author: PELL, Circuit Judge. SPRECHER, Circuit Judge

text:
    NATIONAL LABOR RELATIONS BOARD, Petitioner, v. GRUBER’S SUPER MARKET, INC., Respondent.
    No. 73-1269.
    United States Court of Appeals, Seventh Circuit.
    Argued Jan. 15, 1974.
    Decided Aug. 15, 1974.

      Elliott Moore, Acting Asst. Gen. Counsel, William M. Bernstein, Atty., N.L.R.B., Washington, D. C., for petitioner.
    Frank B. Gilmer, Chicago, 111., for respondent.
    Before HASTINGS, Senior Circuit Judge, and PELL and SPRECHER, Circuit Judges.
   PELL, Circuit Judge.

The National Labor Relations Board (Board) seeks enforcement of its order issued February 5, 1973, against Gru-ber’s Super Market, Inc. (Gruber’s) (201 NLRB No. 98).

The principal issue before the court is whether a Gissel order should be enforced when there has been a single act of unfair labor practice of arguable demonstrability and an absence of either any other indication of anti-union bias or interference with protected employee rights under the National Labor Relations Act.

I.

Gruber’s had owned and operated a supermarket in South Bend, Indiana, for the better part of a decade. In June 1970 it purchased a second supermarket, located in Mishawaka, Indiana, about nine miles from the first store. Although separate political municipalities, South Bend and Mishawaka are in appearance one continuous municipality, and the two stores catered to the same general buying public, were operated similarly, and, from time to time, employees were interchanged between the stores.

A Board election was held on August 16, 1971, at the Mishawaka store and as a result the Retail Clerk’s Union Local 37, a/w Retail Clerk’s International Association, AFL-CIO (Union), was certified as the bargaining agent. The record does not reflect that any attempt was made to have the appropriate unit consist of the employees of both stores.

At about the time of the Mishawaka certification, the Union, having nine authorization cards from the South Bend employees, a majority of the thirteen eligible employees, requested recognition at the South Bend store at the same time it submitted a proposed contract for Mish-awaka. Gruber’s indicated it wanted an election, which in due course was scheduled for September 30,1971.

After business hours on September 27, James Gruber, vice president of Gru-ber’s and manager of the South Bend store, called a meeting at that store of the eligible employees there. The remarks made by James Gruber on that occasion, although occurring more than six months prior to the charged unfair labor practice and therefore themselves not a basis for such a charge, were considered by the Administrative Law Judge (ALJ) as shedding light on the true character of matters occurring within the limitation period.

The election was held as scheduled and resulted in a 5-5 vote. On October 8, 1971, the Union filed objections to the conduct of the election, alleging, inter alia, that management had interfered with the election by promising the employees wage increases if they voted against the Union.

On February 16, 1972, a hearing was held on the objections. On April 5, 1972, Gruber’s granted the South Bend employees wage increases comparable to those that had been negotiated at the Mishawaka store and put into effect there in late December 1971. On April 10, 1972, the Hearing Officer issued his report on the Union’s objections to the September 30th election; he recommended that two objections be sustained, the election be set aside, and a second election held. Gruber’s filed no exceptions to the report, and, on June 8, 1972, the Board adopted the Hearing Officer’s recommendations.

Subsequent to the wage increases but prior to the Board’s decision on the election objections, the Union had filed unfair labor practice charges. Adopting the findings and recommendations of the ALJ, the Board found that Gruber’s had violated section 8(a)(1) by granting its South Bend employees wage increases in order to discourage support of the Union and section 8(a)(5) by refusing to recognize the Union on the basis of the authorization cards signed by a majority of the employees in the appropriate unit. In the order which is the subject of the present petition, the Board required Gruber’s to cease and desist from giving wage increases in order to discourage support of the Union, to bargain collectively with the Union, upon its request, and to post an appropriate notice.

II.

Turning first to the 8(a) (1) violation, we will, as did the ALJ, look first at the meeting with the employees three days before the election to determine what light is shed on the granting of the wage increase more than six months later, during which period there is no indication of any anti-union activity on the part of the company.

For the present purpose, we note the statement of the Board in its brief to this court:

“He [James Gruber] asked each employee why he wanted a union. Most employees said they were concerned about their wages. Gruber said that the Company could not afford to give them wage increases at that time because of expenses incurred in opening the Mishawaka store and reminded the employees that the national ‘wage freeze’ had been on since August 15. He said that if the Union did not win the election, the South Bend employees would get a raise comparable to any negotiated for the Mishawaka store employees. He added that the employees should give the Company a chance and pointed out that the employees would have another opportunity to vote for the Union after a period of time if management failed to satisfy them.” (Citations omitted.)

The light shed on the April wage increases is a caliginous one. We have difficulty in finding much illuminative significance in the request that the company have a chance and the statement that the employees could vote for the Union at a later election. While the remarks conveyed the impression that management would prefer a nonunion-ized South Bend store, we are unaware of any legal preclusion of management’s right so to express itself. Further, these remarks must be examined in the context of Gruber’s statements that the company policy because of the interrelated nature of the stores was to maintain basically the same pay scale at the two stores.

The ALJ, whose decision was adopted by the Board, did not discredit the testimony that the policy of uniformity had been established when the second store was purchased but rather apparently brushed it aside as being without great significance. Giving due deference to the expertise of the Board in such matters, we nevertheless have difficulty in consigning to the waste heap such an obviously true fact of economic life which is bound to occur in the operation of multiple, similar type stores in a single wage area. Whether employees of a nonunion plant of the employer will choose to ride dues free on the coat tails of employees in another plant of the company which has been unionized and which is located and operated in a place and a manner so as virtually to mandate the maintenance of uniform working conditions and wages is a choice not infrequently put. We further are not unmindful that when the choice is put, a majority of voting employees will' frequently determine that they prefer to dispense with the free ride in favor of union representation. We know of no reasons that the employees at Gruber’s were not entitled to be informed of the obvious truth as to the uniformity factor. The Board itself has on numerous occasions in representation proceedings recognized the uniform-treatment fact of economic life by authorizing area-wide bargaining units in cases of multiple stores in a metropolitan area simply because uniformity of conditions promotes industrial peace, a primary objective of the National Labor Relations Act. See, e. g., The Interstate Company, 118 NLRB 746 (1957); The Great Atlantic & Pacific Tea Company, 119 NLRB 603 (1957); Food Fair Stores, Inc., 120 NLRB 497 (1958); Katz Drug Company, 123 NLRB 1615 (1959); Chicago North Side Newspapers, 124 NLRB 254 (1959); Interstate Co., Glass House Restaurants, etc., 125 NLRB 101 (1959).

The ALJ, however, found that James Gruber in September had promised comparable wages if the employees “voted against the Union at the election.” The testimony in the record, without regard to James Gruber’s testimony, is extremely equivocal. It is susceptible of interpretation as a promise on the one hand of an increase in wages contingent upon several factors including voting against the Union. But it is equally susceptible on the other hand of interpretation as a statement that, whether or not there was a union at the South Bend store, under the uniform policy for the two stores wages comparable to those negotiated at Mishawaka could be expected.

Despite the ambiguity of the remarks as reported in the testimony and the fact that on the basis of the remarks the employees might well have concluded that to assure the wage increases they should indeed vote for the Union rather than against it, we will proceed on the basis that some nebulous light was shed on the subsequent unilateral wage increases, to which we now turn.

III.

The employer’s reasons for its actions determine whether the employer violates section 8(a)(1) by conferring benefits either during an election campaign or after an election, while objections are pending. For example, no violation occurs if the wage increases an employer grants are simply implementations of its well-settled practice of periodic raises; or, absent such a practice, compelling business reasons justify the employer’s unilateral decision to furnish the new benefits. However, section 8(a)(1) “prohibits . . . conduct immediately favorable to employees which is undertaken with the express purpose of impinging upon their freedom of choice for or against unionization and is reasonably calculated to have that effect.” NLRB v. Exchange Parts Co., 375 U.S. 405, 409, 84 S.Ct. 457, 11 L.Ed.2d 435 (1964). See NLRB v. Furnas Electric Co., 463 F.2d 665, 669 (7th Cir. 1972); NLRB v. Drives, Inc., 440 F.2d 354, 363 (7th Cir. 1971); Texaco, Inc. v. NLRB, 436 F.2d 520, 524 (7th Cir. 1971); General Teamsters & Allied Workers Union No. 992 v. NLRB, 138 U.S.App.D.C. 312, 427 F.2d 582, 586 (1970).

The ALJ found — and the Board agreed — that the purpose (and effect) of Gruber’s grant of wage increases at a time when it faced the possibility of a rerun election was to erode Union support among the employees at the South Bend unit. Gruber’s, however, maintains that it acted from lawful economic motives, not anti-Union animus.

