author: Mr. Justice White Mr. Justice Black,

text:
    NEELY v. MARTIN K. EBY CONSTRUCTION CO., INC.
    No. 12.
    Argued January 16-17, 1967.
    Decided March 20, 1967.

      Kenneth N. Kripke argued the cause for petitioner. With him on the briefs was Charles A. Friedman.

      John C. Mott argued the cause for respondent. With him on the brief were Anthony F. Zarlengo and Joseph S. McCarthy.

   Mr. Justice White

delivered the opinion of the Court.

Petitioner brought this diversity action in the United States District Court for the District of Colorado alleging that respondent’s negligent construction, maintenance,.and supervision of a scaffold platform used in the construction of a missile silo near Elizabeth, Colorado, had proximately caused her father’s fatal plunge from the platform during the course of his employment as Night Silo Captain for Sverdrup & Parcel, an engineering firm engaged in the construction of a missile launcher system in the silo. At the close of the petitioner’s evidence and again at the close of all the evidence, respondent moved for a directed verdict. The trial judge denied both'motions and submitted the case to a jury, which returned a verdict for petitioner for $25,000.

Respondent then moved for judgment notwithstanding the jury’s verdict or, in the alternative, for a new trial, in accordance with Rule 50 (b), Federal Rules of Civil Procedure. The trial court denied the motions and entered judgment for petitioner on the jury’s verdict. Respondent appealed, claiming that its motion for judgment n. o. v. should have been granted. Petitioner, as agpellee, urged only that the jury’s verdict should be upheld.

The Court of Appeals held that the evidence at trial was insufficient to establish either negligence by respondent or proximate cause and reversed the judgment of the District Court “with instructions to dismiss the action.” Without filing a petition for rehearing in the Court of Appeals, petitioner then sought a writ of cer-tiorari, presenting the question whether the Court of Appeals could, consistent with the 1963 amendments to Rule 50 of the Federal Rules and with the Seventh Amendment’s guarantee of a right to jury trial, direct the trial court to dismiss the action. Our order allowing certiorari directed the parties’ attention to whether Rule 50 (d) and our decisions in Cone v. West Virginia Pulp & Paper Co., 330 U. S. 212; Globe Liquor Co. v. San Roman, 332 U. S. 571; and Weade v. Dichmann, Wright & Pugh, Inc., 337 U. S. 801, permit this disposition by a court of appeals despite Rule 50 (c)(2), which gives a party whose jury verdict is set aside by a trial court 10 days in which to invoke- the trial court’s discretion to order a new trial. We affirm.

Under Rule 50 (b), if a party moves for a directed verdict at the close of the evidence and if the trial judge elects to send the case to the jury, the judge is “deemed” to have reserved decision on the motion. If the ‘jury returns a contrary verdict, the party may within 10 days move to have judgment entered in accordance with his motion for directed verdict. This procedure is consistent with decisions of this Court rendered prior to the adoption of the Federal Rules in 1938. Compare Baltimore & Carolina Line, Inc. v. Redman, 295 U. S. 654, with Slocum v. New York Life Ins. Co., 228 U. S. 364, and Aetna Ins. Co. v. Kennedy, 301 U. S. 389. And it is settled that Rule 50 (b) does not violate the Seventh Amendment’s guarantee of a. jury trial. Montgomery Ward & Co. v. Duncan, 311 U. S. 243.

The question here is whether the Court of Appeals, after reversing the denial of a defendant’s Rule 5j) (b) motion for judgment notwithstanding the verdict, may itself order dismissal or direct entry of judgment for defendant. As far as the Seventh Amendment’s right to jury trial is concerned, there is no greater restriction on the province of the jury when an appellate court enters judgmént n. o. v. than when a trial court does; consequently, there is no constitutional bar to an appellate court granting judgment n. o. v. See Baltimore & Carolina Line, Inc. v. Redman, supra. Likewise, the statutory grant of appellate jurisdiction to the courts of appeals is certainly broad enough to include the power to direct entry of judgment n. o. v. on appeal. Section 2106 of Title 28 provides that,

“The Supreme Court or any other court of appellate jurisdiction may affirm, modify, vacate, set aside or reverse any judgment, decree, or order of a court lawfully brought before it for review, and may remand the cause and direct the entry of such appropriate judgment, decree, or order, or require such further proceedings to be had as may be just under the circumstances.”

See Bryan v. United States, 338 U. S. 552.

This brings us to Federal Rules 50 (c) and 50 (d), which were added to Rule 50 in 1963 to clarify the proper practice under this Rule. Though Rule 50 (d) is more pertinent to the facts of this case, it is useful to examine these interrelated provisions together. Rule 50 (c) governs the case where a trial court has granted a motion for judgment n. o. v. Rule 50 (c)(1) explains that, if the verdict loser has joined a motion for new trial with his motion for judgment n. o. v., the trial judge should rule conditionally on the new trial motion when he grants judgment n. o. v. If he conditionally grants a new trial, and if the court of appeals reverses his grant of judgment n. o. v., Rule 50(c)(1) provides that “the new trial shall proceed unless the" appellate court has otherwise ordered.” On the other hand, if the trial.judge conditionally denies the motion for new trial, and if his - grant of judgment n. o. v. is reversed on appeal, “subsequent proceedings shall be in accordance with the order of the appellate .court.” As the Advisory Committee’s Note to Rule 50 (c) makes clear, Rule 50 (c)(1) contemplates that the appellate court will review on appeal both ■ the grant of judgment n. o. v. and, if necessary, the trial cohrt’s conditional disposition of the motion for new trial. This review necessarily includes the power to grant or to deny a new trial in appropriate cases.

Rule 50 (d) is applicable to cases such as this one where the trial court has denied a motion for judgment n. o. v. Rule 50 (d) expressly preserves to the party who prevailed in the district court the right to urge that the court of appeals grant a new trial should the jury’s verdict be set aside on appeal. Rule 50 (d) also emphasizes that “nothing in this' rule precludes” the court of appeals “from determining that the appellee is entitled to a new trial, or from directing the trial court to determine whether a new trial .shall be granted.” Quite properly, this Rule recognizes that the appellate court may prefer that the trial judge pass first upon the appel-lee’s new trial suggestion. Nevertheless, consideration of the new trial question “in the first instance” is lodged with the court of appeals. And Rule 50 (d) is permissive in the nature of its direction to the court of appeals: as in Rule 50 (c)(1), there is nothing in Rule 50 (d) indicating that the court of appeals may not direct entry of judgment n. o. v. in appropriate cases.

Rule 50 (c)(2), n. 2, supra, is on its face inapplicable to the situation presented here. That Rule regulates the verdict winner’s opportunity to move for a new trial if the trial court has granted a Rule 50 (b) motion for judgment n. o. v. In this case, the trial Court denied judgment n. o. v. and respondent appealed. Jurisdiction over the case then passed to the Court of Appeals, and petitioner’s right to seek a new trial in the trial court after her jury verdict was set aside became dependent upon the disposition by the Court of Appeals under Rule 50 (d).

As the Advisory Committee explained, these 1963 amendments were not intended to “alter the effects of a jury verdict or. the scope of appellate review,” as articulated in the prior decisions of this Court. 31 F. R. D. 645. In Cone v. West Virginia Pulp & Paper Co., supra, the defendant moved for a directed verdict, but the trial judge sent the case to the jury. After a jury verdict for the plaintiff, the trial court denied defendant’s motion for a new trial. On appeal, the Court of Appeals reversed and ordered the entry of judgment n. o. v. This Court reversed the Court of Appeals on the ground that the defendant had not moved for judgment n. o. v. in the trial court, but only for a new trial, and consequently the Court of Appeals was precluded from directing any disposition other than a new trial. See also Globe Liquor Co. v. San Roman, supra. In Johnson v. New York, N. H. & H. R. Co., 344 U. S. 48, this Court held that a verdict loser’s motion to “set aside” the jury’s verdict did not comply with Rule 50 (b)’s requirement of a timely motion for judgment n. o. v. and therefore that the Court of Appeals could not direct entry of judgment n. o. v. And in Weade v. Dichmann, Wright & Pugh, Inc., supra, where a proper motion for judgment n. o. v. was made and denied in the trial court, we modified a Court of Appeals decision directing entry of judgment n. o. v. because there were “suggestions in the complaint and evidence” of an alternative theory of liability which had not been passed upon by the jury and therefore which might justify the grant of a new trial. 337 U. S., at 808-809.

The opinions in the above cases make it clear that an appellate court may not order judgment n. o. v. where the verdict loser has failed strictly to comply with-the procedural requirements of Rule 50 (b), -or where the record reveals a new trial issue which has not been resolved. Part of the Court’s concern has been to protect the rights of the party whose jury verdict has been set aside on appeal and who may have valid grounds for a new trial, some or all of which should be passed upon by the district court, rather than the court of appeals, because of the trial judge’s first-hand knowledge of witnesses, testimony, and issues — because of his “feel” for the overall case. These are very valid concerns to which the court of appeals should be constantly alert. Where a defendant moves for n. o. v. in the trial court, the plaintiff may present, in connection with that motion or with a separate motion after n. o. v. is granted, his grounds for a new trial or voluntary nonsuit. Clearly, where he retains his verdict in the trial court and the defendant appeals, plaintiff should have the opportunity which 50 (d) affords him to press those same or different grounds in the court of appeals. And .obviously judgment for defendant-appellant should not be ordered where the plaintiff-appellee urges grounds for a nonsuit or new trial which should more appropriately be addressed to the trial court.

