author: Per Curiam.

text:
    MAHON, TRUSTEE IN BANKRUPTCY, et al. v. STOWERS et al.
    No. 73-1131.
    Decided April 15, 1974
   Per Curiam.

This litigation arose out of the bankruptcy of Samuels & Co., a large meat packing concern with plants in various parts of Texas. Respondents had. sold cattle to Samuels, for which they received checks in payment, but bankruptcy ensued before the checks had been paid by the drawee bank. With the consent of all parties the receiver and the. trustee of the bankrupt estate continued to sell meat from the cattle that had been slaugh-: . tered and packaged by Samuels and held the proceeds of áuch sales subject to disposition by the referee. Respondents sought reclamation of the cattle which they had sold to Samuels, and asserted a concomitant right to the. proceeds from sale of the packaged meat. C. I. T. Corporation, which held a perfected lien on the bankrupt’s inventory and other property, and the trustee in bankruptcy opposed the respondents’ claim.

The referee made findings of fact and conclusions of law which sustained the respondents’ position. The District Court upheld the referee’s findings of fact, but reversed the judgment on the grounds that under the applicable provisions of the Texas Business. and Commercial Code the claims of the trustee and C. I. T. were superior to that of -respondents. The Court of Appeals for the Fifth Circuit, however, agreed with the referee and reversed the District Court judgment because it read the Packers and Stockyards Act, 42 Stat'. 159/7 U. S. C. § 181 et seq., and certain regulations issued by the .Secretary of Agriculture thereunder, as establishing the superiority of respondents' claim notwithstanding Texas law. We disagree with this reading of the applicable provisions of the Packers and Stockyards Act, and therefore grant certiorari and reverse the judgment of the Court of Appeals.

I

The uncontested facts in this case are contained in the findings of the bankruptcy referee. The referee found that respondents, for a period of some ten days before Samuels filed a Chapter XI petition under the Bankruptcy Act, had been selling live cattle to Samuels for slaughter on a “grade and yield'' basis, and that this was a recognized custom and usage in the trade. Under this usage the contract price is left open at the time of delivery to the purchaser, who slaughters the livestock and allows the carcasses to chill for approximately 24 hoürs. At that time they are graded by the United States Department of Agriculture and the price is determined. The purchaser then gives the seller a check for the established amount. The referee further found that Samuels was subject to the regulations of the Packers and Stockyards Act, and that all of the livestock in question had been delivered to Samuels at its plant- in Mount Pleasant, Texas, where it was slaughtered and then graded by the Department of Agriculture.

Until the livestock is actually graded and the yield determined, the sellers can identify their particular -livestock, but once the carcasses are processed and the meat packaged, identification is no longer possible. When the ■petition for bankruptcy was'filed in this case, none of the . respondents was able to identify his own particular livestock, but the referee found that at least some of the carcasses sold by respondents . were on Samuels’ premises at that time. The referee also determined.that no proceeds from sale of packaged meat could be identified as realized from carcasses'delivered by respondents.

Examining- the competing claims, the referee found that at all .times material to the action C. I. T. was the holder of a duly perfected security interest in all livestock, animal carcasses, packaged and unpackaged meat, packing materials, and other inventory owned by Samuels or in which Samuels may have had an interest.' At the time the bankruptcy petition was filed Samuels was indebted to C. I. T. in an amount in excess of $1,800,000. C. I. T. had been advancing large sums weekly to Samuels, and the bankruptcy was precipitated on May 23, 1969, when C. I. T., deeming itself to be insecure, refused to make a weekly advance of approximately $184,000 which Samuels needed to continue its operations. The referee found that C. I. T. “knew or should have known” of-the method by which Samuels bought livestock from respondents on a grade- and-yield basis. He further found that no respondefit held a security agreement with Samuels, and that none had filed a financing statement reflecting the transactions with Samuels.

The referee reasoned from these facts that respondents and Samuels- had intended to transact their sales business on a cash, rather than a credit, basis, and. that title to the livestock “did not pass from plaintiff to bankrupt until payment was made to plaintiff.” Therefore, he concluded, C. I. T.’s perfected lien could hot attach to the livestock in Samuels’ inventory until the checks issued in payment were subsequently honored. Any other decision would, he said, make the cattle sellers “a' species of involuntary creditor against their wishes and intent,” although they had complied with normal selling arrangements under the Packers and Stockyards Act. He found it unnecessary for the respondents to identify proceeds from the sale of specific carcasses which they had delivered, and placed the duty on C. I. T. to show that the funds to which it laid claim had not been received from the sale of carcasses furnished by respondents.

• The District Court accepted the refereé’s findings of fact but reversed on the law. Turning to the provisions of the Texas Business and Commercial Code, which are largely counterparts of the Uniform Commercial Code, the court found that the respondents by their delivery of the cattle had retained only a security interest in those animals and the proceeds therefrom. It further found that the respondents had taken no action to perfect their security interest nor attempted to utilize any right of reclamation they might have had under Texas law. Delivery of the cattle, to Samuels on this basis enabled it to transfer good title to a good-faith purchaser for value, a category of persons which included both C. I. T. and the trustee in bankruptcy. The District Court also found that respondents were unable to “establish their right to possession by ownership .. . [by] identify[ing] positively, the property sought to be reclaimed in either its-original or substituted form.”

The District Court was in turn reversed by a divided Court of Appeals for the Fifth Circuit.' Although that court conceded that C. I. T. would have a superior right to the sales proceeds were the transaction governed solely by the provisions of the Texas Business and Commercial Code, it found that the Packers and Stockyards Act, 7 U. S. C. § 181 et seq., along with the regulations promulgated thereunder and the relevant usages of trade, made Samuels a trustee of' the proceeds received from the sale of cattle delivered by respondents. The court stated:

“The reasoning of these cases and. the impact of the Packers and Stockyards Act convinces this court that more than an unperfected security interest subject to reclamation is reserved for the cattle seller. Not by contract but by statute and regulation a packer lacks full dominion over the carcasses until the seller has been paid. Where the packer defaults by the issuance of a bad check (and destroys the identity of the security by processing the carcasses into fungible meat products), the seller is the beneficiary of a trust imposed by remedial statute.”

