United States v. Morgan, 313 U.S. 409 (1941)

Author: Justice Roberts

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United States v. Morgan, 313 U.S. 409 (1941)


With much that is said in the opinion of the Court, I agree, but I am compelled to dissent from the conclusion. Despite the fact that this litigation has extended over many years, I still think that not only the rights of the market agencies, but the principles involved, require the Court to take care that the litigation is disposed of in accordance with the principles it has laid down. The result now reached is not in accordance with those principles. A recital of the course of the litigation is necessary for an understanding of the case as now presented.

Rates for the market agencies at Kansas City were fixed by the Secretary of Agriculture{1} July 24, 1923. By virtue of the statute, these became the legal rates, and the agencies were bound not to exceed them until the further order of the Secretary. April 7, 1930, the Secretary instituted an inquiry into the existing rates. June 14, 1933, he issued an order reducing them.

July 19, 1933, the market agencies brought suit to enjoin and set aside the order. The District Court entered a temporary injunction July 22, 1933, in connection with which it provided that the difference between the rates be ng charged by the agencies and those fixed by the order under attack should be impounded pending the outcome of the litigation. Upon the trial of the cause, the court refused to consider an issue tendered by the agencies as to whether the Secretary had granted them a full hearing. Upon examination of the record, it held the order was supported by substantial evidence, and, on October 29, 1934, dismissed the bill.{2} This Court reversed, on May 25, 1936, holding that the District Court should have considered and decided the question whether the agencies had been afforded a full hearing.{3}

On a further trial, the District Court again upheld the order by a decree of July 2, 1937.{4} The United States appealed from this decree. In the meantime, however, a significant thing occurred. On November 14, 1937, the Secretary approved new rates, effective November 1, 1937, in recognition of changed conditions existing in the business at Kansas City. The impounding order therefore ceased to operate November 1, 1937.

This Court reversed the second decree of the District Court because it found that the agencies had been denied a full hearing in the proceedings which eventuated in the order of 1933. Its decision was rendered April 25, 1938, and a rehearing was denied May 31, 1938.{5}

The Secretary and his legal advisers evidently believed, and, as I think, correctly, that the old rates authorized in 1923 stood until a new order, lawfully made, superseded them for the future. The rates fixed for the future by the order of 1933 had not become effective, and the Act contained no provision for altering rates charged in the past under authority of the existing and outstanding order of 1923, or granting reparation in respect of them. The Secretary seems to have thought that he could reach this situation by the entry of a nunc pro tunc order as of July 14, 1933. On June 2, 1938, therefore, he directed that the proceeding be reopened and that the "proceedings, findings of fact, conclusion and order" issued on June 14, 1933, be served upon the agencies as the "Tentative Findings of Fact, Conclusion and Proposed Order" of the Secretary, and he denominated them as "Tentative Findings of Fact, Conclusion, and Proposed Order" issued as of June 14, 1933. It is plain that he proposed thus to cure what had been found to be the defect in the order by affording the market agencies an opportunity to file and argue exceptions, in an effort to show any infirmity in the findings and conclusion on which the 1933 order was based. If none was made to appear, he proposed to issue the order nunc pro tunc as of its original date. It is true that, after exceptions were filed and upon the hearing before an examiner, the agencies were permitted to offer evidence to show changed conditions supervening in the period between 1933 and 1937. It is also true that, while the examiner retained all of the findings previously made as the foundation for the order of 1933, he added certain findings, but he did not, in any material respect, alter the ultimate findings, and, indeed, he retained the exact rates fixed in the earlier order and left undisturbed every finding as to cost (with one immaterial exception), even to the fourth decimal place, as it had stood in the original report.

Immediately after the reopening of the proceeding consequent upon the decision of this Court of May 31, 1938, the Secretary, on June 12, 1938, applied to the District Court for an order staying the distribution of the impounded funds pending his further decision and order. In his petition, he said:

After a full hearing, the Secretary will determine by an order as of June 14, 1933, what rates may reasonably be charged by petitioners to their clients for the services rendered them.

The District Court denied the application.{6}

The United States appealed from the decree. In its brief it stated:

The only purpose and effect . . . [of the reopened proceeding] is to determine whether and to what extent the appellees have been prejudiced by the procedural defect in the earlier proceeding.