As we have indicated, the timing of wage increases or other benefits unilaterally conferred is a significant factor in section 8(a)(1) cases. Here, Grub-er’s granted substantial increases while the Union’s objections to the pre-election conduct of management in September 1971 were still pending. The hearing on those objections had taken place seven weeks prior to the grant, on February 16, 1972. The Hearing Officer issued his report, critical of management’s conduct and recommending the holding of a second election, just five days after Gruber’s gave its South Bend employees the wage increases. The changes in hourly rates ranged from 20 cents to one dollar and were comparable to the increases that the Union had negotiated for the employees at the Mishawaka supermarket and which had gone into effect there in December 1971.

Although the Mishawaka acquisition occurred in June 1970, the record does not unequivocally establish that the South Bend employees had been informed of Gruber’s asserted parity policy until September 27, 1971 — three days prior to the scheduled representation election and after Mishawaka employees had become unionized. Even if we assume, arguendo, that James Gruber did not commit management to a wage hike only if the employees should reject the Union, the announcement at that juncture of a uniform wage policy suggests an attempt to obviate the employees’ need for the Union. Further, if the South Bend workers had been previously informed about the corporation’s supposed policy, they saw no evidence of it until April 1972, when management and the Union were embroiled in an election controversy.

The ALJ found that Gruber’s had “failed to show that there was any build-up of employee pressure for more money prior to April 5th, much less a staffing problem which hampered the Company’s conduct of business.” The record supports this evaluation. According to members of the Gruber family, they received, at most, seven or eight inquiries, made by three or four of the employees, about wages. Four of these inquiries occurred between September and December, that is, before management had decided to grant the increases. The two veteran employees who raised the matter after December accepted the response — that the Union’s objections would first have to be resolved — with no intimation that they might leave their jobs. Furthermore, between September 1971 and April 5, 1972, only two employees who had voted in the election left Gruber’s employment. And the assertions of the corporation’s officials that they were experiencing difficulty finding help were confirmed by no objective evidence. In sum, in rebuttal Gruber’s failed to show that it had suffered such injury as to justify its unilateral action while the Board was processing the Union’s objections, the sustaining of which probably would require that a rerun election be held.

As for the time lag, on which Gru-ber’s relies, although the hearing on the objections arising out of the September 1971 election did not take place until February 1972, there was no reason for the corporation’s officials to assume that the Hearing Officer would not soon issue his decision and recommendations. The pay increases could not have been granted in pursuance of the management’s parity policy until December or January, and Gruber’s counsel at that time advised the corporation’s officials against taking such action. After so long a period of no raises, it is “curious,” as the Board in its brief remarks, that Gruber’s decided it could not wait for the decision of the Hearing Officer at least. See NLRB v. Furnas Electric Co., 463 F.2d 665, 669 (7th Cir. 1972), where we sustained a Board finding “that the Company’s announcement of an increase in wages and benefits, prior to knowledge of the date that a new election was to be held, and while exceptions were pending before the Board, was an unfair labor practice.” Contrast Monroe v. NLRB, 460 F.2d 121, 124-125 (4th Cir. 1972).

“The question on this review is not whether we would have interpreted the employer’s intention as did the Board in the first instance, but whether the Board’s resolution of this factual issue is supported by substantial evidence on the record considered as a whole . ” Luxuray of New York v. NLRB, 447 F.2d 112, 118 (2d Cir. 1971). Although Gruber’s conduct here was not blatant like that of the employer in Texaco, Inc., supra, or transparently manipulative like that condemned in Tower Enterprises, Inc., 182 NLRB 382 (1970), enforced, 79 LRRM 2736 (9th Cir. 1972), the Board did, in our opinion, satisfy its burden of proof. Contrast NLRB v. Ambox, Inc., 357 F.2d 138, 141 (5th Cir. 1966), where the employer “made clear that the increases would be granted retroactively as soon as the election objections were cleared up, and the promise of benefits was not made dependent on the outcome of the election proceeding.” Under these circumstances, not found to be present in our case, the Fifth Circuit concluded that “[t]o extend the pre-election prohibition to the post-election period would unnecessarily seriously curtail the rights of employers and employees.”

Although we consider the case a close one, on the basis of the scope of our review, we uphold that part of the Board’s decision and order which found that Gruber’s by granting wage increases on April 5, 1972, had violated section 8(a)(1) and which required it to cease and desist from such conduct in the future.

IV.

We turn now to the section 8(a)(5) violation and the Board's bargaining order.

In Gissel, 395 U.S. at 579, 89 S.Ct. at 1922, 23 L.Ed.2d 547, the Court held, inter alia, that “a bargaining order is an appropriate and authorized remedy where an employer rejects a card majority while at the same time committing unfair labor practices that tend to undermine the union’s majority and make a fair election an unlikely possibility . ” Although the Court eschewed a per se rule, it did approve the issuance of a bargaining order (1) in “exceptional” cases marked by “outrageous” and “pervasive” unfair labor practices if their “coercive effects” cannot be eliminated by traditional remedies, and (2) “in less extraordinary eases marked by less pervasive practices which nonetheless still have the tendency to undermine majority strength and impede the election processes.” Id. at 613-614, 89 S.Ct. at 1940.

This case, as Parts II and III of our opinion indicate, clearly does not involve “outrageous” unfair labor practices. Because the Union had a valid card majority when it requested recognition, the remaining — and determinative — issue is whether the present situation falls within the second broad category mentioned in Gissel.

In Peerless of America, Inc. v. NLRB, 484 F.2d 1108, 1118 (7th Cir. 1973), we reminded the Board that

“[w]e have consistently held that Gis-sel contemplates that the Board must make ‘specific findings’ as to the immediate and residual impact of the unfair labor practices on the election process and that the Board must make ‘a detailed analysis’ assessing the possibility of holding a fair election in terms of any continuing effect of misconduct, the likelihood of recurring misconduct, and the potential effectiveness of ordinary remedies.”

The Board's decision here consists of stark conclusions; Gissel and Peerless, however, demand that the Board provide a satisfactory explanation for its choice of a bargaining order as a remedy for employer unfair labor practices where the union claims to represent a majority of the employees in a unit on the basis of authorization cards. The decision here furnishes no specifics as to why “the risks that a fair rerun election might not be possible were too great to disregard the desires of the employees already expressed through the cards.” Gissel, supra, 395 U.S. at 615, 89 S.Ct. at 1941.

The Board’s reliance on judicial deference to administrative expertise is misplaced. As Judge Cummings pointed out in Peerless, supra, 484 F.2d at 1118 n.16, the Board’s presumed expertise “does not relieve the Board of its responsibility to explain its conclusions in terms reviewing courts can understand.” Cf. NLRB v. General Stencils, Inc., 472 F.2d 170, 175 (2d Cir. 1972).

The usual course for a reviewing court that finds the Board’s actions unsatisfactory — as we have here — is to remand the matter so that the agency may supply the missing findings and analysis. Peerless, supra, 484 F.2d at 1119; cf. NLRB v. Food Store Employees Union, Local 347, 417 U.S. 1, 8-11, 94 S.Ct. 2074, 40 L.Ed.2d 612 (1974). However, “[w]e conclude on analysis of the simple facts involved that we would be abdicating our judicial function and shirking our responsibilities if we ever enforced a bargaining order in this case. Consequently, in our desire to avoid needless and futile delay, we shall make the essential analysis and deny enforcement.” Peerless, supra, 484 F.2d at 1120.

We first note that, contrary to the Board’s contention, the record does not reveal the employer’s open, continuous hostility to the Union. An employer’s lack of enthusiasm for the unionization of his workers is not the equivalent of “anti-union animus.” James Gruber’s remarks, if injudicious, were also ambiguous. Further, for the purpose of our ascertaining the reasonableness of a bargaining order, the context in which wage increases occurred is significant, even though the granting of those increases constituted an 8(a)(1) violation. Unlike the employer in Tower Enterprises, Inc., supra, Gruber’s did not award wage increases hot on the heels of the union’s demand for recognition. Also, the business justifications asserted by the employer in Tower were - clumsy makeweights; Gruber’s reasons, in contrast, though found not to be sufficiently supported by evidence in the record to rebut successfully the Board’s determination, comport with those that any owner of two small similar stores would be likely to offer, and, as we have previously observed, with the facts of economic life.

Second, the record does not disclose that, following James Gruber’s talk, the South Bend employees lost interest in the Union. Indeed, the next day, that is, two days before the election, some if not all the unit’s employees attended an informational meeting sponsored by the Union. Contrast Texaco, Inc., supra, where, subsequent to two sessions with Texaco’s supervisor of employee relations and the rectification of employment grievances, the employees wrote the union informing it that they no longer desired its representation.

