Swayne Hoyt v. United States

• Decision Date: 01 March 1937
• Docket Number: No. 494,494
• Parties: SWAYNE & HOYT, Limited, et al. v. UNITED STATES
• Court: U.S. Supreme Court

300 U.S. 297

57 S.Ct. 478

81 L.Ed. 659

SWAYNE & HOYT, Limited, et al.

v UNITED STATES.

No. 494.

Argued Feb. 11, 12, 1937.

Decided March 1, 1937.

Appeal from the District Court of the United States for the District of Columbia.

Messrs Elisha Hanson and Eliot C. Lovett, both of Washington, D.C., for appellants.

Mr. Golden W Bell, Asst. Sol. Gen., of Washington, D.C., for the United States.

Mr. Justice STONE delivered the opinion of the Court.

Appellants are steamship corporations engaged in the transportation of freight through the Panama Canal between United States ports on the Gulf of Mexico and on the Pacific Coast. They constitute the Gulf Intercoastal Conference, which operates under an agreement, approved March 28, 1934, by the United States Shipping Board Bureau of the Department of Commerce, as provided by section 15 of the Shipping Act of 1916, 39 Stat. 733, 46 U.S.C. § 814 (46 U.S.C.A. § 814). On May 25, 1933, the Conference, in conformity to the Intercoastal Shipping Act of 1933, section 2, 47 Stat. 1425, 46 U.S.C. § 844 (46 U.S.C.A. § 844), filed with the United States Shipping Board Bureau a new tariff, effective June 2, 1933, publishing certain rates for the transportation of freight, westbound from coast to coast.

The tariff, continuing the contract system in use by the Conference, provided for 'contract rates' for specified commodities, to be enjoyed by shippers who agree with the Conference, by written contract, to make all their shipments of those commodities by vessel of the Conference members for a specified period. The tariff rates on the same commodities for shippers not entering into contracts were $2 per ton higher than the contract rates. In 1934, the Secretary of Commerce ordered an investigation by the Shipping Board Bureau of the lawfulness of the contract rate system (see section 22 of the Shipping Act, 39 Stat. 736, 46 U.S.C. § 821 (46 U.S.C.A. § 821), and section 3 of the Intercoastal Shipping Act of 1933, 47 Stat. 1426, 46 U.S.C. § 845 (46 U.S.C.A. § 845)). The ensuing report condemned the discrimination, and on July 3, 1935, the Secretary ordered the appellants to cease charging the higher rates to shippers who had not entered into contracts.

In September of that year appellants filed new rate schedules, effective October 3, 1935, which continued the contract rate system. Thereupon the Secretary vacated his order of July 3d and made an order suspending the schedules and directing a second hearing concerning the lawfulness of the contract rate system. On this hearing new evidence was introduced, and relevant portions of the evidence adduced on the previous hearing were spread upon the record. In a report reviewing this record, the Secretary found that the 'real purpose of the suspended rates * * * is to prevent shippers from using the lines of other carriers and to discourage all others from attempting to engage in intercoastal transportation from and to the Gulf.' He accordingly found the rates unduly prejudicial and ordered their cancellation.

The present suit was brought in the District Court for the District of Columbia, three judges sitting, to set aside the order of the Secretary as without his statutory authority and because not supported by substantial evidence. From the decree of the district court sustaining the Secretary's order, 18 F.Supp. 25, the case comes here on appeal under section 31 of the Shipping Act, 39 Stat. 738, 46 U.S.C. § 830 (46 U.S.C.A. § 830), and the Act of October 22, 1913, 38 Stat. 220, 28 U.S.C. § 47 (28 U.S.C.A. § 47). Appellants here, as in the court below, have assigned as error that the Secretary was without authority to make the order under review because the Executive Order of June 10, 1933, No. 6166, § 12, which abolished the United States Shipping Board and transferred its functions to the Department of Commerce, was without constitutional and legislative authority, and because the findings and order of the Secretary were without support in the evidence.

First. Since the appeal was taken, the contention that the transfer to the Secretary, by Executive Order (No. 6166, § 12), of powers conferred by the Shipping Act on the United States Shipping Board, was unauthorized by the terms of Title 4 of the Legislative Appropriation Act of June 30, 1932, 47 Stat. 413, as amended, 47 Stat. 1517, has been put at rest by the decision of this Court in Isbrandtsen-Moller Co., Inc., v. United States et al., 300 U.S. 139, 57 S.Ct. 407, 81 L.Ed. 562, February 1, 1937. There we held that the failure of Congress, if any, to express its will in the earlier act had been remedied by various later acts mentioning the Executive Order, and making appropriations to the Department of Commerce for payment of the expenses of carrying out the provisions of the Shipping Act,¹ and by section 204(a) of the Merchant Marine Act of June 29, 1936, 49 Stat. 1985 (46 U.S.C.A. § 1114), which referred to functions of the former Shipping Board as 'now vested in the Department of Commerce pursuant to section 12 of the President's Executive Order No. 6166,' and transferred them to the newly-constituted United States Maritime Commission.

