author: Justice White

text:
    NATIONAL LABOR RELATIONS BOARD v. TRANSPORTATION MANAGEMENT CORP.
    No. 82-168.
    Argued March 28, 1983
    Decided June 15, 1983

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

      Deputy Solicitor General Wallace argued the cause for petitioner. With him on the brief were Solicitor General Lee, Carolyn F. Corwin, Norton J. Come, and Linda Sher.

      Martin Ames argued the cause and filed briefs for respondent.

      Briefs of amici curiae urging affirmance were filed by John W. Noble, Jr., and Stephen A. Bokat for the Chamber of Commerce of the United States; and by Joseph D. Alviani for the New England Legal Foundation et al.
      Briefs of amici curiae were filed by J. Albert Woll, Michael H. Gottes-man, Robert M. Weinberg, and Laurence Gold for the American Federation of Labor and Congress of Industrial Organizations; and by Gerard C. Smetana and Gary L. Starkman for the Council on Labor Law Equality.

   Justice White

delivered the opinion of the Court.

The National Labor Relations Act (NLRA or Act), 29 U. S. C. § 151 ei seq. (1976 ed. and Supp. V), makes unlawful the discharge of a worker because of union activity, §§ 8(a)(1), (3), as amended, 61 Stat. 140,29 U. S. C. §§ 158(a)(1), (3), but employers retain the right to discharge workers for any number of other reasons unrelated to the employee’s union activities. When the General Counsel of the National Labor Relations Board (Board) files a complaint alleging that an employee was discharged because of his union activities, the employer may assert legitimate motives for his decision. In Wright Line, 251 N. L. R. B. 1083 (1980), enf’d, 662 F. 2d 899 (CA1 1981), cert. denied, 455 U. S. 989 (1982), the Board reformulated the allocation of the burden of proof in such cases. It determined that the General Counsel carried the burden of persuading the Board that an antiunion animus contributed to the employer’s decision to discharge an employee, a burden that does not shift, but that the employer, even if it failed to meet or neutralize the General Counsel’s showing, could avoid the finding that it violated the statute by demonstrating by a preponderance of the evidence that the worker would have been fired even if he had not been involved with the union. The question presented in this case is whether the burden placed on the employer in Wright Line is consistent with §§ 8(a)(1) and 8(a)(3), as well as with § 10(c) of the NLRA, 29 U. S. C. § 160(c), which provides that the Board must find an unfair labor practice by a “preponderance of the testimony.”

Prior to his discharge, Sam Santillo was a busdriver for respondent Transportation Management Corp. On March 19, 1979, Santillo talked to officials of the Teamster’s Union about organizing the drivers who worked with him. Over the next four days Santillo discussed with his fellow drivers the possibility of joining the Teamsters and distributed authorization cards. On the night of March 23, George Patterson, who supervised Santillo and the other drivers, told one of the drivers that he had heard of Santillo’s activities. Patterson referred to Santillo as two-faced, and promised to get even with him.

Later that evening Patterson talked to Ed West, who was also a busdriver for respondent. Patterson asked, “What’s with Sam and the Union?” Patterson said that he took Santillo’s actions personally, recounted several favors he had done for Santillo, and added that he would remember San-tillo’s activities when Santillo again asked for a favor. On Monday, March 26, Santillo was discharged. Patterson told Santillo that he was being fired for leaving his keys in the bus and taking unauthorized breaks.

Santillo filed a complaint with the Board alleging that he had been discharged because of his union activities, contrary to §§ 8(a)(1) and 8(a)(3) of the NLRA. The General Counsel issued a complaint. The Administrative Law Judge (ALJ) determined by a preponderance of the evidence that Patterson clearly had an antiunion animus and that Santillo’s discharge was motivated by a desire to discourage union activities. The ALJ also found that the asserted reasons for the discharge could not withstand scrutiny. Patterson’s disapproval of Santillo’s practice of leaving his keys in the bus was clearly a pretext, for Patterson had not known about Santillo’s practice until after he had decided to discharge San-tillo; moreover, the practice of leaving keys in buses was commonplace among respondent’s employees. Respondent identified two types of unauthorized breaks, coffeebreaks and stops at home. With respect to both coffeebreaks and stopping at home, the ALJ found that Santillo was never cautioned or admonished about such behavior, and that the employer had not followed its customary practice of issuing three written warnings before discharging a driver. The ALJ also found that the taking of coffeebreaks during working hours was normal practice, and that respondent tolerated the practice unless the breaks interfered with the driver’s performance of his duties. In any event, said the ALJ, respondent had never taken any adverse personnel action against an employee because of such behavior. While acknowledging that Santillo had engaged in some unsatisfactory conduct, the ALJ was not persuaded that Santillo would have been fired had it not been for his union activities.

