text:
    John M. CLEARY, Appellant, v. O. Roy CHALK et al.

      No. 71-1153.
    United States Court of Appeals, District of Columbia Circuit.
    Argued June 15, 1973.
    Decided Nov. 12, 1973.

      John M. Cleary, appellant, pro se. Harvey M. Spear, New York City, with whom Manuel J. Davis, Washington, D. C., was on the brief, for appellee.
    Before ROBINSON and WILKEY, Circuit Judges, and JAMESON, Senior United States District Judge for the District of Montana.

       Sitting by designation pursuant to 28 U.S.C. § 294(d) (1970).

   SPOTTSWOOD W. ROBINSON, III, Circuit Judge:

Section 10 of the Clayton Act prohibits interstate common carriers and corporations with which they have interlocking directors from dealing in securities and articles of commerce aggregating in value more than $50,000 annually except on the basis of competitively-derived bids most favorable to the carrier. Section 4 of the Act enables a person injured in his business or property by activity violative of the federal antitrust laws to sue for triple damages. On appellees’ motion, appellant’s complaint invoking Section 4 for alleged infractions of Section 10 was dismissed by the District Court on the ground that it failed to state a claim upon which relief could be awarded. We affirm.

Any person who shall be injured in his business or property bj reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney’s fee.

I

From 1956 to 1973, D. C. Transit System, Inc. (Transit), engaged as a common carrier of passengers in and between the District of Columbia and its Maryland and Virginia suburbs. Between 1964 and 1970, Transit made six conveyances of improved parcels of real estate which had been withdrawn from transportation operations after they had lost their usefulness therein. Each conveyance was of a single parcel to a corporation in exchange for all of its capital stock. Each was made at the property’s book value — which exceeded Section 10’s $50,000 ceiling — without competitive bidding. At the time of each transaction, Transit and at least five of the conveyees were interlocked in a fashion addressed by Section 10. And at the inauguration of this litigation, all of the conveyees remained wholly-owned subsidiaries of Transit. These were the salient facts established on the record when the District Court acted.

Appellant was a regular farepaying rider of Transit’s vehicles. In that role he sued for himself and the entire class of riders. The theory of the complaint, predicated squarely on Section 10, was that Transit had conveyed properties worth substantially more than the securities — the corporate stocks — received in return, and had divested itself of the earning power and loan value which those properties possessed, all to the detriment of Transit’s customers in the form of higher fares. For this the complaint sought treble damages, and jurisdiction and standing to sue were rested exclusively on Section 4.

In the view that the allegations of appellant’s complaint did not provide a foundation for relief, the District Court granted appellees’ motion to dismiss. On this appeal the parties have debated a number of points, but we find it necessary to address only the question whether the transactions described fell within the condemnation of Section 10. We answer that question in the negative.

II

The goal of the Federal antitrust laws is to safeguard the intérplay of competitive forces in the far-flung commerce of the Nation. The Sherman Act, passed in 1890, “was designed to be a comprehensive charter of economic liberty aimed at preserving free and unfettered competition as the rule of trade.” Its “fundamental purpose . . . was to secure equality of opportunity and to protect the public against evils commonly incident to destruction of competition through monopolies and combinations in restraint of trade.” The Clayton Act, adopted in 1914, had these wholesome aims no less in view, but sought its contribution to them through a regulatory technique of its own.

Unlike the Sherman Act, which broadly approached antitrust problems by outlawing consummated contracts and conspiracies, the Clayton Act specifically prohibits particular practices which are outside the ambit of the Sherman Act but nonetheless are steps toward the monopolistic ends which the latter had undertaken to forbid. “[I]n passing the Clayton Act,” Congress “sought to bring within the scope of its proscriptive provisions, conduct and practices which though dangerous to the competitive structure, were not covered at all or only inadequately covered by provisions of the Sherman Act.” It was intended “to supplement the purpose and effect of other anti-trust legislation, principally the Sherman Act of 1890; ” it “sought to reach the agreements embraced within its sphere in their incipiency, and . to determine their legality by specific tests of its own.” In sum, by banishing designated practices, Congress endeavored to nip embryonic conspiracies and monopolies in the bud.

That, which is so true of the Clayton Act, generally, is no less so of Section 10, which imposes the prohibition upon which appellant relies. In its features relevant to this case, Section 10 provides that:

No common carrier engaged in commerce shall have any dealings in securities ... or other articles of commerce, ... to the amount of more than $50,000, in the aggregate, in any one year, with another corporation, . . . when the said common carrier shall have upon its board of directors or as its president, manager, or as its purchasing or selling officer, or agent in the particular transaction, any person who is at the same time a director, manager, or purchasing or selling officer of, or who has any substantial interest in, such other corporation, . . . unless and except such purchases shall be made from, or such dealings shall be with, the bidder whose bid is the most favorable to such common carrier, to be ascertained by competitive bidding under regulations to be prescribed by rule or otherwise by the Interstate Commerce Commission.

As we shall see, both the legislative history and a consistent course of judicial construction unveils Section 10 as “a narrowly drawn statute designed to meet a particular set of experienced evils.”

Section 10 followed in the wake of public concern over abuses flowing from interlocking directorates among railroads and their suppliers and bankers shortly after the turn of the century. Interlocked office-holding in these industries created the potential for such activities as purchases by railroads at exhorbitantly high prices, issuance of railroad securities at exhorbitantly low prices, and loans to railroads at excessively high rates of interest. President Wilson, in his message to Congress of January 20, 1914, proposed “laws which will effectively prohibit and prevent such interlockings of the personnel of the directorates of great corporations.” The House promptly responded with a bill which would have outlawed certain kinds of interlocks between carriers and bankers. The Senate expanded the House version to cover dealings in supplies and other articles of commerce, but contrasted it by supplanting the total ban on interlocks with a requirement for competitive bidding. In conference, the Senate bill prevailed, and became Section 10 of the Act in the exact form in which it appears today.

So it is that, as. the Supreme Court has observed, “[w]h-ile history shows a rather wide pattern of railroad misconduct leading to § 10, that section is a rather narrow prohibition applicable to activity that is conceptually within the antitrust philosophy.” For, as the Court has declared, “[t]he evident purpose of § 10 of the Clayton Act was to prohibit a corporation from abusing a carrier by palming off upon it securities, supplies and other articles without competitive bidding and at excessive prices through overreaching by, or other misfeasance of, common directors, to the financial injury of the carrier and the consequent impairment of its ability to serve the public interest.” It is clear, on the other hand, that Section 10 bars noncompetitive dispositions- as well as noncompetitive acquisitions by carriers in transactions with an interlocked corporation. It is equally clear, on the other hand, that the section is not to be extended to business activities which are not infected with the wrongdoing for which Congress intended redress.

Ill

It is against the historical and adjudicative background of Section 10 that we must examine the case which appellant advanced in the District Court. In essence, it was as we have said, a claim that Transit transferred illegally — that is, without competitive bidding —six parcels of real estate to six subsidiaries at book value rather than true market value in return for securities— all of the capital stock — of the subsidiaries. In this fashion, appellant’s complaint charged, Transit divested itself of assets for less than their fair value, and of the earning power those assets had and of the assistance they might have afforded Transit in obtaining loans to bolster its financial stability. Since these transactions occurred without competitive bidding, appellant insists that they fell within the purview of Section 10.

It may be that the facts stated in the complaint could be jammed into the mold of the literal language of Section 10, but the ability to do so would not constitute the full proof of its applicability. “[L]iteralness may strangle meaning,” and “[t]he decisions of [the Supreme] Court have repeatedly warned of the dangers of an approach to statutory construction which confines itself to the bare words of a statute.” We ourselves have had previous occasion to point out that “[t]he literal wording of [a] statute is . not the sole index to legislative intent,” and that “[i]t cannot prevail over strong contrary indications in the legislative history;” rather, as we have added, “[w]e must look through the statute itself to what lay behind it.” These admonitions deserve special heed in Section 10 cases, wherein courts before us have recognized the hazards inherent in literal interpretation of that section.

Moreover, Section 10 not only augurs civil liability but criminal penalties as well. So, as the Supreme Court has held, Section 10 is “[a] criminal statute [which] is to be construed strictly, not loosely.” We think the factor entitled to dominance in tightening the interpretation to be given Section 10 is the specific object which Congress had in mind in enacting it What Congress sought, we repeat, was protection against the draining away of carrier assets by noncompetitive acquisitions for which the carrier pays too much, or by noncompetitive dispositions for which it nets too little. We turn, then, to the case at bar to ascertain whether the conveyances complained of impinged in that way on Section 10.

One feature of the conveyances stands out indelibly. Each was made to a corporation in exchange for all of its capital stock. And both at the time of conveyance and at the time of suit, each corporate conveyee was a wholly-owned subsidiary of Transit. To be sure, the conveyances effected a legal transformation of Transit’s ownership of real estate to ownership of stock, but in the practical sense Transit’s position hardly-changed at all. Its complete ownership of the stock of the corporations having direct ownership of the realty was tantamount to continuing proprietorship of the realty. By virtue of its exclusive power to control the subsidiaries, Transit retained full dominion over the properties. Its economic relationship to the properties after the conveyances was virtually the same as it had been before.

In these circumstances, we cannot agree with appellant that in making the conveyances Transit divested itself of the properties at less than fair value. Viewing the situation realistically, Transit simply did not depart with them. And certainly the post-transfer value of the stock which Transit acquired was equal to the value which the properties would have possessed had they remained as nonoperating assets in Transit’s hands. Nor can we agree that Transit, or in turn its farepayers, lost either the earning power of the properties or the financial strength which they could impart to Transit’s loan applications. The earnings of the subsidiaries in which the properties were titled, though retained, were the earnings of Transit, their parent. As the record establishes, the financial statements of Transit and its corporate subsidiaries were consolidated for purposes of financial transactions. Indeed, some of the properties have been mortgaged and the proceeds used to support transportation operations. No financial prejudice to Transit or its customers in consequence of the rearrangement of its property holdings is apparent.

Beyond that, the grievances which appellant’s complaint attributed to the conveyances were not bases for disapprobation by farepayers. It is one thing to say, as recently we have held, that upon removal of Transit’s properties from operating to nonoperating status, its farepayers were entitled to consideration, in the fare-setting process, of value appreciations resulting solely from the interaction of market forces while the properties were dedicated to the public weal. That point was not raised in the complaint which the District Court dismissed, and in any event could not have affected the outcome of the litigation. It is quite a different thing, however, to claim for farepayers, as the complaint did, the earnings and the loan value of assets after they have properly been removed from public service. Properties so withdrawn from then on are ordinarily outside the area of farepayers’ concern, which is the reasonableness of the rates they are called upon to pay for the service. It is well settled that income received by a public utility from nonoperating property is not to be considered in establishing the rate, and in the setting of Transit’s fares for public transportation that rule has been specifically observed. And we perceive no ground upon which farepayers can legitimately object that the withdrawal of an asset no longer useful to transportation service has weakened the financial position of the carrier. The record before us discloses without contradiction that the properties in question were removed from transportation operations only after they had outlived their usefulness therein.

