author: Mr. Justice Douglas Me. Justice White,

text:
    NATIONAL LABOR RELATIONS BOARD v. SAVAIR MANUFACTURING CO.
    No. 72-1231.
    Argued November 12, 1973
    Decided December 17, 1973
    Douglas, J., delivered the opinion of the Court, in which Burger, C. J., and Stewart, Marshall, Powell, and RehNquist, JJ., joined. White, J., filed a dissenting opinion, in which BreNNAN and BlacicmuN, JJ., joined, post, p. 281.

      Norton J. Come argued the cause for petitioner. With him on the brief were Solicitor General Boric, Samuel Huntington, Peter G. Nash, John S. Irving, Patrick Hardin, and Linda Sher.

      Robert J. Solner argued the cause and filed a brief for respondent.
   Mr. Justice Douglas

delivered the opinion of the Court.

The National Labor Relations Board, acting pursuant to § 9 (c) of the National Labor Relations Act, as amended, 61 Stat. 144, 29 U. S. C. § 159 (c), conducted an election by secret ballot among the production and maintenance employees of respondent at the request of the Mechanics Educational Society of America (hereafter Union). Under the Act the Union, if it wins the election, becomes “the exclusive representative of all the employees” in that particular unit for purposes of collective bargaining. The Union won the election by a vote of 22-20.

Respondent filed objections to the election, but after an evidentiary hearing, a hearing officer found against respondent and the Board certified the Union as the representative of the employees in that unit. Respondent, however, refused to bargain. The Union thereupon filed an unfair labor practice charge with the General Counsel, who issued a complaint alleging that respondent had violated §§ 8 (a)(1) and (5) of the Act. The Board sustained the allegations and ordered respondent to bargain with the Union. 194 N. L. R. B. 298. The Court of Appeals denied enforcement of the order. 470 F. 2d 305. We granted the petition for certiorari, 411 U. S. 964, there apparently being a conflict between this decision in the Sixth Circuit and a decision in the Eighth Circuit, NLRB v. DIT-MCO, Inc., 428 F. 2d 775, and also with one in the Ninth Circuit, NLRB v. G. K. Turner Associates, 457 F. 2d 484. We affirm.

It appeared that prior to the election, “recognition slips” were circulated among employees. An employee who signed the slip before the election became a member of the Union and would not have to pay what at times was called an “initiation fee” and at times a “fine.” If the Union was voted in, those who had not signed a recognition slip would have to pay.

The actual solicitation of signatures on the “recognition slips” was not done by Union officials. Union officials, however, explained to employees at meetings that those who signed the slips would not be required to pay an initiation fee, while those who did not would have to pay. Those officials also picked out some five employees to do the soliciting and authorized them to explain the Union’s initiation-fee policy. Those solicited were told that there would be no initiation fee charged those who signed the slip before the election. Under the bylaws of the Union, an initiation fee apparently was not to be higher than $10; but the employees who testified at the hearing (1) did not know how large the fee would be and (2) said that their understanding was that the fee was a “fine” or “assessment.”

One employee, Donald Bridgeman, testified that he signed the slip to avoid paying the “fine” if the Union won. He got the message directly from an employee picked by the Union to solicit signatures on the “slips.” So did Thomas Rice, another employee.

The Board originally took the position that pre-election solicitation of memberships by a union with a promise to waive the initiation fee of the union was not consistent with a fair and free choice of bargaining representatives. Lobue Bros., 109 N. L. R. B. 1182. Later in DIT-MCO, Inc., 163 N. L. R. B. 1019, the Board explained its changed position as follows:

“We shall assume, arguendo, that employees who sign cards when offered a waiver of initiation fees do so solely because no cost is thus involved; that they in fact do not at that point really want the union to be their bargaining representative. The error of the Lobue premise can be readily seen upon a review of the consequences of such employees casting votes for or against union representation. Initially, it is obvious that employees who have received or been promised free memberships will not be required to pay an initiation fee, whatever the outcome of the vote. If the union wins the election, there is by postulate no obligation; and if the union loses, there is still no obligation, because compulsion to pay an initiation fee arises under the Act only when a union becomes the employees’ representative and negotiates a valid union-security agreement. Thus, whatever kindly feeling toward the union may be generated by the cost-reduction offer, when consideration is given only to the question of initiation fees, it is completely illogical to characterize as improper inducement or coercion to vote 'Yes’ a waiver of something that can be avoided simply by voting 'No.’
“The illogic of Lobue does not become any more logical when other consequences of a vote for representation are considered. Thus, employees know that if a majority vote for the union, it will be their exclusive representative, and, provided a valid union-security provision is negotiated, they will be obliged to pay dues as a condition of employment. Thus, viewed solely as a financial matter, a 'no’ vote will help to avoid any subsequent obligations, a 'yes’ may well help to incur such obligations. In these circumstances, an employee who did not want the union to represent him would hardly be likely to vote for the union just because there would be no initial cost involved in obtaining membership. Since an election resulting in the union’s defeat would entail not only no initial cost, but also insure that no dues would have to be paid as a condition of employment, the financial inducement, if a factor at all, would be in the direction of a vote against the union, rather than for it.” Id., at 1021-1022.

We are asked to respect the expertise of the Board on this issue, giving it leeway to alter or modify its policy in light of its ongoing experience with the problem. The difficulty is not in that principle but with the standards to govern the conduct of elections under §9 (c)(1)(A). We said in NLRB v. Tower Co., 329 U. S. 324, 330, that the duty of the Board was to establish “the procedure and safeguards necessary to insure the fair and free choice of bargaining representatives by employees.”

It is, of course, true as we said in NLRB v. Wyman-Gordon Co., 394 U. S. 759, 767, that “Congress granted the Board a wide discretion to ensure the fair and free choice of bargaining representatives.” See also NLRB v. Waterman S. S. Co., 309 U. S. 206, 226. But in this case two opposed groups are in contention: one composed of those who want a union and the other, of those who prefer not to have one. The Board in its DIT-MCO opinion says “it is completely illogical to characterize as improper inducement or coercion” a waiver of initiation fees for those who vote “yes” when the whole problem can be avoided by voting “no.” 163 N. L. R. B., at 1021-1022. But the Board’s analysis ignores the realities of the situation.

Whatever his true intentions, an employee who signs a recognition slip prior to an election is indicating to other workers that he supports the union. His outward manifestation of support must often serve as a useful campaign tool in the union’s hands to convince other employees to vote for the union, if only because many employees respect their coworkers’ views on the unionization issue. By permitting the union to offer to waive an initiation fee for those employees signing a recognition slip prior to the election, the Board allows the union to buy endorsements and paint a false portrait of employee support during its election campaign.

That influence may well have been felt here for, as noted, there were 28 who signed up with the Union before the election petition was filed with the Board and either seven or eight more who signed up before the election. We do not believe that the statutory policy of fair elections prescribed in the Tower case permits endorsements, whether for or against the union, to be bought and sold in this fashion.

In addition, while it is correct that the employee who signs a recognition slip is not legally bound to vote for the union and has not promised to do so in any formal sense, certainly there may be some employees who would feel obliged to carry through on their stated intention to support the union. And on the facts of this case, the change of just one vote would have resulted in a 21-21 election rather than a 22-20 election.

Any procedure requiring a “fair” election must honor the right of those who oppose a union as well as those who favor it. The Act is wholly neutral when it comes to that basic choice. By § 7 of the Act employees have the right not only to “form, join, or assist” unions but also the right “to refrain from any or all of such activities.” 29 U. S. C. § 157. An employer who promises to increase the fringe benefits by $10 for each employee who votes against the union, if the union loses the election, would cross the forbidden line under our decisions. See NLRB v. Exchange Parts Co., 375 U. S. 405. The right of employees to “form, join, or assist” labor unions guaranteed by § 7 has an express sanction in § 8 (a)(1) which makes it an unfair labor practice for an employer “to interfere with, restrain, or coerce employees ” in the exercise of those rights. 29 U. S. C. §§ 157, 158 (a)(1). Such interference is an unfair labor practice as we held in NLRB v. Exchange Parts Co., supra. But, as already noted, § 7 guarantees the right of employees “to refrain from any or all of such activities.”

Congress has also listed in § 8 (b) of the Act “unfair” labor practices of unions. 29 U. S. C. § 158 (b). There is no explicit provision which makes “interference” by a union with the right of an employee to “refrain” from union activities an unfair labor practice.

Section 8 (c), however, provides:

“The expressing of any views, argument, or opinion, or the dissemination thereof, whether in written, printed, graphic, or visual form, shall not constitute or be evidence of an unfair labor practice under any of the provisions of this subchapter, if such expression contains no threat of reprisal or force or promise of benefit.” 29 U. S. C. § 158 (c) (emphasis added).

Whether it would be an “unfair” labor practice for a union to promise a special benefit to those who sign up for a union seems not to have been squarely resolved. The right of a free choice is, however, inherent in the principles reflected in § 9 (c)(1)(A).