The right of the cattle sellers to funds thus found to be specifically held in trust for their benefit was deemed superior to the general perfected lien of C.' I. T. on Samuels’' inventory.

II

This Court .has'•■previously held that an ordinary debtor-creditor relationship requires more than the post-bankruptcy disappointment of the creditor to convert it into a trust relationship. See McKee v. Paradise, 299 U. S. 119 (1936). Examining a claim by employees that funds held for their general benefit by an employee association were funds' held in trust, the Court in McKee ^stated:

"The bankrupt was a debtor which had failed to pay its debt. We know of no principle upon which that failure can be treated as a conversion of property held in trust. At no time throughout the whole period was there á trust fund or res. No fund was segregated or set up by special deposit or in any manner. When the wages became due, there was no such fund but only the general assets of the employer and its obligation to pay a debt. . . . The fact that the failure to pay the association was án acute disappointment and was especially regrettable as the claimant was an association of employees, cannot avail to change the debtor into a trustee or enable the creditor to obtain a preference over other claims against a bankrupt estate.” Id., at 122-123.

The Court therefore held that the employees .were entitled- to share in the bankrupt’s assets only in the position of a general unsecured creditor. .

Similarly, we believe that the - Court of , in concluding that in this case a trust relationsnip existed between Samuels and respondents, placed more weight on the Packers and Stockyards Act, and corresponding regulations and practices, than they will properly- bear. For although the Act does regulate methods of payment and recordkeeping procedures for persons defined as "packers” by thé Act, we must remember that the “chief evil” at which it was aimed was “the monopoly of the packers, enabling them unduly and arbitrarily to lower prices' to the shipper who sells, and unduly and arbitrarily to increase the price to the consumer who buys.” Stafford V. Wallace, 258 U. S. 495, 514-515 (1922). We find no evidence in either the Act or the regulations that: packers are to hold cattle or carcasses in trust until the sellers actually convert into cash the checks given them as payment for each sale.

We noté at the outset that Samuels is subject to the Packers and Stockyards Act solely as a “packer” ráther than as a “stockyard owner,” “market agency,” or “dealer.” This difference is important, for the Act regulates packers in a different manner than it does those in the other enumerated categories. Thus, for example, the bonding requirement's of 7 U. S. C. § 204 are not applicable to packers, nor does the Act give a private cause of action against packers, as it does against stockyards, market agéncies, and dealers. 7 U. S. C. § 209. An implicit fiduciary obligation which would override state commercial law and establish a special priority in bankruptcy, such as the Court of Appeals found to exist here, must therefore be extracted either from the specific sections relating to packers, or from the few general sections which are applicable to all categories Of persons subject to tht: Act.

The specific provisions dealing with packers impose no such duty, The only section which might possibly be relevant to this question, 7 U. S. C. § 192, deals generally with unlawful practices of packers, placing heavy emphasis on practices which might be considered to be in restraint of trade. Enforcement of this section is the responsibility of the Secretary of Agriculture, who is given authority to hold hearings and enter binding orders. But there is no indication that, lurking within this intention to control deceptive and monopolistic practices in the packing industry, lies a further intention to guarantee persons who sell cattle to such packers a special favored position in regard to the packers' assets. Nor do the general provisions show such an intent. Those sections are primarily concerned with recordkeeping, allocation of responsibility between the Secretary of Agriculture and the Federal Trade Commission, and the authority of the Secretary of Agriculture to promulgate appropriate rules and regulations to carry out the provisions of the Act.

The Court of Appeals did not rest its decision upon the Act itself, however, but rather upon two regulations promulgated by the Secretary of Agriculture. The first regulation, 9 CFR § 201.43 (b), requires that a packer “before the close of the next business day following the purchase of livestock and the determination of the amount of the purchase price, transmit or deliver to the seller or his duly authorized agent the full amount of-the purchase price, unless otherwise expressly agreed between the parties before the purchase of the livestock.” The second regulation, 9 CFR § 201.99, requires a packer “purchasing livestock on a . . . carcass grade and weight basis” to “maintain the identity of each seller’s livestock and the carcasses therefrom” and, after determination of the purchase price, to deliver to the seller a “true written, account of such purchase” incorporating the pertinent terms. The Court of Appeals reasoned that these regulations, read in conjunction, were intended to provide cattle sellers with special protection when forced to deal on a carcass grade-and-weight basis. The protection fashioned by the Court of Appeals was to make a packer, such as Samuels, a trustee for the proceeds of any sale derived from cattle delivered under these provisions.' We believe that that conclusion was erroneous.

We think that a fair reading of 9 CFR § 201.99 reveals its overriding concern that cattle sellers, having delivered their livestock into .the hands of a purchasing packer prior, to actual determination of the purchase, price, receive a fair and accurate accounting of the proceeds of their sale. A seller operating without the, benefit of such provisions clearly would face substantial risk that his livestock might be mingled with other livestock of lesser value and thereby become indistinguishable from livestock delivered by other sellérs, or that he might become subject to arbitrary weighing practices on the part of the packers. Regulation 201.99 insupes that the packers both observe principles of fair dealing in determining, the proceeds of the sale and also maintain sufficient records so that the sellers and the Secretary of Agriculture can exercise proper supervision. But there is no indication in this record that Samuels failed to comply with the provisions of Regulation 201.99. Respondents complained, not that Samuels commingled their livestock, or failed to provide fair pricing, but rather that bankruptcy intervened before checks in the concededly proper amount cleared the bank on which they were drawn. And Regulation 201.99 simply does not address itself to this problem.