Third, the entry of the section 8(a)(1) cease and desist order and the posting of an appropriate notice about it will decrease the likelihood of the recurrence of misconduct by the employer. And the employees will be informed of the kinds of benefits the granting of which the Board finds improper. In addition, the employees will be on notice that the employer has been determined to have been guilty of an unfair labor practice.

We place some, though not controlling, weight on the changed composition of the work force at the South Bend store. Almost half the work complement at the times pertinent ■ here have left Gruber’s employment; most of these former employees were high school students who went on to college or to other positions. See Peerless, supra at 1121; NLRB v. General Stencils, Inc., 472 F.2d 170, 175 n.5 (2d Cir. 1972). “Since it is the present work force that stands to be deprived of exercising its free choice in the preferred election process, the fact that it is substantially different from the one which existed at the time of the misconduct militates against issuance of a bargaining order where, as here, that drastic remedy is not otherwise clearly warranted.” Peerless, supra, 484 F.2d at 1121.

The ordinary Board procedures applicable to the determination of whether a unit of employees desires to be represented by a union make available to the employer the privilege of calling for a governmentally-supervised secret election. This is as it should be in a democracy. Of course, in many instances the use of authorization cards provides an expeditious route to industrial harmony. On the other hand, pressures to sign authorization cards are not unknown, cf. NLRB v. Urban Tel. Corp., 499 F.2d 239 (7th Cir., 1974), and, because of personal factors arising out of the daily working relationship among fellow employees, are not always easily resisted. The voting booth, where no one looks over the employee’s shoulder, is the ideal forum for the expression of the free choice of each employee. It is only when one of the prongs of Gissel becomes an onlooker in the booth that there should be a resort to the forced recognition of the bargaining order, which may or may not be in accord with the desires of the majority of those affected.

In sum, a bargaining order in the present case is unwarranted and unreasonable. “[T]he concededly superior election process should take its course.” Peerless, supra.

Accordingly, we deny enforcement of that part of the Board’s order directing Gruber’s to bargain with the Union. However, we enforce the Board’s determination of an 8(a)(1) violation and its cease-and-desist directive on that point. The Board’s proposed notice, of course, will have to be modified to conform with our holdings.

SPRECHER, Circuit Judge

(concurring in part and dissenting in part).

I concur in that portion of Judge Pell’s opinion whereby the Board’s order is enforced.

I dissent from the denial of enforcement of that part of the order directing the employer to bargain with the union. My reason for doing so is that I believe that the promise of wage increases three days before the election had “the tendency to undermine majority strength and impede the election processes.” National Labor Relations Board v. Gissel Packing Co., 395 U.S. 575, 614, 89 S.Ct. 1918, 1940, 23 L.Ed.2d 547 (1969).

The nine employee authorization cards out of thirteen employees indicated that only four employees were opposed to the union shortly prior to the election. After the promised wage increase, the election vote was five to five, indicating the change of only one vote as definitely opposed to the union. Three employees, on the other hand, who had apparently signed cards were influenced enough to abstain from voting without having changed their labor philosophy to that of anti-union. In other words, they were temporarily mollified. This tends to show as much causal connection between the promised increase and the tainted vote as can ever reasonably be traced.

The Board’s analysis of the possibility of holding a fair election under these circumstances (footnote 7 of majority opinion) are sufficient “specific findings” in my view to satisfy Peerless of America, Inc. v. National Labor Relations Board, 484 F.2d 1108 (7th Cir. 1973).

      . NLRB v. Gissel Packing Co., Inc., 395 U.S. 575, 89 S.Ct. 1918, 23 L.Ed.2d 547 (1969).

      . Gruber’s argued that the Board deprived it of due process by accepting the Union’s objections as timely filed even though they were received in the Board’s Indianapolis Regional Office the day after October 7th, the date section 102.92(a) of the Board’s Rules and Regulations required. ' The Board concedes that early decisions appear to impose a rigid requirement that the Regional Office actually receive objections on or before the due date. See Dunn Motor Co., 100 NLRB 822 (1952) (objections refused where mailed day before due date but received one day late). Since the Board’s decision in Rio de Oro Uranium Mines, Inc., 119 NLRB 153 (1957), however, the test of compliance with section 102.92(a) is whether “it could be reasonably assumed [by the party filing objections] that its actions would have effected timely delivery.” Hughes Tool Co., d/b/a KLAS-TV, 197 NLRB No. 178 (1972), 80 LRRM 1479, n. 21. Thus, in Rio de Oro the Board accepted the employer’s objections although they were received a day late because they had been sent airmail, registered, special delivery from Albuquerque, New Mexico, to Fort Worth, Texas, about noon of the day before the due date.
      Here, the mailing did occur only the day before the objections were due, but there was testimony by a South Bend post office employee in charge of routing that a letter so mailed would normally be delivered in Indianapolis the next day. The Board concluded that the processing of objections received under these circumstances accords with Board policy. We, merely noting that the events transpired in 1971 rather than 1974 when the testimony might well have not been available or at least not entirely credible, cannot disagree with the determination made by the Board.

      . The other allegations were that Gruber’s had “unlawfully threatened employees with loss of hours and jobs if they voted for the Retail Clerks Union” and that it “unlawfully misrepresented Board procedures concerning the time a second election could be held if they voted against the Retail Clerks Union.” After an adminstrative investigation, the Regional Director recommended that the latter objection be dismissed.

      . Douglas Way, a part-time stock clerk, testified at the February 1972 bearing that Gruber had declared “. . . if we didn’t get a union in we would be, you — I don’t know if he exactly said if we didn’t, but he said we would get ... a raise comparable to the other store as soon as they got done negotiating.” (Emphasis added.) At that same hearing, David Jozwiak stated that “. . . there was the question of salary and I can’t recall too much, about that, but I recall something that he said that we would receive a raise, I guess, if the union wasn’t in we would receive a raise.” (Emphasis added.) Ken Horvath, a former stock clerk at the South Bend store, testified that Gruber had said “if we didn’t have a union our wage could be comparable to the union contract with [the Mishawaka employees].” At the August. 10th hearing, former employee Howard Sappington testified that Gruber had said, “[I]f we didn’t get a union that we would get our raise comj)arable to the Mishawaka store once their negotiations were over . . . . ” And Margaret Ellis, a ten-year veteran, testified that Gruber had not promised the employees wage increases if they voted against the Union. “No, that was not the promise, if we voted against it. Just that we would get a raise when it was possible for them to give us one.”

      . Of course, this has double-edged implications for the Q-issel issue since the lack of employee pressure for an increase would have some tendency to minimize the impact of the unilateral wage increase on free choice in an election.

      . See the dissent of Chairman Miller in General Stencils, Inc., 79 LRRM 1608, 1611, 1613 (1972), enforcement of bargaining order denied, 472 F.2d 170 (2d Cir.) :
      “No recent decisional task has more perplexed this Board, or confounded the courts which review our decisions, than that committed to us in Gissel: To determine whether an order to bargain is an appropriate remedy for employer interference with rights protected in Section 7 The standards by which we must decide whether to enter [such] an order . . . are uniquely amorphous. . . . The Court . . . made abundantly clear . . . that the aim of our inquiry must be somehow to quantify the impact upon employees which follows from unlawful conduct by their employer. . . . I do not doubt that the statements by Respondent could have affected the election atmosphere, interfered with the free exercise of employee choice, and prevented the conduct of a fair rerun election. In my view, however, there is not sufficient showing that occurred.” [Footnotes omitted.]

      . The Board’s justification for the imposition of a bargaining order was that
      “Respondent’s conduct in giving all the employees in the bargaining unit a substantial wage increase, in violation of Section 8(a)(1), is such as to have a lingering effect and to make it unlikely that the use of traditional remedies will insure a fair rerun election. . . . The unambiguous cards . . . therefore represent a more reliable measure of employee desire on the issue of representation in this case. . . . Accordingly, . . . Respondent by refusing to recognize the Union on the basis of its authorization cards engaged in conduct violative of Section 8(a)(5) of the Act. . . . The Board has held that a bargaining order is warranted under Gissel where, as here, an employer refuses recognition cards from a majority of the employees . . . and thereafter grants substantial wage increases to a high percentage of the employees in violation of Section 8(a)(1) of the Act. O & G Electric, Inc., 172 NLRB 426; Tower Enterprises, Inc., 182 NLRB 382, note 1.” [Footnote omitted.]