But these considerations do not justify an ironclad rule that the court of appeals should never order dismissal or judgment for defendant when the plaintiff’s verdict has been set aside on appeal. Such a rule would not serve the purpose of Rule 50. to speed litigation and to avoid unnecessary retrials. Nor do any of our cases mandate such a rule. Indeed, in Pence v. United States, 316 U. S. 332, we affirmed a Court of Appeals decision reversing the trial court’s failure to grant judgment n. o. v. And in New York, N. H. & H. R. Co. v. Henagan, 364 U. S. 441, this Court itself directed entry of judgment for a verdict loser whose proper request for judgment n. o. v. had been wrongly denied by the District Court and by the Court of Appeals. In view of these cases, the language of Rule 50 (d), and the statutory grant of broad appellate jurisdiction, we think a more discriminating approach is preferable to the inflexible rule for which the petitioner contends.

There are, on the one hand, situations where the defendant’s grounds for setting aside the- jury’s verdict raise questions of subject matter jurisdiction or disposi-tive issues of law which, if resolved in defendant’s favor, must necessarily terminate the litigation. The court of appeals may hold in an employer’s suit against a union, for example, that the case is within the exclusive jurisdiction of the National Labor Relations Board, or in a libel, suit, that the defendant was absolutely privileged t"o publish the disputed statement. In such situations, and others like them, there can be no reason whatsoever to prevent the court of appeals from ordering dismissal of the action or the entry of judgment for the defendant.

On the other hand, where the court of appeals sets aside the jury’s verdict because the evidence was insufficient to send the case to the jury, it is not so clear that the litigation should be terminated. Although many of the plaintiff-appellee’s possible grounds for a new trial, such as inadequacy of the verdict, will iiot survive a decision that the case should not have gone to the jury in the first place, there remain important considerations which may entitle him to a new trial. The erroneous exclusion of evidence which would have strengthened his case is an important possibility. Another is that the trial court itself caused the insufficiency in plaintiff-appellee’s case by erroneously placing too high a burden of proof on him at trial. But issues like these are issues of law with which the courts of appeals regularly and characteristically must deal. The district court in all likelihood has already ruled on these questions in the course of the trial and, in any event, has no special advantage or competence in dealing with them. They are precisely the kind of issues that the losing defendant below may bring to the court of appeals without ever moving for a new trial in the district court. Cf. Globe Liquor Co. v. San Roman, 332 U. S. 571, 574. Likewise, if the plaintiff's verdict is set aside by the trial court on defendant's motion for judgment n. o. v., plaintiff may bring these Very grounds directly to the court of appeals without moving for a new trial in the district court. Final action on these issues normally rests with the court of appeals.

A plaintiff whose jury verdict is set aside by the trial court on defendant’s motion for judgment n. o. v. may ask the trial judge to grant a voluntary nonsuit to give plaintiff another chance to fill a gap in his proof. Cone v. West Virginia Pulp & Paper Co., 330 U. S., at 217. The plaintiff-appellee should have this same opportunity when his verdict is set aside on appeal. Undoubtedly, in many cases this question will call for an exercise of the trial court’s discretion. However, there is no substantial reason why the appellee should not present the matter to the court of appeals, which can if necessary remand the case to permit initial consideration by the district court.

In these cases where the challenge of the defendant-appellant is,to the sufficiency of the evidence, the record in the court of appeals will very likely be a full one. Thus, the appellee will not be required to designate ahd print additional parts of the record to substantiate his grounds for a nonsuit (or a new trial), and it should not be an undue burden in the course of arguing for his verdict to indicate in his brief why he is entitled to a new trial should his judgment be set aside. Moreover, the appellee can choose for his own convenience, when to make his case for a new trial: he may bring his grounds for new trial to the trial judge’s attention when defendant first makes an n. o. v. .motion, he may argue this question in his brief to the court of appeals, or he may in suitable situations seek rehearing from the court of appeals after his judgment has been reversed.

In our view, therefore, Rule 50 (d) makes express and adequate provision for the opportunity — which the plaintiff-appellee had without this rule — to present his grounds for a new trial in the event his verdict is set aside by the court of appeals. If he does so in his brief — or in a petition for rehearing if the court of appeals has directed entry of judgment for appellant— the court of appeals may make final disposition of the issues presented, except those which in its informed discretion should be reserved for the tri&l court. If appellee presents no new trial issues in his brief or in a petition for rehearing, the court of appeals may, in any event, order a new trial on its own motion or refer the question to the district court, based on factors encountered in its own review of the case. Compare Weade v. Dichmann, Wright & Pugh, Inc., supra.

In the case before us, petitioner won a verdict in the District Court which survived respondent’s motion for judgment n. o. v. In the Court of Appeals the issue was the sufficiency of the evidence and that court set aside the verdict. Petitioner, as appellee, suggested no grounds for a new trial in the event her judgment was reversed, nor did she petition for rehearing in the Court of Appeals, even though that court had directed a' dismissal of her case. Neither was it suggested that the record was insufficient to present any new trial issues or that any other reason required a remand to the District Court. Indeed, in her brief in the Court of Appeals, petitioner stated, “This law' suit was fairly tried and the jury was properly instructed.” It was, of course, incumbent on the Court of Appeals to consider the new trial question in the light of its own experience with the case. But we will not assume that the court ignored its duty in this respect, although it would have been better had its opinion expressly dealt with the new trial question.

In a short passage at the end of her brief to this Court, petitioner suggested that she has a valid ground for a new trial in the District Court’s exclusion of opinion testimony by her witnesses concerning whether respondent’s scaffold platform was adequate for the job it was intended to perform. This matter was not raised in the Court of Appeals or in the petition for a writ of certiorari, even though the relevant portions of the transcript were made a part of the record on appeal. Under these circumstances, we see no cause for deviating from our normal policy of not considering issues which have not been presented to the Court of Appeals and which are not properly presented for review here. Supreme Court Rule 40 (1)(d)(2). See J. I. Case Co. v. Borak, 377 U. S. 426, 428-429; California v. Taylor, 353 U. S. 553, 556-557, n. 2.

Petitioner’s case in this Court is pitched on the total lack of power in the Court of Appeals to direct entry of judgment for respondent. We have rejected that argument and therefore affirm.

It is so ordered.

Mr. Justice Douglas and Mr. Justice Fortas, while agreeing with the Court’s construction of Rule 50, would reverse the judgment because in their view the evidence of negligence and proximate cause was sufficient to go to the jury. .

Mr. Justice Black,

dissenting.

I dissent from the Court’s decision in this case for three reasons: First, I think the evidence in this case was clearly sufficient to go to the jury on the issues of both negligence and proximate cause. Second, I think that under our prior decisions and Rule 50, a court of appeals, in reversing a trial court’s refusal to enter judgment n. o. v. on the ground of insufficiency of the evidence, is entirely powerless to order the trial court to dismiss the case, thus depriving the verdict winner of any opportunity to present a motion for new trial to the trial judge who is thoroughly familiar with the case. Third, even if a court of appeals has that power, I find it manifestly unfair to affirm the Court of Appeals’ judgment here without giving this petitioner a chance to present her grounds for a new trial to the Court of Appeals as the Court today for the first time holds she must.

I.

Petitioner and respondent, both in their briefs on the merits and in their oral argument, have vigorously and extensively addressed themselves to the question of whether the lower court was correct in holding that petitioner’s evidence of negligence and proximate cause was insufficient to go to the jury. The Court, however, conveniently avoids facing this issue — which if resolved in petitioner’s favor, would completely dispose of this case — by a footnote statement that this issue was not presented in the petition for certiorari nor encompassed by our order granting certiorari. Besides the fact that this seems to me to be an overly meticulous reading of the petition for certiorari and our order granting it, I see no reason for the Court’s refusal to deal with an issue which is undoubtedly present in this case even though not specifically emphasized in the petition for certiorari. Although usually this Court will not consider questions not presented in the petition for certiorari, our Rule 40(l)(d)(2) has long provided that “the court, at its option, may notice a plain error not presented,” and the Court has frequently disposed of cases by deciding crucial issues which the parties themselves failed to present. See, e. g., Brotherhood of Carpenters v. United States, 330 U. S. 395; Silber v. United States, 370 U. S. 717; Boynton v. Virginia, 364 U. S. 454. If, as I believe, the Court of Appeals was wrong in concluding that the evidence was insufficient to go to the jury,' then its reversal of the jury’s verdict was a violation of the Seventh Amendment, and certainly this is the kind of plain constitutional error that this Court can and should correct.

That the evidence was more than ample to prove both negligence and proximate cause is, I think, inescapably clear from even a cursory review of the undisputed facts in this record. Petitioner’s father was killed while working on the construction of a missile-launching silo in Colorado. Neely worked for an engineering firm and his job was to work on certain concrete blocks suspended 130 feet from the bottom of the silo. Respondent, a carpentry firm responsible for the construction, maintenance, and supervision of all scaffolding in the silo, constructed a wooden platform between two of the concrete blocks in order to allow workers such as Neely to go from one block to the other. The platform, however, did not cover the entire distance between the blocks nor was it level with them. Instead, it was two feet horizontally away from either block arid was raised two feet vertically above the blocks. Also, a railing was constructed on one side of the platform between it and one of the blocks. No railing was placed on the other side of the platform. When Neely along with three fellow workers arrived at the silo, they were told by respondent’s foreman that the platform was ready. The only way they could get from the platform to the blocks was by jumping the gap between the platform and blocks. However, because of the railing on one side of the platform, the workers could not jump directly across the two-foot gap to the block on that side, but had either to jump three feet diagonally to the block or to climb over the railing. One worker successfully leaped to the block, fastened his safety belt, and then, looked- back and saw Neely, who was to follow, falling ¿head- first through the hole between the platform and the block. Neely, failing to make the jump, fell to his death 130 feet below.

