ENDICOTT JOHNSON CORP. ET AL. v. PERKINS, SECRETARY OF LABOR.
No. 142
Supreme Court of the United States
Argued November 20, 1942.—Decided January 11, 1943.
317 U.S. 501
Mr. Paul Freund, with whom Solicitor General Fahy, Assistant Attorney General Shea, and Messrs. Sidney J. Kaplan and Irving J. Levy were on the brief, for respondent.
MR. JUSTICE JACKSON delivered the opinion of the Court.
This case concerns the validity of a subpoena issued by the Secretary of Labor in administrative proceedings against the petitioner under the Walsh-Healey Public Con-
The Walsh-Healey Act requires that contracts with the Government for the “manufacture or furnishing of materials, supplies, articles, and equipment in any amount exceeding $10,000” shall represent and stipulate, inter alia, for the payment of “not less than the minimum wages as determined by the Secretary of Labor” (
The Act provides for liquidated damages for violations of required stipulations in the contract (
The Sеcretary is directed “to administer the provisions of this Act” and empowered to “make investigations and findings as herein provided, and prosecute any inquiry necessary to his functions.” (
Pursuant to her authority under the Act, the Secretary in 1937 defined by rulings the coverage of the Act. She provided, inter alia, that “employees engaged in or connected with the manufacture, fabrication, assembling, handling, supervision, or shipment of materials, supplies, articles, or equipment used in the performance of the con-
From the pleadings in the District Court and admitted statements in affidavits filed, there appear the following facts:
Between October 26, 1936, and June 8, 1938, petitioner was awarded several contracts for boots, shoes, gymnasium shoes and arctic overshoes. Each was for an amount in excess of $10,000, and each contract included representations and stipulations in accordance with the Act and the
The Secretary did not аgree, and instituted an administrative proceeding against petitioner, charging violation
To obtain the compliance to the subpoena which petitioner refused, the Secretary had resort to the District Court as provided by
The Corporation pleaded to the District Court its ownership and management of the plants in question and that the rubber heels and soles, the counters, cartons, and all except a portion of the leather soles “used in the manufacture” of the government footwear, “were manufac-
The District Court denied the Secretary‘s motion on the pleadings and accompanying affidavits for an enforcement order, overruled her contention that it was for her to decide this issue in the administrative proceeding, and set the case down for trial on the question of whether the Act and contracts under the circumstances covered the separate plants.
We think that the admitted facts left no doubt that undеr the statute determination of that issue was primarily the duty of the Secretary.
The Act directs the Secretary to administer its provisions. It is not an Act of general applicability to industry. It applies only to contractors who voluntarily enter into competition to obtain government business on terms of which they are fairly forewarned by inclusion in the contract. Its purpose is to use the leverage of the Government‘s immense purchasing power to raise labor standards.
Congress submitted the administration of the Act to the judgment of the Secretary of Labor, not to the judgment of the courts.10 One of her principal functions is thе conclusive determination of questions of fact for the guidance of procurement officers in withholding awards of govern-
The matter which the Secretary was investigating and was authorized to investigate was an alleged violation of this Act and these contracts. Her scope would include determining what employees these contracts and the Act covered. It would also include whether the payments to them were lower than the scale fixed pursuant to the Act. She could not perform her full statutory duty until she examined underpayments wherever the coverage extended, because underpayment is an indispensable, albeit not the only, element of proof of violation. It is the only basis on which she can compute liquidated damage as she is required to do, and it is necessary to find the date of the last underpayment to fix the beginning of the three-year period of disqualification for further contracts. Thus the payrolls are clearly related to the violation. Indeed, the underpayment is itself the violation under investigation.