The Board affirmed, adopting with some clarification the ALJ’s findings and conclusions and expressly applying its Wright Line decision. It stated that respondent had failed to carry its burden of persuading the Board that the discharge would have taken place had Santillo not engaged in activity protected by the Act. The Court of Appeals for the First Circuit, relying on its previous decision rejecting the Board’s Wright Line test, NLRB v. Wright Line, 662 F. 2d 899 (1981), refused to enforce the Board’s order and remanded for consideration of whether the General Counsel had proved by a preponderance of the evidence that Santillo would not have been fired had it not been for his union activities. 674 F. 2d 130 (1982). We granted certiorari, 459 U. S. 1014 (1982), because of conflicts on the issue among the Courts of Appeals. We now reverse.

Employees of an employer covered by the NLRA have the right to form, join, or assist labor organizations. NLRA § 7, 29 U. S. C. § 157. It is an unfair labor practice to interfere with, restrain, or coerce the exercise of those rights, NLRA § 8(a)(1), 29 U. S. C. § 158(a)(1), or by discrimination in hire or tenure “to encourage or discourage membership in any labor organization,” NLRA § 8(a)(3), 29 U. S. C. § 158(a)(3).

Under these provisions it is undisputed that if the employer fires an employee for having engaged in union activities and has no other basis for the discharge, or if the reasons that he proffers are pretextual, the employer commits an unfair labor practice. He does not violate the NLRA, however, if any antiunion animus that he might have entertained did not contribute at all to an otherwise lawful discharge for good cause. Soon after the passage of the Act, the Board held that it was an unfair labor practice for an employer to discharge a worker where antiunion animus actually contributed to the discharge decision. Consumers Research, Inc., 2 N. L. R. B. 57, 73 (1936); Louisville Refining Co., 4 N. L. R. B. 844, 861 (1938), enf’d, 102 F. 2d 678 (CA6), cert. denied, 308 U. S. 568 (1939); Dow Chemical Co., 13 N. L. R. B. 993, 1023 (1939), enf’d in relevant part, 117 F. 2d 455 (CA6 1941); Republic Creosoting Co., 19 N. L. R. B. 267, 294 (1940). In Consumers Research, the Board rejected the position that “antecedent to a finding of violation of the Act, it must be found that the sole motive for discharge was the employee’s union activity.” It explained that “[s]uch an interpretation is repugnant to the purpose and meaning of the Act, and . . . may not be made.” 2 N. L. R. B., at 73. In its Third Annual Report, the Board stated: “Where the employer has discharged an employee for two or more reasons, and one of them is union affiliation or activity, the Board has found a violation [of § 8(a)(3)].” 3 NLRB Ann. Rep. 70 (1938). In the following year in Dow Chemical Co., supra, the Board stated that a violation could be found where the employer acted out of antiunion bias “whether or not the [employer] may have had some other motive . . . and without regard to whether or not the [employer’s] asserted motive was lawful.” 13 N. L. R. B., at 1023. This construction of the Act — that to establish an unfair labor practice the General Counsel need show by a preponderance of the evidence only that a discharge is in any way motivated by a desire to frustrate union activity — was plainly rational and acceptable. The Board has adhered to that construction of the Act since that time.

At the same time, there were decisions indicating that the presence of an antiunion motivation in a discharge case was not the end of the matter. An employer could escape the consequences of a violation by proving that without regard to the impermissible motivation, the employer would have taken the same action for wholly permissible reasons. See, e. g., Eagle-Picher Mining & Smelting Co., 16 N. L. R. B. 727, 801 (1939), enf’d in relevant part, 119 F. 2d 903 (CA8 1941); Borden Mills, Inc., 13 N. L. R. B. 459, 474-475 (1939); Robbins Tire & Rubber Co., 69 N. L. R. B. 440, 454, n. 21 (1946), enf’d, 161 F. 2d 798 (CA5 1947).

The Courts of Appeals were not entirely satisfied with the Board’s approach to dual-motive cases. The Board’s Wright Line decision in 1980 was an attempt to restate its analysis in a way more acceptable to the Courts of Appeals. The Board held that the General Counsel of course had the burden of proving that the employee’s conduct protected by § 7 was a substantial or a motivating factor in the discharge. Even if this was the case, and the employer failed to rebut it, the employer could avoid being held in violation of §§ 8(a)(1) and 8(a)(3) by proving by a preponderance of the evidence that the discharge rested on the employee’s unprotected conduct as well and that the employee would have lost his job in any event. It thus became clear, if it was not clear before, that proof that the discharge would have occurred in any event and for valid reasons amounted to an affirmative defense on which the employer carried the burden of proof by a preponderance of the evidence. “The shifting burden merely requires the employer to make out what is actually an affirmative defense . . . .” Wright Line, 251 N. L. R. B., at 1088, n. 11; see also id., at 1084, n. 5.