We conclude, then, that the challenged conveyances are free from the evil against which Section 10 was designed to protect. That evil is financial imposition upon the carrier, and we can identify nothing of that sort in the property transfers under attack. It follows that appellant’s complaint failed to state a claim under Section 10 upon which relief might be awarded, and that' the District Court was plainly right in dismissing it. Its judgment doing so is accordingly

Affirmed.

      . Act of Oct. 15, 1914, ch. 323, 38 Stat. 730, as amended, 15 U.S.C. §§ 12 et seq. (1970).

      . Section 10, 15 U.S.C. § 20 (1970), provides:
      No common carrier engaged in commerce shall have any dealings in securities, supplies, or other articles of commerce, or shall make or have any contracts for construction or maintenance of any kind, to the amount of more than $50,000, in the aggregate, in any one year, with another corporation, firm, partnership, or association when the said common carrier shall have upon its board of directors or as its president, manager, or as its purchasing or selling officer, or agent in the particular transaction, ■any person who is at the same time a director, manager, or purchasing or selling officer of, or who has any substantial interest in, such other corporation, firm, partnership, or association, unless and except such purchases shall be made from, or such dealings shall be with, the bidder whose bid is the most favorable to such common carrier, to be ascertained by competitive bidding under regulations to be prescribed by rule or otherwise by the Interstate Commerce Commission. No bid shall be received unless the name and address of the bidder or the names and addresses of the officers, directors, and general' managers thereof, if the bidder be a corporation, or of the members, if it be a partnership or firm, be given with the bid.
      Any person who shall, directly or indirectly, do or attempt to do anything to prevent anyone from bidding, or shall do any act to prevent free and fair competition among the bidders or those desiring to bid, shall be punished as prescribed in this section in the case of an officer or director.
      Every such common carrier having any such transactions or making any such purchases shall, within thirty days after making the same, file with the Interstate Commerce Commission a full and detailed statement of the transaction showing the manner of the competitive bidding, who were the bidders, and the names and addresses of the directors and officers of the corporations and the members of the firm or partnership bidding; and whenever the said commission shall, after investigation or hearing, have reason to believe that the law has been violated in and about the said purchases or transactions, it shall transmit all papers and documents and its own views or findings regarding the transaction to the Attorney General.
      If any common carrier shall violate this section, it shall be fined not exceeding $25,-000; and every such director,, agent, manager, or officer thereof who shall have knowingly voted for or directed the act constituting such violation, or who shall have aided or abetted in such violation, shall be deemed guilty of a misdemeanor and shall be fined not exceeding $5,000 or confined in jail not exceeding one year, or both, in the discretion of the court.

      . Section 4, 15 U.S.C. § 15, provides:

      . See Fed.R.Civ.P. 12(b)(6). See also notes 17, 53, 64, infra.

      . D.C. Transit System, Inc., is a District of Columbia corporation, and a wholly-owned subsidiary of D.C. Transit of Delaware, a Delaware corporation.

      . Act of July 24, 1956, Pub.L.No.757, 70 Stat. 598 (1956) ; National Capital Area Transit Act of 1972, Pub.L.No.92-517, 86 Stat. 999 (1972).

      . Three other conveyances between 1959 and 1962 and another in 1970 — all to conveyees unassociated with Transit — are not involved in this litigation.

      . See Democratic Cent. Comm. v. Washington Metropolitan Area Transit Comm’n, 158 U.S. App.D.C. -, 485 F.2d 786 (1973) ; Bebchick v. Washington Metropolitan Area Transit Comm’n, 158 U.S.App.D.C.-, ---, 485 F.2d 856, 868-867 (1973) ; Democratic Cent. Comm. v. Washington Metropolitan Area Transit Comm’n, 158 U.S.App.D.C. ---, 485 F.2d 886, 895-903 (1973).

      . See Democratic Cent. Comm. v. Washington Metropolitan Area Transit Comm’n, supra note 8, 158 U.S.App.D.C. ---, 485 F.2d at 829-831 1H11-6.

      . The complaint alleges that Transit and five of the conveyees had common directors and officers. It makes no similar allegation respecting the sixth.

      . The facts we have recited, for the most part, were alleged in appellant’s complaint. A few were established by an uncontradicted affidavit submitted on behalf of appellees, which the District Court was at liberty to consider. The motion to dismiss was treatable as a motion for summary judgment, Fed.R. Civ.P. 12(b) ; see also 2A J. Moore, Federal Practice If 12.09 (2d ed. 1948) ; 5 C. Wright & A. Miller, Federal Practice § 1364 at 664-73 (1969) ; and the absence of any issue of material fact was evident. See Adickes v. S. H. Kress & Co., 398 U.S. 144, 157-160, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970) ; Bloomgarden v. Coyer, 156 U.S.App.D.C. 156, 109, 479 F.2d 201, 206-207 (1973).

      . Prior to filing suit in the District Court, appellant sought to intervene in a proceeding pending before Transit’s regulatory agency, the Washington Metropolitan Area Transit Commission, upon Transit’s application for an increase in certain of its fares. At the time, appellant informed the Commission that he desired to test the validity of the conveyances by the requirements of § 10. The Commis-son denied intervention but instructed its staff to investigate the matter, and the staff later reported that it found no evidence of § 10 violations to lay before the Commission. See D.C. Transit Sys., Inc. (Order No. 1090), 85 P.U.R.3d 508, 509-10 (WMATC 1970). After the Commission granted Transit a fare increase, D.C. Transit Sys., Inc. (Order No. 1052), 85 P.U.R.3d 1 (WMATC 1970), rev’d, Democratic Cent. Comm. v. Washington Metropolitan Area Transit Comm’n, 158 U.S.App.D.C. -, 485 F.2d 886, supra note 8, appellant sought reconsideration but apparently did not renew the antitrust objection. The Commission denied reconsideration, D.C. Transit Sys., Inc. (Order No. 1090), supra, and apipellant filed a petition for review in this court, but on appellant’s motion it was later dismissed with prejudice. The disposition we make eliminates any occasion to investigate the possible effect of those events upon appellant’s suit.

      . The suit was instituted prior to the termination of Transit’s franchise by public acquisition and consequent cessation of its transportation operations. See National Capital Area Transit Act of 1972, § 102(b), 86 Stat. 1001 (1972). Neither in its character as a suit against Transit nor as one against its officers and conveyee-subsidiaries was it impaired by the takeover. See id. § 102(d), 86 Stat. 1001 (1972); Democratic Cent. Comm, v. Washington Metropolitan Area Transit Comm’n, supra note 8, 158 U.S.App.D.C. at ---, 485 F.2d at 828-829.

      . The defendants named are Transit, its parent corporation, the six subsidiaries, and directors and officers of those corporations.

      . See note 3, supra. Appellant advises us that he does not seek payment of damages to farepayers individually, which obviously is an impossibility. Instead, he would have any •amount recovered in his lawsuit held and dispensed pursuant to court order for the benefit of users of the transit system. Compare, e. g., Bebchick v. Public Utils. Comm’n, 115 U.S.App.D.C. 216, 232-233, 318 F.2d 187, 203-204, cert. denied, 373 U.S. 913, 83 S.Ct. 1304, 10 L.Ed.2d 414 (1963). See also Democratic Cent. Comm. v. Washington Metropolitan Area Transit Comm’n, supra note 8, 158 U.S.App.D.C. at ---, 485 F.2d at 823-829.

      . See note 11, supra.

      . Appellees also mount a strenuous attack on appellant's standing to sue. The jurisdictional predicate of the suit is § 4 of the Clayton Act, which authorizes an action for treble damages by a “person . ... injured in his business or property by reason of [conduct] forbidden in the antitrust laws.” See note 3, supra. This language makes evident three basic requirements which appellant had to satisfy in order to achieve standing to maintain the action.
      The first was sufficient allegation of injury to “business or property,” and those words “refer to commercial interests or enterprises.” Hawaii v. Standard Oil Co., 405 U.S. 251, 264, 92 S.Ct. 885, 892, 31 L.Ed.2d 184 (1972). One who in a business transaction purchases an article is “injured in [his] property” when he is “led to pay more than the worth of the” article, Chattanooga Foundry & Pipe Works v. Atlanta, 203 U.S. 390, 396, 27 S.Ct. 65, 66, 51 L.Ed. 241 (1906) ; “[a] person whose property is diminished by a payment of money wrongfully induced is injured in his property.” Id,. Accord, Hanover Shoe, Inc. v. United Shoe Mach. Corp., 392 U.S. 481, 489-490, 88 S.Ct. 2224, 20 L.Ed.2d 1231 (1968). We have no doubt that a consumer of service who is illegally overcharged sustains a property injury no less than a consumer of goods. See Hawaii v. Standard Oil Co., supra, 405 U.S. at 262-264, 92 S.Ct. 885, Thomsen v. Cayser, 243 U.S. 66, 88, 37 S.Ct. 353, 61 L. Ed. 597 (1917). Appellant’s complaint claims injury to' Transit’s riders as consumers in the marketplace of local transportation service.
      Appellant, however, faced also additional requirements of § 4 — injury in consequence of a violation of the antitrust laws. See Karseal Corp. v. Richfield Oil Corp., 221 F.2d 358, 362 (9th Cir. 1955), and cases there cited. Section 10 is an antitrust law within the meaning of § 4, Clayton Act § 1, 15 U.S.C. § 12 (1970), but the more critical inquiries here are whether the activities asserted in appellant’s complaint could have injured Transit’s customers, and whether those activities would, if proven, fall within the scope and purpose of § 10. Thus standing to sue depends in part upon whether the case alleged in the complaint sufficed to charge an infringement of § 10.

      . United States v. Von’s Grocery Co., 384 U.S. 270, 274-275, 86 S.Ct. 1478, 16 L.Ed.2d 555 (1966) ; Northern Pac. Ry. v. United States, 356 U.S. 1, 4-5, 78 S.Ct. 514, 2 L.Ed. 2d 545 (1958) ; United States v. Reading Co., 253 U.S. 26, 57-58, 40 S.Ct. 425, 64 L.Ed. 760 (1920).

        . Act of July 2, 1890, eh. 647, 26 Stat. 209, as amended, 15 U.S.C. §§ 1 et seq. (1970).

      . Northern Pac. Ry. v. United States, supra note 18, 356 U.S. at 4, 78 S.Ct. at 517.

