author: Chief Justice Burger

text:
    UNITED STATES v. WILL et al.
    No. 79-983.
    Argued October 13, 1980
    Decided December 15, 1980

      Burger, C. J., delivered the opinion of the Court, in which all other Members joined, except BlacelmüN, J., who took no part in the decision of the cases.

      Acting Solicitor General Getter argued the cause for the United States. With him on the briefs were Assistant Attorney General Daniel, Mark I. Levy, Anthony J. Steinmeyer, Neil H. Koslowe, and Mark N. Mutterperl.

      Kevin M. Forde argued the cause for appellees. With him on the brief was Richard J. Prendergast.

      Together with No. 79-1689, United States v. Will et al., also on appeal from the same court.

      Briefs of amici curiae urging affirmance in both cases were filed by Leonard F. J ano j sky, John A. Sutro, Francis B. Kirkham, and C. Douglas Floyd for the American Bar Association; by Richard William Austin and John F. McCarthy for the Chicago Bar Association; and by Nancy Y. Bekcwac and Richard Coleman for the Los Angeles County Bar Association.

   Chief Justice Burger

delivered the opinion of the Court.

These appeals present the questions whether under the Compensation Clause, Art. Ill, § 1, Congress may repeal or modify a statutorily defined formula for annual cost-of-living increases in the compensation of federal judges, and, if so, whether it must act before the particular increases take effect.

I

Congress has enacted an interlocking network of statutes to fix the compensation of high-level officials in the Executive, Legislative, and Judicial Branches, including federal judges. It provides for quadrennial review of overall salary levels and annual cost-of-living adjustments determined in the same fashion as those for federal employees generally. In four consecutive fiscal years, Congress, with respect to these high-level Executive Branch, Legislative, and Judicial salaries, enacted statutes to stop or to reduce previously authorized cost-of-living increases initially intended to be automatically operative under that statutory scheme, once the Executive had determined the amount. In two of these years, the legislation was signed by the President and became law before the start of the fiscal year; in the other two years, on or after the first day of the fiscal year.

A

The salaries of high-level Executive, Legislative, and Judicial officials are set under the Postal Revenue and Federal Salary Act of 1967, 81 Stat. 642, as amended, 2 U. S. C. §§351-361 (1976 ed. and Supp. III). The Salary Act provides for a quadrennial review, starting in 1969, of these officials compensation. A Commission on Executive, Legislative, and Judicial Salaries periodically examines the salary levels for these positions in relation to one another and to the General Schedule (GS), the matrix of grades and steps that determines the salaries of most federal employees. Its recommendations are submitted to the President, who in turn submits that report with his recommendations to Congress in the next budget. Each House of Congress must vote on the President’s proposal within 60 days. If both Houses approve, the adjustment takes effect at the start of the first pay period beginning 30 days thereafter.

In 1975, Congress adopted the Executive Salary Cost-of-Living Adjustment Act, Pub. L. 94-82, 89 Stat. 419. The Adjustment Act subjects the salaries covered by the Salary Act to the same annual adjustment made in the General Schedule under the Federal Pay Comparability Act of 1970, 5 U. S. C. §§ 5305-5306. The Comparability Act requires that each year the President designate an agent to compare federal salaries to data on private-sector salaries compiled by the Bureau of Labor Statistics. The agent must undertake certain steps in his investigation and, ultimately, submit a report to the President recommending adjustments as deemed appropriate to bring federal employees’ salaries in line with prevailing rates in the private sector. A separate Advisory Committee on Federal Pay then reviews that report and makes its own independent recommendation. Thereafter, the President issues an order ádjusting the salaries of federal employees and submits a report to Congress listing the overall percentage of the adjustment and including the reports and recommendations submitted to him on the subject. If the President believes that economic conditions or conditions of national emergency' make the planned adjustment inappropriate, he may submit to Congress before September 1 an alternative plan for adjusting federal employees’ salaries. This alternative plan controls unless within 30 days of continuous legislative session either House of Congress adopts a resolution disapproving of the President’s proposed plan. ' If one House disapproves, the agent’s recommendation governs. The increases take effect with the start of the first pay period starting on or after the beginning of the federal fiscal year on October 1.

This complex web of base salaries adjusted annually for civil service employees and again quadrennially for higher-rank positions has led to the following statutory definition of a United States district judge’s compensation:

“Each judge of a district court of the United States shall receive a salary at an annual rate determined under section 225 of the Federal Salary Act of 1967 (2 U. S. C. 351-361), as adjusted by section 461 of this title.” 28 U. S. C. § 135.

Similarly phrased statutes apply to all other Article III judges. Title 28 U. S. C. § 461 in turn provides that the annual GS adjustment, rounded to the nearest multiple of $100, shall apply to salaries subject to that section, effective at the start of the next pay period. Compensation of judges is set at an annual figure and paid monthly, with each pay period coinciding with the calendar month. See 5 U. S. C. § 5505. Accordingly, any annual change in salary under the Adjustment Act takes effect at the beginning of October, the start of the fiscal year.

B

In October 1975, GS salaries were increased by an average of 5% under the terms of the Comparability Act. Federal judges and the other officials covered by the Adjustment Act received similar increases. In each of the following four years, however, Congress adopted a statute that altered the application of the Adjustment Act for the officials of the three branches subject to it. To avoid the confusion generated by a fiscal year’s having a number different from the calendar year in which it begins, we refer to these as Years 1, 2, 3, and 4. We turn now to the specific actions taken for each of the four years in question.

Year 1

In October 1976, GS salaries were increased by an average of 4.8% under the procedures of the Comparability Act outlined earlier. On October 1, the first day of the new fiscal year and the first day of the relevant pay period, the President signed the Legislative Branch Appropriation Act, 1977, Pub. L. 94 440, 90 Stat. 1439. Title II of that statute provided:

“[N]one of the funds contained in this Act shall be used to increase salaries of Members of the House of Representatives .... No part of the funds appropriated in this Act or any other Act shall be used to pay the salary of an individual in a position or office referred to in section 225 (f) of the Federal Salary Act of 1967, as amended (2 U. S. C. 356), including a Delegate to the House of Representatives, at a rate which exceeds the salary rate in effect on September 30, 1976, for such position or office . . .

By virtue of the reference to the Salary Act, this statute applied to federal judges; its import, therefore, was to prohibit paying the 4.8% raise on October 1, 1976, under the Adjustment Act to federal judges, as well as Members of Congress and high-level officials in the Executive Branch.

In March 1977, Members of Congress, federal judges, and high-ranking employees in the Executive Branch received raises pursuant to the quadrennial review under the Salary Act. The salary of a United States district judge, for example, increased to $54,500; circuit judges and special appellate judges, to $57,500; Associate Justices of the Supreme Court, to $72,000. 42 Fed. Reg. 10297 (1977) .

Year 2

In October 1977, GS salaries, which generally are not subject to the quadrennial review under the Salary Act, were increased an average of 7.1% under the Comparability Act. On July 11, 1977, the President signed Pub. L. 95-66, 91 Stat. 270, which provided:

“[T]he first adjustment which, but for this Act, would be made after the date of enactment of this Act under the following provisions of law in the salary or rate of pay of positions or individuals to which such provisions apply [the 7.1% in October 1977], shall not take effect:
“(3) section 461 of title 28, United States Code, relating to comparability adjustments in the salary and rate of pay of justices, judges, commissioners, and referees . . .

Parallel subdivisions applied to the other officials under the Salary Act. According to the House Report on this measure, an Adjustment Act increase would be inappropriate following the Comparability Act increase earlier in the same calendar year. H. R. Rep. No. 95-458, p. 2 (1977). The effect of this statute was to nullify the contemplated 7.1% increase for these high-level executive employees, Members of Congress, and federal judges.

Year 3

For the fiscal year beginning October 1, 1978, the President approved the recommendation to increase GS salaries an average of 5.5%. On September 30, 1978, the final day of the preceding fiscal year, however, the President signed the Legislative Branch Appropriation Act, 1979, Pub. L. 95-391, 92 Stat. 763. Section 304 (a) of that Act stated:

“No part of the funds appropriated for the fiscal year ending September 30, 1979, by this Act or any other Act may be used to pay the salary or pay of any individual in any office or position in the legislative, executive, or judicial branch, or in the government of the District of Columbia, at a rate which exceeds the rate (or maximum rate, if higher) of salary or basic pay payable for such office or position for September 30, 1978 . . . .”

The effect of this .provision was to prohibit paying the 5.5% increase authorized by the Adjustment Act for the fiscal year beginning October 1, 1978.

Year 4

For the fiscal year beginning October 1, 1979, the President’s statutory agent transmitted a recommendation for an average increase of 10.41%. However, on August 31, the President invoked his power under the Comparability Act to alter this rate; he reduced the proposed increase to 7% from the 10.41% recommended. These increases, the Government concedes, took effect on October 1, 1979. Moreover, because the September 30, 1978, statute (Year 3) prohibited paying the 5.5% increase only during fiscal year 1979, that increase took effect as well; along with the 7% adjustment, this brought the total to 12.9%. Nevertheless, the Government now contends that this increase was in effect for only 11 days, since on October 12, the President signed Pub. L. 96-86, 93 Stat. 656. Section 101 (c) of this statute stated, in relevant part:

“For fiscal year 1980, funds available for payment to executive employees, which includes Members of Congress, who under existing law are entitled to approximately 12.9 percent increase in pay, shall not be used to pay any such employee or elected or appointed official any sum in excess of 5.5 percent increase in existing pay and such sum if accepted shall be in lieu of the 12.9 percent due for such fiscal year.”

None of the appellees have exercised the statutory option to accept the 5.5% increase pursuant to the final clause of this statute; in terms that statute provides such acceptance of the 5.5% operates as a waiver of all claims to rates higher than the 5.5%. The Government concedes the 5.5% increase has continued in effect.