Of course another indispensable element of violation is that the underpaid еmployee be included within the benefits of the Act and contracts. This, too, was a matter under investigation in the administrative proceeding. But because she sought evidence of underpayment before she made a decision on the question of coverage and alleged that she “had reason to believe” the employees in question were covered, the District Court refused to order its production, tried the issue of coverage itself, and decided it against the Secretary. This ruling would require the Secretary, in order to get evidence of violation, either to allege she had decided the issue оf coverage before the hearing or to sever the issues for separate hearing and decision. The former would be of dubious propriety, and the latter of doubtful practicality. The Secretary is given no power to investigate mere coverage, as such, or to make findings thereon except as incident to trial of the issue of violation. No doubt she would have discretion to take
Nor was the District Court authorized to decide the question of coverage itself. The evidence sought by the subpoena was not plainly incompetent or irrelevant to any lawful purpose of the Secretary in the discharge of her duties under the Act, and it was the duty of the District Court to order its production for the Secretary‘s consideration. The Secretary may take the same view of the evidence that the District Court did, or she may not. The consequence of the action of the District Court was to disable the Secretary from rendering a complete decision on the alleged violation as Congress had directed her to do, and that decision was stated by the Act to be conclusive as to matters of fact for purposes of the award of government contracts. Congress sought to have the procurement officers advised by the experience and disсretion of the Secretary rather than of the District Court. To perform her function she must draw inferences and make findings from the same conflicting materials that the District Court considered in anticipating and foreclosing her conclusions.
The petitioner has advanced many matters that are entitled to hearing and consideration in its defense against the administrative complaint, but they are not of a kind that can be accepted as a defense against the subpoena.11
The subpoena power delegated by the statute as here exercised is so clearly within the limits of Congressional authority that it is nоt necessary to discuss the constitutional questions urged by the petitioner, and on the record before us the cases on which it relies12 are inapplicable and do not require consideration.
Affirmed.
MR. JUSTICE MURPHY, dissenting:
Because of the varied and important responsibilities of a quasi-judicial nature that have been entrusted to administrative agencies in the regulation of our political and economic life, their activities should not be subjected to unwarranted and ill-advised intrusions by the judicial branch of the government. Yet, if they are freed of all restraint upon inquisitorial activities and are allowed uncontrolled discretion in the exercise of the sovereign power of government tо invade private affairs through the use of the subpoena, to the extent required or sought in situations like the one before us and other inquiries of much broader scope, under the direction of well-meaning but over-zealous officials they may at times become instruments of intolerable oppression and injustice. This is not to say that the power to enforce their subpoenas should never be entrusted to administrative agencies, but thus far Congress, for unstated reasons, has not seen fit to confer such authority upon any agency which it has
The Government concedes that the district courts are more than mere rubber stamps of the agencies in enforcing administrative subpoenas and lists as examples of appropriate defenses, claims that a privilege of the witness, like that against self-incrimination, would be violated;3 or that the subpoena is unduly vague or unreasonably oppressive;4 or that the hearing is not of the kind authorized;5 or that the subpoena was not issued by the person vested with the pоwer;6 or that it is plain on the pleadings that the evidence sought is not germane to any lawful subject of inquiry. But the Government insists that the issue
If petitioner is not subject to the Act as to the plants in question, the Secretary has no right to start proceedings or to require the production of records with regard to those plants. In other words, there would be no lawful subject of inquiry, and under present statutеs giving the courts jurisdiction to enforce administrative subpoenas, petitioner is entitled to a judicial determination of this issue before its privacy is invaded. Cf. Interstate Commerce Comm‘n v. Brimson, 154 U. S. 447, 479; Harriman v. Interstate Commerce Comm‘n, 211 U. S. 407; Ellis v. Interstate Commerce Comm‘n, 237 U. S. 434; General Tobacco & Grocery Co. v. Fleming, 125 F. 2d 596.
Of course, the courts should not arrogate to themselves the functions of administrative agencies. It is trite but truthful to say that administrative agencies render valuable and very necessary services in the solution of the complex governmental and economic problems of our time. In the making of investigations, the determination of policy, the collection of evidence, and its current evaluation, preparatory or incidental to administrative action, experience and special training are valuable aids. But after all, as pointed out by Gellhorn, Federal Administrative Proceedings, pp. 27-29, the administrator is only an expert ex-officio.7 Just as the courts should not usurp
the prerogatives of the agencies, neither should the word “administrative” and its companion “expertness” overawe them into abdicating responsibilities imposed upon them by Congress.