      . Charles A. Ramsay Co. v. Associated Billposters, 260 U.S. 501, 512, 43 S.Ct. 167, 168, 67 L.Ed. 368 (1923). See also United States v. Von’s Grocery Co., supra note 18, 384 U.S. at 274-275, 78 S.Ct. 514; United States v. American Linseed Oil Co., 262 U.S. 371, 388-389, 43 S.Ct. 607, 67 L.Ed. 1035 (1923).

      . See note 1, supra.

      . See United States v. Von’s Grocery Co., supra note 18, 384 U.S. at 274-275, 78 S.Ct. 514; International Shoe Co. v. FTC, 280 U.S. 291, 298, 50 S.Ct. 89, 74 L.Ed. 431 (1930).

      . New Jersey Wood Finishing Co. v. Minnesota Mining & Mfg. Co., 332 F.2d 346, 350-351 ns. 5-6 (3d Cir. 1964), aff’d, 381 U.S. 311, 85 S.Ct. 1473, 14 L.Ed.2d 405 (1965) ; McElhenney Co. v. Western Auto Supply Co., 269 F.2d 332, 337 (4th Cir. 1959) ; United States v. United Shoe Mach. Co., 264 F. 138, 162 (E.D.Mo.1920), aff’d, 258 U.S. 451, 42 S.Ct. 363, 66 L.Ed. 708 (1922).

      . Dictograph Prods., Inc. v. FTC, 217 F.2d 821, 826 (2d Cir. 1954), cert. denied, 349 U.S. 940, 75 S.Ct. 784, 99 L.Ed. 1268 (1955). See also United States v. National City Lines, 334 U.S. 573, 581, 68 S.Ct. 1169, 92 L.Ed. 1584 (1948).

      . Standard Fashion Co. v. Magrane-Houston Co., 258 U.S. 346, 355, 42 S.Ct. 360, 362, 66 L.Ed. 653 (1922). See also United Shoe Mach. Corp. v. United States, supra note 24, 258 U.S. at 460, 42 S.Ct. 363.

      . Standard Fashion Co. v. Magrane-Houston Co., supra note 26, 258 U.S. at 356, 42 S.Ct. at 362.

      . New Jersey Wood Finishing Co. v. Minnesota Mining & Mfg. Co., supra note 24, 332 F.2d at 351 n. 6.

      . Section 10 is quoted in full in note 2, supra.

      . Klinger v. Baltimore & O. R.R., 432 F.2d 506, 516 (2d Cir. 1970) (concurring opinion).

      . See Five Per Cent Case, 31 I.C.C. 351 (1914) ; Financial Transactions of the New York, N. H. & H. R.R., 31 I.C.C. 32 (1914).

      . See the testimony of Mr. (later Justice) Louis D. Brandéis, who had been counsel in the Five Per Cent Case, supra note 31, Hearings Before the House Judiciary Committee, 63d Cong., 2d Sess., Trust Legislation, 1913-14, 679-80 (1914).

      . 51 Cong.Rec. 1963 (1914) (emphasis in original). See also H.R.No.627, 63d Cong., 2d Sess., 17-20 (1914).

      . H.R.Rep.No.627, 63d Cong., 2d Sess., 3, 17-20 (1914).

      . S.Rep.No.698, 63d Cong., 2d Sess., 47-48, 63, 69 (1914).

      . S.Doc.No.584, 63d Cong., 2d Sess., 13-14 (1914).

      . United States v. Boston & M. R.R., 380 U.S. 157, 162, 85 S.Ct. 868, 871, 13 L.Ed.2d 728 (1965).

      . Minneapolis & S. L. Ry. v. United States, 361 U.S. 173, 190, 80 S.Ct. 229, 240, 4 L.Ed. 2d 223 (1959) (footnote omitted).

      . See, e. g., Minneapolis & S. L. Ry. v. United States, supra note 38; Klinger v. Baltimore & O. R.R., supra note 30.

      . See Part I, supra.

      . Utah Junk Co. v. Porter, 328 U.S. 39, 44, 66 S.Ct. 889, 90 L.Ed. 1071 (1946).

      . Lynch v. Overholser, 369 U.S. 705, 710, 82 S.Ct. 1063, 1067, 8 L.Ed.2d 211 (1962).

      . Lange v. United States, 143 U.S.App.D.C. 305, 307-308, 443 F.2d 720, 722-723 (1971) (footnote omitted).

      . Id. See also Salt River Project Agricultural Improvement & Power Dist. v. FPC, 129 U.S.App.D.C. 117, 121, 391 F.2d 470, 474, cert. denied, 393 U.S. 857, 89 S.Ct. 104, 21 L. Ed.2d 126 (1968) ; Shaffer v. Singh, 120 U.S. App.D.C. 42, 44, 343 F.2d 324, 326 (1965) ; Smither & Co. v. Coles, 100 U.S.App.D.C. 68, 70, 242 F.2d 220, 222, cert. denied 354 U.S. 914, 77 S.Ct. 1299, 1 L.Ed.2d 1129 (1957).

      . Salt River Project Agricultural Improvement & Power Dist. v. FPC, supra, note 44, 129 U.S.App.D.C. at 121, 391 F.2d at 474.

      . See United States v. Boston & M. R.R., supra note 37, 380 U.S. at 160-162, 85 S.Ct. at 868; Minneapolis & S. L. Ry. v. United States, supra note 38, 361 U.S. at 190-191, 80 S.Ct. 229 & n. 13; Klinger v. Baltimore & O. R.R., supra note 30.

      . See note 2, supra.

      . United States v. Boston & M. R.R., supra note 37, 380 U.S. at 160, 85 S.Ct. at 870.

      . See First Nat’l Bank v. Walker Bank & Trust Co., 385 U.S. 252, 261, 87 S.Ct. 492, 17 L.Ed.2d 343 (1966) ; United States v. CIO, 335 U.S. 106, 112, 68 S.Ct. 1349, 92 L.Ed. 1849 (1948) ; United States v. American Trucking Ass’ns, 310 U.S. 534, 543-544, 60 S.Ct. 1059, 84 L.Ed. 1345 (1940) ; United States v. Maryland for Use of Meyer, 121 U.S. App.D.C. 258, 260, 349 F.2d 693, 695 (1965) ; Richmond, F. & P. R.R. v. Brooks, 91 U.S.App.D.C. 24, 27, 197 F.2d 404, 407, cert. denied, 344 U.S. 828, 73 S.Ct. 31, 97 L.Ed. 644 (1952).

      . See Part II, supra.

      . As put by the Washington Metropolitan Area Transit Commission in dealing with appellant’s petition for reconsideration, see note 12, supra,
      [T]he properties in question here have not been sold. They have been placed in nonop-erating status and their title has been .transferred to subsidiary companies, but those subsidiaries are wholly owned by Transit. Thus, Transit continues to own the property just as it always has. The only change is that the ownership occurs through holding all of the stock of the company having title, rather than retaining title directly. D.C. Transit Sys., Inc. (Order No. 1090), supra note 12, 85 P.U.R.3d at 513.

      . Compare Colorado Interstate Gas Co. v. FPC, 324 U.S. 581, 607-608, 65 S.Ct. 829, 89 L.Ed. 1206 (1945) ; Kimberly Coal Co. v. Douglas, 45 F.2d 25, 27 (6th Cir. 1930) ; Socony-Vacuum Oil Co. v. Sheehan, 50 F. Supp. 1010, 1012 (E.D.Mo.1943), appeal dismissed, 144 F.2d 252 (8th Cir. 1944).

      . Compare Colorado Interstate Gas Co. v. FPC, supra note 52, 324 U.S. at 607-608, 65 S.Ct. 829.

      . D.C. Transit Sys., Inc. (Order No. 1090), supra note 12, 85 P.U.R.3d at 514.

      . So, even if the conveyances had fallen within the proscription of § 10, the absence of injury to farepayers would be fatal to appellant’s action. E. g., Klinger v. Baltimore & O. R.R., supra note 30, 432 F.2d at 516; Advance Business Sys. & Supply Co. v. SCM Corp., 415 F.2d 55, 63 (4th Cir. 1969), cert. denied, 397 U.S. 920, 90 S.Ct. 928, 25 L.Ed. 2d 101 (1970) ; Winckler & Smith Citrus Prods. Co. v. Sunkist Growers, Inc., 346 F.2d 1012, 1014 n. 1 (9th Cir.), cert. denied, 382 U.S. 958, 86 S.Ct. 433, 15 L.Ed.2d 362 (1965). See also note 17, supra.

      . See cases cited supra note 8.

      . See, e. g., Miller v. Avirom, 127 U.S.App. D.C. 367, 369-371, 384 F.2d 319, 321-323 (1967), and cases there cited.

      . A lowering of fares in consequence of the value appreciations could in no way have been hindered by the conveyances. See cases cited supra note 8. Nor could a failure to do so in any way implicate § 10. See Part II, supra. See also note 17, supra. It should be noted, however, that Transit’s farepayers will benefit from the appreciation in value of in-service properties, though not on a treble-damages basis. See eases cited supra note 8.

      . See Washington Metropolitan Area Transit Regulation Compact, tit. II, art. XII, §§ 3, 0(a)(3), 74 Stat. 1031 (1960), as amended, 74 Stat. 765 (1962), and set forth following D.C.Code §§ 1-1410, l-1410a (1973).

      . San Diego Gas & Elec. Co., 26 P.U.R.3d 129, 134 (Cal.Pub.Utils.Comm’n 1958) ; General Tel. Co., 29 P.U.R.3d 29, 47 (Fla.R.R. & Pub.Utils.Comm’n 1959) ; Union Elec. Light & Power Co., 17 P.U.R. (n.s.) 337, 388 (Mo. Pub.Serv.Comm’n 1937) ; Henderson Tel. Co., 36 P.U.R.3d 458, 462-63 (Nev.Pub.Serv. Comm’n 1960) ; Westchester Lighting Co., 15 P.U.R. (n.s.) 299, 315 (N.Y.Pub.Serv.Comm’n 1936). See also Peninsular Tel. Co., 17 P.U.R.3d 109, 114 (Fla.R.R. & Pub.Utils.Comm’n 1956) ; Baltimore Transit Co., 37 P.U.R.3d 1, 8 (Md.Pub.Serv.Comm’n 1961) ; Laclede Gas Light Co., 7 P.U.R. (n.s.) 277, 323 (Mo.Pub.Serv.Comm’n 1934) ; East Ohio Gas Co. v. City of Cleveland, 27 P.U.R. (n.s.) 387, 409-10 (Ohio Pub.Utils.Comm’n 1939) ; Commonwealth Tel. Co., 41 P.U.R. (n.s.) 78, 91-92 (Wis.Pub.Serv.Comm’n 1941).

