Morgan v. United States
304 U.S. 1 (1938)

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U.S. Supreme Court

Morgan v. United States, 304 U.S. 1 (1938)

Morgan v. United States

No. 581

Argued March 10, 11, 1938

Decided April 25, 1938

Petition for rehearing denied, May 31, 1938

304 U.S. 1

Syllabus

1. An order of the Secretary of Agriculture fixing the maximum rates to be charged by market agencies (commission men) at stockyards held void for failure to allow the "full hearing" before the Secretary required by the Packers and Stockyards Act. Morgan v. United States,298 U. S. 468. P. 304 U. S. 13.

2. In administrative proceedings of a quasi-judicial character, the liberty and property of the citizen must be protected by the rudimentary requirements of fair play. These demand a fair and open hearing. P. 304 U. S. 14.

3. In requiring a "full hearing," the Packers and Stockyards Act has regard to judicial standards -- not in any technical sense, but with respect to those fundamental requirements of fairness which are of the essence of due process in a proceeding of a judicial nature. Those requirements relate not only to the taking and consideration of evidence, but also to the concluding, as well as to the beginning and intermediate steps in the procedure. P. 304 U. S. 19.

4. The proceeding was begun by a general notice of inquiry into the reasonableness of the rates of market agencies at the Kansas City Stockyards. Thousands of pages of testimony were taken by an examiner, and numerous complicated exhibits were introduced, bearing upon all phases of the broad subject of the businesses in question. Appellants' request that the examiner prepare a tentative report, to be submitted as a basis for exceptions and

Page 304 U. S. 2

argument, was refused. Oral argument, before an Assistant Secretary, was general and sketchy and did not reveal in any appropriate manner the Government's claims. The Government submitted no brief and furnished no statement of its contentions. Numerous and elaborate findings were prepared by subordinates who had conducted the proceedings for the Government, and were submitted to the Secretary, who accepted them, with certain rate alterations. No opportunity was afforded the appellants to examine the findings until they were served with the order fixing rates which they claim to be confiscatory. A rehearing was refused by the Secretary. The Secretary did not read the testimony, but examined it somewhat to get its drift; he did not hear the oral argument, but read a transcript of it and the appellants' briefs, and conferred ex parte concerning the findings with the subordinates who prepared them.

Held:

(1) The right to a "full hearing" embraces not only the right to present evidence, but also a reasonable opportunity to know the claims of the opposing party and to meet them. The right to submit argument implies that opportunity; otherwise, the right may be but a barren one. Those who are brought into contest with the Government in a quasi-judicial proceeding aimed at the control of their activities are entitled to be fairly advised of what the Government proposes and to be heard upon its proposals before it issues its final command. P. 304 U. S. 18.

(2) No such reasonable opportunity was accorded in this case. P. 304 U. S. 19.

(3) In all substantial aspects, the proceeding was an adversary one -- a prosecution by the Government of the owners of the market agencies threatening the existence of the agencies and the owners' means of livelihood. P. 304 U. S. 20.

(4) An earlier order containing findings of facts and fixing a schedule of rates, which was set aside because of changes in economic conditions, could not avail to remedy the defects in the conduct of the latter proceeding here in question. P. 304 U. S. 21.

(5) The action of the Secretary in accepting and making as his own the findings which had been prepared by the active prosecutors for the Government, after an ex parte discussion with them and without according any reasonable opportunity to the respondents in the proceeding to know the claims thus presented and to contest them, was more than an irregularity in procedure; it was a vital defect. P. 304 U. S. 21.

Page 304 U. S. 3

5. A petition for rehearing based upon the grounds of inconsistency of the decision on this appeal with rulings on the earlier appeal, 298 U. S. 298 U.S. 468, and upon the ground of surprise, is denied. P. 304 U. S. 23.

6. Questions as to the disposition of moneys impounded in the District Court representing charges for market agency services paid in excess of the rates fixed by the void order are for that court to decide. P. 304 U. S. 26.

23 F.Supp. 380 reversed.

Appeal from a decree of the District Court, constituted of three judges, which dismissed the bills in fifty suits, consolidated for hearing, challenging the validity of maximum rates fixed by the Secretary of Agriculture for market agencies at the Kansas City Stock Yards. A former appeal is reported in 298 U. S. 298 U.S. 468. The present report includes an opinion delivered May 31, 1938, denying a rehearing. Summaries of the arguments on the procedural questions are extracted from the main briefs used on the hearing.

Page 304 U. S. 13

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