When the dissent says that “[t]he special inducement is to sign the card, not to vote for the union” and that treating the two choices as one is untenable, it overlooks cases like NLRB v. Gissel Packing Co., 395 U. S. 575. There we held that the gathering of authorization cards from a majority of the employees in the bargaining unit may entitle the union to represent the employees for collective-bargaining purposes, even though there has been and will be no election, id., at 582-583, and that rejection of that authorization by the employer is an unfair labor practice. Where the solicitation of cards is represented as being solely for the purpose of obtaining an election, a contrary result is indicated. Id., at 584, 606. Thus the solicitation of authorization cards may serve one of two ends. Of course, when an election is contemplated, an employee does not become a member of the union merely by signing a card. But prior to the election if the union receives overwhelming support, the pro-union group may decide to treat the union authorization cards as authorizing it to conduct collective bargaining without an election. The latent potential of that alternative use of authorization cards cautions us to treat the solicitation of authorization cards in exchange for consideration of fringe benefits granted by the union as a, separate step protected by the same kind of moral standard that governs elections themselves.

The Board in its supervision of union elections may not sanction procedures that east their weight for the choice of a union and against a nonunion shop or for a nonunion shop and against a union.

In the Exchange Parts case we said that, although the benefits granted by the employer were permanent and unconditional, employees were “not likely to miss the inference that the source of benefits now conferred is also the source from which future benefits must flow and which may dry up if it is not obliged.” 375 U. S., at 409. If we respect, as we must, the statutory right of employees to resist efforts to unionize a plant, we cannot assume that unions exercising powers are wholly benign towards their antagonists whether they be nonunion protagonists or the employer. The failure to sign a recognition slip may well seem ominous to nonunionists who fear that if they do not sign they will face a wrathful union regime, should the union win. That influence may well have had a decisive impact in this case where a change of one vote would have changed the result.

Affirmed.

Me. Justice White,

with whom Mr. Justice Brennan and Mr. Justice Blackmun join, dissenting.

The report of the Hearing Officer, filed in response to the Company’s objections to the election, reveals that prior to the filing of the representation petition, a union organizer had told employees that, if the Union won the election, they would be subject to an initiation fee or “fine” if they did not sign an authorization card. The Union was then engaged in securing the necessary 30% showing of union support which would entitle it to hold an election under the Labor Board’s rules. 29 CFB, §§ 101.17, 101.18 (1973). The officer concluded that there was “insufficient evidence . . . that a threat of a 'fine’ occurred either before or after the filing date of the petition.” In any event, he also concluded that conduct occurring before the filing of an election petition was not ground for setting aside the election since “[w]hether or not a sufficient valid showing of interest was obtained, constitutes a matter for administrative determination.” Cf. Goodyear Tire & Rubber Co., 138 N. L. R. B. 453 (1962).

After the representation petition was filed and the election campaign proper commenced, the Union’s Secretary-Treasurer, Alfred Smith, addressed a group of about 20 employees at an organization meeting. In response to a question about the initiation fee, Smith indicated that there was “a small fee” which would be waived for all employees who signed cards prior to the election. The fee was, in fact, $10. Qualification for fee waiver was obtained by signing membership cards, but the testimony indicated that no one incurred any obligation to the Union until and unless the Union became the bargaining agent and a collective contract was signed. The Hearing Officer found “no evidence, nor any contention, that the Union misrepresented to employees that they would have to become members immediately upon the certification of the union as bargaining agent.”

On this record, the Board, obviously relying on its decision in DIT-MCO, Inc., 163 N. L. R. B. 1019 (1967), enforced, 428 F. 2d 775 (CA8 1970), which overruled its prior decision in Lobue Bros., 109 N. L. R. B. 1182 (1954), ordered the employer to bargain with the Union. 194 N. L. R. B. 298 (1971). The Sixth Circuit denied enforcement of the order, 470 F. 2d 305 (1972), and the majority now affirms that judgment.

Because in my view the Labor Board has “a wide degree of discretion in establishing the procedure and safeguards necessary to insure the fair and free choice of bargaining representatives by employees,” NLRB v. Tower Co., 329 U. S. 324, 330 (1946), and because I am unpersuaded that the waiver of initiation fees in this case is so clearly coercive within § 7 of the National Labor Relations Act that the Board has abused its discretion in finding otherwise, I respectfully dissent.

I

It is well established that an “unconditional” offer to waive initiation fees, where the waiver offer is left open for some period of time after the election, is not coercive and does not constitute an unfair labor practice. The Sixth Circuit itself has so held, NLRB v. Gafner Automotive & Machine, Inc., 400 F. 2d 10 (1968), and other courts of appeals have reached the same result. Amalgamated Clothing Workers v. NLRB, 345 F. 2d 264 (CA2 1965); NLRB v. Crest Leather Mfg. Corp., 414 F. 2d 421 (CA5 1969). The existence of the initiation fee is created by the union 'and represents .a self-imposed barrier to entry. There is no evidence that the fee is normally imposed for the sole purpose of removing it during a labor campaign. A different case might be put if the union purported to remove a nonexistent fee or artificially inflated the fee so as to misrepresent the benefit tendered by its removal. See NLRB v. Corbea, Perez & Morell, 328 F. 2d 679 (CA1 1964). Similarly, it is established that the union can promise employees to obtain wage increases or other benefits if it is elected as a bargaining representative. Wilson Athletic Goods Mjg. Co. v. NLRB, 164 F. 2d 637 (CA7 1947).

It must be obvious that these waivers of fees are a form of economic inducement, as the opinion for the Court employs that term. Undoubtedly an offer to reduce the cost of joining the union makes the union a more attractive possibility and may influence an employee to vote for the union, though one would assume, in view of the other costs and benefits at stake, that this consideration will be marginal. Similarly, if the union represents to the employees that it will attempt to secure higher wages, an employee’s calculations of costs and benefits will be altered, but in that instance the union is merely stating the obvious; indeed, the promise of higher wages is the primary rationale for the existence of the union. In any event, these forms of inducement are valid.

In the instant case, an offer which by its terms expires with the conclusion of the election is also a form of economic inducement. But insofar as the offer might affect the calculation of costs and benefits of joining the union, its effect is the same as an offer which does not expire until some time after the election. The inability to distinguish between these two situations, at least where small fees are involved and where the sole source of concern is pure financial inducement, led the Board to conclude in DIT-MCO that “an employee who did not want the union to represent him would hardly be likely to vote for the union just because there would be no initial cost involved in obtaining membership.” 163 N. L. R. B., at 1022.

The majority places heavy reliance on the supposed analogy between the waiver of fees in this case and an actual increase in benefits made by an employer during the course of an election campaign. NLRB v. Exchange Parts Co., 375 U. S. 405 (1964). There the employer increased vacation-pay benefits during the course of the campaign. The Court agreed with the Board that this was coercive activity on the part of the employer, and accordingly reversed the Court of Appeals, and ordered enforcement of the Board’s order. It was stated that "[t]he danger inherent in well-timed increases in benefits is the suggestion of a fist inside the velvet glove.” Id., at 409. A number of important differences exist between that case and the instant one. First, the employer actually gave his employees substantial increased benefits, whereas here the benefit is only contingent and small; the union glove is not very velvet. Secondly, in the union context, the fist is missing. When the employer increased benefits, the threat was made “that the source of benefits now conferred is also the source from which future benefits must flow and which may dry up if it is not obliged.” Ibid. The Union, on the other hand, since it was not the representative of the employees, and would not be if it were unsuccessful in the election, could not make the same threat by offering a benefit which it would take away if it lost the election. A union can only make its own victory more desirable in the minds of the employees.

II

If pure economic inducement in the form of lowering anticipated costs of joining the union is not to be considered coercive, one must focus on the special dangers, if any, presented by the conditional offer, an analysis not undertaken by the majority. It has been proposed that the conditional offer is specially to be proscribed because of the interjection of a new consideration into the voting choice of an employee: how probable it is that the union will win or lose the election. NLRB v. Gafner Automotive & Machine, Inc., 400 F. 2d, at 13 (Phillips, J., concurring); Amalgamated Clothing Workers v. NLRB, 345 F. 2d, at 268 (Friendly, J., concurring). The argument might be that an employee who estimates that the costs of joining the union exceed the benefits, even taking into account the reduced initiation fees available by signing a card, will still sign the card, as a hedge, because of his prediction that the union will win the election. A statement of the theory carries with it its own disproof. The special inducement is to sign the card, not to vote for the union. The majority decision collapses these two choices into one, and is thus untenable. The majority assumes, contrary to fact, that the employee has joined the Union by signing the authorization card. This is only true, however, if the Union wins the election and signs a collective contract, and the employee can still seek to prevent that outcome by casting his vote against the Union in a secret ballot. The testimony was clear that if the Union loses the election, the employee who signs the card incurs no obligation to the Union. The expressed preference in the National Labor Relations Act for secret ballot elections assumes that voters may act differently in private than in public, and ordinarily guarantees to employees the ability to make a secret choice. It is, therefore, important to highlight the fact that the Board in DIT-MCO assumed, arguendo, “that employees who sign cards when offered a waiver of initiation fees do so solely because no cost is thus involved; that they in fact do not at that point really want the union to be their bargaining representative.” 163 N. L. R. B., at 1021.