      . In its brief, the Board placed some emphasis on a footnote to the Gissel opinion, 395 U.S. at 612 n. 32, 89 S.Ct. at 1939, which provides in part: “In fashioning its remedies under the broad provisions of § 10(c) of the Act (29 U.S.C. § 160(c)), the Board draws on a fund of knowledge and expertise all its own, and its choice of remedy must therefore be given special respect by reviewing courts.”


source: Caselaw Access Project

author: GOLDBERG, Circuit Judge:

license: Public Domain

text:
    Nancy DUKES, d/b/a Louisiana Concessions, Plaintiff-Appellant, v. The CITY OF NEW ORLEANS and Honorable Moon Landrieu, Defendants-Appellees.
    No. 73-3979
    Summary Calendar.

    United States Court of Appeals, Fifth Circuit.
    Sept. 27, 1974.

      Joseph Neves Marcal, III, Gen. Counsel, ACLU of La., New Orleans, La., for' plaintiff-appellant.
    Blake G. Arata, City Atty., Joel P. Loeffelholz, Asst. City Atty., New Orleans, La., for defendants-appellees.
    Before WISDOM, GOLDBERG and GEE, Circuit Judges.

       Rule 18, 5 Cir.; see Isbell Enterprises, Inc. v. Citizens Casualty Company of New York et al., 5 Cir. 1970, 431 F.2d 409, Part I.

   GOLDBERG, Circuit Judge:

Before January, 1972, plaintiff-appellant Nancy Dukes maintained a pushcart business in the Vieux Carre of New Orleans, selling hot dogs, drinks, confections and novelties. Subsequently the New Orleans City Council revised its ordinances, removing hot dog vendors from the list of specifically permitted pushcart enterprises in the Vieux Carre, but simultaneously allowing all licensed vendors who had continuously operated the same such business in the Quarter for eight years prior to January 1, 1972, to continue selling. Since Dukes’ operation was only a year old, the effect of this revision was to eliminate her from the Vieux Carre market. The other pushcart hot dog vendor in the Quarter, eight year veteran Lucky Dogs, Inc., was thus left with an apparently unchallengeable monopoly.

Dukes brought this action under 28 U.S.C. §§ 2201 & 2202 against the City of New Orleans and its Mayor challenging the application of the revised ordinance’s “grandfather clause” to hot dog sellers in the Vieux Carre as a denial of Equal Protection and praying for an injunction and declaratory judgment. Both Dukes and the City moved for summary judgment on the merits of the Constitutional claim. The district court, ruling on the basis of the pleadings, answers to the plaintiff’s interrogatories, and uncontested affidavits, found no genuine issue of material fact and entered judgment for the City as a matter of law.

We conclude that the court below erred in its application of Equal Protection principles, and thus reverse. New Orleans retains ancestral entitlement to regulate business so as to maintain the charms of the Vieux Carre. But the Equal Protection Clause of the Constitution reaches beyond Canal Street, and lays its heavy hand when unjustified discrimination scars the Quarter’s complexion. The City’s purpose in revising its ordinance, fair though it be, cannot support its favoring a venerable hot dog dealer with the skins of eight seasons over franks of a more recent vintage.

I

There is no question of the City Council’s legitimate authority generally to regulate business conducted on the public streets and sidewalks of the Vieux Carre in order to preserve the appearance and custom valued by the Quarter’s residents and attractive to tourists. The sole dispute is whether the Council has exceeded Constitutional bounds in its discriminations regarding which enterprises are to be permitted and which are to be prohibited.

The Council’s classifications are not drawn upon inherently suspect lines such as race or religion. Nor is the personal interest Dukes seeks to protect here one of such Constitutional fundamentally as to give rise to a necessity for strict judicial scrutiny in preserving its equal protection. See, e. g., Harper v. Virginia State Bd. of Elections, 1966, 383 U.S. 663, 86 S.Ct. 1079, 16 L.Ed.2d 169 (voting); NAACP v. Button, 1963, 371 U.S. 415, 83 S.Ct. 328, 9 L.Ed.2d 405 (association); NAACP v. Alabama, 1958, 357 U.S. 449, 78 S.Ct. 1163, 2 L. Ed.2d 1488 (access to courts). Rather here

[we] deal with economic and social legislation where legislatures have historically drawn lines which we respect against the charge of violation of the Equal Protection Clause if the law be “reasonable, not arbitrary” and bears “a rational relationship to a [permissible] state objective.”

Village of Belle Terre v. Boraas, 1974, 416 U.S. 1, 94 S.Ct. 1536, 39 L.Ed.2d 797. Under this test the deference to legislative judgment is strong. See, e. g., San Antonio School District v. Rodriguez, 1973, 411 U.S. 1, 17, 40, 93 S.Ct. 1278, 1288, 1300, 36 L.Ed.2d 16, 33, 47; McGowan v. Maryland, 1961, 366 U.S. 420, 425, 81 S.Ct. 1101, 1104, 6 L.Ed.2d 393, 399; Williamson v. Lee Optical, 1955, 348 U.S. 483, 488-489, 75 S.Ct. 461, 464-465, 99 L.Ed. 563, 572-573; Railway Express Agency v. New York, 1949, 336 U.S. 106, 109-110, 69 S.Ct. 463, 465, 93 L.Ed. 533, 538-539. As the Supreme Court restated in Morey v. Doud, 1957, 354 U.S. 457, 463-464, 77 S.Ct. 1344, 1348-1349, 1 L.Ed.2d 1485, 1490, our chief guide in resolving this case,

“1. The equal protection clause of the Fourteenth Amendment does not take from the State the power to classify in the adoption of police laws, but admits of the exercise of a wide scope of discretion in that regard, and avoids what is done only when it is without any reasonable basis and therefore is purely arbitrary. 2. A classification having some reasonable basis does not offend against that clause merely because it is not made with mathematical nicety or because in practice it results in some inequality. 3. When the classification in such a law is called in question, if any state of facts reasonably can be conceived that would sustain it, the existence of that state of facts at the time the law was enacted must be assumed. 4. One who assails the classification in such a law must carry the burden of showing that it does not rest upon any reasonable basis, but is essentially arbitrary.” Lindsley v. Natural Carbonic Gas Co., [1911,] 220 U.S. 61, 78, 79, 31 S.Ct. 337, 340, 341, 55 L.Ed. 369, 377 .. .

Thus, we view the New Orleans ordinance initially from a traditionally sympathetic perspective. This does not mean, however, that the judicial role of constitutional oversight is to be abdicated. Morey v. Doud also teaches that where the discriminations to be assessed assume an “unusual character,” we must exercise “careful consideration to determine whether they are obnoxious” to the Equal Protection Clause. 354 U.S. at 464, 77 S.Ct. at 1349, 1 L.Ed2d at 1490-1491 (quoting Hartford Steam Boiler Inspee. & Ins. Co. v. Harrison, 1937, 301 U.S. 459, 462, 57 S.Ct. 838, 840, 81 L.Ed. 1223, 1226; Louisville Gas & Elec. Co. v. Coleman, 1928, 277 U.S. 32, 37, 48 S.Ct. 423, 425, 72 L.Ed. 770, 774). Finding the “grandfather clause” of the New Orleans ordinance here at issue to be facially “unusual” in its establishment of a closed class of favored enterprises distinguished solely by the length of their tenure as established operations, we proceed to such a “careful consideration.”

II

In our examination of the nature of the discrimination attacked here, we are guided by two principles consistently reiterated by the Supreme Court. First, “distinctions in the treatment of business entities engaged in the same business activity may be justified by genuinely different characteristics of the business involved. . . . But distinctions cannot be so justified if the ‘discrimination has no reasonable relation to these differences.’ Hartford S. B. I. Ins. Co. v. Harrison, [1937,] 301 U.S. 459, 463, [57 S.Ct. 838, 840] 81 L. Ed. 1223, 1226.” Morey v. Doud, 354 U.S. at 466, 77 S.Ct. at 1350, 1 L.Ed. 2d at 1492. Second, “[a] classification ‘must rest upon some ground of difference having a fair and substantial relation to the object of the legislation, so that all persons similarly circumstanced shall be treated alike.’ Roy-ster Guano Co. v. Virginia, [1920,] 253 U.S. 412, 415, [40 S.Ct. 560, 561] 64 L. Ed. 989, 990.” Reed v. Reed, 1971, 404 U.S. 71, 75-76, 92 S.Ct. 251, 254, 30 L. Ed.2d 225, 229.

