313 U.S. 409 (1941), 640, United States v. Morgan

Docket Nº:No. 640
Citation:313 U.S. 409, 61 S.Ct. 999, 85 L.Ed. 1429
Party Name:United States v. Morgan
Case Date:May 26, 1941
Court:United States Supreme Court

Page 409

313 U.S. 409 (1941)

61 S.Ct. 999, 85 L.Ed. 1429

United States



No. 640

United States Supreme Court

May 26, 1941

Argued April 10, 1941




1. The function of the Secretary of Agriculture, when determining under the Packers and Stockyards Act reasonable rates for services rendered by market agencies during a period of years past, is not merely to compare their actual expenditures and incomes, but involves consideration of the extent to which the services properly should be charged to the public. P. 414.

2. As a basis for distribution of funds paid into the registry of the District Court by market agencies pursuant to an order granting an interlocutory injunction in their suit to enjoin the enforcement of an order of the Secretary of Agriculture purporting to fix their rates, which ultimately was adjudged void for defects of procedure, the Secretary of Agriculture reopened the proceeding and found and fixed for the impounding period rates which were on the level of those fixed by the original order.


(1) A contention that the Secretary based his judgment on conditions existing at the date of the original order, without considering subsequent changes, is disproved by the record. P. 416.

(2) A contention that the Secretary's findings are without support in the evidence is without merit. P. 417.

(3) Quite different considerations may properly have influenced the Secretary in fixing rates for the impounding period from those by which he determined a schedule of rates for the future. P. 419.

(4) A motion that the Secretary be disqualified for bias was properly overruled by him. P. 420.

The charge of bias grew out of his criticism of the decision of this Court declaring his original order void (304 U.S. 1), in a letter which he wrote to a newspaper while in the mistaken belief that the decision meant return of the impounded funds to the market agencies. In overruling the motion, he explained the mistake, denied bias, and added that, as a matter of expediency, he might have disqualified himself but for the fact that, while the market agencies were pressing his disqualification, they were simultaneously urging that none other than the Secretary had legal authority to make the rate order.

Page 410

(5) The fact that the Secretary not merely held but expressed strong views on matters believed by him to have been in issue in the earlier stage of the case did not unfit him for exercising his duty in the subsequent proceedings. P. 421.

3. In a suit by market agencies attacking rates fixed by the Secretary of Agriculture, it was improper for the District Court, over the Government's objection, to authorize the plaintiffs to take the Secretary's deposition, and improper, upon his appearing at the trial, to examine him regarding the process by which he reached his conclusions, including the manner and extent of his study of the record and his consultation with subordinates. P. 422.

4. Administrative and judicial processes are collaborative instrumentalities of justice, and the appropriate independence of each should be respected by the other. P. 422.

32 F.Supp. 546 reversed.

Appeal from a decree of the District Court, of three judges, which adjudged invalid an order of the Secretary of Agriculture fixing rates and directed that funds in the registry that had been paid in by the plaintiffs be returned to them. The history of this protracted litigation is summed up in the first paragraph of the opinion.

Page 413

BLACK, J., lead opinion

MR. JUSTICE FRANKFURTER delivered the opinion of the Court.

This case originated eleven years ago. As a result of proceedings begun in April, 1930, under the Packers and Stockyards Act, 42 Stat. 159, 7 U.S.C. § 181 et seq., the Secretary of Agriculture in June, 1933, issued an order setting maximum rates to be charged by market agencies for their services at the Kansas City Stockyards. The market agencies brought suit to set aside his order. The district court issued a temporary restraining order under which amounts charged in excess of the rates fixed by the order were impounded, and later it upheld the order. 8 F.Supp. 766. On appeal here, 7 U.S.C. § 217; 28 U.S.C. §§ 44, 47a, the case was sent back to the district court in order to determine on the issues raised by the pleadings whether the agencies had been denied the "full hearing" demanded by § 310 of the Act. 298 U.S. 468. The district court thereupon decided that this requirement of the statute had been satisfied. 23 F.Supp. 380. The case was again brought here and the order of the Secretary

Page 414

was held invalid because of procedural defects. 304 U.S. 1. Prior to this decision, the Secretary and the market agencies had agreed upon a higher schedule of rates to become effective on December 1, 1937. However, under the impounding order which had continued in effect until that date, over half a million dollars had been deposited. The disposition of this fund was made a [61 S.Ct. 1001] ground for a petition for rehearing after the second Morgan decision, but the petition was denied because that question was for the district court. 304 U.S. 23, 26. The secretary then reopened the original proceedings to determine reasonable rates during the impounding period. Before the Secretary had made a new order, the district court directed that the impounded moneys be turned over to the market agencies. 24 F.Supp. 214. The case came here for the third time, and we reversed the district court and required its retention of the fund "until such time as the Secretary, proceeding with due expedition, shall have entered a final order in the proceedings pending before him." 307 U.S. 183, 198. This decision was rendered on May 15, 1939. A month later, the Secretary issued a new schedule of rates for the impounding period based on elaborate findings. Accordingly, the Government moved the district court to distribute the funds in accordance with the Secretary's order, but that court, with one of its three judges dissenting, held the order invalid and directed that the funds be given to the market agencies. 32 F.Supp. 546. The case is now here for the fourth time.

The validity of the Secretary's order has undergone the closest scrutiny in elaborate briefs and extended oral arguments. Nothing has been overlooked. However, in the final stage of this long drawn out litigation, critical examination reveals only a few issues demanding attention.

When the matter was last here, we defined the duty of the Secretary. He was to determine reasonable rates for the impounding period so that there could be just distribution

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of the funds which the court below had taken into its registry. The nature of the problem before the Secretary was a guide to its solution. The Secretary's task was not the usual enterprise of fixing rates for the future, so largely an exercise in prophecy. Unique circumstances made him, in 1939, the arbiter of rates for a period between 1933 and 1937. But even such a retrospective determination does not present a mathematical problem. Doubts and difficulties incapable of exact resolution confront judgment. More than that, since the Secretary is the guardian of the public interest in regulating a business of public concern, it is not for him merely to reflect the items on a profit and loss statement. He must consider whether these represent services which properly should be charged to the public. While, therefore, the Secretary, in determining rates for the past, could not deny himself the benefit of hindsight, he was not merely a bookkeeper posting items into a ledger. Rates to which these public agencies were entitled were not to be derived merely from their expenditures and actual income.

This Court defined the duty of the Secretary in its decision in the 307th U.S. The record leaves no doubt that the Secretary, when he filed his order a month after that decision, appropriately discharged the duty. He served upon the market agencies the order of June 14, 1933, and the findings underlying it as the starting point of the inquiry. The market agencies protested against any order "nunc pro tunc as of June 14, 1933," alleged that conditions had changed much since 1933, and asked for the appointment of an examiner to take new evidence. Because he deemed the earlier findings...

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