author: Me. Justice Beennan

text:
    CARBON FUEL CO. v. UNITED MINE WORKERS OF AMERICA et al.
    No. 78-1183.
    Argued November 5, 1979
    Decided December 10, 1979

      BreNNAN, J., delivered the opinion for a unanimous Court.

      David D. Johnson argued the cause for petitioner. With him on the briefs were Forrest H. Roles and Larry L. Roller.

      Harrison Combs argued the cause for respondents. With him on the brief were Richard L. Trumka, James M. Haviland, Isaac N. Groner, and Walter H. Fleischer.

      Briefs of amici curiae urging reversal were filed by Leonard L. Schein-holtz for the Bituminous Coal Operators’ Association, Inc.; by Vincent J. Apruzzese and Stephen A. BoJcat for the Chamber of Commerce of the United States; and by Daniel J. Popeo and Paul D. Kamenar for the Washington Legal Foundation.
      Briefs of amici curiae urging affirmance were filed by J. Albert Woll and Laurence Gold for the American Federation of Labor and Congress of Industrial Organizations; and by William Tomar for the Glass Bottle Blowers Association of the United States and Canada, AFL-CIO.

   Me. Justice Beennan

delivered the opinion of the Court.

The question for decision in this case is whether an international union, which neither instigates, supports, ratifies, nor encourages “wildcat” strikes engaged in by local unions in violation of a collective-bargaining agreement, may be held hable in damages to an affected employer if the union did not use all reasonable means available to it to prevent the strikes or bring about their termination.

Petitioner, Carbon Fuel Co., and respondent United Mine Workers of America (UMWA) were parties to the National Bituminous Coal Wage Agreements of 1968 and 1971, collective-bargaining agreements covering, inter alia, workers at petitioner’s several coal mines in southern West Virginia. Forty-eight unauthorized or “wildcat” strikes were engaged in by three local unions at petitioner’s mines from 1969 to 1973. Efforts of District 17, a regional subdivision of UMWA, to persuade the miners not to strike and to return to work were uniformly unsuccessful.

Petitioner brought this suit pursuant to § 301 of the Labor Management Relations Act, 1947 (Taft-Hartley Act), 61 Stat. 156, 29 U. S. C. § 185, in the District Court for the Southern District of West Virginia. UMWA, District 17, and the three local unions were named defendants. The complaint sought injunctive relief and damages, alleging that the strikes were in violation of the two collective-bargaining agreements. The case was tried before a jury. The trial judge found as a matter of law that the strikes violated the agreements. The trial judge also instructed the jury, over objection of UMWA and District 17, that those defendants might be found liable in damages to petitioner “[i]f you find from a preponderance of the evidence that the International and District Unions did not use all of the reasonable means available to them to prevent work stoppages or strikes from occurring in violation of the contract, or to terminate any such work stoppages or strikes after they began. . . App. 197a. Verdicts in different amounts were returned against UMWA, District 17, and the three local unions.

On appeal, the Court of Appeals for the Fourth Circuit vacated in part the judgments against the three local unions but otherwise affirmed those judgments. However, the Court of Appeals vacated the judgments against UMWA and District 17, and remanded to the-District Court with directions to dismiss the case against those defendants. 582 F. 2d 1346 (1978). The court held that this result was required by its earlier decision in United Construction Workers v. Haislip Baking Co., 223 F. 2d 872 (1955). 582 F. 2d, at 1351. Haislip held as follows, 223 F. 2d, at 877-878:

“We have never held . . . that there is any responsibility on the part of a union for a strike with which it has had nothing to do; and there manifestly is no such liability. If [UMWA or District 17] had done nothing when [petitioner] called on them to help get the men back to work, there would have been no liability on the part of [UMWA or District 17]. This being true, defendants were not rendered liable by the efforts which [District 17] made to bring about an adjustment of the difficulty, even if they did not do everything that they might have done to that end. The question is not whether they did everything they might have done, but whether they adopted, encouraged or prolonged the continuance of the strike. There is no evidence of any sort that they did.”

The Court of Appeals recognized that its conclusion was in conflict with the holding of the Court of Appeals for the Third Circuit in Eazor Express, Inc. v. International Brotherhood of Teamsters, 520 F. 2d 951 (1975) (union liable under no-strike clause for failure to use best efforts to end unauthorized strikes). We granted certiorari to resolve the conflict. 440 U. S. 957 (1979). We affirm.

Petitioner argues that the obligation of UMWA and District 17 to use all reasonable means to prevent and end unauthorized strikes in violation of the collective-bargaining agreement is either (a) implied in law because the agreement contains an arbitration provision or (b) in any event is to be implied from the provision of the agreement that the parties “agree and affirm that they will maintain the integrity of this contract. . . .” We find no merit in either argument.

A

Insofar as petitioner’s argument relies on the history of § 301 and the congressional plan to prevent and remedy strikes in breach of contract by encouraging arbitration, the legislative history is clear that Congress limited the responsibility of unions for strikes in breach of contract to cases when the union may be found responsible according to the common-law rule of agency.

Section 301 (a) makes collective-bargaining agreements judicially enforceable. Textile Workers v. Lincoln Mills, 353 U. S. 448 (1957). At the same time, Congress gave careful attention to the problem of strikes during the term of a collective-bargaining agreement, but stopped short of imposing liability upon a union for strikes not authorized, participated in, or ratified by it. Rather, to effectuate § 301 (a), the Taft-Hartley Act provided in § 301 (b) that a union “shall be bound by the acts of its agents,” and in § 301 (e) provided that the common law of agency shall govern “in determining whether any person is acting as an ‘agent’ of another person.” In explaining § 301 (e) Senator Taft stated, 93 Cong. Rec. 4022 (1947):

“If the wife of a man who is working at a plant receives a lot of telephone messages, very likely it cannot be proved that they came from the union. There is no case then. There must be legal proof of agency in the case of unions as in the case of corporations. . . .” (Emphasis supplied.)

Congress’ reason for adopting the common-law agency test, and applying to unions the common-law doctrine of re-spondeat superior, follows the lead of Mr. Chief Justice Taft in Coronado Coal Co. v. Mine Workers, 268 U. S. 295, 304 (1925), that to find the union liable “it must be clearly shown . . . that what was done was done by their agents in accordance with their fundamental agreement of association.” The common-law agency test replaced the very loose test of responsibility incorporated in § 2 (2) of the original 1935 National Labor Relations Act under which the term “employer” included “any person acting in the interest of an employer. . . .” 49 Stat. 450.

Petitioner makes the distinct argument that we should hold the International liable for its own failure to respond to the locals’ strike. In the face of Congress’ clear statement of the limits of an international union’s legal responsibility for the acts of one of its local unions, it would be anomalous to hold that an international is nonetheless liable for its failure to take certain steps in response to actions of the local. Such a rule would pierce the shield that Congress took such care to construct. Accordingly, we reject petitioner’s suggestion that Congress’ policy in favor of arbitration extends to imposing an obligation on the respondents, which agreed to arbitrate grievances, to use reasonable means to try to control the locals’ actions in contravention of that agreement.

