of confidential information are withheld, and where it must be recognized that counsel is under practical constraints in the making.of objections and in the tactical handling of his case which would not obtain in a cause being tried in a court of law before trained judges, scrupulous observance of departmental procedural safeguards is clearly of particular importance. In this instance an examination of the record, and of the transcript of the hearing before the departmental security board, discloses that petitioner’s procedural rights under the applicable regulations were violated in at least three material respects in the proceedings which terminated in the final notice of his dismissal.
. First, § 15 (a) of Order No. 2738 requires that the' statement of charges served upon an employee at the time of his suspension on security grounds “shall be as specific and detailed as security considerations, including the need for protection of confidential sources of information, permit . . . and shall be subject to amendment within 30 days of issuance.”. Although the statement of charges furnished petitioner appears on its face to be reasonably specific; the transcript of hearing establishes that the statement, jvhich was never amended, cannot conceivably be said in fact to be as specific and detailed as “security considerations . . . permit.” For petitioner was questioned by the security officer and by the . hearing board in great detail concerning Jhis association with and knowledge of various persons and organizations nowhere mentioned in the statement of charges, and at length concerning his activities in Bugks County, Pennsylvania, and elsewhere after 1945, activities as to which the charges are also completely silent. These questions were presumably asked because they were deemed relevant to the inquiry before the board, and the very fact that they were' asked and thus spread on the record is conclusive indication that “security considerations” could not have justified the omission of any statement concerning them in the charges furnished petitioner.
Second, §§ 21 (a) and (e) require that hearings before security hearing boards shall be “orderly” and that “reasonable restrictions shall be imposed as to relevancy,, competency, and materiality of matters considered.” The material set forth in the margin, taken from the transcript, and illustrative rather than exhaustive, shows that these indispensable indicia of & meaningful hearing were not observed. It is. not an overcharacterization to say that as the hearing proceeded it developed into a wide-ranging inquisition into this man’s educational, social, and- political beliefs, encompassing even a question as to whether he was “a religious man.”
Third, § 21 (c) (4) gives the employee the right “to cross-examine any witness offered in ‘support of the charges.” It is apparent from an over-all reading of the regulations that it was not contemplated that this provision should require the Department to call witnesses to testify in support of any or all of the charges, because it was expected that charges might rest on information gathered from or by “confidential informants.” We think, however, that § 21 (c) (4) did contemplate the calling by the Department of any informant not properly classifiable as “confidential,” if information furnished by that informant was to be used by the board in assessing an employee’s status. The transcript shows that this provision was violated on at least one occasion at petitioner’s hearing, for the security officer-identified by name a person who had given information apparently considered, detrimental to petitioner, thus negating any possible inference that that person was considered a “confidential informant” whose identity it was necessary to keep secret, and questioned petitioner at some length concerning the information supplied from this source without calling the ■ informant and affording petitioner the right to cross-examine.
Because thé proceedings attendant upon petitioner’s dismissal from government service on grounds of national security fell substantially short of-the requirements of the applicable departmental regulations, we hold that such dismissal was illegal and of no effect.
Respondent urges that even if the dismissal of September 10,1954, was invalid, petitioner is not entitled to reinstatement by reason of the fact that he was at all events vaiidly dismissed in October 1956, when a copy of the second' “Notification of Personnel Action,” omitting all reference to any statute, order, or regulation relating to seeúrity discharges, was delivered to him. Granting that the Secretary could at any time after September 10, 1954, have validly dismissed petitioner without any statement of reasons, and independently of - the proceedings taken against him under Order No. 2738, we cannot view the delivery of the new notification to petitioner as an exercise of that summary dismissal power. Rather, the fact that it was dated “9-21-54,” contained a termination of employment date of “9-10-54,” was designated as “a revision” of the 1954 notification, and was evidently filed in the District Court before its delivery to petitioner indicates that its sole purpose was an attempt to moot petitioner’s suit in the District Court by an “expunging” of the grounds for the dismissal which brought Order No. 2738 into play. In. these’'circumstances, we would not be justified in now treating the 1956 action, plainly intended by the Secretary as a grant of relief to petitioner in connection with the form of the 1954 discharge, as an exercise of the Secretary’s summary removal power as of the date of its delivery to petitioner.
It follows from what we have said that petitioner, is entitled to the reinstatement which he seeks, subject, of course to any lawful exercise of the.Secretary’s authority hereafter to dismiss him from employment in the Department of the Interior.
Reversed.
An affidavit of the custodian of records of .the Civil Service Commission, filed in the District Court together with this revised notification, states “That all records of the said Commission have been expunged of all adverse findings made with respect to Mr. William Vincent Vitarelli under Executive Order 10450.”
As already noted, we do not reach the question of the constitutional permissibility of an administrative adjudication based on “confidential information” not disclosed to the employee.
The substance of the charges has been stated on pp. 536-537, supra.
The statement of charges referred to petitioner’s alleged associations with only three named persons, “F-, W-, and W-During the course of the hearing the security officer, however, asked “How well did you know- L- B-? . . . Did you ever meet H-B-C-? . . . Did you ever remember meeting a J-L-?” Further, petitioner was questioned as to his knowledge of and relationships with a- wide variety of organizations not mentioned in the statement of charges. Thus he was asked: “Do you know what Black Mountain Transcendentalism is? . . . Do yoü recall an organization by the name of National Council for Soviet-American Friendship? . . . How about the Southern Conference for Human Welfare? . . . What is the organization called the. Joint Antifascist Refugee Committee? . . . Have you ever had any contact with the Negro Youth. Congress? . . \ How about Abraham Lincoln Brigade? . . . Have you ever heard of a magazine called ‘Cooperative Union’? ... I was wondering whether you had ever heard of Consumers'Hnion?”
“Mr. Armstrong [the departmental security officer, inquiring about petitioner's activities as a teacher in a Georgia college]: Were these activities designed to be put into effect by both the white and the colored races? . . . What were your feelings at that time concerning race equality? . . . How about civil, rights.? Did that enter into a discussion in your seminar groups?”-
“Mr. Armstrong: Do I interpret your statement correctly that maybe Negroes and Jews are denied some of their constitutional rights at present?
“Mr. Vitarelli: Yes.
“Mr. Armstrong: In what way?
“Mr.-Vitarelli: I saw it in the South where certain jobs were open to white people and not open to Negroes because they were Negroes. ... In our own university, there was a quota at Columbia College for the medical students. Because they were Jewish, they would permit only so many. I thought that was wrong.
“Chairman Towson :- Doctor, isn’t it also true that Columbia College had quotas by states and other classifications as well ?
“Mr. Vitarelli: I don’t remember that. It may be true.
“Mr. Armstrong: In other words, wasn’t there a quota on Gentiles as well as Jews?
“Mr. Vitarelli: ... I had remembered that some Jews seemed to feel, and I felt, too, at the time, that they were being persecuted somewhat.
“Chairman Towson: Did you eyer take the trouble to investigate whether or not they were or did you just accept their word?
“Mr. Vitarelli: No, I didn’t investigate it.
“Chairman Towson : You accepted their word for it.
“Mr. Vitabe'lli: I accepted the general opinion of the group of professors, with whom I associated and was taught. . . .
“Chairman Towson: I am simply asking you to verify the vague impression I have that Columbia College puts a severe quota on residents of New York City, whatever their race, creed or color may be.
“Mr. Vitarelli: I think that is true. ...
“Chairman Towson: Otherwise there would be no students at Columbia College except resident^ of New York City.
“Mr. Vitarelli: There may be a few others, but mostly New York City.
“Chairman Towson : Isn’t it true that the quota system is designed by the college in order to make it available' to persons other'than live in New York City?
“Mr. Vitarelli: I believe that is the .reason.
“Chairman Towson : And any exclusion of a resident óf New York City would be for that reason, rather than the race, creed or color?
“Mr. Vitarelli: I think that is the way the policy is stated.
“Chairman Towson: Is it not a fact? ‘
“Mr. Vitarelli: I don’t think so. . .■.
“Chairman Towson: Excuse me, Mr. Armstrong.
“Mr. Armstrong: I went to Columbia Law School for two years and certainly there was not any quota system there at that time, and that is a long time ago. All right, we are getting afield.”
Petitioner was also asked the following questions by .the security officer during the course of the hearing:
“Mr. Armstrong: I think you indicated in an answer or a reply to an interrogatory that you at times voted for and sponsored the principles of Franklin Delano Roosevelt, Norman A. Thomas, and Henry Wallace? . . . How many times di.d you vote for . . . [Thomas] if you care to say ? . . . How about Henry Walláce? . . . How about Norman Thomas? Did his platform coincide more nearly with your ideas of democracy? ... At one time, or two, you were a strong advocate of the United Nations. Are you still? . . . The file indicates, too, that you were quite hepped up over the one world idea at one time; is'that right?”
Witnesses presented by petitioner were asked by the security officer and board members such questions as:
“The Doctor indicated that he was acquainted with and talked to Norman Thomas on occasions. Did you know about that? . . . How about Dr. Vitarelli? Is he scholarly? ... A good administrator? . . . Was he careless with his language around the students or careful? . . . Did you consider Dr. Vitarelli as a religious man? . . . Was he an extremist on equality of races? ... In connection with the activities that Dr. Vitarelli worked on that you know about, either in the form of projects or in connection with the educational activities that you have mentioned, did they extend to the Negro population of the country?, In other words, were they contacts with Negro groups, with Negro instructors, with Negro students, and so on?”
It'is not apparent how any of the above matters could be material to a consideration of the question whether petitioner’s retention in government service would be consistent with national security.
This reading of-the provision is supported by §21 (e) of the Order, which provides in part that “if the employee is or may be handicapped by the nondisclosure to him of confidential information or by lack of opportunity to cross-examine confidential informants, the hearing board shall take that fact into consideration,” thus implying that the employee is-to have the right to cross-examine nonconfidential informants who provide material taken into consideration by the board.
The information was to the effect that petitioner had criticized, as “bourgeois” the purchase of a house by a woman associate in Georgia. Petitioner flatly denied that he had made the remark attributed to him, and said that he could never have made such a statement except in a spirit of-levity.
Thé Secretary successfully took the position in the courts below that the only possible defect in the 1954 discharge was the articulation of the “national security” grounds therefor, and that since that defect did not void the dismissal as such, an “expunging” of these grounds gave petitioner the maximum relief to which he could possibly be entitled.
Respondent’s brief in this Court refers to the 1956 notice as part of “corrective administrative action which has been taken,” and as “relief voluntarily accorded [petitioner].” The premise upon which the dissenting opinion essentially rests — that the 1956 action was an attempt “to discharge Vitarelli retroactively” — thus is contrary to the Secretary’s own position as to the reason for that action. | 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"
] | [
25
] | sc_adminaction |
WILLIAMS et al. v. FANNING, POSTMASTER OF LOS ANGELES.
No. 47.
Argued October 22, 1947.
Decided December 8, 1947.
Richard L. North argued the cause for petitioners. With him on the brief was Irving M. Walker.
Frederick Bernays Wiener argued the cause for respondent. With him on the brief were Solicitor General Perl-man, Herbert A. Bergson, Paul A. Sweeney and Melvin Richter.
Mr. Justice Douglas
delivered the opinion of the Court.
This case, here on certiorari to resolve a conflict between the circuits, presents the question whether those against whom the Postmaster General has issued a postal fraud order may sue the local postmaster to enjoin him from carrying out the order or whether the Postmaster General is an indispensable party.
The Postmaster General, after a hearing in Washington, D. C., found that petitioners’ weight-reducing enterprise was fraudulent. He accordingly issued a fraud order (R. S. §§3929, 4041, 39 U. S. C. §§ 259, 732) directing respondent, postmaster at Los Angeles, California (where petitioners do business) to refuse payment of any money order drawn to the order of petitioners, to advise the remitter of such money order that payment had been forbidden, and to stamp “fraudulent” on all mail matter directed to petitioners and to return it to the senders.
Petitioners thereupon brought this suit in the District Court for the Southern District of California to enjoin respondent from carrying out the order, claiming that they had been deprived of the hearing to which they were entitled and that the fraud order was without the support of substantial evidence. On motion of respondent the District Court dismissed the complaint, holding in accord with the view of the Ninth Circuit Court of Appeals that the Postmaster General was an indispensable party. The Circuit Court of Appeals affirmed. 158 F. 2d 95.
It was long assumed that the Postmaster General was not an indispensable party in these fraud order cases. Beginning at least with American School of Magnetic Healing v. McAnnulty, 187 U. S. 94, decided in 1902, the maintenance of the suit against the local postmaster alone was not challenged.
Meanwhile, another line of cases was emerging. Warner Valley Stock Co. v. Smith, 165 U. S. 28, held that a suit against the Secretary of the Interior to compel him to issue patents to public lands abated on his resignation. As the purpose of the bill was “to control the action of the Secretary of the Interior” (165 U. S. p. 34), he was held to be an indispensable party. Next came Gnerich v. Rutter, 265 U. S. 388, which was a suit to enjoin a representative of the Commissioner of Internal Revenue from enforcing a restriction embodied in a permit issued under the National Prohibition Act. The subordinate official, acting for the Commissioner, had refused to give plaintiffs the more liberal permit which they desired; and he had no power to grant the desired permit without revision of his delegated authority. The Commissioner was held to be an indispensable party. Webster v. Fall, 266 U. S. 507, followed. That was a suit brought by an Osage Indian to require payment to him of funds under an act of Congress. The power and responsibility of making the payments being in the Secretary of the Interior, he was held to be an indispensable party.
These cases evolved the principle that the superior officer is an indispensable party if the decree granting the relief sought will require him to take action, either by exercising directly a power lodged in him or by having a subordinate exercise it for him.
That principle was brought into clearer relief by Colorado v. Toll, 268 U. S. 228. There the director of national parks had issued regulations forbidding operation in the Rocky Mountain National Park of automobiles for hire. Toll was the superintendent of the park who was enforcing the regulation. A suit to enjoin him was allowed to be maintained without joining his superior, the director, who had promulgated the regulation. That result followed, 268 U. S. p. 230, by analogy to those cases which permit suit against a public official who invades a private right either by exceeding his authority or by carrying out a mandate of his superior. United States v. Lee, 106 U. S. 196; Philadelphia Co. v. Stimson, 223 U. S. 605, 619, 620. In those situations relief against the offending officer could be granted without risk that the judgment awarded would “expend itself on the public treasury or domain, or interfere with the public administration.” Land v. Dollar, 330 U. S. 731, 738.
But the distinction we have noted between these two lines of cases apparently was not as clear to others as it seems to us. For a conflict among the circuits developed in these postal fraud cases. National Conference v. Goldman, 85 F. 2d 66, which held that the Postmaster General must be made a party, suggested that if he were not, the local postmaster would be left under a command of his superior to do what the court has forbidden. But that seems to us immaterial if the decree which is entered will effectively grant the relief desired by expending itself on the subordinate official who is before the court. It seems plain in the present case that that will be the result even though the local postmaster alone is sued. It is he who refuses to pay money orders, who places the stamp “fraudulent” on the mail, who returns the mail to the senders. If he desists in those acts, the matter is at an end. That is all the relief which petitioners seek. The decree in order to be effective need not require the Postmaster General to do a single thing — he need not be required to take new action either directly as in the Smith and Fall cases or indirectly through his subordinate as in the Rutter case. No concurrence on his part is necessary to make lawful the payment of the money orders and the release of the mail unstamped. Yet that is all the court is asked to command.
Reversed.
The Chief Justice and Mr. Justice Burton dissent.
The Circuit Court of Appeals in the instant case followed its earlier decisions holding that the Postmaster General was an indispensable party. Neher v. Harwood, 128 F. 2d 846; Dolphin v. Starr, 130 F. 2d 868. Accord: National Conference v. Goldman, 85 F. 2d 66 (Second Circuit). Contra: Jarvis v. Shackelton Inhaler Co., 136 F. 2d 116 (Sixth Circuit). For collection and review of the cases see 158 A. L. R. 1126.
Jurisdiction was invoked under § 24 (6) of the Judicial Code, 28 U. S. C. §41 (6).
See note 1, supra.
And see Public Clearing House v. Coyne, 194 U. S. 497; Leach v. Carlile, 258 U. S. 138.
See note 1, 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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] | [
111
] | sc_adminaction |
DENVER & RIO GRANDE WESTERN RAILROAD CO. et al. v. UNITED STATES et al.
No. 305.
Argued March 16, 1967.
Decided June 5, 1967.
William H. Dempsey, Jr., argued the cause for appellants. With him on the briefs were Jeremiah C. Waterman, Royce D. Sickler, C. W. Fiddes, David Axelrod, Eugene T. Liipfert, Benjamin W. Boley, Martin J. Flynn, Giles Morrow, Peter T. Beardsley, Harry Jordan and R. Edwin Brady.
Robert S. Rifkind argued the cause for the United States et al. With him on the brief were Solicitor General Marshall, Assistant Attorney General Turner, Howard E. Shapiro, Robert W. Ginnane and Betty Jo Christian. Thomas D. Barr argued the cause for ap-pellees Railway Express Agency, Inc., et al. Mr. Barr filed a brief for Railway Express Agency, Inc. Owen Jameson filed a brief for appellee Greyhound Corp.
Mr. Justice Brennan
delivered the opinion of the Court.
The question in this case is whether the Interstate Commerce Commission complied with its statutory-responsibilities under § 20a of the Interstate Commerce Act when it approved without consideration of control or anticompetitive consequences the issuance to appellee Greyhound Corporation of 500,000 shares of the common stock of appellee Railway Express Agency, Inc. (REA).
REA provides railroad express service and is also a motor common carrier. The approximately 2,000,000 shares of REA common stock outstanding are entirely owned by railroads and no railroad stockholder may dispose of its shares without first offering them to the other railroad stockholders. REA also is authorized, however, to issue 500,000 additional shares of common stock without first offering them to its stockholders. Greyhound, which operates an express carrier service through its wholly owned subsidiary Greyhound Lines, Inc., a motor carrier of passengers and express subject to the Interstate Commerce Act, agreed to purchase these 500,000 shares. REA thereupon applied to the ICC for an order under § 20a approving the transaction. Minority railroad REA stockholders, motor bus competitors of Greyhound, motor carriers, and freight forwarders intervened in the proceeding to protest against approval of the transaction. They alleged, among other things, the necessity of a hearing on the questions whether Greyhound's acquisition of the stock was in the “public interest” and for a “lawful object” as those terms are used in § 20a. The ICC approved the acquisition without a hearing. A three-judge District Court for the District of Colorado sustained the ICC order. 255 F. Supp. 704. We noted probable jurisdiction. 385 U. S. 897. We reverse with direction to the District Court to enter a new judgment remanding the case to the ICC for further proceedings consistent with this opinion.
I.
REA was organized in 1929 and until 1961 operated on a nonprofit basis under a pooling agreement with the railroads. See Securities and Acquisition of Control of Railway Express Agency, Inc., 150 I. C. C. 423. Financial difficulties forced abandonment of the nonprofit operation and REA was converted to a profit and loss basis in order to effect more efficient and economic operation. See Express Contract, 1959, 308 I. C. C. 545, 549-550. In addition, REA was released from restrictions against use of carriers other than railroads. In 1963 REA’s bylaws were amended to eliminate a limitation against stock ownership except by railroads; the disposition of shares by a railroad, however, was made subject to the right of first refusal of the other railroad stockholders. The issuance of 500,000 additional shares not subject to the right of first refusal was also authorized, but only upon the consent of two-thirds of the railroad stockholders.
Greyhound, principally a passenger carrier, became interested in expanding its growing express business. In January 1964 Greyhound offered to purchase, subject to ICC approval, at least 67% of REA’s stock, of which Greyhound intended to offer 16% to major airlines. Greyhound also agreed to finance part of REA’s capital requirements as part of a plan to coordinate the express services of both companies. This proposal was defeated by railroad stockholders.
REA and Greyhound persisted in their efforts to coordinate their operations. Greyhound proposed to acquire a 20% interest in REA through acquisition of REA’s 500,000 authorized but unissued shares, stating that its “interest in REA... stems primarily from our views as to the improvements... which could be realized through combination and correlation of certain of our facilities and services.” Greyhound offered to pay $16 per share if permitted to name one-fifth of the REA Board of Directors and if the REA Board would declare its intention “to consider seriously and work toward a long-term agreement between REA and Greyhound to consolidate operating functions and facilities...,” and if, further, the REA Board would agree “to consider seriously at a later time...” the sale of REA stock to airlines and the general public. Finally, Greyhound offered, if permitted to acquire the 500,000 shares, to purchase enough additional shares at $25 each to give it 50% of the stock of REA, the offer to remain open for 60 days following Greyhound’s acquisition of the 500,000 shares. It expressed willingness, however, to purchase the 500,000 shares and leave “to the future the question of the acquisition of additional shares by Greyhound and giving the railroads an opportunity to reconcile their views on this question.”
REA countered with an offer to sell the 500,000 shares at $20 per share provided Greyhound would agree to offer within the 60-day period to purchase an additional 1,000,000 shares of the outstanding stock at the same price. The agreement was consummated on this basis subject to ICC approval.
REA’s application to the ICC sought approval only of the issuance to Greyhound of the 500,000 shares. The application was supplemented with detailed data reviewing the negotiations, a statement of REA’s financial condition and a statement of the purposes to which the $10,000,000 realized from the sale of the 500,000 shares would be applied. The burden of the protests of numerous intervenors was that the transaction was not in the “public interest” and for a “lawful object,” but rather was the first step toward establishing a virtual monopoly of express transportation, and would result in “control” by Greyhound of REA, necessitating a hearing under § 5 of the Act. The Department of Justice also intervened. It urged the ICC to conduct a hearing to determine whether the transaction would violate § 7 of the Clayton Act, suggesting that, while a § 5 proceeding might be unnecessary, one might be instituted and consolidated with the recommended Clayton Act § 7 proceeding, since the anticompetitive issues involved would be virtually identical.
Division Three of the ICC approved the application without hearing, ruling that investigation into the “control” and “anticompetitive” issues “would not be appropriate at this time....” After the ICC denial of petitions for reconsideration this action to enjoin and set aside the ICC order was filed. The full Commission meanwhile reconsidered and affirmed the action of Division Three but postponed the effective date of the order pending the conclusion of judicial proceedings.
In the District Court the parties adhered basically to the positions maintained before the ICC, except that the Department of Justice abandoned its position urging a hearing on the § 7 question and declined either to support or to oppose the ICC order. In sustaining the order the District Court reasoned that, while the ICC might be required in some circumstances to consider “control” and “anticompetitive” issues before approving a stock issuance under § 20a, the ICC properly exercised discretion to defer consideration of such questions in this case until after it was determined whether and to what extent Greyhound would succeed in purchasing additional shares from railroad stockholders; only then would the “chain of events started by the stock issuance... [be] ascertainable rather than conjectural.” 255 F. Supp. 704, 709.
In this Court the Government concedes, and the other appellees assume arguendo, that important issues of “control” and “anticompetitive” effects were involved in the application before the ICC. The Government has completely reversed its position from what it was before the ICC, arguing here that § 20a was designed to accomplish only the limited objective of protecting stockholders and the public from fiscal manipulation, and that, in any event, postponement of consideration of “control” and “anticompetitive” issues was justified in this case because the facts relevant to both issues might be wholly different at the end of the 60-day period, and because no prejudice to any party’s interests could result from the delay.
II.