      . D.C. Transit Sys., Inc. (Order No. 1090), supra note 12, 85 P.U.R.3d at 514-15.

      . See Part II, supra.

      . A similar course of reasoning leads also to the conclusion that appellant lacked standing to maintain this law suit. See note 17, supra. AVe need not consider the further question whether, particularly in view of the class-action feature of the complaint, see Hawaii v. Standard Oil Co., supra note 17, 405 U.S. at 266, 92 S.Ct. 885, its allegations overcame the objections discussed in Keogh v. Chicago & N. W. R.R., 260 U.S. 156, 162-165, 43 S.Ct. 47, 67 L.Ed. 183 (1922).

      . We are mindful of “the accepted rule that a complaint should not be dismissed for failure to state a claim unless it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957). Accord, Dollar v. Land, 81 U.S.App. D.C. 28, 30, 154 F.2d 307, 309 (1946). But appellant has not suggested, and we cannot perceive any set of facts which would sustain the specific claim asserted in his complaint.


source: Caselaw Access Project

author: PER CURIAM: PER CURIAM:

license: Public Domain

text:
    TRANSCONTINENTAL GAS PIPE LINE CORPORATION, Petitioner, v. FEDERAL POWER COMMISSION, Respondent, The Peoples Gas Light and Coke Company et al. PUBLIC SERVICE COMMISSION FOR the State of NEW YORK, Petitioner, v. FEDERAL POWER COMMISSION, Respondent, The Brooklyn Union Gas Company et al. ASSOCIATED GAS DISTRIBUTORS, Petitioners, v. FEDERAL POWER COMMISSION, Respondent, Northern Illinois Gas Company et al. CONSOLIDATED EDISON COMPANY OF NEW YORK, INC., Petitioner, v. FEDERAL POWER COMMISSION, Respondent, Northern Illinois Gas Company et al., Intervenors.
    Nos. 73-1410, 73-1412, 73-1558, 73-1575.
    United States Court of Appeals, District of Columbia Circuit.
    Argued Oct. 31, 1973.
    Decided Nov. 12, 1973.
    Rehearing Denied Nov. 21, 1973.

      Thomas F. Ryan, Jr., Washington, D. C., with whom Robert G. Hardy, Washington, D. C., and Lawrence H. Gall, Houston, Tex., were on the brief, for Transcontinental Gas Pipe Line Corp.
    Richard A. Solomon, Washington, D. C., with whom Peter H. Schiff, Gen. Counsel, Albany, N. Y., was on the brief for Public Service Commission for the State of New York. Michael H. Rosen-bloom, Washington, D. C., also entered an appearance for the Public Service Commission for the State of New York.
    Frederick Moring, and Richard G. Morgan, Washington, D. C., were on the briefs for Associated Gas Distributors.
    William I. Harkaway, Washington, D. C., and Robert A. Froehlieh, New York City, were on the briefs for Consolidated Edison Co. of New York, Inc., Petitioners in No. 73-1575.
    William M. Sawyer, Atty., Federal Power Commission with whom Leo E. Forquer, Gen. Counsel, and George W. McHenry, Jr., Sol., were on the brief, for respondent.
    Paul E. Goldstein, Chicago, 111., was on the brief for Intervenor, Peoples Gas Light and Coke Co. and Natural Gas Pipeline Co. of America.
    Barbara M. Gunther, and Joseph P. Stevens, Brooklyn, N. Y., were on the brief for the Intervenor, The Brooklyn Union Gas Co. in Nos. 73-1410 and 73-1412.
    Mark L. Goldstein, Chicago, 111., was on the brief for the Intervenor, City of Chicago.
    J. Stanley Stroud, Chicago, 111., was on the brief for the Intervenor, Northern Illinois Gas Co.
    Thomas P. Hamill, Houston, Tex., was on the brief for the Intervenor, Mobile Oil Corp.
    Philip R. Ehrenkranz, and Carroll L. Gilliam, Washington, D. C., also entered an appearance for Intervenor, Mobil Oil Corp.
    William A. Sackmann, Geneva, Switzerland, entered an appearance for Inter-venor, Marathon Oil Co.
    Richard F. Generelly, Washington, D. C., entered an appearance for Interve-nor, Monsanto Co.
    Before WRIGHT, ROBINSON and MacKINNON, Circuit Judges.
   PER CURIAM:

This case involves petitions to review orders of the Federal Power Commission (the Commission) granting abandonment of natural gas supplies in the context of a critical nation-wide fuel shortage. As such, it raises important issues relating to the proper standard to be applied in natural gas abandonment proceedings for the foreseeable future. All parties to this controversy agree that an early determination of the issues is necessary and this court has acted accordingly.

I

The facts of this ease are fully stated in the Presiding Examiner’s Initial Decision; we only summarize here those necessary to understand the precise issues decided. Petitioner, Transcontinental Gas Pipe Line Corporation (Transco), and intervenor, Natural Gas Pipeline Company of America (Natural), are natural gas pipelines engaged in the transportation and sale of natural gas in interstate commerce. Transco and Natural have purchased natural gas production from the La Gloria field area in Texas since the late 1940’s and early 1950’s respectively. In the middle 1950’s, the La Gloria producers contended they could not continue to meet the requirements of both companies and still have adequate gas for other needs. For .this reason the producers attempted to discontinue service to Natural by invoking certain “escape clauses” in their contracts. Pending court review of a Commission decision disallowing the proposed discontinuance, the producers and Natural agreed upon a settlement of the controversy. The settlement agreement, as approved by the Commission, provided for a substantial reduction in deliveries to Natural and the continued delivery of 81,000 Mcf per day to Trans-co until its contract with the producers expired in 1971. The quid pro quo for acceptance by Natural of the reduced deliveries was a contract with the producers that dedicated all the natural gas reserves in the La Gloria Field to Natural and required the producers to seek abandonment of deliveries of the 81,000 Mcf per day to Transco when its contract expired. Although Transco was not a party to the settlement agreement, it had intervened in the original proceeding before the Commission.

In early 1971 after Transco’s contract expired, the La Gloria producers filed applications with the Commission to abandon sales to Transco. These applications were consolidated and hearings were held in the fall of 1971. The Commission, reversing the decision of the Presiding Examiner, granted the applications for abandonment and certificated the sale of the abandoned gas to Natural. Thus Natural presently is receiving the 81,000 Mcf per day formerly delivered to Transco. Upon denial of its request for a rehearing before the Commission, Transco filed the instant petitions for review with this court. We vacate the orders of the Commission, restore the parties to the status quo ante, and remand the case to the Commission.

II

Based upon an extensive and careful review of the evidence, the Presiding Examiner found, inter alia, that Transco had greater need for the La Gloria field gas than Natural. Accordingly, he denied the application for abandonment pursuant to the comparative need standard enunciated by this court in Michigan Consolidated Gas Co. v. FPC, 108 U.S.App.D.C. 409, 283 F.2d 204, cert. denied, 364 U.S. 913, 81 S.Ct. 276, 5 L.Ed. 2d 227 (1960). On review, the Commission reversed the Examiner’s decision, ordered abandonment and certificated sale of the gas to Natural. In its decision the Commission stated that the comparative need standard was not appropriate in the context of this case, which involves: (1) a critical natural gas shortage in all areas of the country, (2) the expiration of Transco’s contract with the La Gloria producers, and (3) Natural’s contract rights to the gas under the 1958 Commission approved settlement agreement. For these reasons the Commission formulated a new standard that would give controlling weight to the settlement agreement absent “compelling proof” of countervailing “unequivocal public necessity.”

Ill

Section 7(b) of the Natural Gas Act, 15 U.S.C. § 717f(b) (1970), provides that abandonment of natural gas facilities or services subject to the Commission’s jurisdiction can be granted only “after due hearing, and a finding by the Commission . . . that the present or future public convenience or necessity permit such abandonment.” In Michigan Consolidated, supra at 419, 283 F.2d at 214, this court, in considering the criteria for abandonment under § 7(b), recognized two important principles: (1) a pipeline which has obtained a certificate of public convenience and necessity to serve a particular market has “an obligation, deeply embedded in the law, to continue service,” and (2) the burden of proof is on the applicant for abandonment to show that the “public convenience and necessity” permits abandonment, that is, that the public interest “will in no way be disserved” by abandonment.

The fundamental tenets established by Michigan Consolidated are that the public interest is the ultimate criterion under § 7(b) and that all factors relevant to the determination of which course of action best promotes the overall public interest must be fully considered. The Commission there proposed, and this court accepted, a comparative needs test which balanced the relative needs of the competing pipelines and their ultimate consumers as the principal index of the public interest.

Against these principles of statutory and case law, it is clear that the Commission’s orders cannot stand. At bottom, the Commission’s decision stands for the simple proposition that where all parties need contested gas supplies the party having a contractual right to such gas will prevail. This proposition possesses the alluring qualities of simplicity and precision; indeed, it seems to have so mesmerized the Commission that it abdicated its statutory responsibility to guarantee that the overall public interest “will in no way be disserved” by abandonment. Simply stated, the Commission apparently failed to perceive that the fact that all need gas does not mean that all need it equally. The approach thus taken failed to consider adequately and fully all the factors relevant to an intelligent determination of the overall public interest.

The Commission also erred in according dispositive weight to private, albeit Commission approved, contrae-tual arrangements absent a showing of countervailing “unequivocal public necessity.” The Commission essentially argues that failure to honor long term gas acquisition contracts would be “disastrous since no pipeline would be able to plan for the future.” Clearly there are advantages to insuring as great certainty in gas acquisition plans as is possible. Moreover, if such plans and contracts are not given significant weight, then a pipeline in Transco’s position might not be inclined, or at least would not have as great an incentive, to seek new sources of supply to replace those lost upon expiration of its contracts. Thus it is conceded that private, long term contracts, at least where they are part of a Commission approved settlement agreement, must be accorded significant weight in the determination of the overall public interest. But to argue that anything less than controlling weight would be “disastrous” grossly overstates the case. Rigid deferral to contractual arrangements without a searching inquiry into other factors relevant to the public interest as required by § 7(b) simply is an inadequate means to assure vindication of the transcendant interests of the public. ,

IV

It is appropriate to reiterate here the principle that guides our review of abandonment orders as stated in Michigan Consolidated:

Where, as here, a regulatory agency has ignored factors which are relevant to the public interest, the scope of judicial review is sufficiently broad to order their consideration. These limits are not to be confused with the narrower ones governing review of an agency’s conclusions reached upon proper consideration of the relevant factors.

Supra, 108 U.S.App.D.C. at 431, 283 F. 2d at 226.