Petitioner’s case consisted of the testimony of the day foreman, one of the carpenters who .constructed the platform, and the worker who was closest to Neely when he fell. Quite understandably, in view of the strong evidence, petitioner did not call to testify the two other workers who witnessed Neely’s fall or the other carpenters who worked on the platform. She did, however, introduce several revealing photographs of the platform, blocks, and intervening gap taken immediately after the accident. On respondent’s objection, . the trial judge excluded several other photographs which showed nets which, after the accident, were placed under the platform, for the safety of the investigators. There was testimony that neither the railing nor platform broke and that there was no grease on the platform. But when petitioner’s counsel asked the day foreman whether he considered the platform safe and adequate, he replied in the negative, though this testimony, on respondent’s objection, was then ordered stricken as opinion evidence on an ultimate issue. The trial court refused to allow the same question to be asked of the other witnesses. At one time, the carpenter did testify that a railing was put on only one side of the platform because lunch hour was nearing and the platform had to be completed before then.

On this evidence, which the trial judge characterized as presenting a “close case,” the Court of Appeals held a verdict should have been directed for respondent. Although the court was willing to assume that there might be some negligence in the size of the platform or the placing of the railing along one side, and though it was willing to concede; “that the platform might possibly have had something to do with his [Neely’s] fall,” 344 F. 2d 482, 486, the court purported to find no evidence, not even circumstantial evidence, that the cón-struction of the platform was the proximate cause of the fall. I think this holding cries for reversal. If constructing a platform 130 feet in the air, at which height workmen use safety belts, with a three-foot diagonal gap over which workers must leap .and with a railing which makes a direct jump impossible, does not itself show negligence and proximate cause, then it is difficult to conceive of any evidence that would. Besides the size of the plat-f.orm and the presence of the railing, the photographs shown to the jury, and reproduced in this record, reveal other possible defects in its construction: a vertical kick-board extending beyond the railing into the gap through which Neely jumped; rough boards on the floor of the platform. The fact that Neely was coming headfirst by the time he passed the block two feet below might have made it reasonable for the jury to have concluded that he tripped on these impediments rather than merely stepped in the opening. In short, I believe it was a clear violation of the Seventh Amendment to deprive petitioner of a jury verdict rendered on this evidence.

II.

Since the adoption of Rule 50, our cases have consistently and emphatically preserved the right of a litigant whose judgment — whether it be a judgment entered on the verdict or judgment n. o. V- — is set aside to invoke the discretion of . the trial court in ruling on a motion for new trial. The first of these cases was Montgomery Ward & Co. v. Duncan, 311 U. S. 243, where the trial judge, unlike here, granted the defendant’s motion for judgment n, o. v., but in doing so failed to rule oh his alternative motion for a new trial. The Court of Appeals reversed the trial court’s grant of judgment n. o. v. to the defendant and remanded the case with directions to enter judgment on the yerdict fpr the plaintiff, overruling defendant’s contention that the trial judge should be given an opportunity to pass on his alternative motion for new trial. Holding that the trial judge should have initially ruled on this alternative motion, this Court remanded the case to the trial judge for the purpose of passing on that motion. In explaining this result the Court said:

“The rule contemplates that.either party to the action is entitled to the trial judge’s decision on both motions, if both are presented. ... If, however, as in the present instance, the trial court erred in granting the motion the party against whom the verdict went is entitled to have his motion for a new trial considered in respect of asserted substantial trial errors and matters appealing to the discretion of the judge.” Id,., at 251-252.

The question here, however, unlike that in Duncan, is whether the Court of Appeals, after holding that the District Court erred in failing to direct a verdict against the plaintiff, can then order the District Court to dismiss the case and thereby deprive the verdict winner of any opportunity to ask the trial judge for a new trial in order to cure a defect in proof in the first trial. This question was first considered in Cone v. West Virginia Pulp & Paper Co., 330 U. S. 212. In Cone, as in this case, the question was whether the Court of Appeals could direct the dismissal of a case in which the trial court hac] erroneously failed to grant a directed verdict. In that case no motion for judgment n. o. v. had been made by the verdict loser. We held that the Court of Appeals could not under those circumstances order the dismissal of the case. Noting that “[determination of whether a new trial should be granted or a judgment entered under Rule 50 (b) calls for the judgment in the first instance of the judge who saw and heard the witnesses and has the feel of the case which no appellate printed transcript can impart,” id., at 216 (emphasis added), we held that “a litigant should not have his right to a new trial foreclosed without having had the benefit of the trial court’s judgment on the question,” id., at 217 (emphasis added). We clearly indicated that the result would have been the same had the verdict loser, as had the respondent here, unsuccessfully moved , for a judgment n. o. v. in the trial court, for in that case, likewise,, the verdict winner would have had to wait until the Court of Appeals deprived him of his verdict before presenting his grounds for a new trial. We specifically rejected a suggestion— today accepted by the Court — that the verdict winner should have to claim his right to a new trial in the Court of Appeals or lose it. Id., at 218.

Following Cone, we emphasized and re-emphasized in Globe Liquor Co. v. San Roman, 332 U. S. 571, that the reason why courts of appeals are without power to dismiss cases in situations like this is that the power to determine this issue is vested exclusively in the judge who tried the case. And again, in Weade v. Dichmann, Wright & Pugh, Inc., 337 U. S. 801, even where — as in this case — a timely motion for judgment n. o. v. had been made, the Court affirmed the Court of Appeals’ holding that the verdict could not stand, but, relying on Cone and Globe Liquor, modified its judgment to provide the trial judge with an opportunity to decide whether the verdict winner was entitled to a new trial. Id., at 809 and n. 8. See also Johnson v. New York, N. H. & H. R. Co., 344 U. S. 48; Fountain v. Filson, 336 U. S. 681.

This issue of whether a new trial is justified after a verdict is set aside either by a trial or an appellate court is a new issue which it was not necessary to decide in the original trial. It is a factual issue and that the trial court is the more appropriate tribunal to determine it has been almost universally accepted by both federal and state courts throughout the. years. There are many reasons for this. Appellate tribunals are not equipped to^, try factual issues as trial courts are. A trial judge who has heard the evidence in the original case has a vast store of information and knowledge about it that the appellate court cannot get from a cold, printed record. Thus, as we said in Cone, the trial judge can base the broad discretion granted him in determining factual issues of a new trial on his own knowledge of the evidence and the issues “in á perspective peculiarly available to him alone.” 330 U. S., at 216. The special suitability of having a trial judge decide the issue of a new trial in cases like this is emphasized by a long and unbroken line of decisions of this Court holding that the exercise of discretion by trial judges in granting or refusing new trials on factual grounds is practically unreviewable by appellate courts. See, e. g., Fairmount Glass Works v. Cub Fork Coal Co., 287 U. S. 474, 481-482; cited with approval in Montgomery Ward & Co. v. Duncan, supra, at 253, n. 12.

Today’s decision is out of harmony with all the cases referred to above. The Court’s opinion attempts to justify its grant of power to appellate courts by pointing to instances in which those courts, and even assertedly this Court, have utilized this power in the past. The Court cites Pence v. United States, 316 U. S. 332, and New York, N. H. & H. R. Co. v. Henagan, 364 U. S. 441, as such instances. In Pence, the Court of Appeals reversed the trial court’s refusal to grant judgment n. o. v. and remanded for further consistent proceedings. We affirmed without the slightest indication that we felt the Court of Appeals’ mandate deprived the verdict winner of the chance to move for a new trial on remand. Neither did the Court indicate that this would be the effect of its mandate in Henagan where it remanded the case to the District Court to enter judgment n. o. v. for the verdict loser. And the same cán be said of almost every other post-Cone court of appeals decision cited by the Court in note 5. Cf. Johnson v. New York, N. H. & H. R. Co., supra, at 54, n. 3.

The Court also attempts to justify its new grant of power to appellate judges by a strained process of .reasoning. First, the Court suggests that the power of an appellate court to dismiss a case after setting aside a litigant’s verdict can be derived from 28 U. S. C. § 2106. This idea, of course, was first suggested by a dissent in Johnson v. New York, N. H. & H. R. Co., supra, at 65., which argued that because of § 2106 “the discretion now rests with the Court of Appeals to grant a new trial or to direct a verdict according to law on the record already made.” This contention, however, was not deemed worthy of argument or comment either by the Court in its opinion or by others who dissented in the Johnson case. Section 2106 merely deals with the general power of appellate courts and indicates no congressional purpose to overcome the long-standing and established practice, recognized by this Court’s decisions and Rule 50, that the discretion to decide whether a new, trial should be granted, when the appellate court finds.a gap in the supporting evidence, rests with the trial judge and. not with the appellate court. It begs the question to argue that it is appropriate for an appellate court in such circumstances to order a dismissal merely because § 2106 provides that a. court of appeals may direct the entry of an “appropriate judgment.”

The Court further purports to derive this power from the provisions of Rule 50 (c) and (d), The Court notes that under Rule 50 (c).(l), where the trial judge grants a judgment n. o. v. and either grants or denies the conditional motion for new trial, an appellate court in reversing the judgment n. o. v. has “the power to grant or to deny a new trial in appropriate cases.” But, as the Court fails to recognize, the crucial prerequisite to the exercise of this appellate power is a ruling in the first instance, as required in Cone, by the trial court on the motion for new trial. Here that crucial prerequisite is missing.

The Court then proceeds to find Rule 50 (c)(2) inapplicable on its face to a situation where the trial court denies a judgment n. o. v. but an appellate court orders that one be entered. In doing so, the Court ignores the purpose of Rule 50(c)(2). The' Rules Committee explained this provision as follows:

“Subdivision (c) (2) is a reminder that the verdict-winner is entitled, even after entry of judgment n. o. v. against him, to move for a new trial in the usual course.” 31 F. R. D. 646.

