Yakus v. United States

Mr. Justice Roberts:

I dissent. I find it unnecessary to discuss certain of the questions treated in the opinion of the court. I am of opinion that the Act unconstitutionally delegates legislative power to the Administrator. As I read the opinion of the court it holds the Act valid on the ground that sufficiently precise standards are prescribed to confine the Administrator’s regulations and orders within fixed limits, and that judicial review is provided effectively to prohibit his transgression of those limits. I believe that analysis demonstrates the contrary. I proceed, therefore, to examine the statute.

The Powers Conferred.

When, in his judgment, commodity prices have risen, or threaten to rise, “to an extent or in a manner inconsistent with the purposes” of the Act, the Administrator may establish “such maximum price or maximum prices as in his judgment will be generally fair and equitable and will effectuate the purposes” of the Act.

“So far as practicable” in establishing any maximum price, he is to ascertain the prices prevailing in a specified period in 1941 but may use another period nearest to that specified because necessary data for the period specified is not available; and may make adjustments “for such relevant factors as he may determine and deem to be of general applicability,” including several factors mentioned. Before issuing any regulation, he shall “so far as practicable” advise with representative members of the industry affected.

Any regulation may provide for adjustments and reasonable exceptions which, in the Administrator’s judg *449 ment, are necessary and proper to effectuate the purposes of the Act. If, in his judgment, such action is necessary or proper to effectuate the purposes of the Act, he may, by regulation or order, regulate or prohibit speculative or manipulative practices or hoarding in connection with any commodity ( 50 U. S. C. § 902 ).

It will be seen that whether, and, if so, when, the price of any commodity 1 shall be regulated depends on the judgment of the Administrator as to the necessity or propriety of such price regulation in effectuating the purposes of the Act.

The Supposed Standards for the Administrator’s Guidance.

The Act provides that any regulation or order must be “generally fair and equitable” in the Administrator’s judgment; but coupled with this injunction is another that the order and regulation must be such as, in the judgment of the Administrator, is necessary or proper to effectuate the purposes of the Act.

I turn, therefore, to the stated purposes to ascertain what, if any, limits the statute places upon the Administrator’s exercise of his powers.

Section 1 (a) ( 50 U. S. C. § 901 (a)) states seven purposes, which should be set forth separately as follows:

“to stabilize prices and to prevent speculative, unwarranted, and abnormal increases in prices and rents;”

In order to exercise his power anent this purpose the Administrator will have to form a judgment as to what stabilization means, and what are speculative, unwarranted and abnormal increases in price. It hardly need be said that men may differ radically as to the connotation of these terms and that it would be very difficult to convict *450 anyone of error of judgment in so classifying a given economic phenomenon.

“to eliminate and prevent profiteering, hoarding, manipulation, speculation, and other disruptive practices resulting from abnormal market conditions or scarcities caused by or contributing to the national emergency;”

To accomplish this purpose the Administrator must form a judgment as to what constitutes profiteering, hoarding, manipulation or speculation. As if the administrative discretion were not sufficiently broad there is added the phrase “other disruptive practices,” which seems to leave the Administrator at large in the formation of opinion as to whether any practice is disruptive.

“to assure that defense appropriations are not dissipated by excessive prices;”

It is not clear—to me at least—what is the limit of this purpose. I can conceive that an honest Administrator might, without laying himself open to the charge of exceeding his powers, make any kind of order or regulation based upon the view that otherwise defense appropriations by Congress might be dissipated by what he considers excessive prices. How his exercise of judgment in connection with this purpose could be thought excessive it is impossible for me to say.

“to protect persons with relatively fixed and limited incomes, consumers, wage earners, investors, and persons dependent on life insurance, annuities, and pensions, from undue impairment of their standard of living;”

The Administrator’s judgment that any price policy will tend to affect the classes mentioned in this purpose from what he may decide to be “undue impairment of their standard of living” would seem to be so sweeping that it would be impossible to convict him of an error of judgment in any conclusion he might reach.

