Perkins v. Lukens Steel Co

• Decision Date: 29 April 1940
• Docket Number: No. 593,593
• Citation: 60 S.Ct. 869,84 L.Ed. 1108,310 U.S. 113
• Parties: PERKINS et al. v. LUKENS STEEL CO. et al
• Court: U.S. Supreme Court

84 L.Ed. 1108

60 S.Ct. 869

310 U.S. 113

PERKINS et al.

v LUKENS STEEL CO. et al.

No. 593.

Argued April 3, 1940.

Decided April 29, 1940.

[Syllabus from pages 113-115 intentionally omitted] Messrs. Robert H. Jackson, Atty. Gen., and Francis B. Biddle, Sol. Gen., for petitioners.

Mr. Wm. Clarke Mason, of Philadelphia, Pa., for respondents.

[Arguments of Counsel from pages 115-116 intentionally omitted] Mr. Justice BLACK delivered the opinion of the Court.

In exercise of its authority to determine conditions under which purchases of Government supplies shall be made, Congress passed the Public Contracts Act of June 30, 1936.¹ By virtue of that Act, sellers must agree to pay employees engaged in producing goods so purchased 'not less than the minimum wages as determined by the Secretary of Labor to be the prevailing minimum wages for persons employed on similar work or in the particular or similar industries or groups of industries currently operating in the locality in which the * * * supplies * * * are to be manufactured or furnished under said contract.' The Court of Appeals for the District of Columbia has held that the Secretary erroneously construed the term 'locality' to include a larger geographical area than the Act contemplates, and has ordered six Members of the Cabinet including the Secretary of Labor, the Director of Procurement and all other officials responsible for purchases necessary in the operation of the Federal Government, not to abide by or give effect to the wage determination made by the Secretary for the iron and steel industry either as to the complaining companies or any others. In this vital industry, by action of the Court of Appeals for the District of Columbia, the Act has been suspended and inoperative for more than a year.

We must, therefore, decide whether a Federal court, upon complaint of individual iron and steel manufacturers, may restrain the Secretary and officials who do the Government's purchasing from carrying out an administrative wage determination by the Secretary, not merely as applied to parties before the Court, but as to all other manufacturers in this entire nation-wide industry. Involving, as it does, the marking of boundaries of permissible judicial inquiry into administrative and executive responsibilities, this problem can best be understood against the background of what took place before the Court of Appeals for the District acted:

July 11, 1938, all the iron and steel companies in the United States were given notice that the Secretary contemplated proceedings for determining the minimum prevailing wage for their industry. On the 25th and 26th of that month, hearings were had before the Public Contracts Board also functioning under the Act. Many companies, and all of those involved here, were represented in the hearings. Companies from the entire United States filed briefs and submitted information and suggestions, and these producers who are parties here had notice of and actively participated in the various stages of the proceedings. After the hearing, time for filing of briefs was allowed. Following investigation of testimony, exhibits, letters, telegrams, briefs, data from the Bureau of Labor Statistics, and arguments of representatives of both labor and industry itself, the Board, October 27, 1938, made its findings of fact, conclusions and recommendations: (a), Accepting recommendations of industry and labor, the Board adopted—with minor exceptions—the definition of the steel industry previously in effect under the National Industrial Recovery Act, 48 Stat. 195; (b), 'the base rates paid to the workers classified as common laborers' was utilized as a basis for finding the minimum wage prevailing in the industry and a common laborer was defined as 'one who performs physical or manual labor of a general character and simple nature, requiring no special training, judgment nor skill'; (c), the view that municipalities be treated as the geographical limit of a 'locality' and that different minimum prevailing wage standards be adopted for small as distinguished from larger companies, was rejected. The Board pointed out that 'the main channels of trade in the industry take their course far beyond the confines of local producing areas'; that 'conventional measurement of miles on the map to out-line the marketing areas of the iron and steel producers' was unsuitable; that 'geographic location does not limit the efforts of iron and steel manufacturers to secure Government business'; that 'the workers being paid wages below the base rates are employed in large, medium and small size companies and in plants located in all parts of the country'; and that in fixing a 'locality' all these factors as well as geographic and economic considerations were relevant.

