BOWLES, PRICE ADMINISTRATOR, v. WILLINGHAM ET AL.
No. 464
Supreme Court of the United States
March 27, 1944
Argued January 7, 10, 1944.
321 U.S. 503
Mr. Charles J. Bloch for appellees.
Briefs of amici curiae were filed by Messrs. Maxwell C. Katz, Otto C. Sommerich, and Benjamin Busch, and by Mr. R. H. Fryberger, urging affirmance.
MR. JUSTICE DOUGLAS delivered the opinion of the Court.
Appellee, Mrs. Willingham of Macon, Georgia, sued in a Georgia court to restrain the issuance of certain rent orders under the Emergency Price Control Act of 1942 (
Sec. 2 (b) of the Act provides in part that, “Whenever in the judgment of the Administrator such action is necessary or proper in order to effectuate the purposes of this Act, he shall issue a declaration setting forth the neces-
On June 30, 1942, the Administrator issued Maximum Rent Regulation No. 26, effective July 1, 1942, establishing the maximum legal rents for housing in these defense areas, including Macon, Georgia. 7 Fed. Reg. 4905. It recited that the rentals had not been reduced or stabilized since the declaration of April 28, 1942, and that defense activities had resulted in increases in the rentals on or about April 1, 1941, but not prior to that date. The maximum rentals fixed for housing accommodations rented on April 1, 1941 were the rents obtained on that date. § 1388.1704 (a). As respects housing accommodations not rented on April 1, 1941, but rented for the first time between that date and the effective date of the regulation, July 1, 1942—the situation involved in this case—it was provided that the maximum rent should be the first rent charged after April 1, 1941. § 1388.1704 (c). But in that case it was provided that the Rent Director (designated by § 1388.1713) might order a decrease on his own initiative on the ground, among others, that the rent was higher than that generally prevailing in the area for comparable housing accommodations on April 1, 1941. § 1388.1704 (c), §1388.1705 (c) (1). By Procedural Regulation No. 3, as amended (8 Fed. Reg. 526, 1798, 3534, 5481, 14811) issued pursuant to § 201 (d) and § 203 (a) of the Act4 provision was made that when the Rent Direc-
In June, 1943, the Rent Director gave written notice to Mrs. Willingham that he proposed to decrease the maximum rents for three apartments owned by her, and which had not been rented on April 1, 1941, but were first rented in the summer of 1941, on the ground that the first rents for these apartments received after April 1, 1941, were in excess of those generally prevailing in the area for comparable accommodations on April 1, 1941. Mrs. Willingham filed objections to that proposed action together with supporting affidavits. The Rent Director thereupon ad-
I. We are met at the outset with the question whether the District Court could in any event give the relief which the Administrator seeks in view of § 265 of the Judicial Code (
The suggestion is made that Congress could not constitutionally withhold from the courts of the States jurisdiction to entertain suits attacking the Act on constitutional grounds. But we have here a controversy which arises under the Constitution and laws of the United States and is therefore within the judicial power of the United States as defined in Art. III, § 2 of the Constitu-
II. The question of the constitutionality of the rent control provisions of the Act7 raises issues related to those considered in Yakus v. United States, ante, p. 414.
When it came to rents Congress pursued the policy it adopted respecting commodity prices. It established standards for administrative action and left with the Administrator the decision when the rent controls of the Act should be invoked. He is empowered to fix maximum rents for housing accommodations in any defense-rental area,8 whenever in his judgment that action is necessary or proper in order to effectuate the purposes of the Act. A defense-rental area is any area “designated by the Administrator as an area where defense activities have re-
The considerations which support the delegation of authority under this Act over commodity prices (Yakus v. United States) are equally applicable here. The power to legislate which the Constitution says “shall be vested” in Congress (Art. I, § 1) has not been granted to the Administrator. Congress in § 1 (a) of the Act has made clear its policy of waging war on inflation. In § 2 (b) it has defined the circumstances when its announced policy is to be declared operative and the method by which it is to be effectuated. Those steps constitute the performance of the legislative function in the constitutional sense. Opp Cotton Mills v. Administrator, 312 U. S. 126, 144.