The Court of Appeals stated: “There was no evidence presented in the district court that either the District or International Union instigated, supported, ratified, or encouraged any of the work stoppages. . . .” 582 F. 2d, at 1351. Under Art. XVI, § 1, of the UMWA constitution, the local unions lacked authority to strike without authorization from UMWA. App. 195a. Moreover, UMWA had repeatedly expressed its opposition to wildcat strikes. Petitioner thus failed to prove agency as required by §§ 301 (b) and (e), and we therefore agree with the Court of Appeals that “under these circumstances it was error for the [District Court] to deny the motions of these defendants for directed verdicts.” 582 F. 2d, at 1351.

B

We turn next to petitioner’s argument that even if the no-strike obligation to be implied from the promise to resolve disputes by arbitration did not carry with it the further step of implying an obligation on UMWA and District 17 to use all reasonable efforts to end an unauthorized strike, that obligation should nevertheless be implied from the contract provision obligating UMWA and District 17 to “maintain the integrity of this contract. . . .”

In the 1947 Taft-Hartley Act Congress sought to promote numerous policies. One policy of particular importance—if not the overriding one — was the policy of free collective bargaining. See Teamsters v. Lucas Flour Co., 369 U. S. 95, 104 (1962); NLRB v. Insurance Agents, 361 U. S. 477, 488 (1960); Textile Workers v. Lincoln Mills, supra, at 453-454. And to make crystal clear the intention to leave the parties entirely free of any Government compulsion to agree to a proposal, or even reach an agreement, Congress added § 8 (d) defining “to bargain collectively” as “not '[to] compel either party to agree to a proposal or require the making of a concession.” 29 U. S. C. § 158 (d). See Howard Johnson Co. v. Hotel Employees, 417 U. S. 249, 25A-255 (1974); NLRB v. Burns Security Services, 406 U. S. 272, 287 (1972); H. K. Porter Co. v. NLRB, 397 U. S. 99, 104-106 (1970); NLRB v. Insurance Agents, supra, at 488. It follows that the parties’ agreement primarily determines their relationship. Steelworkers v. Warrior & Gulf Navigation Co., 363 U. S. 574 (1960) (though policy in favor of arbitration may color interpretation of contract, it cannot impose an agreement to arbitrate where the parties have agreed not to arbitrate). See Steelworkers v. American Manufacturing Co., 363 U. S. 564, 570 (1960) (Brennan, J., concurring). If the parties’ agreement specifically resolves a particular issue, the courts cannot substitute a different resolution.

The contractual provision to which petitioner looks to create the alleged union duty to use “all reasonable means” to end wildcat strikes is the promise to “maintain the integrity of this contract.” Petitioner argues that the promise, intended to get disputes into arbitration, is meaningless if the UMWA and District 17 have no obligation to exert their best efforts to force the miners to live up to the contracts.

The bargaining history of the contracts completely answers petitioner’s argument. The parties directly addressed the issue early in their bargaining history and, after first including such an obligation, specifically deleted it from their agreement. The first agreement between the parties, in 1941, contained an explicit no-strike clause. In order to avoid liability under § 301 for contract breaches, UMWA negotiated the deletion of the no-strike provision from the 1947 contract. Instead, the coverage of the contract was limited to employees “able and willing to work,” and the parties agreed that all disagreements would be settled through arbitration or collective bargaining. In 1950 the contract was again rewritten. The “able and willing” provision was dropped and replaced by a promise “to maintain the integrity of this contract and to exercise their best efforts through available disciplinary measures to prevent stoppages of work by strike or lockout.” (Emphasis supplied.)

Because the union did not want to surrender its freedom to decide what measures to take or not to take in dealing with unauthorized strikes, it negotiated the deletion of the “best efforts through available disciplinary measures” clause. See International Union, UMWA v. NLRB, 103 U. S. App. D. C. 207, 212-213, 257 F. 2d 211, 216-217 (1958); International Union, UMWA, 117 N. L. R. B. 1095, 1118 (1957) (Intermediate Report of Trial Examiner, reprinted as an appendix to NLRB opinion). The new provision in the 1952 contract, which was carried forward into the 1968 and 1971 contracts essentially unchanged as to this issue, read as follows:

“The United Mine Workers of America and the Operators agree and affirm that they will maintain the integrity of this contract and that all disputes and claims which are not settled by agreement shall be settled by the machinery provided in the 'Settlement of Local and District Disputes’ section of the Agreement unless national in character in which event the parties shall settle such disputes by free collective bargaining as heretofore practiced in the industry, it being the purpose of this provision to provide for the settlement of all such disputes and claims through the machinery in this contract provided and by collective bargaining without recourse to the courts.”

It makes no sense to assume that the parties thought the new language subsumed the deleted provision. Had that been their intention, there would have been no reason to alter the contract.

The inescapable conclusion to be drawn from their bargaining history is that, whatever the integrity clause may mean, the parties purposely decided not to impose on the union an obligation to take disciplinary or other actions to get unauthorized strikers back to work. It would do violence to the bargaining process and the national policy furthering free collective bargaining to impose by judicial implication a duty upon UMWA and District 17 that the parties in arm’s-length bargaining first included and then purposely deleted.

Moreover, since the deletion but before 1968 or 1971 when these agreements were reached, two Courts of Appeals construed this contract as not imposing liability on the union for wildcat strikes and as not requiring UMWA to take any action with regard to such strikes. Lewis v. Benedict Coal Corp., 259 F. 2d 346, 351 (CA6 1958) (Stewart, J.), aff’d by an equally divided Court, 361 U. S. 459, 464 (1960); United Construction Workers v. Haislip Baking Co., 223 F. 2d, at 877. If these interpretations did not accord with the parties’ understanding of their contract, they had ample opportunity to make their own understanding explicit. Failure to do so strongly suggests the parties incorporated the courts’ interpretation of the agreements.

Affirmed.

       The facts relevant to the participation of the District and International in the wildcat strikes can be briefly stated. As recently as 1965 the International expressed its intention to discipline “wildcatters.” The District and International were promptly notified of each strike. In each instance a District representative arranged for a meeting of the striking local and directed the members to return to work. Often the representative advised the members that the International and the District could take disciplinary action against participants in illegal, unauthorized strikes. If the strike did not end after the first meeting a second meeting was called. Most strikes ended in the first one or two days. No strike lasted longer than six days. From concern that such action might only aggravate a bad situation, no disciplinary action was taken against the strikers. There is however no suggestion that the District’s efforts to end the strikes were not in good faith.

       The contracts have expired, and the question of injunctive relief is out of the case.

       Review of the judgments against the locals was not sought here.

       Accord, Republic Steel Corp. v. UMWA, 570 F. 2d 467 (CA3 1978); Bituminous Coal Operators v. UMWA, 585 F. 2d 586 (CA3 1978); United States Steel Corp. v. UMWA, 534 F. 2d 1063 (CA3 1976); Wagner Elec.

        Corp. v. Local 1104, Electrical Workers, 496 F. 2d 954 (CA8 1974). Contra, Southern Ohio Coal Co. v. UMWA, 551 F. 2d 695 (CA6 1977).