The rule does not remotely indicate that the verdict winner loses this right to move for a new trial if the trial court’s entry of judgment n. o. v. against him is on direction by the appellate court rather than on its own initiative. Sections (c) and (d) were added to Rule 50 in-1963, after all the cases discussed above had been decided. As the Notes of the Rules Committee indicate, these amendments were made to implement those decisions which had emphasized the importance of having trial judges initially determine the factual issue of whether a new trial is justified in cases where judgment n. o. v. has been entered against the verdict winner, either by the trial or appellate court. The Committee at no place hinted that the amendments were meant to change the practice established by those cases, and, to the contrary, it specifically stated that, “The amendments do not alter the effects of a jury verdict on the scope of - appellate review.” 31 F. R. D. 645. (Emphasis added.)

Certainly this is true of Rule 50 (d). This section provides that the ■ verdict winner, who prevailed on the motion for judgment n. o. v., '“may, as appellee, -assert grounds entitling him to a new trial in the event the appellate Gourt concludes- -that the trial court erred in denying the motion for judg-mént notwithstanding the verdict” (emphasis added) and. that “nothing in this rule precludes it [the appellate court] from determining that the appellee is entitled to a new trial, or from directing the trial court to determine whether a new. trial shall be granted.” Because the Court finds that the rule “is permissive in the nature of its direction to the court of appeals,” it concludes “there is nothing in Rule 50(d) indicating that the "court of appeals may not direct entry of judgment n. o. v. in appropriate cases.” The Court entirely overlooks the fact that the rule is likewise permissive in the nature of its direction to the verdict winner as appellee: it provides that the verdict winner “may”, ask the Court of Appeals for a new trial; it does not provide that he must do so in order to protect his right to a new trial. Contrary to the Court, I think the express failure of Rule 50 (d) to give the appellate court power to order a case dismissed indicates a clear intention to deny it any such power. The practice now permitted by Rule 50 (d) was first embodied in the Notes of the Rules Committee to the proposed, but unadopted, amendments of 1946. The Notes suggested that a verdict winner could, ás appellee, assign grounds for a new trial in the event the appellate court set aside his verdict. In Cone, however, we expressly rejected the contention that the verdict winner’s failure, as appellee, to assign grounds for a new trial in the appellate court gave that court the power to deny him a new trial. Cone v. West Virginia-Pulp & Paper Co., supra, at 218 and n. 6. This rejection was extensively discussed, by the commentators, most of whom concluded that under Cone the verdict winner should be allowed a chance to present his motion for new trial at the trial court level. Finally, when Rule 50 (d) was adopted, there was not the slightest indication that it was intended to adopt the practice that we found objectionable in Cone. In fact, it was carefully worded to avoid giving the appellate court any power to deny^a new trial. I do not believe this omission unintentional, for the language of Rule 50 (c)(1), adopted at the same time, does purport to give the appellate court this power when it_ reverses a judgment n. o. v. and the trial court has already denied the verdict loser’s conditional motion for new trial. It.does so clearly by providing that “subsequent proceedings shall be in accordance with the order of the appellate court.”

In short, today’s decision flies in the teeth of Rule 50 (c)(2), and our cases which that rule was intended to implement, by giving the Court of Appeals the power, clearly withheld by Rule 50 (d), to substitute its judg-' ment for the trial court’s and then decide that justice requires no new trial.

III.

Even were I to agree with the Court that courts of appeals have the power to deny a verdict winner a new -trial, I could not agree to the affirmance of such a denial here. Here, so far as appears from the record, the Court of Appeals never even gave a thought to the question of whether petitioner was entitled to a new trial, but simply required that the district judge dismiss the lawsuit as though it were an automatic necessity. And petitioner, in seeking to support her verdict without directing the Court of Appeals’ attention to any grounds for a new ■ trial, had every right to rely on our past cases which plainly told her that she was entitled to make her motion for a new trial to the trial judge who is far more able to determine whether justice requires a new trial. While in one breath the Court says that it “will not assume that the court [of appeals] ignored its duty” to “consider the new trial question,” in another breath it notes that ^t]his matter was not raised in the Court of Appeals.” And because petitioner failed to present grounds for a new trial to the Court of Appeals, the Court, while recognizing that she here presents grounds for a new trial which might require decision, by the trial court, refuses to consider these grounds.

In refusing to consider petitioner’s grounds for a new trial, the Court completely ignores what was done in Weade v. Dichmann, Wright & Pugh, Inc., supra. There we ordered the case remanded to the trial court to pass on petitioner’s motion for new trial because petitioner suggested to this Court that there was an alternative theory presented by the complaint and evidence. However, nowhere in the record in that case was it indicated that petitioner had argued this alternative theory in the Court of Appeals, and nothing in our opinion indicates any such requirement. The Court correctly summarizes Weade as holding that “an appellate court may not order judgment n. o. v. where . . . the record reveals a new trial issue which has not been resolved.” (Emphasis added.) I think the record here reveals such an issue and that, at the very least, petitioner should now be given a chance to argue that issue to the Court of Appeals.

The record here clearly reveals that there were gaps in petitioner’s case which she might, if given a chance, fill upon a new trial. First, only one of the three eyewitnesses to Neely’s fall and only one of the carpenters who worked on the platform were called as witnesses. Second, the trial court excluded testimony by all the witnesses as to their opinions of the adequacy of the platform. Third, several of petitioner’s very relevant photographs of the platform were excluded by the trial judge. From such circumstances as these the trial judge might properly have concluded that petitioner was entitled to a new trial to fill the gaps in her case. It is particularly pertinent in this respect that the Court of Appeals itself said:

“It may, of course, be conceded that the platform might possibly have had something to do with his fall, but there is nothing in the record to show what it was.” 344 F. 2d, at 486.

It surely cannot be dismissed as idle conjecture to think that petitioner could, if given a chance, introduce sufficient evidence to prove to the most exacting fact finder that the three-foot diagonal gap in the platform 130 feet above the ground had something to do with this fall and this death.

       “(b) Motion for Judgment Notwithstanding the Verdict. When-_ ever a motion for a directed verdict made at the close of all the evidence is denied or for any reason is not granted, the court is deemed to have submitted the action to the jury subject to a later determination of the legal questions raised by the motion. Not. later than 10 days aftér entry of judgment, a party who has moved for a directed verdict may move to have the verdict and any judgment entered thereon set aside and to have judgment entered in accordance with his motion for a directed verdict . . . . A motion for a new trial may be joined with this motion, or a new trial may be prayed for in the alternative. If a verdict was returned the court may allow the judgment to stand or may reopen the judgment and either order a new trial or direct the entry of judgment as if the requested verdict had been directed. . . .”

       Principally, the amendments added new subdivisions (c) and (d) to Rule 50:
      “(c) Same: Conditional Ridings on Grant of Motion.

      “(1) If the motion for judgment notwithstanding the verdict, provided for in subdivision, (b) of this rule, is granted, the court shall also rule on the motion for a new trial, if any, by determining whether it should be granted if the judgment is thereafter vacated or reversed, and shall specify the grounds for granting or denying the motion for the new trial. If the motion for a new trial is thus conditionally granted, the order thereon does not affect the finality of the judgment. In case the motion for a new trial has been conditionally granted and the judgment is reversed on appeal, the new trial shall proceed unless the appellate court has otherwise ordered. In case the motion for a new trial has been conditionally denied, the appellee on appeal may assert error in'that denial; and if the judgment is reversed on appeal, subsequent proceedings shall be in accordance with the order of the appellate court.
      “(2) The party whose verdict has been set aside on motion for judgment notwithstanding the verdict may serve a motion for a new trial pursuant to Rule 59 not later than 10 days after entry of the judgment notwithstanding the verdict.
      “(d) Same: Denial of Motion. If the motion for judgment notwithstanding the verdict is .denied, the party who prevailed on that motion may, as appellee, assert grounds entitling him to a new trial in the event the appellate court concludes that the trial court erred in denying the motion for judgment notwithstanding the verdict. If the appellate court reverses the judgment, nothing in this rule precludes it from determining that the appellee is entitled to a new trial, or from directing the trial court to determine whether a new 'trial shall be granted.”

       Petitioner presented the following question in her petition for a writ of certiorari: >•
      “Do Rules 50 (d) and 38 (a) Federal Rules of Civil Procedure and the Seventh Amendment to the Constitution of the United States preclude the Court of Appeals from instructing the trial court to dismiss an action wherein the trial court denied the defendant’s motions for new trial and for judgment notwithstanding the verdict and entered judgment for the plaintiff?”
      In view of the question presented by petitioner and our order granting certiorari, we do not consider whether the Court of Appeals correctly held that petitioner’s evidence of negligence and proximate cause was insufficient to go to the jury.

       The Advisory Committee explains: “If the motion for new trial has been conditionally granted . . . [t]he party against whom the judgment n. o. v. was entered below may, as appellant, besides seeking to overthrow that judgment, also attack the condi-tional grant of the new trial. And the appellate court, if it reverses the judgment n. o. v., may in an appropriate case also reverse the conditional grant of the new trial and direct that judgment be entered on the verdict.” 31 F. R. D. 645. See Lind v. Schenley Indus. Inc., 278 F. 2d 79 (C. A. 3d Cir. 1960), cert. denied, 364 U. S. 835; Moist Cold Refrigerator Co. v. Lou Johnson Co., 249 F. 2d 246 (C. A. 9th Cir. 1957), cert. denied, 356 U. S. 968; Bailey v. Slentz, 189 F. 2d 406 (C. A. 10th Cir. 1951). See also Tribble v. Bruin, 279 F. 2d 424 (C. A. 4th Cir. 1960).