C

On February 7, 1978, 13 United States District Judges filed an action (No. 79-983 in this Court) in the District Court for the Northern District of Illinois. The complaint, which named the United States as defendant, challenged the validity of the statutes in Years 1 and 2 under the Compensation Clause, U. S. Const., Art. III, § 1. The plaintiff judges were certified as representatives of two classes of Article III judges, the classes defined with reference to Years 1 and 2. The Government, while not opposing certification of the classes, defended the validity of both statutes.

In an opinion filed August 29, 1979, the District Court granted summary judgment for the plaintiffs, appellees here. 478 F. Supp. 621. A corresponding judgment order was entered September 24. On appeal by the Government, we postponed decision on jurisdiction to the hearing on the merits and directed the parties to address the effect of 28 U. S. C. § 455, if any, on the jurisdiction of the District Court and this Court. 444 U. S. 1068 (1980).

No. 79-1689 comes to us from a similar complaint filed in the United States District Court for the Northern District of Illinois on October 19, 1979, after the District Court had entered judgment in No. 79-983. At issue this time were the statutes in Years 3 and 4. The same 13 judges, joined by one other, again sought to represent two classes of Article III judges defined by the years. The United States is defendant. The case was referred to the same member of the District Court who had presided over the proceedings in No. 79-983.

On January 31, 1980, the District Court entered an order certifying the classes and granting summary judgment for the plaintiffs, appellees in No. 79-1689. Based on its decision in No. 79-983, the court held that the statute in Year 3 violated the Compensation Clause. The court noted with respect to Year 4 that the relevant statute referred only to “executive employees.” It then held that while it was doubtful Congress intended the statute to apply to judges, the statute would be unconstitutional if Congress did so intend. In either case, the Adjustment Act increase for Year 4 took effect.' Judgment for appellees was formally entered February 12. On the Government’s appeal to this Court, we postponed consideration of jurisdiction to the merits and consolidated this case with No. 79-983 for briefing and oral argument. 447 U. S. 919 (1980).

II

A

Jurisdiction

Although it is clear that the District Judge and all Justices of this Court have an interest in the outcome of these cases, there is no doubt whatever as to this Court’s jurisdiction under 28 U. S. C. § 1252 or that of the District Court under 28 U. S. C. § 1346 (a) (2) (1976 ed., Supp. III). Section 455 of Title 28 neither expressly nor by implication purports to deal with jurisdiction. On its face § 455 provides for disqualification of individual judges under specified circumstances; it does not affect the jurisdiction of a court. Nothing in the text or the history of § 455 suggests that Congress intended, by that section, to amend the vast array of statutes conferring jurisdiction over certain matters on various federal courts.

B

Disqualification

Jurisdiction being clear, our next inquiry is whether 28 U. S. C. § 455 or traditional judicial canons operate to disqualify all United States judges, including the Justices of this Court, from deciding these issues. This threshold question reaches us with both the Government and the appellees in full agreement that § 455 did not require the District Judge, and does not now require each Justice of this Court, to disqualify himself. Rather, they agree the ancient Rule of Necessity prevails over the disqualification standards of § 455. Notwithstanding this concurrence of views resulting from the Government’s concession, the sensitivity of the issues leads us to address the applicability of § 455 with the same degree of care and attention we would employ if the Government asserted that the District Court lacked jurisdiction or that § 455 mandates disqualification of all judges and Justices without exception.

In federal courts generally, when an individual judge is disqualified from a particular case by reason of § 455, the disqualified judge simply steps aside and allows the normal administrative processes of the court to assign the case to another judge not disqualified. In the cases now before us, however, all Article III judges have an interest in the outcome; assignment of a substitute District Judge was not possible. And in this Court, when one or more Justices are recused but a statutory quorum of six Justices eligible to act remains available, see 28 U. S. C. § 1, the Court may continue to hear the case. Even if all Justices are disqualified in a particular case under § 455, 28 U. S. C. § 2109 authorizes the Chief Justice to remit a direct appeal to the Court of Appeals for final decision by judges not so disqualified. However, in the highly unusual setting of these cases, even with the authority to assign other federal judges to sit temporarily under 28 U. S. C. §§ 291-296 (1976 ed. and Supp. Ill), it is not possible to convene a division of the Court of Appeals with judges who are not subject to the disqualification provisions of § 465. It was precisely considerations of this kind that gave rise to the Rule of Necessity, a well-settled principle at common law that, as Pollack put it, “although a judge had better not, if it can be avoided, take part in the decision of a case in which he has any personal interest, yet he not only may but must do so if the case cannot be heard otherwise.” F. Pollack, A First Book of Jurisprudence 270 (6th ed. 1929).

C

Rule of Necessity

The Rule of Necessity had its genesis at least five and a half centuries ago. Its earliest recorded invocation was in 1430, when it was held that the Chancellor of Oxford could act as judge of a case in which he was a party when there was no provision for appointment of another judge. Y. B. Hil. 8 Hen. VI, f. 19, pi. 6. Early cases in this country confirmed the vitality of the Rule.

The Rule of Necessity has been consistently applied in this country in both state and federal courts. In State ex rel. Mitchell v. Sage Stores Co., 157 Kan. 622, 143 P. 2d 652 (1943), the Supreme Court of Kansas observed:

“[I]t is well established that actual disqualification of a member of a court of last resort will not excuse such member from performing his official duty if failure to do so would result in a denial of a litigant’s constitutional right to have a question, properly presented to such court, adjudicated.” Id., at 629, 143 P. 2d, at 656.

Similarly, the Supreme Court of Pennsylvania held:

“The true rule unquestionably is that wherever it becomes necessary for a judge to sit even where he has an interest — where no provision is made for calling another in, or where no one else can take his place — it is his duty to hear and decide, however disagreeable it may be.” Philadelphia v. Fox, 64 Pa. 169, 185 (1870).

Other state and federal courts also have recognized the Rule.

The concept of the absolute duty of judges to hear and decide cases within their jurisdiction revealed in Pollack, supra, and Philadelphia v. Fox, supra, is reflected in decisions of this Court. Our earlier cases dealing with the Compensation Clause did not directly involve the compensation of Justices or name them as parties, and no express reference to the Rule is found. See, e. g., O’Malley v. Woodrough, 307 U. S. 277 (1939); O’Donoghue v. United States, 289 U. S. 516 (1933); Evans v. Gore, 253 U. S. 245 (1920). In Evans, however, an action brought by an individual judge in his own behalf, the Court by clear implication dealt with the Rule:

“Because of the individual relation of the members of this court to the question ... , we cannot but regret that its solution falls to us ... . But jurisdiction of the present case cannot be declined or renounced. The plaintiff was entitled by law to invoke our decision on the question as respects his own compensation, in which no other judge can have any direct personal interest; and there was no other appellate tribunal to which under the law he could go.” Id., at 247-248.

It would appear, therefore, that this Court so took for granted the continuing validity of the Rule of Necessity that no express reference to it or extended discussion of it was needed.

D

Limited Purpose of Section 455

The objective of § 455 was to deal with the reality of a positive disqualification by reason of an interest or the appearance of possible bias. The House and Senate Reports on § 455 reflect a constant assumption that upon disqualification of a particular judge, another would be assigned to the case. For example:

“[I]f there is [any] reasonable factual basis for doubting the judge’s impartiality, he should disqualify himself and let another fudge preside over the case.” S. Rep. No. 93-419, p. 5 (1973) (emphasis added); H. R. Rep. No. 93-1453, p. 5 (1973) (emphasis added).

The Reports of the two Houses continued:

“The statutes contain ample authority for chief judges to assign other judges to replace either a circuit or district court judge who become disqualified [under §455].” S. Rep. No. 93-419, supra, at 7 (emphasis added); H. R. Rep. No. 93-1453, supra, at 7 (emphasis added).

The congressional purpose so clearly expressed in the Reports gives no hint of altering the ancient Rule of Necessity, a doctrine that had not been questioned under prior judicial disqualification statutes. The declared purpose of § 455 is to guarantee litigants a fair forum in which they can pursue their claims. Far from promoting this purpose, failure to apply the Rule of Necessity would have a contrary effect, for without the Rule, some litigants would be denied their right to a forum. The availability of a forum becomes especially important in these cases. As this Court has observed elsewhere, the Compensation Clause is designed to benefit, not the judges as individuals, but the public interest in a competent and independent judiciary. Evans v. Gore, supra, at 253. The public might be denied resolution of this crucial matter if first the District Judge, and now all the Justices of this Court, were to ignore the mandate of the Rule of Necessity and decline to answer the questions presented. On balance, the public interest would not be served by requiring disqualification under § 455.

We therefore hold that § 455 was not intended by Congress to alter the time-honored Rule of Necessity. And we would not casually infer that the Legislative and Executive Branches sought by the enactment of § 455 to foreclose federal courts from exercising “the province and duty of the judicial department to say what the law is.” Marbury v. Madison, 1 Cranch 137, 177 (1803).

Ill

The Compensation Clause

The Compensation Clause has its roots in the longstanding Anglo-American tradition of an independent Judiciary. A Judiciary free from control by the Executive and the Legislature is essential if there is a right to have claims decided by judges who are free from potential domination by other branches of government. Our Constitution promotes that independence specifically by providing:

“The Judges, both of the supreme and inferior Courts, shall hold their Offices during good Behaviour, and shall, at stated Times, receive for their Services, a Compensation, which shall not be diminished during their Continuance in Office.” Art. Ill, § 1.

Hamilton, in The Federalist No. 79, p. 491 (1818) (emphasis deleted), emphasized the importance of protecting judicial compensation:

“In the general course of human nature, a power over a man’s subsistence amounts to a power over his will.”

