text:
    ARGO v. ALABAMA.
    No. 121,
    Misc.
    Decided March 4, 1968.

      MacDonald Gallion, Attorney General of Alabama, and John C. Tyson III, Assistant Attorney General, for respondent.
   Per Curiam.

The motion for leave to proceed in forma pauperis and the petition for a writ of certiorari are granted. The judgment is vacated and the case is remanded to the Supreme Court of Alabama for further consideration in light of Long v. District Court of Iowa, 385 U. S. 192.


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    ROBISON v. UNITED STATES.
    No. 451,
    Misc.
    Decided March 4, 1968.

      Solicitor General Griswold for the United States.
   Per Curiam.

The motion for leave to proceed in forma pauperis and the petition for a writ of certiorari are granted. In light of the representations of the Solicitor General and our own independent consideration of the entire record, the judgment is vacated and the case is remanded to the District Court for the Northern District of California for further consideration.


text:
    JUSTICE et ux. v. UNITED STATES et al.
    No. 570.
    Decided March 4, 1968.

      Francis D. Burke for appellants.

      Acting Solicitor General Spritzer, Assistant Attorney General Rogovin and Joseph M. Howard for the United States et al.
   Per Curiam.

The motion to affirm is granted and the judgment is affirmed.


text:
    JONES v. RUSSELL, WARDEN.
    No. 407,
    Misc.
    Decided March 4, 1968.

      George F. McCanless, Attorney General of Tennessee, and Paul E. Jennings, Assistant Attorney General, for respondent.
   Per Curiam.

The motion for leave to proceed in forma pauperis and the petition for a writ of certiorari are granted. Upon the representations of the Attorney General and our own independent consideration of the entire case, the judgment is vacated and the case remanded to the Supreme Court of Tennessee for further proceedings.


text:
    DeCESARE et al. v. UNITED STATES.
    No. 11.
    Decided March 4, 1968

      Allen David Stolar for petitioners in No. 11. Newton B. Schwartz for petitioner in No. 17. Ollie Lancaster, Jr., for petitioners in No. 19. Francis L. Giordano for petitioner in No. 24. Patrick T. McGahn, Jr., for petitioner in No. 30. Robert J. O’Hanlon and Richard L. Daly for petitioner in No. 45. B. Clarence Mayfield for petitioner in No. 567.

      Solicitor General Marshall for the United States in No. 11. Solicitor General Marshall, Assistant Attorney General Vinson, Beatrice Rosenberg and Mervyn Hamburg for the United States in No. 17. Solicitor General Marshall, Assistant Attorney General Vinson, Miss Rosenberg and Robert G. Maysack for the United States in Nos. 19 and 30. Solicitor General Marshall, Assistant Attorney General Vinson, Miss Rosenberg and Sidney M. Glazer for the United States in No. 24. Solicitor General Marshall, Assistant Attorney General Vinson, Miss Rosenberg and Kirby W. Patterson for the United States in No. 45. Acting Solicitor General Spritzer, Assistant

      Attorney General Vinson and Miss Rosenberg for the United States in No. 567.

      Together with No. 17, Butler v. United States; No. 19, Brazzell et al. v. United States; No. 24, Rosenzweig v. United States; No. 30, Augello v. United States; No. 45, Gennaro v. United States; and No. 567, Mutcherson v. United States, all on petitions for writs of certiorari. Nos. 17, 19, and 567 are to the Court of Appeals for the Fifth Circuit, No. 24 to the Second Circuit, No. 30 to the Third Circuit, and No. 45 to the Eighth Circuit.

   Per Curiam.

The petitions for writs of certiorari are granted, the judgments of the courts below are vacated, and the cases are remanded for further consideration in the light of Marchetti v. United States, ante, p. 39. See also 28 U. S. C. § 2106 and Grosso v. United States, ante, p. 62.

Mr. Justice Marshall took no part in the consideration or decision of Nos. 11, 17, 19, 24, 30, and 45.


text:
    COSTELLO v. UNITED STATES.
    No. 3.
    Decided March 4, 1968.

      Ira B. Grudberg and Jacob D. Zeldes for petitioner.

      Solicitor General Marshall, Assistant Attorney General Vinson, Francis X. Beytagh, Jr., Beatrice Rosenberg and Theodore George Gilinsky for the United States.
   Per Curiam.

Upon the suggestion of mootness by reason of the death of the petitioner, the judgment of the United States Court of Appeals for the Second Circuit is vacated and the case is remanded to the United States District Court for the District of Connecticut for such disposition as law and justice require.

Mr. Justice Marshall took no part in the consideration or decision of this case.


text:
    PICCIOLI v. UNITED STATES.
    No. 4.
    Decided March 4, 1968

      Alfred Belinkie for petitioner in No. 4. Edward G. Burstein for petitioner in No. 5. David Goldstein and Jacob D. Zeldes for petitioner in No. 6. Francis J. DiMento, Paul J. Bums and Ronald R. Popeo for petitioners in No. 10. Albert J. Krieger and Robert Kasanof for petitioners in No. 32. Max M. Barr for petitioner in No. 374.

      Solicitor General Marshall, Assistant Attorney General Vinson, Beatrice Rosenberg and Marshall Tarnor Golding for the United States in No. 4 and No. 2, Mise. Solicitor General Marshall for the United States in Nos. 6, 6 and 10. Solicitor General Marshall, Assistant Attorney General Vinson and Miss Rosenberg for the United States in No. 32. Acting Solicitor General Spritzer, Assistant Attorney General Vinson, Miss Rosenberg and Jerome M. Feit for the United States in No. 374.

      Together with No. 5, Millo v. United States; No. 6, Grassia v. United States; No. 10, Driscoll et al. v. United States; No. 32, Serao et al. v. United States; No. 374, Wrieole v. United States; and No. 2, Misc., Gjanci v. United States, all on petitions for writs of certiorari. Nos. 5, 6, 32, and 2, Misc., are to the United States Court of Appeals for the Second Circuit, No. 374 to the Third Circuit, and No. 10 to the First Circuit. The motion for leave to proceed in forma pawperis in No. 2, Misc., is also granted.

   Per Curiam.

The petitions for writs of certiorari are granted, the judgments of the courts below are vacated, and the cases are remanded for further consideration in the light of Marchetti v. United, States, ante, p. 39.

Mr. Justice Marshall took no part in the consideration or decision of these cases.


text:
    FORGETT v. UNITED STATES.
    No. 861,
    October Term, 1965.
    Decided March 4, 1968.

      Charles J. Irwin, Eugene Gressman and Arthur L. Abrams on the petition for rehearing.
   Per Curiam.

The petition for rehearing is granted, the order of February 28, 1966, denying certiorari is vacated, the petition for a writ of certiorari to the United States Court of Appeals for the Sixth Circuit is granted, the judgment of that court is vacated, and the case remanded for further consideration in the light of Haynes v. United States, ante, p. 85.

Mr. Justice Marshall took no part in the consideration or decision of this case.


text:
    ORTEGA v. MICHIGAN.
    No. 965,
    Misc.
    Decided March 4, 1968.
   Per Curiam.

The appeal is dismissed for want of jurisdiction. Treating the papers whereon the appeal was taken as a petition for a writ of certiorari, certiorari is denied.


text:
    STONE v. UNITED STATES.
    No. 9.
    Decided March 4, 1968.

      Charles W. Tessmer and Emmett Colvin, Jr., for petitioner in No. 9. William T. Griffin for petitioners in No. 14. Seymour Samuels, Jr., and William B. Willis, Jr., for petitioner in No. 77. Anna R. Jjavin and Richard E. Gorman for petitioner in No. 798. James G. Starkey for petitioner in No. 1024.
    Former Solicitor General Marshall for the United States in No. 9. Former Solicitor General Marshall,

      Assistant Attorney General Vinson, Beatrice Rosenberg and Theodore George Gilinsky for the United States in No. 14. Former Solicitor General Marshall, Assistant Attorney General Vinson, Miss Rosenberg and Mervyn Hamburg for the United States in No. 77. Former Solicitor General Marshall, Assistant Attorney General Vinson, Miss Rosenberg and Marshall Tamor Golding for the United States in No. 121. Solicitor General Griswold, Assistant Attorney General Vinson and Miss Rosenberg for the United States in No. 798. Solicitor General Griswold for the United States in No. 1024.

      Together with No. 14, Conti et al. v. United States; No. 77, Ross v. United States; No. 121, Donlon v. United States; No. 798, Angelini v. United States; and No. 1024, Pizzarello v. United States, all on petitions for writs of certiorari. No. 77 is to the United States Court of Appeals for the Sixth Circuit, Nos, 14 and 1024 to the Second Circuit, No. 121 to the Third Circuit, and No. 798 to the Seventh Circuit.

   Per Curiam.

The petitions for writs of certiorari are granted, the judgments of the courts below are vacated and the cases are remanded for further consideration in the light of Marchetti v. United States, ante, p. 39, and Grosso v. United States, ante, p. 62.

Mr. Justice Marshall took no part in the consideration or decision of Nos. 9, 14, 77, and 121.


text:
    ANDERSON et al. v. GEORGIA.
    No. 329,
    Mise.
    Decided March 4, 1968.

      Jack Greenberg, Charles Stephen Ralston and Michael Meltsner for petitioners.