       Since the decision in Cone v. West Virginia Pulp & Paper Co., six courts of appeals have reversed the denial of a Rule SO (b) motion and directed entry of judgment n. o. v. in addition to the Tenth Circuit’s decision in this case. See, e. g., Capital Transit Co. v. Gamble, 82 U. S. App. D. C. 57, 160 F. 2d 283; Stopper v. Manhattan Life Ins. Co., 241 F. 2d 465 (C. A. 3d Cir.), cert. denied, 355 U. S. 815; Richmond Television Corp. v. United States, 354 F. 2d 410 (C. A. 4th Cir.); Mills v. Mitsubishi Shipping Co., 358 F. 2d 609 (C. A. 5th Cir.); Lappin v. Baltimore & Ohio R. Co., 337 F. 2d 399 (C. A. 7th Cir.); Massachusetts Mut. Life Ins. Co. v. Pistolesi, 160 F. 2d 668 (C. A. 9th Cir.). The other, circuits had rendered similar decisions prior to Cone. See Ferro Concrete Constr. Co. v. United States, 112 F. 2d 488 (C. A. 1st Cir.), cert. denied, 311 U. S. 697; Brennan v. Baltimore & Ohio R. Co., 115 F. 2d 555 (C. A. 2d Cir.), cert. denied, 312 U. S. 685; Connecticut Mut. Life Ins. Co. v. Lanahan, 113 F. 2d 935, modifying 112 F. 2d 375 (C. A. 6th Cir.); Federal Sav. & Loan Ins. Corp. v. Kearney Trust Co., 151 F. 2d 720 (C. A. 8th Cir.).

       The Advisory Committee’s Note to Rule 50(c)(2) explains: “Even if the verdict-winner makes no motion for a new trial, he is entitled upon his appeal from the judgment n. o. v. not only to urge that that judgment should be reversed and judgment entered upon the verdict, but that errors were committed during the trial which at the. least entitle him to a new trial.” 31 F. R. D. 646.

       Heretofore, when faced with this issue, the Court has met it head-on and thus avoided unnecessarily discussing the effect of Rule 50. See, e. g., Conway v. O’Brien, 312 U. S. 492; Berry v. United States, 312 U. S. 450; Halliday v. United States, 315 U. S. 94.

       Petitioner’s “Question Presented,” as set out in n. 3 of the Court’s opinion, is whether — -in addition to Rule 50 (d) — Rule 38 (a) and the Seventh Amendment “preclude the Court of Appeals from instructing the trial court to dismiss an action wherein the trial court denied the defendant’s motions for new trial and for judgment notwithstanding the verdict and entered judgment for the plaintiff?” Certainly, if there were sufficient evidence to go to the jury, then Rule 38 (a) and the Seventh Amendment preclude the Court of Appeals from directing a dismissal of petitioner’s case after she had obtained a jury verdict. To make it further clear that petitioner was challenging the Court of Appeals’ ruling on the sufficiency of the evidence, the petition for certiorari also states that “petitioner does not concede for one moment that the trial court and the jury were wrong and that the appellate court was fight in interpreting the evidence as to proximate cause and negligence.” And our order granting certiorari, while directing counsel’s attention to the question of the Court of Appeals’ power to dismiss the case under Rule 50 (c) and (d), stated that this question was “[i]n addition to all the questions presented by the petition.” 382 U. S. 914.

       See, e. g., Comment, 51 Nw. U. L. Rev. 397, 400-402 (1956); Note, 58 Col. L. Rev. 517, 524-525 (1958).


source: Caselaw Access Project

author: ■ Per Curiam. Mr. Justice Harlan,

license: Public Domain

text:
    O’BRIEN et al. v. UNITED STATES.
    No. 823.
    Decided March 20, 1967.

      Philip A. Gillis for O’Brien and Ivan Barns for Parisi, petitioners.

      Solicitor General Marshall, Assistant Attorney General Vinson, Beatrice Rosenberg and Mervyn Hamburg for the United States.
   ■ Per Curiam.

The petition for a writ of certiorari is granted, judgment vacated and the case is remanded to the United States District Court for the Eastern District of Michigan for a new trial should the Government seek to prosecute petitioners anew. Black v. United States, 385 U. S. 26.

Mr. Justice Harlan,

whom Mr. Justice Stewart joins,

dissenting.

Petitioners in this case, Charles O’Brien and Thomas Parisi, were convicted on several counts of removing merchandise from a bonded area under the. supervision of the United States Customs Service, in violation of 18 U. S. C. § 549. The items involved were, on the first count, applicable only to petitioner O’Brien, 14 cases of marble slabs; on the second count, a marble statue of St. Theresa; on the third count, 21 cases of valves and valve handles.

The issues raised in the petition for certiorari involve questions as to the sufficiency of the indictment and alleged errors at trial, none of which could well be deemed worthy of review by this Court. However, the Solicitor General in his response commendably notified the Court that pursuant to a general review of the use of. “electronic eavesdropping or wiretapping,”, he discovered that a microphone had been installed in a commercial . establishment owned by an acquaintance of petitioner O’Brien. A conversation in which O’Brien participated, occurring after the indictment and concerning his forthcoming trial, was overheard. The Solicitor General characterizes the episode as follows: “That conversation, although overheard by the monitoring agents and summarized in their logs, was not mentioned in any F. B. I. report nor were its contents communicated' to attorneys for the Department of Justice, including those who prosecuted this case.”

The Solicitor General further revealed a later conversation which he characterizes as follows: “It also appears from the logs of this surveillance . . . that petitioner O’Brien was on the premises and was overheard in January 1964, when he placed a telephone call and requested one of his attorneys to file an application relating to the territorial conditions of his release on bail. This conversation, like the one in May 1963, was noted in the logs of the monitoring agents but was not communicated in any manner outside the F. B. I.” (Footnote omitted.)

On the basis of these representations the Solicitor General indicated that he would “not oppose” a remand of the case for an adversary hearing as to the effect of this activity on the validity of petitioners’ convictions. The Court, however, without a word of explanation, vacates the convictions and remands the entire case for a new trial. I must respectfully • but emphatically dissent.

As I stated in dissenting from a similar disposition in Black v. United States, 385 U. S. 26, 31: “I agree, of course, that-petitioner.is entitled to a full-scale development of the facts, but I can see no valid reason why this unimpeáched conviction should be vacated at this stage. . . . [A] new trial is not an appropriate vehicle for sorting out the eavesdropping issue because until it is determined that such occurrence vitiated the original conviction no basis for a retrial exists. The Court’s action puts the cart before the horse.”

In Black the Court’s disposition might conceivably, be accounted for by the fact that the Government admitted that the contents of the recorded conversation had been incorporated in memoranda used by the prosecuting attorneys. In the present case, however; I can think of no justification for going beyond the position of the Solicitor General and forcing the Government to go through the effort and expense of an entirely'new trial on the basis of this peripheral, totally insignificant, and uncommunicated eavesdropping. As in Black, I consider the Court’s action quixotically precipitate.

I would deny this petition for certiorari, but, given the Solicitor General’s acknowledgment that electronic eavesdropping or wiretapping did in fact take place, I would remand the case to the District Court for a full hearing as to the circumstances and effects of these activities.

      In Schipani v. United States, 385 U. S. 372, the Court properly vacated the conviction because the Solicitor General conceded that evidence used at trial was tainted.


author: Per Curiam.

text:
    GULF-CANAL LINES, INC., et al. v. UNITED STATES et al.
    No. 947.
    Decided March 20, 1967.

      Harry C. Ames, Jr., T. Randolph Buck, Nuel D. Belnap and Richard J. Hardy for appellants.

      Solicitor General Marshall, Assistant Attorney General Turner, Howard E. Shapiro, Robert W. Ginnane and Fritz R. Kahn for the United States et al.

      Nuel D. Belnap and'Richard J. Hardy for Waterways Freight Bureau, as amicus curiae, in support of appellants.
   Per Curiam.

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


text:
    NEW YORK v. UNITED STATES et al.
    No. 968.
    Decided March 20, 1967.

      Louis J. Lefkowitz, Attorney General of New York, Ruth Kessler Toch, Solicitor General, Dunton F. Tyrian, Assistant Solicitor General, Matthew A. Tiffany, Assistant Attorney General, and Walter J. Myskowski for appellant.

      Solicitor General Marshall, Assistant Attorney General Turner, Howard E. Shapiro, Robert W. Gihnane and Leonard S. Goodman for the United States et al.

      R, J. Murphy and D. M. Tolmie for appellee railroads; William C. Serinett, Attorney General of Pennsylvania, and Edward Friedman for the Commonwealth of Pennsylvania, and Eugene T. Liipjert for the Port Authority of Allegheny County et al., appellees.
   Per Curiam.

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


text:
    ARDEN FARMS CO. et al. v. STATE DEPARTMENT OF AGRICULTURE et al.
    No. 1004.
    Decided March 20, 1967.

      James C. Dezeñdorf for appellants.

      Robert Y. Thornton, Attorney General of Oregon, and Harold E. Burke and Don Parker, Assistant Attorneys General, for appellees.,
   Per Curiam.

The motion to dismiss is granted and the appeal is dismissed for want of a. substantial federal question.

Mr. Justice Douglas, Mr. Justice Harlan and Mr. Justice White are of the opinion that probable jurisdiction should be noted and the case set for oral argument.


author: Mr. Justice Black

text:
    RAILROAD TRANSFER SERVICE, INC. v. CITY OF CHICAGO et al.
    No. 209.
    Argued February 13, 1967.
    Decided March 27, 1967.

      Amos M. Mathews argued the cause for petitioner. With him or the briefs was David Axelrod.

      Raymond F. Simon argued the cause and filed a brief for respondents.

      Joseph H. Hays, James W. Nisbet, Ed White and J. D. Feeney filed a brief for Chicago Terminal Railroads, as amicus curiae, urging reversal.
   Mr. Justice Black

delivered the opinion of the Court.