There is no need to consider here, as does the majority, whether the Union could achieve recognition on the basis of authorization cards secured, in part, by an offer of fee waiver. Of course, a card majority cannot serve as a basis for a § 8 (a) (5) bargaining order under NLRB v. Gissel Packing Co., 395 U. S. 575, 614-616 (1969), unless the employer has committed serious unfair labor practices. It may be that even given a serious unfair labor practice on the part of the employer, these cards could not serve as a basis for recognition. In this case, however, the Board’s bargaining order was based on the vote of a secret ballot election, and the Court must supply the connective between the decision to sign a card and the decision to vote for the Union. This connective can only be supplied by some rather speculative counter-rational psychological assumptions, i. e., that a person who signs the card will vote for the union. The Board assumes that such is not the case, and I am not prepared to upset the Board’s judgment on this matter. The majority opinion stresses the fact that the margin of Union victory was only two votes, and thus suggests that the “psychological connective” may explain the outcome indicating that it “may well have had a decisive impact” (emphasis added). But there is no evidence to this effect, and definitions of unfair practices which become a function of the outcome of an election are subject to severe problems of administration. The Board, in my judgment, is entitled to regulate elections on standard theories of coercion.

Ill

Since the case for coercion arising out of the conditional offer is speculative, and since the alteration of the calculus of costs and benefits is marginal where a small fee is involved, the issue here resolves into the proper allocation of institutional responsibility between an administrative agency and a reviewing court. The Board, upon reflection and study, has concluded that the conditional offer is not coercive within the meaning of § 7. This represented a basic change in policy but “one of the signal attributes of the administrative process is flexibility in reconsidering and reforming of policy.” City of Chicago v. FPC, 128 U. S. App. D. C. 107, 115, 385 F. 2d 629, 637 (1967). Such revisions are especially likely in the regulation of labor elections, due to the substantial problems in deciding what is likely to interfere with employee free choice. See Bok, The Regulation of Campaign Tactics in Representation Elections under the National Labor Relations Act, 78 Harv. L. Rev. 38, 44-45 (1964).

While the invocation of agency expertise is not talis-manic, see Radio Corp. v. United States, 341 U. S. 412, 421 (1951) (Frankfurter, J., dubitante), and while the decision of the Board must be supported by substantial evidence, Universal Camera Corp. v. NLRB, 340 U. S. 474 (1951), one cannot ask the agency to do the impossible. When choosing between alternative contentions of coercion, the agency must make judgments based on available knowledge. This is a difficult task and accounts in part for the decision of Congress to entrust the Board “with a wide degree of discretion in establishing the procedure and safeguards necessary to insure the fair and free choice of bargaining representatives by employees.” NLRB v. Tower Co., 329 U. S., at 330. Recognition of this discretion has been a recurrent theme in this Court's review of Board decisions. NLRB v. Waterman S. S. Co., 309 U. S. 206, 226 (1940); NLRB v. Wyman-Gordon Co., 394 U. S. 759, 767 (1969). In other contexts, the Board has had to perform the “far more delicate task ... of weighing the interests of employees in concerted activity against the interest of the employer in operating his business in a particular manner . . . .” NLRB v. Erie Resistor Corp., 373 U. S. 221, 229 (1963); American Ship Bldg. Co. v. NLRB, 380 U. S. 300, 312 (1965). There is certainly a conflicting interest between the union's right to make itself attractive to employees without misrepresentation and the employee's unfettered choice to vote for or against the union. I think it is rational for the Board to conclude on the basis of the facts presented that the decision of the Union to waive small fees was not coercive within the meaning of § 7. I, therefore, respectfully dissent.

       Section 9 (c)(1)(A) provides in part:
      “(c)(1) Whenever a petition shall have been filed, in accordance with such regulations as may be prescribed by the Board—
      “(A) by an employee or group of employees or any individual or labor organization acting in their behalf alleging that a substantial number of employees (i) wish to be represented for collective bargaining and that their employer declines to recognize their representative as the representative defined in [§ 9 (a)] ...
      “the Board shall investigate such petition and if it has reasonable cause to believe that a question of representation affecting commerce exists shall provide for an appropriate hearing upon due notice. . . . If the Board finds upon the record of such hearing that such a question of representation exists, it shall direct an election by secret ballot and shall certify the results thereof.” 29 U. S. C. § 159 (c).

       Section 9 (a) provides:
      “Representatives designated or selected for the purposes of collective bargaining by the majority of the employees in a unit appropriate for such purposes, shall be the exclusive representatives of all the employees in such unit for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment, or other conditions of employment . . . .” 29 U. S. C. § 159 (a).

       Sections 8 (a) (1) and (5) provide:
      “(a) It shall be an unfair labor practice for an employer—
      “(1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in [§ 7];
      “(5) to refuse to bargain collectively with the representatives of his employees, subject to the provisions of section [9 (a)).” 29 U. S. C. §§ 158 (a)(1) and (5).

       The question for review presented by the Board is whether the “Board properly concluded that a union’s offer to waive initiation fees for all employees who sign union authorization cards before a Board representation election, if the union wins the election, does not tend to interfere with employee free choice in the election.” (Emphasis added.) There was testimony by Alfred Smith, National Secretary-Treasurer of the Union, that he told the employees at a meeting that the waiver of initiation fees was open to all who signed the authorization cards before the collective-bargaining contract was signed.
      The Hearing Officer, however, found that
      “Bridgeman further testified that subsequent to that meeting, and prior to the election, Bennie McKnight told employees that if they signed the union membership and authorization card before the

        election, there would be no union 'initiation fee’ if the union were successful at the election.” (Emphasis added.)
      While Bridgeman’s testimony about McKnight’s representations after the meeting might have been only implicit, the Hearing Officer also referred to Bridgeman’s testimony that Smith himself had stated at the meeting that waiver of the initiation fee would be limited to those signing up before the election. The Hearing Officer clearly proceeded on the premise that the waiver was open only to those who signed up before the election:
      “The Employer further argues that it is an economic inducement contingent upon how employees vote in the election and on the results of the election, and as such, constitutes an objectionable inducement. This argument, however, has been rejected by the Board. In the DIT-MCO, Inc., 163 N. L. R. B. No. 147 case [p. 1019], the Board held that a provisional waiver of initiation fees prior to election is not improper regardless of whether it is contingent upon the results of the election. The Board pointed out that it would be unreasonable to conclude that a statement by the union during an election to the effect that an assessment of money or an obligation to pay money which could be avoided by the execution of a union membership card prior to the election, would influence a vote in favor of the Union when the simplest way to avoid the incurrence of any financial obligation would be to vote 'no.’ Thus, it would appear that any threat to impose a 'fine,’ 'assessment’ or 'initiation fee,’ or ‘payment to join the union,’ although it may induce an employee to execute a union authorization membership card, would more probably induce him to vote ‘no’ at the election." (Emphasis added.)
      The Court of Appeals read the Hearing Officer’s Report to state that the waiver was limited to those signing up before the election, as do we. Such a reading is amply supported by the evidence in the record beyond the testimony to which we have already alluded. The record demonstrates the pressure which employees felt to sign up with the Union quickly, before the election and perhaps even before the representation petition itself was filed, a pressure utterly inconsistent with a belief that a waiver would be available to them up to the time a collective-bargaining agreement was signed after the election. It is also supported by the fact that 28 individuals signed up with the Union before the election petition was filed with the Board on August 12, 1970, and apparently an additional seven or eight signed up before the September 22, 1970, election. But there is no indication of any individuals signing up with the Union after the election, which would be the obviously rational decision once the Union had won the election.
      The Board argues that unions have a valid interest in waiving the initiation fee when the union has not yet been chosen as a bargaining representative, because “ ‘[e]mployees otherwise sympathetic to the union might well have been reluctant to pay out money before the union had done anything for them. Waiver of the [initiation fees] would remove this artificial obstacle to their endorsement of the union.’ ” See Amalgamated Clothing Workers v. NLRB, 345 F. 2d 264, 268 (CA2 1969). While this union interest is legitimate, the Board’s argument ignores the fact that this interest can be preserved as well by waiver of initiation fees available not only to those who have signed up with the union before an election but also to those who join after the election. The limitation imposed by the Union in this ease — to those joining before the election — is necessary only because it serves the additional purpose of affecting the Union organizational campaign and the election.

       See n. 4, supra.