The Court of Appeals for the First Circuit refused enforcement of the Wright Line decision because in its view it was error to place the burden on the employer to prove that the discharge would have occurred had the forbidden motive not been present. The General Counsel, the Court of Appeals held, had the burden of showing not only that a forbidden motivation contributed to the discharge but also that the discharge would not have taken place independently of the protected conduct of the employee. The Court of Appeals was quite correct, and the Board does not disagree, that throughout the proceedings, the General Counsel carries the burden of proving the elements of an unfair labor practice. Section 10(c) of the Act, 29 U. S. C. § 160(c), expressly directs that violations may be adjudicated only “upon the preponderance of the testimony” taken by the Board. The Board’s rules also state that “[t]he Board’s attorney has the burden of pro[ving] violations of Section 8.” 29 CFR § 101.10(b) (1982). We are quite sure, however, that the Court of Appeals erred in holding that § 10(c) forbids placing the burden on the employer to prove that absent the improper motivation he would have acted in the same manner for wholly legitimate reasons.

As we understand the Board’s decisions, they have consistently held that the unfair labor practice consists of a discharge or other adverse action that is based in whole or in part on antiunion animus — or as the Board now puts it, that the employee’s protected conduct was a substantial or motivating factor in the adverse action. The General Counsel has the burden of proving these elements under § 10(c). But the Board’s construction of the statute permits an employer to avoid being adjudicated a violator by showing what his actions would have been regardless of his forbidden motivation. It extends to the employer what the Board considers to be an affirmative defense but does not change or add to the elements of the unfair labor practice that the General Counsel has the burden of proving under § 10(c). We assume that the Board could reasonably have construed the Act in the manner insisted on by the Court of Appeals. We also assume that the Board might have considered a showing by the employer that the adverse action would have occurred in any event as not obviating a violation adjudication but as going only to the permissible remedy, in which event the burden of proof could surely have been put on the employer. The Board has instead chosen to recognize, as it insists it has done for many years, what it designates as an affirmative defense that the employer has the burden of sustaining. We are unprepared to hold that this is an impermissible construction of the Act. “[T]he Board’s construction here, while it may not be required by the Act, is at least permissible under it. . . ,” and in these circumstances its position is entitled to deference. NLRB v. J. Weingarten, Inc., 420 U. S. 251, 266-267 (1975); NLRB v. Erie Resistor Corp., 373 U. S. 221, 236 (1963).

The Board’s allocation of the burden of proof is clearly reasonable in this context, for the reason stated in NLRB v. Remington Rand, Inc., 94 F. 2d 862, 872 (CA2), cert. denied, 304 U. S. 576 (1938), a case on which the Board relied when it began taking the position that the burden of persuasion could be shifted. E. g., Eagle-Picker Mining & Smelting, 16 N. L. R. B., at 801. The employer is a wrongdoer; he has acted out of a motive that is declared illegitimate by the statute. It is fair that he bear the risk that the influence of legal and illegal motives cannot be separated, because he knowingly created the risk and because the risk was created not by innocent activity but by his own wrongdoing.

In Mt. Healthy City Board of Education v. Doyle, 429 U. S. 274 (1977), we found it prudent, albeit in a case implicating the Constitution, to set up an allocation of the burden of proof which the Board heavily relied on and borrowed from in its Wright Line decision. There, we held that the plaintiff had to show that the employer’s disapproval of his First Amendment protected expression played a role in the employer’s decision to discharge him. If that burden of persuasion were carried, the burden would be on the defendant to show by a preponderance of the evidence that he would have reached the same decision even if, hypothetically, he had not been motivated by a desire to punish plaintiff for exercising his First Amendment rights. The analogy to Mt. Healthy drawn by the Board was a fair one.

For these reasons, we conclude that the Court of Appeals erred in refusing to enforce the Board’s orders, which rested on the Board’s Wright Line decision.

The Board was justified in this case in concluding that Santillo would not have been discharged had the employer not considered his efforts to establish a union. At least two of the transgressions that purportedly would have in any event prompted Santillo’s discharge were commonplace, and yet no transgressor had ever before received any kind of discipline. Moreover, the employer departed from its usual practice in dealing with rules infractions; indeed, not only did the employer not warn Santillo that his actions would result in being subjected to discipline, it also never even expressed its disapproval of his conduct. In addition, Patterson, the person who made the initial decision to discharge Santillo, was obviously upset with Santillo for engaging in such protected activity. It is thus clear that the Board’s finding that San-tillo would not have been fired if the employer had not had an antiunion animus was “supported by substantial evidence on the record considered as a whole,” 29 U. S. C. § 160(f).