This case arises from more than a decade of controversy between Railroad Transfer Service, Inc., and the City of Chicago Over the city’s persistent efforts to regulate Transfer’s business, under contract with the railroads, of daily transporting by motor vehicle thousands of interstate railroad passengers between the city’s rail terminals. In 1955 the railroads hired Transfer to replace another motor carrier in performing this interterminal transfer service. Bent on blocking this replacement, the city then amended Chapter 28 of its Municipal Code, which had before been primarily directed at regulating taxicab companies, to require that new companies seeking to perform the transfer service obtain licenses from the city by demonstrating, among other things, their ability to satisfy the public convenience and necessity. Because the city threatened to fine Transfer and arrest its drivers if it pperated without a city license for each vehicle, Transfer, without attempting to obtain such licenses, and the railroads brought suit against the city to challenge the validity of the public-convenience-and-necessity section of the ordinance. In Chicago v. Atchison, T. & S. F. R. Co., 357 U. S. 77, rejecting the city’s argument that the challenge was premature, we held that section “completely invalid insofar as it applies to Transfer . . . .” Id at 89.

In 1959, after our decision in Atchison, the city repealed the invalid section, added some new provisions, and amended or left unchanged others which clearly applied to Transfer but were not specifically dealt with in our Atchison opinion. The amended ordinance, still making it unlawful for Transfer to operate without obtaining licenses from the city, provides that an applicant for a license must, among other things: pay a license fee, hire only Chicago residents as its drivers, maintain its principal place of business in Chicago, and file a detailed written application. Upon receipt of an application, the city must investigate the applicant’s “character and reputation ... as a law -abiding citizen” and his “financial ability” to render “safe and comfortable” service, to replace and maintain equipment, and to pay all judgments arising out of vehicle operation. If the city, finds that the applicant is “qualified” and that the vehicle for which the license is sought is in “safe and proper condition,” the amended ordinance requires the city to issue the license. Licenses are valid for only one year, and under the amended ordinance a licensee must annually go through this detailed application procedure. ’Outstanding licenses are revocable on a number of grounds at the city’s discretion. Finally, the ordinance provides a fine of up to $100 for each violation of any of its provisions and specifies that each day such violation continues shall be deemed a separate offense.

With the ordinance thus amended, the city in 1960 demanded that Transfer apply for licenses. Transfer did so, after unsuccessfully attempting to pay the license fees under protest, and .then brought this present lawsuit against the city, asking the District Court to declare the above-mentioned provisions of the ordinance invalid as unconstitutional burdens on interstate commerce and as unconstitutional attempts to regulate in an area preempted by the Interstate Commerce Act, 24 Stat. 379, as amended, 49 U. S. C. § 1 et seq. While the case was pending, the city again demanded that Transfer cease and desist operations unless it “fully complied” with the ordinance and again amended its ordinance to impose new requirements on Transfer such as filing detailed financial reports and opening its books and records for city inspection. Nevertheless, the District Court dismissed Transfer’s action as premature. Because Transfer had continued to operate by paying its license fees into court and because the city had taken no further action to enforce its ordinance, the Court of Appeals affirmed, holding Transfer’s complaint premature and the ordinance valid on its face. 358 F. 2d 55. We granted certiorari to consider these two holdings and conclude that the action is not premature and that the ordinance is invalid.

First. The prematurity arguments which the city makes here are similar to. the ones it made and we rejected in Atchison. Though the city argues that some of the challenged provisions of the ordinance do not apply to Transfer, the Court of Appeals clearly considered them applicable. Though the city argues that it does not retain as much power to deny Transfer a license as Transfer fears, it is clear that “the City claims at least some power ... to decide whether a motor carrier may transport passengers from, one station to another.” 357 U. S., at 85 (emphasis added)>. That was enough in Atchison to enable Transfer to attack the public-convenience-and-necessity requirement, even though the city there disclaimed any power to deny a license because of economic considerations. It is enough here. It is difficult to imagine a controversy more actual, alive, and ripe than this one. It has lasted for more than a decade. Though Transfer obtained its 1960 licenses after it filed this lawsuit to challenge the ordinance, it has continued to operate only by paying the license fees into court. The city has continually — and even while this case was pending — amended its ordinance to regulate Transfer further and has continually demanded that Transfer fully comply with the ordinance. Though the city-now disclaims any power to “stop” Transfer’s operations, it does not give up its power under the ordinance to fine Transfer and arrest its drivers for operating without licenses or its power to revoke- for discretionary reasons all licenses which Transfer may obtain. In short, although Transfer continues to operate, it is only at the city’s reluctant sufferance. If the ordinance is invalid insofar as it applies to Transfer, then, as we said in Atchison, “that company was not obligated to apply for a . . . [license] and submit to the administrative procedures incident thereto before bringing this action.” 357 U. S., at 89.

Second. The rationale of Atchison compels our holding that the provisions of the ordinance now challenged by Transfer cannot be validly applied to it. In Atchison, recognizing that Transfer’s “service is an integral part of interstate railroad transportation authorized and subject to regulation under the Interstate Commerce Act,” id., at 89, we pointed to various provisions of the Act which in our view completely precluded the city “from exercising any veto power over such transfer service,” id., at 85 (emphasis added). The Act, as we said in Atchison, gives the railroads, not the city, the “discretion to determine who may transfer interstate passengers and baggage between railroad terminals.” Id., at 84-85. That power, that discretion, is precisely what the comprehensive licensing scheme of the amended ordinance purports to reserve to the city. It matters not that the city no longer seeks to exercise that power by requiring a showing of public convenience and necessity. The total effect of the current ordinancé on Transfer’s operations and the burdens it places on interstate commerce are the same. As we recognized in Atchison, the city retains authority to insist that Transfer 'obey “general safety regulations” such as traffic-signals and speed limits. Id., at 88. Many of the provisions of the current ordinance, such as the requirements that Transfer maintain its principal place of business in Chicago, have its drivers reside in Chicago, file annually the most detailed financial reports, and open its books and records for city inspection, bear no resemblance to general safety regulations such as trafile signals and speed limits. Other provisions, if standing alone and enforced by means other than this particular licensing program, might possibly be justified as safety regulations. Castle v. Hayes Freight Lines, 348 U. S. 61. But we need not decide that question now, for here each of these provisions is an integral part of, and cannot be divorced from, the comprehensive licensing scheme that the city seeks to impose as a whole on Transfer. See Adams Express Co. v. New York, 232 U. S. 14. Here the city seeks to enforce each and all of these related requirements by denial of a license for noncompliance and then criminal sanctions for operation without a license. This is the “veto power” which Atchison held the city may not exercise.

Reversed.

Mr. Justice Harlan would affirm the judgment below substantially for the reasons given in the opinion of Chief Judge Hastings for the Court of Appeals, 358 F. 2d 55.

       § 28-2. (The provisions herein cited are from the current Municipal Code.)

       No vehicle may be licensed until it has been inspected by the city and found to be “in safe operating condition and to have adequate . . . facilities which are clean and in good repair for the comfort'and convenience of passengers” (§28-4), unless it has at least two doors on each side (§28-4.1), and unless the licensee has a specified amount of public liability, property damage, and workmen’s compensation insurance evidenced by policies filed with the city (§28-12). The validity of these provisions is not specifically challenged by Transfer.

       Section 28-7 imposes an annual fee of $40 for each terminal vehicle, clearly defined in § 28-1 (p) to include Transfer’s vehicles, and provides that such fee “shall be applied to the cost of issuing such license, including, without being limited to, the investigations, inspections and supervision necessary therefor, and to the cost of regulating all operations of public passenger vehicles . . . .”

       Provisions of Chapter 28 require that drivers be public chauffeurs licensed by the city, §§28-1(1), 28-9, and several provisions of Chapter 28.1 appear to make residence in the city a condition to being licensed as a chauffeur, e. g., §§28.1-3, 28.1-9, and 28.1-14.

       Section 28-5.1, added for the first time in 1959.

       Section 28-5, describing the information to be contained in the application, was amended in 1959 to'provide:
      “If the applicant is affiliated or to become affiliated or identified with any person [defined elsewhere to. include a corporation] by . . . service agreement, the application shall contain the full name, Chicago business address and telephone number of said affiliate, and a copy of the. agreement with said affiliate, if .any, shall be filed with the application.”
      Since Transfer operates under a service contract with the railroads,. it is conceivable that the railroads might be considered affiliates of Transfer. However, it is clear that the provisions of the ordinance requiring an affiliate to maintain its principal place of business in Chicago, to register with the Commissioner, to carry certain insurance, and to comply with all provisions of the ordinance and-rules issued by the Commissioner, §§ 28-5.1, 28-12.1, 28 — 13.1, cannot be validly applied to the railroads, and the city does not now suggest that they can.

       §28-6:
      “Upon receipt of an application for a public passenger vehicle license the commissioner shall cause an investigation to be made of the character and reputation of the applicant as a law abiding citizen; the financial ability of the applicant to. render safe and comfortable transportation service, to maintain or replace the equipment for such service and to pay all judgments and awards which may be rendered for any cause arising out of the operation of a public passenger vehicle during the license period. If the commissioner shall find that the application, and all other statements and docu- ■ , merits required to be filed with said application have been properly ^Xecuted, and that the applicant is qualified to pursue the occupation

        of a cabman or coachman [defined in § 28-1 (m) to include- the proprietor of a terminal vehicle], the commissioner shall issue to him and in his name a license for each public passenger vehicle applied for, to terminate on the Slst day of December following the date of issue, provided that each said vehicle is registered in applicant’s name and is in safe and proper condition at the time the license is issued.” The italicized sentence was added in 1959.