      Arthur K. Bolton, Attorney General of Georgia, G. Ernest Tidwell, Executive Assistant Attorney General, and Marion 0. Gordon, Assistant Attorney General, for respondent.
   Per Curiam.

The motion for leave to proceed in forma pauperis and the petition for a writ of certiorari are granted. The judgments of the Supreme Court of Georgia are reversed. Whitus v. Georgia, 385 U. S. 545.

Mr. Justice Harlan would set the case for plenary consideration.


author: Mr. Justice Brennan Mr. Justice Harlan,

text:
    SECURITIES AND EXCHANGE COMMISSION v. NEW ENGLAND ELECTRIC SYSTEM et al.
    No. 305.
    Argued January 18, 1968.—
    Decided March 5, 1968.

      Daniel M. Friedman argued the cause for petitioner. With him on the briefs were Solicitor General Griswold, Robert S. Rifkind, Philip A. Loomis, Jr., David Ferber, Roger S. Foster and Richard E. Nathan.

      John R. Quarles argued the cause for respondents. With him on the brief were Richard B. Dunn, Richard W. Southgate and John J. Glessner III.

      George Spiegel filed a brief for the Municipal Electric Association of Massachusetts, as amicus curiae, urging reversal.
   Mr. Justice Brennan

delivered the opinion of the Court.

Respondent New England Electric System (NEES), a holding company registered under § 5 of the Public Utility Holding Company Act of 1935, controls both an integrated electric utility system and an integrated gas utility system. Section 11 (b) of the Act requires the Securities and Exchange Commission to limit the operations of a holding company system to a single integrated public utility system, except the Commission may permit the holding company to continue control of any additional integrated utility system that the Commission determines, among other things, “cannot be operated as an independent system without the loss of substantial economies which can be secured by the retention of control by such holding company of such system . ...” In 1957 the Securities and Exchange Commission instituted proceedings to determine whether NEES should be permitted to retain control of both the electric and gas systems. The Commission initially found that the electric companies constituted a single integrated electric utility system, 38 S. E. C. 193 (1958), and NEES elected to retain those companies as its principal system. NEES urged, however, that it should also be permitted to retain the gas system. After extensive hearings, the Commission refused respondent permission to do so, and ordered the gas system divested. 41 S. E. C. 888 (1964).

In reaching its conclusion the Commission construed the statutory phrase “loss of substantial economies” in Clause A of § 11 (b)(1) to require a showing that the “additional system cannot be operated under separate ownership without the loss of economies so important as to cause a serious impairment of that system.” In its first review of the Commission’s order, the Court of Appeals for the First Circuit held that the Commission had erroneously construed the statute; in the court’s view, “loss of substantial economies” merely “called for a business judgment of what would be a significant loss . . . .” The court therefore set aside the Commission’s order and remanded for reconsideration in light of that test. 346 F. 2d 399, 406. We reversed, approving the Commission’s construction, and remanded to the Court of Appeals for review of the challenged order in light of the proper meaning of the statutory term. SEC v. New England Electric System, 384 U. S. 176 (NEES I). On remand, the Court of Appeals again set aside the Commission’s order. 376 F. 2d 107. That court, “after a fresh review of all the evidence,” concluded “that the Commission’s opinion does not reveal that application of both reason and experience to facts which merits endorsement as the responsible exercise of expertise.” Id., at 111. We granted certiorari. 389 U. S. 816. We reverse and remand to the Court of Appeals with direction to enter a judgment affirming the Commission’s order.

The question for our decision is whether the Court of Appeals properly held that, on the record, the Commission erred in finding that NEES failed to prove a case for retention of the integrated gas utility system. We address that question against the background of a congressional objective to protect consumer interests through the “elimination of 'restraint of free and independent competition.’ . . . One of the evils that had resulted from control of utilities by holding companies was the retention in one system of both gas and electric properties and the favoring of one of these competing forms of energy over the other.” NEES I, 384 U. S., at 183. Congress therefore ordained separate ownership — and divestiture where necessary to reduce holdings to one system — as the “ 'very heart’ of the Act.” Id., at 180. Although Congress was aware that some economic loss might be suffered by the parent holding company or the separated integrated utility, Congress relented only to the extent of authorizing the Commission to permit retention of an additional integrated utility if that permission might be granted under the narrow exception provided by § 11 (b)(1). But “retention of an 'additional’ integrated system is decidely the exception,” and the burden is on the holding company to satisfy the “stringent test” set by the statute. Id., at 180, 182; cf. United States v. First City Nat. Bank, 386 U. S. 361, 366.

Congress committed to the Commission the task of determining whether a holding company has met the burden of showing that its situation falls within the narrow exception under § 11 (b)(1). The Clause A determination whether separation entails a loss of economies likely to cause a serious impairment of the system involves an element of prediction which necessarily calls for difficult and expert judgment. That judgment requires the assessment of many subtle and often intangible factors not easily expressed in precise or quantifiable terms. This is the very nature of economic forecasting. The task calls for expertise and is not simply “an exercise in counting commonplaces.” United States v. Drum, 368 U. S. 370, 384; see NEES I, 384 U. S., at 184 — 185. Judicial review of that expert judgment is necessarily a limited one. See Gray v. Powell, 314 U. S. 402, 412-413; NLRB v. Hearst Publications, 322 U. S. 111, 131; Atlantic Ref. Co. v. FTC, 381 U. S. 357, 367-368; United States v. Drum, supra, at 375-376. Congress expressly provided that “[t]he findings of the Commission as to the facts, if supported by substantial evidence, shall be conclusive.” 15 U. S. C. § 79x (a); see Universal Camera Corp. v. NLRB, 340 U. S. 474; cf. NLRB v. Erie Resistor Corp., 373 U. S. 221, 236. In our view, the Court of Appeals in this case indulged in an unwarranted incursion into the administrative domain. The Commission’s order has adequate support in the record and should have been affirmed.

As of 1958, the test year selected for purposes of these proceedings, NEES’ eight gas subsidiaries provided retail service to some 237,000 customers in a relatively compact 660-square-mile franchise area in Massachusetts. NEES’ electric companies also served 75% of this area and about 78% of the gas customers were also electric customers. NEES’ gross investment in gas plant and equipment was about $56,300,000 and gross gas revenues for 1958 were about $22,700,000. The eight gas companies were organized administratively as a Gas Division with centralized management, marketing and supply, operations, and merchandising departments. The chief executive of the Gas Division was also president of each gas company and ultimately responsible to NEES’ vice president in charge of management; in short, top management rested with executives having joint control over both electric and gas operations.

The Commission had before it a “severance study,” a cost analysis and projection prepared for NEES by a professional public utilities management consulting firm, Ebasco Services, Inc. This study projected a loss of economies of approximately $1,100,000 annually for the gas system as the result of its separation from NEES. The Commission dealt with this study in alternative ways. It analyzed the study and concluded that “[t]he Ebasco estimate is inadequately supported in a number of important aspects and leaves considerable doubts which [NEES has] not satisfactorily overcome in the record.” Then it went on to find that even if the estimated $1,100,000 in loss of economies were accepted as accurate “it would not lead us to conclude that such a loss is so substantial, when compared with the loss of economies involved in prior divestment cases and viewed in light of the objectives of the Act, as to warrant retention of the gas properties . . . .” 41 S. E. C., at 895, 897. Because we conclude that the record supports the Commission’s decision on the latter ground, we have no occasion to consider whether the Commission’s strictures on the reliability of the Ebasco study are well founded.

The Commission’s ultimate finding that the projected $1,100,000 loss of economies annually did not constitute a loss of “substantial” economies within Clause A of § 11 (b)(1) was reached primarily upon the basis of its subsidiary findings upon three matters: (1) That NEES’ estimated losses were not significantly out of line with those found insubstantial in previous cases; (2) that other nonaffiliated Massachusetts gas companies, all but one of them smaller than the NEES gas system, are apparently able to operate successfully without electric utility affiliations; (3) that NEES did not establish that independent management devoted solely to promoting gas sales would not result in benefits to offset some of the projected losses. The Court of Appeals held that none of the three subsidiary findings was supported by substantial evidence. We disagree.

I.

The Commission, consistent with its practice in prior cases, weighed NEES’ estimated $1,100,000 losses in relative rather than absolute terms, calculating the losses as a percentage of NEES’ 1958 revenues, expenses, and income. It found these loss ratios to be “lower or not significantly higher than corresponding ratios of gas systems whose divestment we have required on the ground that the estimated loss of economies was not substantial within the meaning of clause A.” 41 S. E. C., at 898. The cases with which these particular comparisons were made involved companies outside Massachusetts. The Court of Appeals held that the comparisons with the loss ratios of companies involved in prior cases were “largely irrelevant” because “. . . these ratios are significant only as they affect the investment structure of the companies in the particular case, and different companies may be compared only on the assumption that both operate at the same level.” 376 F. 2d, at 113, 115. The court’s ultimate conclusion was that only close analysis of NEES’ own “particular circumstances” was relevant to the Commission’s inquiry.

It is significant, however, that the Court of Appeals’ criticism of the Commission’s use of ratios relied heavily on the court’s reading of the statistical data in evidence as showing that the projected loss of economies “would decrease [NEES’] rate of return from 6.4 per cent in 1959 to 4.1 per cent on the projected basis,” or some 30% below, “an average rate of 5.9 per cent for the non-affiliated Massachusetts gas companies . . . .” 376 F. 2d, at 114. But, as the Commission has noted, the court’s computation that the separated companies would realize a return of only 4.1%. contained a serious error, for it overlooked the allowance to be made for income tax deductions generated by the projected losses. The actual rate of return taking such deductions into account would be a significantly higher 5.2%.