We do not agree that Congress limited ICC consideration under § 20a to an inquiry into fiscal manipulation. Even if Congress’ primary concern was to prevent such manipulation, the broad terms “public interest” and “lawful object” negate the existence of a mandate to the ICC to close its eyes to facts indicating that the transaction may exceed limitations imposed by other relevant laws. Common sense and sound administrative policy point to the conclusion that such broad statutory standards require at least some degree of consideration of control and anticompetitive consequences when suggested by the circumstances surrounding a particular transaction. Both the ICC and this Court have read terms such as “public interest” broadly, to require consideration of all important consequences including anticompetitive effects. Thus the ICC is required to weigh anticompetitive effects in approving applications for merger or control under § 5 of the Act, authorizing the ICC to grant such applications only if “consistent with the public interest.” McLean Trucking Co. v. United States, 321 U. S. 67. And similarly broad responsibilities are encompassed within like broad directives addressed to other agencies. E. g., National Broadcasting Co. v. United States, 319 U. S. 190, 224; FCC v. RCA Communications, Inc., 346 U. S. 86, 94; California v. FPC, 369 U. S. 482, 484-485.
It is true that the requirement that the ICC consider anticompetitive effects is more readily found under § 5, since § 5 (11) enables the ICC to confer immunity from the antitrust laws for transactions approved under § 5 (2). But the foundations of the ICC’s obligation under § 5 are largely applicable to § 20a as well. Section 20a, like § 5, must after all be read in the context of overall ICC responsibilities. The responsibility under § 11 of the Clayton Act to enforce that Act’s provisions is one of them. The responsibility to advance the National Transportation Policy, read into the “public interest” standard of § 5, is another persistent and overriding duty, equally applicable to § 20a. In sum, as we said in McLean Trucking, supra, while transportation “legislation constitutes the immediate frame of reference within which the Commission operates... and the policies expressed in it must be the basic determinants of its action..., in executing those policies the Commission may be faced with overlapping and at times inconsistent policies embodied in other legislation enacted at different times and with different problems in view. When this is true, it cannot, without more, ignore the latter.” 321 U. S., at 80.
In proceedings under § 20a (2), the ICC itself has not acted as though it lacks the power or responsibility to weigh anticompetitive consequences. In Columbia Terminals Co. — Issuance of Notes, 40 M. C. C. 288, 293, an application to issue notes under § 20a (2) was granted in part only on the condition that the notes be made the subject of competitive bidding. The ICC explicitly rejected the argument that § 10 of the Clayton Act, 15 U. S. C. § 20, requiring competitive bidding in certain situations, was superseded by § 20a. In Stock of New Jersey, I. & I. R. Co., 94 I. C. C. 727, 729, the Commission said, in considering an application to issue stock: “[I]t can not be said that in the performance of the broad duty imposed upon us by the statute we must confine our investigation and consideration to the effect of proposed issues upon the carrier immediately involved. In any application to us for authority to issue securities we are bound to measure the proposal by the test of public interest in whatever phase that interest may appear to be affected.”
This “broad duty” was significantly adhered to in Chesapeake & O. R. Co. Purchase, 271 I. C. C. 5. There, the C & O sought modification of an earlier order so as to enable it to acquire and exercise 400,000 shares of New York Central, and two of C & O’s directors sought authority under § 20a (12) to hold seats simultaneously on the Central Board. C & O and its directors alleged, in terms strikingly similar to the claims in this case, that Central needed funds and new management, and that the two companies were contemplating plans of mutual advantage and ultimately a merger under § 5 (2). The ICC took a broad view of its power and responsibility. It found, as to the § 20a (12) issue, that an insufficient showing had been made that “neither public nor private interests.. would be adversely affected by the proposed interlocking directorate, citing its own cases to the effect that authority would be granted under § 20a (12) only where no lessening of competition or independence occurred, 271 I. C. C., at 18, and pointing out that, even if the Central were strengthened, an interlocking directorate might injure other railroads in which the “public has just as great an interest...,” 271 I. C. C., at 40. In treating the request that it approve the stock acquisition, the ICC referred in great detail to the facts that (1) the acquisition, when considered along with long-range plans, would result in C & 0 control of Central; (2) extensive competition between C & 0 and Central would be eliminated; and (3) cooperation between C & 0 and Central would pose a substantial threat to another railroad, 271 I. C. C., at 24-29. It refused to authorize the acquisition, concluding that it was in effect being asked “to sanction a violation of the provisions of section 5 (4) [requiring carriers to request authority under § 5 (2) before acquiring control of another carrier] and also a violation of section 7 of the Clayton Antitrust Act.” 271 I. C. C., at 39, 43. It stated that, if the applicants were so confident that their long-run aims would be in the public interest, they should seek authority for control under § 5 (2). These principles and arguments relied upon by the ICC in rejecting C & O’s application are equally applicable here. The economic consequences do not differ because we are concerned here with the issuance of stock rather than an acquisition on the open market.
Appellees argue, with some ambivalence, that it would be anomalous to require the ICC to consider anticom-petitive issues under § 20a (2). The ICC is authorized under § 5 to grant antitrust immunity for consolidations. No such power exists under § 20a, and the Government contends therefore that to require consideration of § 7 issues under § 20a would lead to the “anomalous conclusion that a securities issue may have to be disallowed even though it might be the first step in an acquisition of control that the Commission could, on proper findings, authorize under section 5 notwithstanding antitrust considerations.” REA advances a variant of this argument pointing out that the Sixty-sixth Congress, which passed both § 5 and § 20a, would not have “adopted the erratic policy of relaxing enforcement of the antitrust laws when competition was eliminated but requiring strict enforcement when lesser competitive harm might occur.”
First, it is by no means true that greater competitive harm necessarily results from consolidations than from stock issuances under § 20a. A particular consolidation may be in the public interest because it increases competition in some respects, while a stock issuance, even though not involving control, may have no similar redeeming feature. Second, any anomaly which may be created by the juxtaposition of §§ 5 and 20a stems, not from the fact that no immunity may be granted under § 20a, but from the ICC’s special power under § 5. The obligation to enforce the Clayton Act is the rule, and § 5 is the exception. Finally, there are good reasons upon which Congress may have relied in providing that immunity might be conferred under § 5 but not under § 20a. Congress recognized in the Transportation Act of 1940, 54 Stat. 898, as it had in the Act of 1920, that railroad consolidations often result in benefits for the national transportation system as well as for the railroads involved. Consequently, it authorized the ICC to approve consolidations and to immunize them from the antitrust laws when they were found to be in the public interest. The special benefits sometimes realized from carrier consolidations are less likely to come about through the mere issuance of stock, unless the issuance results in control or merger; and when control or merger does result, the party acquiring control may invoke the Commission’s power under § 5 to immunize the consolidation from the antitrust laws.
Appellees’ reliance upon Alleghany Corp. v. Breswick & Co., 353 U. S. 151, 355 U. S. 415, is misplaced. That litigation stands at most for the proposition that the ICC has discretion in some circumstances to consider § 20a issues without coming to grips with the question whether control of one carrier by another may be unlawful. Alleghany had acquired control of the New York Central without ICC approval. It applied to the ICC rather than to the Securities and Exchange Commission for approval of an issue of preferred stock. The ICC took jurisdiction on the ground that, while Alle-ghany was an investment company normally under the jurisdiction of the SEC, its control of Central made it a carrier subject to ICC regulation. The District Court set aside the order approving the issuance on the ground that ICC jurisdiction to act under § 20a could not rest upon a control it had not approved. This Court reversed, pointing out that it would be contrary to the policy of the- statute to oust the ICC of regulatory jurisdiction because a noncarrier had failed to abide by the law. On remand the District Court considered the illegality of Alleghany’s control as relevant to the merits of the issuance under § 20a, and we reversed again, stating simply that the only issue left open on remand was whether the stock issue “as approved” was unlawful. 355 U. S. 415, 416. However this litigation may be interpreted, it wholly fails to support the proposition that, because § 20a was designed primarily to protect against fiscal manipulation, the ICC is relieved of the necessity of considering other issues germane to the transaction.
We conclude, therefore, that the ICC is required, as a general rule, under its duty to determine that the proposed transaction is in the “public interest” and for a “lawful object,” to consider the control and anticompeti-tive consequences before approving stock issuances under § 20a (2). This does not mean the ICC must grant a hearing in every case, or that it may never defer consideration of issues which arise when special circumstances are present. But it does mean that, when the ICC exercises its discretion to approve issuances without first considering important control and competition issues, the reviewing court must closely scrutinize its action in light of the ICC’s statutory obligations to protect the public interest and to enforce the antitrust laws. Whether or not an abuse of discretion is present must ultimately depend upon the transaction approved, its possible consequences, and any justifications for the deferral. We turn now to this question, first with respect to the deferral of the control issue, and second with respect to the deferral of the anticompetitive issues.
III.
REA’s proposed issuance of a 20% stock interest to Greyhound undoubtedly raised a serious question whether control of its operations might pass to Greyhound. Control under § 5 must be judged realistically, and is a matter of degree. See Rochester Tel. Corp. v. United States, 307 U. S. 125. Even the 20% acquisition standing alone might raise an issue of control necessitating greater consideration than given it by the ICC, but it is clear from REA’s own evidence that the purpose of its negotiations with Greyhound was to bring the two companies into a joint alignment. The 20% stock issuance was treated by both as the first step of a more ambitious project, and as evidence of the seriousness of each other’s intentions to that end.
What the ICC has done must, however, be placed in perspective. It has not denied that a substantial issue of control is present, and it has not refused to consider the issue. It has held only that consideration should be deferred for the 60-day period during which Greyhound has agreed to extend to REA stockholders an offer to purchase up to 1,000,000 shares. We have stressed the unsatisfactory consequences which often occur when agencies defer action and leave parties uncertain as to their rights and obligations. United States v. Chicago, M., St. P. & P. R. Co., 294 U. S. 499, 510. We might also observe that the ICC apparently could have avoided the deferral by requiring REA and Greyhound to reform their contract so that all the facts relevant to the control issue could be ascertained before approval was given under § 20a (2). Nevertheless, we cannot say that the ICC exceeded its discretion when it deferred consideration of the control issue; radical changes in the relevant facts may take place during the 60-day period, and it is highly unlikely that any harm can flow to appellants or to the public interest from a deferral limited to that issue.
Resolution of the “public interest” issue under § 5, requiring consideration of anticompetitive and other consequences, is required when the threshold fact of control or merger is established. But in this case, even assuming that the 20% purchase may amount to “control” under the existing stock distribution, events may occur during the 60-day period which might negate this possibility. Some railroads have indicated their intention to sell their REA holdings, but whether Greyhound or the dissident railroads wind up in a controlling position may depend on the extent to which the latter exercise their right of first refusal. The dissident railroads have made clear their intention to prevent Greyhound from acquiring any additional shares, but even if they obtain one-third of REA’s stock they will be able to determine the composition of REA’s Board of Directors. In either case, the added power in the hands of the dissident roads may, depending on the circumstances, lead the ICC to find that Greyhound had not acquired control. Thus the control question can more realistically be resolved with finality after the 60-day period.
Moreover, the ICC reasonably concluded that allowing Greyhound tentatively to acquire the 20% stock interest would not prejudice appellants as to the control issue in light of the dissident railroads’ position that Greyhound would not acquire “one additional share under the offer to purchase up to one million shares...,” and because Greyhound would be unable under REA’s bylaws to control the board, since its five directors would be faced by 18 railroad directors, any 13 of whom would have the power to prevent any action proposed by Greyhound.
IV.
The action of the-Commission in deferring consideration of the anticompetitive issues stands on a different footing. The Commission’s responsibility under § 5 and under the Clayton Act differs markedly, and the reasons which support an exercise of discretion as to the control issue are wholly inapplicable to the anticompetitive questions. There is, in short, no reasonable justification for deferring the Clayton Act questions.
The Commission is, of course, required to consider anticompetitive issues under the public interest standard of § 5, just as it must under the public interest standard of § 20a. But the duty under § 5, as we point out above, arises only after the threshold fact of control is established. No such preliminary finding need be made to trigger the ICC’s duty under the Clayton Act. A company need not acquire control of another company in order to violate the Clayton Act. See, e. g., United States v. du Pont & Co., 353 U. S. 586; American Crystal Sugar Co. v. Cuban-American Sugar Co., 152 F. Supp. 387 (D. C. S. D. N. Y. 1957), aff’d, 259 F. 2d 524 (C. A. 2d Cir. 1958). Section 7 proscribes acquisition of “any part” of a company’s stock where the effect “may be substantially to lessen competition, or to tend to create a monopoly.” Moreover, the purpose of § 5 is significantly different from that of the Clayton Act. Section 5 is designed to enable carriers to seek and obtain approval of consolidations with other carriers, with immunity from the antitrust laws. When a carrier effects a consolidation without ICC authority, the Commission can of course act under § 5 (4). But, as the Commission has often held, the carrier must initiate consolidations under § 5, and it is reasonable to expect that carriers will seek the benefits of that provision. In contrast, the Clayton Act is prohibitive, and imposes a positive obligation upon the ICC to act. The Commission is directed, whenever it has reason to believe any carrier within its jurisdiction is violating § 7, to “issue and serve upon such person and the Attorney General a complaint stating its charges in that respect, and containing a notice of a hearing....” 15 U. S. C. § 21 (b). Section 16, 15 U. S. C. § 26, excepts from the power of private persons to bring §■ 7 suits for injunctive relief all cases involving matters subject to ICC jurisdiction. By thus limiting the authority of private persons to institute court proceedings to enjoin § 7 violations, this provision underscores the ICC’s responsibility to act when such violations are brought to its attention.
One of the principal justifications advanced for the ICC’s deferral of the control issue is that the facts relevant to that issue may change so significantly during the 60-day period that the control question could be. settled either way. No such possibility exists with respect to at least some of the anticompetitive issues presented by REA’s application. We need not accept the argument of appellants, based upon the distinction between “express” and other forms of transport, see, e. g., Railway Express Agency, Inc., Extension — Nashua, N. H., 91 M. C. C. 311, 322, sustained sub nom. Auclair Transportation, Inc. v. United States, 221 F. Supp. 328 (D. Mass.), aff’d, 376 U. S. 514, that the 20% stock acquisition would itself violate § 7 because REA controls 88% and Greyhound 7% of the “express” market. For if appellees REA and Greyhound are correct that, because of the increasing cross-competition among groups carrying transport, it is impossible to categorize REA as a carrier of “express,” then the claims of appellant truck lines, freight forwarders and trucking associations take on added significance. It is precisely the increasing diversification of REA’s transport activity, together with Greyhound’s considerable capacity and the economies and efficiencies the two companies intend to effectuate jointly, that concerns these appellants.
It is clear that REA and Greyhound contemplate major changes in their operation which could have a significant impact upon competition for express and other types of transport which they seek to carry. The “Memorandum of Understanding” into which the companies entered about three weeks before REA agreed to Greyhound’s 20% stock acquisition contemplates efficiencies and savings through consolidation of facilities for terminal service, of garages, and'of communications, advertising and sales forces. These changes might therefore realize large savings for both REA and Greyhound, and in this way and other ways significantly strengthen their competitive position. And the Memorandum expresses a determination to engage in aggressive action to capture larger shares of express and transport business, especially by utilizing Greyhound’s bus operations as a complement to REA’s air and rail service. “The consolidation of effort by the two companies,” the Memorandum states, “would create a new market with revenue opportunity arising from a complete package express service to the public.” The “new ability” of the air express service to reach off-airline points would add significantly to REA and Greyhound revenues, and the new market, would have an estimated growth potential of 10% per year. Similarly, rail-bus service was expected to generate millions in “new business,” and to “create a new capability for the two carriers to compete in the ltl [less-than-load] market. The only foreseeable limitation to the growth of this service would be the physical space limitations of Greyhound’s fleet.”
There is nothing in the record to rebut the allegations of many of the appellants that cooperation between Greyhound and REA of the sort contemplated by the Memorandum aided by the 20% stock acquisition will result in serious harm to appellants individually and to the public interest which they serve. The freight forwarders fear a great reduction in their business, as do the bus companies. Some of the bus companies, which engage in commuter transport, claim that Greyhound-REA cooperation would deprive them of their express business, and that, since that business makes economically feasible their commuter operations, would compel the termination of services essential to the public interest.
It cannot be said with assurance that deferral of consideration of the anticompetitive issues will in no way prejudice appellants or the public interest. The fact that the railroads presently control the REA Board of Directors is hardly relevant to that question. It is not the possibility of control that may prejudice appellants and the public interest, but simply the fact that with Greyhound holding 20% of REA’s stock there is likely to be immediate and continuing cooperation between the companies, cooperation which appellants claim will be to their detriment and which the Government concedes may be against the public interest. If appellants are correct, and if such an alliance would in fact be against the public interest, then § 7 of the Clayton Act requires that it be stopped in its incipiency. Cf. FTC v. Dean Foods Co., 384 U. S. 597, 606, n. 5.
We are told that REA is in need of | 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
] | sc_adminaction |
COMMISSIONER OF INTERNAL REVENUE v. IDAHO POWER CO.
No. 73-263.
Argued February 27, 1974
Decided June 24, 1974
Keith A. Jones argued the cause for petitioner. With him on the briefs were Solicitor General Bork, Assistant Attorney General Crampton, and Elmer J. Kelsey.
Frank Norton Kern argued the cause for respondent. With him on the brief was Lawrence Chase Wilson.
Mr. Justice Blackmun
delivered the opinion of the Court.
This case presents the sole issue whether, for federal income tax purposes, a taxpayer is entitled to a deduction from gross income, under § 167 (a) of the Internal Revenue Code of 1954, 26 U. S. C. § 167 (a), for depreciation on equipment the taxpayer owns and uses in the construction of its own capital facilities, or whether the capitalization provision of §263 (a)(1) of the Code, 26 U. S. C. § 263 (a)(1), bars the deduction.
The taxpayer claimed the deduction, but the Commissioner of Internal Revenue disallowed it. The Tax Court (Scott, J., in an opinion not reviewed by the full court) upheld the Commissioner’s determination. 29 T. C. M. 383 (1970). The United States Court of Appeals for the Ninth Circuit, declining to follow a Court of Claims decision, Southern Natural Gas Co. v. United States, 188 Ct. Cl. 302, 372-380, 412 F. 2d 1222, 1264-1269 (1969), reversed. 477 F. 2d 688 (1973). We granted certiorari in order to resolve, the apparent conflict between the Court of Claims and the Court of Appeals. 414 U. S. 999 (1973).
I
Nearly all the relevant facts are stipulated. The taxpayer-respondent, Idaho Power Company, is a Maine corporation organized in 1915, with its principal place of business at Boise, Idaho. It is a public utility engaged in the production, transmission, distribution, and sale of electric energy. The taxpayer keeps its books and files its federal income tax returns on the calendar year accrual basis. The tax years at issue are 1962 and 1963.
For many years, the taxpayer has used its own equipment and employees in the construction of improvements and additions to its capital facilities. The major work has consisted of transmission lines, transmission switching stations, distribution lines, distribution stations, and connecting facilities.
During 1962 and 1963, the tax years in question, taxpayer owned and used in its business a wide variety of automotive transportation equipment, including passenger cars, trucks of all descriptions, power-operated equipment, and trailers. Radio communication devices were affixed to the equipment and were used in its daily operations. The transportation equipment was used in part for operation and maintenance and in part for the construction of capital facilities having a useful life of more than one year.
On its books, the taxpayer used various methods of charging costs incurred in connection with its transportation equipment either to current expense or to capital accounts. To the extent the equipment was used in construction, the taxpayer charged depreciation of the equipment, as well as all operating and maintenance costs (other than pension contributions and social security and motor vehicle taxes) to the capital assets so constructed. This was done either directly or through clearing accounts in accordance with procedures prescribed by the Federal Power Commission and adopted by the Idaho Public Utilities Commission.
For federal income tax purposes, however, the taxpayer treated the depreciation on transportation equipment differently. It claimed as a deduction from gross income all the year’s depreciation on such equipment, including that portion attributable to its use in constructing capital facilities. The depreciation was computed on a composite life of 10 years and under straight-line and declining-balance methods. The other operating and maintenance costs the taxpayer had charged on its books to capital were not claimed as current expenses and were not deducted.
To summarize: On its books, in accordance with Federal Power Commission-Idaho Public Utilities Commission prescribed methods, the taxpayer capitalized the construction-related depreciation, but for income tax purposes that depreciation increment was claimed as a deduction under § 167 (a).
Upon audit, the Commissioner of Internal Revenue disallowed the deduction for the construction-related depreciation. He ruled that that depreciation was a nondeductible capital expenditure to which § 263 (a)(1) had application. He added the amount of the depreciation so disallowed to the taxpayer’s adjusted basis in its capital facilities, and then allowed a deduction for an appropriate amount of depreciation on the addition, computed over the useful life (30 years or more) of the property constructed. A deduction for depreciation of the transportation equipment to the extent of its use in day-to-day operation and maintenance was also allowed. The result of these adjustments was the disallowance of depreciation, as claimed by the taxpayer on its returns, in the net amounts of $140,429.75 and $96,811.95 for 1962 and 1963, respectively. This gave rise to asserted deficiencies in taxpayer’s income taxes for those two years of $73,023.47 and $50,342.21.
The Tax Court agreed with the decision of the Court of Claims in Southern Natural Gas, supra, and described that holding as one to the effect that “depreciation al-locable to the use of the equipment in the construction of capital improvements was not deductible in the year the equipment was so used but should be capitalized and recovered over the useful life of the assets constructed.” 29 T. C. M., at 386. The Tax Court, accordingly, held that the Commissioner “properly disallowed as a deduction... this allocable portion of depreciation and that such amount should be capitalized as part of [taxpayer’s] basis in the permanent improvements in the construction of which the equipment was used.” Ibid.
The Court of Appeals, on the other hand, perceived in the Internal Revenue Code of 1954 the presence of a liberal congressional policy toward depreciation, the underlying theory of which is that capital assets used in business should not be exhausted without provision for replacement. 477 F. 2d, at 690-693. The court concluded that a deduction expressly enumerated in the Code, such as that for depreciation, may properly be taken and that “no exception is made should it relate to a capital item.” Id., at 693. Section 263 (a) (1) of the Code was found not to be applicable because depreciation is not an “amount paid out,” as required by that section. The court found Southern Natural Gas unpersuasive and felt “constrained to distinguish” it in reversing the Tax Court judgment. 477 F. 2d, at 695-696.
The taxpayer asserts that its transportation equipment is used in its “trade or business” and that depreciation thereon is therefore deductible under § 167 (a)(1) of the Code. The Commissioner concedes that § 167 may be said to have a literal application to depreciation on equipment used in capital construction, Brief for Petitioner 16, but contends that the provision must be read in light of § 263 (a)(1) which specifically disallows any deduction for an amount “paid out for new buildings or for permanent improvements or betterments.” He argues that § 263 takes precedence over § 167 by virtue of what he calls the “priority-ordering” terms (and what the taxpayer describes as “housekeeping” provisions) of § 161 of the Code, 26 U. S. C. § 161, and that sound principles of accounting and taxation mandate the capitalization of this depreciation.
