The Union's position is that the Act's broad authority to the President "to issue such orders and regulations as he may deem appropriate to stabilize prices, rents, wages and salaries" vests "unbridled legislative power in the President," a "naked grant of authority" to determine whether they "will be controlled, and the scope, manner and timing of those controls."
The constitutional question thus put to this court is novel and fraught with difficulty, for we cannot blink the broad discretion given to the President by the Act.
The matter has been argued to us on principle and precedent. The divergences in the principles perceived by the litigants are matched by divergences in the precedents they summon. The Government cites numerous authorities but relies most heavily on Yakus v. United States, 321 U.S. 414, 64 S. Ct. 660, 88 L. Ed. 834 (1944), sustaining the grant in the Emergency Price Control Act of 1942 of broad price-fixing authority. The Union particularly invokes the 1935 decisions in Schechter Corp. v. United States, 295 U.S. 495, 55 S. Ct. 837, 79 L. Ed. 1570, and Panama Refining Co. v. Ryan, 293 U.S. 388, 55 S. Ct. 241, 79 L. Ed. 446, holding invalid provisions of the National Industrial Recovery Act of June 16, 1933, 48 Stat. 195.
We are of the view that the Yakus ruling and principles there applied provide the more meaningful guidance for the novel problem at hand, and that this constitutional assault cannot be sustained. We review the several interrelated considerations that lead us to this conclusion.
1. Permissibility of delegation of legislative power, within limits
We may usefully begin with the modest observation that the Constitution does not forbid every delegation of "legislative" power. This was recognized explicitly at least as long ago as Norwegian Nitrogen Products Co. v. United States, 288 U.S. 294, 305, 53 S. Ct. 350, 354, 77 L. Ed. 796 (1933), where Justice Cardozo stated that the tariff provision under consideration involved "in substance a delegation, though a permissible one, of the legislative process."
There may thus be added to the outworn doctrines interred in the cause of wisdom the conception developed in Field v. Clark, 143 U.S. 649, 692-693, 12 S. Ct. 495, 505, 36 L. Ed. 294 (1892), which centers the validity of a delegation by Congress to the President on whether he "was the mere agent of the lawmaking department to ascertain and declare the event upon which its expressed will was to take effect." That officials may lawfully be given far greater authority than the power to recognize a triggering condition was recognized within twenty years in the famous Grimaud case where a unanimous Court "admitted that it is difficult to define the line which separates legislative power to make laws, from administrative authority to make regulations."
There is no analytical difference, no difference in kind, between the legislative function -- of prescribing rules for the future -- that is exercised by the legislature or by the agency implementing the authority conferred by the legislature. The problem is one of limits.
An agency assigned to a task has its freedom of action circumscribed not only by the constitutional limitations that bind Congress but by the perimeters described by the legislature as hedgerows defining areas open to the agency. The question is the extent to which the Constitution limits a legislature that may think it proper and needful to give the agency broad flexibility to cope with the conditions it encounters.
2. Governing concepts of necessary flexibility and accountability for conformance to "intelligible principle" and legislative will
The legislative power granted to Congress by the Constitution includes the power to avail itself of "the necessary resources of flexibility and practicality * * * to perform its function."
The spaciousness of the legislative authority is underscored by the following quotations from the Yakus opinion voicing the elements of the applicable principles: "The Constitution as a continuously operative charter of the government does not demand the impossible or the impracticable." Congress is free to delegate legislative authority provided it has exercised "the essentials of the legislative function" -- of determining the basic legislative policy and formulating a rule of conduct -- held satisfied by "the rule, with penal sanctions, that prices shall not be greater than those fixed by maximum price regulations which conform to standards and will tend to further the policy which Congress has established." The key question is not answered by noting that the authority delegated is broad, or broader than Congress might have selected if it had chosen to operate within a narrower range. The issue is whether the legislative description of the task assigned "sufficiently marks the field within which the Administrator is to act so that it may be known whether he has kept within it in compliance with the legislative will."
The Yakus ruling of Chief Justice Stone carries forward the doctrine earlier articulated by Chief Justice Taft in Hampton that there is no forbidden delegation of legislative power "if Congress shall lay down by legislative act an intelligible principle" to which the official or agency must conform.
Concepts of control and accountability define the constitutional requirement. The principle permitting a delegation of legislative power, if there has been sufficient demarcation of the field to permit a judgment whether the agency has kept within the legislative will, establishes a principle of accountability under which compatibility with the legislative design may be ascertained not only by Congress but by the courts and the public.
