Denver Union Stock Yard Company v. Producers Livestock Marketing Association/Dissent Whittaker

Mr. Justice WHITTAKER, with whom Mr. Justice FRANKFURTER and Mr. Justice HARLAN join, dissenting.

I respectfully dissent. The question presented is whether certain regulations issued by the owner of a posted stockyard are void on their face. Petitioner, the Denver Union Stock Yard Company, is the 'stockyard owner' of the Denver Union stockyard, a facility in Denver, Colorado, which constitutes a 'stockyard' within the meaning of § 302 of the Packers and Stockyards Act, 42 Stat. 159, as amended, 7 U.S.C. § 181 et seq., 7 U.S.C.A. § 181 et seq.-hereinafter called the Act. In 1921 the Secretary of Agriculture, pursuant to § 302(b) of the Act, 'posted' that stockyard, and it thereupon became, and has since been, subject to the provisions of the Act. Under § 304, it became the 'duty' of petitioner 'to furnish upon reasonable request, without discrimination, reasonable stockyard services at such stockyard'; and, under § 307, it also became its 'duty' to, 'establish, observe, and enforce just, reasonable, and non-discriminatory regulations and practices in respect to the furnishing of stockyard services' at that stockyard. Pursuant thereto petitioner filed with the Secretary on May 11, 1955, an amendment of its existing regulations to become effective May 25, 1955. The amended regulations, in pertinent part, provide:

'No market agency or dealer engaging in business at this     Stock Yard shall, upon Stockyard Company property, or      elsewhere, nor shall any other person upon Stock Yard Company      property-

'(1) Solicit any business for other markets, for sale at     outside feed yards or at country points, or endeavor to      secure customers to sell or purchase livestock elsewhere; or '(2) In any manner divert or attempt to divert livestock   from this market which would otherwise normally come to   this Stock Yard; or

'(3) Engage in any practice or device which would impair or     interfere with the normal flow of livestock to the public      market at this Stockyard.' (Emphasis supplied.)

Sometime after the Denver Union stockyard was 'posted,' respondent, pursuant to the provisions of § 303, 'registered' with the Secretary as a market agency-not as a 'dealer'-on the Denver Union stockyard, and thereby acquired the status of a 'market agency' under the Act 'at such stockyard.' Section 301(c) defines the term 'market agency' to mean: '(A)ny person engaged in the business of (1) buying or selling in commerce livestock at a stockyard on a commission basis or (2) furnishing stockyard services.' (Emphasis supplied.) By § 306(a), it became the duty of respondent, as a 'market agency at such stockyard,' to print, file with the Secretary, and keep open to public inspection 'at the (Denver) stockyard,' a schedule showing all rates and charges for 'stockyard services' to be furnished by it 'at such stockyard'; and, under § 304, it became its duty 'to furnish upon reasonable request, without discrimination, reasonable stockyard services at such stockyard.' (Emphasis supplied.)

Section 309(a) provides, inter alia, that: 'Any person complaining of anything done * *  * by any stockyard owner *  *  * in violation of the provisions (of the Act) may *  *  * apply to the Secretary by petition which shall briefly state the facts, whereupon the complaint *  *  * shall be forwarded by the Secretary to the defendant, who shall be called upon *  *  * to answer it in writing, within a reasonable time to be specified by the Secretary.' (Emphasis supplied.) The following section (§ 310), in relevant part, provides: 'Whenever after full hearing upon a complaint *  *  * the Secretary is of the opinion that any *  *  * regulation *  *  * of a stockyard owner *  *  * for or in connection with the furnishing of stockyard services, is or will be unjust, unreasonable, or discriminatory, the Secretary-

'(a) May determine and prescribe * *  * what regulation *  *  *      is or will be just, reasonable, and non-discriminatory to be      thereafter followed; and

'(b) May make an order that such owner or operator * *  * (3)      shall conform to and observe the regulation *  *  * so      prescribed.' (Emphasis supplied.) Invoking the Secretary's regulatory powers under § 310(a), respondent, on July 7, 1955, filed a complaint with the Secretary, alleging that the quoted regulations were unauthorized because the Act authorized the stockyard owner 'to establish 'regulations and practices (only) in respect to the furnishing of stockyard services'; and that (the) practice purported to be prescribed or established by (the regulation) does not *  *  * relate to the furnishing of stockyard services and is therefore unauthorized and invalid'; and, without waiving that contention, it further alleged that the regulation 'is unjust, unreasonable and discriminatory, and should be set aside as unlawful'; it then proceeded to state its conclusions respecting the operation and effect of the regulations, and ultimately prayed that they 'be set aside and annulled.'