       An international union, of course, is responsible under § 301 for any authorized strike if such strike violates any term of the contract, whether express or implied. See, e. g., Gateway Coal Co. v. Mine Workers, 414 U. S. 368 (1974); Boys Markets, Inc. v. Retail Clerks, 398 U. S. 235 (1970). Our holding in Part A of this opinion does not affect the content, as implied by law, of arbitration clauses. Rather, we are addressing the wholly different issue of whether an international or district union may be held legally responsible for locals’ unilateral actions which are concededly in violation of the locals’ responsibilities under the contract.

       At the same time, Congress applied to unions the common-law doctrine of respondeat superior rather than the more restrictive test of union responsibility under § 6 of the Norris-LaGuardia Act, which requires “clear proof of actual participation in, or actual authorization of, such acts, or of ratification of such acts after actual knowledge thereof.” 29 U. S. C. § 106 (emphasis supplied).

         The full text of this new provision read:
      “The United Mine Workers of America and the Operators signatory hereto affirm their intention to maintain the integrity of this contract and to exercise their best efforts through available disciplinary measures to prevent stoppages of work by strike or lockout pending adjustment or adjudication of disputes and grievances in the manner provided in this agreement.”

       Contrary to petitioner’s suggestion, the Trial Examiner’s opinion, which was affirmed by the Labor Board but set aside by the Court of Appeals, does not present an inconsistent interpretation of the bargaining history on this point. Although the Trial Examiner gave more importance to the retention of the integrity clause than to the deletion of the best-efforts clause, he did so in the discrete context of deciding whether or not there was an implied agreement not to strike. The issue of what obligation, if any, the union owed to try to get the miners back to work was not before the Board. Consequently, the importance of the best-efforts language was properly minimized.
      In fact, the Trial Examiner’s interpretation of the contract appears to reject, rather than support, petitioner’s suggested reading concerning the damages liability of UMWA for wildcat strikes. He stated that the contract and the bargaining history suggested that “the contracting parties may have intended that no breach of contract damage or other suits resulting from strikes should be lodged in courts of law.” 117 N. L. R. B., at 1115. This suit seeks damages in a court of law on the basis of a breach of contract resulting from a strike.

       We need not decide what content the “integrity” clause has since we have determined that it does not support petitioner's cause of action. The District of Columbia Circuit has suggested one possible meaning. International Union, UMWA v. NLBB, 103 U. S. App. D. C. 207, 214, 257 F. 2d 211, 218 (1958).

       Since 1971 the Seventh Circuit has adopted the same reading of this contract. Old Ben Coal Corp. v. Local Union No. 1487, United Mine Workers, 457 F. 2d 162, 164 (1972). Only the Third Circuit has read this provision differently. United States Steel Corp. v. UMWA, 534 P. 2d, at 1072-1073.


source: Caselaw Access Project

author: Per Curiam. Mr. Justice Marshall,

license: Public Domain

text:
    STRYCKER’S BAY NEIGHBORHOOD COUNCIL, INC. v. KARLEN et al.
    No. 79-168.
    Decided January 7, 1980

      Together with No. 79-181, City of New York v. Karlen et al.; and No. 79-184, Secretary of Homing and Urban Development v. Karlen et al., also on petitions for certiorari to the same court.

   Per Curiam.

The protracted nature of this litigation is perhaps best illustrated by the identity of the original federal defendant, “George Romney, Secretary of the Department of Housing and Urban Development.” At the center of this dispute is the site of a proposed low-income housing project to be constructed on Manhattan’s Upper West Side. In 1962, the New York City Planning Commission (Commission), acting in conjunction with the United States Department of Housing and Urban Development (HUD), began formulating a plan for the renewal of 20 square blocks known as the “West Side Urban Renewal Area” (WSURA) through a joint effort on the part of private parties and various government agencies. As originally written, the plan called for a mix of 70% middle-income housing and 30% low-income housing and designated the site at issue here as the location of one of the middle-income projects. In 1969, after substantial progress toward completion of the plan, local agencies in New York determined that the number of low-income units proposed for WSURA would be insufficient to satisfy an increased need for such units. In response to this shortage the Commission amended the plan to designate the site as the future location of a high-rise building containing 160 units of low-income housing. HUD approved this amendment in December 1972.

Meanwhile, in October 1971, the Trinity Episcopal School Corp. (Trinity), which had participated in the plan by building a combination school and middle-income housing development at a nearby location, sued in the United States District Court for the Southern District of New York to enjoin the Commission and HUD from constructing low-income housing on the site. The present respondents, Roland N. Karlen, Alvin C. Hudgins, and the Committee of Neighbors To Insure a Normal Urban Environment (CONTINUE), intervened as plaintiffs, while petitioner Strycker’s Bay Neighborhood Council, Inc., intervened as a defendant.

The District Court entered judgment in favor of petitioners. See Trinity Episcopal School Corp. v. Romney, 387 F. Supp. 1044 (1974). It concluded, inter alia, that petitioners had not violated the National Environmental Policy Act of 1969 (NEPA), 83 Stat. 852, 42 U. S. C. § 4321 et seq.

On respondents’ appeal, the Second Circuit affirmed all but the District Court’s treatment of the NEPA claim. See Trinity Episcopal School Corp. v. Romney, 523 F. 2d 88 (1975). While the Court of Appeals agreed with the District Court that HUD was not required to prepare a full-scale environmental impact statement under § 102 (2) (C) of NEPA, 42 U. S. C. § 4332 (2)(C), it held that HUD had not complied with § 102 (2) (E), which requires an agency to “study, develop, and describe appropriate alternatives to recommended courses of action in any proposal which involves unresolved conflicts concerning alternative uses of available resources.” 42 U. S. C. §4332 (2)(E). See 523 F. 2d., at 92-95. According to the Court of Appeals, any consideration by HUD of alternatives to placing low-income housing on the site “was either highly limited or nonexistent.” Id., at 94. Citing the “background of urban environmental factors” behind HUD’s decision, the Court of Appeals remanded the case, requiring HUD to prepare a “statement of possible alternatives, the consequences thereof and the facts and reasons for and against. . . .” Ibid. The statement was not to reflect “HUD’s concept or the Housing Authority’s views as to how these agencies would choose to resolve the city’s low income group housing situation,” but rather was to explain “how within the framework of the Plan its objective of economic integration can best be achieved with a minimum of adverse environmental impact.” Ibid. The Court of Appeals believed that, given such an assessment of alternatives, “the agencies with the cooperation of the interested parties should be able to arrive at an equitable solution.” Id., at 95.

On remand, HUD prepared a lengthy report entitled Special Environmental Clearance (1977), After marshaling the data, the report asserted that, “while the choice of Site 30 for development as a 100 percent low-income project has raised valid questions about the potential social environmental impacts involved, the problems associated with the impact on social fabric and community structures are not considered so serious as to require that this component be rated as unacceptable.” Special Environmental Clearance Report 42. The last portion of the report incorporated a study wherein the Commission evaluated nine alternative locations for the project and found none of them acceptable. While HUD’s report conceded that this study may not have considered all possible alternatives, it credited the Commission’s conclusion that any relocation of the units would entail an unacceptable delay of two years or more. According to HUD, “[m]eas-ured against the environmental costs associated with the minimum two-year delay, the benefits seem insufficient to justify a mandated substitution of sites.” Id., at 54.