It is worth noting the various items that are not at issue here. The mathematics, as such, is not in dispute. The taxpayer has capitalized, as part of its cost of acquisition of capital assets, the operating and maintenance costs (other than depreciation, pension contributions, and social security and motor vehicle taxes) of the transportation equipment attributable to construction. This is not contested. The Commissioner does not dispute that the portion of the transportation equipment’s depreciation allocable to operation and maintenance of facilities, in contrast with construction thereof, qualifies as a deduction from gross income. There is no disagreement as to the allocation of depreciation between construction and maintenance. The issue, thus comes down primarily to a question of timing, as the Court of Appeals recognized, 477 F. 2d, at 692, that is, whether the construction-related depreciation is to be amortized and deducted over the shorter life of the equipment or, instead, is to be amortized and deducted over the longer life of the capital facilities constructed.
II
Our primary concern is with the necessity to treat construction-related depreciation in a manner that comports with accounting and taxation realities. Over a period of time a capital asset is consumed and, correspondingly over that period, its theoretical value and utility are thereby reduced. Depreciation is an accounting device which recognizes that the physical consumption of a capital asset is a true cost, since the asset is being depleted. As the process of consumption continues, and depreciation is claimed and allowed, the asset's adjusted income tax basis is reduced to reflect the distribution of its cost over the accounting periods affected. The Court stated in Hertz Corp. v. United States, 364 U. S. 122, 126 (1960): “[T]he purpose of depreciation accounting is to allocate the expense of using an asset to the various periods which are benefited by that asset.” See also United States v. Ludey, 274 U. S. 295, 300-301 (1927); Massey Motors, Inc. v. United States, 364 U. S. 92, 96 (1960); Fribourg Navigation Co. v. Commissioner, 383 U. S. 272, 276-277 (1966). When the asset is used to further the taxpayer’s day-to-day business operations, the periods of benefit usually correlate with the production of income. Thus, to the extent that equipment is used in such operations, a current depreciation deduction is an appropriate offset to gross income currently produced. It is clear, however, that different principles are implicated when the consumption of the asset takes place in the construction of other assets that, in the future, will produce income themselves. In this latter situation, the cost represented by depreciation does not correlate with production of current income. Rather, the cost, although certainly presently incurred, is related to the future and is appropriately allocated as part of the cost of acquiring an income-producing capital asset.
The Court of Appeals opined that the purpose of the depreciation allowance under the Code was to provide a means of cost recovery, Knoxville v. Knoxville Water Co., 212 U. S. 1, 13-14 (1909), and that this Court’s decisions, e. g., Detroit Edison Co. v. Commissioner, 319 U. S. 98, 101 (1943), endorse a theory of replacement through “a fund to restore the property.” 477 F. 2d, at 691. Although tax-free replacement of a depreciating investment is one purpose of depreciation accounting, it alone does not require the result claimed by the taxpayer here. Only last Term, in United States v. Chicago, B. & Q. R. Co., 412 U. S. 401 (1973), we rejected replacement as the strict and sole purpose of depreciation:
“Whatever may be the desirability of creating a depreciation reserve under these circumstances, as a matter of good business and accounting practice, the answer is... [depreciation reflects the cost of an existing capital asset, not the cost of a potential replacement.’ ” Id., at 415.
Even were we to look to replacement, it is the replacement of the constructed facilities, not the equipment used to build them, with which we would be concerned. If the taxpayer now were to decide not to construct any more capital facilities with its own equipment and employees, it, in theory, would have no occasion to replace its equipment to the extent that it was consumed in prior construction.
Accepted accounting practice and established tax principles require the capitalization of the cost of acquiring a capital asset. In Woodward v. Commissioner, 397 U. S. 572, 575 (1970), the Court observed: “It has long been recognized, as a general matter, that costs incurred in the acquisition... of a capital asset are to be treated as capital expenditures.” This principle has obvious application to the acquisition of a capital asset by purchase, but it has been applied, as well, to the costs incurred in a taxpayer’s construction of capital facilities. See, e. g., Southern Natural Gas Co. v. United States, supra; Great Northern R. Co. v. Commissioner, 40 F. 2d 372 (CA8), cert. denied, 282 U. S. 855 (1930); Coors v. Commis sioner, 60 T. C. 368, 398 (1973); Norfolk Shipbuilding & Drydock Corp. v. United States, 321 F. Supp. 222 (ED Va. 1971); Producers Chemical Co. v. Commissioner, 50 T. C. 940 (1968); Brooks v. Commissioner, 50 T. C. 927, 935-936 (1968), rev'd on other grounds, 424 F. 2d 116 (CA5 1970).
There can be little question that other construction-related expense items, such as tools, materials, and wages paid construction workers, are to be treated as part of the cost of acquisition of a capital asset. The taxpayer does not dispute this. Of course, reasonable wages paid in the carrying on of a trade or business qualify as a deduction from gross income. §162 (a)(1) of the 1954 Code, 26 U. S. C. § 162 (a)(1). But when wages are paid in connection with the construction or acquisition of a capital asset, they must be capitalized and are then entitled to be amortized over the life of the capital asset so acquired. Briarcliff Candy Corp. v. Commissioner, 475 F. 2d 775, 781 (CA2 1973); Perlmutter v. Commissioner, 44 T. C. 382, 404 (1965), aff'd, 373 F. 2d 45 (CA10 1967); Jaffa v. United States, 198 F. Supp. 234, 236 (ND Ohio 1961). See Treas. Reg. § 1.266-1 (e).
Construction-related depreciation is not unlike expenditures for wages for construction workers. The significant fact is that the exhaustion of construction equipment does not represent the final disposition of the taxpayer's investment in that equipment; rather, the investment in the equipment is assimilated into the cost of the capital asset constructed. Construction-related depreciation on the equipment is not an expense to the taxpayer of its day-to-day business. It is, however, appropriately recognized as a part of the taxpayer’s cost or investment in the capital asset. The taxpayer’s own accounting procedure reflects this treatment, for on its books the construction-related depreciation was capitalized by a credit to the equipment account and a debit to the capital facility account. By the same token, this capitalization prevents the distortion of income that would otherwise occur if depreciation properly allocable to asset acquisition were deducted from gross income currently realized. See, e. g., Coors v. Commissioner, 60 T. C., at 398; Southern Natural Gas Co. v. United States, 188 Ct. Cl., at 373-374, 412 F.2d, at 1265.
An additional pertinent factor is that capitalization of construction-related depreciation by the taxpayer who does its own construction work maintains tax parity with the taxpayer who has its construction work done by an independent contractor. The depreciation on the contractor’s equipment incurred during the performance of the job will be an element of cost charged by the contractor for his construction services, and the entire cost, of course, must be capitalized by the taxpayer having the construction work performed. The Court of Appeals’ holding would lead to disparate treatment among taxpayers because it would allow the firm with sufficient resources to construct its own facilities and to obtain a current deduction, whereas another firm without such resources would be required to capitalize its entire cost including depreciation charged to it by the contractor.
Some, although not controlling, weight must be given to the fact that the Federal Power Commission and the Idaho Public Utilities Commission required the taxpayer to use accounting procedures that capitalized construction-related depreciation. Although agency-imposed compulsory accounting practices do not necessarily dictate tax consequences, Old Colony R. Co. v. Commissioner, 284 U. S. 552, 562 (1932), they are not irrelevant and may be accorded some significance. Commissioner v. Lincoln Savings & Loan Assn., 403 U. S. 345, 355-356 (1971). The opinions in American Automobile Assn. v. United States, 367 U. S. 687 (1961), and Schlude v. Commissioner, 372 U. S. 128 (1963), urged upon us by the taxpayer here, are not to the contrary. In the former case it was observed that merely because the method of accounting a taxpayer employs is in accordance with generally accepted accounting procedures, this “is not to hold that for income tax purposes it so clearly reflects income as to be binding on the Treasury.” 367 U. S., at 693. See also Cincinnati, N. O. & T. P. R. Co. v. United States, 191 Ct. Cl. 572, 583-584, 424 F. 2d 563, 570 (1970). Nonetheless, where a taxpayer’s generally accepted method of accounting is made compulsory by the regulatory agency and that method clearly reflects income, it is almost presumptively controlling of federal income tax consequences.
The presence of § 263 (a)(1) in the Code is of significance. Its literal language denies a deduction for “[a]ny amount paid out” for construction or permanent improvement of facilities. The taxpayer contends, and the Court of Appeals held, that depreciation of construction equipment represents merely a decrease in value and is not an amount “paid out,” within the meaning of § 263 (a)(1). We disagree.
The purpose of § 263 is to reflect the basic principle that a capital expenditure may not be deducted from current income. It serves to prevent a taxpayer froih utilizing currently a deduction properly attributable, through amortization, to later tax years when the capital asset becomes income producing. The regulations state that the capital expenditures to which § 263 (a) extends include the “cost of acquisition, construction, or erection of buildings.” Treas. Reg. § 1.263 (a)-2 (a). This manifests an administrative understanding that for purposes of §263 (a)(1), “amount paid out” equates with “cost incurred.” The Internal Revenue Service for some time has taken the position that construction-related depreciation is to be capitalized. Rev. Rui. 59-380, 1959-2 Cum. Bull. 87; Rev. Rul. 55-252, 1955-1 Cum. Bull. 319.
There is no question that the cost of the transportation equipment was “paid out” in the same manner as the cost of supplies, materials, and other equipment, and the wages of construction workers. The taxpayer does not question the capitalization of these other items as elements of the cost of acquiring a capital asset. We see no reason to treat construction-related depreciation' differently. In acquiring the transportation equipment, taxpayer “paid out” the equipment’s purchase price; depreciation is simply the means of allocating the payment over the various accounting periods affected. As the Tax Court stated in Brooks v. Commissioner, 50 T. C., at 935, “depreciation — inasmuch as it represents a using up of capital — is as much an ‘expenditure’ as the using up of labor or other items of direct cost.”
Finally, the priority-ordering directive of § 161 — or, for that matter, § 261 of the Code, 26 U. S. C. § 261 — requires that the capitalization provision of § 263 (a) take precedence, on the facts here, over § 167 (a). Section 161 provides that deductions specified in Part VI of Sub-chapter B of the Income Tax Subtitle of the Code are “subject to the exceptions provided in part IX.” Part VI includes § 167 and Part IX includes § 263. The clear import of § 161 is that, with stated exceptions set forth either in § 263 itself or provided for elsewhere (as, for example, in § 404 relating to pension contributions), none of which is applicable here, an expenditure incurred in acquiring capital assets must be capitalized even when the expenditure otherwise might be deemed deductible under Part VI.
The Court of Appeals concluded, without reference to § 161, that § 263 did not apply to a deduction, such as that for depreciation of property used in a trade or business, allowed by the Code even though incurred in the construction of capital assets. We think that the court erred in espousing so absolute a rule, and it obviously overlooked the ¡contrary direction of § 161. To the extent that reliance was placed on the congressional intent, in the evolvement of the 1954 Code, to provide for “liberalization of depreciation,” H. R. Rep. No. 1337, 83d Cong., 2d Sess., 22 (1954), that reliance is misplaced. The House Report also states that the depreciation provisions would “give the economy added stimulus and resilience without departing from realistic standards of depreciation accounting.” Id., at 24. To be sure, the 1954 Code provided for new and accelerated methods for depreciation, resulting in the greater depreciation deductions currently available. These changes, however, relate primarily to computation of depreciation. Congress certainly did not intend that provisions for accelerated depreciation should be construed as enlarging the class of depreciable assets to which § 167 (a) has application or as lessening the reach of §263 (a). See Note, 1973 Duke L. J. 1386.
We hold that the equipment depreciation allocable to taxpayer’s construction of capital facilities is to be capitalized.
The judgment of the Court of Appeals is reversed.
It is so ordered.
Ҥ 167. Depreciation.
“(a) General rule.
“There shall be allowed as a depreciation deduction a reasonable allowance for the exhaustion, wear and tear (including a reasonable allowance for obsolescence)—
“ (1) of property used in the trade or business, or
“(2) of property held for the production of income.”
Ҥ263. Capital expenditures.
“(a) General rule.
“No deduction shall be allowed for—
“(1) Any amount paid out for new buildings or for permanent improvements or betterments made to increase the value of any property or estate.”
For a period near the end of World War II, the taxpayer constructed all its capital improvements. At other times, outside contractors have performed part of this work. At the time of the trial of this tax case, the taxpayer had 140 employees engaged in new construction; it has had as many as 300 employees so engaged.
For 1962 and 1963 the taxpayer’s gross construction additions were $8,235,440.22 and $5,988,139.56, respectively. Of these amounts, the taxpayer itself constructed $7,139,940.72 and $5,642,342.79. The self-construction portion, therefore, obviously was a substantial part of the gross. The equipment depreciation for those years, to the extent allocated to use in construction and capitalized on the taxpayer’s books, amounted to $150,047.42 and $130,523.99, respectively. These were the depreciation amounts deducted for income tax purposes, the major portions of which are presently at issue.
For purposes of the issue here presented, the key phrase of § 167 (a) (1) is “property used in the trade or business.” Construction of this phrase in the present context has been infrequent and not consistent. In Great Northern R. Co. v. Commissioner, 40 F. 2d 372 (CA8), cert. denied, 282 U. S. 855 (1930), the court held that where a railroad transported men and equipment to a construction site, the depreciation of the train attributable to the construction work was to be capitalized. No consideration was given to whether the claimed deduction was available for property used in the taxpayer’s trade or business. See also Gulf, M. & N. R. Co. v. Commissioner, 22 B. T. A. 233, 245-247 (1931), aff’d as to other issues, 63 U. S. App. D. C. 244, 71 F. 2d 953 (1934), aff’d, 293 U. S. 295 (1934); Missouri Pacific R. Co. v. Commissioner, 22 B. T. A. 267, 286-287 (1931); Northern Pacific R. Co. v. Helvering, 83 F. 2d 508, 513 (CA8 1936).
In a subsequent case, Great Northern R. Co. v. Commissioner, 30 B. T. A. 691 (1934), the Board of Tax Appeals reached the contrary result on identical facts. The Board held that the train equipment, even though used in part for construction of branch lines of the railroad, was used in a trade or business, and that this satisfied the requirements of the statute. The depreciation, therefore, was held deductible. Id., at 708. This appears to have been the prevailing view until the issuance of Rev. Rui. 59-380, 1959-2 Cum. Bull. 87, where it was stated:
“In the instant case the capital improvements constructed constitute property to be used in the trade or business or property held for the production of income. However, the building equipment used in the construction cannot be considered as property used in the regular trade or business of the taxpayer.” Id., at 88.
Rev. Rui. 59-380 was in part the basis for the holding of the Court of Claims in Southern Natural Gas Co. v. United States, 188 Ct. Cl., 302, 378-379, 412 F. 2d 1222, 1268 (1969). The Court of Claims rejected the " ‘a trade or business’ ” approach in favor of the rule that, to be deductible from current income, depreciation must be of property used in the trade or business of the taxpayer. Equipment, to the extent used by the taxpayer in construction of additional facilities, was not used in the trade or business of the natural gas company. Thus, no depreciation deduction was allowable and the contested amount of depreciation was to be capitalized.
In the instant case, the Court of Appeals concluded that transportation equipment used by the taxpayer to construct its own capital improvements was used in the trade or business of the taxpayer: “The continuity and regularity of taxpayer’s construction activities, the number of employees engaged in construction and the amounts expended on construction all point to the conclusion that construction of facilities is a major aspect of the taxpayer’s trade or business. These activities are auxiliary operations incident to the taxpayer’s principal trade or business of producing, transmitting, distributing and selling electrical energy within the meaning of section 167.” 477 F. 2d, at 696.
Since the Commissioner appears to have conceded the literal application of § 167 (a) to Idaho Power's equipment depreciation, we need not reach the issue whether the Court of Appeals has given the phrase “used in the trade or business” a proper construction. For purposes of this case, we assume, without deciding, that § 167 (a) does have a literal application to the depreciation of the taxpayer’s transportation equipment used in the construction of its capital improvements.
Ҥ 161. Allowance of deductions.
“In computing taxable income under section 63 (a), there shall be allowed as deductions the items specified in this part, subject to the exceptions provided in part IX (sec. 261 and following, relating to items not deductible).”
The Committee on Terminology of the American Institute of Certified Public Accountants has discussed various definitions of depreciation and concluded that:
“These definitions view depreciation, broadly speaking, as describing not downward changes of value regardless of their causes but a money cost incident to exhaustion of usefulness. The term is sometimes applied to the exhaustion itself, but the committee considers it desirable to emphasize the cost concept as the primary if not the sole accounting meaning of the term: thus, depreciation means the cost of such exhaustion, as wages means the cost of labor.” 2 APB Accounting Principles, Accounting Terminology Bulletin No. 1 — Review and Resumé ¶48, p. 9512 (1973) (emphasis in original).
The general proposition that good accounting practice requires capitalization of the cost of acquiring a capital asset is not seriously open to question. The Commissioner urges, however, that accounting methods as a rule require the treatment of construction-related depreciation of equipment as a capital cost of the facility constructed. Indeed, there is accounting authority for this. See, e. g., W. Paton, Asset Accounting 188, 192-193 (1952); H. Finney & H. Miller, Principles of Accounting — Introductory 246-247 (6th ed. 1963) (depreciation as an expense should be matched with the production of income); W. Paton, Accountants’ Handbook 652 (3d ed. 1943) ; Note, 1973 Duke L. J. 1377, 1384; Note, 52 N. C. L. Rev. 684, 692 (1974).
Except for the Court of Appeals in the present case, the courts consistently have upheld the position of the Commissioner that construction-related depreciation is to be capitalized. Great Northern R. Co. v. Commissioner, 30 B. T. A. 691 (1934), upon which the Court of Appeals relied, is not to the contrary. In that case the Board concluded that construction-related depreciation was deductible under the Revenue Act of 1928, §23 (k), 45 Stat. 800 (the provision corresponding to §167 (a)(1) of the 1954 Code). The Commissioner in that case, however, had not argued for the capitalization of construction-related depreciation. 30 B. T. A., at 708.
Section 446 of the Code, 26 U. S. C. § 446, reads in part as follows:
Ҥ 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.”
The taxpayer contends that depreciation has been held not to be an expenditure or payment for purposes of a charitable contribution under § 170 of the Code, 26 U. S. C. § | 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
] | sc_adminaction |
COMMISSIONER OF INTERNAL REVENUE v. BILDER, EXECUTRIX.
No. 384.
Argued March 29, 1962.
Decided April 30, 1962.
Stephen J. Poliak argued the cause for petitioner. On the briefs were Solicitor General Cox, Assistant Attorney General Oberdorjer, I. Henry Kutz and Joseph Kovner.
Martin D. Cohen argued the cause for respondent. With him on the briefs was Louis J. Cohen.
Mr. Justice Harlan
delivered the opinion of the Court.
This case concerns the deductibility as an expense for “medical care,” under § 213 of the Internal Revenue Code of 1954, 26 U. S. C. § 213, of rent paid by a taxpayer for an apartment in Florida, where he was ordered by his physician, as part of a regimen of medical treatment, to spend the winter months.
The taxpayer, now deceased, was an attorney practicing law in Newark, New Jersey. In December 1953, when he was 43 years of age and had suffered four heart attacks during the previous eight years, he was advised by a heart specialist to spend the winter season in a warm climate. The taxpayer, his wife, and his three-year-old daughter proceeded immediately to Fort Lauderdale, Florida, where they resided for the ensuing three months in ah apartment rented for $1,500. Two months of the succeeding winter were also spent in Fort Lauderdale in an apartment rented for $829.
The taxpayer claimed the two rental payments as deductible medical expenses in his 1954 and 1955 income tax returns. These deductions were disallowed in their entirety by the Commissioner. The Tax Court reversed the Commissioner’s determination to the extent of one-third of the deductions, finding that proportion of the total claimed attributable to the taxpayer’s own living accommodations. The remaining two-thirds it attributed to the accommodations of his wife and child, whose presence, the Tax Court concluded, had not been shown to be necessary to the medical treatment of the taxpayer’s illness. 33 T. C. 155.
On cross-appeals from the decision of the Tax Court, the Court of Appeals held, by a divided vote, that the full rental payments were deductible as expenses for “medical care” within the meaning of § 213. 289 F. 2d 291. Because of a subsequent contrary holding by the Court of Appeals for the Second Circuit, Carasso v. Commissioner, 292 F. 2d 367, and the need for a uniform rule on the point, we granted certiorari to resolve the conflict. 368 U. S. 912.
The Commissioner concedes that prior to the enactment of the Internal Revenue Code of 1954 rental payments of the sort made by the taxpayer were recognized as deductible medical expenses. This was because § 23 (x) of the Internal Revenue Code of 1939, though expressly authorizing deductions only for “amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease,” had been construed to include “travel primarily for and essential to . . . the prevention or alleviation of a physical or mental defect or illness,” Treasury Regulations 111, § 29.23 (x)-1, and the cost of meals and lodging during such travel, I. T. 3786, 1946-1 Cum. Bull. 76. See, e. g., Stringham v. Commissioner, 12 T. C. 580, aff’d, 183 F. 2d 597; Rev. Rule 55-261, 1955-1 Cum. Bull. 307.
The Commissioner maintains, however, that it was the purpose of Congress, in enacting § 213 (e)(1)(A) of the 1954 Code, albeit in language identical to that used in § 23 (x) of the 1939 Code (compare notes 1 and 3, supra,), to deny deductions for all personal or living expenses incidental to medical treatment other than the cost of transportation of the patient alone, that exception having been expressly added by subdivision (B) to the definition of “medical care” in § 213 (e)(1). Note 1, supra.
We consider the Commissioner's position unassailable in light of the congressional purpose explicitly revealed in the House and Senate Committee Reports on the bill. These reports, anticipating the precise situation now before us, state:
“Subsection (e) defines medical care to mean amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of diseases or for the purpose of affecting any structure or function of the body (including amounts paid for accident or health insurance), or for transportation primarily for and essential to medical care. The deduction permitted for ‘transportation primarily for and essential to medical care’ clarifies existing law in that it specifically excludes deduction of any meals and lodging while away from home receiving medical treatment. For example, if a doctor prescribes that a patient must go to Florida in order to alleviate specific chronic ailments and to escape unfavorable climatic conditions which have proven injurious to the health of the taxpayer, and the travel is prescribed for reasons other than the general improvement of a patient’s health, the cost of the patient’s transportation to Florida would be deductible hut not his living expenses while there. However, if a doctor prescribed an appendectomy and the taxpayer chose to go to Florida for the operation not even his .transportation costs would be deductible. The subsection is not intended otherwise to change the existing definitions of medical care, to deny the cost of ordinary ambulance transportation nor to deny the cost of food or lodging provided as part of a hospital bill.” H. R. Rep. No. 1337, 83d Cong., 2d Sess. A60 (1954); S. Rep. No. 1622, 83d Cong., 2d Sess. 219-220 (1954). (Emphasis supplied.)
Since under the predecessor statute, as it had been construed, expenses for meals and lodging were deductible as expenses for “medical care,” it may well be true that the Committee Reports spoke in part inartistically when they referred to subsection (e) as a mere clarification of “existing law,” although it will be noted that the report also referred to what was being done as a pro tanto “change” in “the existing definitions of medical care.” Yet Congress’ purpose to exclude such expenses as medical deductions under the new bill is unmistakable in these authoritative pronouncements, ibid.; cf. Budget Message of the President for the Fiscal Year 1955, H. R. Doc. No. 264, 83d Cong., 2d Sess. M17 (1954); Memorandum of Joint Committee on Internal Revenue Taxation, 1 Senate Hearings on the Internal Revenue Code of 1954, 83d Cong., 2d Sess. 24 (1954); Memorandum of the Under Secretary of the Treasury, id., at 103. It is that factor which is of controlling importance here.