A classification • based on tenure may have a legitimate governmental rationale and thus be constitutionally permissible. A zoning ordinance, for example, may be made applicable only to future builders in order to conserve reliance interests. See Sampere v. New Orleans, 1928, 166 La. 776, 117 So. 827, aff’d per curiam, 1929, 279 U.S. 812, 49 S.Ct. 262, 73 L.Ed. 971. Cf. United States v. Maryland Savings-Share Ins. Corp., 1970, 400 U.S. 4, 91 S.Ct. 16, 27 L.Ed.2d 4. Even a discrimination between established operations based on distinctions in tenure may be proper if rationally connected to a valid legislative purpose. Thus in Watson v. Maryland, 1910, 218 U.S. 173, 30 S.Ct. 644, 54 L. Ed. 987, the Supreme Court upheld a Maryland statute exempting physicians who had practiced in the state for four years from taking a licensing examination, upon the reasonable legislative “theory that those who have acceptably followed the profession in the community for a period of years may be assured to have the qualifications which others are required to manifest as a result of an examination.” 218 U.S. at 177, 30 S.Ct. at 646, 54 L.Ed. at 989. See also Dent v. West Virginia, 1889, 129 U.S. 114, 9 S.Ct. 231, 32 L.Ed. 623. Cf. Eslin v. Collins, Fla.1959,108 So.2d 889.

The New Orleans ordinance challenged here was enacted as part of a series of measures limiting peddling in the Vieux Carre in accordance with the New Orleans City Council’s apparent and reasonable belief that the presence of such distractions inhibits tourism. The Council’s asserted purpose in permitting only those vendors who had sustained their operations in the Quarter for eight years to remain was to preserve those least likely to disturb “the unique charm and beauty that is characteristic of the Vieux Carre.” While we are sympathetic to New Orleans’ efforts to conserve the traditional complexion of the Vieux Carre and sensitive to the difficulty of consistently aligning tradition with purely reasonable distinctions, we nevertheless find the Council’s rationale insufficient to support the discrimination imposed.

The pivotal defect here is akin to that exposed by the Supreme Court in Morey v. Doud, supra. Under the Illinois statute invalidated there, the American Express Company was exempted from regulatory and licensing requirements imposed on other issuers of money orders in the state, apparently in recognition of its stability and preeminence. The Supreme Court held this rationale insufficient, however, because American Express would “continue to be unregulated whether or not [it] retains its present characteristics.” 354 U.S. at 467, 77 S.Ct. at 1351, 1 L.Ed.2d at 1492. Here similarly, the hypothesis that a present eight year veteran of the pushcart hot dog market in the Vieux Carre will continue to operate in a manner more consistent with the traditions of the Quarter than would any other operator is without foundation. There is simply no suggestion that eight years’ experience in the pushcart hot dog business in the Vieux Carre is necessary or helpful to better hot dog salesmanship, or that it instills in the licensed vendors (or their likely transient operators) the kind of appreciation for the conservation of the Quarter’s tradition that would move them to refine their methods of operation.

Furthermore, the New Orleans ordinance selects a single vendor for special preference, closing the Vieux Carre pushcart foodstuff market to all other operators regardless of how well established or desirable their operations may be or might otherwise become. This factor distinguishes the present matter from Stanley v. Public Util. Comm’n, 1935, 295 U.S. 76, 55 S.Ct. 628, 79 L.Ed. 1311, in which the Supreme Court upheld legislation somewhat similar to that challenged here, but which operated only to limit entry into the regulated field to qualifying applicants, not to bar future entry altogether. There, a 1933 Maine statute required common carriers operating motor vehicles for hire to obtain a certificate of public convenience and necessity, but also provided that such certification was to be granted “as a matter of right” to carriers in continuous operation since March 1, 1932. The Supreme Court’s opinion went no further than to sanction such a limited qualification on free entry into the market, holding that in the exercise of its legitimate regulatory powers, “the legislature could determine, within reason, as of what period the service of carriers for hire over its highways did not impair their use or cause congestion, and [could] require certificates for those seeking to supply additional transportation for a later period.” 295 U.S. at 78, 55 S.Ct. at 628, 79 L.Ed. at 1313. Cf. Watson v. Maryland, 1910, 218 U.S. 173, 30 S.Ct. 644, 54 L.Ed. 987.

The exclusionary character of the New Orleans ordinance more closely resembles the provisions of the Illinois statute held invalid in Morey v. Doud, supra, which imposed economic and organizational burdens , above and beyond the requirement of demonstrating public convenience, on competitors of American Express while exempting American Express alone. Of course it is true that not every statute treating uniquely some individual enterprise or some closed class of enterprises is constitutionally objectionable. Nevertheless, the ereation of a protected monopoly for the favored class member is a significant factor to be considered in assessing the nature of the discrimination here. Like Morey v. Doud, “[t]his is not a case in which the Fourteenth Amendment is being invoked to protect a business from the general hazards of competition. The hazards here have their roots in the statutory discrimination.” 354 U.S. at 468-469, 77 S.Ct. at 1352, 1 L.Ed.2d at 1493.

We conclude that appellant Dukes has overcome' the presumption of constitutionality of the New Orleans ordinance’s “grandfather clause” by demonstrating the insubstantiality of the relation between the nature of the discrimination and the legitimate governmental interest in conserving the traditional assets of the Vieux Carre. We need not determine which aspects of the legislative monopoly created here might hypothetically be adjusted to render the ordinance constitutionally inoffensive. It is enough that the sum of the constitutional considerations examined outweighs the legislative presumption, so that we are not driven to balance each individual factor. “Taking all of [the] factors in conjunction-the remote relationship of the statutory classification to the [ordinance’s] purpose or to business characteristics, and the creation of a closed class . . .• — we hold that the application of the [ordinance] to [appellant] deprives [her] of equal protection of the laws.” Morey v. Doud, supra, 354 U.S. at 468-469, 77 S.Ct. at 1352, 1 L.Ed.2d at 1493.

We emphasize that our holding does not bar New Orleans from further legitimate attempts to conserve the Vieux Carre’s unique resources. The City Fathers might constitutionally enact any of a broad range of measures— for example, strict regulation of the location and appearance of pushcarts — in order to satisfy the same concerns that prompted the ordinance here examined. But such a “grandfather clause” as was enacted could be viable only if paternally genuine; a classifieatory statute can withstand constitutional attack only if its classifieatory directions are rationally guided. Here the strictly chronological divisions were not. We hold only that the City may not satisfy its proper goals through such arbitrary discriminations.

Finding the ordinance unconstitutional as applied, we reverse the summary judgment for the City entered below. Since the trial court did not find the ordinance’s discrimination unconstitutional, it did not consider whether the “grandfather clause” was severable from the ordinance’s simultaneous general preclusion of pushcart hot dog vendors from the Quarter, that is, whether the ordinance should be read as a total nullity, or whether it should be read to preclude the operation of all pushcart hot dog dealers in the Vieux Carre. We remand for the district court to resolve this question and enter judgment accordingly.

Reversed and remanded for further proceedings consistent with this opinion.

      . New Orleans, La., Ordinance 4822, Apr. 13, 1972, amending Ordinance 828 M.O.S. ch. 46. See also Ordinance 4957, Sept. 21, 1972, amending Ordinance 828 M.O.S. ch. 46.

      . Dukes began this action against the predecessor version of the New Orleans ordinance regulating peddling on the public streets and sidewalks of the Vieux Oarre, New Orleans, La., Ordinances 4744, May 13, 1971; 4555, May 13, 1971; 4439, Dec. 18, 1970, all amending Ordinance 838 M.O.S. ch. 46. That version prohibited most pushcart sales, but excepted from prohibition the vending of certain items, including hot dogs. Dukes’ other sales items, drinks, confections and novelties, were not specifically excepted under the ordinance, however. After the arrest of one of her employees on charges— later dismissed — of violating the existing ordinance, Dukes initiated this suit challenging the ordinance’s discrimination between “similar and comparable businesses” as a denial of Equal Protection. After the revision of the ordinance in 1972, she amended her pleadings to attack the “grandfather clause.” Since the current ordinance permits no pushcart foodstuff vendors in the Quarter, qua foodstuff vendors, Dukes appears no longer seriously to press her original attack on discriminations between vendors of different types of goods. In any case, we have no difficulty in concluding that such an Equal Protection claim on Dukes’ part could not withstand analysis. See McGowan v. Maryland, 1961, 366 U.S. 420-426, 81 S.Ct. 1101, 1105, 6 L.Ed.2d 393-399.

      . Brief of Appellee at 7.

      . Of. McGowan v. Maryland, 1961, 366 U.S. 420, 426, 81 S.Ct. 1101, 1105, 6 L.Ed.2d 393, 399; Kotch v. River Port Pilot Comm’rs, 1947, 330 U.S. 552, 67 S.Ct. 910, 91 L.Ed. 1093.

      . The line of analysis we adopt here is not at odds with the principle that in assessing economic legislation under challenge as a denial of Equal Protection, we should assume any reasonable set of facts on which the legislature might have based its judgment. That principle applies only to the assumption of facts in existence at the time of enactment. Bee Lindsley v. Natural Carbonic Gas Co., 1911, 220 U.S. 61, 78, 31 S.Ct. 337, 340, 55 L.Ed. 369, 377, quoted in Morey v. Doud, 354 U.S. at 464, 77 S.Ct. at 1349, 1 L.Ed.2d at 1490.