The relationship of judges’ compensation to their independence was by no means a new idea initiated by the authors of the Constitution. The Act of Settlement in 1701, designed to correct abuses prevalent under the reign of the Stuart Kings, includes a provision that, upon the accession of the successor to then Princess Anne,

“Judges Commissions be made Quamdiu se bene gesserint [during good behavior], and their Salaries ascertained and established . . . .” 12 & 13 Will. III, ch. 2, § III, cl. 7 (1701).

This English statute is the earliest legislative acknowledgment that control over the tenure and compensation of judges is incompatible with a truly independent judiciary, free of improper influence from other forces within government. Later, Parliament passed, and the King assented to, a statute implementing the Act of Settlement providing that a judge’s salary would not be decreased “so long as the Patents and Commissions of them, or any of them respectively, shall continue and remain in force.” 1 Geo. Ill, ch. 23, § III (1760). These two statutes were designed “to maintain both the dignity and independence of the judges.” 1 W. Blackstone, Commentaries *267.

Originally, these same protections applied to colonial judges as well. In 1761, however, the King converted the tenure of colonial judges to service at his pleasure. The interference this change brought to the administration of justice in the Colonies soon became one of the major objections voiced against the Crown. Indeed, the Declaration of Independence, in listing the grievances against the King, complained:

“He has made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries.”

Independence won, the colonists did not forget the reasons that caused them to separate from the Mother Country. Thus, when the Framers met in Philadelphia in 1787 to draft our organic law, they made certain that in the judicial articles both the tenure and the compensation of judges would be protected from one of the evils that had brought on the Revolution and separation.

Madison’s notes of the Constitutional Convention reveal that the draftsmen first reached a tentative arrangement whereby the Congress could neither increase nor decrease the compensation of judges. Later, Gouverneur Morris succeeded in striking the prohibition on increases; with others, he believed the Congress should be at liberty to raise salaries to meet such contingencies as inflation, a phenomenon known in that day as it is in ours. Madison opposed the change on the ground judges might tend to defer unduly to the Congress when that body was considering pay increases.

The concern for the ravages of inflation is revealed in Madison’s comment:

“The variations in the value of money, may be guarded agst. by taking for a standard wheat or some other thing of permanent value. 2 M. Farrand, The Records of the Federal Convention of 1787, p. 45 (1911).

Morris criticized the proposal for overlooking changes in the state of the economy; the value of wheat may change, he said, and leave the judges undercompensated. The Convention finally adopted Morris’ motion to allow increases by the Congress, thereby accepting a limited risk of external influence in order to accommodate the need to raise judges’ salaries when times changed. As Hamilton later explained:

“It will readily be understood, that the fluctuations in the value of money, and in the state of society, rendered a fixed rate of compensation [of judges] in the Constitution inadmissible. What might be extravagant to-day might in half a century become penurious and inadequate. It was therefore necessary to leave it to the discretion of the legislature to vary its provisions in conformity to the variations in circumstances; yet under such restrictions as to put it out of the power of that body to change the condition of the individual for the worse.” The Federalist No. 79, pp. 49H92 (1818).

This Court has recognized that the Compensation Clause also serves another, related purpose. As well as promoting judicial independence, it ensures a prospective judge that, in abandoning private practice — more often than not more lucrative than the bench — the compensation of the new post will not diminish. Beyond doubt, such assurance has served to attract able lawyers to the bench and thereby enhances the quality of justice. Evans v. Gore, 253 U. S., at 253; 1 J. Kent, Commentaries on American Law 276. (1826).

IV

The four statutes now before us present an issue never before addressed by this Court: when, if ever, does the Compensation Clause prohibit the Congress from repealing salary increases that otherwise take effect automatically pursuant to a formula previously enacted? We must decide when a salary increase authorized by Congress under such a formula “vests” — i. e., becomes irreversible under the Compensation Clause. Is the protection of the Clause first invoked when the formula is enacted or when increases take effect?

A

Appellees argue that we need not reach this constitutional question. They contend that Congress intended these four statutes do no more than halt funding for the salary increases under the Adjustment Act. If, as appellees contend, the statutes are appropriations measures that do not alter substantive law, the increases in all four years nevertheless are now in effect and the Government is obliged to pay them; it has simply to authorize that payment. Accordingly, appellees submit, these congressional actions violate the Compensation Clause regardless of whether Congress could have rescinded increases previously passed.

As a general rule, “repeals by implication are not favored.” Posadas v. National City Bank, 296 U. S. 497, 503 (1936). See also TV A v. Hill, 437 U. S. 153, 189 (1978), and Morton v. Mancari, 417 U. S. 535, 549 (1974). This rule applies with especial force when the provision advanced as the repealing measure was enacted in an appropriations bill. TV A v. Hill, supra, at 190. Indeed, the rules of both Houses limit the ability to change substantive law through appropriations measures. See Senate Standing Rule XVI (4); House of Representatives Rule XXI (2). Nevertheless, when Congress desires to suspend or repeal a statute in force, “[t]here can be no doubt that ... it could accomplish its purpose by an amendment to an appropriation bill, or otherwise.” United States v. Dickerson, 310 U. S. 554, 555 (1940). "The whole question depends on the intention of Congress as expressed in the statutes.” United States v. Mitchell, 109 U. S. 146, 150 (1883). See also Belknap v. United States, 150 U. S. 588, 594 (1893).

In the cases now before us, we conclude that in each of the four years in question Congress intended to repeal or postpone previously authorized increases. In the statute for Year 2, Congress expressly stated that the Adjustment Act increase due the following October “shall not take effect.” Pub. L. 95-66, 91 Stat. 270. Thus, the plain words of the statute reveal an intention to repeal the Adjustment Act insofar as it would increase salaries in October 1977. This reading finds support in the House Report on the bill, which repeatedly uses language such as “eliminate the expected October 1977 comparability adjustment.” See H. R. Rep. No. 95-458, pp. 1, 3 (1977). The floor remarks of Senators and Representatives confirm that this construction was generally understood.

The statutes in Years 1, 3, and 4, although phrased in terms of limiting funds, see supra, at 205-206, 207, 208, nevertheless were intended by Congress to block the increases the Adjustment Act otherwise would generate. Representative Shipley introduced the rider in relation to Year 1 to “preven [t] the automatic cost-of-living pay increase . . . 122 Cong. Rec. 28872 (1976). Floor remarks in both Houses reflected this view. In Year 3, the House Report characterized the statute as a “change [in] the application of existing law,” H. R. Rep. No. 95-1254, p. 31 (1978), and described its effect as creating a one-year “pay freeze,” id., at 35. The Senate Report stated that the statute would “continu[e] . . . the so called ‘cap’ ” on salaries for the next fiscal year. S. Rep. No. 95-1024, p. 50 (1978). Floor debate once again expressed agreement with this construction. The House Report on the statute for Year 4 characterized it .as “reducing] Federal executive pay increases from the mandatory entitlement of 12.9 per centum to 5.5 per centum.” H. R. Rep. No. 96-500, p. 7 (1979). The Report referred to the bill as a change in existing law. See id., at 3. Later the Conference Report stated that the statute “restricts Cost-of-Living increases- to 5.5 percent” for the fiscal year just begun. H. R. Conf. Rep. No. 96-513, p. 3 (1979). The floor debates also confirm this understanding.

These passages indicate clearly that Congress intended to rescind these raises entirely, not simply to consign them to the fiscal limbo of an account due but not payable. The clear intent of Congress in each year was to stop for that year the application of the Adjustment Act. The issue thus resolves itself into whether Congress could do so without violating the Compensation Clause.

B

Year 1

The statute applying to Year 1 was signed by the President during the business day of October 1, 1976. By that time, the 4.8% increase under the Adjustment Act already had taken effect, since it was operative with the start of the month — and the new fiscal year — at the beginning of the day. The statute became law only upon the President’s signing it on October 1; it therefore purported to repeal a salary increase already in force. Thus it “diminished” the compensation of federal judges.

The Government contends that Congress could reduce compensation as long as it did not “discriminate” against judges, as such, during the process. That the “freeze” applied to various officials in the Legislative and the Executive Branches, as well as judges, does not save the statute, however. This is quite different from the situation in O’Malley v. Woodrough, 307 U. S. 277 (1939). There the Court held that the Compensation Clause was not offended by an income tax levied on Article III judges as well as on all other taxpayers; there was no discrimination against the plaintiff judge. Federal judges, like all citizens, must share “the material burden of the government . . . .” Id., at 282. The inclusion in the freeze of other officials who are not protected by the Compensation Clause does not insulate a direct diminution in judges’ salaries from the clear mandate of that Clause; the Constitution makes no exceptions for “nondiscriminatory” reductions. Accordingly, we hold that the statute with respect to Year 1, as applied to compensation of members of the certified class, violates the Compensation Clause of Art. III.

Year 2

Unlike the statute for Year 1, the statute for Year 2 was signed by the President before October 1, when the 7.1% raise under the Comparability Act was due to take effect. Year 2 thus confronts us squarely with the question of whether Congress may, before the effective date of a salary increase, rescind such an increase scheduled to take effect at a later date. The District Court held that by including an annual cost-of-living adjustment in the statutory definitions of the salaries of Article III judges, see supra, at 204, and n. 2, Congress made the annual adjustment, from that moment on, a part of judges’ compensation for constitutional purposes. Subsequent action reducing those adjustments “diminishes” compensation within the meaning of the Compensation Clause. Relying on Evans v. Gore, 253 U. S., at 254, the District Court held that such action reduces the amount “a judge . . . has been promised,” and all amounts thus promised fall within the protection of the Clause.

We are unable to agree with the District Court’s analysis and result. Our discussion of the Framers’ debates over the Compensation Clause, supra, at 219-220, led to a conclusion that the Compensation Clause does not erect an absolute ban on all legislation that conceivably could have an adverse effect on compensation of judges. Rather, that provision embodies a clear rule prohibiting decreases but allowing increases, a practical balancing by the Framers of the need to increase compensation to meet economic changes, such as substantial inflation, against the need for judges to be free from undue congressional influence. The Constitution delegated to Congress the discretion to fix salaries and of necessity placed faith in the integrity and sound judgment of the elected representatives to enact increases when changing conditions demand.