We need not consider whether we would be warranted in disregarding these unequivocal expressions of legislative intent if the statute were so written as to permit no reasonable construction other than that urged on behalf of the taxpayer. Compare Boston Sand & Gravel Co. v. United States, 278 U. S. 41, 48; United States v. Dickerson, 310 U. S. 554, 561-562; Harrison v. Northern Trust Co., 317 U. S. 476, 479. See also Association of Westinghouse Salaried Employees v. Westinghouse Elec. Corp., 348 U. S. 437, 444. Even the initial decision of the Tax Court under the 1939 Code respecting the deductibility of similar expenses under § 23 (x) recognized that the language of that statute was “susceptible to a variety of conflicting interpretations,” Stringham v. Commissioner, 12 T. C. 580, 583. The Tax Court's conclusion as to the meaning of § 23 (x) of the earlier statute which was affirmed by the Court of Appeals, 183 F. 2d 579, and acquiesced in by the Commissioner, necessarily rested on what emerged from a study of the legislative history of that enactment. So too the conclusion in this case, which turns on the construction of the identical words re-enacted as part of § 213, must be based on an examination of the legislative history of this provision of the 1954 Code. The Committee Reports foreclose any reading of that provision which would permit this taxpayer to take the rental payments for his Florida apartment as “medical care” deductions.
Reversed.
Me. Justice Douglas would affirm the judgment below for the reasons given by Judge Kalodner, 289 F. 2d 291.
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.
Section 213 of the 1954 Code allows as deductions in computing net income “the expenses paid during the taxable year, not compensated for by insurance or otherwise, for medical care of the taxpayer, his spouse, or a dependent . . . .” Subdivision (e)(1) defines such expenses as “amounts paid”—
“(A) for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body (including amounts paid for accident or health insurance), or
“(B) for transportation primarily for and essential to medical care referred to in subparagraph (A).”
The Commissioner concedes that the taxpayer’s sojourn in Florida was not for vacation purposes but was “a medical necessity and . . . a primary part of necessary medical treatment of a disease” from which the taxpayer was suffering, i. e., atherosclerosis. 33 T. C., at 157. The taxpayer also claimed in each of his tax returns a $250 deduction for his transportation between Newark and Fort Lauder-dale. Although the Commissioner initially disallowed this deduction, he thereafter acquiesced in its allowance by the Tax Court.
Section 23 (x) was added to the Internal Revenue Code of 1939 by § 127 (a) of the Revenue Act of 1942, 56 Stat. 825. It provided, in pertinent part:
“[In computing net income there shall be allowed as deductions] . . . expenses paid during the taxable year, not compensated for by insurance or otherwise, for medical care of the taxpayer, his spouse, or a dependent ... of the taxpayer. The term ‘medical care,’ as used in this subsection, shall include amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body (including amounts paid for accident or health insurance).”
The substance of the rule set forth in both Reports has been embodied in the Treasury Regulations interpreting § 213:
“ (iv) Expenses paid for transportation primarily for and essential to the rendition of the medical care are expenses paid for medical care. However, an amount allowable as a deduction for 'transportation primarily for and essential to medical care’ shall not include the cost of any meals and lodging while away from home receiving medical treatment. For example, if a doctor prescribes that a taxpayer go to a warm climate in order to alleviate a specific chronic ailment, the cost of meals and lodging while there would not be deductible. On the other hand, if the travel is undertaken merely for the general improvement of a taxpayer’s health, neither the cost of transportation nor the cost of meals and lodging would be deductible. If a doctor prescribes an operation or other medical care, and the taxpayer chooses for purely personal considerations to travel to another locality (such as a resort area) for the operation or the other medical care, neither the cost of transportation nor the cost of meals and lodging (except where paid as part of a hospital bill) is deductible.” Treasury Regulations on Income Tax (1954 Code) §1.213-1 (e)(1) (iv).
The explicitness of the Committee Reports renders it unnecessary to consider the Commissioner’s alternative argument that the statute on its face precludes these deductions because (1) §262 of the 1954 Code, 26 U. S. C. § 262, allows no deductions for “personal, living, or family expenses” “[e]xcept as otherwise expressly provided in this chapter,” and (2) apart from the medical “transportation” expense provided in §213 (e)(1)(B), no other express exception can be found in the statute. And the equitable considerations which the respondent brings to bear in support of her construction of § 213 are of course beside the point in this Court, since we must give the statute effect in accordance with the purpose so clearly manifested by Congress. | 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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] | [
68
] | sc_adminaction |
COLONIAL AMERICAN LIFE INSURANCE CO. v. COMMISSIONER OF INTERNAL REVENUE
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT
No. 88-396.
Argued April 18, 1989
Decided June 15, 1989
Carolyn P. Chiechi argued the cause for petitioner. With her on the briefs were Margaret Milner Richardson, Francis M. Gregory, Jr., James V. Heffernan, Gordon 0. Pehrson, Jr., and George R. Abramowitz.
Michael R. Dreeben argued the cause for respondent. With him on the brief were Acting Solicitor General Bryson, Acting Assistant Attorney General Knapp, Deputy Solicitor General Wallace, Alan I. Horowitz, Gary R. Allen, David English Carmack, and Nancy G. Morgan.
William B. Harman, Jr., Jack H. Blaine, John W. Holt, and John T. Adney filed a brief for the American Council of Life Insurance et al. as amici curiae urging reversal.
Justice Kennedy
delivered the opinion of the Court.
The arcane but financially important question before us is whether ceding commissions paid by a reinsurance company to a direct insurer under a contract for indemnity reinsurance are fully deductible in the year tendered or instead must be amortized over the anticipated life of the reinsurance agreements.
I
This case involves the workings of the reinsurance industry. In order to spread the risks on policies they have written or to reduce required reserves, insurance companies commonly enter into reinsurance agreements. Under these agreements, the reinsurer pays the primary insurer, or “ceding company,” a negotiated amount and agrees to assume the ceding company’s liabilities on the reinsured policies. In return, the reinsurer receives the future income generated from the policies and their associated reserve accounts.
Reinsurance comes in two basic types, assumption reinsurance and indemnity reinsurance. In the case of assumption reinsurance, the reinsurer steps into the shoes of the ceding company with respect to the reinsured policy, assuming all its liabilities and its responsibility to maintain required reserves against potential claims. The assumption reinsurer thereafter receives all premiums directly and becomes directly liable to the holders of the policies it has reinsured.
In indemnity reinsurance, which is at issue in this case, it is the ceding company that remains directly liable to its policyholders, and that continues to pay claims and collect premiums. The indemnity reinsurer assumes no direct liability to the policyholders. Instead, it agrees to indemnify, or reimburse, the ceding company for a specified percentage of the claims and expenses attributable to the risks that have been reinsured, and the ceding company turns over to it a like percentage of the premiums generated by the insurance of those' risks.
Both the assumption and the indemnity reinsurer ordinarily pay an up-front fee, known as a “ceding commission,” to the ceding company. The issue in this case is whether ceding commissions for indemnity reinsurance may be deducted by the reinsurer in the year in which they are paid, or whether they must be capitalized over the estimated life of the underlying policies. Petitioner writes and reinsures life, accident, and health insurance. In 1975 and 1976, petitioner entered into four indemnity reinsurance agreements to rein-sure blocks of life insurance policies written by Transport Life Insurance Company, the ceding company. The agreements required petitioner to indemnify Transport for 76.6% of Transport’s liabilities under the block of reinsured policies. Petitioner also contracted to pay ceding commissions of $680,000 for the 1975 pair of agreements and $852,000 for the 1976 pair of agreements. In addition, petitioner paid Transport a “finder’s fee” of $13,600 in 1975, which the parties agree is subject to the same tax treatment as the ceding commissions.
On its federal income tax returns for 1975 and 1976, petitioner claimed deductions for the full amount of the ceding commissions and the finder’s fee. The Commissioner disallowed the deductions, concluding that the ceding commissions and finder’s fee had to be capitalized and amortized over the useful life of the reinsurance agreements, a period later stipulated to be seven years. Petitioner then filed for review in the Tax Court, which agreed with petitioner that the ceding commissions could be deducted in full in the year of payment.
The Court of Appeals for the Fifth Circuit reversed, holding that ceding commissions are not currently deductible. 843 F. 2d 201 (1988). The Court of Appeals reasoned that ceding commissions represent payments to acquire an asset with an income producing life that extends substantially beyond one year, and that under fundamental principles of taxation law, such payments must be amortized over the estimated life of the asset.
To resolve a conflict in the Courts of Appeals, we granted certiorari. 488 U. S. 980 (1988).
II
This case is initially a battle of analogies. The tax treatment of life insurance companies is prescribed in Part I of Subchapter L of the Internal Revenue Code of 1954, 26 U. S. C. §§801-820 (1970 ed. and Supp. V). Given that these provisions do not specify in explicit terms whether ceding commissions for indemnity reinsurance may be taken as current deductions, the parties each argue that the tax treatment of allegedly analogous payments should be controlling. Petitioner analogizes to the tax treatment of “agents’ commissions and other expenses incurred by a life insurance company in issuing directly-written insurance.” Brief for Petitioner 21. Such expenses of primary insurers are currently deductible under § 809(d)(12) of the Code, which incorporates the allowance for “ordinary and necessary” business expenses under § 162(a). Petitioner argues that indemnity reinsurance is in effect a direct insurance agreement between the reinsurer and the ceding company. Parties to an indemnity reinsurance agreement, petitioner points out, stand in the same relation to one another as do the parties to a conventional insurance policy: in return for a premium, the rein-surer agrees to reimburse the ceding company in the event the company becomes liable for certain designated risks. Petitioner reasons that just as a direct insurer may currently deduct the commissions it pays to acquire policies, so should an indemnity reinsurer be able to deduct currently the ceding commissions it expends to acquire business.
Respondent counters with an analogy to assumption reinsurance, the ceding commissions for which, it is well established, must be capitalized and amortized. See 26 CFR § 1.817-4(d) (1988). “[Tjhere is essentially no economic difference,” respondent argues, “between a ceding commission paid in an assumption reinsurance transaction and one paid in an indemnity reinsurance transaction.” Brief for Respondent 19-20. In both cases, according to respondent’s analysis, the ceding commission represents payment for the right to share in the future income stream from the reinsured policies. Id., at 18-19.
As the parties’ dispute makes clear, indemnity reinsurance bears some formal and functional similarities to both direct insurance and assumption reinsurance. But the salient comparison is between ceding commissions in indemnity reinsurance and their asserted analogues in the other two forms of insurance. At this level of inquiry, we agree with respondent that the analogy to ceding commissions in assumption reinsurance is the more compelling one. Although indemnity-reinsurance is different from assumption reinsurance in some important ways, none of them go to the function and purpose of the ceding commissions. Whether the reinsurer assumes direct liability to the policyholder in no way alters the economic role that the ceding commissions play in both kinds of transactions. The only rational business explanation for the more than $1,500,000 that petitioner paid in ceding commissions to Transport is that petitioner was investing in the future earnings on the reinsured policies. The ceding commissions thus are not administrative expenses on the order of agents’ commissions in direct insurance; rather, they represent part of the purchase price to acquire the right to a share of future profits.
The parallels between ceding commissions in indemnity insurance and agents’ commissions in direct insurance, on the other hand, are chiefly nominal. The commission paid to the insurance agent in a direct insurance setting is an administrative expense to remunerate a third party who helps to facilitate the sale; the agent’s commission is akin to a salary, and to other sales expenses of writing new policies, such as administrative overhead. In the reinsurance setting, by contrast, the ceding company owns the asset it is selling, and the reinsurer pays a substantial “commission” as part of the purchase price to induce the ceding company to part with the asset it has created; the payment, in other words, is for the asset itself rather than for services.' This point is illustrated by a comparison with risk-premium insurance, which is in effect like a direct insurance contract between the rein-surer and the ceding company. In risk-premium reinsurance, the reinsurer does not acquire a future stream of income extending beyond the 1-year term of insurance; rather, in exchange for a premium, it agrees to indemnify the ceding company against liability to its policyholders. Not coincidentally, risk-premium reinsurance agreements typically do not involve the payment of ceding commissions. See n. 1, supra.
Finally, even if we were to accept petitioner’s arguments about the resemblances between direct insurance and indemnity reinsurance, it would not undermine the basic character of the ceding commissions at issue here as capital expenditures. Petitioner’s argument at most proves only that Congress decided to carve out an exception for agents’ commissions, notwithstanding their arguable character as capital expenditures. We would not take it upon ourselves to extend that exception to other capital expenditures, notwithstanding firmly established tax principles requiring capitalization, where Congress has not provided for the extension.
We therefore agree with respondent that the ceding commissions paid in respect of indemnity reinsurance, like those involved in assumption reinsurance, represent an investment in a future income stream. The general tax treatment of this sort of expense is well established. Both the Code and our cases long have recognized that amounts expended to acquire an asset with an income-producing life extending substantially beyond the taxable year of acquisition must be capitalized and amortized over the useful life of the asset. See 26 U. S. C. §263 (1970 ed. and Supp. V.); Commissioner v. Idaho Power Co., 418 U. S. 1, 12 (1974); Woodward v. Commissioner, 397 U. S. 572, 575 (1970); see also Massey Motors, Inc. v. United States, 364 U. S. 92, 104 (1960) (the basic purpose of capitalization rules is to “mak[e] a meaningful allocation of the cost entailed in the use ... of the asset to the periods to which it contributes [income] ”)• Our agreement with respondent as to the character of ceding commissions therefore resolves this case, absent some specific statutory-provision indicating that ceding commissions for indemnity insurance are an exception to the general rule for which Congress has authorized current deduction. Petitioner offers three possible sources in Subchapter L of such a specific authorization.
We consider first petitioner’s contention that the commissions are currently deductible under § 809(d)(12) of the Code. That provision authorizes deductions for “ordinary and necessary” business expenses as described in § 162(a). It is § 809(d)(12) upon which direct insurers rely in deducting the commissions paid to their agents. Petitioner argues that there is no distinction in Subchapter L between direct insurance and indemnity reinsurance, and therefore that the allowance for direct insurers applies in the latter context as well. This argument, in other words, is the statutory hook upon which petitioner hangs its general submission that its ceding commissions should receive the same tax treatment as the agents’ commissions paid by direct insurers.
Were we to agree with petitioner’s general premise, § 809(d)(12) would be a logical source of authority to deduct ceding commissions as ordinary and necessary business expenses. But since we have rejected petitioner’s efforts to analogize ceding commissions to agents’ commissions paid in a direct insurance setting, we necessarily reject its argument that § 809(d)(12) authorizes the deduction petitioner claimed. That section does permit petitioner to deduct ordinary and necessary business expenses such as salaries and certain administrative costs, but the ceding commissions at issue in this case do not fall in that category.
Petitioner also relies on § 818(a) of the Code, which requires a life insurance company to compute its taxes in a manner consistent with the accounting procedures established by the National Association of Insurance Commissioners (NAIC) for purposes of preparing an annual statement, except when such procedures would be inconsistent with accrual accounting rules. See Commissioner v. Standard Life & Accident Ins. Co., 433 U. S. 148, 158-159 (1977). Petitioner points out that NAIC practices prescribe the current deduction of ceding commissions, and argues that the Code, through § 818(a), incorporates the same prescription. In the first place, we think petitioner’s argument begs the question. Treasury Regulations require accrual taxpayers to amortize the expenses of procuring intangible assets that produce economic benefits extending over more than one year. Thus, § 1.461 — 1(a)(2) of the Treasury Regulations, 26 CFR § 1.461-1(a)(2) (1988), entitled “Taxpayer using an accrual method,” provides that “any expenditure which reáults in the creation of an asset having a useful life which extends substantially beyond the close of the taxable year may not be deductible, or may be deductible only in part, for the taxable year in which incurred.” Since NAIC practices do not apply where their applicátion would be inconsistent with accrual accounting rules, they are inapposite if a ceding commission is properly characterized as an “expenditure which results in the creation of an asset having a useful life which extends substantially beyond the close of the taxable year.” Petitioner’s contention that § 818(a) justifies the deduction therefore loops back into its general contention that ceding commissions are up-front expenses rather than capital expenditures, a contention which we have rejected.
More important, petitioner’s argument rests on an unduly expansive reading of the reference to the NAIC in § 818(a), one that would trump many of the precise and careful substantive sections of the Code. Under petitioner’s interpretation, the fundamental question whether an expense is properly characterized as a capital outlay which has to be amortized or instead as an ordinary business expense subject to immediate deduction would be answered by simple reference to accounting procedures in the industry. It is inconceivable that Congress intended to delegate such a core policy determination to the NAIC. Indeed, under petitioner’s argument, it appears that ceding commissions for assumption reinsurance, no less than those for indemnity reinsurance, should be immediately deductible because NAIC accounting principles appear not to distinguish between the two kinds of ceding commissions. See Patterson, Underwriting Income, in Reinsurance 539 (R. Strain ed. 1980). Yet it is common ground among the parties that ceding commissions for assumption reinsurance must be amortized, regardless of the treatment they are accorded under NAIC accounting. As this point suffices to illustrate, petitioner’s interpretation of § 818(a) proves too much.
Petitioner’s remaining statutory argument, based on § 809 (c)(1) of the Code, is more difficult to dismiss. As part of their computation of gains from operations, life insurance companies must calculate the gains from several designated categories, including “Premiums.” Section 809(c)(1) provides the somewhat complicated formula governing gains from premiums. The provision instructs the company to take into account
“[t]he gross amount of premiums and other consideration (including advance premiums, deposits, fees, assessments, and consideration in respect of assuming liabilities under contracts not issued by the taxpayer) on insurance and annuity contracts (including contracts supplementary thereto).”
From this amount the taxpayer is then to subtract
“return premiums, and premiums and other consideration arising out of reinsurance ceded. Except in the case of amounts of premiums or other consideration returned to another life insurance company in respect of reinsurance ceded, amounts returned where the amount is not fixed in the contract but depends on the experience of the company or the discretion of the management shall not be included in return premiums.” 26 U. S. C. §809(c)(1) (1970 ed.).
The sum of the amounts identified in the first clause of the provision minus the amounts excluded in the second part of the provision represents the gross amount of premium income earned by a life insurance company. This figure is then added to the other sources of income identified in §§ 809(b) and (c), and from that total the life insurance company subtracts any allowable deductions identified in § 809(d). The result represents the company’s net gain or loss from operations, which is the basis of its tax bill. In this way, the items identified in the latter part of § 809(c)(1) which are subtracted from premium income contribute eventually to a reduction in the insurance company’s taxable income.
Petitioner contends that § 809(c)(1) allows it to subtract the ceding commissions it pays for indemnity reinsurance from its premium income in either of two ways. The commissions, petitioner argues, qualify under the latter part of § 809(c)(1) both as “return premiums” and as “premiums and other consideration arising out of reinsurance ceded.” In construing the statutory phrase “return premiums,” petitioner relies on the definition of that phrase in the Treasury Regulations. Title 26 CFR § 1.809 — 4(a)(l)(ii) (1988) provides:
“The term ‘return premiums’ means amounts returned or credited which are fixed by contract and do not depend on the experience of the company or the discretion of the management. Thus, such term includes amounts refunded due to policy cancellations or erroneously computed premiums. Furthermore, amounts of premiums or other consideration returned to another life insurance company in respect of reinsurance ceded shall be included in return premiums.”
Thus, to compress petitioner’s labyrinthine statutory argument, petitioner should prevail in this case if ceding commissions for indemnity reinsurance are fairly encompassed in either the statutory term “premiums and other consideration arising out of reinsurance ceded” or the regulatory definition “consideration returned to another life insurance company in respect of reinsurance ceded.”
It cannot be denied that the language on which petitioner relies, taken in isolation, could be read to authorize the tax treatment it seeks. Ceding commissions for indemnity reinsurance might loosely be described as consideration “arising out of” or “in respect of reinsurance ceded.” But when the statutory and regulatory language is parsed more carefully, petitioner’s position becomes dubious, and when the language is read against the background of the statutory structure, it becomes untenable.
The difficulty with including ceding commissions within the regulatory definition of “return premiums” is that ceding commissions are not “returned to” the ceding company at all. The commissions never belong to the ceding company until they are paid over in exchange for the right to share in the future income from the reinsured policies. The term “return premiums” more naturally refers to premiums that the insuring or reinsuring company has been paid and then must remit to the individual policyholder or ceding company, as, for example, pursuant to an experience-rated refund clause, which readjusts the amounts of policy premiums paid over to the ceding company to reflect unanticipated savings.
As for the statutory language “premiums and other consideration arising out of reinsurance ceded,” ceding commissions do not find a snug fit within this phrase either. Unlike individual policyholders and, in the case of risk-premium reinsurance, ceding companies, reinsurers do not pay premiums. Therefore, a plausible reading of this language is that it refers only to payments from the ceding company to the rein-surer, as, for example, when the ceding company is simply passing on premiums it has received from a policyholder but is obligated to deliver to a reinsurer under an indemnity-reinsurance agreement. The “other consideration” phrase, while admittedly open ended, can be read in quite a sensible way as tagalong language that refers to analogous expenditures of this kind, rather than as a broad catchall provision that encompasses payments of any kind from any party. This reading is supported by a comparison with the identical language in the first portion of § 809(c)(1), which also furnishes possible content to “other consideration.” That phrase would appear to refer only to incidental items such as “advance premiums, deposits, [and] fees” paid, like premiums, to the reinsurer from the ceding company.
What this closer reading augurs, a broader examination of the statutory structure confirms: ceding commissions are not at all the kind of payments that Congress sought to permit the taxpayer to exclude from gross premiums in § 809(c)(1). In fact, deduction of ceding commissions has nothing to do with the calculations prescribed by that provision. The purpose of § 809(c)(1) is to ensure that “premium income” is included in a company’s tax base and to specify exactly what is and is not encompassed by that term. The provision begins with a general definition of premium income, which it then fine-tunes in the latter part of the section by excluding certain items that might otherwise be considered to come within the general definition. As the Court of Appeals for the Eighth Circuit has written, the latter part of § 809(c)(1) “serves simply to eliminate from the ‘gross amount of premiums and other consideration’ those portions of premiums received which do not, in the end, ‘belong’ to the company in question, but which must either be returned to the policyholder or turned over to or shared with another company under an indemnity reinsurance agreement. ” Modern American Life Ins. Co. v. Commissioner, 830 F. 2d 110, 113-114 (1987) (footnote omitted).
Thus, we read the latter part of § 809(c)(1) as a fine-tuning mechanism that permits the exclusion from premium income of phantom premiums that might be encompassed within a strict definition of premiums but that in fact never really accrued to the company that nominally receives them. This category might include, for example, experience-rated refunds; or premium payments that have been refunded because of an overcharge or the cancellation of a policy; or premiums that the ceding company has received from policyholders and must pass on to an indemnity reinsurer. See S. Rep. No. 291, 86th Cong., 1st Sess., 39, 54 (1959). But the ceding commissions that are at issue in this case fall well outside what we take to be the intended purpose of the provision, which is to except from the general provision a small, residual category of payments that resemble premiums but do not fairly represent income to the recipient. There is no need for careful delineation of ceding commissions as apart from the general statutory category of premium income, because ceding commissions never would be thought to come within that category in the first place. Unlike the above examples, ceding commissions bear no resemblance to premiums; rather, they are an up-front, one-time payment to secure a share in a future income stream.
