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AMALGAMATED MEAT CUTTERS v. CONNALLY

October 22, 1971

AMALGAMATED MEAT CUTTERS AND BUTCHER WORKMEN OF NORTH AMERICA, AFL-CIO, Plaintiff,
v.
John B. CONNALLY, Individually, and as Chairman of the Cost of Living Council, et al., Defendants



The opinion of the court was delivered by: LEVENTHAL

LEVENTHAL, Circuit Judge:

In this litigation Plaintiff Union, the Amalgamated Meat Cutters *fn1" suing on its own behalf and on behalf of its affiliated local unions, attacks the constitutionality of the Economic Stabilization Act of 1970 (Act *fn2" ), contained in Title II of Public Law 91-379, 84 Stat. 799, and appended as Annex A, and governmental actions thereunder.

 Two different actions are consolidated in the complaint. Count II seeks to require the major meat packing companies *fn3" to perform their obligations, under their 1970 collective bargaining agreements with the Union, to grant a general wage increase of twenty-five cents an hour effective September 6, 1971. The Union asserts this wage increase was agreed upon in April 1970 after long and difficult negotiations, that the parties carefully weighed alternative benefits and concessions before agreeing on the specific provisions, and that its inclusion was decisive in obtaining the Union's acceptance. The employers respond that the implementation of the wage increase obligation would violate Executive Order 11615, 36 F.R. 15727, promulgated by President Nixon August 15, 1971, appended as Annex B. This Executive Order, Stabilization of Prices, Rents, Wages and Salaries, establishes a 90-day price-wage freeze, a requirement that "prices, rents, wages and salaries shall be stabilized for a period of 90 days" at levels no greater than the highest rates pertaining to a substantial volume of actual transactions by the seller of commodities or services involved in a specified base period preceding August 15. The Union's position is that this defense is insufficient as a matter of law because the Act is unconstitutional and the Executive Order invalid.

 The broader aspect of the controversy before us appears in Count I of the complaint, an action brought against John B. Connally, who as Secretary of the Treasury is Chairman of the Cost of Living Council, and the other officials constituting the Council. In Executive Order 11615 President Nixon established the Cost of Living Council "which shall act as an agency of the United States," specified that it shall be composed of certain designated officials as members *fn4" and "delegated to the Council all of the powers conferred on the President by the Economic Stabilization Act of 1970."

 In Count I the Union seeks a declaratory judgment that the Act and Executive Order 11615 are illegal and unconstitutional, and also an injunction against the officials named as defendants, individually and as members of the Council, restraining and enjoining them from administering or giving any force or effect to the Executive Order and the Act. In view of the prayer for injunction a three-judge District Court was convened October 3, 1971, pursuant to 28 U.S.C. §§ 2282, 2284. We heard oral argument October 8, 1971 on the Union's motion for preliminary injunction. The court rejects the Union's contention that the Act and Executive Order are invalid on their face, for the reasons set forth below.

 A. GOVERNMENT'S CONTENTION OF ADEQUACY OF REMEDY AT LAW

 The federal defendants raise a threshold claim that the Union's prayer for an injunction must be dismissed because it has an adequate remedy at law. This contention would not remove the litigation, since the Union could maintain action against the employers and challenge the constitutionality of the Act and order presented as a defense. However the jurisdiction of this three-judge district court depends on both a substantial constitutional question and equity jurisdiction of the action for injunction. We conclude we have requisite equity jurisdiction.

 While under familiar doctrine, a litigant's claim to injunctive relief requires a showing of irreparable injury and inadequacy of legal remedies, these are "practical terms." Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 507, 79 S. Ct. 948, 3 L. Ed. 2d 988 (1959). The mere fact that a court may ultimately decide in the exercise of its discretion, including balance of conveniences, that an injunction should not be issued -- even assuming for purpose of decision that plaintiff has a valid claim on the merits -- does not negative equity jurisdiction. Where the action seeks to enjoin enforcement of a Federal statute on the ground of unconstitutionality, this would not negative the jurisdiction of a statutory three-judge district court. Broadly speaking such actions to contest a statute's validity, like actions to review Federal administrative action, *fn5" may be maintained by a proceeding for injunction or declaratory judgment or both.