       Prior to 1963 a license was subject to discretionary revocation only if it was obtained by an application in which a material fact was omitted or stated falsely. § 28-15.1. This section was amended in 1963 to authorize revocation also where a licensee fails “to carry out any representation made to the Commissioner before the issuance of such license,” and to make clear that revocation under this section may extend to all licenses held by a person who obtains any single license by misrepresentation.
      Under §28-14, the city’s, vehicle commissioner may suspend a license at any time that a vehicle becomes “unsafe for operation or . . . unfit for public use,” and “[i]n determining whether any . . . vehicle is unfit for public use the commissioner shall give consideration to its'" effect on the health, comfort and convenience of passengers and its public appearance on the streets of the city.”

       § 28-32.

       The city also ordered Transfer’s drivers to submit to medical examinations and fingerprinting.

       §28-30.1:
      “Every cabman, corporation and affiliate shall keep and provide accurate books and records of account of his operations at his place of business in the city. On or before May 1 of each year, every cabman, corporation and affiliate shall file with the Commissioner a profit and loss statement for the preceding calendar year, showing all his earnings and expenditures for operation, maintenance and repair of property, depreciation expense, premiums paid for workmen’s compensation and public liability insurance, and taxes paid for unemployment insurance and social security, and all state and local license fees, property taxes and Federal income taxes, and a balance sheet taken at the close of said year.
      “The Commissioner , . . shall have access to the property, books, contracts, accounts and records during normal business hours at said place of business, for such information as may be required for the effective administration and enforcement of the provisions of this chapter ....

        “In addition to the foregoing reports, each cabman shall within thirty days after the six months’ period ended December 81 and within thirty days after the six months’ period ended June 80 of each year file a sworn statement with the Commissioner showing his gross fares collected and his operating expenses for the six months immediately preceding said dates.”

      The italicized provisions were added in 1963. As first enacted in 1959, the section was applicable only to taxicab companies.

       For instance, the city argues that § 28-30.1 does not apply to Transfer. But, as the Court of Appeals apparently recognized, the 1963 amendments of this section make its first two paragraphs applicable to Transfer. See note 11, supra.

       The city argues that its commissioner may only consider the so-called “safety factors” specifically enumerated in § 28-6 in determining whether Transfer is “qualified” to perform the interterminal service. See n. 7, supra. Transfer, perhaps understandably, is afraid that the word “qualified” gives the commissioner unlimited discretion to consider the very same nonsafety factors that he previously could consider under the invalid public-convenience-and-necessity provision.

       At the same time the city was assuring the District Court that its threat to stop Transfer was an “idle” one, it was adding a new provision to the ordinance which seems custom-tailored to make Transfer’s already precarious position more .precarious. Section 28-31.2, added in 1963, provides':
      “No license which has been. revoked, surrendered, cancelled or not applied for within a period of seven months after such license application is due, shall hereafter be issued.”

       The city argues 'that Transfer cannot challenge the principal-place-of-business requirement because Transfer now has its principal, and only, place of business jn Chicago. The provision quoted in n. 14, supra, makes, it clear that neither Transfer, which might want to change its place-of business, nor the railroads, which might want to hire another transfer agent or perform the service themselves, can afford to make any change prior to challenging the plaee-of-business requirement. Under § 28-15, “ [i] f any licensee abandons his . . . place of business in the city ... all his licenses shall be revoked.” After such revocation, no new licenses may be issued.

       In particular, we mentioned 49 U. S. C. §§ 1 (4) and 3 (4) requiring the railroads to provide, reasonable and proper facilities for the transfer of passengers between terminals, § 15 (3) giving the Interstate Commerce Commission power to establish such service, and § 302 (c) (2) providing that the interterminal service conducted by any motor carrier under contract with a railroad shall be regarded as transportation performed by the railroad and shall be subject to the same comprehensive scheme of regulation which applies to such transportation. Furthermore,. under a proviso of § 302 (c), the ICC retains power to treat interterminal service as motor carrier service under §304 for the purpose of regulating “qualifications and maximum hours of service of employees and safety of operation and equipment.”
      Although, at the time we decided Atchison, the ICC had pot adopted any special regulations for interterminal transfer service, we there noted that it could do so at any time under the Act, id., at 86-87, arid since then, the ICC has, indeed, promulgated under § 304 certain safety regulations which are specifically applicable to motor carriers engaged in such service. See generally 49 CFR §190.1 et-seq.

       In Atchison we- noted that the city retains authority to “exact reasonable fees for . . . use of the local streets.” Id., at 88. The license fees exacted here, however, were for the purpose of enforcing this invalid licensing scheme. See note 3, supra. Transfer cannot be compelled to pay them.


author: Mr. Justice Douglas

text:
    UNITED STATES v. FIRST CITY NATIONAL BANK OF HOUSTON et al.
    No. 914.
    Argued February 20-21, 1967.
    Decided March 27, 1967.

      Assistant Attorney General Turner argued the cause for the United States in both cases. With him on the brief were Solicitor General Marshall and Richard A. Posner.

      David T. Searls argued the cause for appellees First City National Bank of Houston et al. in No. 914. With him on the brief were Harry M. Reasoner, Leon M. Payne and William R. Lummis. Frederic L. Ballard argued the cause for appellees Provident National Bank et al. in No. 972. With him on the brief were Charles I. Thompson, Jr., Tyson W. Coughlin and Richard C. Bull. Eugene J. Metzger in No. 914 and Joseph J. O’Malley in No. 972 argued the- cause for appellee Comptroller of the Currency. With them on the brief were Robert Bloorh, Charles H. McEnerney, Jr., and Philip L. Roache, Jr.

      Together with No. 972, United States v. Provident National Bank et al., on appeal from the United States District Court for the Eastern District- of Pennsylvania, argued February 21, 1967.

   Mr. Justice Douglas

delivered the opinion of the Court.

These civil suits were filed by the United States under § 7 of the Clayton Act, 38 Stat. 731, as amended, 64 Stat. 1125, 15 U. S. C. § 18, to prevent two bank mergers — one in Texas between the First City National Bank of Houston and the Southern National Bank of Houston, and one in Pennsylvania between the Provident National Bank and the Central Penn National Bank, both in Philadelphia.

The Comptroller of the Currency approved the mergers under the Bank Merger Act of 1966, 80 Stat. 7,12 U. S. C. § 1828 (e) (1964 ed., Supp. II). The United States thereupon brought these suits in the respective District Courts and the Comptroller intervened in them. The District Courts dismissed the complaints. No. 914 (unreported) ; No. 972, 262 F. Supp. 397. The United States appealed, 32 Stat. 823, as amended, 15 U. S. C. § 29, and we noted probable jurisdiction, 385 U. S. 1023, 1024.

I. ■

It is suggested that the complaints are defective in that they fail to state that the actions are brought under the Bank Merger Act of 1966, do not even mention the Act, and that, therefore, these cases should be remanded to allow the Government to amend the complaints.

The Bank Merger Act of 1966 provides that “[a]ny action brought under the antitrust laws” shall be brought within a specified time (12 U. S. C. § 1828 (c)(7)(A)); it also specifies the standards to be applied by a court in a judicial proceeding challenging a bank merger “on the ground that the merger . . . constituted a violation of any antitrust laws other than section 2 of [the Sherman Act]” (12 U. S. C. § 1828 (c)(7)(B)); and it provides immunity from such an attack if those standards are met. Section 1828 (c)(8) provides that, “[f]or the purposes of [§ 1828 (c) ], the term ‘antitrust laws’ means . . . [the Sherman Act, the Clayton Act], and any other Acts in pari materia.” (Emphasis added.) Thus, an action challenging a bank merger on the ground of its anticompeti-tive effects is brought under the antitrust laws. Once an action - is brought under the antitrust laws, the Bank Merger Act provides a new defense or justification to the merger’s proponents — “that the anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served.” 12 U. S. C. § 1828 (c)(5)(B). There is no indication that an action challenging a merger on the ground of its anticompetitive effects is bottomed on the Bank Merger. Act rather than on the antitrust, laws. What is apparent is that Congress intended that a defense or justification be available once it had been determined that a transaction would have anticompetitive effects, as judged by the standards normally applied in antitrust actions. Thus, the Government’s failure to base the actions on the Bank Merger Act of 1966 does not constitute a defect in its pleadings. Nor is the Government’s failure to mention the Bank Merger Act fatal, for, as we shall see, the offsetting community “convenience and needs,” as, specified in 12 U. S. C. § 1828 (c)(5)(B), must be pleaded and proved by the defenders of the merger.

. - n.

An application for approval of- the Texas merger was made to the Comptroller of the Currency pursuant to 12 U. S. C. § 1828 (c)(5)(B), which provides that he shall not approve the merger “whose effect in any section of*the country may be substantially to lessen competition, or to tend to create a monopoly, or which in any other manner would be-in restraint of trade, unless [he] finds that the - anticompetitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served.” Requests were made of the Attorney General and the Federal Reserve Board pursuant to 12 U. S. C. § 1828 (c) (4) for their views- and both submitted reports to the Comptroller that the merger would have serious anticompetitive effects. The Comptroller nonetheless approved it.

The same procedure was followed in the Pennsylvania case, and the Attorney General and Federal Reserve, submitted adverse reports. Nonetheless the Comptroller approved this merger also. And, as we have said, these civil suits were instituted to enjoin the mergers under § 7 of the Clayton Act.