Finally, we note that petitioner’s reading of § 809(c)(1) is highly implausible in light of the intricate attention to detail displayed throughout Subchapter L. To accept petitioner’s submission, we would have to conclude that Congress subsumed a major deduction within the fine details of its definition of premium income. This would be especially surprising given that § 809(c) in its entirety concerns gross income; deductions are treated in a separate subsection, § 809(d). We find it incredible that Congress, with but a whisper, would have tucked away in the fine points of its definition of premium income a deduction of this magnitude.
I — I !
We have concluded that ceding commissions are costs incurred to acquire an asset with an income-producing life that may extend substantially beyond one year. General tax principles provide that such costs must be amortized and capitalized over the useful life of the asset, and no specific provision in the Code dictates a contrary result. The judgment of the Court of Appeals therefore is
Affirmed.
There is a form of indemnity reinsurance known as risk-premium, or yearly-renewable-term, reinsurance that does not involve ceding commissions. Under risk-premium reinsurance, much like a normal insurance policy, the ceding company typically pays an annual premium to the rein-surer in return for which the reinsurer promises to reimburse the ceding company should identified losses arise.
The parties structured the agreements so as to require the actual transfer of only a small amount of cash. To understand this arrangement, it is necessary to touch on the differences between the two types of coinsurance, which is the most common form of indemnity reinsurance. These two types are conventional coinsurance and modified coinsurance. The two differ in their effect on the reserves that insurance companies are required to maintain against potential liabilities, and which represent essentially an estimate of the present value of future benefits less future premiums. In a conventional coinsurance agreement, the ceding company pays a “reinsurance commission” to the reinsurer in an amount equal to the reserves that the reinsurer must establish to support the liabilities assumed; in a modified coinsurance agreement, the ceding company continues to maintain the reserves and transfers to the reinsurer only the investment income that the reserves generate. Insurance companies frequently pair conventional and modified coinsurance agreements in such a proportion that the ceding commission is roughly equal to the reinsurance commission, with the net effect being that very little money changes hands. So it was in this case: petitioner entered into two modified coinsurance agreements covering 70'%' of a block of policies, and two conventional coinsurance agreements covering 6.6% of the same block of policies; the total ceding commissions were designed to be roughly equal to the reserves petitioner was required to establish under the conventional agreements, with the result being that petitioner actually paid Transport a total of less than $5,000. The parties elected to treat the modified coinsurance agreements for tax purposes as if they were conventional coinsurance agreements, which the Code then permitted. 26 U. S. C. §820 (1976 ed.). Thus, the difference between modified and conventional coinsurance agreements is, mercifully, of no legal significance in this case.
Compare Prairie States Life Ins. Co. v. United States. 828 F. 2d 1222 (CA8 1987) (requiring capitalization), with Merit Life Ins. Co. v. Commissioner, 853 F. 2d 1435 (CA7 1988) (permitting current deduction).
Although the Code does not explicitly permit primary insurers to deduct agent’s commissions in the year in which they are paid, such deductions have been permitted historically, and Congress has recognized and approved of the historic practice. See S. Rep. No. 291, 86th Cong., 1st Sess., 7, 9 (1959); H. R. Rep. No. 98-432, p. 1428 (1984).
Petitioner suggests that the ceding commission is designed in part to reimburse the ceding company for the deductible, administrative costs it originally incurred in issuing the policies. Even assuming this is so, however, petitioner’s argument confuses the character of the payment to the taxpayer with its function to the seller. Whether the payment represents a partial reimbursement of deductible expenses to the seller is not pivotal, for as respondent points out, that is often the case with capital assets. See Brief for Respondent 19, n. 11. The important point is not how the purchase price breaks down for the seller but whether the taxpayer is investing in an asset or economic interest with an income-producing life that extends substantially beyond the taxable year. For this reason, contrary to Justice Stevens’ suggestion, see post, at 261, n., whether the receipt of the ceding commission creates a capital gain for the ceding company is of no relevance in this case.
Likewise, we do not mean to imply that other expenses that do bear a greater resemblance to agents’ commissions would be currently deductible, notwithstanding the strictures of the Code. We confront today only the specific tax treatment of ceding commissions for indemnity reinsurance.
Petitioner suggests that § 1.461-l(a)(2) is not an accrual accounting rule because its prescription applies equally to cash-basis taxpayers. Under petitioner’s argument, NAIC accounting principles would dictate all questions of accounting save in those rare instances where Congress or the Commissioner had promulgated a special rule applicable only to accrual-basis taxpayers. We decline to interpret a statutory provision requiring life insurance companies to compute their taxable income “under an accrual method of accounting,” § 818(a)(1), to prescribe application of the rules of accrual accounting only to the extent that they are inconsistent with the rules of cash-basis accounting.
As petitioner points out, 26 CFR § 1.809 — 4(a)(l)(iii) (1988) specifies that the term “reinsurance ceded” in § 809(c)(1) includes indemnity reinsurance but not assumption reinsurance. | 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
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RAMSPECK et al. v. FEDERAL TRIAL EXAMINERS CONFERENCE et al.
No. 278.
Argued January 9, 12, 1953.
Decided March 9, 1953.
Robert W. Ginnane argued the cause for petitioners. With him on the brief was Solicitor General Cummings.
Charles S. Rhyne argued the cause for respondents. With him on the brief was Eugene J. Bradley.
Richard S. Doyle and Donald C. Beelar filed a brief for the Bar Association of the District of Columbia, Inc., as amicus curiae, urging affirmance.
Mr. Justice Minton
delivered the opinion of the Court.
The present suit was brought by the Federal Trial Examiners Conference, an unincorporated association of trial examiners, and by a number of individual trial examiners, against the members of the United States Civil Service Commission and the National Labor Relations Board. The plaintiffs, who had been appointed pursuant to § 11 of the Administrative Procedure Act, 60 Stat. 244, 5 U. S. C. § 1010, sought a declaratory judgment that certain rules relating to their promotion, compensation, tenure, and the assignment of cases, promulgated by the Civil Service Commission pursuant to § 11, were invalid, and asked that their enforcement be enjoined. The District Court held that these four rules were invalid, interpreting § 11 as requiring: (1) that hearing examiners employed by a particular federal administrative agency must be placed in the same salary grade; (2) that a hearing examiner may not be promoted from one salary grade to another within the same agency; (3) that hearing examiners must be assigned to cases in mechanical rotation without regard to the difficulty or importance of particular cases or the competence or experience of particular examiners; and (4) that the employment of hearing examiners may not be terminated by reduction in force procedures where there is a lack of work or of funds with which to pay them. The District Court granted a permanent injunction against the enforcement of these four Civil Service rules, 104 F. Supp. 734. The Court of Appeals affirmed in a short per curiam opinion, one judge dissenting. 91 U. S. App. D. C. 164, 202 F. 2d 312. We granted certiorari, 344 U. S. 853.
Prior to the passage of the Administrative Procedure Act, hearing examiners’ tenure and status were governed by the Classification Act of 1923, as amended. Under the Classification Act, as employees of an agency, their classification was determined by the ratings given them by the agency, and their compensation and promotion depended upon their classification. The examiners were in a dependent status.
With the rapid growth of administrative law in the last few decades, the role of these quasi-judicial officers became increasingly significant and controversial. Many of the regulatory powers which Congress has assigned federal administrative agencies can be exercised only after notice and hearing required by the Constitution or by statute. These agencies have such a volume of business, including cases in which a hearing is required, that the agency heads, the members of boards or commissions, can rarely preside over hearings in which evidence is required. The agencies met this problem long before the Administrative Procedure Act by designating hearing or trial examiners to preside over hearings for the reception of evidence. Such an examiner generally made a report to the agency setting forth proposed findings of fact and recommended action. The parties could address to the agency exceptions to the findings, and, after receiving briefs and hearing oral argument, the agency heads would make the final decision.
Many complaints were voiced against the actions of the hearing examiners, it being charged that they were mere tools of the agency concerned and subservient to the agency heads in making their proposed findings of fact and recommendations. A study by President Roosevelt’s Committee on Administrative Management resulted in a report in 1937 recommending separation of adjudicatory functions and personnel from investigative and prosecution personnel in the agencies. The Attorney General’s Committee on Administrative Procedure was appointed in 1939 to study the decisional process in administrative agencies, and the final report of this Committee was published in 1941. Both the majority and minority members of the Committee recommended that hearing examiners be made partially independent of the agency by which they, were employed; the majority recommended hearing examiners be appointed for a term of seven years, and the minority recommended a term of twelve years. Although extensive hearings were held on bills to carry out the recommendations of this Committee, World War II delayed final congressional action on the subject. After the war, the McCarran-Sumners Bill, which became the Administrative Procedure Act, was introduced. The Senate Judiciary Committee Print of June 1945 reveals that at that time there was still great diversity of opinion as to how the status of hearing examiners should be enhanced. Several proposals were considered, and in the final bill Congress provided that hearing examiners should be given independence and tenure within the existing Civil Service system.
Congress intended to make hearing examiners “a special class of semi-independent subordinate hearing officers” by vesting control of their compensation, promotion and tenure in the Civil Service Commission to a much greater extent than in the case of other federal employees. Section 11 is as follows:
“Subject to the civil-service and other laws to the extent not inconsistent with this Act, there shall be appointed by and for each agency as many qualified and competent examiners as may be necessary for proceedings pursuant to sections 7 and 8, who shall be assigned to cases in rotation so far as practicable and shall perform no duties inconsistent with their duties and responsibilities as examiners. Examiners shall be removable by the agency in which they are employed only for good cause established and determined by the Civil Service Commission (hereinafter called the Commission) after opportunity for hearing and upon the record thereof. Examiners shall receive compensation prescribed by the Commission independently of agency recommendations or ratings and in accordance with the Classification Act of 1923, as amended, except that the provisions of paragraphs (2) and (3) of subsection (b) of section 7 of said Act, as amended, and the provisions of section 9 of said Act, as amended, shall not be applicable. Agencies occasionally or temporarily insufficiently staffed may utilize examiners selected by the Commission from and with the consent of other agencies. For the purposes of this section, the Commission is authorized to make investigations, require reports by agencies, issue reports, including an annual report to the Congress, promulgate rules, appoint such advisory committees as may be deemed necessary, recommend legislation, subpena witnesses or records, and pay witness fees as established for the United States courts.”
An examination of § 11 shows that Congress retained the examiners as classified Civil Service employees but made inapplicable to them paragraphs (2) and (3) of subsection (b) of § 7 of the Classification Act and § 9 of that Act. These sections had made the examiners dependent upon the agencies’ ratings for their classification. Freed from this dependence upon the agencies, the examiners were specifically declared to be otherwise under the other provisions of the Classification Act of 1923 as amended (now the Classification Act of 1949, 5 U. S. C. (Supp. V) § 1071 et seq.).
The position of hearing examiners is not a constitutionally protected position. It is a creature of congressional enactment. The respondents have no vested right to positions as examiners. They hold their posts by such tenure as Congress sees fit to give them. Their positions may be regulated completely by Congress, or Congress may delegate the exercise of its regulatory power, under proper standards, to the Civil Service Commission, which it has done in this case.
The question we have presented is whether the Civil Service Commission in the adoption of these rules followed or departed from the directions given it by § 11 of the Administrative Procedure Act. Did it implement the statute, or did it enlarge it?
Respondents do not contend that all hearing examiners should be classified in the same grade; they contend only that all hearing examiners in any one agency should be classified in the same grade. Petitioners argue that cases in a given agency are of varying levels of difficulty and importance and that the examiners hearing them must possess varying degrees of competency and types of qualifications. Petitioners point to the experience of the Civil Aeronautics Board where there are safety cases heard by one group of examiners and economic eases heard by another. The examiners assigned to the safety cases have pilots’ certificates, while those assigned to the economic cases have completely different types of qualifications. Again, certain cases before the Interstate Commerce Commission involve relatively simple applications for extensions of motor carrier certificates, while others involve complicated and difficult railroad rate proceedings. Petitioners’ argument indicates the need for specialization among examiners in the same agency to meet the diverse types of cases presented.
Proceeding under the provisions of the Classification Act, the Commission still classified the examiners according to their experience, skill, and ability, but without seeking or receiving rating of the examiners by the agencies and wholly independent thereof. A classification of the examiners into grades, with salaries appropriate to each grade, was set up by the Commission in each federal agency using examiners. This classification ranged from just one grade in several agencies to five grades in two agencies. Allocation of examiners in accordance with these classifications is provided for in Rule 34.10 which specifically states, “Allocations shall be made independently of agency recommendations and ratings.” (Emphasis supplied.)
When the Commission classified the examiners according to the Classification Act, it was doing just what Congress directed it to do. As has been previously shown, § 11 specifically directs that “Examiners shall receive compensation ... in accordance with the Classification Act of 1923, as amended,” with the exception provided in the statute and in the rules that this is to be done independently of agency influence. This contradicts the contention that Congress did not intend to permit classification of examiner positions by the Commission. The Act clearly provides, as Congress thought it did, for the allocation of positions within an agency to be made in various salary grades, which reflect the competence and experience of the person in the grade. Congress must have recognized the right of the Commission so to classify when it amended the Classification Act in 1949. At that time it specifically excluded thirty-two categories of government employees, but not examiners, 5 U. S. C. (Supp. V) § 1082, although the Commission then was classifying examiners under regulations similar to the present ones.
The District Court was critical of the specifications used by the Commission to classify the examiners as being “nebulous and subjective.” To classify the positions into the different grades from GS 11 to GS 15, the Commission used specifications as to job content as “moderately difficult and important,” “difficult and important,” “unusually difficult and important,” “exceedingly difficult and important,” and “exceptionally difficult and important.” These specifications of necessity must be subjective. They are not based so much on evidence as on judgment. It is a discriminating judgment and one Congress committed to the experience and expertise of the Civil Service Commission, not the courts. The specifications evidently had practical content and meaning to Congress, as it repeatedly used similar phrases to describe relative methods in § 602 of the Classification Act of 1949, 5 U. S. C. (Supp. V) § 1112.
We come next to Rule 34.4 of the Commission relating to promotions, which is set forth in the margin. This rule was held invalid by the District Court, consistent with its view that there can be no classification of examiners and therefore there can be only one grade. Since we disagree with the court below as to the right of the Commission to classify examiners into grades within an agency and hold that such classification can be made, it must follow that promotions from one grade to another may be made.
But respondents also challenge the method by which promotions are made. The rule provides that the agency shall decide if there is a vacancy to be filled, and further that the agency shall decide if this vacancy is to be filled by promotion from among the present examiners. The examiners insist that thus the agency can control and coerce its examiners, and has an absolute veto power over promotions. But it is the Commission which chooses the examiner who shall receive the promotion. Respondents imagine all sorts of devious schemes by which the agencies shrewdly analyze their staffs to pick out which examiners would probably be chosen by the Commission for promotion, and then create vacancies for them as a reward for favorable decisions, or else fill vacancies from outside in order to discipline recalcitrant examiners. Respondents have not shown any actual examples of this, nor do they show that in such circumstances the Commission would not correct the situation. As a practical matter, the Commission must always turn to the agency for advice on the number of examiners needed at the various levels. The statute declares that “there shall be appointed by and for each agency as many qualified and competent examiners as may be necessary.” (Emphasis supplied.) It then puts sufficient responsibility in the Commission’s hands to ensure independent judgments from the examiners. It does not reduce the responsibility of the agency to see that it has a sufficient number of competent examiners to handle its business properly.
We come next to Rule 34.12, Rotation of Examiners. It provides:
“Insofar as practicable, examiners shall "be assigned in rotation to cases of the level of difficulty and importance that are normally assigned to ^positions of the salary grade they hold.” 5 CFR, 1951 Supp., § 34.12.
This rule purports to implement the provision of § 11 that examiners “shall be assigned to cases in rotation so far as practicable.” (Emphasis supplied.) The respondents contend that this means mechanical rotation— that a case must be assigned to an examiner when his name comes up on the register, unless he is on leave or sick or disqualified or has not completed another assignment, etc. The lower courts accepted the respondents’ view and held Rule 34.12 invalid.
The Commission gave to § ll’s requirement of assignment of cases in rotation “so far as practicable” consideration beyond the mere mechanics of bringing the next case on the docket opposite the top name on the register of available examiners. It gave consideration to the kind of case involved as well as the kind of examiner available. The Commission had classified the examiners on that basis, and it considered it was practicable to assign cases to examiners who were, according to their classification, qualified to handle the case at hand, having regard to the complexity and difficulty thereof, together with the experience and ability of the examiner available. If assigned by mechanical rotation, the value and use of such classification, which Congress had authorized, would be lost. .To use the classification, it was not practicable to use mechanical rotation. Congress did not provide for the classification of examiners by the Commission, and then provide for the Commission to ignore such classification by a mechanical rotation. The rotation for practical reasons was adjusted to the classifications. This was an allowable judgment by the Commission as to what was practicable.
Finally, we come to the consideration of Rule 34.15, which provides for a reduction in force of examiners under circumstances governing the reduction in force of other federal employees. Respondents’ contention, sustained by the courts below, is that the provision of § 11 that examiners “shall be removable . . . only for good cause established and determined by the Civil Service Commission . . . after opportunity for hearing and upon the record thereof” gives them a lifetime position, subject to removal only for cause, and that the reduction in force procedures of the Commission have no application to them.
In this, we think the respondents are mistaken. Congress intended to provide tenure for the examiners in the tradition of the Civil Service Commission. They were not to be paid, promoted, or discharged at the whim or caprice of the agency or for political reasons. One of the individual examiners suing here was discharged by the Labor Board for lack of funds. The Commission has traditionally provided for a reduction in force for lack of funds, personnel ceilings, reorganizations, decrease of work, and similar reasons. 5 CFR, 1951 Supp., § 20.2 (a).
Part of respondents’ argument seems to direct itself to the point that it is the agency which makes the reduction in force. Rule 34.15 provides for the dropping of examiners with the lowest number of “retention credits” after the agency finds that it must reduce its force. These credits are based on length of service and are beyond the power of the agency to affect. As with promotions, the Commission will always need to consult with the agency to ascertain that there is occasion for a reduction. Just as the statute leaves with the agency the duty to see that there are an adequate number of the right type of examiners, it leaves with the agency the responsibility to declare that there are a lesser number of examiners necessary at this time. It must be assumed that the Commission will prevent any devious practice by an agency which would abuse this Rule. The Rule provides for examiner appeal to the Commission, so there is opportunity to bring abuses to the Commission’s attention. Also challenged is the statement in the Retention Preference Regulations for Reduction in Force (5 CFR, 1951, § 20.2) allowing reduction in force “for other reasons.” This is obviously to provide for legitimate reasons for reduction not now foreseen, and it must be assumed that the Commission will not permit an agency to misuse it.
We find no evidence that Congress intended to make hearing examiners a class with lifetime employment, whether there was work for them to do or not, as contended by the respondents. A reduction in force for the reasons heretofore provided by the Civil Service Commission and removal of an examiner in accordance therewith is “good cause” within the meaning of § 11.
The rules conform to the statute and carry out the purpose and intent of Congress, and they are therefore valid.
The judgment is reversed, and the cause is remanded to the District Court with directions to dismiss the comPlaint- Reversed.
Since the question was not raised before us, we do not rule on the standing of the Federal Trial Examiners Conference to be a party in this suit.
The Senate Report described the alternatives before the Congress and the purpose of § 11 as follows:
“The purpose of this section is to render examiners independent and secure in their tenure and compensation. The section thus takes a different ground than the present situation, in which examiners are mere employees of an agency, and other proposals for a completely separate ‘examiners’ pool’ from which agencies might draw for hearing officers. Recognizing that the entire tradition of the Civil Service Commission is directed toward security of tenure, it seems wise to put that tradition to use in the present case. However, additional powers are conferred upon the Commission.” Administrative Procedure Act — Legislative History, S. Doc. No. 248, 79th Cong., 2d Sess., p. 215.
Legislative History, p. 192.
Section 11 of the Administrative Procedure Act became effective June 11, 1947, one year after the Act’s approval. The Commission accepted the examiner positions in the five different grades established by the agencies. After notice and hearing, regulations were promulgated on September 23, 1947. The Commission appointed a Board of Examiners from outside the Government to pass on the qualifications of incumbent status examiners, and to conduct a competitive examination for nonstatus incumbents and new applicants. When the results were announced in March 1949, 25.5% of the 212 status incumbents rated by the Board were found disqualified, but appeals were taken and ultimately all were found qualified. The action of the Board of Examiners was much criticized. See Thomas, The Selection of Federal Hearing Examiners: Pressure Groups and the Administrative Process (1950), 59 Yale L. J. 431, 433; Fuchs, The Hearing Examiner Fiasco Under the Administrative Procedure Act (1950), 63 Harv. L. Rev. 737, 767. Meanwhile, dispute had arisen as to what part the agencies had in the promotion of examiners — the existing regulations permitted the agency to select the examiner to be promoted subject to the retroactive approval of the Commission. On February 23, 1951, the Attorney General issued an opinion holding the promotion regulation invalid. 41 Op. Atty. Gen., No. 14. On September 21, 1951, the Commission promulgated the present regulations involved in this suit.
Ҥ 34.10 Compensation, (a) Hearing examiner positions shall be allocated by the Commission in accordance with the regulations and procedures adopted by the Commission for allocations under the Classification Act of 1949. Allocations shall be made independently of agency recommendations and ratings.
“(b) Hearing examiners shall receive within-grade salary advancements in accordance with Part 25 of this chapter: Provided, That the requirement of a satisfactory or better performance rating shall not apply.” 5 CFR, 1951 Supp., § 34.10.
“In the matter of examiners’ compensation the section adds greatly to the Commission’s powers and function. It must prescribe and adjust examiners’ salaries, independently of agency ratings and recommendations. The stated inapplicability of specified sections of the Classification Act carries into effect that authority. The Commission would exercise its powers by classifying examiners’ positions and, upon customary examination through its agents, shift examiners to superior classifications or higher grades as their experience and duties may require. The Commission might consult the agency, as it now does in setting up positions or reclassifying positions, but it would act upon its own responsibility and with the objects of the bill in mind.” Legislative History, p. 215 (Senate Report). See also pp. 280-281 (House Report).
“§ 34.4 Promotion — (a) From a hearing examiner position. When an agency decides that a hearing examiner position should be filled by the promotion of one of its hearing examiners, the Commission will select the examiner who is to be promoted. To be eligible to compete for promotion, hearing examiners must be serving in the agency, in the area of competition designated by the Commission, under absolute appointments, in grades lower than the position to be filled. In addition, hearing examiners must meet the current recruiting standards (including the requirement of at least one year of experience of a level of difficulty comparable to that of the next lower grade). After examining the qualifications of all candidates, the Commission will select the best qualified. The hearing examiner selected by the Commission must be promoted not later than the beginning of the second pay period following the period in which the Commission’s decision is reached, unless the Commission directs that the promotion be delayed pending adjudication of appeals. Once an agency elects to have a position filled by promotion and the Commission undertakes an examination to fill the position, the hearing examiner selected by the Commission must be promoted.