We contemplate on remand, therefore, a searching and comprehensive inquiry by the Commission into all factors relevant to determining the overall public interest in this abandonment proceeding. For this purpose it will doubtless be necessary to supplement the record with additional evidence with respect to these factors. Primary importance must be given to a broadly conceived comparison of the needs of the two natural gas systems and the public markets they serve. Additionally, the Commission should consider the environmental effects of its decision (See Arizona Public Service Co. v. FPC, 157 U.S.App.D.C. 272, 483 F.2d 1275 (1973)), the economic effect on the pipelines and their consumers, the presumption in favor of continued service and the relative diligence of the respective pipelines in providing for adequate natural gas supplies. As discussed previously, the Commission should also accord significant weight to Natural’s contract rights that resulted from the 1958 Commission approved settlement agreement. For the purpose of judicial review it is, of course, essential that the Commission’s findings with respect to the factors it considered in determining the public interest be apparent from its opinion.

We recognize that the balancing process we impose upon the Commission is a complex one, but we perceive no acceptable alternative that would guarantee that the public interest “will in no way be disserved” in abandonment proceedings. Accordingly, the orders of the Commission are vacated, the parties are restored to the status quo ante, and the case is remanded to the Commission for further proceedings not inconsistent with this opinion.

So ordered.

On Motions for Clarification and Rehearing and for Recall of Mandate and Stay of Reissuance of Mandate

ORDER

On consideration of the petitions for clarification and for rehearing and of the motions for recall of mandate and for stay of reissuance of mandate, it is

Ordered by the Court that the aforesaid petition for clarification is granted and the remaining motions are denied in accord with the Per Curiam opinion of this Court attached hereto, to be published at a later date.

PER CURIAM:

Intervenor Natural Gas Pipe Line Company of America, in an emergency motion, has petitioned this court to clarify the opinion and order in the above captioned case, and to direct the Federal Power Commission on remand to allocate equitably the remaining supplies of natural gas in the La Gloria Field pending final disposition. It has also filed a petition for rehearing, a motion for recall of mandate and for stay of reissuance of mandate pending action on petition for rehearing. We clarify the opinion and order as hereinafter set forth but decline to enter any further directive to the Federal Power Commission.

The language of the opinion and order “the parties are restored to the status quo ante,” as amplified by note 15, means that all parties are now restored to the respective daily volumes of natural gas to which they would have been entitled absent the grant of abandonment, with respect to p. 1330, footnote 15 is stricken and the following is inserted in lieu thereof:

Delivery of the daily volumes of natural gas to which Transco is entitled under the status quo ante shall be restored as quickly as possible.

The petition for rehearing, the motion to recall mandate and for stay of reis-suance of mandate pending action on petition for rehearing are all denied. Judgment accordingly.

      . Scheduling of oral argument in this case has been expedited twice and the opinion rendered expeditiously because of the urgency for a speedy decision.

      . Hilda B. Weinert, 49 FPC - (June 2, 1972) (Presiding Examiner’s Initial Decision) ; J.A. at 55.

      . Transco serves the Atlantic Seaboard, including New York City; Natural serves the Midwest, including Chicago. Id.

      . Argo Oil Corp., 15 FPC 622 (1956).

      . Argo Oil Corp., 20 FPC 208 (1958).

      . [T]he average customer using gas for winter residential space heating in the market sand, c = cubic, f = feet, d (M = thousand, c = cubic, f = feet, d = day). Hilda B. Weinert, 49 FPC -,- (June 2, 1972) (Presiding Examiner’s Initial Decision) ; J.A. at 57. Thus the 81,000 Mcf per day of natural gas contested in this case is sufficient to meet the needs of approximately 54,000 residential households.

      . Thus, if abandonment were approved, Natural -would receive the volumes of natural gas formerly delivered to Transco.

      . In its Order Denying Rehearing and Partial Stay, J.A. at 151, 152, the Commission stated that the comparative space heating saturation test employed in Michigan Consol

        idated is not appropriate to the facts of this case. Although the Commission failed to explain why this is so, it erred more fundamentally in not recognizing that the public interest requires a more broadly conceived comparison of need than it made in this proceeding. See note 13 and accompanying text, infra.

      . In the instant proceeding, both pipelines are in short supply of natural gas and each is rendering less than full service to its customers. The loss of this gas to either pipeline will result in a diminution of its ability to continue even current levels of service. Under these circumstances, we find no showing of unequivocal public necessity for abrogating the contracts of the parties.
      Hilda B. Weinert, 49 FPC -,- (Opinion No. 655, March 21, 1973) ; J.A. at 107, 118. The Commission never adequately refuted the Examiner’s finding that Transeo had the greater need for .the natural gas.

      . A finding by the Commission that a settlement resolving an immediate controversy would be in the public interest in 1958 cannot be construed to be sufficiently binding to preclude or restrict in any sense a new and comprehensive determination of the public interest as it exists in 1973. Indeed, the Commission itself apparently recognized this in its order approving the 1958 settlement:
      Nothing contained herein shall be construed as a waiver of the requirements of Section 4 or 7 of the Natural Gas Act, or of the Commission’s regulations thereunder, and is without prejudice to any findings or orders which have been or may hereafter be issued by the Commission in any proceeding now pending or hereafter instituted by or against any of the parties to these proceedings.
      Argo Oil Corp., 20 FPC 208, 210 (1958).

      . The Commission focused on language quoted out of context from Permian Basin Area Rate Cases, 390 U.S. 747, 822, 88 S.Ct. 1344, 1389, 20 L.Ed.2d 312 (1968) :
      The regulatory system created by the {Natural Gas] Act is premised on contractual agreements voluntarily devised by the regulated companies; it contemplates abrogation of these agreements only in circumstances of unequivocal public necessity.

        Permian, of course, involved rate regulation and did not consider the sanctity of private contracts in the context of abandonment proceedings under § 7(b). The situation confronting the Court in Permian involved producers who were dissatisfied with their contract prices which were not as high as would be permissible under the maximum area rates subsequently fixed by the Commission. The decision holds that such “improvident bargains” could not be relieved absent injury to the public interest, such as impaired ability to maintain adequate service to the consuming public.
      In the instant abandonment proceeding, loss of the La Gloria gas will directly result in further curtailment of existing service to present customers of the losing pipeline. The public interest is jeopardized and “unequivocal public necessity” is demonstrated whenever private contracts substantially impair the ability of a pipeline to maintain adequate levels of service to its customers. In this situation, contract rights should be considered as but one of the important factors to be weighed in the balancing process set forth in this opinion.

      . Hilda B. Weinert, 49 FPC -, - (Opinion No. 655, March 21, 1973) ; J.A. at 107, 117.

      . The Presiding Examiner noted that the Commission staff had proposed eleven criteria for comparing the needs of the two pipeline systems. Several of these were not considered because of insufficient evidence, difficulty of meaningful comparison or their speculative nature. Hilda B. Weinert, 49 FPC -, - (June 2, 1972) (Presiding Examiner’s Initial Decision) ; J.A. at 55, 95. The Commission, of course, is not bound by these proposals, but it should exercise its expertise to insure that all relevant and meaningful indices of comparative need are considered.

      . A certain tension is created by the fact that the less diligent pipeline often might, by definition, have greater need for the contested gas supplies. Nevertheless, the more diligent pipeline should be favored if such preferential treatment would not be inconsistent with the overriding public interest in a particular case.

      . Delivery of the 81,000 Mcf per day of natural gas to Transco shall be restored as quickly as possible.


author: PER CURIAM:

text:
    UNITED STATES of America v. David E. DOUGLAS a/k/a David D. Mitchell, Appellant.
    No. 72-2150.
    United States Court of Appeals, District of Columbia Circuit.
    Argued Oct. 30, 1973.
    Decided Nov. 19, 1973.
    Raymond E. Cahill, Washington, D. C. (appointed by this Court), for appellant.
    Steven R. Schaars, Asst. U. S. Atty., with whom Harold H. Titus, Jr., U. S. Atty., John A. Terry and Charles H. Roistacher, Asst. U. S. Attys., were on the brief, for appellee.
    Before BAZELON, Chief Judge, and McGOWAN and MaeKINNON, Circuit Judges.
   PER CURIAM:

Appellant alleges that he was denied his right to a speedy trial. We remand the record for supplementation to provide an adequate basis for our review function.

I

Reduced to bare essentials, the facts are as follows. Appellant was arrested on August 28, 1971, in connection with a burglary earlier that day. At the time of his arrest, appellant was on parole from an eight year sentence for burglary imposed in 1967. His arrest eventually led to the revocation of parole.

After a preliminary hearing, appellant was indicted for first degree burglary, petit larceny, unauthorized use of a vehicle and grand larceny. On November 11, 1971, a United States Magistrate appointed counsel to represent appellant. Appointed counsel was not present when appellant was arraigned and pled not guilty in the District Court on November 19, 1971.

There is no record of any action by the government, appellant,.or his counsel until a status call on March 1, 1972. At that time appellant’s counsel moved to vacate her appointment and the motion was granted. No reason for the motion appears in the record. Substitute counsel was appointed, and on March 10 the trial was set for March 17.

The trial, however, did not take place on that date. The government subsequently stated that the trial date was continued at its request because of the unavailability of the complaining witness.

After the March 17 postponement appellant made several unsuccessful requests, both pro se and through counsel, to have his indictment dismissed because he had not received a speedy trial. Finally, on August 31- — one year and three days after his arrest — appellant was tried and convicted on all four counts.

II

Evaluating an alleged deprivation of the right to a speedy trial requires. a careful balancing in which the conduct of both the government and the defendant are weighed. Four factors have been identified as relevant: the length of the delay, the reason for the delay, the defendant’s assertion of his right, and prejudice to the defendant.

On the record before us we are unable to properly weigh these factors in appellant’s case. The record is inadequate in the following respects:

1) Between the appointment of counsel on November 11, 1971, and the status call on March 1, 1972, there is nothing to indicate the cause of the delay or whether appellant asserted his right to a speedy trial. The record does not disclose whether appointed counsel was available to assist appellant during this period. Thus we can only speculate as to whether the delay was attributable to the government, the appellant, or the ineffective assistance of his counsel.

2) There is no information concerning the parole revocation proceedings involving appellant. Again, we are left to speculate as to whether court appointed counsel aided appellant in these proceedings and was therefore unable to avoid the delay, or whether appellant had other counsel or no counsel working on the parole matter.

3) The government’s complaining witness was unavailable for the March 17, 1972, trial date, but the record does not indicate whether she was unavailable for the entire period until the August 31, 1972 trial. Nor does it appear whether the government communicated to appellant or the court the reason for the delay after March 17.

