author:
Mr. Justice Goldberg
      Mr. Justice Harlan,

text:
    SECURITIES AND EXCHANGE COMMISSION v. CAPITAL GAINS RESEARCH BUREAU, INC., et al.
    No. 42.
    Argued October 21, 1963.
    Decided December 9, 1963.

      David Ferber argued the cause for petitioner. With him on the brief were Solicitor General Cox, Daniel M. Friedman and Philip A. Loomis, Jr.

      Leo C. Fennelly argued the cause and filed a brief for respondents.
   Mr. Justice Goldberg

delivered the opinion of the Court.

We are called upon in this case to decide whether under the Investment Advisers Act of 1940 the Securities and Exchange Commission may obtain an injunction compelling a registered investment adviser to disclose to his clients a practice of purchasing shares of a security for his own account shortly before recommending that security for long-term investment and then immediately selling the shares at a profit upon the rise in the market price following the recommendation. The answer to this question turns on whether the practice — known in the trade as “scalping” — “operates as a fraud or deceit upon any client or prospective client” within the meaning of the Act. We hold that it does and that the Commission may “enforce compliance” with the Act by obtaining an injunction requiring the adviser to make full disclosure of the practice to his clients.

The Commission brought this action against respondents in the United States District Court for the Southern District of New York. At the hearing on the application for a preliminary injunction, the following facts were established. Respondents publish two investment advisory services, one of which — “A Capital Gains Report” — is the subject of this proceeding. The Report is mailed monthly to approximately 5,000 subscribers who each pay an annual subscription price of $18. It carries the following description:

“An Investment Service devoted exclusively to (1) The protection of investment capital. (2) The realization of a steady and attractive income therefrom. (3) The accumulation of CAPITAL GAINS thru the timely purchase of corporate equities that are proved to be undervalued.”

Between March 15, 1960, and November 7, 1960, respondents, on six different occasions, purchased shares of a particular security shortly before recommending it in the Report for long-term investment. On each occasion, there was an increase in the market price and the volume of trading of the recommended security within a few days after the distribution of the Report. Immediately thereafter, respondents sold their shares of these securities at a profit. They did not disclose any aspect of these transactions to their clients or prospective clients.

On the basis of the above facts, the Commission requested a preliminary injunction as necessary to effectuate the purposes of the Investment Advisers Act of 1940. The injunction would have required respondents, in any future Report, to disclose the material facts concerning, inter alia, any purchase of recommended securities “within a very short period prior to the distribution of a recommendation . . . ,” and “[t]he intent to sell and the sale of said securities . . . within a very short period after distribution of said recommendation . ...”

The District Court denied the request for a preliminary injunction, holding that the words “fraud” and “deceit” are used in the Investment Advisers Act of 1940 “in their technical sense” and that the Commission had failed to show an intent to injure clients or an actual loss of money to clients. 191 F. Supp. 897. The Court of Appeals for the Second Circuit, sitting en banc, by a 5-to-4 vote accepted the District Court’s limited construction of “fraud” and “deceit” and affirmed the denial of injunctive relief. 306 F. 2d 606. The majority concluded that no violation of the Act could be found absent proof that “any misstatements or false figures were contained in any of the bulletins”; or that “the investment advice was unsound”; or that “defendants were being bribed or paid to tout a stock contrary to their own beliefs”; or that “these bulletins were a scheme to get rid of worthless stock”; or that the recommendations were made “for the purpose of endeavoring artificially to raise the market so that [respondents] might unload [their] holdings at a profit.” Id., at 608-609. The four dissenting judges pointed out that “[t]he common-law doctrines of fraud and deceit grew up in a business climate very different from that involved in the sale of securities,” and urged a broad remedial construction of the statute which would encompass respondents’ conduct. Id., at 614. We granted certiorari to consider the question of statutory construction because of its importance to the investing public and the financial community. 371 U. S. 967.

The decision in this case turns on whether Congress, in empowering the courts to enjoin any practice which operates “as a fraud or deceit upon any client or prospective client,” intended to require the Commission to establish fraud and deceit “in their technical sense,” including intent to injure and actual injury to clients, or whether Congress intended a broad remedial construction of the Act which would encompass nondisclosure of material facts. For resolution of this issue we consider the history and purpose of the Investment Advisers Act of 1940.

I.

The Investment Advisers Act of 1940 was the last in a series of Acts designed to eliminate certain abuses in the securities industry, abuses which were found to have contributed to the stock market crash of 1929 and the depression of the 1930’s. It was preceded by the Securities Act of 1933, the Securities Exchange Act of 1934, the Public Utility Holding Company Act of 1935, the Trust Indenture Act of 1939, and the Investment Company Act of 1940. A fundamental purpose, common to these statutes, was to substitute a philosophy of full disclosure for the philosophy of caveat emptor and thus to achieve a high standard of business ethics in the securities industry. As we recently said in a related context, “It requires but little appreciation ... of what happened in this country during the 1920’s and 1930’s to realize how essential it is that the highest ethical standards prevail” in every facet of the securities industry. Silver v. New York Stock Exchange, 373 U. S. 341, 366.

The Public Utility Holding Company Act of 1935 “authorized and directed” the Securities and Exchange Commission “to make a study of the functions and activities of investment trusts and investment companies . . . .” Pursuant to this mandate, the Commission made an exhaustive study and report which included consideration of investment counsel and investment advisory services. This aspect of the study and report culminated in the Investment Advisers Act of 1940.

The report reflects the attitude — shared by investment advisers and the Commission — that investment advisers could not “completely perform their basic function — furnishing to clients on a personal basis competent, unbiased, and continuous advice regarding the sound management of their investments — unless all conflicts of interest between the investment counsel and the client were removed.” The report stressed that affiliations by investment advisers with investment bankers, or corporations might be "an impediment to a disinterested, objective, or critical attitude toward an investment by clients . . . .”

This concern was not limited to deliberate or conscious impediments to objectivity. Both the advisers and the Commission were well aware that whenever advice to a client might result in financial benefit to the adviser — ■ other than the fee for his advice — “that advice to a client might in some way be tinged with that pecuniary interest [whether consciously or] subconsciously motivated . . . .” The report quoted one leading investment adviser who said that he “would put the emphasis . . . on subconscious” motivation in such situations. It quoted a member of the Commission staff who suggested that a significant part of the problem was not the existence of a “deliberate intent” to obtain a financial advantage, but rather the existence “subconsciously [of] a prejudice” in favor of one’s own financial interests. The report incorporated the Code of Ethics and Standards of Practice of one of the leading investment counsel associations, which contained the following canon:

“[An investment adviser] should continuously occupy an impartial and disinterested position, as free as humanly possible from the subtle influence of prejudice, conscious or unconscious; he should scrupulously avoid any affiliation, or any act, which subjects his position to challenge in this respect.” (Emphasis added.)

Other canons appended to the report announced the following guiding principles: that compensation for investment advice “should consist exclusively of direct charges to clients for services rendered”; that the adviser should devote his time "exclusively to the performance” of his advisory function; that he should not “share in profits” of his clients; and that he should not “directly or indirectly engage in any activity which may jeopardize [his] ability to render unbiased investment advice.” These canons were adopted “to the end that the quality of services to be rendered by investment counselors may measure up to the high standards which the public has a right to expect and to demand.”

One activity specifically mentioned and condemned by investment advisers who testified before the Commission was “trading by investment counselors for their own account in securities in which their clients were interested . . . .”

This study and report — authorized and directed by statute — culminated in the preparation and introduction by Senator Wagner of the bill which, with some changes, became the Investment Advisers Act of 1940. In its “declaration of policy” the original bill stated that

“Upon the basis of facts disclosed by the record and report of the Securities and Exchange Commission ... it is hereby declared that the national public interest and the interest of investors are adversely affected- — - . . . (4) when the business of investment advisers is so conductéd as to defraud or mislead investors, or to enable such advisers to relieve themselves of their fiduciary obligations to their clients. “It is hereby declared that the policy and purposes of this title, in accordance with which the provisions of this title shall be interpreted, are to mitigate and, so far as is presently practicable to eliminate the abuses enumerated in this section.” S. 3580, 76th Cong., 3d Sess., § 202.

Hearings were then held before Committees of both Houses of Congress. In describing their profession, leading investment advisers emphasized their relationship of “trust and confidence” with their clients and the importance of “strict limitation of [their right] to buy and sell securities in the normal way if there is any chance at all that to do so might seem to operate against the interests of clients and the public.” The president of the Investment Counsel Association of America, the leading investment counsel association, testified that the

“two fundamental principles upon which the pioneers in this new profession undertook to meet the growing need for unbiased investment information and guidance were, first, that they would limit their efforts and activities to the study of investment problems from the investor’s standpoint, not engaging in any other activity, such as security selling or brokerage, which might directly or indirectly bias their investment judgment; and, second, that their remuneration for this work would consist solely of definite, professional fees fully disclosed in advance.”

Although certain changes were made in the bill following the hearings, there is nothing to indicate an intent to alter the fundamental purposes of the legislation. The broad proscription against “any . . . practice . . . which operates ... as a fraud or deceit upon any client or prospective client” remained in the bill from beginning to end. And the Committee Reports indicate a desire to preserve “the personalized character of the services of investment advisers,” and to eliminate conflicts of interest between the investment adviser and the clients as safeguards both to “unsophisticated investors” and to “bona fide investment counsel.” The Investment Advisers Act of 1940 thus reflects a congressional recognition “of the delicate fiduciary nature of an investment advisory relationship,” as well as a congressional intent to eliminate, or at least to expose, all conflicts of interest which might incline an investment adviser— consciously or unconsciously — ;to render advice which was not disinterested. It would defeat the manifest purpose of the Investment Advisers Act of 1940 for us to hold, therefore, that Congress, in empowering the courts to enjoin any practice which operates “as a fraud or deceit,” intended to require proof of intent to injure and actual injury to clients.