“(b) From a position other than a hearing examiner position. When an agency desires to fill a vacancy in a hearing examiner position by the promotion of an employee who is serving in a position other than a hearing examiner position, with competitive status but without absolute status as a hearing examiner, it shall submit the name of the person to the Commission with an application form executed by him. The Commission will rate the qualifications of the applicant in accordance with the experience and training requirements of the open competitive examination (except the maximum age requirement) including an investigation of character and suitability. If on the basis of the rating assigned, the applicant would be within reach for certification if his name were on the open competitive register with the same rating, the Commission will approve the promotion; otherwise it will disapprove the request.” 5 CFR, 1951 Supp., § 34.4.
“§ 34.15 Reductions in force — (a) Retention credits. Retention credits for purposes of reductions in the force of hearing examiners are credits for length of service in determining retention order in each retention subgroup. They are computed by allowing one point for each full year of Federal Government service.
“(b) Retention 'preference, classification. For the purpose of determining relative retention preference in reduction in force, hearing examiners shall be classified according to tenure of employment in competitive retention groups and subgroups in the manner prescribed in § 20.3 of the Retention Preference Regulations for Use in Reductions in Force (Part 20 of this chapter): Provided, That no distinction will be made in subgroups on the basis of a satisfactory or better performance rating as opposed to performance ratings of less than satisfactory.
“(c) Status of hearing examiners who are reached in reduction in force. When a hearing examiner has been separated, furloughed, or reduced in rank or compensation because of a reduction in force, his name shall be placed at the top of the open competitive register for the grade in which he formerly served and for all lower grades. Where more than one hearing examiner is affected, the qualifications of the several hearing examiners shall be rated by the Commission and relative standing at the top of the register will be on the basis of these ratings.
“(d) Appeals. (1) Any hearing examiner who feels that there has been a violation of his rights under the regulations governing reductions in force may appeal to the Commission (attention, Chief Law Officer) within 10 days from the date he received his notice of the action to be taken.
“(2) Each appeal shall state clearly the grounds on which it is based, whether error in the records; violation of the rule of selection; restriction of the competitive area or level; disregard of a specified right under the law or regulations; or denial of the right to examine the regulations, retention register, or records.
"(3) The agency in which the hearing examiner is employed shall be notified of the appeal and shall be allowed to file an answer thereto. The agency’s answer must be submitted to the Commission’s Chief Law Officer within 10 days from the date the agency is notified.
“ (4) Upon receipt of an appeal the Chief Law Officer will refer the case to the Personnel Classification Division for investigation. The Personnel Classification Division will make investigation and submit its report to the Chief Law Officer. If the investigation discloses violations of the rights of the appellant, the Chief Law Officer shall notify the agency as to the corrective action to be taken. The agency may appeal the decision of the Chief Law Officer within 10 days of its receipt to the Commission’s Board of Appeals and Review. If the Board of Appeals and Review disagrees with the decision of the Chief Law Officer, it shall refer the case to the Commission’s Chief Hearing Examiner for a hearing in accordance with subpara-graph (5) of this paragraph.
“(5) Appeals in which the Chief Law Officer cannot make initial finding in favor of the appellant shall be referred to the Commission’s Chief Hearing Examiner for a hearing. The hearing shall be conducted in accordance with the provisions of the Administrative Procedure Act. The appellant, the agency concerned, and the Commission’s Chief Law Officer may be represented at the hearing. Upon completion of the hearing the presiding hearing examiner shall transmit the entire file with his recommended decision to the Commission for decision.
“(e) Retention preference regulations. The Retention Preference Regulations for Use in Reductions in Force (Part 20 of this chapter), except as modified by this section, shall apply to reductions in the force of hearing examiners.”
Respondents' brief and the dissenting opinion filed herein quote a sentence from a letter of September 6, 1951, from Senator McCar-ran, Chairman of the Senate Judiciary Committee, to Chairman Ramspeck of the Civil Service Commission, as follows: “It was intended that [examiners] be very nearly the equivalent of judges even though operating within the Federal system of administrative justice.” S. Doc. No. 82, 82d Cong., 1st Sess., p. 9. We do not feel justified in regarding this sentence, taken out of context and written over five years after the Administrative Procedure Act was enacted, as illustrative of the intent of Congress at the time it passed the Act. | 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 Mediation Board",
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"National Security Agency",
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"Pay Board (established under the Economic Stabilization Act of 1970)",
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] | [
19
] | sc_adminaction |
COMMUNIST PARTY OF THE UNITED STATES v. SUBVERSIVE ACTIVITIES CONTROL BOARD.
No. 12.
Argued October 11-12, 1960.—
Decided June 5, 1961.
John J. Abt and Joseph Foret argued the cause and filed a brief for petitioner.
Solicitor General Rankin argued the cause for respondent. With him on the brief were Assistant Attorney General Yeagley, Bruce J. Terris, Kevin T. Maroney, George B. Searls, Lee B. Anderson and Frank R. Hunter, Jr.
Briefs of amici curiae, urging reversal, were filed by Nanette Dembitz for the American Civil Liberties Union; Thomas I. Emerson for the National Lawyers Guild; and Royal W. France for Rev. Edwin E. Aiken et al.
Mr. Justice Frankfurter
delivered the opinion of the Court.
This is a proceeding pursuant to §14 (a) of the Subversive Activities Control Act of 1950' to review an order of the Subversive Activities Control Board requiring the Communist Party of the United States to register as a Communist-action organization under § 7 of the Act. The United States Court of Appeals for the District of Columbia has affirmed the Board's registration order. Because important questions of construction and constitutionality of the statute were raised by the Party’s petition for certiorari, we brought the case here. 361 U. S. 951.
The Subversive Activities Control Act is Title I of the Internal Security Act of 1959, 64 Stat. 987, 50 U. S. C. § 781 et seg. It has been amended, principally by the Communist Control Act of 1954, 68 Stat. 775, and certain of its provisions have been carried forward in sections of the Immigration and Nationality Act adopted in 1952, 66 Stat. 163, 8 U. S. C. §§ 1182, 1251, 1424, 1451. A brief outline of its structure, in pertinent part, will frame the issues for decision.
Section 2 of the Act recites legislative findings based upon evidence adduced before various congressional committees. The first of these is:
“There exists a world Communist movement which, in its origins, its development, and its present practice, is a world-wide revolutionary movement whose purpose it is, by treachery, deceit, infiltration into other groups (governmental and otherwise), espionage, sabotage, terrorism, and any other means deemed necessary, to establish a Communist totalitarian dictatorship in the countries throughout the world through the medium of a world-wide Communist organization.”
The characteristics of a “totalitarian dictatorship,” as set forth in subsections (2) and (3) are the existence of a single, dictatorial political party substantially identified with the government of the country in which it exists, the suppression of all opposition to the party in power, the subordination of the rights of the individual to the state, and the denial of fundamental rights and liberties characteristic of a representative form of government. Subsection (4) finds that the direction and control of the “world Communist movement” is vested.in and exercised by the Communist dictatorship of a foreign country; and subsection (5), that the Communist dictatorship of this foreign country, in furthering the purposes of the world Communist movement, establishes and utilizes in various countries action organizations which are not free and independent organizations, but are sections of a world-wide Communist organization and are controlled, directed, and subject to the discipline of the Communist dictatorship of the same foreign country. Subsection (6) sets forth that
“The Communist action organizations so established and utilized in various countries, acting under such control, direction, and discipline, endeavor to carry out the objectives of the world Communist movement by bringing about the overthrow óf existing governments by any available means, including force if necessary, and setting up Communist totalitarian dictatorships which will be subservient to the most powerful existing Communist totalitarian dictatorship. Although such organizations usually designate themselves as political parties, they are in fact constituent elements of the world-wide Communist movement and promote the objectives of such movement by conspiratorial and coercive tactics, instead of through the democratic processes of a free elective system or through the freedom-preserving means employed by a political party which operates as an agency by which people govern themselves.”
In subsection (7) it is found that the Communist organizations thus described are organized on a secret conspiratorial basis and operate to a substantial extent through “Communist-front” organizations, in most instances created or used so as to conceal their true character and purpose, with the result that the “fronts” are able to obtain support from persons who would not extend their support if they knew the nature of the organizations with which they dealt. Congress makes other findings: that the most powerful existing Communist dictatorship has caused the establishment in numerous foreign countries of Communist totalitarian dictatorships, and threatens to establish such dictatorships in still other countries (10); that Communist agents have devised ruthless espionage and sabotage tactics successfully carried out in evasion of existing law (11); that the Communist network in the United States is inspired and controlled in large part by foreign agents who are sent in under various guises (12); that international travel is prerequisite for the carrying on of activities in furtherance of the Communist movement’s purposes (8); that Communists have infiltrated the United States by procuring naturalization for disloyal aliens (14); that under our present immigration laws, many deportable aliens of the subversive, criminal or immoral classes are free to roam the country without supervision or control (13). Subsection (9) finds that in the United States individuals who knowingly participate in the world Communist movement in effect transfer their allegiance to the foreign country in which is vested the direction and control of the world Communist movement. Finally, in § 2 (15), Congress concludes that
“The Communist movement in the United States is an organization numbering thousands of adherents, rigidly and ruthlessly disciplined. Awaiting and seeking to advance a moment when the United States may be so far extended by foreign engagements, so far divided in counsel, or so far in industrial or financial straits, that overthrow of the Government of the United States by force and violence may seem possible of achievement, it seeks converts far and wide by an extensive system of schooling and indoctrination. Such preparations by Communist organizations in other countries have aided in supplanting existing governments. The Communist organization in the United States, pursuing its stated objectives, the recent successes of Communist methods in other countries, and the nature and control of the world Communist movement itself, present a clear and present danger to the security of the United States and to the existence of free American institutions, and make it necessary that Congress, in order to provide for the common defense, to preserve the sovereignty of the United States as an independent nation, and to guarantee to each State a republican form of government, enact appropriate legislation recognizing the existence of such world-wide conspiracy and designed to prevent it from accomplishing its purpose in the United States.”
Pursuant to these findings, § 7 (a) of the Act requires the registration with the Attorney General, on a form prescribed by him by regulations, of all Communist-action organizations. A Communist-action organization is defined by § 3 (3) as
“(a) any organization in the United States (other than a diplomatic representative or mission of a foreign government accredited as such by the Department of State) which (i) is substantially directed, dominated, or controlled by the foreign government or foreign organization controlling the world Communist movement referred to in section 2 of this title, and (ii) operates primarily to advance the objectives of such world Communist movement as referred to in section 2 of this title; and
“(b) any section, branch, fraction, or cell of any organization defined in subparagraph (a) of this paragraph which has not complied with the registration requirements of this title.”
Registration must be made within thirty days after the enactment of the Act, or, in the case of an organization which becomes a Communist-action organization after enactment, within thirty days of the date upon which it becomes such an organization; in the case of an organization which is ordered to register by the Subversive Activities Control Board, registration must take place within thirty days of the date upon which the Board’s order becomes final. § 7 (c). Registration is to be accompanied by a registration statement, which must contain the name of the organization and the address of its principal office; the names and addresses of its present officers and of individuals who have been its officers within the past twelve months, with a designation of the office held by each and a brief statement of the functions and duties of each; an accounting of all moneys received and expended by the organization during the past twelve months, including the sources from which the moneys were received and the purposes for which they were expended; the name and address of each individual who was a member during the past twelve months; in the case of any officer or member required to be listed and who uses or has used more than one name, each name by which he is or has been known; and a listing of all printing presses and machines and all printing devices which are in the possession, custody, ownership, or control of the organization or its officers, members, affiliates, associates, or groups in which it or its officers or members have an interest. § 7 (d). Once an organization has registered, it must file an annual report containing the same information as is required in the registration statement. §7(e). A registered Communist-action organization must keep accurate records and accounts of all moneys received and expended, and of the names and addresses of its members and of persons who actively participate in its activities. § 7 (f).
Section 7 (b) requires the registration of Communist-front organizations, defined as those substantially directed, dominated, or controlled by a Communist-action organization and primarily operated for the purpose of giving aid and support to a Communist-action organization, a Communist foreign government, or the world Communist movement. §3(4). The procedures and requirements of registration for Communist fronts are identical with those for Communist-action organizations, except that fronts need not list their non-officer members. In case of the failure of any organization to register, or to file a registration statement or annual report as required by the Act, it becomes the duty of the executive officer, the secretary, and such other officers of the organization as the Attorney General by regulations prescribes, to register for the organization or to file the statement or report. § 7 (h). Any individual who is or becomes a member of a registered Communist-action organization which he knows to be registered as such but to have failed to list his name as a member is required to register himself within sixty days after he obtains such knowledge; and any individual who is or becomes a member of an organization concerning which there is in effect a final order of the Subversive Activities Control Board requiring that it register as a Communist-action organization, but which has not so registered although more than thirty days have elapsed since the order became final, is required to register himself within thirty days of becoming a member or within sixty days after the registration order becomes final, whichever is later. § 8. Criminal penalties are imposed upon organizations, officers and individuals who fail to register or to file statements as required: fine of not more than $10,000 for each offense by an organization; fine of not more than $10,000 or imprisonment for not more than five years or both for each offense by an officer or individual; each day of failure to register constituting a separate offense. Individuals who in a registration statement or annual report willfully make any false statement, or willfully omit any fact required to be stated or which is necessary to make any information given not misleading, are subject to a like penalty. § 15.
The Attorney General is required by § 9 to keep in the Department of Justice separate registers of Communist-action and Communist-front organizations, containing the names and addresses of such organizations, their registration statements and annual reports, and, in the case of Communist-action organizations, the registration statements of individual members. These registers are to be open for public inspection. The Attorney General must submit a yearly report to the President and to Congress including the names and addresses of registered organizations and their listed members. He is required to publish in the Federal Register the fact that any organization has registered as a Communist-action or Communist-front organization, and such publication constitutes notice to all members of the registration of the organization.
Whenever the Attorney General has reason to believe that any organization which has not registered is an organization of a kind required to register, or that any individual who has not registered is required t'o register, he shall petition the Subversive Activities Control Board for an order that the organization or individual register in the manner provided by the Act. §§ 12, 13 (a). Any organization or any individual registered, or any individual listed in any registration statement who denies that he holds office or membership in the registered organization and whom the Attorney General, upon proper request, has failed to strike from the register, may, pursuant to designated procedures, file with the Subversive Activities Control Board a petition for cancellation of registration or other appropriate relief. § 13 (b).
The Board, whose organization and procedure are prescribed, §§ 12, 13 (d), 16, is empowered to hold hearings (which shall be public), to examine witnesses and receive evidence, and to compel the attendance and testimony of witnesses and the production of documents relevant to the matter under inquiry. § 13 (c), (d). If after hearing the Board determines that an organization is a Communist-action or a Communist-front organization or that an individual is a member of a Communist-action organization, it shall make a report in writing and shall issue an order requiring the organization or individual to register or denying its or his petition for relief. § 13 (g), (j). If the Board determines that an organization is not a Communist-action or a Communist-front organization or that an individual is not a member of a Communist-action organization, it shall make a report in writing and issue an order denying the Attorney General’s petition for a registration order, or canceling the registration of the organization or the individual, or striking the name of the individual from a registration statement or annual report, as appropriate. § 13 (h), (i).
The party aggrieved by any such order of the Board may obtain review by filing in the Court of Appeals for the District of Columbia a petition praying that the order be set aside. The findings of the Board as to the facts, if supported by the preponderance of the evidence, shall be conclusive. If either party shall apply to the court for leave to adduce additional evidence and shall show to the satisfaction of the court that such additional evidence is material, the court may order such additional evidence to be taken before the Board, and the Board may modify its findings as to the facts, and shall file such modified or new findings, which, if supported by the preponderance of the evidence, shall be conclusive. The court may enter appropriate orders. Its judgment and decree shall be final, except that they may be reviewed in this Court on writ of certiorari. § 14 (a). When an order of the Board requiring the registration of a Communist organization has become final upon the termination of proceedings for judicial review or upon the expiration of the time allowed for institution of such proceedings, the Board shall publish in the Pederal Register the fact that its order has become final, and that publication shall constitute notice to all members of the organization that the order has become final. §§ 13 (k), 14 (b).
Section 13 (e) of the Act provides that
“In determining whether any organization is a ‘Communist-action organization’, the Board shall take into consideration—
“(1) the extent to which its policies are formulated and carried out and its activities performed, pursuant to directives or to effectuate the policies of the foreign government or foreign organization in which is vested, or under the domination or control of which is exercised, the direction and control of the world Communist movement referred to in section 2 of this title; and
“(2) the extent to which its views and policies do not deviate from those of such foreign government or foreign organization; and
“(3) the extent to which it receives financial or other aid, directly or indirectly, from or at the direction of such foreign government or foreign organization; and
“(4) the extent to which it sends members or representatives to any foreign country for instruction or training in the principles, policies, strategy, or tactics of such world Communist movement; and
“(5) the extent to which it reports to such foreign government or foreign organization or to its representatives; and
“(6) the extent to which its principal leaders or a substantial number of its members are subject to or recognize the disciplinary power of such foreign government or foreign organization or its representatives; and
“(7) the extent to which, for the purpose of concealing foreign direction, domination, or control, or of expediting or promoting its objectives, (i) it fails to disclose, or resists efforts to obtain information as to, its membership (by keeping membership lists in code, by instructing members to refuse to acknowledge membership, or by any other method); (ii) its members refuse to acknowledge membership therein; (iii) it fails to disclose, or resists efforts to obtain information as to, records other than membership lists; (iv) its meetings are secret; and (v) it otherwise operates on a secret basis; and
“(8) the extent to which its principal leaders or a substantial number of its members consider the allegiance they owe to the United States as subordinate to their obligations to such foreign government or foreign organization.”
Similarly, § 13 (f) enumerates a set of evidentiary considerations to guide the inquiry and judgment of the Board in determining whether a given organization is or is not a Communist-front organization.
When an organization is registered under the Act, or when there is in effect with respect to it a final order of the Board requiring it to register, § 10 (1) prohibits it, or any person acting in behalf of it, from transmitting through the mails or by any means or instrumentality of interstate or foreign commerce any publication which is intended to be, or which it may be reasonably believed is intended to be, circulated or disseminated among two or more persons, unless that publication, and its envelope, wrapper or container, bear the writing: “Disseminated by [the name of the organization], a Communist organization.” Section 10 (2) prohibits the organization, or any person acting in its behalf, from broadcasting or causing to be broadcast any matter over any radio or television station unless the matter is preceded by the statement: “The following program is sponsored by [the name of the organization], a Communist organization.” Under § 11 of the Act, the organization is not entitled to exemption from federal income tax under § 101 of the 1939 Internal Revenue Code, and no deduction for federal income-tax purposes is allowed in the case of a contribution to it. It is unlawful for any officer or employee of the United States, or of any department or agency of the United States, or of any corporation whose stock is owned in a major part by the United States, to communicate to any other person who such officer or employee knows or has reason to believe is an officer or member of a Communist organization, any information classified by the President as affecting the security of the United States, knowing or having reason to know that such information has been classified. § 4 (b). It is unlawful for any officer or member of a Communist organization knowingly to obtain or receive, or attempt to obtain or receive, any classified information from any such government officer or employee. §4(c). When a Communist organization is registered or when there is in effect with respect to it a final registration order of the Subversive Activities Control Board, it is unlawful for any member of the organization, knowing or having notice that the organization is registered or the order final, to hold non-elective office or employment under the United States or to conceal or fail to disclose that he is a member of the organization in seeking, accepting, or holding such office or employment; and it is unlawful for him to conceal or fail to disclose that he is a member of the organization in seeking, accepting or holding employment in any defense facility, or, if the organization is a Communist-action organization, to engage in any employment in any defense facility. It is unlawful for such a member to hold office or employment with any labor organization, as that term is defined in § 2 (5) of the National Labor Relations Act, as amended, 29 U. S. C. § 152, or to represent any employer in any matter or proceeding arising or pending under that Act. § 5 (a) (1). It is unlawful for any officer or employee of the United States or of a defense facility, knowing or having notice that the organization is registered or a registration order concerning it is final, to advise or urge a member of the organization, with knowledge or notice that he is a member, to engage in conduct which constitutes any of the above violations of the Act, or for such an officer or employee to contribute funds or services to the organization. §5 (a)(2). When a Communist organization is registered or when there is in effect with respect to it a final registration order of the Subversive Activities Control Board, it is unlawful for a member of the organization, with knowledge or notice that it is registered or the order final, to apply for a passport, or the renewal of a passport, issued under the authority of the United States, or to use or to attempt to use a United States passport; and, in the case of a Communist-action organization, it is unlawful for any officer or employee of the United States to issue or renew a passport for any individual, knowing or having reason to believe that he is a member of the organization. § 6. Aliens who are members or affiliates of any organization during the time it is registered or required to be registered, unless they establish that they did not have knowledge or reason to believe that it was a Communist organization, are ineligible to receive visas, are excluded from admission to the United States, and, if in the United States, are subject to deportation upon the order of the Attorney General. Immigration and Nationality Act, §§ 212 (a)(28)(E), 241 (a)(6)(E), 66 Stat. 163, 185, 205, 8 U. S. C. §§ 1182 (a) (28) (E), 1251 (a)(6)(E). No person shall be naturalized as a citizen of the United States who is, or, with certain exceptions, has within ten years immediately preceding filing of his naturalization petition been, a member or affiliate of any Communist-action organization during the time it is registered or is required to be registered, or a member or affiliate of any Communist-front organization during the time it is registered or required to be registered unless he establishes that he did not have knowledge or reason to believe that it was a Communist-front organization. Immigration and Nationality Act, §313 (a)(2)(G), (H), (c), 66 Stat. 163, 240, 241, 8 U. S. C. § 1424 (a)(2)(G), (H), (c). If any person naturalized after the effective date of the Act becomes within five years following his naturalization a member or affiliate of any organization, membership in which or affiliation with which at the time of naturalization would have precluded his having been naturalized, it shall be considered prima facie evidence that such person was not attached to the principles of the Constitution and was not well disposed to the good order and happiness of the United States at the time of naturalization, and in the absence of countervailing evidence, this shall suffice to authorize the revocation of naturalization. Immigration and Nationality Act, § 340 (c), 66 Stat. 163, 261, 8 U. S. C. § 1451 (c). Service in the employ of any organization then registered or in connection with which a final registration order is then in effect is not “employment” for purposes of the Social Security Act, as amended, 70 Stat. 807, 839, 42 U. S. C. § 410 (a) (17), and Chapter 21 of the Internal Revenue Code of 1954, as amended, 70 Stat. 807, 839, 26 U. S. C. § 3121 (b)(17), if performed after June 30, 1956.
Section 4 (f) of the Subversive Activities Control Act of 1950 provides that neither the holding of office nor membership in any Communist organization by any person shall constitute per se a violation of penal provisions of the Act or of any other criminal statute, and the fact of registration of any person as an officer or member of such an organization shall not be received in evidence against the person in any prosecution for violations of penal provisions of the Act or any other criminal statute. Section 32 provides:
“If any provision of this title, or the application thereof to any person or circumstances, is held invalid, the remaining provisions of this title, or the application of such provision to other persons or circumstances, shall not be affected thereby.”
I.