       The lower courts have recognized that promising benefits or conferring benefits before representation elections may unduly influence the representational choices of employees where the offer is not across the board to all employees but, as here, only to those who sign up prior to the election. See, e. g., NLRB v. Gorbea, Perez & Morell, 328 F. 2d 679, 681-682 and nn. 6-7 (CA1 1964) (promise to waive initiation fee for those joining union prior to election, but not after, may substantially influence election); Amalgamated Clothing Workers v. NLRB, 345 F. 2d, at 268-269 (Friendly, J., concurring) (improper to waive fees for those joining union immediately while indicating that this is foreclosed to those joining later). See also Collins & Aikman Corp. v. NLRB, 383 F. 2d 722, 728-729 (CA4 1967) (paying employee $7 to be observer at election is an “unreasonable or excessive economic inducement” potentially influencing other employees and is ground to set aside election); NLRB v. Commercial Letter, Inc., 455 F. 2d 109 (CA8 1972) (disproportionate payments to employees attending union “hearings” prior to representation election).
      The NLRB itself has recognized in other contexts that promising or conferring benefits may unduly influence representation elections. See e. g., Wagner Electric Corp., 167 N. L. R. B. 532, 533 (grant of life insurance policy to those who signed with union before representation election “subjects the donees to a constraint to vote for the donor union”); General Cable Corp., 170 N. L. R. B. 1682 ($5 gift to employees by union before election, even when not conditioned on outcome of election, was inducement to cast ballots favorable to union); Teletype Corp., 122 N. L. R. B. 1594 (payment of money by rival unions to those attending pre-election meetings).

       The opinion for the Court places no special emphasis on the fact that the waiver of initiation fees may have been referred to as a “fine.” Since the Hearing Officer expressly found that no such representation was made, the matter deserves no further attention.

       Mr. Bridgeman, an employee who attended the meeting, testified that his brother asked Smith if there was a fee for joining the union. Mr. Smith’s answer was “[t]here would be a small fee.” App. 28.

       The role of the initiation fee has been described by one writer as follows: “Initiation fees serve several sorts of union purposes. First, of course, they are a source of revenue, which is occasionally expendable however during an organization drive when the union is anxious to induce workers to join the union. Second, the initiation fee represents for the older member a kind of equity payment by the new member to compensate, at least partially, for the efforts that others have put into building the union. . . .” J. Barbash, The Practice of Unionism 79 (1956).

       The Court cannot ignore the fact, as well, that § 1 of the National Labor Relations Act declared the congressional policy of “encouraging the practice and procedure of collective bargaining.” 29 U. S. C. § 151. The existence of unions is an inescapable corollary of this preference. To the extent that this Court prohibits the union from promising a fairer deal for unionized employees by describing the benefits to be obtained by unionization, this policy is seriously eroded. This Court has often underscored this preference in the Act. See, e. g., Phelps Dodge Corp. v. NLRB, 313 U. S. 177, 182 (1941); NLRB v. Allis-Chalmers Mfg. Co., 388 U. S. 175, 180 (1967). This preference is only one of opportunity and the free choice of the employee must be protected, but restrictions on the communications of the union as to potential benefits may unduly prevent the intelligent exercise of such choice. The employer may garner loyalty through his actions and record of past performance for his own employees; the union can only sell employees the future.

       This possibility of hedging is to some extent borne out by the record. Although the Court cannot know what the correlation was between signed cards and votes for the Union, we do know that not everyone who signed cards voted for the Union. Twenty-eight persons plus signed cards (App. 75) and only 22 voted for the Union. Moreover, there is testimony that some employees discussed the hedge. “Of course some of us fellows did say to other fellows that were really against it [the Union] and have always been against it you better sign your ticket and turn it in because if you didn’t if it does get voted in, if the majority of the men vote the union in, at least you have to pay your dues which is very natural but you wouldn't have to pay no initiation fee." App. 28-29. (Emphasis added.)

       As to the possible effect of the fee waiver offer on securing the 30% showing necessary for holding an election, whether or not there is a valid showing is a matter for administrative determination not subject to litigation by the parties. Goodyear Tire & Rubber Co., 138 N. L. R. B. 453 (1962). Courts of appeals have uniformly so held. See NLRB v. J. I. Case Co., 201 F. 2d 597 (CA9 1953); NLRB v. White Constr. & Eng. Co., 204 F. 2d 950, 953 (CA5 1953); Kearney & Trecker Corp. v. NLRB, 209 F. 2d 782, 787-788 (CA7 1953); NLRB v. National Truck Rental Co., 99 U. S. App. D. C. 259, 261-262, 239 F. 2d 422, 424-425 (1956) (Burger, J.), cert. denied, 352 U. S. 1016 (1957); NLRB v. Louisville Chair Co., 385 F. 2d 922, 926-927 (CA6 1967); Intertype Co. v. NLRB, 401 F. 2d 41, 43 (CA4 1968), cert. denied, 393 U. S. 1049 (1969).

       It is certainly arguable that such a connection can be made when the union pays a person cash to vote for or assist the union. The benefit of the union has been tendered and the employee may well feel he has incurred a moral obligation to vote for the union. See, e. g., Wagner Electric Corp., 167 N. L. R. B. 532, 533 (1967) (grant of life insurance policy to those who signed with union before representation election “subjects the donees to a constraint to vote for the donor union”). See also Collins & Aikman Corp. v. NLRB, 383 F. 2d 722 (CA4 1967) (payment of $7 to employee to be observer at election); NLRB v. Commercial Letter, Inc., 455 F. 2d 109 (CA8 1972) (excessive payments to union members to attend meetings). In Wagner, supra, the Board distinguished the initiation fee decision in DIT-MCO, Inc., 163 N. L. R. B. 1019 (1967), on the ground that there was no immediate improvement in an employee's economic situation when fees were waived.

       The majority in its conclusion seems to articulate still another theory of coercion: “The failure to sign a recognition slip may well seem ominous to nonunionists who fear that if they do not sign they will face a wrathful union regime, should the union win.” This theory, of course, assumes a card signer will vote for the union. Moreover, this problem is fundamental in labor elections, at the outset, when cards are collected for the purpose of holding an election pursuant to the necessary showing of support, and, at the conclusion, if the union wins, when those who oppose the union must still decide to join the union or face the union’s wrath. One could easily argue that at least an equal deterrent to signing the card is the wrathful employer if the union loses the election.


source: Caselaw Access Project

author: Mr. Justice White Mr. Justice Brennan,

license: Public Domain

text:
    ZAHN et al. v. INTERNATIONAL PAPER CO.
    No. 72-888.
    Argued October 16, 1973
    Decided December 17, 1973
    White, J., delivered the opinion of the Court, in which Burger, C. J., and Stewart, Blacicmtjn, Powell, and Rehnqtjist, JJ., joined. BrennaN, J., filed a dissenting opinion, in which Douglas and Marshall, JJ., joined, post, p. 302.

      Peter F. Langrock argued the cause and filed a brief for petitioners.

      Taggart Whipple argued the cause for respondent. With him on the brief were Richard E. Nolan, William H. Levit, Jr., Nicholas R. Weiskopf, and George W. Ray, Jr.

        Norman Redlich and Stanley Buchsbawm filed a brief for the city of New York as amicus curiae urging affirmance.

   Mr. Justice White

delivered the opinion of the Court.

Petitioners, asserting that they were owners of property fronting on Lake Champlain in Orwell, Vermont, brought this action in the District Court on behalf of a class consisting of themselves and 200 lakefront property owners and lessees. They sought damages from International Paper Co., a New York corporation, for allegedly having permitted discharges from its pulp and paper-making plant, located in New York, to flow into Ticonderoga Creek and to be carried by that stream into Lake Champlain, thereby polluting the waters of the lake and damaging the value and utility of the surrounding properties. The suit was brought as a diversity action, jurisdiction assertedly resting on 28 U. S. C. § 1332 (a) (1). The claim of each of the named plaintiffs was found to satisfy the $10,000 jurisdictional amount, but the District Court was convinced “to a legal certainty” that not every individual owner in the class had suffered pollution damages in excess of $10,000. Reading Snyder v. Harris, 394 U. S. 332 (1969), as precluding maintenance of the action by any member of the class whose separate and distinct claim did not individually satisfy the jurisdictional amount and concluding that it would not be feasible to define a class of property owners each of whom had more than a $10,000 claim, the District Court then refused to permit the suit to proceed as a class action. 53 F. R. D. 430 (Vt. 1971). A divided Court of Appeals affirmed, 469 F. 2d 1033 (CA2 1972), principally on the authority of Snyder v. Harris, swpra. We granted the petition for writ of certiorari, 410 U. S. 925 (1973).

The Court of Appeals correctly held that this case is governed by the rationale of this Court’s prior cases construing the statutes defining the jurisdiction of the District Court. We therefore affirm its judgment.