In any event, we may agree that the ratios of losses of revenues, expenses, and income are necessarily affected by differences in capital structure, management, market position, and other factors. But it by no means follows that the Commission’s comparisons are for that reason irrelevant to the determination whether a projected loss of economies is so important as to cause a serious impairment of the separated system. It was well within the' range of the Commission’s administrative discretion to use the loss ratios, as it did, “as a guide in adjudicating the pending case.” Philadelphia Co., 28 S. E. C. 36, 50, n. 24. The Commission in its expert judgment may so employ evaluative factors it considers relevant.

Indeed, NEES apparently recognized that its burden to establish that its situation comes within Clause A included the burden of showing that the projected loss of economies would be more serious for its separated system than the comparable level of losses in the other cases already decided by the Commission. Respondent attempted to prove that the gas system’s distance from sources of supply gives it only a very narrow competitive advantage over oil as a fuel, and, further, that the system’s growth potential is more limited by a lack of new housing expansion in the area serviced by the gas companies. As we shall see below, the Commission found that NEES had not made a case in either respect insofar as those matters bore on whether the projected loss of economies threatened serious impairment of the separated system.

II.

The Commission’s resort to data concerning the operations of the nonaffiliated Massachusetts gas companies was a response to NEES’ argument, supported by the Massachusetts Department of Public Utilities, that the projected loss of economies from separation of the gas system would require the gas companies to seek rate increases which might seriously impair or destroy any hope of a successful operation. Natural gas in 1959 enjoyed in New England the smallest price advantage over oil of any section of the country. The annual differential was $7 over oil for a typical New England house compared with $27 to $118 in favor of gas in the rest of the country. NEES contended that the predicted rate increase would substantially or entirely eliminate the gas system’s already narrow price advantage over oil competitors. The Commission’s answer was to inquire about the economic health of the already nonaffiliated Massachusetts gas companies. The Commission found that these companies were apparently able to earn a fair return although not enjoying the supposed advantages of affiliation with electric utilities; and it could find no evidence that they did not face the same competitive conditions as NEES. The Commission found further that, despite NEES’ insistence that its market conditions differed from the nonaffiliated companies because of relatively stagnant franchise areas offering less sales growth, there was no evidence that this would prevent the separated gas system — which would emerge as the second largest independent in the State — from competing as effectively as the smaller independents who had long held their own. Finally, the Commission noted that after severance the gas system’s operating ratio would be more favorable or only slightly higher than the ratios of nine independents and therefore concluded that it “would be entering the realm of speculation at this time to assume that rate increases would ensue from severance.” 41 S. E. C., at 899.

The Court of Appeals rejected the comparison of these operating ratios, again on the ground that such ratios fail to take account of special characteristics of individual companies. The court observed that since all New England gas companies operated on a “small cushion . . . [t]he significance of this is not negated by observing that non-NEES companies in Massachusetts seem to be surviving, for the focus must be on the specific characteristics of the NEES companies, the only ones affected by the Commission’s order.” 376 F. 2d, at 113. The court further held “irrelevant the comparison of operating ratios, since a business may operate relatively efficiently, yet at a level too low to attract investors.” 376 F. 2d, at 114, n. 6. For the reasons already stated for our disagreement with the Court of Appeals’ view of the Commission’s use of other ratios, we disagree that this comparison was either irrelevant or outside the limits of the Commission’s administrative discretion. The dissection and evaluation of an economic projection is a function Congress committed to the Commission, not the courts. A court may believe it would have done the job differently and better; but judicial inquiry must be addressed to whether what the Commission did is fatal to its ultimate conclusion that the holding company failed to carry its burden of showing a loss of “substantial” economies within the meaning of Clause A. In assessing NEES’ forecast of the need for rate increases because of the projected loss of economies, it was proper for the Commission to consider the performance of other Massachusetts gas companies which were already operating independently. NEES was afforded every opportunity to sustain its burden of showing that the separated gas system would wither into critical health despite the contrary inferences suggested by the comparison made by the Commission. It cannot be a basis for finding error that the Commission found the attempt unpersuasive, given the gas system’s size, and the prognosis of efficiencies comparable to those achieved by the independents.

III.

The Commission conceived that the projected loss of economies would in some measure be offset by advantages realized by the separated system under the direction of “a management solely interested in and devoted to the gas operations . . . .” 41 S. E. C., at 901. NEES, again supported by the Massachusetts Department of Public Utilities, took the position that its operation of the companies had already achieved all possible benefits of interservice competition. The Commission found the argument unpersuasive, relying again on a comparison with the nonaffiliated Massachusetts gas companies. This was a comparison of the sales performance of the gas companies under NEES management with the sales performances of the independents. All seven of the comparable independents showed substantially higher gas sales and revenues per customer and lower costs to customers. The Commission found unpersuasive NEES’ explanation that this was accounted for by the greater residential growth potential of the areas serviced by the independents.

The Court of Appeals held that the test of “serious impairment” under Clause A already took account of offsetting benefits to be realized from separation and therefore “that done, the general judgment has no independent significance in an individual case.” 376 F. 2d, at 115-116. Whatever the merit of the general premise, see NEES I, 384 U. S., at 184-185, we understand the Commission’s finding to have been simply that the projected $1,100,000 loss of economies did not in fact take into account any offsetting benefits on the assumption that joint operation had already achieved the advantages of independence. See 41 S. E. C., at 900-901. The Commission’s conclusion that NEES’ assumption was not proved has support in the record and the Court of Appeals was not justified in rejecting it.

The judgment of the Court of Appeals is reversed and the case is remanded to that court with direction to enter a judgment affirming the Commission’s order.

It is so ordered.

Mr. Justice Douglas and Mr. Justice Marshall took no part in the consideration or decision of this case.

Mr. Justice Harlan,

whom Mr. Justice Stewart joins,

concurring.

Given the earlier decision of the Court in this case, SEC v. New England Electric System, 384 U. S. 176, which I continue to believe wrongly construed the statute but by which I consider myself bound, I join today’s opinion of the Court.

       49 Stat. 812, 15 U. S. C. § 79e.

       At the time of this proceeding, the integrated electric utility system consisted of seven electric utility companies serving parts of New Hampshire, Massachusetts, Rhode Island, and Connecticut. The integrated gas utility system consisted of eight Massachusetts gas companies. NEES also controlled a service company which provided services for the whole NEES operation.

       Section 11 (b) of the Public Utility Holding Company Act of 1935, 49 Stat. 820, 15 U. S. C. § 79k (b), provides in pertinent part: “It shall be the duty of the Commission, as soon as practicable after January 1, 1938:
      “(1) To require by order, after notice and opportunity for hearing, that each registered holding company, and each subsidiary company thereof, shall take such action as the Commission shall find necessary to limit the operations of the holding-company system of which such company is a part to a single integrated public-utility system . . . : Provided, however, That the Commission shall permit a registered holding company to continue to control one or more additional integrated public-utility systems, if, after notice and opportunity for hearing, it finds that—
      “(A) Each of such additional systems cannot be operated as an independent system without the loss of substantial economies which can be secured by the retention of control by such holding company of such system . . . .”

       On remand, the Court of Appeals interpreted the “serious impairment” standard as requiring proof only of “a condition allowing survival but not on a sound or 'healthful continuing’ basis,” rather than proof that severance "will result in imminent bankruptcy . . . .” 376 F. 2d, at 109. The Commission has not contested this interpretation in this Court.

       “By fostering competition between gas and electric utility companies, the Act promotes what has been described as ‘variegated competition.’” NEES I, 384 U. S., at 184, n. 15.

       The following passage is from the court’s opinion on remand:
      “Even without the burden of proving likely demise, [NEES’] burden is, as the Court said, to meet 'a much more stringent test’ than that of a probable significant loss. But, if the standard to be applied to [NEES] is stringent, so is the level of analysis and expertise to be exercised by the Commission. We have, only after a fresh review of all the evidence in the light of this most stringent practical standard, concluded that the Commission’s opinion does not reveal that application of both reason and experience to facts which merits endorsement as the responsible exercise of expertise.” 376 F. 2d, at 111.

       This was the latest year for which audited financial statements were available at the time of the hearing before the Commission. 41 S. E. C., at 889, n. 3.

       All but one of the eight companies are located within 48 miles of the division headquarters; one is 80 miles away.

       “Nonaffiliated” or “independent” refers to gas companies not having any electric affiliations and gas companies not jointly operated with electric companies serving the same franchise area.

        E. g., Philadelphia Co., 28 S. E. C. 35, 50-52 (1948); General Pub. Util. Corp., 32 S. E. C. 807, 837 (1951).

       The losses would amount to: 4.8% of operating revenues; 6.0% of operating revenue deductions (excluding federal income taxes); 23.3% of gross income (before federal income taxes); 29.9% of net income (before taxes).

