United States v. Morgan, No. 640

CourtUnited States Supreme Court
Writing for the CourtFRANKFURTER
PartiesUNITED STATES et al. v. MORGAN et al
Docket NumberNo. 640
Decision Date26 May 1941

313 U.S. 409
61 S.Ct. 999
85 L.Ed. 1429
UNITED STATES et al.

v.

MORGAN et al.

No. 640.
Argued April 10, 1941.
Decided May 26, 1941.

Page 410

Mr. Robert H. Jackson, Atty. Gen., for appellants.

[Argument of Counsel from pages 410-411 intentionally omitted]

Page 412

Messrs. Frederick H. Wood, of New York City, and John B. Gage, of Kansas City, Mo., for appellees.

[Argument of Counsel from Page 412 intentionally omitted]

Page 413

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., 7 U.S.C.A. § 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, 7 U.S.C.A. § 217; 28 U.S.C. §§ 44, 47a, 28 U.S.C.A. §§ 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, 56 S.Ct. 906, 80 L.Ed. 1288. 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, 58 S.Ct. 773, 82 L.Ed. 1129. 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 disposit on of this fund was made a 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, 58 S.Ct. 999, 1001, 82 L.Ed. 1135. 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, 59 S.Ct. 795, 803, 83 L.Ed. 1211. 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 dis-

Page 415

tribution 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., 59 S.Ct. 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 illuminating and helpful 'as a working basis for this hearing', the Secretary refused to withdraw them. But he appointed an examiner to hear new evidence and denied 'any intention of depriving the respondents of the opportunity of offering evidence concerning conditions affecting the reasonableness of their

Page 416

rates during the period subsequent to June 14, 1933'. He further stated that the 'forecasts of conditions' in the 1933 order 'can now be checked in light of subsequent events'. He neither purported to make nor did he make a nunc pro tunc order. The Secretary thus adopted a procedure which admitted whatever light was shed by change of circumstances after 1933. The market agencies freely availed themselves of this procedure; and the Secretary's findings leave no room for doubt that his conclusions represent a judgment of 1939 and not a prophecy of 1933. Having overruled the contention of Government counsel that evidence of conditions after 1933 was irrelevant, he took note of the fact that fewer livestock came to the market after 1933; that a larger number came by truck, thereby causing a decrease in the number of animals in an average consignment; that specific as well as general economic factors touching the market at Kansas City had changed; that statistics relevant in 1933 had become outmoded; and that he had before him evidence of expenses for 'business getting and maintaining' and salesmanship not before him in 1933. The Secretary thus unequivocally avowed his intention to consider conditions after 1933 and his findings carry out his purpose.1 We must therefore reject the claim that the Secretary's judgment was founded on the misconception that he must shut his mind to everything that happened after 1933 and in 1939 fix rates in the imaginary world of 1933.

Another attack upon the Secretary's order is the con-

Page 417

ventional objection that the findings were not rooted in proof. To reexamine here with particularity the extensive findings made by the Secretary and to test them by a record of 1340 printed pages and thousands of pages of additional exhibits would in itself go a long way to convert a contest before the Secretary into one before the courts. Compare Litchfield v. Register and Receiver, 9 Wall. 575, 578, 19 L.Ed. 681. We have canvassed too fully in the past the duties respectively allotted to the Secretary of Agriculture and the courts in the enforcement of the Packers and Stockyards Act to justify extended discussion of the governing principles. Tagg Bros. & Moorhead v. United States, 280 U.S. 420, 50 S.Ct. 220, 74 L.Ed. 524; Acker v. United States, 289 U.S. 426, 56 S.Ct. 824, 80 L.Ed. 1257; see also United States v. Morgan, 307 U.S. 183, 190, 191, 59 S.Ct. 795, 799, 83 L.Ed. 1211. We are in the legislative realm of fixing rates. This is a task of striking a balance and reaching a judgment on factors beset with doubts and difficulties, uncertainty and speculation. On ultimate analysis the real question is whether the Secretary or a court should make an appraisal of elements having delusive certainty. Congress has put the responsibility on the Secretary and the Constitution does not deny the assignment.

The objection that the proof does not support the findings is really a repetition in disguise of the unfounded claim that the Secretary misconceived his duty and made his order in 1939 as though he were acting in 1933. The bed rock of these variously phrased attacks upon the order is the contention that the Secretary was indifferent to events occurring after 1933. The short answer is that he was not. The conclusion which he drew from these events is another matter.2

Page 418

Specifically, it is urged that by the increase of rates for the future, to which the market agencies and the Secretary agreed in 1937, changes in circumstances were recognized, while the present order ignored these changes because its rates are at the same level as the original order. But the Secretary did not disregard changed market conditions during the impounding period. Evidence showing these changes was submitted by the market agencies. 3 He was thus duly apprised of the changes and

Page 419

they entered into the findings. To be sure, in ascertaining the reasonable rates for the impounding period he did not attach to them the significance which the market agencies drew from them. As a result of an elaborate study of conditions prior to 1933 and evidence indicating no essential change in those conditions for the purpose at hand...

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