Section 7 of the Clayton^ Act condemns mergers where “the effect of such acquisition may be substantially to lessen competition.” The Bank Merger Act of 1966 did not change that standard or the machinery for obtaining the prior approval of the Comptroller and a preliminary expression of views by the Attorney General and the Federal Reserve, but it added an additional standard for the Comptroller. Section 1828 (c)(5)(B) says, as already noted, that no merger shall be approved where the effect “may be substantially to lessen competition” unless the responsible agency, in this case the Comptroller, “finds that the anti-competitive effects of the proposed transaction are clearly outweighed in the public interest by the probable effect of the transaction in meeting the convenience and needs of the community to be served.” And that subsection goes on to say: “In every case, the responsible agency shall take into consideration the financial and managerial resources and future prospects of the existing and proposed institutions, and the convenience and needs of the community! to be served.”

Section 1828 (c) (7) (B) provides that in a judicial proceeding attacking a merger on the ground that it violates the antitrust laws “the standards applied by the court shall be identical with” those the banking agencies must apply. Arid 12 U. S. C. § 1828 (c)(7)(A) states that “In any such action, the court shall review de novo the issues presented.” (Emphasis added.)

Section 1828 (c)(7)(A) also provides that the commencement of an antitrust action in the courts “shall stay the effectiveness of the agency’s approval unless the court shall otherwise specifically order.”

It is around these new provisions of the 1966 Aet and their interplay with §.7 of the Clayton Act that the present controversy turns.

First is the question whether the burden of proof is on the defendant banks to establish that an anticom-petitive merger is within the exception of 12 U, 8. C. § 1828 (c) (5) (B) or whether it is on the Government. We think it plain that the banks carry , the burden.' That is the general rule where one claims the benefits of an exception to the prohibition of a statute, Federal Trade Commission v. Morton Salt Co., 334 U. S. 37, 44-45. The House Report (No. 1221, 89th Cong., 2d Sess.) makes clear that antitrust standards were the norm and anticompetitive bank mergers, the exception: “. . . the bill acknowledges that the general principle of the antitrust- laws — that substantially anticompetitive mergers are prohibited — applies to banks, but permits an exception in cases where it is clearly shown that a given merger is so beneficial to the convenience and needs of the community to be served . . . that it would be in the public interest to permit it ” (Emphasis added.) Id., at 3-4.

The sponsor of the bill that was finally enacted, Congressman Patman, flatly stated: “It should be clearly noted that the burden of establishing such 'convenience and needs' is on the banks seeking to merge; and when we say clearly outweighed we mean outweighed' by the preponderance of the evidence.” 112 Cong. Rec.' 2333-2334 (Feb. 8, 1966).

We therefore disagree with the views ■ of the lower courts to the contrary. *

This problem is, of course, subtly merged with the question whether judicial review of the Comptroller’s decision is in the category of other administrative rulings which are sustained unless a court is persuaded that the agency’s action is clearly unsupported or not supported by substantial evidence.

The 1966 Act was the product of powerful contending forces, each of which in the aftermath claimed more of a victory than it deserved, leaving the controversy that finally abated in Congress to be finally resolved in the courts. So far as review of administrative agency action is concerned, we have only this to say. Prior to the 1966 Act administrative approval of bank mergers was necessary. Yet in an antitrust action later brought to enjoin them we never stopped to consider what weight, if any, the agency’s determination should have in the antitrust case. See United States v. Philadelphia National Bank, 374 U. S. 321; United States v. First Nat. Bank, 376 U. S. 665. Traditionally in antitrust actions involving regulated industries, the courts have never given presumptive weight to a prior agency decision, for the simple reason that Congress put such suits on a different axis than was familiar in administrative procedure. United States v. Radio Corporation of America, 358 U. S. 334; United States v. El Paso Natural Gas Co., 376 U. S. 651; United States v. Philadelphia National Bank, supra; United States v. First Nat. Bank, supra. We have found no indication that Congress designed judicial review differently under the 1966 Act than had earlier obtained.

In fact, as already noted, “the standards applied by the court shall be identical with those that the banking agencies are directed to apply.” 12 U. S. C. § 1828 (c) (7)(B). This language does not express the conventional standard, i. e., whether the agency’s action is supported by substantial evidence. In the latter instance it is the agency’s function to determine whether the law has been violated, while it is the court’s function to ascertain whether, absent error in statutory construction, the agency’s action has substantial support in the evidence.

There is no indication that Congress took that course here. Indeed the 1966 Act provides that the court in an antitrust action “shall review de novo the issues presented.” (Emphasis added.) 12 U. S. C. § Í828 (c)(7)(A). It is argued that the use of the word “review” rather than “trial” indicates a more limited scope to judicial action. The words “review” and “trial” might conceivably be used interchangeably. The critical words seem to us to be “de novo” and “issues presented.” They mean to us that the court should make an independent determination of the issues. Congressman Patman, the Chairman of the House Committee that drafted the Act, in speaking of this de novo review, said that the court would “completely and On its own make a determination as to whether the challenged bank merger should .be approved under the standard set forth in paragraph 5 (B) of the bill.” He added that the “court is not to give any special weight to the determination of the bank supervisory agency on this, issue.” 112 Cong.' Rec. 2335 (Feb. 8, 1966). Indeed the momentum of judicial precedents is in .that direction. For immunity from antitrust laws “is not lightly implied.” California v. Federal Power Commission, 369 U. S. 482, 485. And .the grant of administrative power to give immunity unless the agency's decision is arbitrary; 'capricious, or unsupported by substantial evidence, would be a long step in that direction. • Moreover, the Comptrollér’s action is informal, no hearings in the customary sense having been held prior to the 1966 Act (United States v. Philadelphia National Bank, supra, at 351) and none being required by Congress in the 1966 Act. We would therefore have to assume that Congress made a revolutionary innovation by making administrative action well nigh conclusive, even though no hearing had been held and no record in the customary sense created.

The courts may find the Comptroller’s reasons persuasive or well nigh conclusive. But it is the court’s judgment, not the Comptroller’s, that finally determines whether the merger is legal. That was the practice prior to the 1966 Act; and we cannot find a purpose on the part of Congress to change the rule. This conclusion does not raise serious constitutional questions by making the courts perform non judicial tasks. The “rule of reason,” long prevalent in the antitrust field (see, e. g., Chicago Board of Trade v. United States, 246 U. S. 231), has been administered by the courts. A determination of tiie effect on competition within the meaning of § 7 of the Clayton Act is a familiar judicial task. The area of “the convenience and needs of the community to be served,” now in focus as part of the defense under the 1966 Act, is related, though perhaps remotely, to the failing-company, doctrine, long known to the courts in antitrust merger cases. United States v. Diebold, Inc., 369 U. S. 654. The appraisal of competitive factors is grist for the antitrust mill. See, e. g., United States v. Philadelphia National Bank, supra, 357-367. The courts are not left at-large as planning agencies. The effect on competition is the standard; and it is a familiar one. If the anticompeti-tive effect is adverse, then it is to be excused only if “the convenience and needs of the community to be served” clearly outweigh it. We see no problems in bringing these standards into the area of judicial competence. There are no constitutional problems here not present in the “rule of reason” cases.

There is left only the stay issue; As we have seen, the 1966 Act provides that a timely antitrust action “shall stay the effectiveness of the agency’s approval unless the court shall otherwise specifically order.” 12 U. S. C. § 1828 (c)(7)(A). The lower courts dissolved the statutory stays on dismissing the antitrust suits.

Our remand will direct that the stays continue until the hearings below are completed and any appeal is had. A stay of course is not mandatory under any and all circumstances. But absent a frivolous complaint by the United States, which we presume will be infrequent, a stay is essential until the judicial remedies have been exhausted. The caption of the 1966 Act states that it is designed “[t]o establish a procedure for the review of proposed bank mergers so as to eliminate the necessity for the dissolution of merged banks.” Moreover, bank mergers may not, absent emergency conditions, be consummated until 30 days after approval by the Comptroller in order to enable the Attorney General to commence an antitrust action, 12 U. S. C. § 1828 (c)(6), which, apart from emergency situations, must be started within 30 days of the agency’s approval, 12 U. S. C. § 1828 (c)(7)(A). The legislative history is replete with references to the difficulty of unscrambling two or more banks after their merger. The normal procedure therefore should be maintenance of the status quo until the antitrust litigation has run its course, lest consummation take place and the unscrambling process that Congress abhorred in the case of banks be necessary.

Reversed.

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

       12 U. S. C. §1828 (e)(5)(B) provides, as we have seen, that a merger shall not be approved “whose effect.in any section of the country may be substantially to lessen competition.” It is pointed out that that standard omits the phrase “in-any line of commerce” which is present in § 7 of the Clayton Act. It is argued that Con-' gress meant that commercial banking is no longer to be considered as an area of effective competition and that the Act establishes in banking “a market test measürable only by larger commercial realities.”
      We do not reach this question and we intimate no opinion on it nor any views on the merits of these mergers or on the justifications that are urged in their support. All questions except the procedural ones treated in the opinion are reserved.

       The Chairman of the Federal Reserve System testified in the hearings that preceded enactment of the Bank Merger Act of 1966 that “a Federal court order cannot recreate the two banks that formerly existed .... [N]o matter how one may feel about whether the merger should have taken place in the first instance, there is no turning back. To unscramble the resulting bank clearly'poses serious problems not only for the bank but for its customers and the community.” Hearings on S. 1698 and related bills before the Subcommittee on Domestic Finance of the Hous§. Committee on Banking and Currency, 89th Cong., 1st Sess., 11. The president of the American Bankers Association declared that “ ‘[u]nmerging’ a bank after the two banks have operated as a single unit is nightmarish even in the abstract.” Hearings on S. 1698 before a Subcommittee of the Senate Committee on Banking and Currency, 89th Cong., 1st Sess., 63.. Senator Robertson stated, “you are dealing with a physical impossibility,” and “the community gets hurt,” when divestiture is attempted in a bank merger case. Id., at 4. Senator Proxmire spoke of “the agony and the inequity and the financial loss, disruption of the economy in the community, of being required . . . to unscramble.” Id., at 202.