       See Engineers Pub. Service Co., 12 S. E. C. 41, 55-61, 78-81 (1942); North Amer. Co., 18 S. E. C. 611 (1945); Philadelphia Co., 28 S. E. C. 35, 45-53 (1948); General Pub. Util. Corp., 32 S. E. C. 807, 814-815, 823-839 (1951); Middle So. Util., Inc., 35 S. E. C. 1 (1953), 36 S. E. C. 383 (1955). The relevant financial data for each case are summarized in an appendix to the Commission’s opinion. 41 S. E. C., at 905.

       Rate of retum is the percentage of net operating income to the rate base, which is fixed by a formula tied generally to the value of capital assets. The source of the 4.1% figure appears to have been the Court of Appeals. The 4.1% was apparently derived as follows:
      (a) $ 3,050,988 (1959 net oper. income after taxes) $47,723,162 (rate base) =6.4% rate of retum
      (b) $ 3,050,988 1,098,600 (projected losses) $ 1,952,388 (est. net oper. income)
      (c) $ 1,952,388 $47,723,162 =4-1% mte °f retum
      However, the $1,100,000 projected loss would generate income tax deductions of roughly 50%, increasing the numerator of fraction (c) from $1,952,388 to $2,501,688, and the rate of retum to 5.2%. The NEES brief relies on the 4.1% figure, but NEES has not challenged the Commission’s recalculation.
      The 1959 rates of retum for the comparable nonaffiliated Massachusetts companies were as follows:

        Percent

      Berkshire Gas . 5.2
      Brockton-Taunton Gas . 6.1
      Fall River Gas. 6.2
      Haverhill Gas . 6.8
      Lowell Gas . 7.9
      Springfield Gas . 6.4
      Worcester Gas . 4.5
      (Resp. Ex. 117; R. 1436.)

       Although the parties are in dispute as to the validity of some of the data drawn from the previous cases, we do not consider it necessary to become involved in that controversy. Suffice it to say that we do not think the Commission in looking to the data for guidance exceeded the bounds of reason or administrative discretion.

       Gas to New England was piped all the way from Texas, whereas oil was shipped in by tanker. NEES estimated the average home heating cost to be $166 for gas, $173 for oil; and it was in residential space heating that NEES found its chief market.

       NEES calculated the composite rate of return for its gas system at 6.6% for 1958 and 6.4% for 1959. (Resp. Ex. 114; R. 1431.) The average for seven comparable independents was 6.3% in 1958 and 5.9% in 1959. (Resp. Ex. 117; R. 1436.)

       NEES cites as prime evidence in this regard the testimony of Robert Cahal, an Ebasco marketing consultant who had to some extent analyzed the marketing conditions NEES faced. The substance of his testimony was that (a) gas and oil are highly competitive in the State, with oil being well entrenched in many areas so that the major source of growth has to be in new residence construction; (b) in Massachusetts growth is in the suburbs with towns proper being relatively stagnant; (c) gas companies are limited by their franchise area, prisoners of the characteristics of their particular communities; (d) the independents are not necessarily comparable with NEES because they may be in areas of higher growth; (e) independents having such areas are Haverhill, Lowell, Springfield, Worcester, Brockton-Taunton; all of them having growth greater (but unspecified as to degree) than any NEES gas company except Norwood.
      The Commission noted, without comment, that the population increase in NEES’ franchise areas between 1950 and 1960 was only 11% as compared with 18% in the areas of seven independents. 41 S. E. C., at 899, n. 23.

       The operating ratio is “the percentage of total operating revenue deductions (other than depreciation, amortization of conversion costs, and Federal income taxes) to total operating revenues.” 41 S. E. C., at 899, n. 25. The ratio “affords a measure for determining the efficiency with which the enterprise is conducted and while its value is greater in comparing the year to year trend it has a limited use in comparing very similar enterprises.” Moody’s Public Utility Manual ix (1967). NEES’ ratio was fixed at 76.41% and compared with the composite ratio of nine independents of 79.14%, as well as their median and mean ratios of 74.87% and 76.35% respectively. Individual ratios are cited at 41 S. E. C., at 899, n. 26.

       The Commission may properly regard size of operation to be a relevant factor. One of Congress’ concerns in providing the exception involved here was to protect small companies likely to fail if separated from the parent holding company. Cf. NEES I, 384 U. S., at 181; North Amer. Co. v. SEC, 327 U. S. 686, 697. See also H. R. Rep. No. 1903, 74th Cong., 1st Sess., 68-71; S. Doc. No. 92, 70th Cong., 1st Sess., Pt. 72-A, at 831, 835. And size, especially given its relatively compact franchise area, indication of its competitive position. NEES’ is some

       See n. 18, supra, and accompanying text.

       The breakdown was as follows:
      1958— NEES Indep.
      Sales, mcf/cust. 44.2 78.8
      Revenues, cust. $95.44 $135.19
      Cost to customers, mcf. $2.16 $1.72
      1959-
      Sales, mcf/cust. 51.5 83.7
      Revenues, cust. $104.49 $142.10
      Cost to customers, mcf. $2.03 $1.70
      Equivalent data for the Norwood Gas Company, the NEES subsidiary asserted to have growth potential comparable to the independents, see n. 17, supra, were as follows (1958 and 1959 figures): Sales — 51.8 and 60.4 mcf/customer; Revenues — $112.59 and $125.66/customer; Cost to customers — $2.17 and $2.08/mcf. 41 S. E. C., at 901, nn. 29-30. See R. 1446-1447, 1449-1450.

       “[N]o specific demonstration of the existence or extent of such a causal relation was presented.” 41 S. E. C., at 901. See also n. 21, supra.


author: Mr. Justice Fortas

text:
    UNITED STATES v. HABIG et al.
    No. 107.
    Argued January 17, 1968.
    Decided March 5, 1968.

      Harris Weinstein argued the cause for the United States. With him on the brief were Solicitor General Griswold, Assistant Attorney General Rogovin, Joseph M. Howard and Vincent P. Russo.

      Lester M. Ponder argued the cause for appellees. With him on the brief were Anton Dimitroff and Fred P. Bamberger.

   Mr. Justice Fortas

delivered the opinion of the Court.

Appellees were indicted for crimes relating to allegedly false income tax returns. The District Court dismissed Counts 4 and 6 of the indictment, charging an attempt to evade taxes by filing of a false return (26 U. S. C. § 7201) and aiding in the preparation and presentation of a false return (26 U. S. C. § 7206 (2)), on the ground that the six-year statute of limitations, 26 U. S. C. § 6531, barred prosecution under those counts. 270 F. Supp. 929. The United States filed notice of appeal to this Court under 18 U. S. C. § 3731. We noted probable jurisdiction. 389 U. S. 810.

The question presented is the construction of §§ 6531 and 6513 (a) of the Internal Revenue Code of 1954 (26 U. S. C. §§6531 and 6513(a)). It is squarely raised by the facts of this case. The indictment was filed on August 12, 1966. The income tax returns involved in Counts 4 and 6 were filed on August 12 and 15, 1960. Section 6531 limits the time when indictments may be filed for the charged offenses to six years “next after the commission of the offense.”

The offenses involved in Counts 4 and 6 are committed at the time the return is filed. See, e. g., Swallow v. United States, 307 F. 2d 81, 83 (C. A. 10th Cir. 1962); Benham v. United States, 215 F. 2d 472, 473 (C. A. 5th Cir. 1954); Butzman v. United States, 205 F. 2d 343, 350-351 (C. A. 6th Cir. 1953); United States v. Yeoman-Henderson, Inc., 193 F. 2d 867, 869 (C. A. 7th Cir. 1952); United States v. Croessant, 178 F. 2d 96, 98 (C. A. 3d Cir. 1949); Cave v. United States, 159 F. 2d 464, 467 (C. A. 8th Cir. 1947). Six years had not quite elapsed from the commission of the crimes in the present case to the fifing of the indictment. Appellees do not contest the chronological calculation. But because of § 6513 (a) of the Code, they say that the critical date here is not the date when the returns were actually filed but the date when they were initially due to be filed, viz., May 15, and not August 15, 1960.

The basis for this contention is as follows: Section 6531, which prescribes the six-year period of limitations, also says that “[f]or the purpose of determining '[such] periods of limitation . . . the rules of section 6513 shall be applicable.” Instead of fifing on the due date of May 15, 1960, the corporations obtained extensions of time to August 15, 1960. Accordingly, if the six-year period of limitations runs not from the date of actual fifing (August 12 and 15, 1960) but from the original due date of the returns (May 15, 1960), the indictment, having been filed on August 12, 1966, was several months too late.

Section 6513 (a) reads as follows:

“Section 6513. Time Return Deemed Filed and Tax Considered Paid.
“(a) Early Return or Advance Payment of Tax.— For purposes of section 6511 [relating to claims for credit or refund], any return filed before the last day prescribed for the filing thereof shall be considered as filed on such last day. For purposes of section 6511 (b)(2) and (c) and section 6512 [relating to suits in the Tax Court], payment of any portion of the tax made before the last day prescribed for the payment of the tax shall be considered made on such last day. For purposes of this subsection, the last day prescribed for filing the return or paying the tax shall be determined without regard to any extension of time granted the taxpayer and without regard to any election to pay the tax in installments.”

Appellees’ argument is that by reason of the third sentence of § 6513 (a), the starting date for computing the six-year limitations period is to be determined by the original due date of the return, May 15, 1960, “without regard to any extension of time granted the taxpayer.” The District Court agreed. In other cases, the Court of Appeals for the Fifth Circuit, Hull v. United States, 356 F. 2d 919 (1966), and the District Courts for the Northern District of Ohio, United States v. Doelker, 211 F. Supp. 663 (1962), and the District of New Jersey, United States v. Alper, 200 F. Supp. 155 (1961), have so held. The District Court for the District of New Mexico has arrived at the contrary result. United States v. Hensley, 257 F. Supp. 987 (1966).