This conclusion moreover, is not in derogation of the common law of fraud, as the District Court and the majority of the Court of Appeals suggested. To the contrary, it finds support in the process by which the courts have adapted the common law of fraud to the commercial transactions of our society. It is true that at common law intent and injury have been deemed essential elements in a damage suit between parties to an arm’s-length transaction. But this is not such an action. This is a suit for a preliminary injunction in which the relief sought is, as the dissenting judges below characterized it, the “mild prophylactic,” 306 F. 2d, at 613, of requiring a fiduciary to disclose to his clients, not all his security holdings, but only his dealings in recommended securities just before and after the issuance of his recommendations.

The content of common-law fraud has not remained static as the courts below seem to have assumed. It has varied, for example, with the nature of the relief sought, the relationship between the parties, and the merchandise in issue. It is not necessary in a suit for equitable or prophylactic relief to establish all the elements required in a suit for monetary damages.

“Law had come to regard fraud ... as primarily a tort, and hedged about with stringent requirements, the chief of which was a strong moral, or rather immoral element, while equity regarded it, as it had all along regarded it, as a conveniently comprehensive word for the expression of a lapse from the high standard of conscientiousness that it exacted from any party occupying a certain contractual or fiduciary relation towards another party.”
“Fraud has a broader meaning in equity [than at law] and intention to defraud or to misrepresent is not a necessary element.”
“Fraud, indeed, in the sense of a court of equity properly includes all acts, omissions and conceal-ments which involve a breach of legal or equitable duty, trust, or confidence, justly reposed, and are injurious to another, or by which an undue and unconscientious advantage is taken of another.”

Nor is it necessary in a suit against a fiduciary, which Congress recognized the investment adviser to be, to establish all the elements required in a suit against a party to an arm’s-length transaction. Courts have imposed on a fiduciary an affirmative duty of “utmost good faith, and full and fair disclosure of all material facts,” as well as an affirmative obligation “to employ reasonable care to avoid misleading” his clients. There has also been a growing recognition by common-law courts that the doctrines of fraud and deceit which developed around transactions involving land and other tangible items of wealth are ill-suited to the sale of such intangibles as advice and securities, and that, accordingly, the doctrines must be adapted to the merchandise in issue. The 1909 New York case of Ridgely v. Keene, 134 App. Div. 647, 119 N. Y. Supp. 451, illustrates this continuing development. An investment adviser who, like respondents, published an investment advisory service, agreed, for compensation, to influence his clients to buy shares in a certain security. He did not disclose the agreement to his client but sought “to excuse his conduct by asserting that ... he honestly believed, that his subscribers would profit by his advice . . . .” The court, holding that “his belief in the soundness of his advice is wholly immaterial,” declared the act in question “a palpable fraud.”

We cannot assume that Congress, in enacting legislation to prevent fraudulent practices by investment advisers, was unaware of these developments in the common law of fraud. Thus, even if we were to agree with the courts below that Congress had intended, in effect, to codify the common law of fraud in the Investment Advisers. Act of 1940, it would be logical to conclude that Congress codified the common law “remedially” as the courts had adapted it to the prevention of fraudulent securities transactions by fiduciaries, not “technically” as it has traditionally been applied in damage suits between parties to arm’s-length transactions involving land and ordinary chattels.

The foregoing analysis of the judicial treatment of common-law fraud reinforces our conclusion that Congress, in empowering the courts to enjoin any practice which operates “as a fraud or deceit” upon a client, did not intend to require proof of intent to injure and actual injury to the client. Congress intended the Investment Advisers Act of 1940 to be construed like other securities legislation “enacted for the purpose of avoiding frauds,” not technically and restrictively, but flexibly to effectuate its remedial purposes.

II.

We turn now to a consideration of whether the specific conduct here in issue was the type which Congress intended to reach in the Investment Advisers Act of 1940. It is arguable — indeed it was argued by “some investment counsel representatives” who testified before the Commission — that any “trading by investment counselors for their own account in securities in which their clients were interested . . .” creates a potential conflict of interest which must be eliminated. We need not go that far in this case, since here the Commission seeks only disclosure of a conflict of interests with significantly greater potential for abuse than in the situation described above. An adviser who, like respondents, secretly trades on the market effect of his own recommendation may be motivated — consciously or unconsciously — to recommend a given security not because of its potential for long-run price increase (which would profit the client), but because of its potential for short-run price increase in response to anticipated activity from the recommendation (which would profit the adviser). An investor seeking the advice of a registered investment adviser must, if the legislative purpose is to be served, be permitted to evaluate such overlapping motivations, through appropriate disclosure, in deciding whether an adviser is serving “two masters” or only one, “especially ... if one of the masters happens to be economic self-interest.” United States v. Mississippi Valley Co., 364 U. S. 520, 549. Accordingly, we hold that the Investment Advisers Act of 1940 empowers the courts, upon a showing such as that made here, to require an adviser to make full and frank disclosure of his practice of trading on the effect of his recommendations.

III.

Respondents offer three basic arguments against this conclusion. They argue first that Congress could have made, but did not make, failure to disclose material facts unlawful in the Investment Advisers Act of 1940, as it did in the Securities Act of 1933, and that absent specific language, it should not be.assumed that Congress intended to include failure to disclose in its general proscription of any practice which operates as a fraud or deceit. But considering the history and chronology of the statutes, this omission does not seem significant. The Securities Act of 1933 was the first experiment in federal regulation of the securities industry. It was understandable, therefore, for Congress, in declaring certain practices unlawful, to include both a general proscription against fraudulent and deceptive practices and, out of an abundance of caution, a specific proscription against nondisclosure. It soon became clear, however, that the courts, aware of the previously outlined developments in the common law of fraud, were merging the proscription against nondisclosure into the general proscription against fraud, treating the former, in effect, as one variety of the latter. For example, in Securities & Exchange Comm’n v. Torr, 15 F. Supp. 315 (D. C. S. D. N. Y. 1936), rev’d on other grounds, 87 F. 2d 446, Judge Patterson held that suppression of information material to an evaluation of the disinterestedness of investment advice “operated as a deceit on purchasers,” 15 F. Supp., at 317. Later cases also treated nondisclosure as one variety of fraud or deceit. In light of this, and in light of the evident purpose of the Investment Advisers Act of 1940 to substitute a philosophy of disclosure for the philosophy of caveat emptor, we cannot assume that the omission in the 1940 Act of a specific proscription against nondisclosure was intended to limit the application of the antifraud and anti-deceit provisions of the Act so as to render the Commission impotent to enjoin suppression of material facts. The more reasonable assumption, considering what had transpired between 1933 and 1940, is that Congress, in enacting the Investment Advisers Act of 1940 and proscribing any practice which operates “as a fraud or deceit,” deemed a specific proscription against nondisclosure surplusage.

Respondents also argue that the 1960 amendment to the Investment Advisers Act of 1940 justifies a narrow interpretation of the original enactment. The amendment made two significant changes which are relevant here. “Manipulative” practices were added to the list of those specifically proscribed. There is nothing to suggest, however, that with respect to a requirement of disclosure, “manipulative” is any broader than fraudulent or deceptive. Nor is there any indication that by adding the new proscription Congress intended to narrow the scope of the original proscription. The new amendment also authorizes the Commission “by rules and regulations [to] define, and prescribe means reasonably designed to prevent, such acts, practices, and courses of business as are fraudulent, deceptive, or manipulative.” The legislative history offers no indication, however, that Congress intended such rules to substitute for the “general and flexible” antifraud provisions which have long been considered necessary to control “the versatile inventions of fraud-doers.” Moreover, the intent of Congress must be culled from the events surrounding the passage of the 1940 legislation. “[0] pinions attributed to a Congress twenty years after the event cannot be considered evidence of the intent of the Congress of 1940.” Securities & Exchange Comm’n v. Capital Gains Research Bureau, Inc., 306 F. 2d 606, 615 (dissenting opinion). See United States v. Philadelphia Nat. Bank, 374 U. S. 321, 348-349.

Respondents argue, finally, that their advice was “honest” in the sense that they believed it was sound and did not offer it for the purpose of furthering personal pecuniary objectives. This, of course, is but another way of putting the rejected argument that the elements of technical common-law fraud — particularly intent — must be established before an injunction requiring disclosure may be ordered. It is the practice itself, however, with its potential for abuse, which “operates as a fraud or deceit” within the meaning of the Act when relevant information is suppressed. The Investment Advisers Act of 1940 was “directed not only at dishonor, but also at conduct that tempts dishonor.” United States v. Mississippi Valley Co., 364 U. S. 520, 549. Failure to disclose material facts must be deemed fraud or deceit within its intended meaning, for, as the experience of the 1920’s and 1930’s amply reveals, the darkness and ignorance of commercial secrecy are the conditions upon which predatory practices best thrive. To impose upon the Securities and Exchange Commission the burden of showing deliberate dishonesty as a condition precedent to protecting investors through the prophylaxis of disclosure would effectively nullify the protective purposes of the statute. Reading the Act in light of its background we find no such requirement commanded. Neither the Commission nor the courts should be required “to separate the mental urges,” Peterson v. Greenville, 373 U. S. 244, 248, of an investment adviser, for “[t]he motives of man are too complex ... to separate . . . .” Mosser v. Darrow, 341 U. S. 267, 271. The statute, in recognition of the adviser's fiduciary relationship to his clients, requires that his advice be disinterested. To insure this it empowers the courts to require disclosure of material facts. It misconceives the purpose of the statute tó confine its application to “dishonest” as opposed to “honest” motives. As Dean Shul-man said in discussing the nature of securities transactions, what is required is “a picture not simply of the show window, but of the entire store . . . not simply truth in the statements volunteered, but disclosure.” The high standards of business morality exacted by our laws regulating the securities industry do not permit an investment adviser to trade on the market effect of his own recommendations without fully and fairly revealing his personal interests in these recommendations to his clients.