From the outset, Congress has provided that suits between citizens of different States are maintainable in the district courts only if the “matter in controversy” exceeds the statutory minimum, now set at $10,000. 28 U. S. C. § 1332 (a). The same jurisdictional-amount requirement has applied when the general federal-question jurisdiction of the district courts, 28 U. S. C. § 1331 (a), is sought to be invoked. A classic statement of the dichotomy that developed in construing and applying these sections is found in Troy Bank v. G. A. Whitehead & Co., 222 U. S. 39, 40-41 (1911):

“When two or more plaintiffs, having separate and distinct demands, unite for convenience and economy-in a single suit, it is essential that the demand of each be of the requisite jurisdictional amount; but when several plaintiffs unite to enforce a single title or right, in which they have a common and undivided interest, it is enough if their interests collectively equal the jurisdictional amount.”

This distinction and rule that multiple plaintiffs with separate and distinct claims must each satisfy the jurisdictional-amount requirement for suit in the federal courts were firmly rooted in prior cases dating from 1832, and have continued to be the accepted construction of the controlling statutes, now §§ 1331 and 1332. The rule has been applied to forbid aggregation of claims where none of the claimants satisfies the jurisdictional amount, as was the case in Scott v. Frazier, 253 U. S. 243, 244 (1920), for example, where the Court stated the rule to be that “the amount in controversy must equal the jurisdictional sum as to each complainant.” It also requires dismissal of those litigants whose claims do not satisfy the jurisdictional amount, even though other litigants assert claims sufficient to invoke the jurisdiction of the federal court. Clark v. Paul Gray, Inc., 306 U. S. 583 (1939); Stewart v. Dunham, 115 U. S. 61, 64-65 (1885); Bernards Township v. Stebbins, 109 U. S. 341, 355 (1883).

In Clark v. Paul Gray, Inc., decided after the effective date of the Federal Rules of Civil Procedure in 1938, the Court applied the familiar rule that “when several plaintiffs assert separate and distinct demands in a single suit, the amount involved in each separate controversy must be of the requisite amount . . . , and . . . those amounts cannot be added together to satisfy jurisdictional requirements.” 306 U. S., at 589. Upon ascertaining on its own motion that only one of the plaintiffs in the District Court had presented a claim satisfying the jurisdictional amount, the Court reached the merits of that claim but directed the District Court to dismiss the claims of all other plaintiffs for want of jurisdiction.

The same rules were applied to class actions contemplated by Fed. Rule Civ. Proc. 23. The spurious class action authorized by Rule 23 (a) (3), as it stood prior to amendment in 1966, was viewed by Judge Frank, writing for himself and Judges Learned and Augustus Hand, as, “in effect, but a congeries of separate suits so that each claimant must, as to his own claim, meet the jurisdictional requirements.” Steele v. Guaranty Trust Co. of N. Y., 164 F. 2d 387, 388 (CA2 1947). The direct precedent for Steele was a 1941 decision in the same Circuit expressed in an opinion written by Judge Charles Clark, who, as a member of and Reporter for the Advisory Committee, was a principal architect of the Federal Rules of Civil Procedure. That case, Hackner v. Guaranty Trust Co. of N. Y., 117 F. 2d 95 (CA2 1941), involved a class action brought on behalf of plaintiffs with separate and distinct claims. Judge Clark invoked a long line óf authority in this Court, and in other courts, to hold that among parties related only by a common question of law and fact, “aggregation is improper” and that jurisdiction cannot be supplied for those without claims in the requisite amount “by adding a plaintiff who can show jurisdiction.” Id., at 98. (Citations omitted.) This was the accepted view in the federal courts with respect to class actions. In consequence, district courts were to entertain the claims of only those class action plaintiffs whose individual cases satisfied the jurisdictional amount requirement.

The meaning of the “matter in controversy” language of § 1332 as it applied to class actions under Rule 23 reached this Court in Snyder v. Harris, supra, the occasion being a division of opinion in the courts of appeals as to whether the 1966 amendments to Rule 23 had changed the jurisdictional-amount requirement of § 1332 as applied to class actions involving separate and distinct claims. None of the named plaintiffs and none of the unnamed members of the class before the Court alleged claims in excess of the requisite amount. It was nevertheless urged that in class action situations, particularly in light of the 1966 amendments to the rule, aggregation of separate and distinct claims should be permitted. The Court was of a contrary view, holding that class actions involving plaintiffs with separate and distinct claims were subject to the usual rule that a federal district court can assume jurisdiction over only those plaintiffs presenting claims exceeding the $10,000 minimum specified in § 1332. Aggregation of claims was impermissible, and the federal court was without jurisdiction where none of the plaintiffs presented a claim of the requisite size. The Court unmistakably rejected the notion that the 1966 amendments to Rule 23 were intended to effect, or effected, any change in the meaning and application of the jurisdictional-amount requirement insofar as class actions are concerned.

“The doctrine that separate and distinct claims could not be aggregated was never, and is not now, based upon the categories of old Rule 23 or of any rule of procedure. That doctrine is based rather upon this Court’s interpretation of the statutory phrase ‘matter in controversy.’ The interpretation of this phrase as precluding aggregation substantially predates the 1938 Federal Rules of Civil Procedure. . . . Nothing in the amended Rule 23 changes this doctrine. . . . The fact that judgments under class actions formerly classified as spurious may now have the same effect as claims brought under the joinder provisions is certainly no reason to treat them differently from joined actions for purposes of aggregation.” 394 U. S., at 336-337.

The Court also refused to reconsider its prior constructions of the “matter in controversy” phrase, concluding that it should not do so where Congress, with complete understanding of how the courts had construed the statute, had not changed the governing language and down through the years had continued to specify and had progessively increased the jurisdictional amount necessary for instituting suit in the federal courts.

None of the plaintiffs in Snyder v. Harris alleged a claim exceeding $10,000, but there is no doubt that the rationale of that case controls this one. As previously indicated, Snyder invoked the well-established rule that each of several plaintiffs asserting separate and distinct claims must satisfy the jurisdictional-amount requirement if his claim is to survive a motion to dismiss. This rule plainly mandates not only that there may be no aggregation and that the entire case must be dismissed where none of the plaintiffs claims more than $10,000 but also requires that any plaintiff without the jurisdictional amount must be dismissed from the case, even though others allege jurisdictionally sufficient claims.

This follows inescapably from the Court’s heavy reliance on Clark v. Paul Gray, Inc., supra, where only one of several plaintiffs had a sufficiently large claim and all other plaintiffs were dismissed from the suit. Moreover, the Court cited with approval the decision in Alvarez v. Pan American Life Insurance Co., 375 F. 2d 992 (CA5), cert. denied, 389 U. S. 827 (1967), which was decided after the 1966 amendments to Rule 23 and which involved a class action with only one member of the class having a claim sufficient to satisfy § 1332. Only that claim was held within the jurisdiction of the District Court.

We conclude, as we must, that the Court of Appeals in the case before us accurately read and applied Snyder v. Harris: Each plaintiff in a Rule 23(b)(3) class action must satisfy the jurisdictional amount, and any plaintiff who does not must be dismissed from the case — “one plaintiff may not ride in on another's coattails.” 469 F. 2d, at 1035.

Neither are we inclined to overrule Snyder v. Harris nor to change the Court’s' longstanding construction of the “matter in controversy” requirement of § 1332. The Court declined a like invitation in Snyder v. Harris after surveying all relevant considerations and concluding that to do so would undermine the purpose and intent of Congress in providing that plaintiffs in diversity cases must present claims in excess of the specified jurisdictional amount. At this time, we have no good reason to disagree with Snyder v. Harris or with the historic construction of the jurisdictional statutes, left undisturbed by Congress over these many years.

It also seems to us that the application of the jurisdictional-amount requirement to class actions was so plainly etched in the federal courts prior to 1966 that had there been any thought of departing from these decisions and, in so doing, of calling into question the accepted approach to cases involving ordinary joinder of plaintiffs with separate and distinct claims, some express statement of that intention would surely have appeared, either in the amendments themselves or in the official commentaries. But we find not a trace to this effect. As the Court thought in Snyder v. Harris, the matter must rest there, absent further congressional action.

Affirmed.

Mr. Justice Brennan,

with whom Mr. Justice Douglas and Mr. Justice Marshall join, dissenting.

The Court holds that, in a diversity suit, a class action under Fed. Rule Civ. Proc. 23 (b) (3) is maintainable only when every member of the class, whether an appearing party or not, meets the $10,000 jurisdictional-amount requirement of 28 U. S. C. § 1332 (a). It finds this ruling compelled by the “rationale of this Court's prior cases construing the statutes defining the jurisdiction of the District Court.” I disagree and respectfully dissent.

The jurisdictional-amount provision of § 1332 (a) tersely states that “the matter in controversy [must exceed] the sum or value of $10,000 . . . Those words, substantially unchanged since the passage of the Judiciary Act of 1789, apply to “civil actions,” and say nothing about the requirements applicable to individual claimants and individual claims. Although Congress has several times altered the amount required, generally upward, it has left the task of defining those requirements to the judiciary. The result has been a relatively complex and sensitive set of rules designed to implement Congress’ broad directive in a way that is responsive to the demands of fairness and efficiency in adjudication.