After soliciting the parties’ comments on HUD’s report, the District Court again entered judgment in favor of petitioners. See Trinity Episcopal School Corp. v. Harris, 445 P. Supp. 204 (1978). The court was “impressed with [HUD’s analysis] as being thorough and exhaustive,” id., at 209-210, and found that “HUD’s consideration of the alternatives was neither arbitrary nor capricious”; on the contrary, “[i]t was done in good faith and in full accordance with the law.” Id., at 220.

On appeal, the Second Circuit vacated and remanded again. Karlen v. Harris, 590 F. 2d 39 (1978). The appellate court focused upon that part of HUD’s report where the agency considered and rejected alternative sites, and in particular upon HUD’s reliance on the delay such a relocation would entail. The Court of Appeals purported to recognize that its role in reviewing HUD’s decision was defined by the Administrative Procedure Act (APA), 5 U. S. C. § 706 (2) (A), which provides that agency actions should be set aside if found to be “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. . . .” Additionally, however, the Court of Appeals looked to “[t] he provisions of NEPA” for “the substantive standards necessary to review the merits of agency decisions. . . 590 F. 2d, at 43. The Court of Appeals conceded that HUD had “given ‘consideration’ to alternatives” to redesignating the site. Id., at 44. Nevertheless, the court believed that “ ‘consideration’ is not an end in itself.” Ibid. . Concentrating on HUD’s finding that development of an alternative location would entail an unacceptable delay, the appellate court held that such delay could not be “an overriding factor” in HUD’s decision to proceed with the development. Ibid. According to the court, when HUD considers such projects, “environmental factors, such as crowding low-income housing into a concentrated area, should be given determinative weight.” Ibid. The Court of Appeals therefore remanded the case to the District Court, instructing HUD to attack the shortage of low-income housing in a manner that would avoid the “concentration” of such housing on Site 30. Id., at 45.

In Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U. S. 519, 558 (1978), we stated that NEPA, while establishing “significant substantive goals for the Nation,” imposes upon agencies duties that are “essentially procedural.” As we stressed in that case, NEPA was designed “to insure a fully informed and well-considered decision,” but not necessarily “a decision the judges of the Court of Appeals or of this Court would have reached had they been members of the decisionmaking unit of the agency.” Ibid. Vermont Yankee cuts sharply against the Court of Appeals’ conclusion that an agency, in selecting a course of action, must elevate environmental concerns over other appropriate considerations. On the contrary, once an agency has made a decision subject to NEPA’s procedural requirements, the only role for a court is to insure that the agency has considered the environmental consequences; it cannot “ ‘interject itself within the area of discretion of the executive as to the choice of the action to be taken.' ” Kleppe v. Sierra Club, 427 U. S, 390, 410, n. 21 (1976). See also FPC v. Transcontinental Gas Pipe Line Corp., 423 U.S. 326 (1976).

In the present litigation there is no doubt that HUD considered the environmental consequences of its decision to re-designate the proposed site for low-income housing. NEPA requires no more. The petitions for certiorari are granted, and the judgment of the Court of Appeals is therefore

Reversed.

Mr. Justice Marshall,

dissenting.

The issue raised by these cases is far more difficult than the per curiam opinion suggests. The Court of Appeals held that the Secretary of Housing and Urban Development (HUD) had acted arbitrarily in concluding that prevention of a delay in the construction process justified the selection of a housing site which could produce adverse social environmental effects, including racial and economic concentration. Today the majority responds that “once an agency has made a decision subject to NEPA's procedural requirements, the only role for a court is to insure that the agency has considered the environmental consequences,” and that in this litigation “there is no doubt that HUD considered the environmental consequences of its decision to redesignate the proposed site for low-income housing. NEPA requires no more.” The majority finds support for this conclusion in the closing paragraph of our decision in Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U. S. 519, 558 (1978).

Vermont Yankee does not stand for the broad proposition that the majority advances today. The relevant passage in that opinion was meant to be only a “further observation of some relevance to this case,” id., at 557. That “observation” was a response to this Court’s perception that the Court of Appeals in that case was attempting “under the guise of judicial review of agency action” to assert its own policy judgment as to the desirability of developing nuclear energy as an energy source for this Nation, a judgment which is properly left to Congress. Id., at 558. The Court of Appeals had remanded the case to the agency because of “a single alleged oversight on a peripheral issue, urged by parties who never fully cooperated or indeed raised the issue below,” ibid. It was in this context that the Court remarked that “NEPA does set forth significant substantive goals for the Nation, but its mandate to the agencies is essentially procedural.” Ibid, (emphasis supplied). Accordingly, “[a]dmin-istrative decisions should be set aside in this context, as in every other, only for substantial procedural or substantive reasons as mandated by statute,” ibid, (emphasis supplied). Thus Vermont Yankee does not stand for the proposition that a court reviewing agency action under NEPA is limited solely to the factual-issue of whether the agency “considered” environmental consequences. .The agency’s decision must still be set aside if it is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” 5 U. S. C. § 706 (2) (A), and the reviewing court must still insure that the agency “has taken a ‘hard look’ at environmental consequences,” Kleppe v. Sierra Club, 427 U. S. 390, 410, n. 21 (1976).

In the present case, the Court of Appeals did not “substitute its judgment for that of the agency as to the environmental consequences of its actions,” ibid., for HUD in its Special Environmental Clearance Report acknowledged the adverse environmental consequences of its proposed action: “the choice of Site 30 for development as a 100 percent low-income project has raised valid questions about the potential social environmental impacts involved.” These valid questions arise from the fact that 68% of all public housing units would be sited on only one crosstown axis in this area of New York City. As the Court of Appeals observed, the resulting high concentration of low-income housing would hardly further racial and economic integration. The environmental “impact... on social fabric and community structures” was given a B rating in the report, indicating that from this perspective the project is “questionable” and ameliorative measures are “mandated.” The report lists 10 ameliorative measures necessary to make the project acceptable. The report also discusses two alternatives, Sites 9 and 41, both of which are the appropriate size for the project and require “only minimal” amounts of relocation and clearance. Concerning Site 9 the report explicitly concludes that “[f]rom the standpoint of social environmental impact, this location would be superior to Site 30 for the development of low-rent public housing.” The sole reason for rejecting the environmentally superior site was the fact that if the location were shifted to Site 9, there would be a projected delay of two years in the construction of the housing.

The issue before the Court of Appeals, therefore, was whether HUD was free under NEPA to reject an alternative acknowledged to be environmentally preferable solely on the ground that any change in sites would cause delay. This was hardly a “peripheral issue” in the case. Whether NEPA, which sets forth “significant substantive goals,” Vermont Yankee Nuclear Power Corp. v. NRDC, supra, at 558, permits a projected 2-year time difference to be controlling over environmental superiority is by no means clear. Resolution of the issue, however, is certainly within the normal scope of review of agency action to determine if it is arbitrary, capricious, or an abuse of discretion. The question whether HUD can make delay the paramount concern over environmental superiority is essentially a restatement of the question whether HUD in considering the environmental consequences of its proposed action gave those consequences a “hard look,” which is exactly the proper question for the reviewing court to ask. Kleppe v. Sierra Club, supra, at 410, n. 21.