On the other hand, the Government argues that ap-pellees’ contention, despite its support in the decisions of several courts, is necessarily based upon the surprising assertion that Congress intended the limitations period to begin to run before appellees committed the acts upon which the crimes were based. It argues that this result cannot be squared with the language of the Code or the intent of Congress. We perforce agree with the Government’s analysis.

Section 6513 (a), as its title clearly indicates, was designed to apply when a return is filed or a tax is paid before the statutory deadline. The first two sentences provide that the limitations periods on claims for refunds and tax suits (26 U. S. C. §§ 6511, 6512), when the return has been filed or payment made in advance of the date “prescribed” therefor, shall not begin to run on the early date, but on the “prescribed” date. The third sentence states that, for “purposes of [the] subsection,” the date “prescribed” for filing or payment shall be determined on the basis fixed by statute or regulations, without regard to any extension of time. The net effect of the language is to prolong the limitations period when, and only when, a return is filed or tax paid in advance of the statutory deadline.

There is no reason to believe that § 6531, by reference to the “rules of section 6513” expands the effect and operation of the latter beyond its own terms so as to make it applicable to situations other than those involving early filing or advance payment. The reference to § 6513 in § 6531 extends the period within which criminal prosecution may be begun only when the limitations period would also be extended for the refunds and tax suits expressly dealt with in § 6513 — only when there has been early filing or advance payment. In other words, if a taxpayer anticipates the April 15 filing date by filing his return on January 15, the six-year limitations period for prosecutions under § 6531 commences to run on April 15. Practically, the effect of the reference to § 6513 in § 6531 is to give the Government the administrative assistance, for purposes of its criminal tax investigations, of a uniform expiration date for most taxpayers, despite variations in the dates of actual filing.

The legislative history supports this reading. The first predecessor of § 6513 (a) was enacted in 1942. See § 332 (b) (4) of the 1939 Code, added by Act of October 21, 1942, c. 619, § 169 (a), 56 Stat. 877. This section applied only to civil income tax refund proceedings. The Report of the House Ways and Means Committee (H. R. Rep. No. 2333, 77th Cong., 2d Sess., 119) states:

“If the taxpayer files his return before the last day on which it is due, the period in which he can file a claim for refund under the provisions of section 322 (b)(1), measured from the date the return was filed, will expire sooner than would be the case if he waited until such last day. Section 150 of the bill adds paragraph (4) to section 322 (b) to provide that the period of limitations with respect to credit or refund is measured from the last day prescribed for the filing of the return in cases where the return is filed before such last day. This provision does not apply to taxpayers who are given the benefit of an extension of time in which to file their returns, and file the return before the last day of the extended period. . . .” (Emphasis added.)

Accord, S. Rep. No. 1631, 77th Cong., 2d Sess., 156. Then, in adopting the 1954 Code, the contested reference to § 6513 was added to § 6531. The House and Senate Reports expressly confirmed that § 6513 still encompassed “the existing . . . rule as to early returns and advance payment.” H. R. Rep. No. 1337, 83d Cong., 2d Sess., A 416; S. Rep. No. 1622, 83d Cong., 2d Sess., 587. (Emphasis added.)

The language of § 6513 (a) does not purport to apply when a return is filed during an extension of time. The legislative history is to the same effect. Accordingly, although we reiterate the principle that criminal limitations statutes are “to be liberally interpreted in favor of repose,” United States v. Scharton, 285 U. S. 518, 522 (1932), we cannot read the statute as appellees urge.

The judgment of the District Court is reversed, and the case is remanded for further proceedings.

Reversed and remanded.

Mr. Justice Marshall took no part in the consideration or decision of this case.


text:
    UNITED STATES v. NEIFERT-WHITE CO.
    No. 267.
    Argued January 18, 1968.
    Decided March 5, 1968.

      John S. Martin, Jr., argued the cause for the United States. With him on the briefs were Solicitor General Griswold, Assistant Attorney General Weisl, John C. Eldridge and Robert V. Zener.

      Patrick F. Hooks argued the cause for respondent. With him on the brief was Michael J. Hughes.

   Mr. Justice Fortas

delivered the opinion of the Court.

This is an action by the United States to recover statutory forfeitures under the False Claims Act. The question is whether the Act applies to the supplying of false information in support of an application to a federal agency, the Commodity Credit Corporation (CCC), for a loan. The District Court dismissed the action on the ground that an application for a CCC loan, as distinguished from a claim for payment of an obligation owed by the Government, is not a “claim” within the meaning of the Act. The Court of Appeals for the Ninth Circuit affirmed. We granted certiorari. 389 U. S. 814 (1967).

The CCC is authorized to make loans to grain growers to finance the construction or purchase of storage facilities. § 4 (h) of the Commodity Credit Corporation Charter Act, as amended, 62 Stat. 1071, 15 U. S. C. § 714b (h). Pursuant to its authority under statute, 15 U. S. C. § 714b (d), the CCC has adopted regulations providing for the granting of loans in amounts not to exceed 80% of the actual purchase price of storage bins. A grain grower who desires to apply for a loan is required to support his application by an invoice showing the purchase price and the amount of the down payment made by him. 23 Fed. Reg. 9687.

Since the Government’s complaint was dismissed for failure to state a cause of action, the allegations of the complaint must be taken as true for present purposes. According to the complaint, respondent is a dealer in grain storage bins. In 1959, in selling bins to 12 grain farmers, one of respondent’s officers prepared invoices in which the purchase price was deliberately overstated. The purpose was fraudulently to induce the CCC to extend loans to respondent’s customers in amounts exceeding 80% of the actual purchase price. The invoices were submitted to the CCC along with the loan applications, and the agency relied on the overstated purchase price in determining the amount of loans that were subsequently made. The United States claims the statutory forfeiture of $2,000 for each of the 12 alleged violations of the Act.

The issue in this case is narrow and precise: Does the False Claims Act reach “claims” for favorable action by the Government upon applications for loans or is it confined to “claims” for payments due and owing from the Government? It is respondent’s position that the term “claims” in the Act must be read in its narrow sense to include only a demand based upon the Government’s liability to the claimant. Respondent relies upon United States v. Cohn, 270 U. S. 339 (1926), and United States v. McNinch, 356 U. S. 595 (1958), to support this narrow reading.

Cohm, involved a criminal proceeding under an earlier version of the present False Claims Act. It concerned a fraudulent application to obtain the release of merchandise which did not belong to the United States and which was being held by the customs authorities as bailee only. The case did not involve an attempt, by fraud, to cause the Government to part with its money or property, either in discharge of an obligation or in response to an application for discretionary action. The language in the Court’s opinion upon which respondent relies cannot be taken as a decision upon a point which the facts of the case did not present.

In McNinch, the Government brought suit for damages and forfeitures under the False Claims Act, in its present form, against persons who had filed fraudulent applications for home-modernization loans with a private bank which was regularly insured by the Federal Housing Administration against losses on such loans. The bank granted the loans sought by defendants, which were “routinely” insured by the FHA. 356 U. S., at 597, n. 4. This Court held that since FHA “disburses no funds nor does it otherwise suffer immediate financial detriment,” id., at 599, the transaction was not within the ambit of the False Claims Act. The Court emphasized the distinction between contracts of insurance against loss such as those involved in McNinch, and transactions in which the United States pays or lends money. For purposes of the present case, we need not reconsider the validity of this distinction. It is sufficient to note that the instant case involves a false statement made with the purpose and effect of inducing the Government immediately to part with money.

The precise question presented by this case has never been considered by the Court. However, both the history and the language of the False Claims Act, as well as the thrust of our prior decisions, indicate the answer to our present inquiry. The original False Claims Act was passed in 1863 as a result of investigations of the fraudulent use of government funds during the Civil War. Debates at the time suggest that the Act was intended to reach all types of fraud, without qualification, that might result in financial loss to the Government. In its present form the Act is broadly phrased to reach any person who makes or causes to be made “any claim upon or against” the United States, or who makes a false “bill, receipt, . . . claim, . . . affidavit, or deposition” for the purpose of “obtaining or aiding to obtain the payment or approval of” such a false claim. In the various contexts in which questions of the proper construction of the Act have been presented, the Court has consistently refused to accept a rigid, restrictive reading, even at the time when the statute imposed criminal sanctions as well as civil. See, e. g., United States ex rel. Marcus v. Hess, 317 U. S. 537 (1943).

On the very day that this Court decided McNinch, it also decided three cases holding that a fraudulent application for a loan submitted to the CCC was a claim against the Government of the United States, within the meaning of the False Claims Act. The question debated in those cases was not the meaning of the word “claim,” but whether the CCC, a wholly owned government corporation, was “the Government of the United States, or any department or officer thereof” within the meaning of the statute. In the course of its opinion on this matter, the Court noted that the objective of Congress in enacting the False Claims Act “was broadly to protect the funds and property of the Government from fraudulent claims, regardless of the particular form, or function, of the government instrumentality upon which such claims were made” and that “ [b] y any ordinary standard the language of the Act is certainly comprehensive enough to achieve this purpose.” Rainwater v. United States, 356 U. S. 590, 592 (1958).