That principle was conjoined in Yakus with a recognition that the burden is on the party who assails the legislature's choice of means for effecting its purpose, a burden that is met "[only] if we could say that there is an absence of standards for the guidance of the Administrator's action, so that it would be impossible in a proper proceeding to ascertain whether the will of Congress has been obeyed."
These doctrines have been applied to sustain legislation that delegated broad authority indeed in order to assure requisite flexibility to the officials or agencies designated to discharge the tasks assigned by the Congress. New York Central Securities Corp. v. United States, 287 U.S. 12, 24, 53 S. Ct. 45, 77 L. Ed. 138 (1932) (permitting consolidation of carriers when "in the public interest"); FPC v. Hope Natural Gas Co., 320 U.S. 591, 600, 64 S. Ct. 281, 88 L. Ed. 333 (1944) ("just and reasonable" rates for natural gas); Nat'l Broadcasting Co. v. United States, 319 U.S. 190, 225-226, 63 S. Ct. 997, 87 L. Ed. 1344 (1943) (licensing of radio communications "as public convenience, interest or necessity requires"); Lichter v. United States, 334 U.S. 742, 785-786, 68 S. Ct. 1294, 92 L. Ed. 1694 (1948) (recovery of "excessive profits" earned on war contracts). But perhaps the broadest delegation yet sustained and the one closest to the case before us came in Yakus, for the ultimate standard in the 1942 statute was only that the maximum prices be "generally fair and equitable."
3. Standards of Act are sufficient, in context of history, to permit court to ascertain that 90-day "freeze" was in conformance to legislative will
Under these governing concepts we cannot say that in the Act before us there is such an absence of standards that it would be impossible to ascertain whether the will of Congress has been obeyed.
In some respects, indeed, Congress has been precise in its limitations. The President is given an authority to stabilize prices and wages by § 202(a) of the Act, but not at levels less than those prevailing on May 25, 1970.
Moreover the legislation is not as vulnerable as it would have been prior to the amendment adopted earlier in 1971, under which the President is precluded by § 202(b) from singling out "a particular industry or sector of the economy upon which to impose controls" unless he makes a specific finding that wages or prices in that industry or sector have increased at a rate disproportionate to the rate for the economy as a whole. This limitation was added in reaction to the President's limited exercise of power to impose controls on union-negotiated wages in the building and construction industry. Legislative guidance is amplified in the pertinent committee report:
The Committee has serious reservations about applying the price and wage control authority to a single industry. An industry subject to price controls has no control over the price it must pay for the products of other industries. Likewise, workers subject to wage controls have no protection against a continued rise in the cost of living. For these reasons, the committee hopes the administration will adopt a voluntary system of wageprice guideposts before applying mandatory controls to any specific sector of the economy.
The limitation on the President's power to take action in particular industries or sectors made this authority more narrow than the authority over prices in the 1942 legislation.
It also clarified the will of Congress. Congress gave the President broad authority to stabilize prices, rents, wages and salaries, but in effect it contemplated that controls to achieve broad stabilization would begin with a regulation applicable to the entire economy. While the subject matter was broad, the technique was relatively confined. Confronted with the continuing and escalating inflation, Congress made its will relatively plain, by giving the President authority to halt the inflationary escalation with the issuance of a regulation providing across-the-board controls. The House Banking and Currency Committee Report specifically envisaged a 3-month "freeze" to get "a handle on inflation." H.R. Rep. No. 91-1330, p. 9 (Annex C).
This ascertainment of the contours of the power to "stabilize" is fortified by explicit legislative history. But even the text of the law, the starting point of analysis, must not be taken in a vacuum. In rejecting claims of invalid delegation of legislative power the Court has made clear that the standards of a statute are not to be tested in isolation
and derive "meaningful content from the purpose of the Act, its factual background, and the statutory context."
The historical context of the 1970 law is emphasized in the Government's submission:
"In enacting the legislation in question here, Congress was, of course, acting against a background of wage and price controls in two wars. The administrative practice under both of those Acts was the subject of extensive judicial interpretation and review. This substantial background of prior law and practice provides a further framework for assessing whether the Executive has stayed within the bounds authorized by Congress and provides more than adequate standards for the exercise of the authority granted by the Act."
We think this contention is sound. The context of the 1970 stabilization law includes the stabilization statutes passed in 1942, and the stabilization provisions in Title IV of the Defense Production Act of 1950,
and the "common lore" of anti-inflationary controls established by the agency approaches and court decisions, including the probing analyses of the Emergency Court of Appeals. We do not suggest that the 1970 law was intended as or constitutes a duplicate of the earlier laws. But those laws and their implementation do provide a validating context as against the charge that the later statute stands without any indication to the agencies and officials of legislative contours and contemplation.