The issue of whether the Secretary’s decision was arbitrary or capricious is sufficiently difficult and important to. merit plenary consideration in this Court. Further, I do not subscribe to the Court’s apparent suggestion that Vermont Yankee limits the reviewing court to the essentially mindless task of determining whether an agency “considered” environmental factors even if that agency may have effectively decided to ignore those factors in reaching its conclusion. Indeed, I cannot believe that the Court would adhere to that position in a different factual setting. Our cases establish that the arbitrary-or-capricious standard prescribes a “searching and careful” judicial inquiry designed to ensure that the agency has not exercised its discretion in an unreasonable manner. Citizens To Preserve Overton Park, Inc. v. Volpe, 401 U. S. 402, 416 (1971). Believing that today’s summary reversal represents a departure from that principle, I respectfully dissent.

It is apparent to me that this is not the type of case for a summary disposition. We should at least have a plenary hearing.

      At the time of the Court of Appeals’ decision, this section was numbered 102 (2) (D) and was codified at 42 U. S. C. § 4332 (2) (D) (1970 ed.). Congress redesignated it two weeks later. See Act of Aug. 9, 1975, Pub. L. 94-83, 89 Stat. 424.

       If we could agree with the dissent that the Court of Appeals held that HUD had acted “arbitrarily” in redesignating the site for low-income housing, we might also agree that plenary review is warranted. But the District Court expressly concluded that HUD had not acted arbitrarily or capriciously and our reading of the opinion of the Court of Appeals satisfies us that it did not overturn that finding. Instead, the appellate court required HUD to elevate environmental concerns over other, admittedly legitimate, considerations. Neither NEPA nor the APA provides any support for such a reordering of priorities by a reviewing court.

      The Secretary concedes that if an agency gave little or no weight to environmental values its decision might be arbitrary or capricious. Pet. for Cert, in No. 79-184, p. 15, n. 16.


author: Mr. Chief Justice Burger

text:
    McLAIN et al. v. REAL ESTATE BOARD OF NEW ORLEANS, INC., et al.
    No. 78-1501.
    Argued November 6, 1979
    Decided January 8, 1980

      Burger, C. J., delivered the opinion of the Court, in which all other Members joined, except Marshall, J., who took no part in the consideration or decision of the case.

      Richard G. Vinet argued the cause for petitioners. With him on the brief was John P. Nelson, Jr.

      Harry McCall, Jr., argued the cause for respondents. With him on the brief for respondents Real Estate Board of New Orleans et al. were Arthur L. Ballin, Frank C. Dudenhejer, Edward F. Wegmann, Harry S. Redmon, Jr., Rutledge Clement, Jr., Charles F. Barbera, Moise S. Steeg, Jr., and William D. North. Edward F. Schijj, Paul B. Hewitt, and Moise W. Dennery filed a brief for respondent Latter & Blum, Inc.

      Deputy Solicitor General Easterbrook argued the cause for the United States as amicus curiae urging reversal. With him on the brief were Solicitor General McCree, Assistant Attorney General Shenejield, John J. Powers III, and Margaret G. Halpern.

        William D. North and Valentine A. Weber, Jr., filed a brief for the National Association of Realtors as amicus curiae urging affirmance.

        Ellen Broadman and Alan Mark Silbergeld filed a brief for Consumers Union of United States, Inc., as amicus curiae.

   Mr. Chief Justice Burger

delivered the opinion of the Court.

The question in this case is whether the Sherman Act extends to an agreement among real estate brokers in a market area to conform to a fixed rate of brokerage commissions on sales of residential property.

I

The complaint in this private antitrust action, filed in the Eastern District of Louisiana in 1975, alleges that real estate brokers in the Greater New Orleans area have engaged in a price-fixing conspiracy in violation of § 1 of the Sherman Act, ch. 647, 26 Stat. 209, as amended, 15 U. S. C. § 1. No trial has as yet been had on the merits of the claims since the complaint was dismissed for failure to establish the interstate commerce component of Sherman Act jurisdiction.

The complaint asserts a claim individually and on behalf of that class of persons who employed the services of a respondent real estate broker in the purchase or sale of residential property in the Louisiana parishes of Jefferson or Orleans (the Greater New Orleans area) during the four years preceding the filing of the complaint. The respondents are two real estate trade associations, six named real estate firms, and that class of real estate brokers who at some time during the period covered by the complaint transacted realty brokerage business in the Greater New Orleans area and charged a brokerage fee for their services. The unlawful conduct alleged is a continuing combination and conspiracy among the respondents to fix, control, raise, and stabilize prices for the purchase and sale of residential real estate by the systematic use of fixed commission rates, widespread fee splitting, suppression of market information useful to buyers and sellers, and other allegedly anticompetitive practices. The complaint asserts that respondents’ conduct has injured petitioners in their business or property because the fees and commissions charged for brokerage services have been maintained at an artificially high and noncompetitive level, with the effect that the prices of residential properties have been artificially raised. The complaint seeks treble damages and injunctive relief as authorized by §§ 4 and 16 of the Clayton Act, 38 Stat. 731, 737, as amended, 15 U. S. C. §§ 15, 26.

The allegations of the complaint pertinent to establishing federal jurisdiction are:

(1) that the activities of the respondents are “within the flow of interstate commerce and have an effect upon that commerce”;

(2) that the services of respondents were employed in connection with the purchase and sale of real estate by “persons moving into and out of the Greater New Orleans area”;

(3) that respondents “assist their clients in securing financing and insurance involved with the purchase of real estate in the Greater New Orleans area,” which “financing and insurance are obtained from sources outside the State of Louisiana and move in interstate commerce into the State of Louisiana through the activities of the [respondents]”; and

(4) that respondents have engaged in an unlawful restraint of “interstate trade and commerce in the offering for sale and sale of real estate brokering services.”

Respondents moved in the District Court to dismiss the complaint for failure to state a claim within the ambit of the Sherman Act. This motion was supported by a memorandum and by the affidavits of two officers of respondent Real Estate Board of New Orleans. The affiants testified that real estate brokers in Louisiana were licensed to perform their function in that State only, that there was no legal or other requirement that real estate brokers be employed in connection with the purchase or sale of real estate within Louisiana, and that the affiants had personal knowledge of such transactions occurring without the assistance of brokers. The function of real estate brokers was described as essentially completed when buyer and seller had been brought together on agreeable terms. The affiants also stated that real estate brokers did not obtain and were not instrumental in obtaining financing of credit sales, save in a few special cases, nor were they involved with examination of titles in connection with the sale of real estate or the financing of such sales.