Upon remand a hearing will clarify these matters and others that may surface in the wake of their clarification. “[Njeither one judge’s surmise nor another’s doubt can take the place of proof.”

Record remanded for supplementation.

      . Barker v. Wingo, 407 U.S. 514, 530, 92 S. Ct. 2182, 33 L.Ed.2d 101 (1972).

      . Id. Appellant alleges that he was prejudiced because if he had been tried sooner, his sentence would have been “more nearly concurrent with the sentence imposed in his prior conviction.” Appellant’s brief at 26.

      . United States v. DeCoster (1973), 159 U.S. App.D.C. - at -, 487 F.2d 1197 at 1204.


text:
    Stephen DODGE et al., Appellants, v. GIANT FOOD, INC.
    No. 71-1415.
    United States Court of Appeals, District of Columbia Circuit.
    Argued Sept. 25, 1973.
    Decided Nov. 26, 1973.
    Ben Paul Noble, Washington, D. C., with whom Thomas O. Mann, Washington, D. C., was on the brief for appellants.
    David W. Rutstein, Washington, D. C., with whom Robert F. Rolnick, Washington, D. C., was on the brief for appellee.
    Julia P. Cooper, Chief, App. Section, Equal Employment Opportunity Commission, and Charles L. Reischel, Atty., Equal Employment Opportunity Commission, filed a brief on behalf of Equal Employment Opportunity Commission urging reversal.
    Robert A. W. Boraks and John Ells-worth Stein, Washington, D. C., filed a brief on behalf of American Civil Liberties Union Fund as amicus curiae urging reversal.
    Before TAMM, MacKINNON and ROBB, Circuit Judges.
   PER CURIAM:

Plaintiffs are male employees of Giant Food, Inc., a food store chain, who have been discharged or assigned to unfavorable positions because they chose to wear their hair longer than permitted by Giant’s grooming regulations. Plaintiffs filed this class action contending that the defendant’s grooming regulations violate the prohibition against sex discrimination contained in Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq. Following a trial without a jury, the district court entered findings of fact, conclusions of law, and judgment for the defendant. We affirm.

Plaintiffs make no allegation that Giant discriminates between men and women in its hiring policies. However, all of Giant’s employees must comply with separate written grooming standards for men and women. The grooming regulations provide:

MALE EMPLOYEES
No hair may exist below the earlobe except for a neatly trimmed mustache which does not droop or hang over the upper lip.
No beards allowed.
Haircuts must not be long or ragged. If it is neat, groomed and reasonably trimmed on the back of the neck, it meets Giant’s standards. If however, it is ragged and not reasonably trimmed, and gives the impression of being unreasonably long, unkept or ragged, it does not meet the standard.
FEMALE EMPLOYEES
Whatever the style, hair should be kept neat.
Avoid off-beat or extreme hair styles, especially the following: obviously dyed hair, unnatural colors (green, blue, etc); ragged hair styles. Long hair must be secured and may not fall freely.
In compliance with hair regulations, meat wrappers, self-service delly clerks and bakery clerks must wear a hair net if hair is difficult to manage.

(Emphasis in original.)

Section 703 of the Civil Rights Act of 1964, 42 U.S.C. § 2000e-2, provides in pertinent part:

(a) It shall be an unlawful employment practice for an employer—
(1) . . . to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s . . . sex . . . ; or
(2) to limit, segregate, or classify his employees in any way which would deprive or tend to deprive any individual of employment opportunities or otherwise adversely affect his status as an employee, because of such individual’s . . . sex ....
* •» * *• * -x-(e) (1) it shall not be an unlawful employment practice for an employer to hire and employ employees ... on the basis of [their] sex ... in those certain instances where . sex . . . is a bona fide occupational qualification reasonably necessary to the normal operation of that particular business or enterprise.

Application of this statute requires a two-step analysis. It must first be determined that a discrimination on the basis of sex has occurred. If there is no sex discrimination, the inquiry ends. However, if the court concludes that an employer has discriminated on the basis of sex then it is the employer’s burden to establish that a “bona fide occupational qualification” (BFOQ) reasonably necessary to the operation of the employer’s business justifies the discriminatory practice. We conclude that Giant’s hair-length regulations do not discriminate or classify within the meaning of the statute, and thus do not reach the issue whether hair length is a bona fide occupational qualification in this case.

It is necessary at the outset to identify the classification which allegedly vio-. lates the statute. Although the grooming regulations obviously distinguish between long and short haired males, it is equally clear that the regulations treat long haired males differently than long haired females. Thus, the regulations embody a distinction among employees based upon their sex. The issue is whether this distinction is an unlawful discrimination or classification within the meaning of the statute.

The decisions are divided on the question whether separate hair-length regulations for men and women constitute sex discrimination in violation of the Civil Rights Act. In Willingham v. Macon Telegraph Publishing Co. a three-judge panel of the Fifth Circuit concluded that virtually any difference in treatment of the sexes, including separate háir-length regulations, is a per se violation of the statute. That decision has been scheduled for rehearing en banc.

One day after Willingham was decided, the District of Columbia Circuit in Fagan v. National Cash Register Co. examined the authorities on the issue and concluded that Congress never intended the statute “ ‘to interfere in the promulgation and enforcement of general rules of employment, deemed essential by the employer, where the direct or indirect economic effect upon the employee was nominal or non-existent.’ ” Therefore, the court interpreted the statute to prohibit only those classifications or discriminations which afford significant employment opportunities to one sex in favor of the other. Since hair length is not an immutable characteristic but one which is easily altered, the Fagan court concluded that the sexual distinction embodied in the hair-length regulations does not significantly affect employment opportunities and thus does not violate the statute.

The Fagan decision settled the law in this circuit and controls the present case. We are not persuaded by the appellants’ attempted distinction of Fagan on the ground that the employer in that case had no women employees in the department subject to the regulation.

The court’s extended discussion of the statute and relevant decisions makes clear that the absence of women employees was not the focal point of the Fagan decision. Indeed, the court stated that it was “persuaded by the reasoning and the treatment” in the eases holding hair-length regulations not discriminatory.

The Fagan decision represents the more reasonable and realistic interpretátion of Title VII. Title VII serves the important goal of eliminating arbitrary sex discrimination in employment, and our decision in no way denigrates this laudable goal. As Judge Gesell remarked in Boyce v. Safeway Stores, Inc.:

[Defendant’s] management may well be out of touch with the attitudes of its own customers, but all this is beside the point. The laws outlawing sex discrimination are important. They are a significant advance. They must be realistically interpreted, or they will be ignored or displaced.

Some courts have analogized hair-length regulations to the requirement that men and women use separate toilet facilities or that men not wear dresses. Admittedly these are extreme examples, but they are important here because they are logically indistinguishable from hair-length regulations. These examples, like hair-length regulations, are classifications by sex which do not limit employment opportunities by making distinctions based on immutable personal characteristics, which do not represent any attempt by the employer to prevent the employment of a particular sex, and which do not pose distinct employment disadvantages for one sex. Neither sex is elevated by these regulations to an appreciably higher occupational level than the other. We conclude that Title VII never was intended to encompass sexual classifications having only an insignificant effect on employment opportunities.

In Sprogis v. United Air Lines, Inc. the Seventh Circuit held that United Air Lines’ no-marriage policy for stewardesses constituted sex discrimination within the meaning of Title VII. The no-marriage policy for stewardesses in Sprogis bears some resemblance to the hair-length regulations here because United employed both men and women for the similar positions of steward and stewardess; the no-marriage policy applied only to stewardesses; and marriage is not an immutable personal characteristic of either sex. The Sprogis court concluded that the no-marriage policy was discriminatory within the meaning of Title VII because the policy represented “sex stereotypes” that were “irrational impediments to job opportunities and enjoyment which have plagued women in the past. Appellants in the present case argue that the hair-length regulations similarly represent a sex stereotype which discriminates in violation of the Act.

However, there are important differences between the no-marriage policy in Sprogis and the hair-length regulations at issue here. Unlike the employer in Sprogis who did not subject its male employees to any restriction similar to the no-marriage policy, Giant enforces strict grooming regulations against both male and female employees. Thus the disparity in treatment of the sexes is not as severe as in Sprogis.

Furthermore, although neither marriage nor hair length is an unalterable personal characteristic, marriage has a much more fundamental importance to and effect upon an individual’s life. Marriage is more difficult to initiate or to terminate than long hair, and the legal and social ramifications of marriage are far more significant than the consequences of wearing long hair. For these reasons, our decision here does not contravene the Sprogis decision.

The issue in these cases is one of degree. New would disagree that an employer’s blanket exclusion of women from certain positions constitutes “discrimination” within the meaning of Title VII. At the same time, few would argue that separate toilet facilities for men and women constitute Title VII “discrimination.” The line must be drawn somewhere between these two extremes, and we draw the line to exclude Giant’s hair-length regulations from the ambit of Title VII. We do not believe that Title VII was intended to invalidate grooming regulations which have no significant effect upon the employment opportunities afforded one sex in favor of the other.

Affirmed.

      . The alleged class comprises all males who have been refused employment, discharged or forced to cut their hair, trim their mustaches or shave their beards as a result of defendant’s grooming regulations. Although only two of the named plaintiffs obtained a “notice of right to sue” from the EEOC, the class action may be maintained on behalf of aggrieved individuals who have not filed charges with the Commission. E. g.t Macklin v. Spector Freight Systems, Inc., 156 U.S.App.D.C. 69, 75 n. 11, 478 F.2d 979, 985 n. 11 (1973) ; Bowe v. Colgate-Palmolive Co., 416 F.2d 711, 719-721 (7th Cir. 1969) ; Robinson v. Lorillard Corp., 444 F.2d 791, 801-802 (4th Cir.), cert. dismissed, 404 U.S. 1006, 92 S.Ct. 578, 30 L.Ed.2d 655 (1971). Furthermore, members of the aggrieved class who have not filed charges may join as co-plaintiffs in the litigation. Oatis v. Crown Zellerbach Corp., 398 F.2d 496, 499 (5th Cir. 1968) ; see DeFigueiredo v. Trans World Airlines, Inc., 322 F.Supp. 1384 (S.D.N.Y.1971) ; Hall v. Werthan Bag Corp., 251 F.Supp. 184, 188 (M.D.Tenn.1966).

      . See note 3 infra and accompanying text. While jurisdiction in the trial court was also urged pursuant to 42 U.S.C. §§ 1981, 1983, for the purposes of this appeal appellants rely solely on Title VII. Brief for Appellants at 3.
      In addition to their allegations of sex discrimination, various appellants contend that they suffered racial discrimination because of Giant’s' grooming regulations. We find no merit in these allegations. Also, we note the district court’s Finding of Fact No. 4: “No showing has been made of discrimination against negro males wearing a natural or modified Afro coiffure, since the hair held [sic] together and brushed upward and outward from the neck. There was no evidence of Giant’s taking any action against this form of hair arrangement.”