Accordingly, the judgment is

Reversed.

       Section 8(a), as set forth in 29 U. S. C. § 158(a), provides, in relevant part:
      “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 section 157 of this title;
      “(3) by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization . . . .”

       Section 10(c) provides, in relevant part:
      “If upon the preponderance of the testimony taken the Board shall be of the opinion that any person named in the complaint has engaged in or is engaging in any such unfair labor practice, then the Board shall state its findings of fact and shall issue and cause to be served on such person an order requiring such person to cease and desist from such unfair labor practice, and to take such affirmative action including reinstatement of employees with or without back pay, as will effectuate the policies of this subchapter .... If upon the preponderance of the testimony taken the Board shall not be of the opinion that the person named in the complaint has engaged in or is engaging in any such unfair labor practice, then the Board shall state its findings of fact and shall issue an order dismissing the said complaint. No order of the Board shall require the reinstatement of any individual as an employee who has been suspended or discharged, or the payment to him of any back pay, if such individual was suspended or discharged for cause.” 29 U. S. C. § 160(c).

       The Board’s Wright Line decision has been rejected by the Second and Third Circuits, see NLRB v. New York University Medical Center, 702 F. 2d 284 (CA21983), cert. pending, No. 82-1705; Behring International, Inc. v. NLRB, 675 F. 2d 83 (CA3 1982), cert. pending, No. 82-438, as well as by the First. Several Circuits have expressly approved the Wright Line test. See NLRB v. Senftner Volkswagen Corp., 681 F. 2d 557, 560 (CA8 1982); NLRB v. Nevis Industries, Inc., 647 F. 2d 905, 909 (CA9 1981); Peavey Co. v. NLRB, 648 F. 2d 460 (CA7 1981).

       The Board argues that its approach to mixed-motive cases was known to Congress and ratified by the passage of the Labor Management Relations Act (LMRA), 61 Stat. 136, which reenacted §§ 8(a)(1) and 8(a)(3) almost without material change. We need not pass on this submission, since we find nothing in the legislative history of the LMRA that calls into question the decisions of the Board relevant to the issue before us now. The issue after, as well as before, the passage of the LMRA is whether the Board’s construction of § 8(a) is sufficiently rational to be acceptable in the courts. We do note that nowhere in the legislative history is reference made to any of the mixed-motive cases decided by the Board or by the courts, see, e. g., NLRB v. Remington Rand, Inc., 94 F. 2d 862, 872 (CA2) (L. Hand, J.) (“[S]ince the refusal [to negotiate] was at least one cause of the strike, and was a tort... it rested upon the tortfeasor to disentangle the consequences for which it was chargeable from those from which it was immune”), cert. denied, 304 U. S. 576 (1938); NLRB v. Stackpole Carbon Co., 105 F. 2d 167, 176 (CA3), cert. denied, 308 U. S. 605 (1939); Borden Mills, Inc., 13 N. L. R. B., at 474-475 (dicta); Davis Precision Machine Co., 64 N. L. R. B. 529, 537 (1945); Wright-Hibbard Industrial Electric Truck Co., 67 N. L. R. B. 897, 908, n. 15 (1946); Robbins Tire and Rubber Co.. 69 N. L. R. B.. at 454. n. 21.

       The Board has not purported to shift the burden of persuasion on the question of whether the employer fired Santillo at least in part because he engaged in protected activities. The General Counsel satisfied his burden in this respect and no one disputes it. Thus, Texas Department of Community Affairs v. Burdine, 450 U. S. 248 (1981), is inapposite. In that case, which involved a claim of racial discrimination in violation of Title VII of the Civil Rights Act of 1964, 42 U. S. C. § 2000e et seq. (1976 ed. and Supp. V), the question was who had “[t]he ultimate burden of persuading the trier of fact that the defendant intentionally discriminated against the plaintiff. . . 450 U. S-, at 253. The Court discussed only the situation in which the issue is whether either illegal or legal motives, but not both, were the “true” motives behind the decision. It thus addressed the pretext case.