“to prevent hardships to persons engaged in business, to schools, universities, and other institutions, and to the *451 Federal, State, and local governments, which would result from abnormal increases in prices;”

Of course Congress might have included in the catalogue of beneficiaries churches, hospitals, labor unions, banks and trust companies and other praiseworthy organizations, without rendering the “standard” any more vague.

“to assist in securing adequate production of commodities and facilities;”

Here is a purpose which seems, to some extent at least, to permit the easing of price restrictions; for it would appear that diminishment of price would hardly assist in promoting production. Thus the Administrator, and he alone, is to balance two competing policies and strike the happy mean between them. Who shall say his conclusion is so indubitably wrong as to be properly characterized as “arbitrary or capricious.”

“to prevent a post emergency collapse of values;”

This purpose, or “standard,” seems to permit adoption by the Administrator of any conceivable policy. I have difficulty in envisaging any price policy in support of which some economic data or opinion could not be cited to show that it would tend to prevent post emergency collapse of values.

These seven purposes must, I submit, be considered as separate and independent. Any action taken by the Administrator which, in his judgment, promotes any one or more of them is within the granted power. If, in his judgment, any action by him is necessary or appropriate to the accomplishment of one or more of them, the Act gives sanction to his order or regulation.

Reflection will demonstrate that in fact the Act sets no limits upon the discretion or judgment of the Administrator. His commission is to take any action with respect to prices which he believes will preserve what he deems a sound economy during the emergency and prevent what he considers to be a disruption of such a sound economy *452 in the postwar period. His judgment, founded, as it may be, on his studies and investigations, as well as other economic data, even though contrary to the great weight of current opinion or authority, is the final touchstone of the validity of his action.

I shall not repeat what I have said in Bowles v. Willingham, post, p. 503. I have there quoted the so-called standards prescribed in the National Industrial Recovery Act. Comparison of them with those of the present Act, and perusal of what was said concerning them in Schechter Corp. v. United States, 295 U. S. 495 , leaves no doubt that the decision is now overruled. There, as here, the “code” or regulation, to become effective, had to be found by the Executive to “tend to effectuate the policy” of the Act. (See footnote 3, p. 521.)

The Administrator’s Procedure.

I have not yet spoken of the statutory provisions respecting the permissible procedure of the Administrator in imposing prices. Sec. 202 (a) ( 50 U. S. C. § 922 (a)) authorizes him to make such studies and investigations and to obtain such information as he deems necessary or proper to assist him in prescribing any regulation or order, or in the administration and enforcement of the Act and regulations, orders, and price schedules thereunder. The remaining subsections give him broad powers to compel disclosure of information. And he may take official notice of economic data and other facts, including facts found as a result of his investigations and studies (§ 203 (b), 50 U. S. C. i 923 (b)).

Each regulation or order must be accompanied by a “statement of the considerations involved” in its issue (§ 2 (a), 50 U. S. C. § 902 (a)). This is not a statement or finding of fact. Webster defines the term “consideration” as “that which is, or should be, considered as a ground of opinion or action; motive; reason.” The citizen, *453 therefore, is merely to be advised of the reasons for the Administrator’s action.

How is he to proceed if he desires to challenge that action? The answer is found in § 203 ( 50 U. S. C. § 923 ). Within a specified time after the issue of a regulation any person subject to any provision of it may file a protest “specifically setting forth objections to any such provision and affidavits or other written evidence in support of such objections.” The Administrator may receive statements in support of the regulations and incorporate them in his proceedings. Within a time fixed he must (1) grant or deny the protest in whole or in part, (2) note it for hearing, or (3) provide an opportunity to present further evidence. His is the choice.

If he denies the protest in whole or in part he must inform the protestant of the grounds upon which his decision was based and of any economic data or other facts of which he has taken official notice.