Regulation 201.43, though more to the point, likewise fails to support the imposition of a trust on Samuels. • It requires packers, market agencies, and dealers purchasing. livestock to make payment within one business day following the determination of the amount of the purchase price, but does not meet the question of whether a seller, failing to receive payment within that time, has a special claim against the defaulting payor. Respondents argue strongly that this regulation'insures prompt payment, and that the. failure to make prompt payment is a prohibited deceptive practice under the Act. While, this contention may well be true, it does not necessarily support a conclusion that the regulation, designed to regulate payment procedures between a buyer and seller, was also intended to determine security rights between the sellers and third parties holding a-valid claim on the packer’s assets.. Whatever might be the. policy reasons for insuring that packers did not take unnecessary advantage of cattle sellers by holding funds for their own purposes, it is hard to see that those reasons would automatically require that such sellers stand on better footing than persons who have extended secured credit to a packer. And the regulation in no way suggests an intention to override established principles of state commercial law which might strike a different balance.

When the Secretary has desired to impose trust relationships by regulation, he has chosen language which clearly effectuates that purpose. Regulation 201.42, 9 CFR § 201.42, deals specifically with the subject of custodial accounts, and provides- in subsection (a) that payments made to a market agency or licensee are to be considered trust funds until a payee custodial account has been paid in full. Subsection (b) requires that any market agency or licensee engaged in selling livestock “on a commission or agency basis” establish a custodial account for the sales proceeds. Subsection (e) requires-establishment of custodial accounts when market agencies or licensees representing buyers of livestock misuse funds entrusted to them for that purpose.

Had the Secretary deemed it lawful and desirable to require that packers or other persons purchasing livestock establish trust accounts on behalf of the sellers until payment was actually received, such a provision could easily have been included within these regulations. Its absence suggests the Secretary expected that cattle sellers, making sales to packers in the ordinary course of business, would assume- the normal risks of insolvency which any seller in that situation assumes. Their interests, like that of similarly situated sellers, would depend for protection upon their taking of appropriate steps under the commercial law of the various States in which they did business.

The cases cited by the Court of Appeals to support its position require no different conclusion.. The case most heavily relied on, Bowman v. Department of Agriculture, 363 F. 2d 81 (CA5 1966), cited for the proposition that a packer’s obligation to pay is that of a fiduciary, dealt not with packers at all, but rather with a person who was a stockyard owner, market agency, and dealer. The court in that case did discuss the duty of prompt payment-by such a person,, but the discussion occurred in the context of a discussion of the test for insolvency. The court there concluded that a definition .of insolvency dealing with the relation of current assets and current liabilities was appropriate in this instance, since the ability to meet current obligations and to make prompt payment was necessary to effect the beneficial purposes of the Act. The only specific discussion of trustee relationships, however, occurs in a separate discussion on the matter of custodial bank accounts. As discussed above, this discussion would be relevant to the obligation of market agencies under Regulation 201.42 to maintain custodial accounts and to refrain from commingling their own funds with the funds of the persons for whom they act. The other cases cited by the Court of Appeals do not deal with packers, or deal with them in a totally different situation from that presented here. None of the cases holds or even intimates that packers hold livestock and carcasses as trustees until cash proceeds are realized by the sellers.

Ill

We hold that, on the undisputed facts of this case, nothing in the Packers and Stockyards Act or the regulations issued by the Secretary under the Act overrides the Texas Business and Commercial Code in determining the respective rights of the parties to the funds held by the trustee. We do note, however, that an isolated passage at the end of the Court of Appeals’ opinion states that the “Packers and Stockyards Act and Regulations 201.42 and 201.99 thereunder comprise a course of dealing and usage of trade known to both the bankrupt packer and C. I. T., which had financed it for an extended period.” 483 F. 2d 557, 563.. While we hold that the Act and regulations do not ex proprio vigore override the provisions of Texas law determining priorities to the funds in question, we do not mean to say that a course pf conduct mandated by the Act or regulations might not, just as any other course of conduct, be relevant or even dis-positive under state law. The District Judge, herself a longtime Texas practitioner and then state court judge before taking the federal bench, determined otherwise here. To the extent that respondents in appealing to the Court of Appeals challenged that determination, it will of course be open for adjudication in the Court of Appeals on remand.

The petition for certiorari is granted, the judgment of the'Court of Appeals is ■ reversed, and the case is remanded for proceedings not inconsistent with this opinion.

It is so ordered.

       Tex. Bus, & Com. Code §§ 1.201 (37) and 2.401 (a) (1968).

        Id., § 9.312(c) (1968).

        Id., §2.702 (b) (1968). The Court further noted that, in any event, the rights of C. I. T. and the bankruptcy trustee would not have been affected by a demand for reclamation under the Code. See § 2.702 (c).

         Id:, §2.403 (a) (1968).

       483 F. 2d 557, 563.

       See 7 U. S. C. §191.

       See id., § 201 (a).

       See id., §201 (c).

       See id., §201 (d).

        Id., §§ 191-195.

        Id., §§221-229.

       Title 9 CFR § 201.43 (b) reads:
      “(b) Purchasers to pay promptly for livestock. Each 1 packer, market agency, or dealer purchasing livestock shall, before the close of 'the. next business day following the purchase of livestock arid the determination of the amount of the purchase price, transmit or' deliver to the seller or his duly authorized agent the full amount of the purchase price, unless otherwise expressly agreed between the parties before the purchase of the livestock. Any such agreement shall be disclosed in the records of any market agency or dealer selling the livestock, and in the purchaser^ records and on the accounts or other documents issued by the purchaser relating to the transaction. The provisions of this section shall not be construed to permit any transaction prohibited by § 201.61 (a) relating to financing''by market agencies selling on a commission basis .”