Analogous reasoning leads us to hold today that the False Claims Act should not be given the narrow reading that respondent urges. This remedial statute reaches beyond “claims” which might be legally enforced, to all fraudulent attempts to cause the Government to pay out sums of money. We believe the term “claim,” as used in the statute, is broad enough to reach the conduct alleged by the Government in its complaint. Accordingly, we reverse the judgment of the Court of Appeals and remand the case for further proceedings in accordance with this opinion.

Reversed and remanded.

Mr. Justice Marshall took no part in the consideration or decision of this case.

       In relevant part, the statute provides as follows:
      R. S. § 3490 (1874):
      “Any person . . . who shall do or commit any of the acts prohibited by any of the provisions of section fifty-four hundred and thirty-eight, Title ‘CRIMES/ shall forfeit and pay to the United States the sum of two thousand dollars, and, in addition, double the amount of damages which the United States may have sustained by reason of the doing or committing such act . . . .”
      R. S. § 5438 (1874):
      “Every person who makes or causes to be made, or presents or causes to be presented, for payment or approval, to or by any person or officer in the civil, military, or naval service of the United States, any claim upon or against the Government of the United States, or any department or officer thereof, knowing such claim to be false, fictitious, or fraudulent, or who, for the purpose of obtaining or aiding to obtain the payment or approval of such claim, makes, uses, or causes to be made or used, any false bill, receipt, voucher, roll, account, claim, certificate, affidavit, or deposition, knowing the same to contain any fraudulent or fictitious statement or entry, or who enters into any agreement, combination, or conspiracy to defraud the Government of the United States, or any department or officer thereof, by obtaining or aiding to obtain the payment or allowance of any false or fraudulent claim, . . . shall be imprisoned at hard labor for not less than one nor more than five years, or fined not less than one thousand nor more than five thousand dollars.”
      The criminal aspect of this statutory scheme has been altered and codified in 18 U. S. C. §287 and 18 U. S. C. § 1001; see n. 2, infra. The civil (forfeiture) provisions have been codified, unaltered, in 31 U. S. C. § 231, but the above-cited version of these provisions continues to be the official one. The above-quoted provisions survive only insofar as civil liability is concerned.

       No other issue is presented. The statute expressly reaches persons who falsify a “receipt” “for the purpose of . . . aiding to obtain the payment or approval of [a] claim.” See n. 1, supra.

         See n. 1, supra. The criminal aspect of the original False Claims Act has been carried forward in two separate criminal statutes currently in force. Section 287 of Title 18 makes it a crime for a person to present “any claim upon or against the United States, or any department or agency thereof, knowing such claim to be false, fictitious, or fraudulent.”
      Section 1001 of the same title subjects to criminal penalties “[w]hoever . . . knowingly and willfully falsifies, conceals or covers up by any trick, scheme, or device a material fact, or makes any false, fictitious or fraudulent statements or representations, or makes or uses any false writing or document knowing the same to contain any false, fictitious or fraudulent statement or entry.”
      Respondent has been indicted under still another criminal statute, 15 U. S. C. § 714m (a), which prohibits the making of false statements for the purpose of influencing the CCC.

      “[I]t is clear, in the light of the entire context, that in the present statute, the provision relating to the payment or approval of a ‘claim upon or against’ the Government relates solely to the payment or approval of a claim for money or property to which a right is asserted against the Government, based upon the Government’s own liability to the claimant!’ 270 U. S., at 345-346. (Emphasis added.)

       See Cong. Globe, 37th Cong., 3d Sess., 952-958.

         See n. 1, supra.

       The principal case was Rainwater v. United States, 356 U. S. 590 (1958). Reference was made to the other two cases, Cato Bros. v. United States and Toepleman v. United States, in the course of the opinion in McNinch.


author: Per Curiam. Mr. Justice Douglas,

text:
    HARRIS v. UNITED STATES.
    No. 92.
    Argued January 18, 1968.
    Decided March 5, 1968.

      Paul H. Weinstein argued the cause for petitioner. With him on the brief was Laurence Levitan.

      Francis X. Beytagh, Jr., argued the cause for the United States. On the brief were Acting Solicitor General Spritzer, Assistant Attorney General Vinson, Beatrice Rosenberg and Julia P. Cooper.

   Per Curiam.

Petitioner was charged with robbery under the District of Columbia Code. D. C. Code Ann. § 22-2901. At his trial in the United States District Court for the District of Columbia, petitioner moved to suppress an automobile registration card belonging to the robbery victim, which the Government sought to introduce in evidence. The trial court, after a hearing, ruled that the card was admissible. Petitioner was convicted of the crime charged and sentenced to imprisonment for a period of two to seven years. On appeal, a panel of the United States Court of Appeals for the District of Columbia Circuit reversed, holding that the card had been obtained by means of an unlawful search. The Government’s petition for rehearing en banc was, however, granted, and the full Court of Appeals affirmed petitioner’s conviction, with two judges dissenting. We granted certiorari to consider the problem presented under the Fourth Amendment. 386 U. S. 1003 (1967). We affirm.

Petitioner’s automobile had been seen leaving the site of the robbery. The car was traced and petitioner was arrested as he was entering it, near his home. After a cursory search of the car, the arresting officer took petitioner to a police station. The police decided to impound the car as evidence, and a crane was called to tow it to the precinct. It reached the precinct about an hour and a quarter after petitioner. At this moment, the windows of the car were open and the door unlocked. It had begun to rain.

A regulation of the Metropolitan Police Department requires the officer who takes an impounded vehicle in charge to search the vehicle thoroughly, to remove all valuables from it, and to attach to the vehicle a property tag listing certain information about the circumstances of the impounding. Pursuant to this regulation, and without a warrant, the arresting officer proceeded to the lot to which petitioner’s car had been towed, in order to search the vehicle, to place a property tag on it, to roll up the windows, and to lock the doors. The officer entered on the driver’s side, searched the car, and tied a property tag on the steering wheel. Stepping out of the car, he rolled up an open window on one of the back doors. Proceeding to the front door on the passenger side, the officer opened the door in order to secure the window and door. He then saw the registration card, which lay face up on the metal stripping over which the door closes. The officer returned to the precinct, brought petitioner to the car, and confronted petitioner with the registration card. Petitioner disclaimed all knowledge of the card. The officer then seized the card and brought it into the precinct. Returning to the car, he searched the trunk, rolled up the windows, and locked the doors.

The sole question for our consideration is whether the officer discovered the registration card by means of an illegal search. We hold that he did not. The admissibility of evidence found as a result of a search under the police regulation is not presented by this case. The precise and detailed findings of the District Court, accepted by the Court of Appeals, were to the effect that the discovery of the card was not the result of a search of the car, but of a measure taken to protect the car while it was in police custody. Nothing in the Fourth Amendment requires the police to obtain a warrant in these narrow circumstances.

Once the door had lawfully been opened, the registration card, with the name of the robbery victim on it, was plainly visible. It has long been settled that objects falling in the plain view of an officer who has a right to be in the position to have that view are subject to seizure and may be introduced in evidence. Ker v. California, 374 U. S. 23, 42-43 (1963); United States v. Lee, 274 U. S. 559 (1927); Hester v. United States, 265 U. S. 57 (1924).

Affirmed.

Mr. Justice Marshall took no part in the consideration or decision of this case.

Mr. Justice Douglas,

concurring.

Though Preston v. United States, 376 U. S. 364, is not mentioned in the Court's opinion, I assume it has survived because in the present case (1) the car was lawfully in police custody, and the police were responsible for protecting the car; (2) while engaged in the performance of their duty to protect the car, and not engaged in an inventory or other search of the car, they came across incriminating evidence.


author: Mr. Justice Black Me. Justice Haelan,

text:
    FEDERAL MARITIME COMMISSION et al. v. AKTIEBOLAGET SVENSKA AMERIKA LINIEN (SWEDISH AMERICAN LINE) et al.
    No. 257.
    Argued January 25, 1968.
    Decided March 6, 1968.

      Irwin A. Seibel argued the cause for petitioners in No. 257. With him on the brief were Solicitor General Griswold, Assistant Attorney General Turner, Louis F. Claiborne, Robert N. Katz and Gordon M. Shaw.

      Robert J. Sisk argued the cause for petitioner in No. 258. With him on the briefs were Harold S. Barron and Glen A. Wilkinson.

      Edward R. Neaher argued the cause for respondents in both cases. With him on the brief were Carl S. Rowe and Gertrude S. Rosenthal.

      Together with No. 258, American Society of Travel Agents, Inc. v. Aktiebolaget Svenska Amerika Linien (Swedish American Line) et al., also on certiorari to the same court.

   Mr. Justice Black

delivered the opinion of the Court.

The question presented in these cases is whether the Federal Maritime Commission properly disapproved two provisions of several shipping conference agreements. One of the provisions under attack, the so-called tying rule, prohibits travel agents who book passage on ships participating in the conferences from selling passage on competing, nonconference lines. The second provision, known as the unanimity rule, requires unanimous action by conference members before the maximum rate of commissions payable to travel agents may be changed.