Experience has shown that disclosure in such situations, while not onerous to the adviser, is needed to preserve the climate of fair dealing which is so essential to maintain public confidence in the securities industry and to preserve the economic health of the country.

The judgment of the Court of Appeals is reversed and the case is remanded to the District Court for proceedings consistent with this opinion.

Reversed and remanded.

Me. Justice Douglas took no part in the consideration or decision of this case.

Mr. Justice Harlan,

dissenting.

I would affirm the judgment below substantially for the reasons given by Judge Moore in his opinion for the majority of the Court of Appeals sitting en banc, 306 F. 2d 606, and in his earlier opinion for the panel. 300 F. 2d 745. A few additional observations are in order.

Contrary to the majority, I do not read the Court of Appeals’ en banc opinion as holding that either § 206 (1) of the Investment Advisers Act of 1940, 54 Stat. 847 (prohibiting the employment of “any device, scheme, or artifice to defraud any client or prospective client”), or § 206 (2), 54 Stat. 847 (prohibiting the engaging “in any transaction, practice, or course of business which operates as a fraud or deceit upon any client or prospective client”), is confined by traditional common law concepts of fraud and deceit. That court recognized that “federal securities laws are to be construed broadly to effectuate their remedial purpose.” 306 F. 2d, at 608. It did not hold or intimate that proof of “intent to injure and actual injury to clients” (ante, p. 186) was necessary to make out a case under these sections of the statute. Rather it explicitly observed: “Nor can there be any serious dispute that a relationship of trust and confidence should exist between the advisor and the advised,” ibid., thus recognizing that no such proof was required. In effect the Court of Appeals simply held that the terms of the statute require, at least, some proof that an investment adviser’s recommendations are not disinterested.

I think it clear that what was shown here would not make out a case of fraud or breach of fiduciary relationship under the most expansive concepts of common law or equitable principles. The nondisclosed facts indicate no more than that the respondents personally profited from the foreseeable reaction to sound and impartial investment advice.

The cases cited by the Court (ante, p. 198) are wide of the mark as even a skeletonized statement of them will show. In Securities & Exchange Comm’n v. Torr, 15 F. Supp. 315, reversed on other grounds, 87 F. 2d 446, defendants were in effect bribed to recommend a certain stock. Although it was not apparent that they lied in making their recommendations, it was plain that they were motivated to make them by the promise of reward. In the case before us, there is no vestige of proof that the reason for the recommendations was anything other than a belief in the soundness of the investment advice given.

Charles Hughes & Co. v. Securities & Exchange Comm’n, 139 F. 2d 434, involved sales of stock by customers’ men to those ignorant of the market value of the stocks at 16% to 41% above the over-the-counter price. Defendant’s employees must have known that the customers would have refused to buy had they been aware of the actual market price.

The defendant in Norris & Hirshberg, Inc., v. Securities & Exchange Comm’n, 85 U. S. App. D. C. 268, 177 F. 2d 228, dealt in unlisted securities. Most of its customers believed that the firm was acting only on their behalf and that its income was derived from commissions; in fact the firm bought from and sold to its customers, and received its income from mark-ups and mark-downs. The nondisclosure of this basic relationship did not, the court stated, “necessarily establish that petitioner violated the anti-fraud provisions of the Securities and Securities Exchange Acts.” Id., at 271, 177 F. 2d, at 231. Defendant’s trading practices, however, were found to establish such a violation; an example of these was the buying of shares of stock from one customer and the selling to another at a substantially higher price on the same day. The opinion explicitly distinguishes between what is necessary to prove common law fraud and the grounds under securities legislation sufficient for revocation of a broker-dealer registration. Id., at 273, 177 F. 2d, at 233.

Arleen Hughes v. Securities & Exchange Comm’n, 85 U. S. App. D. C. 56, 174 F. 2d 969, concerned the revocation of the license of a broker-dealer who also gave investment advice but failed to disclose to customers both the best price at which the securities could be bought in the open market and the price which she had paid for them. Since the court expressly relied on language in statutes and regulations making unlawful “any omission to state a material fact,” id., at 63, 174 F. 2d, at 976, this case hardly stands for the proposition that the result would have been the same had such provisions been absent.

In Speed v. Transamerica Corp., 235 F. 2d 369, the controlling stockholder of a corporation made a public offer to buy stock, concealing from the other shareholders information known to it as an insider which indicated the real value of the stock to be considerably greater than the price set by the public offer. Had shareholders been aware of the concealment, they would undoubtedly have refused to sell; as a consequence of selling they suffered ascertainable damages.

In Archer v. Securities & Exchange Comm’n, 133 F. 2d 795, defendant copartners of a company dealing in unlisted securities concealed the name of Claude Westfall, who was found to be in control of the business. Westfall was thereby enabled to defraud the customers of the brokerage firm of Harris, Upham & Co., for which he worked as a trader. Securities of the customers of the latter firm were bought by defendants’ company at under the market level, and defendants’ company sold securities to the clients of Harris, Upham & Co. at prices above the market.

In all of these cases but Arleen Hughes, which turned on explicit provisions against nondisclosure, the concealment involved clearly reflected dishonest dealing that was vital to the consummation of the relevant transactions. No such factors are revealed by the record in the present case. It is apparent that the Court is able to achieve the result reached today only by construing these provisions of the Investment Advisers Act as it might a pure conflict of interest statute, cf. United States v. Mississippi Valley Co., 364 U. S. 520, something which this particular legislation does not purport to be.

1 can find nothing in the terms of the statute or in its legislative history which lends support to the absolute rule of disclosure now established by the Court. Apart from the other factors dealt with in the two opinions of the Court of Appeals, it seems to me especially significant that Congress in enacting the Investment Advisers Act did not include the express disclosure provision found in § 17 (a) (2) of the Securities Act of 1933, 48 Stat. 84, even though it did carry over to the Advisers Act the comparable fraud and deceit provisions of the Securities Act. To attribute the presence of a disclosure provision in the earlier statute to an “abundance of caution” (ante, p. 198) and its omission in the later statute to a congressional belief that its inclusion would be “surplusage” (ante, p. 199) is for me a singularly unconvincing explanation of this controlling difference between the two statutes.

However salutary may be thought the disclosure rule now fashioned by the Court, I can find no authority for it either in the statute or in any regulation duly promulgated thereunder by the S. E. C. Only two Terms ago we refused to extend certain provisions of the Securities Exchange Act of 1934 to encompass “policy” considerations at least as cogent as those urged here by the S. E. C. Blau v. Lehman, 368 U. S. 403. The Court should have exercised the same wise judicial restraint in this case. This is particularly so at this interlocutory stage of the litigation. It is conceivable that at the trial the S. E. C. would have been able to make out a case under the statute construed according to its terms.

I respectfully dissent.

       54 Stat. 847, as amended, 15 U. S. C. § 80b-1 et seq.

       54 Stat. 852, as amended, 15 U. S. C. (Supp. IV) § 80b-6, provides in relevant part that:
      “It shall be unlawful for any investment adviser, by use of the mails or any means or instrumentality of interstate commerce, directly or indirectly—
      “(1) to employ any device, scheme, or artifice to defraud any client or prospective client;

        “(2) to engage in any transaction, practice, or course of business which operates as a fraud or deceit upon any client or prospective client;
      “(3) acting as principal for his own account, knowingly to sell any security to or purchase any security from a client, or acting as broker for a person other than such client, knowingly to effect any sale or purchase of any security for the account of such client, without disclosing to such client in writing before the completion of such transaction the capacity in which he is acting and obtaining the consent of the client to such transaction. The prohibitions of this paragraph shall not apply to any transaction with a customer of a broker or dealer if such broker or dealer is not acting as an investment adviser in relation to such transaction. . . .”

       54 Stat. 853, as amended, 15 U. S. C. (Supp. IV) § 80b-9, provides in relevant part that:
      " (e) Whenever it shall appear to the Commission that any person has engaged, is engaged, or is about to engage in any act or practice constituting a violation of any provision of this subchapter, or of any rule, regulation, or order hereunder, or that any person has aided, abetted, counseled, commanded, induced, or procured, is aiding, abetting, counseling, commanding, inducing, or procuring, or is about to aid, abet, counsel, command, induce, or procure such a violation, it may in its discretion bring ah action in the proper district court of the United States, or the proper United States court of any Territory or other place subject to the jurisdiction of the United States, to enjoin such acts or practices and to enforce compliance with this sub-chapter or any rule, regulation, or order hereunder. Upon a showing that such person has engaged, is engaged, or is about to engage in any such act or practice, or in aiding, abetting, counseling, commanding, inducing, or procuring any such act or practice, a permanent or temporary injunction or decree or restraining order shall be granted without bond.”

       See Appendix, infra, p. 202.