 Even where a declaratory judgment is available, the three-judge district court has equity jurisdiction so long as there is a reasonable possibility that it may approve of an injunction in order to give complete protection to constitutional rights. *fn6" Relegating the Union to the remedies contemplated by the Government would involve a multiplicity of litigation. Multiple damage actions, or their declaratory equivalent, would be required by this Union, and possibly also by its affiliates, not only against the defendant meat packers, but also against various employers in other industries -- retail foods; fur and leather; food-processing; poultry and seafood; canning; and miscellaneous non-food industries. It is alleged that the Union and its affiliates have entered into collective bargaining agreements with employers, providing for increases scheduled to take effect during the 90-day freeze period of Executive Order 11615, affecting in excess of 150,000 employees.

 There is palpably a significant difference to these thousands of employees between the receipt of these increases at the times agreed, available to meet any obligations programmed on their receipt, and any subsequent declaration of right. We need not pursue the question whether a court might have reason to withhold injunctive relief, particularly a preliminary injunction, even though it had been convinced of the merit of the Union's substantive claims. As we have indicated we do not accept the Union's position on the merits. But for present purposes we are concerned with a threshold objection, that the lack of equity jurisdiction precludes our even giving consideration to the merits of the Union's position. That contention we cannot accept. Applying familiar principles, the Union's action, seeking to prevent hardship to its members and multiplicity of litigation, clearly comes within the court's equity jurisdiction.

 B. CLAIM OF UNCONSTITUTIONALITY OF ACT AS DELEGATION OF LEGISLATIVE POWER

 The main claim of the Union is that the Act unconstitutionally delegates legislative power to the President, in violation of the general constitutional principle of the Separation of Powers, and in contravention of Article I, Section I of the Constitution, which provides: "All legislative Powers herein granted shall be vested in a Congress of the United States."

 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." *fn7" 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." *fn8" 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." *fn9"

 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. *fn10"

 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. *fn11" 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." *fn12"

 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. *fn13"

 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. *fn14" 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 *fn15" and derive "meaningful content from the purpose of the Act, its factual background, and the statutory context." *fn16"

 The historical context of the 1970 law is emphasized in the Government's submission: *fn17"

 
"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, *fn18" 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).

 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 *fn19" (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. *fn20"

 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.

 Whether legislative purposes are to be obtained from committee reports, or are set forth in a separate section of the text of the law, is largely a matter of drafting style. Plainly the 1970 legislative purpose set forth in the House Report does not differ in material degree from the statement of legislative purpose in the 1942 legislation upheld in Yakus. This purpose was reiterated in debate on the 1970 Act.

 5. Delegation to President of "timing" of direct controls supported by legislative conclusions that indirect controls were insufficient medicine for "cost-push" inflation and that "stand-by" authority was necessary to permit the President to change his program and to use a freeze as a check on inflationary psychology

 We see no merit in the contention that the Act is constitutionally defective because the timing of the imposition of controls was delegated to the President.

 The House Report clarifies that this delegation was not an abdication by Congress, but the product of a reasoned analysis that only such delegation as to timing would further the legislative purpose of stabilization. It states that the Act "reflects a sincere congressional willingness to do its part -- and to share the consequences -- in a meaningful attack on its inflation," and that the stabilizing authority, together with the December 1969 law granting authority over credit for the purpose of preventing or controlling inflation, *fn21"

 
will, in the opinion of your committee, provide the President with all of the tools necessary to control inflation, while at the same time providing for healthy economic growth. In this way we will not need to rely exclusively on fiscal and monetary actions which place an inordinate burden on those segments of our economy and society least able to bear them.

 The issue whether the delegation before us is excessive must be considered in the light of the unique situation, with the President not in accord with the conclusion of Congress as to the need or desirability of the power entrusted to him. *fn22" Thus the Speaker, supporting the law, put it that the President and his advisers "are prescribing the wrong medicine for the particular inflationary virus now affecting the Nation," *fn23" that restrictive fiscal and monetary policies are appropriate for combating traditional "demand-pull inflation" but the country was now beset by "cost-push inflation" for which direct controls were needed. It is not our place to review the merits of these differences. But the physician-virus metaphor is revealing. Viewing the President as a physician in charge, Congress could advise but not mandate his diagnosis. It sought in the national interest to have the right remedy available on a standby basis, if the President should wish to adopt that prescription, following his further reflection and taking into account future developments and experience.

 We cannot say that this delegation was unreasoned, or a mere abdication to the President to do whatever he willed. It conferred an authority that Congress concluded, with reasons, ...


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