The Commission’s authority in this area stems from the Shipping Act, 1916. Section 15 of this Act, as amended, requires common carriers by water to submit most of their cooperative agreements to the Commission and directs it to:

“disapprove, cancel or modify any agreement, or any modification or cancellation thereof, whether or not previously approved by it, that it finds to be unjustly discriminatory or unfair as between carriers, shippers, exporters, importers, or ports, or between exporters from the United States and their foreign competitors, or to operate to the detriment of the commerce of the United States, or to be contrary to the public interest, or to be in violation of this chapter . . . .”

In 1959 proceedings were initiated before the Federal Maritime Board, predecessor agency to the present Federal Maritime Commission, on the complaint of the American Society of Travel Agents, petitioner in No. 258. The Society challenged a number of the practices of two conferences composed of steamship lines that furnish passenger service across the Atlantic. After extensive investigation and hearings before a Commission Examiner, the Commission disapproved both the tying and unanimity rules and ordered them eliminated. 7 F. M. C. 737 (1964). The Court of Appeals, however, set aside the order and remanded the case to the Commission for more detailed findings and explanations. 122 U. S. App. D. C. 59, 351 F. 2d 756 (1965). On remand the Commission again disapproved both rules. The tying rule was found detrimental to the commerce of the United States, unjustly discriminatory as between carriers, and contrary to the public interest. The unanimity rule was found detrimental to the commerce of the United States and contrary to the public interest. -F. M. C. - (1966). On appeal, the Court of Appeals again set aside the order, holding that the Commission’s new opinion had not remedied the defects noted in the prior decision on appeal, 125 U. S. App. D. C. 359, 372 F. 2d 932 (1967), and we granted certiorari, 389 U. S. 816 (1967). We hold that the Commission’s order was supported in all respects by adequate findings and analysis. We therefore reverse the judgment of the Court of Appeals and approve the order of the Commission.

I.

An understanding of the issues in these cases will be facilitated by a very brief discussion of the purposes of these shipping conferences and the federal statutes enacted to regulate them. Major American and foreign steamship lines which compete for trafile along the same routes have long joined together in conferences to fix rates and other charges, allocate traffic, and in other ways moderate the rigors of competition. Despite traditional hostility to anticompetitive arrangements of this kind, however, Congress found after extensive investigation that the cooperative activity of these conferences was to some extent in the public interest. The House Committee that conducted the primary inquiry reported that the conferences promoted:

“regularity and frequency of service, stability and uniformity of rates, economy in the cost of service, better distribution of sailings, maintenance of American and European rates to foreign markets on a parity, and equal treatment of shippers through the elimination of secret arrangements and underhanded methods of discrimination.” H. R. Doc. No. 805, 63d Cong., 2d Sess., 416.

These advantages, the Committee concluded, could probably not be preserved in the face of unrestricted competition, and accordingly it recommended that the industry be granted some exemption from the antitrust laws. On the other hand, the Committee stressed that an unqualified exemption would be undesirable. The conferences had abused their power in the past and might do so in the future unless they were subjected to some form of effective governmental supervision. In response to these findings Congress enacted the Shipping Act, 1916. The statute not only outlawed a number of specific abuses but set up the United States Shipping Board, a predecessor of the present Federal Maritime Commission, with permanent authority under § 15 of the Act to modify or disapprove conference agreements. The antitrust immunity conferred was, as the House Committee had recommended, a limited one — only agreements receiving the approval of the Board were exempted. Originally the Board could disapprove an agreement on only three grounds: unjust discrimination, detriment to commerce, or illegality under one of the specific provisions of the Act. In 1959, however, Congress began an extensive review of regulation under the Shipping Act, and amendments passed in 1961 in response to these studies included a provision granting considerably broader authority by permitting disapproval under § 15 of any agreement found to be “contrary to the public interest.” The scheme of regulation adopted thus permits the conferences to continue operation but insures that their immunity from the antitrust laws will be subject to careful control.

II.

A crucial issue in these cases is respondents’ challenge to the Commission’s reliance on antitrust policy as a basis for disapproving these rules. Since the contention is equally relevant to analysis of the tying and unanimity rules, we consider it at the outset.

The Commission has formulated a principle that conference restraints which interfere with the policies of antitrust laws will be approved only if the conferences can “bring forth such facts as would demonstrate that the . . . rule was required by a serious transportation need, necessary to secure important public benefits or in furtherance of a valid regulatory purpose of the Shipping Act.” See - F. M. C., at -. In the present cases, but for the partial immunity granted by the Act, both the tying and unanimity rules undoubtedly would be held illegal under the antitrust laws, and respondents failed to satisfy the Commission that the rules were necessary to further some legitimate interest. The Commission found this sufficient reason to disapprove the rules, but the Court of Appeals disagreed. Emphasizing that “[t]he statutory language authorizes disapproval only when the Commission finds as a fact that the agreement operates in one of the four ways set out in the section by Congress,” the court held, “We do not read the statute as authorizing disapproval of an agreement on the ground that it runs counter to antitrust principles . . . .” 122 TJ. S. App. D. C., at 64; 351 F. 2d, at 761 (opinion on first appeal).

Insofar as this holding rests on the absence of an explicit antitrust test among the “four ways set out in the section,” we think the Court of Appeals was excessively formalistic in its approach to the Commission’s findings. By its very nature an illegal restraint of trade is in some ways “contrary to the public interest,” and the Commission’s antitrust standard, involving an assessment of the necessity for this restraint in terms of legitimate commercial objectives, simply gives understandable content to the broad statutory concept of “the public interest.” Certainly any reservations the Court of Appeals may have had on this point should have been dispelled by the Commission’s careful explanation on remand of the connection between its antitrust standard and the public interest requirement. See-F. M. C., at-. As long as the Commission indicates which of the statutory standards is the ultimate authority for its disapproval, we can see no objection to the Commission’s casting its primary analysis in terms of the requirements of its antitrust test.

Respondents argue more broadly, however, that the antitrust test is not a permissible elaboration of the statutory standards. They contend that the whole purpose of the statutory scheme would be defeated if incompatibility with the antitrust laws can be a sufficient reason for denying immunity from these laws. Congress, it is argued, has already decided that there is a justification for intrusions on our antitrust policy by the conference system, and accordingly the Commission cannot require further justifications from the shipping lines but must itself demonstrate the way in which the statutory requirements are violated.

Respondents’ arguments, however, are not even superficially persuasive. Congress has, it is true, decided to confer antitrust immunity unless the agreement is found to violate certain statutory standards, but as already indicated, antitrust concepts are intimately involved in the standards Congress chose. The Commission’s approach does not make the promise of antitrust immunity meaningless because a restraint that would violate the antitrust laws will still be approved whenever a sufficient justification for it exists. Nor does the Commission’s test, by requiring the conference to come forward with a justification for the restraint, improperly shift the burden of proof. The Commission must of course adduce substantial evidence to support a finding under one of the four standards of § 15, but once an antitrust violation is established, this alone will normally constitute substantial evidence that the agreement is “contrary to the public interest,” unless other evidence in the record fairly detracts from the weight of this factor. It is not unreasonable to require that a conference adopting a particular rule to govern its own affairs, for reasons best known to the conference itself, must come forward and explain to the Commission what those reasons are. We therefore hold that the antitrust test formulated by the Commission is an appropriate refinement of the statutory “public interest” standard.

III.

We turn then to the Commission’s analysis of the specific impact of the unanimity rule. The rule is embodied in the basic agreement of the carriers in the Atlantic Passenger Steamship Conference, an association of the major lines serving passenger traffic between Europe and the United States and Canada. Article 6 (a) of this agreement provides that the rate of commission which member lines may pay to their agents must be established by unanimous agreement of the member lines. In addition, Article 3 (d) of the agreement permits the subcommittee with primary responsibility for suggesting commission rates to make recommendations to the full conference only when subcommittee members are in unanimous accord.

The Commission noted that at the time of its hearings, the commission paid by conference members to travel agents was substantially lower than that paid by the airlines. By the time the Commission wrote its opinion on remand, the conference had raised its commission to the level offered by the airlines, but the effective commission earned by travel agents remained lower on ocean travel because booking passage by sea requires three to four times as much of a travel agent’s time as is required to book air travel. The Commission found that the unanimity rule was responsible for the existing disparity between effective commissions on air and sea travel and for the delays in conference action to rectify the situation. On three specific occasions, lack of unanimity prevented the conference subcommittee from recommending an increase, even though a majority was recorded as being in favor of the proposals. The Commission also referred to several other occasions on which the conference and its subcommittee failed to take action. Because minutes apparently were not taken for these meetings, the Commission was unable to determine with certainty whether the unanimity rule had frustrated the will of a majority on these occasions.

The Commission then found that as a result of the relatively advantageous commission on sales of air travel, there was a definite tendency for travel agents to encourage their customers to travel by air rather than by sea. This situation in turn not only injured the majority of the shipping lines by diverting business to the airlines, but also injured the undecided traveler, who lost the opportunity to deal with an agent whose recommendations would not be influenced by his own economic interest. The Commission also found that respondents had failed to establish any important public interest served by the unanimity rule. Under these circumstances the Commission concluded that the rule was detrimental to commerce by fostering a decline in travel by sea, and contrary to the public interest in the maintenance of a sound and independent merchant marine. The Commission also found the rule contrary to the public interest in that it invaded the principles of the antitrust laws more than was necessary to further any valid regulatory purpose.