       The language of the NLRA requiring that the Board act on a preponderance of the testimony taken was added by the LMRA, 61 Stat. 136, in 1947. A closely related provision directed that no order of the Board reinstate or compensate any employee who was fired for cause. Section 10(c) places the burden on the General Counsel only to prove the unfair labor practice, not to disprove an affirmative defense. Furthermore, it is clear from the legislative history of the LMRA that the drafters of § 10(c) were not thinking of the mixed-motive case. Their discussions reflected the assumption that discharges were either “for cause” or punishment for protected activity. Read fairly, the legislative history does not indicate whether, in mixed-motive eases, the employer or the General Counsel has the burden of proof on the issue of what would have happened if the employer had not been influenced by his unlawful motives; on that point the legislative history is silent.
      The “for cause” proviso was not meant to apply to cases in which both legitimate and illegitimate causes contributed to the discharge, see infra. The amendment was sparked by a concern over the Board’s perceived practice of inferring from the fact that someone was active in a union that he was fired because of antiunion animus even though the worker had been guilty of gross misconduct. The House Report explained the change in the following terms:
      “A third change forbids the Board to reinstate an individual unless the weight of the evidence shows that the individual was not suspended or discharged for cause. In the past, the Board, admitting that an employee was guilty of gross misconduct, nevertheless frequently reinstated him, ‘inferring’ that, because he was a member or an official of a union, this, not his misconduct, was the reason for his discharge.” H. R. Rep. No. 245, 80th Cong., 1st Sess., 42 (1947) (emphasis added).
      The proviso was thus a reaction to the Board’s readiness to infer antiunion animus from the fact that the discharged person was active in the union, and thus has little to do with the situation in which the Board has soundly concluded that the employer had an antiunion animus and that such feelings played a role in a worker’s discharge.

       Respondent also argues that placement of the burden of persuasion on the employer contravenes § 10(b) of the Act and § 7(c) of the Administrative Procedure Act, 5 U. S. C. § 556(d). Section 10(b) provides that the Federal Rules of Evidence apply to Board proceedings insofar as practicable. Respondent contends that Federal Rule of Evidence 301 requires that the burden of persuasion rest on the General Counsel. Rule 301 provides:
      “In all civil actions and proceedings not otherwise provided for by Act of Congress or by these rules, a presumption imposes on the party against whom it is directed the burden of going forward with evidence to rebut or meet the presumption, but does not shift to such party the burden of proof in the sense of the risk of nonpersuasion, which remains throughout the trial upon the party on whom it was originally cast.”
      The Rule merely defines the term “presumption.” It in no way restricts the authority of a court or an agency to change the customary burdens of persuasion in a manner that otherwise would be permissible. Indeed, were respondent correct, we could not have assigned to the defendant the burden of persuasion on one issue in Mt. Healthy City Board of Education v. Doyle, 429 U. S. 274 (1977).
      Section 7(c) of the Administrative Procedure Act, 5 U. S. C. § 556(d), provides that the proponent of an order has the burden of proof. Since the General Counsel is the proponent of the order, asserts respondent, the General Counsel must bear the burden of proof. Section 7(c), however, determines only the burden of going forward, not the burden of persuasion. Environmental Defense Fund, Inc. v. EPA, 179 U. S. App. D. C. 43, 49, 58-60, 548 F. 2d 998, 1004, 1013-1015 (1976), cert. denied sub nom. Velsicol Chemical Corp. v. EPA, 431 U. S. 925 (1977).


source: Caselaw Access Project

author: Justice White Justice O’Connor,

license: Public Domain

text:
    PHILKO AVIATION, INC. v. SHACKET et ux.
    No. 82-342.
    Argued April 20, 1983
    Decided June 15, 1983

      White, J., delivered the opinion of the Court, in which Burger, C. J., and Brennan, Marshall, Blackmun, Powell, Kehnquist, and Stevens, JJ., joined. O’CONNOR, J., filed an opinion concurring in part and concurring in the judgment, post, p. 414.

      Leslie R. Bishop argued the cause for petitioner. With him on the briefs were Donald B. Garvey and John N. Dore.

      James C. Murray, Jr., argued the cause for respondents. With him on the brief was Lee Ann Watson.

        J. Arthur Mozley and Donald R. Andersen filed a brief for the Aircraft Finance Association as amicus curiae urging reversal.

   Justice White

delivered the opinion of the Court.

This case presents the question whether the Federal Aviation Act of 1958 (Act), 72 Stat. 737, as amended, 49 U. S. C. § 1301 et seq. (1976 ed. and Supp. V), prohibits all transfers of title to aircraft from having validity against innocent third parties unless the transfer has been evidenced by a written instrument, and the instrument has been recorded with the Federal Aviation Administration (FAA). We conclude that the Act does have such effect.

On April 19, 1978, at an airport in Illinois, a corporation operated by Roger Smith sold a new airplane to respondents. Respondents, the Shackets, paid the sale price in full and took possession of the aircraft, and they have been in possession ever since. Smith, however, did not give respondents the original bills of sale reflecting the chain of title to the plane. He instead gave them only photocopies and his assurance that he would “take care of the paperwork,” which the Shackets understood to include the recordation of the original bills of sale with the FAA. Insofar as the present record reveals, the Shackets never attempted to record their title with the FAA.