       The requested injunction reads in full as follows:
      “Wherefore the plaintiff demands a temporary restraining order, preliminary injunction and final injunction:
      “1. Enjoining the defendants Capital Gains Research Bureau, Inc. and Harry P. Schwarzmann, their agents, servants, employees, attorneys and assigns, and each of them, while the said Capital Gains Research Bureau, Inc. is an investment adviser, directly and indirectly, by the use of the mails or any means or instrumentalities of interstate commerce from:
      “(a) Employing any device, scheme or artifice to defraud any client or prospective client by failing to disclose the material facts concerning
      “(1) The purchase by defendant, Capital Gains Research Bureau, Inc., of securities within a very short period prior to the distribution of a recommendation by said defendant to its clients and prospective clients for purchase of said securities;
      “(2) The intent to sell and the sale of said securities by said defendant so recommended to be purchased within a very short period after distribution of said recommendation to its clients and prospective clients;
      “(3) Effecting of short sales by said defendant within a very short period prior to the distribution of a recommendation by said defendant to its clients and prospective clients to dispose of said securities;
      "(4) The intent of said defendant to purchase and the purchase of said securities to cover its short sales;
      “(5) The purchase by said defendant for its own account of puts and calls for securities within a very short period prior to the distribution of a recommendation to its clients and prospective clients for purchase or disposition of said securities.
      “(b) Engaging in any transaction, practice and course of business which operates as a fraud or deceit upon any client or prospective client by failing to disclose the material facts concerning the matters set forth in demand 1 (a) hereof.”

       The case was originally heard before a panel of the Court of Appeals, which, with one judge dissenting, affirmed the District Court. 300 F. 2d 745. Rehearing en banc was then ordered.
      The Court of Appeals purported to recognize that “federal securities laws are to be construed broadly to effectuate their remedial purpose.” 306 F. 2d 606, 608. But by affirming the District Court’s “technical” construction of the Investment Advisers Act of 1940 and by requiring proof of “misstatements,” unsound advice, bribery, or intent to unload “worthless stock,” the court read the statute, in effect, as confined by traditional common-law concepts of fraud and deceit.

       See generally Douglas and Bates, The Federal Securities Act of 1933, 43 Yale L. J. 171 (1933); Loomis, The Securities Exchange Act of 1934 and the Investment Advisers Act of 1940, 28 Geo. Wash. L. Rev. 214 (1959); Shulman, Civil Liability and the Securities Act, 43 Yale L. J. 227 (1933). Cf. Galbraith, The Great Crash (1955).

       48 Stat. 74, as amended, 15 U. S. C. § 77a et seq.

       48 Stat. 881, as amended, 15 U. S. C. § 78a et seq.

       49 Stat. 838, as amended, 15 U. S. C. § 79 et seq.

       53 Stat. 1149, as amended, 15 U. S. C. § 77aaa et seq.

       54 Stat. 789, as amended, 15 U. S. C. § 80a-1 et seq.

       See H. R. Rep. No. 85, 73d Cong., 1st Sess. 2, quoted in Wilko v. Swan, 346 U. S. 427, 430.

       49 Stat. 837, 15 U. S. C. §79z-4.

       While the study concentrated on investment advisory services which provide personalized counseling to investors, see Investment Trusts and Investment Companies, Report of the Securities and Exchange Commission, Pursuant to Section 30 of the Public Utility Holding Company Act of 1935, on Investment Counsel, Investment Management, Investment Supervisory, and Investment Advisory Services, H. R. Doc. No. 477, 76th Cong., 2d Sess., 1 (hereinafter cited as SEC Report) the Senate Committee on Banking and Currency did receive communications from publishers of investment advisory services, see, e. g., Hearings on S. 3580 before Subcommittee of the Senate Committee on Banking and Currency, 76th Cong., 3d Sess., pt. 3 (Exhibits), 1063, and the Act specifically covers “any person who, for compensation, engages in the business of advising others, either directly or through publication or writings . . . 54 Stat. 847, 15 U. S. C. § 80b-2.

       SEC Report, at 28.

        Id., at 29.

        Id., at 24.

        Ibid.

        Ibid.

        Id., at 66-67.

        Id., at 66.

        Id., at 65.

        Id., at 67.

        Id., at 29.

        Id., at 66.

        Id., at 29-30. (Emphasis added.)

       See text accompanying note 14, supra.

       S. 3580, 76th Cong., 3d Sess.

       Hearings on S. 3580 before Subcommittee of the Senate Committee on Banking and Currency, 76th Cong., 3d Sess. (hereinafter cited as Senate Hearings). Hearings on H. R. 10065 before Subcommittee of the House Committee on Interstate and Foreign Commerce, 76th Cong., 3d Sess. (hereinafter cited as House Hearings).

       Senate Hearings, at 719.

        Id., at 716.

        Id., at 724.

       The bill as enacted did not contain a section attributing specific abuses to the investment adviser profession. This section was eliminated apparently at the urging of the investment advisers who, while not denying that abuses had occurred, attributed them to certain fringe elements in the profession. They feared that a public and general indictment of all investment advisers by Congress would do irreparable harm to their fledgling profession. See, e. g., Senate Hearings, at 715-716. It cannot be inferred, therefore, that the section was eliminated because Congress had concluded that the abuses had not occurred, or because Congress did not desire to prevent their repetition in the future. The more logical inference, considering the legislative background of the Act, is that the section was omitted to avoid condemning an entire profession (which depends for its success on continued public confidence) for the acts of a few.

       H. R. Rep. No. 2639, 76th Cong., 3d Sess. 28 (hereinafter cited as House Report). See also S. Rep. No. 1775, 76th Cong., 3d Sess. 22 (hereinafter cited as Senate Report).

       See Senate Report, at 22.

         Id., at 21.

       2 Loss, Securities Regulation (2d ed. 1961), 1412.

       See cases cited in 37 C. J. S., Fraud (1943), 210.
      Even in a damage suit between parties to an arm’s-length transaction, the intent which must be established need not be an intent to cause injury to the client, as the courts below seem to have assumed. “It is to be noted that it is not necessary that the person making the misrepresentations intend to cause loss to thé other or gain a profit for himself; it is only necessary that he intend action in reliance on the truth of his misrepresentations.” 1 Harper and James, The Law of Torts (1956), 531. “[T]he fact that the defendant was disinterested, that he had the best of motives, and that he thought he was doing the plaintiff a kindness, will not absolve him from liability so long as he did in fact intend to mislead." Prosser, Law of Torts (1955), 538. See 3 Restatement, Torts (1938), §531, Comment b, illustration 3. It is clear that respondents' failure to disclose the practice here in issue was purposeful, and that they intended that action be taken in reliance on the claimed disinterestedness of the service and its exclusive concern for the clients’ interests.

       Neither is this a criminal proceeding for “willfully” violating the Act, 54 Stat. 857, as amended, 15 U. S. C. § 80b-17, nor a proceeding to revoke or suspend a registration “in the public interest,” 54 Stat. 850, as amended, 15 U. S. C. § 80b-3. Other considerations may be relevant in such proceedings. Compare Federal Communications Comm’n v. American Broadcasting Co., 347 U. S. 284.

       Hanbury, Modem Equity (8th ed. 1962), 643. See Letter of Lord Hardwicke to Lord Kames, dated June 30, 1759, printed in Parkes, History of the Court of Chancery (1828), 508, quoted in Snell, Principles of Equity (25th ed. 1960), 496:
      “Fraud is infinite, and were a Court of Equity once to lay down rules, how far they would go, and no farther, in extending their relief against it, or to define strictly the species or evidence of it, the jurisdiction would be cramped, and perpetually eluded by new schemes which the fertility of man’s invention would contrive.”

       De Funiak, Handbook of Modern Equity (2d ed. 1956), 235.

        Moore v. Crawford, 130 U. S. 122, 128, quoting 1 Story, Equity Jur. § 187.

       Prosser, Law of Torts (1955), 534-535 (citing cases). See generally Keeton, Fraud—Concealment and Non-Disclosure, 15 Texas L. Rev. 1.

       1 Harper and James, The Law of Torts (1956), 541.

       See generally Shulman, Civil Liability and the Securities Act, 43 Yale L. J. 227 (1933).

       3 Sutherland, Statutory Construction (3d ed. 1943), 382 et seq. (citing cases). See Note, 38 N. Y. U. L. Rev. 985; Comment, 30 U. of Chi. L. Rev. 121, 131-147.

       See text accompanying note 27, supra.

       For a discussion of the effects of investment advisory service recommendations on the market price of securities, see Note, 51 Calif. L. Rev. 232, 233.

      This Court, in discussing conflicts of interest, has said:
      “The reason of the rule inhibiting a party who occupies confidential and fiduciary relations toward another from assuming antagonistic positions to his principal in matters involving the subject matter of the trust is sometimes said to rest in a sound public policy, but it also is justified in a recognition of the authoritative declaration that no man can serve two masters; and considering that human nature must be dealt with, the rule does not stop with actual violations of such trust relations, but includes within its purpose the removal of any temptation to violate them. . . .
      “. . . In Hazelton v. Sheckells, 202 U. S. 71, 79, we said: 'The objection . . . rests in their tendency, not in what was done in the particular case. . . . The court will not inquire what was done. If that should be improper it probably would be hidden and would not appear.’ ” United States v. Mississippi Valley Co., 364 U. S. 520, 550, n. 14.

       48 Stat. 84, as amended, 15 U. S. C. § 77q (a), provides:
      “It shall be unlawful for any person in the offer or sale of any securities by the use of any means or instruments of transportation or communication in interstate commerce or by the use of the mails, directly or indirectly—
      “(1) to employ any device, scheme, or artifice to defraud, or
      “(2) to obtain money or property by means of any untrue statement of a material fact or any omission to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or
      “(3) to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser.”

       See Archer v. Securities & Exchange Comm’n, 133 F. 2d 795 (C. A. 8th Cir.), cert. denied, 319 U. S. 767; Charles Hughes & Co. v. Securities & Exchange Comm’n, 139 F. 2d 434 (C. A. 2d Cir.), cert. denied, 321 U. S. 786; Hughes v. Securities & Exchange Comm’n, 85 U. S. App. D. C. 56, 174 F. 2d 969; Norris & Hirshberg v. Securities & Exchange Comm’n, 85 U. S. App. D. C. 268, 177 F. 2d 228; Speed v. Transamerica Corp., 235 F. 2d 369 (C. A. 3d Cir.).