One “bright line” has emerged to control all § 1332 actions: there must be at least one plaintiff, or joint interest, seeking more than the statutory amount. Snyder v. Harris, 394 U. S. 332 (1969); Troy Bank v. G. A. Whitehead & Co., 222 U. S. 39 (1911). The “longstanding” and “well established” rule on aggregation of claims that the Court invokes was developed to determine whether a group of claims was sufficiently interrelated to constitute such a “joint” claim or “common and undivided interest.”

Once jurisdiction has attached to the “action,” however, the “aggregation” rule has been but one of several ways to establish jurisdiction over additional claims and parties. In this case, the claims of the named plaintiffs provided the District Court with jurisdiction over the diversity action. And petitioners make no argument inconsistent with the Court’s holding that the theory of “joint” claims or interests will not support jurisdiction over the nonappearing members of their class. Their contention is rather that a second theory, ancillary jurisdiction, supports a determination that those claims may be entertained.

Ancillary jurisdiction to adjudicate claims that cannot be fitted within the aggregation rules has long been recognized by this Court, see Freeman v. Howe, 24 How. 450 (1861); Phelps v. Oaks, 117 U. S. 236 (1886); Wichita R. & Light Co. v. Public Utilities Comm’n, 260 U. S. 48 (1922). But, as one commentator has pointed out, the rules developed to control the exercise of that jurisdiction cannot be explained by “any single rationalizing principle.” C. Wright, Federal Courts § 9, p. 21 (2d ed. 1970). They are instead accommodations that take into account the impact of the adjudication on parties and third persons, the susceptibility of the dispute or disputes in the case to resolution in a single adjudication, and the structure of the litigation as governed by the Federal Rules of Civil Procedure.

After consideration of these factors, the Court has sustained the exercise of ancillary jurisdiction over compulsory counterclaims under Rule 13 (a), Horton v. Liberty Mutual Insurance Co., 367 U. S. 348 (1961), aff’g 275 F. 2d 148 (CA5 1960); Moore v. New York Cotton Exchange, 270 U. S. 593 (1926). It has also done so where a party's intervention was held to be a matter of right, as is now provided by Rule 24 (a), Phelps v. Oaks, supra; see 2 W. Barron & A. Holtzoff, Federal Practice & Procedure § 593 (C. Wright ed. 1961). Following this lead, the courts of appeals have sustained ancillary jurisdiction over cross-claims permitted by Rule 13 (g), R. M. Smythe & Co. v. Chase National Bank, 291 F. 2d 721 (CA2 1961); Childress v. Cook, 245 F. 2d 798 (CA5 1957); over impleaded defendants under Rule 14, Pennsylvania R. Co. v. Erie Avenue Warehouse Co., 302 F. 2d 843 (CA3 1962); and over defendants interpleaded under Rule 22, Walmac Co. v. Isaacs, 220 F. 2d 108 (CA1 1955). See Developments in the Law — Multiparty Litigation in the Federal Courts, 71 Harv. L. Rev. 874 passim (1958).

Class actions under Rule 23 (b)(3) are equally appropriate for such treatment. There are ample assurances, in the provisions of the Rule that “the questions of law or fact common to the members of the class [must] predominate over any questions affecting only individual members/' to guarantee that ancillary jurisdiction will not become a facade hiding attempts to secure federal adjudication of nondiverse parties’ disputes over unrelated claims. And the practical reasons for permitting adjudication of the claims of the entire class are certainly as strong as those supporting ancillary jurisdiction over compulsory counterclaims and parties that are entitled to intervene as of right. Class actions were born of necessity. The alternatives were joinder of the entire class, or redundant litigation of the common issues. The cost to the litigants and the drain on the resources of the judiciary resulting from either alternative would have been intolerable. And this case presents precisely those difficulties: approximately 240 claimants are involved, and the issues will doubtless call for extensive use of expert testimony on difficult scientific issues.

It is, of course, true that an exercise of ancillary jurisdiction in such cases would result in some increase in the federal courts’ workload, for unless the class action is permitted many of the claimants will be unable to obtain any federal determination of their rights. But that objection is applicable to every other exercise of ancillary jurisdiction. It should be a sufficient answer that denial of ancillary jurisdiction will impose a much larger burden on the state and federal judiciary as a whole, and will substantially impair the ability of the prospective class members to assert their claims.

If the State provides a class action device comparable to Rule 23 (b)(3), some of this inefficiency and unfairness may be avoided, but certainly not all. The named plaintiffs, and any other members of their class who can meet the jurisdictional-amount requirement, may choose to litigate those claims in the district courts, as these plaintiffs have shown to be their preference. Moreover, they will probably now be required separately to litigate the common issues in their cases, thus possibly enlarging the federal judiciary's burden, and ironically reversing the Court's apparent purpose.

Moreover, if the State does not provide a Rule 23 (b) (3) device, litigation of the claims of class members who either lack the jurisdictional amount or simply prefer to litigate their claims in the state courts — as they would be free to do under any construction of the jurisdictional requirement — will produce a multitude of suits. And the chief influence mitigating that flood — the fact that many of these landowners’ claims are likely to be worthless because the cost of asserting them on a case-by-case basis will exceed their potential value — will do no judicial system credit.

Not only does the practical desirability of sustaining ancillary jurisdiction bring Rule 23 (b) (3) class actions within the logic of our decisions, but the Court has long since recognized that fact, and has sustained ancillary jurisdiction over the nonappearing members in a class action who do not meet the requirements of traditional rule of complete diversity laid down in Strawbridge v. Curtiss, 3 Cranch 267 (1806). In Supreme Tribe of Ben Hur v. Cauble, 255 U. S. 356 (1921), the Court not only held that only the original named plaintiffs and defendants had to satisfy the diversity requirements, but it also stated that intervention by nondiverse members of the class would not destroy the District Court’s jurisdiction. Id., at 366. Particularly in view of the constitutional background on which the statutory diversity requirements are written, see 469 F. 2d 1033, 1038 (CA2 1972) (Timbers, J., dissenting), it is difficult to understand why the practical approach the Court took in Supreme Tribe of Ben-Hur must be abandoned where the purely statutory “matter in controversy” requirement is concerned.

Certainly this result is not compelled by Snyder v. Harris, 394 U. S. 332 (1969), for that decision turned solely on whether federal diversity jurisdiction could be established over the “action.” Nor can I accept the Court’s contention that Snyder’s, citation to Clark v. Paul Gray, Inc., 306 U. S. 583 (1939), controls here. That case dealt only with the jurisdictional-amount requirements for the original named plaintiffs who litigated the case. Here petitioners clearly meet that requirement. Snyder’s characterization of Clark as a class action did not turn that case into a precedent for applying the jurisdictional-amount requirements to nonappearing class members who, so far as the Court indicated in Clark, were not even involved in that case.

It would be far more consistent with Clark for the Court to rule, as it did in Supreme Tribe of Ben-Hur, that only the original named plaintiffs must meet the jurisdictional requirements, and that nonappearing class members and intervenors need not. Such a ruling, while going a step farther than petitioners seek, would be reasonable and pragmatically justified. There is a substantial difference between the impact on a case of an appearing party and a nonappearing class member, and intervention poses no threat since the district courts are given discretion by Rule 23 (d) (3) to permit intervention subject to appropriate conditions. See 3B J. Moore, Federal Practice ¶ 23.73 (3), p. 1441 (2d ed. 1969). The question in this case is not whether the class action must be permitted, but whether the District Court has the power to determine whether to permit it, taking into account the elaborate guidance and discretion provided by Rule 23.

The Court also appears to rely on Snyder’s rejection of “the notion that the 1966 amendments to Rule 23 were intended to effect, or effected, any change in the meaning and application of the jurisdictional amount requirement insofar as class actions are concerned.” Ante, at 299. Snyder based this rejection on Rule 82’s admonition that the Federal Rules of Civil Procedure are not to be “construed to extend or limit the jurisdiction of the United States district courts . . . .” Reliance on Rule 82 was proper there because the petitioner contended that the restructuring of Rule 23 to abolish “spurious” class actions in favor of a “functional” approach that took into account the nature of the litigation and its effects undercut this Court’s long line of decisions establishing the minimum requirements for diversity jurisdiction over a “civil action.”

But this case presents no suggestion that the 1966 amendments override the Court’s decisions construing § 1332. There are no earlier decisions construing the jurisdictional-amount requirements for the nonappearing members of a “spurious” class, probably because the old Rule did not bind members of the class unless they affirmatively requested inclusion. Nor did the 1966 amendments bring Rule 23 (b)(3) class actions within any other holdings. If anything, they merely made the determination whether the class should be permitted to turn more directly on the kinds of concerns that have motivated the exercise of ancillary jurisdiction.