       Titie 9 CFR § 201.99 reads:
      “(a) Each packer purchasing livestock on a carcass grade, carcass weight,. oi' carcass grade and weight basis shall, prior to such purchase, make known to the seller, or to his duly authorized agent, the details of the purchase contract. Such details shall include, when applicable, expected date and place of slaughter, carcass price, condemnation terms, description of the carcass trim, grading to be used, accounting, and any special conditions.
      “(b) Each packer purchasing livestock on a carcass grade, carcass weight, or carcass grade and weight basis, shall maintain the identity of each seller’s livestock and the carcasses therefrom and shall, after determination of the amount of the purchase price, transmit or deliver to the seller, or his duly authorized agent, a true written account of such purchase showing the number, weight, and price of the. carcasses of each grade (identifying the grade) and of the ungraded carcasses, an explanation of any condemnátions, and any other information affecting final accounting. Packers purchasing livestock on such a basis shall maintain sufficient records to substantiate the settlement of each transaction.
      “(c) When livestock are purchased by a packer on a carcass weight or carcass grade and weight basis, purchase and settlement therefore shall be on the basis of carcass price. This paragraph does not apply to purchases of livestock by a packer on a guaranteed yield basis.
      “(d) Settlement and final payment for livestock purchased by a packer on a carcass weight or carcass grade and weight basis shall be on actual (hot) carcass weights. The hooks, rollers, and gambrels or other similar equipment used at a packing establishment in connection with the weighing of carcasses of the same species of livestock shall be uniform in weight. The tare"weight siall include only the weight of such equipment: Provided, however, That until July. 1, 1968, these packers who shroud carcasses befo'e weighing them may include in the tare weight the average weght of the shrouds and pins.
      “(e) Settlement and final payment for livestock purchased by a packer on a USDA carcass grade shall be on an official (final— not preliminary) grade. If settlement and final payment are based upon any grades other than official USDA grades, such other grades shall be set forth.in detailed written specifications which shall be made available to the seller or his duly authorized agent. For purposes of settlement and final payment for livestock purchased on a grade or grade an.d weight basis, carcasses shall be final graded before the close of the second business day following the day .the livestock are slaughtered,”

        Glover Livestock Comm’n Co. v. Hardin, 454 F. 2d 109- (CA8 1972).

        Bruhn’s Freezer Meats of Chicago v. Department of Agriculture, 438 F. 2d 1332 (CA8 1971); Swift & Co. v. United States, 393 F. 2d 247 (CA7 1968).


source: Caselaw Access Project

author: Mr. Justice Blackmun Mr. Justice Stewart,

license: Public Domain

text:
    SUPER TIRE ENGINEERING CO. et al. v. McCORKLE et al.
    No. 72-1554.
    Argued January 15, 1974
    Decided April 16, 1974

      Blackmun,-- J., delivered the opinion of the Court, in which Douglas, Brennan; White, and Marshall, JJ., joined. Stewart, J., filed a dissenting opinion, in which Burger, C. J., and Powell and Rehnquist, JJ., joined, post, p. 127. .

      Lawrence M. Cohen argued the.'cause for petitioners. With him on the briefs were Herbert G. Keene, Jr., and James A. Young.

      Stephen SJcillman, First Assistant Attorney" General of New jersey, argued the cause for respondents McCorkle et al. With him on the briefs were George F. Kugler, Jr., former Attorney General, William F. Hyland, Attorney General, and Jane Sommer and Paul N. Waiter, Deputy Attorneys General. Robert F. O’Brien argued the cause and filed briefs for respondent Teamsters Local Union No. 676.

      Briefs of amici curiae were filed by Milton Smith, Gerard C. Smetana, and Jerry Kronenberg for the Chamber of Commerce of the United States, and by J. Albert Woll, Laurence Gold, and Thomas E. Harris for the American Federation of Labor and Congress of Industrial Organizations.

   Mr. Justice Blackmun

delivered the opinion of the Court.

In New Jersey, workers engaged in an economic strike are eligible for public assistance through state welfare programs. Employers whose plants were struck instituted this suit for injunctive and declaratory relief against such eligibility. Before the .case was tried, the labor dispute- was settled and the strike came to an end. The question presented is whether a “case” or “controversy” still exists, within the meaning of Art. Ill, § 2, of the • Constitution, and of the Declaratory Judgment Act, 28 U. S. C. §§ 2201-2202.

I

A collective-bargaining agreement between petitioners Super Tire Engineering Company and Supercap Corporation, affiliated New Jersey corporations, and Teamsters Local Union No. 676, the certified collective-bargaining representative for the two corporations’ production and maintenance employees, expired on May 14, 1971. Because ¿ new agreement had not as yet been reached, the employees promptly went out on strike. Some four weeks later, with the strike continuing, the two corporations, and their president and chief executive officer, filed the present suit in the United States District Court for the District of- New Jersey against various New Jersey officials.

The complaint alleged that many of the striking employees had received and would continue to receive pub-lie assistance through two New Jersey public welfare programs, pursuant to regulations issued and administered by the named defendants. The petitioners sought a declaration that these interpretive regulations, according benefits, to striking workers, were null and void because they constituted an interference with the federal labor policy of free collective bargaining expressed in the Labor Management Relations Act, 1947, 29 U. S. C. § 141 et seq., and with other federal policy pronounced in provisions of the Social Security Act of 1935, viz., 42 U. S. C. §§ 602 (a)(8)(C), ¿06 (e)(1), and 607 (b)(1)(B)'. The petitioners also sought injunctive relief against the New Jersey welfare administrators’ making public, funds available to labor union members engaged in the strike.

With their complaint, the petitioners filed a motion for a preliminary injunction. The supporting affidavit by the individual petitioner recited the expiration of .the collective-bargaining agreement, the failure of the parties to reach a new agreement, the commencement and continuation of the strike, the application by many of the strikers for state welfare benefits, and their receipt of such benefits from the beginning of the strike to the date of the affidavit. The affiant further stated that the availability of these benefits interfered with and infringed upon free collective bargaining as guaranteed by Congress and “hardened the resolve of the said strikers to remain out of work in support of their bargaining demands,” App. 32, and, in addition, that

“the current strike will undoubtedly be of longer duration than would have otherwise been the case; that the impact of the grant of welfare benefits and public assistance to the strikers involved has resulted in the State of New Jersey subsidizing one party to the current labor dispute; and that such subsidization by the State has resulted in upsetting the economic balance between employer and employees otherwise obtained in such a labor dispute.” Ibid.