To dispose of further contentions also urged here, that Congress was without constitutional power to delegate to the President authority to determine whether the transfer should be effected, and that he did not exercise it in a constitutional manner, the Court found it enough that the order of the Secretary, which the Maritime Commission had continued in effect, had 'determined no rights and prescribed no duties' of the carrier. The rate order here is of a different sort and we face the question previously reserved. It is unnecessary now to pass on the efficacy of the transfer by Executive Order, for we are of opinion that as Congress itself had power to abolish the Shipping Board and to require its functions to be performed by the Secretary, it had power to recognize and validate his performance of those functions even though their attempted transfer by Executive Order was ineffectual.

It is well settled that Congress may, by enactment not otherwise inappropriate, 'ratify * * * acts which it might have authorized,' see Mattingly v. District of Columbia, 97 U.S. 687, 690, 24 L.Ed. 1098, and give the force of law to official action unauthorized when taken. Wilson v. Shaw, 204 U.S. 24, 32, 27 S.Ct. 233, 51 L.Ed. 351; United States v. Heinszen & Co., 206 U.S. 370, 382, 27 S.Ct. 742, 51 L.Ed. 1098, 11 Ann.Cas. 688; Hamilton v. Dillin, 21 Wall. 73, 96, 22 L.Ed. 528; Chuoco Tiaco v. Forbes, 228 U.S. 549, 556, 33 S.Ct. 585, 57 L.Ed. 960; Rafferty v. Smith, Bell & Co., 257 U.S. 226, 232, 42 S.Ct. 71, 66 L.Ed. 208; Charlotte Harbor R. Co. v. Welles, 260 U.S. 8, 11, 43 S.Ct. 3, 4, 67 L.Ed. 100; Hodges v. Snyder, 261 U.S. 600, 603, 43 S.Ct. 435, 436, 67 L.Ed. 819. And we think that Congress, irrespective of any doctrine of ratification, has, by the enactment of the statutes mentioned, in effect confirmed and approved the exercise by the Secretary of powers originally conferred on the Shipping Board.

The mere fact that the validation is retroactive in its operation is not enough, in the circumstances of this case, to render it ineffective. In Graham & Foster v. Goodcell, 282 U.S. 409, 429, 51 S.Ct. 186, 194, 75 L.Ed. 415, this Court recognized that a distinction must be taken 'between a bare attempt of the Legislature retroactively to create liabilities for transactions * * * fully consummated in the past * * * and the case of a curative statute aptly designed to remedy mistakes and defects in the administration of government where the remedy can be applied without injustice.' And see Hecht v. Malley, 265 U.S. 144, 164, 44 S.Ct. 462, 469, 68 L.Ed. 949. Here the retroactive application of the curative act impairs no substantial right or equity of appellants; their rights to an administrative hearing and determination, and to a judicial review, have been as fully preserved as if the act had been adopted at the date of the Executive Order. The proceedings were conducted by the Secretary in the name of the United States, cf. United States v. Heinszen & Co., supra, 206 U.S. 370, at page 385, 27 S.Ct. 742, 51 L.Ed. 1098, 11 Ann.Cas. 688, by virtue of the 1932 Act and the Executive Order. The consequences of the validating statute are free of the elements of novelty and surprise which have led to condemnation, as unreasonable and arbitrary, of other retroactive legislation. See Milliken v. United States, 283 U.S. 15, 21, 51 S.Ct. 324, 326, 75 L.Ed. 809; United States v. Hudson, 299 U.S. 498, 57 S.Ct. 309, 81 L.Ed. 370, decided January 11, 1937. We conclude that the Secretary's exercise of the powers conferred on the Shipping Board has been sanctioned by Congress.

Second. Section 16 of the Shipping Act (46 U.S.C.A. § 815) declares that 'it shall be unlawful for any common carrier by water,' subject to the Act, 'to make or give any undue or unreasonable preference or advantage to any particular person, locality, or description of traffic in any respect whatsoever, or to subject any particular person, locality, or description of traffic to any undue or unreasonable prejudice or disadvantage in any respect whatsoever.'² The differential between appellants' rates on commodities transported under contract and the rates on the same commodities for non-contract shippers was prima facie discriminatory since the two rates were charged for identical services and facilities, and the narrow issue presented to the Secretary for decision was whether, in the conditions affecting the traffic involved, the discrimination was undue or unreasonable.

As pointed out by this Court in United States Navigation Co. v. Cunard S.S. Co., Ltd., 284 U.S. 474, 52 S.Ct. 247, 76 L.Ed. 408, the provisions of the Shipping Act which confer upon the Shipping Board authority over rates and practices of carriers by water, and prescribe the mode of its exercise, closely parallel those of...