There is no grant of unbridled administrative discretion as appellee argues. Congress has not told the Administrator to fix rents whenever and wherever he might like and at whatever levels he pleases. Congress has directed that maximum rents be fixed in those areas where defense activities have resulted or threaten to result in increased rentals inconsistent with the purpose of the Act. And it has supplied the standard and the base period to guide the Administrator in determining what the maximum rentals should
As we have pointed out and as more fully developed in Yakus v. United States, supra, § 203 (a) of the Act provides for the filing of a protest with the Administrator against any regulation or order under § 2. Moreover, any person “aggrieved” may secure judicial review of the action of the Administrator in the Emergency Court of Appeals. § 204 (a). And that review is on a transcript which includes “a statement setting forth, so far as practicable, the economic data and other facts of which the Administrator has taken official notice.” § 204 (a). Here, as in the Yakus case, the standards prescribed by the Act are adequate for the judicial review which has been accorded. The fact that there is a zone for the exercise of discretion by the Administrator is no more fatal here than in other situations where Congress has prescribed the general standard and has left to an administrative agency the determination of the precise situations to which the provisions of the Act will be applied and the weight to be accorded various statutory criteria on given facts. Opp Cotton Mills v. Administrator, supra; Yakus v. United States, supra.
Thus so far as delegation of authority is concerned, the rent control provisions of the Act, like the price control provisions (Yakus v. United States, supra), meet the requirements which this Court has previously held to be adequate for peacetime legislation.
III. It is said, however, that § 2 (b) of the Act is unconstitutional because it requires the Administrator to fix maximum rents which are “generally fair and equitable.” The argument is that a rental which is “generally fair and equitable” may be most unfair and inequitable as applied to a particular landlord and that a statute which does not
It is implicit in cases such as Nebbia v. New York, 291 U. S. 502, which involved the power of New York to fix the minimum and maximum prices of milk, and Sunshine Anthracite Coal Co. v. Adkins, supra, which involved the power of the Bituminous Coal Commission to fix minimum and maximum prices of bituminous coal, that high cost operators may be more seriously affected by price control than others. But it has never been thought that price-fixing, otherwise valid, was improper because it was on a class rather than an individual basis. Indeed, the decision in Munn v. Illinois, 94 U. S. 113, the pioneer case in this Court, involved a legislative schedule of maximum prices for a defined class of warehouses and was sustained
IV. It is finally suggested that the Act violates the Fifth Amendment because it makes no provision for a hearing to landlords before the order or regulation fixing rents becomes effective. Obviously, Congress would have been under no necessity to give notice and provide a hearing before it acted, had it decided to fix rents on a national basis the same as it did for the District of Columbia. See
Language in the cases that due process requires a hearing before the administrative order becomes effective (Morgan v. United States, 304 U. S. 1, 19-20; Opp Cotton Mills v. Administrator, supra, pp. 152-153) is to be explained on two grounds. In the first place, the statutes there involved required that procedure.
Secondly, as we have held in Yakus v. United States, supra, Congress was dealing here with the exigencies of wartime conditions and the insistent demands of inflation control. Cf. Porter v. Investors Syndicate, 286 U. S. 461, 471. Congress chose not to fix rents in specified areas or on a national scale by legislative fiat. It chose a method designed to meet the needs for rent control as they might arise and to accord some leeway for adjustment within the formula which it prescribed. At the same time, the procedure which Congress adopted was selected with the view of eliminating the necessity for “lengthy and costly trials with concomitant dissipation of the time and ener-
We fully recognize, as did the Court in Home Bldg. & Loan Assn. v. Blaisdell, 290 U. S. 398, 426, that “even the war power does not remove constitutional limitations safeguarding essential liberties.” And see Hamilton v. Kentucky Distilleries Co., supra, p. 155. But where Congress has provided for judicial review after the regulations or orders have been made effective it has done all that due process under the war emergency requires.
Other objections are raised concerning the regulations or orders fixing the rents. But these may be considered only by the Emergency Court of Appeals on the review provided by § 204. Yakus v. United States, supra.
Reversed.
MR. JUSTICE RUTLEDGE, concurring:
I concur in the result and substantially in the Court‘s opinion, except for qualifications expressed below. In view of these and my difference from the Court‘s position in Yakus v. United States, ante, p. 414, a statement of reasons for concurrence here is appropriate.