The memorandum in support of the motion to dismiss sought to distinguish this case from Goldfarb v. Virginia State Bar, 421 U. S. 773 (1975), in which we held that § 1 of the Sherman Act had been violated by conformance with a bar association’s minimum-fee schedule that established fees for title examination services performed by attorneys in connection with the financing of real estate purchases. The respondents construed the applicability of Goldfarb as limited by certain language in the opinion that described the activities of lawyers in the examination of titles as an inseparable and integral part of the interstate commerce in real estate financing. 421 U. S., at 784-785. In contrast, with respect to this case, respondents asserted on the basis of the affidavits that “the role of . . . real estate brokers in financing such purchases is neither integral nor inseparable.” Respondents contended (1) that the activities of respondent real estate brokers were purely local in nature; (2) that the allegation that respondents assisted in securing financing or insurance in connection with the purchase of real estate had been controverted by the affidavits; and (3) that the conclusory assertion in the complaint that respondents’ activities “are within the flow of interstate commerce and have an effect upon that commerce” was insufficient by itself to establish federal jurisdiction.

Petitioners’ response to the motion to dismiss asserted that since adequate pretrial discovery up to that time had been precluded pursuant to a pretrial order, petitioners had not had a full opportunity to substantiate the jurisdictional allegations of their complaint. Petitioners advanced two independent theories to support federal jurisdiction: (1) that respondents’ activities occurred within the stream of interstate commerce; and (2) that even if respondents’ activities were wholly local in character they depended upon and affected the interstate flow of both services and people.

Accompanying the response was an affidavit stating that one of the named petitioners had employed the services of a respondent real estate broker to assist in an interstate relocation. There was also an affidavit from a loan guarantee officer of the Veterans’ Administration disclosing that VA-insured loans for residential purchases in the Greater New Orleans area for the years 1973-1975 amounted to $46.3 million, $45.9 million, and $53.5 million, respectively.

After briefing on the jurisdictional issue, the District Court heard oral argument and received postargument briefs. The court then held a conference with counsel, the substance of which was carefully recorded in the minute entries by the District Judge:

“The Court advised counsel that it appears plaintiffs may satisfy said jurisdictional requirement only by bringing the facts of this case within the parameters of the Supreme Court’s holding in Ooldfarb v. Virginia State Bar. ... It is recognized, however, that further discovery is needed on the issue of Ooldfarb’s applicability sub judice. More specifically, such discovery should determine whether, in the first place, there is the requisite interdependence between the brokerage activity of defendants and the financing and/or insuring of real estate transactions in the New Orleans area and, secondly, whether there is a substantial involvement of interstate commerce in such real estate transactions via the financing and/or insurance aspects thereof.”

Following this conference, petitioners deposed nine witnesses, who produced various documents. The deponents included government officials, real estate brokers, mortgage lenders, and real estate title insurers. This evidence was directed to establishing that an appreciable amount of interstate commerce was involved in various aspects of the purchase and sale of residential property in the Greater New Orleans area.

The deposition testimony of the president of Security Homestead Association, one of nearly 40 savings and loan institutions in the Greater New Orleans area, revealed that during the period covered by the complaint the Association lent in excess of $100 million for local purchases of residential property. The Association obtained loan capital from deposits by investors, some of whom lived out of state, and from borrowings from the Federal Home Loan Bank of Little Rock, Ark. Toward the close of the relevant period, the Association entered the interstate secondary mortgage market, in which existing mortgages were sold to raise new capital for future loans.

Another deponent was the president of Carruth Mortgage Corp., an Arkansas corporation doing business in Louisiana, Mississippi, and Texas. Its business was to originate home loans, then to sell the financial paper in the secondary mortgage market. The testimony showed that during the relevant period Carruth made in excess of $100 million in loans on residential real estate in the Greater New Orleans area. The overwhelming proportion of these home loans was guaranteed by either the Federal Housing Administration or the Veterans’ Administration. With respect to the FHA-guaranteed loans, Carruth collected and remitted premiums for the guarantee to the FHA in Washington, D. C., on a periodic basis for each account.

Both deponents testified that real estate brokers often play a role in securing financing information on behalf of a borrower and in bringing borrower and lender together, but that after the introductory phases the substance of the mortgage transaction progressed without the involvement of a real estate broker. The president of Carruth testified that his company required title insurance on all the home loans it made. This testimony was accompanied by the deposition of the president of Lawyers Title Insurance Co. of Louisiana, which revealed that each of the nearly 30 title insurance companies then writing coverage in the Greater New Orleans area was a subsidiary or branch of a corporation in another state.

Following the close of the discovery period and the filing of additional briefs, the District Court took the matter under submission and, having considered the memoranda of counsel and the relevant documents of record, issued a memorandum opinion and order granting the motion to dismiss the complaint. 432 F. Supp. 982 (1977). The court stated that the ground upon which respondents had challenged jurisdiction was that “brokerage activities are wholly intrastate in nature and, since they neither occur in nor substantially affect interstate commerce, are beyond the ambit of federal anti-trust prohibition.” Id., at 983. In line with the view expressed at the earlier conference, see swpra, at 237-238, the District Court viewed the jurisdictional inquiry as narrowly confined: the question was whether the facts of this case could be brought within the Ooldfarb holding. In the District Court’s view, “any inquiry based upon [Goldfarb] must be twofold: 1) whether a 'substantial’ volume of interstate commerce is involved in the overall real estate transaction, and 2) whether the challenged activity is an essential, integral part of the transaction and inseparable from its interstate aspects.” 432 F. Supp., at 984. The District Court assumed, arguendo, that the title insurance and financing aspects of the New Orleans residential real estate market were interstate in character, but ruled that federal jurisdiction was not established because in its view “the inescapable conclusion to be drawn from the evidence is that the participation of the broker in these (presumably interstate) phases of the real estate transaction is an incidental rather than indispensable occurrence in the transactional chain of events.” Id., at 985.

The United States Court of Appeals for the Fifth Circuit affirmed the dismissal of the complaint. 583 F. 2d 1315 (1978). Examining first the specific acts complained of in this case, the Court of Appeals concluded that they failed to satisfy the “in commerce” test. Realty was viewed as a quintessentially local product, and the brokerage activity described in the pleadings was found to occur wholly intrastate. Id., at 1319. Second, that court rejected petitioners’ “effect on commerce” argument. The interpretation of Goldfarb that had guided the District Court’s analysis was adopted by the Court of Appeals, which ruled that “unlike the attorneys in Goldfarb whose participation in title insurance was statutorily mandated, real estate brokers are neither necessary nor integral participants in the 'interstate aspects’ of realty financing and insurance.” 583 F. 2d, at 1321-1323.

The Court of Appeals noted that the District Court had styled its judgment as a dismissal under Federal Rule of Civil Procedure 12 (b)(6) for failure to state a claim upon which relief could be granted, to be treated as a summary judgment insofar as matters outside of the pleadings were considered. The Court of Appeals concluded that the appropriate designation of the dismissal was for lack of subject-matter jurisdiction under Rule 12 (b)(1), and affirmed the dismissal on that basis.

We granted certiorari. 441 U. S. 942.