Congress enacted the Adjustment Act based on this delegated power to fix and, periodically, increase judicial compensation. It did not thereby alter the compensation of judges; it modified only the formula for determining that compensation. Later, Congress decided to abandon the formula as to the particular years in question. For Year 2, as opposed to Year 1, the statute was passed before the Adjustment Act increases had taken effect — before they had become a part of the compensation due Article III judges. Thus, the departure from the Adjustment Act policy in no sense diminished the compensation Article III judges were receiving; it refused only to apply a previously enacted formula.

A paramount — indeed, an indispensable — ingredient of the concept of powers delegated to coequal branches is that each branch must recognize and respect the limits on its own authority and the boundaries of the authority delegated to the other branches. To say that the Congress could not alter a method of calculating salaries before it was executed would mean the Judicial Branch could command Congress to carry out an announced future intent as to a decision the Constitution vests exclusively in the Congress. We therefore conclude that a salary increase “vests” for purposes of the Compensation Clause only when it takes effect as part of the compensation due and payable to Article III judges. With regard to Year 2, we hold that the Compensation Clause did not prohibit Congress from repealing the planned but not yet effective cost-of-living adjustment of October 1, 1977, when it did so before October 1, the time it first was scheduled to become part of judges’ compensation. The statute in Year 2 thus represents a constitutionally valid exercise of legislative authority.

Year 8

For our purposes, the legal issues presented by the statute in Year 3 are indistinguishable from those in Year 2. Each statute eliminated — before October 1 — the Adjustment Act salary increases contemplated but not yet implemented. Each statute was passed and signed by the President before the Adjustment Act increases took effect, in; the case of Year 3, on September 30. For the reasons set forth in our discussion of the issues for Year 2, we hold that the statute in Year 3 did not violate the Compensation Clause.

Year 4

Before reaching the constitutional issues implicated in Year 4, we must resolve a problem of statutory construction. On its face, the statute in Year 4 applies in terms to “executive employees, which includes Members of Congress.” See supra, at 208. It does not expressly mention judges. Ap-pellees contend that even if Congress constitutionally could freeze the salaries of Article III judges, it did not do so in this statute.

We are satisfied that Congress’ use of the phrase “executive employees,” in context, was intended to include Article III judges. The full title of the Adjustment Act is the Executive Salary Cost-of-Living Adjustment Act, but it is clear that it was intended to apply to officials in the Legislative and the Judicial Branches as well. The title does not control over the terms of the statute. The statutes in the three preceding years undeniably applied to judges, and we can discern no indication that the Congress chose to single them out for an exemption when it was including Executive and Legislative officials. Most important, both the Conference Report and the Chairman of the House Appropriations Committee, speaking on the floor, made explicit what already was implicit: the limiting statute would apply to judges as well. See H. R. Conf. Rep. No. 96-513, p. 3 (1979); 125 Cong. Rec. 27530, 27532 (1979) (remarks of Rep. Whitten).

Having concluded that the statute in Year 4 was intended to apply to judges as well as other high-level federal officials, we are confronted with a situation similar to that in Year 1. Here again, the statute purported to revoke an increase in judges’ compensation after those statutes had taken effect. For the reasons governing the statute as to Year 1, we hold that the statute revoking the increase for Year 4 violated the Compensation Clause insofar as it applied to members of the certified class.

V

The District Court has not yet calculated the precise dollar amounts involved in Years 1 and 4, the years in which we hold the statutes violated the Compensation Clause. Further proceedings are required to resolve these questions. Accordingly, the judgment of the District Court in No. 79-983 is affirmed in part and reversed in part, the judgment in No. 79-1689 is affirmed in part and reversed in part, and the cases are remanded for further proceedings consistent with this opinion.

It is so ordered.

Justice Blackmun took no part in the decision of these cases.

       The Salary Act, as amended, does not expressly prescribe what occurs if either House of Congress disapproves. See 2 U. S. C. § 359 (1976 ed., Supp. III).

       See 28 U. S. C. § 5 (the Chief Justice and each Associate Justice of the Supreme Court); 28 U. S. C. § 44 (d) (circuit judges); 28 U. S. C. § 173 (Court of Claims); 28 U. S. C. § 213 (Court of Customs and Patent Appeals); 28 U. S. C. § 252 (Court of International Trade (formerly Customs Court)).

       These amounts exceeded the levels these salaries would have achieved had Congress left in effect the 4.8% increase from October 1, 1976. Therefore, appellees' complaint in No. 79-983 challenged the statute in Year 1 only insofar as it affected judicial compensation from October 1, 1976, to March 1, 1977. See n. 6, infra.

       See also 123 Cong. Rec. 7126 (1977) (remarks of Sen. Scott) (“prevents people . . . from receiving two pay raises in 1 year”); id., at 21121 (remarks of Rep. Solarz) (“individuals who have already received one increase during the course of the current year should not be entitled to receive a second increase as well”); infra, at 222, and n. 24.

       The 7% increase was computed on the salary levels as they stood after the addition of the 5.5% increase deferred from Year 3. The compounding of the two increases means that the employees affected felt a combined increase of 12.9%. This explains the additional 0.4%.

       The plaintiffs challenged the statute in Year 1 only insofar as it applied to compensation earned from October 1, 1976, until March 1, 1977, the date the quadrennial increase under the Comparability Act took effect. See n. 3, supra.

       For Year 1, the class was défined as all Article III judges serving during part or all of the period October 1, 1976, to March 1, 1977, the date the quadrennial increase under the Comparability Act took effect. See n. 6, supra. For Year 2, the class was defined as all Article III judges taking office prior to July 11, 1977, the date the statute was passed, and continuing in office after October 1, 1977, the date the Adjustment Act increase was due to take effect.
      The case was referred to a newly appointed member of the District Court who had taken office after October 1, 1977, and thus was not a member of either class.

       For Year 3, the class was defined as all Article III judges in office on October 1, 1978, the date of the scheduled Adjustment Act increase, and continuing in office thereafter. For Year 4, the class was defined as all Article III judges in office on October 1, 1979, the date the Adjustment Act increase took effect, and continuing in office through October 12, 1979, the date the Year 4 statute was signed.

       This section provides in part:
      “Any party may appeal to the Supreme Court from an interlocutory or final judgment, decree or order of any court of the United States . . . holding an Act of Congress unconstitutional in any civil action, suit, or proceeding to which the United States or any of its agencies, or any officer or employee thereof, as such officer or employee, is a party.”

       This provision confers on the district courts and the Court of Claims concurrent jurisdiction over actions against the United States based on the Constitution when the amount in controversy does not exceed $10,000. The complaints in both No. 79-983 and No. 79-1689 state that the claims of individual members of the classes do not exceed $10,000, an allegation the Government has not disputed. See App. 9a, 62a.

       This section provides in relevant part:
      “(a) Any justice, judge, or magistrate of the United States shall disqualify himself in any proceeding in which his impartiality might reasonably be questioned.
      “(b) He shall also disqualify himself in the following circumstances:
      “ (4) He knows that he . . . has a financial interest in the subject matter in controversy . . . ;
      “(5) He . . .
      “(i) Is a party to the proceeding ...”

       See, e. g., ABA, Code of Judicial Conduct, Canon 3 (C).

       Section 2109 provides, in relevant part:
      “If a case brought to the Supreme Court by direct appeal from a district court cannot be heard and determined because of the absence of a quorum of qualified justices, the Chief Justice of the United States may order it remitted to the court of appeals for the circuit including the district in which the case arose, to be heard and determined by that court either sitting in banc or specially constituted and composed of the three circuit judges senior in commission who are able to sit, as such order may-direct. The decision of such court shall be final and conclusive. In the event of the disqualification or disability of one or more of such circuit judges, such court shall be filled as provided in chapter 15 of this title.” The second paragraph of the section provides that, in all other cases when a quorum of qualified Justices is unable to sit, the Court shall enter an order affirming the judgment extant, which shall have the precedential effect of an affirmance by an equally divided Court.
      The original version of this section was designed to ensure that the parties in antitrust and Interstate Commerce Commission cases, which at that time could be appealed directly to this Court, would always have some form of appellate review. See H. R. Rep. No. 1317, 78th Cong., 2d Sess., 2 (1944). Congress broadened this right in the 1948 revision of Title 28 to include all cases of direct review. H. R. Rep. No. 308, 80th Cong., 1st Sess., A175-A176 (1947).

       Rolle’s Abridgment summarized this holding as follows:
      “If an action is sued in the bench against all the Judges there, then by necessity they shall be their own Judges.” 2 H. Rolle, An Abridgment of Many Cases and Resolutions at Common Law 93 (1668) (translation).

       For example, in Mooers v. White, 6 Johns. Ch. 360 (N. Y. 1822), Chancellor Kent continued to sit despite his brother-in-law’s being a party; New York law made no provision for a substitute chancellor. See In re Leefe, 2 Barb. Ch. 39 (N. Y. 1846). See also cases cited in Annot., 39 A. L. R. 1476 (1925).