       74 Stat. 887, 15 U. S. C. (Supp. IV) § 80b-6 (4).
      The amendment, as it is relevant here, made it unlawful for an investment adviser:
      “(4) to engage in any act, practice, or course of business which is fraudulent, deceptive, or manipulative. The Commission shall, for the purposes of this paragraph (4) by rules and regulations define, and prescribe means reasonably designed to prevent, such acts, practices, and courses of business as are fraudulent, deceptive, or manipulative."

       See, e. g., 48 Stat. 895, as amended, 15 U. S. C. § 78o (c)(1), which refers to such devices “as are manipulative, deceptive, or otherwise fraudulent.” (Emphasis added.)

        Stonemets v. Head, 248 Mo. 243, 263, 154 S. W. 108, 114. See also note 41, supra.

       Shulman, Civil Liability and the Securities Act, 43 Yale L. J. 227, 242.

       According to respondents’ brief (and the fact does not appear to be contested), the annual gross income of Capital Gains Research Bureau from publishing investment information and advice was some $570,000. Even accepting the S. E. C.’s figures, respondents’ profit from the trading transactions in question was somewhat less than $20,000. Thus any basis for an inference that respondents’ advice was tainted by self-interest, which might have been drawn had respondents’ buying and selling activities been more significant, is lacking on this record.

       That section makes it unlawful “to obtain money or property by means of . . . any omission to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading . . . .”

       Section 17 (a) of the 1933 Act makes it unlawful “(1) to employ any device, scheme, or artifice to defraud ... (3) to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser.'’ Compare the language of these provisions with that of § 206 (1), (2) of the Investment Advisers Act, supra, p. 203.

       The argument is that by the time of enactment of the Investment Advisers Act in 1940 Congress had become aware that the courts “were merging the proscription against nondisclosure [contained in the 1933 Securities Act] into the general proscription against fraud” also found in the same act. Ante, p. 198. However, the only federal pre-1940 case cited is Securities & Exchange Comm’n v. Torr, ante, p. 198, and supra, p. 204. There the failure of a fiduciary to disclose that his advice was prompted by a “bribe” was equated by the trial judge with deceit. Such a decision can hardly be deemed to establish that any nondisclosure of a fact material to the recipient of investment advice is fraud or deceit. Saying the least, it strains credulity that a provision expressly proscribing material omissions would be thought by Congress to be “surplusage” when it came to enacting the 1940 Act. This is particularly so when it is remembered that violation of the fraud and deceit section is punishable criminally (§ 217 of the Investment Advisers Act of 1940, 54 Stat. 857); Congress must have known that the courts do not favor expansive constructions of criminal statutes.


source: Caselaw Access Project

author:
Per Curiam.
      Mr. Justice Douglas, Mr. Justice Harlan,

license: Public Domain

text:
    DENNIS v. DENVER & RIO GRANDE WESTERN RAILROAD CO.
    No. 25.
    Argued November 19, 1963.
    —Decided December 9, 1963.

      Wayne L. Black argued the cause for petitioner. With him on the brief were Calvin W. Raiolings, Harold E. Wallace, Brigham E. Roberts and John L. Black.

      Clifford L. Ashton argued the cause for respondent. With him on the brief were Dennis McCarthy and Grant Macfarlane, Jr.

   Per Curiam.

Petitioner, a section laborer employed by respondent railroad, brought this suit under the Federal Employers’ Liability Act, 35 Stat. 65, as amended, 45 U. S. C. § 51 et seq., in a Utah State Court to recover damages for personal injury sustained as a result of respondent’s alleged negligence. The jury, finding respondent negligent and petitioner contributorily negligent, assessed “general damages” at $20,000 and deducted $10,000 “by reason of contributory negligence,” leaving a verdict of $10,000 for petitioner. The Supreme Court of Utah vacated the jury verdict and ordered the entry of judgment for respondent. 13 Utah 2d 249, 372 P. 2d 3. We granted certiorari, 371 U. S. 946, to consider whether the Supreme Court of Utah erred in its action.

From the evidence adduced at trial the jury could have concluded that: Petitioner was required to work from about 5 p. m. to about 5 a. m. in temperatures ranging from 10° Fahrenheit to minus 5° Fahrenheit, in 10 inches of snow, with “the wind a-blowing pretty hard,” to repair a damaged section of railroad track; petitioner was dressed less warmly than the other members of the crew, and the foreman knew this; the only source of heat (outside of the cab of the truck which had transported the crew to the worksite) was a fire built from a single railroad tie, which did not give “very much” heat; at about midnight, petitioner, while handling a cold wrench, noticed that “two [of his] fingers were clamped shut and [he] had to pull them apart . . . before [he] could get [his] glove off”; he also noticed a “kind of burning, tingling sensation” in these fingers; although he communicated some or all of this to the foreman, petitioner was permitted to continue working on the track for about three and one-half hours; he spent only about one-half hour in the heated cab of the truck; as a result of this exposure, petitioner suffered frostbite and lost two fingers.

There can be little dispute that these facts, if believed, establish negligence by respondent railroad, since they show that the foreman, who had full control over petitioner’s activities while on this job, did not take all necessary and reasonable precautions to prevent injury to petitioner when put on notice of his condition. Lavender v. Kurn, 327 U. S. 645; Boston & M. R. Co. v. Meech, 156 F. 2d 109, cert. denied, 329 U. S. 763.

It is true that there was evidence in conflict with petitioner’s version of what occurred. For example, other members of the work crew testified that immediately after his complaint petitioner was transferred to the heated cab where he stayed until the end of the job, whereas petitioner testified that after his complaint he spent only one-half hour in the heated cab and three and one-half hours working outside. There was also evidence from which the jury could reasonably have concluded that petitioner’s own negligence was the sole cause of his injury. But in FELA cases this Court has repeatedly held that where “there is an evidentiary basis for the jury’s verdict, the jury is free to discard or disbelieve whatever facts are inconsistent with its conclusion.” Lavender v. Kurn, supra, at 653. “Only when there is a complete absence of probative facts to support the conclusion reached [by the jury] does a reversible error appear.” Ibid. Once it is shown that “employer negligence played any part, even the slightest, in producing the injury,” Rogers v. Missouri Pac. R. Co., 352 U. S. 500, 506, a jury verdict for the employee may not be upset on the basis of his own negligence, no matter how substantial it may have been, although the jury may, of course, take petitioner’s contributory negligence into account, as it did here, in arriving at the final verdict.

In this case, petitioner’s evidence, though vigorously disputed, was sufficient to support the jury’s conclusion that respondent’s negligence contributed to the injury. Hence, “the appellate court’s function [was] exhausted,” Lavender v. Kurn, supra, at 653, and it could not properly substitute its judgment for that of the jury and decide, as the Supreme Court of Utah did here, that “it seems quite inescapable that it was [petitioner’s] own conduct . . . that resulted in this regrettable injury.” 13 Utah 2d, at 255; 372 P. 2d, at 7.

The judgment of the Supreme Court of Utah is reversed and the cause is remanded for further proceedings not inconsistent with this opinion.

It is so ordered.

Mr. Justice Douglas,

with whom Mr. Justice Harlan concurs,

dissenting.

The cases cited by the Court to reverse the Utah Supreme Court are familiar ones that involve the duty of an employer to provide the employee with a safe place to work. Lavender v. Kurn, 327 U. S. 645, 651-653; Boston & M. R. Co. v. Meech, 156 F. 2d 109, 111-112. That issue was covered by the instructions to the jury in the present case. But as I read the record there is no evidence of negligence on the issue of “a reasonably safe place in which to work.” In this case each workman furnished his own clothes. If it were the custom of the railroad to furnish gloves or other clothes to the employees or if, under a collective bargaining agreement, it had become its duty to do so and petitioner had been issued faulty garments, we would have a different case. We would also have a different case if failure to furnish an employee with certain kinds of equipment were tantamount to a failure to provide him a safe place to work. See, e. g., Williams v. Atlantic Coast Line R. Co., 190 F. 2d 744; Young v. Clinchfield R. Co., 288 F. 2d 499; Ferrara v. Boston & M. R. Co., 338 Mass. 323, 155 N. E. 2d 416. But no such issue is tendered here.

The weather was bitter, and the emergency job of repairing a section of a damaged rail could only be done outdoors. But there was a heated truck cab for protection against the weather and outdoors there was a fire. There is nothing to suggest that petitioner was barred from using either, that pressures were put on him to remain outdoors and away from the fire or the heated cab, or that disciplinary measures would be used against those who took frequent recesses to keep warm. Rather, it was admitted that the men generally took turns using the fire and that each was the best judge of when he should warm himself.

Knowledge of the foreman that petitioner was dressed less warmly than the other crew members would be relevant if it were coupled with the foreman’s insistence that he perform labor for which his attire was not suitable. That, too, is a different case. The strongest possible case for petitioner, as the Court says, is that he was “permitted” to continue working after his fingers, with the knowledge of the foreman, became very cold. But unless employers are to become insurers of these industrial accidents, that is no evidence of negligence in a society where everyone is presumed to have enough sense “to come in out of the rain.”

Mr. Justice Harlan,

dissenting.

I do not believe this case should have been taken for review and I now dissent from the reversal of the judgment of the Utah Supreme Court, for reasons already expressed in past cases of this type. See Rogers v. Missouri Pac. R. Co., 352 U. S. 500, 559; Webb v. Illinois Central R. Co., 352 U. S. 512, 559; Ferguson v. Moore-McCormack Lines, Inc., 352 U. S. 521, 559; Arnold v. Panhandle & S. F. R. Co., 353 U. S. 360, 361; Harris v. Pennsylvania R. Co., 361 U. S. 15, 25; Davis v. Virginian R. Co., 361 U. S. 354, 358; Michalic v. Cleveland Tankers, Inc., 364 U. S. 325, 332; Gallick v. Baltimore & Ohio R. Co., 372 U. S. 108, 122; Basham v. Pennsylvania R. Co., 372 U. S. 699, 701.