At the hearing held on June 24- on the motion for preliminary injunction, the union, now a respondent here, was permitted to intervene. App. 37. Counsel for the union contended that “this entire matter . . . has been mooted” because “these employees voted to return to work and are scheduled to return to work tomorrow morning.” App. 39. The District Court, nonetheless, proceeded to the merits of the dispute and, on the basis of the holding in ITT Lamp Division v. Minter, 435 F. 2d 989 (CA1 1970), cert. denied, 402 U. S. 933 (1971), ruled that the appropriate forum for the petitioners’ claim was the Congress, and that the New Jersey practice of according aid to striking workers was not violative of thé Supremacy Clause of the Constitution. The court denied the motion for preliminary injunction and dismissed the complaint. App. 45-46. On appeal, the United States Court of Appeals for the Third Circuit, by a divided vote, did not reach the merits but remanded the case.with instructions to vacate and dismiss for mootness. 469 F. 2d 911, 922 (1972). We granted certiorari to consider the mootness issue. 414 U. S. 817 (1973).

n

The respondent union invites us to conclude that this controversy between the petitioners and the State became moot when the particular economic strike terminated upon the execution of the new collective-bargaining agreement and the return of the strikers to work in late June. That conclusion, however, is appropriate with respect to only one aspect of the lawsuit, that is, the request for injunctive relief made in the context of official state action during the pendency of the strike.

The petitioners here have sought, from the very beginning,, declaratory relief as well as an injunction. Clearly, the District Court had “the duty to decide the appropriateness and the merits of the declaratory request irrespective of its conclusion as to the propriety of the issuance of the injunction.” Zwickler v. Koota, 389 U. S. 241, 254 (1967); Roe v. Wade, 410 U. S. 113, 166 (1973); Steffel v. Thompson, 415 U. S. 452, 468-A69 (1974). Thus, even though the case for an injunction dissolved with the subsequent settlement of the strike and the strikers’ return to wofk, the parties to the principal controversy, that is, the corporate petitioners and the New Jersey officials, may still retain sufficient interests and injury as. to justify the award of declaratory relief! The question is “whether the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having advérse legal interests, of sufficiént immediacy and reality to warrant the issuance of a declaratory judgment.” Maryland Casualty Co. v. Pacific Coal & Oil Co., 312 U. S. 270, 273 (1941), And ' since this case involves governmental action, we must ponder the broader consideration whether the short-term, nature of that action makes the issues presented here “capable of repetition, yet evading review,” so that peti-. tioners are adversely affected by government “without a chance of redress.” Southern Pac. Terminal Co. v. ICC, 219 U. S. 498, 515 (1911).

' A. We hold that the facts here provide full and complete satisfaction of the. requirement of the Constitution's Art. Ill, § 2, and the Declaratory Judgment Act, that a case or controversy exist between the parties. Unlike the situations that prevailed in Oil Workers Unions v. Missouri, 361 U. S. 363 (1960), on which the Court of Appeals' majority chiefly relied, and. in Harris v. Battle, 348 U. S. 803 (1954), the challenged governmental activity in the present, case is not contingent, has not' evaporated or disappeared, and,- by' its continuing and brooding presence, casts what may well, be a substantial adverse effect on the interests of the petitioning parties.

In both Harris and Oil Workers k state statute authorized the Governor to take immediate possession of a public utility in the event of a strike or work stoppage that interfered with the public interest. The seizure was not automatic for every public utility labor dispute. It took effect only upon the exercise of the Governor’s discretion. In each case the Court held the controversy to be moot because both the seizure and the strike had terminated prior to the time the case reached this. Court, The governmental action challenged was the authority to seize the !public utility, and it was clear that a seizure would not recur except in circumstances where (a) there was another strike or' stoppage, and (b) in the judgment of'the Governor, the public interest required it. The question was thus posed in a situation where the threat of governmental action was two steps removed from reality. "This made the recurrence of a seizure so remote and speculative that there, was no tangible prejudice to the existing interests of the parties and, therefore, there was a “want of a subject matter” on which any judgment' of this Court could operate. Oil Workers, 361 U. S., at 371. This was particularly apparent in Oil Workers because, although the union had sought both declaratory and injunctive relief,, the decision the Court was asked'to review “upheld only the validity of an injunction, an injunction that expired by its own terms more than three years ago.” Ibid.

The present case has a decidedly different .posture. As in Harris and Oil Workers, the strike here was settled before the litigation reached this’ Court. But, unlike those cases, thq challenged governmental action has not ceased. The . New, Jersey governmental action does not rest on the distant contingencies of another strike and the discretionary act of an official. Rather, New Jersey has declared positively that able-bodied striking workers who are engaged, .individually and collectively, in an economic dispute with their employer are eligible for economic benefits. This policy is fixed and definite. It is not contingent upon executive discretion. Employees know that if they go out on strike, public funds are available. The petitioners’ claim is that this eligibility affects the collective-bargaining relationship, both in the context of a live labor dispute when a collective-bargaining agreement is in process of formulation, and in the ongoing collective relationship, so that the economic balance between labor and management, carefully formulated and preserved by Congress in the federal labor statutes, is altered by the State’s beneficent policy toward strikers. It cannot be doubted that the availability of state welfare assistance for striking workers in New Jersey pervades every work stoppage, affects every existing collective-bargaining agreement, • and is a factor lurking in the background of every incipient labor contract. The question, of course, is whether Congress, explicitly or implicitly, has ruled out such assistance in its calculus of laws regulating labor-management disputes. In this sense petitioners allege a colorable claim of injury from an extant and fixed policy directive of the State of New Jersey. That claim deserves a hearing.