        E. g., Moulton v. Byrd, 224 Ala. 403, 140 So. 384 (1932); Olson v. Cory, 26 Cal. 3d 672, 609 P. 2d 991 (1980); Nellius v. Stiftel, 402 A. 2d 359 (Del. 1978); Dacey v. Connecticut Bar Assn., 170 Conn. 520, 368 A. 2d 125 (1976); Wheeler v. Board of Trustees of Fargo Consol. School

        Dist., 200 Ga. 323, 37 S. E. 2d 322 (1946); Schward v. Ariyoshi, 57 Haw. 348, 555 P. 2d 1329 (1976); Eiger v. Hansen, 67 Idaho 45, 170 P. 2d 411 (1946); Gordy v. Dennis, 176 Md. 106, 5 A. 2d 69 (1936); State ex rel. Gardner v. Holm, 241 Minn. 125, 62 N. W. 2d 52 (1954); State ex rel. West Jersey Traction Co. v. Board of Public Works, 56 N. J. L. 431, 29 A. 163 (1894); Long v. Watts, 183 N. C. 99, 110 S. E. 765 (1922); First American Bank & Trust Co. v. Ellwein, 221 N. W. 2d 509 (N. D.), cert. denied, 419 U. S. 1026 (1974); McCoy v. Handlin, 35 S. D. 487, 153 N. W. 361 (1915); Alamo Title Co. v. San Antonio Bar Assn., 360 S. W. 2d 814 (Tex. Civ. App.), writ ref’d, no rev. error (Tex. 1962).

        E. g., Atkins v. United States, 214 Ct. Cl. 186, 556 F. 2d 1028 (1977), cert. denied, 434 U. S. 1009 (1978); Pilla v. American Bar Assn., 542 F. 2d 56 (CA8 1976); Brinkley v. Hassig, 83 F. 2d 351 (CA10 1936); United States v. Corrigan, 401 F. Supp. 795 (Wyo. 1975).

        O’Malley east doubt on the substantive holding of Evans, see n. 31, infra, but the fact that the Court reached the issue indicates that it did not question this aspect of the Evans opinion.

       In another, not unrelated context, Chief Justice Marshall’s exposition in Cohens v. Virginia, 6 Wheat. 264 (1821), could well have been the explanation of the Rule of Necessity; he wrote that a court “must take jurisdiction if it' should. The judiciary cannot, as the legislature may, avoid a measure because it approaches the confines of the constitution. We cannot pass it by, because it is doubtful. With whatever doubts, with whatever difficulties, a case may be attended, we must decide it, if it be brought before us. We have no more right to decline the exercise of jurisdiction which is given, than to usurp that which is not given. The one or the other would be treason to the constitution. Questions may occur which we would gladly avoid; but we cannot avoid them.” Id., at 404 (emphasis added).

       See Act of Mar. 3, 1911, ch. 231, §§ 20, 21, 36 Stat. 1090 (current version at 28 U. S. C. §§144, 455 (1976 ed. and Supp. III)). This statute applied only to district judges, but its existence demonstrates that the Rule of Necessity has continued in force side by side with statutory disqualification standards.

       See, e. g., W. Carpenter, Judicial Tenure in the United States 2-3 (1918).

       The rejection of Madison’s suggestion of tying judicial salaries to the price of some commodity may have arisen from colonial Virginia’s unsatisfactory experience with a similar scheme for paying the clergy with a set amount of tobacco. See generally L. Gipson, The Coming of the Revolution, 1763-1775, pp. 46-54 (1954); Scott, The Constitutional Aspects of the “Parson’s Cause,” 31 Pol. Sci. Q. 558 (1916). Although ultimately the tobacco statutes and the subsequent cases are more important as indications of early dissatisfaction with the Crown, the widespread publicity surrounding them surely made the Framers wary of indexing salaries by reference to some commodity.

       Indeed, in both Mitchell and Belknap, the Court held that provisions in appropriations statutes funding certain officials’ salaries at amounts below those established under previous statutes operated to repeal the relevant provisions of those statutes and set new salary levels.

       See, e. g., 123 Cong. Rec. 7095 (1977) (remarks of Sen. Byrd) (“salaries . . . shall not be increased . . . thus obviatfing] the effect of the comparability pay provisions”); ibid, (remarks of Sen. Baker) (“forgo and rescind that adjustment”); id., at 21121 (remarks of Rep. Solarz) (“knock[s] out the comparability increase for this year”); id., at 21125 (remarks of Rep. Ammerman) (“deny the October 1 cost-of-living pay increase”).

       Representative Shipley’s original amendment applied only to Members of the House of Representatives. The provision was expanded to cover all officials subject to the Salary Act. See 122 Cong. Rec. 28877 (1976). The Senate Committee studying the bill recommended the provision be deleted altogether, see S. Rep. No. 94-1201, p. 2 (1976), but the Senate ultimately passed a version applying the freeze to all Members of Congress, see 122 Cong. Rec. 29132-29133 (1976). The Conference Committee recommended that the freeze apply to all Salary Act positions, see H. R. Conf. Rep. No. 94-1559, p. 3 (1976). This recommendation prevailed.

       See, e. g., 122 Cong. Rec. 28865 (1976) (remarks of Rep. Armstrong) (a “freeze of the salaries”); ibid, (remarks of Rep. Yates) (“freeze the salaries”); ibid, (remarks of Rep. McClory) (“effectively eliminate the .. . cost-of-living increases”); id., at 28870 (remarks of Rep. Derwinski) (“freezing . . . pay at its current level”); id., at 28871 (remarks of Rep. Miller) (“stopping the pay raise”); id., at 28879 (remarks of Rep. Anderson) (“block a cost-of-living pay increase”); id., at 29132 (remarks of Sen. Taft) (“effectively freeze those salaries — the employees would not be given a cost-of-living raise on October 1, or a salary increase”); id., at 29164 (remarks of Sen. Allen) (“freezing the compensation”); id., at 29172 (remarks of Sen. Allen) (“denied the upcoming increase”; “salaries frozen at the September 30,1976, level”); id., at 29372 (remarks of Sen. Bartlett) (“automatic pay raises . . . eliminated”); id., at 31892 (remarks of Rep. Shipley) (“no October cost-of-living increases would be made”; bill “proscribe[s] . . . the October cost-of-living pay increase[s]”); id., at 31896 (remarks of Rep. Riegle) (“elimination of the cost-of-living raise”).

       See, e. g., 124 Cong. Rec. 17603 (1978) (remarks of Rep. Shipley) (“pay freeze”); id., at 17604 (remarks of Rep. Armstrong) (“automatic cost-of-living increases will not be permitted”); id., at 24375 (remarks of Sen. Sasser) (“freeze, during fiscal year 1979, the pay”).

       See, e. g., 125 Cong. Rec. 27532 (1979) (remarks of Rep. Whitten) (“sharply decreas [es] such automatic increases”); id., at 27533 (remarks of Rep. Jacobs) (“rollback of the automatic 12.9-percent salary increase”); id., at 28019 (remarks of Sen. Byrd) (“put a cap on that pay increase”); id., at 28020 (remarks of Sen. Magnuson) (“this is in the nature of a cap, a limitation”); id., at 28108 (remarks of Rep. Conte) (“reduces from 12.9 to 5.5 percent the increase in pay”).

       The Government asks us to invoke the rule that the law does not recognize fractions of a day, see, e. g., Lapeyre v. United States, 17 Wall. 191 (1873); it is argued that we should treat the President’s assent as having been given at the start of October 1, the same time the Year 1 increase was to take effect. It is correct that “the law generally reject[s] all fractions of a day, in order to avoid disputes.” 2 W. Blackstone, Co.mTnenta.ries *141. Here, however, the Government acknowledges that the statute was signed by the President after the Year 1 increase had taken effect. This Court, almost a century ago, stated:

        “ ‘[Wjhenever it becomes important to the ends of justice, or in order to decide upon conflicting interests, the law will look into fractions of a day, as readily as into the fractions of any other unit of time. The rule is purely one of convenience, which must give way whenever the rights of parties require it. . . . The law is not made of such unreasonable and arbitrary rifles.”' Louisville v. Savings Bank, 104 U. S. 469, 474-475 (1881) (quoting Grosvenor v. Magill, 37 Ill. 239, 240-241 (1865); citations omitted).
      Accord, Combe v. Pitt, 3 Burr. 1423, 97 Eng. Rep. 907 (K. B. 1763); 2 C. Sands, Sutherland on Statutory Construction §33.10 (4th ed. 1973).
      In Burgess v. Salmon, 97 U. S. 381 (1878), this Court was required to look to the time of day when a statute was enacted as compared to another and related event. This Court held that, notwithstanding the general rule, a person could not be subjected to a civil fine for violating a statute passed on the same day he engaged in the conduct but after that conduct had occurred. To impose a penalty on an act innocent when performed would render the statute an ex post facto law. Id., at 384-385. Thus Burgess dealt not so much with benefits and penalties as it did with constitutional limitations on the legislative authority of Congress and the Executive. In the context of periodic increases, the Compensation Clause, like the Ex Post Facto Clause of Art. I, § 9, places limits on Congress and the President. Because of the constitutional implications, the logic of Burgess applies to the statute for Year 1 and requires us to look to the precise time the statute became law by the President’s action.

       We need not address the question of whether evidence of an intent to influence the Judiciary would invalidate a statute that on its face does not directly reduce judicial compensation. See Evans v. Gore, 253 U. S. 245, 252 (1920).

       In O’Malley v. Woodrough, 307 U. S. 277 (1939), this Court held that the immunity in the Compensation Clause would not extend to exempting judges from paying taxes, a duty shared by all citizens. The Court thus recognized that the Compensation Clause does not forbid everything that might adversely affect judges. The opinion concluded by saying that to the extent Miles v. Graham, 268 U. S. 501 (1925), was inconsistent, it “cannot survive.” 307 U. S., at 282-283. Because Miles relied on Evans v. Gore, O’Malley must also be read to undermine the reasoning of Evans, on which the District Court relied in reaching its decision.

        United States v. More (CC DC 1803), writ of error dism’d for want of jurisdiction, 3 Cranch 159 (1805), is not to the contrary.. Congress had enacted a system of fees for compensating justices of the peace in the District of Columbia but subsequently abolished the fees. The Government brought an indictment against a justice of the peace who had continued to charge the fees, and the defendant demurred. The Circuit Court for the District of Columbia held that the compensation of justices of the peace in the District of Columbia was subject to the Compensation Clause and that a statute diminishing (here, abolishing) the fees violated the Constitution. Id., at 161, n. In More, the fee system was already in place as part of the justices’ compensation when Congress repealed it. Here, by contrast, the increase in Year 2 had not yet become part of the compensation of Article III judges when the statute repealing it was passed and signed by the President.