This, then, is the first opportunity the protestant has to know on what the Administrator has based his “considerations” or reasons for action. As the Emergency Court of Appeals held in Lakemore Co. v. Brown, 137 F. 2d 355 : 2

“Thus, consistently with statutory requirements, the Administrator could have waited until he had entered his order denying the protest before informing the protestant of the economic data of which he had taken official notice and of the economic conclusions which he had derived therefrom and the other grounds upon which the denial was based.”

And it is to be observed that, after seeing the protestante affidavits and the evidence, the Administrator may load the record with all sorts of material, articles, opinions, *454 compilations, and what not—pure hearsay—subject to no cross-examination, to persuade the court that his order could, “in his judgment,” promote one of the “purposes” of the Act.

Thus is the “record” weighted against formal complaint in court.

Chatlos v. Brown, 136 F. 2d 490 , Spaeth v. Brown, 137 F. 2d 669 , and Bibb Manufacturing Co. v. Bowles, 140 F. 2d 459 , amongst other cases, indicate the sort of data— although they do not exclude the use of other sorts—on which the Administrator seems to be accustomed, and to be entitled, to act. He need make no findings of fact.

The Court Review.

The protestant who is aggrieved by the denial or partial denial of his protest may, within a set time, file a complaint with a specially created Emergency Court of Appeals “specifying his objections and praying that the regulation, order, or price schedule protested be enjoined or set aside in whole or in part.” The court is given exclusive jurisdiction and all other courts are forbidden to take jurisdiction to grant such relief. The court may set aside the order, dismiss the complaint, or remand the proceeding. Upon the filing and service of the complaint, the Administrator is to certify and file a transcript of such portion of the proceedings before him as are material to the complaint (§ 204 (a); 50 U. S. C. § 924 (a)).

The section proceeds:

“No objection to such regulation, order, or price schedule, and no evidence in support of any objection thereto, shall be considered by the court, unless such objection shall have been set forth by the complainant in the protest or such evidence shall be contained in the transcript. If application is made to the court by either party for leave to introduce additional evidence which was either offered to the Administrator and not admitted, or which could not *455 reasonably have been offered to the Administrator or included by the Administrator in such proceedings, and the court determines that such evidence should be admitted, the court shall order the evidence to be presented to the Administrator. The Administrator shall promptly receive the same, and such other evidence as he deems necessary or proper, and thereupon he shall certify and file with the court a transcript thereof and any modification made in the regulation, order, or price schedule as a result thereof; except that on request by the Administrator, any such evidence shall be presented directly to the court.”

It is not difficult to picture the plight of the protestant. The Administrator’s statement of considerations, without more, constitutes proof in the cause.

In Montgomery Ward & Co. v. Bowles, 138 F. 2d 669 , the Administrator in his statement of considerations said that he took official notice of three propositions of the most general scope. No evidence in support of these or of any other facts upon which he relied was included in the transcript. The complainant suggested to the court the omission of pertinent matter, namely, the evidence' in support of the propositions of which the Administrator said he took official notice, the evidence of various other assertions of fact in his opinion, and the particular facts and evidence upon which he based, the conclusions expressed in his statement of considerations that “the maximum prices established in this regulation are fair and equitable.” The Administrator objected to the suggestion and the court rej ected it. It was held that the Act requires “only a summary statement of the basic facts which justify the regulation.”

Referring to § 204 (b), 50 U. S. C. § 924 (b), the court held that the requirement that the complainant • must establish “to the satisfaction of the court” that the regulation, order, or price schedule is not in accordance with law or is arbitrary or capricious throws upon the protestant *456 the burden “to bring forward and satisfactorily prove the invalidating facts,” and added: “Unless and until he does so the regulation is to be taken as valid and the existence of a state of facts which justify it is to be assumed without the necessity of proof thereof by the Administrator.”