II

A

The broad authority of Congress under the Commerce Clause has, of course, long been interpreted to extend beyond activities actually in interstate commerce to reach other activities that, while wholly local in nature, nevertheless substantially affect interstate commerce. Wickard v. Filburn, 317 U. S. 111 (1942); United States v. Darby, 312 U. S. 100 (1941). This Court has often noted the correspondingly broad reach of the Sherman Act. Hospital Building Co. v. Rex Hospital Trustees, 425 U. S. 738, 743 (1976); United States v. Employing Plasterers Assn., 347 U. S. 186, 189 (1954); United States v. South-Eastern Underwriters Assn., 322 U. S. 533, 558 (1944); Atlantic Cleaners & Dyers, Inc. v. United States, 286 U. S. 427, 435 (1932). During the near century of Sherman Act experience, forms and modes of business and commerce have changed along with changes in communication and travel, and innovations in methods of conducting particular businesses have altered relationships in commerce. Application of the Act reflects an adaptation to these changing circumstances. Compare United States v. E. C. Knight Co., 156 U. S. 1, 12-15 (1895), and Hopkins v. United States, 171 U. S. 578, 587-592 (1898), with Mandeville Island Farms, Inc. v. American Crystal Sugar Co., 334 U. S. 219, 231-235 (1948), and United States v. Employing Plasterers Assn., supra, at 189.

The conceptual distinction between activities “in” interstate commerce and those which “affect” interstate commerce has been preserved in the cases, for Congress has seen fit to preserve that distinction in the antitrust and related laws by limiting the applicability of certain provisions to activities demonstrably “in commerce.” United States v. American Building Maintenance Industries, 422 U. S. 271 (1975); Gulf Oil Corp. v. Copp Paving Co., 419 U. S. 186 (1974); FTC v. Bunte Bros., Inc., 312 U. S. 349 (1941). It can no longer be doubted, however, that the jurisdictional requirement of the Sherman Act may be satisfied under either the “in commerce” or the “effect on commerce” theory. Hospital Building Co. v. Rex Hospital Trustees, supra, at 743; Gulf Oil Corp. v. Copp Paving Co., supra, at 194—195; United States v. Women’s Sportswear Manufacturers Assn., 336 U. S. 460, 464 (1949); Mandeville Island Farms, Inc. v. American Crystal Sugar Co., supra, at 235-237.

Although the cases demonstrate the breadth of Sherman Act prohibitions, jurisdiction may not be invoked under that statute unless the relevant aspect of interstate commerce is identified; it is not sufficient merely to rely on identification of a relevant local activity and to presume an interrelationship with some unspecified aspect of interstate commerce. To establish jurisdiction a plaintiff must allege the critical relationship in the pleadings and if these allegations are controverted must proceed to demonstrate by submission of evidence beyond the pleadings either that the defendants’ activity is itself in interstate commerce or, if it is local in nature, that it has an effect on some other appreciable activity demonstrably in interstate commerce. Gulf Oil Corp. v. Copp Paving Co., supra, at 202.

To establish the jurisdictional element of a Sherman Act violation it would be sufficient for petitioners to demonstrate a substantial effect on interstate commerce generated by respondents’ brokerage activity. Petitioners need not make the more particularized showing of an effect on interstate commerce caused by the alleged conspiracy to fix commission rates, or by those other aspects of respondents’ activity that are alleged to be unlawful. The validity of this approach is confirmed by an examination of the case law. If establishing jurisdiction required a showing that the unlawful conduct itself had an effect on interstate commerce, jurisdiction would be defeated by a demonstration that the alleged restraint failed to have its intended anticompetitive effect. This is not the rule of our cases. See American Tobacco Co. v. United States, 328 U. S. 781, 811 (1946); United States v. Socony-Vacuum Oil Co., 310 U. S. 150, 225, n. 59 (1940). A violation may still be found in such circumstances because in a civil action under the Sherman Act, liability may be established by proof of either an unlawful purpose or an anti-competitive effect. United States v. United States Gypsum Co., 438 U. S. 422, 436, n. 13 (1978); see United States v. Container Corp., 393 U. S. 333, 337 (1969); United States v. National Assn, of Real Estate Boards, 339 U. S. 485, 489 (1950); United States v. Socony-Vacuum Oil Co., supra, at 224-225, n. 59.

Nor is jurisdiction defeated in a case relying on anticom-petitive effects by plaintiff’s failure to quantify the adverse impact of defendant’s conduct. See Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U. S. 100, 123-125 (1969); Bigelow v. RKO Radio Pictures, Inc., 327 U. S. 251, 265-266 (1946). Even where there is an inability to prove that concerted activity has resulted in legally cognizable damages, jurisdiction need not be impaired, though such a failure may confine the available remedies to injunctive relief. See Georgia v. Pennsylvania R. Co., 324 U. S. 439, 452-463 (1945); Keogh v. Chicago & N. W. R. Co., 260 U. S. 156 (1922).

B

The interpretation and application of our holding in Goldfarb v. Virginia State Bar, 421 U. S. 773 (1975), has figured prominently in this case. The District Court held that petitioners could establish federal jurisdiction only if the facts of this case could be brought within Goldfarb. As previously noted, as interpreted by that court, "any inquiry based upon [Goldfarb] must be twofold: 1) whether a ‘substantial’ volume of interstate commerce is involved in the overall real estate transaction, and 2) whether the challenged activity is an essential, intergral part of the transaction and inseparable from its interstate aspects.” 432 F. Supp., at 984. The Court of Appeals took a similar view of Goldfarb, holding that Sherman Act jurisdiction did not exist because petitioners had failed to demonstrate that real estate brokers are either necessary or integral participants in the interstate aspects of residential real estate financing and title insurance. 583 F. 2d, at 1322.

It is with the second phase of the analysis of the District Court and of the Court of Appeals that we disagree. The facts of Goldfarb revealed an application of the state bar association’s minimum-fee schedule to fix fees for attorneys’ title examination services. Since the financing depended on a valid and insured title we concluded that title examination, was “an integral part” of the interstate transaction of obtaining financing for the purchase of residential property and, because of the “inseparability” of the attorneys’ services from the title examination process, we held that the legal services were in turn an “integral part of an interstate transaction.” 421 U. S., at 784-785. By placing the Goldfarb holding on the available ground that the activities of the attorneys were within the stream of interstate commerce, Sherman Act jurisdiction was established. The Goldfarb holding was not addressed to the “effect on commerce” test of jurisdiction and in no way restricted it to those challenged activities that have an integral relationship to an activity in interstate commerce. To adopt the restrictive interpretation urged upon us by respondents would return to a jurisdictional analysis under the Sherman Act of an era long past. It has been more than 30 years since this Court stated: “At this late day we are not willing to take that long backward step.” Mandeville Island Farms, Inc. v. American Crystal Sugar Co., 334 U. S., at 235.

C

On the record thus far made, it cannot be said that there is an insufficient basis for petitioners to proceed at trial to establish Sherman Act jurisdiction. It is clear that an appreciable amount of commerce is involved in the financing of residential property in the Greater New Orleans area and in the insuring of titles to such property. The presidents of two of the many lending institutions in the area stated in their deposition testimony that those institutions committed hundreds of millions of dollars to residential financing during the period covered by the complaint. The testimony further demonstrates that this appreciable commercial activity has occurred in interstate commerce. Funds were raised from out-of-state investors and from interbank loans obtained from interstate financial institutions. Multistate lending institutions took mortgages insured under federal programs which entailed interstate transfers of premiums and settlements. Mortgage obligations physically and constructively were traded as financial instruments in the interstate secondary mortgage market. Before making a mortgage loan in the Greater New Orleans area, lending institutions usually, if not always, required title insurance, which was furnished by interstate corporations. Reading the pleadings, as supplemented, most favorably to petitioners, for present purposes we take these facts as established.