       Indeed, it would be particularly ironic if we were to bind Congress to an indexing scheme for salaries when the Framers themselves rejected an indexing proposal. See supra, at 220. Of course, indexing techniques have improved since 1787. Nevertheless, Congress’ repeated rejections of specific adjustments indicates some dissatisfaction with automatic adjustments according to a predetermined formula, even if not with the formula itself.

       Most positions covered, of course, are in the Executive Branch, which may explain the limited title.

       Several Members of Congress acknowledged the potential constitutional problem with rolling back the salary increase already in effect for judges. See 125 Cong. Rec. 27529-27530 (1979) (remarks of Rep. Latta); id,., at 27531-27533 (remarks of Rep. Whitten); id., at 27533 (remarks of Rep. Jacobs); id., at 28022 (remarks of Sen. Stevens). Representative Whitten, the Chairman of the House Appropriations Committee, stated that “the courts will have to make a final determination regarding this issue.” Id., at 27532.


source: Caselaw Access Project

author: Justice Powell Justice Stevens,

license: Public Domain

text:
    FEDERAL TRADE COMMISSION et al. v. STANDARD OIL COMPANY OF CALIFORNIA
    No. 79-900.
    Argued October 15, 1980
    Decided December 15, 1980

      Powell, J., delivered the opinion of the Court, in which BuRger, C. J., and BrenNan, White, Marshall, BlackmuN, and Rehnqtjist, JJ., joined. Stevens, J., filed an opinion concurring in the judgment, post, p. 247. Stewart, J., took no part in the consideration or decision of the case.

      Solicitor General McCree argued the cause for petitioners. With him on the briefs were Deputy Solicitor General Wallace, Elliot Schulder, Michael N. Sohn, Howard E. Shapiro, Joanne L. Levine, and Mark W. Haase.

      George A. Sears argued the cause for respondent. With him on the brief were Richard W. Odgers and C. Douglas Floyd.

        Daniel J. Popeo and Paul D. Kamenar filed a brief for the Washington Legal Foundation as amicus curiae urging affirmance.

   Justice Powell

delivered the opinion of the Court.

This case presents the question whether the issuance of a complaint by the Federal Trade Commission is “final agency action” subject to judicial review before administrative adjudication concludes.

I

On July 18, 1973, the Federal Trade Commission issued and served upon eight major oil companies, including Standard Oil Company of California (Socal), a complaint averring that the Commission had “reason to believe” that the companies were violating § 5 of the Federal Trade Commission Act, 38 Stat. 719, as amended, 15 U. S. C. § 45, and stating the Commission’s charges in that respect. The Commission issued the complaint under authority of § 5 (b) of the Act, 15 U. S. C. § 45 (b), which provides:

“Whenever the Commission shall have reason to believe that any . . . person, partnership, or corporation has been or is using any unfair method of competition or unfair or deceptive act or practice in or affecting commerce, and if it shall appear to the Commission that a proceeding by it in respect thereof would be to the interest of the public it shall issue and serve upon such person, partnership, or corporation a complaint stating its charges in that respect and containing a notice of a hearing . . .

An adjudication of the complaint’s charges began soon thereafter before an Administrative Law Judge, and is still pending.

On May 1, 1975, Socal filed a complaint against the Commission in the District Court for the Northern District of California, alleging that the Commission had issued its complaint without having “reason to believe” that Socal was violating the Act. Socal sought an order declaring that the issuance of the complaint was unlawful and requiring that the complaint be withdrawn. Socal had sought this relief from the Commission and been denied. In support of its allegation and request, Socal recited a series of events that preceded the issuance of the complaint and several events that followed. In Socal’s estimation, the only inference to be drawn from these events was that the Commission lacked sufficient evidence when it issued the complaint to warrant a belief that Socal was violating the Act.

The gist of Socal’s recitation of events preceding the issuance of the complaint is that political pressure for a public explanation of the gasoline shortages of 1973 forced the Commission to issue a complaint against the major oil companies despite insufficient investigation. The series of events began on May 31, 1973. As of that day, the Commission had not examined any employees, documents, or books of Socal’s, although the Commission had announced in December 1971, that it intended to investigate possible violations of the Federal Trade Commission Act in the petroleum industry.

On May 31, Senator Henry M. Jackson, then Chairman of the Senate Interior and Insular Affairs Committee and of the Permanent Investigation Subcommittee of the Senate Committee of Government Operations, requested the Commission “to prepare a report within thirty days regarding the relationship between the structure of the petroleum industry and related industries and the current and prospective shortages of petroleum products.” Immediately the Commission subpoenaed three Soeal officers to testify before it, and they did so in late June. This examination was the Commission’s only inquiry as to Socal’s books and records, and the only interview of a Socal officer, prior to the issuance of the complaint. On July 6, the Commission sent to Senator Jackson a “Preliminary Federal Trade Commission Staff Report on Its Investigation of the Petroleum Industry,” requesting that the report not be made public because it had not yet “been evaluated or approved by the Commission.” On July 9, Senator Jackson informed the Commission by letter that he intended to publish the report as a congressional committee reprint unless the Commission explained by July 13 why public release of the report would be improper. The Commission responded on July 11 that public release of the report, which the Commission characterized as “an internal staff memorandum,” would be “inconsistent with [the Commission’s] duty to proceed judiciously and responsibly in determining what, if any, action should be taken on the basis of the staff investigation.” On July 13, Senator Jackson released the report for publication by the Senate Committee on Interior and Insular Affairs. On July 18, the Commission issued its complaint.

The subsequent events recited by Socal in its complaint were intended to confirm that the Commission lacked sufficient evidence before issuing its complaint to determine that it had reason to believe that Socal was violating the Act. One subsequent event was the issuance on August 27 of a report by the Office of Energy Advisor of the Department of the Treasury, concluding that the Commission’s staff report was wrong in implying that the major oil companies had contrived the gasoline shortages. The report recommended that the complaint be withdrawn. A second event was Senator Jackson’s statement in January 1974, at the conclusion of congressional hearings about the shortages, that he had found no “hard evidence” that the oil companies had created shortages. In addition to these expressions of doubt about the allegations of the Commission’s complaint, Socal recounted the several failures of the Commission’s complaint counsel in the adjudication to comply with orders of the Administrative Law Judge to identify the witnesses and documents on which the Commission intended to rely. The complaint counsel admitted that most of the evidence and witnesses the Commission hoped to introduce were yet to be secured through discovery, and he moved to relax the Commission’s procedural rules for adjudication in order to allow such extensive discovery. In certifying this motion to the Commission, the Administrative Law Judge recommended “withdrawal of this case from adjudication — that is, dismissal without prejudice— so that it may be more fully investigated.” The Commission denied the complaint counsel’s motion and declined to follow the Administrative Law Judge’s recommendations.

The District Court dismissed Socal’s complaint on the ground that “a review of preliminary decisions made by administrative agencies, except under most unusual circumstances, would be productive of nothing more than chaos.” The Court of Appeals for the Ninth Circuit reversed. 596 F. 2d 1381 (1979). It held the Commission’s determination whether evidence before it provided the requisite reason to believe is “committed to agency discretion” and therefore is unreviewable according to § 10 of the Administrative Procedure Act (APA), 5 U. S. C. § 701 (a)(2). The Court of Appeals held, however, that the District Court could inquire whether the Commission in fact had made the determination that it had reason to believe that Socal was violating the Act. If the District Court were to find upon remand that the Commission had issued the complaint “solely because of outside pressure or with complete absence of a ‘reason to believe’ determination,” 596 F. 2d, at 1386, then it was to order the Commission to dismiss the complaint. The Court of Appeals further held that the issuance of the complaint was “final agency action” under § 10 (c) of the APA, 5 U. S. C. § 704.

We granted the Commission’s petition for a writ of cer-tiorari because of the importance of the questions raised by Socal’s request for judicial review of the complaint before the conclusion of the adjudication. 445 U. S. 903 (1980). We now reverse.

II

The Commission averred in its complaint that it had reason to believe that Socal was violating the Act. That averment is subject to judicial review before the conclusion of administrative adjudication only if the issuance of the complaint was “final agency action” or otherwise was “directly reviewable” under § 10 (c) of the APA, 5 U. S. C. § 704. We conclude that the issuance of the complaint was neither.

A

The Commission’s issuance of its complaint was not “final agency action.” The Court observed in Abbott Laboratories v. Gardner, 387 U. S. 136, 149 (1967), that “[t]he cases dealing with judicial review of administrative actions have interpreted the 'finality’ element in a pragmatic way.” In Abbott Laboratories, for example, the publication of certain regulations by the Commissioner of Food and Drugs was held to be final agency action subject to judicial review in an action for declaratory judgment brought prior to any Government action for enforcement. The regulations required manufacturers of prescription drugs to print certain information on drug labels and advertisements. The regulations were “definitive” statements of the Commission’s position, id., at 151, and had a “direct and immediate . . . effect on the day-to-day business” of the complaining parties. Id., at 152. They had “the status of law” and “immediate compliance with their terms was expected.” Ibid. In addition, the question presented by the challenge to the regulations was a “legal issue ... fit for judicial resolution.” Id., at 153. Finally, because the parties seeking the declaratory judgment represented almost all the parties affected by the regulations, “a pre-enforcement challenge . . . [was] calculated to speed enforcement” of the relevant Act. Id., at 154. Taking “a similarly flexible view of finality,” id., at 150, and in view of similar pragmatic considerations, the Court had held the issuance of administrative regulations to be “final agency action” in Columbia Broadcasting System, Inc. v. United States, 316 U. S. 407 (1942), Frozen Food Express v. United States, 351 U. S. 40 (1956), and United States v. Storer Broadcasting Co., 351 U. S. 192 (1956). The issuance of the complaint in this case, however, is materially different.