In this instance we are not even precisely informed by the Court’s opinion wherein the respondent’s conduct was negligent. The means for requiting unfortunate industrial accidents of this sort should be found not in destroying the supervisory power of the courts over jury verdicts unsupported by evidence of employer fault, but in legislative expansion of the concepts of workmen’s compensation laws, under which compensation is not dependent upon a showing of employer negligence. Cf. Gallick v. Baltimore & Ohio R. Co., supra.

      “It is the duty of a railroad company to exercise reasonable care in furnishing its employees with a reasonably safe place in which to work. This duty does not require the absolute elimination of all danger, but it does require the elimination of all dangers which the exercise of reasonable care would remove or guard against.
      “In this connection, you are instructed that if you find from a preponderance of the evidence, that the railroad company failed to exercise reasonable care in that it subjected plaintiff to unreasonable exposure to. harm from weather conditions, then you are instructed that defendant was negligent in failing to discharge its duty as here-inabove set forth; and if you further find that such negligence, if any, in whole or in part, proximately caused plaintiff to sustain injuries, then you should return a verdict in favor of the plaintiff and against defendant and assess damages in accordance with these instructions.”


author: Per Curiam.

text:
    KAYE v. SPENCE CHAPIN ADOPTION HOME.
    No. 478.
    Decided December 9, 1963.
    Appellant pro se.

      Richard Jones for appellee.
   Per Curiam.

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


text:
    ECKSTROM v. READING POLICE HOME ASSOCIATION OF READING, PA.
    No. 497.
    Decided December 9, 1963.

      Charles H. Weidner and Arthur Littleton for appellant.
   Per Curiam.

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


text:
    FRANK ADAMS & CO. et al. v. UNITED STATES et al.
    No. 506.
    Decided December 9, 1963.

      Howard Gould for appellants.

      Solicitor General Cox, Assistant Attorney General Or-rick, Robert B. Hummel, Irwin A. Seibel, Robert W. Ginnane and H. Neil Garson for the United States and the Interstate Commerce Commission.

      F. B. Henderson, Richard J. Murphy, Kemper A. Dobbins, R. B. Claytor and Robert H. Bierma for appellee rail carriers.
   Per Curiam.

The motion of Henry B. Street for leave to withdraw his appearance as counsel fpr the appellants is granted. The motions to affirm are granted and the judgment is affirmed.


text:
    BROTHERHOOD OF MAINTENANCE OF WAY EMPLOYES et al. v. UNITED STATES et al.
    No. 510.
    Decided December 9, 1963.

      Clarence M. Mulholland, Richard R. Lyman, Edward J. Hickey, Jr., William O. Mahoney and Harry A. Carson for appellants in No. 510. Charles S. Rhyne, Edward D. Means, Jr. and Alfred J. Tighe for appellants in No. 511.

      Solicitor General Cox for the United States, and Robert W. Ginnane and Fritz R. Kahn for the Interstate Commerce Commission, appellees.

      Edward K. Wheeler, Hewitt 8. Biaett, Robert G. Seaks and Kenneth H. Ekin for appellee carriers.

      Together with No. 511, Brotherhood of Railway & Steamship Clerks, Freight Handlers, Express & Station Employes et al. v. United States et al., also on appeal from the same Court.

   Per Curiam.

The motions to affirm are granted and the judgment is affirmed.


author: Mr. Chief Justice Warren Mr. Justice Harlan,

text:
    FOTI v. IMMIGRATION AND NATURALIZATION SERVICE.
    No. 28.
    Argued October 17, 21, 1963.
    —Decided December 16, 1963.

      James J. Catty argued the cause and filed a brief for petitioner.

      Philip R. Monahan argued the cause for respondent. With him on the brief were Solicitor General Cox and Assistant Attorney General Miller.

      Jack Wasserman and David Carliner filed a brief for the Association of Immigration and Nationality Lawyers, as amicus curiae, urging affirmance.
   Mr. Chief Justice Warren

delivered the opinion of the Court.

Involved in this case is the single question of whether the Federal Courts of Appeals have the initial, exclusive jurisdiction, under § 106 (a) of the Immigration and Nationality Act, to review discretionary determinations of the Attorney General, relating to the suspension of deportation, under § 244 (a)(5) of the Act.

Petitioner, a 47-year-old alien and a native and citizen of Italy, last entered the United States in late 1950, through the port of Norfolk, Virginia, on a seaman’s visa which authorized him to remain in this country for a period not to exceed 29 days. He remained here illegally for more than 10 years, leaving his wife and three minor children in Italy. In 1961, deportation proceedings were instituted against petitioner, directing him to appear before a special inquiry officer of the Immigration and Naturalization Service and show cause why he should not be deported under § 241 (a) (2) of the Immigration and Nationality Act of 1952, 8 U. S. C. § 1251 (a)(2), as an alien who had unlawfully overstayed the period for which he had been admitted. At a hearing conducted before a special inquiry officer under § 242 (b) of the Act, petitioner conceded his deportability, and applied, in the alternative, for two forms of discretionary relief which the Attorney General is authorized by the Act to grant to deportable persons who meet defined eligibility requirements. He sought, pursuant to § 244 (a) (5) of the Act, a suspension of deportation on the ground that it would be difficult for him to earn a living for his family in Italy if he were deported and deportation would result in his having to liquidate the bakery business which he owned and operated in Brooklyn, New York. Alternatively, if suspension of deportation were refused, petitioner requested, pursuant to § 244 (e) of the Act, the privilege of voluntary departure at his own expense in lieu of deportation. The special inquiry officer, although finding that petitioner met the good moral character and 10 years’ continuous presence in the United States requirements of §244 (a)(5), denied his application for suspension of deportation, on the ground that petitioner was ineligible for that form of discretionary relief since his deportation would not result “in exceptional and extremely unusual hardship . . . .” Petitioner’s alternative request for the privilege of voluntary departure was granted, however. Petitioner appealed to the Board of Immigration Appeals from that part of the order of the special inquiry officer which denied his request for suspension of deportation. The Board, on November 28, 1961, dismissed the appeal. Petitioner was directed to effect his departure by December 18,1961. Prior to that date, petitioner commenced an action in the Federal District Court for the Southern District of New York, seeking declaratory and injunctive relief from the administrative refusal to grant his request for suspension of deportation. The District Court dismissed the action on the ground that, under the recently enacted § 106 (a) of the Immigration and Nationality Act, 8 U. S. C. § 1105a (a), the sole and exclusive procedure for obtaining judicial review of such a determination was by a petition for review filed in an appropriate Federal Court of Appeals. Accordingly, petitioner then sought review in the Court of Appeals for the Second Circuit. On September 21, 1962, the Court of Appeals, sitting en banc and by a five-to-four vote, dismissed the petition for lack of jurisdiction, holding that the term “final orders of deportation” in § 106 (a) does not include a denial of discretionary relief under § 244 (a)(5). 308 F. 2d 779. Because of a conflict among the Courts of Appeals regarding the interpretation of this jurisdictional language in § 106 (a), we granted certiorari, limited to the question whether Courts of Appeals have jurisdiction to review final administrative orders with respect to discretionary relief sought during deportation proceedings. 371 U. S. 947.

The issue involved here is solely one relating to procedures incident to deportation proceedings. In the present posture of the case, we need not be concerned with the ultimate merits as to petitioner’s deportability, since he concedes that he is deportable and the question of the propriety of the administrative refusal of suspension of deportation has not as yet been reviewed in any lower federal court. The only question presented for decision involves the scope of judicial review by the Courts of Appeals of administrative determinations made during the course of deportation proceedings. Specifically, we must decide a rather narrow question of statutory construction — whether a refusal by the Attorney General to grant a suspension of deportation is one of those “final orders of deportation” of which direct review by Courts of Appeals is authorized under § 106 (a) of the Act. Both parties have contended that it is. While the question is not free of difficulty, as evidenced by the division in the court below and the conflict among the various Courts of Appeals on the matter, we have concluded that the court below erred in holding that it was not.

The statutory provision in question, § 106 (a) of the Immigration and Nationality Act, provides that the procedure for judicial review by the Courts of Appeals of certain orders of the Federal Communications Commission, Secretary of Agriculture, Federal Maritime Board and Atomic Energy Commission shall also “apply to, and shall be the sole and exclusive procedure for, the judicial review of all final orders of deportation heretofore or hereafter made against aliens within the United States pursuant to administrative proceedings under section 242 (b) of this Act or comparable provisions of any prior Act . . . .” Section 242 provides a detailed administrative procedure for determining whether an alien should be deported. Sections 243 and 244 relate to certain situations in which the Attorney General may suspend deportation in his discretion. In its decision below, the Court of Appeals for the Second Circuit held that § 106 (a) applies only to orders required by statute to be made in a § 242 (b) hearing, i. e., findings of de-portability. Both petitioner and the Government have urged that the decision below should be reversed, and that the statutory language should be so construed as to include both an adjudication of deportability and an order denying suspension of deportation. Based on the historical background of the Immigration and Nationality Act, the manifest purpose of Congress in enacting § 106 (a), the context of the statutory language when viewed against the prevailing administrative practices and procedures, and pertinent legislative history of § 106 (a), we are led to the conclusion that the interpretation argued for by petitioner and the Government is the correct one.