The court added that the protestant is given means of carrying this burden by filing affidavits and other evidence, but omits to refer to the fact that these affidavits and other evidence must be addressed to the Administrator’s order and his most general and sweeping statement of considerations, which merely means his reasons for making the order. These affidavits and this evidence under the procedure prescribed are to be put in before the protestant even knows what data the Administrator relied upon or sees the Administrator’s opinion denying his protest. It is hardly necessary to dilate upon the burden thus placed on a protestant or the extent to which he is compelled to fill the record with what he may think relevant matter only to find that he has been shooting at straws. The court further adverted to the fact that the Act permits the protestant to state in detail in connection with his protest the nature and sources of any further evidence not subject to his control upon which he believes he can rely in support of the. facts alleged in his protest. Here again the protestant is under the same handicap. He must disclose all he has in mind to the Administrator before the Administrator makes any disclosure to him of the facts and data upon which that official has relied.

Finally the court refers to the privilege given the protestant to file a brief with the Administrator and to “request an oral hearing,” without mentioning the facts that the brief can be addressed only to the reasons given in the statement of consideration, and that the Administrator is at liberty to deny the request.

A procedure better designed to prevent the making of an issue between parties can hardly be conceived.

*457 And the extent of the burden is further emphasized by what the Emergency Court of Appeals has said in Lakemore Co. v. Brown, supra:

“It is objected that the Administrator thus in effect has prejudged the case; that as witness, immune from cross-examination, he has rendered an opinion which concludes the matter which is before him as judge.

“This overlooks the fact that the Administrator, from the necessities of the case, does not come with á virgin mind to the consideration of a protest. He has previously performed the official act of issuing the regulation, the terms of which of course reflect his conclusions on many economic, administrative and legal questions. In this sense, he necessarily approaches consideration of a protest with certain ‘preconceived notions’—to use complainant’s phrase. It is the object of the protest procedure to give the Administrator a chance to reconsider any challenged provisions in the regulation in the light of further evidence or arguments which may be advanced by the protestant. What the Administrator did here was to lay his cards on the table in the protest proceedings, offering protestant an opportunity to play its trump cards, if it had any.

“Of course such statements of economic conclusions thus incorporated in the record are not ‘evidence.’ Section 204 (a) requires the transcript of the protest proceedings, filed in this court, to ‘include a statement setting forth, so far as practicable, the economic data and other facts of which the Administrator has taken official notice.’ Insofar as any economic generalizations or conclusions formulated by the Administrator constitute indispensable steps in his process of reasoning in denying the protest, it is for this court to say whether they have any rational basis, in performance of our statutory duty to consider whether the regulation or order should be set aside in whole or in part as being ‘arbitrary or capricious.’ This is so, whether the Administrator includes such generalizations and con *458 elusions in his opinion accompanying the denial of the protest or, as in this case, incorporates them into the record of the protest proceedings at an earlier stage in order to afford protestant an opportunity for rebuttal.”

To this may be added what the Emergency Court said in Madison Park Corp. v. Bowles, 140 F. 2d 316 , 324:

“We do not decide that this Court should limit the application of the term ‘generally fair and equitable’ to standards mentioned in the law and in discussions of its enactment while pending in Congress. It may be possible that a case will occur in which the effect of a regulation established by the Administrator clearly will be shown to be generally unfair and inequitable on grounds not mentioned. But in such a case the reasons must be clear and compelling. The Act provides the Administrator may establish such rents as in his judgment will be generally fair and equitable. Review in this Court is plainly limited. It may not substitute its judgment for the judgment of the Administrator, but may act in review only when it finds the regulation is not in accordance with law or- is arbitrary and capricious. Thus if the Court finds any reasonable basis to support the view that the regulation deals fairly and equitably with the industry concerned, the regulation must stand.” (Italics in original.)