I.
With reference to the substantive aspects of the legislation, I would add here only the following. Since the phases in issue in this case relate to real estate rentals, it is not amiss to note that these ordinarily are within the state‘s power to regulate rather than that of the federal government. But their relation, both to the general
Likewise, with respect to the delegation of authority to the administrator to designate “defense rental areas” and to fix maximum rentals within them, the same considerations, and others, sustain the delegation as do that to fix prices of commodities generally. The power to specify defense rental areas, rather than amounting to an excess of permissible delegation, is actually a limitation upon the administrator‘s authority, restricting it to regions where the facts, not merely his judgment, make control of rents necessary both to keep down inflation and to carry on the war activities concentrated in them. Accordingly, I concur fully with the Court‘s expressed views concerning the substantive features of the legislation.
II.
This appeal presents two kinds of jurisdictional and procedural questions, though they are not unrelated. The first sort relate to the power of the District Court to restrain the further prosecution of the state court proceedings and the execution of, or attempts to execute, orders issued in them. The other issues relate to the District Court‘s power to restrain Mrs. Willingham from violating the Emergency Price Control Act and the orders issued pursuant to it affecting her interests.
As to the former, I have no doubt that the District Court had power, for the reasons stated by the Court, to restrain the prosecution of the suit in the state court and the execution of orders made by it. By § 204 (d) of the Act, Congress withheld from all courts, including the state courts, with an exception in the case of the Emergency Court of Appeals and this Court on review of its judg-
III.
In vesting jurisdiction in the federal district courts to enjoin violations of the Price Control Act and regulations
But the contention has been made earnestly all through these proceedings that the regulations, on the basis of which any injunction obtained by the administrator must rest, are invalid and beyond his authority under the Act. And the Court, relying upon the decision in the Yakus case, has indicated that these contentions may not be considered in a proceeding of this character.
From what already has been said, it is clear the contention misconceives the administrator‘s rights with respect to an injunction restraining the further prosecution of the state suit and execution of the state court‘s orders. His right to such an injunction may rest on considerations entirely different from those governing his right to secure an injunction restraining Mrs. Willingham from violating the regulation. The former could be founded wholly upon the power of Congress to require the state courts to keep hands entirely off, in the discharge of federal functions by federal officials, at any rate during such time as might be required for decision, with finality, upon the validity of the statute and regulations issued under it by an appropriate alternative federal method. The latter, however, presents the different question whether Congress can require the federal district courts, organized under
That Congress can require the court exercising the civil jurisdiction in equity to refrain from staying statutory provisions and regulations is clear. Whether the enforcing court acts civilly or criminally, in circumstances like these, Congress can cut off its power to stay or suspend the operation of the statute or the regulation pending final decision that it is invalid. But this leaves the question whether Congress also can confer the equity jurisdiction to decree enforcement and at the same time deprive the court of power to consider the validity of the law or regulation and to govern its decree accordingly.
Different considerations, in part, determine this question from those controlling when enforcement is by criminal sanction. The constitutional limitations specially applicable to criminal trials fall to one side. Those relating to due process of law in civil proceedings, including whatever matters affecting discrimination are applicable under the
All this is pertinent to whether Congress, in providing for civil enforcement of the Act and the regulations, can do what in my opinion it cannot require by way of criminal enforcement of this statute, namely, by providing the single opportunity to challenge the validity of the
In my opinion Congress can do this, subject however to the following limitations or reservations, which I think should be stated explicitly: (1) The order or regulation must not be invalid on its face; (2) the previous opportunity must be adequate for the purpose prescribed, in the constitutional sense; and (3) what is a corollary of the second limitation or implicit in it, the circumstances and nature of the substantive problem dealt with by the legislation must be such that they justify both the creation of the special remedy and the requirement that it be followed to the exclusion of others normally available.