Prior to 1940, the Attorney General had no discretion with respect to the deportation of an alien who came within the defined category of deportable persons. The expulsion of such a person was mandatory; his only avenue of relief in a hardship case was by a private bill in Congress. Therefore, any differentiation that might have been made prior to 1940 between a determination that an alien was deportable and the order directing his deportation would have been merely formalistic and essentially meaningless. In fact, the determination of deportability necessarily resulted in, and was invariably accompanied by, a deportation order. Since 1940, however, when the Attorney General was given the power to grant discretionary relief under various circumstances in deportation cases, administrative regulations having the force and effect of law have provided for the practice of determining deportability and ruling on an application for suspension of deportation in a single proceeding conducted by the Immigration and Naturalization Service. Thus, the administrative discretion to grant a suspension of deportation has historically been consistently exercised as an integral part of the proceedings which have led to the issuance of a final deportation order, and discretionary relief, if sought, must be requested prior to or during the deportation hearing. The hearings on deportability and on an application for discretionary relief have, as a matter of traditional uniform practice, been held in one proceeding before the same special inquiry officer, resulting in one final order of deportation. Significantly, when suspension is granted, no deportation order is rendered at all, even if the alien is in fact found to be deportable.

It must be concluded that Congress knew of this familiar administrative practice and had it in mind when it enacted § 106 (a). These usages and procedures, which were actually followed when the provision was enacted, must reasonably be regarded as composing the context of the legislation. A colloquy between Congressmen Walter, Lindsay and Moore, all knowledgeable in deportation matters, is definitely corroborative of this view. This colloquy occurred during the House debates on the predecessor to the bill which was enacted in 1961 and contained § 106 (a). Representative Lindsay suggested that the legislative history should make absolutely clear “that if there is any remedy on the administrative level left of any nature, that the deportation order will not be considered final.” Representative Walter agreed, and stated that “the final order means the final administrative order.” With Representative Moore concurring, all three congressmen agreed that there would be no “final order of deportation” until after determination of the question of suspension. Significantly, Representative Walter, in discussing the running of the time period provided for the filing of petitions for review by the Courts of Appeals under the proposed legislation, stated that “the 6 months’ period on the question of finality of an order applies to the final administrative adjudication of the applications for suspension of deportation just as it would apply to any other issue brought up in deportation proceedings.” With the dissenters below, we feel that the court’s speculation that few congressmen were present at the time of this exchange was unwarranted and probably immaterial.

It can hardly be contended that the meaning of the phrase “final orders of deportation” is so clear and unambiguous as to be susceptible of only a narrow interpretation confined solely to determinations of deportability.' If anything, the literal language would appear to include a denial of discretionary relief, made during the same proceedings in which deportability is determined, which effectively terminates the proceeding. In arriving at the intended construction of this language, we must therefore inevitably turn to the purpose of Congress in enacting this legislation. The fundamental purpose behind § 106 (a) was to abbreviate the process of judicial review of deportation orders in order to frustrate certain practices which had come to the attention of Congress, whereby persons subject to deportation were forestalling departure by dilatory tactics in the courts. A House Judiciary Committee report succinctly stated the problem to which Congress addressed itself in enacting § 106 (a). It indicated that the Committee “has been disturbed in recent years to observe the growing frequency of judicial actions being instituted by undesirable aliens whose cases have no legal basis or merit, but which are brought solely for the purpose of preventing or delaying indefinitely their deportation from this country.” Pointing to the essence of the problem, the report continued:

“Other aliens, mostly subversives, gangsters, immoral [persons], or narcotic peddlers, manage to protract their stay here indefinitely only because their ill-gotten gains permit them to procure the services of astute attorneys who know how to skillfully exploit the judicial process. Without any reflection upon the courts, it is undoubtedly now the fact that such tactics can prevent enforcement of the deportation provisions of the Immigration and Nationality Act by repetitive appeals to the busy and overworked courts with frivolous claims of impropriety in the deportation proceedings.”

The key feature of the congressional plan directed at this problem was the elimination of the previous initial step in obtaining judicial review — a suit in a District Court— and the resulting restriction of review to Courts of Appeals, subject only to the certiorari jurisdiction of this Court. As stated in the same Committee report, the plain objective of § 106 (a) was “to create a single, separate, statutory form of judicial review of administrative orders for the deportation ... of aliens . . . .” Further evidence of a specific congressional intent to give Courts of Appeals exclusive jurisdiction to review denials of discretionary relief in deportation proceedings is contained in the legislative history. Case histories of abuse of the existing judicial review process, as summarized in the various Committee reports, include references to litigation arising out of discretionary determinations. And a reference chart reproduced in the Committee reports shows the denial of discretionary relief as being antecedent to and a constituent part of the “final order of deportation.” Although deportability and whether to grant a suspension are determined in the same hearing, the decision below means that an alien may appeal only the deportability finding to a Court of Appeals and must initially seek review of a denial of suspension in a District Court. A short analysis of the reasoning of the court below demonstrates that its conclusion is inconsistent with this manifest purpose of Congress.

Although the Court of Appeals agrees that the basic purpose of § 106 (a) was to expedite the deportation of undesirable aliens by preventing successive dilatory appeals to various federal courts, it fails to apply that interpretation to the question presented in this case. Its finding that the bifurcated procedure resulting from an alien’s seeking review of a denial of discretionary relief in a District Court and review of an adjudication of deportability, as is admittedly required by § 106 (a), in a Court of Appeals would expedite the deportation is without foundation. It is premised on its assumption that, in actions to review denial of discretionary relief, District Courts rarely grant restraining orders. Reliance upon such an assumption, we feel, is unjustified. At all events, under the procedure urged by the petitioner and the Government, an alien can obtain an automatic stay of deportation under § 106 (a) by seeking a review of the finding of de-portability and can simultaneously seek review of the denial of discretionary relief in a Court of Appeals. Review of the denial of discretionary relief is ancillary to the deportability issue, and both determinations should therefore be made by the same court at the same time. We realize that deportability is conceded in a large number of cases. But this fact hardly detracts from our view as to a proper interpretation of § 106 (a).

In substance, we feel that the Court of Appeals was wrong in limiting the phrase “final orders of deportation” in § 106 (a) to adjudications of deportability. The finding of the court below that the phrase was a “term of art” with a well-understood meaning, merely because it was used several times in §§ 242 and 244 when plainly referring only to rulings on deportability, cannot be substantiated. Section 106 (a) was of course not enacted contemporaneously with §§ 242 and 244, and it is solely concerned with the rather different problem of judicial review. And the language of § 242 (b) indicates that Congress plainly distinguished determinations of de-portability from orders of deportation. We regard this as of especial relevance since § 106 (a), in describing the “final orders of deportation” intended to be encompassed thereunder, specifically refers to administrative proceedings conducted under § 242 (b).

Paragraph (4) of the subsidiary exceptions to § 106 (a) provides for review solely upon the administrative record and indicates that the findings of fact below are conclusive “if supported by reasonable, substantial, and probative evidence on the record considered as a whole.” However, this does not necessarily mean that Congress intended review in the Courts of Appeals to be restricted to adjudications of deportability. Admittedly, the standard of review applicable to denials of discretionary relief cannot be the same as that for adjudications of deportability, since judicial review of the former is concededly limited to determinations of whether there has been any abuse of administrative discretion. While paragraph (4) clearly applies only to review of adjudications of deportability, and possibly to review of administrative findings of eligibility for discretionary relief, this is not decisive with respect to the intent of Congress. The inclusion in one of the “exceptions” to the principal provision of § 106 (a) of a proviso which primarily could apply only to determinations of deportability does not necessarily indicate that the principal provision of the section was also intended to be thus limited. Since the adjudication of deportability is certainly the principal ingredient, and an indispensable one, of the ultimate result of the proceeding — a final order of deportation — it would not be unusual for Congress to include in an overall enactment relating to judicial review of all final orders of deportation a specific provision pertinent to the primary constituent of such an order.

Also, it seems rather clear that all determinations made during and incident to the administrative proceeding conducted by a special inquiry officer, and reviewable together by the Board of Immigration Appeals, such as orders denying voluntary departure pursuant to § 244 (e) and orders denying the withholding of deportation under § 243 (h), are likewise included within the ambit of the exclusive jurisdiction of the Courts of Appeals under § 106 (a). We see nothing anomalous about the fact that a change in the administrative regulations may effectively broaden or narrow the scope of review available in the Courts of Appeals. Furthermore, we do not regard it “in the last degree unlikely” that Congress intended a court of three judges to initially review discretionary determinations denying suspension of deportation. Much of the litigation in deportation cases with respect to the setting aside of an administrative determination on the ground of arbitrariness involves disputed eligibility questions and matters of statutory construction. Additionally, the concern of the court below does not comport with the declared purpose of § 106 (a) to eliminate the District Court stage of the judicial review process in an effort to prevent dilatory tactics. And the suggestion of the court below that it is “incredible” that Congress meant to burden the Courts of Appeals with review of all orders denying discretionary relief in deportation cases is unconvincing. Congress presumably realized that, in practical effect, those engaged in dilatory tactics would hardly hesitate to appeal to a Court of Appeals from an adverse District Court determination where discretionary relief had been denied in the administrative proceeding.

We need not pass at this time on whether § 106 (a) extends the exclusive jurisdiction of the Courts of Appeals to include review of orders refusing to reopen deportation proceedings. The question is admittedly a somewhat different one, since such an administrative determination is not made during the same proceeding where deportability is determined and discretionary relief is denied. And, of course, our decision in this case in no way impairs the preservation and availability of habeas corpus relief.