Thereupon the Secretary sent a copy of the complaint to petitioner, and, in a covering letter, stated that the complaint would be entertained as a 'disciplinary proceeding' in accordance with § 202.6(b) of his rules of practice; advised that petitioner was required to file an answer within 20 days from receipt of the complaint 'containing a definite statement of the facts which constitute the grounds of defense'; and concluded that, under his rules of practice, 'the burden of proof (would) be upon the complainant to establish the matters complained of.' Petitioner answered, admitting that it was the 'owner' of the 'posted' Denver Union 'stockyards'; that respondent was 'registered' to do business thereon as a 'market agency'; that it had published the questioned regulations, but specifically denied the conclusions concerning the interpretation and effect of the regulations, and generally denied all other averments of the complaint, and then proceeded to allege facts which it concluded made the regulations reasonable and necessary to prevent unfair and unjustly discriminatory practices by market agencies and dealers, registered as such at that stockyard, in connection with receiving and handling livestock, and to enable it to render, and to require market agencies to render, 'reasonable stockyard services' at the Denver Union stockyard.

Soon afterward, petitioner, in preparing for the hearing, filed with the Secretary and served upon respondent a motion to produce for inspection certain of the latter's books and records, alleged to contain evidence relevant and material to the issues. Respondent then filed a 'reply' to the motion in which it resisted production of the books and records upon the ground that the regulations were void on their face. Petitioner moved to strike that reply as not responsive to the motion to produce. After argument, the hearing examiner issued an 'interim ruling,' in which he said, 'We cannot hold, as complainant asks, that respondent's regulation violates the law on its face. We must have facts to see whether the regulation, or action taken under it, is reasonable under the circumstances'; but he did not sustain the motion to produce. Instead he set the proceeding for hearing at Denver on January 24, 1956, and indicated that if, after respondent had produced its evidence, it appeared necessary to the presentation of petitioner's defense he would sustain the motion.

On December 23, 1955, respondent filed what it termed an 'Election To Rest,' reciting 'that this complainant elects to stand upon the illegality of said regulation, as a matter of law,' and that it would 'not present evidence in this cause.' Thereupon petitioner moved to dismiss the complaint for failure of respondent 'to sustain the burden of making a prima facie case in support of its complaint.' After hearing the parties upon that motion, the hearing examiner certified the proceeding to the Judicial Officer for decision, with a recommendation that it be dismissed. The Judicial Officer, after hearing the parties orally and upon briefs, concluded that the regulations were not void on their face and that, in the total absence of evidence, he could not find that the regulations were invalid, and dismissed the proceeding. 15 Agr. Dec. 638.

Pursuant to 5 U.S.C. § 1034, 5 U.S.C.A. § 1034, respondent filed in the Court of Appeals its petition against the United States and the Secretary of Agriculture to review the decision and order of the Judicial Officer. The Denver Union Stock Yard Company intervened as a respondent. The Court of Appeals, concluding that '(t)he compulsion of the regulation is in immediate conflict with the requirement of Sec. 304 which contemplates and imposes the duty upon marketing agencies to render reasonable services to their customers at every stockyard where they do business,' held that the regulations were void on their face and reversed the decision of the Judicial Officer, and also remanded the proceeding to the Secretary 'with instructions to vacate the order dismissing (the) complaint and (to) enter an appropriate order requiring the Denver Union Stock Yards Company to cease and desist from issuing or enforcing (the) Regulation.' 241 F.2d, at pages 196-197. Upon petition of the Denver Union Stock Yard Company in No. 106, and of the Secretary of Agriculture in No. 118, we granted certiorari. 353 U.S. 982, 77 S.Ct. 1283, 1285, 1 L.Ed.2d 1141.

This Court now affirms. Its opinion, like that of the Court of Appeals, is based upon the conclusion that the regulations conflict with the provisions of § 304 of the Act. The majority have expressed the basis of their conclusion as follows (356 U.S. 286, 78 S.Ct. 741): 'The market agency registered with the Denver Stock Yard Co. must, while working in the 'normal marketing area' of that yard, solicit or do business exclusively for it and for none of the other stockyards with which it is registered. Yet § 304 of the Act makes it 'the duty' of every market agency 'to furnish upon reasonable request, without discrimination, reasonable stockyard services at such stockyard.' * *  * From the Act it seems plain, therefore, that the duty of respondent would be to furnish a producer in the Denver area stockyard service at Kansas City, if the producer so desired. * *  * Their duty is to serve all, impartially and without discrimination. The Regulations bar both the market agency and the stockyard from performing their statutory duty. * *  * The conflict seems clear and obvious; and no evidence could make it clearer.' (Emphasis supplied.)