By its terms, the Commission’s averment of “reason to believe” that Socal was violating the Act is not a definitive statement of position. It represents a threshold determination that further inquiry is warranted and that a complaint should initiate proceedings. To be sure, the issuance of the complaint is definitive on the question whether the Commission avers reason to believe that the respondent to the complaint is violating the Act. But the extent to which the respondent may challenge the complaint and its charges proves that the averment of reason to believe is not “definitive” in a comparable manner to the regulations in Abbott Laboratories and the cases it discussed.

Section 5 of the Act, 15 U. S. C. § 45 (b), in conjunction with Commission regulations, 16 CFR §§ 3.41-3.46 (1980), and § 5 of the APA, 5 U. S. C. § 554 (1976 ed. and Supp. Ill), requires that the complaint contain a notice of hearing at which the respondent may present evidence and testimony before an administrative law judge to refute the Commission’s charges. Either party to the adjudication may appeal an adverse decision of the administrative law judge to the full Commission, 5 U. S. C. §577; 16 CFR §3.52 (1980); see 15 U. S. C. §45 (c), which then may dismiss the complaint. See 15 U. S. C. § 45 (c). If instead the Commission enters an order requiring the respondent to cease and desist from engaging in the challenged practice, the respondent still is not bound by the Commission’s decision until judicial review is complete or the opportunity to seek review has lapsed. 15 U. S. C. §45 (g). Thus, the averment of reason to believe is a prerequisite to a definitive agency position on the question whether Socal violated the Act, but itself is a determination only that adjudicatory proceedings will commence. Cf. Ewing v. Mytinger & Casselberry, Inc., 339 U. S. 594 (1950); Chicago & Southern Air Lines, Inc. v. Waterman S.S. Corp., 333 U. S. 103 (1948).

Serving only to initiate the proceedings, the issuance of the complaint averring reason to believe has no legal force comparable to that of the regulation at issue in Abbott Laboratories, nor any comparable effect upon Socal’s daily business. The regulations in Abbott Laboratories forced manufacturers to “risk serious criminal and civil penalties” for noncompliance, 387 U. S., at 153, or “change all their labels, advertisements, and promotional materials; . . . destroy stocks of printed matter; and . . . invest heavily in new printing type and new supplies.” Id., at 152. Socal does not contend that the issuance of the complaint had any such legal or practical effect, except to impose upon Socal the burden of responding to the charges made against it. Although this burden certainly is substantial, it is different in kind and legal effect from the burdens attending what heretofore has been considered to be final agency action.

In contrast to the complaint’s lack of legal or practical effect upon Socal, the effect of the judicial review sought by Socal is likely to be interference with the proper functioning of the agency and a burden for the courts. Judicial intervention into the agency process denies the agency an opportunity to correct its own mistakes and to apply its expertise. Weinberger v. Salfi, 422 U. S. 749, 765 (1975). Intervention also leads to piecemeal review which at the least is inefficient and upon completion of the agency process might prove to have been unnecessary. McGee v. United States, 402 U. S. 479, 484 (1971); McKart v. United States, 395 U. S. 185, 195 (1969). Furthermore, unlike the review in Abbott Laboratories, judicial review to determine whether the Commission decided that it had the requisite reason to believe would delay resolution of the ultimate question whether the Act was violated. Finally, every respondent to a Commission complaint could make the claim that Socal had made. Judicial review of the averments in the Commission’s complaints should not be a means of turning prosecutor into defendant before adjudication concludes.

In sum, the Commission’s issuance of a complaint averring reason to believe that Socal was violating the Act is not a definitive ruling or regulation. It had no legal force or practical effect upon Socal’s daily business other than the disruptions that accompany any major litigation. And immediate judicial review would serve neither efficiency nor enforcement of the Act. These pragmatic considerations counsel against the conclusion that the issuance of the complaint was “final agency action.”

B

Socal relies, however, upon different considerations than these in contending that the issuance of the complaint is “final agency action.”

Socal first contends that it exhausted its administrative remedies by moving in the adjudicatory proceedings for dismissal of the complaint. By thus affording the Commission an opportunity to decide upon the matter, Socal contends that it has satisfied the interests underlying the doctrine of administrative exhaustion. Weinberger v. Salfi, supra, at 765. The Court of Appeals agreed. 596 F. 2d, at 1387. We think, however, that Socal and the Court of Appeals have mistaken exhaustion for finality. By requesting the Commission to withdraw its complaint and by awaiting the Commission’s refusal to do so, Socal may well have exhausted its administrative remedy as to the averment of reason to believe. But the Commission’s refusal to reconsider its issuance of the complaint does not render the complaint a “definitive” action. The Commission’s refusal does not augment the complaint’s legal force or practical effect upon Socal. Nor does the refusal diminish the concerns for efficiency and enforcement of the Act.

Socal also contends that it will be irreparably harmed unless the issuance of the complaint is judicially reviewed immediately. Socal argues that the expense and disruption of defending itself in protracted adjudicatory proceedings constitutes irreparable harm. As indicated above, we do not doubt that the burden of defending this proceeding will be substantial. But “the expense and annoyance of litigation is 'part of the social burden of living under government.’ ” Petroleum Exploration, Inc. v. Public Service Comm’n, 304 U. S. 209, 222 (1938). As we recently reiterated: “Mere litigation expense, even substantial and unrecoupable cost, does not constitute irreparable injury.” Renegotiation Board v. Bannercraft Clothing Co., 415 U. S. 1, 24 (1974).

Socal further contends that its challenge to the Commission’s averment of reason to believe can never be reviewed unless it is reviewed before the Commission’s adjudication concludes. As stated by the Court of Appeals, the alleged unlawfulness in the issuance of the complaint “is likely to become insulated from any review” if deferred until appellate review of a cease-and-desist order. 596 F. 2d, at 1387. Socal also suggests that the unlawfulness will be “insulated” because the reviewing court will lack an adequate record and it will address only the question whether substantial evidence supported the cease-and-desist order.

We are not persuaded by this speculation. The Act expressly authorizes a court of appeals to order that the Commission take additional evidence. 15 U. S. C. § 45(c). Thus, a record which would be inadequate for review of alleged unlawfulness in the issuance of a complaint can be made adequate. We also note that the APA specifically provides that a “preliminary, procedural, or intermediate agency action or ruling not directly reviewable is subject to review on the review of the final agency action,” 5 U. S. C. § 704, and that the APA also empowers a court of appeals to “hold unlawful and set aside agency action . . . found to be . . . without observance of procedure required by law.” 5 U. S. C. § 706. Thus, assuming that the issuance of the complaint is not “committed to agency discretion by law,” a court of appeals reviewing a cease-and-desist order has the power to review alleged unlawfulness in the issuance of a complaint. We need not decide what action a court of appeals should take if it finds a cease-and-desist order to be supported by substantial evidence but the complaint to have been issued without the requisite reason to believe. It suffices to hold that the possibility does not affect the application of the finality rule. Cf. Macauley v. Waterman S.S. Cory., 327 U. S. 540, 545 (1946).

c

There remains only Socal’s contention that the claim of illegality in the issuance of the complaint is a “collateral” order subject to review under the doctrine of Cohen v. Beneficial Loan Corp., 337 U. S. 541 (1949). It argues that the Commission’s issuance of the complaint averring reason to believe “fall[s] in that small class [of decisions] which finally determine claims of right separable from, and collateral to, rights asserted in th'e action, too important to be denied review and too independent of the cause itself to require that appellate consideration be deferred until the whole case is adjudicated.” Id., at 546. In that diversity case, a District Court refused to apply a state statute requiring shareholders bringing a derivative suit to post a security bond for the defendant’s litigation expenses. This Court held that the District Court’s order was subject to immediate appellate review under 28 U. S. C. § 1291. Giving that section a “practical rather than a technical construction,” the Court concluded that this order “did not make any step toward final disposition of the merits of the case and will not be merged in final judgment.” 337 U. S., at 546.

Cohen does not avail Socal. What we have said above makes clear that the issuance of the complaint averring reason to believe is a step toward, and will merge in, the Commission’s decision on the merits. Therefore, review of this preliminary step should abide review of the final order.

Ill

Because the Commission’s issuance of a complaint averring reason to believe that Socal has violated the Act is not “final agency action” under § 10 (c) of the APA, it is not judicially reviewable before administrative adjudication concludes. We therefore reverse the Court of Appeals and remand for the dismissal of the complaint. c

r, . , ,7 It is so ordered.

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

Justice Stevens,

concurring in the judgment.

“Agency action” is a statutory term that identifies the conduct of executive and administrative agencies that Congress intended to be reviewable in federal court. In general, the term encompasses formal orders, rules, and interpretive decisions that crystallize or modify private legal rights. Agency action that is merely “preliminary, procedural, or intermediate” is subject to judicial review at the termination of the proceeding in which the interlocutory ruling is made. Today the Court holds that an agency decision to initiate administrative proceedings is in the interlocutory category. In a footnote, ante, at 238-239, n. 7, the Court determines whether the decision is ever reviewable and in the body of the opinion the Court determines when it is reviewable.

In my opinion, Congress did not intend to authorize any judicial review of decisions to initiate administrative proceedings. The definition of “agency action” found in 5 U. S. C. § 551 (13) plainly contemplates action that affects legal rights in some way. As the Court points out, ante, at 242, the mere issuance of a complaint has no legal effect on the respondent’s rights. Although an agency’s decision to file a complaint may have a serious impact on private parties who must respond to such complaints, that impact is comparable to that caused by a private litigant’s decision to file a lawsuit or a prosecutor’s decision to present evidence to a grand jury. A decision to initiate proceedings does not have the same kind of effect on legal rights as “an agency rule, order, license [or other sanction].” I am aware of nothing in the Administrative Procedure Act, or its history, that indicates that Congress intended to authorize judicial review of this type of decision.