We believe that the controlling intention of Congress, in enacting § 106 (a), was to prevent delays in the deportation process by vesting in the Courts of Appeals sole jurisdiction to review “all final orders of deportation.” It seems apparent that, because of the consistent practice under the administrative regulations since 1940 of adjudicating deportability and passing on applications for discretionary relief in the same proceeding, the final administrative action that Congress was thinking of in using the phrase “final orders of deportation” included denials of suspension of deportation. To so construe § 106 (a) does not constitute an expansion of “the words used by Congress beyond their well-understood meaning.” Bifurcation of judicial review of deportation proceedings is not-only inconvenient; it is clearly undesirable and not the necessary result from a fair interpretation of the pertinent statutory language. Therefore, this matter can and should be passed upon by the Courts of Appeals, resulting in a judicial review procedure that would be both fair to the petitioner and expeditious for the Government. The decision below is therefore reversed and the case is remanded to the Court of Appeals for further consideration consistent with this opinion.

It is so ordered.

Mr. Justice Harlan,

concurring.

Believing that a jurisdictional statute of this kind should be circumspectly construed, cf. Kesler v. Department of Public Safety, 369 U. S. 153, 156-157, and recognizing the force of the considerations which concerned the majority of the Court of Appeals, 308 F. 2d 779, I am nevertheless satisfied that the legislative history of § 106 (a) of the Immigration and Nationality Act leaves no room for a conclusion other than that which this Court has reached.

I therefore concur in the judgment.

       The granting of voluntary departure relief does not result in the alien’s not being subject to an outstanding final order of deportation. In this ease, the order granting voluntary departure was combined with a contingent deportation order, which directed that petitioner be deported if he failed to depart within the prescribed time and was to become effective automatically if petitioner did not depart the country by the date fixed by the District Director.

       Immigration and Nationality Act, § 106, as added by § 5 (a) of Public Law 87-301, approved September 26, 1961, 75 Stat. 651, 8 U. S. C. (Supp. IV, 1962) § 1105a.

       Compare Fong v. Immigration and Naturalization Service, 308 F. 2d 191 (C. A. 9th Cir. 1962), Blagaic v. Flagg, 304 F. 2d 623 (C. A. 7th Cir. 1962), and Roumeliotis v. Immigration and Naturalization Service, 304 F. 2d 453 (C. A. 7th Cir. 1962), cert. denied, 371 U. S. 921, with Holz v. Immigration and Naturalization Service, 309 F. 2d 452 (C. A. 9th Cir. 1962), Zupicich v. Esperdy, 207 F. Supp. 574 (D. C. S. D. N. Y. 1962), and the decision below.

         On October 24, 1962, subsequent to the decision below and while the case was pending before this Court on petition for certiorari, Congress enacted Public-Law 87-885, § 4, 76 Stat. 1247, effective the same date. This enactment provides, in relevant part, for the amendment of § 244 of the Act, the source of the Attorney General’s power to suspend the deportation of eligible classes of aliens, by the addition of a new subsection, which states: “(f) No provision of this section shall be applicable to an alien who (1) entered the United States as a crewman ....”. Although petitioner concededly entered the United States as a crewman, and the Government has indicated that, when the merits of this case are reached, it will argue that petitioner is now absolutely ineligible for the relief sought, because of the 1962 amendment to § 244, we agree with the parties that the enactment of this amendment did not necessarily have the effect of rendering moot the jurisdictional issue involved in this litigation. The applicability of this provision to one in petitioner’s situation is an arguable matter, and, since it is not undisputed but remains debatable whether the relief sought by petitioner could still be granted, we have determined it not improper to consider and decide the threshold question of the jurisdiction of the Court of Appeals.

       Hobbs Act, 64 Stat. 1129 (1950), as amended, 5 U. S. C. § 1031-1042, vesting the Courts of Appeals with exclusive jurisdiction to review final orders of certain designated federal agencies.

       On the history of the recent congressional enactments relating to deportation, see Comment, 71 Yale L. J. 760 (1962).

       Regarding the extent of the Attorney General's discretion in suspension of deportation cases, see, e. g., Jay v. Boyd, 351 U. S. 345, 354, 357-358 (1956).

       Representative Walter was the chairman of a subcommittee of the House Judiciary Committee responsible for immigration and nationality matters, author and chief sponsor of the measure under consideration, and a respected congressional leader in the whole area of immigration law. Representative Lindsay was thoroughly familiar with the problems in this area and the role of discretionary determinations denying suspension in the deportation process, as a result of having represented the Government, three years earlier, in Jay v. Boyd, 351 U. S. 345 (1956). Representative Moore was a co-sponsor of the bill under discussion and a member of the House Judiciary Committee out of which the bill containing § 106 (a) was reported.

       105 Cong. Rec. 12728.

       H. R. Rep. No. 1086, 87th Cong., 1st Sess. 22-23 (1961).

       In further elucidating the purpose of the proposed legislation on the floor of the House, Representative Walter, in reference to one of the predecessor bills in 1968, stated: “Most important, by eliminating review in the district courts, the bill would obviate one of the primary causes of delay in the final determination of all questions which may arise in a deportation proceeding.” 104 Cong. Rec. 17173.

       According to the General Counsel of the Immigration and Naturalization Service, the Service’s policy and practice is to stay deportation, sua sponte, when a petition to obtain judicial review of determinations made during the administrative proceedings is not “patently frivolous.” See Comment, 111 U. of Pa. L. Rev. 1226, 1230 (1963). Consequently, temporary restraining orders issued by District Courts would usually be unnecessary to prevent deportation, and whether District Courts grant restraining orders rarely or frequently is rather irrelevant. And the assumption of the court below that, since the Attorney General can moot the proceedings in the District Courts (unless a restraining order is issued) by deporting the alien pendente lite, ultimate deportation would be expedited by permitting bifurcated judicial review seems unwarranted. Also, an assumption that the practice of District Courts is merely to issue restraining orders pending final disposition in a Court of Appeals of all of the questions presented for judicial review in a deportation case appears unjustified. See, e. g., Zupicich v. Esperdy, 207 F. Supp. 574 (D. C. S. D. N. Y. 1962).

       Deportability is conceded in about 80% of the cases. See Gordon and Rosenfield, Immigration Law and Procedure, § 5.7a, at 541 (1962). Even so, the bifurcation problem remains in that type of case which prompted the enactment of § 106 (a), where judicial review of both an adjudication of deportability and a denial of discretionary relief is sought.

       Because of the effect of our holding here, it is of course unnecessary to consider the Government’s contention that, where deport-ability is actually adjudicated, a Court of Appeals has “pendent jurisdiction” to review a denial of discretionary relief in the same proceeding.

       In the instant case the special inquiry officer not only found that petitioner failed to meet the eligibility requirements for suspension of deportation, since no hardship would result from his deportation, but further indicated that, even had the hardship requirement been met, relief would have been denied as a discretionary matter. Since a special inquiry officer cannot exercise his discretion to suspend deportation until he finds the alien statutorily eligible for suspension, a finding of eligibility and an exercise of (or refusal to exercise) discretion may properly be considered as distinct and separate matters. And since the finding of eligibility involves questions of fact and law, paragraph (4) of § 106 (a) might be read to require that this finding be based on substantial evidence in the record. See Comment, 111 U. of Pa. L. Rev. 1226, 1229 (1963). However, we'need not pass on this question here. And, of course, denial of suspension of deportation as a discretionary matter is reviewable only for arbitrariness and abuse of discretion, and thus could hardly be within the procedural and evidentiary requisites of paragraph (4).

       When § 106 (a) was enacted, the withholding of deportation under § 243 (h) was a matter determined by an official other than the special inquiry officer conducting the deportation hearing, on a later occasion, under regulations promulgated by the Attorney General, and the designation of the country of deportation was not made until after the issuance of the warrant of deportation. Under revised and currently effective regulations, both the designation of the country of deportation and the decision on any § 243 (h) request for relief which the alien might wish to make are effected in the deportation proceedings and reflected in the final order of deportation. While presumably denials of § 243 (h) relief were not covered by § 106 (a) at the time of its enactment, it does not seem incongruous to assume that such orders, because of the change in administrative regulations making such decisions an integral part of the deportation proceedings conducted by a special inquiry officer, are now within the reach of §106 (a)’s judicial review provisions. Such a result simply means that, while the jurisdiction of the Courts of Appeals is limited now, as when § 106 (a) was enacted, to the review of “all final orders of deportation,” a change in the administrative regulations relating to the processing and determination of applications for § 243 (h) relief had the incidental effect of expanding the decisional content of such orders. Clearly, changes in administrative procedures may affect the scope and content of various types of agency orders and thus the subject matter embraced in a judicial proceeding to review such orders.

       Compare, however, 308 F. 2d, at 785, n. 6, where the court below referred to the “inarticulate premise that all deportation suits are appealed . . .” from District Courts to Courts of Appeals.

       The court below manifested its concern that, if it were to find that it had jurisdiction in this case, the door would then be opened to the obtaining of review of a refusal to reopen a deportation proceeding in the Courts of Appeals. 308 F. 2d, at 785. And the Government has argued in its brief that, although the question is a close one, an order refusing to reopen a deportation proceeding should be regarded as within the provisions of § 106 (a) with respect to judicial review in the Courts of Appeals, though occurring subsequent to the issuance of a final deportation order. Brief for respondent, pp. 51-54. Compare Giova v. Rosenberg, 308 F. 2d 347 (C. A. 9th Cir. 1962), petition for cert. pending, No. 15, Misc., October Term, 1963. Cf. Dentico v. Immigration and Naturalization Service, 303 F. 2d 137 (C. A. 2d Cir. 1962), holding that Courts of Appeals have exclusive jurisdiction to review denials of motions to reopen deportation proceedings, where review of a final order of deportation is sought at the same time.

       Compare the provisions of § 106 (c) purporting to restrict the availability of habeas corpus relief in deportation cases. But see the provisions of § 106 (a) (9) with respect to the availability of habeas corpus relief to aliens held in custody pursuant to a deportation order.