      . Nor does the challenged ordinance require the eight year veterans permitted to remain in the Vieux Carre to maintain the current appearance or location of their equipment or operations, or their habitual ways of doing business.

      . Unlike the statute invalidated in Morey v. Doud, the New Orleans ordinance does not specify the one enterprise given legislative favor, Lucky Dogs, Inc., by name; here the statutory exemption is ostensibly generic. The functional effect of the specific statutory exemption is identical to that encountered in Morey v. Doud, however; it is a matter of public licensing record that Lucky Dogs, Inc., is the only hot dog vendor qualifying under the “grandfather clause” to operate in the Vieux Carre. We see no legal significance in the different manner of describing the single favored entity. See Cotting v. Godard, 1901, 183 U.S. 79, 114-115, 22 S.Ct. 30, 44, 46 L.Ed. 92, 109-110, cited with approval in Morey v. Doud, 354 U.S. at 467, 77 S.Ct. at 1351, 1 L.Ed.2d at 1492-1493.

      . These included preclusion from selling through retail establishments and the imposition of licensing, surety and insurance costs.

      . See, e. g., Erb v. Morasch, 1900, 177 U.S. 584, 20 S.Ct. 819, 44 L.Ed. 897 (statute exempting named rail line from compliance with limit on train speed in city).

      . In United States v. Maryland Savings-Share Ins. Corp., 1970, 400 U.S. 4, 91 S.Ct. 16, 27 L.Ed.2d 4, for example, the Supreme Court upheld a 1960 federal statute granting tax exemption to existing non-profit corporations engaged in the insurance of savings and loan associations against the equal protection attack of a like corporation chartered in 1962 and denied the exemption. The Court was at some pains to point out, however, that a legitimate and rationally related governmental interest in not extending the exemption had been “affirmatively” demonstrated. Id. at 6, 7 n. 2, 91 S.Ct. at 17, 18, 27 L.Ed.2d at 7, 7 n. 2.

      . We likewise specifically decline to consider tlie constitutionality of the “grandfather clause” as it applies to other categories of enterprise in the Vieux Carre.


author: MacKINNON, Circuit Judge,

text:
    Harry R. HALDEMAN, Petitioner, v. Honorable John J. SIRICA, Judge (formerly Chief Judge), United States District Court for the District of Columbia, Respondent. Gordon C. STRACHAN, Petitioner, v. Honorable John J. SIRICA, United States District Judge, United States District Court for the District of Columbia, Respondent.
    Nos. 74-1364, 74-1368.
    United States Court of Appeals, District of Columbia Circuit.
    Argued March 21, 1974.
    Decided March 21, 1974.
    As Amended March 27, 1974.
    John J. Wilson, Washington, D. C., for petitioner Harry R. Haldeman, with whom Frank H. Strickler, Washington, D. C., was on the petition.
    John M. Bray, Washington, D. C., for .petitioner Gordon C. Strachan.
    Philip A. Lacovara, Counsel to the Special Prosecutor, Watergate Special Prosecution Force, for respondent, wich whom Leon Jaworski, Special Prosecutor, and Peter M. Kreindler, Executive Asst, to the Special Prosecutor, were on the responsive pleadings for respondent.
    Before BAZELON, Chief Judge, and WRIGHT, McGOWAN, LEVENTHAL, ROBINSON and MacKINNON, Circuit Judges.
   ORDER

This matter came on to be heard on the separate petitions for writs of prohibition or mandamus filed by Harry R. Haldeman and Gordon C. Strachan, the memorandum in opposition filed by the United States on behalf of the respondent and the grand jury, and the oral arguments of counsel.

This relief by extraordinary writ is sought to prohibit the respondent District Judge from transmitting, as recommended by the grand jury, to the House Judiciary Committee a sealed report and accompanying grand jury evidence. The grand jury has characterized that material as bearing upon the inquiry currently being made by that Committee, pursuant to the authorization of the entire House, into possible grounds for impeachment of the President of the United States. The burden of the petitions is that the District Judge has abused his discretion in this instance and should be curbed by the use of our power to issue extraordinary writs. Although it was argued in the District Court that the grand jury was wholly lacking in power to make the report and recommendation in question, now it is said by petitioner Haldeman that it has never been the custom for grand juries in this circuit to issue reports, and that the question is, in any event, not one of law but of policy. Petitioner Strachan at oral argument represented that he was raising no objection to the grand jury’s power to report, and that this question is unimportant to the position he asserts.

The position of both petitioners essentially is that the District Judge should not disclose to the Judiciary Committee evidence taken before the grand jury that returned the indictment against petitioners. It has been asserted, both in the District Court and here, that the discretion ordinarily reposed in a trial court to make such disclosure of grand jury proceedings as he deems in the public interest is, by the terms of Rule 6(e) of the Federal Rules of Criminal Procedure, limited to circumstances incidental to judicial proceedings and that impeachment does not fall into that category. Judge Sirica has dealt at length with this contention, as well as the question of the grand jury’s power to report, in his filed opinion. We are in general agreement with his handling of these matters, and we feel no necessity to expand his discussion.

We think it of significance that the President of the United States, who is described by all parties as the focus of the report and who presumably would have the greatest interest in its disposition, has interposed no objection to the District Court’s action. The interest of the petitioners is said by them to be that of persons under indictment who may be unable to receive a fair trial because of unfavorable publicity likely to result from the disclosure of grand jury evidence to the House Committee. As did the District Judge, we note that this is at best a slender interest on which to support standing to seek the relief in question, but we do not turn the petitions aside on that ground.

We note, as did also the District Judge, that, if the disclosures to the public so feared by petitioners do in fact take place and have the consequences that petitioners predict, they will be free at trial to raise these claims in the light of what has actually happened, and to seek the traditional relief ranging from continuance through change of venue to dismissal of their indictments. It appears to be premature at the least to make their speculations about future prejudice the basis for present employment of our extraordinary writ power. With respect to the substance of those speculations, we cannot be unaware of the fact that the Special Prosecutor has concluded that his interests in successful prosecutions can be reconciled with this transmittal for consideration in the impeachment process — thereby suggesting that the dangers in his estimation are not great. The District Judge who received the indictment, perused the materials accompanying the report, and expressed his general interest in the fairness of the trial over which he will preside later this year, also concluded that it is unlikely that this transmittal will interfere with a fair trial.

We are asked to employ our extraordinary powers now primarily because it is said that the District Judge, being the judge who will later try the indictment and who presently has under his control grand jury evidence which, when and if disclosed publicly, may possibly create a climate of prejudice in which a fair trial may not be possible, should take no chance in this regard and exercise his discretion in favor of the more cautious course. This claim is, obviously, that we should intervene by prohibition or mandamus to exert our supervisory power as a barrier to a step by the District Judge which, although within the legal limits of his authority, is not sound policy. It almost goes without saying that this is not the kind of abuse of discretion or disregard of law amounting to judicial usurpation for which the extraordinary writs were conceived.

Now, therefore, it is

Ordered that the petitions pending before us for prohibition or mandamus are hereby denied; and it is

Further ordered that execution of the District Court’s order is stayed until 5:00 p. m. March 25, 1974, to permit petitioners to apply to the Supreme Court for such relief as they may deem advisable.

MacKINNON, Circuit Judge,

concurring in part and dissenting in part:

I concur in the implicit finding that the petitioners have standing to seek the relief here requested. My view of the record, however, after the limited research permitted by the rapidity with which this court has handled this matter, convinces me that the grand jury exceeded its authority in releasing (1) the report, (2) the so-called index, and (3) the selective evidence. Application of United Electrical, Radio & Mine Workers, 111 F.Supp. 858 (S.D.N.Y. 1953); see conflicting authorities in Judge Sirica’s opinion. The process of composing the index and selecting the evidence supporting it necessarily reflects a conscious and focused judgment by the grand jury on the credibility of witnesses and the inferences to be drawn from the totality of evidence presented to it. Moreover, potentially exculpatory material may have been excluded. For these reasons, it is my opinion that the interests of justice will not be furthered by transmitting to the Committee this grand jury report and the selective evidence accompanying it. Congress would only be forced to come back for additional testimony if it is to judge credibility, as it certainly should do.