      . In 1972, Section 2000e-2(a) (2) was amended to cover “applicants for employment” as well as employees. Pub.L. No. 92-261, § 8(a), 86 Stat. 109 (Mar. 24, 1972).

      . 42 U.S.C. § 2000e-2(a).

      . Weeks v. Southern Bell Tel. & Tel. Co., 408 F.2d 228, 232 (5th Cir. 1969) ; see 42 U.S.C. § 2000e-2(e) ; Note, Developments in the Law, Employment Discrimination and Title VII of the Civil Bights Act of 1964, 84 Harv.L.Bev. 1109, 1169 (1971)..

      . Cf. Note, note 5 supra, at 1171.

      . Willingham v. Macon Tel. Publishing Co., 482 F.2d 535 (5th Cir. 1973) (discrimination) ; Fagan v. National Cash Register Co., 157 U.S.App.D.C. 15, 481 F.2d 1115 (1973) (no discrimination) ; Boyce v. Safeway Stores, Inc., 351 F.Supp. 402 (D.D.C.1972) (no discrimination) ; Baker v. California Land Title Co., 349 F.Supp. 235 (C.D.Cal.1972) (no discrimination) ; Aros v. McDonnell Douglas Corp., 348 F.Supp. 661 (C. D.Cal.1972) (discrimination) ; Donohue v. Shoe Corp. of America, 337 F.Supp. 1357 (C.D.Cal.1972) (discrimination).

      . 482 F.2d 535 (5th Cir. 1973).

      . See id. at 537-538 & n. 3.

      . Id. at 542.

      . 157 U.S.App.D.C. 15, 481 F.2d 1115 (1973).

      . Id. at 23, 481 F.2d at 1123, quoting Baker v. California Land Title Co., 349 F.Supp. 235, 238 (C.D.Cal.1972).

      . The court quoted with approval from ' Boyce v. Safeway Stores, Inc., 351 F.Supp. 402, 403 (D.D.C.1972), where Judge Gesell noted that prior decisions had interpreted Title VII to proscribe only those “outmoded and unjustifiable sex stereotypes [which] had distinct employment opportunity disadvantages for one sex.” 157 U.S.App.D.C. at 23, 481 F.2d at 1123 (emphasis added).

       157 U.S.App.D.C. at 25, 481 F.2d at 1125.

      . The Fagan court pointed out that “no woman here complained of the company’s policy” and that “there are no women employees here involved.” Id. at 21, 22, 481 F.2d at 1121, 1122. Further, the court noted that “[t]here is no suggestion that any woman had ever sought or had been denied employment in the [department at issue.]” Id. at 1121.

      . Id. at 24, 481 F.2d at 1124. The court also stated:
      We here see nothing in the legislative history of the Act or in the Act itself which requires a federal court to rule that an employee’s hair style which conflicts with an employer’s grooming regulations constitutes per se discrimination because of sex. Id. at 22 n. 17, 481 F.2d at 1122 n. 17.

      . The legislative history of the sex discrimination provision of the Act is sparse.
      The addition of sex as a forbidden basis of discrimination in employment was offered as a floor amendment to Title VII in the House, without any prior legislative hearings or debate. The original proponent of the measure was a southern congressman who voted against the Act, and whose strategy was allegedly to “clutter up” Title VII so that it would never pass at all. The passage of the amendment, and its subsequent enactment into law, came without even a minimum of congressional investigation into an area with implications that are only beginning to pierce the consciousness and conscience of America.
      Note, note 5 supra, at 1167 (footnotes omitted). See also Boyce v. Safeway Stores, Inc., 351 F.Supp. 402, 403 (D.D.C.1972).
      Several courts have relied on an interpretative memorandum submitted by Title VII’s floor managers which defined “to discriminate” as “to make a distinction, to make a difference in treatment or favor . . . . ” H.R. 7152, 110 Cong.Rec. 7213 (1964) ; see Willingham v. Macon Tel. Publishing Co., 482 F.2d 535, 537-538 n. 3 (5th Cir. 1973). However, these comments do not necessarily mean that the Act was intended to invalidate sexual classifications having only an insignificant effect on the employment opportunities afforded one sex.

      . Cf. Griggs v. Duke Power Co., 401 U.S. 424, 429-430, 91 S.Ct. 849, 28 L.Ed.2d 158 (1971).

      . 351 F.Supp. 402, 404 (D.D.C.1972).

      . Id. at 403.

      . Willingham v. Macon Tel. Publishing Co., 352 F.Supp. 1018, 1020 (M.D.Ga.1972).

      . Plaintiffs make no allegation that Giant’s hair-length regulations are a guise or .pretext for failing to employ members of one sex.

      . 444 F.2d 1194 (7th Cir. 1971).

      . The court held that the policy discriminated on the basis of sex, id. at 1197-1198, and that the policy was not justified as a BFOQ. Id. at 1198-1199. We are concerned here only with the finding of discrimination, not with the conclusion as to BFOQ. See notes 4-5 supra and accompanying text.

      . Id. at 1198.


author: McGOWAN, Circuit Judge:

text:
    SIBLEY MEMORIAL HOSPITAL, Appellant, v. Verne WILSON.
    No. 72-1498.
    United States Court of Appeals, District of Columbia Circuit.
    Argued Oct. 26, 1973.
    Decided Nov. 29, 1973.

      Thomas M. Raysor, Chevy Chase, Md., for appellant.
    R. Bruce Keiner, Jr., Washington, D: C., for appellee.
    Julia P. Cooper, Acting Associate Gen. Counsel, Equal Employment Opportunity Commission, Beatrice Rosenberg and Edward Katze, Attys., EEOC, filed a brief on behalf of the EEOC as amicus curiae.
    Before BAZELON, Chief Judge, and McGOWAN and MacKINNON, Circuit Judges.
   McGOWAN, Circuit Judge:

This appeal from a sua sponte grant of summary judgment in the District Court, 340 F.Supp. 686, requires us to resolve only the question of whether, on the facts alleged in the complaint, the action was maintainable under Title VII of the Civil Rights Act of 1964. 42 U. S.C. § 2000e et seq. We agree with the District Court’s holding that it was, but we do not agree that the record before it justified the District Court’s entry of summary judgment, since the liability of appellant under the Act depends upon the resolution at trial of material issues of fact which appear to be in dispute. Accordingly, we reverse and remand for further proceedings.

I

Appellee is a male private duty nurse licensed to practice in the District. of Columbia. Appellant is a private nonprofit hospital in the District of Columbia. Appellee works for patients in private hospitals pursuant to arrangements under which hospital patients who require the services of a private nurse ask the Nursing Office of the hospital to communicate their need to one of the registries operating in the District — the Professional Nurses’ Official Registry or the United States Employment Service registry. When a patient at appellant Sibley makes such a request, he or she is informed that neither the hospital nor the registry to which it will refer the offer of employment can discriminate on the basis of race, age or sex. The patient’s request is telephoned to the Professional Nurses’ Official Registry, which matches the request with the name of a nurse who has indicated his or her availability for work that day. The nurse is informed of the patient’s name and situation, and told to report directly to the patient’s room at the hospital. If, on arrival, the nurse is for any reason unacceptable to the patient, the patient is nevertheless obliged to pay the nurse for a full day’s work.

This registry and referral system is designed to insure that no private duty nurses are victimized by invidious discrimination. Such nurses as are rejected by patients for discriminatory reasons must be paid by the patient for one day’s service. Appellee alleged, however, that on two occasions, in 1968 and 1969, supervisory nurses at appellant themselves rejected him because he is a male and the requesting patients were female ; and that such supervisory personnel prevented his reporting to the requesting patient, to be accepted or rejected but nonetheless compensated. He further alleged that during the period 1936 to 1970 every patient whom he attended at appellant was male, despite the fact that female nurses routinely served both male and female clients.

In the wake of his first alleged rejection, appellee filed complaints with District of Columbia Council on Human Relations and the United States Equal Employment Opportunity Commission (EEOC). The EEOC, having found reasonable cause to believe that appellant had violated the terms of Title VII of the Civil Rights Act of 1964, attempted to conciliate the dispute, without success. It eventually notified appellee of the accrual of his right to sue in District Court, and a timely complaint was filed for injunctive relief and for monetary damages.

Appellee’s original complaint, filed September 13, 1971, alleged but one cause of action, that arising under Title VII. Appellant responded on October 12, 1971, by moving to dismiss, or for summary judgment, on the sole ground that “[t]he complaint [did] not allege jurisdictional facts to come within said statute, i. e., it [did] not set forth the necessary employer-employee relationship. . . .” The motion was supported by a statement of material facts as to which there is no dispute. Rule 9(h) of the Local Rules. Appellee, on December 2, 1971, filed an opposition, supported by an affidavit reciting the two occasions on which he asserted that he had been turned away by the supervisory personnel.

In this posture, the District Court decided the jurisdictional issue adversely to appellant and, accordingly, denied its motion to dismiss or for summary judgment. Appellant having not as yet responded in any fashion on the merits, the court noted that the hospital did not appear to have denied appellee’s factual allegations, and, on the basis of the papers before it and without oral argument, entered summary judgment, sua sponte, for appellee.

II

Title VII of the Civil Rights Act of 1964 makes it an unlawful employment practice for an employer to engage in certain enumerated forms of discrimination on the basis, inter alia, of sex. For purposes of the Act, an “employer” is, with certain exceptions not here relevant, defined as a “person engaged in an industry affecting commerce who has twenty-five or more employees.” That appellant falls within this definition is not disputed. Appellant takes the position, however, that, since no direct employment relationship between itself and appellee was ever contemplated by either of them, it is not an employer under the Act with respect to him.

The Supreme Court has said that the Congressional objective in Title VII is “plain from the language of the statute,” and that it is “to achieve equality of employment opportunities . . . ” (Emphasis supplied). Griggs v. Duke Power Co., 401 U.S. 424, 429, 91 S.Ct. 849, 853 (1969). In prohibiting discrimination in employment on the basis of sex, “one of Congress’ main goals was to provide equal access to the job market for both men and women.” Diaz v. Pan American World Airways, Inc., 442 F.2d 385, 386 (5th Cir.), cert. denied, 404 U. S. 950, 92 S.Ct. 275, 30 L.Ed.2d 267 (1971). Control over access to the job market may reside, depending upon the circumstances of the case, in a labor organization, an employment agency, or an employer as defined in Title VII; and it would appear that Congress has determined to prohibit each of these from exerting any power it may have to foreclose, on indivious grounds, access by any individual to employment opportunities otherwise available' to him. To permit a covered employer to exploit circumstances peculiarly affording it the capability of discriminatorily interfering with an individual’s employment opportunities with another employer, while it could not do so with respect to employment in its own service, would be to condone continued use of the very criteria for employment that Congress has prohibited.