This litigation has a long history. On November 22, 1950, the Attorney General petitioned the Subversive Activities Control Board for an order to require that the Communist Party register as a Communist-action organization. The Party thereupon brought suit in the District Court for the District of Columbia, seeking to have the proceedings of the Board enjoined. A statutory three-judge court denied preliminary relief, Communist Party of the United States v. McGrath, 96 F. Supp. 47, but stayed answer and hearings before the Board pending appeal. After this Court denied a petition for extension of the stay, 340 U. S. 950, the Party abandoned the suit. Hearings began on April 23, 1951, and ended on July 1, 1952. Twenty-two witnesses for the Attorney General and three for the Party presented oral testimony; 507 exhibits, many of book length, were received; the stenographic record, exclusive of these exhibits, amounted to more than 14,000 pages. On April 20, 1953, the Board issued its 137-page report concluding that the Party was a Communist-action organization within the meaning of the Subversive Activities Control Act, and its order requiring that the Party register in the manner prescribed by § 7. Pending disposition in the Court of Appeals for the District of Columbia of the Party’s petition for review of the registration order, the Party moved in that court, pursuant to § 14 (a), for leave to adduce additional evidence which it alleged would show that three witnesses for the Attorney General — Crouch, Johnson, and Matusow— had testified perjuriously before the Board. The Court of Appeals denied the motion and affirmed the order of the Board, one judge dissenting. Communist Party of the United States v. Subversive Activities Control Board, 96 U. S. App. D. C. 66, 223 F. 2d 531. Finding that the Party’s allegations of perjury had not been denied by the Attorney General, and concluding that the registration order based on a record impugned by a charge of perjurious testimony on the part of three witnesses whose evidence constituted a not insubstantial portion of the Government’s case could not stand, this Court remanded to the Board “to make certain that [it] bases its findings upon untainted evidence.” 351 U. S. 115, 125.
On remand the Party filed several motions with the Board seeking to reopen the record for the introduction of additional evidence. These were denied. A motion in the Court of Appeals for leave to adduce additional evidence was similarly denied, except that the Board was granted permission to entertain a motion concerning the Party’s offer to show that another of the Attorney General’s witnesses, Mrs. Markward, had committed perjury with regard to a specified aspect of her testimony. The Board granted the Party’s motion; hearings were reopened; Mrs. Markward was cross-examined. Motions by the Party for orders requiring the Government to produce certain documents relevant to the matter of her testimony were denied. On December 18, 1956, the Board issued its 240-page Modified Report. It found that Mrs. Markward was a credible witness, made new findings of fact, and, having expunged the testimony of Crouch, Johnson and Matusow, reaffirmed its conclusion that the Party was a Communist-action organization and recommended that the Court of Appeals affirm its registration order. That court, while affirming the Board’s actions in other regards, held that the Party was entitled to production of several documents relating to Mrs. Mark-ward’s testimony, and remanded. Communist Party of the United States v. Subversive Activities Control Board, 102 U. S. App. D. C. 395, 254 P. 2d 314. The scope of this remand was enlarged by subsequent orders requiring the production of recorded statements made to the F. B. I. by the Attorney General’s witness Budenz, the existence of these recordings having become known to government counsel and to the Board only at this time. These statements related to Budenz’s testimony at the original hearings concerning the “Starobin letter” and the “Childs-Weiner conversation.” Motions pursuant to § 14 (a) seeking the production of other government-held documents — memoranda furnished to the Government by the Attorney General’s witness Gitlow, and recordings made by the F. B. I. of interviews with Budenz — were denied.
On second remand, the documents specified orders of the Court of Appeals were made available to the Party. The hearing was reopened before a member of the Board sitting as an examiner. When the illness of Budenz made impossible his recall for cross-examination in connection with the documents produced, the examiner denied the Party’s motion to strike all of Budenz’s testimony, but did strike so much as related to the Starobin and Childs-Weiner matters. After re-evaluating the credibility of Budenz and Markward, and affirming the action of its examiner in striking only that portion of Budenz’s testimony which concerned the Starobin letter and the Childs-Weiner conversation, the Board re-examined the record as a whole and issued its Modified Report on Second Remand — its findings of fact consisting principally of the findings contained in its first Modified Report, with a few deletions — again concluding that the Communist Party of the United States was a Communist-action organization, and again recommending that its order to register be affirmed. The same panel of the Court of Appeals affirmed the order, at the same time denying the Party’s motion under § 14 (a) for an order requiring production of all statements made by government witnesses and now in the possession of the Government, 107 U. S. App. D. C. 279, 277 F. 2d 78, the dissenting judge again dissenting in part. It is this decision which is now before us for review.
II.
The Communist Party urges, at the outset, that procedural rulings by the Board and the Court of Appeals constitute prejudicial error requiring that this proceeding be remanded to the Board. Before reaching the statutory and constitutional issues which this case presents, we must consider these rulings.
A. The Board’s Refusal to Strike All Testimony of the Witness Budenz. At the original hearing before the Board, Bud | 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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] | [
102
] | sc_adminaction |
Noel Reyes MATA, Petitioner
v.
Loretta E. LYNCH, Attorney General.
No. 14-185.
Supreme Court of the United States
Argued April 29, 2015.
Decided June 15, 2015.
Mark C. Fleming, Boston, MA, for the petitioner.
Anthony A. Yangfor the United States for the respondent supporting reversal and remand.
William R. Peterson, appointed by this Court as amicus curiae, supporting the judgment below.
Mark C. Fleming, Sydenham B. Alexander, III, Nicole Fontaine Dooley, Jeffery A. Habenicht, Wilmer Cutler Pickering Hale and Dorr LLP, Boston, MA, Jason D. Hirsch, Wilmer Cutler Pickering Hale and Dorr LLP, New York, NY, Claire M. Bergeron, Wilmer Cutler Pickering Hale and Dorr LLP, Washington, DC, Raed Gonzalez, Counsel of Record, Naimeh Salem, Sheridan Green, Bruce Godzina, Gonzalez Olivieri LLC, Houston, TX, Brian K. Bates, Reina & Bates, Houston, TX, Alexandre I. Afanassiev, Quan Law Group, Houston, TX, for Petitioner.
Donald B. Verrilli, Jr., Solicitor General, Counsel of Record, Joyce R. Branda, Acting Assistant Attorney General, Edwin S. Kneedler, Deputy Solicitor General, Anthony A. Yang, Assistant to the Solicitor General, Donald E. Keener, Patrick J. Glen, Attorneys, Department of Justice, Washington, DC, for Respondent.
Opinion Justice KAGANdelivered the opinion of the Court.
An alien ordered to leave the country has a statutory right to file a motion to reopen his removal proceedings. See 8 U.S.C. § 1229a(c)(7)(A). If immigration officials deny that motion, a federal court of appeals has jurisdiction to consider a petition to review their decision. See Kucana v. Holder,558 U.S. 233, 242, 253, 130 S.Ct. 827, 175 L.Ed.2d 694 (2010). Notwithstanding that rule, the court below declined to take jurisdiction over such an appeal because the motion to reopen had been denied as untimely. We hold that was error.
I
The Immigration and Nationality Act (INA), 66 Stat. 163, as amended, 8 U.S.C. § 1101 et seq.,and its implementing regulations set out the process for removing aliens from the country. An immigration judge (IJ) conducts the initial proceedings; if he orders removal, the alien has the opportunity to appeal that decision to the Board of Immigration Appeals (BIA or Board). §§ 1229a(a)(1), (c)(5). "[E]very alien ordered removed" also "has a right to file one motion" with the IJ or Board to "reopen his or her removal proceedings." Dada v. Mukasey,554 U.S. 1, 4-5, 128 S.Ct. 2307, 171 L.Ed.2d 178 (2008); see § 1229a(c)(7)(A). Subject to exceptions not relevant here, that motion to reopen "shall be filed within 90 days" of the final removal order. § 1229a(c)(7)(C)(i). Finally, the BIA's regulations provide that, separate and apart from acting on the alien's motion, the BIA may reopen removal proceedings "on its own motion"-or, in Latin, sua sponte-at any time. 8 CFR § 1003.2(a) (2015).
Petitioner Noel Reyes Mata is a Mexican citizen who entered the United States unlawfully almost 15 years ago. In 2010, he was convicted of assault under the Texas Penal Code. The federal Department of Homeland Security (DHS) immediately initiated removal proceedings against him, and in August 2011 an IJ ordered him removed. See App. 6-13. Mata's lawyer then filed a notice of appeal with the BIA, indicating that he would soon submit a written brief stating grounds for reversing the IJ's decision. But the attorney never filed the brief, and the BIA dismissed the appeal in September 2012. See App. 4-5.
More than a hundred days later, Mata (by then represented by new counsel) filed a motion with the Board to reopen his case. DHS opposed the motion, arguing in part that Mata had failed to file it, as the INA requires, within 90 days of the Board's decision. Mata responded that the motion was "not time barred" because his first lawyer's "ineffective assistance" counted as an "exceptional circumstance[ ]" excusing his lateness. Certified Administrative Record in No. 13-60253 (CA5, Aug. 2, 2013), p. 69. In addressing those arguments, the Board reaffirmed prior decisions holding that it had authority to equitably toll the 90-day period in certain cases involving ineffective representation. See App. to Pet. for Cert. 7; see also, e.g., In re Santa Celenia Diaz,2009 WL 2981747 (BIA, Aug. 21, 2009). But the Board went on to determine that Mata was not entitled to equitable tolling because he could not show prejudice from his attorney's deficient performance; accordingly, the Board found Mata's motion untimely. See App. to Pet. for Cert. 7-8. And in closing, the Board decided as well that Mata's case was not one "that would warrant reopening as an exercise of" its sua sponteauthority. Id., at 9(stating that "the power to reopen on our own motion is not meant to be used as a general cure for filing defects" (internal quotation marks omitted)).
Mata petitioned the Court of Appeals for the Fifth Circuit to review the BIA's denial of his motion to reopen, arguing that he was entitled to equitable tolling. The Fifth Circuit, however, declined to "address the merits of Mata's equitable-tolling ... claim[ ]." Reyes Mata v. Holder,558 Fed.Appx. 366, 367 (2014)(per curiam). It stated instead that "[i]n this circuit, an alien's request [to the BIA] for equitable tolling on the basis of ineffective assistance of counsel is construed as an invitation for the BIA to exercise its discretion to reopen the removal proceeding sua sponte." Ibid.And circuit precedent held that courts have no jurisdiction to review the BIA's refusal to exercise its sua spontepower to reopen cases. See ibid.The Court of Appeals thus dismissed Mata's appeal for lack of jurisdiction.
Every other Circuit that reviews removal orders has affirmed its jurisdiction to decide an appeal, like Mata's, that seeks equitable tolling of the statutory time limit to file a motion to reopen a removal proceeding.We granted certiorari to resolve this conflict. 574 U.S. ----, 135 S.Ct. 1039, 190 L.Ed.2d 907 (2015). And because the Federal Government agrees with Mata that the Fifth Circuit had jurisdiction over his appeal, we appointed an amicus curiaeto defend the judgment below.We now reverse.
II
As we held in Kucana v. Holder,circuit courts have jurisdiction when an alien appeals from the Board's denial of a motion to reopen a removal proceeding. See 558 U.S., at 242, 253, 130 S.Ct. 827. The INA, in combination with a statute cross-referenced there, gives the courts of appeals jurisdiction to review "final order[s] of removal." 8 U.S.C. § 1252(a)(1); 28 U.S.C. § 2342. That jurisdiction, as the INA expressly contemplates, encompasses review of decisions refusing to reopen or reconsider such orders. See 8 U.S.C. § 1252(b)(6)("[A]ny review sought of a motion to reopen or reconsider [a removal order] shall be consolidated with the review of the [underlying] order"). Indeed, as we explained in Kucana,courts have reviewed those decisions for nearly a hundred years; and even as Congress curtailed other aspects of courts' jurisdiction over BIA rulings, it left that authority in place. See 558 U.S., at 242-251, 130 S.Ct. 827.
Nothing changes when the Board denies a motion to reopen because it is untimely-nor when, in doing so, the Board rejects a request for equitable tolling. Under the INA, as under our century-old practice, the reason for the BIA's denial makes no difference to the jurisdictional issue. Whether the BIA rejects the alien's motion to reopen because it comes too late or because it falls short in some other respect, the courts have jurisdiction to review that decision.
Similarly, that jurisdiction remains unchanged if the Board, in addition to denying the alien's statutorily authorized motion, states that it will not exercise its separate sua sponteauthority to reopen the case. See supra,at 2153. In Kucana,we declined to decide whether courts have jurisdiction to review the BIA's use of that discretionary power. See 558 U.S., at 251, n. 18, 130 S.Ct. 827. Courts of Appeals, including the Fifth Circuit, have held that they generally lack such authority. See, e.g., Enriquez-Alvarado v. Ashcroft,371 F.3d 246, 249-250 (C.A.5 2004);Tamenut v. Mukasey,521 F.3d 1000, 1003-1004 (C.A.8 2008)(en banc) (per curiam) (citing other decisions). Assuming arguendo that is right, it means only that judicial review ends after the court has evaluated the Board's ruling on the alien's motion. That courts lack jurisdiction over one matter (the sua spontedecision) does not affect their jurisdiction over another (the decision on the alien's request).
It follows, as the night the day, that the Court of Appeals had jurisdiction over this case. Recall: As authorized by the INA, Mata filed a motion with the Board to reopen his removal proceeding. The Board declined to grant Mata his proposed relief, thus conferring jurisdiction on an appellate court under Kucana. The Board did so for timeliness reasons, holding that Mata had filed his motion after 90 days had elapsed and that he was not entitled to equitable tolling. But as just explained, the reason the Board gave makes no difference: Whenever the Board denies an alien's statutory motion to reopen a removal case, courts have jurisdiction to review its decision. In addition, the Board determined not to exercise its sua sponteauthority to reopen. But once again, that extra ruling does not matter. The Court of Appeals did not lose jurisdiction over the Board's denial of Mata's motion just because the Board also declined to reopen his case sua sponte.
Nonetheless, the Fifth Circuit dismissed Mata's appeal for lack of jurisdiction. That decision, as described earlier, hinged on "constru[ing]" Mata's motion as something it was not: "an invitation for the BIA to exercise" its sua sponteauthority. 558 Fed.Appx., at 367; supra,at 2153 - 2154. Amicus's defense of that approach centrally relies on a merits-based premise: that the INA forbids equitable tolling of the 90-day filing period in any case, no matter how exceptional the circumstances. See Brief for Amicus Curiae by Invitation of the Court 14-35. Given that is so, amicus continues, the court acted permissibly in "recharacteriz[ing]" Mata's pleadings. Id.,at 36. After all, courts often treat a request for "categorically unavailable" relief as instead "seeking relief [that] may be available." Id.,at 35, 38. And here (amicus concludes) that meant construing Mata's request for equitable tolling as a request for sua spontereopening-even though that caused the Fifth Circuit to lose its jurisdiction.
But that conclusion is wrong even on the assumption-and it is only an assumption-that its core premise about equitable tolling is true.If the INA precludes Mata from getting the relief he seeks, then the right course on appeal is to take jurisdiction over the case, explain why that is so, and affirm the BIA's decision not to reopen. The jurisdictional question (whether the court has power to decide if tolling is proper) is of course distinct from the merits question (whether tolling is proper). See Steel Co. v. Citizens for Better Environment,523 U.S. 83, 89, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998)("[T]he absence of a valid ... cause of action does not implicate subject-matter jurisdiction"). The Fifth Circuit thus retains jurisdiction even if Mata's appeal lacks merit. And when a federal court has jurisdiction, it also has a "virtually unflagging obligation ... to exercise" that authority. Colorado River Water Conservation Dist. v. United States,424 U.S. 800, 817, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976). Accordingly, the Court of Appeals should have asserted jurisdiction over Mata's appeal and addressed the equitable tolling question.
Contrary to amicus's view, the practice of recharacterizing pleadings so as to offer the possibility of relief cannot justify the Court of Appeals' alternative approach. True enough (and a good thing too) that courts sometimes construe one kind of filing as another: If a litigant misbrands a motion, but could get relief under a different label, a court will often make the requisite change. See, e.g., 12 J. Moore, Moore's Federal Practice, § 59.11[4] (3 ed. 2015) (explaining how courts treat untimely Rule 59 motions as Rule 60 motions because the latter have no time limit). But that established practice does not entail sidestepping the judicial obligation to exercise jurisdiction. And it results in identifying a route to relief, not in rendering relief impossible. That makes all the difference between a court's generously reading pleadings and a court's construing away adjudicative authority.
And if, as amicus argues, that construal rests on an underlying merits decision-that the INA precludes any equitable tolling-then the Court of Appeals has effectively insulated a circuit split from our review. Putting the Fifth Circuit to the side, all appellate courts to have addressed the matter have held that the Board may sometimes equitably toll the time limit for an alien's motion to reopen. See n. 1, supra. Assuming the Fifth Circuit thinks otherwise, that creates the kind of split of authority we typically think we need to resolve. See this Court's Rule 10(a). But the Fifth Circuit's practice of recharacterizing appeals like Mata's as challenges to the Board's sua spontedecisions and then declining to exercise jurisdiction over them prevents that split from coming to light. Of course, the Court of Appeals may reach whatever conclusion it thinks best as to the availability of equitable tolling; we express no opinion on that matter. See n. 3, supra. What the Fifth Circuit may not do is to wrap such a merits decision in jurisdictional garb so that we cannot address a possible division between that court and every other.
For the foregoing reasons, we reverse the judgment of the Court of Appeals and remand the case for further proceedings consistent with this opinion.
It is so ordered.
See, e.g., Da Silva Neves v. Holder,613 F.3d 30, 33 (C.A.1 2010)(per curiam) (exercising jurisdiction over such a petition);Iavorski v. INS,232 F.3d 124, 129-134 (C.A.2 2000)(same); Borges v. Gonzales,402 F.3d 398, 406 (C.A.3 2005)(same); Kuusk v. Holder,732 F.3d 302, 305-306 (C.A.4 2013)(same); Barry v. Mukasey,524 F.3d 721, 724-725 (C.A.6 2008)(same); Pervaiz v. Gonzales,405 F.3d 488, 490 (C.A.7 2005)(same); Hernandez-Moran v. Gonzales,408 F.3d 496, 499-500 (C.A.8 2005)(same); Valeriano v. Gonzales,474 F.3d 669, 673 (C.A.9 2007)(same); Riley v. INS,310 F.3d 1253, 1257-1258 (C.A.10 2002)(same); Avila-Santoyo v. United States Atty. Gen.,713 F.3d 1357, 1359, 1362-1364 (C.A.11 2013)(per curiam) (same). Except for Da SilvaNeves,which did not resolve the issue, all those decisions also held, on the merits, that the INA allows equitable tolling in certain circumstances. See infra,at 2156 - 2157.
We appointed William R. Peterson to brief and argue the case, 574 U.S. ----, 135 S.Ct. 1039, 190 L.Ed.2d 907 (2015), and he has ably discharged his responsibilities.
We express no opinion as to whether or when the INA allows the Board to equitably toll the 90-day period to file a motion to reopen. Moreover, we are not certain what the Fifth Circuit itself thinks about that question. Perhaps, as amicus asserts, the court believes the INA categorically precludes equitable tolling: It is hard to come up with any other reason why the court construes every argument for tolling as one for sua sponterelief. See Brief for Amicus Curiae by Invitation of the Court 2, 10, 14, n. 2. But the Fifth Circuit has stated that position in only a single sentence in a single unpublished opinion, which (according to the Circuit) has no precedential force. See Lin v. Mukasey,286 Fed.Appx. 148, 150 (2008)(per curiam); Rule 47.5.4 (2015). And another unpublished decision cuts in the opposite direction, "hold[ing] that the doctrine of equitable tolling applies" when exceptional circumstances excuse an alien's failure to meet the 90-day reopening deadline. See Torabi v. Gonzales,165 Fed.Appx. 326, 331 (C.A.5 2006)(per curiam). So, in the end, it is hard to say. | 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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MEMPHIS LIGHT, GAS & WATER DIVISION et al. v. CRAFT et al.
No. 76-39.
Argued November 2, 1977
Decided May 1, 1978
Powell, J., delivered the opinion of the Court, in which BreNNAN, Stewart, White, Marshall, and BlackmuN, JJ., joined. SteveNS, J., filed a dissenting opinion, in which Burger, C. J., and Rehnquist, J., joined, post, p. 22.
Frierson M. Graves, Jr., argued the cause and filed a brief for petitioners.
Thomas M. Daniel argued the cause for respondents. With him on the brief were Elliot Taubman and Bruce Mayor
David Sive filed a brief for the National Council of the Churches of Christ as amicus curiae.
Me. Justice Powell
delivered the opinion of the Court.
This is an action brought under 42 U. S. C. § 1983 by homeowners in Memphis, Tenn., seeking declaratory and injunctive relief and damages against a municipal utility and several of its officers and employees for termination of utility service allegedly without due process of law. The District Court determined that respondents’ claim of entitlement to continued utility service did not implicate a “property” interest protected by the Fourteenth Amendment, and that, in any event, the utility’s termination procedures comported with due process. The Court of Appeals reversed in part. We granted certiorari to consider this constitutional question of importance in the operation of municipal utilities throughout the Nation.
I
Memphis Light, Gas and Water Division (MLG&W) is a division of the city of Memphis which provides utility service. It is directed by a Board of Commissioners appointed by the City Council, and is subject to the ultimate control of the municipal government. As a municipal utility, MLG&W enjoys a statutory exemption from regulation by the state public service commission. Tenn. Code Ann. §§ 6-1306, 6-1317 (1971).
Willie S. and Mary Craft, respondents here, reside at 1019 Alaska Street in Memphis. When the Crafts moved into their residence in October 1972, they noticed that there were two separate gas and electric meters and only one water meter serving the premises. The residence had been used previously as a duplex. The Crafts assumed, on the basis of information from the seller, that the second set of meters was inoperative.
In 1973, the Crafts began receiving two bills: their regular bill, and a second bill with an account number in the name of Willie C. Craft, as opposed to Willie S. Craft. Separate monthly bills were received for each set of meters, with a city service fee appearing on each bill. In October 1973, after learning from a MLG&W meter reader that both sets of meters were running in their home, the Crafts hired a private plumber and electrical contractor to combine the meters into one gas and one electric meter. Because the contractor did not consolidate the meters properly, a condition of which the Crafts were not aware, they continued to receive two bills until January 1974. During this period, the Crafts’- utility service was terminated five times for nonpayment.
On several occasions, Mrs. Craft missed work and went to the MLG&W offices in order to resolve the “double billing” problem. As found by the District Court, Mrs. Craft sought in good faith to determine the cause of the “double billing,” but was unable to obtain a satisfactory explanation or any suggestion for further recourse from MLG&W employees. The court noted:
“On one occasion when Mrs. Craft was attempting to avert a utilities termination, after final notice, she called the defendant’s offices and explained that she had paid a bill, but was given no satisfaction. The procedure for an opportunity to talk with management was not adequately explained to Mrs. Craft, although she repeatedly tried to get some explanation for the problems of two bills and possible duplicate charges.” Pet. for Cert. 38-39.
In February 1974, the Crafts and other MLG&W customers filed this action in the District Court for the Western District of Tennessee. After trial, the District Court refused to certify the plaintiffs’ class and rendered judgment for the defendants. Although the court apparently was of the view that plaintiffs had no property interest in continued utility service while a disputed bill remained unpaid, it nevertheless addressed the procedural due process issue. It acknowledged that respondents had not been given adequate notice of a procedure for discussing the disputed bills with management, but concluded that “[n]one of the individual plaintiffs [was] deprived of [a] due process opportunity to be heard, nor did the circumstances indicate any substantial deprivation except in the possible instance of Mr. and Mrs. Craft.” Id., at 45. The court expressed “hope,” “whether on the principles of [pendent] jurisdiction, or on the basis of a very limited possible denial of due process to Mr. and Mrs. Craft,” that credit in the amount of $35 be issued to reimburse the Crafts for “duplicate and unnecessary charges made and expenses incurred by [them] with respect to terminations which should have been unnecessary had effectual relief been afforded them as requested.” The court also recommended “that MLG&W in the future send a certified or registered mail notice of termination at least four days prior to termination,” and that such notice “provide more specific information about customer service locations and personnel available to work out extended payment plans or adjustments of accounts in genuine hardships or appropriate situations.” Id., at 46-47.
