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YOUNGSTOWN SHEET & TUBE CO. v. SAWYER

April 29, 1952

YOUNGSTOWN SHEET & TUBE CO. et al.
v.
SAWYER, Secretary of Commerce and nine other cases



The opinion of the court was delivered by: PINE

By Executive Order 10340, promulgated April 8, 1952, the President of the United States directed defendant to take possession of such plants of companies named in a list attached thereto as he deemed necessary in the interests of national defense, to operate them or arrange for their operation, and to prescribe the terms and conditions of employment under which they should be operated. The plaintiffs are among those named in the list. In the recitals of the Executive Order, the President stated that a controversy had arisen between certain companies producing and fabricating steel and certain of their workers represented by the United Steel Workers of America, C.I.O., regarding terms and conditions of employment; that the controversy had not been settled through the processes of collective bargaining or through the efforts of the Government, and a strike had been called for April 9, 1952; that a work stoppage would immediately jeopardize and imperil our national defense and the defense of those joined with us in resisting aggression; and that in order to insure the continued availability of steel it was necessary that the United States take possession of and operate the plants. By virtue of this Executive Order, defendant issued his Order No. 1 bearing the same date, stating that he deemed it necessary in the interest of national defense that possession be taken of the plants of the companies named in a list attached to his order, including the plant of plaintiffs, and that therefore he did take possession of the same, effective April 8, 1952. By the same order, he designated the president of each company as operating manager for the United States until further notice, and directed him to operate the plants of such company, subject to defendant's supervision. Telegraphic notification to this effect was given to the president of each company.

Plaintiffs thereupon brought these actions praying for declaratory judgments and injunctive relief, and there are now before me for decision motions for temporary injunctions seeking to restrain the defendant from taking any action under the authority of the Executive Order. These motions were combined for hearing and have been fully heard. Voluminous briefs have been filed and considered. At the hearing, plaintiff United States Steel limited its motion to a preservation of the status quo in respect of terms and conditions of employment.

 Plaintiffs contend that defendant's acts under the Executive Order resulting in the seizure of their plants are without authority of law and constitute an illegal invasion of their property and rights, and that they are entitled to preliminary injunctions to restrain defendant from acting thereunder, particularly in the light of his threat to make changes in terms and conditions of employment. The basis of plaintiffs' contention is that there is no constitutional or statutory right in the President to issue the Executive Order, and there being none, defendant acting thereunder is acting without legal authority and his acts are illegal and contrary to law. Plaintiff Lavino has urged an additional reason, namely, that it has been improperly included among the plants seized.

 Defendant contends in his Opposition to the motions that the breakdown of collective bargaining negotiations 'created an immediately impending national emergency because interruption of steel manufacture for even a brief period would seriously endanger the well-being and safety of the United States in a critical situation'; that the President has 'inherent power in such a situation to take possession of the steel companies in the manner and to the extent which he did by his Executive Order'; that the courts are without power to negate Executive action of the President by enjoining it; that the courts will not interfere in advance of a full hearing on the merits except upon a showing that the damage to flow from a refusal of a temporary injunction is irreparable and outweighs the harm which would result from its issuance; and that, since the right of the companies to recover all damages resulting from the taking has been recognized by Supreme Court decisions, there is no showing that the companies' legal remedy is inadequate or that their injury is irreparable.

 The fundamental issue is whether the seizure is or is not authorized by law. In my opinion, this issue should be decided first, and that I shall now do.

 There is no express grant of power in the Constitution authorizing the President to direct this seizure. There is no grant of power from which it reasonably can be implied. There is no enactment of Congress authorizing it. On what, then, does defendant rely to sustain his acts? According to his brief, reiterated in oral argument, he relies upon the President's 'broad residuum of power' sometimes referred to as 'inherent' power under the Constitution, which, as I understand his counsel, is not to be confused with 'implied' powers as that term is generally understood, namely, those which are reasonably appropriate to the exercise of a granted power. *fn1"

 This contention requires a discussion of basic fundamental principles of constitutional government, which I have always understood are immutable, absent a change in the framework of the Constitution itself in the manner provided therein. The Government of the United States was created by the ratification of the Constitution. It derives its authority wholly from the powers granted to it by the Constitution, which is the only source of power authorizing action by any branch of Government. It is a government of limited, enumerated, and delegated powers. *fn2" The office of President of the United States is a branch of the Government, namely, that branch where the executive power is vested, and his powers are limited along with the powers of the two other great branches or departments of Government, namely, the legislative and the judicial. *fn3"

 The President therefore must derive this broad 'residuum of power' or 'inherent' power from the Constitution itself, more particularly Article II thereof, which contains the grant of Executive power. That Article provides that the executive power shall be vested in the President; that he shall swear he will faithfully execute the office of President and will to the best of his ability preserve, protect, and defend the Constitution of the United States, Sec. 1; that he shall be commander in chief of the army and navy of the United States, Sec. 2; and that he shall take care that the laws be faithfully executed, Sec. 3. These are the only sections which have any possible relevancy, and their mere enumeration shows the utter fallacy of defendant's claim. Neither singly nor in the aggregate do they grant the President, expressly or impliedly, as that term has hereinabove been defined, the 'residuum of power' or 'inherent' power which authorizes him, as defendant claims, to take such action as he may deem to be necessary, including seizure of plaintiffs' properties, whenever in his opinion an emergency exists requiring him to do so in the public interest. *fn4" Instead, in Congress is lodged, within Constitutional limitations, the power to 'provide for the common defense and general welfare', Art. I, Sec. 8.