I would expunge the entire grand jury report and permit the House Judiciary Committee, on request to the District Court, to have access not only to the limited testimony accompanying the report and index but to the entire grand jury proceedings under supervision of the court in the manner generally followed by Chief Judge Bryan in In re Petition for Disclosure of Evidence, 184 F.Supp. 38 (E.D.Va.1960). In this way the House Committee would be better able itself to pass on credibility without having credibility prejudged for it. Chief Judge Bryan, in his opinion, supra, deferred disclosure to the state and local authorities until after the federal trials were completed. He thus protected those who were the subject of federal indictments. Those indicted here are not receiving that protection. The prosecutor here, however, has indicated that he is knowledgeably and intentionally taking a calculated risk that the transmission of this evidence with the risk of its premature disclosure may make it impossible for those indicted to receive a fair trial. In my view that is a hazard the Special Prosecutor is permitted to take at this stage of the criminal proceedings.

As for the argument made by the Special Prosecutor that Rule 6(e) does not limit disclosure by the judge in releasing grand jury testimony, it is my view that said rule is a codification of longstanding decisions that hold to the “indispensable secrecy of grand jury proceedings . . . except where there is a compelling necessity,” United States v. Procter & Gamble, 356 U.S. 677, 683, 78 S.Ct. 983, 986, 2 L.Ed.2d 1077 (1958); United States v. Johnson, 319 U.S. 503, 513, 63 S.Ct. 1075, 87 L.Ed. 1413 (1943), and that the judge is as much bound by this rule as other persons. A contrary interpretation strains the language and obvious intent of Rule 6(e) and frustrates its operation.

At oral argument the prosecutor represented that this disclosure of the grand jury material to the House Judiciary Committee and eventually possibly to the House and Senate is being made “preliminarily to [and] in connection with a judicial proceeding,” Fed.R.Crim. P. 6(e), in which due process of law will be available. My concurrence in the release of the grand jury material has taken this representation into consideration.

      . (e) Secrecy of Proceedings and Disclosure. Disclosure of matters occurring before the grand jury other than its deliberations and the vote of any juror may be made to the attorneys for the government for use in the performance of their duties. Otherwise a juror, attorney, interpreter, stenographer, operator of a recording device, or any typist who transcribes recorded testimony may disclose matters occurring before the grand jury only when so directed by the court preliminary to or in connection with a judicial proceeding or when permitted by the court at the request of the defendant upon a showing that grounds may exist for a motion to dismiss the indictment because of matters occurring before the grand jury. No obligation of secrecy may be imposed upon any person except in accordance with this rule. The court may direct that an indictment shall be kept secret until the defendant is in custody or has given bail, and in that event the clerk shall seal the indictment and no person shall disclose the finding of the indictment except when necessary for the issuance and execution of a warrant or summons.
      (Emphasis added.)


author: J. SKELLY WRIGHT, Circuit Judge:

text:
    DIRECT MAIL/MARKETING ASSOCIATION, INC., Appellant, v. UNITED STATES POSTAL SERVICE.
    No. 74-1272.
    United States Court of Appeals, District of Columbia Circuit.
    Argued June 6, 1974.
    Decided June 28, 1974.

      David E. McGiffert, Washington, D. C., for appellant. Dana T. Ackerly, New Canaan, Conn., also entered an appearance for appellant.
    Stephen F. Eilperin, Atty., Dept of Justice, with whom Irving Jaffe, Acting Asst. Atty. Gen., Earl J. Silbert, U. S. Atty., and Michael H. Stein, Atty., Dept, of Justice, were on the brief, for appel-lee.
    Before WRIGHT and WILKEY, Circuit Judges, and JAMESON, Senior District Judge.

       Of the United States District Court for the District of Montana, sitting by designation pursuant to 28 U.S.C. § 294(d) (1970).

   J. SKELLY WRIGHT, Circuit Judge:

Direct Mail/Marketing Association, Inc. (DMMA), plaintiff-appellant, sought in the District Court a declaration that a schedule of temporary mail rates implemented by the United States Postal Service violated Section 403(e) of the Postal Reorganization Act of 1970, 39 U.S.C. § 403(c) (1970), by working an “undue or unreasonable discrimination” against users of regular third class mail service. The District Court dismissed the complaint for failure to state a claim but, apparently, also reached the merits to the extent of holding “that there is no undue or unreasonable discrimination within the meaning of 39 U.S.C. 403(c) in the schedule of temporary rates * * *.” Because a schedule of temporary rates must meet the standard of Section 403(c), the complaint did state a cause of action. However, we affirm the holding on the merits that this schedule worked no unlawful discrimination.

I

This court has already canvassed the complex procedures by which postal rates are set under the Act. See Assn of American Publishers, Inc. v. Governors of U.S. Postal Service, 157 U.S. App.D.C. 397, 485 F.2d 768 (1973) ; Direct Mail Advertising Assn v. U.S. Postal Service, 147 U.S.App.D.C. 394, 458 F. 2d 813 (1972). See also Mail Advertising Corp. of America v. United States Postal Service, 148 U.S.App.D.C. 158, 459 F.2d 1182 (1972), which upheld the constitutionality of the procedures. In brief: The Postal Service initiates the process by requesting permanent rate changes, which request is adjudicated before the independent Postal Rate Commission. The Commission’s decision is subject to review by the Governors of the Postal Service, and ultimately by the courts. For certain classes of mail, including third class mail, rate increases approved by the Governors must be introduced in gradual year-by-year steps if Congress appropriates money to cover the revenue foregone by such “phasing.” If Congress does not appropriate this revenue foregone, the rate increases may be implemented instanter, without phasing.

The Postal Service may, however, implement “temporary” rate increases before this elaborate procedure has run its course. Specifically, if the Commission fails to issue its decision within 90 days of the Postal Service’s request for an increase in permanent rates, the Service may, upon 10 days notice in the Federal Register, “place into effect temporary changes in rates of postage, [and] in fees for postal service * * * it considers appropriate to carry out the provisions” of the Act. 39 U.S.C. § 3641(a). The Service does not have carte blanche in setting temporary rates. A temporary rate

may not exceed the lesser of (1) the rate or fee requested for such class or service, or (2) a rate or fee which is more than one-third greater than the permanent rate or fee in effect for that class or service at the time a permanent change in the rate or fee of such class or service is requested under section 3622 of this title.

39 U.S.C. § 3641(c). The “rate or fee requested” — the ceiling on temporary rates set in Section 3641(c)(1) — refers to the full permanent rate requested, not to the “phased” level of that permanent rate. Thus Section 3641(c) does not embody the mandatory phasing requirement, which applies in terms only to permanent rates. Direct Mail Advertising Assn v. United States Postal Service, supra. In addition to the “ceiling” requirement in Section 3641(c), the Act requires that temporary rates, like permanent ones, bear a reasonable relationship inter sese:

In providing services and in establishing classifications, rates, and fees under this title, the Postal Service shall not, except as specifically authorized in this title, make any undue or unreasonable discrimination among users of the mails, nor shall it grant any undue or unreasonable prefer-enees to any such user.

39 U.S.C. § 403(c).

The present case involves a schedule of temporary rates allegedly in violation of the nondiscrimination requirement in Section 403(e). The necessary background is quickly recited. The Postal Service gave notice on October 19, 1973 that it had requested an increase in permanent rates and that it would implement temporary rate increases on January 5, 1974 if the Commission had not acted on the request within 90 days. On December 21, 1973 the Service gave notice that, for the third class regular mail, the temporary rate would equal the requested permanent rate, but that all other classes of mail eligible for “phasing” would enjoy temporary rates at the “phased” (i. e. first step) level of the corresponding permanent rates requested. The Service made this distinction on the theory that Congress would pass supplemental appropriations to support phasing of all temporary rates except that for third class mail.

Because of action by the Cost of Living Council, the temporary rates were implemented on March 2, 1974, rather than January 5, 1974, but they otherwise conformed to the prior announcement. In the meantime, the Service had in fact sought a supplemental appropriation to support phasing of the temporary rates — including phasing of temporary third class rates. The Service asked for a total of $195 million —$84 million to support phasing of third class rates and $111 million to support phasing of other phasing-eligible rates. The President joined the request for $111 million but advocated omitting any appropriation to support phasing of third class rates. The House passed a $110 million appropriation, the Senate a $100 million appropriation, and the Conference Committee settled upon a $105 million figure, the legislation stating in its entirety r

For an additional amount for “Payment to the postal service fund”, $105,000,000.

Pub.L. 93-245, 93d Cong., 1st Sess., 12 (January 3,1974).

II

The question before us is whether the discrepancy between third class and other “phasing-eligible” rates, alleged to be discriminatory under 39 U.S.C. § 403(c), can be justified by Congress’ action in passing the $105 million supplemental appropriation. DMMA argues in the negative on two grounds: (1) that appropriations actions are irrelevant to assessing the legality of temporary rates, and (2) that, if the appropriations action is relevant, it nonetheless reflects congressional intent too ambiguously in this case to support the inter-rate discrepancy. We reject both arguments.