In this case, in my judgment, these conditions concur to justify the procedure Congress has specified. Except for the charge that the regulations, or some of them, are so vague and indefinite as to be incapable of enforcement, there is nothing to suggest they are invalid on their face. And they clearly are not so, either in the respect specified or otherwise.2 The proceeding by protest and appeal through the Emergency Court, even for civil consequences
Accordingly, I agree that, as against the challenges made here, the special remedy provided by the Act was adequate and appropriate, in the constitutional sense, for the determination of appellee‘s rights with civil effects, had she followed it. And her failure to follow it produced no such irrevocable and harmful consequences, for such purposes, as would ensue if she were charged with violation as a crime. Accordingly, by declining to take the plain way opened to her, more inconvenient though that may have been, and taking her misconceived remedy by another route, she has arrived where she might well have expected, at the wrong end.
No doubt this was due to a misconception of her rights,
Other issues raised by the appellee with respect to the regulations likewise are disposed of by the rulings upon the statute‘s provisions.6 In so far as the regulations are identical with the statute, therefore, and the objections to them are identical, the disposition of these objections to the Act disposes also of those made to the regulations. In so far as the latter raised questions not raised concerning the statute, and since none of these, except as mentioned above, called attention to any feature making a regulation void on its face, the appellee has foreclosed her opportunity to assert them, as to facts existing when the suit was begun, by her failure to follow the prescribed special remedy. It is not unreasonable, in a matter of this importance and urgency, to require one, whose only valid objection to the law, including the regulations, rests in proof of facts not apparent to the administrator or the
MR. JUSTICE ROBERTS:
I should be content if reversal of the District Court‘s decision were upon the ground that that court lacked power to enjoin prosecution of the appellees’ state court suit. The policy expressed in
The appellant in his complaint charged that the appellees threatened to disobey the provisions of the Act and the regulations made pursuant to it. The appellees answered that the Act and the regulations were void because in excess of the powers of Congress. I do not understand the Administrator to contend that the court below was precluded by the terms of the statute from passing upon the question whether the Act constitutes an unconstitutional delegation of legislative power. I am not sure whether he asserts that the provisions of
The statute of its own force is not applicable in any area except the District of Columbia unless and until so
This brings me to a consideration of the appellees’ principal contention, namely, that, as applied to rent control, the Emergency Price Control Act is an unconstitutional delegation of legislative power to an administrative officer. In approaching this question it is hardly necessary to state the controlling principles which have been reiterated in recent decisions.1 Congress may perform its legislative function by laying down policies and establishing standards while leaving administrative officials free to make rules within the prescribed limits and to ascertain facts to which the declared policy is to apply. But any delegation which goes beyond the application and execution of the law as declared by Congress is invalid.
Congress cannot delegate the power to make a law or refrain from making it; to determine to whom the law shall be applicable and to whom not; to determine what the law shall command and what not. Candid appraisal
As already stated, the Act is not in itself effective with respect to rents. It creates an Office of Price Administration to be under the direction of a Price Administrator appointed by the President (
The “judgment of the Administrator” as to what is necessary and proper to effectuate the purposes of the Act is the only condition precedent for his issue of an order, regulation, or prohibition affecting speculative or manipulative practices or renting or leasing practices in connection with any defense-area housing accommodations, which practices “in his judgment” are equivalent to or are likely to result in rent increases inconsistent with the purposes of the Act (
At the moment these statutory provisions were adopted rent control was not effective in any part of the nation. The Administrator was appointed for the purpose of enacting such control by regulations and orders. As will be seen, the first step he was authorized to take was to issue a declaration stating the necessity for reduction of rents within a particular defense-rental area and recommendations as to the nature of such reductions.
How is the reader of the statute to know what is meant by the term “defense-rental area“? The statutory “standard” is this:
“The term ‘defense-rental area’ means the District of Columbia and any area designated by the Administrator as an area where defense activities have resulted or threaten to result in an increase in the rents for housing accommodations inconsistent with the purposes of this Act.” (Italics supplied.) (
50 U. S. C. § 942 (d) .)
But is not the Administrator‘s judgment channeled and confined by the final limitation that his action must be the promotion of the “purposes of this Act“? What are they? So far as material they are: “To prevent speculative, unwarranted, and abnormal increases in . . . rents” (
Placing the relevant sections of the statute together we find that the term “defense-rental area” means any area designated by the Administrator as an area where “defense activities” have resulted, or threaten to result, in “speculative, unwarranted, and abnormal increases in . . . rents.” Can anyone assert that Congress has thus laid down a standard to control the action of the executive? The Administrator, and he alone, is to say what increase is speculative, what increase is unwarranted, and what increase is abnormal. What facts is he to consider? Such as he chooses. What facts did he consider in the instant case? One cannot know.