The majority of the Board suggested two localities, one for the Southern States and another for the remainder of the steel producing States. One member disagreed and insisted upon four localities throughout the nation, but noted that 'the Board is agreed on all the essential facts before it in the case.' He recognized that 'the law * * * permits the division of the country into localities for the purpose of determining minimum wages. No rule is laid down to define the extent of any localities * * *. A too minute concept of locality would obviously nullify the law, for each plant must necessarily occupy a different locale or site from every other. To reduce the interpretation of locality to its most minute point would be to find a minimum wage prevailing in each plant * * *. When we depart from this interpretation we are immediately thrown upon judgment. * * * Obviously we must look for wage patterns or uniformities. * * * Again judgment must be relied upon for the answer.' Excepting to the Board's recommendations, the companies now before this Court urged that the Secretary make a finding of minimum prevailing wages with 'locality' given the connotation of a subdivision of the respective States as originally provided in the Bacon-Davis Act.²

On December 20, 1938, the Assistant Secretary of Labor, acting for the Secretary, heard arguments and received briefs both from industry and labor organizations. He did not adopt the recommendations of the Board in full, but instead divided the industry of the entire country into six 'localities', proceeding, however, upon the view that to construe 'locality' to mean small political divisions of the States, as the Bacon-Davis Act had done in express terms, would render 'effective administration of the Act * * * almost impossible.' It was pointed out that 'this narrowly restricted construction of the word 'locality' * * * is contrary to the administrative construction consistently adhered to by the Secretary of Labor in the administration of the Act', and that while Congress had closely followed the language of the Davis-Bacon Act in some respects, it had 'carefully avoided the use of the more narrowly restrictive language of 'city, town, village or other civil subdivision." In the twenty-two preceding wage determinations under this Act the Secretary's administrative construction of the term had been—with a sole exception—that of geographic areas no smaller than those determined for the steel industry.³ The determintion in question was made January 16, 1939, but was not made operative until March 1, 1938, 'in order that industry may make necessary readjustments to comply with the decision.'

In their bill for an injunction and a declaratory judgment, these seven producers of iron and steel (respondents here) sought to enjoin as individuals and in their official capacities, the Secretaries of the Labor, Treasury, War, Navy, and Interior Departments, the Postmaster General, the Director of Procurement of the Treasury Department, the Assistant Secretary of Labor, and the Administrator of the Division of Public Contracts of the Department of Labor and their 'officers, agents, assistants, employees, representatives and attorneys, and any one associated with or acting in concert or participation with them, or any of them, and their successors in office and each of them, and their officers,' etc. The seven companies named as complainants by the bill did not merely pray relief for themselves against the Secretary's wage determination but insisted that all these Government officials be restrained from requiring the statutory stipulation as to minimum wages in contracts with any other steel and iron manufacturers throughout the United States.

The District Court declined to interfere so sweepingly with the administration of the Act, even in the temporary restraining order which it granted. Its order ran only against the Secretaries of Labor and the Navy, and specifically limited its benefits to but three of the complaining companies. Recitals in the order indicate that only the Secretary of the Navy had actually solicited bids and that only those three companies were 'desirous of bidding.' After hearing, this order was dissolved and the Court granted a motion to dismiss the complaint for lack of jurisdiction, inadequacy of the complaint, lack of standing to sue, and because the suit was one against the United States without its consent.⁴ A stay pending appeal was denied by the District Court, but the Court of Appeals for the District of Columbia, Justice Edgerton dissenting, by temporary injunction granted the sweeping prayer that all the Government officials and agents designated in the bill be restrained from continuing in effect the Determination made by the Secretary of Labor. By motion for reargument, the restrained officials, represented by attorneys of the Government, asked that the injunction be clarified so as to be 'restricted to enjoining enforcement of the Determination against parties to this proceeding * * * and * * * not be extended to other bidders, not parties to this action, and who, for all that appears, may desire to abide by the Determination.' In...