The decision in- Bus Employees v. Missouri, 374 U. S. 74 (1963), is not to the contrary. .In that case the Court adjudicated the merits of the same statutory scheme that had been challenged earlier in Oil Workers. It reached the merits even though the Governor had terminated the seizure of the public utility. His executive order, however, recited that the labor dispute “remains unresolved.” The Court’s rationale was that, since the labor dispute had not ended, “[tjhere thus exists in the present case not merely the speculative possibility of invocation of the King-Thompson Act in some future labor dispute, but the presence of an existing unresolved dispute which continues subject to all the provisions of the Act. Cf. Southern Pac. Terminal Co. v. Interstate Commerce Comm’n, 219 U. S. 498, 514-516; United States v. W. T. Grant Co., 345 U. S. 629, 632.” 374 U. S., at 78. The existence of the strike was important in that it rendered concrete the likelihood of state action prejudicial to the interests of the union. It was the remoteness of the threat of state action that convinced the Court in Oil Workers to hold that case moot. In the case now before us, the state action is not at all contingent. Under the petitioners’ view of the case, it is immediately and directly injurious to thé corporate petitioners’ economic positions. Pidiere such state action or its imminence adversely affects the status of private parties, the courts should be available to render appropriate relief and judgments affecting the parties’ rights and interests:

B. If we were to condition our review on the existence of an economic strike, this case most certainly would be of the type presenting an issue “capable-of repetition, yet evading review.” Southern Pac. Terminal Co. v. ICC, 219 U. S., at 515; Grinnell Corp. v. Hackett, 475 F. 2d 449 (CA1), cert. denied, 414 U. S. 858 and 879 (1973); ITT Lamp Division v. Minter, 435 F. 2d, at 991. To require the presence of an active and live labor dispute would tax the litigant too much by arbitrarily slighting claims of adverse injury from concrete governmental action (of the immediate threat thereof). It is sufficient, therefore, that the litigant show the existence of an immediate and definite governmental action or policy that has adversely affected and continues to affect a present interest. Otherwise, a state policy affecting a collective-bargaining arrangement, except one involving a fine or other penalty, could be adjudicated only rarely, and the. purposes of the Declaratory Judgment Act would be frustrated.

Certainly, the pregnant appellants in Roe v. Wade, supra, and in Doe v. Bolton, 410 U. S. 179 (1973), had long since outlasted their pregnancies by the time their cases reached this Court. Yet we h'ad no difficulty in rejecting suggestions of' mootness. 410 U. S., at. 125 and 187. Similar and consistent results were reached in Storer v. Brown, 415 U. S. 724, 737 n, 8 (1974); Rosario v. Rockefeller, 410 U. S. 752, 756 n. 5 (1973); Dunn v. Blumstein, 405 U. S. 330, 333 n. 2 (1972); and Moore v. Ogilvie, 394 U. S. 814, 816 (1969), cases concerning various challenges to state election laws. The important ingredient' in these cases was governmental action directly affecting, and continuing to affect, the behavior of citizens in our society.

The issues here are no different. Economic' strikes are of comparatively short duration. There are exceptions, of course; See, for example, Local 888, UAW v. NLRB, 112 U. S. App. D. C. 107, 300 F. 2d 699, cert. denied sub nom. Kohler Co. v. Local 888, UAW, 370 U. S. 911 (1962)., But the great majority of economic strikes do not last long enough for complete judicial review of the controversies they engender. U. S. Dept. of Labor, Bureau of Labor Statistics, Analysis of Work Stoppages 1971, TableA 3, p. 16 (1973). A strike that lasts six weeks, as this'one did, may seem long, but its termination, like pregnancy at nine months and elections spaced at year-long or biennial intervals, should not preclude challenge to state policies that-have had their impact and that continue in force, unabated and unreviewed. The judiciary must not close the door to the resolution of the important* questions these concrete ■disputes present. '

The judgment of the Court of Appeals is reversed and the case is remanded for further proceedings on the merits of the controversy.

Zi * so ordered¡

Mr. Justice Stewart,

with whom The Chief Justice, Mr. Justice Powell, and Mr. Justice Rehnquist join, dissenting. •

• The Court today reverses the Court of Appeals and holds that this case is not moot, despite the fact that the underlying labor dispute that gave rise to the petitioners’ claims ended even before the parties made their initial appearance in the District. Court. I think this . holding ignores the limitations placed upon the federal-judiciary by Art. III . of the Constitution and disregards the clear teachings of prior cases. Accordingly, I dissent.

This Court has repeatedly recognized that the inability of the' federal judiciary “to review moot cases derives from the requirement of Art. Ill of the Constitution under which the exercise of judicial power depends upon the. existence of a case or controversy.” Liner v. Jafco, Inc., 375 U. S. 301, 306 n. 3. See also North Carolina v. Rice, 404 U. S. 244, 246; Powell v. McCormack, 395 U. S. 486, 496 n. 7; Sibron v. New York, 392 U. S. 40,. 50 n. 8. Since Art. Ill courts are precluded from issuing advisory opinions, Hay bum’s Case, 2 Dall. 409*;. Muskrat v. United States, 219 U. S. 346, it necessarily follows that they are impotent “to decide questions that cannot affect the.rights of litigants in the case before, them.” North Carolina v. Rice, supra, at 246; St. Pierre v. United States, 319 U. S. 41, 42.

These broad constitutional principles, of course, provide no more than the starting point, since the decision as to whether any particular lawsuit is moot can be made only after analysis- of the .precise factual situation of the parties involved. ’ But in my view our task in the present case is greatly simplified, for this Court has had several occasions within the. past 20 years to apply the general principles of mootness- to the specific facts of labor disputes closely analogous to the one at hand.

The first of these cases was Harris v. Battle, 348 U. S. 8.03, in which the.issue was whether a Virginia statute that permitted the state Governor to order that “possession” be taken of a transit company whose employees were on strike was in conflict with the National Labor Relations Act. The underlying labor dispute was settled, and the seizure terminated before the case came to trial, but the trial court nevertheless proceeded to decide the merits of the controversy, finding the statute constitutional. After the Virginia Supreme Court refused review, an appeal was taken to this Court. In a brief per curiam opinion, this Court held that the case was. moot and ordered the appeal dismissed.