The legal propriety of instituting proceedings is a question which an agency is authorized if not obliged to determine, provisionally at least, before instituting the proceedings. But while the decision may be the agency‘s in the first placе, it is not a decision which it is ordinarily more competent to make than the courts and judges, who (at least in theory) should be more qualified than administrative officers, many of whom are laymen, to determine whether a statute extends to a certain set of facts. If the preliminary determinations by an agency of the scope of its power and jurisdiction are sacrosanct, why did Congress subject their final determination to judicial scrutiny, as it has done in the Walsh-Healey Act with regard, at least, to the enforcement of the wage and hour requirements on behalf of the employees? And if the courts are qualified to pass final judgment on the “quasi-judicial” findings and conclusions of the administrators, which they are ordinarily permitted to do to a greater or lesser extent,8 they are no less qualified to determine whether the evidence which moved the administrator to enter a formal complaint is sufficient in law to show probable cause that the statute under which the administrator is proceeding covers the case. Without such a showing of probable cause, the district courts ought not to be required as a matter of mere routine to lend their aid to the proceeding by compelling obedience to the subpoena.
Considerations of practical advantage and elementary justice support this conclusion. Such a rule carries out what must have been the statutory intent, and would permit a timely and reasonable measure of judicial control over administrative use of the drastic subpoena power, subject to prompt review if the control were abused to the detriment of the agency. If administrative agencies may be temporarily handicapped in some instances by frivolous objections, the public will be protected in other instances against the needless burden and vexation of proceedings which may be instituted without legal justification. There is an obvious difference between the present case, wherein the district court exercises a jurisdiction expressly given to it by the statute, and those cases, such as Myers v. Bethlehem Corp., 303 U. S. 41, and Newport News Co. v. Schauffler, 303 U. S. 54, in which without express statutory authority a court is asked to enjoin an аdministrative proceeding as being contrary to law. Indeed, the very difference is noted in the Myers case, where it is said that
Just how much of a showing of statutory coverage should be required to satisfy the district court, and just how far it should explore the question, are difficult problems, to be solved best by a careful balancing of interests and the exercise of a sound and informed discretion. If the proposed examination under the subpoena or the proceeding itself would be relatively brief and of a limited scope, any doubt should ordinarily be resolved in favor of the agency‘s power. If it promises to be protracted and burdensome to the party, a more searching inquiry is indicated. A formal finding of coverage by the agency, which the Secretary did not make here, should be accorded some weight in the court‘s deliberation, unless wholly wanting in either legal or factual support, but it should not be conclusive. In short, the responsibility resting upon the court in this situation is not unlike that of a committing magistrate on preliminary examination to determine whether an accused should be held for trial.
With these considerations in mind, let us turn tо the facts of this case. Petitioner has willingly complied with all demands of the Secretary relating to the plants of its establishment, named in the contracts, in which the shoes were manufactured. It resists the application for enforcement of the subpoenas directing the production of records of other plants, not named in the contracts, in which some component parts for the shoes were manufactured, on the ground that the Walsh-Healey Act does not extend to those plants. It is true that petitioner voluntarily entered into the contracts with the Government, but those referred only to the speсific plants where the finished product was made. And, it was not until 1939, after all the contracts were completed, that the Secretary issued rulings specifically deal-
In view of the оpinion of the Court, there is no reason for discussing whether the district court correctly construed the scope of the Walsh-Healey Act, or whether it conducted its examination in accordance with the principles I have attempted to outline in the course of this opinion. It is enough to say that I am of opinion that under the facts of this case the district court should not be compelled mechanically to enforce the Secretary‘s subpoena, in the exercise of its statutory jurisdiction. It should first satisfy itself that probable cause exists for the Secretary‘s contention that the Act covers the plants in question.
MR. JUSTICE ROBERTS joins in this dissent.
Notes
A typical statement in response is:
| Names and locations of factories: | Quantities |
| “George F. Tabernacle” Factory (item 1)........ | 133,524 pairs |
| East side of Washington Street (item 2)......... | 182,256 pairs |
| (South of corner Susquehanna Streеt), Binghamton, N. Y., (total items 1 and 2)........ | 315,780 pairs |
A typical notice of award stated:
For 133,524 pairs Shoes, Service; Special Type “B” with Full Middle sole and Rubber Heel; 182,256 pairs Shoes, Service, Special Type “B,” with Corded Rubber Sole and Uncorded Rubber Heel.
To be manufactured at or supplied from Geo. F. Tabernacle, Binghamton, N. Y.
The Walsh-Healey Act provides in § 5 that the Secretary‘s findings of fact shall be conclusive in any court of the United States “if supported by the preponderance of the evidence.”