Unfortunately for all, Smith did not keep his word but instead commenced a fraudulent scheme. Shortly after the sale to the Shackets, Smith purported to sell the same airplane to petitioner, Philko Aviation. According to Philko, Smith said that the plane was in Michigan having electronic equipment installed. Nevertheless, Philko and its financing bank were satisfied that all was in order, for they had examined the original bills of sale and had checked the aircraft’s title against FAA records. At closing, Smith gave Philko the title documents, but, of course, he did not and could not have given Philko possession of the aircraft. Philko’s bank subsequently recorded the title documents with the FAA.

After the fraud became apparent, the Shackets filed the present declaratory judgment action to determine title to the plane. Philko argued that it had title because the Shackets had never recorded their interest in. the airplane with the FAA. Philko relied on § 503(c) of the Act, 72 Stat. 773, as amended, 49 U. S. C. § 1403(c), which provides that no conveyance or instrument affecting the title to any civil aircraft shall be valid against third parties not having actual notice of the sale, until such conveyance or other instrument is filed for recordation with the FAA. However, the District Court awarded summary judgment in favor of the Shackets, Shacket v. Roger Smith Aircraft Sales, Inc., 497 F. Supp. 1262 (ND Ill. 1980), and the Court of Appeals affirmed, reasoning that § 503(c) did not pre-empt substantive state law regarding title transfers, and that, under the Illinois Uniform Commercial Code, Ill. Rev. Stat., ch. 26, ¶ 1-101 et seq. (1981), the Shackets had title but Philko did not. 681 F. 2d 506 (1982). We granted certiorari, 459 U. S. 1069 (1982), and we now reverse and remand for further proceedings.

Section 503(a)(1) of the Act, 49 U. S. C. § 1403(a)(1), directs the Secretary of Transportation to establish and maintain a system for the recording of any “conveyance which affects the title to, or any interest in, any civil aircraft of the United States.” Section 503(c), 49 U. S. C. § 1403(c), states:

“No conveyance or instrument the recording of which is provided for by [§ 503(a)(1)] shall be valid in respect of such aircraft . . . against any person other than the person by whom the conveyance or other instrument is made or given, his heir or devisee, or any person having actual notice thereof, until such conveyance or other instrument is filed for recordation in the office of the Secretary of Transportation.”

The statutory definition of “conveyance” defines the term as “a bill of sale, contract of conditional sale, mortgage, assignment of mortgage, or other instrument affecting title to, or interest in, property.” 49 U. S. C. §1301(20) (1976 ed., Supp. V). If § 503(c) were to be interpreted literally in accordance with the statutory definition, that section would not require every transfer to be documented and recorded; it would only invalidate unrecorded title instruments, rather than unrecorded title transfers. Under this interpretation, a claimant might be able to prevail against an innocent third party by establishing his title without relying on an instrument. In the present case, for example, the Shackets could not prove their title on the basis of an unrecorded bill of sale or other writing purporting to evidence a transfer of title to them, even if state law did not require recordation of such instruments, but they might still prevail, since Illinois law does not require written evidence of a sale “with respect to goods for which payment has been made and accepted or which have been received and accepted.” Ill. Rev. Stat., ch. 26, ¶ 2-201 (3)(c) (1981).

We are convinced, however, that Congress did not intend § 503(c) to be interpreted in this manner. Rather, § 503(c) means that every aircraft transfer must be evidenced by an instrument, and every such instrument must be recorded, before the rights of innocent third parties can be affected. Furthermore, because of these federal requirements, state laws permitting undocumented or unrecorded transfers are pre-empted, for there is a direct conflict between § 503(c) and such state laws, and the federal law must prevail.

These conclusions are dictated by the legislative history. The House and House Conference Committee Reports, and the section-by-section analysis of one of the bill’s drafters, all expressly declare that the federal statute “requires” the recordation of “every transfer ... of any interest in a civil aircraft.” The House Conference Report explains: “This section requires the recordation with the Authority of every transfer made after the effective date of the section, of any interest in a civil aircraft of the United States. The conveyance evidencing each such transfer is to be recorded with an index in a recording system to be established by the Authority.” Thus, since Congress intended to require the recordation of a conveyance evidencing each transfer of an interest in aircraft, Congress must have intended to pre-empt any state law under which a transfer without a recordable conveyance would be valid against innocent transferees or lienholders who have recorded.