Before the case had been decided here, the reopened proceeding before the Secretary had so progressed that the evidence had been closed, a tentative report made by an examiner, exceptions filed, and argument heard by the Secretary. The record plainly discloses that, up to the time of our final decision on this last appeal, the Secretary had been content to take the data disclosed by his investigation of the market agencies’ activities in the years 1929, 1930, and 1931 as the basis of any order, and this was natural if, as he then supposed, he was justified in entering an order nunc pro tunc as of the date of his original 1933 order.

This Court rendered its opinion in the last appeal May 15, 1939.{7} Speaking by a majority, the Court there held that, as the District Court was acting as a court of equity in the premises, the impounded funds should be disbursed according to the equities of the situation. It adverted to the fact that the rates fixed by the Secretary October 14, 1937, governed for the future until altered in accordance with law, but it held that the equities of the case required an investigation as to whether the rates charged in the interval between 1933 and 1937 had been unreasonable, and, as a result, whether it would be inequitable to withhold from the market agencies’ customers and return to the market agencies all or any part of the impounded fund. The court was of the view that the Secretary was in a peculiarly favorable position to find the facts and advise the court upon this subject, and that the court ought to cooperate with the Secretary to attain a just result.

At this juncture, the reopened proceeding was under submission before the Secretary. It is to be noted that he had refused to consider the data in his own possession with respect to the actual experience of two of the market agencies which had conformed to the rates he fixed in 1933. It is further to be noted that the existence of changed conditions not only is shown by the uncontradicted evidence offered by the agencies, but by the fact that the Secretary recognized such change in making his order of October 14, 1937.

The court below has found that conditions in the business had substantially, and in some respects radically, changed since the completion of the original record on which the 1933 order was based. The court found the facts as to the changes which had increased the cost of doing the business. The government does not question the correctness of these findings. I think these increased costs cannot be ignored or dismissed with the comment that the Secretary considered them, when it is plain he did not. This Court did not intend by its decision in 1939 that the Secretary should shut his eyes to these changed conditions, and make a forecast in 1939 as of 1933 and upon the data available in 1933, as if he had before him only the experience prior to 1933 and were then acting. Of a similar situation, this Court has said: "A forecast gives us one rate. A survey gives another. To prefer the forecast to the survey is an arbitrary judgment."{8}

The Secretary had made a careful investigation of the operations of the market agencies in the years prior to 1933. The same data was available to him in 1939 for the period 1933 to 1937, but was not considered. What he should have done, in the light of this Court’s decision, was again to reopen the cause and to investigate the fairness and reasonableness of the charges exacted from 1933 to 1937 in the light of actual experience. To assert that he did in fact pursue this course is to place an unjustified gloss upon the record now before the Court.

We ought not to conclude the parties by a strained construction of the record facts, or by applying to this inquiry technical rules of evidence and procedure which have not place in such a proceeding. On the contrary, we should require that to be done which the broad equities of the case demand. No less, it seems to me, will satisfy the mandate of this Court in its earlier pronouncement. I should therefore reverse the decree and direct that the Secretary ascertain the facts upon all available evidence, in accordance with the decisions of this Court when the case was last here.

1. Several incumbents of the office acted in the case at successive dates. The term Secretary is used to designate the official who acted in any instance.

2. 8 F.Supp. 766.

3. 298 U.S. 468.

4. 23 F.Supp. 380.

5. 304 U.S. 1, 23.

6. 24 F.Supp. 214.

7. 307 U.S. 183.

8. West Ohio Gas Co. v. Public Utilities Comm’n, 294 U.S. 79, 82.


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Chicago: Roberts, "Roberts, J., Dissenting," United States v. Morgan, 313 U.S. 409 (1941) in 313 U.S. 409 313 U.S. 424–Joint_313 U.S. 428. Original Sources, accessed April 20, 2019, http://www.originalsources.com/Document.aspx?DocID=DLZSENV1TRU77X7.

MLA: Roberts. "Roberts, J., Dissenting." United States v. Morgan, 313 U.S. 409 (1941), in 313 U.S. 409, pp. 313 U.S. 424–Joint_313 U.S. 428. Original Sources. 20 Apr. 2019. www.originalsources.com/Document.aspx?DocID=DLZSENV1TRU77X7.

Harvard: Roberts, 'Roberts, J., Dissenting' in United States v. Morgan, 313 U.S. 409 (1941). cited in 1941, 313 U.S. 409, pp.313 U.S. 424–Joint_313 U.S. 428. Original Sources, retrieved 20 April 2019, from http://www.originalsources.com/Document.aspx?DocID=DLZSENV1TRU77X7.