The question in this case ought, instead, to be whether changes in the Civil Rules may affect, and be affected by, the determination whether to exercise existing jurisdiction. Of course, they must. As the Reporter to the Advisory Committee on Civil Rules that prepared the 1966 amendments has' observed: “From the start the Civil Rules, elaborating and complicating actions through joinder of claims and parties, have profoundly influenced jurisdictional result.” The Court’s prior decisions upholding novel exercises of ancillary jurisdiction have made liberal use of the opportunities presented by the Civil Rules and amendments of them, and Rule 82 has stood as no bar to that action.

Indeed, the effects of today’s decision will also be influenced by the form of Rule 23. The District Court, after ruling that ancillary jurisdiction could not be exercised, was confronted with a dilemma that did not exist prior to the 1966 amendments: identification of the members of the class that would be bound by the decision so that they could be provided the required notice. After determining that it was not possible to determine which of the 240 proposed members met the $10,000 requirement, the court denied class action status to all. But few, if any, Rule 23 (b) (3) classes will lend themselves to a determination, on the basis of the pleadings, that each proposed member meets that requirement. Intervention, at least for the purpose of establishing jurisdiction, may be necessary, and that is more than even the old Rule contemplated when it specified that class members had to request inclusion in order to be bound.

Thus, on the basis of the Court’s implicit holding that ancillary jurisdiction would not support recognition of a Rule 23 (b) (3) class, the 1966 amendments will still influence the number of cases in which federal jurisdiction will be exercised. They will, as in this case, simply curtail the exercise of jurisdiction rather than expand it. In view of the Court’s previous concern with practical realities in both its cases involving class actions and its cases involving the exercise of ancillary jurisdiction, I think that this limitation is both unwarranted and unwise.

       The section provides in pertinent part that:
      “(a) The district courts shall have original jurisdiction of all civil actions where the matter in controversy exceeds the sum or value of $10,000, exclusive of interest and costs, and is between-—
      “(1) citizens of different States . . . .”
      Section 11 of the First Judiciary Act- of 1789 set the jurisdictional amount in diversity suits at $500. 1 Stat. 78. In 1801, Congress lowered the requirement to $400 in the Midnight Judges Act, 2 Stat. 89, 92, but it was quickly restored to $500 the following year. 2 Stat. 132. The jurisdictional-amount requirement remained fixed at this level until the Act of Mar. 3, 1887, 24 Stat. 552, when it was raised to $2,000. The figure was subsequently increased by $1,000 by the Act of Mar. 3, 1911, §24, 36 Stat. 1091. See S. Rep. No. 388, 61st Cong., 2d Sess., pt-. 2, pp. 30-32 (1910); H. R. Rep. No. 818, 61st Cong., 2d Sess. (1910); Conference Report, S. Doc. No. 848, 61st Cong., 3d Sess. (1911); 45 Cong. Rec. 3596-3599 (1910); 46 Cong. Rec. 4002, 4003, 4004 (1911).
      The current $10,000 jurisdictional amount, codified in 28 U. S. C. § 1332 (a), was enacted by the Act of July 25, 1958, 72 Stat. 415. The legislative history discloses that the change was made “on the premise that the amount should be fixed at a sum of money that will make jurisdiction available in all substantial controversies where other elements of Federal jurisdiction are present. The jurisdictional amount should not be so high as to convert the Federal courts into courts of big business nor so low as to fritter away their time in the trial of petty controversies.” S. Rep. No. 1830, 85th Cong., 2d Sess., 3-4 (1958); see also id., at 21; H. R. Rep. No. 1706, 85th Cong., 2d Sess., 3 (1958).

       Section 1331 (a) provides:
      “(a) The district courts shall have original jurisdiction of all civil actions wherein the matter in controversy exceeds the sum or value of $10,000, exclusive of interest and costs, and arises under the Constitution, laws, or treaties of the United States.”

       The following are representative of innumerable eases confirming this principle: Woodside v. Beckham, 216 U. S. 117 (1910); Waite v. Santa Cruz, 184 U. S. 302, 328-329 (1902); Wheless v. St. Louis, 180 U. S. 379, 382 (1901); Bernards Township v. Stebbins, 109 U. S. 341, 355 (1883). Cf. Clay v. Field, 138 U. S. 464 (1891); Russell v. Stansell, 105 U. S. 303 (1882); Seaver v. Bigelows, 5 Wall. 208 (1867); Stratton v. Jarvis, 8 Pet. 4 (1834); Oliver v. Alexander, 6 Pet. 143 (1832).

        Snyder v. Harris, 394 U. S. 332 (1969), noted that the judicial interpretation of “matter in controversy” to bar aggregation of separate and distinct claims dated back to at least Oliver v. Alexander, which is representative of the unbroken line of decisions of this Court interpreting our appellate jurisdiction when that jurisdiction was confined to review of lower court decisions in which the “matter in dispute” exceeded a designated monetary amount. Consistently, plaintiffs with separate and distinct claims could not aggregate their respective “matters in dispute” to bring an appeal to this Court. See, e. g., Stewart v. Dunham, 115 U. S. 61, 64-65 (1885) (and cases cited therein). The original Alexander construction of our appellate jurisdiction was applied to the jurisdictional-amount requirement for federal trial courts in Walter v. Northeastern R. Co., 147 U. S. 370, 373 (1893):
      “Is the plaintiff entitled to join [all his actions] in a single suit in a Federal court, and sustain the jurisdiction by reason of the fact that the total amount involved exceeds $2,000? We think not. It is well settled in this court that when two or more plaintiffs, having several interests, unite for the convenience of litigation in a single suit, it can only be sustained in the court of original jurisdiction, or on appeal in this court, as to those whose claims exceed the jurisdictional amount; and that when two or more defendants are sued by the same plaintiff in one suit the test of jurisdiction is the joint or several character of the liability to the plaintiff.”

        Rogers v. Hennepin County, 329 U. S. 621 (1916); Title Guaranty Co. v. Allen, 240 U. S. 136 (1916); Pinel v. Pinel, 240 U. S. 594, 596 (1916); Scott v. Frazier, 253 U. S. 243, 244 (1920); Clark v. Paul Gray, Inc., 306 U. S. 583 (1939).

       Rule 23 (a)(3) provided:
      “If persons constituting a class are so numerous as to make it impracticable to bring them all before the court, such of them, one or more, as will fairly insure the adequate representation of all may, on behalf of all, sue or be sued, when the character of the right sought to be enforced for or against the class is
      “(3) several, and there is a common question of law or fact affecting the several rights and a common relief is sought.”

       “The spurious class suit was a permissive joinder device. . . .
      “There was no jural relationship between the members of the class; unlike, for example, the members of an unincorporated association, they had taken no steps to create a legal relationship among themselves. They were not fellow travelers by agreement. The right or liability of each was distinct. The class was formed solely by the presence of a common question of law or fact. When a suit was brought by or against such a class, it was merely an invitation to joinder — an invitation to become a fellow traveler in the litigation, which might or might not be accepted. It was an invitation and not a command performance.” 3B J. Moore, Federal Practice ¶ 23 10 [1], pp. 2601-2603 (2d ed. 1969).
      Professor Moore thus recognized that the jurisdictional-amount requirements governing the joinder of separate and distinct claims applied to spurious class suits:
      “These principles applied with equal force in the class action, since the class actions as constituted under original Rule 23 were but procedural devices to permit some to prosecute or defend an action without the necessity of all appearing as plaintiffs or defendants.” Id., ¶ 23.13, p. 2957.

         Alfonso v. Hillsborough County Aviation Authority, 308 F. 2d 724 (CA5 1962); Troup v. McCart, 238 F. 2d 289 (CA5 1956); Hughes v. Encyclopaedia Britannica, 199 F. 2d 295 (CA7 1952); Ames v. Mengel Co., 190 F. 2d 344 (CA2 1951); Miller v. National City Bank of New York, 166 F. 2d 723 (CA2 1948); Matlaw Corp. v. War Damage Corp., 164 F. 2d 281 (CA7 1947); Sturgeon v. Great Lakes Steel Corp., 143 F. 2d 819 (CA6 1944); Black & Yates, Inc. v. Mahogany Assn., 129 F. 2d 227 (CA3 1942); Woerter v. Orr, 127 F. 2d 969 (CA10 1942); Central Mexico Light & Power Co. v. Munch, 116 F. 2d 85 (CA2 1940); Independence Shares Corp. v. Deckert, 108 F. 2d 51, 53 (CA3 1939), rev'd on other grounds, 311 U. S. 282 (1940); Ames v. Chestnut Knolls, Inc., 159 F. Supp. 791 (Del. 1958); Air Line Dispatchers Assn. v. California Eastern Airways, 127 F. Supp. 521 (ND Cal. 1954); Goldberg v. Whittier Corp., 111 F. Supp. 382 (ED Mich. 1953); Schuman v. Little Bay Constr. Corp., 110 F. Supp. 903 (SDNY 1953); Giesecke v. Denver Tramway Corp., 81 F. Supp. 957 (Del. 1949); Roster v. Turchi, 79 F. Supp. 268 (ED Pa.) aff’d, 173 F. 2d 605 (CA3 1948); Shipley v. Pittsburgh & L. E. R. Co., 70 F. Supp. 870, 873, 874-875 (WD Pa. 1947); Long v. Dravo Corp., 6 F. R. D. 226 (WD Pa. 1946); Scarborough v. Mountain States Tel. & Tel. Co., 45 F. Supp. 176 (WD Tex. 1942); Stevenson v. City of Blue field, 39 F. Supp. 462 (SD W. Va. 1941).