The practical consequences of the Court’s contrary holding — that the Commission’s prelitigation decision, although not reviewable now, will be reviewable later — confirms my opinion that the Court’s decision does not reflect the intent of Congress. If the Commission ultimately prevails on the merits of its complaint, Socal surely will not be granted immunity because the Commission did not uncover the evidence of illegality until after the complaint was filed. On the other hand, if Socal prevails, there will be no occasion to review the contention that it now advances, because the only relief it seeks is a dismissal of the Commission’s complaint. Socal is surely correct when it argues that unless review is available now, meaningful review can never be had.

The Court’s casual reading of the Administrative Procedure Act is unfortunate for another reason. The disposition of a novel and important question of federal jurisdiction in a footnote will lend support to the notion that federal courts have a “carte blanche” authorizing judicial supervision of almost everything that the Executive Branch of Government may do. Because that notion has an inevitable impact on the quantity and quality of judicial service, federal judges should be especially careful to construe their own authority strictly. I therefore respectfully disagree with the Court’s perfunctory analysis of the “agency action” issue. I do, however, concur in its judgment because I am persuaded that the Commission’s decision to initiate a complaint is not “agency action” within the meaning of § 10 (b) of the Administrative Procedure Act, 5 U. S. C. § 702.

       The other seven respondents to the complaint were Exxon Corp., Texaco, Inc., Gulf Oil Corp., Mobil Oil Corp., Standard Oil Co. (Indiana), Shell Oil Corp., and Atlantic Richfield Co. In re Exxon Corporation, et al., Docket No. 8934.

       Section 5 of the Act, as set forth in 15 U. S. C. § 45, provides in pertinent part:
      “(a) ... (1) Unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are declared unlawful.”

       The Commission charged that the eight companies had “maintained and reinforced a noncopipetitive market structure in the refining of crude oil into petroleum products,” had “exercised monopoly power in the refining of petroleum products,” and had followed “common courses of action in accommodating the needs and goals of each other throughout the petroleum industry.”

       Socal invoked federal-court jurisdiction under 5 U. S. C. § 704 and 28 U. S. C. §§ 1331, 1337, 1346, 1361, and 2201.

       The Commission had denied Socal’s motion to dismiss the complaint on February 12, 1974. The Commission also had denied Socal’s motion for reconsideration, stating:
      “[I]t has long been settled that the adequacy of the Commission’s 'reason to believe’ a violation of law has occurred and its belief that a proceeding to stop it would be in the 'public interest’ are matters that go to the mental processes of the Commissioners and will not be reviewed by the courts. Once the Commission has resolved these questions and issued a complaint, the issue to be litigated is not the adequacy of the Commission’s pre-complaint information or the diligence of its study of the material in question but whether the alleged violation has in fact occurred. That is the posture of the instant matter.” In re Exxon Corp., 83 F. T. C. 1759, 1760 (1974).

       On July 6, 1973, the Commission subpoenaed certain of SocaPs books and records, but the complaint was issued before those records were produced. The subpoena was quashed on July 27, 1973, by the commencement of adjudication.

       In addition to contending that the issuance of the complaint is not “final” agency action, the Commission argues that' the issuance is not “agency action” under § 2 (g) of the APA, 5 U. S. C. § 551 (13), and that, if agency action, it is “committed to agency discretion by law” under § 10. 5 U. S. C. §701 (a)(2).
      We agree with Socal and with the Court of Appeals that the issuance of the complaint is “agency action.” The language of the APA and its legislative history support this conclusion. According to § 10 of the APA, 5 U. S. C. § 701 (b) (2), “agency action” has the meaning given to it by §2, 5 U. S. C. § 551. That section provides that “ 'agency action’ includes the whole or a part of an agency rule, order, license, sanction, relief, or the equivalent or denial thereof, or failure to act,” 5 U. S. C. § 551 (13), and also that “ 'order’ means the whole or a part of a final disposition . . . of an agency in a matter other than rule making . . . .” 5 U. S. C. § 551 (6). According to the legislative history of the APA:
      “The term 'agency action’ brings together previously defined terms in order to simplify the language of the judicial-review provisions of section 10 and to assure the complete coverage of every form of agency power, proceeding, action, or inaction. In that respect the term includes the supporting procedures, findings, conclusions, or statements or reasons or basis for the action or inaction.” S. Doc. No. 248, 79th Cong., 2d Sess., 255 (1946). We conclude that the issuance of the complaint by the Commission is “a part of a final disposition” and therefore is “agency action.”
      In view of our conclusion that the issuance of the complaint was not “final agency action,” we do not address the question whether the issuance of a complaint is “committed to agency discretion by law.” 5 U. S. C. §701 (a) (2).

       In Columbia Broadcasting System, Inc. v. United States, the Court held reviewable a regulation of the Federal Communications Commission proscribing certain contractual arrangements between chain broadcasters and local stations. The Commission did not have authority to regulate such contracts; its regulation asserted only that the Commission would not license stations which maintained such contracts. In a challenge to the regulation before any enforcement action had been brought, the Court noted that the regulations had “the force of law before their sanctions are invoked as well as after/’ that they were “promulgated by order of the Commission,” and that “the expected conformity to them causes injury cognizable by a court of equity.” 316 U. S., at 418-419.
      In Frozen Food Express v. United States, the Court held reviewable an order of the Interstate Commerce Commission specifying commodities that were deemed not to be “agricultural . . . commodities.” The carriage of such commodities exempted vehicles from ICC supervision. The order was held to be “final agency action” in a challenge brought by a carrier transporting commodities that the ICC’s order had not included in its terms.
      In United States v. Storer Broadcasting Co., the Court also held reviewable as “final agency action” a Federal Communications Commission regulation announcing a policy not to issue television licenses to applicants already owning five such licenses. The rulemaking was complete and “operate [d] to control the business affairs of Storer.” 351 U. S., at 199.

       The Commission held as much in its order denying Socal’s motion for reconsideration of the motion to dismiss. See n. 5, supra.

       Possible judicial review also includes review in this Court upon a writ of certiorari. 15 U. S. C. § 45 (g).

       The Court of Appeals additionally suggested that the complaint would be “insulated” from review because the alleged unlawfulness would be moot if Socal prevailed in the adjudication. These concerns do not support a conclusion that the issuance of a complaint averring reason to believe is “final agency action.” To the contrary, one of the principal reasons to await the termination of agency proceedings is “to obviate all occasion for judicial review.” Supra, at 242; McGee v. United States, 402 U. S. 479, 484 (1971); McKart v. United States, 395 U. S. 185, 195 (1969). Thus, the possibility that Socal’s challenge may be mooted in adjudication warrants the requirement that Socal pursue adjudication, not shortcut it.

       Section 5 (c), as set forth in 15 U. S. C. § 45 (c), provides in pertinent part:
      “If either party shall apply to the court for leave to adduce additional evidence, and shall show to the satisfaction of the court that such additional evidence is material and that there were reasonable grounds for the failure to adduce such evidence in the proceeding before the Commission, the court may order such additional evidence to be taken before the Commission and to be adduced upon the hearing in such manner and upon such terms and conditions as to the court may see proper.”

       Contrary to the suggestion of Justice Stevens in his concurring opinion, we do not hold that the issuance of the complaint is reviewable agency action. We leave open the question whether the issuance of the complaint is unreviewable because it is “committed to agency discretion by law.” See n. 7, supra.

       By this holding, we do not encourage the issuance of complaints by the Commission without a conscientious compliance with the “reason to believe” obligation in 15 U. S. C. § 45 (b). The adjudicatory proceedings which follow the issuance of a complaint may last for months or years. They result in substantial expense to the respondent and may divert management personnel from their administrative and productive duties to the corporation. Without a well-grounded reason to believe that unlawful conduct has occurred, the Commission does not serve the public interest by subjecting business enterprises to these burdens.

       Title 5 U. S. C. § 702 provides in part:
      “A person suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action within the meaning of a relevant statute, is entitled to judicial review thereof.”

       Section 701 (b)(2) provides:
      “For the purposes of this chapter—
      “(2) ‘person’, ‘rule’, ‘order’, ‘license’, ‘sanction’, ‘relief’, and ‘agency action’ have the meanings given them by section 551 of this title.” Section 551 (13) provides:
      “ ‘agency action’ includes the whole or a part of an agency rule, order, license, sanction, relief, or the equivalent or denial thereof, or failure to act.”

       Section 704 provides in part:
      “A preliminary, procedural, or intermediate agency action or ruling not directly reviewable is subject to review on the review of the final agency action.”

       See n. 2, supra. The Court’s partial quotation of the definition of the term “order” in 5 U. S. C. § 551 (6), see ante, at 239, n. .7, implies that the Court regards the initial step in a proceeding as a “part” of the final order terminating the proceeding. In my opinion that is a rather plain misreading of the definition. An ordinary reader would interpret “part” of an order to refer to one of several paragraphs or sections in that document, not to actions that preceded the entry of the order. Under a contrary reading, presumably the Commission’s action in filing a brief directed to some preliminary issue in the proceeding would be considered “part” of the agency action terminating the proceedings and therefore subject to judicial review. Section 551 (6) reads, in full, as follows:
      “‘order’ means the whole or a part of a final disposition, whether affirmative, negative, injunctive, or declaratory in form, of an agency in a matter other than rule making but including licensing.”

       Because judicial review of the Commission’s decision is not specifically proscribed by statute, the decision to file a complaint will be reviewable later unless the Commission, by a showing of “clear and convincing” evidence, can overcome the strong presumption against a determination that its action was “committed to agency discretion” under 5 U. S. C. § 701 (a)(2). See Dunlop v. Bachowski, 421 U. S. 560, 567 (1975).