Any other construction would defeat the primary congressional purpose for the enactment of § 503(c), which was to create “a central clearing house for recordation of titles so that a person, wherever he may be, will know where he can find ready access to the claims against, or liens, or other legal interests in an aircraft.” Hearings on H. R. 9738 before the House Committee on Interstate and Foreign Commerce, 75th Cong., 3d Sess., 407 (1938) (testimony of F. Fagg, Director of Air Commerce, Dept, of Commerce). Here, state law does not require any documentation whatsoever for a valid transfer of an aircraft to be effected. An oral sale is fully valid against third parties once the buyer takes possession of the plane. If the state law allowing this result were not pre-empted by § 503(c), then any buyer in possession would have absolutely no need or incentive to record his title with the FAA, and he could refuse to do so with impunity, and thereby prevent the “central clearing house” from providing “ready access” to information about his claim. This is not what Congress intended.

In the absence of the statutory definition of conveyance, our reading of § 503(c) would be by far the most natural one, because the term “conveyance” is first defined in the dictionary as “the action of conveying,” i. e., “the act by which title to property ... is transferred.” Webster’s Third New International Dictionary 499 (P. Gove ed. 1976). Had Congress defined “conveyance” in accordance with this definition, then § 503(c) plainly would have required the recor-dation of every transfer. Congress’ failure to adopt this definition is not dispositive, however, since the statutory definition is expressly not applicable if “the context otherwise requires.” 49 U. S. C. § 1301 (1976 ed. and Supp. V). Even in the absence of such a caveat, we need not read the statutory definition mechanically into § 503(c), since to do so would render the recording system ineffective and thus would defeat the purpose of the legislation. A statutory definition should not be applied in such a manner. Lawson v. Suwannee Fruit & S.S. Co., 336 U. S. 198, 201 (1949). Accordingly, we hold that state laws allowing undocumented or unrecorded transfers of interests in aircraft to affect innocent third parties are pre-empted by the federal Act.

In support of the judgment below, respondents rely on In re Gary Aircraft Corp., 681 F. 2d 365 (CA5 1982), which rejected the contention that § 503 pre-empted all state laws dealing with priority of interests in aircraft. The Court of Appeals held that the first person to record his interest with the FAA is not assured of priority, which is determined by reference to state law. We are inclined to agree with this rationale, but it does not help the Shackets. Although state law determines priorities, all interests must be federally recorded before they can obtain whatever priority to which they are entitled under state law. As one commentator has explained: “The only situation in which priority appears to be determined by operation of the [federal] statute is where the security holder has failed to record his interest. Such failure invalidates the conveyance as to innocent third persons. But recordation itself merely validates; it does not grant priority.” Scott, Liens in Aircraft: Priorities, 25 J. Air L. & Commerce 193, 203 (1958) (footnote omitted). Accord, Sigman, The Wild Blue Yonder: Interests in Aircraft under Our Federal System, 46 So. Cal. L. Rev. 316, 324-325 (1973) (although recordation does not establish priority, “failure to record . . . serves to subordinate”); Note, 36 Wash. & Lee L. Rev. 205, 212-213 (1979).

In view of the foregoing, we find that the courts below erred by granting the Shackets summary judgment on the basis that if an unrecorded transfer of an aircraft is valid under state law, it has validity as against innocent third parties. Of course, it is undisputed that the sale to the Shackets was valid and binding as between the parties. Hence, if Philko had actual notice of the transfer to the Shackets or if, under state law, Philko failed to acquire or perfect the interest that it purports to assert for reasons wholly unrelated to the sale to the Shackets, Philko would not have an enforceable interest, and the Shackets would retain possession of the aircraft. Furthermore, we do not think that the federal law imposes a standard with which it is impossible to comply. There may be situations in which the transferee has used reasonable diligence to file and cannot be faulted for the failure of the crucial documents to be of record. But because of the manner in which this case was disposed of on summary judgment, matters such as these were not considered, and these issues remain open on remand. The judgment of the Court of Appeals is reversed, and the case is remanded for further proceedings consistent with this opinion.

So ordered.

Justice O’Connor,

concurring in part and concurring in the judgment.

I join the opinion of the Court except to the extent that it might be read to suggest this Court’s endorsement of the view that one who makes a reasonably diligent effort to record will obtain the protections ordinarily reserved for recorded interests. I would express no opinion on that question, for it is not before us and has not been addressed in brief or in argument or, indeed, in the statute.

       It is perhaps noteworthy, however, that Philko’s title search did not even reveal that the seller, Smith’s corporation, owned or ever had owned the subject airplane.

       U. S. Const., Art. VI, cl. 2; Pacific Gas & Electric Co. v. State Energy Resources Conservation & Development Comm’n, 461 U. S. 190, 204 (1983); Fidelity Federal Savings & Loan Assn. v. De la Cuesta, 458 U. S. 141, 153 (1982); Jones v. Rath Packing Co., 430 U. S. 519, 525-526 (1977).