..In Oil Workers Unions v. Missouri, 361 U. S. 363, we had occasion to explicate the. holding of Harris v. Battle in the context of a challenge to Missouri’s King-Thompson Act, which allowed the Governor on behalf of the -State to take possession of and operate a privatély owned pütílic utility affected by a work stoppage. In that case, the underlying strike and seizure had terminated while the case was on appeal to the Supreme Court of Missouri. Nonetheless, that court considered the merits of the lawsuit, holding the King-Thompson Act constitutional. We read Harris v. Battle as requiring that the case be held moot, since the termination of both the strike and the seizure left “no 'actual matters in controversy essential to the decision of the particular case’ ” then before us. 361 U. S., at 367, quoting from United States v. Alaska S. S. Co., 253 U. S. 113, 116.

The constitutionality of the King-Thompson Act was again at issue in Bus Employees v. Missouri, 374 U. S. 74. The strike and seizure in that case were still in effect at the time of the decision of the Supreme Court of Missouri, but, after. the appellants’ jurisdictional statement was filed in this Court, the Governor of Missouri terminated the outstanding seizure order. ' Consequently, the appellees argued that the case had become moot, relying on Harris and Oil Workers. We rejected the contention, noting that in both those cases, the underlying labor dispute had been settled by the time the litigation reached this Court. In Bus Employees, by contrast, the strike was still unresolved, and the appellants were thus fully subject to the provisions of th,e King-Thompson Act. Hence, we concluded that Harris and Oil Workers did not control, .and we proceeded to decide the merits of the case, holding the Missouri law to be in conflict with the National Labor Relations Act, and thus invalid under the Supremacy Clause.

I think it is clear that the facts of the case before us.serve to bring it within the teaching of Harris and Oil Workers, and outside the ambit of Bus Employees. Here, as in Harris and Oil Workers, both the underlying work stoppage and the challenged governmental action— the providing of welfare benefits to the petitioners’ employees — had ceased long before review was sought in this Court.. Any view that a federal court might express on the merits of the petitioners’ Supremacy Clause claims would, therefore, amount to an advisory opinion, having no effect on any “actual matters in controversy.” As we noted in Oil Workers, such an undertaking would ignore a “basic limitation upon the duty and function of the Court, and . . . disregard principles of judicial administration long established and repeatedly followed.” 361 U. S., at 368.

The Court offers essentially two arguments aifned at distinguishing this case from Harris and Oil Workers. First, it says that the very existence of the New. Jersey welfare programs constitutes a continuing burden on the petitioners’ ability to engage in collective bargaining with the respondent union. Secondly, the Court says that the underlying controversy here is “capable of repetition, yet evading review,” and thus comes within the rule of Southern Pac. Terminal Co. v. ICC, 219 U. S. 498, 515.

Similar arguments, however, were considered and rejected in both Harris and Oil Workers. In each of those cases it was argued that the Southern Pacific doctrine prevented a finding of mootness, and it was also argued that the case was not moot because of the continuing threat of state seizure of public utilities in future labor disputes. The Court’s summary dismissal of the Harris appeal necessarily rejected both of these contentions, and we explicitly adhered to that holding in Oil Workers:

“In [Harris] it was urged that the controversy was not moot because of the continuing threat of state seizure in future labor disputes. It was argued that the State’s abandonment of alleged unconstitutional activity after its objective had been accomplished should not be permitted to forestall decision as to the validity of the statute under which the State had purported to act. It was contended that the situation was akin to cases like Southern Pac. Terminal Co. v. Interstate Commerce Comm’n, 219 U. S. 498, 514-516. In finding that the controversy was moot, the Court necessarily rejected all these contentions. 348 U. S. 803. Upon the authority of that decision the same contentions must be rejected in the present case. See also Barker Co. v. Painters Union, 281 U. S. 462; Commercial Cable Co. v. Burleson, 250 U. S. 360.” 361 U. S., at 368-369 (footnotes omitted).

1 find no reason to depart from this holding in the case before us. While it is not inconceivable that the petitioners’ employees will once again strike and perhaps once again become eligible for future New Jersey welfare benefits, I find little to distinguish that hypothetical situation from the “speculative possibility of invocation of the'King-Thompson Act in some future labor dispute” that was present in Oil Workers. And, even if it could be assumed that the present controversy is “capable of repetition” within the meaning of the Southern Pacific test, I am less than confident that the issues presented can truly be characterized as “evading review.” If nothing else, thé Bus Employees case teaches that even the most confident predictions about the future unreviewabiiity. of specific legal controversies are often proved inaccurate. |ndeed, several courts of appeals have had the opportunity to consider the precise Supremacy Clause issues now raised- by the petitioners in the context of ongoing labor disputes. Given that experience, I cannot conclude that it is permissible to resolve .these important questions in a case where their resolution will have no direct effect on the parties to the litigation.

The argument that eligibility of strikers for future New Jersey welfare benefits might affect the “ongoing” process of collective- bargaining fares no better in the light of the Oil Workers decision. The continued exist-, ence of the King-Thompson Act in Oil Workers arguably had a most significant effect on the employees’ collective-bargaining ability, since it threatened to deprive them of their principal economic weapon, the capacity to strike. Yet the Court found the continuing threat of seizure in future labor disputes to be insufficient to save the Oil Workers case from mootness. No different weight should be accorded to the petitioners’ argument that the possibility of strikers receiving welfare benefits will make future work stoppages less onerous for their employees.

In short, I think that this case is completely controlled by Harris and Oil Workers. The doctrine of mootness is already a difficult and complex one, and I think that the Court today muddies the waters further by straining unnecessarily to distinguish and limit some , of the few clear precedents available to us.

For these reasons I would affirm the judgment of the Court of Appeals.

       Super Tire Engineering Company is engaged in the business of truck tire sales and service and the manufacture-and sale of industrial polyurethane tires and wheels. Supercap Corporation is engaged in the business of truck tire recapping and repairing.

       The named defendants were Lloyd W. McCorkle, Commissioner of the Department of Institutions and Agencies of the State of New Jersey; Irving J. Engelman, Director of the Division of Public Welfare of the Department of Institutions and .Agencies of the State of New Jersey; Fred L. Streng, Director of the Camden County, New Jersey, Welfare Board; and Juanita E. Dicks, Welfare Director of the Municipal Welfare Department of the City of Camden, New Jersey.