But the matter does not stop here. We have now only arrived at the designation of an area by the Administrator. As we have seen, his next step is to issue a declaration or recommendation. How shall he determine whether to do so or not? As seen by the above summary of the Act‘s provisions, the matter rests in the judgment of the Ad-
Does the statute afford a standard for the Administrator to follow in deciding the quantity of the reduction? Again his judgment alone is determinative. And, more, in his judgment alone rests the decision as to what accommodations within the area are to be affected by the decreed reduction. He may recommend the reduction of rent for “any accommodations” within the defense-rental area.
After the issue of his declaration and recommendations the Administrator must wait sixty days before putting his recommendations into effect. If, in his sole and unfettered judgment, stabilization has not been accomplished, he may then, by regulation or order, establish such maximum rent or maximum rents as “in his judgment” will be “generally fair and equitable and will effectuate the purposes of this Act.” His order may be based upon nothing but his own opinion. It may be made without notice, without hearing, without inquiry of any sort, with-out consultation with local authorities. The rents established may vary from street to street, and from subdivision to subdivision, all in accordance with the Administrator‘s personal judgment. The order may involve classification and exemption if the Administrator, in his sole discretion, deems that this course will “effectuate the purposes of this Act.” Which means, of course, if he thinks non-specula-
How shall he fix the amount of the maximum rent? The only standard given him is the exercise of his own judgment that the rents fixed will be “generally fair and equitable and will effectuate the purposes of this Act.” “Fair and equitable” might conceivably be a workable standard if inquiry into the specific facts were prescribed and if the bearing of those facts were to be given weight in the ultimate decision, but the addition of the word “generally,” and the failure to prescribe any method for arriving at what is fair and equitable leaves the Administrator such room for disregard of specific injustices and particular circumstances that no living person could demonstrate error in his conclusion. And, again, even the phrase “generally fair and equitable” is qualified by empowering the Administrator to consider also questions of speculation, unwarranted action or abnormality of condition. Such a “standard” is pretense. It is a device to allow the Administrator to do anything he sees fit without accountability to anyone.
But, it is said, this is an unfair characterization of the statute because, “so far as practicable,” the Administrator must ascertain and duly consider rents prevailing for “such accommodations, or comparable accommodations, on or about April 1, 1941,” and that, although he may pick out some other period which he thinks more representative, he must not select any period earlier than April 1, 1940, and, therefore, he is definitely confined and prohibited in exercising control over rentals. This argument will not do. The mere fact that he may not go to any period for comparison earlier than April 1, 1940, although he may take any later period he thinks appropriate, does not serve to obliterate the fact that after such wide and unrestricted choice of a period he can make any regulation he sees fit.