       H. R. Conf. Rep. No. 2635, 75th Cong., 3d Sess., 74 (1938) (emphasis added); H. R. Rep. No. 2254, 75th Cong., 3d Sess., 9 (1938); Hearings on S. 3760 before the Senate Committee on Commerce, 75th Cong., 3d Sess., 9 (1938) (section-by-section analysis of C. M. Hester, Assistant General Counsel, Treasury Dept.). Section 503(c) of the present Act is derived from § 503(b) of the Civil Aeronautics Act of 1938, 52 Stat. 1006. The only pertinent legislative history that we have found is that relating to the passage of the original 1938 provision.

       H. R. Conf. Rep. No. 2635, supra, at 74 (emphasis added). The “Authority” mentioned in the quotation is the Civil Aeronautics Authority, the predecessor of the FAA.

       Although the recording system ideally should allow any transferee who has checked the FAA records to acquire his interest with the certain knowledge that the transferor’s title is clear, we recognize that the present system does not allow for such certainty, because there is a substantial lag from the time at which an instrument is mailed to the FAA to the time at which the FAA actually records the instrument. Thus, if the owner of an airplane grants a lien on it to Doe on one day and attempts to sell it to Roe on the following day, Roe might erroneously assume, based on a search of the FAA records, that his vendor has clear title to the plane, even if Doe had promptly mailed the documents evidencing his lien to the FAA for recordation.

        Gary Aircraft involved a contest between the holder of a security interest in two airplanes and a subsequent purchaser. Although the security interest holder recorded its interest in the planes prior to the time that the purchaser did so, the Court of Appeals held in favor of the purchaser, because Texas law governed priorities and, under Texas law, the purchaser was a buyer in the ordinary course of business who took free of the security interest. The security interest holder argued that Texas law was pre-empted by § 503(d) of the Act, 49 U. S. C. § 1403(d), which states that all instruments recorded with the FAA shall be “valid” without further recordation, but the court found that “validity” did not mean “priority.” Instead, it only meant such “validity” as granted by state law. Gary Aircraft thus dealt with the question of the effect of recording under § 503(d), unlike the present case, which concerns the effect of nonrecording under § 503(c).
      In support of its decision, the Court of Appeals, 681 F. 2d, at 510, cited Haynes v. General Electric Credit Corp., 582 F. 2d 869 (CA4 1978); Sanders v. M. D. Aircraft Sales, Inc., 575 F. 2d 1086 (CA3 1978); State Securities Co. v. Aviation Enterprises, Inc., 355 F. 2d 225 (CA10 1966); Northern

        Illinois Corp. v. Bishop Distributing Co., 284 F. Supp. 121 (WD Mich. 1968); and Bitzer-Croft Motors, Inc. v. Pioneer Bank & Trust Co., 82 Ill. App. 3d 1, 401 N. E. 2d 1340 (1980). All of these cases involved facts similar to those of Gary Aircraft and are distinguishable on the same basis.

       Nothing in § 506 of the Act, 49 U. S. C. § 1406, provides support for a different conclusion. This provision states:
      “The validity of any instrument the recording of which is provided for by [§ 503] shall be governed by the laws of the State, District of Columbia, or territory or possession of the United States in which such instrument is delivered, irrespective of the location or the place of delivery of the property which is the subject of such instrument.”
      Section 506 was passed in 1964 to rectify the “chaotic situation existing] in the aircraft industry as a result of conflicting State rules relating to the choice of law governing the validity of instruments for the transfer of interests in tangible personal property.” H. R. Rep. No. 1033, 88th Cong., 1st Sess., 1 (1963). Although §506 provided a uniform federal choice-of-law rule for determining which State’s laws govern the substantive validity of an instrument, § 506 did not repeal § 503(c)’s requirement that the instrument must be recorded before it obtains whatever validity to which it is entitled under the state law applicable pursuant to § 506. In enacting §506, the Senate Committee Report observed that, under the §503 regime, “to determine whether there are any encumbrances on [an] aircraft, it is only necessary to consult the central file,” and no disapproval of this regime was expressed. S. Rep. No. 1060, 88th Cong., 2d Sess., 2 (1964).

       For example, if the instrument evidencing the transfer of the aircraft from Smith’s corporation to Philko failed to comply with formal requisites of Illinois law, then Philko might have no enforceable interest at all in the plane, in which case the Shackets would retain possession. This does not mean, of course, that Philko can be deemed to have no interest in the plane on the ground that, due to the sale to the Shackets, under Illinois law Smith had no interest to transfer to Philko.

       See, e. g., State Securities Co. v. Aviation Enterprises, Inc., supra, at 228 (buyer mailed its bill of sale to the FAA for recordation, but the FAA refused to record it). There is no indication in the record now before us that the Shackets made a prompt attempt to record.