       The General Public Assistance Law, N. J.' Stat. Ann. •§ 44:8-107 et seq. (Supp. 1973-1974), a state program, and the Assistance for Dependent Children Law (ADC), N. J. Stat. Ann. §44:10-1 et seq. (Supp. 1973-1974), a federal-state program created by § 402 of the Social Security Act, as amended, 42 U. S. C. § 602.
      Effective June 30, 1971, New Jersey elected no longer to participate in the unemployed parent segment of the AEDC program, and enacted, in its place, the Assistance to Families of the- Working Poor program, N. J. Stat. Ann. §44:13-1 et seq. (Supp. 1973-1974).

      The Regulations (M. A. 1.006/revised Mar. 1957), issued by the New. Jersey Department of Institutions and Agencies under the General Public Assistance Law, provided in pertinent part:
      “A. Citation of Statute and Constitution
      “Chapter 156, P. L. 1947 (R. S. 44:8-108) defines reimbursable public assistance as ‘assistance rendered to needy persons not otherwise provided for under the laws of this State, where such persons are willing to work but are unable to secure employment due either to physical disability or inability to find employment.’
      “The Constitution of New Jersey 1947, Article I, paragraph 19, guarantees that ‘Persons in private employment shall have the right to organize and bargain collectively.’
      “B. Interpretation and Policy
      “It may be inferred from the quoted section of the statute that persons unwilling to work are ineligible for public assistance. However, for purposes of public administration, the phrase ‘unwilling to work’ must be defined as objectively as possible.
      “. . . The Constitutional guarantee of the ‘right to organize and bargain colleetivély’ implies the right of the individual to participate in a bona -fide labor dispute as between.the employer and the' collective bargaining unit by which the individual is represented. Moreover, a ‘strike,’ when lawfully authorized and conducted, is recognized as an inherent and lawful element of the process of bargaining collectively and of .resolving labor disputes. Accordingly, when an individual is participating in a lawful ‘strike,’ he may not be considered merely because of. such participation, as refusing to work without just cause.
      “C. Regulations
      “Based on the foregoing statement of interpretation and' policy, the following regulations are established:
      “4. No individual shall be presumed to be unwilling to work, or to be wrongfully refusing to accept suitable employment, merely because he is participating in a lawful labor dispute.
      “5. An individual who is participating in a lawful labor.dispute, and who is 'needy, has the same right to apply far public assistance, for himself and his dependents, as any other individual who is needy.
      “6. In the ease "of an applicant for public assistance who is participating iñ a lawful labor dispute, there shall be an investigation of need and other conditions of eligibility, and an evaluation of income, and resources, in the same way and to the same extent as in all other cases. In such instances, 'strike benefits’ or other payments available to the individual from the labor union or other source; shall be considered a resource and shJUL be determined and accounted for.”
      . The record is not clear as to the eligibility of strikers under. New Jersey’s newly enacted program 'of Assistance to Families of' the Working Poor. Petitioners state that striking workers are eligible for benefits under that program. Brief for Petitioners 4 n. 1. The respondents concede this, as “a matter of administrative application.-” Tr. of Oral Arg.. 46.

      The complaint also alleged that the inclusion of -striking workers in these programs was contrary to. New Jersey law. .

       All the strikers returned to work by Monday, June 28, 1971, and normal operations at the corporate petitioners’ plants were then resumed.

      -Although the threat of seizure'in Oil Workers constituted a far more severe form of governmental- action, going as it did to cripple any strike, the features of that .action were inexorably contingent, serving to make it more remote and speculative.

       It 'may not 'appropriately be argued that there is an element of discretion present here, in the making of the determination of individual “need" for welfare benefits. That determination has no measurable effect on th? rights of the corporate petitioners. Instead, it is the basic eligibility for- assistance that allegedly prejudices those petitioners’ economic position.

       See generally Diamond, Federal Jurisdiction to Decide Moot Cases, 94 XJ. Pa. L. Rev. 125; Note, Mootness on Appeal in the Slipreme Court, 83 Harv. L. Rev. .1672; Note, Mootness and Ripeness: The Postman Always Rings Twice, 65 Col. L. Rev. 867; Note, Cases Moot, on Appeal: A Limit on the Judicial Power, 103 U. Pa. L. Rev. 772.

        Bus Employees v. Missouri, 374 U. S. 74, 78.

       In ITT Lamp Division v. Minter, 435 F. 2d 989 (CA1), two cases were consolidated on appeal; one of them. involved an ongoing strike. Similarly, the underlying labor dispute in Russo v. Kirby, 453 F. 2d 548 (CA2), was still in effect at'the time of the Court of Appeals’ decision, although the appellate court did not reach the employers’ Supremacy Clause arguments, since it found that the District Court lacked jurisdiction to hear the suit,, -which had been brought by strikers to compel the payment of welfare benefits.

       The Court characterizes the governmental action challenged in Oil Workers and Harris as more "remote” and "contingent" than the . New Jersey policy at hand. For mootness purposes, I think that this is a distinction without a difference. For one thing, New Jersey does not automatically extend welfare benefits to striking workers; it merely makes them eligible to receive such benefits, provided that they meet all other appropriate criteria. Thus, for th^ challenged governmental action here, to recur, at least two things must happen: the. respondent union must again call a strike, and the workers must satisfy the standards of need that may then be set forth in the New Jersey welfare statutes. If the threat. of seizure in Oil Workers was viewed as “contingent” in nature, no different conclusion can be reached here.
      Moreover, as the Court concedes, ante, at 123 n. 7, the threat of seizure in Oil Workers involved-“a far more severe form” of governmental interference in the collective-bargaining process than does the New Jersey policy of making strikers eligible for welfare benefits, since invocation of the Missouri statute served t.o cripple any strike completely. Thus, even if the governmental action involved in Oil Workers is viewed as more “contingent” than in the present case, I cannot understand how its effect on the collective-bargaining process can be characterized as less serious.