In my view, the reasoning and conclusion of both the Court of Appeals and this Court misinterpret the provisions of the Act, and the regulations as well.

The first, and most grievous, misinterpretation stems from the failure to appreciate that respondent's status, privileges and obligations, as a registered 'market agency' at the Denver Union stockyard, are limited by the Act to 'such stockyard,' and that the challenged regulations apply only to a 'market agency or dealer engaging in business at this Stockyard'-the Denver Union stockyard. As earlier shown, § 303 plainly states that after the Secretary has 'posted' a particular stockyard 'no person shall carry on the business of a market agency * *  * at such stockyard unless he has registered with the Secretary (stating, among other things) the kinds of stockyard services *  *  * which he furnishes at such stockyard.' By equally clear language § 306(a) makes it the duty of 'every market agency at such stockyard (to print, file with the Secretary) and keep open to public inspection at the stockyard, schedules showing all rates and charges for the stockyard services furnished by such person at such stockyard,' Section 304 is no less plain in stating that it is the duty of every 'market agency to furnish upon reasonable request, without discrimination, reasonable stockyard services at such stockyard.' (Emphasis supplied.) I submit that these provisions of the Act leave no room to doubt that a person by registering with the Secretary to do business as a market agency at a particular stockyard acquires the rights, and assumes the obligations, of a 'market agency' only 'at such stockyard.' And inasmuch as the challenged regulations apply only to a 'market agency or dealer engaging in business at this Stockyard'-the Denver Union stockyard they cannot have any application or effect at any other stockyard. Registration to do business as a 'market agency' at 'such stockyard' does not give the registrant the status of a 'market agency,' or create the right or obligation to furnish 'stockyard services,' at all stockyards in the Nation, or at any place other than a particular stockyard where so registered as a 'market agency.' While a market agency is a public utility (Stafford v. Wallace, 258 U.S. 495, 42 S.Ct. 397, 66 L.Ed. 735; Swift & Co. v. United States, 316 U.S. 216, 232, 62 S.Ct. 948, 956, 86 L.Ed. 1391), it is such only on the posted stockyard where registered as a market agency. Doubtless one who has the status of a 'market agency,' and thus also of a public utility, at the Denver stockyard, may, by an additional registration under § 303, acquire a like status at another posted stockyard, yet he would not thereby become one market agency or one public utility covering the several stockyards where so registered. On the contrary, his status as a market agency and public utility on each of such posted stockyards would be just as several, separate and independent as though owned by different persons. In legal effect, a 'market agency' and public utility on one posted stockyard is a separate entity from a 'market agency' and public utility on another, even though both be owned by the same person. And regulations promulgated by the 'stockyard owner' of one of such stockyards, applicable to a 'market agency' thereon, could have no application or effect at another posted stockyard or to a registered 'market agency' thereon. Hence the question is not whether the challenged regulations might restrict a 'market agency' on some other posted stockyard from furnishing reasonable stockyard services at such other stockyard for the challenged regulations have no application to a 'market agency' on such other stockyard, but apply only to a 'market agency or dealer engaging in business at (the Denver Union) Stockyard.'

