Denver Union Stock Yard Company v. Producers Livestock Marketing Association/Concurrence Clark

by Tom C. Clark

United States Supreme Court

356 U.S. 282

Denver Union Stock Yard Company  v.  Producers Livestock Marketing Association

 Argued: March 10, 1958. --- Decided: April 28, 1958

Mr. Justice CLARK, concurring.

I agree that invalidity is evident on the face of the regulations issued by the Denver Union Stock Yard Company. Section 304 of the Packers and Stockyards Act, 42 Stat. 164, as amended, 7 U.S.C. § 205, 7 U.S.C.A. § 205, requires a market agency registered at a given stockyard to furnish reasonable services at that stockyard on reasonable request of a customer. Respondent's complaint alleges that respondent is registered at other stockyards besides the Denver yard, and because of petitioner's motion to dismiss the complaint we take those allegations as true. Under § 304, the several registrations impose a duty on the part of respondent to offer Colorado customers reasonable service at each yard where it is registered. Since the Denver regulations prohibit respondent's fulfillment of that statutory duty, they would appear void on their face under § 307, which declares unlawful 'every unjust, unreasonable, or discriminatory regulation or practice.' 42 Stat. 165, as amended, 7 U.S.C. § 208, 7 U.S.C.A. § 208.

The regulatory scheme devised by the Congress, however, makes it possible for invalidity on the face of the regulations to be overcome by evidence showing that their application and operation is not in fact unjust, unreasonable, or discriminatory. Primary jurisdiction is placed in the Secretary to make such a determination. Because of that, I should think the normal course of action where dismissal is found unwarranted would be to remand the case to the Secretary for a full hearing.

That procedure does not appear to be in order here, however, because the purpose and intended effect of the regulations is crystal clear. The president of the Denver stockyard, before the case took its present posture, filed an affidavit in the record alleging in substance that in the period July 1, 1951, to June 30, 1955, respondent market agency 'continually diverted away from the Denver Union Stockyards a large volume of livestock' which normally would have been consigned to that yard, that respondent sold lambs 'direct to many packers * * * including some located on the Atlantic Coast and in interior Iowa,' and that 'many like transactions were conducted by (respondent) in its own name or for its account by its wholly owned subsidiary, the Western Order Buyers, or by the employees of (respondent) or its said subsidiary.' The affidavit further recites that, 'As a result, the Denver Union Stock Yard Company in the early part of this year (1955) issued item 10(c) of its rules and regulations which was designed to * * * eliminate an unjust, unreasonable, and discriminatory practice by (respondent) * * *.' The purpose and effect of the regulations is made certain by the additional statement that, '(I)t was felt that market agencies may not engage in transactions away from the Denver market inconsistent with the duties imposed upon them to render the best possible service which, when boiled down, means that they must refrain from diverting the normal flow of livestock to this market if they are to continue to operate at the market.' (Emphasis added.) With greater force than any other possible evidence, this frank statement reveals that petitioner intended to, and did, monopolize the livestock market in the entire State of Colorado, save a small area on the eastern border. Since the Denver stockyard itself would impose the only sanction possible for violation of the regulation, namely, cancellation of registration, the affidavit is a complete answer to any evidence offered as to reasonableness in practical operation. The regulations, according to their author, bluntly say that to continue operation on the Denver market a registrant 'must refrain' from selling Colorado livestock, unless from the small area mentioned above, on any other market. It would be a useless formality to remand in the light of such an irrefutable acknowledgment.

It also is worthy of note that petitioner elected to defend the regulations without any evidence when it moved to dismiss the complaint before the Secretary. Petitioner could have offered its presently proffered explanations then but chose not to do so. While such action does not preclude a remand now for a full hearing, petitioner's about-face on losing the battle lends no support to its cause.

For these reasons I join the judgment of affirmance.

Mr. Justice FRANKFURTER, whom Mr. Justice HARLAN joins, dissenting.

The sole question presented by the case is this:

Under his powers and duties to effectuate the scheme designed by Congress through the Packers and Stockyards Act of 1921, for the regulation of the stockyards industry, is the Secretary of Agriculture barred from determining on the basis of evidence whether or not regulations are reasonable that are promulgated by the Denver Stockyards for the purpose of preventing the diversion of stockyard services from the Denver Stockyards that as a matter of normal business flow would go to the Denver yards, on the challenge to such regulations by a market agency registered at the Denver Stockyards to furnish 'reasonable stockyard services' at that yard?

To deny the Secretary of Agriculture the power even to hear evidence as to the reasonableness of such regulations is to misconceive the whole scheme for the regional regulation of the stockyards industry for which stockyards and market agencies are geographically licensed, and to deny to the Secretary of Agriculture powers of administration that Congress has conferred upon him.

While a regulation may, like the one in question, on its face that is, abstractly considered-appear to be unreasonable because discriminatory, elucidation of such a regulation in the concrete, on the basis of its practical operation in light of evidence, may negative such appearance. It is for the Secretary of Agriculture to hear such relevant evidence and to assess it, subject to the appropriate scope of judicial review. This proceeding should therefore be remanded to the Secretary of Agriculture for appropriate action. These views are elaborated in Mr. Justice WHITTAKER's opinion, which I join.

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

Notes