On appeal, the Court of Appeals for the Sixth Circuit affirmed the District Court’s refusal to certify a class action, but held that the procedures accorded to the Crafts did not comport with due process. 534 F. 2d 684 (1976).
On July 12, 1976, petitioners sought a writ of certiorari in this Court to determine (i) whether the termination policies of a municipal utility constitute “state action” under the Fourteenth Amendment; (ii) if so, whether a municipal utility’s termination of service for nonpayment deprives a customer of “property” within the meaning of the Due Process Clause; and (iii) assuming “state action” and a “property” interest, whether MLG&W’s procedures afforded due process of law in this case. On February 22, 1977, we granted certiorari, 429 U. S. 1090. We now affirm.
II
There is, at the outset, a question of mootness. Although the parties have not addressed this question in their briefs, “they may not by stipulation invoke the judicial power of the United States in litigation which does not present an actual ‘case or controversy,' Richardson v. Ramirez, 418 U. S. 24 (1974)... Sosna v. Iowa, 419 U. S. 393, 398 (1975).
As the case comes to us, the only remaining plaintiffs are respondents Willie S. and Mary Craft. Since the Court of Appeals affirmed the District Court’s refusal to certify a class, the existence of a continuing “case or controversy” depends entirely on the claims of respondents. Cf. Sosna v. Iowa, supra, at 399, 402. It appears that respondents no longer desire a hearing to resolve a continuing dispute over their bills, as the double-meter problem has been clarified during this litigation. Nor do respondents aver that there is a present threat of termination of service. “An injunction can issue only after the plaintiff has established that the conduct sought to be enjoined is illegal and that the defendant, if not enjoined, will engage in such conduct.” United Transportation Union v. Michigan Bar, 401 U. S. 576, 584 (1971). Respondents insist, however, that the case is not moot because they seek damages and declaratory relief, and because the dispute that occasioned this suit is “capable of repetition, yet evading review.” Tr. of Oral Arg. 45-46.
We need not decide whether this case falls within the special rule developed in Southern Pacific Terminal Co. v. ICC, 219 U. S. 498 (1911); see Moore v. Ogilvie, 394 U. S. 814, 816 (1969); Roe v. Wade, 410 U. S. 113, 125 (1973), to permit consideration of questions which, by their very nature, are not likely to survive the course of a normal litigation. Respondents’ claim for actual and punitive damages arising from MLG&W’s terminations of service saves this cause from the bar of mootness. Cf. Powell v. McCormack, 395 U. S. 486, 496-500 (1969). Although we express no opinion as to the validity of respondents’ claim for damages, that claim is not so insubstantial or so clearly foreclosed by prior decisions that this case may not proceed.
Ill
The Fourteenth Amendment places procedural constraints on the actions of government that work a deprivation of interests enjoying the stature of “property” within the meaning of the Due Process Clause. Although the underlying substantive interest is created by “an independent source such as state law,” federal constitutional law determines whether that interest rises to the level of a “legitimate claim of entitlement” protected by the Due Process Clause. Board of Regents v. Roth, 408 U. S. 564, 577 (1972); Perry v. Sindermann, 408 U. S. 593, 602 (1972).
The outcome of that inquiry is clear in this case. In defining a public utility’s privilege to terminate for nonpayment of proper charges, Tennessee decisional law draws a line between utility bills that are the subject of a bona fide dispute and those that are not.
“A company supplying electricity to the public has a right to cut off service to a customer for nonpayment of a just service bill and the company may adopt a rule to that effect. Annot., 112 A. L. R. 237 (1938). An exception to the general rule exists when the customer has a bona fide dispute concerning the correctness of the bill. Steele v. Clinton Electric Light & Power Co., 123 Conn. 180, 193 A. 613, 615 (1937); Annot., 112 A. L. R. 237, 241 (1938); see also 43 Am. Jur., Public Utilities and Services, Sec. 65; Annot., 28 A. L. R. 475 (1924). If the public utility discontinues service for nonpayment of a disputed amount it does so at its peril and if the public utility was wrong (e. g., customer overcharged), it-is liable for damages. Sims v. Alabama Water Co., 205 Ala. 378, 87 So. 688, 690, 28 A. L. R. 461 (1920).” Trigg v. Middle Tennessee Electric Membership Corp., 533 S. W. 2d 730, 733 (Tenn. App. 1975), cert. denied (Tenn. Sup. Ct. Mar. 15, 1976).
The Trigg court also rejected the utility’s argument that plaintiffs had agreed to be bound by the utility’s rules and regulations, which required payment whether or not a bill is received. “A public utility should not be able to coerce a customer to pay a disputed claim.” Ibid.
State law does not permit a public utility to terminate service “at will.” Cf. Bishop v. Wood, 426 U. S. 341, 345-347 (1976). MLG&W and other public utilities in Tennessee are obligated to provide service “to all of the inhabitants of the city of its location alike, without discrimination, and without denial, except for good and sufficient cause,” Farmer v. Nashville, 127 Tenn. 509, 515, 156 S. W. 189, 190 (1913), and may not terminate service except “for nonpayment of a just service bill,” Trigg, 533 S. W. 2d, at 733. An aggrieved customer may be able to enjoin a wrongful threat to terminate, or to bring a subsequent action for damages or a refund. Ibid. The availability of such local-law remedies is evidence of the State’s recognition of a protected interest. Although the customer’s right to continued service is conditioned upon payment of the charges properly due, “[t]he Fourteenth Amendment’s protection of 'property’... has never been interpreted to safeguard only the rights of undisputed ownership.” Fuentes v. Shevin, 407 U. S. 67, 86 (1972). Because petitioners may terminate service only “for cause,” respondents assert a “legitimate claim of entitlement” within the protection of the Due Process Clause.
IV
In determining what process is “due” in this case, the extent of our inquiry is shaped by the ruling of the Court of Appeals. We need go no further in deciding this case than to ascertain whether the Court of Appeals properly read the Due Process Clause to require (i) notice informing the customer not only of the possibility of termination but also of a procedure for challenging a disputed bill, 534 F. 2d, at 688, and (ii) “ '[an] established [procedure] for resolution of disputes' ” or some specified avenue of relief for customers who “dispute the existence of the liability,” id., at 689.
A
“An elementary and fundamental requirement of due process in any proceeding which is to be accorded finality is notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.” Mullane v. Central Hanover Trust Co., 339 U. S. 306, 314 (1950) (citations omitted). The issue here is whether due process requires that a municipal utility notify the customer of the availability of an avenue of redress within the organization should he wish to contest a particular charge.
The “final notice” contained in MLG&W’s bills simply stated that payment was overdue and that service would be discontinued if payment was not made by a certain date. As the Court of Appeals determined, “the MLG&W notice only warn[ed] the customer to pay or face termination.” 534 F. 2d, at 688-689. MLG&W also enclosed a “flyer” with the “final notice.” One “flyer” was distributed to about 40% of the utility’s customers, who resided in areas serviced by “credit counseling stations.” It stated in part: “If you are having difficulty paying your utility bill, bring your bill to our neighborhood credit counselors for assistance. Your utility bills may be paid here also.” No mention was made of a procedure for the disposition of a disputed claim. A different “flyer” went to customers in the remaining areas. It stated: “If you are having difficulty paying your utility bill and would like to discuss a utility payment plan, or if there is any dispute concerning the amount due, bring your bill to the office at..., or phone....” Id., at 688 n. 4.
The Court of Appeals noted that “there is no assurance that the Crafts were mailed the just mentioned flyer,” ibid., and implicitly affirmed the District Court’s finding that Mrs. Craft was never apprised of the availability of a procedure for discussing her dispute “with management.” The District Court’s description of Mrs. Craft’s repeated efforts to obtain information about what appeared to be unjustified double billing — “good faith efforts to pay for [the Crafts’] utilities as well as to straighten out the problem” — makes clear that she was not adequately notified of the procedures asserted to have been available at the time.
Petitioners’ notification procedure, while adequate to apprise the Crafts of the threat of termination of service, was not “reasonably calculated” to inform them of the availability of “an opportunity to present their objections” to their bills. Mullane v. Central Hanover Trust Co., supra, at 314. The purpose of notice under the Due Process Clause is to apprise the affected individual of, and permit adequate preparation for, an impending “hearing.” Notice in a case of this kind does not comport with constitutional requirements when it does not advise the customer of the availability of a procedure for protesting a proposed termination of utility service as unjustified. As no such notice was given respondents — despite “good faith efforts” on their part — they were deprived of the notice which was their due.
B
This Court consistently has held that “some kind of hearing is required at some time before a person is finally deprived of his property interests.” Wolff v. McDonnell, 418 U. S. 539, 557-558 (1974). We agree with the Court of Appeals that due process requires the provision of an opportunity for the presentation to a designated employee of a customer’s complaint that he is being overcharged or charged for services not rendered. Whether or not such a procedure may be available to other MLG&W customers, both courts below found that it was not made available to Mrs. Craft. Petitioners have not made the requisite showing for overturning these “concurrent findings of fact by two courts below....” Graver Tank & Mfg. Co. v. Linde Air Products Co., 336 U. S. 271, 275 (1949).
Our decision in Mathews v. Eldridge, 424 U. S. 319 (1976), provides a framework of analysis for determining the “specific dictates of due process” in this case.
“[0]ur prior decisions indicate that identification of the specific dictates of due process generally requires consideration of three distinct factors: First, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government’s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.” Id., at 334-335.
Under the balancing approach.outlined in Mathews, some administrative procedure for entertaining customer complaints prior to termination is required to afford reasonable assurance against erroneous or arbitrary withholding of essential services. The customer's interest is self-evident. Utility service is a necessity of modern life; indeed, the discontinuance of water or heating for even short periods of time may threaten health and safety. And the risk of an erroneous deprivation, given the necessary reliance on computers, is not insubstantial.
The utility’s interests are not incompatible with affording the notice and procedure described above. Quite apart from its duty as a public service company, a utility — in its own business interests — may be expected to make all reasonable efforts to minimize billing errors and the resulting customer dissatisfaction and possible injury. Cf. Goss v. Lopez, 419 U. S. 565, 583 (1975). Nor should “some kind of hearing” prove burdensome. The opportunity for a meeting with a responsible employee empowered to resolve the dispute could be afforded well in advance of the scheduled date of termination. And petitioners would retain the option to terminate service after affording this opportunity and concluding that the amount billed was justly due.
C
Petitioners contend that the available common-law remedies of a pretermination injunction, a post-termination suit for damages, and post-payment action for a refund are sufficient to cure any perceived inadequacy in MLG&W’s procedures.
Ordinarily, due process of law requires an opportunity for “some kind of hearing” prior to the deprivation of a significant property interest. See Boddie v. Connecticut, 401 U. S. 371, 379 (1971). On occasion, this Court has recognized that where the potential length or severity of the deprivation does not indicate a likelihood of serious loss and where the procedures underlying the decision to act are sufficiently reliable to minimize the risk of erroneous determination, government may act without providing additional “advance procedural safeguards,” Ingraham v. Wright, 430 U. S. 651, 680 (1977); see Mathews v. Eldridge, supra, at 339-349.
The factors that have justified exceptions to the requirement of some prior process are not present here. Although utility service may be restored ultimately, the cessation of essential services for any appreciable time works a uniquely final deprivation. Cf. Stanley v. Illinois, 405 U. S. 645, 647-648 (1972). Moreover, the probability of error in utility cutoff decisions is not so insubstantial as to warrant dispensing with all process prior to termination.
The injunction remedy referred to by petitioners would not be an adequate substitute for a pretermination review of the disputed bill with a designated employee. Many of the Court’s decisions in this area have required additional procedures to further due process, notwithstanding the apparent availability of injunctive relief or recovery provisions. It was thought that such remedies were likely to be too bounded by procedural constraints and too susceptible of delay to provide an effective safeguard against an erroneous deprivation. These considerations are applicable in the utility termination context.
Equitable remedies are particularly unsuited to the resolution of factual disputes typically involving sums of money too small to justify engaging counsel or bringing a lawsuit. An action in equity to halt an improper termination, because it is less likely to be pursued and less likely to be effective, even if pursued, will not provide the same assurance of accurate decisionmaking as would an adequate administrative procedure. In these circumstances, an informal administrative remedy, along the lines suggested above, constitutes the process that is “due.”
y
Because of the failure to provide notice reasonably calculated to apprise respondents of the availability ‘ of an administrative procedure to consider their complaint of erroneous billing, and the failure to afford them an opportunity to present their complaint to a designated employee empowered to review disputed bills and rectify error, petitioners deprived respondents of an interest in property without due process of law.
The judgment of the Court of Appeals is
Affirmed.
Although MLG&W is listed as one of the petitioners, the District Court dismissed the action as to the utility itself because “a municipality or governmental unit standing in that capacity is not a 'person’ within the meaning” of § 1983. Pet. for Cert. 43. The Court of Appeals did not disturb that determination, and respondents have not sought review of the point in this Court. The individual petitioners, who are sued in both their official and personal capacities, are the utility’s president and general manager, vice president, members of the Board of Commissioners, and two employees who have had responsibility for terminating utility services. They will be referred to throughout as either “MLG&W” or “petitioners.”
Of those who brought the original action, only the Crafts remain. The parties have not sought review in this Court of the rulings made below with respect to the other plaintiffs.
The city service fee is a separate item on the regular utility bill, as required by municipal ordinance.
The District Court’s conclusion was advanced with little explanation, other than a reference to MLG&W’s credit extension program. In an earlier discussion, the opinion offered a description of the utility’s procedures. First, the court listed the steps involved in a termination: (i) Approximately four days after a meter reading date, a bill is mailed to the service location or other address designated by the customer. The last day to pay the net amount would be approximately 20 days after the meter reading date, (ii) Approximately 24 days after the meters are read, a “final notice” is mailed stating that services will be disconnected within four days if no payment is received or other provision for payment is made, (iii) Electric service is then terminated by the meter reader, unless the customer assures him that payment is in the mail, shows a paid receipt, or explains that nonpayment was due to illness. If there is no communication prior to termination, the meter reader or serviceman is instructed to leave 8/ cutoff notice giving information about restoration of service, (iv) Approximately five days after the electric service cutoff, the remaining services are terminated if the customer has not paid the bill or made other arrangements for payment. Pet. for Cert. 34-35.
The court also noted that on or about March 1, 1973, MLG&W instituted an “extended payment plan.” This generous program allows customers able to demonstrate financial hardship to pay only one-half of a past due bill with the balance to be paid in equal installments over the next three bills. The plaintiffs in this action were participants in the plan. Id., at 36.
Finally, the court observed that MLG&W provided a procedure for resolution of disputed bills:
“Credit counselors assist customers who have difficulty with payments or disputes concerning their bills with MLG&W. If those counselors cannot satisfy the customer, then the customer is referred to management personnel; generally the chief clerk in the department; then the supervisor in credit and collection. In addition, a dissatisfied customer may appeal to the Board of Commissioners of MLG&W as to complaints regarding bills, service, termination of service or any other matter relating to the operation of the Division. A customer may, if he so desires, be accompanied by an appropriate representative. The billing of customers, the determination as to when a final notice is sent, and the termination of service [are] governed by policies, rules and regulations adopted and approved by the Board of Commissioners of MLG&W.” Id., at 36-37.
In its order filed on December 30, 1974, the court acknowledged that defendants had issued the recommended credit and “instituted some new procedures which will give more definitive and adequate notice to customers of possible or impending cut-off of services.” Id., at 49. See n. 16, infra.
Petitioners have abandoned their contention that “state action” is not present in this case. Brief for Petitioners 44.
“Not until after the action was filed were the Crafts able to discover that they continued to receive double computer billings because MLG&W failed to combine the two accounts properly (A. 146-150), or that, as a result of the double computer billings, MLG&W had overcharged them for gas service and city service fees.” Brief for Respondents 5.
The District Court found that “[o]f the balance-claimed by MLG&W in March, 1974, some involved possible gas overcharges and double or duplicate billings with respect to city service fees.” Pet. for Cert. 39. Presumably, respondents also seek recovery for the loss of pay occasioned by Mrs. Craft’s several visits to the offices of MLG&W “which should have been unnecessary had effectual relief been afforded them as requested.” Id., at 46.
While not urging mootness, petitioners assert that their compliance with the District Court’s recommendation that a $35 credit be issued to the Crafts removes any claim for damages from this case. We do not understand the District Court’s suggestion to have been an award of damages. The validity of the damages claim is a matter for initial determination by the courts below.
Tennessee's formulation of a public utility’s privilege to terminate service for nonpayment of an undisputed charge is in accord with the common-law rule. See generally 64 Am. Jur. 2d, Public Utilities §§ 63-64 (1972); Annot., 112 A. L. R. 237, 241 (1938); Note, The Duty of a Public Utility to Render Adequate Service: Its Scope and Enforcement, 62 Colum. L. Rev. 312, 326 (1962).
Petitioners attempt to avoid the force of Trigg by referring to several Tennessee decisions which state the general rule that a utility may terminate service for nonpayment of undisputed charges or noncompliance with reasonable rules and regulations. These authorities, however, do not cast doubt upon the exception recognized in Trigg for a customer who tenders the undisputed amount, but withholds complete payment because of a bona fide dispute. See Patterson v. Chattanooga, 192 Tenn. 267, 241 S. W. 2d 291 (1951); Farmer v. Nashville, 127 Tenn. 509, 156 S. W. 189 (1913); Jones v. Nashville, 109 Tenn. 550, 72 S. W. 985 (1903); Crumley v. Watauga Water Co., 99 Tenn. 420, 41 S. W. 1058 (1897); Watauga Water Co. v. Wolfe, 99 Tenn. 429, 41 S. W. 1060 (1897).
Petitioners also rely on Lindsey v. Normet, 405 U. S. 56 (1972). There, the Court upheld an Oregon statute that required a tenant seeking a continuance of an eviction hearing to post security for accruing rent during the continuance, and limited the issues triable in an eviction proceeding to the questions of physical possession, forcible withholding, and legal right to possession. This reliance is misplaced. First, the Court merely held that the Oregon procedures comported with due process, without intimating that a tenant’s claim to continued possession during a rent dispute failed to implicate a "property” interest. Second, “[t]he tenant did not have to post security in order to remain in possession before a hearing; rather, he had to post security only in order to obtain a continuance of the hearing.... [T]he tenant was not deprived of his possessory interest even for one day without opportunity for a hearing.” Fuentes v. Shevin, 407 U. S. 67, 85 n. 15 (1972) (emphasis in original).
In Arnett v. Kennedy, 416 U. S. 134 (1974), "the Court concluded that because the employee could only be discharged for cause, he had a property interest which was entitled to constitutional protection.” Bishop v. Wood, 426 U. S. 341, 345 n. 8 (1976). See Arnett v. Kennedy, supra, at 166 (Powell, J., concurring in part); cf. Board of Regents v. Roth, 408 U. S. 564, 578 (1972).
The Court of Appeals did refer to its earlier decision in Palmer v. Columbia Gas of Ohio, Inc., 479 F. 2d 153 (1973), which approved a comprehensive remedy for a due process violation, including investigation of every communicated protest by a management official, provision of a hearing before such an official, and an opportunity to stay the termination upon the posting of an appropriate bond. Id., at 159-160, 168-169. These procedures were fashioned in response to findings, based on uncon-tradicted evidence, of hostility and arrogance on the part of the collection-oriented clerical employees, id., at 168. No such findings were made here, and the Court of Appeals’ ruling did not purport to require a similar remedy in this case.
Respondents do request certain additional procedures: “an impartial decision maker,” who may be a responsible company official; “the opportunity to present information and rebut the records presented”; and “a written decision,” which apparently can be rendered after termination or payment. Tr. of Oral Arg. 28, 31; Brief for Respondents 31. As respondents have not cross-petitioned, cf. | 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
] | sc_adminaction |
FLOWER v. UNITED STATES
No. 71-1180.
Decided June 12, 1972
Per Curiam.
Petitioner John Thomas Flower, a regional “Peace Education Secretary” of the American Friends Service Committee and a civilian, was arrested by military police while quietly distributing leaflets on New Braunfels Avenue at a point within the limits of Fort Sam Houston, San Antonio, Texas. In an ensuing prosecution before the United States District Court for the Western. District of Texas on charges of violating 18 U. S. C. § 1382 (“Whoever reenters or is found [within a military post] after having been removed therefrom or ordered not to reenter by any officer or person in command or charge thereof — Shall be fined not more than $500 or imprisoned not. more than six months, or both”), it was established that petitioner had previously been barred from the post by ordfer of the deputy commanda’ because of alleged participation in an attempt to distribute “unauthorized” leaflets. The District Court found that § 1382 “is a valid law” and was validly applied. It sentenced petitioner to six months in prison. A divided panel of the Court of Appeals for the Fifth Circuit affirmed.. 452 F. 2d 80 (CA5 1972).
We reverse. Whatever power the authorities may have to restrict general access to a military facility, see Cafeteria & Restaurant Workers v. McElroy, 367 U. S. 886 (1961), here the fort commander chose not to exclude the public from the street where petitioner was arrested. As Judge Simpson, dissenting/noted below:
“There is -no sentry post or guard at either entrance or anywhere along the route. Traffic flows through the post on this and other streets 24 hours a day. A traffic count conducted on New Braunfels Avenue on January 22, 1968, by the Director of Transportation of the city of San Antonio, shows a daily (24-hour) vehicular count of 15,110 south of Grayson Street (the place where the street enters the post boundary) and 17,740 vehicles daily north of that point. The street is an important traffic artery used freely by buses, taxi cabs and other public transportation facilities as well as by private vehicles, and its sidewalks are used extensively at all hours . of the day by civilians as well as by military personnel. Fort Sam Houston was an open post; the street, New Braunfels Avenue, was a completely open street.” 452 F. 2d, at 90.
Under such circumstances the military has abandoned ' any claim that it has special interests in who walks, talks, or distributes leaflets on the avenue. The base commandant can no more order petitioner off this public street because he was distributing leaflets than could the city police order any leafleteer off any public street. Cf. Lovell v. City of Griffin, 303 U. S. 444 (1938), Schneider v. State, 308 U. S. 147 (1939). “[S]treets are natural and proper places for the dissemination of information and opinion,” 308 U. S., at 163. “[0]ne who is rightfully on a street which the state has left open to the public carries with him there as elsewhere the constitutional right to express his views in an orderly fashion.” Jamison v. Texas, 318 U. S. 413, 416 (1943).
The First Amendment protects petitioner from the application of § 1382 under conditions like those of this case. Accordingly, without need to set the matter for further argument, we grant the petition for a writ of certiorari 'and reverse the conviction.
Reversed and remanded.
Mr. Justice Blackmun dissents, for he would grant the petition for 'certiorari and hear argument on the merits. | 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",
"Processing Tax Board of Review"
] | [
5
] | sc_adminaction |
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