We find the Commission’s analysis sound and the evidence in support of its conclusions more than ample. Respondents attack the initial finding that the unanimity-rule has blocked the desires of the majority to raise the commission rate, but the argument reduces to an insistence that the Commission establish this point by conclusive proof. It is true that there is no specific evidence in the record revealing that at any of the conference meetings where no action was taken, a majority favored an immediate increase. But the Maritime Commission faces no such rigorous standard of proof. The issue to be decided was a purely factual one, and the Commission was entitled to draw inferences as to the wishes of the majority from the record as a whole. The record showed beyond doubt that in several instances a majority of the subcommittee favored an increase, and faced with the lack of proof one way or the other as to the wishes of the majority of the full conference, the Commission acted reasonably in assuming that the views of the subcommittee were not diametrically opposed to that of the entire membership. In addition, it is undisputed that the rule on several occasions operated to prevent a majority of the subcommittee from presenting its recommendations to the full conference, and the Commission could reasonably conclude that this impact on the subcommittee served in itself to delay or prevent action by the full conference. Although any conclusion as to the commission rate that would have prevailed under a different voting procedure must to some extent rest on “conjecture,” the court below misconceived its reviewing function when it found this a sufficient basis for setting the Commission’s finding aside. Having correctly noted that positive proof on various aspects of the case was simply not available one way or the other, the Commission was fully entitled to draw inferences on these points from the incomplete evidence that was available. “Conjecture” of this kind, when based on inferences that are reasonable in light of human experience generally or when based on the Commission’s special familiarity with the shipping industry, is fully within the competence of this administrative agency and should be respected by the reviewing courts.

Respondents’ attack on the finding that the commission disparity affected the recommendations of travel agents suffers from this same misconception of the Commission’s task. It is true that no agent testified that he had ever persuaded a customer to travel by air over the customer’s preference to travel by sea. Agents heavily dependent on conference business could hardly be expected to make such an admission, but one agent did go so far as to concede that under some circumstances, there was a “definite tendency” to encourage a customer to choose air travel because “it is easier to sell” and “you make more money.” This amply supports the Commission’s conclusion.

The final problem is respondents’ claim that the rule is justified because none of the member lines, the American-flag minority in particular, wishes to surrender control over basic financial decisions to a majority of its competitors. This is a bewildering contention, to say the least. The rule may enable a single line to protect itself from a majority decision, but the rule in no way guarantees that line control over its own financial decisions. Lack of unanimity under this particular rule does not leave the lines free to make independent decisions, but simply freezes the existing situation. In this way control over the basic financial decisions of all lines is “surrendered” not to the majority but to any single line that happens to oppose change. We therefore find that the Commission’s conclusions with respect to the unanimity rule were supported by substantial evidence and should have been upheld by the Court of Appeals.

IV.

The tying rule is imposed by the second conference involved in these cases, the Trans-Atlantic Passenger Steamship Conference. This conference is composed of the major lines providing passenger service between America and Europe, and it has substantially the same membership as the conference which is formally responsible for the unanimity rule already considered. The tying rule prohibits all travel agents authorized to book passage for the member lines “from selling passage tickets for any steamer not connected with the fleets of the member Lines.” The rule does not prohibit these agents from arranging air travel.

As the Commission correctly noted, this rule seriously interferes with the purposes of the antitrust laws. Under the Sherman Act, any agreement by a group of competitors to boycott a particular buyer or group of buyers is illegal per se. United States v. General Motors, 384 U. S. 127, 146-147 (1966); Klor’s v. Broadway-Hale Stores, 359 U. S. 207 (1959). And the conference’s tying rule specifically injures three distinct sets of interests. It denies passengers the advantages of being able to deal with a travel agent who can sell any means of travel. It denies agents the ability to serve passengers who wish to travel on nonconference lines. Most important, it denies nonconference lines the opportunity to reach effectively the 80% of all transatlantic steamship passengers who book their travel through conference-appointed agents.

Given these effects of the rule, which are not seriously disputed, it was incumbent upon the conference to establish a justification for the rule in terms of some legitimate objective. One of the possible purposes of the rule is to eliminate the competition of the noncon-ference lines, but this is not a permissible objective under the Shipping Act, see Federal Maritime Board v. Isbrandtsen Co., 356 U. S. 481, 491-493 (1958), and respondents quite properly do not press it. Respondents do contend, however, that the rule is justified as a means of preserving the stability of the conference. By choosing and supervising responsible agents who will book steamship passage only for its members, the conference creates an incentive for members to remain in the conference and for other lines to join. The Commission found no indication, however, that elimination of the rule would in fact jeopardize the stability of the conference. Although no evidence in the record actually tends to refute respondents’ theory, it is also clear that respondents failed to come forward with any evidence to support their claim. The theory was therefore insufficient to justify the undeniable injury to interests ordinarily protected by the antitrust laws.

Equally insubstantial is the second justification presented by respondents, that the conference members bear the expense of selecting and supervising qualified agents and that other lines who wish to take advantage of these efforts should pay their fair share by joining the conference. The Commission found that most of the expenses incurred by the conference were in fact reimbursed by the agents themselves through annual fees. Many of the promotional activities were paid for by individual lines, and in addition these arrangements often required matching contributions by the agents. In light of these factors the Commission properly concluded that although the conference’s efforts might entitle it to exercise some control over the agents’ activities, there was no justification for completely prohibiting the agents from dealing with nonconference lines.

These circumstances taken together provide substantial support for all three of the Commission’s findings — that the rule is detrimental to the commerce of the United States by injuring passengers, agents, and nonconference lines, that the rule is unjustly discriminatory as between conference and nonconference carriers, and that the rule is contrary to the public interest by unnecessarily invading the policies of the antitrust laws.

Y.

For the reasons indicated the Commission properly disapproved the tying and unanimity rules involved in these cases. These proceedings were commenced more than eight years ago, and this is the second time the controversy has been appealed to the reviewing courts. On the second appeal to the Court of Appeals, that court took the extraordinary course of simply reversing, without remanding to the Commission for further action. Since we have found that the Commission’s findings and order are supported by substantial evidence, and since there are no other meritorious contentions raised by the respondents, we think it is time for a final disposition of the proceedings. The judgment of the Court of Appeals is reversed, and the cases are remanded with directions to affirm the order of the Commission.

It is so ordered.

Me. Justice Marshall took no part in the consideration or decision of these cases.

Me. Justice Haelan,

concurring in the result.

I concur in the result reached by the Court, substantially for the reasons stated in the Court’s opinion. However, I cannot join in the Court’s general statements, ante, at 244-246, concerning the relationship between the antitrust laws and the “contrary to the public interest” standard of § 15 of the Shipping Act. It seems plain that the “contrary to the public interest” test was intended to comprehend factors unique to the shipping industry as well as those embodied in the antitrust laws. Hence, I believe that under the Act the Commission may not place upon a shipping conference the burden of justifying an agreement until the Commission has determined that in light of both shipping and antitrust factors the agreement would be “contrary to the public interest” in the absence of further explanation.

       39 Stat. 728, as amended, 46 U. S. C. § 801 et seq.

       See Hearings before Antitrust Subcommittee of House Committee on the Judiciary, on Monopoly Problems in Regulated Industries: Ocean. Freight Industry, 86th Cong., 1st and 2d Sess., ser. 14, Pt. 1, Vols. I-V, and Pt. 2, Vols. I-II (1959-1960), 87th Cong., 1st Sess., ser. 10, Pt. 3, Vols: I-II (1961); Hearings before Special Subcommittee on Steamship Conferences of House Committee on Merchant Marine and Fisheries, Steamship Conference Study, 86th Cong., 1st Sess., Pts. 1-3 (1959); H. R. Rep. No. 1419, 87th Cong., 2d Sess. (1962).

       75 Stat. 762.

       For this reason the Commission’s antitrust standard is entirely consistent with respondents’ evidence of a congressional recognition at the time the “contrary to the public interest” test was added in 1961, that “our traditional antitrust concepts cannot be fully applied to this aspect of international commerce.” S. Rep. No. 860, 87th Cong., 1st Sess., 2 (1961) (emphasis added). And for the same reason respondents’ reliance on Seaboard Air Line R. Co. v. United States, 382 U. S. 154 (1965), and Minneapolis St. Louis R. Co. v. United States, 361 U. S. 173 (1959), is misplaced. The antitrust standard formulated here is in full accord with the kind of accommodation between antitrust and regulatory objectives approved by this Court in those cases. Indeed we have stressed that such an accommodation does not authorize the agency in question to ignore the antitrust laws. E. g., McLean Trucking Co. v. United States, 321 U. S. 67, 79-80 (1944).

       Respondents correctly point out that there is no support for the Commission’s finding that the majority of the members were unable to act at the meeting of February-March 1956 because of a veto exercised by one line. It does appear that at the meeting of May 3, 1960, a majority favored an increase, but the memorandum disclosing this does not indicate clearly whether the majority preferred to put the increase into effect immediately, or favored the actual decision to defer consideration.

       Compare IATA Traffic Conference Resolution, 6 C. A. B. 639, 645 (1946). These airline conferences leave the individual members free to initiate their own rates when unanimous agreement cannot be reached.

       The Commission's reference to the fact that the Caribbean cruise trade operates without a tying rule does not seem to meet respondents’ contention. Since the Caribbean cruise trade operates without a conference at all, the lack of a tying rule would in no way indicate the extent to which such a rule tends to strengthen membership in conferences.