The question then is whether the challenged regulations may be said, from their face as a matter of law, to obstruct a market agency on the Denver Union stockyard from furnishing just, reasonable and nondiscriminatory stockyard services at that stockyard, where, and only where, they apply. I think analysis of them shows that they do not upon their face in any way conflict with § 304 nor obstruct 'the duty of (a) market agency to furnish upon reasonable request, without discrimination, reasonable stockyard services at such stockyard'-the Denver Union stockyard as required by that section. It will be observed that they prohibit a 'market agency or dealer engaging in business at this Stockyard' from doing six things. The first subsection provides that they shall not (1) 'solicit any business for other markets,' (2) solicit any business 'for sale at outside feed yards,' (3) solicit any business for sale 'at country points,' or (4) 'endeavor to secure customers to sell or purchase livestock elsewhere'; and the second subsection provides that they shall not (5) '(i)n any manner divert or attempt to divert livestock from this market * *  * '; and the third subsection provides that they shall not (6) '(e)ngage in any practice or device which would impair or interfere with the normal flow of livestock to the public market at this Stockyard.' (Emphasis supplied.) Surely the regulations prohibiting a registered 'market agency' on the Denver Union stockyard from soliciting business for other markets, and from soliciting business (livestock) for sale 'at outside feed yards' or 'at country points,' and from endeavoring to induce customers not to buy or sell their livestock on the Denver stockyard, do not at all prohibit it from furnishing stockyard services (note 3) 'at such stockyard' (§ 304); and, moreover, as shown, such a market agency is not authorized by the Act to furnish stockyard services 'at outside feed yards,' at 'country points,' or at any place other than the posted stockyard upon which it is registered as a market agency. § 303. And inasmuch as a 'market agency,' as distinguished from a 'dealer,' may not buy and sell livestock for its own account, but only on a 'commission basis' for others, it cannot lawfully own any livestock to 'divert,' but it is in position to 'attempt to divert' livestock from the Denver market, and thus to boycott it, by attempting to cause those who are owners of livestock to ship and sell elsewhere. A regulation prohibiting this surely cannot be said to prevent the market agency from furnishing stockyard services at the Denver yard. Lastly, I believe it cannot logically be contended that the regulation prohibiting a market agency on the Denver yard from engaging 'in any practice or device' which would impair or interfere with the normal flow of livestock to the Denver stockyard could prevent such market agency from furnishing stockyard services at that stockyard.

It is plain and undisputed that the regulations may not-in the total absence of evidence, as here-be held void unless it is clear upon their face that there cannot be any circumstances under which they, or any of them, could be lawful, 'just, reasonable, and nondiscriminatory.' s 307. And only when it affirmatively and clearly so appears upon the face of the regulations may it be said that a proceeding to contest their validity, in which no evidence whatever is offered to sustain the complaint, constitutes the 'full hearing' required by § 310. General American Tank Car Corp. v. El Dorado Terminal Co., 308 U.S. 422, 60 S.Ct. 325, 84 L.Ed. 361.

Under the terms of the Act and of the regulations, which we have shown, it seems entirely clear that this is not such a case, and I think it must follow that the regulations cannot be said to be void on their face. The foregoing demonstrates the error of the pivotal conclusion of the Court of Appeals that § 304 'contemplates and imposes the duty upon marketing agencies (registered as such at the Denver Union stockyard) to render reasonable services * *  * at every stockyard where they do business.' (241 F.2d 196.) (Emphasis by the Court of Appeals.) It also demonstrates, I think, the error of the basic conclusion of the opinion of this Court that: 'From the Act it seems plain, therefore, that the duty of respondent would be to furnish a producer in the Denver area stockyard service at Kansas City, if the producer so desired. * *  * Their duty is to serve all, impartially and without discrimination.' (Emphasis supplied.)