I am far from urging that, in the present war emergency, rents and prices shall not be controlled and stabilized. But I do insist that, war or no war, there exists no necessity, and no constitutional power, for Congress’ abdication of its legislative power and remission to an executive official of the function of making and repealing laws applicable to the citizens of the United States. No truer word was ever said than this court‘s statement in the Minnesota Mortgage Moratorium Case2 that emergency does not create power but may furnish the occasion for its exercise. The Constitution no more contemplates the elimination of any of the coordinate branches of the Government during war than in peace. It will not do to say that no other method could have been adopted consonant with the legislative power of Congress. “Defense-rental areas” and “defense activities” could have been reasonably defined. Rents in those areas could have been frozen as of a given date, or reasonably precise standards could have been fixed, and administrative or other tribunals could have been given power according to the rules and standards prescribed to deal with special situations after hearing and findings and exposition of the reasons for action. I say this only be-
The obvious answer to what I have said is that this court has sustained, and no one would now question, the constitutional validity of Acts of Congress laying down purported standards as vague as those contained in the Act under consideration. But the answer is specious. Generally speaking, statutes invoking the aid of the administrative arm of the Government for their application and enforcement fall into two classes, -those in which a policy is declared and an administrative body is empowered to ascertain the facts in particular cases so as to determine whether that policy in a particular case had been violated. Of this type of legislation the Interstate Commerce Act and the Federal Trade Commission Act are classical examples. In the one, carriers are required to charge just and reasonable rates for their services. In the other, citizens are forbidden to indulge in unfair methods of competition. If it be asserted that these are but vague standards of conduct, it must at once be said that, in adopting them, Congress adopted common law concepts, the one applying to those pursuing a public calling and the other to business competitors in general, and that the standards announced carried with them concepts and contours attaching as a result of a long legal history. But more, in such instances, the standards were not to be applied in the uncontrolled judgment of the administrative body. On the contrary, the statutes require a complaint specifying the conduct thought to violate the statute and opportunity for answer, for hearing, for production of evidence, and for findings
The other and distinct class of cases is that in which Congress, as in the present instance, declares a policy and entrusts to an administrative agent, without more, the making of general rules and regulations for the implementation of that policy. These rules are, in all but name, statutes. Here, unless the rule for the guidance of the Administrator is clear, and the considerations upon which he may act are definite and certain, it must inevitably follow that, to a greater or less degree, he will make the law. No citizen can question the motive or purpose of Congress in enacting a specific statute to control and define conduct as long as Congress acts within the powers granted it by the Constitution. As has been pointed out, Congress, in passing the Emergency Price Control Act, has attempted to clothe its delegate -an Administrator -with the same unchallengeable legislative power which it possesses. In this respect the delegation is no different from that involved in the National Industrial Recovery Act which was held invalid in Schechter Corp. v. United States, supra.
We are told that “Congress has specified the basic conclusions of fact upon the ascertainment of which by the Administrator its statutory command is to become effective.” This means, I take it, that the Administrator need find no facts, in the accepted sense of the expression. He need only form an opinion, -for every opinion is a conclusion of fact. And “basic” means, evidently, that his opinion is that one of the “purposes of the Act” requires the making of a law applicable to a given situation. It is not of material aid that he discloses the reasons for his action. Such a test of constitutionality was unanimously rejected in the Schechter case.
Under that Act the President was required to find that the promulgation by him of a code of fair competition in any industry would “tend to effectuate the policy” of Congress as above declared. He did so find in promulgating the code there under attack.
I have already quoted what this court said with respect to the so-called standards established by the statute. That case and this fall into exactly the same category. There it was held that the President‘s basic conclusions of fact amounted to an exercise of his judgment as to whether a law should come into being or not. Here it is said that the Administrator‘s basic conclusions of fact are but the enforcement of an enactment by Congress. Whether explicitly avowed or not, the present decision overrules that in the Schechter case.
The judgment of the Administrator is, by this Act, substituted for the judgment of Congress. It is sought to make that judgment unquestionable just as the judg-
The Emergency Price Control Act might have been drawn so as to lay down standards for action by the Administrator which would be reasonably definite; it might have authorized inquiries and hearings by him to ascertain facts which affect specific cases within the provisions of the statute. That would have been a constitutional and practicable measure. It has done no such thing.
But it is said the Administrator‘s powers are not absolute, for the statute provides judicial review of his action. While the Act purports to give relief from rulings of the Administrator by appeal to the Emergency Court of Appeals and to this court, the grant of judicial review is illusory. How can any court say that the Administrator has erred in the exercise of his judgment in determining what are defense activities? How can any court pronounce that the Administrator‘s judgment is erroneous in defining a “defense-rental area“? What are the materials on which to review the judgment of the Administrator that one or another period in the last three years reflects, in a given area, no abnormal, speculative, or unwarranted increase in rent in particular defense housing accommodations in a chosen defense-rental area? It is manifest that it is beyond the competence of any court to convict the Administrator of error when the supposed materials for judgment are so vague and so numerous as those permitted by the statute.
One only need read the decisions of the Emergency Court of Appeals to learn how futile it is for the citizen to attempt to convict the Administrator of an abuse of judgment in framing his orders, how illusory the purported
I think the judgment of the District Court was right and should be affirmed.