The first argument rests upon Direct Mail Advertising Assn v. United States Postal Service, supra. There, as here, the Postal Service had established a temporary rate schedule in which third class mail charges were at the full permanent rate requested, rather than at the first “phasing” step of that rate. The District Court had ruled that all phasing-eligible rates must be phased, unless Congress fails to appropriate the necessary revenues, and that Congress had not failed to do so. On appeal by the Postal Service we held that phasing was not required for temporary rates but only for permanent rates. We reasoned that the phasing provisions are located in the subchapter on permanent rates, not the one on temporary rates, that the provisions take effect only after the first permanent rate decision (which had not then occurred), that recourse to congressional appropriations to support phasing of temporary rates would be cumbersome as a practical matter, and, finally, that the Act contains “ceiling” limitations peculiar to temporary rates, 39 U.S.C. § 3641(c), which supplant the lower ceilings represented by “phasing.” 147 U.S.App.D.C. at 397-399, 458 F.2d at 816-818. As the temporary rate in question met the requirements of Section 3641(c), we sustained the Postal Service; we found it unnecessary to consider whether Congress had in fact failed to appropriate money to support phasing of that rate, “[s]ince we have concluded that, in any case, phasing is not required by the Act for temporary rates.” 147 U.S.App.D.C. at 397 n. 9, 458 F.2d at 816 n. 9.

DMMA reads Direct Mail Advertising Assn broadly as holding that the phasing provisions have no application to temporary rates. If this were true, the temporary rate structure at issue in the present case would lack the coherent rationale required by the nondiscrimination provision, 39 U.S.C. § 403(c). The rate structure distinguishes between rates eligible and ineligible for phasing, and it distinguishes between third class and other phasing-eligible rates by relying on congressional appropriations action, as specified in the Act’s phasing provisions. If those provisions have no application to temporary rates, none of these distinctions makes sense.

But Direct Mail Advertising Assn cannot in fact be accorded a broad reading. As this court subsequently-stated, in denying a motion to rehear that case, Direct Mail Advertising Assn was decided without considering the possible bearing of Section 403(c) on the question of whether the phasing provisions apply to schedules of temporary rates. This unresolved issue is before us now. Our conclusions are quite simple and straightforward. We agree with the earlier court that the Act does not require phasing of temporary rates. Consistent with Section 3641(c)(1), the Postal Service may set temporary rates equal to the corresponding permanent rates requested. When this is done throughout a schedule of temporary rates, there will presumably be no shortfall between temporary revenue collected and temporary revenue needed and, consequently, no occasion to petition Congress for supporting appropriations. But Section 3641(c)(1) establishes only a ceiling on temporary rates, not a floor. Thus it is open to the Service to introduce temporary rates some or all of which are at their phased levels. As a practical matter, this course will require supporting appropriations. When the Service chooses in this way to phase some or all of its temporary rates, and to seek appropriations as support, the phasing provisions, 39 U.S.C. §§ 2401 (c), 3626, and 3627, come into play. The Service’s choice vests in the Congress the power to determine, through the appropriations process, which temporary rates shall be phased and which shall not.

This reading of the Act has a direct bearing on the nondiscrimination provision, 39 U.S.C. § 403(c). That provision recognizes as legal any inter-rate discrepancy which is “specifically authorized in this title.” Obviously, any inter-rate discrepancies resulting from a proper invocation of the phasing provisions would be “specifically authorized in this title.” Therefore, the sole question before us is whether the discrepancy between third class and other phasing-eligible rates contained in the present schedule of temporary rates results from proper application of the phasing procedures. That is, we must determine whether Congress’ appropriations action evinced an intent to ratify the inter-rate discrepancy pursuant to 39 U.S.C. § 3627.

DMMA insists that Congress’ action was ambiguous on this point. There is some merit in the argument. The supplemental appropriation came in a lump sum, with no explicit assignment of particular amounts to particular classes of mail. By so obscuring its will, Congress causes a great waste of administrative and judicial energies. Nevertheless, the congressional intent here is not beyond discernment. For reading congressional intent we have fashioned a very lenient standard:

It seems to us quite plain that if in good faith (which no one denies) the Postal Service specifies how many dollars it must get from Congress in order not to be in the hole with respect to carrying third class mail, then, regardless of Budget officials or others outside the Postal Service, the Postal Service’s conclusion fixes the amount of revenue foregone in so far as that concept is used in 39 U.S.C. §§ 3626 and 3627 or other parts of the Postal Service Act.

Assn of American Publishers, Inc. v. Governors of United States Postal Service, supra,, 157 U.S.App.D.C. at 405, 485 F.2d at 776. The Postal Service did make a good faith request for $84 million to support phasing third class mail. By so doing the Service acquired the power to interpret Congress’ response to that request, subject only to judicial review for arbitrariness or caprice. The House and the Senate separately, and the Conference Committee which resolved their differences, all embraced appropriations levels below that requested by the President, whose recommendation expressly excluded money for phasing third class mail. Though the House committee was silent on the issue, the Senate committee expressly noted that its recommended bill excluded any revenue for phasing third class mail rates. With this background, the Postal Service’s interpretation of Congress’ will was manifestly reasonable.

Accordingly, we find that the discrepancy between third class and other phasing-eligible rates was properly determined according to the phasing provisions of the Act and, being “specifically authorized” in this fashion, was not in violation of 39 U.S.C. § 403(c).

Affirmed.

      . An injunction was also sought, but the District Court’s denial of that relief has not been appealed.

      . 39 U.S.C. § 101 et seq. (1970), Pub.L. 91-375, Aug. 12,1970, 84 Stat. 719.

      . Order of Feb. 21, 1974, Civil Action No. 74-254.

      . The section applies to provision of all “services” and establishment of all “classifications, rates, and fees under this title.”

      . 39 U.S.C. §§ 3622, 3624.

      . 39 U.S.C. §§ 3621, 3625.

      . 39 U.S.C. § 3628.

      . 39 U.S.C. § 3626.

      . 39 U.S.C. § 3627.

      . 38 Fed.Reg. 29198.

      . 38 FedJReg. 35056.

      . See 39 Fed.Reg. 1125 (Jan. 4, 1974).

      . See Hearings, Subcommittee of the House Committee on Appropriations, on Fiscal Year 1974 Supplemental Appropriation, 93d Cong., 1st Sess., 1084-1085, 1101-1102 (1973) (hereinafter House Hearings) ; Hearings, Senate Committee on Appropriations, on 1974 Supplemental Appropriation, 93d Cong., 2d Sess., Part I, 378 (1973).

      . The exact amount requested by the President, via the Office of Management and Budget, was $111,603,000. See H.R.Doc. No.93-178, 93d Cong., 2d Sess. (1973), and House Hearings, supra note 13, at 1084 & 1101.

      . The bills passed conformed to the pertinent committee recommendations. See H.R. Rep.No.93-663, 93d Cong., 1st Sess., 40 (1973), and S.Rep.No.93-614, 93d Cong., 1st Sess., 66 (1973).

      . The petition for rehearing stressed that phasing of temporary rates would raise serious problems under § 403(c) if the phasing provisions were in fact inapplicable to temporary rates, as the court had implied. In denying rehearing the court clarified its opinion as follows:
      The Court has considered the petition for rehearing or recall of the mandate, and the opposition thereto. We decline to order rehearing, but a clarification of our original opinion is in order. The allegation that the temporary rates for third class mail instituted by the Postal Service were discriminatory in violation of 39 U. S.C. § 403 (1970) was not in issue when we first heard this case. It was therefore neither considered nor disposed of by the original opinion.
      Direct Mail Advertising Assn v. United States Postal Service, D.C.Cir., No. 72-1065, order of March 15, 1972 (unreported).

      . The Postal Service has assured us that the practical difficulties earlier perceived in utilizing the appropriations process to ratify temporary rate schedules have .considerably diminished. Compare Direct Mail Advertising Assn v. United States Postal Service, 147 U.S.App.D.C. 394, 399, 458 F.2d 813, 818 (1972).

      . The phasing provisions take effect only after the first permanent rate decision has been rendered under the Act. 39 U.S.C. § 3626. That event has now occurred, but liad not done so at the time Direct Mail Advertising Assn, was written.

      . That is, Congress may either compel or veto phasing of any and all eligible temporary rates, contrary to the wishes of the Postal Service, once the Service makes the threshold choice to seek appropriations as support for a temporary rate schedule.

      . In addition, the amount appropriated is not precisely equal to the amount necessary to phase all eligible rates other than the third class rate. This is of course a factor to be weighed in interpreting the purport of Congress’ action, but it is not necessarily a dispositive factor.

      . S.Rep.No.93-614, supra note 15, at 66.