It is indeed obvious that the Secretary, after the 'full hearing' contemplated by § 310, might reasonably find from all the facts adduced at such 'full hearing' (1) that the conduct of a 'market agency' on the Denver stockyard in boycotting that yard by soliciting livestock for sale at other markets, or at outside feed yards, or at country points, or by endeavoring to induce livestock owners not to buy or sell on the Denver yard and to divert their livestock from the Denver market, constitutes an 'unfair, unjustly discriminatory, or deceptive practice or device in connection with the receiving, marketing, buying, or selling * *  * delivery, shipment *  *  * or handling, in commerce at a stockyard, of livestock,' in violation of § 312 of the Act (note 6), and (2) that these regulations-or at least some of them-are a 'just, reasonable, and nondiscriminatory (means) to be thereafter followed' (§ 310) to prevent such illegal practices by a market agency on that yard, and to enable the stockyard owner to furnish, and to require market agencies on that yard to furnish, 'reasonable stockyard services,' at the Denver stockyard. But, of course, the Secretary could not make findings in a vacuum-in the total absence of evidence as here. We must keep in mind that Congress, by § 307, made it the 'duty' of petitioner to 'establish, observe, and enforce just, reasonable, and nondiscriminatory regulations and practices in respect to the furnishing of stockyard services' at its posted stockyard, and that the questioned regulations were promulgated by petitioner pursuant to that duty. And we must not forget that Congress gave to the Secretary-not to the courts-the duty and power to determine what regulations of a stockyard owner are or will be just, reasonable and nondiscriminatory to be followed in the future, and prescribed the method for challenging, and for determining, the validity of such regulations. By § 309(a) Congress prescribed that '(a)ny person complaining' shall file a complaint with the Secretary 'stat(ing) the facts, whereupon the complaint thus made shall be forwarded by the Secretary to the defendant, who shall be called upon * *  * to answer it in writing,' and, by § 310, Congress prescribed that if 'after full hearing upon (the) complaint *  *  *, the Secretary is of the opinion that any *  *  * regulation *  *  * of a stockyard owner *  *  * is or will be unjust, unreasonable, or discriminatory, the Secretary-(a) may determine and prescribe *  *  * what regulation *  *  * is or will be just, reasonable, and nondiscriminatory to be thereafter followed; and (b) may make an order that such owner or operator *  *  * (3) shall conform to and observe the regulation *  *  * so prescribed.' Only after 'full hearing' of the facts and circumstances could the Secretary perform his duty under § 310 of determining 'what regulation *  *  * will be just, reasonable, and nondiscriminatory to be thereafter followed.' By the terms of the Act, Congress left these determinations to the experienced and informed judgment of the Secretary and gave to him appropriate discretion to assess all factors relevant to the subject. Addison v. Holly Hill Fruit Products, 322 U.S. 607, 614, 64 S.Ct. 1215, 1219, 88 L.Ed. 1488. To determine whether the regulations are just, reasonable and nondiscriminatory the Secretary must 'consider the facts peculiar to the business to which the restraint is applied; its condition before and after the restraint was imposed; the nature of the restraint and its effect, actual or probable. The history of the restraint, the evil believed to exist, the reason for adopting the particular remedy, the purpose or end sought to be attained, are all relevant facts.' Chicago Board of Trade v. United States, 246 U.S. 231, 238, 38 S.Ct. 242, 244, 62 L.Ed. 683. 'Courts deal with cases upon the basis of the facts disclosed, never with nonexistent and assumed circumstances,' Associated Press v. National Labor Relations Board, 301 U.S. 103, 132, 57 S.Ct. 650, 655, 81 L.Ed. 953. 'Because the relation of remedy to policy is peculiarly a matter for administrative competence, courts must not enter the allowable area of the (Secretary's) discretion and must guard against the danger of sliding unconsciously from the narrow confines of law into the more spacious domain of policy.' Phelps Dodge Corp. v. National Labor Relations Board, 313 U.S. 177, 194, 61 S.Ct. 845, 852, 85 L.Ed. 1271. After such 'full hearing' the Secretary might reasonably find, from all the facts and circumstances disclosed, that all of the regulations were just, reasonable and nondiscriminatory, or that only part of them met that test, or that none of them did so; but it is evident that he could reach no conclusion upon those matters in the total absence of any facts.

Respondent's complaint did not allege that the regulations were void on their face. Rather respondent injected that question collaterally and for the first time by its 'reply' to petitioner's motion for an order requiring respondent to produce certain of its records for inspection by petitioner as a step in the latter's preparation for the 'full hearing' to be held upon the issues of fact and law that had been joined in the proceeding; and when the hearing officer, after considering that motion and reply, found that he could not determine whether the regulations were valid or invalid without fully hearing the facts, respondent filed its 'Election To Rest' stating that 'this complainant elects to stand upon the illegality of said regulation, as a matter of law' and that it would 'not present evidence in this cause.' Respondent thus refused to adduce evidence to sustain its burden of proof upon the issues tendered by its complaint, and hence withdrew its challenge of the need for, and the reasonableness of, the regulations. The Judicial Officer did not hold that the regulations were valid or invalid. He held only that the question could not be determined in a vacuum-without a 'full hearing' of the facts-and dismissed the proceeding. In so doing, I believe he was entirely justified and that our analysis of the law and the regulations makes this clear.

It is worthy of note that though the questioned regulations apply to 'dealers' as well as market agencies on the Denver stockyard, the validity of the regulations in respect to dealers is in no way here questioned. Yet-in the total absence of evidence and assuming certain facts- this Court affirms the action of the Court of Appeals in striking down the regulations in whole on the ground that they are all void upon their face for conflict with § 304 of the Act. I believe it has been demonstrated that there is no such conflict, and that the regulations are not void on their face. In these circumstances, it was for the Secretary, under § 310, to say after 'full hearing' of the facts and circumstances whether the regulations-or some part of them-were just, reasonable and nondiscriminatory; and to say 'what regulation (would) be just, reasonable, and nondiscriminatory to be thereafter followed.' For these reasons I would vacate the judgment of the Court of Appeals and remand the case to that court with instructions to direct the Secretary of Agriculture to himself initiate a proceeding, as he may do under § 309(c), to determine whether the challenged regulations, or any of them, are just, reasonable and nondiscriminatory, and to determine, under § 310, after 'full hearing' just 'what regulation or practice is or will be just, reasonable, and nondiscriminatory to be thereafter followed.'