At trial, respondents will have the opportunity, if they so choose, to make their own case contradicting this factual showing. On the other hand, it may be possible for petitioners to establish that, apart from the commerce in title insurance and real estate financing, an appreciable amount of interstate commerce is involved with the local residential real estate market arising out of the interstate movement of people, or otherwise.

To establish federal jurisdiction in this case, there remains only the requirement that respondents’ activities which allegedly have been infected by a price-fixing conspiracy be shown “as a matter of practical economics” to have a not insubstantial effect on the interstate commerce involved. Hospital Building Co. v. Rex Hospital Trustees, 425 U. S., at 745; see Goldfarb v. Virginia State Bar, supra, at 784, n. 11; Burke v. Ford, 389 U. S. 320, 321-322 (1967). It is clear, as the record shows, that the function of respondent real estate brokers is to bring the buyer and seller together on agreeable terms. For this service the broker charges a fee generally calculated as a percentage of the sale price. Brokerage activities necessarily affect both the frequency and the terms of residential sales transactions. Ultimately, whatever stimulates or retards the volume of residential sales, or has an impact on the purchase price, affects the demand for financing and title insurance, those two commercial activities that on this record are shown to have occurred in interstate commerce. Where, as here, the services of respondent real estate brokers are often employed in transactions in the relevant market, petitioners at trial may be able to show that respondents’ activities have a not insubstantial effect on interstate commerce.

It is axiomatic that a complaint should not be dismissed unless “it appears beyond doubt that the plaintiff can prove no set of facts in support of his claim which would entitle him to relief.” Conley v. Gibson, 355 U. S. 41, 45-46 (1957) ; see 5 C. Wright & A. Miller, Federal Practice and Procedure §§ 1202, 1205-1207, 1215-1224, 1228 (1969). This rule applies with no less force to a Sherman Act claim, where one of the requisites of a cause of action is the existence of a demonstrable nexus between the defendants’ activity and interstate commerce. Here, what was submitted to the District Court shows a sufficient basis for satisfying the Act’s jurisdictional requirements under the effect-on-commerce theory so as to entitle the petitioners to go forward. We therefore conclude that it was error to dismiss the complaint at this stage of the proceedings. The judgment of the Court of Appeals is vacated, and the case is remanded for further proceedings consistent with this opinion.

Vacated and remanded.

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


author: Per Curiam.

text:
    THOMPSON v. UNITED STATES
    No. 79-5180.
    Decided January 14, 1980
   Per Curiam.

The Department of Justice has a firmly established policy, known as the “Petite” policy, under which United States Attorneys are forbidden to prosecute any person for allegedly criminal behavior if the alleged criminality was an ingredient of a previous state prosecution against that person. An exception is made only if the federal prosecution is specifically authorized in advance by the Department itself, upon a finding that the prosecution will serve “compelling interests of federal law enforcement.”

In this case the Solicitor General has advised us that this established Department policy was violated. Accordingly, he urges the Court “to permit the effectuation of the government’s policy against successive prosecutions by granting the petition, vacating the judgment of the court of appeals, and remanding the case to the district court with instructions to grant the government’s motion to dismiss the indictment.”

In 1978, the petitioner was brought to trial in a Kentucky court on a charge of armed burglary, and was convicted by a jury of a lesser included offense. He was then prosecuted and convicted in a Federal District Court on a charge of unlawfully possessing a firearm — a charge that grew out of the same criminal transaction that had been the basis of the Kentucky prosecution. This federal conviction was affirmed by the Court of Appeals for the Sixth Circuit, which accepted the Government’s then position that the “Petite” policy had not been violated.

The Solicitor General now concedes that the United States Attorney did not obtain the authorization required under the established Department policy before bringing the federal prosecution. Moreover, “after careful review” of whether to grant nunc pro tunc authorization, the Solicitor General has concluded that “petitioner’s prosecution for unlawfully possessing a firearm was not supported by an independent compelling federal interest not satisfied by the state prosecution for armed burglary.”

Ever since the Justice Department established the “Petite” policy in 1959, the Court has consistently responded to requests by the Government in cases such as this by granting certiorari and vacating the judgments. See, e. g., Hammons v. United States, 439 U. S. 810 (1978); Frakes v. United States, 435 U. S. 911 (1978); Rinaldi v. United States, 434 U. S. 22 (1977); Croucher v. United States, 429 U. S. 1034 (1977); Watts v. United States, 422 U. S. 1032 (1975); Ackerson v. United States, 419 U. S. 1099 (1975); Hayles v. United States, 419 U. S. 892 (1974); Thompson v. United States, 400 U. S. 17 (1970); Marakar v. United States, 370 U. S. 723 (1962); Petite v. United States, 361 U. S. 529 (1960).

This practice, which rests on the power of the Court to “afford relief which is ‘just under the circumstances' 28 U. S. C. § 2106,” Rinaldi v. United States, supra, at 25, n. 8, is not unique to violations of the “Petite” policy. The Court has also consistently vacated the judgments in other cases which the Solicitor General has represented were in violation of other Justice Department policies. See, e. g., Blucher v. United States, 439 U. S. 1061 (1979) (obscenity prosecution); Nunley v. United States, 434 U. S. 962 (1977) (prosecution for willfully making false statements concerning matters within jurisdiction of Department of Treasury); Margraf v. United States, 414 U. S. 1106 (1973) (prosecution for carrying a “concealed deadly or dangerous” weapon while boarding an aircraft); Robison v. United States, 390 U. S. 198 (1968) (addition of counts upon retrial); Redmond v. United States, 384 U. S. 264 (1966) (obscenity prosecution).

The instant case differs from this long line of decisions only in that here the Government mistakenly, and successfully, represented to the Court of Appeals that Justice Department policy had not been violated. Because of this circumstance, we do not accept the Solicitor General’s suggestion. Rather, in response to his suggestion and upon an independent examination of the record, we grant leave to proceed in forma pau-peris and certiorari, vacate the judgment, and remand the case to the Court of Appeals for reconsideration in light of the Government’s present position. This course is one that the Court has frequently taken when, as here, the Government has changed its position while a criminal case is pending on petition for certiorari. See, e. g., Garner v. United States, 430 U. S. 942 (1977).

It is so ordered.

The Chief Justice and Mr. Justice White dissent.

Mr. Justice Blackmun, with whom Mr. Justice Rehnquist joins, dissents for the reason that in this case the United States already has presented the “Petite” policy issue to the Court of Appeals and that court has passed upon the issue adversely to the Government’s present position.

       Promulgated in the wake of this Court's decision in Abbate v. United States, 359 U. S. 187 (1959), the policy was first recognized by the Court in Petite v. United States, 361 U. S. 529, 531 (1960). It has since been known as the “Petite” policy.

       The per curiam opinion of the Court of Appeals is unreported, but the affirmance order is reported at 601 F. 2d 591.