When these cumulative burdens placed upon the protestant who seeks review are fairly appraised it becomes apparent that he must carry an insupportable load, and that, in truth, the court review is a solemn farce in which the Emergency Court of Appeals, and this court, on certiorari, must go through a series of motions which look like judicial review but in fact are nothing but a catalogue of reasons why, under the scheme of the Act, the courts are unable to say that the Administrator has exceeded the discretion vested in him.

No court is competent, on a mass of economic opinion consisting of studies by subordinates of the Administrator, *459 charts and graphs prepared in support of the studies, and economic essays gathered hither and yon, to demonstrate, beyond doubt, that the considerations or conclusions of the Administrator from such material cannot support the Administrator’s judgment that what he has done by way of regulation or price schedule tends to prevent postwar collapse of values, or to prevent dissipation of defense appropriations through excessive prices, or to prevent impairment- of the standard of living of persons dependent on life insurance, or to prevent hardship to schools—to enumerate but a few of the stated purposes of the Act.

It is not surprising that, in the thirty-one cases decided by the Emergency Court of Appeals of which I have found reports, complaints have been dismissed in twenty-eight, and but three have been remanded to the Administrator for further proceedings. 3 Two of the three involved no question of merits under the statutory provisions.

The War Power.

The Emergency Court of Appeals in Taylor v. Brown, 137 F. 2d 654 , overruled a challenge to the constitutional validity of the Act’s delegation of legislative power to the Administrator by invocation of the “War Power” of Congress, the powers embodied- in Article I, § 8, of the Constitution “to declare War,” “to raise and support Armies,” “to provide and maintain a Navy,” and “to make all Laws which shall be necessary and proper for carrying into Execution” those powers. After showing, what needs no argument, that these powers of Congress are very different from those to be exercised in peace, the court then— without a sign that it realizes the great gap in the process— assumes that one of Congress’ war powers is the power to transfer its legislative function to a delegate. By the *460 same reasoning it could close this court or take away the constitutional prerogatives of the President as “War measures.”

I am not sure how far this court’s present opinion adopts the same view. There are references in it to the war emergency, and yet the reasoning and the authorities cited seem to indicate that the delegation would be good in peacetime and in respect of peacetime administration. And the Emergency Court of Appeals, in spite of its decision in Taylor v. Brown, supra, and its statement in Philadelphia Coke Co. v. Bowles, 139 F. 2d 349 , that, as the Act is an exercise of the war power and therefore does not deprive citizens of property without due process, has, nevertheless, weighed provisions of the Act as against the guaranty of the Fifth Amendment in Wilson v. Brown, 137 F. 2d 348 , and in Avant v. Bowles, 139 F. 2d 702 .

I am sure that my brethren, no more than I, would say that Congress may set aside the Constitution during war. If not, may it suspend any of its provisions? The question deserves a fair answer. My view is that it may not suspend any of the provisions of the instrument. What any of the branches of government do in war must find warrant in the charter and not in its nullification, either directly or stealthily by evasion and equivocation. But if the court puts its decision on the war power I think it should say so. The citizens of this country will then know that in war the function of legislation may be surrendered to an autocrat whose “judgment” will constitute the law; and that his judgment will be enforced by federal officials pursuant to civil judgments, and criminal punishments will be imposed by courts as matters of routine.

If, on the contrary, such a delegation as is here disclosed is to be sustained even in peacetime, we should know it.

The Act gives the Administrator no power with respect to wages, and limits his powers as respects fishery commodities ( 50 U. S. C. § 902 (i)), and agricultural commodities ( 50 U. S. C. § 903 ).

In citing cases decided by that court, I do so with no thought that in construing the Act’s provisions that court has erred. On the contrary, I cite its interpretations of the statute as supporting my views that, as properly construed, the Act is invalid.

Armour & Co. v. Brown, 137 F. 2d 233 ; Montgomery Ward & Co. v. Bowles, 138 F. 2d 669 ; Hillcrest Terrace Corp. v. Brown, 137 F. 2d 663 .