A fair reading of the Act in the light of its stated purposes precludes such a result. Section 703(a)(1) provides that:

(a) It shall be an unlawful' employment practice for an employer—
(1) to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s . . . sex. .... [42 U.S.C. § 2000e-2(a) (1). Emphasis added.]

The Act defines “employee” as “an individual employed by an employer,” but nowhere are there words of limitation that restrict references in the Act to “any individual” as comprehending only an employee of an employer. Nor is there any good reason to confine the meaning of “any individual” to include only former employees and applicants for employment, in addition to present employees. Those words should, therefore, be given their ordinary meaning so long as that meaning does not conflict with the manifest policy of the Act.

The Act, in providing for the filing of complaints with EEOC and of eventual actions in the District Court, does not use the term “employee.” The phrase is, rather, the “person aggrieved;” and that term can certainly be taken as comprehending individuals who do not stand in a direct employment relationship with an employer. The fact that the Act purports to provide remedies for a class broader than direct employees is a strong indication that the proscriptions contemplated by Section 703(a)(1) reach beyond the immediate employment relationship. It seems unlikely that Congress would confer standing to bring a suit under the Act upon persons without rights under the Act because they are not employees.

Appellant presses upon us the asserted incompatibility of the nature of the remedies referred to in Section 706(g) as supporting its narrow interpretation of Section 703(a)(1). The former provision authorizes the district courts, on finding an intentional violation of the Act, to

enjoin the respondent from engaging in such unlawful employment practice, and order such affirmative action as may be appropriate, which may include reinstatement or hiring of employees, with or without back pay (payable by the employer, employment agency, or labor organization, as the case may be, responsible for the unlawful employment practice). [42 U. S.C. § 2000e-5(g).]

Appellant argues that this provision “concerns relief that only an employer can give to its employees.” The statutory enumeration of remedies is by its terms, however, illustrative rather than exhaustive; and it also reaches explicitly beyond the context of direct employment to employment agencies and labor organizations. While neither hiring nor reinstatement may be relevant outside the context of direct employment, both injunctive and back pay relief (in the sense of monetary damages for lost employment opportunities) may be available, in an appropriate case, against respondents who are neither actual nor potential direct employers of particular complainants, but who control access to such employment and who deny such access by reference to invidious criteria. On the basis of the facts alleged, this is such a ease.

The question of jurisdiction here is an important one, and we note the fact that the parties have concededly been unable to point to any decided case which is squarely in point. We think it significant that the Act has addressed itself directly to the problems of interference with the direct employment relationship by labor unions and employment agencies — institutions which have not a remote but a highly visible nexus with the creation and continuance of direct employment relationships between third parties. On the facts as alleged, although not yet proved, appellant is so circumstanced, and its daily operations are of such a character as to have such a nexus to the third parties in this case; and we think neither the spirit nor, more essentially, the language of the Act leave it outside the reach of Title VII.

Ill

On the record as it existed at the time summary judgment was granted, there seems to be no question that appellant and appellee did not contemplate any immediate or future relationship of direct employment in the sense of the usual in-dicia of such employment. The patient was to be responsible for appellee’s compensation, and could reject or terminate his services for any or no reason. Appellant did, however, control the premises upon which those services were to be rendered, including appellee’s access to the patient for purposes of the initiation of such employment. What is alleged here is that on two occasions appellant blocked .that access and, without reference to the patient, itself determined that a female patient should not have a male nurse. If those allegations are made good by proof, then, as we have indicated hereinabove, we think appellant has brought itself within the strictures of Title VII.

Intent as it was on winning the case without the necessity of trial, by showing the want of the direct employment relationship it deemed essential to the applicability of the Act, appellant was not as sensitive as it should have been to the allegations that it had intruded itself between the patient and appellee. This circumstance undoubtedly gave rise to the District Court’s finding of liability on the assumption that these particular allegations had not been disputed, as they should have been, clearly and unmistakably, in order to protect against the contingency of the failure of appellant’s direct employment theory.

Since appellee had not himself moved for summary judgment, however, appellant had less reason to believe that its tactical choice, if unavailing, would deprive it of an opportunity to contest the merits. Counsel for appellant assured this court at oral argument that, given the opportunity, appellant will deny that appellee appeared at the hospital on one of the days in question, and that he was rejected by hospital personnel on the other. In the interests of justice, we think the hospital should be given an opportunity to litigate these basic facts.

In so holding, the court is not relying solely upon counsel’s explicit representations at our bar that appellee’s allegations will be contested. The specific allegation in the complaint was that, on February 12, 1968, and June 20, 1969, the registry office “provided defendant with plaintiff’s name for nursing duty the next day and plaintiff was rejected by defendant because he was not female.”

In appellant’s Rule 9(h) statement in support of its motion, it is said, in addition to denying generally any policy or practice of discrimination against male nurses, that “the hospital’s investigation showed no violation in the case of complainant and that on the date in question, February 12, 1968, hospital records showed that no day calls for private duty nurses had been received; that as calls for particular private duty shifts are received they are entered in the hospital records but there was no record for the date complained of; that the records did show that on February 13, 1968, complainant was referred to a case at the hospital and that in accepting the call complainant through the registry limited his availability to four days; that hospital denied there was any discrimination because of sex. . . .”

Elsewhere in that statement it is said that “[I]f the private duty nurse accepts the assignment, such nurse reports directly to the room number of the patient furnished by the Registry. If the patient or the patient’s representative rejects a private duty nurse for any reason, the patient is nonetheless liable for payment of such nurse’s fee for that day. . . .,” and that appellant “does not decide who may serve as a private duty nurse,” nor does it “accept or reject nurses. . . .” We think, thus, that the Rule 9(h) statement, when closely read, provided a significant degree of notice that appellant was not admitting that these incidents occurred as alleged by appellee.

Trial judges are not, of course, without the power to enter summary judgment sua sponte® It is, in any event, one to be cautiously used. In this case, where the defendant had not as yet answered the complaint, and no oral argument was heard, an exercise of sound discretion might well have required that a motion for summary judgment, had plaintiff made one, be denied. Absent an affirmative indication that the facts would indeed be undisputed óme jurisdiction was determined to exist, it was not the part of careful adjudication to enter summary judgment sua sponte, although we recognize that the contribution of appellant to the making of that error was not insubstantial.

The judgment appealed from is reversed and the case remanded for further proceedings consistent herewith.

It is so ordered.

      . The timeliness of the complaint is measured by the statutory requirement of 30 days from the receipt by appellee of the notice from the EEOC of the ripening of the right to sue. This notice was issued on August 12, 1971, and the complaint was filed the following September 13. We note that this was more than three years after appellee’s complaint was made to the EEOC on July 24, 1968. There is no express requirement in the Act, however, as to the time within which the EEOC must complete its consideration of a complaint.
      The District of Columbia Council on Human Relations appears to have taken no ac- • tion with respect to the earlier complaint filed with it by appellee on May 8, 1968.

      . While appellant’s motion was pending, ap-pellee filed an amended complaint alleging as additional jurisdictional bases the Fifth and Fourteenth Amendments and the Civil Rights Act of 1866, citing 42 U.S.C. § 1983. Appellant moved to strike the amended complaint, and this motion was denied on the same day summary judgment was ordered for appellee. Liberal construction of the amended complaint would enable it to be read as asserting an additional cause of action under § 1983, but the district judge’s disposition of the case made it unnecessary to advert to this possibility, which has since been foreclosed by District of Columbia v. Carter, 409 U.S. 418, 93 S.Ct. 602, 34 L.Ed.2d 613 (1973).

      . 42 U.S.C. § 2000e(b).

      . When Congress was addressing itself- to the question of those who can seek remedial action, it used language reflective of the standing concepts articulated by the Supreme Court as “injury in fact” and an interest “within the zone of those regulated by the statute or constitutional guarantee in question.” Association of Data Processing Organizations v. Camp, 397 U.S. 150, 152-153, 90 S.Ct. 827, 830, 25 L.Ed.2d 184 (1970). In Hackett v. McGuire Bros., 445 F.2d 442 (3rd Cir. 1971), the question was whether a former employee, now a pensioner, could maintain an action under Title VII. Belying upon the statutory definition of an employee, as appellant would have us do here, the trial court ruled that the action was not maintainable. The Court of Appeals, however, held that that definition was not controlling with respect to who might be an aggrieved person within the scope of the' remedies provided. The court said that “[a] person to be aggrieved may never have been an employee of the defendant,” and that “[a]n aggrieved person obviously is any person aggrieved by any of the forbidden practices . . . . ”

      . See, e. g., United States v. Wood, Wire and Metal Lathers Int’l. Union, Local 46, 328 P. Supp. 429, 441-445 (S.D.N.Y.1971) (back pay loss assessed against union).

      . In appellee’s opposition to appellant’s motion, the characterization is in these terms: “As the Complaint alleges, Defendant on at least two occasions has made the crucial employment decision by refusing Plaintiff employment as a nurse for female patients.”
      In the supporting affidavit of appellee, the characterization is as follows :
      “On February 12, 1968, and June 20, 1969 (after the June, 1968, circulation of Defendant’s antidiscriminatory “Private Duty Protocol”), Affiant was rejected for duty with patients to which Affiant had been assigned, and Defendant’s supervisory nurses indicated that the reason for rejection was Affiant’s sex.”
      In view of the fact that it is conceded that the patient was always at liberty to reject the private nurse for any or no reason, there is a certain ambiguity which continues to surround these allegations. However, they do include statements that it was appellant (as distinct from the patient) who denied the employment, and thus there is an issue of fact to be resolved as to just what did happen.

      . Nowhere does the statement address itself directly to the alleged incident on June 20, 1969, as distinct from the one on February 12, 1968. This appears to be due to the fact that the Rule 9(h) statement consists in substantial part of a description of the representations made by appellant to the EEOC at the time it was summoned to respond to appellee’s complaint. That complaint, as filed on July 24, 1968, naturally referred only to the February 12, 1968, incident. Appellant’s representations in response to it were made prior to the date of the second incident alleged in the District Court action, namely, June 20, 1969.

      . See 6 Moore, Federal Practice ]]56.12, at 2241-42 (2d ed. 1972), and cases there cited.

      . Moore, supra, suggests as a test that the trial court “be reasonably certain that [summary] judgment can be justly rendered without the necessity of trial.” Cf. Hudson v. Hardy, 134 U.S.App.D.C. 44, 412 F.2d 1091 (1968).