The approaches and decisions under the earlier laws are certainly not "frozen" as guidelines for the present law. Indeed an ordinary agency is not precluded from modifying its policies, see Greater Boston Television Corp. v. FCC, 143 U.S. App. D.C. 383, 444 F.2d 841, 852 (D.C. Cir. 1971). An agency "may switch rather than fight the lessons of experience." New Castle County Airport Comm'n v. CAB, 125 U.S. App. D.C. 268, 270, 371 F.2d 733, 735 (1966), cert. denied, 387 U.S. 930, 87 S. Ct. 2052, 18 L. Ed. 2d 991 (1967).
The present administration is entitled to a fresh approach. City of Chicago v. FPC, 128 U.S. App. D.C. 107, 115-116, 385 F.2d 629, 637-638 (1967). The fact that there are significant differences between the inflationary problems of 1970 and the inflationary problems of 1942 and 1950 provides additional reasons for differences in policies. Notwithstanding the permissible differences from prior approaches the historic context of government stablization [stabilization] measures provides a starting point, within the broad contemplation of Congress, that negatives a conclusion that the whole program was set adrift without any rudder.
An undeniably prominent feature of the earlier stabilization programs was the adoption thereunder of across-the-board wage and price controls, typically with "freeze" and "hold-the-line" approaches, subject to relaxation for hardships and inequities under implementing standards. There can be no doubt that in its broad outlines the general freeze ordered by the President conforms to the legislative intention. Even a rudimentary recourse to available legal materials readily permits a court to ascertain at least to this extent the contours of the legislative will and the conformance of the Executive action to it.
4. Availability of legislative stabilization purpose from legislative history
The Union challenges the thesis that the 1970 Act can be sustained by reference to the earlier stabilization laws and rulings thereunder, complaining that unlike the earlier statutes the present law is "shorthand legislation," devoid of any statement of policy or objectives, or of conditions under which action is to be taken, or findings of Congressional intent.
The Act is obviously different in its structure from the law upheld in Yakus, which was replete with just such statements of policy, objectives and findings. The difference is largely one of drafting style, ascribable perhaps to the circumstance that the 1942 law was proposed by the Executive, and introduced on that basis after scrutiny by the legislature's drafting staffs. This circumstance is not immaterial -- for power may come on occasion to be granted more broadly to one who seeks it not -- but it can hardly be decisive.
The Yakus opinion made reference to these purposes of the 1942 law, 321 U.S. at 420, 64 S. Ct. at 665:
to stabilize prices and to prevent speculative, unwarranted, and abnormal increases in prices and rents; * * * to assure that defense appropriations are not dissipated by excessive prices; to protect persons with relatively fixed and limited incomes, consumers, wage earners, investors, and persons dependent on life insurance, annuities, and pensions, from undue impairment of their standard of living; to prevent hardships to persons engaged in business, * * * and to the Federal, State, and local governments, which would result from abnormal increases in prices * * *.
While there are differences in circumstances and emphasis, the purposes relied on in Yakus are largely overlapping of the purposes inherent in the 1970 authority to "stabilize" prices and wages -- in particular the dominant purpose of avoiding the impairment of the standard of living of consumers, wage earners and those on fixed incomes. It is not without significance that Title II of the Act of August 15, 1970, which is identified in its short title as the Economic Stabilization Act of 1970, is captioned: "Title II -- Cost of Living Stabilization." The situation may be diagrammed as two intersecting circles with a large overlapping sector in common.
The purposes of the 1970 law, to a considerable extent inherent in the very authority to "stabilize," are set forth more explicitly in the Report of the House Committee on Banking and Currency which inserted these provisions into the legislative process. H.R. Rep. No. 91-1330
(hereafter cited as House Report). We consider this Report as of such importance for the present ruling, that we append the pertinent excerpts as Annex C. Settled precedent establishes beyond any doubt that committee reports may be considered in order to ascertain the purpose of legislation.
The House Report states (at p. 10) that the provisions were proposed so that "the President will have all of the necessary weapons needed to control inflation." And the Committee added:
No one can doubt that inflation is still on a rampage in our economy. The cost-of-living figures released on July 22 indicated that prices have risen in the first half of this year at a 6 percent annual rate. Granted that this rate of increase is insignificantly less than that experienced in the first half of last year, this is in no way provides any solace to the unemployed, the aged, and others living on fixed incomes, and the wage earner who finds his wages continually eroded by increases in the cost of living. This same inflation is responsible for the housing depression, the balance-of-payments crisis and the current liquidity squeeze.