       The Court of Appeals for the Fifth Circuit held that there had been no change in the rule. Alvarez v. Pan American Life Insurance Co., 375 F. 2d 992, cert. denied, 389 U. S. 827 (1967). The same result was reached in the Eighth Circuit in Snyder v. Harris, 390 F. 2d 204, 205 (1968), but a contrary ruling developed in the Tenth Circuit, Gas Service Co. v. Coburn, 389 F. 2d 831, 833-834 (1968). We granted the petitions for certiorari in the latter two cases and decided them together. Snyder v. Harris, 394 U. S. 332 (1969).
      In Snyder, the named plaintiff was a shareholder of an insurance company who brought a diversity suit against the company's board of directors on behalf of herself and approximately 4,000 other shareholders. Although Mrs. Snyder’s claim totaled only $8,740 in damages, she defended the motion to dismiss for lack of jurisdiction on the ground that if all 4,000 potential claims were aggregated, the amount in controversy would well exceed $10,000. The District Court held that the claims could not be aggregated, and the Court of Appeals affirmed. In the consolidated case, Gas Service Co. v. Coburn, a customer of petitioner public utility brought a diversity suit on behalf of himself and 18,000 other similarly situated consumers, alleging the illegal collection of a city franchise tax. The single named plaintiff’s .damages amounted to only $7.81, but the District Court allowed all the claims to be aggregated to satisfy the jurisdictional-amount requirement. The Court of Appeals affirmed.

       The dissent recognizes that Clark requires the dismissal of any named plaintiff in an action whose case does not satisfy the jurisdictional amount. But apparently unnamed members of the class would enjoy advantages not shared by the named plaintiffs since their separate and distinct cases would be exempted from the jurisdictional-amount requirement. Why this should be the ease and how this squares with Clark or with Snyder v. Harris are left unexplained. We simply apply the rule governing named plaintiffs joining in an action to the unnamed members of a class, as Snyder v. Harris surely contemplated.

       The inevitability of this conclusion was suggested by the dissent in Snyder v. Harris, 394 U. S., at 343 (Fortas, J., dissenting). The same result was reached in City of Inglewood v. City of Los Angeles, 451 F. 2d 948, 952-954 (1971), by the Court of Appeals for the Ninth Circuit.

       Because a class action invoking general federal-question jurisdiction under 28 U. S. C. § 1331 would be subject to the same jurisdictional-amount rules with respect to plaintiffs having separate and distinct claims, the result here would be the same even if a cause of action under federal law could be stated, see Illinois v. City of Milwaukee, 406 U. S. 91, 98-101 (1972), or if substantive federal law were held to control this case. Of course, Congress has exempted major areas of federal-question jurisdiction from any jurisdictional-amount requirements, see 28 U. S. C. §§ 1333-1334, 1336-1340, 1343-1345, 1347-1358, 1361-1362, the exemption being so widely applicable, in fact, that the Court in Snyder v. Harris, 394 U. S., at 341, discounted the impact of its holding in federal cases.

       Section 11, 1 Stat. 78. The First Judiciary Act used the term “matter in dispute,” ibid., and that phrase was retained until 1911, when the jurisdictional amount was increased from $2,000 to $3,000, Act of Mar. 3, 1911, § 24, 36 Stat. 1091, and the words “matter in controversy” were substituted.

       The amendments are catalogued in n. 1 of the Court’s opinion.

       Adjustments for changes in the purchasing power of the dollar generally have been given as the explanation for this phenomenon. See, e. g., S. Rep. No. 1830, 85th Cong., 2d Sess., 4 (1958):
      “The present requirement of $3,000 has been on the statute books since 1913 and obviously the value of the dollar in terms of its purchasing power has undergone marked depreciation since that date. The Consumers Price Index for moderate income families in large cities indicates a rise of about 152 percent since 1913, shortly after the present $3,000 minimum was established. . . . Accordingly the committee believes that the standard for fixing jurisdictional amounts should be increased to $10,000.”
      See H. R. Rep. No. 1706, 85th Cong., 2d Sess., 3 (1958) (containing identical language). The only decrease, in 1801, is discussed in n. 1 of the Court’s opinion.

       The only recent suggestion of congressional purpose is an oft-repeated statement in the legislative history of the 1958 amendments:
      “The recommendations of the Judicial Conference [of the United States] regarding the amount in controversy, which this committee approves, is based on the premise that the amount should be fixed at a sum of money that will make jurisdiction available in all substantial controversies where other elements of Federal jurisdiction are present. The jurisdictional amount should not be so high as to convert the Federal courts into courts of big business nor so low as to fritter away their time in the trial of petty controversies.”
      S. Rep. No. 1830, supra, at 3-4 (emphasis added); H. R. Rep. No. 1706, supra, at 3 (containing identical language).

       See Troy Bank v. G. A. Whitehead & Co., 222 U. S. 39 (1911), and cases cited in n. 3 of the Court’s opinion. The Court also observes, quite correctly, that the same rule on aggregation has been applied to the federal-question jurisdiction, 28 U. S. C. § 1331. But the assertion, in the Court’s final footnote, that the same jurisdictional rules it announces for § 1332 will apply to § 1331, is even more questionable than its application of those rules in this case. The continued need for exercise of diversity jurisdiction, at least where a showing of prejudice is not made, has been challenged by respected authorities. See Wechsler, Federal Jurisdiction and the Revision of the Judicial Code, 13 Law & Contemp. Prob. 216, 234-240 (1948); Currie, The Federal Courts and the American Law Institute (pts. I & II), 36 U. Chi. L. Rev. 1, 268 (1968, 1969). Cf. S. Rep. No. 1830, supra, n. 3. But a sharply different view has been taken of the federal-question jurisdiction, and the Court has reflected that view in its decisions upholding the exercise of jurisdiction over pendent claims under state law. See Mine Workers v. Gibbs, 383 U. S. 715 (1966). Similarly significant disincentives to assertion of federal rights in federal forums are likely if claimants are barred from combining to reduce the time and cost of litigation.

       See Fraser, Ancillary Jurisdiction and the Joinder of Claims in the Federal Courts, 33 F. R. D. 27 (1963); H. Hart & H. Wechsler, The Federal Courts and the Federal System 1075-1081 (2d ed. 1973). Professor Kaplan, the Reporter for the 1966 amendments, has articulated his expectation that Rule 23 would be similarly accommodated:
      “New rule 23 alters the pattern of class actions; subdivision (b)(3), in particular, is a new category deliberately created. Like other innovations from time to time introduced into the Civil Rules, those as to class actions change the total situation on which the statutes and theories regarding subject matter jurisdiction are brought to bear.” Kaplan, Continuing Work of the Civil Committee: 1966 Amendments of the Federal Rules of Civil Procedure (I), 81 Harv. L. Rev. 356, 399-400 (1967).

       See also 7 C. Wright & A. Miller, federal Practice & Procedure § 1756, pp. 564-565 (1972), approving as sound and “a natural corollary to other applications of the ancillary jurisdiction concept,” a holding that only one representative party need meet the jurisdictional-amount requirement to support a class action in Lesch v. Chicago & Eastern Illinois R. Co., 279 F. Supp. 908 (ND Ill. 1968).

       Rule 23 (b)(3). This Rule further states:
      “The matters pertinent to the findings include: (A) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; (D) the difficulties likely to be encountered in the management of a class action.”

       See 3B J. Moore, Federal Practice ¶¶ 23.02 [1], 23.05 passim (2d ed. 1969).

         This is the probable consequence of the District Court's determination, after holding that each class member had to meet the jurisdictional-amount requirement, that it could find “no appropriate class over which [it had] jurisdiction.” 53 F. R. D. 430, 433 (Vt. 1971); see infra, at 311-312.

       See Developments in the Law — Multiparty Litigation in the Federal Courts, 71 Harv. L. Rev. 874, 941-942 and eases cited n. 493 (1958).

       See Rules 23(a)(1), (2), (3) and (b)(3)(A), (B), (C). Cf. H. Hart & H. Weehsler, supra, n. 6, at 1078. (“Under the revised rule, which contemplates that in a class action all members of the class not properly excluded will be bound by the judgment, the ‘spurious’ class action no longer exists, and ancillary jurisdiction may support intervention by class members in all cases.”)

       Kaplan, supra, n. 6, at 400.

       Rules 23 (c)(2), (3).