 The non-existence of this 'inherent' power in the President has been recognized by eminent writers, and I cite in this connection the unequivocal language of the late Chief Justice Taft in his treatise entitled 'Our Chief Magistrate and His Powers' (1916) wherein he says: 'The true view of the Executive function is, as I conceive it, that the President can exercise no power which cannot be fairly and reasonably traced to some specific grant of power or justly implied and included within such express grant as proper and necessary to its exercise. Such specific grant must be either in the Federal Constitution or in an Act of Congress passed in pursuance thereof. There is no undefined residuum of power which he can exercise because it seems to him to be in the public interest, and there is nothing in the Neagle case, (infra), and its definition of a law of the United States, or in other precedents, warranting such an inference. The grants of Executive power are necessarily in general terms in order not to embarrass the Executive within the field of action plainly marked for him, but his jurisdiction must be justified and vindicated by affirmative constitutional or statutory provision, or it does not exist.'

 I stand on that as a correct statement of the law. Defendant, realizing the untenable position in which that statement places him, attempts to weaken it by referring to statements made by Chief Justice Taft in Myers v. United States, 1923, 272 U.S. 52, 164, 47 S. Ct. 21, 41, 71 L. Ed. 160, wherein the Court sustained the President's authority to remove a postmaster appointed with the advice and consent of the Senate, but all that the Court held was that Article Ii granted the President 'the executive power of the Government, i.e., the general administrative control of those executing the laws, including the power of appointment and removal of executive officers- a conclusion confirmed by his obligation to take care that the laws be faithfully executed.' I see in that decision nothing inconsistent with his previous pronouncement, in that he traces the authority to a specific power granted to the President; but apparently fearing that someone might read certain obiter in the Myers case as contrary thereto, as defendant now does, the Supreme Court, in Humphrey's Executor v. United States, 1935, 295 U.S. 602, 626, 55 S. Ct. 869, 873, 79 L. Ed. 1611, in a unanimous opinion written by Mr. Justice Sutherland, removed any doubt with respect thereto, in the following language: 'In the course of the opinion of the Court (in the Myers case), expressions occur which tend to sustain the Government's contention, but these are beyond the point involved and, therefore, do not come within the rule of stare decisis. Insofar as they are out of harmony with the views here set forth, these expressions are disapproved.' And the view set forth in that opinion was that the President had no power to remove a member of the Federal Trade Commission by reason of the fact that he was a member of a quasi-legislative and quasi-judicial agency of government and not a purely executive officer as was Myers.

 This would seem to dispose of defendant's contention that the Supreme Court differed from the hereinabove quoted views of Chief Justice Taft.

 But defendant goes further and says there is no lack of judicial recognition of this 'flexible executive power' to seize property without authority of a statute, and he cites, in support of this statement, the following cases: Roxford Knitting Co. v. Moore & Tierney, 2 Cir., 265 F. 177, 179, 11 A.L.R. 1415; but that case involved power exercised under a war statute. Employers Group of Motor Freight Carriers, Inc., v. National Labor Board, 79 U.S.App.D.C. 105, 107, 111, 143 F.2d 145, 147, 151; but that likewise involved a war statute, and no rights had been taken or threatened to be taken which required review of the Board's order. Alpirn v. Huffman, D.C. Neb., 49 F.Supp. 337; but that likewise was under a statute authorizing the President during the national emergency to make requisitions. United States v. Pewee Coal Co., Inc., 341 U.S. 114, 71 S. Ct. 670, 95 L. Ed. 809, where there was a non-statutory seizure during World War II, and where compensation was allowed; but he neglected to state that the legality of the seizure was not in issue in the case. Ct. Cl., 88 F.Supp. 426. These cases are therefore not apposite.

 He next cites general language from the works of Alexander Hamilton, Vol. 4, page 438, but it is far from convincing when read in context. He thereafter cites In re Neagle, 135 U.S. 1, 10 S. Ct. 658, 34 L. Ed. 55, involving a habeas corpus proceeding brought by Neagle, a United States Marshal who killed David S. Terry in defense of Judge Stephen J. Field, but that case traced the source of power in the Executive to Article II, Sec. 3, requiring that he shall 'take care that the laws be faithfully executed.' He also cites the Prize Cases (The Amy Warwick) 2 Black 635, 17 L. Ed. 459, but that simply upheld the validity of President Lincoln's blockade of southern ports and was predicated upon the existence of a state of war, which is not claimed by defendant to exist. He also cites In re Debs, 158 U.S. 564, 15 S. Ct. 900, 39 L. Ed. 1092, concerning the dispatch of troops by President Cleveland in a labor dispute, for the purpose of enforcing the faithful execution of the laws of the United States and the protection of its property and removing obstructions to interstate commerce and the United States mail. There, again, the authority is traced to an express grant of power. These cases therefore do not support his contention, but refute it. He next refers to seizures by former presidents, some during war and several shortly preceding a war, without the authority of ...


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